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Hatch To Meet With Executives Seeking Asbestos Litigation
Reform
Senate Judiciary Chairman Orrin Hatch (R-Utah) is scheduled to meet for
two hours today with executives from various industries seeking asbestos
litigation reform legislation this year, CongressDaily reported.
The meeting is part of Sen. Hatch's efforts to derive a consensus among
the various business interests and defendant companies -- whose unity is
seen as a necessary first step to legislation. Representatives from the
Asbestos Study Group, the Asbestos Alliance and the American Insurance
Association have been invited, and several chief executives were
scheduled to attend. Hatch has indicated he wants to mark up asbestos
reform legislation by the April recess, and sources said they suspect
Hatch could announce at today's meeting a more definitive timeline for
drafting a bill, reported the newswire.
Home Equity Borrowing Rises to Worrisome Levels
Americans are borrowing against their homes at unprecedented levels,
leading some bankruptcy lawyers and consumer advocates to warn that many
people could wind up losing their houses, the New York Times
reported. Homeowners raised $130 billion last year through home equity
loans and lines of credit, nearly double the total a year earlier,
according to the Federal Reserve. This boom in borrowing comes at a time
when housing prices nationwide are still strong.
Separately, the Times reported that consumer confidence plunged
to its lowest level in almost 10 years this month, according to a
Conference Board report yesterday. Only during four previous periods in
the history of the survey, which dates to 1967, has the index plunged as
low as the reading of 62.5 yesterday. In each case, the move came when
the stock market had been weak but was poised to rise the next year. To
read the articles, point your browser to
href='http://www.nytimes.com'>www.nytimes.com.
XO Communications' Fourth-quarter Net Loss Narrows to $169.8
Million
XO Communications Inc., which sells business telephone and Internet
services, said
its fourth-quarter net loss narrowed as it wrote down the value of fiber
networks it purchased from Level 3 Communications Inc., Bloomberg News
reported. The net loss narrowed to $169.8 million, or 39 cents a share,
from $782.6 million, or $1.84, in the same period a year earlier, the
company said in a statement, reported the newswire. XO emerged from
chapter 11 bankruptcy protection in January and sold control of the
company to financier Carl Icahn. The company sought bankruptcy
protection after demand for phone and Internet services fell, Bloomberg
reported.
AK Steel Shares Fall on Concerns Over Loss, Pending
Acquisition
Shares of AK Steel Holding Corp. fell as much as 17 percent after a
Morgan Stanley
analyst said the company may be unable to get the financing needed to
win the bidding for bankrupt National Steel Corp., Bloomberg News
reported. AK Steel will have a first-quarter net loss, the company said
in a regulatory filing on Friday. It blamed reduced demand and falling
shipments, which it said will drop by about 5.6 percent to
1.35 million tons from the fourth quarter. Morgan Stanley analyst Wayne
Atwell said that loss may hinder financing for AK Steel's $1.13 billion
bid and expects the company to have difficulty winning a cheaper labor
contract with National's steelworkers, Bloomberg reported. National
Steel and a bankruptcy judge have said they prefer AK Steel's offer to
the $950 million bid from U.S. Steel Corp., the biggest U.S. steelmaker,
reported the newswire.
National Steel Asset-sale Deadlines Get Two-week Extension
National Steel Corp. got a two-week extension of deadlines related to
the sale of its assets to either AK Steel Holding Corp. or U.S. Steel
Corp., Bloomberg News reported. A Chicago bankruptcy court extended the
deadlines, which gives AK Steel more time to negotiate a cheaper labor
contract with National's United Steelworkers of America members. The new
deadlines also give U.S. Steel more time to file a competing bid, AK
Steel spokesman Alan McCoy said, reported the newswire.
Banks Come To Bargaining Table On Big Energy Loans
As cash-strapped energy companies face massive loans coming due this
year, banks are driving tough bargains in the negotiations to
restructure or refinance the debt, Dow Jones reported. But while they
are forcing companies to put up collateral, sell assets or stick to
tight payback schedules, banks seem more willing to reach a deal and are
backing away from pushing companies into bankruptcy. 'What we are seeing
generally [are] creditors who are concerned about their exposure, but
willing to sit down and find a solution rather than put companies into
bankruptcy,' said George Bilicic, a managing director and head of the
energy group at Lazard LLC.
