April 13, 2004

Proposed Georgia Law Would
Crack Down on Payday Lenders

Georgia would enact one of the
nation's toughest laws against 'payday lenders' if Gov. Sonny Perdue
signs a bill state lawmakers endorsed last month, the Washington
Times reported yesterday. If the bill becomes law, lenders who
violate Georgia's criminal usury cap of 60 percent annual interest would
face as much as 20 years in prison and a fine of $25,000 per
transaction. Perdue, a Republican, has until May 17 to sign or veto the
bill, which has captured the industry's attention because of its harsh
penalties. Other states may attempt to provide borrowers with more
consumer protections, but none is expected to follow Georgia's lead in
outlawing the lending, advocates on both sides of the debate
said.

Payday loan lenders operate
between 20,000 and 24,000 stores in the United States, and take in $2.4
billion in fees and interest each year, according to a 2001 report by
the Consumer Federation of America, the newspaper reported. The federal
government does not regulate small-scale lending in the United States,
leaving the matter up to the states. At least 13 states, including
Maryland, do not permit payday lending. However, opponents say payday
lending sometimes continues in these states because the legal penalties
are so weak that prosecutors don't find it worthwhile to seek criminal
charges.

The Georgia legislation would
allow consumers to file class-action lawsuits, and it would require
lenders to be licensed by the state insurance commissioner. The Georgia
legislature passed the bill March 4. Perdue has not reviewed the
bill, said Loretta Lepore, his spokeswoman. 'When he does review it,
he's going to want to ensure that there are no unintended consequences
for businesses that are operating in good faith,' Lepore said, the
Times reported.

Retail Sales Rise in
March

The Commerce Department said
today retail sales rose an unexpectedly sharp 1.8 percent in March to a
seasonally adjusted $333.01 billion, the biggest gain since March 2003,
Reuters reported. Excluding cars and trucks, sales gained 1.7 percent,
that category's best performance since March 2000. Wall Street analysts
had expected both figures to advance a smaller 0.6 percent. February
sales were also revised upward, to a 1.0 percent increase from the
previously reported 0.7 percent gain. February ex-auto sales were
revised to a 0.6 percent increase from a previously reported flat
reading. The figures show the economy kept up its momentum in the first
quarter of the year. Economists closely track retail sales, which make
up about 36 percent of overall consumer spending, the driver of
two-thirds of U.S. economic activity, the newswire reported.

MCI: States Using 'Abusive'
Tactics In Tax Fight

MCI has asked a federal bankruptcy judge to deny a request by 14
states to remove KPMG as its auditor, claiming the states are using
'abusive' tactics to win concessions in a tax dispute, Reuters reported.
The bankrupt company said in a court filing on Friday that the work of
KPMG was legal, and that if the states succeed, the company's emergence
from bankruptcy could be delayed indefinitely beyond the April 28
deadline.

The coalition of states contend
a tax strategy designed by KPMG and used by MCI for years has allowed
the company to improperly transfer $24 billion in revenues between
states to avoid taxes. The states, led by Massachusetts, could seek as
much as $500 million in back taxes, according to a source familiar with
the case. The states also want KPMG dismissed as MCI's auditor, and want
the firm to return or waive $146 million in fees, claiming MCI could sue
KPMG for reimbursement if MCI is forced to pay back taxes. MCI said it
was in settlement talks with the states, but that the timing of their
motion 'demonstrates the abusive litigation tactics being employed by
the states and is, in and of itself, reason to deny the motion,' the
newswire reported. U.S. Bankruptcy Judge Arthur Gonzalez is scheduled to
hear arguments in the dispute today in New York.

PACIFIC GAS &
ELECTRIC

Pacific Gas & Electric
Emerges From Bankruptcy

Pacific Gas & Electric Co.
emerged yesterday from bankruptcy protection, Reuters reported. The
company, a unit of PG&E Corp., said it made about 2,100 payments
that resolved $8.4 billion in allowed creditor claims and deposited $1.8
billion in escrow accounts for disputed claims as part of its deal to
emerge. The utility filed for chapter 11 bankruptcy protection on April
6, 2001, after California's failed attempt at electricity market
deregulation prevented the company from raising consumer rates amid
soaring wholesale electricity prices. 'By resolving these financial
challenges in a collaborative manner, we are able to move forward on a
sound financial basis in a more stable regulatory environment,' PG&E
Corp. President and CEO Robert Glynn said, Reuters reported. As part of
the deal that allowed the company out of bankruptcy, the company said
its investment grade credit rating was restored to help the utility
finance infrastructure improvements and natural gas purchases to meet
growing demand.

