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Asbestos Bill Slated For Markup
A bill creating a separate court system and a pool for compensation for
asbestos-related litigation is tentatively scheduled for a Senate
Judiciary Committee markup on Thursday, CongressDaily reported.
The bill has been in development for months in a process that has
involved meetings among senators, industry lobbyists and workers'
groups. The 'Fairness in Asbestos Injury Resolution Act' is sponsored by
Judiciary Chairman Orrin Hatch (R-Utah) and Sens. Mike DeWine (R-Ohio)
and Saxby Chambliss (R-Ga.). Hatch had held off offering the bill until
he could build consensus behind it. But consensus has proven elusive as
Democrats and labor group sought assurances of available money for
damages in the event an industry fund runs dry.
Stocks Cut Gains After Greenspan's Talk
Stocks pared earlier gains by late afternoon on Tuesday after Federal
Reserve Chairman Alan Greenspan warned of the impact of high energy
prices on the fragile U.S. economy, Reuters reported. Earlier in the
day, stocks rose after an encouraging forecast from chipmaker Micron
Technology Inc. and an analyst's upgrade of aircraft manufacturer Boeing
Co. But the stock market trimmed its gains after Greenspan told a
congressional committee that if natural gas prices remain high, 'we're
going to see some erosion in a number of macroeconomic variables.' He
noted, however, that so far there was no impact from natural gas prices
on economic data. Last month, Greenspan said dwindling natural gas
supplies were a 'very serious problem' that could add pressure on the
economy, reported the newswire.
Hunton & Williams Lures Core of Rival's Bankruptcy Group
The fast-growing Miami outpost of Richmond, Va.-based Hunton &
Williams has lured away Holland & Knight's three-man bankruptcy and
creditors' rights practice group, part of a push to add legal practice
areas in Miami while expanding nationally in the busy field of
bankruptcy law, the Miami Daily Business Review reported.
Partners Craig V. Rasile, Jeffrey P. Bast and Andrew D. Zaron on Monday
joined the 45-lawyer Hunton & Williams office headed by former
Holland & Knight Miami executive partner Marty Steinberg. To read
the full article, point your browser to
href='http://www.law.com/jsp/article.jsp?id=1052440865350'>http://www.law.com/jsp/article.jsp?id=1052440865350.
MCI's General Counsel, Treasurer Resign
Despite the recent claims by MCI's new management that all managers
connected to the company's huge accounting fraud had resigned or been
fired and that the scandal was coming to a close, the telecom company's
general counsel and treasurer both resigned after new disclosures about
their roles, the Wall Street Journal reported. Michael Salsbury,
the general counsel, and Susan Mayer, the treasurer, resigned following
two outside reports on the investigation of the fraud at the former
WorldCom Inc. were released Monday and concluded that they hadn't acted
properly.
Salsbury, in a statement, said he offered to step down to ensure that
his presence at the company didn't deter its emergence from bankruptcy.
'This can only occur if the public has absolute confidence that the
company is in full compliance with all laws, has cooperated with all
investigations and is committed to reform of its corporate governance
process,' said Salsbury, who had worked at the company since 1995,
reported the Journal.
Reuters reported that WorldCom Inc.'s treasurer Susan Mayer signed loan
agreements and asserted the company had sufficient cash weeks before it
filed for the world's largest corporate bankruptcy, according to a
report filed with the court. Mayer asserted in a June 17, 2002 press
statement, which dealt with attempts to get a credit agreement, that the
No. 2 U.S. long-distance company had 'plenty of cash on hand.' A week
later, WorldCom revealed the first details of its $11 billion accounting
scandal, and it filed for chapter 11 bankruptcy protection on July 21,
2002, with less than $200 million in cash and $41 billion in debt,
reported the newswire.
Kmart Jumps in First Day on Nasdaq
Shares of Kmart Holding Corp., jumped more than 13 percent on Tuesday,
the first day of trading on the Nasdaq National Market, Reuters
reported. The Troy, Mich.-based company's stock was listed under the
symbol 'KMRT.' Since last month, the company has traded on the
over-the-counter market. The stock was delisted from the New York Stock
Exchange in December after 84 years on the exchange when it failed to
remain above $1 as required by listing rules.