Furr's Restaurant Group Retains Financial Adviser
Furr's Restaurant Group Inc. received indications of interest from
'several' potential buyers, and hired investment banker Murphy Noell
Capital LLC to seek additional bids and to help evaluate all proposals,
Dow Jones reported. In a press release on Tuesday, the company said it
will reorganize its debt and operate as a smaller restaurant if plans to
sell the company fall through. Furr's filed for chapter 11 bankruptcy
protection in January, citing a downturn in the restaurant industry's
cafeteria segment. As of Dec. 3, the company had total assets of about
$49.3 million and total debt of about $80.3 million. On March 11, Judge
Harlin Hale of the U.S. Bankruptcy Court in Dallas signed an order that
allows the company to close restaurants under procedures in effect
before Furr's filed for bankruptcy protection, reported the
newswire.
WORLDCOM
WorldCom Wants Extension To File Assets Data With Court
WorldCom Inc., citing its ongoing restatement process, is seeking two
more months -- until May 31 -- to file with the bankruptcy court the
assets data that could help creditors estimate their recovery, Dow Jones
reported. The request, however, doesn't mean that the company will need
more time than previously announced to hammer out a plan of
reorganization, said its attorney, Alfredo Perez of Weil Gotshal &
Manges. 'We're still on track,' Perez said. WorldCom, hoping for a quick
emergence from chapter 11 bankruptcy-court protection, has said it
expects to submit by mid-April a reorganization plan that will divvy up
ownership of the company among banks, bondholders and other creditors,
reported the newswire.
Court OKs WorldCom Unit's Settlement With Verizon
Communications
The bankruptcy court overseeing WorldCom Inc.'s chapter 11 case on
Tuesday approved a settlement between WorldCom unit MCI WorldCom Network
Services Inc. and Verizon Communications Inc., according to a court
order, Dow Jones reported. Judge Arthur J. Gonzalez of the U.S.
Bankruptcy Court in Manhattan signed the order, which related to a modem
services agreement between the two firms. In its motion, WorldCom said
MCI WorldCom Network Services in 2001 subscribed to some modem services
provided by affiliates of Verizon Communications, reported the
newswire.
DirecTV Latin America Asks To Continue Staff Retention Plan
DirecTV Latin America LLC asked the bankruptcy court overseeing its
chapter 11 case to allow the company to continue an employee retention
program, Dow Jones reported. The plan will help keep qualified employees
at the company and motivate them to take on the additional workload
necessary to move the company through its restructuring, court papers
obtained by Dow Jones Newswires on Tuesday said. Under the plan, DirecTV
Latin America would pay periodic bonuses to encourage employees to stay
through the end of the restructuring-a bonus when it emerges from
bankruptcy protection and another bonus to employees still with the
company six months after emergence, the motion said, reported the
newswire. A hearing in the case is scheduled for April 14.
Boundless Gets Delisting Notification From AMEX
Boundless Corp. won't appeal a delisting notice from the American Stock
Exchange and may apply for listing on the over-the-counter Bulletin
Board, Dow Jones reported. The American Stock Exchange said the company
did not meet its requirements of at least $2 million in shareholders'
equity and earnings from continuing operations or net earnings in at
least two of three recent fiscal years. The company's stock had been
suspended since March 12, because of the company's November bankruptcy
filing, reported the newswire.
NYSE Seeks To Delist HealthSouth Stock
The New York Stock Exchange said on Tuesday it will seek to delist
HealthSouth Corp. and suspend trading in its stock for the fifth
consecutive session following accusations that the rehabilitation chain
and its chairman engaged in massive accounting fraud, the Associated
Press reported. The exchange made the announcement as a federal court in
Birmingham scheduled a hearing into whether assets of the Birmingham
company and its founder, Richard Scrushy, should be frozen as requested
by federal regulators, reported the newswire.
Finance Companies Face Uncertain Outlook In 2003
The sluggish pace of economic recovery, coupled with the fear that a
double-dip recession might occur, have brought great uncertainty to the
U.S. finance company sector, according to a report released today by
Standard & Poor's Ratings Services, Dow Jones reported. The onset of
war with Iraq and questions related to its duration and aftermath have
added to the uncertainty and lack of confidence in a faster recovery.
Consumer debt levels remain very high, and the pace of personal
bankruptcy is unabated, reported the newswire. Delinquencies and
charge-offs also remain high, particularly in the troubled subprime
consumer lending segment. On the commercial finance side, the economic
doldrums have been problematic for many businesses, most notably
commercial airlines, telecommunications, and transportation, leading to
higher delinquencies and losses for lenders, Dow Jones reported. The
full report, '2003 Outlook for Finance Companies: The Persistent
Problems of Economic Uncertainty,' is available from RatingsDirect,
Standard & Poor's web-based credit analysis system, at
href='http://www.ratingsdirect.com'>www.ratingsdirect.com.
