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May 23, 2006
name='1'>Proposed Pension Bill Amendment Would Have PBGC Chief
Appointed by the President
Senate Finance Chairman
Charles Grassley (R-Iowa) and ranking member Sen. Max Baucus (D-Mont.)
said Monday they are looking to add a provision to pension legislation
currently in conference to make the Pension Benefit Guarantee
Corporation’s executive director a presidential
appointment,
size='3'>CongressDaily reported today. The
PBGC's executive director is currently appointed by the Labor secretary.
'Senate approval of the executive director would guarantee more
attention to the agency,' said Grassley. The current executive director,
Bradley Belt, has said he intends to leave at the end of May after two
years on the job.
face='Times New Roman' size='3'>
name='2'>Union
size='3'> Says that Northwest Deal Includes
Layoffs
The International Association
of Machinists (IAM) and Aerospace Workers said Monday that Northwest
Airlines would be able to lay off roughly 700 ground workers under a
tentative agreement with their union, the Associated Press reported
yesterday. The exact number of layoffs won't be known until the airline
decides which positions to eliminate and workers decide whether to
accept a company buyout, said Bobby De Pace, who runs the IAM branch
that covers Northwest workers. The airline made the deal with the IAM on
Friday just hours before a bankruptcy judge was expected to decide if
Northwest could reject that union contract outright. Under the new pact,
their wage cuts stay the same, 11.5 percent, and the proposal would
still save Northwest $190 million a year.
href='http://www.nytimes.com/aponline/business/AP-Northwest-Labor.html?pagewa…'>Read
more.
ABB
Lummus Gets Approval to Borrow up to $320 Million
U.S. Bankruptcy
Judge Judith
Fitzgerald approved ABB Lummus’ ability
to borrow up to $320 million to cover operational costs like meeting
payroll obligations and paying vendors while navigating through the
chapter 11 process,
size='3'>Portfolio Media reported yesterday.
The financing plan includes a “carve out” of $3
million, which will be set aside to pay administrative and professional
fees. Handwritten at the end of the order is a caveat preserving the
right of any statutory committee in the case to lodge an objection
within 20 days. A speedy departure is especially important to ABB Ltd.,
which is planning to sell the bankrupt unit to aid the chapter 11 case
of another asbestos litigation-plagued unit, Combustion Engineering Inc.
Late last year, Combustion Engineering, a boiler maker, reached a $1.43
billion settlement with more than 100,000 asbestos claimants. Under the
terms of Combustion Engineering’s chapter 11 plan, confirmed in
December 2005, ABB must now provide another $204 million for a trust
handling the unit's asbestos claims.
name='4'>Armstrong World to File New Reorganization
Plan
Judge Eduardo C. Robreno
will consider Armstrong World Holdings Inc.’s modified
reorganization plan, the company’s fifth attempt since filing for
chapter 11 five years ago,
size='3'>Portfolio Media reported yesterday. A
confirmation hearing on reorganization plan is scheduled for today. The
plan will be substantially similar to the fourth amended plan of
reorganization, filed almost exactly a year ago, with the exception to
eliminate the distribution of warrants to shareholders of Armstrong
World’s parent company, Armstrong Holdings Inc. The case is
Armstrong World Industries,
Inc., case number 00-04471-JKF, in the U.S.
Bankruptcy Court for the District of Delaware.
name='5'>AirNet to File for Chapter 11 Bankruptcy
AirNet Communications
Corp. announced plans to file for chapter 11 in response to continuing
adverse market conditions, the
size='3'>Orlando Business Journal reported
yesterday. While
under chapter 11, Melbourne, Fla.-based AirNet says it plans to continue
operating while it works out its reorganization plan. AirNet
is a supplier of wireless base stations and other telecommunications
equipment.
href='http://orlando.bizjournals.com/orlando/stories/2006/05/22/daily4.html?t…'>Read
more.
w:st='on'>
name='6'>Chicago
face='Times New
Roman' size='3'> Real Estate Partnership Files Bankruptcy over
Project
A real estate partnership
founded by businessman and political fundraiser Antoin 'Tony' Rezko has
filed for bankruptcy in Chicago, the Chicago Tribune
reported today. The partnership is trying to free
itself from an agreement to sell. Rezko attorney Michael Sreenan said
Monday that the aim of the lawsuit is to get the developer out from
under an agreement to a River North,
w:st='on'>
size='3'>Ill.
which was supposed to be the site of a condominium project, to an
affiliate of Chicago-based developer Centrum Properties Inc. for $9
million. Sreenan said the company is looking to sell the property to
Champaign, Ill.-based Royal Apartments USA for $12.3 million to repay
the bank debt and default fees on the property, which amount to $12.5
million. The bankruptcy petition requests that the court sell the
property at auction on June 15.
href='http://www.chicagotribune.com/business/chi-0605230264may23,1,4835829,pr…'>Read
more.
