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House OKs Bankruptcy Bill for Farmers
The House passed legislation (H.R. 2465) on Monday to extend for six
months special bankruptcy protections that allow family farmers to hold
onto their assets while reorganizing debt, the Associated Press
reported. The 379-3 House vote would extend the protections beyond their
June 30 expiration until Dec. 31. The Senate is expected to act quickly
on the House version, sending it to President Bush for his
signature.
Chapter 12 of the U.S. Bankruptcy Code gives family farmers filing for
bankruptcy extra room to protect their land and equipment from creditors
while pulling themselves out of debt. House Judiciary Chairman James
Sensenbrenner (R-Wis.) who introduced the bill, said the extension is
needed because other bankruptcy laws do not adequately protect farmers.
He also noted that chapter 12 filings have risen more than 60 percent
over the past year. The provision has been extended nine times since it
was enacted in 1986. In March, the House passed a broader bankruptcy
reform bill that would make such protections permanent.
Fed, Impatient on Recovery, Seems Ready to Cut Again
The Federal Reserve seems ready to cut interest rates once again when it
concludes a two-day meeting that begins today, the New York Times
reported. Economists and investors are divided over whether the cut will
be one-half of a percentage point or a quarter-point, but they are
nearly unanimous in thinking that the Fed will reduce borrowing costs to
encourage business and consumer spending.
A rate cut would come despite a 20 percent jump in the stock market
since mid-March and early signs that retail sales are rising,
manufacturing is recovering and inflation is picking up slightly. Even a
quarter-point reduction would lower rates to their lowest level since
the 1950s. 'The Fed is saying, 'Until we see the whites of the eyes of a
strong economy, we're going to continue to ease,' ' said Robert J.
Barbera, chief economist of ITG/Hoenig, an investment firm. 'They don't
want ephemeral signs. They want the original article,' reported the
Times.
ABB Judge Withholds Approval of $1.3 Billion Asbestos
Settlement
A U.S. judge told ABB Ltd., Europe's largest electrical-engineering
company, and its bankrupt Combustion Engineering unit to provide more
information about a $1.3 billion settlement of more than 130,000
asbestos lawsuits, Bloomberg News reported. ABB's Norwalk, Conn.-based
Combustion Engineering unit, filed for bankruptcy in February. More than
90 percent of asbestos injury claimants suing ABB and Combustion
Engineering have agreed to the payout plan, under which the company will
create a trust to pay claims.
U.S. Bankruptcy Judge Judith Fitzgerald in Pittsburgh said ABB
must provide more information about how the settlement affects asbestos
claimants suing ABB's Basic refractories unit and its Lummus refinery
units within 10 days before she can approve the plan. Zurich-based ABB
has said that shedding asbestos liabilities will speed the sale of its
oil-equipment business, part of an effort to cut $8.2 billion of debt,
reported the newswire.
Amerco Shares Rise After Bankruptcy Shows More Assets Than
Debt
Shares of Amerco Inc. rose as much as 76 percent today after the company
filed for bankruptcy protection on Friday, listing more asset value than
debt, Bloomberg News reported. Amerco listed $1.04 billion in assets and
$884 million of debt in a chapter
11 filing with the U.S. Bankruptcy Court in Reno, Nev. 'Even in
liquidation and paying off its debts, the company is worth $10 a share
to investors,'' said Roth Capital Partners analyst Ian Gilson, who
raised his recommendation on the stock to 'strong buy'' from 'buy''
yesterday.
The Reno, Nev.-based owner of U-Haul filed for bankruptcy to cope
with off-books accounting restatements after failing to arrange $865.8
million in new financing it needed. With the founding Shoen family
owning 56 percent of the company's shares, investors may expect the
company to try to preserve stock value in the reorganization, Gilson
said, reported the newswire.
Advanced Glassfiber Files Plan to Pay Creditors,
Reorganize
Advanced Glassfiber Yarns LLC filed a plan to transfer ownership of the
company to lenders from Owens Corning and Group Porcher SA, Bloomberg
News reported. Under the proposed plan a majority of the reorganized
Advanced Glassfiber's stock would go to secured lenders, who would also
receive $120 million in secured notes. Owens Corning currently owns 49
percent of the Aiken, S.C.-based company and Group Porcher owns 51
percent.
