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Environmentalists Oppose Class Action Reform Legislation
Environmentalists are opposed to class action reform legislation
scheduled for markup today by the Senate Judiciary Committee,
CongressDaily reported. Several groups sent a letter to Judiciary
Chairman Orrin Hatch (R-Utah) and ranking member Patrick Leahy (D-Vt.),
saying the pending bill 'would not be fair to citizens bringing class
action cases based on state environmental or public health protection
laws who wish to have their cases heard by their state's courts.' A
number of civil rights attorneys and organizations issued similar
criticisms against the bill last week, saying it would make it more
difficult to have federal civil rights cases heard, reported the
newswire.
Fleming Receives $50 Million in Interim Bankruptcy
Financing
Fleming Cos. said existing lenders agreed to provide $50 million in
funding so it can continue to pay suppliers while in bankruptcy
protection, Bloomberg News reported. Talks are being held with lenders
for a $150 million debtor-in-possession loan, Fleming said in a
statement. The company will seek U.S. Bankruptcy Court approval for the
funding today. Fleming needs the cash to pay suppliers for shipments so
it can keep operating. The Lewisville, Texas-based company filed for
chapter 11 protection on Tuesday after its biggest customer, Kmart
Corp., ended a supply contract and regulators began an investigation
into accounting practices, reported the newswire.
Kmart Names New Board of Directors
Kmart Corp. investors, creditors and lenders have elected an entirely
new board of directors to lead the discount retailer when it exits
bankruptcy protection, the Associated Press reported. Kmart President
and Chief Executive Julian Day, will serve on the board, along with
Edward S. Lampert, chairman and chief executive of ESL Investments, a
major Kmart investor. If the company's reorganization plan is approved
in bankruptcy court, none of the nine current board members would remain
on the board, company spokesman Jack Ferry said on Wednesday. Kmart
plans to exit chapter 11 protection by April 30. The nominees have been
submitted to the U.S. Bankruptcy Court in Chicago. A hearing at the
court is scheduled for April 14-15 to approve the company's exit from
bankruptcy, reported the newswire.
Mortgage Applications Plunge 17 Percent
Applications for mortgages in the United States plummeted 17 percent
last week, a report said on Wednesday, as Iraq war news preoccupied
Americans who might have otherwise bought homes or refinanced their home
loans, Reuters reported. That fall might reverse in the next few weeks
as the war settles down, but even if it does, the housing market appears
to have more or less stabilized at current strong levels, economists
said on Wednesday. The housing sector has provided crucial support for
the economy since the Federal Reserve started cutting rates over two
years ago to revive a flagging U.S. economy,' according to Mark Zandi,
chief economist at Economy.com in West Chester, Pa. Home and
home-related purchases accounted for about 15 percent of economic growth
after inflation between late 2000 and late 2002, Zandi said. 'If housing
started struggling, the economy would have trouble avoiding recession,'
Zandi said, reported the newswire.
Bush Considers Airline Aid `Excessive,' Aide Says
Congressional proposals to give U.S. carriers such as AMR Corp.'s
American Airlines and UAL Corp.'s United Airlines at least $3.2 billion
in federal aid are 'excessive,'' White House spokesman Ari Fleischer
said. The House Appropriations Committee approved $3.2 billion to
reimburse airlines for security costs as part of a bill to pay for the
war in Iraq. The Senate Appropriations Committee adopted a $3.5 billion
airline aid proposal in its version of the measure. The differences will
have to be resolved in a House-Senate conference committee once the
bills pass both chambers. 'The amounts they've asked [for], we believe,
are excessive,'' Fleischer told reporters. 'The administration does not
oppose some assistance for the airlines'' so long as it isn't a result
of factors that existed before the war with Iraq, Fleischer said. 'It's
too early'' to consider the possibility of a veto over airline aid,
Fleischer told Bloomberg News.
Dynegy Completes $1.66 Billion Refinancing to Fund Businesses
Dynegy Inc. said it received $1.66 billion in credit agreements to
replace debts that expire this month and next, Bloomberg News reported.
