February 2, 2000
Final Vote on S. 625 Expected Today at Noon
The Senate will reconvene this morning at 9:30 a.m. and begin
debate on remaining amendments to S. 625, including a controversial
amendment dealing with abortion clinic violence claims in bankruptcy by
Sen. Charles Schumer (D-N.Y.). Votes on all amendments and final passage
are scheduled to begin at 12:00 noon today. The bill is expected
to receive at least 70 votes in favor. Senate leaders may name conferees
today in anticipation of a House-Senate conference.
Yesterday the Senate continued its methodical consideration of the
remaining amendments to S. 625, under the terms of a unanimous consent
agreement of last week. The Senate debated three of the remaining
amendments yesterday. None of them go to the core of the bill's terms,
but rather involve peripheral issues. The first was an amendment (#2537)
by Sen. Paul Wellstone (D-Minn.) to require large financial institutions
to offer low-fee checking accounts with low minimum balance requirements
as a condition to have their claims allowed in bankruptcy cases. The
other Wellstone amendment (#2538) would disallow claims in bankruptcy
for high-cost credit transactions (e.g., where the APR is
greater than 100 percent), such as
href='http://www.consumerfed.org/safeharpr.pdf'>'payday'
lending. This amendment would also cover car title loans made at
an equally high rate of interest. Both amendments were opposed as an
improper intrusion into already-regulated state law banking practices,
not relevant to bankruptcy reform. Sen. Orrin Hatch (R-Utah), chairman
of the Senate Judiciary Committee, moved to table, or kill, both
amendments. Amendment #2538 was tabled by a vote of 53-44.
Also debated, but withdrawn, was a non-germane amendment (#2667) by
Sen. Russell Feingold (D-Wis.) on the self-determination of East
Timor.
The Senate also debated one of the controversial amendments left over
from last November's floor action, this one dealing with the denial of
discharge for any corporation from a debt arising from the use or
transfer of a firearm 'based in whole or in part on fraud, recklessness,
misrepresentation, nuisance, negligence or product liability.' The
amendment, by Sen. Carl Levin (D-Mich.), would also permit state and
federal legal actions to proceed against gun makers, notwithstanding the
automatic stay. The amendment is targeted at gun manufacturers who are
now the subject of legal actions by a growing number of states and
localities, such as the city of Chicago. Davis Industries is one such
company; it filed for chapter 11 in 1999 as a result of these liability
suits.
This amendment, and a similar one by Sen. Schumer dealing with
abortion clinic violence claims in bankruptcy, will be voted on today.
Two Senators were absent yesterday due to the New Hampshire primary.
Voting on these amendments will occur today so that all members' votes
can be recorded.
CQ Daily Monitor reported today that an aide to Sen. Charles
E. Grassley (R-Iowa), one of the bill's co-sponsors, said that the vote
on Sen. Schumer's amendment 'will be a squeaker.' Republicans are
expected to offer a counter amendment that would broaden the language to
include harassment and violent activities generally and delete
references to 'abortion.' Also, some Republicans are working with
Schumer on other amendments trying to reach agreement on 'safe harbor'
language seeking to protect low- and moderate-income filers from
lawsuits arising from income and expense information they must file. The
managers' amendment would require debtors to provide this
information.
In other Washington developments yesterday, Senate Majority Leader
Trent Lott (R-Miss.) repeated his desire to make bankruptcy reform a
priority for this year; he said this during breakfast remarks at a U.S.
Chamber of Commerce breakfast. Lott described the current bankruptcy
system as broken in that it does not require those with the ability to
repay to do so. He included S. 625 in a long list of priorities for this
legislative session.
Following the votes today on S. 625, the Senate will then proceed to
renomination of Alan Greenspan for a fourth term as chairman of the
Federal Reserve. The Senate Banking Committee unanimously approved him
yesterday. The Fed is widely expected to begin a series of small
interest-rate increases during the next few months to head off
inflation.
Tracking Campaign Contributions
Republican presidential candidate George W. Bush continues to
set fund-raising records; he has raised a record $68.7 million, plus
$1.3 million for a separate account to pay legal and accounting costs
for the general election, The Washington Post reported. As of
Dec. 31, Bush had $31.4 million in the bank; he is not accepting
taxpayer assistance for his campaign, so he can spend as much money as
he can raise. Bush has taken in another $35,250 from employees of MBNA
Corp., a major bank holding company and the second largest issuer of
credit cards in the United States, according to analysis by the
Associated Press. Earlier Bush had raised $139,150 from the company's
employees. Credit card companies are pushing for bankruptcy reform
legislation to make it more difficult for debtors to file for
bankruptcy. Sen. John McCain (R-Ariz.), who won yesterday's primary in
New Hampshire on the Republican side, spent $14.2 million last year and
raised $13.7 million with $6.3 million coming in the last three months
of the year. He transferred another $2 million from his Senate campaign
account. As of year end, McCain had $1.5 million in the bank and
expected $6.2 million in federal funds. Vice President Al Gore has
raised $29 million for his campaign, plus $2.9 million to pay legal and
accounting costs in the general election. Rival Bill Bradley has raised
$27.7 million for his campaign.
