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August 26, 2005
name='1'>United Parent
Gets $3 Billion Offer
UAL Corp., parent
of bankrupt
United Airlines, has received proposals for up to $3 billion dollars
in exit
financing, above the $2.5 billion the carrier had requested, the
airline’s CEO
said yesterday, according to Reuters reports. Four financial
institutions that
have seen the business plan that United intends to file have
determined that
the company would need an additional $500 million in all-debt
financing, Glenn
Tilton said in a recorded telephone message to employees. United has
said that,
as it nears an exit from chapter 11, reorganization expenses will
remain high.
Read the
full story.
id='2'>That
Bankruptcy Boom
An editorial in
today’s
Wall Street Journal claims that the new bankruptcy law is
"already working,
even before it takes effect, and suggests that we’re likely to
see a sharp
and prolonged decline in bankruptcies come October — just as the
href='http://online.wsj.com/article/0,,SB112502015564623821,00-search.html?KEYWORDS=bankruptcy=wsjie/archive%20'>Read
the full story.
id='3'>State
Law Would Narrow Lawsuits
A new Texas law
says that
people with less than 20 percent damage to their lungs from asbestos
cannot
sue unless the damage gets worse, Austin Channel 8 News reported
yesterday.
Bill Hammond, with the Texas Association of Business, says that the
new law
will reduce frivolous lawsuits. In the past, he said, true asbestos
victims
were too often grouped with non-victims in huge cash settlements. Read
href='http://www.news8austin.com/content/your_news/default.asp?ArID=144036'>Read
the full story.
id='4'>Fed,
Banks Will Meet Over Derivatives
The Federal Reserve
Bank
of New York will meet with Wall Street banks next month to discuss the
still
relatively opaque market for credit derivatives, the Wall Street
Journal
reported yesterday. The market is a young, but rapidly growing one,
where traders
and investors use the derivatives to buy and sell protection against
defaults.
Trading volumes have soared, but the back-office functions needed to
ensure
that trades get completed haven’t kept up with that growth. It
is such
settlement issues that the New York Fed wants to discuss with the
bankers on
Sept. 15.
href='http://online.wsj.com/article/0,,SB112489581089621871-email,00.html'>Read
more.
id='5'>San
Diego Judge Orders Documents
A federal judge
ordered the
city of San Diego’s pension board Tuesday to turn over documents
to the U.S.
Attorney’s Office so that federal lawyers can complete a
criminal fraud investigation
into city financial matters, NBC News reported Wednesday. U.S.
Attorney Carol
Lam subpoenaed the documents in 2004, but pension board officials had
refused
to release them, claiming that attorney-client privilege allowed them
to withhold
the information. The pension board can challenge the order to turn
over the
documents, but that appears unlikely. "I suspect that we’re
not going to
appeal it," said board President Peter Prevolos. While the order
by Chief
U.S. District Judge Irma E. Gonzalez assists the U.S. attorney’s
investigation,
it does not require release of the documents to the city, its auditors
or the
general public. Acting Mayor Toni Atkins said that the City Council
will continue
pressing the pension board to waive attorney-client privilege and turn
over
the documents to the city so it can complete its overdue 2003 fiscal
audit.
The city is also tardy on its 2004 audit. Without the audits, the city
has been
crippled in its ability to borrow money.
id='6'>Tom’s
to Terminate Pensions
Snack maker
Tom’s Foods,
working its way through bankruptcy reorganization, said yesterday that
it is
terminating its employee pension plan because of financial
"distress,”
the Columbus Ledger-Enquirer reported today. Columbus,
Ga.-based Tom’s,
founded in 1925, has filed an application with the federal Pension
Benefit Guaranty
Corp. to halt benefit accruals by Oct. 7. The Tom’s Foods plan,
which
is underfunded by $43 million, would be eliminated on Nov. 15 if the
U.S. Bankruptcy
Court for the Middle District of Georgia in Macon approves the move.
About 3,500
active, retired and former workers vested into the plan are affected
by the
decision.
href='http://www.ledger-enquirer.com/mld/ledgerenquirer/news/12478502.htm'>Read
more.
id='7'>Falcon
Products Sees Exit from Bankruptcy
Falcon Products
Inc. reached
an agreement with its unsecured creditors committee that will allow it
to emerge
from bankruptcy in the next few months, the St. Louis Business
Journal
reported yesterday. The U.S. Bankruptcy Court for the Eastern District
of Missouri
approved on Monday the company’s amended reorganization plan and
set a confirmation
hearing for Oct. 6. The company said that it expects to emerge from
bankruptcy about
30 days after the plan is confirmed. Under the terms of the plan,
Falcon’s
debt will be reduced from more than $250 million to less than $90
million. Much
of the debt would be converted to equity for investors Los
Angeles-based Oaktree
Capital Management LLC and White Plains, N.Y.-based Whippoorwill
Associates
Inc., and the company would become private.
href='http://stlouis.bizjournals.com/stlouis/stories/2005/08/22/daily55.html'>Read
more.
id='8'>Consumer
Credit Interest Rates Still Soaring
The amount that
Americans
are paying each month on their credit card bills continues to hover at
record
levels, Cardweb.com reported yesterday. After dipping in May, the
average is
now about 18.5 percent of the outstanding balance. One year ago, the
monthly
payment rate was about 17.3 percent. Approximately 42 percent of
consumers pay
off credit card balances in full each month, while 33 percent pay more
than
the minimum, according to a recent American Bankers Association
survey.
href='http://www.cardweb.com/cardtrak/news/2005/august/24a.html'>Read
the full story.