The new facility for the company's Dynegy Holdings Inc. unit includes a
$1.1 billion revolving credit line and a $200 million secured term loan,
both of which mature Feb. 15, 2005, Dynegy said in a statement
distributed on Business Wire. The company also got a $360 million loan
due Dec. 15, 2005. The new agreements replace a $900 million credit
facility maturing April 28 and a $400 million line maturing May 28, the
company said. Dynegy also had a $360 million communications lease that
was scheduled to mature in December 2005, reported the newswire.
AES Holders of $4.1 Billion in Debt Agree to Ease Terms
Arlington, Va.-based AES Corp. said holders of $4.1 billion in debt
agreed to change covenants that would have triggered defaults if units
file for bankruptcy, Bloomberg News reported. The new terms apply to 12
issues of debt securities, AES said in a statement on Business Wire. The
company sought the change because under the covenants, bondholders could
have demanded payment upon bankruptcy filings by units Eletropaulo
Metropolitana SA, Sao Paulo's electric utility, or AES Drax Holdings
Ltd., the owner of the United Kingdom's biggest power plant. AES has
defaulted on loan payments for Eletropaulo and is negotiating with
creditors to restructure debt at Drax, reported the newswire.
AMR Management Pay, Jobs, Benefits Will Be Cut Under Proposal
American Airlines will pare management ranks by 5 percent, cut pay by as
much as 17 percent and reduce medical benefits as part of efforts to
reduce labor costs by $1.8 billion and avoid bankruptcy, Bloomberg News
reported. American on Monday met a self-imposed deadline to secure
tentative agreements for union contributions to the $1.8 billion. The
amount will be added to $2 billion in other savings to lower annual
costs by $4 billion in an effort to stay out of bankruptcy and compete
with thriving low-fare rivals, reported the newswire.
Biovail's Melnyk Makes Offer To Buy Ottawa Senators Club
Eugene Melnyk, the chief executive of Toronto pharmaceutical company
Biovail Corp., has made a formal offer to purchase the Ottawa Senators,
the Wall Street Journal reported. The details and value of
Melnyk's bid for the National Hockey League team weren't disclosed. But
he told reporters that his bid will keep the team, which has been
operating under bankruptcy protection, in Canada's capital city. The bid
is being reviewed by creditors of the Senators and by
PricewaterhouseCoopers, the accounting firm that is managing the team's
bankruptcy restructuring, reported the online newspaper.
Hawaiian Airlines Criticizes Boeing's Petition for Trustee
After Boeing Co.'s financing unit late on Monday asked a U.S. Bankruptcy
Court judge in Honolulu to appoint a trustee to oversee the chapter 11
case of Hawaiian Airlines in place of current management, the carrier
said it was 'disappointed' to learn of Boeing's action. Hawaiian, in a
statement issued late on Monday night, said it hadn't yet reviewed the
Boeing petition. But the airline said it believes the motion 'is a
thinly veiled attempt by Boeing to distract the [airline] and the court
during the 60-day statutory period during which the company is afforded
the opportunity to renegotiate its leases,' reported the
Journal.
Federal-Mogul Wins Approval of Sale to Decoma International
Federal-Mogul Corp. won bankruptcy court permission to sell some
auto-lighting assembly operations to Decoma International Inc.,
Bloomberg News reported. Decoma will pay about $19 million for
manufacturing and distribution facilities in Matamoros, Mexico,
Brownsville, Texas and Toledo, Ohio. Decoma also will acquire customer
contracts and equipment at a lighting facility in Hampton, Va. Since
filing for bankruptcy protection in October 2001, Federal-Mogul has sold
some units, including its North American camshaft business for $28
million in February. The company's chapter 11 filing came after
auto-parts sales fell and asbestos-related lawsuits against the company
increased, reported the newswire.
Panaco Gets OK For Bond To Secure Payment To U.S. Agency
A bankruptcy court authorized Panaco Inc. to enter into a secured
bonding agreement for leases with the U.S. Interior Department on some
of the company's oil and gas properties, according to a court order
obtained recently by Dow Jones Newswires. Judge Letitia Z. Clark of the
U.S. Bankruptcy Court in Houston signed an order on Thursday approving
the bonding pact. The Houston-based company leases some of its oil and
gas properties from the department's Minerals Management Service. The
properties are in federal waters on the outer continental shelf of the
Gulf of Mexico, according to a motion filed in March with the bankruptcy
court, reported the newswire.
