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February 4, 2005
Panel Eyes Hearings in Preparation for Bankruptcy Markup
Senate Judiciary Chairman Arlen Specter (R–Pa.) said yesterday
he might schedule a markup as early as this month on the bankruptcy
bill, CongressDaily reported. Specter said he had
considered moving the bill through the committee next Thursday. He later
suggested marking it up on a different date—perhaps later this
month—in order to accommodate Democrats’ request for
hearings on the legislation.
The bipartisan bill, introduced this week by Finance Chairman Charles
Grassley (R–Iowa), is similar to bankruptcy legislation that
passed the House last year, but stalled in the Senate amid controversy
over Democratic-favored abortion language. Grassley has said he expects
the bankruptcy legislation to be one of the first bills considered by
the Senate this year, the newswire reported.
Class-Action Measure Passes Panel Without Amendments
Judiciary Chairman Arlen Specter (R–Pa.) yesterday said he
plans to support a contentious amendment by Sen. Jeff Bingaman
(D–N.M.) during next week’s floor deliberations, after his
panel approved the class-action bill on a 13–5 vote with no
amendments, CongressDaily reported. Stanton Anderson,
executive vice president of the U.S. Chamber of Commerce and chairman of
the Class Action Fairness Coalition, said the Bingaman amendment would
gut the bill. But he said the amendment is likely to fail despite
Specter’s support. “I think we still have the votes on the
floor to pass a clean bill,” Anderson said.
The class-action bill would move many multistate class-action
lawsuits from state courts to federal courts, where more stringent rules
would govern the cases. The Bingaman amendment would give federal judges
guidance for certifying class-action cases based on state consumer laws.
Before approving the bill, the committee rejected, 13–5, an
amendment by Senate Judiciary ranking member Patrick Leahy (D–Vt.)
to increase federal judges’ salaries.
Asbestos Legislation Could Be Marked Up Next Week
Asbestos legislation could be marked up next week and be on the
Senate floor before the Easter recess, Senate Judiciary hairman Arlen
Specter (R–Pa.) said today, CongressDaily reported.
Specter said he has talked to Majority Leader Bill Frist (R–Tenn.)
about a floor vote either immediately before or after the break. Specter
said he has satisfactorily answered questions about how a proposed
asbestos trust fund would treat victims exposed to both asbestos and
silica—the subject of a
href='http://judiciary.senate.gov/hearing.cfm?id=1362'>Judiciary
Committee hearing on Wednesday. He plans by next Thursday to
complete legislative language in a bill that has been circulated as a
draft with key details left blank.
Senate Confirms Gonzales as Next Attorney General
The Senate yesterday confirmed Alberto Gonzales to be attorney
general, 60–36. Lacking the votes to sustain a filibuster of his
nomination, Senate Minority Leader Harry Reid (D–Nev.) decided on
Tuesday to back away from threats of a Democratic blockade, clearing the
way for Thursday’s vote. All 36 “no” votes were from
Democrats, the newswire reported.
Economy Added 146,000 Jobs in January
U.S. employers added just 146,000 new jobs in January and hiring in
the previous three months was revised lower, the government said on
Friday in an unexpectedly weak report on the job market, but a drop in
job-seekers pushed the unemployment rate to its lowest level in three
years, Reuters reported. The gain in non-farm payrolls in January came
in below market expectations for 190,000 new jobs but was enough to
return the nation’s employment to where it was before the 2001
recession began. It also erased the jobs lost during President George W.
Bush’s first term. The unemployment rate fell to 5.2 percent, the
lowest level since a 5.0 percent reading in September 2001, the newswire
reported. The drop came amid a fall in the number of people in the labor
force, which includes both those with jobs and those looking for
work.
Retail Sales Strong in January
U.S. consumers kept on spending in January, according to the
International Council of Shopping Centers–UBS, which said that
sales at 72 retail chains, in stores open a year or more, rose 3.6
percent in January from a year ago, beating forecasts, the Wall
Street Journal reported. Gift cards and post-holiday discounts
helped boost sales. The brisk business was unevenly distributed,
however, the newswire reported. While Target thrived, with sales up 9.4
percent from a year ago, trumping expectations, Wal-Mart sales rose just
2.5%, missing forecasts.
