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May 19, 2006
name='1'>Pension Legislation Conferees Likely to Miss Another
Deadline
House Education and the
Workforce Chairman Buck McKeon (R-Calif.)
size='3'>said Thursday that negotiators working to reconcile the House
and Senate versions of pension legislation will miss another deadline
for finishing a conference report, according to a
face='Times New 

Roman'
size='3'>CongressDaily report today. Rep.
McKeon, a member of the conference committee,
said that although conferees have made progress in the
last few days, including at a meeting Thursday afternoon, the conference
report is unlikely to go before either chamber by the time Congress
breaks for the Memorial Day recess. Leaders had hoped to clear a pension
bill through both chambers by then, as talks have dragged on and
conferees missed an earlier deadline of April 15, the date companies
must make their first pension payments of the year.
name='2'>Judge Throws Out Settlement in
w:st='on'>
size='3'>Spokane
Bankruptcy
U.S. Bankruptcy
Judge Patricia
Williams rejected a $45.7 million settlement
today for 75 people who have filed sex abuse claims against the bankrupt
Roman Catholic Diocese of Spokane, the Associated Press reported
yesterday. Judge Williams decided that the deal favored the 75 people
over other alleged victims and urged the dozens of lawyers representing
the diocese, victims, parishes and other parties to enter into
mediation. The
deal, announced earlier this year, was controversial from the start
because it covered only a fraction of those who had filed lawsuits
contending they were abused by priests in
w:st='on'>
size='3'>Spokane
individual claims have been filed against the diocese, although Judge
Williams has said some are duplicates and others are invalid.
href='http://seattletimes.nwsource.com/cgi-bin/PrintStory.pl?document_id=2003003610&zsection_id=2002111777&slug=webdiocese18&date=20060518'>Read
more.
w:st='on'>
name='3'>U.S.
face='Times New Roman' size='3'> Indicts Leading Class-Action Law
Firm
The nation's leading
class-action securities law firm, Milberg Weiss Bershad & Schulman,
and two of its partners were charged yesterday with making more than $11
million in secret payments to three individuals who served as plaintiffs
in more than 150 lawsuits, the
size='3'>New York Times reported today. The
indictment is the first instance of a law firm with national reach
facing criminal charges, and it could prove to be a fatal blow for the
firm. The lawsuits cited in the indictment spanned two decades,
occurring as recently as 2005, and generated some $216 million in legal
fees for the firm. In the 20-count indictment by a federal grand jury
in
size='3'>Los Angeles
size='3'>yesterday, Milberg Weiss and two of its prominent partners,
David J. Bershad and Steven G. Schulman, are accused of racketeering
conspiracy, mail fraud, money laundering conspiracy and obstruction of
justice. The prosecutors are asking for the return of the fees earned by
the firm and those named in the indictment. In addition, there is the
possibility of prison for the two partners of up to 20 years for
racketeering conspiracy.
href='http://www.nytimes.com/2006/05/19/business/19legal.html?pagewanted=print'>Read
more.
Airlines
name='4'>Ground Workers Reach Agreement with Northwest
Airlines
and airline officials said Northwest Airlines Corp. and
its baggage handlers and ramp workers reached a tentative agreement
early Friday aimed at slashing the bankrupt airline's labor expenses,
the Associated Press reported today. Terms of the tentative agreement
and the schedule for a ratification vote were being prepared for
distribution to members of the union representing about 5,600 ground
workers. The union will also hold a simultaneous strike authorization
vote in case the tentative agreement is rejected and the union contract
is nullified by the court, said Bobby DePace, president of District 143
of the International Association of Machinists and Aerospace Workers.
The agreement came hours before a bankruptcy court hearing in
size='3'>New York
Judge Allan Gropper was to consider whether to allow Northwest to
throw out the union contract and impose its own terms.
href='http://www.nytimes.com/aponline/business/AP-Northwest-Labor.html?pagewanted=print'>Read
more.
name='5'>Judge Blocks Mesaba Airlines from Canceling Union
Contracts
The judge in the
bankruptcy case of Mesaba Airlines ruled in favor of the airline's
unions, denying Mesaba the right to impose pay and benefit cuts on its
workers, Minnesota Public Radio reported today. The ruling by U.S.
