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Senate Democrats Urge Senate Action on Bankruptcy Bill
Sen. Thomas Carper (D-Del.), who is seeking to facilitate passage of a
comprehensive bankruptcy reform bill, on Wednesday was joined by 10
other Democratic senators in sending a letter to Senate Majority Leader
Bill Frist (R-Tenn.) urging him to schedule floor time to consider the
legislation, CongressDaily reported. Sens. Joseph Biden (D-Del.),
Tim Johnson (D-S.D.), John Breaux (D-La.), Mary Landrieu (D-La.), Byron
Dorgan (D-N.D.), Ernest (Fritz) Hollings (D-S.C.), Blanche Lincoln
(D-Ark.), Zell Miller (D-Ga.), Ben Nelson (D-Neb.) and Charles Schumer
(D-N.Y.), in addition to Carper, signed the letter. Their missive makes
no specific reference to Schumer's amendment dealing with protestors and
bankruptcy court, which helped bring down a House-Senate bankruptcy
conference report in the House last year. However, in their letter to
Frist, the Democratic senators asked that the bill the Senate brings up
this year be based on last year's conference agreement. Carper supports
the Schumer language, but has indicated he would not reject the
bankruptcy bill as a whole if that amendment was not included, reported
the newswire.
Hatch, Feinstein Agree On Class Action; Other Democrats
Balk
Senate Judiciary Chairman Orrin Hatch (R-Utah) and Sen. Dianne Feinstein
(D-Calif.) reached a deal on Wednesday night to modify proposed
legislation that would shift more class action lawsuits to federal
court, among other changes, CongressDaily reported. But Democrats
on Thursday balked at considering the amendment at a Judiciary Committee
markup, complaining that they had not had time to review it. Hatch then
agreed to delay the markup until next week. Sens. Charles Grassley
(R-Iowa) and Herb Kohl (D-Wis.) will cosponsor the Hatch-Feinstein
amendment, a Feinstein aide said. Although the pending class action
measure already has the support of a majority of committee members, bill
supporters believe an affirmative vote from Feinstein could mean other
like-minded Democrats in the full Senate would follow suit -- thus
buoying the bill's chances of weathering an expected Democratic
filibuster on the floor, reported the newswire.
Supporters Hurry To Meet Hatch's Deadline On Asbestos
In a dash to put their stamp on asbestos litigation legislation by the
mid-April deadline set by Senate Judiciary Chairman Orrin Hatch
(R-Utah), a number of industry stakeholders are conducting exhaustive
meetings this week in an effort to reach consensus on what is considered
their most daunting challenge: divvying up the liability, CongressDaily
reported. Industry, insurance and labor stakeholders agreed with
senators at a private meeting on Tuesday that an administrative solution
to compensate victims is the most politically feasible path, reported
the newswire.
Greenspan Says Financial Education Needed From Childhood
Federal Reserve Chairman Alan Greenspan said financial education needs
to begin in early childhood to prevent young people from making
ill-advised decisions with lasting consequences, Dow Jones reported.
'The importance of basic financial skills underscores the need to begin
the learning process as early as possible,' Greenspan said yesterday in
a speech to the JumpStart Coalition.. 'Improving basic financial
education at the elementary- and secondary-school level will provide a
foundation of financial literacy that can help prevent younger people
from making poor decisions that can take years to overcome,' Greenspan
said. The Federal Reserve has a strong interest in financial literacy,
and in measuring the success of education efforts, Greenspan said.
Greenspan said financial awareness helps consumers manage the debt that
U.S. households are rapidly racking up. 'While analyses suggest that,
overall, this level of debt is being serviced adequately, reports of
nonbusiness bankruptcy filings reaching record highs in 2002 reveal that
many consumers are experiencing significant financial crises,' Greenspan
said, reported the newswire.
US Airways Posts February $98 Million Net Loss on $474 Million
Revenue
US Airways Group Inc. posted a smaller net loss in February than in
January even as
revenue decreased from the prior month, Bloomberg News reported. The
company said the February net loss was $97.97 million on revenue of
$473.8 million, compared with a $98.67 million loss on $477 million in
revenue the month before. US Airways cut labor costs, including both
union and non-union workers, by 37 percent through wage and benefit
reductions and contract changes to increase productivity. The company is
financing its operations with a $1 billion loan in addition to a $240
million investment from Retirement Systems of Alabama as it shifts to a
business plan that relies more on small jets and lower labor costs,
reported the newswire.
HealthSouth Executives to Plead Guilty to Conspiracy
Five HealthSouth Corp. executives agreed to plead guilty to conspiring
to inflate company earnings, prosecutors said, Bloomberg News reported.
Admissions by the five will bolster testimony of three other HealthSouth
executives who have pleaded guilty to fraud and are aiding prosecutors
with an investigation of fired CEO Richard Scrushy. The U.S. Securities
and Exchange Committee accused Scrushy and HealthSouth of inflating
revenue by at least $1.4 billion and assets by $800 million, reported
the newswire.
