July 232004

Submitted by webadmin on Fri, 2004-07-23 00:00

July 23, 2004

Senate Democrats Tell Frist
They Would Consider $104 Billion Asbestos Fund

Senate Minority Leader Tom
Daschle (D-S.D.) and other key Democrats told Senate Majority Leader
Bill Frist (R-Tenn.) yesterday in a letter that they would consider his
recent proposal to cerate a $140 billion asbestos trust fund, citing
progress in negotiations over the long-stalled bill,
CongressDaily reported. The Democratic senators said they
wanted to work over the August recess to narrow differences on asbestos
legislation. The two sides have differed over the size of the fund,
which will be created by insurers and companies facing asbestos
liabilities.

Two Years Later,
Sarbanes-Oxley Loan Provision Debated

House Financial Services
Chairman Michael Oxley (R-Ohio) raised concerns yesterday that the 2002
Sarbanes-Oxley Act's ban on corporations from making personal
loans to their executives may have been drawn too broadly,
CongressDaily reported. 'I've heard some legitimate, I think,
criticisms about that particular provision -- how difficult it is in
terms of moving expenses for officers in corporations, and that kind of
thing,' Oxley said during a hearing on the two-year-old corporate
governance law. Oxley said before the law's enactment, he had concerns
about the Senate-favored corporate loan provision, which had not been
part of the House version of the legislation. 'I think everybody
understood the reason for that provision being added in the Senate,'
Oxley said, noting that WorldCom had loaned former CEO Bernard Ebbers
more than $400 million before its collapse, the newswire reported. 'The
amendment, I think, was going at that abuse, which is understandable.
But my sense is it might have gone beyond just that and included a lot
more than that.'

Deloitte & Touche CEO James
Quigley said lawmakers should consider modifying the provision to allow
for 'customary' corporate loans, such as advances to help executives
cover their moving costs when they relocate. But E-Trade CEO Mitchell
Caplan said his company is 'quite comfortable' with the rule. AFL-CIO
Secretary-Treasurer Richard Trumka said Congress should not tinker with
the corporate loan rule. 'We think corporate reform is only starting to
take root right now, and it would send the wrong message to change that
provision at this time,' Trumka said, CongressDaily reported.
Quigley, Caplan, Trumka and other witnesses told the panel that the
Sarbanes-Oxley law has had a positive overall impact on corporate
governance.

As Cash Fades, America
Becomes A Plastic Nation

The nation now uses cards to subscribe
to cable TV, pay taxes, the Wall Street
Journal reported. Vending machines, subway systems and charities now
accept cards. The government is handing out cards in lieu of food stamps
and child-support disbursements. Hip-hop mogul Russell Simmons is
marketing a service that lets people put their paychecks directly onto a
Visa card, giving consumers without bank accounts access to
plastic.

Consumer activists, however, have long
warned of the dangers of credit cards, which have caused many a tragic
story of personal bankruptcy. As cards spread, critics say consumers are
running tabs for increasingly routine purchases. 'You could end up
paying interest on ice cream,' says Travis Plunkett of the Consumer
Federation of America. Read the article at
href='http://www.wsj.com/'>www.wsj.com
size='3'>(subscription requitred).

Telmex, Global Crossing
In Phone Traffic Deal

Telmex, owned by Mexican
billionaire Carlos Slim, and fiber optic network operator Global
Crossing Ltd. said on Thursday they signed a deal to carry phone traffic
between Mexico and the United States, Reuters reported. Under the
commercial deal the companies will help each other deliver telephone
traffic between the two countries using their respective networks. The
move extends the relationship between Telefonos de Mexico (Telmex), the
country's leading telecommunications company, and Global Crossing Ltd.
They already share data transmission services. Terms were not disclosed,
the newswire reported.

Movie Chain AMC in
$1.67 Billion Buyout

AMC Entertainment Inc. said it
agreed to be bought by two private investment firms for about $1.67
billion, after its talks over a merger with rival Loews Cineplex
Entertainment fizzled out early this year, Reuters reported. Kansas
City, Miss.-based AMC said buyout firms J.P. Morgan Partners and Apollo
Management offered $19.50 cash a share for the company, a 37 percent
premium over the AMC share price before news broke that the deal was
pending. After the deal is complete, J.P. Morgan will hold about 50.1
percent of the company, while Apollo -- already an AMC investor -- will
hold about 49.9 percent, the newswire reported.

Airlines Lose Ratings
Altitude As Fuel Costs Soar

U.S. airlines, already suffering from high fuel and
labor costs and competition from discount rivals, are coming under even
more pressure as credit rating downgrades lead to higher borrowing
costs, Reuters reported. Major airlines have posted another series of
big losses for the second quarter as high fuel prices thwart the
industry's ability to return to profitability. 'High costs are the
single biggest problem facing the (major) carriers and rising oil prices
are one of those exacerbating problems,' said Richard Bittenbender,
analyst at Moody's Investors Service. As a result, credit ratings
agencies have responded with deeper cuts into junk bonds for some of the
major airlines, Reuters reported.

FERC Launches Consolidated
Review of Enron Power Trading

Federal energy regulators
ordered a consolidation of all cases related to Enron Corp.'s
western power trading activities Thursday, creating a broad inquiry that
will examine all evidence of misbehavior and could force the bankrupt
company to disgorge profits from power sales in the region dating back
to 1997. The Federal Energy Regulatory Commission also confirmed a
judge's earlier decision and ordered the energy firm to disgorge $32.5
million from power sales involving El Paso Electric. In that case, the
commission found Enron improperly coordinated its trading activity with
the utility's.

In confirming that decision,
the commission said the rule breaking involving El Paso Electric was a
subset of broader Enron practices under scrutiny in other cases. The
commission decided to consolidate all those investigations and all
evidence of wrongdoing in determining punishment.

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Spiegel Sale Of Eddie
Bauer Headquarters To Microsoft Gets Court Go Ahead

Retailer Spiegel Inc. received
approval to sell to Microsoft Corp. the Redmond, Wash., headquarters
building of its Eddie Bauer unit, unless it receives a higher bid for
the property. As reported, Microsoft's lead bid is $38 million for the
building, which is near the software company's own headquarters. Judge
Cornelius Blackshear of the U.S. Bankruptcy Court in Manhattan approved
the sale, along with procedures for other parties to outbid Microsoft,
in an order made public Wednesday.

Loral to Exit Chapter 11 by Year's End

Loral Space & Communications Ltd. reached an agreement with its
creditors, enabling it to emerge from chapter 11 bankruptcy protection
by year's end, the Wall Street
Journal reported. Under proposed terms of the reorganization, the
New York telecommunications-satellite company says it will operate under
current management; retain its two remaining businesses, Space
Systems/Loral and Loral Skynet; and shed nearly all of its debt of about
$1 billion. That debt will be exchanged for nearly all of the equity of
the reorganized company. Other creditors will be repaid over time,
according to a statement. Loral filed for chapter 11 in July 2003. The
company since then has sold its stakes in certain businesses and used
proceeds from the sales to help reduce debt, restructure operations and
focus on its five remaining satellites. Chairman and CEO Bernard L.
Schwartz said that 'relieved of the burden of debt, Loral will have the
financial strength necessary to capitalize on an improving industry
environment.'

July 232004

FERC Launches Consolidated Review of Enron Power Trading

FERC Launches Consolidated
Review of Enron Power Trading