src='/AM/Images/headlines/headline.gif' />
June 21, 2005
Retirement Plans Get New Safeguards
In response to a wave of lawsuits, a growing number of companies are
hiring outside consultants to oversee the handling of company stock held
in employee retirement plans, the Wall Street Journal
reported. These independent fiduciaries are taking the place of company
executives who have traditionally monitored the company-stock component
of those plans on behalf of the employees. In the post–Enron Corp.
era, companies are concerned about employees who may be loading up on
company stock in their retirement plans—and who don’t have
the time or skills necessary to keep track of the stock on their own.
Read the full article at www.wsj.com
(subscription required).
Adelphia Founder Sentenced to 15 Years, Son Given
20
John Rigas, the founder of cable giant Adelphia, was sentenced to 15
years in prison yesterday for his role in the fraud that pushed the
company into bankruptcy, the New York Law Journal reported.
His son received 20 years. “Were it not for age and health, I
would impose a sentence far greater,” Southern District of New
York Judge Leonard Sand told 80-year-old John Rigas.
href='http://www.law.com/jsp/article.jsp?id=1119270950184'>Read the full
article.
PGE Could Be Handed to Enron Creditors
Enron Corp. is seeking state approval to transfer its Portland
General Electric (PGE) subsidiary to creditors under a stock
distribution plan while the bankrupt Texas energy company considers
offers for PGE, including one from the city of Portland, the Associated
Press reported. Under the plan already approved by a federal bankruptcy
judge, newly issued shares of PGE stock would be distributed to Enron
creditors in phases, beginning in April 2006. PGE would be listed on the
New York Stock Exchange, and shares would be publicly traded.
Eldorado Approved to Buy Hollywood Casino
Eldorado Casino may buy the Hollywood Casino out of bankruptcy court,
a federal bankruptcy judge has ruled, the Gainesville Sun
reported. “I think we need to get this casino in the practice of
making money and keeping it rather than making money and paying lawyers
with it,” Judge Stephen V. Callaway said on Sunday, outlining
details worked out during the 22-hour session in his chambers.
Bill Could Be Boon for Grace & Co.
Of 74 U.S. companies forced into bankruptcy by asbestos lawsuits,
Columbia, Md.–based W.R. Grace & Co. is among a handful that
stand to gain the most from congressional efforts to set up a trust fund
to compensate those sickened by exposure to asbestos, the
Baltimore Sun reported. Legal experts and some critics of
legislation moving through the Senate say Grace, which employs about
1,200, could see its asbestos liability reduced by as much as 87
percent, potentially freeing the company from bankruptcy and resulting
in more than $1 billion in savings, the newspaper reported.
Pride Electric Files for Bankruptcy
Pride Electric Inc., once among the largest electrical contractors in
the St. Louis area, hopes to stave off its creditors while it seeks an
investor or buyer, bizjournals.com reported. “We were at a point
where if we put more dollars in, we could turn the company around.
I’m at the point where I can’t afford to do it any
longer,” said Robert Rackers, Pride’s president. Rackers
said he has invested about $2 million in the company. Pride’s
current contracts are profitable since the management change, he said,
but the company lost revenue on jobs completed last year and has been
unable to catch up on its delinquent accounts. Rackers said that
prompted the company’s bankruptcy filing.
New Bankruptcy Law Helps Fuel a Spike in
Business Filings
Bankruptcy filings jumped 8 percent in the first quarter of 2005, as
consumers rushed to get debt relief before tougher rules go into effect,
the Nashville Business Journal reported. Personal
bankruptcies accounted for 393,086 of the quarter’s filings, while
8,063 business bankruptcy cases were filed.
href='http://www.bizjournals.com/nashville/stories/2005/06/20/smallb3.html'>Read
the full article.
CIT Report: Outlook Good for Small Business
Sector
Nearly 70 percent of small businesses have performed well over the
past 12 months, in comparison with the U.S. economy, according to the
third edition of the CIT Small Business Outlook, a nationwide survey
conducted jointly by CIT Group and BusinessWeek Research Services,
abfjournal.com reported. The survey also found that small business
owners and executives continue to have an optimistic outlook for the
future success of their own businesses for the second consecutive year.
href='http://www.abfjournal.com/story.asp?lg=1&ID=14083'>Read the
full article.
Judge OKs Trial for Credit Official
The Federal Trade Commission’s $172 million lawsuit against
AmeriDebt founder Andris Pukke could go to trial as early as January,
after a federal judge yesterday denied the government’s request to
rule in its favor without a trial, the Baltimore Sun
reported. Also yesterday, Pukke’s lawyer informed the U.S.
District Court in Greenbelt that his client, whose assets were frozen by
the same judge in April, intends to file for bankruptcy court protection
soon. That move would not affect the FTC case but would put on hold, as
far as Pukke is concerned, a class action lawsuit filed on behalf of
consumers against Pukke and others.
Labor Talks Hold Key to AK Steel’s
Future Solvency, Analysts
Say
Whether AK Steel is headed for turbulent financial times will be
determined by the its upcoming labor negotiations, the Cincinnati
Business Courier reported. The Middletown-based steel
maker’s pension and health care costs are so high that it’s
at a $40-a-ton disadvantage to its competitors. The company plans to win
concessions from its unions in the next go-round of labor talks.
Contracts with its three biggest bargaining units come up for
renegotiation in the next 16 months, said Alan McCoy, AK Steel’s
vice president of government and public relations.