The company sought chapter 11 protection in December amid declining
sales and heavy debt. Advanced Glassfiber's sales fell as aircraft
production slowed and competition from Asia increased. Most of the
'company's stock is going to lenders,'' said Gary Barnhardy, COO of
Advanced Glassfiber. All of the current stock 'is being extinguished,''
reported the newswire.
AIR CANADA
Air Canada Pilots Union Says Deal at Risk
Air Canada's pilots union said on Monday that a seniority arbitration
ruling is causing so such discontent among its members that they could
reject a cost-cutting agreement deemed essential to the survival of the
insolvent airline, Reuters reported. The Air Canada Pilots Association
told its members to delay their vote on the deal until Thursday, after
the union meets with the chairman of the Canadian Industrial Relations
Board to appeal the seniority decision, reported the newswire. The issue
first arose three years arose when Air Canada bought its distressed
rival, Canadian Airlines, and tried to merge the two pilots groups.
A first ruling on the merged seniority lists was opposed by the former
Canadian pilots, who felt they lost too much. A second ruling came down
last week, this time causing an uproar among the original Air Canada
pilots, who account for about two-thirds of the 3,200 pilots. Air Canada
gave its unions until June 30 to ratify tentative agreements on cost and
job cuts as it is running against the clock to lower labor costs by
C$1.1 billion, reported the newswire.
GE Capital May Seek Return of More Than 100 Air Canada
Planes
General Electric Co.'s aircraft-leasing unit said it may seek the return
of more than 100 planes from Air Canada, which is in bankruptcy
protection, unless the carrier negotiates a new payment agreement in the
next 10 days, Bloomberg News reported. Robert Thornton, a lawyer for GE
Capital Aviation Services, made the comments at an Ontario Superior
Court hearing this morning where Montreal-based Air Canada was granted
an extension of its protection from creditors until Sept. 30.
Laidlaw Emerges from Bankruptcy Protection
Laidlaw International Inc. said on Monday it has emerged from bankruptcy
protection, as shares of the operator of Greyhound Bus Lines began
trading under a new name and stock symbol, Reuters reported. In a
release, Laidlaw said it had concluded its chapter 11 reorganization
process and reached agreement with its creditors on all conditions of
its amended plan of reorganization.
The company had been operating under bankruptcy protection since June
2001, when it sought shelter from $4.6 billion in debt brought on by an
aggressive expansion campaign. Newly issued shares of the former Laidlaw
Inc., which completed its exit financing last Thursday, were at C$12.55
at midday on the Toronto Stock Exchange, after opening at C$12.49, and
trading under a new ticker symbol. As part of its reorganization, old
shares were canceled and 13.8 million shares of new stock were issued,
primarily to holders of Laidlaw bond and bank debt claims, reported the
newswire.
Conseco Unit Arbitration Award Set Aside by U.S. Supreme
Court
The U.S. Supreme Court set aside a $27 million judgment against a
Conseco Inc. unit in a consumer-lending dispute, Bloomberg News
reported. The justices in Washington, D.C., said an arbitrator must
decide whether two agreements that Conseco Finance signed with customers
barred disputes from being handled as a group rather than individually,
the newswire reported. South Carolina courts had upheld collective
rather than individual arbitration in the consumer disputes.
Conseco Finance, the mobile home lender whose losses helped drive
Conseco into chapter 11 bankruptcy, got preliminary court approval in
Chicago on Thursday for its liquidation plan. Conseco Finance's lawyer,
Carter Phillips, said the court's action means the money set aside to
pay the judgments would be returned to the company, reported the
newswire.
Global Crossing Lenders Object to Bid
Creditors to Global Crossing Ltd. have objected to a move by the
bankrupt telecom group to extend its exclusive takeover deal with
Singapore Technologies Telemedia Pte. Ltd., documents showed on Monday,
Reuters reported. The creditor banks, according to documents filed in
the U.S. Bankruptcy Court for Southern District of New York, said they
were concerned about uncertainty surrounding ST Telemedia's plan to pay
$250 million for a 61.5 percent stake in a reorganized Global Crossing.
They cited concerns over whether the Singapore government-owned ST
Telemedia would win the necessary U.S. government national security
approvals.
