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Bush Unveils Stimulus Plan, Calls for Immediate Relief
President Bush yesterday proposed a $674 billion boost for a
struggling U.S. economy with measures including eliminating taxes on
dividends, the acceleration of across-the-board rate cuts, immediate tax
relief for married couples and families with children and bigger
incentives for small businesses to invest in new equipment, Reuters
reported. The 'growth and jobs' package aims to kick-start the U.S.
economy by encouraging consumer spending, promoting investment that will
create jobs and helping the unemployed, the newswire reported. While
emphasizing that the economy is and has been growing, Bush expressed
concern for the unemployed and pointed to taxation and high personal
debt loads as potential drags on growth. The president demanded that
Congress phase in elements of the 2001 tax cut more quickly, and
promised to continue to press lawmakers to make it permanent, reported
CongressDaily.
Hatch Keeps Hopes Alive for Asbestos Litigation Reform
Effort
Senate Judiciary Chairman Orrin Hatch (R-Utah) emphasized his desire
Tuesday to pass asbestos litigation-management legislation within a
year, but conceded that lawmakers from both parties would have to walk a
fine line on the politically explosive issue, CongressDaily
reported. 'We would have to do everything right, in order to get it
done,' Hatch said in an interview. Sen. Christopher Dodd (D-Conn.), who,
like Hatch, cosponsored asbestos bills in the 105th and 106th
Congresses, confirmed speculation that he, too, would play a role in
trying to broker this year's deal, reported the newswire. Along with
Sens. Joseph Lieberman (D-Conn.) and Charles Schumer (D-N.Y.), Dodd was
among the few Democrats to cosponsor those earlier bills. Industry
proponents of the latest version of asbestos reform are touting what
they say is growing bipartisan support for a 'docket management' measure
limiting the right to bring legal actions to individuals who can
demonstrate specific medical ailments, as opposed to mere exposure,
reported CongressDaily.
Cornyn Wins a Seat on the Senate Judiciary Committee
Sen. John Cornyn (R-Texas) won a seat on the powerful Senate Judiciary
Committee on Monday, the Houston Chronicle reported. Cornyn, a
former state attorney general and Texas Supreme Court justice, also
secured seats on the Budget, Armed Services and Environment and Public
Works committees.
American Classic Wins Approval to Seek Creditors' Votes on
Plan
A bankruptcy judge said American Classic Voyages Co., a defunct cruise
ship
line run by billionaire Sam Zell, can seek approval from creditors for a
plan that includes reimbursing customers seeking $10 million in
deposits, Bloomberg News reported. The customers want refunds for
cruises that were canceled after the company sought bankruptcy in
October 2001. U.S. Bankruptcy Judge Jerry Venters in Wilmington, Del.,
said the company can proceed to line up votes from creditors in support
of the plan, and he scheduled a final hearing on the matter for Feb.
6.
American Classic Voyages sought bankruptcy protection after customers
canceled trips following the Sept. 11 terrorist attacks. Since then, the
company has sold most of its assets, including its Mississippi Queen
riverboat, for $80.9 million in cash and assumed liabilities, reported
Bloomberg. The liquidation plan also would pay between 1 percent and 20
percent of the claims to unsecured creditors of some of American Classic
Voyages' subsidiaries, reported the newswire.
ABB to Finish Unit's Bankruptcy Plan in Coming Days
ABB Ltd., Europe's biggest electrical-engineering company, will in the
next few days propose a plan to reorganize a U.S. unit facing 111,000
asbestos claims, Bloomberg News reported. The Swiss company, which has
already offered a $1.1 billion settlement, must persuade 75 percent of
those suing Combustion Engineering Inc. to accept the plan to put the
unit into bankruptcy protection before asking a judge for final
approval, reported the newswire. ABB has said it had a second-straight
loss last year amid mounting costs for asbestos claims. After paying $1
billion since 1990 for claims against the U.S. unit, the company is now
trying to reach an agreement with the rest of those suing Combustion
Engineering to cap losses, reported Bloomberg.
