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Senate Panel Postpones Final Asbestos Bill Vote
A Senate panel on Thursday agreed to increase the size of a proposed
fund to compensate asbestos victims to $153 billion to answer fears it
might run out of money, Reuters reported. But after the death of former
Sen. Strom Thurmond was announced, Judiciary Committee Chairman Sen.
Orrin Hatch (R-Utah) abruptly postponed until July 10 a committee vote
to send the measure to the Senate floor. Hatch said that in any case
senators had not agreed on the size of payouts to asbestos victims from
the proposed fund. Waiting until after a week-long Independence Day will
allow them time to negotiate a consensus, he said, reported the
newswire.
'We are so close to having a bill, it would be a tragedy for us not to
get together,' Hatch said. But he warned that even if senators did not
agree on the size of payouts to people sickened by asbestos, he would
still bring the bill to a committee vote on July 10. The committee's
decision earlier to add as much as $45 billion to the fund's proposed
size, cleared a major obstacle to a bill that seeks to take thousands of
asbestos injury lawsuits out of the courts and limit the liability of
industry and insurers to asbestos claims, Reuters reported.
Senate Bill Would Leave Few Class Actions In States, Says Public
Citizen Litigation Group
Under the terms of class action reform legislation making its way
through Congress, few class action cases will remain in state courts --
even if all the class members are in a given state, the violation
occurred in one state, and it was the state's laws that were broken, the
Public Citizen Litigation Group states in an analysis,
CongressDaily reported. An amendment to Senate Judiciary Chairman
Orrin Hatch's (R-Utah) bill by Sen. Dianne Feinstein (D-Calif.) that was
adopted by the House during last week's floor vote -- uses a two-part
calculus to determine whether a case remains in state court or moves to
federal court. First, for a case to stay in state court, more than 60
percent of the plaintiffs must reside in that state. Second, the primary
defendant must be a citizen of that state -- headquartered or
incorporated there, reported the newswire.
Sen. Feinstein and Sen. Arlen Specter (R-Pa.) announced they had
reached a compromise with Hatch on 'mass action' cases. When the Hatch
class action bill goes to the floor, most likely in July, an amendment
will keep 'mass action' cases with plaintiffs from a single state suing
over a single incident in state court. Originally, the Hatch bill would
have moved all such cases to federal court, to which Specter and
Feinstein objected during a markup in April, reported the newswire.
Air Canada Flight Attendants Ratify Concessions, Union
Says
Air Canada's flight attendants union said its 8,300 members ratified a
labor agreement providing C$137 million ($101 million) in concessions to
help the airline emerge
from bankruptcy protection, Bloomberg News reported. Bill Trbovich of
the Canadian Union of Public Employees, which represents the flight
attendants, said as many as 1,750 workers may be laid off. Many of the
layoffs may be avoided because the Montreal-based airline plans to offer
2,500 early-retirement packages, he said.
The airline is waiting for its pilots union to finish voting on a
concessions agreement, the final labor group to do so at the carrier.
Air Canada expects to shave C$1.1 billion from its total annual labor
costs, including union and non-union workers. Air Canada filed for
protection from creditors on April 1, reported the newswire.
XO Makes Bid for Global Crossing Bonds
XO Communications Inc. offered $200 million to Global Crossing
bondholders to get them to back its bid for the company, sources
familiar with the situation said, Reuters reported. XO, a regional
telephone company looking to expand globally, is adding the $200 million
to its existing $495 million bid for Global Crossing's bank debt, its
latest for building a high-speed network. Global Crossing, which filed
for bankruptcy-court protection in January 2002 amid massive debts and
slow growth, previously agreed to sell a 61.5 percent stake to
Singapore-based Singapore Technologies Telemedia for $250 million.
However, the Singapore deal may face opposition from U.S. regulators
concerned about foreign ownership of key telecommunications assets.
Global Crossing officials sought bankruptcy court approval on Thursday
to extend the exclusivity period for the Singapore Technologies bid by
four months, so that the bid might obtain government approval, reported
the newswire.
Wheeling-Pitt, Union Reach Tentative Deal
Wheeling-Pittsburgh Steel and the United Steelworkers union said on
Thursday they have reached a tentative agreement on a new contract that
is crucial to the company's emergence from chapter 11 bankruptcy
proceedings, the Associated Press reported. Details of the agreement
will not be released until union members have been informed and have had
an opportunity to discuss the deal, union officials in Pittsburgh
said.
The union had been negotiating with Wheeling-Pitt since May on the new
contract. It now goes to the rank-and-file steelworkers for a
ratification vote that will be conducted over the next several weeks
through mail-in balloting, according to AP. The company filed for
bankruptcy in November 2000, when mounting debts left it unable to make
a $15 million bond payment. Last week, U.S. Bankruptcy Judge William
T. Bodoh approved Wheeling-Pitt's reorganization plan, positioning
the steelmaker to claim a $250 million federally guaranteed loan from
the Royal Bank of Canada, reported the newswire.