ST Telemedia, a unit of Temasek Holdings, the investment arm of the
Singapore government, became the sole bidder for Global Crossing after
Hutchison Whampoa walked away from its own bid for Global Crossing in
April. U.S. national security officials had balked at Hong Kong-based
Hutchison's ties to China, and some analysts have said the ST Telemedia
deal might spark objections from U.S. lawmakers, reported the
newswire.
Allegheny Energy Faces Bankruptcy Without More Cash
Allegheny Energy said on Monday it may seek bankruptcy protection unless
it can raise new capital, Reuters reported. The Hagerstown, Md.-based
firm said a decline in the value of trading positions, write-downs
related to project cancellations and a financial performance that has
been substantially weaker than it had earlier expected could lead to a
financial crunch. As a result, it is in breach of a public utility law
that requires it to hold a certain common equity ratio.
A substantial number of the company's recent financing arrangements, and
those of Allegheny Energy Supply Company, depend upon it meeting this
requirement, the newswire reported. Since it does not, Allegheny will
ask the Securities and Exchange Commission to authorize more borrowing.
'Without these authorizations, the company has very limited flexibility
to meet expected liquidity requirements or to address contingencies,'
the company said in a statement. The firm has about $5 billion in debt,
reported the newswire.
California Regulators Set hearing on PG&E Bankruptcy Plan
The California Public Utilities Commission (CPUC) said on Monday it
scheduled a prehearing conference on the proposed Pacific Gas &
Electric Co. (PG&E) bankruptcy settlement for July 9, Reuters
reported. CPUC Judge Robert Barnett said that by July 1 the PG&E
Corp.-owned utility must give the commission a proposed schedule for
steps needed to put the settlement plan into effect. A federal
bankruptcy judge announced on Thursday that Pacific Gas & Electric
and the CPUC had reached a settlement to merge their rival plans to
restructure the bankrupt utility.
PG&E and the CPUC were sharply divided on whether the company should
remain intact or broken up. The proposed agreement would keep the
utility intact under state regulations, repay creditors about $12
billion in cash, and bring the utility out of bankruptcy early in 2004,
reported the newswire.
SLI Plan of Reorganization Confirmed by Court
SLI, Inc. announced in a press release distributed by PR Newswire that
on June 19, 2003, the U.S. Bankruptcy Court for the District of Delaware
confirmed the amended plan of reorganization that was filed by the
company and its U.S. subsidiaries. Confirmation of the amended plan
should permit the company to meet its goal of emerging from chapter 11
on or about June 30, 2003. The plan garnered overwhelming support from
its unsecured creditors and the secured lenders. Emergence from chapter
11 is subject to the order becoming a final order, consummation of the
purchase of equity in the reorganized company by the secured lenders and
funding of a term loan by the secured lenders. SLI and its U.S.
subsidiaries filed voluntary petitions for reorganization under chapter
11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District
of Delaware on Sept. 9, 2002.
Court Confirms PSC's Plan of Reorganization
PSC Inc., a global provider of integrated data-collection solutions and
services for the retail supply chain, announced in a press release
distributed by Business Wire that on June 19, 2003 the U.S. Bankruptcy
Court for the Southern District of New York confirmed the company's plan
of reorganization, allowing the company to take the final actions
necessary to emerge from chapter 11.
'Since filing to reorganize just eight months ago, PSC has successfully
restructured the company's financial position, strengthened and refined
its business and built a foundation from which we can grow. PSC will
emerge from this process a leaner, more competitive company with a
strong balance sheet,' said President and CEO Edward J. Borey, according
to the press release.
Lehman Plans Le Meridien Lifeline
U.S. investment bank Lehman Brothers has offered to invest 60 million
pounds ($100 million) into struggling British hotel group Le Meridien,
the Financial Times reported on Tuesday, according to Reuters.
Lehman will invest the money provided Le Meridien is put into
administration -- something the privately held hotel firm is battling to
avoid. Administration is similar to chapter 11 bankruptcy in the United
States. Lehman's proposal is conditional on an agreement being struck
between lenders and creditors ahead of any Le Meridien administration,
the FT said. Le Meridien has been told by Merrill and CIBC that
it has until Friday to come up with a refinancing plan or be placed into
administration, sources close to the matter have told Reuters.
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