November 32004

Submitted by webadmin on Wed, 2004-11-03 00:00

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November 3, 2004

Airlines Ask for Lower Rents to Cut Costs at Portland, Ore.,
Airport

Cash-strapped airlines are looking for some rent relief at Portland
International Airport, the Oregonian reported. They have
persuaded the Port of Portland, which operates the airport, to
renegotiate lease terms that will govern all 16 passenger airlines and
13 cargo airlines providing service to Portland. The discussions come as
airlines struggle in the worst period since the industry was deregulated
in 1978. Squeezed by low-cost carriers, high fuel prices and the
post-Sept. 11 economic crunch, three of the country’s top 10
carriers have filed for bankruptcy protection. A fourth, Delta Air
Lines, posted a $651 million third-quarter loss last month and is
teetering near bankruptcy. Along with obtaining wage concessions from
workers, airlines are seeking relief in their lease arrangements, both
for aircraft and terminal space, the newspaper reported.

United Airlines’ CEO Speaks About Company’s Past
Problems

United Airlines CEO Glenn Tilton said that the company’s past
leadership lacked credibility and that bad decisions hurt the airline,
the Denver Post reported. Speaking on Friday at an American
Bar Association forum on air and space law in Santa Monica, Calif.,
Tilton said United faced chronic problems in past years.
“Leadership lacked credibility, courage and had limited
authority,” Tilton said, according to a written copy of his
remarks provided by the company. He said current leadership is trying to
restructure the airline through chapter 11 bankruptcy and transform the
company and its culture.

Ruling Offers Hope to WorldCom Ex-Employees

In a sign of hope for the thousands of employees of WorldCom Inc.
left holding worthless stock options when the telecommunications giant
filed for bankruptcy-court protection in 2002, an arbitration panel has
ordered a Citigroup Inc. unit to pay for part of the losses of one
former employee, the Wall Street Journal reported. A
three-person National Association of Securities Dealers panel last week
concluded that Citigroup’s Salomon Smith Barney unit, since
renamed Citigroup Global Markets, breached its fiduciary duty to the
WorldCom employee. Read the full article at
href='http://www.wsj.com/'>www.wsj.com (subscription required).

ATA Says Nasdaq to Delist Its Stock

ATA Holdings Corp., the parent of low-cost carrier ATA Airlines,
which filed for bankruptcy protection last week, said on Tuesday that
Nasdaq will delist its stock at the opening of business on Friday,
Reuters reported. The company’s shares will not be immediately
eligible to trade on the over-the-counter bulletin board because of
pending chapter 11 bankruptcy proceedings, the company said.

Jury Deliberations Resume in Enron Barge Criminal Trial

Deliberations resumed Tuesday in the fraud and conspiracy trial of
four former Merrill Lynch & Co. executives and two former midlevel
Enron Corp. executives, according to an Associated Press article. Jurors
had told U.S. District Judge Ewing Werlein they might leave early on
Election Day so those among the six men and six women deciding the
outcome of the trial could vote if they hadn’t done so early. It
wasn’t clear when they would wrap up deliberations for the day if
they didn’t reach a verdict. On Monday, jurors ended their
discussions mid-afternoon after one of them became ill.

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NorthWestern Corp. Emerges From Chapter 11

NorthWestern Corp. has emerged from bankruptcy and will begin trading
its new common stock on the NASDAQ exchange, company executives
announced Monday according to an Associated Press article. “This
is an important day for the new NorthWestern, as we have completed a
highly successful restructuring in a very short time frame without
raising our customers’ utility rates,” said Gary Drook,
NorthWestern’s president and chief executive officer. The Sioux
Falls-based utility filed for chapter 11 protection in September 2003
after months of struggling to gets its finances back on track. At the
time, NorthWestern was more than $2 billion in debt. NorthWestern
provides electricity and natural gas to 600,000 customers in South
Dakota, Montana and Nebraska.

VarTec Telecom Inc. Seeks Relief, Files for Bankruptcy
Protection

VarTec Telecom Inc. succumbed to the mounting pressures of its large
debt and falling revenue and filed for bankruptcy protection Monday,
citing an urgent need for new capital, Knight-Ridder reported. The
Dallas-based phone company also said its Excel subsidiary would stop
selling telephone services through independent representatives. That
move, if approved by the U.S. Bankruptcy Court for the Northern District
of Texas, would mean that the company will no longer pay commissions to
130,000 outside agents. VarTec said it has set up a $30 million loan
from the Rural Telephone Finance Cooperative, one of its biggest
lenders. The bankruptcy court in Dallas will approve or reject that loan
at a hearing on Thursday.

Monsour Asks More Time for Bankruptcy Filing

Attorneys for the bankrupt Monsour Medical Center in Jeannette have
asked a federal judge in Pittsburgh for more time to submit a detailed
bankruptcy petition, the Pittsburgh Tribune reported.
Monsour faced a Monday deadline, but attorney Robert O. Lampl, of
Pittsburgh, asked for an extension until Nov. 15 because he said he
needs time to gather the hospital’s “voluminous”
records to complete the filing. Monsour filed for bankruptcy in U.S.
District Court last month, submitting a preliminary report listing debts
ranging from $1 million to $10 million and 29 creditors.

Airlines Fearing a Vicious Circle of Weak Finances and Low
Morale

Low morale among workers inevitably results in low productivity, low
quality, erosion of customer loyalty, and ultimately, lower profits. And
US Airways employees, who have seen their pay cut by more than 20
percent and their health insurance and pension plans shrink, are
certainly unhappy, the New York Times reported. Read the
full article at
href='http://www.nytimes.com/'>www.nytimes.com.

Surge in British Asbestos Claims Will Cost Billions

A surge in asbestos-related claims over the coming decades could land
British insurers and employers with a bill of up to pounds 20bn,
according to research by actuaries published yesterday, Europe
Intelligence Wire reported. The study predicts that as many as 200,000
new insurance claims from British workers who were exposed to asbestos
are expected over the next 30 years or so. It claims there is a risk of
Britain mirroring the US, which has in recent years seen an explosion in
claims from people who are not sick but are worried they could become
ill—bankrupting several large American firms in the process. The
study is based on data collected by the Actuarial Profession from all
major UK insurance companies.