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November 16, 2005
name='1'>U.S.
Senators Seek Further Delay on Asbestos Bill
U.S. Senate Budget Committee leaders are seeking to further delay
action
on legislation to create a $140 billion fund to compensate asbestos
victims,
saying in a letter released yesterday that they are worried that the
program
could run short of money, Reuters reported. Since the proposed
asbestos compensation
fund would have the authority to borrow money from the U.S.
government, it
could deepen the federal budget deficit if it runs short of cash.
href='http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&s…'>Read
the full article.
In a related story, CongressDaily reports this morning that
the chief
co-sponsors of asbestos legislation attempted yesterday to quell
concerns
about their bill’s cost raised by Senate Budget Chairman Judd
Gregg (R-N.H.)
and ranking member Kent Conrad (D-N.D.), who apparently are seeking
to delay
the asbestos bill. In a letter to Gregg and Conrad, Judiciary
Chairman Arlen
Specter (R-Pa.) and ranking member Patrick Leahy (D-Vt.)—whose
asbestos
legislation cleared the Judiciary panel earlier this
year—questioned
why the senators would want to put the brakes on the asbestos bill.
They sought
to assuage concerns Gregg and Conrad had raised about that taxpayers
would
wind up bearing the costs of an asbestos trust fund the bill would
set up.
"A simple reading of the bill will show that [it] contains
affirmative
provisions that explicitly absolve the federal government from any
liability
for obligations of the trust fund," Specter and Leahy wrote.
id='2'>Bernanke
Suggests Inflation-Targeting Strategy for Fed
Ben Bernanke,
President Bush’s
nominee to succeed Alan Greenspan as chairman of the Federal Reserve,
yesterday
told the Senate Banking Committee that he will push for a so-called
inflation-targeting
framework if confirmed, CongressDaily reported yesterday.
Bernanke said
that adopting an approach where the Fed would set monetary policy with
the goal
of achieving and maintaining a particular inflation rate would not
require legislative
action. He said that it also would build on the Fed’s recent
efforts to become
more transparent in its policymaking. Senate Banking Chairman Shelby
called
Bernanke a "superb" choice to head the Federal Reserve and
said he
was pleased with the nominee’s push for an inflation-targeting
framework. But
Banking ranking member Paul Sarbanes (D-Md.) raised concerns about
inflation
targeting. Sarbanes noted that the United States has a lower
unemployment rate
and higher economic growth than countries that are subject to
inflation targeting
by the European Central Bank.
id='3'>GM
Bankruptcy Fears Rising on Wall Street
An increasing number of investors are betting that General Motors
Corp.,
the world’s largest automaker, may be forced to seek
bankruptcy protection
within the next six to 12 months as it struggles to overcome
slumping sales
and the high cost of health care benefits for workers and retirees,
the Associated
Press reported yesterday. Concerns about the automaker’s
future are showing
up in the credit default swaps market, where investors effectively
buy insurance
protection against defaults. Holders of GM debt who want to arrange
a hedge
against the risk that they won’t be repaid are finding that
the cost of buying
the protection has risen dramatically in recent days.
href='http://abcnews.go.com/Business/wireStory?id=1314876'>Read
more.
id='4'>Oregon
Archdiocese Reveals Plan Today
The Archdiocese of
Portland’s
long-awaited, much-anticipated plan for emerging from its 16-month-old
bankruptcy
will be made public today, according to Oregonian reports. A
late filing
yesterday just met the deadline imposed by U.S. Bankruptcy Judge
Elizabeth
L. Perris, who had already granted a year’s worth of
extensions. Lawyers
involved in the bankruptcy have said that they expect the
archdiocese’s plan
to offer a settlement fund of at least $20 million to pay more than
200 pending
child sexual-abuse claims.
href='http://www.oregonlive.com/news/oregonian/index.ssf?/base/news/113211154…'>Read
more.
id='5'>A
Savvy Way to Trim Pensions
With bankruptcy
reorganization
strategies in the auto and airline industries seeking elimination of
decades-old
employee pension and health care obligations, firms could be expected
to beat
a path to the door of the bankruptcy court of the Second U.S. Circuit
Court
of Appeals, the National Law Journal reported today. Like the
story of
the three bears, some debtors consider the Third Circuit too hostile
to revoking
union contracts in bankruptcy, and the Sixth Circuit law too
confusing, but
the Second Circuit seems just right. Still, danger lurks in any
attempt to find
relief from billions of dollars in pension obligations through
bankruptcy because
top management essentially loses control of the company to major
creditors and
shareholders. Creditors could decide to break up an ailing firm, for
example.
