Clinton Vetoes Bankruptcy Legislation
President Clinton vetoed the bankruptcy reform legislation (H.R. 2415)
yesterday that proposed the most sweeping changes in the bankruptcy law
in 20 years because he said it was unfair to ordinary debtors and
working families who fall on hard times, according to the Associated
Press. Clinton favors revamping the bankruptcy laws but thinks the
current bill is not evenhanded. “I would have signed a
balanced bankruptcy reform bill that addressed known abuses without
tilting the playing field against those debtors who genuinely turn to
bankruptcy for a fresh start,” Clinton said. The president
said the bill would allow debtors who own expensive homes to shield
their mansions from creditors while debtors with moderate incomes,
especially renters, must live frugally and comply with rigid payment
plans for five to seven years.
“This loophole for the wealthy is fundamentally unfair and must
be closed,” he said. The president also criticized the
bill's failure to address the abusive use of the bankruptcy laws by
anti-abortion activists who espouse and practice violence at health care
clinics and then use bankruptcy as a shield against liability.
By leaving the Bankruptcy Reform Act of 2000 unsigned, the president
issued a pocket veto, the fourth indirect veto of his
administration. By waiting until the lame-duck congressional
session adjourned before vetoing it, he deprived lawmakers of the chance
to override the veto.
Senators React to
Presidential Veto
Sen. Paul Wellstone (D-Minn.), one of the main opponents of the
controversial bankruptcy bill, praised President Clinton yesterday after
the president issued a pocket veto of the bankruptcy reform legislation
(H.R. 2415). “I commend the President for his leadership in
pocket vetoing the harsh bankruptcy reform bill passed by the
Congress,” Wellstone said. “This is a tremendous
victory for working families made all the more significant because it
was a triumph in the face of enormous odds.” He said he
would craft new bankruptcy legislation in the 107th Congress
and promised to push legislation that promotes the economic security of
working families to address the root causes of bankruptcy such as
overwhelming medical bills.
Wellstone referred to the legislation as a David vs. Goliath fight,
calling it ill conceived, unjust and imbalanced. But supporters of
the overhaul, which was strongly backed by banks and credit card
companies, say current law encourages bankruptcies of convenience by
people who could afford to pay back some of their debts, burdening
businesses and the economy and driving up the cost of credit for
everybody else.
“President Clinton let the American people down,” said
Sen. Charles Grassley (R-Iowa), the legislation's chief sponsor.
“This veto means ... that consumers will continue to pay higher
prices for goods and services due to the exploding number of
bankruptcies.”
Changes Slated For Judiciary
Committee
Republican Sen. Jeff Sessions of Alabama is slated to take over the
Senate Judiciary Administrative Oversight and the Courts Subcommittee
— the panel with primary jurisdiction over bankruptcy reform
— when current Subcommittee Chairman Charles Grassley (R-Iowa)
leaves to chair the Finance Committee, according to
CongressDaily. Prior to adjournment, Sessions said he would
make bankruptcy reform and legislation his top priorities and make
moving bankruptcy legislation one of his first orders of business.
Sources noted, however, that Sessions would have an interesting
challenge depending on who becomes the subcommittee’s ranking
member. While Grassley was paired with Sen. Robert Torricelli
(D-N.J.), a key proponent of the legislation, Sessions could wind up
with Sen. Russell Feingold (D-Wis.), the most senior democrat on the
subcommittee behind Torricelli and one of the leading opponents of this
year’s bankruptcy legislation.
Winn-Dixie To Buy Grocery Stores, Fuel
Centers From Jitney Jungle
Winn-Dixie Stores Inc. yesterday announced that it has received
approval from the bankruptcy court to purchase 68 grocery stores and 32
fuel centers from Jitney-Jungle Stores of America Inc., according to a
newswire report. The closing is planned for January and is subject
to final governmental approval. The Jitney-Jungle companies,
headquartered in Jackson, Miss., have been operating under chapter 11
since Oct. 12, 1999. Four stores in Mississippi and Florida were
removed from the list that Winn-Dixie originally agreed to
purchase. Winn-Dixie has agreed to pay about $80.2 million plus
inventory for the stores that currently generate about $625 million in
annual sales. Winn-Dixie Stores Inc. is one of the nation's
largest supermarket retailers.
