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February 15, 2006
Asbestos
name='1'>Asbestos Legislation Blocked in the
Senate
The Senate derailed
legislation to create a trust fund for asbestos victims, a victory for
Democrats and their trial-lawyer allies who waged a relentless campaign
to defeat a bill that took five years to negotiate, the
face='Times New Roman' size='3'>Washington Post
size='3'>reported today. Supporters of the bill, including most
Republicans and some Democrats, held out hope for a return to the
legislation after it failed, in a 58 to 41 vote, to gain the support of
60 senators needed to overcome a challenge over its potential budgetary
impact. A new Congressional Budget Office examination of the bill did
little to clear up the debate. In a letter from acting Director Donald
B. Marron to Senate Budget Committee Chairman Judd Gregg (R-N.H.), the
CBO estimated that payments, start-up costs and other expenses would
total $64 billion over 10 years, 2006 to 2015, while the fund would
collect an estimated $58 billion from asbestos companies, insurance
firms and existing private trust funds.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/02/14/AR20060…'>Read
more .
Though asbestos
litigation legislation failed a key test vote Tuesday,
size='3'>Senate Majority Leader Bill Frist (R-Tenn.)
size='3'>said he might bring the contentious bill back to the floor as
early as this week,
size='3'>CongressDaily reported today. 'We'll
see if there are 100 people on campus,' a senior GOP aide said.
'Asbestos is not dead.'
In related news,
size='3'>U.S.
size='3'>senators who voted against asbestos legislation are calling for
a different approach to curb lawsuits that have bankrupted almost 80
companies, Bloomberg News reported today. Once the Senate shelved the
fund plan yesterday on a procedural vote, opponents proposed an
alternative: requiring victims to document their medical condition
before suing for damages. 'We have a broken legal system that needs to
be fixed,'' said Sen. John Ensign (R-Nev.) The new approach would 'get
rid of all the phony claims'' and benefit actual victims, he said. Four
states --
size='3'>Florida
w:st='on'>
size='3'>Texas
size='3'>Georgia
size='3'>Ohio
that require victims to show that their cancer or respiratory disease
was caused by asbestos in order to file suit.
href='http://www.bloomberg.com/apps/news?pid=10000103&sid=aCc87I.6qe6g&refer=…'>Read
more .
name='2'>Congressional Hearing Focuses on Credit Card Transaction
Fees
Retailers and credit card
companies will be on opposite sides today at a House Commerce, Trade and
Consumer Protection Subcommittee hearing examining fees that banks
charge merchants for credit card transactions, but each will argue that
its position benefits consumers,
size='3'>CongressDaily reported today.
Merchants argue that some credit card companies engage in monopolistic
practices by charging stores a fee of about 2 percent for each
transaction when a customer uses plastic. Card issuers disagree,
contending their network brings stability to a 21st Century economy that
relies heavily on electronic commerce. They note that they provide a
quick and efficient service with major safeguards to prevent fraud,
along with incentives for free airline trips and cash rebates. House
Energy and Commerce Chairman Barton has an interest in the issue, noting
the large profits that banks made off gas purchases when oil prices
spiked last year.
name='3'>Former Refco Capital Markets Customer Looks to Recoup
Assets
One of Refco's biggest
customers said that the bankrupt brokerage deceived him into thinking
his firm's assets were being held in his account, when in fact Refco was
borrowing against them, Reuters reported yesterday. Richard Deitz,
president of VR Capital Group, a Refco customer that is now one of the
company's biggest creditors, said in court that his Moscow-based hedge
fund believed that Refco would not borrow against VR's assets, unless
the fund itself borrowed against the assets. At issue is a larger
question in the futures and commodities broker's bankruptcy: what to do
with the assets customers had kept in trading accounts at Refco Capital
Markets (RCM), an unregulated offshore broker-dealer. Some RCM customers
have filed a motion with U.S. Bankruptcy Court Judge Robert
Drain proposing a 'stockbroker liquidation' under chapter
7. Lawyers for New York-based Refco, though, countered that RCM did
not act like a conventional stockbroker and therefore should not be
liquidated as a stock broker. Refco says such a liquidation would
unfairly favor a narrow group of customers. Tom Moloney, a lawyer
representing an RCM customer seeking liquidation, said at the hearing
that there is a shortfall of $2 billion in customer property.
href='http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&s…'>Read
more .
Integrated Electrical
Services (IES) filed for chapter 11 bankruptcy protection Tuesday, but
the
size='3'>Houston
contractor said it is aiming to emerge quickly, the
face='Times New Roman' size='3'>Houston Chronicle
size='3'>reported today. The company is looking to exit bankruptcy court
sometime between April 1 and April 15, said Byron Snyder, the company's
chairman, president and chief executive officer. The company has
negotiated with its creditor groups over the past several months and
made the necessary preparations to ensure that the restructuring does
not interfere with services for customers, he said. Standard &
Poor's noted on Tuesday that IES, one of the larger electrical
contractors in the country, had a total debt of $223 million at the end
of 2005. The company's bankruptcy case was filed in
w:st='on'>
size='3'>Dallas
agreement was reached with institutions that hold about 61 percent of
the company's $173 million senior subordinated notes, the company said.