Ex-Enron Treasurer Wins Delay in Asset Fight
Former Enron Corp. Treasurer Ben F. Glisan Jr. won postponement of the
government's bid to seize his $916,137 bank account, after arguing that
the proceeding might force him to reveal evidence that would help the
government prosecute him, Bloomberg News reported. Glisan requested the
forfeiture case be put on hold after prosecutors told him he is under
criminal investigation in the energy company's collapse, reported the
newswire. U.S. District Judge Melinda Harmon in Houston disclosed that
last week she halted asset forfeiture proceedings against Glisan and his
wife, reported Bloomberg. The government didn't oppose Glisan's
request.
Adelphia Gets More Time to Provide Financial Information
The court handling Adelphia Communications Corp.'s chapter 11 case has
given the company four more months to provide required financial
information to the court and the company's creditors, Dow Jones
reported. In an order obtained recently by Dow Jones Newswires, Judge
Robert Gerber of the U.S. Bankruptcy Court in Manhattan gave
Adelphia until April 23 to file the information with the court. The
information-including schedules of assets and liabilities that could
help creditors and shareholders estimate what type of recovery they
could expect-was originally due around the time the cable company filed
for chapter 11 protection last June, according to the newswire. But
Judge Gerber extended that deadline twice, most recently through Dec.
23, 2002, according to court papers obtained Monday by Dow Jones
Newswires.
Airlines Push for Labor Law Change to Reduce Strikes
The faltering airline industry is pushing for a change in the federal
law governing airline labor disputes that will allow it to reach
contract agreements with unions without costly strikes and work
slowdowns, Dow Jones reported. Airlines hope that Sen. John McCain,
(R-Ariz.) will reintroduce his labor bill this year requiring the
creation of an arbitration body that would resolve disputes quickly.
Such a requirement would help the money-losing industry seek much-needed
wage cuts and more rigorous work rules while reducing the likelihood of
workers walking off their jobs or engaging in slowdowns. Having lost an
estimated $9 billion last year alone, airlines are eager to gain more
leverage in contract negotiations and curb labor costs, their single
largest expense, reported the newswire.
Genetronics: Bankruptcy Likely if BTX Sale Not Completed
Genetronics Biomedical Corp. said it 'would most likely' have to file
for bankruptcy protection if the sale of its BTX division to Harvard
Bioscience Inc. isn't completed, according to a proxy filed on Tuesday
with the Securities and Exchange Commission, Dow Jones reported. The
company said it probably can't continue operating in the long term
without additional capital. If the sale isn't approved, Genetronics
said, it must raise capital either by offering securities or by selling
the BTX assets to another buyer, reported the newswire. Otherwise, the
company would most likely have to file for bankruptcy protection or
state insolvency proceedings, the filing said, reported Dow Jones.
Subprime Credit Card Companies Saw More Credit Erosion in 4th
Quarter
Credit-card companies that lend to consumers with less-than-perfect
credit histories continued to battle rising loan losses during the
fourth-quarter, while plastic purveyors to the more financially
comfortable saw a more stable quarter, Dow Jones reported. 'The
companies that have been facing credit problems will continue to see
deterioration, including Capital One, Metris and to a lesser extent,
Providian,' said analyst Jennifer Scutti of CIBC World Markets, reported
the newswire. However, credit quality trends at other issuers are
expected to remain stable otherwise, as unemployment and bankruptcies --
although at elevated levels -- haven't spiked higher in the latest
quarter, reported Dow Jones.
Holiday spending will help to bolster balance growth across the board.
However, weaker spending thanks to the sluggish economy and the impact
of record mortgage refinancings will offset any demonstrations of real
strength, according to the newswire. 'Borrowers have become more
conservative and continue to take the proceeds from mortgage
refinancings and pay down other types of borrowings,' said David
Hochstim, an analyst with Bear Stearns & Co., reported Dow Jones. To
read the full article, point your browser to
href='http://www.wsj.com'>www.wsj.com (subscription required).
Napster Creditors Get Deal Approved
The committee of unsecured creditors for the entity formerly known as
Napster Inc. won approval yesterday of a deal that settles a claim
dispute with Bertelsmann AG and earmarks part of the proceeds generated
from a sale of substantially all of Napster's assets for unsecured
creditors, Dow Jones reported. The settlement resolves a dispute over
the amount of Bertelsmann's pre-petition and post-petition secured
claims. Bertelsmann had asserted a $95 million pre-petition claim and a
$3 million post-petition claim against Napster's chapter 11 estate,
according to the newswire. The creditor panel had challenged the claims
in an adversary proceeding. The order signed by Chief Judge Peter J.