Read
more.
(Paid subscription required to read full story.)
id='6'>Adelphia
Files Revised Draft Fourth Amended Plan of Reorganization
Adelphia
Communications Corp.
filed a revised draft fourth amended plan of reorganization with the
U.S. Bankruptcy
Court for the Southern District of New York yesterday, the company
reported
in a news release. The filing represents Adelphi’s additional
responses and
proposed resolutions to many of the objections that had been filed to
approval
of the company’s disclosure statement. The hearing to consider
approval of the
disclosure statement commenced on Oct. 27 and 28, 2005, and is
scheduled to
resume today.
href='http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/…'>Read
the full release.
id='7'>Cooper
Seeks $25M Fee for Work at Enron
The turnaround
expert who
led Enron Corp. through one of the most complex and expensive
bankruptcies in
history said yesterday that his work is worth $25 million, the
Associated Press
reported today. "I think this has been a remarkable
success," Stephen
Cooper told U.S. Bankruptcy Judge Arthur Gonzalez at a hearing
in New
York. The hearing concerned his request for a "success fee,"
as well
as final fee and expense requests from lawyers, accountants and other
professionals
involved in the massive chapter 11 case. Cooper has been Enron’s
interim CEO
since January 2002. Gonzalez will rule later on Cooper’s fee
request.
href='http://www.wjla.com/news/stories/1105/278192.html'>Read
the full story.
id='8'>Refco
CEO Sexton Resigns
Refco Inc. CEO William Sexton abruptly resigned, quickly reversing
his career
plans for a second time at the brokerage, the Wall Street
Journal reported
today. Sexton originally announced plans in late September to leave
as an
executive vice president. But on Oct. 10, he agreed to stay on as
the top
executive after Refco announced that then-CEO Phillip Bennett had
improperly
taken on $430 million in bad debts owed to the company. It was
unclear yesterday
why Mr. Sexton changed his mind again, although in the past few
weeks Refco
has remained in tumult, as more customers fled and the brokerage put
its unregulated
operations into bankruptcy and auctioned off its main trading
business. Robert
Dangremond, a managing director at the turnaround-management
firm AlixPartners
LLC, who was overseeing Refco’s restructuring, will take over
as interim CEO.
Sexton couldn’t be reached to comment.
href='http://online.wsj.com/article/SB113211011518898584-search.html?KEYWORDS…'>Read
the full story.
In related news, Refco Inc.’s auditor, Grant Thornton LLP,
told a bankruptcy
judge that it played a crucial role in uncovering the securities
fraud that
precipitated the collapse of the nation’s largest independent
commodities
brokerage. The disclosure came in a response that Grant Thornton
filed late
Monday to allegations by Refco’s unsecured creditors committee
that the accounting
firm ”failed to discover” the fraud ”despite the
presence of obvious red
flags.” The creditors have since demanded what Grant Thornton
called ”carloads”
of Refco-related records.
href='http://www.nytimes.com/aponline/business/AP-Refco-Auditor.html'>Read
the full article.
International
id='9'>U.K.
Lawyer Chases Asbestos Cases
Manchester, U.K.,
lawyer
Anthony Coombs has set up his own practice to race against time for
victims
of asbestos-related cancer, the Manchester Evening News
reported yesterday.
He quit as a partner at the firm John Pickering & Partners after
20 years
to specialize in claims for people suffering from mesothelioma.
Coombs, who
is based in Didsbury, U.K., said that about 1,800 people die from
mesothelioma
each year in the U.K., but the figure is forecast to rise to 2,500
over the
next decade.
href='http://www.manchesteronline.co.uk/men/business/s/181/181953_anthony_cha…'>Read
more.
id='10'>Federal-Mogul
Relief Granted
Federal-Mogul
announced that
the U.S. Bankruptcy Court granted the relief necessary to reach
another key
milestone set out in the U.K. settlement agreement between, among
others, Federal-Mogul
and the U.K. administrators overseeing the restructuring proceedings
of the
company’s U.K. subsidiaries, BankruptcyData.com reported
yesterday. The court
provided Federal-Mogul and its U.S. and U.K. subsidiaries all of the
approvals
needed for the actions required by the U.K. settlement agreement that
were the
subject of the Nov. 9 hearing. The court also agreed with the
administrators’
position that they did not need the U.S. court’s authorization
or approval to
perform all required actions under the U.K. settlement agreement.