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December 20, 2004
UAL Corp. Seeks Bankruptcy Exit Financing
United Airlines has begun reaching out to potential lenders with its
revamped business plan for financing to leave bankruptcy, the company
said on Friday, Reuters reported. The UAL Corp. unit said in an update
to the U.S. Bankruptcy Court for the Northern District of Illinois that
it has established a framework for presenting its business plan to
capital markets, but offered no additional details. United said
consulting firm Bridge Associates LLC had completed its review of the
airline’s business plan and found it feasible. Chief Financial
Officer Jake Brace added that cost cuts proposed by the carrier so far
appear to be enough to attract the needed investors, the newswire
reported.
U.S. Pension Insurer Is Concerned about Terms of UAL-Pilots
Pact
The Pension Benefit Guaranty Corp. said it is concerned that terms of
a tentative contract UAL Corp. and its pilots union have agreed to
“sets a dangerous precedent,” the Wall Street
Journal reported. The pension insurer is worried that the airline
is making generous new pension promises while refusing to honor old
pension agreements. Last week, the United Airlines parent, which is
operating in bankruptcy-court protection, reached accord with the Air
Line Pilots Association on a five-year concessionary labor agreement
that would give active pilots $550 million in convertible notes if they
agree not to fight UAL’s efforts to terminate their
defined-benefit pension plan and shift that plan onto the PBGC. The
shift is expected to sharply reduce the pension benefits of many active
and retired pilots, the online newspaper reported.
Utah Study to Dissect Bankruptcy Epidemic
Two years ago, Utah emerged as the No. 1 state in bankruptcy filings
per household, the Salt Lake Tribune reported. The Utah Foundation, a
nonprofit research organization, is launching a long-term effort to
explore Utah’s bankruptcy phenomenon. The results may provide some
answers to a difficult and complex problem. “Factors that may
explain why the bankruptcy problem in Utah is so acute include
larger-than-average families and homes, low wages, high charitable
commitments, high rates of entrepreneurship and a legal culture that
steers debtors into solutions that often fail,” the foundation
said in its new report. Read the full article at
href='http://www.sltrib.com/business/ci_2490236'>www.sltrib.com/business/ci_2490236.
Clifford Chance Settles Brobeck Collapse Claims
Clifford Chance agreed Friday to pay $5.5 million in a global
settlement with Ronald Greenspan, trustee of Brobeck’s estate, and
retired partners and longtime employees of Brobeck who had sued the
London-based firm, the Recorder reported. The Lanier Law
Firm, representing the plaintiffs in that suit, and Brobeck’s
liquidation committee also signed the deal. Read the full article at
href='http://www.law.com/jsp/article.jsp?id=1103138427155'>www.law.com/jsp/article.jsp?id=1103138427155.
Global Crossing U.K. to Price Bond Today
Global Crossing (U.K.) Finance Plc, a subsidiary of formerly bankrupt
Global Crossing Ltd., will price its $350 million high-yield bond today,
a day earlier than planned, a banker said, Reuters reported. The
two-part 10-year deal is a key refinancing for the telecom company,
which exited bankruptcy a year ago. GCUK will price a dollar-denominated
bond to yield around 11 percent, another banker said on Friday, while a
sterling-denominated bond will be priced to yield around 100 basis
points more, or around 12 percent. Global Crossing said in October it
needed “significant” extra funds beyond the end of 2004, the
newswire reported.
Union, Tembec Reach Deal on New Brunswick Mill
The Canadian Auto Workers and Tembec Inc. have reached a deal that
could lead to the company purchasing and reopening a bankrupt New
Brunswick pulp mill, the union said on Friday, Reuters reported. The
union said the labor agreement was a “giant step” to
restarting the Saint-Anne Nackawic mill, which had employed more than
400 people, but that other issues involving the former owners and
government still had to be resolved.
Previously Unknown Baikal Gets Yukos
Baikal Finance Group, an unknown company, won an auction for Russian
oil company’s Yukos’s core asset on Sunday with a $9.4
billion bid, Reuters reported. Gazprom, which had been favored to win
but
was outbid, declared it had no links to Baikal. Analysts still believed
the state-controlled gas giant or other state interests may have had a
hand in the winning bid for Yuganskneftegaz.