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July 26, 2005
Legislative Hearings
The Senate Finance Committee
will hold full committee markup of employee pension legislation (
href='http://thomas.loc.gov/cgi-bin/bdquery/z?d109:s.219:'>S.219,
National Employee Savings and Trust Equity Guarantee Act of 2005) at
215 Dirksen Senate Office Building. 10 a.m. today. Contact: 202-224-4515
/ finance.senate.gov
House Judiciary Committee
The
href='http://judiciary.house.gov/committeestructure.aspx?committee=5'>House
Commercial and Administrative Law Subcommittee will hold an
oversight hearing on the implementation of the
href='http://thomas.loc.gov/cgi-bin/query/z?c109:S.256.ENR:'>Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005 at 2141 Rayburn
House Office Building at 2 p.m. today. Witnesses are: Clifford White
III, acting director, Executive Office for United States Trustees;
Thomas Small, U.S. Bankruptcy Judge for the Eastern District of
North Carolina on behalf of Judicial Conference of the United States;
Travis Plunkett, legislative director, Consumer Federation of America;
and George Wallace, Coalition to Implement Bankruptcy Reforms. Contact:
202-225-3951 /
href='http://judiciary.house.gov/'>judiciary.house.gov
Subpoena Power Sought over U.S. Asbestos Fund Dues
Subpoenas could be served on companies to determine their
contributions to a proposed $140 billion asbestos compensation fund, the
top two members of the Senate Judiciary Committee said yesterday.
Judiciary Committee Chairman Sen. Arlen Specter (R–Penn.) and
ranking panel Democrat, Patrick Leahy of Vermont, told a meeting of
committee staff they would seek the authority to issue subpoenas when
the panel meets on Thursday, Reuters reported yesterday. Financing is
one of the issues Specter and Leahy need to resolve as they try to build
support for their joint legislation to create the asbestos compensation
fund.
Bill That Gives Airlines Pension Break Gains
Senate Finance Committee Chairman Charles E. Grassley (R–Iowa)
said yesterday that his legislation overhauling pension regulations will
include an exemption for U.S. airlines, the Baltimore Sun
reported today. The compromise would grant airlines between 12 and 15
years to pay off their overdue pension contributions, up to double the
seven years that other companies would receive to pay off outstanding
obligations.
href='http://www.baltimoresun.com/business/bal-bz.delta26jul26,1,828981.story…'>Read
the full story.
In other news, if US Airways Group Inc. completes its merger with
America West Holdings Corp., only two top US Airways executives are
expected to join the new carrier, the airline said yesterday. Alan W.
Crellin, US Airways vice president of operations, would retain the same
title and oversee the combined carrier’s day-to-day operations for
safety, maintenance, airports and in-flight services. Crellin, 58, would
join Bruce R. Lakefield, 61, US Airways president and chief executive,
who would become vice chairman of the carrier, the Washington
Post reported today.
href='http://www.washingtonpost.com/wp-dyn/content/article/2005/07/25/AR20050…'>Read
the full story.
Parishioners Added as Defendants in Archdiocese Bankruptcy Case
Hundreds of thousands of defendants have been added to the class
action bankruptcy case involving the Portland Catholic Archdiocese,
Oregon Public Broadcasting reported yesterday. The bankruptcy case,
which resulted from more than 200 sex abuse complaints against the
Portland Archdiocese, now has nearly 400,000 parishioners as defendants.
A handful of defendants will represent the hundreds of thousands of
parishioners, but anyone receiving a notice can join the case.
Waging War on Payday Lenders
Under a bill that passed the Michigan state House last month, the
most a lender could charge would be $76 for a $600 short-term payday
loan. Some lenders charge $108 or more for such loans now, the
Detroit Free Press reported yesterday. Michigan does not
regulate payday lenders, but consumers could see protections if the bill
becomes law. House Bill 4834 will now go to the Senate. Gov. Jennifer
Granholm, who vetoed a bill on payday lending last year, is expected to
approve the current bill. But it isn’t without
critics—notably, small lenders who are putting up a fight.
href='http://www.freep.com/money/business/tompor25e_20050725.htm'>Read
the full story.
3 Former WorldCom Executives Settle
Three former executives of WorldCom Inc. have reached settlements in
a class action lawsuit brought by investors who lost billions of dollars
when the telecommunications firm collapsed in an $11 billion accounting
fraud, a judge said Monday. U.S. District Court Judge Denise Cote, of
Manhattan federal court, scheduled a hearing Thursday to discuss
preliminary approval of the settlements, reached by former WorldCom CFO
Scott Sullivan, former Accounting Director Buford Yates and former
Controller David Myers, the Associated Press reported yesterday. The
three former executives were the last remaining defendants in the
investor lawsuit.
