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December 20, 2005
name='1'>House
Boosts Firms’ Pension Guarantee Fees
Companies that
declare bankruptcy
and dump their pension plans onto the federal government would face a
$3,750
fee per covered worker under a budget plan passed by the House early
Monday,
the Associated Press reported yesterday. The vote to pass the $39.7
billion
federal budget bill was 212-206, and the Senate planned a vote later
in the
day. The new fee, broken down in three yearly installments of $1,250
per covered
employee, would be paid to the Pension Benefit Guaranty Corp. The
measure also
includes an increase in the per-employee premium companies pay to the
financially
troubled PBGC, which has an operating deficit of about $23 billion as
it takes
over payments of abandoned plans, particularly in the airlines and
steel industries.
Lawmakers say that without these steps, taxpayers will be on the hook
for the
government’s responsibility to backstop pension plans.
id='2'>Refco
Appoints New CEO
Refco, the futures
trader
that filed for bankruptcy protection in October after revealing that
its chief
executive had hidden $430 million in debt, said yesterday it had
appointed Harrison
J. Goldin as chief executive, Bloomberg News reported today. Goldin
replaces
Robert Dangremond, who served as interim chief executive after the
resignation
of William Sexton last month. A partner with Goldin Associates, Goldin
was the
New York City comptroller from 1974 to 1989 and served as a
court-appointed
examiner in the Enron bankruptcy case. Refco is selling off assets to
repay
about $16.8 billion owed creditors after filing for bankruptcy. The
company
suspended its chief executive, Phillip Bennett, on Oct. 10 for
concealing debts
from investors and auditors. Bennett was later indicted for securities
fraud.
id='3'>Delta
Judge OKs Rejection of Texas Hangar Lease, Allows Fuel Hedges
A bankruptcy court
judge
yesterday allowed Delta Air Lines Inc. to enter new agreements, or
hedges, to
protect against sharp spikes in fuel prices and approved the rejection
of a
lease for a hangar at Dallas-Fort Worth International Airport, the
Associated
Press reported yesterday. In approving the carrier’s ability to
enter the special
agreements, Judge Prudence Carter Beatty cautioned
the airline
against speculating in non-fuel contracts. Delta did not spell out
exactly how
it would hedge itself against rapid changes in fuel prices. Delta
spokesman
Dan Lewis could not immediately provide details about how the hedge
process
would work or when it would be implemented.
href='http://www.macon.com/mld/macon/news/politics/13443605.htm'>Read
more.
id='4'>Delphi
Rescinds Plan to Slash Union Pay
Delphi Corp., the
troubled
auto parts giant, has pulled a controversial proposal to slash union
workers’
pay after steadfast opposition from the United Auto Workers (UAW) and
other
labor unions, the Washington Post reported today. As part of
its bankruptcy
reorganization, Delphi was proposing salary scales that would have
paid some
workers as little as $9.50 per hour, down from about $27 per hour that
workers
earn now. The UAW had rejected the proposal. In a statement, Delphi
said it
was formally withdrawing the proposal because General Motors Corp.,
Delphi’s
former parent company and largest customer, has entered the
negotiations.
href='http://www.washingtonpost.com/wp-dyn/content/article/2005/12/19/AR20051…'>Read
more.
id='5'>Court
OKs Land Sale in Fla. Bankruptcy
The bankruptcy
court overseeing
the auction of Durango Georgia Paper’s St. Marys land has
approved the sale
of the property to LandMar Group LLC, the Jacksonville Business
Journal
reported yesterday. Judge Lamar W. Davis Jr. approved a deal where
LandMar will
pay $36.5 million for more than 4,000 acres and another $5.5 million
in a separate
deal for the paper mill equipment and other properties. Jacksonville,
Fla.-based
LandMar plans a multi-use real estate development that will include a
marina.
Attorneys for the estate said marketing the property as something
other than
a paper mill was the key to getting a good price for it. "When we
started
this process, the value of the offers that we received for the
bankruptcy estate
was virtually zero," said Ward Stone Jr., an
attorney
for the estate. "To be able to provide in excess of $42 million
to the
estate is simply a phenomenal outcome that would not have happened if
the property
were marketed as a paper mill. The proof is that we received no bid
from a mill
re-starter."
id='6'>Cooper
Settles Asbestos Claims
Cooper Industries
shares
hit record highs yesterday after the company detailed the terms of a
multimillion-dollar
asbestos settlement in the Federal-Mogul Corp. bankruptcy proceeding,
MarketWatch
reported yesterday. Cooper stock moved as high as $75.75 before
reversing course
and closing down $1.15 at $73.81. The Houston-based company said that
it will
pay $130 million cash and provide 1.4 million shares to be placed into
a trust,
as well as make payments of up to $20 million annually over the next
25 years.
