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United Provides Some Specifics on New Airline
United Airlines plans to shift about 30 percent of its domestic capacity
into the new discount airline that the carrier hopes to form as it plots
its exit from bankruptcy, executives said yesterday, giving their most
detailed public accounting of United's recovery plan, the New York
Times reported. Representatives of the airline's unions said they
still had reservations about the proposal - particularly over the
process of identifying the workers who would be assigned to jobs at the
discount carrier. To read the full article, point your browser to
href='http://www.nytimes.com/'>www.nytimes.com.
Mesa Air Shares Up on News That US Air Will Exit Bankruptcy by
2Q
Shares of Mesa Air Group Inc. rose 12 percent on Wednesday after
business partner US Airways Group Inc. said it's on track to emerge from
bankruptcy by the start of the second quarter, Dow Jones reported. Mesa
and US Airways forged a deal, called 'jets for jobs,' in which
furloughed US Airways pilots fly regional jets operated by Mesa. Under
the deal, Mesa is to order 70 new jets and up to one-half of them can be
flown by US Airways pilots, said BB&T Capital Markets analyst Tony
Cristello, reported the newswire. 'The real key is getting the financing
lined up, and it's a really difficult market right now,' Cristello said,
referring to the purchase of the planes. US Airways' emergence from
bankruptcy will make lenders more likely to hand money over to Mesa, a
Phoenix-based regional air carrier, reported Dow Jones.
Wherehouse Entertainment Resolves Closing Sales Objections
Wherehouse Entertainment Inc. on Wednesday resolved all of the
objections to a motion to conduct going-out-of-business sales at 92 of
its stores starting today, Dow Jones reported. The company said the
sales will provide the revenue it needs to fund its continued
operations. The music retailer plans to shut down 208 locations, most of
which are underperforming or unprofitable. The move will save Wherehouse
Entertainment roughly $2 million a month in rent and other charges.
Fourteen landlords had filed objections to the motions before
Wednesday's hearing. Wherehouse Entertainment negotiated resolutions to
the objections and must now revise a proposed court order to reflect the
agreements, Dow Jones reported.
Judiciary Committee To Take Up Grassley's Class Action Bill
Senate Judiciary Chairman Orrin Hatch (R-Utah) has assured Sen. Charles
Grassley
(R-Iowa), a lead sponsor of class action reform legislation, that his
bill would be marked up in committee this session, a Grassley
spokeswoman confirmed on Wednesday, CongressDaily reported.
Separately, Senate Budget Chairman Don Nickles (R-Okla.) said on
Wednesday he was planning to move 'very quickly' to introduce his
asbestos litigation reform legislation, which he recently announced was
in the drafting phase, reported the newswire.
Heilig-Meyers Gets OK To Extend DIP Loan Through Oct. 31
Dow Jones Newswires reported that Heilig-Meyers Co. won court approval
to extend its $30 million debtor-in-possession loan with a group of
lenders led by CIT Group/Business Credit Inc. The debtor-in-possession
loan, set to expire on Jan. 31, has been extended through Oct. 31. Chief
Judge Douglas O. Tice Jr. of the U.S. Bankruptcy Court in Richmond, Va.
authorized the furniture retailer to pay CIT Group/Business Credit a
$75,000 fee for amending the debtor-in-possession loan. Judge Tice's
order also allows the company to enter into a second amendment to the
debtor-in-possession loan-giving it an option to further extend the loan
through Jan. 31, 2004-provided no objections are filed to the second
amendment, Dow Jones reported.
Communication Dynamics Seeks To Extend Exclusive Period
Annville, Pa.-based Communication Dynamics Inc. is asking a bankruptcy
court for a 90-day extension of its exclusive periods to present a
chapter 11 liquidation plan, Dow Jones reported. The company wants to
extend the plan-filing period to April 21 and the vote-solicitation
period to June 20. The U.S. Bankruptcy Court in Wilmington, Del., will
consider the extension request at a hearing scheduled for Tuesday if
objections were filed by last Tuesday, the court filings said, the
newswire reported.
Delta Air To Notify Pilots Of Contract Talks
Delta Air Lines Inc. said it will notify its pilots of its plan to begin
discussions with the union about opening the existing labor contract in
an effort to cut costs, Dow Jones reported. During the Deutsche Bank
Global Transportation Conference broadcast via the Internet yesterday,
M. Michele Burns, executive vice president and chief financial officer
of Delta, said she believes the third-largest U.S. carrier will have a
'meaningful and productive' conversation with its pilots, who are
'generally' supportive of the carrier, she said, reported the newswire.
Delta's contract with its pilots, represented by the Air Line Pilots
Association, won't be open for renewal until May 2005, and it's up to
the union to agree to negotiate reopening it, Burns said, according to
Dow Jones. Pilots are the only unionized labor group at the Atlanta
carrier.
