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February 3, 2005
Senate Will Take Up Bankruptcy Bill This Month, Santorum Says
Sen. Rick Santorum (R–Pa.) said he is confident the chamber
will break a decade-long stalemate over legislation limiting
personal-bankruptcy protection and bring a bill to the floor this month,
Bloomberg News reported. Santorum said Republican leaders believe they
will have the votes to defeat a Senate-passed abortion amendment.
“We think we have the votes this time” to defeat the
amendment, Santorum said. He said a planned effort to add the abortion
language, which bars abortion protesters from escaping court-ordered
fines by filing for bankruptcy protection, is the only challenge to a
compromise this year with the House.
Senate Finance Chairman Charles Grassley (R–Iowa) late on
Tuesday introduced legislation to overhaul the nation’s bankruptcy
laws. He said the bill would require debtors who have the means to pay
off their debts to enter a repayment plan. The bill also would
permanently extend “Chapter 12” bankruptcy protections for
family farmers, and includes several provisions aimed at protecting
consumers.
Bush Proposes Social Security Overhaul
President Bush proposed the biggest overhaul of Social Security since
its 1935 creation yesterday in his State of the Union speech, and for
the first time said he would consider limiting future retirement
benefits as part of a solution, Reuters reported. “Social Security
on its current path is headed toward bankruptcy. And so we must join
together to find the most effective combination of reforms,” he
said, the newswire reported.
On Class Action, House Leaders Pledge to Follow Senate
House sponsors of class-action legislation said yesterday they will
accept a Senate compromise version if it passes without amendments,
CongressDaily reported. “We are going to watch very
closely what the Senate does,” Rep. Bob Goodlatte (R–Va.)
said during a briefing. “If they produce a good, strong bill, we
hope that will expedite the process of passing the legislation on to the
president of the United States.” Goodlatte said the House
“stands ready to move its own legislation” if the Senate
modifies the compromise bill with nongermane or “killer”
germane amendments, the newswire reported.
Asbestos Legislation, Once On Fast Track, Appears Mired
Senate Judiciary Chairman Arlen Specter (R–Pa.) said he wants
to move quickly on asbestos legislation, but a hearing yesterday
emphasized continuing disagreements over details and even the core of
the bill, CongressDaily reported. Concerns about the
growing number of cases involving silica exposure appear to be slowing
the bill, which already is two weeks past the date Specter said he
wanted to introduce legislation. Judiciary ranking member Patrick Leahy
(D–Vt.) criticized a provision in the draft bill intended to limit
compensation only to asbestos victims. Sen. Dianne Feinstein
(D–Calif.), who is also drafting an asbestos bill, called the
provision “a potential deal breaker,” the newswire
reported.
Group Aims To Change Sarbanes-Oxley Governance Law
Financial Services Roundtable President Steve Bartlett said yesterday
his group is likely to push for amendments this year to the
Sarbanes–Oxley corporate governance law, in order to change the
balance between enforcement and regulation, CongressDaily
reported. “We’re an organization that believes that
technical amendments to Sarbanes–Oxley will be required,”
said Bartlett, whose group has designated SEC enforcement and regulation
as one of its top policy priorities this year.
Fed Raises Rates for Sixth Time
The U.S. Federal Reserve yesterday raised interest rates for a sixth
straight time, extending a policy of gradually lifting borrowing costs
to levels high enough against inflation pressures, Reuters reported. The
unanimous decision by the U.S. central bank’s policy-setting
Federal Open Market Committee moves the target for the benchmark federal
funds rate to 2.5 percent. In a statement issued after a two-day
meeting, Fed officials retained an assessment that economic risks were
balanced between slower growth and rising prices and said they thought
they could keep raising rates at a “measured” pace, the
newswire reported.
Pension Agency Takes Over US Airways Workers’ Retirement
Plans
The U.S. agency that insures the pensions of 44 million workers took
over retirement plans of 51,000 current and former US Airways Group Inc.
workers, adding $2.3 billion to a record deficit at the agency,
Bloomberg News reported. The Pension Benefit Guaranty Corp. (PBGC) said
yesterday it seized plans covering US Airways mechanics, flight
attendants and customer-service agents. A federal bankruptcy judge last
month gave the airline permission to end the programs. The PBGC took
over retirement plans covering US Airways pilots in 2002, during the
airline’s previous bankruptcy reorganization, the newswire
reported.