Upheaval Continues in San Diego as 11 Vie for Mayor
The candidates have different views of the city’s needs. While
Jerry Sanders says that San Diego needs a strong leader, another
candidate, a corporate executive, says the city should be run as a
business, the New York Times reported yesterday. The
environmental activist says that city government needs to be more open.
And the bankruptcy lawyer says that San Diego should declare bankruptcy.
“You’re in a single forum in front of a single judge,”
said the lawyer, Pat Shea, arguing that bankruptcy would be the most
efficient solution to the city’s financial problems. Shea, who
represented certain government entities in the Orange County bankruptcy
proceedings in the 1990s, said that San Diego’s pension deficit
might be as large as $6 billion and that the city has to face up to
“reality reality” as opposed to “political
reality….”
href='http://www.nytimes.com/2005/07/25/national/25diego.html'>Read the
full story.
ExelTech Loses $1.7 Million in 2005 as Jetsgo Bankruptcy Writedown
Helps Reverse 2004 Profit
ExelTech Aerospace Inc. posted a loss in fiscal 2005 as writedowns of
$3.7 million linked to the Jetsgo airline bankruptcy helped reverse a
profit the previous year, the Canadian Press reported
yesterday. The Montreal company, formerly known as NordTech Aerospace
Inc., reported yesterday a net loss of $1.7 million, or three cents a
share for the year ended March 31. That compared with a net profit of
$736,437 or one cent a share for fiscal 2004.
IMPATH Bankruptcy Liquidating Trust Announces Initial Cash
Distribution
The trustee of the IMPATH Bankruptcy Liquidating Trust announced that
Aug. 12, 2005, will be the payable date on which the liquidating trust
will make an initial cash distribution of $42,957,866.00, or $2.55 per
unit, to holders of record of Class A Beneficial Interests in the
liquidating trust on Aug. 5, 2005, Business Wire reported yesterday.
This initial cash distribution will be made by the liquidating trust in
accordance with the third amended joint plan of liquidation under
chapter 11.
Crane Co. Settles Asbestos Claims with Lloyd’s Reinsurer
Equitas for $33 Million
Crane Co., a Stamford, Conn.–based manufacturer of engineered
industrial products, has agreed to settle its insurance coverage claims
for asbestos and other liabilities against underwriters at Lloyd’s
of London reinsured by Equitas Limited for a total payment of $33
million, the Insurance Journal reported yesterday. Under
the agreement, $1.5 million will be paid to Crane Co. in the third
quarter of this year. The balance will be placed into an escrow account
for the payment of future asbestos claims and funds remaining in the
escrow will be paid to Crane Co. on Jan. 3, 2007, if no federal asbestos
legislation is enacted by that date. If federal asbestos reform is
enacted before Jan. 3, 2007, funds then remaining in the escrow would be
paid to Equitas, subject to a payment of an additional $1.5 million to
Crane Co. and a hold-back of certain funds in the escrow for the payment
of asbestos claims during the year following enactment of asbestos
legislation.
Moody’s Finds High Pay, Credit Risk Link
Investors may want to take a hard look at stock options and bonuses
going into top executives’ pockets before spending their own money
to buy a company’s bonds. Corporations doling out large incentive
compensation packages to chief executives appear to face a greater risk
of potential default or a significant downgrade, a new study by
Moody’s Investors Service suggests, the New York
Times reported yesterday. Believed by the credit agency’s
analysts to be the first empirical examination of a link between
excessive compensation and credit risk, the report may provide new
ammunition to a growing chorus of critics taking issue with escalating
pay packages.
href='http://www.nytimes.com/aponline/business/AP-CEO-Pay.html'>Read the
full report.
Loral Chairman Schwartz Sees Satellite-making Unit Prospering
Loral Space & Communications Ltd. Chairman and CEO Bernard
Schwartz, fresh from bankruptcy court approval of the company’s
plan of reorganization, predicted the company’s satellite-making
unit will be among those surviving anticipated industry consolidation,
the Wall Street Journal reported yesterday. The New York
company expects to finally emerge from chapter 11 reorganization with
its management team impact, probably within two months, pending transfer
of satellite licenses to the new corporate entity by the Federal
Communications Commission.