March 202003

Rep. Jerrold Nadler (D-N.Y.) urged colleagues to take a fresh look at
the measure in light of changing economic circumstances during the six
years that have elapsed since the bill's inception, reported
CongressDaily. House Judiciary Chairman James Sensenbrenner
(R-Wis.) responded, 'If you can pay some of your debt—that's your
obligation, and why should you pass that on to people who pay 100
percent of their bills all the time?' The House on Wednesday also
defeated a proposed Democratic substitute, which among other things
would have addressed what Nadler characterized as the lending industry's
'irresponsible extension of credit' to individuals clearly unable to pay
back the loan, the newswire reported.

House bill supporters in the course of floor debate alluded
repeatedly to a future House-Senate conference—indicating they
have little faith the Senate will take up and approve the House-passed
bill.

Hughes's DirecTV Latin America Unit Wins Approval to Tap
Loan

Hughes Electronics Corp.'s DirecTV Latin America unit won court approval
to tap a $300 million loan from Hughes to continue operating in
bankruptcy, Bloomberg News reported. U.S. Bankruptcy Judge Peter
Walsh in Wilmington, Del., gave DirecTV Latin America permission to
use as much as $30 million of the loan. He scheduled an April 14 hearing
to consider final approval for the company to use the full amount,
reported the newswire.

Bankrupt Airlines Risk Liquidation in War

The beleaguered airline industry faces further credit deterioration
going into a potential war with Iraq, with the possibility of further
bankruptcies and even liquidation among carriers, Standard & Poor's
said on Wednesday, Dow Jones reported. 'Clearly, the airlines have
already been suffering from high fuel prices and a decline in bookings
in advance of what now appears to be an imminent war involving the U.S.
and its allies against Iraq,' S&P credit analyst Philip Baggaley
said in a conference call. On Tuesday, the rating agency put the credit
ratings of essentially the entire airline sector on review for a
downgrade due to the prospect of war with Iraq, reported the
newswire.

War will accelerate the airline industry's financial decline, leaving
American Airlines with a 'a mere three months' before it reaches a
critical cash shortage, an analyst predicts in a new report on the
impact of a conflict in Iraq, according to an article in The Miami
Herald. Without quick action by management, Continental has four
months until bankruptcy; America West about seven months; Delta 13
months; Northwest 20 months; and Alaska 23 months, Credit Suisse First
Boston analyst James Higgins estimates, the online newspaper reported.
Among the largest carriers, only Southwest Airlines never reaches a
liquidity shortage that would threaten its solvency, he said. US Airways
and United Airlines are already operating under chapter 11 bankruptcy
protection. As war looms, the airline industry is bracing for a
catastrophic impact. In a report released last week, the Air Transport
Association said, 'The economic damage could be so severe that there is
serious risk of chaotic industry bankruptcies and liquidations.' To read
the full article, point your browser to
http://www.miami.com/mld/miamiherald/5432856.htm.

United Revises Low-cost Carrier Idea to Pacify Unions

UAL Corp.'s United Airlines revised its plan to create a low-cost
carrier in a bid to win more support from its unions, which have
lambasted the concept because it would move some workers to lower-paid
non-union jobs, Bloomberg News reported. The bankrupt airline came up
with the idea of a separate carrier to save money. Instead of splitting
off the low-cost airline's workforce as initially proposed, United has
now proposed that each work group, such as the pilots, be covered by a
single labor contract and seniority list for the main airline and
discount operation, the newswire reported. The revised plan still would
save money for United, the world's second-largest airline, because
workers at the low-cost carrier would be paid less than employees at the
main airline and be subject to different rules as part of a side
agreement, Bloomberg reported. At the same time, the unions wouldn't
lose members.

SkyWest in Talks with Other Companies in Case UAL
Liquidates

SkyWest Inc., which flies United Express flights for United and Delta
Express service for Delta Air Lines Inc., expects lower operating
margins this year and has cut management pay as its flying partners seek
concessions on the rates they pay the regional airline, a company
official said on Wednesday, Dow Jones reported. The carrier also said it
is talking to unidentified airlines about possibly providing replacement
service in case UAL Corp.'s United Airlines is liquidated, reported the
newswire.

Rep. Oberstar Introduces U.S. Airline Aid Bill

Rep. James Oberstar (D-Minn) introduced a bill on Wednesday aimed at
reimbursing U.S. airlines for up to $5 billion in projected losses from
a near-certain war with Iraq, Dow Jones reported. Rep. Oberstar said the
bill would help airlines purchase fuel and pay for security costs
mandated since Sept. 11, 2001. Last week the Air Transport Association,
which represents major U.S. airlines, projected the industry could lose
an additional $4 billion this year under a war scenario that goes well.
Additional losses could mount if a war drags on for months. The U.S.
airline industry as a whole has suffered since the Sept. 11 terror
attacks. After losing a collective $10 billion in revenues last year,
the airline industry is projected to lose at least $6.7 billion this
year—and that is without a war, reported the newswire.