Cooper will take an aftertax charge of $150 million to $225 million in
the fourth
quarter in connection with the settlement. The deal, which involves
Cooper’s
former Abex Friction Products business, needs the approval of the
bankruptcy
court and 75 percent of Abex asbestos claimants.
href='http://www.marketwatch.com/news/story.asp?guid=%7B91C9A883-B150-40A9-A2…'>Read
more.
id='7'>Pa.
Shuttle Service Enters Chapter 11
Shuttle service
provider
Pittsburgh Transportation Co. has filed for bankruptcy, citing high
fuel costs
and a recent court decision mandating overtime payments to its
employees, the
Pittsburgh Tribune-Review reported today. Under terms of its
chapter
11 filing, the company, which moves passengers for area employers
between various
loading points, is asking the court for permission to continue
business. According
to documents filed in court, the company’s total assets and
liabilities each
total between $1 and $10 million. Its secured creditor is Sky Bank,
which provided
a $4 million term loan and $300,000 line of credit. Combined, the
company owes
Sky Bank roughly $2.6 million. Thirteen unsecured creditors are owed
$10,201,
a list headed by Pioneer Printing & Business Forms of Heidelberg,
owed $2,290.
The bankruptcy filing cites three primary reasons for seeking creditor
protection:
a recent court ruling mandating that Pittsburgh Transportation must
pay drivers
overtime, this year’s run-up in fuel costs, and a lack of
progress in concession
negotiations with Teamsters Local 249.
href='http://pittsburghlive.com/x/tribune-review/business/s_405603.html'>Read
more.
id='8'>Lawyer
Worries that Calpine Could Cost California
California Attorney
General
Bill Lockyer today petitioned federal officials to compel Calpine to
continue
providing below-market-rate power to California if the San Jose-based
company
files for bankruptcy, San Jose Broadcast News reported yesterday.
Calpine signed
a long-term contract with the state Department of Water Resources in
2001 and
renegotiated it in 2002, agreeing to provide California consumers with
1,000
megawatts of electricity for $59.60 per megawatt hour until 2009.
Current market
rates for power are higher, and Lockyer fears the company may seek to
terminate
the contract if it files for bankruptcy.
href='http://www.cbs5.com/localwire/localfsnews/bcn/2005/12/19/n/HeadlineNews…'>Read
more.
id='9'>Michael
Jackson : Facing Bankruptcy?
Michael Jackson
could be
declared a bankrupt if he fails to pay back a $270 million loan, due
this week,
E-central.com reported today. Jackson owes the Fortress Investment
Group the
amount, with reports surfacing that the pop superstar is having
trouble coming
up with the payment. If Jackson fails to pay up, the creditors will
proceed
to seize possession of his 50 percent share in the Sony/ATV publishing
company,
plus his MiJac music publishing company.
International
id='10'>ABB
Clears Hurdle in Asbestos Case
Zurich’s ABB
Ltd has cleared
another hurdle in its asbestos litigation process, with a U.S.
bankruptcy court
confirming the revised reorganisation plan for ABB’s Combustion
Engineering
(CE) unit and recommending the affirmation of the plan to the district
court,
AFX News reported yesterday. This follows a vote by asbestos
claimants, completed
in September, in which they approved the reorganization plan, and a
confirmation
hearing by the bankruptcy court at which all objections to the plan
were withdrawn.
ABB expects the district court hearing to be held soon. If the court
approves
the plan, which will protect ABB and its subsidiaries against current
and future
claims, there will be a 30-day appeal period, and if no appeals are
lodged,
the plan is final. Under the plan, ABB has committed $1.43 billion for
a trust
fund for claims against CE.
id='11'>Foreign
Capital May Be Used in Russian Bankruptcy Attempts
The Russian Federal
Security
Service (FSB) does not rule out that foreign capital may be involved
in attempts
to bankrupt some of Russia’s strategic and defense enterprises,
FSB Director
Nikolai Patrushev said today, according to an Itar-Tass News Service
report.
“Taking into consideration the scope of the activity of agencies
specializing
in ‘contract’ bankruptcies, as well as particular
significance of
their aims, we have grounds to believe such a scheme for the
liquidation of
enterprises and organizations in leading sectors of the Russian
economy is stimulated,
including with the help of foreign capital,” the FSB director
stressed
in an interview. He said that security services had revealed an
attempt to liquidate
a unique Omsk transport engineering plant, which can fully ensure
capital repairs
and modernization of T-80 tanks the Russian Army has in service.
href='http://www.tass.ru/eng/level2.html?NewsID=2737576&PageNum=0'>Read
more.