June 4, 2004

Asbestos Bankruptcies Face Setbacks on Two
Fronts

Efforts to resolve the asbestos-related bankruptcy
cases of several large companies were most likely hampered yesterday by
a federal district judge's decision to retire and by the filing of a
lawsuit in one case, the New York
Times reported. The judge, Alfred M. Wolin in Newark, plans to
retire at the end of the month, according to his deputy clerk, Gail
Hansen. Judge Wolin has overseen the bankruptcies of five companies
battling asbestos litigation: Armstrong
World Industries, Federal-Mogul,
Owens Corning,
USG and W.R. Grace. Judge Wolin's retirement comes after an appellate
court ruled that he should recuse himself from at least three asbestos
cases.

Lawyers said his decision could delay proceedings
while a new judge learns the details of the cases. Separately, a lawsuit
brought against a well-known plaintiffs' lawyer who helped negotiate a
settlement in another bankruptcy case could upend that proceeding. The
lawsuit, filed in federal court in Manhattan, contends that the lawyer,
Joseph F. Rice, and his firm, Motley Rice, had a conflict of interest,
the newspaper reported.

Job Growth Strong in
May

U.S. employers added an unexpectedly large 248,000
jobs in May, according to a government report today, Reuters reported.
The May results exceeded Wall Street expectations for 216,000 new jobs
and followed an upwardly revised total of 346,000 jobs in April and
353,000 in March. The 947,000 jobs created in the March-May period made
it the strongest for any three months in four years. The evidence of
accelerating economic activity is certain to reinforce expectations that
Federal Reserve policy-makers will raise interest rates up from current
46-year lows when they meet June 29-30, the newswire
reported.

Enron Defendants Say
Evidence Was Withheld: Ex-CFO's Statements Key to
Case

Defense lawyers in the first criminal case of former
Enron Corp. executives set for trial asked a federal judge yesterday to
examine whether prosecutors withheld key evidence until days before the
trial was to begin, the Washington
Post reported. The lawyers said that prosecutors didn't turn over
statements from former Enron CFO Andrew S. Fastow that might help their
clients until two days ago -- a week before jury selection begins. The
statements, in the form of notes from an interview the FBI conducted
with Fastow, show that Fastow did not use the words 'promise' or
'guarantee' in a crucial December 1999 phone call with executives at
Merrill Lynch & Co., the Post
reported.

Continental Sees
Possible Furloughs

Continental Airlines CEO Gordon Bethune said on
Thursday that furloughs and wage concessions could be needed sometime
this fall if jet fuel prices remain high, Reuters reported. The
Houston-based airline recently said high oil prices could force it to
consider wage concessions and furloughs along with reduced pension
funding, but it had not identified a timetable. 'Revenue has to go up,'
said Bethune, who testified earlier on Thursday on Capitol Hill about
the state of the airline industry. 'Or the price of oil has to go
(down).' Continental has been one of the most aggressive airlines in
trying to impose fuel surcharges, although most have failed to stick,
the newswire reported.

Court Orders Kaiser To Sell
Refinery Stake To Hydro

A U.S. Bankruptcy Court ruled
that aluminium producer Kaiser Aluminum Corp. should proceed with its
sale of its interests in a Jamaican alumina refinery to Hydro Aluminium
A.S., Reuters reported. Hydro, which had the right of first refusal on
the sale, is buying it for $295 million plus adjustments of about $20
million. The deal is
expected to result in a pre-tax gain of about $100 million.



Pegasus Satellite TV Files for Chapter 11

Shares of Pegasus Communications Corp. decreased as
much as 32 percent on Thursday, a day after the company said its
satellite television subsidiary filed for chapter 11 bankruptcy
protection, Reuters reported. Pegasus made the filing on Wednesday after
DirecTV terminated an exclusive agreement that allowed it to distribute
DirecTV service in rural areas. Pegasus said it will fight the move,
which it called 'unlawful,' and said bankruptcy protection was the best
way for it to continue to serve its customers. The company would seek a
ruling from the bankruptcy court to restore the contract, as well as
damages from DirecTV and NRTC, the newswire reported.

size='3'>General Counsel Compensation in the Crosshairs?




size='3'>New York Attorney General Eliot Spitzer's recent lawsuit
against Richard Grasso marks a turning point in executive compensation,
the Recorder reported. But while executive compensation is
in the spotlight, the compensation of chief legal officers could be in
line for particular scrutiny. The unique role of in-house attorneys has
already led to new rules for reporting corporate fraud to outside
regulators. Some compensation experts say a re-evaluation of the top
lawyer's pay package would not be a surprising development. Read the
article at
href='http://www.law.com/jsp/article.jsp?id=1085626373650'>
face='Times New Roman'
size='3'>http://www.law.com/jsp/article.jsp?id=1085626373650.

size='3'>Class Action Yields $60.7 Million in Legal Fees



A
face='Times New Roman' color='#333333' size='3'>federal judge has
awarded more than $60.7 million in attorney fees to the team of lawyers
who brought a class action antitrust suit against the leading
manufacturers of corrugated paper products and secured more than $202
million in settlements,
class='subtext1'>The Legal Intelligencer reported.
class='text1'>'The
lawyering in the case at every stage was superb,' Senior U.S. District
Judge Jan E. DuBois wrote in his 37-page decision in In re:
Linerboard Antitrust Litigation. Read the article
at
href='http://www.law.com/jsp/article.jsp?id=1085626375360'>
face='Times New Roman'
size='3'>http://www.law.com/jsp/article.jsp?id=1085626375360.

Ex-Executives of Symbol
Technologies Charged With Fraud

Seven former senior executives of Symbol Technologies were
indicted yesterday in an accounting fraud scheme that the chief federal
prosecutor in the case called 'breathtaking in its scope,' the
face='Times New




Roman'>New
York Times reported. According to the Justice Department, the
wide-ranging deception ran from 1999 to 2002, inflated Symbol's reported
revenues by more than $200 million, and involved nearly its entire
former management team, including the chief executive, chief financial
officer and senior vice presidents for operations, sales and finance,
the newspaper reported.

Kmart to Sell Stores to Home
Depot

Kmart Holding Corp. today said
it will sell up to 24 stores to home improvement chain Home Depot Inc.
for up to $365 million as part of its strategy to improve profit after
emerging from bankruptcy last year, Reuters reported. The exact number
of stores, locations, and total sales price will be based on the
satisfaction of certain conditions to occur within the next 60 days,
Kmart said. The discount retailer, which operates more than 1,500
stores, closed 600 of its stores while in bankruptcy between January
2002 and May 2003, the newswire reported.

Children's Place
Interested in Disney Store Chain

The Children's Place Retail Stores on Thursday became
the first potential buyer to disclose that it is in discussions with the
Walt Disney Co. about buying its Disney Stores business in the United
States and Canada, Reuters reported. A Disney spokeswoman
declined comment on the situation but confirmed that the number of
Disney Stores in North America now stands at 323. Disney does not break
out Disney Store results, but analysts have estimated that it is losing
as much as $50 million a year, the newswire reported.