Separately, Dow Jones reported that Senate Commerce Chairman John
McCain (R-Ariz.) and Sen. Trent Lott (R-Miss.), the chairman of the
Commerce Aviation Subcommittee, asked the White House on Wednesday to
spell out its position on aid for the U.S. airline industry, saying they
were concerned about the financial viability of the industry.

Continental Air to Cut 1,200 Jobs by Year-end

Houston-based Continental Airlines Inc., seeking $500 million in annual
savings, will cut 1,200 jobs by year-end and said a protracted war with
Iraq or continued soft demand could lead to further reductions in
service, Dow Jones Newswires reported. In a press release Wednesday, the
airline said the total includes 125 pilots, 500 reservations agents, 350
airport agents and 225 other employees around the system. The job cuts
are in addition to the 4,300 employees currently on furlough or
company-offered leaves of absence. Continental said it reduced its
senior management ranks by more than 25 percent and cut its overall
officer group by more than 15 percent this week, the newswire
reported.

Enron Examiner Batson and His Law Firm Bill Company $36
Million

Enron Corp. bankruptcy examiner Neal Batson and his law firm have
billed the company $35.7 million since being appointed last May to
investigate its collapse, Bloomberg News reported. Batson, a partner
with Atlanta-based Alston & Bird, personally asked for $413,000 in
legal fees and expenses in a bill submitted to a bankruptcy court in New
York last week for approval, the newswire reported. That brings the
total he has charged the former energy trader to $882,000, according to
Bloomberg. His law firm filed a $19.9 million bill for fees and expenses
last week, bringing its total to $34.8 million.

Investors suing companies that have filed the largest bankruptcies,
such as Enron, have criticized the size of legal fees. Shareholders say
big fees reduce the amount available to pay damages caused by conduct
that led to the reorganizations. 'The problem Batson is going to have is
that there is already a lot of independent information about Enron out
there,' said Jonathan Lipson, a bankruptcy law expert at the University
of Baltimore School of Law, the newswire reported. 'If the creditors'
committee is concerned, they might say something like 'did you have to
duplicate work that was already out there?'' Almost $26 million of the
requests for compensation by Batson and his law firm were for legal
fees, more than 14 percent of the $179 million in fees charged Enron
over the same period by 23 law firms.

Devon Mobile Asks for More Time to File Exclusive Plan

Devon Mobile Communications LP is asking the U.S. Bankruptcy Court in
Wilmington, Del., for a 90-day extension of its sole right to file a
reorganization plan and lobby for creditor support, Dow Jones reported.
The company wants until June 16 to file a reorganization plan and until
Aug. 18 to lobby for creditor support. Devon Mobile filed for chapter 11
protection on Aug. 19, listing total assets of $142.7 million and total
liabilities of $64.8 million as of June 30, reported the newswire.

Bankruptcy Court Confirms Rand McNally Reorganization Plan

The U.S. Bankruptcy Court in Chicago confirmed Rand McNally & Co.'s
reorganization plan and accompanying disclosure statement on Tuesday,
Dow Jones reported. A court order signed by Judge Eugene Wedoff
approved the plan. Rand McNally had filed a prepackaged chapter 11
petition in February to put majority control of the company into the
hands of private-equity firm Leonard Green & Partners LP. In
January, the company said it was preparing for a debt-to-equity swap
that would lead to bankruptcy and recapitalization, reported the
newswire. The company's debt is to be cut to $100 million from $350
million under the plan. Rand McNally has said it expects to emerge from
bankruptcy eight to 10 days after confirmation of the plan, according to
Dow Jones.

WorldCom's Settlements with Four Telecom Companies
Approved

The bankruptcy court overseeing WorldCom Inc.'s case approved
settlements that allow the telecommunications giant to modify existing
service agreements with four companies, according to court papers, Dow
Jones reported. Judge Arthur J. Gonzalez of the U.S. Bankruptcy
Court in Manhattan signed orders on Tuesday that authorized WorldCom to
enter separate settlements with units of BellSouth Corp., Time Warner
Telecom Inc., Cable & Wireless PLC and SBC Communications Inc. A
hearing on a proposed settlement with Verizon Communications Inc. was
continued until next Tuesday, Alfredo R. Perez, an attorney representing
WorldCom, told Dow Jones Newswires on Wednesday.