Bankruptcy Court Judge
size='3'>Gregory Kishel encouraged the two
sides to continue to work out their differences. Judge Kishel
acknowledged in his ruling that Mesaba's imposition of new employment
terms might have brought on a strike by the unions, but he did not seem
to give that scenario much weight in his opinion. Judge Kishel did
conclude his ruling by saying that Mesaba can refile its request to
impose labor cuts if its unions fail to recognize the depth of the
concessions that are required.
href='http://minnesota.publicradio.org/display/web/2006/05/18/mesaba/'>Read
more.
name='6'>Calpine Sees Bankruptcy Claims Exceeding $17.4
Billion
Bankrupt power producer Calpine
Corp. said on Friday it expected claims in bankruptcy court to be
'significantly greater'' than the total consolidated funded debt of
$17.4 billion it reported at the end of last year, Reuters reported
today. In an annual report filed with the U.S. Securities and Exchange
Commission, the company also said it was working on a new business plan
that would make it cash-flow positive on an operating basis in
2007.The company,
whose bankruptcy was among the 10 largest in recent
size='3'>history when it was filed last year, ended 2005 with total
consolidated assets of $20.5 billion and a stockholders' deficit of $5.5
billion. Calpine also disclosed that the salary of its former chief
executive, Peter Cartwright, rose about 60 percent in 2005 to $1.6
million from $1 million.
href='http://www.nytimes.com/reuters/business/business-utilities-calpine.html?pagewanted=print'>Read
more.
Additionally, a federal
bankruptcy judge has given Calpine Corp. the approval to pay $18 million
to former partner Dominion Resources Inc. in a move aimed at ending a
dispute over a major
w:st='on'>
size='3'>Texas
plant, Portfolio
Media reported yesterday. On Tuesday,
Judge Burton R.
Lifland of the U.S. Bankruptcy Court in
size='3'>Manhattan
the deal regarding Calpine's Clear Lake Cogeneration LP subsidiary.
California-based Calpine and Dominion were partners in a joint venture
that owned
size='3'>Clear
face='Times New Roman' size='3'>Lake
size='3'>, a plant based in
w:st='on'>
size='3'>Pasadena
w:st='on'>
size='3'>Tex.
the
size='3'>California
giant bought out Dominion's 50 percent stake but still owed the company
$59.6 million resulting from the transaction. Under the terms of the
recent agreement, Calpine will be permitted to continue selling steam
produced by the
w:st='on'>
size='3'>Clear
face='Times New Roman' size='3'>Lake
facility to two units of a pair of chemical companies,
Celanese Corp. and Old World Industries.
name='7'>Unsecured Creditors Get Approval to Trade Pliant
Securities
Members of bankrupt
packaging company Pliant Corp.’s unsecured creditors' committee
have received a U.S. bankruptcy judge’s permission to buy and sell
Pliant’s securities, but that permission is contingent on putting
an “ethical wall” in place, Portfolio Media reported
today. This prohibition presents a quandary for companies that deal in
securities, but still want to serve on a creditors' committee. “It
assures that the non public information stays with the committee members
and doesn’t leak to the trading side of the house,”
said Michael
Bernstein, a bankruptcy attorney and partner
at Arnold & Porter LLP’s
w:st='on'>
size='3'>Washington,
w:st='on'>
size='3'>D.C.
“You effectively split the institution.”
face='Times New Roman'>Judge Mary Walrath signed off on the
order allowing the committee members to trade in Pliant securities on
Monday in response to a motion by the official unsecured creditors'
committee dated May 3. The case is In re Pliant
Corporation et al., case number 06-10001, in
the U.S. District Court for the District of Delaware.
name='8'>Investment Bankers Oppose Sphinx-Refco
Settlement
Merrill Lynch & Co.
and two other top investment firms have asked a judge to reject a $263
million proposed settlement between a hedge fund and Refco Inc.
creditors, claiming that the deal is a thinly veiled attempt to conceal
misconduct by hedge fund insiders,
size='3'>Portfolio Media reported yesterday.