The institutions have agreed to swap those senior notes for 82 percent
of the new common stock of the reorganized company.
href='http://www.chron.com/cs/CDA/printstory.mpl/business/3659920'>Read
more .
name='5'>Bankruptcy Failed to Shield Accused Patent
Infringer
The U.S. Court of Appeals for
the Federal Circuit has overturned a lower court’s decision that
allowed a bankruptcy judge to shield a corporate debtor from allegations
of patent infringement, Portfolio Media reported yesterday. The
plaintiff in the case accused the district court of improperly
dismissing his suit, arguing that bankruptcy does not discharge
liability for patent infringement that takes place after debts are
discharged in abankruptcy filing. “Filing a petition for
bankruptcy, and obtaining a discharge, does notvoid a complaint that
had been filed against the bankrupt party,” wrote Federal Circuit
Senior Judge Clevenger, siding with plaintiff appellant Albert
Hazelquist. Hazelquist sued business owner Ken Yamaguchi in February
2004, accusing the founder and sole employee of the accused company of
infringing his
w:st='on'>
size='3'>U.S.
size='3'>design patent for fishing tackle.
face='Times New Roman' size='3'>The Federal Circuit’s ruling
overturned a May 2005 decision at the U.S. District Court for the
District of Western Washington, where a federal judge dismissed the
claims against defendant Yamaguchi after his company, Guchi Moochie
Tackle Co., filed for bankruptcy. The district court determined that
because Mr. Yamaguchi's debts had been
size='3'>discharged in bankruptcy as of Dec.r 29, 2004, all of
Hazelquist's claims against Mr. Yamaguchi were likewise discharged. The
case is Hazelquist v.
Guchi Moochie Tackle Co., case number 05-1446,
in the U.S. Court of Appeals for the Federal Circuit.
name='6'>Victims Committee Seeks $20M More In Portland Archdiocese
Case
The bankrupt Archdiocese
of Portland in Oregon is objecting to a claimants committee’s
alternative plan of reorganization, which would add another $20 million
to the church’s trust fund for settling sex abuse cases,
Portfolio Media
reported yesterday. The tort claimants committee, which
represents alleged victims of clergy sexual abuse, submitted its
proposed plan to the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Portland
the archdiocese’s previous offer of $42 million was not
sufficient. The committee’s court document said $66 million would
settle all sexual abuse claims without requiring the archdiocese to sell
any parish or school property. The committee's plan leaves open the
possibility of foreclosure of the archdiocese’s property should
the funds be depleted before all claims are paid. To that end, the
committee has called for all trust deeds to the archdiocese's real
property to be placed in the fund. In January, a federal bankruptcy
judge in
face='Times New Roman' size='3'>Oregon
ruled that parishes and schools are part of the diocese's
total assets, despite efforts of the diocese to prove
otherwise.
name='7'>Lottery Winner Gets Prison Term for Bankruptcy
Lies
A former
size='3'>Lincoln
size='3'>woman was sentenced to 22 months in jail Friday for lying to
federal bankruptcy court in 2000 regarding two years worth of payments
for the $1 million jackpot she won in 1984, the
face='Times New Roman' size='3'>Lincoln Courier
size='3'>reported yesterday. U.S. District Judge Jeanne Scott gave Karen
Diane Cohen, 53, now of
w:st='on'>
size='3'>Edmonds
w:st='on'>
size='3'>Wash.
April 4 before she has to report for jail. On her release, she faces
three years of mandatory supervision and must pay a $100 special
assessment. Cohen won $1 million June 1982 playing the Illinois State
Lottery while living in
w:st='on'>
size='3'>Lincoln
winnings were paid in 20 annual installments of $50,000. Cohen and her
husband, Steve Shanle, divorced in 1984 and the settlement included a
court order that Cohen pay Shanle $9,000 from each annual lottery
payment. A jury found that in December 2000, in a hearing before U.S.
Bankruptcy Judge Larry Lessen, Cohen lied when she said she had not
received the checks for her share of the lottery winnings in 1997 and
1998.
href='http://www.lincolncourier.com/story.asp?SID=386&SEC=8'>Read
more .
name='8'>Two Bankruptcy Judges Named in
w:st='on'>South
Florida
Two new bankruptcy
judges, including the first woman, have been appointed to the U.S.
Bankruptcy Court for the Southern District of Florida, the
Miami Herald
size='3'>reported today. Laurel I. Isicoff, 48, who
spent the past 14 years as a bankruptcy lawyer at
w:st='on'>
size='3'>Miami
Throckmorton, was appointed Monday to serve in
w:st='on'>
size='3'>Miami
law degree from the
w:st='on'>
size='3'>University
size='3'>Miami
John K. Olson, 56, formerly of counsel to Stearns,
Weaver, Miller, Weissler, Alhadeff & Sitterson in
w:st='on'>
size='3'>Tampa
serve in
face='Times New Roman' size='3'>Fort
Lauderdale
Boston College School of Law, Olson was a bankruptcy lawyer for about 30
years. Isicoff and Olson were each appointed to serve 14-year terms by
the 12-judge 11th Circuit Court of Appeals in
w:st='on'>
size='3'>Atlanta
appointments increase the number of bankruptcy judges in
Florida
href='http://www.miami.com/mld/miamiherald/business/13872931.htm'>Read
more .
