February 25, 2004
Group Airs New Ad on Asbestos Bill
A group representing victims of asbestos-related illnesses is
running television and print advertisements this week in Washington,
urging senators to reject legislation overhauling the asbestos
litigation system, CongressDaily reported. Consumer group
USAction said in the ad that the bill does not provide adequate
compensation for asbestos victims. USAction was running ads in about
eight markets last week while senators were in their home states during
the Presidents Day recess and again in Washington this week, said Helen
Gonzales, the group's policy director. Senate leaders are hoping to
negotiate an agreement based on the asbestos bill that emerged from the
Senate Judiciary Committee last year on a near party-line vote. Senate
Majority Leader Bill Frist (R-Tenn.) has said that he wants to reach an
agreement and bring the asbestos bill to the floor next month. But
staffers and lawmakers say negotiations have yet to be restarted,
reported the newswire.
House to Name Conferees in Pension Legislation
House Speaker Dennis Hastert (R-Ill.) may name conferees as early as
tomorrow to negotiate with the Senate over pension legislation, a
spokesman said, CongressDaily reported. Senate Health, Education,
Labor and Pensions Chairman Judd Gregg (R-N.H.), one of the Senate
negotiators selected to work on the bill, said yesterday that he still
hoped once the House conferees were named, conferees could wrap up their
work before April 15. That is the deadline for many companies to
calculate the contributions they must make to their pension plans which,
under the new legislation, will be calculated using a revised formula.
The change is expected to save companies about $80 billion over the next
two years. Provisions included in the Senate bill but not in the House
version would save airlines and steel manufacturers an additional $16
billion in pension payments. The House passed the pension bill last year
and the Senate followed suit last month, reported the newswire.
Greenspan Too Upbeat on Household Sector, Credit Experts Say
Federal Reserve board chairman Alan Greenspan delivered an upbeat
assessment about the state of U.S. household finances, CBS MarketWatch
reported. In a
href='http://www.federalreserve.gov/boarddocs/speeches/2004/20040223/default…'>speech
to a credit union trade association, Greenspan said consumers could
handle their higher debt levels. 'Overall, the household sector seems to
be in good shape,' Greenspan said, CBS reported.
However, many financial experts say that consumers are stretched too
thin without being able to successfully plan for their financial
futures. Credit cards have trapped many, they say. 'Middle-class,
hard-working, play-by-the-rules families are in terrible financial
trouble,' said Elizabeth Warren, a professor at Harvard Law
School. At issue is the sharp rise in personal bankruptcies, which have
more than tripled in the past 17 years to a record 1.6 million in
2003.
'Personal bankruptcies keep increasing -- even through business
cycles. It has to have as its root cause something besides the business
cycle,' said Lewis Mandell, professor of finance at the University at
Buffalo School of Management. In his speech, Greenspan said bankruptcy
rates were not a reliable measure of the overall health of the household
sector, because they may be impacted by outside factors like changes in
laws. Read the
href='http://cbs.marketwatch.com/news/print_story.asp?print=1&guid=%7B704…'>full
story.
Adelphia Proposes Reorganization Plan
Adelphia Communications Corp. today said it had arranged $8.8 billion in
financing as part of its plan to emerge from bankruptcy later this year,
Reuters reported. Adelphia, which submitted the reorganization plan to
the U.S. Bankruptcy Court for the Southern District of New York, said
its proposal includes a variety of distributions in cash, preferred
shares and common stock as well as interests in a litigation trust for
its various creditors, shareholders and litigants. The Rigas family will
receive no payments with regard to their equity stakes and other claims,
Adelphia said. The filing of the proposed plan is expected to touch off
a battle between Adelphia's new management, appointed after the Rigas
family resigned amid fraud charges, and Adelphia's shareholders, who
charge the plan will enrich creditors and bondholders at their expense,
the newswire reported. The proposed plan values Adelphia at $17 billion
and estimates the company will have $8 billion in indebtedness and
access to $750 million in credit when it emerges from bankruptcy.
JPMorgan Chase & Co., Credit Suisse First Boston, Citigroup Inc. and
Deutsche Bank AG will lead the financing package, which is subject to
bankruptcy court approval, Adelphia said.
DirecTV Latin America Emerges from Chapter 11
DirecTV Latin America LLC on Tuesday said it has emerged from chapter 11
bankruptcy protection after reorganizing, Reuters reported. The company,
majority owned by Hughes Electronics Corp., filed for chapter 11
protection from creditors last March after losing subscribers because of
recessions, political unrest and currency fluctuations in Argentina,
Venezuela and Brazil. In December, the company filed its reorganization
plan with the U.S. Bankruptcy Court in Delaware. The plan included an
agreement between Hughes and company creditors, in which they agreed to
take 20 cents on the dollar for allowed claims. The filing only applied
to the U.S. entity and did not include any of the operating companies in
Latin America and the Caribbean, which have continued regular
operations. In December, the company said it had lost 100,000
subscribers since 2002. It lost 25,000 subscribers in Brazil alone, the
region's largest market.