AT&T Objects to WorldCom's Proposed Claim Dispute
Rules

AT&T Corp. said it opposes proposed procedures for objecting to
claims filed in WorldCom Inc.'s bankruptcy case, according to court
papers obtained by Dow Jones Newswires. AT&T, which said it has $55
million in claims against WorldCom, said in an objection filed with a
bankruptcy court on Monday that the procedures are WorldCom's attempt to
eliminate valid claims without providing due process to affected
creditors. The filing said WorldCom and its subsidiaries shouldn't be
allowed to choose which bankruptcy laws and rules it follows and must
not be allowed to rewrite the rules 'to the detriment of creditors such
as AT&T,' reported the newswire.

Federal-Mogul Seeks Court OK to Sell Property in England

Auto-parts company Federal-Mogul Corp. wants approval from a bankruptcy
court to sell an 11-acre industrial site held by its Federal-Mogul
Engineering Ltd. and T&N Ltd. units in Ilminster, England for 3.459
(GBP) million, Dow Jones reported. The company plans to sell the
property to Daido Industrial Bearings Europe Ltd., or DIBE, a joint
venture Federal-Mogul has operated for many years with Daido Metal Co.,
court papers said, reported the newswire. Federal-Mogul filed for
chapter 11 bankruptcy protection in October 2001, listing $10.15 billion
in assets and $8.86 billion in liabilities, to resolve
asbestos-liability issues related to the 1997 acquisition of British
industrial products maker T&N PLC. A hearing on the matter is
scheduled for April 2 in the U.S. Bankruptcy Court in Wilmington, Del.,
Dow Jones reported.

Adelphia Names Joe Bagan Chief Administrative Officer

Adelphia Communications Corp. named another former executive of AT&T
Corp.'s Broadband unit to its senior management team, Dow Jones
reported. In a press release on Wednesday, the company said it named Joe
Bagan senior vice president and chief administrative officer. Bagan, who
was chief information officer of AT&T Broadband, will be responsible
for Adelphia's information technology and services, including customer
billing. In addition, he will manage companywide logistics and supply
chain, vendor management and several special projects. In January,
Adelphia hired William Schleyer, former chief executive of AT&T
Broadband, as its chief executive. Ron Cooper, former chief operating
officer of AT&T Broadband, was named to the same position, reported
the newswire.

On Monday, a bankruptcy court judge gave Adelphia until June 20 to
submit its plan of reorganization and until Aug. 21 to solicit votes
from creditors.

Armstrong Holdings Gets Inquiries About World Trade Center

Armstrong Holdings Inc. said on Wednesday it has received inquiries from
parties, including the National Institute of Standards and Technology,
investigating the fire and collapse of the World Trade Center, Dow Jones
reported. The parties have asked for information on the types and
amounts of Armstrong products that were in the World Trade Center, the
company said in its 10-K filing with the Securities and Exchange
Commission on Wednesday. Armstrong World, the main operating unit of
Armstrong Holdings, filed for chapter 11 bankruptcy protection in 2000
to manage asbestos liabilities, reported the newswire.

Williams Says Asset Sales Needed or Bankruptcy Possible in
2004

Tulsa, Okla.-based Williams Cos., owner of the second-longest North
American natural-gas pipeline system, must sell more businesses or
consider seeking bankruptcy protection in a year, the company said in a
filing, Bloomberg News reported. The company can meet obligations
through next year's first quarter, the filing said. Unless financial
conditions improve from selling assets and scaling back energy trading,
Williams said it may then become insolvent, the newswire reported.
Williams plans to sell more than $5 billion in assets after posting a
third straight quarterly loss for the last three months of 2002. The
company has put up for bid a 6,000-mile (9,650 kilometer) gas pipeline
and its 55 percent stake in Williams Energy Partners LP, worth about
$551 million at today's close, Bloomberg reported.

Rand McNally, Mapmaker, to Come Out of Bankruptcy Next
Week

Rand McNally & Co., the world's biggest commercial mapmaker, said it
won court approval of its bankruptcy reorganization plan, Bloomberg News
reported. U.S. Bankruptcy Judge Eugene Wedoff yesterday approved
the company's plan, which reduces its debt from about $350 million to
$100 million, according to Rand McNally spokesman John Dillard. The
Skokie, Ill.-based company expects to come out of bankruptcy protection
around March 28, Dillard said, according to the newswire. The
147-year-old company, which publishes the Rand McNally Road Atlas and
the Thomas Guide, filed for chapter 11 bankruptcy protection on Feb. 11
with a plan supported by creditors.

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