UAL Says 'Highly Likely' Shares Will Be Worthless
United Airlines parent UAL Corp. told holders of its common stock on
Tuesday that they can expect their investments to be wiped out once the
airline emerges from bankruptcy, Reuters reported. UAL shares lost more
than half of their already depressed value on Tuesday morning after
United said in a regulatory filing that it was 'highly likely' the
shares would be canceled under a bankruptcy reorganization plan. Assets
of the world's second largest carrier 'will be insufficient to permit
any meaningful distribution to its equity holders,' based on many
factors, including the competing claims of various constituents, United
said. After hiring a new CEO, UAL filed in December for chapter 11
protection, the largest such case in aviation history. It is working on
a reorganization plan that would allow it to emerge from bankruptcy in
the fourth quarter of 2003 or the first quarter of 2004, reported the
newswire.
Williams Completes Share Repurchase from Berkshire
Natural gas and pipeline operator Williams Cos. Inc. on Tuesday said it
closed a deal to repurchase preferred shares held by a Berkshire
Hathaway Inc. unit, in a move to reduce loan costs, Reuters reported.
Williams, which was near bankruptcy last year, said it redeemed all of
the outstanding 9-7/8 percent cumulative-convertible preferred shares
held by MidAmerican Energy Holdings Co., a unit of Warren Buffett's
Berkshire Hathaway. The shares, redeemed for about $289 million plus
$5.3 million for accrued dividends, were sold to MidAmerican in March
2002 in a $275 million deal. They were repurchased with proceeds from a
private placement of 5.5 percent junior subordinated convertible
debentures due 2033, Williams said. A company spokesman said the
debentures should save Williams about $17 million per year in loan
costs, including savings from tax deductions, reported the newswire.
Global Crossing Creditors Back Sale to ST Telemedia
Global Crossing Ltd. creditors backed a plan to sell majority control of
the bankrupt network operator to Singapore Technologies Telemedia Pte.,
saying rival bids would make it harder for the company to exit chapter
11, Bloomberg News reported. The committee of creditors owed more than
$5 billion at the time Global Crossing filed for bankruptcy protection
last year urged the U.S. government to expedite its review of the
planned $250 million sale, according to a June 9 letter filed with the
U.S. Federal Communications Commission.
Under the plan, Global Crossing creditors would receive $300 million in
cash, including the $250 million to be paid by ST Telemedia. They also
stand to receive 38.5 percent of the reorganized company and $200
million of notes. The planned sale to ST Telemedia, controlled by the
Singapore government, has yet to win U.S. approval, reported the
newswire.
DTE Energy Says It May Buy NRG Power Plants in Louisiana
DTE Energy Co. said it may buy power plants in Louisiana owned by Xcel
Energy Inc.'s bankrupt electricity-generation unit, Bloomberg News
reported. Xcel's NRG Energy Inc. unit filed for bankruptcy protection
last month to restructure more than $9 billion in debt that was racked
up building and buying power plants. Secured bondholders of NRG's South
Central Generating LLC unit revealed the possible sale of NRG's
Louisiana plants in a court filing, and a DTE spokesman confirmed his
company's interest in the transaction, reported the newswire.
Mirant San Francisco Power Plant Outlook Uncertain
A plan by energy company Mirant Corp. to rebuild a critical San
Francisco power plant is stalled by environmental problems and worry
that Mirant's shaky financial health may hobble the project, Reuters
reported. Atlanta-based Mirant is working with its lenders to reach an
agreement on $5.3 billion of unsecured bank and bond debt to avert
bankruptcy. But some Mirant bondholders are preparing to take legal
action to block the company from going forward with a debt exchange for
up to $1.45 billion in unsecured bonds, people familiar with the action
said on Tuesday, reported the newswire.
