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June 9, 2006
name='1'>Congressional Leaders Pushing Pension Conferees to Pick Up
Their Pace
Republican leaders in
both chambers are frustrated by the pace of negotiations and are trying
to get conferees on pension legislation to speed up their work,
CongressDaily
size='3'>reported today. 'My goal is to have it done absolutely by July
4, and that's the signal I sent to conferees,' Senate Majority Leader
Bill Frist (R-Tenn.) told reporters Thursday, echoing sentiments
expressed earlier by House Majority Leader John Boehner (R-Ohio). They
and other GOP leaders huddled Thursday night to discuss strategy. One
key negotiator said the talks, which began in March after the Senate
adopted its version of the bill, have slowed while Republican leaders
determine whether they would add tax measures to the pension package.
Democrats lashed out Thursday at provisions in the House-passed pension
bill that they say would allow insurers to jump ahead of victims in
settlements for personal injury lawsuits. Language included in the House
bill would override state laws that prevent health plans from recovering
the cost of medical care from court settlements to
victims.
Judge
Approves $263 Million Refco Settlement
A
w:st='on'>
size='3'>U.S.
size='3'>bankruptcy court has approved the $263 million settlement
between insolvent futures broker Refco Inc. and collapsing hedge fund
Sphinx Managed Futures Fund, ignoring multiple objections and chastising
those who attempted to thwart the deal,
size='3'>Portfolio Media reported yesterday.
Sphinx investors had objected to the settlement, claiming that the fund
would use investors’ money to pay Refco and that the settlement
would protect Sphinx executives from any further investigation. In
approving the settlement, Bankruptcy Judge Robert Drain also denied a
request by Sphinx investors seeking information on the fund’s
relationship with both Refco and Austrian bank Bawag PSK Group. For the
past few months, Refco's creditors have been battling the
size='3'>hedge fund’s “improper” transfer, suing SMFF
in December to compel the return of hundreds of millions of dollars. The
creditors claim the funds were inappropriately transferred out of Refco
by PlusFunds Chairman Christopher Sugrue, a former Refco
executive.
name='3'>Northwest Set for Next Step in Labor Dispute
The union for Northwest's
baggage handlers and ramp workers today will announce results of a
membership vote on a proposed 11.5 percent pay cut,
face='Times New Roman' size='3'>USA Today
size='3'>reported today. Members of that union, the International
Association of Machinists, rejected a previous cost-cutting contract
deal. Judge Allan
Gropper will hold a closed-door meeting with
lawyers for Northwest and the flight attendants' union to find out
whether there's a chance they can negotiate a new agreement and send it
out for a vote. Gropper also could set a date for ruling on Northwest's
request to undo the existing contract. Only the members of one major
union, Northwest's pilots, have voted to approve pay cuts, although
smaller unions have accepted cuts. However, none of the labor savings
can take effect unless all of Northwest's unions agree to pay
cuts.
href='http://www.usatoday.com/travel/flights/2006-06-09-northwest-travel-usat…'>Read
more.
name='4'>Pliant May Test Limits of Executive Bonus
Plans
Some creditors for bankrupt
food packaging company Pliant Corp. are crying foul on the executive
bonus plan found in its proposed reorganization, arguing that the
incentives are
size='3'>tantamount to retention bonuses banned by recent revisions to
bankruptcy law,
size='3'>Portfolio Media reported yesterday.
Pliant's ad hoc committee of second-lien noteholders voiced its concerns
in an objection to the company's amended reorganization plan, in which
it argued that the so-called emergence-bonus payments to
“insiders” violate U.S. Bankruptcy Code. Schaumburg,
Ill.-based Pliant filed for chapter 11 protection on Jan. 3 in the U.S.
Bankruptcy Court for the District of Delaware, listing assets of $604
million and debts of $1.2 billion. The proposed bonus program could cost
$1.25 million if the executives reach their targets. The cost could rise
to as much as $1.66 million if their performance exceeds expectations.
Pliant’s proposed bonus plans aren’t the only reason its
reorganization plan is under attack. As of June 1, creditors were
arguing that the company wasn’t ready to wrap up its bankruptcy.
