May 17, 2004

Air Canada Strikes Deals On
Pension

Air Canada's restructuring bid
was boosted on Friday by a cost-cutting deal with its Jazz regional
airline pilots and by an agreement with regulators to give the carrier
more time to cover its pension deficit, Reuters reported. Canada's
Office of Superintendent of Financial Institutions (OSFI) agreed to
extend to 10 years from five the period Montreal-based Air Canada has to
cover its C$1.2 billion pension-plan deficit, the newswire
reported.

NorthWestern Strikes Deal With
Montana Regulators

Bankrupt power and gas company
NorthWestern Corp. has reached a preliminary deal with Montana
regulators on its reorganization plan and a probe into its finances, the
company said on Friday, Reuters reported. Sioux Falls, S.D.-based
NorthWestern said under the deal the Montana Public Service Commission
and Montana Consumer Counsel would not oppose its reorganization plan in
bankruptcy court and also agreed to settle a financial investigation,
the newswire reported.

Voters Release Houston From Pension
Law

Houston residents voted on
Saturday to exempt their city's pension plan from a state requirement
that pension promises be kept, the New York Times reported. About
73 percent of the ballots cast in the special election were in favor of
opting out of the pension requirement, which became part of the Texas
Constitution in 2003, according to the clerk for Harris County, which
includes Houston. Houston put the matter to the voters amid growing
concern about the solvency of the city's pension fund. Pension officials
added an unusually generous package of benefits to the plan in 2001. The
package attracted little notice at the time, but the cost has since
climbed, the newspaper reported.

From Bankrupt to Billions, With
Big Investment of Time

An investor in troubled
companies, Douglas P. Teitelbaum made a big bet on bankrupt
cellular company NextWave Telecom, the New York Times reported.
Now that gamble appears likely to pay off, earning billions for
Teitelbaum and a group of investors who held on even when the company's
shares appeared nearly worthless. Read the 
href='http://www.nytimes.com/2004/05/17/business/17teitelbaum.html'>article.

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Corporate Turnover at the Top Slowed in 2003, Study
Finds

The rate at which chief
executives are being replaced at large companies has begun to slow,
according to a study scheduled to be released today, the New York
Times reported.

Fewer than 10 percent of the
world's 2,500 biggest companies changed chief executives in 2003, the
lowest rate in five years, according to the study, conducted by Booz
Allen Hamilton. But more companies that did replace their chiefs chose
outsiders over internal candidates, said Charles E. Lucier, senior vice
president emeritus at the firm, the newspaper reported.

Performance of Nursing Homes Improved
in 2003

After a string of federal investigations
and bankruptcies, nursing homes enjoyed a golden year in 2003, thanks in
part to a boost in Medicare reimbursements and corporate restructurings,
the Wall Street Journal reported.
Read the full article at
href='http://www.wsj.com/'>
size='3'>www.wsj.com (subscription
required).

Movie-Theater Chains Are Wary Amid
Recovery

With bankruptcies and shuttered theaters
behind them, movie-theater chains are recovering, the Wall
Street Journal reported. But despite their newfound popularity,
movie theaters still face some issues. Among them: shaking off the
stigma of their recent troubles, keeping debt in check, heading off
declines in movie attendance, and the need to shut down more theaters.
Read the full article at
href='http://www.wsj.com/'>
size='3'>www.wsj.com (subscription
required).

HealthSouth, Some Bondholders Reach
Cash-premiums Deal

Creditors holding about $662 million in
HealthSouth Corp. bonds have agreed to take cash premiums rather than
possibly force accelerated repayments of the entire debt, the Associated
Press reported. While the company said on Friday the agreement was an
'important step' toward solid financial footing, an attorney
representing bondholders in a suit against the company said the
litigation would continue. In a statement, HealthSouth said a majority
of creditors had agreed to its offer of $13.75 for every $1,000 in debt
on two series of bonds representing more than 25 percent of the debt at
issue, the newswire reported.

size='3'>Michael Rigas Never Asked Witness To Commit Crime,
Witness Says

The government's star witness
in its prosecution of four former Adelphia Communications Corp.
executives testified Thursday that defendant Michael Rigas never
directed him to commit any criminal acts. 'Michael Rigas never directed,
requested or asked you to engage in securities fraud, bank fraud or wire
fraud, correct?' Andrew Levander, who represents Michael Rigas in the
case, asked former Adelphia executive James R. Brown. 'Correct,'
responded Brown, who has pleaded guilty in the case and is cooperating
with the government in a plea bargain.

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Enron Wins Court
Approval to Extend DIP Loan to September

Enron Corp. won bankruptcy
court approval to extend its financing arrangements to Sept. 3, heading
off a potential default on contracts critical to the reorganizing energy
giant. U.S. Bankruptcy Judge Arthur J. Gonzalez signed off Thursday on
an order allowing Enron to push back the termination date on $25 million
in letter-of-credit borrowing, according to court documents obtained by
Dow Jones Newswires on Friday. Enron has about $25 million outstanding
against its letter of credit facility, part of the financing package
that has funded its attempt to reorganize under bankruptcy protection,
according to documents filed in connection with its financing motion in
the U.S. Bankruptcy Court in Manhattan.

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Reserved

United Air Says On Track For Summer Chapter
11 Exit

United Airlines still intends
to emerge from chapter 11 bankruptcy protection this summer despite
asking a judge to extend its bankruptcy financing by six months, a
spokeswoman said on Friday, the Associated Press reported. United, a
unit of UAL Corp. said in a May 7 bankruptcy-court filing that it has
agreed with its creditors to extend its debtor-in-possession financing
from June 30 to Dec. 31. It will pay an additional $1.25 million for the
associated financial changes, which require the court's approval, the
newswire reported.

Kmart Posts a Profit as It
Slashes Costs

Kmart Holding Corp. today
posted its second consecutive quarterly profit as it cut costs and pared
inventory, reducing clearance sales, Reuters reported. The retailer,
which emerged from chapter 11 bankruptcy protection last May, said it
earned $93 million, or 94 cents per share, in the fiscal first quarter
ended April 28. For last year's first quarter, Kmart reported a loss of
$862 million while it was still in bankruptcy. The Troy, Michigan-based
retailer said quarterly sales decreased 25.3 percent to $4.62 billion,
reflecting the closing of 316 stores in the first quarter last year. The
company shut about 600 of its 2,100 stores while in bankruptcy, the
newswire reported.

Out of Bankruptcy, NRG Works
to Reshape Itself

NRG Energy Inc. is now
reshaping itself into a leaner, regional business after emerging from
bankruptcy, Reuters reported. Among the hardest hit in the U.S. power
sector by Enron's collapse, the wholesale power generation company is
looking to pick up the pieces and rebuild itself after emerging from
bankruptcy in December. One of its top priorities now is to refocus on
its operations in the Northeast, South Central and West Coast regions,
CEO David Crane said, the newswire reported.