September 3, 2004
U.S. Economy Added 144,000 Jobs in August
The U.S. job market brightened in August as employers added 144,000
workers to their payrolls and hiring totals for the two prior months
were revised up, the Labor Department reported today, Reuters reported.
The department said the August unemployment rate dropped to 5.4 percent
from 5.5 percent in July. It was the lowest rate since a matching 5.4
percent in October 2001.
The August-job gain came in slightly below Wall Street
analysts’ forecasts for a 150,000-job gain but the department also
revised up its totals for June and July job creation by 59,000. That
created a moderately more favorable picture for summer job growth, but
is likely to leave unresolved for now whether the economy was
successfully shaking off a June soft patch as Federal Reserve
policy-makers expect it to do.
Enron Bankruptcy Specialist to File for Additional Payment
Kroll Zolfo Cooper is expected to apply to the U.S. Bankruptcy Court
for the Southern District of New York as early as this morning for a
success fee of $25 million for presiding over Enron’s nearly
three-year passage through bankruptcy court, according to a person
familiar with the filing, the Wall Street Journal reported.
The request comes on top of $63.4 million in fees the firm has already
collected from Enron, the filing is expected to say. Enron filed for
chapter 11 bankruptcy protection in December 2001. Read the full article
at www.wsj.com (subscription
required).
US Airways
US Airways Names Restructuring VP
US Airways Group Inc., which is discussing wage and benefit cuts with
its pilots union to avoid a second bankruptcy, said on Thursday that it
hired previous employee James Schear in a new role as vice president of
restructuring, effective immediately, Reuters reported. Earlier in his
career, Schear had been a manager of flight operations and a director of
business planning for the airline. Schear will help oversee the
efficiency of US Airways’ operations. Previously, Schear had acted
as vice president of the Federal Aviation Administration’s safety
unit. The company emerged from chapter 11 in 2003, but is now seeking
millions in concessions from its pilots union to cut costs further. The
carrier faces a possible default at the end of the month on its
federally guaranteed loans, Reuters reported.
US Airways Pilots Draft Proposal, Deal May Be Near
US Airways Group Inc.’s union said it is working on a new labor
contract to present to the carrier, and said its executive committee may
soon consider a tentative agreement to help the seventh-biggest U.S.
airline avoid a second bankruptcy filing, Reuters reported. In a
statement posted on Thursday just before midnight on its web site, the
Air Line Pilots Association said it may present its new proposal to
Arlington, Va.-based US Airways late this evening. Terms of the proposal
were not immediately available. The union said its 12-member executive
committee had not yet set a definitive time for its next meeting, but
said the subject of that meeting “could very well be the
discussion of a tentative agreement or a final proposal.”
Ormet Files Reorganization Plan
Aluminum producer Ormet Corp. said on Thursday it filed a
reorganization plan in U.S. bankruptcy court that, if approved, would
keep its operations running and give equity ownership to its current
creditors, Reuters reported. Privately held Ormet also said it remained
on track to emerge from chapter 11 bankruptcy protection by the end of
the year. Ormet Corp. filed for chapter 11 on Jan. 30, 2004, along with
subsidiaries Ormet Primary Aluminum Corp. and Ormet Aluminum Mill
Products Corp., saying rising medical benefit costs, low aluminum prices
and weak demand had prevented it from meeting debt payments, the
newswire reported.
Parmalat Rejects AIG, Cigna Debt Claims
Parmalat’s government-named administrator has rejected 75
million euros ($91 million) in claims from U.S. insurers including
American International Group (AIG), a financial source said on Thursday,
Reuters reported. The claims against insolvent Parmalat by the insurers,
which also include Principal Financial Group, had been deposited at a
Parma court as part of Parmalat’s bankruptcy case. Administrator
Enrico Bondi rejected the claims, arguing that Bank of America, not
Parmalat, was the insurers’ direct counterparty in the deals and
that their claims should therefore be made directly to the bank, the
source said, the newswire reported.
K-Mart to Sell 45 Stores to Sears for $524 Million
K-Mart Holding Corp. said on Thursday it would sell 45 stores for
$524 million to Sears, Roebuck and Co., finalizing a June agreement that
called for a sale of up to 54 stores, Reuters reported. The Troy,
Mich.-based company, which last year emerged from bankruptcy protection,
said the sale of up to another six stores for $65 million remained
subject to certain conditions. In June, K-Mart, which has also recently
sold stores to Home Depot Inc. and Kohl’s Corp., agreed to sell up
to 54 stores for $621 million to Sears in a deal that gave Kmart more
cash and Sears more room to expand.