May 7, 2004
Negotiations Fail on
Creating Trust Fund for Asbestos Victims
Negotiations aimed at creating
a federally run trust fund to compensate asbestos victims ended
yesterday, after the parties could not resolve differences over how big
the fund should be, CongressDaily reported. The talks, which
involved labor unions, insurers, defendant companies in asbestos
lawsuits and plaintiffs' attorneys, were being led by retired federal
judge Edward Becker.
Senate sources said the talks
broke down after business groups would not agree to a fund any larger
than $116 billion, with an additional $12 billion in 'contingency'
funding in the event the trust ran dry. Labor unions have been pressing
for a larger fund, insisting that previous proposals have been too small
to cover the claims of workers and individuals affected by asbestos.
Labor unions agreed to a final offer of $134 billion, with a $15 billion
contingency, according to the source. Senate Majority Leader Bill Frist
(R-Tenn.) said earlier this week that if the negotiations did not
yield an agreement, the options for lawmakers would be few. 'If it
breaks down -- I will have exhausted everything possible as a
legislator, as a physician, as a policy-maker,' he said, the newswire
reported.
Pension System
Changes
The government's pension insurance program proposed a
revised penalty system for companies that fail to notify workers of
underfunded retirement plans, the Associated Press reported. The
revisions, proposed by the Pension Benefit Guaranty
Corporation, would impose fines based on the number of plan
participants rather than how late the participants are notified. The
corporation said it would waive penalties for administrators of
underfunded plans in 2002 and 2003 that failed to issue notices if they
participate in a correction program and issue correction notices by a
reporting deadline this year.
Greenspan Says High-debt
Economy Won't Last
Federal Reserve Chairman Alan Greenspan warned yesterday that the past
decade of favorable economic conditions that have allowed the nation and
its consumers to live beyond their means is merely a transition period
that will eventually come to an end, the Washington
Post reported. Greenspan singled out the rising federal budget
deficit as 'a significant obstacle to long-term stability' and cautioned
that the nation's expanding trade gap and record-high household debt are
looming dangers. 'The free lunch has still to be invented,' he said in a
speech to a bankers' conference in Chicago, the newspaper
reported.
Adelphia Trial Is Told
Directors and Public Were Misled
As the Adelphia
Communications Corporation approached financial collapse in early
2002, a top executive, Timothy J. Rigas, continued to mislead both its
directors and investors about how much his family had borrowed through
Adelphia and their ability to repay those loans, a former company
official testified yesterday, the New
York Times reported. In his fourth day of testimony in Federal
District Court in Manhattan, James R. Brown, Adelphia's former VP for
finance, offered descriptions of how he and Rigas covered up crucial
financial information about those loans, the Times
reported.
Italy Fires Alitalia's Board and Seeks New
Investors
Italy's government yesterday fired the entire board of
Alitalia and said that private investors would be sought to provide cash
to its flagging operations, the New York
Times reported. The government postponed any decisions on layoffs.
The government's moves came just two days after Italy's industry
minister, Antonio Marzano, warned that the carrier could be headed for
liquidation if unions did not endorse a plan to cut 3,300
jobs.
U.K. Personal
Bankruptcies Near 11-Year High In Q1
The number of Britons going bankrupt in the first
quarter surged by more than 25 percent from a year earlier,
official figures showed today, reinforcing concerns about high debt
levels as interest rates go up, Reuters reported. The Department of
Trade and Industry said there were 10,294 individual insolvencies in
England and Wales in the first quarter, down 0.5 percent on the previous
quarter's 11-year high, but 26.8 percent higher than a year ago. It was
also not far off the record 11,000 personal bankruptcies seen in the
first quarter of 1993 when Britain was just coming out of the slump that
left millions of households trapped in negative equity after house
prices collapsed, the newswire reported.
Wife of Enron Ex-CFO Gets Year
in Prison
The wife of former Enron Corp. CFO Andrew Fastow
pleaded guilty to a misdemeanor tax charge and was given the maximum
one-year prison sentence, culminating a critical plea bargain that
propelled the Enron investigation forward, Reuters reported. Lea Fastow,
a former Enron assistant treasurer, entered her plea on Thursday before
U.S. District Judge David Hittner. Hittner gave Fastow, a first-time
offender, a year in prison and another year of supervised release.
Prosecutors later said it was twice the average sentence of similar tax
offenders, the newswire reported.
Court Approves Weirton Steel
Creditor Deal; Paves Way For Sale
A group of creditors who stood
to collect only $20 million from the sale of Weirton Steel Corp.
will get about $30 million under a settlement approved Thursday by
a bankruptcy judge, according to an Associated Press article. 'I think
it's fantastic. You all were able to come together and get a deal,'
Judge L. Edward Friend II said. Judge Friend approved the deal between
Weirton and the informal committee of secured noteholders following a
brief hearing in Wheeling, W.Va. His decision clears one of the last
major obstacles to the $237.5 million sale of the company to Ohio's
International Steel Group Inc.
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United Airlines April
Traffic Up 26 Percent
UAL Corp.'s United Airlines
posted a 26 percent rise in April traffic to 9.41 billion revenue
passenger miles from 7.48 billion a year earlier. A revenue passenger
mile is one paying passenger flown one mile. United's load factor, or
percentage of seats filled, rose to 79.9 percent from 71.4 percent a
year earlier, the carrier said in a press release Wednesday.
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