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ABA Approves Asbestos Litigation Resolution
The American Bar Association's (ABA) House of Delegates yesterday voted
to approve a resolution requiring asbestos litigants to meet certain
medical criteria in order to file suit for compensation, reported
CongressDaily. However, under the resolution, complainants would
not be subject to a statute of limitations, and could file a claim once
their illness had manifested itself, according to the newswire. The
resolution, recently submitted by the ABA's commission on asbestos
litigation, was fine tuned before the vote, an ABA spokeswoman said. The
ABA's formal approval of the resolution theoretically gives a boost to
those asbestos defendant companies lobbying in favor of a medical
criteria-based approach to federal asbestos reform legislation, which is
being contemplated in the House and Senate. Other companies with less
immediate exposure have been exploring a trust fund concept. The Senate
Judiciary Committee is planning a March 5 hearing on asbestos litigation
reform legislation, according to CongressDaily.
Enron Report Expected This Week
A report on Enron Corp. is slated to be released on Thursday at a
hearing by the Joint Committee on Taxation, according to
CongressDaily. Senate Finance Chairman Charles Grassley (R-Iowa)
predicted the report would contain 'some eye-popping revelations and
surprises about corporate governance,' and that would be 'substantiated
with ample evidence.'
California Grid Operator Suspends Enron Rights to Market
Power
Bankrupt Enron Corp. had its rights to market power in California
suspended by the state's grid regulator, citing the company's finances,
Bloomberg News reported. The company told the California Independent
System Operator (ISO) in December of a 'potentially significant error'
in meter data, the agency said in a statement, adding that Enron has
said it would not meet the ISO's demands for more collateral, the
newswire reported. 'We have reported them to the Federal Energy
Regulatory Commission for further action, as well as to the California
Attorney General,' Randy Abernathy, the ISO's vice president of market
services, said in a conference call, Bloomberg News reported. 'Some data
was not collected and in other places it was read improperly.'
Consumers Turning Virtuous By Saving More, Cutting Debt
After running up giant credit-card balances for the past decade, there
are signs that American consumers are starting to curtail their
credit-card borrowing and pay down some debts, the Wall Street
Journal reported. Last week, the Federal Reserve reported that
credit-card debt outstanding plunged $8.4 billion in December -- the
largest monthly decline since the data were first collected in 1968. The
savings rate, meanwhile, continued to rise. In the final three months of
2002, consumers saved 4.3 percent of their income, the highest savings
rate since 1998 and a big improvement from less than 1 percent at the
end of 2001. Also, according to the Journal, even as mortgage debt has
soared in the past two years, monthly debt-service burdens have started
to fall. To read the full article, point your browser to
href='http://www.asj.com'>www.wsj.com (subscription required).
Rand McNally Files for Bankruptcy Protection
Rand McNally & Co., the world's biggest commercial mapmaker, filed
for bankruptcy protection, with a plan approved by debt holders to
reduce debt to $100 million from $400 million, according to Bloomberg
News. The almost 150-year-old company, which publishes the Rand
McNally Road Atlas and the Thomas Guide, announced last month
that it would seek chapter 11 protection. The company expects to emerge
from bankruptcy protection in about 30 days, attorney Robert Richards of
the Chicago-based Sonnenschein Nath & Rosenthal firm said, according
to the newswire.
Maxcor Financial Sues to Resolve Disputed Trades in NTL
Shares
Maxcor Financial Group said it filed a lawsuit to resolve disputes over
trading in prospective shares of NTL Inc. before the United Kingdom's
largest cable television company exited bankruptcy and offered stock for
sale to the public, Bloomberg News reported. Maxcor, the parent of Euro
Brokers Inc., said the suit, filed with the state Supreme Court in New
York, seeks a 'uniform and permanent resolution' of the trade disputes,
the newswire reported. Investors who sold prospective shares while NTL
was in bankruptcy earlier this year, balked when the company decided to
issue one quarter as many shares as it had originally planned. By filing
in state court, Maxcor spurned an offer by U.S. Bankruptcy Judge
Allan Gropper, who said he'd handle the disputes on a case-by-case
basis if they were filed in his court. 'Maxcor filed its suit in New
York State Supreme Court -- a court with broader jurisdictional reach,'
the company said in a statement, Bloomberg reported.
Berkshire Hathaway to Buy Burlington Industries
Bloomberg News reported that Warren Buffett's Berkshire Hathaway Inc.
will buy bankrupt Burlington Industries Inc. for $579 million in cash.
Burlington would become a subsidiary of Berkshire Hathaway after the
sale is completed, Burlington said in a press release. As part of the
sale, unsecured creditors would receive cash and other assets worth as
much as 35 percent of their claims, the newswire reported, and
shareholders would receive nothing. Shares of the Greensboro, N.C.-based
Burlington fell 4 cents to less than one cent at 3:54 p.m. in
over-the-counter trading.
Kmart Asks Court to Hold Former Supply-chain Chief in
Contempt
Bankrupt Kmart Corp. asked a U.S. Bankruptcy Court judge to hold its
former supply-chain chief in contempt, according to Bloomberg News.
Anthony D'Onofrio hasn't complied with several subpoenas issued as part
of the Troy, Mich.-based company's investigation into its management
prior to its chapter 11 filing, Kmart said in documents filed with the
U.S. Bankruptcy Court for the Northern District of Illinois.
