June 7, 2004
Bill Curbing Asbestos
Suits Signed Into Law By Ohio Governor
Ohio GOP Gov. Bob Taft signed a measure last Thursday making the state
the first in the nation to require individuals exposed to asbestos to
prove that exposure and meet a set medical threshold to proceed with a
lawsuit, the Toledo Blade reported. 'We are one of the
states suffering the most from the asbestos crisis,' said GOP state Sen.
Steve Stivers, who supported the measure. 'Jobs have been lost.
Otherwise healthy companies have gone bankrupt because of asbestos
lawsuits. Because we are the poster child for abuse, we should be a
poster child for reform. Several states are right behind us.' The bill
will become law in 90 days and is expected to face legal challenge. The
law will likely place an estimated 30,000 of the 40,000 current asbestos
cases to be placed on an inactive docket, according to
CongressDaily.
AmeriDebt Files for Bankruptcy Protection
AmeriDebt, a credit counseling service that has been
accused of misleading hundreds of thousands of customers, filed for
bankruptcy protection on Saturday in Maryland, the New
York Times reported. The Federal Trade Commission sued AmeriDebt
last November, contending that it disguised fees and did not properly
educate customers about how to emerge from debt. The company said then
that it would 'defend itself vigorously.' Last year , Illinois,
Minnesota, Missouri and Texas sued AmeriDebt over the way it administers
its repayment plans, saying it charged excessive fees and channeled
revenue to related businesses.
Jury Selection to Begin in
Enron Trial
About 100 prospective jurors are expected to convene
at the federal courthouse today and a dozen will be chosen to decide the
fate of six former Enron and Merrill Lynch & Co. executives, the
Associated Press reported. Defense lawyers plan to raise questions to
U.S. District Judge Ewing Werlein about statements made to investigators
by former Enron former CFO Andrew Fastow that could favor the defendants
in the case involving an alleged sham sale of barges. The government
says the Fastow statements don't constitute material that prosecutors
are obligated to provide, but they informed the defense out of an
'abundance of caution,' the newswire reported.
UAL Now Sees Bankruptcy Exit In Autumn 2004
UAL Corp. on Friday delayed its expected exit from
chapter 11 to the fall from the summer, and asked a Chicago bankruptcy
judge to extend by three months to Sept. 30 its exclusive right to file
a reorganization plan, Reuters reported. The company is awaiting word
from the Air Transportation Stabilization Board on its request for a
$1.6 billion government guarantee on a $2 billion loan from J.P. Morgan
Chase Bank and Citicorp USA Inc. The guarantee is critical to UAL's
emergence from bankruptcy, the newswire reported.
Maytag to Cut 1,100
Jobs
Maytag Corp. on Friday said it
will cut 1,100 jobs, or about 20 percent of its salaried workforce, and
merge its Hoover vacuum unit with other divisions in an effort to cut
costs and compete better, Reuters reported. The company also scaled back
its second-quarter and full-year profit outlooks, citing disappointing
sales. Its shares were down nearly 8 percent in afternoon trading on the
New York Stock Exchange. The overhaul follows years of cost cutting and
efforts to turn around Hoover, which has lost profitability and market
share, the newswire reported.
Cable Operators Outline
Possible Adelphia Bids
Comcast Corp. CEO Brian Roberts told investors on
Friday that an asset-swap with Time Warner Inc. could be a way to get
hold of some cable systems owned by Adelphia Communications Corp.,
Reuters reported. Under this scenario, if Time Warner made a successful
bid for bankrupt cable television operator Adelphia, Comcast would offer
to exchange its stake in Time Warner Cable for certain Adelphia
properties. 'We own 21 percent of the company and we could exchange that
for assets,' Roberts said at an investor conference. 'There's an
opportunity here as Adelphia comes out of bankruptcy for some trades and
the rationalization of some cable properties,' he said, the newswire
reported.
Omnicare Launches Hostile Bid
For NeighborCare
Omnicare Inc. on Friday proceeded with a $1.35 billion
hostile bid to acquire NeighborCare Inc. after the rival institutional
pharmaceutical provider rejected two previous proposals, Reuters
reported. Omnicare late on Thursday said it would bypass NeighborCare's
management and take its $30-a-share takeover proposal directly to
stockholders in a move to create a premier institutional pharmacy
company serving 1.3 million beds in nursing homes and other long-term
care facilities.
Omnicare said the offer marked a 70-percent premium
over NeighborCare stock price at the time it was first publicly
announced on May 24. NeighborCare urged its shareholders not to take any
action until its board makes a recommendation on the bid. NeighborCare's
shareholder base includes several distressed debt investors who acquired
stakes in the company during a 2001 bankruptcy reorganization, the
newswire reported.
Tampa Airport Collects
$1.9 Million from Debtors
Tampa International Airport has collected $1.9 million
from 24 airlines and other businesses involved throughout the past five
years in bankruptcy proceedings, while writing off $87,394 from those
companies offering services at the airport, the Knight
Ridder reported.
The strong ratio in favor of collections stems in part
from leverage Tampa International enjoys with companies such as United
Airlines and US Airways that want to continue to do business here,
airport General Counsel Gigi Skipper said. In addition, the
airport is careful to create contracts with revenue sharing and other
legal provisions that give Tampa International additional leverage with
companies filing for bankruptcy protection, Skipper said, the newswire
reported.
Utilities Firm Gets Bankruptcy Court OK
NorthWestern Corp. received approval of its disclosure
statement and the go-ahead from a judge to seek approval of its amended
reorganization plan, the Argus
Leader reported. The Committee of Unsecured Creditors gave
preliminary approval of the plan earlier this month, but impaired
claimants will now be mailed ballots to approve or disprove the plan.
NorthWestern submitted the reorganization plan in March. If approved, it
would include the restructuring of $1.4 billion of debt into new
equity.
Loews Cineplex Nears Agreement To Be
Acquired
A group of buyout firms led by Bain
Capital is close to sealing a deal to acquire Loews Cineplex
Entertainment in a transaction valued at about $1.4 billion to $1.5
billion,the Wall Street Journal
reported. The final details and purchase price are still being worked
out.Under a pact between the prospective buyers, Bain is expected to
share ownership with other private-equity shops Spectrum Equity Partners
and Carlyle Group, the online newspaper reported.
HealthSouth Nears Bond Agreement
size='3'>HealthSouth Corp. is close to an
agreement with its bondholders that would pay those investors about $70
million and remove a significant obstacle to the health-care company's
ability to reorganize outside of bankruptcy court, the Wall Street Journal reported. The announcement of a
deal could come as soon as this week, according to people familiar with
the situation, though negotiations were continuing during the
weekend.