Senators Cast Eyes on Finance Committee Openings
Four Finance Committee Democrats are vacating the coveted committee
and Democrats may be awarded an additional seat based on their gains in
the recent election, according to the CQ Daily Monitor.
Republicans, who have a slim majority, will have only one to three slots
to fill. Currently the committee includes 11 Republicans and nine
Democrats, but Senate Minority Leader Tom Daschle (D-S.D.) wants
to see the ratio narrowed. That decision will be determined on how
many seats are opened.
Some Republicans eyeing positions on the Finance Committee include
Olympia Snow (Maine), Jon Kyl (Ariz.), Craig Thomas (Wyo.) and Larry
Craig (Idaho). When the 107th Congress convenes,
Daschle is expected to reclaim the spot he turned over to then-Sen.
Carol Moseley-Braun (D-Ill.) in 1994. Robert Torricell (D-N.J.) is
considered a shoe-in for a seat. Other Democrats expressing
interest in the committee are Jeff Bingaman (N.M.), Charles Schumer
(N.Y.) Dianne Feinstein (Calif.), Blanche Lincoln (Ark.), Evan Bayh
(Ind.) and Patty Murray (Wash.).
President of Home Health Care Provider Arraigned in Federal
Court
Iris Winegeart of Deville, La., president of Four Rivers Home Care,
Inc. (FRHC), appeared in federal court on Wednesday to be arraigned on
charges stemming from an indictment that was returned by a federal grand
jury on Oct. 25. Winegeart was charged with one count of
conspiracy and 10 counts of mail fraud. She entered pleads of not
guilty to each charge. The fraud came to light during a Bankruptcy
Rule 2004 examination, when Winegeart testified on actions constituting
health care fraud.
The indictment alleges that beginning in 1991 and continuing through
September 1996, Winegeart and others conspired to defraud the U.S.
Department of Health and Human Services Medicare Program by obtaining
reimbursements to which they were not entitled. The defendant made
false statements and submitted false cost reports to the Medicare
Program through the U.S. Postal Service or a commercial carrier, for
reimbursement of expenses not allowed pursuant to the rules of the
Medicare Program.
Bankruptcy Epidemic on Horizon
Personal bankruptcies will increase 10 to 20 percent next year, and
with the stock market suddenly no longer making people feel very
wealthy, that estimate could be low, according to SMR Research.
“It's mostly a continuation of an upward trend which has been
going on for 10 years now,' said researcher George Yacik of next year's
trend. The difference between the last two years is that,
“People on the edge were able to refinance their debt and take the
heat off,” Yacik said. But the biggest reason more people
are expected to go bankrupt next year is that most Americans, who are
already wasteful, got into the habit of spending too much at a time when
wealth was being created artificially by the stock market bubble rather
than in the paycheck.
In 1998, there were 1.39 million personal bankruptcy filings.
By contrast, in 1994, the number was only 780,455. But
bankruptcies fell to 1.28 million in 1999, mainly — SMR said
— because people were able to two-step their way out of bankruptcy
thanks to banks that were willing to lend them money against their
home's equity. According to the latest government numbers,
one-quarter of homeowners have less than $1,000 in the bank while 27.5
percent have between $1,000 and $5,000 in the bank. Due to the
declining savings rate in recent years, fewer non-homeowners have the
three to six months' worth of salary stashed away as a buffer against
disaster. And those figures are from 1995, when the savings rate
was higher.
Aside from the tightening of credit, the main culprits during this
round of increased bankruptcies will be higher energy prices and the
uncooperative stock market. The situation will be worse if the
economy doesn't slow gently or the stock market takes a big dip.
David Levy of The Levy Institute said, “The total debt —
personal and corporate — has been growing faster than income,
especially during the past 20 years. There is a constantly increasing
strain on people,” he added. Levy believes if there is a
recession, the bankruptcy epidemic could be much worse than even SMR is
forecasting.
Another Company Announces Interest in Scour
A third company announced its interest Friday in Scour's assets
– or at least one of them, according to a newswire release.
MP3Board, a search engine that is itself mired in litigation with the
Recording Industry Association of America, filed documents Friday
petitioning the U.S. Bankruptcy Court in Los Angeles to sever Scour
Exchange's peer-to-peer file-sharing program from the rest of the
bankrupt company's assets. MP3Board also requested an expedited
auction for the exchange. A hearing to review MP3Board's petition
could be held as early as tomorrow.
