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January 21, 2005
Economic Index Points to Growth
Lifted by gains in stock prices and consumer confidence, the index of
leading economic indicators increased 0.2 percent in December after
rising a revised 0.3 percent in November, the Conference Board said
yesterday, Bloomberg News reported. The rise in the index supported
statements this week by Federal Reserve officials that the United States
is in a sustained expansion. The index had fallen for five consecutive
months before November, the newswire reported.
MCI Buys Security Firm NetSec for $105 Million
MCI Inc. said yesterday it would buy NetSec Inc., a network security
service provider, for about $105 million cash, Reuters reported. MCI
said in a statement that the deal, expected to close within 30 days,
would accelerate its ability to deliver advanced network security
services by more than a year. Analysts said the deal would boost
MCI’s appeal to large corporations and government agencies.
Telecommunications companies such as MCI and AT&T Corp. have turned
to selling security systems and management of corporate networks as
revenues from their traditional voice and data businesses continue to
fall, the newswire reported.
Trump Equity Panel Tries to Stop Testimony
The committee representing equity holders of Trump Hotels &
Casino Resorts Inc. wants a bankruptcy court to block the
company’s financial adviser, UBS Securities LLC, from testifying
at a financing hearing Friday, the Associated Press reported. Meanwhile,
the casino operator filed reorganization value and financial projection
materials with the U.S. Bankruptcy Court in Camden, N.J., in connection
with its chapter 11 reorganization plan. Exhibits to the plan’s
disclosure statement reveal that UBS Securities estimates the
company’s reorganization value at between $1.75 billion and $2.15
billion, the newswire reported.
Debate Rages on over Same-sex Marriage
An attempt by a Florida same-sex couple, who got married last summer
in Massachusetts, to get recognition of their union in their home state
was
rejected on Wednesday when a judge dismissed their lawsuit, upholding a
federal law that lets states ban same-sex marriages, the Associated
Press reported. On Thursday, the Indiana Court of Appeals let
stand a state law that prohibits Indiana from recognizing same-sex
marriages, even those that take place in states where it is legal. Last
year, a federal bankruptcy judge in Washington state ruled the Defense
of Marriage Act constitutional when a lesbian couple sought to file for
bankruptcy as a heterosexual couple would. Read the full article at
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Dan River Bankruptcy Exit Confirmed
A U.S. Bankruptcy Court has confirmed Dan River’s plan of
reorganization, Inteletex.com reported. The company is expected to exit
bankruptcy on February 10, 2005, with debts of around $90 million, down
from more than $270 million when the bankruptcy cases were filed on
March 31, 2004. Under the plan, all of Dan River’s current common
stock will be cancelled and new shares issued to certain lenders and to
its unsecured pre-petition creditors.
Ex-CEO Follows Norvergence into Bankruptcy
Former Norvergence CEO Peter Salzano has now followed his telecom
company into bankruptcy, New York Daily News reported. In
his filing in bankruptcy court in Newark, Salzano estimated his debts at
$1 million to $10 million. Several government agencies are reportedly
investigating Norvergence, including the Internal Revenue Service, the
Department of Justice and the Federal Trade Commission, the newspaper
reported.
Private Equity Investors Wary of Regulated Utilities
Private equity investors are increasingly reluctant to pursue
regulated utilities, Reuters reported. Buying these utilities, which
typically dominate a market and have rates set by regulators, is looking
far more complicated after an Arizona commission last month blocked a
buyout of UniSource Energy. Meanwhile, private investment funds are
waiting to see whether a commission in Oregon will allow investor Texas
Pacific Group to buy Portland General Electric, a local utility that
Enron Corp. put up for sale as part of its bankruptcy proceedings, the
newswire reported.
Claimant Lawyers Want Panel Changed
Lawyers for people who contend they were sexually abused by Catholic
priests are asking a federal bankruptcy judge to replace several members
of a key panel with more victims, rather than people they view as church
sympathizers, the Associated Press reported. The lawyers for 62 alleged
victims said the so-called “claimants’ committee” has
too many Catholic Church “loyalists” who are unlikely to
push the Catholic Diocese of Spokane to fairly compensate victims. The
motion was filed this week with U.S. Bankruptcy Judge Patricia Williams,
the newswire reported.
In Re Twinkie Update: IBC Stockholders Group Gets
Lawyers
The judge in the Interstate Bakeries Corp. reorganization on
Wednesday granted the committee representing stockholders permission to
hire lawyers and financial advisers, Kansascity.com
reported. U.S. Bankruptcy Judge Jerry W. Venters approved the retention
of lawyers from the New York office of Sonnenschein Nath & Rosenthal
LLP as the committee’s legal representative, and Los
Angeles–based investment banking firm Houlihan Lokey Howard &
Zukin as its financial adviser. Their fees will be paid by Interstate
while it is in bankruptcy.
Delta and Continental Report Heavy Losses
Delta Air Lines said yesterday that it lost a record $2.2 billion in
the fourth quarter of 2004, seven times the loss it recorded in the
period in 2003, the New York Times reported. Continental
Airlines said it lost $206 million in the fourth quarter, or $3.12 a
share, including special charges. It had a profit of $47 million, or 47
cents a share, in the period a year before, the newspaper reported. The
reports by the two airlines were the latest from what has proved a
difficult quarter for the nation’s seven major carriers. Of the
five airlines that are not in bankruptcy protection, four lost money.
Only Southwest Airlines reported a profit for the quarter, the newspaper
reported.
Enron Employee Bonuses Win Court Approval
Enron Corp. won court approval to pay as much as $45 million in
bonuses to employees who are responsible for winding down the
company’s operations, Bloomberg News reported. Enron, which is
selling its assets to raise $12 billion to repay creditors, estimates
that employees will ultimately receive about $16.8 million in
bonuses.
Hawaiian Airlines Seeks Court Approval to Modify Pilots Pact
Hawaiian Airlines wants bankruptcy court approval to extend and
modify its labor contract with its pilots union, saying months of
negotiations have only resulted in a deadlock, the online Wall
Street Journal reported. In a press release yesterday, Hawaiian
Airlines said it requested a hearing on its motion for Feb. 14 and Feb
15. In the meantime, the carrier said it will continue to try and reach
an agreement with the Air Line Pilots Association.
U.S. Judge Deals Blow to YUKOS Case
A U.S. Bankruptcy Judge on Thursday dealt a blow to YUKOS’s
bankruptcy case, ruling that the Russian oil company cannot seek
information
about whether oil monopoly Gazprom illegally took part in the sale of
YUKOS’s main oil producing unit, Reuters reported. In her ruling,
U.S. Bankruptcy Judge Letitia Clark backed Gazprom’s former unit
Gazpromneft and said YUKOS fact-finding must be limited to issues
related to whether the U.S. court has jurisdiction in the case.