|
U.S. Economy: Jobless Rate Rises to 6 Percent, Payrolls
Fall
U.S. companies cut payrolls for a third consecutive month in April, the
jobless rate rose to tie an eight-year high of 6 percent and hours
worked fell, suggesting the economy stalled during the Iraq war,
Bloomberg News reported. The unemployment rate matched December's, which
was the highest since August 1994, the Labor Department said. Continued
job losses may threaten consumer spending, which accounts for 70 percent
of the economy. 'It was a weak report, there's no question about it,''
said Joshua Feinman, chief economist with Deutsche Asset Management in
New York. 'But these are data that still are likely influenced by the
war. It's still too early to tell'' how strong the post-war economy will
be, reported the newswire.
Hatch Aiming For Mid-May Asbestos Markup
Senate Judiciary Chairman Orrin Hatch (R-Utah) is aiming for a mid-May
markup of asbestos litigation reform legislation, sources said on
Friday, CongressDaily reported. Meanwhile, a Senate Democratic
aide close to the negotiations said that Judiciary ranking member
Patrick Leahy (D-Vt.) and Sen. Christopher Dodd (D-Conn.) are working
cooperatively to explore the creation of a backstop for the trust fund,
which labor is insisting on as a safeguard for victims in the event the
fund runs dry. By all accounts, the question of whether there will be a
role even marginally for the federal government as a guarantor of the
asbestos trust has become paramount. That piece, along with determining
the overall figure of the trust fund, are issues that are expected to
form the core of negotiations next week among labor, business and Senate
Judiciary aides, reported the newswire.
UAL First-quarter Loss Widens as War Reduces Travel
United Airlines parent UAL Corp.'s first-quarter loss widened to $1.3
billion because the war in Iraq reduced already weak demand for air
travel and led to higher prices for jet fuel, Bloomberg News reported.
The net loss for UAL was $14.16 a share, compared with $510 million, or
$9.92, in the same period last year. Sales slid 3.2 percent to $3.18
billion. UAL, which filed the airline industry's biggest bankruptcy in
December, posted an 11th consecutive quarterly loss. Major U.S. carriers
have been unable to reduce costs enough to match the decline in revenue
that began in 2001 because of the U.S. economic slowdown and the Sept.
11 attacks. The first-quarter loss for the top five U.S. carriers was
$3.46 billion, reported the newswire.
Essential Therapeutics Seeks Bankruptcy Protection
Essential Therapeutics Inc. filed for bankruptcy protection from
creditors after five years of losses, Bloomberg News reported. The
Waltham, Mass.-based company listed $46.3 million in assets and $65
million in debts in its chapter 11 petition in the U.S. Bankruptcy Court
in Delaware. The company said in a statement on Friday that it would pay
some creditors in full and reorganize as a private company. Among the
largest unsecured creditors listed in court papers are New Enterprise
Associates 10 LP of Baltimore, owed $19.9 million, and Prospect Venture
Partners II LP of Palo Alto, Calif., owed $15 million. The company,
whose common shares fell more than 99 percent in the past year, said
last week it didn't have enough money to redeem all of its 60,000
preferred shares, which court papers say are held by 17 investors,
reported the newswire.
Lawsuit Against Raytheon Certified As Class Action
A lawsuit brought by former shareholders of Washington Group
International has been certified as class action by the U.S. District
Court in Idaho, the Associated Press reported. The ruling clears the way
for thousands of former Washington Group investors to seek damages from
the Mass.-based Raytheon Co. Former investors hope to recover some of
the money they lost when the Idaho construction and engineering
company's stock was declared worthless as part of a bankruptcy
settlement. The suit, originally filed in June 2001, alleges that
Raytheon caused the May 2001 bankruptcy because it hid financial
liabilities from Washington Group when it sold its Raytheon Engineers
and Constructors division to the Idaho company in 2000, reported the
newswire.