Separately, the Associated Press reported that HealthSouth Corp. slashed
20 percent of the staff at its headquarters on Thursday as the five
executives agreed to plead guilty amid a huge accounting fraud that has
the health-care giant teetering on the edge of bankruptcy.
AMR Offers Stock Options To American Airlines Employees
American Airlines workers could end up owning nearly 20 percent of the
world's largest airline through stock options offered by parent AMR
Corp. in exchange for hefty concessions, the Wall Street Journal
reported. AMR will issue options to purchase nearly 38 million
additional shares of its common stock, according to the tentative
agreements signed on Monday between the airline's three unions and
management. The tentative agreements still must be ratified by April 15,
or AMR has said it will have to file for bankruptcy-court protection in
order to preserve dwindling cash and assets, reported the online
newspaper.
NationsRent Reschedules Hearing On Plan Confirmation
NationsRent Inc. on Thursday rescheduled a hearing to consider
confirmation of a proposed reorganization plan as it negotiates the
terms of an exit financing agreement, Dow Jones reported. The compnany's
proposed plan will be financed by a $120 million revolving credit
facility, according to the plan disclosure statement. The debtor company
is negotiating the terms of the facility with unidentified lenders, said
Mark A. Cody, an attorney with Jones Day, the firm representing
NationsRent. Chief Judge Peter J. Walsh of the U.S. Bankruptcy
Court in Wilmington, Del., will consider confirmation of the plan on May
13, reported the newswire.
Teleglobe Communications Creditor Panel Gets OK For New
Adviser
A bankruptcy court on Thursday authorized Teleglobe Communications
Corp.'s committee of unsecured creditors to replace its current
financial adviser with Compass Adviser Associates LLP, Dow Jones
reported. Loeb Partners Corp. had been the creditor panel's financial
adviser since August 2002. The committee asked for the change after
several executives at Loeb, including managing directors Phillip
Siegel and Harvey L. Tepner, joined Compass Adviser
Associates, according to court documents, reported the newswire.
Teleglobe Communications filed for chapter 11 bankruptcy protection on
May 28, 2002.
Coram Health Gets Approval For Employee Retention Plan
A bankruptcy judge approved an employee retention plan for Coram
Healthcare Corp. on Thursday, Dow Jones reported. A U.S. Trustee
overseeing Coram's chapter 11 case sought approval of the plan, saying
it would help retain employees 'vital to sustaining (Coram's) business'
and accomplishing a turnaround. The trustee said in its motion that
there was concern with employee morale and potential recruiting of Coram
employees by competitors. The incentive plan allows for incentive
payments of about $2.72 million in 2003 to 79 key employees and another
$330,000 among 66 branch managers, based on company earnings goals and
individual performance targets, court papers said, reported the
newswire.
Globe Metallurgical Files For Chapter 11 Bankruptcy
Silicon metal producer Globe Metallurgical Inc. filed for chapter 11
bankruptcy protection on Wednesday with the U.S. Bankruptcy Court in
Manhattan, according to court documents obtained by Dow Jones Newswires.
The Beverly, Ohio-based company estimated both its total assets and its
total debts at $50 million to $100 million. According to court
documents, the bankruptcy filing 'was precipitated by a significant
downturn in profitability due to both internal and external factors.'
Some of those factors include difficult pricing and a rough economic
environment, a 'considerable' loss in volume to imports, the power
crisis in California and an unsuccessful investment overseas, reported
the newswire. Judge Burton R. Lifland of the Manhattan bankruptcy
court on Wednesday signed an order that allows Globe Metallurgical to
borrow up to $500,000 under a debtor-in-possession financing agreement,
pending an interim hearing on the matter on Monday.
Midwest Air And Its Pilots Agree On Wage Concessions
Midwest Express Holdings Inc. reached a tentative wage concession
agreement with its airline's pilots union, helping the carrier with its
plan to cut costs by $4 million a month and avert a bankruptcy filing,
Dow Jones reported. In a press release on Wednesday, Midwest Express
said the agreement calls for significant reductions in the pilots'
hourly pay rates through Nov. 1. Pending approval by the Air Line Pilots
Association, the concessions would be effective on April 16. The union
is also continuing talks with management regarding staffing, scheduling
and productivity, reported the newswire.
AIR CANADA
Air Canada Told by Regulator to Add C$200 Million to Pension
Plans
Air Canada must add about C$200 million (US$135.5 million) to its
employee-retirement plans to make sure it can cover payments, the
national pension regulator said, Bloomberg News reported. The airline
was allowed to stop contributing to the plans last year because they
were in good shape, the Office of the Superintendent of Financial
Institutions said in the text of a presentation to a Parliamentary
committee. The Montreal-based carrier said it may attempt to change its
pension plans to cut costs. The regulator said any such restructuring
would require its approval, and it would consider the 'fairness'' and
'viability'' of the proposed changes in the decision, reported the
newswire.
Air Canada Holds Early Talks With Texas Pacific and
Others
Air Canada is holding early talks with several potential investors
interested in acquiring an equity stake in the carrier, the Wall Street
Journal reported. The possible outside investments could help Air Canada
restructure its debt and other obligations and emerge from bankruptcy
proceedings as a leaner entity. Air Canada is expected to seek cuts of
at least 20 percent in its labor expenses and to reduce its fleet of
aircraft and the number of destinations. Texas Pacific Group, a
private-equity firm with a history of investing in troubled airlines,
confirmed that it is in preliminary talks to buy a stake in Air Canada,
reported the online newspaper.
