February 4, 2000
White House Comments on Bankruptcy Overhaul
When questioned yesterday about whether President Clinton is
prepared to veto the bankruptcy bill as passed by the Senate this week,
White House spokesman Joe Lockhart said, 'No, not that I'm aware of.
No,' The Washington Post reported today. He went on to say, 'We
believe that the Senate bill has actually fixed many of the problems
that exist in the House bill. There are a number of areas where
improvements were made as far as rights for consumers in the Senate
bill. There are a few areas that we still have a remaining concern,
which we hope to work out in conference. It depends on what bill comes
out of conference, so if it's a bill that looks like the House bill, the
president won't sign it...' Lockhart then said, 'Now, as far as the
minimum wage provision, I think we've been very clear on that. This
minimum wage provision is too slow. It should be two years rather than
three years...This is a case where you have millions of Americans who
are struggling to get by, who deserve a raise. And that ought to be
done, and it ought not be done in a way that provides special interests
and those who are doing very well extra benefits...as a payoff here.'
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Lobbyists Discuss Conference on Reform Bills
Now that both the House and Senate have passed bankruptcy
reform bills, the two must develop one bill in conference to send to the
White House. The Wall Street Journal reported that
Philip Corwin of Federal Legislative Associates, which
represents the American Bankers Association, said 'Any final bill will
fall somewhere between the House and Senate versions, but we hope the
final bill will include the House approach on consumer bankruptcy
issues, including needs-based bankruptcy.' Frank Torres, a Washington
lobbyist for the Consumers Union, publisher of Consumer Reports
magazine, said, 'There's a lot in this bill that can hurt consumers.'
Consumer groups have criticized both versions of reform. Meanwhile, the
bank, retail and credit card industry advocates estimate that consumer
bankruptcies cost them about $40 billion a year. Mallory Duncan, a
lobbyist for the National Retail Federation, said 'Bankruptcy filings
are four times higher than they were during the bad economic times of
the 1980s.' Ironically, it is not these types of provisions in the bill
that will be controversial in reaching a final bill in conference, but
the minimum wage increase.
Realtors Association Applauds Senate for Passing S. 625
The National Association of Realtors (NAR), a trade association
representing more than 750,000 members involved in residential and
commercial real estate, has applauded the Senate's approval of
bankruptcy reform legislation, according to a newswire report. NAR
President Dennis R. Cronk released a statement that saying that the
passage of the legislation is 'an important win for commercial real
estate owners nationwide....The bill...contains key provisions to
eliminate a cap on the value of properties involved in single-asset
bankruptcy cases, close the loophole on residential tenant abuse and
provide protection for shopping center owners.'
New York Bagel Files Chapter 11
New York Bagel Enterprises Inc., Stillwater, Okla., announced
that it has filed for chapter 11 protection and that it expects to
liquidate the company and submit a plan of liquidation to the court in
the near future, according to a newswire report. The company also plans
to keep restaurants open during the liquidation process. New York Bagel
owns and franchises New York Bagel restaurants and owns Lots A'Bagels
restaurants.
AutoInfo Announces Pre-packaged Chapter 11
AutoInfo Inc., Stamford, Conn., announced that it has filed a
disclosure statement and reorganization plan under chapter 11, according
to a newswire report. The company said that the plan provides for the
issuance of one share of common stock and a cash payment of $.03 for
each dollar of approximately $9.5 million of unsecured debt. AutoInfo
said that the requisite number and dollar amount of its unsecured
creditor group has voted to support the plan.
American HealthChoice Updates Status of Reorganization
American HealthChoice Inc., Irving, Texas, announced that the
company is in the process of completing its plan of reorganization,
which it expects to file by the third week of February, according to a
newswire report. A component of the plan is the conversion of about $3.4
million of secured debt into equity. American HealthChoice has executed
a letter of intent to acquire three established clinics in South Texas
for $6 million with $900,000 in cash at closing and the remainder in a
note. The acquisition and future working capital requirements are
expected to be funded through an infusion of about $1.5 million in new
equity. American HealthChoice is a provider of health care services and
operates primary care clinics in Texas and Louisiana.