S&P Global Junk Bond Default Rate Fell in January, S&P
Says
The worldwide junk bond default rate fell last month as rising
profits and low borrowing costs strengthened the financial position of
companies, Standard & Poor’s said, Bloomberg reported. The
speculative-grade default rate decreased to 1.71 percent at the end of
January from 1.82 percent the previous month. The record low rate was
1.3 percent for the second quarter of 1997, according to the New
York-based credit rating company. “Credit fundamentals have
improved as a result of economic expansion, strong corporate
profitability and relatively favorable financing conditions,”
Diane Vazza, head of S&P’s global fixed-income research, said
in an interview, the newswire reported. S&P forecasts the default
rate will be little changed during the next few months and higher before
the end of the year.
MCI Weighs Qwest Bid, Talks with Verizon
MCI Inc. has received a $6.3 billion takeover bid from Qwest
Communications International Inc. and has held talks with Verizon
Communications Inc., sources familiar with the situation said yesterday,
Reuters reported. Athough MCI, which emerged from bankruptcy last year,
has been looking for a buyer for months, interest in the company
intensified after long-distance rival AT&T Corp. last week agreed to
be acquired by SBC Communications Inc. for $16 billion, the sources
said.
MCI is weighing Qwest’s proposal, but a deal is not certain
because it may hold out for a higher offer from other potential suitors,
one source said. Verizon has not made a formal takeover offer for MCI,
but the two companies have held preliminary merger discussions, the
sources said, the newswire reported.
United Mechanics Criticize CEO’s Trial Threat
United Airlines’ mechanics union yesterday assailed the
bankrupt airline’s CEO for threatening to take them to court if
they do not agree to pay concessions, Reuters reported. The
airline’s CEO, Glenn Tilton, said in a phone message to United
employees on Tuesday that the airline would “go to trial” if
it could not reach agreements on permanent cost savings with the
mechanics and machinists unions. “It was unnecessary for Mr.
Tilton to threaten us before we enter extended negotiations,” said
Aircraft Mechanics Fraternal Association National Director O.V.
Delle–Femine in a statement. The mechanics last week voted to
reject proposed wage cuts, emerging as a barrier to United parent UAL
Corp.’s bid to achieve $725 million in annual labor savings needed
to exit bankruptcy after over two years in chapter 11, the newswire
reported.
Ex-WorldCom Accountant Was ‘Shocked’ at False
Entries
A former accountant at WorldCom described for jurors yesterday how he
was repeatedly asked to book baseless accounting entries, the Associated
Press reported. The former accountant, Mark Abide, testifying for the
prosecution at the fraud trial of former CEO Bernard J. Ebbers,
recounted being instructed to book billions of dollars in assets he had
never heard of. Abide never implicated Ebbers in his testimony, and said
under cross-examination in federal District Court in Manhattan that he
believed the entries were being ordered by CFO Scott D. Sullivan, the
newswire reported.
Judge Backs Trump Hotels Loan over Objections of Shareholders
A judge gave a final approval to a $100 million debtor-in-possession
loan for the Trump Hotels & Casino Resorts and set a date for a
confirmation hearing that would formally end the company’s chapter
11 case, the Associated Press reported. U.S. Bankruptcy Judge Judith
Wizmur approved the loan by Dallas-based Beal Bank. The money, $36
million of which has already been drawn down by the company, is paying
salaries, vendors and other operating expenses as Trump Hotels moves
toward the confirmation hearing scheduled to begin March 29, the
newswire reported.
Former HealthSouth President Is Indicted
A federal grand jury yesterday indicted a former HealthSouth Corp.
official on conspiracy and money laundering charges while the criminal
trial of the company’s one-time CEO continued, the
Washington Post reported. James P. Bennett faces more than
three dozen criminal counts and the possible forfeiture of $28.1 million
in connection with accounting fraud at the Birmingham rehabilitation
hospital chain that overstated earnings by $2.7 billion.