March 10, 2000
House Passes Two-year Minimum Wage Increase; Conference to
Intertwine with Bankruptcy Issues
Following lengthy debate, the House of Representatives yesterday
passed by a 282-143 vote, a bill (H.R. 3846) that would increase the
minimum wage by $1 over two years; earlier a $46 billion business
tax-cut package (H.R. 3081) was passed 257-169 with the support of 41
Democrats, CQ Daily Monitor reported. President Clinton has said
he will veto the minimum wage increase legislation if it reaches his
desk with what he called the House's 'irresponsible' tax cuts. The bill
must first go through conference and a number of obstacles there. The
fate of this bill is tied to that of H.R. 833, the House's bill to
reform the bankruptcy system. The Senate passed its own version of a
minimum wage increase and tax breaks that would cost more than $18
billion over a five-year period. Now House and Senate Republican leaders
must attempt to advance all three pieces of legislation‹bankruptcy
overhaul, a minimum wage increase and tax cuts. In its current form, the
bankruptcy measure would be ruled out of order if the House tried to
send it to a conference with the Senate, because the Constitution
requires that tax legislation originate in the House. The House could
tie its bankruptcy measure to its minimum wage increase and tax cuts,
sending the package to conference with the Senate-passed bankruptcy
bill, or the Senate could separate its bankruptcy and minimum wage
packages, allowing each to proceed to a separate conference.
Leaders on Capitol Hill said yesterday that it is not yet been
determined what course to take, and Sen. Majority Leader Trent Lott
(R-Miss.) said, 'We'll wait and see how the House acts; then we'll
decide how to proceed.' Pete Jeffries, a spokesperson for House Speaker
J. Dennis Hastert said, '...the two chambers need to talk about it and
see what works best for both.'
Staff continues to prepare for a bankruptcy conference, focusing on
the areas of difference between S. 625 and H.R. 833. While there are
some important differences, the areas of disagreement in this Congress
are not nearly as significant as those that were presented in the last
Congress.
Joan & David Seeks Chapter 11 Protection
Joan & David Helpern Inc., a luxury footwear and apparel
company, announced late yesterday that it filed chapter 11 in the
Southern District of New York, according to a newswire report. As of
Jan. 1, the company had assets of $34.8 million and liabilities of $33.1
million. Chairman and Treasurer David Helpern said that the filing will
allow the company to reorganize to downsize operations and make more
efficient use of its capital and human resources. Paragon Capital LLC
has agreed to provide a new credit facility of up to $15 million; the
proceeds will be used to retire senior bank debt and provide working
capital during the restructuring. Joan & David Helpern is a
Massachusetts-based company with 76 retail boutiques, shop-in-shops and
eight stores operated by independent operators. Al Togut of
Togut, Segal & Segal, New York, said his firm filed the chapter 11
petition.
Pic N Pay Stores File 'Chapter 22'
Pic N Pay Stores Inc. filed for chapter 11 protection in Delaware
with assets and liabilities totalling between $50 million and $100
million, according to a newswire report. The shoe retailer's 20 largest
unsecured creditors have trade claims ranging from $60,000 to $3.5
million. Pic N Pay emerged from an earlier chapter 11 filing in 1997
after Bank of America, its largest creditor, became a 90 percent owner.
In December, IBJ Whitehall Financial Group's retail finance unit said it
would provide Pic N Pay with a $39 million revolving credit facility.
According to various reports, the company has been approached by several
buyers and has retained a turnaround specialist. Some 125 employees have
been laid off at the company's Matthew, N.C., headquarters, and further
layoffs are expected. Pic N Pay operates 460 stores in 17 states.
Alta Gold Seeks Conversion to Chapter 7
Alta Gold Co., which is currently a debtor-in-possession under
chapter 11, announced that it is seeking court approval to convert the
case to chapter 7 to liquidate, according to a newswire report. The Las
Vegas-based company's Board of Directors, its president, its CEO and its
vice president-operations have resigned, while only two officers have
chosen to remain with the company pending further action by the court.
The filing to liquidate was necessitated by the continued deterioration
of the company's financial condition and the lack of success in finding
a viable buyer for either the company or its assets. The court has
scheduled a March 30 hearing on the conversion and appointed an outside
expert to assist in evaluating assets and liabilities.
Moody's Cuts United Artists Theatre Ratings in Anticipation of
Bankruptcy
Moody's Investors Service has cut United Artists Theatre Co.'s
ratings, reflecting its expectation that the company's future is tenuous
at best and a near-term bankruptcy filing is a very real possibility
because of tightening liquidity, according to a newswire report.
Specifically, Moody's pointed to the need to effect the sale of certain
assets and/or a rather meaningful but unexpected uptick in retained cash
flow in order to the company to have sufficient resources to make its
April interest payment on the senior subordinated notes. Moody's
previously noted the lessening willingness of United Artists' lending
group to continue supporting the attempted turnaround by management.
Based in Englewood, Colo., United Artists operates one of the largest
movie theater chains in the United States.
Public Notice for Reappointment of Pennsylvania Bankruptcy
Judge
The current term of office of David A. Scholl, U.S. Bankruptcy Judge for
the Eastern District of Pennsylvania at Philadelphia, is due to expire
on Aug. 26, 2000. The U.S. Court of Appeals for the Third Circuit is
considering the reappointment of Judge Scholl to a new term of of office
and has determined that he appears to merit reappointment subject to
public notice and opportunity for public comment. Upon reappointment,
the incumbent would continue to exercise the jurisdiction of a
bankruptcy judge as specified in title 28, U.S. Code; title 11, U.S.
Code; and 122, 98 Stat. 333-346. In bankruptcy cases and proceedings
referred by the district court, the incumbent would continue to perform
the duties of a bankruptcy judge that might including holding status
conferences, conducting hearings and trials, making final
determinations, entering orders and judgments, and submitting proposed
findings of fact and conclusions of law to the district court.
Members of the bar and the public are invited to submit comments for
consideration by the Court of Appeals regarding the reappointment of
Judge Scholl to a new term of office. Please not that the Court of
Appeals procedures provide that 'the circuit executive shall not
disclose the identity of any person who requests confidentiality, but
shall provide the incumbent bankruptcy judge with a general description
of the source and nature of the comments.'
All comments should be directed to the following address: Office of
the Circuit Executive, Toby D. Slawsky, Circuit Executive, 22409 U.S.
Courthouse, 601 Market St., Philadelphia, PA 19106-1790. Comments must
be received no later than Friday, April 14.
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