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July 20, 2005
Roberts the Supreme Court Nominee
President Bush nominated U.S. Court of Appeals Judge John G. Roberts
Jr. for the Supreme Court last night, surprising those who expected that
a female candidate would be chosen to replace the retiring Justice
Sandra Day O’Connor, reported the Washington Post.
Judge Roberts is a well-regarded litigator with conservative credentials
and friends in both parties. The president hailed Roberts as an
impressive legal figure who would interpret the Constitution and laws
rather than legislate from the bench.
href='http://www.washingtonpost.com/wp-dyn/content/article/2005/07/19/AR20050…'>Read
the full article.
Grassley Says Pension Bill Will Be Narrow in Scope
Although the House is moving ahead with plans to wrap pension
legislation into a broader retirement bill, Senate Finance Chairman
Charles Grassley (R–Iowa) said yesterday that pension legislation
he plans to introduce Friday will remain narrow in scope,
CongressDaily reported. Grassley also said his bill would
include relief from pension payments for the struggling airline
industry, a provision not included in pension legislation now moving
through the House. Meanwhile, House Education and the Workforce Chairman
John Boehner (R–Ohio) yesterday shared Grassley’s confidence
that Congress would be able to pass a pension bill before the end of the
year. Boehner expects his bill will be wrapped up in a broader package
of retirement proposals that he said the House Ways and Means Committee
would take up “in short order.”
Delta Replaces CFO
Delta Air Lines, which has narrowly avoided bankruptcy this year,
today said it replaced its CFO, Michael Palumbo, with Edward Bastian,
effective immediately, Reuters reported. Bastian, who has worked with
Delta in the past, was most recently CFO at Acuity Brands Inc. The
cash-strapped airline also announced a few other management changes,
including chief marketing officer and chief of customer service.
Bigger Amtrak Budget Brings Veto Threat
President Bush’s plans to close down Amtrak’s long
distance routes were dealt another setback Tuesday as a Senate panel
approved a sizable increase in the budget for the troubled Amtrack rail
system, setting back President Bush’s plan to close down the
railroad’s money-losing long distance routes, the Associated Press
reported. The move earned an immediate veto threat from the Bush
administration. The move would increase the subsidy from this
year’s $1.2 billion to $1.4 billion next year.
HP Struggling with Pension Costs
When Hewlett-Packard Co. announced yesterday that its massive
restructuring would include an overhaul of its retirement plans, the
technology giant joined a long line of companies trying to cut costly
pension obligations that originated in another era, reported AP Biz
Wire. In 1979, 61 percent of employees with pensions were on a
defined-benefit plan, but by the late 1990s that had dropped to 13
percent, according to an analysis by the Center for Retirement Research
at Boston College. The company now will offer just a 401(k) plan to U.S.
workers hired after Jan. 1, 2006. The change will also affect employees
whose age and years of service do not total 62, though they will
continue to be eligible for pension benefits they’ve already
accrued.
Winn-Dixie Sells Stores at Auction for $45.6 Million
Winn-Dixie Stores Inc. sold 102 stores to 30 purchasers at auction
Monday, according to information released by the company, the
Tampa Bay Business Journal reported. The aggregate purchase
price for the store leases and equipment is $45.6 million, and does not
include existing inventory at the locations that will be purchased as
the stores change ownership. The auction process is the result of
Winn-Dixie attempting to remove 326 stores from the company’s
current footprint as the company attempted to reorganize under chapter
11 bankruptcy protection.
Project Group Files for Bankruptcy Protection
Houston-based Project Group Inc. has filed for chapter 11 bankruptcy
protection as a restructuring option to improve shareholder value,
reported the Houston Business Journal. The project
management firm had previously announced the issues related to its
working capital crisis created by the direction of all client payments
to its principal lender, as well as Internal Revenue Service debt for
payroll taxes. Project Group said it believes that reorganizing under
chapter 11 will allow the company to control its working capital for the
benefit of shareholders and to continue the growth started in the last
year. All of the client contracts are expected to continue and new
contracts continue to be awarded, the company said. The Project Group,
founded in 2001, provides enterprise-level business solutions to oil and
gas, financial services, retail, hospitality and pharmaceutical
industries.