Exide Technologies Negotiating For Chapter 11 Exit Loan Up To $800
Million
Exide Technologies expects that a chapter 11 exit financing facility
it's negotiating could total up to $800 million. According to a motion
Exide Technologies filed with the bankruptcy court overseeing its case,
the company wants to spend up to $750,000 to reimburse possible lenders
for due diligence related to the possible loan. A hearing on the motion
is scheduled for June 24, and interested parties can object to the
request by Tuesday.
Provided by Daily Bankruptcy Review (
href='http://www.djnewsletters.com/dbr2.html'>www.djnewsletters.com/dbr2.html)
Copyright (c) 2003 Dow Jones & Company, Inc. All Rights Reserved
Philip Services Seeks OK Of Bid Procedures For Sale Of Assets
Philip Services Corp. is asking the bankruptcy court overseeing its
case to approve bidding procedures for the sale of some or all of its
assets, according to court papers.
In a motion filed with the court on Monday, Philip Services said it has
already begun marketing its assets through Jefferies & Co., its
financial adviser. Some portions of the businesses have been marketed
before, the filing said, and the potential serious bidders from prior
marketing efforts are being contacted about this opportunity to bid.
After it filed for bankruptcy on June 2, Philip Services said it plans
to sell all or most of its assets as a viable business.
Provided by Daily Bankruptcy Review (
href='http://www.djnewsletters.com/dbr2.html'>www.djnewsletters.com/dbr2.html)
Copyright (c) 2003 Dow Jones & Company, Inc. All Rights Reserved
'Audit-related Fees' to Ernst Were for Janitorial
Inspections
Ernst & Young LLP collected $2.6 million from HealthSouth Corp. for
conducting janitorial inspections of the health-services company's
facilities in 2000 and 2001 and advised it to classify the payments as
'audit-related fees,' leading HealthSouth to make inaccurate public
disclosures about Ernst & Young's fees for nonaudit services, the
Wall Street Journal reported.
An Ernst spokesman, Donald Howarth, says: 'E&Y believes that
HealthSouth's fees were properly classified.' He declined to comment
when asked how the pristine audits were related to HealthSouth's
financial-statement audits. HealthSouth's new management team takes a
different view. 'HealthSouth relied on Ernst & Young to classify the
audit- and nonaudit-related fee information,' says Andrew Brimmer, a
HealthSouth spokesman. 'We do not consider the pristine audit work to be
related to the financial audit,' reported the Journal.
ReplayTV Drops Features That Inflame TV Networks
ReplayTV said it will drop features from the newest version of its
product that could inflame television networks, the Wall Street
Journal reported. ReplayTV, which was acquired out of bankruptcy
court in April by Japan's D&M Holdings Inc., said its forthcoming
ReplayTV 5500 product won't allow users to automatically skip over
television commercials or send recorded programs to others. ReplayTV is
one of a class of personal video recorders that work by recording
television programs onto hard disks, allowing viewers to pause live
television, among other capabilities.
The previous owner of ReplayTV, SonicBlue Inc., was sued in 2001 by the
major television networks, including CBS, ABC and NBC, because of the
two features Replay is now dropping. The networks alleged the features
would undermine their advertising businesses and allow unauthorized
distribution of their programming. SonicBlue filed for chapter 11
bankruptcy protection this year, reported the Journal.
American Air Sees $200 Million in Labor Savings in Q2
The chief executive of American Airlines said on Tuesday the world's
largest carrier will save $200 million in labor costs in the second
quarter thanks to concession deals reached a few months ago that were
aimed at keeping the airline out of bankruptcy, Reuters reported.
'Strictly from a labor-cost perspective, we reduced expenses by $200
million this quarter,' Gerard Arpey, the head of American parent AMR
Corp. told an analysts conference in New York, monitored via Webcast.
Arpey said he expected the labor savings to double in the third quarter
and then hit $450 million by the fourth quarter. Bankruptcy-threatened
American has said it wants to cut its operating costs by about $4
billion a year, and it recently reached agreements with its workforce
aimed at saving it $1.8 billion a year, reported the newswire.
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