Deal Seems Likely In PG&E Unit Chapter 11
Negotiations between PG&E Corp. and the California Public Utilities
Commission likely point to a settlement that could get the state's
largest utility out of bankruptcy court and cause the parent's stock to
rally, Dow Jones Newswires reported. At issue is how to reorganize
Pacific Gas & Electric Co., which filed for chapter 11 in April 2001
after suffering huge losses during the state's power crisis. Last week,
U.S. Bankruptcy Judge Dennis Montali postponed his proceedings to give
the settlement talks an extra 30 days at the request of the judge
handling those negotiations, reported the newswire.
Moody's Withdraws All Ratings For Venture Holdings
Moody's Investors Service withdrew all ratings associated with Venture
Holdings Company LLC in response to the company's chapter 11 bankruptcy
filing for its U.S. operations on March 28, 2003, Dow Jones Newswires
reported. Venture ultimately filed for bankruptcy protection in response
to events over the past year at its European operations that severely
affected liquidity, reported the newswire. The company expects to be
able to file a plan of reorganization within the near future, which
would entail a new capital structure. Fraser, Mich.-based Venture is a
global designer, systems integrator and manufacturer of interior and
exterior plastic components, modules, and systems for the North American
and European automotive markets.
Merrill Raises 5 Airlines To 'Buy'
Merrill Lynch analyst Michael Linenberg still expects the airline
industry to lose $8.2 billion this year and another $2.5 billion in
2004, Dow Jones Newswires reported. But on Friday he raised his rating
on five airlines to buy from neutral, believing that the worst for the
industry may be over. In a report, Linenberg wrote that he raised
ratings on Alaska Air Group Inc., Continental Airlines Inc., Delta Air
Lines Inc., Northwest Airlines Inc. and Frontier Airlines Inc. The
analyst said he thinks the threat of bankruptcy has diminished for most
airlines, even though many of their balance sheets are weak, reported
the newswire.
L.L. Bean Mulls Purchase Of Rival Eddie Bauer
L.L. Bean is considering the purchase of all or part of rival outfitter
Eddie Bauer, whose corporate parent Spiegel Inc. is going through
bankruptcy reorganization, the Associated Press reported. The purchase
of Bauer would double the sales of Bean and provide a huge boost to its
efforts to make retail stores a more substantial part of a business that
relies heavily on mail order. Rich Donaldson, a Bean spokesman, said the
company informed the U.S. Bankruptcy Court handling the Spiegel case in
New York that it wants to be kept up to date on developments, reported
the newswire.
Teleglobe Seeks Court OK To Cut Sale Price Of Core Operations
Teleglobe Communications Corp. is seeking bankruptcy court approval to
cut the sale price of its core telecommunications business to $125
million from $155.3 million, Dow Jones Newswires reported. The change is
part of a proposed settlement between Teleglobe and a group led by
Cerberus Capital Management L.P. The group agreed to buy the business in
September 2002 for $155.3 million, subject to adjustment, Teleglobe's
motion filed on Tuesday said. The settlement calls for the deal to close
by May 30, court papers said. A hearing on the matter is scheduled for
May 19 in the U.S. Bankruptcy Court in Wilmington, Del. Teleglobe
Communications, formerly a unit of BCE Inc., filed for chapter 11
bankruptcy protection on May 28, 2002, listing more than $100 million in
both assets and debts in its bankruptcy petition, reported the
newswire.
Horsehead Seeks OK To End Contract Dispute With Sempra
Horsehead Industries Inc. is asking the U.S. Bankruptcy Court in
Manhattan to approve an agreement that would settle its dispute with
Sempra Metals Ltd. over $1 million in futures contracts, Dow Jones
Newswires reported. Under terms of the agreement, Sempra would return
$150,000 of a $500,000 margin call payment it collected following
Horeshead's chapter 11 filing in August 2002. In turn, Sempra would
become a Horsehead creditor with a $1.09 million unsecured claim -- if
it doesn't vote against any chapter 11 plan Horsehead might file with
the court -- and keep the balance of the margin payment. A hearing on
the matter hasn't yet been set by the court, reported the newswire.
Plainwell Seeks Court OK For Claim Settlement With PBGC
Plainwell Inc. is asking the bankruptcy court handling its chapter 11
proceedings to approve a settlement of claims with the Pension Benefit
Guarantee Corp. (PBGC), Dow Jones Newswires reported. Under the
agreement, Plainwell would give the PBGC a general unsecured claim of
$7,457,973 in the bankruptcy case, for unfunded benefits. The PBGC also
would get an administrative expense priority claim of $272,486 and a
priority claim of $73,999, both for unpaid minimum funding
contributions. A hearing date is scheduled for Monday at the U.S.