Anchor Glass Inches Closer to Bankruptcy, Again
Tampa-based Anchor Glass’s poor results from the past two
quarters are beginning to affect its financial resources. The company is
now unable to meet the minimum payments for its revolving credit
agreements with Wachovia Bank NA and Madeleine LLC, as well as its
capital leases with General Electric Credit Corp., the Tampa Bay
Business Journal reported. Anchor Glass is meeting with its
creditors to discuss the possibility of waivers or modifications to its
payment schedule. The company also stated that as a result of the
expected poor results and default under its revolving credit agreements,
there could be no assurance that it would be able to pay the $19.2
million of interest due August 15, 2005, on its $350 million senior
secured notes due 2013. Anchor Glass has formed a restructuring
committee to explore what alternatives are available to cover the debt
load and avoid filing again under chapter 11 of the U.S. Bankruptcy
Code.
Huffy Corporation Files Plan of Reorganization
Huffy Corporation, a leading manufacturer of bicycles and other
sporting equipment, yesterday announced that it has filed its proposed
reorganization plan and related disclosure statement with the U.S.
Bankruptcy Court for the Southern District of Ohio, Western Division,
the company said in a news release.
CCCS Fort Worth Merges with Money Management International
Consumer Credit Counseling Service of Greater Fort Worth (CCCS)
yesterday said that it has merged with Money Management International,
the Dallas Business Journal reported yesterday. CCCS, a
nonprofit credit counseling agency and a member of the Consumer Credit
Counseling Network, did not disclose the financial terms of the deal.
The merger is the 15th with Houston-based Money Management among member
agencies of the Consumer Credit Counseling Network nationwide. Money
Management is a credit counseling agency with 140 branch offices in 22
states. It is a member of the National Foundation for Credit Counseling
and the Consumer Credit Counseling Agencies.
Northwest Airlines Mechanics Vote to Strike
Northwest Airlines Corp. mechanics, cleaners and custodians have
voted overwhelmingly to approve a strike, union leaders said Tuesday,
the Sacramento Business Journal reported. A strike could
begin 30 days after the National Mediation Board (NMB) releases
Northwest and the union from negotiations. Both sides have requested a
release from talks. The financially troubled airline said it needs $176
million in annual cost cuts from the mechanics, has failed to win this
in the mediated talks and does not believe it could win it in binding
arbitration.
Employee Pension Plan to Receive $6.3 Million after Nursing Home
Bankruptcy
Final court orders in bankruptcy proceedings for the Royal Crest
Lifecare nursing home chain, taking effect Tuesday, set a major
precedent for workers at failing companies by providing a payment of
about $6.3 million, Canada.com News reported yesterday. The Service
Employees International Union became a party to the bankruptcy
proceedings as soon as they began in 2003, and now the employees’
pension plan will receive all outstanding employer and worker
contributions from the date of bankruptcy. Hamilton, Can.–based
Royal Crest operated 17 long-term care and retirement homes, serving
more than 2,000 seniors in southwestern Ontario.
Lenders Urged to Help Those with Bad Credit
A new report from the Economic and Social Research Council (ESRC)
suggests lenders should help those with bad credit to improve their
credit rating, reported the UK’s Fair Investment Company web site.
ESRC believes that institutions should be collaborating with
high-interest lenders to help people reduce their debt load. One of the
newest in the market, “near-prime” lenders usually advertise
in daily newspapers and on daytime TV and charge high rates of interest,
but collect through banks, imposing penalties through
“ratchet” charges that increase dramatically if a repayment
is missed. The study suggests that major lenders should work together
with “near-prime” providers to help borrowers migrate to
more conventional credit options, where interest rates are much
lower.