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Nickles's Asbestos Liability Bill Blasted By Labor
Federation
The AFL-CIO on Monday blasted asbestos liability legislation recently
introduced by Senate Budget Chairman Don Nickles (R-Okla.), saying it
embodies the mindset of 'some asbestos manufacturers [who] think the
solution to this problem is to deny any relief at all to millions of
people with asbestos-related disease,' CongressDaily reported. In
a letter to senators, AFL-CIO's director of legislation, William Samuel
said the AFL-CIO strongly opposes the Nickles bill, because it would
deny any compensation at all to the majority of asbestos victims who
have real damage to their lungs but who do not have cancer or
mesothelioma. The labor group is currently in discussion with some major
asbestos defendants and other interested parties aimed at crafting such
a consensus proposal, he added. Those talks revolve around a trust fund
concept, to which Nickles is adamantly opposed, reported the
newswire.
UNITED AIRLINES
United Airlines, Pilots Are 'Miles Apart' in Talks, Union
Says
UAL Corp.'s United Airlines and its pilots union are 'miles apart' in
talks over the company's plan to start a new low-cost airline unit, the
union said, Bloomberg News reported. The two sides also disagree on
other basic elements of the carrier's plan to emerge from bankruptcy
protection, United Air Line Pilots Association leader Paul Whiteford
said in a letter yesterday to UAL Chief Executive Officer Glenn Tilton,
reported the newswire. United and its unions have been in talks about
how to cut costs, change work rules and restructure the carrier to help
it emerge from chapter 11
bankruptcy. The airline is trying to reach labor agreements by
mid-March, Bloomberg reported.
UAL Mulling Hub Closures In Reorganization
An executive for UAL Corp. said on Monday that the airline is mulling
the closure of its hubs in Los Angeles, Denver and Washington, D.C., as
part of its reorganization plan, Dow Jones reported. Senior Vice
President Gregory T. Taylor said in court testimony that UAL, parent of
United Airlines, was asked by its board of directors to consider the hub
closures as an alternative. The board also asked the company to look
into the possible sale of the airline's Pacific operations, he said.
Separately, the judge overseeing UAL's bankruptcy case here denied
Atlantic Coast Airlines Holdings Inc.'s motion to force UAL to assume or
reject a contract between the two companies, reported the newswire.
Saks Says FAO to Run Toy Departments
Saks Inc. said bankrupt retailer FAO Inc. will operate toy shops in most
of the company's department stores, excluding its Saks Fifth Avenue
outlets, Bloomberg News reported. FAO will run toy departments in 245
Saks stores starting in the second half of this year, and add boutiques
for Zany Brainy educational toys and Right Start infant products in time
for the holidays, FAO spokeswoman Renee Hollinger said. Saks also will
buy a minority stake in FAO, reported the newswire.
Sprint Affiliate, AirGate's iPCS, Files for Bankruptcy
Protection
One of the largest independent affiliates of Sprint Corp.'s wireless
network filed for chapter 11 bankruptcy protection on Sunday, creating a
potential headache for the nation's fourth-largest mobile-phone carrier,
the Wall Street Journal reported. AirGate PCS Inc.'s iPCS unit sought
protection from its creditors in federal bankruptcy court in Atlanta
after failing to persuade Sprint to throw it a financial lifeline. The
unit simultaneously filed a complaint in the same court against Sprint,
charging it with violating terms of their affiliate agreement, reported
the Journal. To read the full article, point your browser to
href='http://www.wsj.com'>www.wsj.com (subscription required).
