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April 20, 2005
Bush Signing Bankruptcy Overhaul
President Bush today will make it harder for Americans to wipe out
their debts by declaring bankruptcy, the Associated Press reported.
Under a bill he’s signing at the White House, debtors who can
afford to would have to work out a plan to pay back what they owe. The
measure approved by Congress last week is the biggest overhaul of
bankruptcy law in a quarter-century. Bush calls it a
“commonsense” step that will give more Americans access to
credit.
Specter Ready to Move Asbestos Bill
Senate Judiciary Chairman Arlen Specter (R–Pa.) yesterday
formally introduced asbestos legislation, after meeting with several
Republican on the panel who remained wary of his latest proposal,
CongressDaily reported. Specter said Judiciary ranking
member Sen. Patrick Leahy (D–Vt.) would co-sponsor the bill, along
with Sens. Orrin Hatch (R–Utah) and Mike DeWine (R–Ohio).
The bill will be identical to the draft Specter circulated several weeks
ago, he said, and the committee will mark it up a week from Thursday,
the newswire reported.
House Committee to Consider Predatory Lending Bill
The House Financial Services Committee might begin hearings next
month on a bipartisan bill to curb predatory lending in the subprime
mortgage market, its chief sponsor said yesterday,
CongressDaily reported. “I really expect the bill to
have a chance to move through the [legislative] process,”
Financial Services Housing Subcommittee Chairman Bob Ney (R–Ohio)
said during a Mortgage Bankers Association conference. But Ney said the
lawmakers’ “door is open” to mortgage lenders and
other stakeholders seeking to modify provisions. Ney’s bill would
create uniform national standards that would pre-empt state predatory
lending laws.
Rainbow/PUSH Coalition President Jesse Jackson and other critics of
the Ney bill are supporting a competing measure offered by Reps. Brad
Miller (D–N.C.) and Melvin Watt (D–N.C.) and House Financial
Services ranking member Barney Frank (D–Mass.). That bill would
create a national standard modeled on North Carolina’s
anti-predatory lending statute, but it would allow states to enact
stronger predatory lending laws.
US Airways and America West in Merger Talks
US Airways and America West are in serious discussions about a
merger, a combination that would create the nation’s sixth-largest
airline, the New York Times reported. People close to the
talks characterized them as well along and said that a conclusion could
be reached within a few weeks. America West’s chief executive, W.
Douglas Parker, has been a proponents of the need for consolidation
within the industry, while US Airways has been viewed by many analysts
as ready for a takeover once it emerges from bankruptcy, the newspaper
reported.
Consumer Prices Surge in March
Consumer prices jumped 0.6 percent in March, the biggest inflation
surge in five months, as the costs of energy, clothing and airline fares
all rose sharply, the Associated Press reported. The Labor Department
said last month’s increase in the Consumer Price Index followed a
0.4 percent rise in February and left consumer inflation rising at an
annual rate of 4.3 percent in the first three months of this year. That
was a full percentage point above the 3.3 percent rise in prices for all
of 2004.
Judge Is Seen Approving Adelphia Breakup Fee
Cablevision Systems Corp. faces an uphill battle for Adelphia
Communications Corp. despite raising its mostly cash bid to $17.1
billion from $16.5 billion, the Wall Street Journal
reported. A rival cash-and-stock bid by Time Warner Inc. and Comcast
Corp., valued at $17.6 billion, could be on the verge of getting a big
boost from U.S. Bankruptcy Court Judge Robert Gerber, who has
been overseeing Adelphia since it sought chapter 11 protection three
years ago.
KPMG Settles With SEC on Xerox Audits
KPMG, the accounting firm, was censured yesterday by the Securities
and Exchange Commission, which said the firm helped executives at the
Xerox Corporation manipulate and distort financial statements from 1997
through 2000 by issuing audits stating that Xerox’s reports were
consistent with accounting rules when they were not, theNew York
Times reported. KPMG, which settled the case with regulators,
also agreed to make extensive changes to its business practices to
prevent future securities law violations.
GM Has $1.1 Billion Loss, Withdraws Forecast
General Motors Corp. yesterday posted a first-quarter net loss of
$1.10 billion, its worst result since the company neared bankruptcy in
1992, due to weaker U.S. sales and growing costs for employee health
care and raw materials to build cars, Reuters reported. The company said
its automotive operations lost $1.98 billion in the quarter, with a loss
in North America alone of $1.56 billion. The automaker also withdrew its
earnings and cash flow forecast for the 2005 calendar year.
Personal Bankruptcies to Rise 11 Percent by 2007
Global Insight Inc., an economic consulting firm in Waltham, Mass.,
predicts personal bankruptcy rates in the United States will rise a
dramatic 11.3 percent between 2004 and 2007, the Westchester
County Business Journal reported. Global Insights’ new
study, “Predicting Personal Bankruptcies”, projects that
after a lull in recent years, annual bankruptcy filings will increase to
more than 1.74 million in 2007. Global Insight cites rising interest
rates and inflation combined with slower income growth and housing
appreciation as the primary culprits behind the rise in
bankruptcies.
Krispy Kreme Franchisee Files for Bankruptcy
Krispy Kreme Doughnuts Inc. announced that Canadian franchisee
KremeKo Inc. has filed to restructure under bankruptcy protection, the
Triad Business reported. Krispy Kreme owns a 40.6 percent of KremeKo.
Krispy Kreme, which recently secured $225 million in new loans, said it
will provide financing for KremeKo as it looks to restructure its
operations. The court also has appointed a chief restructuring officer
to manage and oversee KremeKo’s operations. KremeKo posted a net
loss of $2.1 million in the fiscal year that ended Jan. 31, 2004,
according to the most recent annual report filed by Krispy Kreme.
Prosecutor Labels Enron Broadband Unit a Sham
Enron Corp.’s once-proud broadband unit was little more than a
mishmash of questionable software, accounting tricks and unkept
promises, a U.S. prosecutor said as the trial of five former executives
got under way on Tuesday, Reuters reported. “The mission of Enron
Broadband Services (EBS) was to pump up the Enron stock price by telling
investors they had a solution—a solution to the congested
Internet,” federal prosecutor Lisa Monaco told a jury during
opening statements, the newswire reported.