Trump Looking For Lucky Hand With Casino Deal
Donald Trump agreed to hand control of Trump Hotels and Casino Resorts
Inc. to a Credit Suisse First Boston (CSFB) affiliate in return for $400
million in cash, Reuters reported. The deal includes a proposed
refinancing of $1.8 billion in high-interest debt, a modified board of
directors and a name change to Trump International Corp. But the deal
hinges on Trump Hotels' ability to restructure its debt by reaching an
agreement with its bondholders. Failing that, Trump Hotels might have to
file for bankruptcy, according to several bond analysts.
This would not be the first brush with bankruptcy for Trump's casinos in
Atlantic City. Trump Taj Mahal went through a prepackaged bankruptcy in
1991, while Trump Plaza and Trump Marina went through the same in 1992.
But Scott Butero, executive vice president of Trump Hotels, told Reuters
the company does not intend to file for bankruptcy, and the new deal
with DLJ Merchant Bank Partners, the CSFB affiliate, will provide the
company with the cash it needs. 'We now find that the leverage is high
and interest rates are particularly high, relative to our peer group. We
don't have the cash flow to reinvest in properties,' he said. But the
agreement with DLJ should help the company recover lost ground and grow
the brand in the gaming world, he added, reported the newswire.
GE Commercial Finance Business Credit Provides Remet Corporation
With $11.7 Million Senior Credit Facility
GE Commercial Finance, through its Business Credit unit, announced
that it has financed Remet Corporation with a $11.7 million credit
facility, which the company will use for acquisition financing and
working capital. Utica, N.Y.-based Remet Corporation is a leading
manufacturer and distributor of waxes, ceramics and other products used
by foundries in the production of precision investment castings.
TransCanada to Buy U.S. Pipelines for $1.7 Billion
TransCanada Corp., the country's top pipeline company, agreed on Tuesday
to buy a unit of PG&E Corp. in a $1.7 billion deal that would extend
its gas transportation network to California, Reuters reported. But the
acquisition of the main pipeline through the U.S. Pacific Northwest and
another in the southern United States faces a number of hurdles because
the PG&E subsidiary selling the assets is under bankruptcy
protection, TransCanada said. It would be TransCanada's biggest purchase
since its C$14 billion ($11 billion) takeover of Nova Corp. in 1998, and
would follow several smaller deals in the past two years.
Calgary-based TransCanada said it agreed to buy Gas Transmission
Northwest Corp. from PG&E's National Energy & Gas Transmission,
which filed for chapter 11 bankruptcy protection last July. The Canadian
firm would pick up a 1,350-mile (2,174-km) pipeline to northern
California from the British Columbia-Idaho border, formerly known as
Pacific Gas Transmission. It would also acquire the 80-mile (128 km)
North Baja pipeline to Baja California in Mexico from Ehrenberg, Ariz.
The sale of that asset is subject to a right of first refusal by another
firm, TransCanada said, reported the newswire.
Solutia Retirees Get Panel in Company's Bankruptcy Case
The U.S. Bankruptcy Court in Manhattan appointed an official committee
to represent the interests of retirees in the chapter 11 case of
specialty chemicals maker Solutia Inc., the Associated Press reported.
Judge Prudence Carter Beatty signed the order on Friday, naming
seven retirees to serve on the panel. They sought approval of the panel
in January to represent the roughly 9,800 retirees and 9,700 spouses and
dependents receiving health, life and disability benefits under
Solutia's employee plans, saying they feared the chemical company would
try to eliminate these benefits. When St. Louis-based Solutia filed for
chapter 11 protection in December, it asked the court to allow the
company to modify its obligations to pay retiree benefits or to stop
paying them all together. Solutia sued the Pharmacia Corp. unit of drugs
giant Pfizer Inc., as successor to its former parent, saying it was
liable for $475 million in pension liabilities. Solutia filed for
chapter 11 protection on Dec. 17, with 14 affiliates, listing total
assets of $2.85 billion and debts of $3.22 billion, reported the
newswire.
Parent Firm of Montalcino Files for Bankruptcy
The parent firm of the group hoping to build the Montalcino Resort near
the Napa County Airport has filed for bankruptcy, Napanews.com
reported. HCV Pacific Partners, the Hong Kong-based umbrella
organization of HCV Napa Associates, filed the chapter 11 petition in
San Francisco bankruptcy court last Friday. 'It will absolutely not
affect any of our projects,' said Randall Verrue, CEO of the company
that just won tentative approval for Montalcino following literally
years in the planning pipeline. 'This is the only way out' of litigation
over a project in Washington state, said Verrue of the bankruptcy
filing. 'We fully expect to prevail.' The litigation that caused HCV to
head for chapter 11 was brought in San Francisco Superior Court by
Gerald Boscoe. Boscoe claims he is owed substantial sums by HCV and
Verrue personally for his investment in the Port Ludlow resort, stemming
from the time when HCV took over Port Ludlow from former owner and
developer Pope Resources. Because it is a holding and investment
company, Verrue said HCV does not retain the financial resources should
there be a judgment against it, thus the chapter 11 proceeding.
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