Calpers Says It Is
Withholding Votes For PG&E Board

Calpers, the largest U.S.
public pension fund, on Monday said it is withholding its votes for the
entire board of power company PG&E Corp., saying that it had failed
to implement shareholder-approved proposals on poison pills and option
accounting, Reuters reported. The California Public Employees'
Retirement System also said it had decided to cast its 1,697,801 votes
against the company's auditor, Deloitte & Touche, saying the
accounting firm had performed non-audit services. Calpers also cited as
a reason for withholding its votes, the authorization by the power
company's audit committee for Deloitte to perform non-audit
services.

AMR's American Eagle Pilots
Start Contract Talks

Pilots for American Airlines'
regional jet carrier American Eagle started interim contract talks with
management yesterday, focusing on pay and work rules, Reuters reported.
The talks come a year after pilots at American Airlines agreed to
drastic wage concessions aimed at keeping the airline out of bankruptcy.
The Air Line Pilots Association, which represents Eagle's 2,500 pilots,
said that since the carrier has grown, the union is seeking changes to
the agreement to reflect the greater role Eagle pilots play. The union
said it is seeking better deals on compensation, scheduling, retirement
benefits and work rules. A spokeswoman with American Eagle said the
pressure to keep costs down across the airline industry will be a major
consideration for the airline in the talks, the newswire reported.



Ex-Adelphia Employee Says Another Signed Receipt
Phony

Adelphia Communications Corp.'s
former treasury supervisor continued to testify Monday that Timothy
Rigas signed documents containing false statements and that the company
covered expenses related to margin loans for the family. James Helms
testified that former Adelphia Chief Financial Officer Timothy Rigas and
former assistant treasurer Michael Mulcahey signed a receipt stating
that a Rigas family parternship had wired Adelphia $396.49 million in
'immediately available funds' to pay for convertible notes in January
2002. In fact, Adelphia received no wire from the partnership, Highland
2000, on the date of the receipt, after it issued the notes to the
partnership, Helms said.

Timothy Rigas is on trial with
his father, former Adelphia Chairman John Rigas; his brother, former
Executive Vice President Michael Rigas; and Mulcahey on charges of bank
fraud, wire fraud, securities fraud and conspiracy. They are accused of
misleading creditors, investors and the public and enabling the Rigas
family to 'loot' Adelphia 'on a massive scale.'

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WEIRTON
STEEL

ISG, Weirton Steel Deal
Would Have To Pass Antitrust Review

A company that uses aerosol
cans says it fears an International Steel Group Inc. buyout of Weirton
Steel Corp. would create a tin industry dynasty and drive prices
higher for hair spray, canned soup, cat food and other products in tin
containers. According to an Associated Press article, the antitrust
concern, also raised by competing bidders for Weirton Steel, is being
reviewed by the U.S. Department of Justice. If ISG wins a bankruptcy
auction for Weirton and a judge approves the sale, the Cleveland-based
company would take over the nation's No. 2 producer of tin-plated steel.
Only Pittsburgh-based U.S. Steel Corp. is a bigger tin maker.

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Weirton Says Asset
Auction Adjourned

Weirton Steel Corp. said on
Monday that an auction for the company's assets was adjourned until
today, Reuters reported. A group of bond holders of the bankrupt steel
maker and International Steel Group Inc. have submitted bids for the
company's assets, according to a statement from Weirton. Following the
auction, Weirton management will submit a sale recommendation to its
board. The board's decision is scheduled to be given to a bankruptcy
judge on Wednesday for his approval.

Bechtel and G.E. Acquire Enron's Part
of Indian Plant

The Bechtel Group and the
General Electric Company, partners of the Enron Corporation in the
Dabhol Power Company in India, have bought 65 percent of Dabhol to
recoup part of the $1.2 billion they invested in the failed $3 billion
venture, Bloomberg News reported.

Bechtel and a financing unit of
General Electric bought Enron's 65 percent stake in Dabhol for $22
million through a United States Bankruptcy Court in Manhattan, a Bechtel
spokesman said on Monday. The companies, the two main contractors for
the plant, each had a 10 percent stake, the newswire
reported.

Bankrupt Hawaiian Air Seeks
Close Ties To Boeing

Hawaiian Airlines expects Boeing Co. to remain its exclusive aircraft
supplier and a key creditor despite differences over the airline's
bankruptcy, scheduled to end later this year, Reuters reported. 'The
company has a good relationship with Boeing and with Boeing Capital
Corp. (its leasing arm) and the clear intention of the company is to
remain a Boeing customer,' Hawaiian Air President Mark Dunkerley told
Reuters in a recent interview. Chicago-based Boeing opposes Hawaiian's
reorganization plan and has filed a rival plan with a Honolulu
bankruptcy court, the newswire reported.