The case is
size='3'>Pliant Corp., case number 06-10001,
in the U.S. Bankruptcy Court for the District of
Delaware.
name='5'>Emergency Motion Filed in GB Holdings Case to Stop Icahn
Deposition
Attorneys for billionaire
and majority shareholder Carl Icahn are seeking a protective order that
would thwart efforts by the unsecured creditors' committee of bankrupt
gaming company GB Holdings Inc. to have Icahn and three other
individuals deposed in the company’s chapter 11
proceedings, Portfolio
Media reported yesterday. U.S. Bankruptcy
Court Judge Judith Wizumur Tuesday granted a motion on
Icahn’s behalf asking that a short date be set for the hearing on
the committee’s emergency motion and scheduled the hearing for
June 13. The proposed depositions would constitute an abuse of Rule
2004, Icahn’s lawyers argued in their motion for a protective
order. The impetus for the depositions, according to the motion, was the
creditors' committee’s need to investigate the debtor’s
estate and creditors, and gather information needed to file its own
chapter 11 plan, which the committee did on April 4. The bankruptcy case
is GB Holdings
Inc., chapter 11 petition number 05-42736-JHW,
in the U.S. Bankruptcy Court for the District of New
Jersey.
w:st='on'>
name='6'>Louisiana
face='Times New Roman' size='3'> TV Stations File for Chapter 11
Bankruptcy
The Lafayette, La.-based
Communications Corporation of
face='Times New Roman' size='3'>America
size='3'>, which owns the eleven stations in
w:st='on'>
size='3'>Louisiana
elsewhere, filed for chapter 11 bankruptcy Wednesday. In its statement,
the company cited 'an inability to reach a workable restructuring
agreement' with its creditors, the
size='3'>Lafayette Advertiser reported today.
Court filings estimated the company's debts at more than $100 million.
News of the bankruptcies comes roughly eight months after the company
began shopping around for potential buyers.
href='http://www.theadvertiser.com/apps/pbcs.dll/article?AID=/20060609/NEWS01…'>Read
more .
SEC
Disputes Chapter 11 Plan for Three-Five
The U.S. Securities and
Exchange Commission (SEC) objected to Three-Five Systems Inc.’s
reorganization plan, arguing that it clears the way for an unauthorized
“fresh start” to the company’s reorganized corporate
shell, Portfolio Media reported yesterday. The SEC, which filed
its objection Tuesday in the U.S. Bankruptcy Court for the District of
Arizona, contested that Three-Five, based in
w:st='on'>
size='3'>Tempe
w:st='on'>
size='3'>Ariz.
be released from the remaining debts after company’s liquidation,
but should keep the debts with the company’s shell corporation.
“There is no need for a fresh start where there is no business to
reorganize or employment to preserve,” according to the SEC in its
filing.Three-Five
Systems, which filed for bankruptcy protection last September, is a
holding company that employed its units to produce electronics testing
equipment. The company shed its TFS Electronic business subsidiary in
October and is working to shut down its business operations. The
company’s plan intends to pay all creditors in full and offer as
much as $7 million to shareholders.
name='8'>Congress to Allow Proposal to Attract More Foreign
Investment in
w:st='on'>
size='3'>U.S.
size='3'>Airlines
Congress will allow a
Bush administration proposal aimed at attracting foreign investment
in
face='Times New Roman'
size='3'>U.S.
size='3'>airlines to proceed, despite security concerns among some
lawmakers, Reuters reported yesterday. Lawmakers negotiating final
details of emergency war spending and hurricane relief legislation have
agreed to drop language in the bill that would have delayed the airline
proposal for a year, House and Senate aides said. The language was the
central obstacle to the plan to give foreign investors more say in
airline operations, within the existing 25 percent voting stock limit.
The Bush administration and other proponents say the changes are overdue
to help an industry where four big airlines have fallen into bankruptcy
since 2002 and high costs and losses define much of the business.
Previous attempts to ease the restrictions have withered on Capitol
Hill, and current congressional objections have centered on national
security concerns.
href='http://money.cnn.com/2006/06/08/news/economy/congress_airline.reut/inde…'>Read
more.
name='9'>Ford's Debt Rating Is Downgraded Two Notches
Ford Motor Co. faces new
questions about its lineup of vehicles and its ability to reverse
sliding revenue as consumers shift away from big trucks, after Fitch
Ratings downgraded the auto maker's credit rating two notches and
analyzed how creditors might fare in the event of a bankruptcy-court
filing, the Wall Street
Journal reported today. Fitch's decision to
downgrade Ford's debt rating to a highly speculative single-B-plus from
BB highlights growing concern among investors and industry executives
that Ford's North American turnaround plan, dubbed the 'Way Forward,' is
encountering strong headwinds from external competition and internal
problems that have slowed development of new models. Fitch based its
action in part on a 'relative sparse product lineup over the next year,'
and concerns that Ford will be unable to cut product costs because of a
beleaguered supply base and rising costs for commodities like steel,
aluminum and copper.
