Bankruptcy Legislation to be Senate’s Final Business
Assuming lawmakers can finish the fiscal 2001 appropriations bills this
week, Senate Majority Leader Trent Lott (R-Miss.) plans to schedule a
vote on the bankruptcy overhaul legislation (H.R. 2415) as the
Senate’s final legislative business. Lott would first need
to gather the 60 votes needed to invoke cloture and end a
filibuster. On Nov. 1, a cloture motion failed 53-30. Part
of that failure was due to the absence of 17 senators, but full roster
of Republicans this week would likely provide enough votes to force a
final vote on the conference report.
The House adopted the measure by a voice vote on Oct. 12. The
White House, however, has threatened a presidential veto of the
legislation.
House to Consider Chapter 12 Extension Today
The House is expected to consider a measure (H.R. 5539) today that
would extend chapter 12 bankruptcy protection for family farmers for
nine months. The House adopted a conference report on bankruptcy
overhaul legislation (H.R. 2415) on Oct. 12 that included the chapter 12
extension. A similar measure (H.R. 5540) passed by the House on
Oct. 31 would have extended family-farmer bankruptcy protection for one
year, rather than nine months.
Bankruptcy Looms for ICG Communications
ICG Communications Inc. was fueled for several years by the demand for
Internet service, but by last June the telecommunications up-start was
plagued with technical problems, according to the Wall Street
Journal. Key customers, which included Microsft Corp., NetZero
Inc. and Earthlink Inc., complained that users trying to connect to the
Internet through the ICG network were cut off or blocked by busy
signals. Now ICG’s stock is trading for 44-cents a share,
down 98.9 percent from $39.25 in March. The company is expected
this week to file chapter 11 protection while it attempts to
reorganize.
BroadcastAmerica Files Chapter 11
BroadcastAmerica.com announced Friday that it has filed chapter 11
as the online broadcaster pursues a merger, according to the Associated
Press. John Brier, BroadcastAmerica president, said venture
capital has dried up because of the slump in the financial markets,
triggering a revenue shortage. In papers filed in U.S. Bankruptcy
Court, the company said it needed $144,160 to meet its payroll due this
week and an additional $250,000 by the time its next payroll is due Nov.
22.
The Portland, Maine-based BroadcastAmerica said it was getting an
immediate loan of up to $1 million as part of its pending merger with
New Jersey-based
SurferNETWORK.com, an online marketing and radio company.
SurferNETWORK will try to set up as much as $7 million in longer-term
funding by Dec. 1 in return for a 50 percent stake and the right to name
four of the seven board members. BroadcastAmerica transmits 750
radio and 70 television stations over the Internet.
SurferNETWORK’s technology enables web-based broadcasters to
target advertising to specific audiences.
Pittsburgh Corning Seeks Fund For Asbestos Insurance Proceeds
Pittsburgh Corning Corp., a 50-50 equity investment of Corning Inc.
and PPG Industries Inc. (PPG), has asked a bankruptcy court to establish
a qualified settlement fund to hold insurance proceeds the company
receives to settle asbestos-related personal injury claims, according to
a newswire report. The fund would protect the Pittsburgh glass
block and insulation manufacturer from having to recognize and pay
income taxes on the proceeds. Based on the amount of proceeds received
since its April 16 bankruptcy filing alone, the company could owe about
$9 million in taxes. Pittsburgh Corning's chapter 11 petition
listed assets of $140.4 million and liabilities of $62.9 million,
excluding potential liability for asbestos claims.
Before its chapter 11 filing, the company used the proceeds to satisfy
the related settlement and defense costs and took a corresponding tax
deduction. While in bankruptcy, however, the company is prohibited from
distributing the proceeds until after confirmation of a chapter 11
plan. The company has already received about $44 million of
proceeds in 2000 and expects to receive more proceeds before a chapter
11 plan is confirmed in its case. Pittsburgh Corning said in its
bankruptcy petition that it is defending more than 140,000 lawsuits that
seek billions of dollars in damages from alleged exposure to the
company's asbestos-containing insulation products.
Daewoo Motors Wonders if General Motors Will Back Off
Last week, Daewoo Motors officially declared bankruptcy and owes its
creditors about $10.6 billion. Now the Daewoo waits to hear
whether General Motors (GM) will still want to buy the company,
according to a newswire report. While GM was attracted to
Daewoo’s one-quarter share of the South Korean domestic car
market, which would have helped GM increase its sales in the region, the
bankruptcy has delayed GM’s decision to buy. As negotiations
between creditors and unions continue, Daewoo’s future remains
uncertain.
Fine Air Gets $55 Million Credit Facility
Fine Air Services Corp. Friday announced that it has obtained final
approval for a two-year $55 million line of secured financing from Banc
of America, its current lending institution, according to a newswire
report. The credit facility was approved by U.S. Bankruptcy
Judge A. Jay Cristol in Miami, where Fine Air and its
subsidiaries, including Arrow Air, have been operating under the
protection of the Bankruptcy Court since filing petitions for chapter 11
on Sept. 27. This credit facility ensures that Fine Air will have
substantial financial resources during the entire reorganization
process.
The company cited skyrocketing fuel prices and an economic downturn
in Latin America over the past two years as the major causes of its
present financial situation. Since 1994, the company has been the
largest air cargo carrier serving Miami International Airport, based on
tons of international freight transported to and from that airport.
Tri Valley Executives Awarded Bonuses
A U.S. bankruptcy judge has approved a bonus package for the chief
executive of Tri Valley Growers and five top officers, according to a
newswire report. Tri Valley Growers Chief Executive Officer Jeff
Shaw and his top five officers can expect bonuses when the financially
troubled food processor is sold, but the package will not be near the
$4.3 million they were seeking. The executives had asked for
bonuses totaling $4.3 million. The bonus pool could increase if
the company's sale price exceeds that figure.
The money is intended to compensate the executives for the
performance bonuses they might have earned had the processor not filed
for bankruptcy protection. Tri Valley filed for bankruptcy
protection after losing nearly $200 million over three years; the
company is more than $400 million in debt.