New
Law Makes Filing for Bankruptcy More Difficult
Since changes in the
bankruptcy law last fall, Paul Brown of the We The People Service Center
in
size='3'>Ariz.
business has seen a drop in filings of about 80 percent, the
Glendale Star
size='3'>reported today. His business provides an inexpensive and
valuable alternative to lawyers to help consumers understand the law and
file documents. “Before the law changed, there were 20,000
bankruptcies filed in
w:st='on'>
size='3'>Arizona
year,” Brown said. “Last month, there were only
150.”
href='http://www.glendalestar.com/articles/2006/02/10/news/news05.txt'>Read
more .
size='3'>Airlines
name='10'>PBGC Largest holder of Newly
Issued UAL Shares
The nation's federal pension
insurer said it holds a 23.4 percent stake in UAL Corp., parent of
United Airlines, making it the largest single shareholder in the newly
reorganized company, the Wall Street Journal reported today.
The Pension Benefit Guaranty Corp. (PBGC), which insures benefits of
companies that offer traditional pension plans, owns 11.1 million shares
of UAL common stock, it said in a Securities and Exchange Commission
filing. The PBGC became an unsecured creditor after the company shifted
$10.2 billion in unfunded pension liabilities to the agency during its
chapter 11 bankruptcy reorganization. The PBGC will be on the hook for
full pension payments to most of UAL's 120,000 workers and retirees. The
airline company, which emerged from bankruptcy protection Feb. 1, agreed
to pay the PBGC a claim valued at $5.6 billion. Before the stock was
issued on Feb. 2, the PBGC sold $2.5 billion of its claim for $450
million, or 18 cents on the dollar, to hedge funds and banks.
href='http://online.wsj.com/article/SB113995434876073939-email.html'>Read
more.
size='3'>Hawaiian Air Sues to Block
size='3'>Mesa
face='Times New Roman' size='3'>from Initiating Inter-Island
Airline
Mesa Air Group Inc., the
Phoenix-based company that plans to start an inter-island airline
in
size='3'>Hawaii
Airlines yesterday for a lawsuit that seeks a minimum two-year
injunction to keep bankrupt carrier
w:st='on'>
size='3'>Mesa
market as well as monetary damages, according to the Honolulu Star
Advertiser today. Jonathan Ornstein, chairman and chief executive
of
a suit filed by Hawaiian on Monday in federal bankruptcy court is
anti-competitive.
face='Times New Roman' size='3'>Mesa
size='3'>said it intends to start a new inter-island carrier around the
beginning of April with one-way fares as low as $43. The airline has
long sought to establish a presence in
w:st='on'>
size='3'>Hawaii
was one of the potential investors in Aloha Airlines.
href='http://starbulletin.com/2006/02/15/business/story01.html'>Read
more .
name='12'>Retirees Look to Cut Executive Pay at
Lucent
Lucent's shareholders today are
voting on a proxy proposal to restrict the pay of the top executives,
which was put forward by retirees that would make 75 percent of
executive stock grants dependent on the telecom-equipment maker's
performance, the Wall Street Journal reported today. In
addition to Lucent, retirees from a range of companies including Verizon
Communications Inc., General Electric Co., International Business
Machines Corp., Prudential Financial Inc. and Qwest Communications
International Inc. are presenting proposals to restrict executive
compensation. The retirees are motivated partly by concerns that the
value of their nest eggs can crack when the value of their companies'
stocks drops. 'In these years of corporate tumult, which has seen many
great companies turn into shells of their former selves, one thing has
remained constant -- ever-rising levels of executive and board
compensation,' said Joanne Raschke, who filed the Lucent proposal. Even
as retiree benefits are being cut, compensation for executives has
risen: The median compensation for a chief executive officer in a
Standard & Poor's 500 company was $6 million in 2004, up more than
13 percent from 2003, according to the Corporate Library.
href='http://online.wsj.com/article/SB113997409345674369-email.html'>Read
more .
name='13'>Witness Said Skilling Hid Enron Unit's Status from
Board
A former Enron executive
testified that former Enron CEO Jeff Skilling not only hid the sorry
condition of the company's broadband operations from investors and
analysts, but also hid that information from the company's board of
directors, USA
Today reported today. Ken Rice, who served as
CEO of Enron Broadband Services (EBS) from 1999 to 2001, testified that
after preparing a presentation he planned to make about his unit to
Enron's board of directors on May 1, 2001, he 'discussed it with Mr.
Skilling, and he asked me not to give that presentation.' In every
quarter during the two-year period that he ran the troubled unit, Rice
testified that Enron had to resort to accounting gimmicks, asset sales
and speculative investments for EBS to show the revenue growth that
Skilling had promised to the public.
href='http://www.usatoday.com/money/industries/energy/2006-02-14-enron-rice-t…'>Read
more
size='3'>.