Bankruptcy Fraud Prosecutions On Rise in Metro Atlanta
According to statistics from the U.S. Trustees Office, bankruptcy
filings have been on the rise in the Northern District of Georgia since
2001. In 2001, there were 38,435 total bankruptcy filings, which was an
increase of 19.37 percent over the previous year. In 2002, there were
42,434 total bankruptcy filings, which was an increase of 10.40 percent
over 2001. According to U.S. Trustee C. David Butler, more citizens come
into contact with the federal judicial system through bankruptcy than
any other type of proceeding. With the increase in bankruptcy filings
comes the potential for increased fraud committed in relation to those
bankruptcies. Says U.S. Attorney William Duffey, 'Some debtors want the
best of both worlds: they want the protection of the bankruptcy system,
but they also want to keep their property.'
Duffey says that bankruptcy fraud occurs in a number of different
ways, including when debtors provide false information about identity
and social security numbers on voluntary petitions, conceal assets and
income on financial statements and schedules, and lie during bankruptcy
hearings and depositions about the debtor's assets and income. In
addition to these 'traditional' ways of violating the criminal
bankruptcy laws, increasingly, persons engaged in fraud are using the
bankruptcy system to keep their defrauded victims from regaining their
property or assets. For further information, please visit
href='http://www.usdoj.gov/usao/gan'>www.usdoj.gov/usao/gan.
Adelphia Creditors Back Hiring Of Executives Opposed By
Holders
A committee representing creditors of Adelphia Communications Corp.on
Monday pledged its support for two former AT&T Broadband executives
to run the bankrupt cable operator, while representatives for its
shareholders disputed the proposed hiring as too expensive, Dow Jones
reported. The committee representing Adelphia shareholders, which has
attacked the compensation package for the executives as 'grossly
excessive,' further argued at the Monday hearing against the merit of
the current Adelphia board. The board voted five to one for the hiring
of the two cable veterans, reported the newswire.
Desa International Lenders Object To Asset Sale Distribution
Plan
Two of Desa International Inc.'s lenders have objected to the company's
request to distribute some asset sale proceeds to the agent of a
pre-petition credit agreement, according to court papers obtained on
Monday by Dow Jones Newswires. JWC Bridgeco Inc. and UBS Capital LLC,
participants in Desa International's pre-petition senior secured credit
facility, say the distribution might affect their right to receive
payments under the credit pact. According to an objection filed on
Monday with the bankruptcy court overseeing Desa International's case,
the two lenders are also involved in an intercreditor agreement with
Bank of America N.A., the agent for the pre-petition credit pact. The
lenders also objected to Desa International's motion because it seeks to
determine their rights under the intercreditor pact, the filing said,
Dow Jones reported.
Former Budget Group Wins Approval Of $20 Million Sale To Avis
The entity formerly known as Budget Group Inc. on Monday won approval of
the sale of its remaining core assets to Avis Europe PLC in a deal
valued at roughly $20 million, Dow Jones reported. Proceeds of the sale
will be distributed to Budget Group's creditors once the debtor company
wins confirmation of a reorganization plan. The company hasn't yet filed
a plan. On Monday, the company won an extension of the time it has the
exclusive right to file a plan through April 2 and the sole right to get
plan acceptances through June 2, reported the newswire.
Encompass Panel Gets Extension of Investigation Period
The bankruptcy court overseeing Encompass Services Corp.'s chapter 11
case has extended through June 30 the investigation period in which the
firm's unsecured creditors' committee may assert claims and file
lawsuits against the company's lenders on behalf of the company's
estate, Dow Jones reported. Judge William R. Greendyke of the U.S.
Bankruptcy Court in Houston signed a court order last Wednesday that
extended the deadline. The investigation period, originally set as part
of Encompass Services' debtor-in-possession financing agreement, would
have expired on Monday, according to court papers obtained by Dow Jones
Newswires.
KMART
Kmart To Present Draft Amended Chapter 11 Plan To Court
At hearings scheduled to begin today, Kmart Corp. will present a draft
amended reorganization plan and revised disclosure statement to the
court handling its chapter 11 case, according to a hearing agenda Dow
Jones Newswires obtained on Monday. The discount retailer said in the
hearing agenda that the changes reflect the comments of some interested
parties and certain other negotiated terms. At Tuesday's hearing, Kmart
is scheduled to ask Judge Susan Pierson Sonderby of the U.S.
