January 52000

January 5, 2000

United Healthcare Ordered to Pay Claims of Contractors in
Bankruptcy

Maryland Insurance Commissioner Steven B. Larsen yesterday ordered
United Healthcare of the Mid-Atlantic to pay medical claims, estimated
to be millions of dollars, that were left unpaid when three
organizations United used to manage HMO members' care filed for
bankruptcy or went out of business, The Washington Post reported
today. The order highlights the accountability gap that these types of
arrangements can create and the resulting problems nationwide from the
collapse of many organizations that claimed they could manage medical
costs better than HMOs. United had contracts with Doctors Health Inc.,
Maryland Personal Physicians Inc. (MPPI) and Dimensions Health Network
whereby those organizations received fixed payments from United to
provide a range of medical services to United HMO members. These
companies would profit if they could deliver the care for less than
United was paying them, but Doctors Health filed for bankruptcy
protection in November 1998, followed by MPPI in September. Dimensions
folded in November. Millions of dollars of unpaid claims for United HMO
members are an issue, and Larsen said in a news release yesterday that
the HMO is legally responsible for monitoring its intermediaries'
ability to pay.

United issued a brief statement that it is reviewing the order and a
response to it. Joel I. Sher, an attorney representing creditors in the
Doctors Health and MPPI bankruptcies, said that although the total
amount of claims covered by the order is not clear, an 'educated guess'
is that it's more than $10 million. Sher said that without the
commissioner's order, health care providers would have had to seek
payment from Doctors Health and MPPI in bankruptcy court, where they
were likely to recover less than 10 cents on the dollar. Larsen plans to
submit a report to the Maryland General Assembly next week recommending
greater oversight of companies like United's defunct intermediaries.
Some argue that this is a moot point since many consider this way of
doing business to be a failure.

Lamonts Apparel Files Chapter 11

Lamonts Apparel Inc., Kirkland, Wash., announced that it has filed for
chapter 11 protection in the Western District of Washington to address
its capital and liquidity constraints, according to a newswire report.
Lamonts also reported that it has received commitments for $45 million
in debtor-in-possession (DIP) financing from Fleet Retail Finance Inc.
and Back Bay Capital Funding LLC. Upon the court's approval, the first
draw under the new DIP agreement will replace the company's current
working capital-term debt facility with Fleet Retail Finance. Lamonts
said that it has been experience liquidity constraints that prompted it
to open discussions with lenders and informal committees of its largest
trade creditors and counsel. In addition, the company's capital
constraints were exacerbated last year to several specific factors:
higher than anticipated costs to achieve Y2K compliance and to complete
installation of new store point-of-sale registers, as well as weak
spring and summer sales due to unusually cool weather. This is the
second chapter 11 filing for Lamonts, which is well known in the
Northwest as a retailer of brand-name apparel and accessories. The
retailer first filed chapter 11 in January 1995 and emerged from
protection on Jan. 31, 1998. During that time, Lamonts said it achieved
significant sales growth on a comparable-store basis, eliminated $90
million of debt and redirected resources from underperforming stores to
38 core stores that all operated profitably as of Jan. 30, 1999. As of
Oct. 30, 1999, the company showed assets of $110.7 million and
liabilities of $104.4 million. About $40 million in trade payables are
subject to the reorganization.    

EOUST Director Announces Retirement

Joseph 'Jerry' Patchan announced yesterday that he will retire from
his position as director of the Executive Office for U.S. Trustees
effective Feb. 11, the Department of Justice reported. Patchan said,
'Bankruptcy offers a 'fresh start.' I've spent many years in bankruptcy
law, and now it's time for my fresh start. I plan to go home to Ohio and
do nothing for as long as I can stand doing nothing.' He also said that
the U.S. Trustee Program has 'laid the groundwork to take on potential
new responsibilities set forth in the pending bankruptcy reform
legislation, such as means-testing for debtors' chapter 7 eligibility,
and approving pre-bankruptcy credit counseling services.' During
Patchan's five-year tenure, the Program's accomplishments have included
working with the courts to speed bankruptcy case processing,
coordinating with law enforcement agencies to create the National
Bankruptcy Fraud Task Force, establishing the National Bankruptcy
Training Institute, improving relationships with the private bankruptcy
trustees appointed by the Program and with other professionals in
bankruptcy, and developing and distributing reliable data on bankruptcy
administration. The Program has expanded its web site considerably to
make bankruptcy-related information easily accessible to the public.
Patchan was appointed EOUST director in December 1994 after serving more
than three years at the Resolution Trust Corp. in Washington. He was a
bankruptcy judge for the Northern District of Ohio from 1969-1975 and a
partner with Baker & Hostetler from 1975 to 1991.