GenTek To File Financial Documents Under Seal For Joint
Venture
A bankruptcy judge on Wednesday directed GenTek Inc. to file under seal
financial documents relating to the proposed joint venture with Italian
sulfur-product manufacturer Esseco SpA, Dow Jones reported. Judge Mary
F. Walrath of the U.S. Bankruptcy Court in Wilmington, Del., said she
needed to review the documents before she could approve the joint
venture. Judge Walrath said she plans on approving the deal as long as
the documents 'don't contain any surprises.' The company said it will
file the documents on Wednesday, reported the newswire.
Sonicblue To File Annual Report Late; Company Cites Bankruptcy
Sonicblue Inc. said it missed the deadline on Monday to file its 2002
annual report because its finance staff was involved with the company's
recent bankruptcy filing, Dow Jones reported. Before Sonicblue filed for
bankruptcy protection on March 21, its finance staff was preparing for
the chapter 11 filing, according to a non-timely Form 10-K filed on
Tuesday with the Securities and Exchange Commission. Santa Clara,
Calif.-based Sonicblue said its ability to complete the Form 10-K annual
report will be contingent upon the company obtaining bankruptcy court
approval for expenditures necessary to complete the audit and prepare
the document, reported the newswire.
FERC Approves California Power Exchange Reorganization Plan
Federal regulators on Tuesday approved a reorganization plan for the
bankrupt California Power Exchange, meaning the agency is free to wind
down and liquidate, according to documents viewed by Dow Jones. The
Federal Energy Regulatory Commission (FERC) approval allows the CalPX to
establish certain reserves and accounts, and to instate a new
nine-member board of directors to settle and litigate claims, disburse
funds, process data requests and preserve records, reported the
newswire.
PG&E Utility Reorganization Proposal Offered by Consumer
Group
A consumer group proposed a plan to pay debts owed by PG&E Corp.'s
bankrupt Pacific Gas & Electric utility by selling another $2.7
billion in bonds rather than using customer payments as state regulators
requested, Bloomberg News reported. The Utility Reform Network asked the
California Public Utilities Commission to modify its existing
reorganization plan by raising money through the sale of asset-backed
securities rather than letting Pacific Gas use $1.75 billion in customer
payments to finance its debts. Issuing the bonds would save customers
about $5 billion over 10 years because of lower taxes and because
PG&E's shareholders wouldn't get a cut of the money, reported the
newswire.
Midwest Air And Its Pilots Agree On Wage Concessions
Midwest Express Holdings Inc. reached a tentative wage concession
agreement with its airline's pilots union, helping the carrier with its
plan to cut costs by $4 million a month and avert a bankruptcy filing,
Dow Jones reported. In a press release on Wednesday, Midwest Express
said the agreement calls for significant reductions in the pilots'
hourly pay rates through Nov. 1. Pending approval by the Air Line Pilots
Association, the concessions would be effective April 16. In March,
Midwest Airlines joined a growing list of carriers to say it may have to
file for bankruptcy if it can't renegotiate its aircraft payments, lower
other expenses, and boost liquidity, reported the newswire.
Superior Telecom Wants Court OK On Worker Retention Plan
Wire and cable products maker Superior TeleCom Inc. is asking the court
handling its bankruptcy case to approve a $5.72 million bonus and
retention plan to keep its work force intact until the end of the case,
Dow Jones reported. According to court papers obtained by Dow Jones
Newswires on Wednesday, the company needs the plan to retain and
motivate employees through its chapter 11 proceedings. A hearing on the
issue has been scheduled for April 9 in the U.S. Bankruptcy Court in
Wilmington, Del., reported the newswire.
Air Canada Starts Restructuring Under Bankruptcy Protection
Air Canada says it has begun the process of restructuring itself into a
leaner and more efficient airline under court protection from creditors,
Dow Jones reported. Air Canada filed for protection on Tuesday under the
Companies' Creditors Arrangement Act and initiated a restructuring that
is expected to include talks with creditors, lessors, and suppliers, the
company's key unions and potential equity investors. The company said
its restructuring would focus on four aspects: reducing its fleet of 336
aircraft, lowering labor costs, simplifying its capital structure and
reaching an agreement with unsecured creditors and equity holders,
reported the newswire.
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