Walsh of the U.S. Bankruptcy Court in Wilmington puts an end to the
adversary proceeding. The court-appointed trustee administering
Napster's estate signed off on the deal and will now turn his attention
to forming a liquidation plan, said William P. Bowden, an
attorney with Ashby & Geddes, the firm representing the trustee,
reported Dow Jones.
Ottawa Senators Hockey Team May File for Bankruptcy
The Ottawa Senators, unable to pay their players last week, may end up
filing for bankruptcy, the Associated Press reported. TSN in Canada
reported yesterday that an official announcement could come as early as
today. The Ottawa Sun reported the Senators would file for protection
from their creditors in Canada and the United States and receive a
short-term cash infusion from the NHL. The Pittsburgh Penguins are the
only franchise in the four major U.S. pro sports leagues to file for
federal bankruptcy protection in the last 29 years. They did it in 1974
and 1998, with the second filing leading to Mario Lemieux taking over
the club he plays for, reported the newswire. After the Senators failed
to pay players on Jan. 1, team owner Rod Bryden met with NHL
Commissioner Gary Bettman to come up with a plan to help the financially
struggling team that has the most points in the league. Bettman said on
Friday he hoped financing could be arranged and finalized this week, Dow
Jones reported.
United Air Wage Cuts: Sees Machinists Ruling by Jan 10
United Airlines's parent company, UAL Corp., said interim wage
reductions agreed to by its pilots' union will help meet terms of the
airline's debtor-in-possession financing agreement, Dow Jones reported.
In a press release yesterday, the company, operating under bankruptcy
protection since Dec. 9, said similar agreements were reached with the
Transport Workers Union representing United's meteorologists, and the
Professional Airline Flight Control Association, representing
dispatchers. The company expects to learn of a decision by Jan. 10
regarding its request that the bankruptcy court impose wage reductions
on employees represented by the International Association of Machinists
and Aerospace Workers, Dow Jones reported.
United/US Airways: Agreement Approved in October
UAL Corp.'s United Airlines unit will expand its code-sharing network
with US Airways to additional cities in the eastern and western United
States and international destinations such as the Caribbean, Dow Jones
reported. The agreement was first approved in October. United customers
now have access to 14 additional cities in the eastern and southwestern
United States, and US Airways customers have access to 10 additional
cities in the western United States, reported the newswire. The
agreement was designed to combine US Airways's strength in north-south
flights on the East Coast with United's strength in cross-country
flights, reported Dow Jones. Both companies are currently operating
under bankruptcy protection.
U.S. Bankruptcy Court Recognizes GT Group's Plan of
Arrangement
The U.S. Bankruptcy Court for the Southern District of New York issued
an order on Jan. 2 recognizing and giving effect to the plan of
compromise and arrangement for GT Group Telecom Inc.'s GT Group Telecom
Services Corp. and London Connect Inc. In a news release, GT Group said
the U.S. Bankruptcy Court has granted a permanent injunction against all
actions and proceedings against the GT operating companies. GT Group is
a facilities-based telecommunications provider. As reported, the company
said it expects to implement the plan by Feb. 15, just before the
closing of its deal with 360networks Inc., whereby 360networks will
acquire GT Group for an undisclosed amount, reported the newswire.
Running a Bankrupt Company May Be Executives' Path to Gold
Adelphia Communications is negotiating to hire the former top executives
of AT&T Broadband to bring it out of bankruptcy. And they could
enjoy an exceptionally big payday for doing it, the New York
Times reported. If the terms of the employment contracts are
approved at a board meeting today, Adelphia could wind up paying almost
$65 million over two years to William T. Schleyer and Ronald Cooper, the
Times reported. Schleyer's package alone could be worth nearly
twice the $20 million over three years that was recently awarded to
Michael D. Capellas, the new chief executive of Worldcom, which entered
bankruptcy listing assets four times those of Adelphia when it
collapsed, reported the online newspaper. The Adelphia contracts
underline the increasingly rich payouts being awarded to executives who
agree to run bankrupt companies. To read the full article, point your
browser to
href='http://www.nytimes.com/2003/01/08/business/08PLAC.html'>http://www.nytimes.com/2003/01/08/business/08PLAC.html.
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