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December 7, 2004
Specter Convenes Stakeholder Meetings on Asbestos Bill
Incoming Senate Judiciary Chairman Arlen Specter (R–Pa.) is
convening meetings aimed at reaching a compromise on long-stalled
asbestos legislation, outlining a timeline for introducing a revamped
bill in early January and taking it to the Senate floor by the end of
that month, CongressDaily reported. Specter presided over a
meeting of industry stakeholders and Senate staffers on Monday.
Attendees were discussing a draft bill Specter circulated during a Nov.
20 meeting. According to sources, the bill is similar in part to
legislation that stymied Democratic and Republican leaders this session
but was not in final legislative language, the newswire reported.
Chicago Fed Sees ’05 GDP Down at 3.3 Percent
U.S. economic growth is expected to slow in 2005 due to rising
interest rates and high crude oil prices, according to a forecast of
participants at a Federal Reserve Bank of Chicago conference released on
Monday, Reuters reported. Real gross domestic product growth was
forecast at 3.3 percent, down from a projected 4.4 percent this year.
The forecasts came from 28 participants in banking, manufacturing,
consulting and services firms, as well as academics who attended the
Chicago Fed’s Economic Outlook Symposium. “They see growth
in 2005 being a bit more moderate, but that would still be slightly
above potential growth,” William Strauss, Chicago Fed senior
economist, told Reuters.
Mirant to Pay $12.5 Million in Natgas Settlement
A unit of bankrupt energy trading firm Mirant Corp. will pay a $12.5
million civil penalty to settle charges that it gave bogus natural gas
price information to publishers, the Commodity Futures Trading
Commission (CFTC) said on Monday, Reuters reported. From January 2000 to
December 2001, Mirant traders gave “false, misleading and
knowingly inaccurate information” to three industry publications,
the CFTC said in a release. The attempted manipulation by Mirant
traders, if successful, could have affected natural gas futures prices
on the New York Mercantile Exchange, the CFTC said, the newswire
reported.
AirTran, ATA Slot Plan Should Be Denied, JetBlue Says
AirTran Airways and ATA Holdings Corp. should be barred from sharing
airport slots in New York and Washington, D.C., JetBlue Airways Corp.
CEO David Neeleman said, citing a prior U.S. government decision,
Bloomberg News reported. ATA, which filed for bankruptcy protection in
October, agreed last month to share with AirTran 14 take-off and landing
slots at New York’s LaGuardia airport and six at
Washington’s Reagan. The slot-sharing plan is not
“permissible,” Neeleman said at a breakfast with reporters
in Washington. He cited a 2002 U.S. Department of Transportation
decision barring Midway Airlines Inc., then in bankruptcy, from using
two Reagan slots awarded under a 2000 law to fly for US Airways Group
Inc. Any U.S. rejection of the carriers’ plan may threaten a
portion of ATA’s plan to reorganize in chapter 11 bankruptcy and
stifle AirTran’s attempt to capture additional business from ATA
routes, the newswire reported.
High-Yield Default Rate May Rise to 2.6 Percent in 2005,
Moody’s Says
The percentage of high-yield, high-risk borrowers that fail to make
timely debt payments will increase to about 2.6 percent over the next
year, in part because more companies with low ratings have been
borrowing, according to Moody’s Investors Service, Bloomberg News
reported. About 2.4 percent of junk-rated issuers globally defaulted on
debt payments in the 12 months ended in November, unchanged from the
previous month, Moody’s said. The default rate will decline to 2.3
percent this month, and to 1.9 percent in March before rising later next
year, Moody’s said, the newswire reported.
Lenders and U.S. Tighten Screws on Struggling Airlines
After the September 2001 attacks, the federal government, banks,
aircraft lenders and others came forward to help, giving the airlines
plenty of leeway in the face of extraordinary circumstances, the
New York Times reported. But these same backers are stating
new requirements for airlines, particularly those operating under
bankruptcy protection: enforce strict timetables, conserve cash, reduce
spending and eliminate jobs. Read the full article at
href='http://www.nytimes.com/'>www.nytimes.com.
Delta Reports Progress on Cuts
With the important financial pieces of its turnaround plan falling
into place, Delta Air Lines Inc. is about halfway through its program to
restructure operations while avoiding a bankruptcy-court filing, the
airline’s finance chief said, the Wall Street Journal
reported. Last week Delta said it had closed agreements with General
Electric Co.’s commercial-lending unit and American Express Co.
for about $1.1 billion in financing, money that the third-largest U.S.
airline needs to buy time for its cost-cutting program to begin bearing
fruit.
Global Crossing Founder Faces Fine
The Securities and Exchange Commission is expected to fine at least
three former executives of Global Crossing Ltd., the fiber-optic company
that went bankrupt in the recent telecom bust, the Wall Street
Journal reported. The fine on the executives, including the
company’s founder and former chairman, Gary Winnick, stems from
alleged accounting fraud at the former stock-market star.