U.S. Senator Says Aviation Industry To Get Relief
Senate Majority Leader Bill Frist (R-Tenn.) said on Tuesday he expects
the airline industry will receive federal aid later this year to offset
losses due to the Iraq war, Dow Jones reported. 'I think it is likely in
the supplemental or in some form relief will be given, to some extent,
to the aviation industry,' Frist told reporters. He referred to a $74.7
billion supplemental spending bill for the 2003 fiscal year to pay for
the cost of the war. Frist didn't specify the size of any assistance to
the airline industry and said he wasn't sure if the aid would be within
the war spending bill, reported the newswire.
Global Crossing Judge Rejects Suit Over Winnick Gift to Clinton
The judge overseeing the fraud case against Global Crossing Ltd., the
bankrupt fiber-optic network operator, threw out a lawsuit accusing
ex-President Bill Clinton of helping to inflate the stock's price in
return for a donation to his presidential library, Bloomberg News
reported. U.S. District Judge Gerard Lynch dismissed a complaint
alleging that Clinton ignored corruption at the Pentagon, which was
weighing whether Global Crossing should receive a defense contract, in
exchange for a $1 million contribution from former company chairman Gary
Winnick, reported the newswire.
U-Haul Parent Amerco Says Suit Won't Hamper Debt
Restructuring
U-Haul International Inc. parent Amerco said a lawsuit by three debt
holders won't hamper plans to restructure $1.5 billion in debt held by
the truck- and trailer-rental company, Bloomberg News reported. 'Amerco
has been making excellent progress in its restructuring efforts and
remains committed to paying its lenders 100 percent of what is owed to
them, plus interest, and returning Amerco to investment-grade status,''
company spokeswoman Jennifer Flachman said yesterday. Reno, Nevada-based
Amerco was sued yesterday by debt holders who claim the company
defaulted on $100 million in notes issued last year when it failed to
obtain a required investment-grade bond rating, reported the
newswire.
Foster Wheeler's Auditor Raises Doubt About 'Going
Concern'
Foster Wheeler Ltd., a builder of power plants and refineries, said
auditor
PricewaterhouseCoopers raised doubts about the company's ability to stay
in business because of declining cash flow, Bloomberg News reported.
There are no assurances Foster Wheeler will meet its debt obligations
and loan covenants this year, the company said in its annual filing to
the Securities and Exchange Commission. The company had about $1.1
billion in debt as of Dec. 27. The company said that cash from
operations, asset sales, collection of receivables and claims will be
sufficient to fund operations through the first quarter of 2004,
reported the newswire.
Kmart Receives Bankruptcy Court Approval for Fleming
Settlement
Kmart Corp. received bankruptcy court approval for a $400 million
settlement with grocery distributor Fleming Cos., Bloomberg News
reported. Fleming's initial claim was for more than $1.5 billion in
damages stemming from Kmart's cancellation of a contract between the
companies. Fleming said yesterday that under the settlement approved by
U.S. Bankruptcy Judge Susan Pierson Sonderby, it expected to
receive $37 million in cash payments, reported the newswire.
Xcel Energy to Pay NRG Energy $752 Million in Settlement
Xcel Energy Inc. said its board approved a tentative settlement with
holders of most of NRG Energy Inc.'s long-term notes, and will pay NRG
$752 million over the next 13
months, Bloomberg news reported. Xcel will pay $350 million at the time
or shortly after NRG restructures its debt, and $50 million on Jan. 1,
the company said in a statement. In addition, Xcel will pay $352 million
in April 2004 when it expects to get a tax refund for its investment
loss in NRG, Xcel said, reported the newswire.
Philip Morris Asks Illinois Lawmakers To Lift $12 Billion
Burden
Philip Morris is asking Illinois lawmakers to take a huge financial
burden off of its shoulders, the Associated Press reported. Former
Illinois Gov. Thompson said on Tuesday that the company needs
legislation, saying it doesn't have to post a $12 billion bond before
appealing its loss in a lawsuit by Illinois smokers. Without help, the
company could face bankruptcy and the state could lose hundreds of
millions of dollars, Thompson warned at a news conference, reported the
newswire.
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