SEC
Official Urges Competition for Credit Agencies
The U.S. Securities and
Exchange Commission’s (SEC) process for certifying credit-rating
agencies discourages competition in the industry, SEC Commissioner
Cynthia Glassman said in a speech last week, according to
Portfolio Media
yesterday. Glassman attacked an SEC proposal that
requires a credit-rating agency to be “nationally
recognized” before being certified by the agency, a stipulation
that she said may be anti-competitive. The proposal in question,
released for public comment in 2005, was designed to add transparency to
the process by which credit-rating agencies receive SEC certification
and become Nationally Recognized Statistical Rating Organizations
(NRSRO). The proposal would decrease the application processing time and
require continued compliance with the SEC’s terms, as opposed to
the current system in which status is granted in perpetuity. “The
requirement that a credit-rating agency demonstrate ‘national
recognition’ may be anti-competitive because it is extremely
difficult for an agency to gain national recognition without being an
NRSRO,” Glassman said at the Bond Market Association’s
annual conference.
Seven
Indicted in Scandal of Bankrupt Ohio Health Finance
Company
Lance K. Poulsen, former
chairman of National Century Financial Enterprises, a health care
finance concern that is now bankrupt, and six former executives were
indicted on charges of plotting to defraud investors in the company,
Bloomberg News reported today.
size='3'>The 60-count indictment unsealed yesterday by federal
prosecutors in Columbus, Ohio, named Poulsen, Donald H. Ayers and
Randolph H. Speer, the company's former finance chief, along with four
other former executives, for lying to investors, diverting funds and
hiding shortfalls in a money-laundering conspiracy. The indictment is
the latest development in a scandal that began unfolding in November
2002 when National Century filed for bankruptcy two days after the FBI
raided its
face='Times New Roman' size='3'>Ohio
offices. On Dec. 2, 2002, the company failed to pay
investors $8.3 million in interest due on its bonds.
href='http://www.nytimes.com/2006/05/23/business/23health.html?_r=1&oref=slog…'>Read
more.
name='9'>Fannie Mae to Settle Charges and Pay Fine
Mortgage giant Fannie Mae
will pay about $400 million in penalties under an agreement with two
federal agencies to settle charges related to its $10.8 billion
accounting scandal, the
size='3'>Washington Post reported today. The
agreement is scheduled to be announced today by the Securities and
Exchange Commission (SEC) and the Office of Federal Housing
Enterprise Oversight (OFHEO), which regulates Fannie Mae.At the same
time, OFHEO plans to impose new restrictions on the company's business,
according to sources familiar with the agreement. The settlement would
end a nearly three-year investigation by the SEC and OFHEO into
widespread accounting manipulation by the company, including the use of
improper accounting techniques to maximize bonus pay for top executives.
It would not cover potential SEC action against individuals involved in
Fannie Mae's problems, nor does it end a criminal investigation by the
Justice Department.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/05/22/AR20060…'>Read
more.
International
name='10'>Sri Lankan Oil Firm on the Brink of
Bankruptcy
Lanka IOC Ltd. (LIOC),
which operates 160 filling stations in the country, warns of possible
bankruptcy in 42 days due to the non-payment of fuel subsidy by the Sri
Lankan Government, the Sri Lankan Daily Star reported today.
LIOC Managing Director K. Ramakrishnan told The Island Financial
Review that the total fuel subsidy dues have
reached Rs. 7.67 billion ($74 million) as of April this year. LIOC total
turnover in the last financial year has increased by 36 percent to Rs.
37.5 billion ($363 million) from Rs. 27.6 billion ($268
million).
href='http://www.thedailystar.net/2006/05/23/d60523050764.htm'>Read
more.
href='http://www.thedailystar.net/2006/05/23/d60523050764.htm'>