March 31, 2004
White House Pushes To Limit Multi-employer Pension Help
Conferees trying to resolve differences between House and Senate
versions of pension legislation are encountering increased pressure from
the White House to pare provisions helping multi-employer plans,
staffers and conferees said yesterday, CongressDaily reported.
Meanwhile, businesses warned the dispute over the multi-employer
provisions could doom the broader pension bill, which companies hope
will pass before the House adjourns Friday, since they face an April 15
deadline for making their first pension payments of the year. Conference
negotiations broke down last Friday, after House Republicans offered a
plan to provide relief from pension payments to the bottom 7 percent of
those plans, and Democrats countered with a proposal to aid about 20
percent of them. House Education and the Workforce Chairman John Boehner
(R-Ohio) said Tuesday the fate of the conference remains uncertain.
'We're still determining if there's a way to unlock the impasse that we
find ourselves in,' he told reporters, the newswire reported.
National Standard for Subprime Loans Urged by Bankers
Mortgage bankers yesterday urged lawmakers to establish a national
standard for anti-predatory lending laws, arguing that a patchwork of
state laws aimed at benefiting consumers could reduce home ownership by
discouraging reputable institutions from offering subprime loans,
CongressDaily reported. 'The future growth of the subprime market
is confronting very serious hurdles,' Teresa Bryce, vice president of
Nexstar Financial Corp. and a member of the Mortgage Bankers
Association's board of directors, told two House Financial Services
subcommittees during a joint hearing. 'In the zeal to protect our more
vulnerable consumers, state and local governments are passing
far-reaching laws that have created a confusing and fragmented mortgage
market.' Bryce said she 'cannot, in good conscience' recommend that her
company enter the subprime lending market because conflicting state and
local anti-predatory lending laws have made it 'impossible to ensure
compliance and legal certainty.'
Financial Services Housing and Community Opportunity Subcommittee
Chairman Bob Ney (R-Ohio) noted that subprime loans have increased
dramatically over the past decade. Ney said lawmakers must determine
'what this trend means for consumers' as they consider whether to
establish a national anti-predatory lending standard. View
href='http://financialservices.house.gov/hearings.asp?formmode=detail&hea…'>witness
testimony.
Sen. Dole Supports Bankruptcy Reform
Sen. Elizabeth Dole (R-N.C.) on Monday said she wants to see tighter
restrictions on bankruptcy filings, better controls over two of the
nation's largest financial service companies and a crackdown on
'misguided privacy laws' that threaten to encumber the banking system,
the Knight Ridder reported. Dole discussed the issues as the keynote
speaker at the North Carolina Bankers Assembly. Dole told the group that
the time had come to pass bankruptcy reform legislation that will
prevent the system from being exploited by those looking to shirk their
debts. 'Bankruptcy must be a safety net for those Americans who have
given it their best shot and failed, not for those who simply see it as
a way to get out of their bills,' Dole said, the newswire reported.
'This is a matter of personal responsibility.' Dole said she is one of
30 senators who supported a signed letter asking Senate Majority Leader
Bill Frist (R-Tenn.) to bring a proposed bill before the Senate this
year, according to Knight Ridder.
Judge Extends HealthSouth Restraining Order 10 Days
An Alabama judge yesterday extended a restraining order 10 days that
prevents creditors from demanding that HealthSouth Corp. repay one of
its bonds immediately, Reuters reported. At a hearing in the Jefferson
County Circuit Court, Judge Allwin E. Horn III asked HealthSouth and its
creditors to provide a plan regarding its debt, which is presently in
default after a massive accounting fraud at the health care company.
Beall Dozier Gary Jr., HealthSouth's senior vice president for corporate
development, told the court that the effect of accelerated payments
could push the company into bankruptcy and disrupt relationships with
its doctors that co-own surgery centers with the company.
Glenn Waldrop, an attorney representing the creditors, said it would be
hard to damage the company's reputation any further after several
executives pleaded guilty to accounting fraud, Reuters reported.
Creditors, including Franklin Mutual and HSBC, own hundreds of millions
of dollars of HealthSouth bonds and are seeking accelerated payment of
the company's debt, since it is technically in default. The accounting
fraud has left the company unable to file audited results, the newswire
reported.
Judge Only Upholds Denver Airport Bonds
The judge overseeing UAL's bankruptcy case yesterday upheld Denver
International Airport's claims that the airline must repay as much as
$261 million of municipal bonds, Reuters reported. But Judge Eugene
Wedoff rejected bondholder claims made by John F. Kennedy
International Airport and California's airports in San Francisco and Los
Angeles. JFK had about $34 million of bonds outstanding that could be
affected by the decision, according to Fitch Ratings Analyst Peter
Stettler. San Francisco had nearly $155 million, while Los Angeles had a
total of about $59 million.
UAL filed for bankruptcy protection in December 2002. Jean Medina, a
spokeswoman for the airline, which hopes to exit bankruptcy this summer,
said it was pleased with the rulings regarding airport leases in Los
Angeles, San Francisco and New York City. She added that bonds related
to those airports will be treated as other unsecured, pre-petition debt
that the airline will deal with in its reorganization plan, the newswire
reported.