Last week, U.S. Bankruptcy Judge Kathleen P. March laid down
the ground rules for the bidding procedure for Scour's assets, which
include Scour Exchange, a multimedia search engine and webcasting
software. Any other company wishing to be considered by the court
must come forward by Dec. 5. Listen.com, which announced two weeks
ago that it had agreed to buy Scour's assets for $5 million in cash and
some 500,000 Listen.com shares, would then have one week to make a
counteroffer. On Dec. 12, Judge March will supervise an auction in
which the first bid must beat Listen's offer by at least $200,000.
All bids thereafter must then increase by at least $50,000. If
Scour's assets are awarded to a buyer other than Listen.com, the buyer
must pay Listen.com $200,000. CenterSpan has already announced its
intentions to challenge Listen.com's offer. The Hillsboro,
Ore.-based software maker is developing a peer-to-peer network that
incorporates digital rights management. Industry sources speculate
that Listen.com would readily outbid any challenger. Losing the
auction, say observers, would make Listen.com look foolish.
Listen.com said the controversial file-sharing program would be shut
down prior to an acquisition. CEO Rob Reid said at the time of its
bid that he expects to build a legal file-sharing service with Scour's
technology that Listen would syndicate to content owners. Scour's
lawyers from Perkins Coie last week disclosed in court its ownership of
one tenth of a percent of a percent of Listen.com equity.
The “conflict of interest” prompted Judge March to rule that
for matters relating to the sale of its assets, Scour would have to
obtain a different law firm.
Empire of Carolina Files for Bankruptcy
Toy manufacturer Empire of Carolina Inc. and Empire Industries Inc., its
wholly owned subsidiary, announced Friday that they filed voluntary
chapter 11 petitions with the U.S. Bankruptcy Court for the Southern
District of Florida, West Palm Beach Division, according to a Reuters
report. Empire will remain in possession of its assets and
properties, and its business and affairs will continue to be managed by
Empire's directors and officers, subject in each case to the discretion
and supervision of the Bankruptcy Court.
New Study Counts 130 Dot-Com Shutdowns This Year
The dot-com death count for the year now stands at 130, according to a
new study that says the rate of Internet companies going out of business
is accelerating. Webmergers, a San Francisco company that tracks
mergers, acquisitions, and now shutdowns in the Internet space, said
that of the 130 dot-coms that have shut down since January, 21 closed
their doors in the first half of November alone. That compares
with 22 that closed during all of October.
WebMergers President Tim Miller noted that the 130 closures are
actually a small portion of the total number of Internet companies.
“If you think about it, there are probably about 10,000 Internet
companies out there,” he said. But he acknowledged that many
companies that did not make the death list, have been absorbed through
mergers, often at bargain prices in deals where most or all of the
employees were let go.
Bankruptcy Judge OKs Steel Company Loan
A federal bankruptcy judge in Ohio on Friday approved a $290 million
loan that will keep Wheeling-Pittsburgh Steel Corp. operating while it
reorganizes, according to the Associated Press. Citibank is
supplying the interim financing so Wheeling-Pitt's customers are served
and its 4,800 employees can continue to work. Bankruptcy Judge
William T. Bodoh also approved orders allowing the payment of
salaries and benefits.
The Wheeling, W. Va.-based steel maker, facing tough competition from
overseas producers, sought chapter 11 protection last Thursday in
Youngstown, Ohio. The company said it would continue normal
business operations, with no disruptions in orders or deliveries.
No layoffs or plant closures are planned.
C&S Acquires Most of Grand Union
The nation's third-largest grocery wholesaler, C&S Wholesale Grocers
Inc., bid $301.8 million Thursday during a court-ordered bankruptcy
auction for the assets of Grand Union, of Wayne, N.J. The bid
covers 185 of Grand Union's 197 stores and its distribution center in
Montgomery, N.Y. About two dozen interested parties attended the
auction for Grand Union's assets, but when the bidding ended no one had
exceeded C&S' $301.8 million bid. The auction was required
despite the purchase agreement because Grand Union filed for chapter 11
bankruptcy protection early last month, the third such move in the last
five years. The sale still requires approval by antitrust
regulators at the Federal Trade Commission and in each state where
C&S operates, as well as from Federal Bankruptcy Judge Novalyn L.
Winfield in Newark, N.J.