href='http://online.wsj.com/article_print/SB114979194833175209.html'>Read
more. (Registration required.)
name='10'>Commentary: Outsourcing a Company’s Chief
Executive
As companies drive to cut
expenses, most notably by moving factories and call centers to other
countries, they are overlooking the escalating cost of the executives,
according to an op-ed in today’s
size='3'>New York Times. With an increased
supply of candidates in
face='Times New Roman' size='3'>China
size='3'>,
w:st='on'>
size='3'>India
size='3'>and other emerging markets, a truly independent corporate
compensation committee would be easily able to hire superior leaders at
salaries and benefits that are a small fraction of what their American
counterparts demand. Several orders of magnitude separate the
compensation of American and overseas chief executives; the Federal
Reserve notes that while a typical American chief executive in 2004 got
a compensation package 170 times greater than that of the average
American workers, in Britain it was 22 times and in Japan 11.
href='http://www.nytimes.com/2006/06/09/opinion/09orlow.html?pagewanted=print'>Read
more.
International
name='11'>Offshore Sphinx Fund Seeks Chapter 15
Protection
One of Sphinx Managed
Futures Fund’s offshore hedge funds filed for chapter 15
bankruptcy protection just a day before a bankruptcy judge signed off on
Sphinx’s contested $263 million settlement with Refco Inc.
creditors, Portfolio
Media reported yesterday. Sphinx Strategy Fund
Ltd., a fund located in the
face='Times New Roman' size='3'>Cayman Islands
size='3'>that feeds resources to Sphinx Managed Futures Funds SPC,
petitioned for bankruptcy protection Wednesday in the U.S. Bankruptcy
Court for the Southern District of New York.
face='Times New Roman'>A Cayman court put Sphinx Strategy
Fund into liquidation Monday after another offshore hedge fund, Global
Macro Fund Ltd., requested the move. Global Macro had invested
approximately $67.5 million in the Strategy Fund. The fund’s
filing came a day before U.S. Bankruptcy Judge
face='Times New Roman' size='3'>Robert Drain
size='3'>in
face='Times New Roman' size='3'>Manhattan
approved Sphinx’s $263 million pact with Refco
creditors Thursday. The case is
size='3'>Sphinx Strategy Fund Ltd., case
number 06-11292-alg, in the U.S. Bankruptcy Court for the Southern
District of New York.
name='12'>Chinese Sugar Mills Face
Bankruptcy
The Chinese government
expects more than 150 small sugar mills to be faced with bankruptcy in
the near future, according to a new report, ConfectioneryNews.com
reported today. The government estimates that 152 of
w:st='on'>
size='3'>China
small sugar mills are affected. According to a separate report from
the U.S. agricultural attaché in
size='3'>Beijing
sector is facing a great deal of pressure from the country's burgeoning
sweetener market. The production of starch-based sweeteners is expected
to grow by 20 percent in the coming year, as high sugar prices make them
more competitive.
href='http://www.confectionerynews.com/news/ng.asp?n=68275-sugar-china-chinese'>Read
more.
name='13'>British Executive Calls for Flexibility to Cut Pension
Benefits
Christine Farnish, chief
executive of the National Association of Pension Funds Employers, will
state in a speech today that employers should be allowed to roll back
some pension benefits promised to their staff because the costs have
become too burdensome for the economy as a whole, the
face='Times New Roman' size='3'>Financial Times
size='3'>reported today. The British Government said in a recent white
paper on pension reform that it would consider whether there should be
discussion of changes to legislation that would make it possible to
scale back promised benefits as a growing number of employer bodies are
urging.However,
legal experts have pointed out that rolling back benefits, which are in
effect deferred pay, may be very difficult. Benefits promised under
employment contracts have been upheld in the courts and reaffirmed in a
recent case involving pension benefits at the consultancy firm
KPMG.
href='http://news.ft.com/cms/s/8ecd2996-f71f-11da-a566-0000779e2340.html'>Read
more.
href='http://news.ft.com/cms/s/8ecd2996-f71f-11da-a566-0000779e2340.html'>