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January 10, 2005
Specter to Circulate Draft of Asbestos Bill
Senate Judiciary Chairman Arlen Specter (R–Pa.) plans to
circulate a draft of his latest asbestos legislation, according to
congressional and industry sources, CongressDaily reported.
Specter has been attempting to draft a bill that will bridge the gap
between the affected industries over a proposed national trust fund to
compensate victims of asbestos-related diseases. Despite Specter’s
efforts and months of talks, the parties still are divided over how
large the fund should be and whether the bill would permit victims to
seek court relief if the fund runs dry. Those disagreements likely will
be discussed at a Tuesday hearing before the Judiciary Committee.
Sources said Specter’s proposal will include “blanks”
to be filled in later, leaving some stakeholders unsure how far the
debate has moved.
United Airlines
United, Attendants Agree on Pact
United Airlines reached a tentative contract agreement with its
flight attendants union on Saturday, but the deal did not address the
employee pension plans that have become a key point of contention, the
Associated Press reported. Although details of the contract were not
disclosed, the Association of Flight Attendants said the contract does
not include changes to employee pensions, which the airline said it must
eliminate to save funds and emerge from bankruptcy.
United, which reached a tentative agreement with its mechanics union
Friday, is seeking to rework its labor contracts for the second time in
its two-year chapter 11 bankruptcy reorganization, the newswire
reported.
Judge Rejects United’s Deal with Pilots
A federal bankruptcy judge on Friday rejected an agreement between
UAL Corp. and its pilots union, saying it “unfairly tilted the
bankruptcy process” in favor of the pilots, Reuters reported. The
five-year deal would have cut the pilots’ wages by 14 percent,
providing the bankrupt carrier with $180 million in annual labor
savings. It also would have allowed UAL, parent of United Airlines, to
toss out the pilots’ traditional pension plans. Members of the Air
Line Pilots Association ratified the deal on Thursday by a vast
majority. However, Judge Eugene Wedoff said certain caveats of the
agreement gave the pilots undue leverage over the bankruptcy process,
the newswire reported.
White & Case to Get Less Than Half Its Bill for Bankruptcy
Case
The 11th U.S. Circuit Court of Appeals has upheld a lower
court’s decision to slash White & Case’s legal fee in a
bankruptcy-related case from $5.5 million to $1.8 million, criticizing
the firm’s fees as excessive, the Miami Daily Business
Review reported. “White & Case has not persuaded us
that it is entitled to so much more than the attorneys on the other side
of the case,” the three-judge panel stated in its unpublished
opinion, which is not supposed to be cited as precedent. Read the full
article at www.law.com.
Adelphia Extends Bid Deadline by Two Weeks
Adelphia Communications Corp. on Friday said it would extend bid
deadlines by two weeks until the end of January in an auction to sell
the company, Reuters reported. The cable operator, which put itself up
for sale and is simultaneously winding through a reorganization under
bankruptcy, has solicited bids from a broad range of companies that
include private equity firms and large, medium and small-scale media
companies. Analysts and sources familiar with the matter expect the
company to bring $17 billion to $20 billion.
Wet Seal in Talks to Extend Bridge Loan Maturity
Teen retailer Wet Seal Inc. said on Friday that it is in talks to
extend the life of a $10 million bridge loan made to the company last
November, Reuters reported. The Foothill Ranch, Calif.–based
company said it wants to extend the loan to give it additional capital
after the closing of its convertible note and warrant financing
transaction, which is expected to take place next week.
Judge Agrees to Make Bankruptcy Examiner’s Report Public
A judge overseeing the bankruptcy of Gitto/Global Corp. has reversed
his own ruling and will unseal a report on alleged accounting fraud at
the former plastics manufacturer, the Associated Press reported. When
Lunenberg-based Gitto/Global declared bankruptcy in September,
allegations surfaced that the company’s former top executives had
overstated revenues by tens of millions of dollars by logging fictitious
sales on its books. A creditor also alleged that Gitto/Global executives
defrauded the creditor of $18.8 million. A grand jury has been convened
in Boston to consider criminal charges, the Telegram &
Gazette of Worcester, Mass.reported.
Supreme Court Set to Enter Tort Battleground
As the White House and Congress gear up for yet another run at tort
reform, two cases set for argument at the Supreme Court this week
underline the crucial role the justices also play in the policy debate
over how much litigation is too much, the Legal Times
reported. Read the article at
href='http://www.law.com/jsp/article.jsp?id=1104759373079'>www.law.com/jsp/article.jsp?id=1104759373079.
Delta to Cut Number of Attendants on Some Flights
Delta Air Lines is planning to reduce the number of flight attendants
on some flights and eliminate meals for flight crews, according to a
company document, the Wall Street Journal reported. The
latest cost-cutting steps by Delta, which recently cut wages for pilots
and many other employees and is cutting 7,000 jobs as part of a
restructuring plan, follow its move last week to cut its most expensive
U.S. fares by as much as 50 percent, the online newspaper reported.
Enron
U.S. Top Court to Review Andersen’s Enron Conviction
The U.S. Supreme Court said on Friday it would review the conviction
of the Arthur Andersen accounting firm for obstruction of justice by
destroying Enron Corp.–related documents before the
company’s collapse, Reuters reported. The high court agreed to
hear an appeal by the Chicago-based Andersen arguing that its conviction
must be reversed because of improper jury instructions. The Supreme
Court will hear arguments in the case, most likely in April, with a
decision due by the end of June, the newswire reported.
Ex-Enron Directors Reach Settlement
Ten former Enron Corp. directors agreed to pay $13 million of a $168
million settlement of litigation brought by shareholders whose
investments were wiped out after the failed U.S. energy giant’s
2001 bankruptcy filing, the Wall Street Journal
reported.
Unveiled Friday, the settlement follows one earlier in the week
involving former WorldCom Inc. directors. Both accords resolve
allegations that officials violated federal securities laws by
permitting the release of public documents that contained material
misstatements about company finances, the online newspaper reported.
Worldcom
WorldCom Holdouts Are Next Up for Comptroller
New York State Comptroller Alan G. Hevesi is preparing for a trial
set for Feb. 28 against former WorldCom directors, auditors and Wall
Street underwriters who haven’t settled in the class-action
lawsuit related to the telecom company’s accounting fraud, the
Wall Street Journal reported. Read the full article at
href='http://www.wsj.com/'>www.wsj.com (subscription required).
Bear Settles Alabama Suit over WorldCom Bonds
Bear Stearns Cos. on Friday settled accusations by the Retirement
Systems of Alabama that it misled the pension fund about WorldCom
Inc.–backed bonds it sold, Reuters reported. Terms of the
settlement were not disclosed. The pension fund had sued the investment
bank for about $15 million in damages, and already settled with other
defendants in the matter. The pension fund had accused Bear Stearns of
knowing of WorldCom’s shaky accounting practices when it sold the
bonds, the newswire reported.
Zurich Settles with U.S. Superior for $110 Million
Zurich Financial Services will pay $110 million in a legal settlement
over the bankruptcy of Superior National Insurance Companies, concluding
a long-running dispute which initially had much higher claims, Reuters
reported. Zurich’s specialist U.S. unit Center Insurance Company
(CIC) reached the settlement with Superior’s liquidator in the
case that was filed in January 2002 and where claimants initially asked
for $250 million from CIC, Zurich said today. The litigation had started
over contested payments that Superior, a U.S. accident insurer, had made
to CIC just before it went under four years ago, the newswire
reported.