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January 26, 2005
Class Action, Disagreements Might Delay Focus on Asbestos
A new focus in the Senate Judiciary Committee on a class-action bill
and continuing disagreement among committee members and stakeholders are
slowing work on asbestos legislation, aides and lobbyists said,
CongressDaily reported. Senate Judiciary Chairman Arlen
Specter (R-Pa.) has been trying to draft legislation that will win the
support of Democrats and stakeholder groups, but his efforts have been
complicated by legislation competing for his committee’s attention
and disagreements.
Senate Majority Leader Bill Frist (R–Tenn.) announced yesterday
that the Senate would vote on class-action legislation during the week
of Feb. 7. Before then, Frist said, the bill would go through
“regular order” in the Judiciary Committee, all but assuring
the panel will focus on class-action before turning to asbestos.
Outlining his tentative floor agenda, Frist also said the chamber will
follow the class-action vote with debate on a bankruptcy bill.
Halliburton Completes Funding Asbestos Settlements
Halliburton Co. yesterday said it completed funding its asbestos
liability settlements, marking the end of a long-running legal tussle in
the oilfield service company’s history, Reuters reported. The
company said it completed funding a $4.2 billion settlement to resolve
asbestos and silica lawsuits it faces with a final cash payment of $2.78
billion on Tuesday into trusts for the claimants.
Lloyd’s Equitas Calms Nerves Over Bankruptcy Fears
Equitas, the company set up to settle the Lloyd’s insurance
market’s huge asbestos exposures, soothed industry worries
yesterday that a proposed $140 billion fund to settle such claims in the
United States could bankrupt it, Reuters reported. The company played
down reports that it could be stuck with a massive bill for a
contribution to the fund of as much as $10 billion—well over $2
billion more than it has set aside to pay such claims.
“Substantial Abuse” of the Bankruptcy Code?
The New York City guy who recently won a $134 million lottery jackpot
weeks after filing for bankruptcy is not racing to make good on his old
debts, the smokinggun.com reported. The Department of Justice is
charging that Juan Rodriguez is guilty of “substantial
abuse” of the federal Bankruptcy Code. Read the article at
href='http://www.thesmokinggun.com/archive/0120051lotto1.html'>www.thesmokinggun.com/archive/0120051lotto1.html.
Ebbers Trial Gets Under Way in U.S. Court
Nearly three years after WorldCom Inc. disclosed the largest
accounting fraud in U.S. history, opening arguments in the trial of
Bernard Ebbers started in a New York City courtroom as prosecutors laid
out what could be a difficult case against the former chief executive,
the Wall Street Journal reported. The prosecutors told
jurors that his relentless push to meet Wall Street’s expectations
and keep the stock high were instructions to commit fraud. Read the full
article at www.wsj.com (subscription
required).
Adelphia Subscribers Keep Fleeing As Final Bids for Firm Come
Due
Adelphia Communications Corp. reported that it continued to lose
subscribers in December, a sign of weak performance that likely will
influence bids in the auction of the cable operator, which is moving
into its final phase, the Wall Street Journal reported.
Adelphia, which has been operating under chapter 11 protection since
June 2002, also reported that its revenue for December was $337.8
million and its net income was $67.7 million, which includes a $109
million income-tax benefit. Read the full article at
href='http://www.wsj.com/'>www.wsj.com (subscription required).
Banks Give Krispy Kreme 2 More Months
Krispy Kreme Doughnuts said yesterday that its banks had agreed to
not declare it in default until at least March 25 but had imposed new
limits on additional borrowing while negotiations continue, Reuters
reported. The move gives Krispy Kreme’s new chief executive,
Stephen F. Cooper, time to put together a plan to turn around the
company.
Six Ex-AOL, PurchasePro Execs Plead Not Guilty
Six former executives of Time Warner Inc.’s America Online unit
and former business partner PurchasePro.com pleaded not guilty on
Tuesday to conspiracy charges, Reuters reported. The six executives,
including PurchasePro’s former chief executive officer, Charles
Johnson, made their pleas before U.S. District Judge Walter Kelley, 15
days after a grand jury indicted them for conspiracy to inflate
revenues.
Top U.S. Accountants Body Wants More Whistle-Blowing
Company audit committees should encourage whistle-blowing to help
prevent corporate fraud, the American Institute of Certified Public
Accountants (AICPA) urged in guidelines released on Tuesday, Reuters
reported. “It’s the number one method for catching fraud at
the management level,” said AICPA Vice President John Morrow, the
newswire reported.
W.R. Grace Loss Widens After Reorganization Charge
W.R. Grace & Co.’s quarterly loss widened sharply as higher
sales were offset by a big charge for asbestos liabilities and other
claims under its chapter 11 reorganization, the chemical maker said on
Tuesday, Reuters reported. The bankrupt company’s fourth-quarter
net loss jumped to $487.4 million, or $7.36 per diluted share, from
$49.5 million, or 75 cents per share, a year ago.