Owens Corning Bankruptcy Plan Criticized Over Asbestos
Claims
Credit Suisse First Boston and other creditors of Owens Corning, the
biggest
U.S. insulation maker, oppose a plan they say would give too much of the
bankrupt company's remaining assets to asbestos victims, Bloomberg News
reported. A reorganization proposal to value asbestos-related claims at
$16 billion would leave less money for Owens Corning's bank lenders,
bondholders and other creditors, said attorney Andrew Rahl, according to
the newswire. The New York lawyer represents a group of bondholders,
including John Hancock Life Insurance Co. and Jackson National Life
Insurance Co., an affiliate of Prudential PLC. Creditors plan to ask a
bankruptcy judge to reduce the $16 billion valuation on grounds that it
is excessive, reported Bloomberg. The tactic may delay Owens Corning's
bid to end its 26-month bankruptcy, which was triggered by hundreds of
thousands of asbestos claims. Owens Corning plans to spell out its plan
in greater detail in the U.S. Bankruptcy Court in Wilmington, Del., by
March 14, said company attorney Norman Pernick, the newswire
reported.
UAL Creditors Will Object to Terms of CEO's Compensation
The $8.45 million compensation package for UAL Corp.'s CEO is being
challenged by creditors who say contract terms are unreasonable,
according to a court filing by the bankrupt air carrier, reported
Bloomberg News. The parent of United Airlines, the world's
second-largest carrier, said in a bankruptcy court filing that a
committee representing creditors has provided a draft of 'anticipated
objections' to Glenn Tilton's contract, the newswire reported. UAL,
which filed the largest airline bankruptcy on Dec. 9, is asking the
court to reject the committee's request to question Tilton. In addition
to challenging the terms of Tilton's contract, creditors claim the UAL
board was misinformed when it approved the agreement, according to the
court filing. UAL's filing denies the claims by the creditors'
committee, which includes a representative of the flight attendants
union, Bloomberg reported. A hearing on UAL's request that the court bar
the committee from taking depositions from Tilton and board member
Richard McCormick was scheduled for Thursday.
Northwest Air Seeks Up to $1.5 Billion in Cuts to Avoid
Bankruptcy
Northwest Airlines Corp., the fourth-largest U.S. carrier, told its
employees that the company needs to cut as much as $1.5 billion in
annual expenses to avoid a bankruptcy filing, reported Bloomberg News.
The company's costs must be in the same range as those of UAL Corp.'s
United Airlines and US Airways Group Inc., which are reducing pay and
benefits and changing work rules as part of bankruptcy reorganizations,
Northwest said in a newsletter, the newswire reported. 'We will
significantly restructure our costs either through an evolutionary
process or through the more revolutionary process underway at United and
US Airways,'' Chief Executive Richard Anderson said in a 'special
edition' of the employee newsletter, Bloomberg reported.
US Airways Wins Conditional Loan Guarantee After Revising
Plan
US Airways Group Inc., the seventh-biggest U.S. carrier, won conditional
approval for a $900 million loan guarantee based on its revised business
plan, a U.S. regulatory board said, Bloomberg News reported. The board,
which first gave US Airways conditional loan approval last July,
unanimously approved the loan subject to conditions such as getting
labor concession agreements, according to a letter to US Airways Chief
Executive Officer David Siegel from the review board's executive
director, Daniel Montgomery, the newswire reported. US Airways filed for
bankruptcy protection last August.
MagCorp Creditors Want Trustee Named Or Case Converted
Dow Jones Newswires reported that an ad hoc committee of noteholders is
asking a bankruptcy court to appoint a trustee to take the reins of
Magnesium Corp. of America's chapter 11 case or convert the case to a
chapter 7 liquidation. Magnesium Corp. filed an objection to the motion
on Monday. The committee said it wants a trustee to pursue possible
claims against third parties on behalf of MagCorp's creditors, the
newswire reported. The potential claims include actions challenging
amounts transferred to the group in the form of dividends and preferred
stock redemptions, which it said weren't for fair value. A hearing on
the request is scheduled for Friday in the U.S. Bankruptcy Court in
Manhattan.
Maxxim Medical Group Seeks Bankruptcy Protection From
Creditors
Maxxim Medical Group Inc. sought bankruptcy protection from creditors
after
struggling under heavy debt, Bloomberg News reported. In a chapter 11
petition filed in U.S. Bankruptcy Court in Delaware yesterday, the
company listed more than $100 million each in assets and liabilities,
including more than $192 million in senior notes due in 2009 and 2010.
Among Maxxim's largest unsecured creditors listed in court papers are
Wembley Rubber Products of Malaysia, owed $3.59 million for inventory,
and auditor Arthur Andersen LLP, owed $2.07 million in consulting fees,
reported the newswire.
Lender's CEO Got Million-dollar Deal on Exit
The founder of a collapsed Ohio health care financier secured a $1.2
million annual consulting contract from his company the day he resigned
under pressure from creditors and investors, court documents show, the
Washington Post reported. Lance K. Poulsen, who stepped down as
chief executive of National Century Financial Enterprises Inc. on Nov.
8, received approval for the contract -- the amount of his base pay --
from his wife and other company directors, according to his testimony.
They said his departure 'was in the best interests of the firm,'
according to a transcript of the hearing in federal bankruptcy court
last week. To read the full article, point your browser to
href='http://www.washingtonpost.com'>www.washingtonpost.com.
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