Retirees Losing Benefits From Bankruptcy
The nation's persistent economic slump and rash of corporate scandals
that have drained cash from pension plans and 401(k) accounts are eating
into retirees' health benefits, the Associated Press reported. Thousands
of retired workers who were promised lifetime health care coverage by
their former companies have lost those benefits as a growing list of
firms have folded or been sold. According to the Associated Press, by
far the largest single group affected has been steelworkers. In other
industries, Polaroid and Outboard Marine Corp., which made boat motors,
slashed health insurance for thousands of retirees when they went
bankrupt in 2001. Some experts are concerned that struggling airlines
could be the next to slash benefits for retired workers. 'It is part and
parcel of the whole health care crisis,' said Mary Ellen Signorilli, an
attorney with the American Association of Retired Persons, reported the
newswire.
Asia Global Crossing Notes Trustee Seeks To Make Payment
Bank of New York is asking a court to lift a stay on Asia Global's
bankruptcy proceedings so the bank may distribute $27 million of
interest payments held in a trust, Dow Jones reported. The U.S.
Bankruptcy Court in Manhattan has scheduled a hearing on the matter for
March 6. The funds are being held under indenture to notes for holders
of record as of Nov. 12, 2002, according to court papers obtained on
Wednesday by Dow Jones Newswires. Asia Global Crossing gave the funds to
Bank of New York before the company filed for bankruptcy in November
2002.
Owens Corning Asbestos Claimants Fight New Claim Rules
The state of Louisiana and other claimants have criticized procedures
that Owens Corning wants to use to evaluate asbestos-related
property-damage claims, according to court papers obtained by Dow Jones
Newswires. Louisiana and a group of about 200 claimants, represented by
the law firm Speights & Runyan, said they could lose their claims
because of the procedures, which would require them to produce more
evidence in support of their claims within an unrealistic timeframe,
according to filings last week with the U.S. Bankruptcy Court in
Wilmington, Del. A hearing on the request is scheduled for Feb. 24, when
the court is also scheduled to consider the company's request to
disallow or expunge about 100 asbestos-related property-damage claims
that the company says were filed late or without any supporting
documents, reported the newswire.
Berkshire's Burlington Bid Opposed by Creditors, Ross Says
Warren Buffett's $579 million cash bid for bankrupt textile company
Burlington Industries Inc. is opposed by a majority of unsecured
creditors and is a 'covert'' reorganization plan, financier Wilbur Ross
said, Bloomberg News reported. Berkshire Hathaway Inc. on Tuesday
offered unsecured creditors as much as 35 cents on the dollar for their
claims. Ross, whose WL Ross & Co. holds 25 percent of Burlington's
unsecured debt, is also vying for control of the company. The board has
no 'justification'' to accept the Berkshire bid, he said in a letter to
the board that was released to the media, Bloomberg reported.
National Airlines Should Be Liquidated, U.S. Trustee Contends
National Airlines should be liquidated to pay employee-health bills and
other claims, federal officials said, Bloomberg News reported. National
Airlines officials are dragging their feet in converting the company's
chapter 11 filing to a liquidation after failing to get financing, R.
Palmer Cundick, an assistant U.S. Trustee overseeing the case, said in
court papers. Cundick is asking the U.S. Bankruptcy Court in Las Vegas
to convert the case, reported the newswire. The bid to liquidate
National comes as the U.S. airline industry suffered an $11.3 billion
loss last year.
Enron Used Complicated Transactions to Avoid Taxes
Enron Corp. enlisted law firms, investment banks and accountants to
devise 'incredibly complicated transactions'' to avoid paying income
taxes, a congressional report will show today, according to a Senate
aide, Bloomberg News reported. The report, prepared for the Senate
Finance Committee, is the latest study of accounting irregularities at
Enron that propelled a $68 billion loss in market value and forced the
Houston-based energy company into bankruptcy in December 2001. The study
may prompt lawmakers to consider further measures to tighten tax laws
enforced by the Internal Revenue Service to prevent corporations such as
Enron from exploiting loopholes, said Laura Hayes, a spokeswoman for Max
Baucus (D-Mont.), reported the newswire.
'Responsible Lending' Legislation to be Introduced
'The Responsible Lending Act of 2003,' new legislation that would combat
predatory lending, protect consumers, promote homeownership and preserve
a national mortgage market will be announced today at a news conference
by Administration Committee Chairman Rep. Bob Ney (R-Ohio) and Rep.
Kenneth Lucas (D-Ky).
Conseco Finance Creditors to Get Documents Friday, Judge Says
Creditors of Conseco Inc.'s finance unit, whose losses forced its parent
company to file the third-largest chapter 11 case, should receive
documents about the unit's sale by Friday, a bankruptcy judge said,
Bloomberg News reported. Conseco Finance Corp.'s committee for unsecured
creditors demanded the documents last week -- saying that it is trying
to learn about an 'unusual agreement'' allowing an investment group to
buy Conseco Finance. The committee complained in court documents that
the deal, if approved, would leave nothing for creditors owed $1.7
billion, reported the newswire.
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