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January 12, 2006
id='1'>Bankrupt Las Vegas Hotel, Casino Crumbles
Bankrupt Castaways hotel and casino in Las Vegas was torn down Tuesday, the Associated Press reported yesterday. A series of planned explosions reduced the 19-story tower to a 20,000-ton heap of rubble and raised a huge cloud of dust just after dawn. The Castaways had been closed since changing hands in a bankruptcy proceeding in January 2004. The 447-room building opened in 1955 as the Showboat, which hosted professional bowling tour events. It changed hands several times in the 1990s and struggled for years before being crippled by a tourism slowdown following the Sept. 11, 2001, terrorist attacks.
id='2'>Waterman Industries Emerges from Bankruptcy
GNI Waterman LLC announced that it has acquired the vast majority of the operating assets of Waterman Industries Inc., located in Exeter, Calif., and Lubbock, Texas, on Jan. 3, the company said in a press release yesterday. GNI Waterman LLC is owned by Galena National Investment LLC, which is affiliated with two New York-based investment firms with over $20 billion of assets under management. The new company will operate under the name of Waterman Industries and through the leadership of newly appointed CEO Birch Brown. To support its focus on the irrigation, water delivery and water treatment industries, Waterman has reorganized into a more flexible operation and announced that it will concentrate on strengthening consumer and customer relationships. Read more.
id='3'>Retired United Air Pilots Want Recount of Bankruptcy Plan Votes
Pilots retired from United Airlines are demanding a recount of the votes cast for the airline's chapter 11 plan of reorganization, the Associated Press reported yesterday. The United Retired Pilots Benefit Protection Association said that United didn't count the votes of more than 1,500 retired pilots because they sought to recover lost pension benefits in greater amounts than reflected on the ballots. United spokeswoman Jean Medina disputes that, saying that the Elk Grove Village, Ill.-based airline fully complied with the tabulation procedures approved by bankruptcy court. A hearing is scheduled today on the emergency motion the retirees filed in U.S. Bankruptcy Court in Chicago. A hearing to confirm United's plan to exit bankruptcy is scheduled to begin next Wednesday.
In related news, the Associated Press reported yesterday that United Airlines CEO Glenn Tilton could receive stock and options worth $15 million, base pay of more than $600,000 annually and a bonus that could double his salary when the carrier emerges from bankruptcy next month, according to company documents. Tilton would get 545,000 restricted shares and 822,000 options, or just more than 1 percent of the $1.9 billion in equity United intends to issue, if a bankruptcy judge approves. Overall, United plans to set aside 8 percent of the equity it plans to issue -- at a value of around $152 million -- for about 400 salaried and management employees. The compensation awards were disclosed in UAL filings Wednesday with the court and elucidated by company spokeswoman Jean Medina. The proposed incentive plan for senior managers and directors of the nation's No. 2 airline will be a touchy issue as a Chicago bankruptcy court starts hearings Jan. 18 about United's plan for leaving more than three years in bankruptcy court. Read more.
id='4'>Refco Seeks to Remove Ex-Chief from Board
Refco yesterday asked a federal court in New York to remove its former chief executive, Phillip R. Bennett, from its board to 'increase the confidence' of the company's creditors and customers, Bloomberg News reported yesterday. Bennett has not participated in board activities since he disclosed a hidden debt of $430 million on Oct. 10. He was arrested the next day, and in November he pleaded not guilty to federal fraud charges. Refco filed for bankruptcy protection on Oct. 17. 'Formal removal of Mr. Bennett from the board will help to increase the confidence of various interested parties in the board's ability to move forward in a positive manner,' a Refco lawyer, Anthony Clark, said in papers filed with the U.S. Bankruptcy Court in New York. Judge Robert D. Drain will consider the request to remove Bennett from the board today. Read more.
id='5'>McLeodUSA Emerges from Bankruptcy, Names CEO
McLeodUSA Inc. has emerged from chapter 11 bankruptcy reorganization and named a telecommunications veteran as its new chief executive officer, The Cedar Rapids, Iowa, Gazette reported yesterday. The Cedar Rapids-based competitive local exchange carrier said Monday that its joint reorganization plan became effective Friday. It had been approved Dec. 16 by the U.S. Bankruptcy Court for the Northern District of Illinois. Under the terms of the reorganization plan, McLeodUSA eliminated about $677 million in debt, plus interest, and reduced its annual interest expense by over $50 million. Read more.
id='6'>Visteon Plans Shutdowns and Layoffs
Auto parts maker Visteon Corp. announced plans yesterday to shut, sell or overhaul operations at up to 23 of its plants worldwide as part of a sweeping three-year campaign to get the company back on the road to profitability, Dow Jones Newswires reported yesterday. The plan, which Visteon estimates will cost about $800 million, is its second big restructuring push in less than a year. Visteon said that most of the cost will be tied to an unspecified number of layoffs, terminated contracts and consolidating operations at the facilities it plans to keep. The company
currently has about 50,000 employees at 170 locations worldwide. Read more.