Bankruptcy Court in Wilmington, Del., reported the newswire. Plainwell
filed for chapter 11 bankruptcy protection on Nov. 21, 2000, listing
assets of $217.9 million and liabilities of $232.2 million.
Regus Business Centre Gets Nod For $8 Million Interim DIP
Loan
Regus Business Centre Corp., a unit of the United Kingdom.'s Regus PLC,
received approval from the U.S. Bankruptcy Court in White Plains, N.Y.,
to borrow up to $8 million pending a May 28 final hearing on the full
$18 million debtor-in-possession loan from an affiliate, Dow Jones
Newswires reported. The interim order said that without the DIP funds,
Regus Business Centre won't have enough cash or credit to pay rent to
its landlords, make up for working capital shortfalls, or pay customer
service retainers, post-petition payrolls and taxes and other expenses
necessary for it to continue operations. Purchase, N.Y.-based Regus
Business Centre filed for chapter 11 bankruptcy on Jan. 14 along with
its parent, Regus PLC, and two other Regus PLC units, reported the
newswire.
Armstrong World Forced To Trim Outlook For Reorganized
Company
Armstrong World Industries Inc. told a bankruptcy court on Friday that
it will have to revise downward financial projections it made for the
restructured company, according to an 8-K filing with the Securities and
Exchange Commission, Dow Jones Newswires reported. The changes could
affect the reorganization value of the company and therefore the
recovery for its creditors, the filing said. In the disclosure statement
for the company's third amended chapter 11 plan, Armstrong World
estimated the company's reorganization value at between $2.7 billion and
$3.3 billion. Armstrong World said in the 8-K filing that the revisions
to the projections made in December stem from developments in the
company's business and the fact that the company's reorganization plan
won't take effect by July 1, as planned, reported the newswire.
Kaiser Aluminum Comments On Corporate Strategy
Kaiser Aluminum Corp. is considering the sale of one or more of its
assets in bauxite and primary aluminum, which could help the bankrupt
company move along its plan to emerge from chapter 11 protection in
2004, Dow Jones Newswires reported. In a press release on Friday, the
aluminum-products maker emphasized that it only will consider pursuing
transactions that are on 'acceptable terms.' In February 2002, Kaiser
and some of its affiliates filed for chapter 11 bankruptcy protection
after facing near-term debt maturities amid a weak aluminum market and
becoming increasingly burdened by asbestos litigation and growing
obligations for retiree medical and pension costs. In January of this
year, nine units of its Kaiser Aluminum & Chemical Corp. also filed
for chapter 11 protection in an attempt to protect the units' assets
from possible statutory liens, reported the newswire. Separately on
Friday, Dow Jones Newswires reported that Kaiser is asking a bankruptcy
court for more time to file and seek creditor support for its chapter 11
reorganization plan.
EVTAC Mining Files for Bankruptcy Protection
EVTAC Mining Co. of Forbes, Minn., filed for chapter 11 protection from
its creditors in St. Paul bankruptcy court Thursday, according to the
Star Tribune. The move shocked union officials who had been
working with the company and the state to find ways to help the troubled
Iron Range taconite plant. EVTAC managers said in March that they had
only enough orders to keep production going through mid-May, the online
newspaper reported. Dave Foster, director of District 11 of the United
Steelworkers of America, which represents 400 production, clerical and
technical workers at the 500-employee operation, said union, EVTAC and
state representatives met Monday to discuss ways to use existing
economic development money -- particularly the royalties paid to the
state by the taconite mining companies over the years -- to invest in
technology improvements at EVTAC and the state's five other taconite
operations that would lower their costs. EVTAC managers did not mention
plans for the chapter 11 filing at the Monday meeting, he said. Company
officials could not be reached for comment Thursday, the Star
Tribune reported.
