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Bankruptcy Debate Hinges on Abortion Provision
A bipartisan group of Senators will meet this afternoon with Senate
leaders to hammer out the last remaining issues on bankruptcy overhaul
legislation, according to the CQ Daily Monitor. The fate of H.R.
833 is hinged on a provision concerning abortion. The Senate adopted
(80-17) a provision that would prevent those convicted of violence
against abortion clinics or clinic workers from using bankruptcy filings
to escape related debts, including civil damages, fines or attorneys'
fees. During conference negotiations, Republicans omitted references to
abortion clinics, choosing instead to prohibit the discharge of debts by
individuals who make a 'willfull and malicious threat of serious bodily
injury.' Democrats, led by Sen. Charles E. Schumer (N.Y.), are insisting
that intent of the provision remains in the bill, although they said
they are willing to drop the references to abortion clinics to include
violence at all health care facilities. One option suggested by a
Republican leadership aide was that both provisions be included in the
final compromise. Negotiators exchanged proposals and counterproposals
yesterday on other outstanding issues. Two key Democrats offered
proposals to change a provision on collecting money for bounced checks.
Democratic bill co-sponsor Robert G. Torricelli (N.J.) offered his own
similar proposal that focuses on whether a person writes a bad check
'knowingly and with criminal or bad intent.' Republicans are waiting to
see what Minority Leader Tom Daschle (S.D.) says about the issue. In
addition, Sens. Charles Grassley (R-Iowa) and Edward M. Kennedy
(D-Mass.) have been going over proposals to cap the amount of Individual
Retirement Account Savings that debtors could shelter from creditors at
$1 million. A Kennedy aide said that the senator wants to 'specifically
target people who have acted fraudulently,' and not discourage people
from saving for retirement.
Skynet Holdings Announces Bankruptcy Filing
Skynet Holdings Inc., a provider of customized delivery services,
announced yesterday that its wholly owned subsidiary, Pony Express
Delivery Services Inc., has suspended all operations except those in
Florida, and has filed for chapter 11 in the U.S. Bankruptcy Court for
the Northern District of Georgia in Atlanta, according to a newswire
report. The Atlanta company also announced that its wholly owned
subsidiary, Fleet Acquisition Corp., and Courier Express Inc., a wholly
owned subsidiary of Pony Express, also filed chapter 11 petitions in the
Northern District of Georgia. 'Although Pony Express will cease domestic
operations with the exception of Florida, worldwide operations of Skynet
Holdings' other subsidiaries continue uninterrupted,' said Donald L.
Harrill, president and CEO of Skynet Holdings Inc.
Chase Manhattan Sues Iridium Partners
Chase Manhattan Bank has sued 17 members of bankrupt satellite telephone
company Iridium LLC for $242.7 million, according to Reuters. Chase
Manhattan claims it was in an obligation when Iridium defaulted on loan
payments last year. In papers filed Friday in the U.S. District Court in
Delaware, Chase Manhattan alleged the defendants had not met any reserve
capital obligations, which secure the $800 million loan it made in
December 1998 to subsidiary Iridium Operating LLC. Earlier this month,
merchant bank Castle Harlan Inc. told the bankruptcy court it was
interested in paying $50 million, plus five percent equity interest to
creditors, to buy Iridium's assets. At the time, Iridium attorney
William Perlstein testified that 'the bid is a fraction of what the
system costs, but substantially higher than the individual asset bids.'
He urged the bankruptcy court to accept the bid as the best available
option. The court has scheduled a hearing for July 31 on the bidding
process for the Iridium assets. Iridium and certain units filed for
chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the
Southern District of New York last August.
BankruptcyData.com Announces Free Daily Bankruptcy News
TARGET='window2'>BankruptcyData.com, an Internet site providing
in-depth information on major bankruptcies, announced the addition of a
free daily new service, according to a newswire report. By signing up
for the updates at the site, subscribers will receive e-mail each
morning that highlights the previous day's top news for significant
companies operating under chapter 11. In addition, the Boston company's
site will also provide free historical information on pre-negotiated
chapter 11 filings and detailed information on every U.S bankruptcy
court nationwide. The site will track all publicly traded companies with
assets of more than $50 million throughout their entire bankruptcy
proceedings.
Allegheny Health Files Reorganization Plan
Allegheny Health Education & Research Foundation's (AHERF)
court-appointed trustee filed a reorganization plan for the foundation
yesterday in the U.S. Bankruptcy Court in Pittsburgh, according to a
newswire report. The plan for Allegheny provides the foundation's
unsecured creditors and suppliers with a recovery of between $.015 and
$.05 on the dollar. The plan notes that there were originally $5.9
billion in claims filed by more than 20,000 creditors against the
foundation and its affiliates. Those have been whittled down to approved
claims valued at $1.4 billion for 5,790 creditors. Although the plan
sets forth a schedule of what creditors will receive, the overall
payouts are not certain because the plan calls for the disbursements to
be made in stages, the first of which would come from cash being held in
accounts holding asset sale proceeds. With Allegheny's $1.4 billion
collapse two years ago, it was the largest non-profit bankruptcy in the
nation's history.
Shotmaker's Reorganization Plan Confirmed by Court
Camera Platforms International Inc., dba The Shotmaker Co., a leading
provider of film and video production equipment, announced that its
reorganization plan was approved by creditors and confirmed Tuesday by
the U.S. Bankruptcy Court for the Central District of California,
according to a newswire report. Under the court-approved reorganization
plan, a new investor, DOOFF LLC, has acquired a 49 percent equity
interest in the North Hollywood, Calif., company. 'We look forward to
working without new investors to take advantage of the many growth
opportunities now available to us,' said Ron Riddle, chief operating
officer. All of Shotmaker's unsecured debt has been converted to equity,
including the company's newly issued shares.
Visa, MasterCard Blame AMEX for Antitrust Suit
Credit card giants Visa International and MasterCard International
accused their rival American Express Co. of orchestrating the Justice
Department's antitrust trial, which opened Monday, according to The
Daily Deal. American Express 'has gotten the government to be its
point man,' said the lawyer for Visa, Eugene Bannigan, in his opening
statements in U.S. District Court in Manhattan. 'American Express
doesn't need the government's help to compete,' said MasterCard's
attorney Kenneth A. Gallo. The government is charging San
Francisco-based Visa, its parent, Visa International, and Purchase, New
York-based MasterCard with engaging in anti-competitive business
practices that also stifled innovation in the credit-card payment
industry in the U.S. Melvin A. Schwarz, the Justice Department's
lead lawyer, explained that Visa and MasterCard are nonprofit
associations controlled by the same large banks whose representatives
simultaneously serve on the board of directors of one and on important
committees of the other. 'If a bank has temerity to issue American
Express, then they lose the right to issue Visa and MasterCard, and
their customers lose access to Cirrus and Plus at ATM machines,' Schwarz
said in court. Those exclusionary rules 'should be ended so American
Express and Discover have' access to the 7,000 banks that issue
MasterCard and or Visa, he added. Visa and MasterCard claim they have
forged relationships with their member banks on their own merits.
Safety-Kleen Gets Court
Nod To Borrow $40M On Interim Basis
Late Tuesday, the U.S. Bankruptcy Court in Wilmington, Del., has granted
Safety-Kleen Corp. interim approval to borrow $40 million under its $100
million debtor-in-possession credit facility, pending a final hearing.
The court scheduled a final hearing on the financing for July 11. In the
order late Tuesday, U.S. Bankruptcy Judge Peter J. Walsh concluded that
the hazardous waste disposal company's need for financing was immediate
because it didn't have available sources of working capital to
operate its businesses.
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