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January 12, 2005
Specter Says Senate Must Overcome Asbestos Divisions
Senate Judiciary Chairman Arlen Specter (R–Pa.) said yesterday
he is planning to press for an asbestos bill that probably will not
represent a consensus because business, labor and other groups remain
divided over the legislation’s details, CongressDaily
reported. During a Judiciary Committee hearing on the “The
Fairness in Asbestos Injury Resolution Act,” all sides said months
of negotiations on Specter’s bill had yielded progress. But even
the bill’s supporters said differences remained over six or seven
issues, including how a proposed federal trust fund to compensate
asbestos victims would shut down if it ran out of money and whether
cases would return to federal or state courts if it did. Specter said he
hopes to resolve outstanding issues and finish a bill that can garner
more than 60 votes to avoid a cloture fight. Where he cannot secure
industry agreement, he said, lawmakers must make hard choices. “It
is obvious we will not have consensus on all issues,” he said,
adding that he was aiming for a February deadline, the newswire
reported.
Ultimate Files for Chapter 11 Bankruptcy
Ultimate Electronics Inc., a retailer of mainly upscale electronics
that has struggled with shrinking market share for years, said yesterday
it filed for chapter 11 bankruptcy protection, Reuters reported.
Ultimate listed $329.1 million in assets, and $160.6 million in debts,
according to its bankruptcy filing at the Delaware Bankruptcy Court. The
retailer listed as its top creditor Monster Cable Products Inc. and an
affiliate, which are both owed more than $10.8 million. Other creditors
include Sony Electronics Inc., Apple Computer Inc. and Eastman Kodak
Co., the newswire reported.
Friedman’s May File for Bankruptcy
Friedman’s Inc., a jewelry retailer facing federal fraud
probes, said today it may file for bankruptcy because its lenders are
blocking it from accessing needed cash, Reuters reported. The Savannah,
Ga.–based retailer said lenders are letting it draw upon its
senior credit facility only on a discretionary basis. As a result, it
said, “the company has not been able to satisfy all of its cash
requirements.” The company said it is talking to its senior
lenders about its funding needs and possibly amending the credit
facility. Friedman’s said it is reviewing its strategic
alternatives, including a possible chapter 11 reorganization, the
newswire reported.
Leaders of Union OK Tentative UAL Deal
Leaders of the union representing flight attendants at UAL Corp.
approved yesterday a tentative labor agreement with bankrupt United
Airlines, Reuters reported. The Association of Flight Attendants (AFA)
said on its Web site that the United Master Executive Council was
unanimously recommending a “for” vote on the agreement. The
tentative agreement includes a 9.5 percent pay cut to base pay
rates.
MCI
Ex-WorldCom Directors’ Settlement Challenged
A group of Wall Street banks has challenged the settlement announced
last week between 10 former WorldCom Inc. directors and plaintiffs in a
class-action shareholder lawsuit filed after WorldCom collapsed into
bankruptcy court in 2002 following charges of widespread accounting
fraud, the Washington Post reported.
The 16 banks, including J.P. Morgan Chase & Co., Bank of America
Corp. and Deutsche Bank AG, were among the underwriters of WorldCom
securities and are also defendants in the lawsuit, which is scheduled to
go to trial on Feb. 28. Citigroup Inc. agreed last year to pay $2.6
billion to settle its part of the case, the newspaper reported.
MCI Says Ended 2004 with $5.4 Billion in Cash
MCI Inc. ended 2004 with $5.4 billion in cash, the company said in a
U.S. Securities and Exchange filing yesterday. The filing said the
company spent about $1 billion in capital expenditures during the fourth
quarter, and settled $1.35 billion in bankruptcy claims.
Trial of WorldCom’s Ebbers Will Focus on Uneasy
Partnership
When Bernard Ebbers goes on trial this month in federal district
court in Manhattan on fraud and other charges, the focus will be on his
partnership with former CFO Scott Sullivan. Sullivan is expected to be
the chief witness against his former boss, who was federally indicted
only after Sullivan pleaded guilty to fraud charges and agreed to
cooperate with prosecutors early last year. Read the full article at
href='http://www.wsj.com/'>www.wsj.com (subscription required).
Investors Face Challenge to Get Cut of Settlements
Huge settlements against mutual funds and companies such as WorldCom
Inc. and Enron Corp. are giving individual investors a chance to recover
some of their losses, the online Wall Street Journal
reported. But the process of collecting any payout is lengthy and often
confusing, especially for the individual investor. “You hear big
numbers thrown around that are supposedly going back to people, but you
never get any specifics on how you are supposed to get your
money,” says Bruce Carton, executive director for securities
class-action services at Institutional Shareholder Services, an advisory
firm. Read the full article at
href='http://www.wsj.com/'>www.wsj.com (subscription required).
Members of ATA Pilots Union Reject Wage Cut Deal
Members of the pilots union at ATA Holdings Corp. overwhelmingly
rejected a tentative labor deal that would have won up to $6 million in
immediate savings for bankrupt ATA Airlines, the union said, Reuters
reported. The deal would have cut the pay of pilots by as much as 15
percent, the Air Line Pilots Association said in a statement released
late on Monday. Out of 988 crew members eligible to vote, 79.2 percent
voted against the agreement. ATA’s pilots had approved a $43
million concession package in June.
US Airways Executive Said to Be Leaving
Ben Baldanza, the top-ranking marketing executive at US Airways, is
set to leave the carrier to join Spirit Airlines, the trade publication
Aviation Daily reported last night, the New York Times
reported. Baldanza’s departure would be the first by a senior
executive at the airline since it filed for bankruptcy protection on
Sept. 12.
GM Boss Debunks Bankruptcy Doomsday Scenario
Airline-style bankruptcy may not necessarily be pre-ordained for
Detroit’s automakers, but that doesn’t mean an influential
industry player can’t use America’s most prominent auto show
to warn about it in coming years, Detroit News reported.
General Motors Corp. Chairman Rick Wagoner will use a meeting with
analysts on Thursday to debunk doomsday bankruptcy scenarios and make
the case that GM is in far better shape today than it was in the early
1990s. Read the
href='http://www.detnews.com/2005/insiders/0501/11/A01-56205.htm'>full
article.