Foster said a hearing in St. Paul bankruptcy court on Monday will
determine whether workers 'have been working for free this week.' He
said EVTAC managers indicated that they would ask for authority to pay
wages, benefits and health insurance for retirees but that the decision
will be up to the court. Foster said the filing shows that the Bush
administration needs to raise tariffs on foreign steel to protect the
jobs of Minnesota iron ore miners. And the state needs to pursue an
aggressive economic development program to keep more mines from closing,
he said.
IPCS Creditors' Committee Sues Sprint To Recover Funds
The unsecured creditors' committee of AirGate PCS Inc.'s iPCS Inc. unit
has filed a lawsuit in a bankruptcy court against Sprint Corp. and its
Sprint PCS wireless group, seeking to recover funds allegedly owed to
iPCS creditors, Dow Jones Newswires reported. The complaint, filed with
the U.S. Bankruptcy Court in Atlanta, which is overseeing Atlanta-based
iPCS' chapter 11 case, said the lawsuit stems from Sprint's 'domination
and control over' the company and its business activities, the newswire
reported. The filing said Sprint put a system in place to prevent iPCS'
creditors from ever recovering funds owed by the company. The committee
said in the lawsuit, filed Tuesday, that Sprint has 'knowingly made it
severely difficult ... for iPCS to operate in a manner' that enables it
to repay creditors. The filing said iPCS consented to the committee
filing the lawsuit and seeking the court's authority to prosecute the
matter. IPCS filed for chapter 11 bankruptcy protection on Feb. 23,
listing assets of $253.5 million and debts of $378.4 million as of Dec.
31, 2002.
Hawaiian Air to Oppose Boeing Move to Appoint Trustee
Hawaiian Airlines Inc. said it was disappointed that its creditors'
committee supported Boeing Co.'s request to appoint a bankruptcy trustee
and will oppose the move in court, Bloomberg News reported. Hawaiian,
which filed for chapter 11 bankruptcy protection on March 21, is
fighting an attempt by Boeing Co.'s financing unit to oust the carrier's
management and have a trustee take over its reorganization. 'Appointing
a trustee may disrupt negotiations,'' with the airlines' aircraft
lessors, a main part of the company's reorganization, said Sandra
Sternberg, a spokeswoman for the company. The company is on course to
improve operating efficiency and renegotiate contracts with its
workforce and lessors, and the appointment is unnecessary, said
Sternberg, reported the newswire.
For NRG Chapter 11, Legal Experts Would Pick Delaware
NRG Energy Inc., a chapter 11-in-waiting, is incorporated in Delaware
but headquartered in Minnesota. The question now facing the company, its
creditors and parent Xcel Energy Inc. is where to file for bankruptcy
and whether any of that makes a difference, Dow Jones Newswires
reported. According to experts, it doesn't from a legal standpoint. But
there are many nuances that make Delaware, with its reputation for speed
and experience handling major cases, a clear winner over Minnesota,
according to Dow Jones. 'The value of speed is enormous,' said
Richard Tilton, chief executive of Greenacre Asset Advisors in
New York and formerly a representative for parties in the El Paso
Electric Co. and Public Service of New Hampshire bankruptcy cases. The
Delaware bankruptcy court is 'more rapid, more familiar with the
process,' Tilton said. 'You want an orderly procedure, and you want it
to go quickly,' reported the newswire. To read the full article, point
your browser to www.wsj.com (subscription
required).
Safety-Kleen Extends Voting Deadline For Reorganization Plan
Safety-Kleen Corp. voluntarily extended its lenders' voting deadline for
the company's reorganization plan until July 25 from last Friday, Dow
Jones Newswires reported. Chairman, Chief Executive and President Ronald
Rittenmeyer said in a written statement on Monday that some of the
company's lenders wanted additional time to develop an appropriate
credit facility to support Safety-Kleen's emergence from chapter 11. The
company asked the court to reschedule Safety-Kleen's confirmation
hearing for Aug. 1, 2003. Safety-Kleen filed for chapter 11 protection
on June 2000, and the disclosure statement associated with its
reorganization plan was approved by the U.S. Bankruptcy Court for the
District of Delaware in March 2003, reported the newswire.
Thanks for visiting
Today's Bankruptcy Headlines. New articles are posted here
each business day.
|
