March 22, 2000
Senate Leaders Still Deadlocked on Separating Minimum
Wage/Tax from Bankruptcy Bill
Yesterday Senate leaders remained deadlocked on how to work
though the thorny issue of separating minimum wage and small business
tax relief provisions from its bankruptcy reform bill, CQ Daily
Monitor reported. Sen. Majority Leader Trent Lott (R-Miss.) and
Minority Leader Tom Daschle (D-S.D.) both said they favor breaking the
two issues apart, and Lott said he would probably ask the Senate's
unanimous consent to separate the measures in the bill to overhaul
bankruptcy. But their agreement ends there because Lott wants to send
both the minimum wage/tax package and the bankruptcy bill to conferences
with the House. He said, 'It think it's time, now that the House has
acted, that we send these items to conference, and I would urge that the
Senate separate the two, send the bankruptcy bill to the bankruptcy
conference, and send the minimum wage [and] tax proposals to conference
with the House on their bill. And at some time, probably this week, I'll
ask unanimous consent to do that. Somebody may object, but we've got to
do that. Meanwhile, Daschle wants to see what the unanimous consent
motion separating the two issues will look like. He said the Senate must
vote on a separate minimum wage bill to ensure a conference. 'The House
has acted on bankruptcy, the House has acted on minimum wage. The Senate
has acted on bankruptcy, and it has not yet had an independent vote on a
separate minimum wage bill yet.' Lott disagreed and said that 'We've
already voted on it. In fact, they [the Democrats] forced a vote. They
lost on their provision, we won on ours. I'm ready to separate that from
bankruptcy and to go conference.' Lott was referring to the Democrats'
attempts last November to force the minimum wage issue into the
bankruptcy bill.
The House will have to issue a stop-work order if the Senate does not
separate the issues, since the Constitution requires that tax
legislation originate in the House. If Lott's unanimous consent motion
draws an objection, the Senate would have to consider both measures
together, which could jeopardize either, or both, of the bill's chances
for passage this year.
Letter to Editor Comments on 'Big Brother Bankruptcy'
In a letter to the editor in today's Washington Post,
local journalist Steve France writes, 'When President Clinton declared
the end of big government in 1997, most people thought it would be up to
the Republican Congress to hold him to his pledge. When it comes to
bankruptcy reform, however, it will be up to Clinton to hold the line.'
He said that after the 'spend decade of the '90s' the House and Senate
have passed bills to tighten the bankruptcy laws. While he said the
moral intention is fine, he noted that Clinton has said the bills would
inject big government into the the consumer economy, with predictably
dismal results.' The full letter is online at
href='http://www.washingtonpost.com/wp-srv/WPlate/2000-03/21/013l-032100-idx…'>http://www.washingtonpost.com/wp-srv/WPlate/2000-03/21/013l-032100-idx….
House Democrats Seek Crackdown on 'Payday Loans'
Democrats on the House Banking Committee are seeking to
crackdown on so-called 'payday loans,' which are short-term
high-interest loans, CQ Daily Monitor reported. Key
Republicans, however, argue that while such loans need scrutiny, they
are not certain that Congress is the best body suited for that task.
House Banking Committee spokesman David Runkel said, 'A lot of companies
that do this are national banks, so this a major regulatory issue.' He
suggested that while the committee is looking at the issue, tougher
enforcement rather than new laws may be the best approach to the
problem. Earlier this month Rep. John J. LaFalce (D-N.Y.), the ranking
Democrat on the committee, introduced H.R. 3823, a bill to limit payday
lending. Banking Chairman Jim Leach (R-Iowa) assigned the issue to Rep.
Margie Roukema (R-N.J.), who heads the Subcommittee on Financial
Institutions and Consumer Credit. An aide said she has not yet decided
how to proceed. Consumer groups and credit union advocates have been
pushing for the limits, but they are still examining the provision's of
LaFalce's bill. In payday lending, typically a person borrows money for
two weeks and leaves a post-dated check in return. LaFalce said many
lenders charge up to $17.50 for each $100 borrowed, and many consumers
are forced to extend their contracts because they cannot pay the loan
and interest back in time. The Consumer Federation of America estimates
that interest rates on the loans average about 400 percent.