Greenspan to Be Nominated for Fourth Term

As expected, President Clinton will nominate Federal Reserve
Chairman Alan Greenspan to a fourth four-year term, The Wall Street
Journal reported today. His term as head of the central bank will
extend until June 2004, assuming the Senate swiftly holds its hearings.
Greenspan is revered by investors for helping to foster low-inflation
growth during the past decade and keeping the bull market moving. The
announcement of his reappointment did not, however, reduce the fear on
markets that he is about to increase rates.

Invitation for Public Comments re: U.S. Bankruptcy Judges in the
Ninth Circuit

The current terms of four U.S. Bankruptcy Judges for districts in the
Ninth Circuit will expire in the year 2000. The names and respective
districts and term expiration dates are shown below. The U. S. Court of
Appeals for the Ninth Circuit is considering the reappointment of these
judges to new terms of office of 14 years each, and has determined that
they appear to merit reappointment subject to consideration of comments
received from the bar and public. Upon reappointment, the judges would
continue to exercise the jurisdiction of bankruptcy judges as specified
by statute. Such duties include conducting hearings and trials, making
final determinations, and entering orders and judgements. Members of the
bar and public are invited to submit comments concerning one or more of
the judges for consideration by the Court of Appeals in determining
whether or not to reappoint them. Anonymous responses will not be
accepted. However, respondents who do not wish to have their identities
disclosed should so indicate in the response, and such requests will be
honored.

Ninth Circuit—U.S. Bankruptcy Judges for
Reappointment

Comments for the judge(s) should be submitted no later than January
31, 2000 to the following address: Office of the Circuit Executive, P.O.
Box 193939, San Francisco, CA 94119-3939, Attn: U.S. Bankruptcy Judge(s)
Reappointment; Fax: (415) 556-6179

Two Bankruptcy Judge Positions in S.D.N.Y. Open

The Second Circuit Judicial Council invites application from highly
qualified candidates for two bankruptcy judge positions for the Southern
District of New York. The people selected will maintain chambers in New
York City at Bowling Green. The selection process will be confidential
and competitive. Applicants will be considered without regard to race
color, age (over 40), gender, religion, ethnicity, national origin or
disability. The term of office is 14 years, and the current salary is
$129,996 per annum (effective January 1, 2000). Basic qualifications
include: 1) admission to practice before the highest court of at least
one state, the District of Columbia or the Commonwealth of Puerto Rico;
2) membership in good standing in every bar in which membership is held;
and 3) at least five years of legal practice experience. Application
forms may be obtained by calling, writing or faxing a request to: Office
of the Circuit Executive, U.S. Courthouse, 40 Foley Square, Room 2904,
New York, NY 10007. Phone: (212) 857-8700; Fax (212) 857-8680.
Application packages must be received no later than Jan. 14.

Visit
target='_parent'>http://www.abiworld.org/employment/listings.html
for other court position openings or to post a job
listing.

Harnischfeger Equity Panel Seeks OK For Securites Trading

The official committee of equity security holders of Harnischfeger
Industries Inc. (HRZI) is seeking court authorization to trade in the
company's securities, provided that certain information blocking
procedures are set. Committee members who engage in securities' trading
as a regular part of their business have that as a potential conflict on
the one hand, and their status as committee members on the other, the
equity committee noted. Trading members face a dilemma in that they owe
obligations to their clients to maximize returns, yet as committee
members, they owe a duty to the equity holders not to divulge or profit
from confidential or inside information regarding the pulp, paper and
mining equipment maker.

Courtesy of
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Daily Bankruptcy Review Copyright ©
January 5, 2000..