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April 15, 2005
Bankruptcy Bill On Its Way to President for Signature
House and Senate leaders yesterday sent President Bush the bankruptcy
bill, after the House approved the legislation on a 302–126 vote
with no amendments, CongressDaily reported. Among the 73
Democrats voting for the bill were seven members of the leadership,
including the House Democratic Whip and number two Democrat (Rep. Steny
Hoyer), the Caucus Chairman and third ranking Democrat (Rep. Robert
Menendez), the fifth ranking Democrat (Rep. John Spratt) and four chief
deputy whips (Reps. Joseph Crowley, Ron Kind, Ed Pastor and John
Tanner). Bush has said he plans to sign the measure. Supporters said the
bill would reduce abusive and frivolous bankruptcy filings, while
preserving bankruptcy protection for those who genuinely need it. But
opponents called the bill a payoff to credit card companies and argued
it would harm consumers with a legitimate need for bankruptcy
protection.
Credit Offers Target the Bankrupt
A Washington Post article reports that when chapter 7
filers have erased debt, credit card firms are eager to lend. Read the
full article at
href='http://www.washingtonpost.com/wp-dyn/articles/A54745-2005Apr14.html'>www.washingtonpost.com/wp-dyn/articles/A54745-2005Apr14.html.
Stocks Fall as Economic Concerns Grow
U.S. stocks fell on Thursday, with all three major stock indexes
hitting 2005 lows as concerns increased about growth of the economy and
corporate earnings, Reuters reported. The Dow Jones industrial average
was down 84.91 points, or 0.82 percent, at 10,319.02. The Standard &
Poor’s 500 Index was down 7.76 points, or 0.66 percent, at
1,166.03. The technology-laced Nasdaq Composite Index was down 22.05
points, or 1.12 percent, at 1,952.32. “It’s disconcerting,
considering that oil prices are going the right way,” said Jim
Fehrenbach, head of Nasdaq trading at Piper Jaffray, referring to the
drop in crude prices in the past week, which has typically driven the
market higher.
UAW, GM to Cut Costs
The United Auto Workers union will work with General Motors Corp.
within the framework of its current contract to help the automaker cut
its mounting health care costs, a union official said yesterday, Reuters
reported. GM’s health care costs, which it expects to rise to $5.6
billion this year from $5.2 billion last year, and a surprising warning
last month of its worst quarterly loss since 1992 led to some
speculation that the automaker could ask the union to renegotiate parts
of its current contract.
Separately, Reuters reported that General Motors Corp. shares tumbled
6 percent to a 17-and-half year low yesterday in part on what one Wall
Street analyst called “unsubstantiated bankruptcy concerns.”
GM spokesman Jerry Dubrowski said: “General Motors has no plans to
file for bankruptcy.” In a note published to clients, JPMorgan
analyst Himanshu Patel said the concerns were likely tied to GM Chief
Executive Richard Wagoner’s comments to the United Auto Workers
union regarding the company’s need for health care concessions,
which “have been twisted into an imminent bankruptcy
possibility,” the newswire reported.
Hawaiian Air Back in Bankruptcy Court
Hawaiian Airlines and its pilots union are back in federal bankruptcy
court this week over labor negotiations, Reuters reported. Today is the
second day of what is expected to be a three-day hearing before U.S.
Bankruptcy Judge Robert Faris over the carrier’s contract with the
Air Line Pilots Association. Hawaiian wants to impose a contract on the
pilots’ union. It’s one of the last steps the carrier needs
to take to emerge from its two-year-old chapter 11 bankruptcy
filing.
Qwest’s High Offer May Show Desperation, but Should MCI
Care?
Major institutional investors disapprove of the way MCI has conducted
itself in finding a buyer, the New York Times reported. Its
board so far has backed the lower bid from the company that can best
afford it, Verizon, rather than the higher bid from Qwest, a company
that is, to put it gently, financially challenged. “The question
is not whether Verizon is a larger, more financially sound company that
possesses assets, such as wireless, that Qwest lacks,” Bill
Miller, the chief investment officer at Legg Mason, wrote in an angry
letter to MCI. “It is and it does. The question is which
transaction creates the most value for MCI owners.” Read the full
article at www.nytimes.com.
Wattles Makes Bid for Ultimate Electronics Assets
The chief executive of Ultimate Electronics Inc. has formally
submitted a bid to acquire assets of the bankrupt retailer for $47.1
million, according to regulatory filings today, Reuters reported. Mark
Wattles, who joined Ultimate Electronics in February and holds a 54.1
stake in the electronics retailer, said in a filing with the U.S.
Securities and Exchange Commission that his company, Ultimate
Acquisition Partners, intends to participate in a public auction for the
retailer’s assets, which starts on April 15.
US Airways Delays Reorganization Plan to End of April
US Airways Group Inc. yesterday said it has reached agreement to
extend until the end of April the date for filing a bankruptcy
reorganization plan, Reuters reported. The seventh-largest domestic
airline said it reached the agreement with GE Capital Aviation Services
and GE Engine Services. US Airways had been expected to file a
reorganization with the U.S. Bankruptcy Court by April 15.