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September 16, 2005
name='1'>Grassley Considers Bankruptcy Changes For Katrina Victims
In an effort to help victims
of Hurricane Katrina, Senate Finance Chairman Charles Grassley (R-Iowa) is
working with Sen. David Vitter (R-La.) on possible changes to the bankruptcy
law enacted earlier this year, a Grassley spokeswoman said yesterday. The spokeswoman
did not provide details on the proposal, but said that Grassley, who was the
bankruptcy law's chief Senate sponsor, is not considering an extension of the
law's Oct. 17 implementation date, CongressDaily reported today. Senate leaders
announced Thursday that Vitter and Sen. Mary Landrieu (D-La.) are leading the
effort to draft a bipartisan hurricane relief and recovery bill. A Vitter spokesman
did not return a call seeking comment. Grassley's spokeswoman said that he
and Vitter have not decided whether to propose modifications to the bankruptcy
law as a stand-alone bill, or attach it to the broader hurricane relief bill.
No draft of the proposal has been released, but lobbying sources said the modifications
are likely to include language specifying that victims of Hurricane Katrina
would qualify for exemptions under the law's "special circumstance" provisions.
Travis Plunkett, legislative director of the Consumer Federation of America,
said that that type of measure would not be as helpful to victims of the hurricane
as a bill introduced last week by Sen. Russell Feingold (D-Wis.). That bill
would exempt Katrina victims from the bankruptcy law for a year, and permanently
exempt those debtors from several major provisions, including a means test.
AIRLINES
id='2'>Calls for Pension Relief
Intensify
Northwest Airlines' and
Delta Air Lines' simultaneous bankruptcy filings apparently have fueled momentum
in Congress for legislation that would give air carriers 14 years to catch
up on billions of dollars in pension debt, the Minneapolis Star Tribune reported
today. Without quick action, Senate sponsors said yesterday, Northwest and
Delta most likely will be forced to terminate their pension plans in the
face of stiff payment deadlines and leave the government's foundering pension
guaranty
agency with $11.2 billion in new liabilities. That also would mean a collective
$5 billion in reduced pension benefits for many of the tens of thousands
of Northwest and Delta employees and retirees, according to the Pension Benefit
Guaranty Corp. (PBGC). Senate Minority Leader Harry Reid (D-Nev.) called
for
Congress to seize the "immediate opportunity." Amy Call, a spokeswoman
for Senate Majority Leader William Frist (R-Tenn.), said that Frist, too,
wants the bill, which is part of broader pension reform legislation, "to
move quickly." The Bush administration's pension reform bill includes
no pension relief for airlines. A spokesman for the PBGC, which takes over
insolvent private
pension plans and itself faces a soaring shortfall, said that allowing companies "to
skip pension contributions" will only expose workers to greater risks. Read
the full story.
Meanwhile, the growing number of corporate bankruptcies will send the PBGC
's liabilities skyrocketing by billions over the next decade, the Associated
Press reported today. The government agency that guarantees worker pensions
could see its liabilities quadruple over the next decade, jeopardizing the
benefits of millions of retirees, a new report says. In a report made public
yesterday, the Congressional Budget Office estimated that PBGC. shortfalls
will reach nearly $87 billion over the next decade, up from about $23 billion
in 2004.The report also predicted that PBGC liabilities
could rise to $119 billion in 15 years and $142 billion over 20 years as
it is forced to take over large pension plans in the airline, steel and other
troubled industries. Read
the full story.
id='3'>American Flies Above Bankruptcy
Analysts say that American
Airlines is the strongest of the traditional carriers and is unlikely to follow
rivals Delta Air Lines and Northwest Airlines into bankruptcy anytime soon,
the Miami Herald reported today. Unlike two carriers that filed for bankruptcy
this week, American Airlines, the nation's largest carrier, has already cut
wages sharply, eked out a small profit and piled up more than $3 billion in
cash. But American -- which barely avoided bankruptcy two years ago -- is also
struggling with high fuel prices and big pension obligations. If Delta and
Northwest use the bankruptcy process to dump their pension obligations and
cut employees' pay, it could force American to do the same, analysts say. Read
the full story.
id='4'>US Air Nears Exit from Bankruptcy Court
US Airways Group Inc. argued
in bankruptcy court for a severance plan for 23 executives as the company sought
final approval yesterday of its year-long reorganization, anchored by a merger
with America West Airlines, Reuters reported. The packages totaling up to $12
million—that unions call an insult to thousands of regular workers who
took pay and benefit cuts—are among the last matters to be dealt with
before US Airways can emerge from bankruptcy.
id='5'>Southwest Eyes Delta, Northwest Opportunities
Leading U.S. low-fares carrier
Southwest Airlines Co. said today that it might expand its services if bankrupt
rivals Delta Air Lines Inc. and Northwest Airlines Corp. scale back operations,
Reuters reported. "If they do, we are always open to that. We will be
as aggressive as ever," Pete McGlade, vice president for schedule and
planning, told reporters at the World Low-Cost Airlines summit in Amsterdam.
McGlade pointed to Southwest's decision to capitalize on opportunities at Pittsburgh
this year after US Airways cut its services. Read the full story.
id='6'>Investor Ross Keen on Collins & Aikman U.S. Units
Turnaround specialist Wilbur
Ross, known for buying ailing companies and bringing them back to health, expressed
an interest yesterday in the U.S. units of bankrupt auto parts supplier Collins & Aikman
Corp., Reuters reported yesterday. Collins & Aikman filed for chapter 11
bankruptcy protection in the United States in May with its European companies
moving into administration in mid-July. "We would be interested in bidding
if Collins & Aikman in the U.S. were to come up for sale," Ross told
Reuters in a telephone interview. "We are looking at many of these distressed
(auto parts companies) that have some kind of proprietary technology and some
scale of size." Collins & Aikman spokesman David Youngman declined
to comment on the report about Ross, who has provided financing for the company's
administration proceeding in Europe. Read
the full story.
id='7'>Las Vegas's Griffin Investigations Files Bankruptcy
A Las Vegas company known
in the casino world for tracking cheaters has filed for bankruptcy after losing
a court battle to two gamblers who say they were unfairly targeted, Channel
8 Eyewitness News in Las Vegas reported yesterday. Griffin Investigations owes
more than $109,000. The men filed a defamation lawsuit and successfully claimed
that Griffin had false information that led to their April 2000 arrest for
cheating. Charges were later dropped. Griffin publishes volumes containing
thousands of names and mug shots. It also uses a facial recognition program
and alerts casino security when a suspected cheater is gambling.
id='8'>Yukos Gets Bankruptcy Notification
Lawyers for Yukos were scrambling
yesterday to confirm whether a Gazprom subsidiary had filed a bankruptcy suit
against the embattled oil major, the Moscow Times reported yesterday.
Gazprom subsidiary Orenburggeofizika said that Yukos had been declared bankrupt
for nonpayment of debts, according to a letter to Yukos dated Sept. 14, a copy
of which was obtained by the Moscow Times. The letter could signal
a new scramble for the remains of the troubled oil major, which saw its major
production unit renationalized in a controversial state seizure last year.
But it could be a rogue action made without Gazprom's knowledge. Gazprom yesterday
denied that any bankruptcy had been or would be filed. A source in Yukos confirmed
that the company had received the letter and that lawyers were scurrying to
confirm whether Orenburggeofizika had filed a bankruptcy suit in the Moscow
Arbitration Court. Yukos declined to comment. Read
the full story.
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