Worldcom
A WorldCom Settlement Falls Apart
A landmark settlement last month that had 10 former WorldCom
directors agreeing to pay $18 million from their own pockets to
investors who lost money in the company’s failure fell apart
yesterday, the New York Times reported. The settlement fell
apart after the judge overseeing the case ruled that one aspect of the
deal was illegal because it would have limited the directors’
potential liability and exposed the investment banks that are also
defendants in the case to greater damages. The lead plaintiff in the
case said it could not proceed with the settlement with that provision
removed.
Two Who Falsified Books at WorldCom Testify
Two former WorldCom Inc. accounting managers who made billions of
dollars in false accounting entries testified Wednesday that they each
drafted letters of resignation the first time they were asked to falsify
the telecommunication company’s books, in October 2000, the
Washington Post reported. But Betty L. Vinson and Troy M.
Normand told the Manhattan jury considering criminal charges against
WorldCom’s former CEO Bernard J. Ebbers that they decided to stay
because of personal financial pressures, the newspaper reported.
Stelco Workers to Vote on Strike Mandate
Workers at Stelco Inc.’s Edmonton, Alberta–based
AltaSteel facility will vote to renew a strike mandate later this week,
the United Steelworkers said yesterday, Reuters reported. The 266
workers will vote today to renew a strike mandate granted last September
during ongoing contract negotiations. The union local representing the
workers is negotiating with potential bidders for Stelco, as Stelco
management has said it intends to sell AltaSteel as part of its
restructuring process. Stelco won bankruptcy protection in early 2004,
when it said a high cost structure had left it unable to compete
effectively, the newswire reported.
Time Warner to Put Up Most of Adelphia Bid
Time Warner Inc. plans to contribute more than 75 percent of the
roughly $17 billion bid it made with Comcast Corp. for cable operator
Adelphia Communications Corp., Reuters reported. Adelphia, which is
reorganizing under bankruptcy protection after its multibillion-dollar
collapse, is also entertaining takeover bids in an effort to appease its
creditors. Private equity firms Kohlberg Kravis Roberts & Co. and
Providence Equity Partners submitted a competing joint bid on Monday,
though many sources believe their offer is lower than Time Warner and
Comcast’s cash-and-stock bid, the newswire reported.
Western Banks Press Rosneft to Repay YUKOS Loan
Rosneft’s takeover of YUKOS subsidiary Yugansk led the Russian
state oil company to financial difficulties yesterday as Western banks
called in a $540 million loan, Reuters reported. Rosneft must pay up now
or face further potential financial damage from cross-default provisions
built into its other international liabilities, bankers said. A Rosneft
spokesman said the company was talking to its creditors about reaching
an agreement “in line with established business practice,”
the newswire reported.
Bankruptcy Court Approves Federal–Mogul CEO Choice
Bankrupt auto parts supplier Federal–Mogul Corp. said yesterday
that Jose Maria Alapont has been chosen to replace Robert Miller as CEO,
Reuters reported. The decision has been authorized by the court
presiding over the chapter 11 bankruptcy proceedings, the Southfield,
Mich.–based company said. Alapont, who has been CEO of Iveco, the
commercial vehicle company of Fiat Group, will also be president of
Federal–Mogul and join its board of directors. Miller, the interim
CEO of Federal–Mogul, will remain as chairman of the board, the
newswire reported.
Review of Book on the History of Failure in America
In “Born Losers” Scott Sandage examines the lives and
careers of a number of businessmen who failed during the 19th century.
He also examines the ways in which our attitudes toward failure and our
ways of measuring it have changed. Read the article at
href='http://www.washingtonpost.com/wp-dyn/articles/A43081-2005Jan27.html'>www.washingtonpost.com/wp-dyn/articles/A43081-2005Jan27.html.