Fed Increases Interest Rates as Expected
The Federal Reserve continued its steady campaign to dampen the
economy with another small increase in interest rates and said that
other action this spring is likely, The Wall Street Journal
reported. It is not clear how quickly the bank can accomplish this goal,
because there has been little notable impact from the Fed's prior four
rate increases during the past nine months. In a statement accompanying
the increase of the main rate by .25 of a percentage point to 6 percent,
the Fed said that rapid growth 'could foster inflationary imbalances
that would undermine the...record economic expansion.'
Court Approves ICO's Disclosure Statement
ICO Global Communications, London, announced that the U.S.
Bankruptcy Court for the District of Delaware yesterday approved the
company's disclosure statement and scheduled a confirmation hearing for
May 3, according to a newswire report. If approval of the plans is
obtained at that time, and if related approvals are obtained from the
Bermuda and Cayman Islands courts, the global mobile communications
company will emerge from chapter 11 in mid-May. ICO Global filed chapter
11 late last August.
Brake Headquarters Announces Plan for Subsidiaries
Brake Headquarters U.S.A. Inc., Perth Amboy, N.J., announced
that two of its subsidiaries, Sanyo Automotive Parts Ltd. and ABS Brakes
Inc., have filed a reorganization plan under chapter 11; both filed for
protection last May. According to a newswire report, the joint plan, if
confirmed, will resolve the outstanding claims against the two companies
and eliminate more than $8 million of debt. Founded in 1976, Brake
Headquarters is a wholesaler and distributor of automotive brake system
products and other component parts.
Coho Energy Announces Plan Confirmation
Coho Energy Inc., Dallas, announced yesterday that on Monday
the U.S. Bankruptcy Court for the Northern District of Texas confirmed,
with several modifications, Coho's reorganization plan, according to a
newswire report. The modifications to the plan include the retention by
the common shareholders as of Feb. 7 of 20 percent of any proceeds from
Coho's lawsuit against Hicks, Muse, as well as 40 percent of any net
sale proceeds from the company's Tunisia permit. Effectiveness of the
plan is expected to be March 31.
Complete Management to Sell Medical Management Assets
Complete Management Inc. (CMI), a chapter 11
debtor-in-possession, has filed an application to sell substantially all
of the operating assets of its wholly-owned subsidiary, Medical
Management Inc. (MMI), used in MMI's diagnostic imaging facility in New
York, and assign certain leases held in CMI's name. MMI provides
services for the financing, administration and technical management of
magnetic resonance imaging (MRI) facilities. The prospective buyer is a
Maryland corporation known as NYD Inc.; it has proposed to buy the
assets for $1.4 million in cash, plus assumption of certain liabilities.
Bankruptcy Judge Jeffry Gallet (S.D.N.Y.) will hold a
hearing on the offer and higher better offers on April 11. Copies of
CMI's application, together with the asset purchase agreement among CMI,
MMI and NYD, are online at
href='http://www.nysb.uscourts.gov/'>http://www.nysb.uscourts.gov.
I Scream, You Scream, We All Scream for Ice Cream
Ice cream lovers around the country will be in good humor
thanks to Nabisco's Comet cones and the branded Oreo ice cream cones
entry into the food service ice cream industry, according to a newswire
report. The recent chapter 11 filing by Ace Baking Co., a Wisconsin
company that made almost 1.3 billion ice cream cones last year, had left
ice cream lovers and the industry wondering whether there would be
enough ice cream cones this summer. The company closed its doors and
shut down cone production, and local ice cream shops began searching for
alternative sources. Nabisco said that it evaluated the economics of the
cone category and plans to ensure a reliable supply of high-quality
cones while avoiding the financial pitfalls that Ace Baking encountered.
Nabisco's lien of Comet cones started in 1953 and it is now a $15
million business.
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