January 31, 2000
Final Action on S. 625 Expected This Week
S. 625, the Senate's bankruptcy reform bill, is expected to
pass final vote this week by a veto-proof margin. The Washington
Post reported on one provision that is a victory for consumer
groups over financial services companies in that it would require credit
card companies to warn consumers that paying the minimum due on their
statements would add significantly to their costs. Sen. Paul S. Sarbanes
(D-Md.) pushed through an amendment opposed by the credit card industry
that would require credit card billing statements to warn consumers
about interest costs and also provide toll-free phone numbers for
consumers to learn how long it would take to eliminate a balance when
paying only the minimum required each month. According to congressional
staffers, it is unclear whether the consumer disclosure requirements
will make it through the conference reconciliation of the House and
Senate bills. Sen. Phil Gramm (R-Texas), chair of the Banking Committee,
is opposed to Sarbanes' amendment; his spokeswoman said that he fought
it because it is an 'unnecessary government intrusion in private
business.'
Jeff Tassey, a spokesperson for the American Financial Services
Association, which lobbies for large diversified consumer lenders, said
the organization is not happy about the amendment on warning consumers,
but he said they are not fighting it. Consumer Federation of America
Legislative Director Travis Plunkett said that the disclosure
requirements are inadequate and that the bills 'tilt towards creditors
in almost every way. It's just not good enough to say, 'By golly, it's
going to take a while to pay this off, so call this 800 number for more
information.''
Thursday's
href='http://www.washingtonpost.com/wp-srv/WPcap/2000-01/27/000r-012700-idx.h…'
target='_parent''>Washington Post editorialized
against the recent turn of events clearing the way for final
passage.
ABI will update members of the Senate's action through the ABI
Network Update.
Sunny's Great Outdoors Files Chapter 11
Maryland-based Sunny's Great Outdoors Inc., which for many of
its 50 years was known as Sunny's Surplus, filed chapter 11 earlier this
month and announced it would close eight of its 26 stores in the
Washington area, according to The Washington Post. Recently the
company has expanded the number of stores and beyond its core business
of Army tents, Boy Scout uniforms and snow boots to include hiking and
camping gear. CEO Stephen A. Blake said the failure is because the
company lost its focus and because winters in the area for several years
have been mild. Sunny's will close three stores in the Baltimore area
and one each in Gaithersburg and Fredricksburg, Md., and in Sterling,
Fairfax and Woodbridge, Va.
T&W Expects to File Chapter 11
T&W Financial Corp., Tacoma, Wash., announced Friday that
it expects to extend forbearance agreements with secured lenders until
Feb. 15 and that it will file for bankruptcy protection after the
expiration of those extensions, according to a newswire report.
Fruit of the Loom Receives Final DIP Approval
Fruit of the Loom Ltd. announced Friday that the Bankruptcy
Court for the District of Delaware has granted final approval of the
$625 million debtor-in-possession (DIP) credit facility, according to a
newswire report. An interim order in effect since the Dec. 29 chapter 11
filing had limited use of the DIP facility at $275 million pending the
final order.
DecisionOne Begins Soliciting Approval for Plan
DecisionOne Holdings Corp., Frazer, Pa., announced Friday that
it has begun the final phase of its restructuring plan by commencing
solicitation of votes to approve a pre-packaged plan of reorganization,
according to a newswire report. The terms of the plan reflect an
agreement in principle among the company's bank lending group, holders
of its 14 percent senior notes due 2007 and 11.5 percent senior discount
debentures due 2008. DecisionOne will submit its pre-packaged plan to
the bankruptcy court for confirmation after the voting period of 10
days.
Anna Nicole Smith May Not Get Any of Late Husband's Money
Bankruptcy Judge Samuel L. Bufford (C.D. Calif.) has withdrawn
his ruling that Anna Nicole Smith, widow of Texas oil man J. Howard
Marshall II, was entitled to half of her late husband's fortune, the
Associated Press reported. The Houston Chronicle reported on
Friday that a new ruling is scheduled to be handed down later, and legal
experts said it is not clear what impact the new ruling will have. In
May, Judge Bufford ruled that Smith was entitled to an estimated $820
million from her husband's estate. Since then, a debate has continued as
to whether Judge Bufford had jurisdiction on the matter because a county
probate court is scheduled to divide the estate in an upcoming Houston
trial. Last week, Harris County Probate Judge Mike Wood told attorneys
that he believes Judge Bufford withdrew his order because he realized he
did not have jurisdiction; Wood has said that only his court has
jurisdiction over claims to Marshall's fortune.
Site Technologies Completes Sale of StarBase Stock
Site Technologies Inc. announced that it has completed the sale
of 625,000 shares of StarBase Corp. common stock, according to a
newswire report. In December, the bankruptcy court approved the sale in
exchange for the intellectual property Site sold to StarBase in March
last year. Next month the company intends to file its liquidating plan
of reorganization.
Spain Tries to Save Aerolinas Argentinas
Spanish state holding company SEPI plans to save Aerolinas
Argentinas from bankruptcy, it said on Friday. SEPI and AMR Corp.'s
American Airlines are among the Argentine airline's largest
shareholders. American has an 8.5 percent state, and according to SEPI,
has been running Aerolinas since 1998. SEPI said it had until the end of
last year to produce an investment plan for the airline. SEPI, which
with Merrill Lynch and Bankers Trust owns the holding company that
controls Aerolinas, rejected American's proposal. Aerolinas is expected
to lose $170 million this year, up from $68 million in 1998.
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