Merrill Lynch, Raymond James & Associates and Rydex Capital Partners
LLC were investors in Sphinx Managed Futures Fund SPC, a hedge fund with
a long history with Refco that was initiated by executive
Christopher
size='3'>Sugrue. Last month, Sphinx reached the pact with Refco’s
creditors' committee, which alleged Sugrue had improperly shifted $312
million from Refco to Sphinx as Refco was declining last year. The
investment firms said Sphinx investors were disgruntled about footing
the bill for the proposed settlement and stand to forfeit their claims
against the estate, according to a Wednesday filing with the U.S.
Bankruptcy Court in
w:st='on'>
size='3'>Manhattan
size='3'>.The firms
contended that Sphinx propped up a “half-baked” defense
against the lawsuit, and abruptly agreed to a settlement after creditors
warned of bringing fresh claims against Sphinx regarding its connections
to the embattled Austrian bank Bawag PSK Group. The investment firms
said Sphinx was a “shell” and had no assets aside
from those provided by investors.
Autos
Big 3
size='3'>
name='9'>U.S.
size='3'>Automakers Lobby on Capitol Hill on Ethanol and
Pensions
Executives from Ford,
General Motors and Chrysler came together on Capitol Hill yesterday in
an uncharacteristic display of unity to build support for ethanol fuel
and pension reform, the
size='3'>Washington Post reported today. Among
the automakers' concerns are the escalating cost of providing health
care and pensions for hundreds of thousands of workers and retirees. The
companies have also asked for subsidies for research and development and
more tax credits to prop up demand for alternative-fuel vehicles. The
automakers had been scheduled to meet with President Bush this week, but
he postponed the gathering until June 2. Officials at the auto companies
said yesterday that the June 2 meeting has also been postponed.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/05/18/AR2006051802088_pf.html'>Read
more.
name='10'>U.S.
face='Times New Roman' size='3'> Workers at Japanese Automakers
Carry Greater Retirement Obligations
While
w:st='on'>
Nissan have strived to appear to American consumers like homegrown
companies, the one area that these companies have worked hard not to
resemble an American car company is in the way they treat their
retirees, the New York
Times reported today.
size='3'>'We want to avoid commitments when we have no control over
their costs,' said Pete Gritton, the head of human resources for
size='3'>Toyota's U.S.
manufacturing operations. 'We can't build-in things in
such a way that we won't be able to keep our commitments later.' All
three Japanese companies are anticipating that the ranks of retirees
will swell over the next several years. In 2011 and 2012, a combined
1,700 workers will be eligible for retirement at
w:st='on'>
size='3'>Toyota
size='3'>about 6 percent of its current labor force.
size='3'>The workers’ retirement at the Japanese automakers will
contrast in a crucial way with their counterparts who have retired from
the Big Three auto companies in that they will bear much more of the
costs and the risks of retirement on their own.
href='http://www.nytimes.com/2006/05/19/automobiles/19auto.html?_r=1&oref=slogin&pagewanted=print'>Read
more.
w:st='on'>
name='11'>Richmond
face='Times 

New
Roman' size='3'> Fed Official: Don’t Restrict
Lenders
The president of the
Federal Reserve Bank of
w:st='on'>
size='3'>Richmond
Thursday that bank regulators risk stifling the availability of consumer
credit if they act on calls to restrict riskier types of lending,
the
size='3'>Virginian-Pilot reported today.
“Consumer advocates have publicized accounts of abusive practices
by unscrupulous lenders and have charged regulators with lax enforcement
of existing consumer protections,” Jeffrey M. Lacker, head of the
Richmond Fed, told regulators and bankers attending the annual
convention of the Conference of State Bank Supervisors. Some credit card
issuers have come under fire from consumer groups for the sharp
increases in the rates they charge certain borrowers while some mortgage
lenders have been criticized for promoting costly, high-interest home
loans to riskier borrowers. Lacker, an economist who once taught at The
College of William and Mary, acknowledged that the increased
availability of credit has brought with it greater financial strain for
some borrowers, including higher numbers of defaults and bankruptcies.
Instead of resorting to additional restrictions, regulators should
encourage the development of credit-disclosure statements written for
“real consumers,” rather than for lawyers, Lacker
said.
href='http://home.hamptonroads.com/stories/print.cfm?story=104684&ran=51147'>Read
more.
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