ENRON
Enron Bankruptcy Judge Approves Sale of Two Seats on
Nymex
Enron Corp.'s bankruptcy judge ruled the former top energy trader may
sell its two seats on the New York Mercantile Exchange, where it once
traded crude oil, natural gas, gasoline and other commodities, Bloomberg
News reported. The seats, held by Enron North America, are likely to
sell for more than $1 million each, Enron spokesman Eric Thode said.
They will be offered for sale on the Nymex web site on a bid-offer basis
'as soon as is practical,'' he said, reported the newswire.
U.S. Bankruptcy Judge Arthur J. Gonzalez in New York overruled an
objection from the exchange, which wanted proceeds from the sale to be
distributed in accordance with its bylaws. The bylaws state that
exchange members with claims against sellers can submit requests for
part of the proceeds, Nymex said in a court filing. The money would
first go to settle any amounts due to the exchange, then to members with
claims, then to the seller's financers and, finally, to the seller.
'Today's ruling was really about whether Nymex controlled the proceeds
of the seats or the bankruptcy court did,'' Thode said. 'The court ruled
that they will be considered assets of the estate and distributed to the
creditors like everything else,'' Bloomberg reported.
U.S. Sues to Recoup Enron Workers' Pension
Federal regulators yesterday moved to recover what could be more than $1
billion of Enron Corp. workers' retirement savings that evaporated
during the 2001 meltdown of the energy trading giant, Reuters reported.
In a massive lawsuit, the Labor Department accused Enron, its directors,
top officers and retirement plan overseers of abandoning their duty to
act in the best interests of their workers, whose pension plans were
heavily invested in company stock that became nearly worthless.
'Enron employees had a right to expect that their retirement savings
would be managed with prudence and without destructive conflicts of
interests,' Labor Secretary Elaine Chao said in announcing the suit,
reported the newswire. The suit filed in U.S. District Court in Houston
does not specify monetary damages, but Chao said the government would
seek to recoup 'as much as possible for Enron employees,' reported
Reuters.
Weirton President Resigns From Bankrupt Steel Maker
Weirton Steel Corp. President and CEO John Walker announced on Thursday
he is leaving the bankrupt Northern Panhandle steel producer, the
Associated Press reported. Walker, who said he will remain on the job
until his successor is named, has served as president since March 2000.
He was named Weirton Steel's chief executive officer in January 2001. In
his prepared statement, Walker said he is confident the nation's
sixth-largest integrated steel maker and No. 2 producer of tin is moving
in the right direction and will emerge from bankruptcy.
The company filed for chapter 11 bankruptcy protection on May 19 after
incurring more than $700 million in losses over five years. The company,
which has about 3,500 employees, is operating under a $225 million
debtor-in-possession financing package while it reorganizes, reported
the newswire.
Government Expects Scrushy to be Indicted
Later this summer, government officials expect Richard M. Scrushy to be
indicted for his alleged role in the $2.5 billion accounting fraud at
HealthSouth Corp., the Wall Street Journal reported. Scrushy's
case marks one of the first big tests for the corporate-governance
measures passed in 2002. In the wake of a series of corporate scandals,
including Enron Corp.'s collapse and WorldCom's accounting-related
plunge into bankruptcy, regulators and politicians moved swiftly to pass
laws and new rules that would toughen oversight of public companies in
hopes of reassuring investors.
HealthSouth is expected to release details of its review of the
accounting fraud over the next two weeks. People familiar with the
situation believe the company will pursue a prepackaged bankruptcy plan,
reported the Journal.
PG&E Unit to Reclassify $470 Million in Revenue, Expenses
An energy unit of PG&E Corp. that is struggling to stay afloat today
said it is reclassifying about $470 million in revenue and expenses, but
said the move will not change its financial results, Reuters reported.
PG&E National Energy Group said it is revising its 2002 Form 10-K/A
regulatory filing to move $470 million of revenue and expenses from
discontinued operations to continuing operations.
PG&E National Energy said the revision involves an increase in
operating revenues that is offset by an equal increase in operating
expenses. PG&E National Energy has defaulted on several credit lines
in recent months and has struggled to survive since its debt was
downgraded to 'junk' status in the summer of 2002. Parent company
PG&E said in May that the unit would restructure through a chapter
11 bankruptcy filing whether or not it could reach an agreement in talks
with its creditors, reported the newswire.
Reliant Resources Prices $1.1 Billion of Senior Notes
Reliant Resources Inc. on Thursday said it priced $1.1 billion of senior
secured notes, tripling the amount the company said it would issue last
week because of heavy investor demand, Reuters reported. Reliant, which
like many merchant energy companies had been teetering on the brink of
bankruptcy earlier this year, had said on June 17 the issue would total
$350 million, in addition to a $200 million convertible note issue.
Reliant said it will use some of the proceeds of the $1.1 billion in
notes to make the only principal payment required under the refinancing
package that saved it from a chapter 11 bankruptcy filing, reported the
newswire.
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