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Lott Introduces Another Bankruptcy Bill After Wellstone Vowed to
Block S. 3046
With time running out in the current U.S. congressional session,
Republican leaders yesterday agreed to make what will likely be a final
effort to move legislation to overhaul the U.S. bankruptcy system. Just
hours after Sen. Paul Wellstone (D-Minn.) vowed to block Senate Majority
Leader Trent Lott's (Miss.) latest version of the bankruptcy bill (S.
3046) due to its 'egregious' and 'harsh' impact on working families,
seniors, women and children, minorities and single parents, Republicans
decided to drop two provisions opposed by the administration and one,
related to abortion clinics, that it supported, according to the CQ
Daily Monitor. In a press conference earlier in the day, Wellstone
and several colleagues once again announced their opposition to Lott's
bill. 'There is no doubt that this is a bad bill. The measures will harm
the economic security of the groups while encouraging and rewarding
reckless and predatory lending by credit card companies and banks,'
Wellstone said. 'If the bill comes to the floor, I think I can
filibuster at five different stages.' Negotiations between Republicans
and the White House have so far failed to bear fruit, but Lott said he
hoped the latest versionwhich he suggested could be attached to a
must-pass appropriations billmight break the deadlock.
Republicans have agreed to offer a measure without so-called
rent-to-own provisions, which would affect payments on property leased
by those declaring bankruptcy. They also rejected language pushed by
Senate Judiciary Committee Chairman Orrin Hatch (R-Utah) that would
limit a debtor's ability to collect court-ordered attorneys' fees. Also
dropped is the language pushed by Sen. Charles Schumer (D-N.Y.) that
prohibits those fined for protesting abortion clinics from filing
bankruptcy to get out of court ordered penalties. 'We have taken [into
account] President Clinton's objections,' Lott said. 'We're taking out
some of the language that they had concerns with and we hope it will be
acceptable.' Lott also said he would try to attach the measure to a
moving bill at 'the first available opportunity.'
American Pad & Paper Receives Court Approval for Sale of Two
Divisions
American Pad & Paper Co. yesterday announced it received bankruptcy
court approval for the sale of its Ampad and Forms divisions to an
affiliate of American Tissue Inc., according to a newswire report. The
Dallas-based AP&P and American Tissue previously announced the asset
sale agreement for $67.1 million on Aug. 2. The sale is expected to
close during the next few weeks. AP&P has been pursuing the sale of
various business assets as part of its chapter 11 process. Once the
sales of the AP&P operating divisions are completed over the next
few weeks, the company and its advisors will review options for
finalizing the chapter 11 case. Headquartered in Hauppauge, N.Y.,
American Tissue Inc. is a manufacturer and distributor of consumer
private label paper products as well as a major supplier of commercial
and industrial paper products.
Metrocall War Chest for PageNet Bid Swells
Metrocall Inc. stock jumped as much as 32 percent yesterday after the
company said it lined up $337.5 million of financing to bolster its
takeover attempt for bankrupt rival Paging Network Inc., or PageNet,
according to a Reuters report. Three companies, led by Reston, Va.-based
digital wireless provider Nextel Communications Inc., will take a big
equity stake in Metrocall. The Alexandria, Va.-based company separately
outlined an offer to PageNet bondholders in the event the U.S.
Bankruptcy Court in Delaware accepts its merger proposal. Westborough,
Mass.-based Arch had agreed to a $552 million merger with Dallas-based
PageNet last November. Metrocall made an unsolicited $749 million bid in
July, just days after three PageNet bondholders forced PageNet into
bankruptcy.
Metrocall's announcement is 'very significant,' said Marcus Jones, a
senior analyst at credit rating agency Moody's Investors Service. 'This
looks to be an improved version of its plan to buy PageNet. Committed
financing should be looked upon favorably by the bankruptcy court.'
Metrocall said its new financing includes $105 million in equity, $57.5
million in senior unsecured notes distributed among at least four
investors, and $175 million from the sale of mobile radio licenses to
Nextel.
Report Shows Teledesic, New ICO Lost $1 Billion
Teledesic and New ICO, which agreed to merge earlier this year after
billionaire Teledesic founder Craig McCaw bailed ICO out of bankruptcy
protection, together have lost nearly $1 billion in their attempts to
create a space-based telecommunications system, according to a newswire
report. The information was posted yesterday in a filing with the
Securities and Exchange Commission, giving the world its first peek at
the business plan behind McCaw's 'Internet in the sky' vision, which
would use satellites to create a single, world-wide communications
network. The merger is expected to close in November. New ICO, formerly
ICO Global Telecommunications, lost a total of $592.6 million since it
was founded in 1995. Teledesic, founded by McCaw in 1990, has lost
$392.7 million. Neither company has successfully launched a satellite.
London-based New ICO emerged from bankruptcy protection on May 17 thanks
to a $1 billion infusion of cash from McCaw and other investors, most
notably Microsoft Corp. Chairman Bill Gates. Before it went into
bankruptcy protection, ICO lost its first $100 million satellite due to
a failure aboard a Boeing Sea Launch rocket shortly after liftoff from
the floating platform.
Northwest Refuses to Accept Pro Air Tickets
Northwest Airlines said yesterday it would no longer accept tickets
issued on Pro Air because of the carrier's chapter 11 bankruptcy filing,
according to a newswire report. Pro Air filed for chapter 11 Tuesday,
the day after the Federal Aviation Administration (FAA) grounded the
discount carrier, citing continuing maintenance, oversight, quality
control and record-keeping problems. The Eagan, Minn.-based Pro Air has
appealed the FAA order, saying it was based on incorrect and outdated
information. 'Yesterday we worked extremely hard to come to an agreement
with Pro Air so that we could assist their passengers affected by Pro
Air's shutdown,' said Dirk McMahon, Northwest senior vice president for
customer service. 'At no time during those discussions did the Pro Air
executives tell us that they were planning a bankruptcy filing within
hours that rendered our agreement meaningless.'
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