Aaron Rents Acquires Leases on 27
Heilig-Meyers Locations
Aaron Rents Inc., the nation's leader in the rental, rental
purchase and specialty retailing of residential and office furniture,
consumer electronics and home appliances, yesterday announced that it
has acquired 27 real estate leases auctioned off through bankruptcy
court proceedings by Heilig-Meyers, according to a newswire
report. In addition to these leased facilities, the company also
acquired one store in which the real estate was owned by
Heilig-Meyers. The Atlanta-based Aaron Rents plans to reopen these
stores over the next two quarters in its rental purchase division as
Aaron's Sales and Leasing stores. Aaron Rents Inc. controls more
than 545 company-operated and franchised stores in 42
states.
ICG Communications Says Nasdaq to Delist
Company
Telephone and Internet services firm ICG Communications Inc. said that
the Nasdaq had decided to delist the company's shares effective Monday
as a result of the company's chapter 11 filing in November, according to
a Reuters report. The Englewood, Colo.-based ICG filed for chapter
11 on Nov. 14. Earlier this month, both its chief financial officer and
president resigned.
ElderTrust Announces Tentative Agreement to
Extend Bank Credit Facility Term
ElderTrust, a health care real estate investment trust (REIT),
yesterday reported that it has reached a tentative agreement with German
American Capital Corp. to further extend the term on its bank credit
facility, according to a newswire report. Under the new agreement,
the credit facility would be extended from June 30, 2001 to Aug. 31,
2002 and the extension would be contingent upon the completion of
previously announced agreements with Genesis Health Ventures Inc. and
The Multicare Companies.
The Kennett Square, Pa.-based ElderTrust is an REIT that invests in
real estate properties used in the health care services industry,
principally along the east coast. Since commencing operations in
January 1998, and without giving effect to the agreements with Genesis
and Multicare, the company has acquired direct and indirect interests in
31 buildings and has loans outstanding of $31 million, net of allowance,
in construction and term financing on eight additional health care
facilities.
Kaiser Group International Announces Formation of Kaiser Group
Holdings
Kaiser Group International Inc. announced that its reorganization plan,
which was confirmed by the U.S. bankruptcy court for the District of
Delaware, became effective today, according to a newswire report.
As a result, Kaiser Group International Inc. is now solely-owned by
Kaiser Group Holdings Inc., a newly formed Delaware corporation and a
successor issuer to the Fairfax, Va.-based Kaiser Group International
Inc.
MotherNature.com Announces Initial
Distribution of Liquidation Proceeds
MotherNature.com Inc. yesterday announced that it anticipates
making an initial distribution of liquidation proceeds to stockholders
of record on Dec. 27. The Concord, Mass.-based company's
stockholders had previously approved a complete liquidation plan and
dissolution. MotherNature.com Inc. is an online retailer of
vitamins, supplements, minerals, and other natural and healthy living
products.
DIMAC to Exit From Bankruptcy Next
Month
DIMAC Corp. yesterday announced that its reorganization plan has been
approved by the U.S. Bankruptcy Court in Wilmington, Del., setting the
stage for the company to emerge from chapter 11, according to a newswire
report. The plan received support of all major constituencies,
including the St. Louis-based company's secured bank lenders and its
Official Unsecured Creditors Committee.
At the confirmation hearing, the court approved the plan, under which
a line of credit of $20 million will be extended to the company by its
lenders in the form of an 18-month term loan, which will provide
sufficient liquidity when the company exits chapter 11. DIMAC's total
debt will be reduced from about $391 million to $122 million plus about
$31 million in preferred stock. Annual cash interest expense will be
lowered from over $39 million to less than $10 million. DIMAC and
its subsidiaries filed voluntary petitions for reorganization under
chapter 11 on April 6.
