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March 17, 2005
House Committee Approves Bankruptcy Bill
The House Judiciary Committee approved S. 256, as passed by the
Senate, by a vote of 22–13. The bill is now cleared to proceed to
the House floor when members return from their spring recess on April 4.
The House Rules Committee will first meet to establish a rule for which
amendments would be in order to be offered. However, it is not likely
that these amendments will succeed.
Bankrupt United Airlines Paid Chief a Bonus Last Year
Bankrupt United Airlines paid its top executive a bonus of over
$366,000 last year as the company sought salary and other concessions
from union workers, but has cut his pay by 15 percent in 2005, Reuters
reported. Documents filed with the government yesterday showed that CEO
Glenn Tilton’s salary plus bonus amounted to more than $1.1
million in 2004, even though he accepted a pay cut during the year.
Worldcom
J.P. Morgan to Pay $2 Billion in WorldCom Case
J.P. Morgan Chase & Co. agreed yesterday to pay $2 billion to
settle a shareholder lawsuit regarding its involvement with the failed
telecommunications company WorldCom, according to the plaintiffs’
attorney, Reuters reported. New York State Comptroller Alan Hevesi led a
group of investors in a lawsuit that was filed against major banks on
behalf of hundreds of thousands of investors who bought WorldCom stock
and bonds before the long-distance phone company sought bankruptcy
protection in July 2002.
Higher Offer Is Expected From Qwest to Buy MCI
Qwest Communications is expected today to raise its bid for MCI to
$8.45 billion, according to people close to the situation, the New
York Times reported. MCI’s board signed a deal last month
to sell the company to Verizon for $6.75 billion. Under pressure from
shareholders, the board agreed to consider an offer of $8 billion from
Qwest, which was originally made at the beginning of February.
MCI Reports $113 Million Increase in Tax Reserves
MCI Inc. said today it had raised a reserve for income taxes,
increasing its fourth-quarter loss, Reuters reported. The long-distance
telephone company said it had raised a provision for deferred income
taxes by $113 million to $528 million. The move increased its
fourth-quarter net loss to $145 million. MCI said the increase had not
affected its operating earnings or forecasts.
Global Crossing Posts Loss, Expects Drop in Revenue This Year
Global Crossing Ltd. posted a fourth-quarter loss after a hefty
profit a year earlier, when the company benefited from accounting
changes made as it emerged from bankruptcy protection, the Wall
Street Journal reported. Global Crossing said it expects a drop
in revenue this year and additional losses as it continues a push toward
more-lucrative business services and exits some lower-margin
telecommunications services.
KKR, Bain Group to Buy Toys R Us
U.S. private equity firms Kohlberg Kravis Roberts & Co. and Bain
Capital have teamed up with Vornado Realty Trust to buy retailer Toys R
Us Inc. for about $5.7 billion, Reuters reported. The group beat out
rival Cerberus Capital to win the auction for the whole of the retailer
after a battle for its toys business.
Independence Air Strives to Avoid Cash Crisis
Low-cost airline Independence Air, which is controlled by FLYi Inc.
is under pressure to boost revenues and cut cuts to avoid a
“liquidity crisis,” it said in a regulatory filing, Reuters
reported. Faced with fierce competition and record fuel prices,
Independence Air has seen revenue “falling significantly below
anticipated levels and the company expending cash at an unsustainable
rate,” the company said in the filing with the Securities and
Exchange Commission yesterday, the newswire reported.