Value City to Acquire Filene's Basement
Discount retailer Value City Departments Stores Inc., Columbus,
Ohio, announced it will buy Filene's Basement Corp., the discount
clothing and home goods retailer which is in bankruptcy, according to
Reuters. Per an agreement the companies signed, Value City will pay
$12.5 million in cash and stock to acquire substantially all of the
assets and assume certain liabilities of Filene's Basement. The retailer
filed for chapter 11 protection in August, and the deal, subject to
court approval, is expected to be completed by mid-March. Filene's
Basement operates 14 Filene's Basement stores and eight Aisle 3 stores.
Value City operates 105 discount department stores, mostly in Ohio,
Pennsylvania and other Midwestern and mid-Atlantic states. It also owns
and operates 58 DSW Shoe Warehouse stores.
AgriBio Tech to Put Bankruptcy Updates on Web Site
AgriBio Tech Inc. (ABT) will include an extensive section on
its chapter 11 case, including a schedule of events and a link to the
Las Vegas bankruptcy court, where its case was filed, on its web site
href='http://www.agribio%20tech.com/'>(http://www.agribio
tech.com) within a few days, according to a newswire report. The
petitions for the company and its subsidiary were filed onJan. 25 in the
District of Nevada, and Pachulski, Stang, Ziehl, Young & Jones is
serving as bankruptcy counsel. Financial expertise is being supplied by
the Corporate Restructuring Group of Arthur Andersen's Los Angeles
office. ABT does not yet have a post-petition financing agreement and is
negotiating with its current lending syndicate, led by Bank of America
Business Credit, for that financing.
Nextel Seeks FCC Waiver to Bid for Wireless Licenses
Nextel Communications Inc., Reston, Va., has asked the Federal
Communications Commission (FCC) for permission to bid at an upcoming
auction of airwave licenses usually reserved for small companies, the
FCC said yesterday. Previously Nextel had sought to acquire many of the
licenses that bankrupt NextWave Telecom Inc. holds for more than $8
billion. Last month the FCC moved to strip NextWave of the licenses to
re-auction them, but the bankruptcy court has rejected the cancellation
of those licenses. The FCC plans to appeal.
Investors Acquire Bee-Gee Shoes from Elder-Beerman
Paragon Capital, Needham, Mass., announced yesterday that it
will provide a $10 million line of credit to Bee-Gee Shoe Acquisition
Inc., a wholly-owned subsidiary of Jam Shoe Concepts, Dayton, Ohio,
according to a newswire report. Jam Shoes operates throughout the
Midwest under the names Shoebilee! and El-Bee Shoe Outlet. A team of
investors is forming the company, after acquiring Bee-Gee Shoe Corp.
from department store chain Elder-Beerman Stores Inc. Elder-Beerman
filed chapter 11 in 1995, and before it emerged in 1997, it scaled back
its Bee-Gee operations. Last fall, in order to focus on its core
businesses, Elder-Beerman announced that it would sell Bee-Gee to an
investor team.
U.S. Leather to Close Milwaukee Plants
United States Leather Inc., which was taken over by creditors
in 1996 but emerged from bankruptcy two years later, announced that it
will close its Milwaukee operations, according to the Associated Press.
Citing 'adverse business conditions in the global footwear market,' U.S.
Leather will lay off about 600 workers and close the 152-year-old
Pfister & Vogel Tannery. The company will continue to operate or
sell plants in North Carolina, Nebraska, Texas, Indiana and Ontario that
make leather for furniture, cars and equestrian gear. Teamsters Local
270 is planning an 'attack,' stating that there are laws that need to be
met, such as 60-day notice of a plant closing. Workers were only given a
few days notice.
Two Bankruptcy Judgeships Available in Eastern District of
California
The U.S. Courts for the Ninth Circuit is recruiting for two
positions on the Bankruptcy Court for the Eastern District of
California. Chambers for the new judges will be in Fresno and Modesto,
Calif. Completed applications must be received by March 31. Visit ABI's
bankruptcy court employment area for details at
href='/employment/listings.html'>http://www.abiworld.org/employment/listings.html.
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