Cloture Vote Planned for Today
A cloture vote on the conference report to the Bankruptcy Reform Act of
2000 (H.R. 2415) is scheduled in the Senate today, according to the
CQ Daily Monitor. Pending the outcome, Congress will then
begin up to 30 hours of post-cloture debate.
Houses Passes Chapter 12 Extension
The House last night passed by a voice vote H.R. 5540, retroactively
extending chapter 12 of the Bankruptcy Code until June 1, 2001.
The family farmer bankruptcy law, which was enacted in 1986 on a
temporary basis and has been extended several times since, expired on
July 1. The legislation would be retroactive to the chapter 12
sunset day of June 30, allowing family farmers who sought bankruptcy
protection during the hiatus to file for chapter 12 protection.
The bill now goes to the Senate for further action.
The House also gave authorization for 23 new bankruptcy judges in
this bill.
Loewen Reports Third-Quarter Loss
The funeral home and cemetery operator Loewen Group posted a
third-quarter loss on Monday, but said it was making progress in its
reorganization to emerge from bankruptcy protection, according to a
newswire report. The company reported that it had a loss of $2.9
million, or 7 cents a share, for the third quarter, compared with a net
profit of $1.9 million, or nil per share, in the same period last
year. North America's second largest funeral home operator filed
for bankruptcy protection in 1999, and has repeatedly warned investors
that they are unlikely to recoup any of their investments once the
reorganization process is complete.
Sale of MicroAge Unit Delayed as UPS Proposes New Idea
A bankruptcy court sale of the call-center operations of MicroAge Inc.
was delayed an additional week yesterday, after an attorney for MicroAge
said that executives at United Parcel Service of America Inc. (UPS) had
contacted a MicroAge financial adviser with a new plan for the
disposition of the division, according to a newswire report. UPS
is by far the largest customer of the division, which is known as
MicroAge Teleservices. UPS also is part of an investor group called ULA
LLC that was one of two bidders for MicroAge Teleservices at an auction
in U.S. Bankruptcy Court in Phoenix on Monday.
The highest bidder at the auction was Support Technologies Inc. of
Atlanta, Ga., which bid $11.4 million. However, concerns have been
raised about the legal fees that could ensue as MicroAge attempts to
defend the sale against objections voiced by UPS that claim the UPS
contract with the teleservices unit is not transferable without UPS'
consent. Meanwhile, an attorney representing Support Technologies has
expressed an interest in being allowed to bid higher to assuage those
concerns. The Tempe, Ariz.-based MicroAge is currently operating
under chapter 11.
American Aircarriers Support Announces Chapter 11 Filing
American Aircarriers Support Inc., an integrated aviation maintenance,
repair and overhaul service provider, yesterday announced that it
voluntarily filed for protection during reorganization under chapter 11
of the Bankruptcy Code, according to a newswire report. To ensure
that customer and creditor relationships remain intact, the Ft. Mill,
S.C.-based company is in final negotiations for debtor-in-possession
(DIP) financing from its current bank group. American Aircarriers
Support and four of its subsidiaries filed for chapter 11 in the U.S.
Bankruptcy Court for the District of Delaware. The company and its
subsidiaries will continue to operate their businesses in an ordinary
fashion.
UBNetworks Files Chapter 11
Universal Broadband Networks Inc. and four of its wholly owned
subsidiaries yesterday announced that they have filed voluntary chapter
11 petitions, according to a newswire report. The filings took place in
the U.S. Bankruptcy Court for the Central District of California, Santa
Ana Division. Michael A. Sternberg, CEO and president of
UBNetworks said, “Unfortunately, chapter 11 is the only
alternative at the present time. Depressed market conditions in the
telecommunications equipment and services industries have prevented us
from completing essential vendor financing arrangements. We believe that
such vendor financing would have enabled the companies to restructure
existing debt and raise additional capital, which would have allowed our
business plan to be executed.”
Supreme Beef Failed Salmonella Tests Before Declaring
Bankruptcy
Supreme Beef Processors Inc., a Texas firm that challenged the U.S.
Department of Agriculture’s (USDA) food safety standards, flunked
an unprecedented fourth set of salmonella tests just before the company
declared bankruptcy, according to a newswire report. The USDA's
Food Safety and Inspection Service revealed that Supreme Beef's ground
beef plant had failed a fourth test measuring how much salmonella
contamination was in its products. Previously, the USDA said the
company had failed three sets of tests over a period of several months.
That pattern prompted an unsuccessful attempt by regulators to shut down
the Supreme Beef plant.
Supreme Beef said on Sept. 27 that it would shut down its beef
slaughter and beef processing plants and seek protection under chapter
11. The company blamed a legal fight over the USDA food safety rules for
driving it into bankruptcy. In May, a federal judge in Texas
upheld Supreme Beef's challenge of the USDA salmonella tests as an
unfair way to measure whether a plant was clean and sanitary. The
USDA filed an appeal of the ruling on Sept. 11, but the case is in limbo
due to the bankruptcy proceeding.
Seagram Co., Joseph E. Seagram & Sons
Announce Cash Tender Offers
The Seagram Company Ltd. (SCL) and Joseph E. Seagram & Sons Inc.
(JES) yesterday announced that they are commencing cash tender offers
and consent solicitations for certain of their outstanding debt
securities, according to a newswire report. The tender offers and
consent solicitations by SCL are for its 6.5 percent debentures due
April 1, 2003, 8.35 percent debentures due Nov. 15, 2006, 8.35 percent
debentures due Jan. 15, 2022, and 6.875 percent debentures due Sept. 1,
2023.
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