Dynacore Holdings Corp.’s Amended
Reorganization Plan Becomes Effective
Dynacore Holdings Corp., formerly known as Datapoint Corp., yesterday
announced that its amended chapter 11 reorganization plan was confirmed
by the U.S. Bankruptcy Court for the District Court of Delaware and
became effective on Dec. 5, according to a newswire report. The
company has remitted about $33.3 million to the Indenture Trustee for
certain pre-bankruptcy convertible subordinated debentures for
distribution to the debenture holders. Distributions to other unsecured
creditors are to be made directly by the San Antonio-based company.
After cash distributions and certain other expenses, Dynacore will
have about $7 million in available cash, as well as its interests in the
Corebyte Networks(tm) product family and 56.5 percent of the Dynacore
Patent Litigation Trust.
Imperial Home Decor Group Inc. Files Reorganization
Plan
Taking a major step toward emergence from chapter 11, the Imperial Home
Decor Group Inc. (IHDG) filed a reorganization plan and disclosure
statement with the U.S. Bankruptcy Court for the District of Delaware,
according to a newswire report. The court will conduct a hearing
on the adequacy of the disclosure statement on Jan. 31. Should the
disclosure statement be approved at that time, IHDG will commence
solicitation of votes for approval of its plan of reorganization.
The Cleveland-based IHDG also said that it has filed an application
with the court to extend the period in which the company has the
exclusive right to file and advance a plan of reorganization. The
company said it was seeking further extension, which the court will
consider in early January, to permit it additional time to complete the
process of obtaining creditor and court approval of its plan. IHDG
is the world's largest designer, manufacturer and distributor of
residential wall covering products.
SystemOne Technologies Announces Court Approval of Deal With
Safety-Kleen
SystemOne Technologies Inc., formerly Mansur Industries Inc., Monday
announced that its previously disclosed marketing and distribution
agreement with industry leader Safety-Kleen had received approval of the
U.S. Bankruptcy Court administering Safety-Kleen's chapter 11 case,
according to a newswire report. “We are pleased by the
court's approval of the transaction with Safety-Kleen,” Paul I.
Mansur, chief executive officer of SystemOne, said. “As no
creditors filed objections to the transaction with the court, we expect
that the agreement will be fully effective on or about the end of this
month upon expiration of the appeal period.”
The Miami-based SystemOne Technologies designs, manufactures, sells
and supports a full range of self-contained, recycling industrial parts
washing products for use in the automotive, aviation, marine and general
industrial markets.
APBNews.com Staff Returns After Paychecks Arrive
Once again, APBNews.com is back from the brink of death, but its days
could still be numbered, according to a newswire report. A month
behind on payroll, the web site's owner, SafetyTips.com, faced a
spontaneous staff mutiny on Friday. On Monday, the
Massachusetts-based company managed to deliver half of its missed
payments to the full-time editorial staff of 15. These staffers
are still due another check, which has promised to be delivered by this
Friday, said Hoag Levins, executive editor. Levins said the
newsroom continued normal operations on Monday. One APBNews
reporter who asked not to be identified said, “I'm skeptical about
the company's future, obviously. But I'll keep working if we get
paid.” The acclaimed crime news web site was saved from
bankruptcy court by SafetyTips.com in October.
Sun Healthcare Sells Subsidiary
Sun Healthcare Group has sold most of a money-losing medical supply
subsidiary to an Illinois company, according to the Associated
Press. Medline Industries Inc., a privately held company in
Mundelein, Ill., will pay Sun Healthcare $6 million in cash upon
closing, which is expected in January. Sun Healthcare, one of the
nation's largest nursing home operators, filed chapter 11 in October
1999. Since then, it has been selling off businesses and nursing homes
in an attempt to focus on money-making operations.
The subsidiary, SunChoice Medical Supply, employs 40 people at Sun
Healthcare’s corporate office in Albuquerque. A Sun
Healthcare spokesman said about 20 of those people will lose their jobs
after the sale. Medline will employ some workers, and others will remain
with SunChoice, which will continue to operate as a purchasing and
e-commerce company with Sun Healthcare Group as its sole customer.
Medline will sell to most of SunChoice's customers, including nursing
home operator Bridge Healthcare Corp., another Sun Healthcare
subsidiary.
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