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January 5, 2005
Fed Seems Likely to Lift Rates More
Federal Reserve officials’ increased wariness about inflation
will probably impel them to keep raising interest rates, minutes to the
central bank’s last policy meeting suggest, the Wall Street
Journal reported. “With the economic expansion more firmly
entrenched, cost and price pressures were likely to become a clearer
intermediate-term risk to sustained good economic performance,”
absent further interest-rate increases, according to the minutes,
released yesterday. The minutes suggest that the Fed is less likely to
pause in its interest-rate increases this year than markets may have
expected, the online newspaper reported.
Frist to Push Class Action Next Month
A bipartisan bill to overhaul the rules for class-action lawsuits
will move to the Senate floor early next month, Senate Majority Leader
Frist (R–Tenn.) said yesterday, CongressDaily
reported. “I’m confident we’ll pass this bill and take
a big first step to restoring sanity and fairness to our legal
system,” Frist said in his opening floor remarks. Senate Finance
Chairman Charles Grassley (R–Iowa), chief sponsor of last
year’s class-action bill, plans to reintroduce the legislation
shortly after Inauguration Day, according to a spokeswoman. House
Speaker Dennis Hastert (R–Ill.) also listed the legislation as a
top House GOP priority this year, the newswire reported.
Specter Seeking Common Ground On Asbestos Proposal
Senate Judiciary Chairman Arlen Specter (R–Pa.) plans to
circulate a draft of new asbestos legislation later this week and will
convene a hearing on Tuesday in a bid to find a compromise that will
allow the contentious issue to move forward, CongressDaily
reported. As part of a search for common ground, he will meet on Monday
with stakeholders in the debate over asbestos litigation. Although
senators cannot introduce legislation until later this month, Specter
said he hopes to publish a “discussion
draft”—including some blanks to be filled in later—by
the end of the week. Final legislation may be ready by early February,
Specter said, the newswire reported.
Judge Delays Trump Bankruptcy Ruling
A federal judge has delayed for a week a decision on proposed
bankruptcy financing for Trump Hotels & Casino Resorts Inc. so that
shareholders can review the company’s finances, Reuters reported.
A New Jersey bankruptcy court hearing will now be held Jan. 11 to review
the casino operator’s $100 million reorganization financing,
according to a court filing. The judge earlier this month cleared the
financing package, but held off on final approval pending comment from
shareholders, the newswire reported.
Delta Plans to Streamline Fare System
Delta Air Lines plans to start today a program to streamline its fare
system, capping economy-class fares at $499 each way and eliminating the
mandatory Saturday night stay, the New York Times reported.
While many low-fare companies already charge less than $499 for their
highest-priced tickets, the Delta program is the most extensive fare
adjustment by a traditional airline since a similar effort by American
Airlines in 1992. Northwest Airlines said such a program could
“immediately adversely and significantly affect” revenue in
the industry, which has lost $30 billion since 2000, the newspaper
reported.
United Air Creditors Oppose Deal with Pilots
United Airlines’ creditors, along with some banks and unions,
have joined the federal government in opposing a deal in which United
would terminate its pilots’ pension plan and offer the pilots
equity in the airline, the cite>New York Times reported. The
discussions will come in a federal bankruptcy court in Chicago tomorrow,
as the pilots are set to finish voting on the deal, which United reached
with the union leadership last month.
On Friday, United is set to begin a court battle to set aside
virtually all of its labor contracts, impose stringent new terms and
terminate all of its employee retirement programs, including the one for
the pilots, the newspaper reported.
In Coming Enron Trial, Prosecutors Hope to Show Lay Lied About
Firm
The central question in the coming trial is whether, in an ultimately
failed effort to prevent the firm’s collapse, Enron’s former
chairman and chief executive Kenneth Lay repeatedly lied to the public
about Enron’s financial condition in the months before the company
collapsed into bankruptcy proceedings in December 2001. Read the full
article at www.wsj.com (subscription
required).
MCI Doubles Offer to States, They Reject It
MCI Inc. has offered a group of states about $330 million to settle
back tax claims—twice as much as the company first
offered—but the states say it is still too little, a source
familiar with the issue said yesterday, Reuters reported. The long
distance telephone company might be able to settle the tax dispute with
all of the states, except Mississippi, for about $375 million, according
to the source, the newswire reported.
US Air Will Ask Court to Prohibit Any Strike
US Airways Group Inc. will try to stop any attempt by machinists to
strike if a federal court allows the carrier to throw out their
contract, a senior company official said yesterday, Reuters reported.
The executive, who spoke on the condition he not be named, said the
airline will ask a Virginia bankruptcy judge to prohibit a walkout. The
company believes a strike over the contract would violate U.S. labor
law, the newswire reported.