March 3, 2000
Minimum Wage Issue Puts Pressure on Senate for Conference on
Bankruptcy Bill
The House leadership is expected to take up the issue of a
minimum wage increase next week, CQ Daily Monitor reported
today. As House leaders determine the rules for the debate, they also
must determine how to handle H.R. 833, its bankruptcy reform bill passed
last May, which the Senate amended with minimum wage and tax cut
provisions. The bill cannot be conferenced in its current form because
the Constitution specifies that tax provisions must originate in the
House. So this puts pressure on the Senate to get the bankruptcy reform
bill to conference, and some Democratic staffers believe the Senate will
be forced to strip off the tax and minimum wage provisions to move the
bill forward. The Senate may have a difficult time dealing with a
stand-alone bill that combines a minimum wage increase and business tax
breaks, and the legislation could become a magnet for all types of
amendments. Further, it is unlikely that President Clinton would approve
business tax cuts without a two-year minimum wage increase.
Meanwhile, the formal status of S. 625 is unchanged; no conferees
have been appointed, pending the resolution of how to handle the
business tax provisions. This week, House Majority Leader Dick Armey
(R-Texas) stated that he expected the bankruptcy conference report to be
among a list of legislation to be passed before the next recess, which
is set to begin April 14.
North American Energy Conservation Files Chapter 11
North American Energy Conservation Inc., an affiliate of York
Research Corp., filed chapter 11 yesterday in the Southern District of
New York, according to a newswire report. York, which owns 85 percent of
the natural gas marketer, said that neither York nor any of its other
subsidiaries or affiliates are involved in the filing. The company's
filing was prompted by losses sustained in the summer of 1998, when
several vendors in North American's original wholesale electric
marketing business defaulted on long-term electric supply contracts.
Further losses last summer related to the failed long-term contracts
caused additional financial constraints.
Mercury Air Group to Take Charge Related to Tower Air's
Bankruptcy
Mercury Air Group Inc., announced yesterday that it will take a
$2.7 million pre-tax charge related to Tower Air Inc.'s chapter 11
filing, and that this will substantially reduce its fiscal third quarter
results, according to a newswire report. Tower Air filed chapter 11 on
Feb. 29 in Delaware but is continuing operations while negotiating with
creditors. Mercury President and CEO Joseph Cryzyk said, 'As a result of
Tower Air's bankruptcy filing, it will now be our policy to continue
supplying Tower Air on a pre-paid basis.' Mercury Air sells and delivers
fuel, primarily to commercial airlines and air freight concerns. It also
said that its existing reserve for bad debts may 'materially increase in
the current and future periods due to increasing sales based on higher
fuel prices.'
Keebler Bids for Ace Baking Assets
Keebler Co. came up with the winning $6.5 million bid at a
bankruptcy court auction for the right to buy the cone-manufacturing
assets of Ace Baking, the largest ice cream cone maker in the United
States, according to the Associated Press. Keebler was the highest
bidder in the 17 rounds of bids. The Ace Baking unit produced nearly
half of the cones for the country's commercial market until it filed for
bankruptcy and closed last year. The transaction includes the real
estate, machinery, inventory and customers lists. Ace bankruptcy
attorney Peter C. Blain, Reinhart Boerner, et al. in
Milwaukee, said that Toronto-based George Weston Ltd. had the high bid
of $14.2 million for Ace's novelty division, which makes cones for
packaged ice cream products sold in stores. That sale transaction
includes a factory in Green Bay, Wis. Blain said both sales could close
within 10 to 14 days and that both companies will acquire equipment from
Ace's operations in Owings Mills, Md., that make paper wrappers for ice
cream cones. The majority of the $20.7 million in sale proceeds will go
to secured creditors, who hold more than $26 million in Ace debt.
Unsecured creditors owed about $7 million will receive the rest of the
proceeds.
Costilla Energy Files Disclosure Statement
Costilla Energy Inc., Midland, Texas, announced that it filed
its disclosure statement on Feb. 11 in the Bankruptcy Court for the
Western District of Texas, according to a newswire report. A hearing on
the disclosure statement has been scheduled for April 11, and after
court approval, it will be distributed to parties with certain claims
and interests to vote on the proposed reorganization plan. Costilla is
an independent oil and gas company with operations primarily in the Gulf
Coast region of South Texas and the Permian Basin of West Texas and
Southeastern New Mexico.
Criimi Mae and Morgan Stanley Finalize Settlement
Criimi Mae Inc., Rockville, Md., announced that it sold eight
classes of subordinated commercial mortgage-backed securities (CMBS),
which generated proceeds of about $45.9 million and moved Criimi Mae
closer to its goal of selling selected CMBS, according to a newswire
report. The sale, which was part of an agreement between Criimi Mae and
Morgan Stanley & Co. International Ltd., finalized the settlement of
pending litigation between the two parties and represented a positive
step in Criimi Mae's chapter 11 reorganization, the firm said. Criimi
Mae used about $37.5 million of the sales proceeds to pay off all the
debt it owed to Morgan Stanley. The remaining proceeds will be used
primarily to help fund the reorganization plan. Criimi Mae and two
affiliates filed for chapter 11 protection in October 1997.
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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