Physicians Group Files Chapter 11
Physician Resource Group Inc., Dallas, announced that it has
filed for chapter 11 protection in Dallas, according to a newswire
report. Since December 1998, the company has been in discussions with
Resurgence Asset Management L.L.C., which owns or manages in excess of
$92 million of the $125 million principal amount of the company's 6
percent convertible subordinated debentures due 2001. The company
elected not to pay interest on the debentures that was due June 1 and
Dec. 1, 1999, and as of the filing date, the debentures are in default.
Physicians Resource expects to finalize and implement a consensual
restructuring agreement with Resurgence. Since January last year, the
company's focus has been the sale of medical practice assets and certain
interests in surgery centers to the company's affiliated practices, and
the sale of certain interests in surgery centers to an unrelated third
party.
CellNet Data to File Chapter 11 to Facilitate Its
Acquisition
Schlumberger Resource Management Services (RMS), a business
unit of Schlumberger Ltd., announced that it has reached an agreement to
acquire the assets of CellNet Data Systems Inc., according to a newswire
report. As part of the agreement, CellNet will file for chapter 11
protection in the District of Delaware. CellNet is a leading provider of
telemetry services. RMS provides professional business services for
utilities, energy service providers and industry worldwide.
AmeriServe Announces Financing Commitment from Tricon and
Burger King
AmeriServe Distribution Inc., which sought bankruptcy
protection this week, announced late yesterday that it has received
financing commitments from its largest customer partners, Tricon Global
Restaurants Inc. and the Burger King Corp., according to a newswire
report. Upon approval from the bankruptcy court, the company plans to
replace this financing with financing from a traditional
debtor-in-possession lender. Based in Addison, Texas, AmeriServe is the
largest food service distributor in the United States and specializes in
serving chain restaurants including Arby's, Burger King, Chick-fil-A,
Dairy Queen, KFC, Long John Silver's, Pizza Hut and Taco Bell.
Court Approves Colonial Commercial Subsidiary's Acquisition
Colonial Commercial Corp., Levittown, N.Y., announced that its
subsidiary, Atlantic Hardware and Supply Corp., has received approval
from the Bankruptcy Court for the District of New Jersey to purchase the
stock of BRS Products Inc., according to a newswire report. The prior
court approval was subject to confirmation of the BRS Products
reorganization plan, and Colonial announced that the court confirmed the
plan on Monday and that it will be effective on or about March 15.
Atlantic, which has provided certain post-petition financing to BRS
Products through the pre-negotiated plan of reorganization, will own all
of the stock of the reorganized company as of the effective date.
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Telemundo Network Gets Approval on Acquiring
CBS/Telenoticias
Telemundo Network, the Spanish-language network based in Miami,
won a motion in bankruptcy court to acquire the news production assets
of CBS/Telenoticias, a 24-hour all-new channel, according to a newswire
report. CBS/Telenoticias was launched in December 1994 and is jointly
owned by Grupo Medcom and CBS Corp.; it filed for chapter 11 protection
last July.
Ventas Announces Amended Debt Restructuring Agreement
Ventas Inc., Louisville, Ky., said yesterday that it has
entered into an amended long-term credit agreement allowing the
restructuring of about $973 million in outstanding debt, according to a
newswire report. The health care realty company said that Bank of
America and J.P. Morgan will continue to be co-agents under the
long-term credit facility, under which the outstanding balance of the
loan will be divided into three tranches. Ventas said the restructured
deal also includes a new revolving credit facility under which it can
borrow up to $25 million at an interest rate of 2.75 percent over LIBOR
through Bank of America. Vencor Corp., Ventas' principal tenant, is
involved with the restructuring agreement as well because it filed for
chapter 11 protection in September last year. Ventas said Vencor has
received an extension until March 13 to file its plan, which must be
effective on or before Dec. 31 under the terms of the new agreement.
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ICO Global Renegotiates Deal to Emerge from Bankruptcy
ICO Global Communications Ltd., New York, has negotiated a deal
to purchase 12 satellites from Hughes Electronics Corp. on more
favorable terms; the company is making this move to help it rebound from
bankruptcy according to Reuters. The company also is close to securing
an option for four additional satellites. The deal is still preliminary
but could be valued at as much as $3 billion if the options are
exercised.
Roberds Outlines Restructuring Process
Roberds Inc., Dayton, Ohio, which filed chapter 11 on Jan. 19
in the Southern District of Ohio, announced yesterday several changes as
it moves through the reorganization process, according to a newswire
report. The court has issued an interim order authorizing the use of
cash collateral, which enables the company to use cash from its existing
line of credit with BankBoston Retail Finance for daily operations. The
order is effective through Feb. 10. The court also has issued orders
permitting the company to pay pre-petition wages, benefits and related
items, and as reported yesterday, it has engaged a joint venture that
includes Hilco/Great American Group to liquidate the inventory in the
Cincinnati store and the Tampa, Fla., stores and distribution center.
Roberds is negotiating with another asset-based lender to provide
debtor-in-possession financing to be effective Feb. 10. Roberds reported
sales of $287 million in 1999; it is a major retailer of brand name home
furnishings including, furniture, bedding, major appliances and consumer
electronics.
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