June 10, 2004
Jobless Claims Rise
Unexpectedly
The number of Americans filing
initial claims for jobless aid rose unexpectedly last week, government
data showed on Thursday, Reuters reported. First-time claims for state
unemployment benefits rose 12,000 to 352,000 the week ended June 5, the
Labor Department said. Despite the rise in layoffs, economists still
consider claims near the 350,000 level as a token of an improving labor
market. Wall Street analysts had forecast a fall in claims to 335,000
from a revised 340,000 the previous week. This was originally reported
as 339,000.
House Leaders Address Pension
Legislation
House Education and the
Workforce Chairman John Boehner (R-Ohio) said yesterday his
committee is on track to pass comprehensive pension legislation by the
end of next year, CongressDaily reported. Speaking at a briefing
by the American Benefits Council, Boehner said legislation is needed
before a temporary pension bill expires at the end of 2005 to address
weaknesses in retirement plans. Boehner said large numbers of working
Americans are unprepared for retirement, companies are dropping
traditional 'defined benefit' pension plans, and many employees lack
access to investment advice they need to maximize their personal
retirement accounts. Addressing the myriad problems requires lawmakers
to look at the entire system, he said. Rep. Robert Andrews (D-N.J.) said
lawmakers were in a 'pre-legislative process where ideas are thrown into
the mix.' Boehner and Andrews also welcomed a report by the Benefits
Council outlining a 10-year plan for retirement policy. The report
recommended policy changes, including the creation through legislation
of a clearinghouse retirement plan that would allow employees to hold
one retirement account that would stay with them as they changed jobs,
the newswire reported.
class='t1'>Allegiance Telecom Plan of Reorganization Approved by U.S.
Bankruptcy Court
Allegiance Telecom’s proposed plan of reorganization was
approved by Judge Robert Drain of the U.S. Bankruptcy Court for the
Southern District of New York, the company announced in a press release.
The final plan and a disclosure statement are available via the court's
web site. The company's bankruptcy case number is 03-3057.
On Feb. 13, 2004, Allegiance
selected XO Communications Inc. as the winning bidder to purchase
substantially all of the assets of Allegiance Telecom and its
subsidiaries, including the stock of Allegiance's regulated operating
subsidiaries. Under the terms of its bid, XO will purchase substantially
all of Allegiance's assets for approximately $311 million in cash and
approximately 45.38 million shares of XO common stock. The bid was
approved by the court on Feb. 19, 2004, and is currently undergoing
certain federal and state government approvals, according to the press
release.
Study Says Canada Company
Pensions Face Steep Deficits
Most defined benefit pension plans in Canada are running deficits that
could eventually lead to their collapse and pose a threat to corporate
profits and share prices, a study said on Wednesday, Reuters reported.
According to a survey of 847 defined-benefit, or fixed-payment plans,
released by the Certified General Accountants Association of Canada, the
current rebound in stock prices won't fix the problem. It said companies
could be forced to make steep payments to keep the plans from going
bankrupt. While the funding situation improved a little in 2003 from the
previous year, 59 percent of Canadian-defined plans are in deficit and
it could take as much as C$160 billion ($118 billion) to cover the total
shortfall, the study said, the newswire reported.
Markets Prepared For Higher
Rates-New York Fed
U.S financial markets are well
prepared for a gradual rise in official interest rates and should not be
stressed when the Federal Reserve changes policy, New York Fed President
Timothy Geithner said on Wednesday, Reuters reported. Echoing comments
from Fed Chairman Alan Greenspan a day earlier, Geithner also said the
central bank will 'do what is necessary' to keep inflation at bay and
the economy on track. The Fed is expected to begin lifting rates from a
46-year low of 1 percent at its next meeting on June 29-30 and has said
that it will likely raise rates at a 'measured' pace.
Wet Seal Has Hired Financo
As Financial Advisor
Wet Seal Inc. said on Wednesday
it has hired Financo Inc. to aid its current turnaround effort and added
that it hasn't hired the New York investment bank in anticipation of a
possible bankruptcy filing, the online Wall Street Journal
reported. The teen retailer said in a June 1 statement that it had hired
an unnamed financial advisor 'to ensure it has appropriate working
capital to continue its strategic initiatives and deliver a successful
turnaround.'
Horsemen Object To Fair Grounds
Bankruptcy Plan
A Louisiana horsemen's group
has objected to the bankruptcy reorganization plan filed by the Fair
Grounds Race Course, the Courier Journal reported. In a
bankruptcy court filing this week, the Louisiana Horsemen's Benevolent
and Protective Association claim that the disclosure statement by the
New Orleans track omits important facts and is filled with incorrect
information. Churchill Downs made the highest offer in closed-door
negotiations for the Fair Grounds, but the two sides could not reach an
agreement before the bankrupt track filed its reorganization plan on
April 19.
Briazz Cafe Chain Files For Bankruptcy Protection
Cafe chain operator Briazz Inc., citing $12.2 million in debt, filed
for chapter 11 bankruptcy protection this week as it attempts to
reorganize, the Seattle
Post-Intelligencer reported. The Seattle-based company
plans to continue operating its 20 cafes in Seattle, San Francisco and
Los Angeles during the reorganization, it said in a filing yesterday
with the Securities and Exchange Commission.
Briazz, which operated a number
of unprofitable stores, has already tried to cut its costs, closing 18
stores and four bookstore cafes since late March. But the company has
accumulated debt from issuing secured notes in exchange for additional
financing, and it owes money to landlords and vendors.
Interplay Reopens,
Titus Declares Bankruptcy
French authorities suspend trading
of Interplay's corporate parent while the publisher acquires workers'
compensation insurance, TechTV reported. Just days after California
authorities forced Interplay to close its doors, the publisher has
reopened them. A report from The Orange County Register says
that CEO Herve Caen succeeded in acquiring workers' compensation
insurance for the financially troubled company, thereby allowing work to
resume at its Irvine, Calif. offices. The offices were forcibly closed
Friday by state labor inspectors due to lack of workers' compensation
insurance and unpaid wages.
The news for Interplay came on the same day the publisher's majority
shareholder, France-based Titus Interactive, declared bankruptcy.
Speaking to GameSpot, sources said they heard news of the bankruptcy
from Caen.
size='3'>Cannon’s Bankruptcy Dismissed
Cannon Express Inc.’s
bankruptcy was dismissed by the Western District of Arkansas’ U.S.
Bankruptcy Court on Tuesday,. Cannon Express filed for
chapter 11 bankruptcy protection on Dec. 9, listing $33.6 million in
secured debts and less than $50,000 in assets. Then on Feb. 24, a motion
was filed to dismiss or convert the cases from chapter 11 to chapter 7.
Dean Cannon, former president and CEO of Cannon Express, said he
doesn’t know what will happen concerning any further legal issues
surrounding the company.