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August 11, 2005
Share Prices Rise amid Economic Optimism
Investors bid stock prices higher for a second day yesterday,
confident that the economy will remain strong despite rising interest
rates and higher oil prices, the Associated Press reported. Stocks rose
Tuesday, breaking a three-day losing streak, after the Federal Reserve
raised short-term interest rates one-quarter percentage point to 3.5
percent, its 10th consecutive rate increase.
Anchor Glass Receives Notice of Delisting
Anchor Glass Container Corporation received notice that, after
reviewing the company’s Aug. 8 press release announcing that it
had filed for chapter 11 protection and other publicly available
information, Nasdaq will delist the company from The Nasdaq Stock Market
at the opening of business on Aug. 17, 2005, unless the company requests
a hearing, Business Wire reported yesterday.
Copper Miner Asarco Seeks Bankruptcy
Copper miner Asarco has filed for bankruptcy protection, forced by a
five-week-long strike and steep environmental clean-up costs, according
to its parent company Grupo Mexico, Reuters reported yesterday. About
1,500 Asarco workers went on strike over the July 4 weekend at its units
in Arizona and Texas after protracted contract negotiations collapsed.
In response to the filing, Fitch Ratings downgraded the company to
“C” from “CCC” yesterday.
United Edges Closer to Exiting Chapter 11
United Airlines (UAL) said Tuesday that it had finished reworking its
aircraft lease agreements with creditors who hold debt backed by 105
planes, providing the carrier with $300 million in annual savings,
Bloomberg reported today. The company has said that wrapping up the
talks was the largest remaining task before exiting bankruptcy
protection. Last week, UAL said it may not emerge from chapter 11 until
early next year because unsecured creditors wanted more time to review
the reorganization plan. The agreement with the holders of debt backed
by the planes would need to be approved.
Delta Pilots Debate Concessions That Might Help Avert Chapter
11
Delta Air Lines pilots are debating whether a new round of pay
concessions could help avert a possible filing for bankruptcy-court
protection, even as a scramble by the carrier to establish a new
agreement for processing passenger credit-card payments further darkened
its outlook, the Wall Street Journal reported yesterday.
Disclosure of talks with a new card processor to replace a pact with
Visa USA Inc. and MasterCard International Inc. came after Delta shares
tumbled 13 percent, or 28 cents, to $1.95. The drop came as another Wall
Street analyst speculated about a potential chapter 11 filing.
N.J.’s Oldest Federal Tort Case Yields $119 Million
Verdict
A Newark jury has decided the oldest federal tort case in New Jersey,
and it was worth the wait for the winner, the New Jersey Law
Journal reported today. On July 29, after two decades in
litigation, the receiver for bankrupt Ambassador Insurance Co. won a
$119.9 million award from the carrier’s president and accountant,
PricewaterhouseCoopers. The jury, finding that the accounting firm
breached standards of care in its audit of Ambassador’s 1981
financial statement, assigned it 40 percent of the blame and the other
60 percent on the carrier’s president. The winners were insurance
regulators in Vermont, where Ambassador was domiciled, that have been
its receivers.
PRASA: Bankruptcy Not a Feasible Option
Puerto Rico Aqueduct & Sewer Authority (PRASA) Executive
President Jorge Rodriguez rejected the possibility of filing for
bankruptcy protection to help straighten out PRASA’s finances,
Puerto Rico WOW! reported today. “It wouldn’t be feasible.
This is a public corporation. The government can’t file for
bankruptcy. This would be detrimental to the government’s
finances. I won’t do it,” Rodriguez said during a press
conference in Yauco.
Lionel Settles Trade Secrets Lawsuit
Lionel LLC, the nation’s number one model train maker, today
announced that it has reached a settlement with K-Line Electric Trains
Inc. in a trade secrets lawsuit brought by Lionel, PR Newswire reported
yesterday. In late July, Lionel filed a complaint in the U.S. Bankruptcy
Court for the Southern District of New York against K-Line, its owner
Maury Klein and Robert Grubba, a former Lionel employee now working for
K-Line. Under the terms of the settlement, K-Line and the other
defendants admitted that they paid Lionel’s chief engineer to
develop advanced versions of Lionel’s operating systems and
features that were used in a number of K-Line’s engines and
electrical transformers. They further admitted that these products
actually contain Lionel’s technology and are currently for sale in
the marketplace.