Bankruptcy Court in Chicago to approve the disclosure statement, which
describes the proposed plan for creditors. If the disclosure statement
is approved, Kmart will be able to send it and the plan it describes to
its creditors for their vote in March and seek confirmation of the plan
from the court in mid-April, reported the newswire.
Kmart Still Determining Extent Of Headquarters Job Cuts
Kmart Corp. is still determining how many jobs will be cut at its
corporate headquarters as it closes more than 300 stores this year, the
company said on Monday, Dow Jones reported. Kmart is shuttering 316
stores, affecting at least 30,000 employees, as part of its
reorganization, and the company said last month that it planned to lay
off an undetermined number of employees at its headquarters as well,
reported the newswire.
S&P Withdraws Maxxim Medical Group Ratings
Standard & Poor's said on Monday that it withdrew its 'D' corporate
credit, senior secured bank loan, and subordinated debt ratings on
Maxxim Medical Group Inc., Dow Jones reported. These ratings had been
lowered to 'D' after Maxxim filed for chapter 11 bankruptcy protection
from creditors on Feb. 11. The ratings withdrawal reflects the limited
market interest and information on the company, reported the newswire.
Waltham, Mass.-based Maxxim is a supplier of custom-procedure trays,
non-latex examination gloves, and other single-use medical products.
Allegheny Loans Include Institutional Investor Tranche
Allegheny Energy Inc.'s new credit facilities are expected to include a
$470 million term loan open to institutional investors, a person
familiar with the transaction said on Monday, Dow Jones reported.
Allegheny's lenders last week agreed in principle to give the troubled
energy company a new package of credit facilities after it defaulted
last year, according to people familiar with the situation. In a filing
with the Securities and Exchange Commission Friday, Allegheny requested
regulatory approval to increase the amount of secured debt it's allowed
to issue to $2.2 billion from $2 billion, Dow Jones reported. The new
financing package is expected to be around that amount.
IDT to Bid $255 Million For Global Crossing
Telecommunications provider IDT Corp. said on Monday night it plans to
make an unusual $255 million bid for fiber-optic company Global Crossing
Ltd, the Wall Street Journal reported. The bid, which will be
presented in U.S. Bankruptcy Court today, comes as Global Crossing seeks
final regulatory clearance from government security agencies assessing
the company's pending $250 million sale to Hong Kong's Hutchison Whampoa
Ltd. and Singapore Technologies Telemedia Pte. Global Crossing has
already received full bankruptcy-court approval for the Hutchison and
Singapore Technologies transaction, which will give the two companies
61.5 percent control of Global Crossing, reported the Journal.
The Madison, N.J., firm filed for chapter 11 bankruptcy protection in
January 2002.
Roxio Hopes to Revive Napster As Subscription-based Service
Napster, the pioneering online music service, is getting another lease
on life with the launch by year's end of a legal, subscription-based
music business, its new owners said on Monday, the Associated Press
reported. Roxio Inc., which bought Napster's name and intellectual
property for $5 million at a November bankruptcy sale, said it is in
discussions with the five major music labels to provide content for the
online service. Best known for its CD-creation and digital media
software, Roxio also hired Napster founder Shawn Fanning this month as a
consultant to the service, reported the newswire.
Dairy Mart Creditors Object To Pay Package For Fired CEO
A committee of Dairy Mart Convenience Stores Inc.'s unsecured creditors
said the company's plan to pay recently fired Chief Executive Gregory
Landry $1.6 million is unacceptable, Dow Jones reported. The committee
filed an objection to Dairy Mart's liquidation plan with the U.S.
Bankruptcy Court in Manhattan on Friday. A hearing to confirm the plan
is scheduled for Feb. 26.
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Today's Bankruptcy Headlines. New articles are posted here
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