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April 13, 2005
March Retail Sales Weaker Than Expected
U.S. retail sales rose 0.3 percent in March, the Commerce Department
said today, falling short of expectations after a sharp downturn in
department store and clothing sales, Reuters reported. Wall Street had
forecast a 0.7 percent rise in retail sales last month due to higher
gasoline prices and based on assumptions that consumers would stock up
on spring clothing. February’s number was unchanged at 0.5
percent.
House to Consider Bankruptcy Bill Tomorrow
Tomorrow, the House will meet at 10:00 a.m. to begin debate on the
bankruptcy bill. Despite strong opposition from many Democrats, the
House is expected to approve the bill by a wide margin, clearing the way
for the president’s signature.
Key Republicans Hold Off Supporting Asbestos Measure
Key Republican senators on Tuesday continued to withhold their
support for asbestos legislation, even though the latest draft
circulated by Judiciary Chairman Arlen Specter (R–Pa.) picked up
some Democratic endorsements, CongressDaily reported. Some
Republicans suggested changes to the draft, which Specter characterized
as “refinements… that do not go to the core principles of
the bill.” Other Judiciary panel Republicans who met with Specter,
including Sens. John Cornyn (R–Texas) and Tom Coburn
(R–Okla.) were not ready to endorse the proposal, saying they
still had to review it and were hoping for a few changes. “I think
in the next week or two we’ll have a better product, closer to
what we could support,” Cornyn said, the newswire reported.
Delta Shares Fall as Analyst Cites Bankruptcy Risk
Shares in Delta Air Lines Inc. fell as much as 9 percent yesterday
after brokerage Fulcrum Global Partners cut its recommendation, citing
an increased risk of bankruptcy, Reuters reported. Delta shares were
down 29 cents, or 7.4 percent, at $3.65 in morning trading on the New
York Stock Exchange, underperforming a 1.8 percent decline in the Amex
Airlines index. “Our downgrade from ‘buy’ to
‘neutral’ is based on the risk of a bankruptcy
heightening,” analyst Susan Donofrio wrote in a research report,
the newswire reported.
Airline Investment Limit Seen as Outdated
As the U.S. airline industry slumps into its worst crisis in years,
some executives and analysts say the time is ripe to repeal a 1938 law
barring foreigners from owning more than a quarter of U.S. carriers,
Reuters reported. Such a move could provide a source of cash for the
industry as record fuel costs threaten to push more airlines into
bankruptcy. It could also clear the way for the cross-border mergers and
acquisitions that are common in nearly every other industry, the
newswire reported.
Gate Gourmet Creditors Expect Rescue Plan
Creditors of the troubled Swiss and U.S. airline catering company
Gate Gourmet expect a rescue plan this week after it missed a debt
repayment deadline, sources close to creditors told Reuters yesterday.
The airline catering firm missed debt interest payments in December and
a three-month freeze on a bankruptcy filing expired on Monday.
“We’re expecting a sensible proposal from the company and
shareholders Texas Pacific Group this week,” a source close to
creditors said. Discussions between the company and its creditors were
ongoing, a second creditor source said, while a third creditor source
said bankruptcy was a possibility but not this week, the newswire
reported.
Washington Post–ABC News Consumer Comfort Index Survey
The Post-ABC Consumer Comfort Index has released a consumer comfort
index survey based on telephone interviews with 1,000 randomly selected
adults. New data is released every Tuesday at 5 p.m. EDT. View the
survey at
href='http://www.washingtonpost.com/wp-srv/business/interactives/consumercomf…'>www.washingtonpost.com/wp-srv/business/interactives/consumercomfort/con….
Judge to Dismiss 3 Counts of Perjury Against Scrushy
A federal judge indicated on Tuesday that she would dismiss three
perjury charges from the 58 total counts against Richard M. Scrushy, the
Associated Press reported. Opening court after a weeklong break for
jurors, United States District Judge Karon O. Bowdre granted a defense
motion to bar jurors from hearing evidence about Scrushy’s sworn
statement to an investigator from the Securities and Exchange
Commission. Scrushy was charged with three counts of perjury for
allegedly lying during the statement, given in 2003.
Winn-Dixie Bankruptcy Case Moved to Florida
Winn-Dixie Stores Inc. said on Tuesday the U.S. Bankruptcy Court
agreed to move its chapter 11 bankruptcy case to Florida from New York,
Reuters reported. The case was moved to the Jacksonville Division of the
Middle District of Florida from the Southern District of New York,
Winn-Dixie said.
Liquidator’s Revenue Declines
Liquidation World Inc. saw its revenue drop more than 10 percent in
its latest quarter, mostly because of hefty bankruptcy business the
previous year, the Calgary company said yesterday, Montreal
Gazette reported>. Liquidation World said its revenue for the 13
weeks ended April 2—the second quarter of fiscal 2005—fell
10.1 percent to $39.3 million from $43.7 million. For the six-month
period, revenue fell 3.4 percent to $91 million from $94.2 million for
the same 2004 period.