Anicom $18 Million Settlement of Suit Approved by Judge
A federal judge approved an $18 million settlement of the securities
class-action lawsuit against former officials of Anicom Inc., a bankrupt
wire and cable equipment distributor, Bloomberg News reported. Alan
Anixter, former chairman of the Rosemont, Ill.-based company that filed
for chapter 11 in 2001, will pay $12.4 million, with the rest paid by an
insurance policy for Anicom officers and directors, said Keith Johnson,
chief legal counsel for the State of Wisconsin Investment Board, a
plaintiff in the lawsuit, reported the newswire. Anicom shareholders and
other parties involved in the settlement have until May 22 to object,
said Vicki Hearing, a spokeswoman for Wisconsin. A final approval
hearing will be held on May 22 before U.S. District Court Judge John
Darrah, who approved the settlement. The settlement also requires
approval by U.S. Bankruptcy Judge Susan Sonderby, Bloomberg
reported.
United, US Airways Safety Wasn't Hurt by Bankruptcy, FAA Says
UAL Corp.'s United Airlines, US Airways Group Inc. and other carriers
that have operated in bankruptcy maintained flight safety while making
changes such as reducing parts inventory, U.S. regulators said,
Bloomberg News reported. 'We are not seeing any indication they are
cutting corners anywhere,'' said Nick Sabatini, the Federal Aviation
Administration's associate administrator for regulation and
certification, at a briefing on the safety of financially troubled
airlines. The agency increases oversight of bankrupt carriers, analyzing
whether they defer more maintenance, change approved safety procedures
or take other steps because of financial problems, Sabatini said,
reported the newswire.
AES to Sell About $1 Billion of Senior Secured Notes
AES Corp., which generates power in 30 countries, plans to refinance
part of its debt by selling about $1 billion of second priority senior
secured notes, Bloomberg News reported. The proceeds will be used to buy
back some senior and subordinated notes, and to amend and pay down about
$475 million in bank borrowings, Arlington, Va.-based AES said in a
statement distributed by Business Wire. Two days ago the company said
holders of $4.1 billion in debt agreed to drop their right to demand
payment should units in Brazil and the United Kingdom file for
bankruptcy. AES also refinanced $2.1 billion in debt in December after
falling power prices and losses in South America brought the company to
the brink of insolvency, Bloomberg reported.
Illinois Senate Panel Rejects Altria's Move to Cap Bond
The Illinois Senate's executive committee rejected a proposal that would
have capped the size of an appeals bond facing Altria Group Inc.'s
Philip Morris USA unit, ratcheting up pressure on the nation's biggest
cigarette maker to find another solution for dodging a court-ordered $12
billion bond, the Wall Street Journal reported. The company says
it has until April 20 to post the bond, needed to appeal a tobacco
verdict in Illinois over the sale of light cigarettes. Philip Morris USA
has suggested that if the bond requirement isn't reduced, it might have
to file for bankruptcy and may need to suspend the huge payments it must
make to state governments under a 1998 legal settlement, reported the
Journal.
Viskase Companies Inc. Announces Emergence From Prepackaged
Bankruptcy
Viskase Cos. emerged from its prepackaged chapter 11 bankruptcy, with
noteholders receiving about 90 percent of the company's equity under its
reorganization plan that cuts $103 million in debt, Dow Jones reported.
In a press release on Thursday, the food packaging company said its
Viskase Corp. operating unit, which wasn't included in the Nov. 13
bankruptcy filing, will be merged into the parent company, reported the
newswire.
Fleming Nears Interim Approval Of $50 Million DIP Loan
Fleming Cos. on Thursday neared interim approval of a $50 million
debtor-in-possession financing loan and authorization to use up to $70
million of its pre-petition lenders' cash collateral to purchase goods,
Dow Jones reported. The company is amending the proposed court order to
resolve concerns from interested parties, including an ad hoc committee
of creditors and several customers. Fleming said it hopes to submit the
revised documents to the chambers of Judge Mary F. Walrath of the U.S.
Bankruptcy Court in Wilmington, Del. Judge Walrath can sign an order
approving the motions without further need of a hearing, reported the
newswire.
Globalstar Reaches Settlement With European Service Provider
Satellite telephone systems firm Globalstar L.P. reached a settlement
with one of its European service providers, under which Globalstar will
receive cash payments and be released from some debts, according to
Globalstar's annual report, Dow Jones reported. The company agreed to
the settlement on March 25 with Elsacom SpA, the primary Globalstar
satellite communications provider in Central and Eastern Europe, as well
as the operator of a gateway located in Avezzano, Italy. San Jose-based
Globalstar filed for chapter 11 bankruptcy protection on Feb. 15, 2002.
The company listed assets of $573.4 million and liabilities of $3.34
billion when it filed for bankruptcy, reported the newswire.
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