Bush Industries to File for Chapter 11
Furniture maker Bush Industries Inc. on Tuesday said it plans to file
for chapter 11 bankruptcy protection, citing the company's inability to
procure funding sources, Reuters reported. The Jamestown, N.Y.-based
company also said that effective on March 29, Paul Bush had resigned as
chairman, CEO and director of the company and its subsidiaries.
Consultant Michael Buenzow was named the company's interim CEO.
FiberMark Files Voluntary Bankruptcy Petition
FiberMark Inc. said on Tuesday it filed voluntary petitions to
reorganize under chapter 11 bankruptcy protection, Reuters reported. The
Brattleboro, Vt.-based company, hurt by a weak economy and recession in
most of its key markets, also said it had obtained a commitment for $30
million of debtor-in-possession financing from GE Commercial Finance.
FiberMark said its German and United Kingdom operations were not
included in the bankruptcy protection filing as those subsidiaries
continued to perform well. The company said a debt load from
acquisitions, sales declines due to business divestitures and problems
stemming from the consolidation of manufacturing facilities have also
hurt the business. FiberMark said it hoped to emerge from bankruptcy
protection by year end, the newswire reported.
Kaiser Aluminum Reports Wider Quarterly Loss
Bankrupt Kaiser Aluminum Corp. yesterday recorded a wider quarterly
loss, reflecting a number of big operating charges as part of its
restructuring effort and higher energy costs, Reuters reported. The
aluminum producer posted a fourth-quarter net loss of $573.2 million, or
$7.16 a share, compared with a net loss of $270.8 million, or $3.37 a
share, a year earlier. The company also said it sees emergence from
chapter 11 bankruptcy protection as early as late in the third quarter
of this year. Non-cash charges in the fourth quarter included $368
million to impair the assets of an alumina refinery in Louisiana and a
bauxite mining operation, and $121.2 million for the termination of the
company's salaried pension plan. Sales in the quarter fell to $340.4
million from $364.7 million a year ago, the company said, Reuters
reported.
E.U. Antitrust Officials Defend Tactics In WorldCom Case
A week after slapping Microsoft Corp. with a huge fine and tough orders
to
change its ways, European Union antitrust regulators Tuesday faced
tough
questions over their tactics in the case of U.S. giant WorldCom Inc.,
now
MCI Inc. The company is appealing to judges at the European Court of
First
Instance to overturn the E.U. Commission's decision to block its
$127
billion deal to buy Sprint Corp. Judges were critical of the regulators'
arguments, questioning whether they had enough information to back some
of their stronger claims against the company. A victory could allow MCI
to collect damages, and, perhaps more importantly, it could make future
deals possible by overturning the Commission's finding that it had a
dominant position in certain internet markets.
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NorthWestern Stockholders Want Own Chapter 11 Committee
NorthWestern Corp. equity holders are pressing for official
representation
in the power company's bankruptcy case, saying NorthWestern's
reorganization
plan, which would wipe out their holdings, is based on too low an
estimate
of its enterprise value. RCG Carpathia Master Fund Ltd., Performance
Capital and Smith Management LLC, which filed the motion with the U.S.
Bankruptcy Court in Wilmington, Del., collectively own more than 5.4
million NorthWestern shares, or about 14.4 percent of the shares
outstanding.
NorthWestern filed its turnaround plan March 11. Under that plan, the
shareholders, numbering about 7,500, would have their shares canceled,
without getting any of the stock issued in the reorganized company. As
is common in chapter 11 cases, NorthWestern's plan calls for a swap of
its unsecured debt for almost all of the new equity in the reorganized
company -- with current shareholders getting nothing.
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Copyright (c) 2003 Dow Jones & Company, Inc. All Rights Reserved
Trump's Casinos Risk Bankruptcy, Auditors Warn
Donald Trump's auditors have pointed out that Trump casinos risk
bankruptcy if a financing deal with Credit Suisse First Boston (CSFB)
falls through, the Wall Street Journal reported. The plan is for
CSFB to invest about $400 million into the debt-stretched Trump Hotels
& Casino Resorts Inc. However, Ernst & Young attached a note to
the Atlantic City casino company's financial statements, filed on
Tuesday, saying that Trump Hotels' financial problems 'raise substantial
doubt about the company's ability to continue as a going concern' unless
the company concludes a bailout. Credit Suisse First Boston is a unit of
Credit Suisse Group. Trump said in an interview that he does not believe
there will be a bankruptcy filing. He pointed out that his auditors have
filed the same note three years in a row -- and that he expects his deal
with Credit Suisse to close within the next three months, the newspaper
reported.
Dan River Files for Chapter 11 Bankruptcy
Textiles maker Dan River Inc. said today it filed for voluntary chapter
11 bankruptcy protection to strengthen its balance sheet and help
facilitate payment of its debts, Reuters reported. The Danville,
Va.-based company said it has received a commitment for up to $145
million in new debtor-in-possession financing to help fund operations
while it reorganizes.
