August 182004

Submitted by webadmin on Wed, 2004-08-18 00:00

July 18, 2004

size='3'>U.S. Labor
Dept. Says United Agrees to Pension Monitor

United Airlines has agreed to
the appointment of a monitor to represent the interests of its pension
plan participants, the U.S. Department of Labor said yesterday, Reuters
reported. The bankrupt carrier skipped a $72 million payment in July to
its retirement plans and said it would miss nearly $500 million in
contributions later in the year. 'United Airlines' decision to stop
funding its pension plans made clear the need to appoint an independent
fiduciary to represent the interests of workers and retirees,' Labor
Secretary Elaine Chao said in a statement. Last week,
the U.S.
agency that insures corporate pensions urged a bankruptcy court to
prevent United, a unit of UAL Corp., from halting the contributions, the
newswire reported.

Creditors on Board for
Air Canada Recapitalization

Air
Canada's
creditors approved a recapitalization plan on Tuesday that will allow
the airline to emerge from bankruptcy protection with a clean balance
sheet, Reuters reported. Under the plan, creditors could end up owning
as much as 88 percent of the airline, but its current common shares will
have no value. Unsecured creditors, ranging from small bondholders to
big catering companies, voted 99.6 percent in favor of the plan, which
Air Canada will present next week for court approval, the airline said
after a creditor meeting. The approval was largely expected. Air
Canada's
court-appointed monitor, Ernst & Young, had warned that creditors
would most likely recover nothing through a liquidation of the airline,
the newswire reported.

Northwestern, Dissident
Creditors Reach Accord on Recovery Plan

Northwestern Corp., a provider
of electricity and natural gas to 608,000 customers in
Montana,
Nebraska and
South Dakota, reached an
accord with dissident creditors who had opposed the company's plan to
exit bankruptcy, Bloomberg News reported. The settlement would give an 8
percent stake in the reorganized company to holders of Northwestern's
trust preferred securities and quarterly-income preferred securities.
The creditors, led by Harbert Management Corp. and owed more than $390
million, will also get stock options for an additional 13 percent stake,
said Jesse Austin, Northwestern's lawyer.

The preferred securities holders are the only creditor group to reject
Northwestern's plan to reorganize more than $2.45 billion of debt. U.S.
Bankruptcy Judge Charles Case has scheduled an Aug. 25 hearing to
consider the proposal, which if approved, would allow the company to end
its year-long bankruptcy. With Case's approval, Northwestern
“certainly will emerge from bankruptcy by the end of the year and
we're hoping to exit by the end of September,''
Austin said, the
newswire reported.

Pegasus Communications Gets
Subpoena In Customer-count Probe

Pegasus Communications Corp.
said on Monday that it received an investigative subpoena from the
Securities and Exchange Commission. In its second-quarter report, filed
Monday with the SEC, Pegasus said the agency subpoenaed documents
relating to how the company reports subscriber numbers of its direct
broadcast satellite business. The company's broadcast satellite business
is currently operating under chapter 11 bankruptcy protection. DirectTV
Inc. has agreed to buy the business, pending court approval, and Pegasus
said it doesn't believe the SEC investigation will affect the
sale.

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DVI Selling Mexican Assets
to GE Capital for $4.31 Million

DVI Inc. said it plans to sell
certain
Mexico assets
that aren't covered by its chapter 11 bankruptcy case to General
Electric Capital Corp. for $4.31 million as part of its broader
liquidation, according to court papers. Health-care finance
company DVI said Friday that the business, MSF Operations de Mexico SA
de CV, provides asset-backed financing and equipment leasing services to
health-care providers. MSF Mexico is a partially owned unit of
DVI's MSF Holding Ltd. unit and isn't covered by the bankruptcy case,
according to DVI's filing with the U.S. Bankruptcy Court in
Wilmington,
Del., obtained by Dow Jones
Newswires.

Wilbur Ross Wins Horizon
Natural Auction

A group led by financier Wilbur
Ross has won the bidding for the assets of bankrupt coal miner Horizon
Natural Resources, with an offer totaling $786 million, both parties
said on Tuesday, Reuters reported. They said Ross's Newcoal LLC and
Oldcoal LLC in partnership with A.T. Massey Coal Co., was the successful
bidder at Horizon's bankruptcy auction. The bid -- $304 million in cash,
$482 million in second lien notes and the assumption of liabilities --
is subject to bankruptcy court approval set for Aug. 31. Horizon filed
plans of reorganization with the U.S. Bankruptcy Court for the Eastern
District of Kentucky in April and expects to emerge from chapter 11
bankruptcy protection in the third quarter.

Investment Firm Leucadia
Holds About 5 Percent of MCI

Investment company Leucadia
National Corp. said on Tuesday it had bought a 4.96 percent stake in MCI
Inc. for about $245.9 million, Reuters reported. Leucadia disclosed its
stake of 15,738,100 MCI shares in a filing with the U.S. Securities and
Exchange Commission. It did not indicate when it purchased the shares.
MCI said in July that Leucadia had sought government approval to buy up
to 50 percent of
MCI. U.S.
antitrust officials announced no action ahead of the Aug. 9 deadline for
completion of an antitrust review, leaving Leucadia free to proceed, the
newswire reported.

Bankruptcy Judge
Puts Brakes on Asbestos Claims

A Southern District of
New York bankruptcy judge on Tuesday issued orders that effectively bar
tens of thousands of asbestos claims nationwide and provide a fund of
about $500 million to pay claims against Travelers Indemnity Co. that
relate to the bankruptcy of the Johns-Manville Corp.
class='subtext1'>, the
size='3'>New York Law Journal reported.
class='text1'>Judge Burton Lifland affirmed his
determinations in the bankruptcy case, In re Johns-Manville
Corp., including a 1986 indemnification agreement between Travelers
and Johns-Manville and held that the agreement bars direct lawsuits
against Travelers.

Johns-Manville collapsed under
the weight of asbestos-related litigation and filed for bankruptcy in
the 1980s. Read the full article at

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