February 102004

U.S. Debt Recovery Rates Flat in 2003

Ultimate recovery rates for the United States in 2003 showed little
improvement and remain well below the 16-year average, according to a
report issued on Feb. 6, 2004, by Standard & Poor's Risk Solutions,
Reuters reported. Ultimate recovery rates continue to be primarily
influenced by structural quality driven by collateral quality and debt
cushion, according to data from Standard & Poor's LossStats
Database. 'The decrease in the quality of debt instrument structure from
recent years is the main reason for the continued weak recovery rate
results,' said David Keisman, Managing Director, Risk Solutions,
reported the newswire. Historically, the report notes, higher quality
instruments achieve higher ultimate recovery rates, often with a lower
standard deviation. Of the different types of default, distressed debt
exchanges produce higher recovery rates than the full-fledged bankruptcy
process. Overall U.S. recovery rates have been declining since 1995,
Reuters reported.

Senate Democrats Plan Add-ons To Class Action Legislation

Senate Democrats plan to offer several amendments to a modified version
of the controversial class action legislation when it moves to the
floor, a spokeswoman for Senate Judiciary ranking member Patrick Leahy
(D-Vt.) said on Monday, CongressDaily reported. 'We do plan to
offer amendments to improve the bill, and possibly other, nongermane
amendments,' Leahy's spokeswoman said. But the spokeswoman declined to
offer details on what those amendments might be. Majority Leader Bill
Frist (R-Tenn.) has said he plans to move the class action bill to the
floor after the Senate completes action on the legislation reauthorizing
federal surface transportation programs.

Political Money Said to Sway Pension Investments

Five years ago, the Securities and Exchange Commission (SEC) reviewed
the role of campaign money in the selection of pension investments and
found evidence of a widespread problem, citing instances in at least 17
states, the New York Times reported. The SEC drafted regulations
to address the issue. But the project was shelved amid opposition from
the financial industry and elected officials. Today, there is renewed
interest in the subject. As pension assets have dwindled in the last few
years, some pension boards have begun to review their plans, looking to
see how much of their losses, if any, were caused by something other
than adverse market conditions. Read the full article at
href='http://www.nytimes.com/'>www.nytimes.com.



One Price Clothing Files for Chapter 11

One Price Clothing Stores Inc., an operator of clothing stores for women
and children, on Monday filed for bankruptcy protection under chapter 11
and obtained debtor-in-possession financing, Reuters reported. The
retailer said it filed in response to increasing liquidity problems and
ongoing concerns raised by its senior lenders arising from alleged
misrepresentations made by the company's former CFO.

UNITED AIRLINES

United Says Flight Attendants Aware of Benefits

United Airlines on Monday urged a bankruptcy court not to grant its
flight attendants permission to examine potential changes to retiree
medical benefits, saying they have been aware of the plan for more than
a year, Reuters reported. The Association of Flight Attendants last week
said it asked the U.S. Bankruptcy Court here to appoint an examiner to
look into the retiree benefit issue in the hope of preventing any
changes.



The union said the airline had engaged in a 'scheme to defraud thousands
of retirees' by asking them to pay a greater share of their medical
benefits as part of a plan to get out of bankruptcy. United, a unit of
UAL Corp., filed the largest bankruptcy case in aviation history in
December 2002, and has since been slashing costs across all its bases,
from employees to aircraft lessors to vendors and supplies. United is
hoping to emerge from court protection in the first half of this year,
although other issues including underfunded pensions remain to be
resolved, reported the newswire.

Moody's Withdraws Ratings on United Airlines

Moody's Investors Service withdrew its ratings on United Airlines and
its corporate parent, UAL Corp., citing the parent company's bankruptcy
proceedings, and in the case of some securities, a lack of sufficient
information to generate ratings. UAL Corp. had a senior implied rating
of Caa3 before it was withdrawn.

UAL Seeks Extension To File Reorganization Plan To June
30

UAL Corp. is seeking to extend the exclusivity period it has to file a
reorganization plan to June 30 from the current March 8 deadline, the
Wall Street Journal reported. In a court filing with the U.S.
Bankruptcy Court for the Northern District of Illinois dated Friday, the
parent of United Airlines said a number of restructuring initiatives
remain unresolved, specifically a loan guarantee application pending
before the Air Transportation Stabilization Board (ATSB). UAL said the
resolution of its application is an essential piece of its restructuring
efforts, particularly the $2 billion it has lined up to help fund its
operations once it emerges from bankruptcy-court protection. Without the
guarantee, it's 'unlikely' that UAL would be able to secure its exit
financing, the filing said. UAL said the ATSB guidelines require it to
raise 10 percent of the contemplated $2 billion in exit financing
without ATSB guarantee. It has raised $400 million, reported the online
newspaper.

PARMALAT

Output at Parmalat Brasil Slips Further

Production at Parmalat's Brazilian subsidiary dropped further on Monday
as it struggled to pay for raw materials, Reuters reported. A
spokeswoman for Parmalat Brasil Industria de Alimentos said average
output was 'a little below 40 percent' of normal, and production at two
of the unit's eight plants in Brazil had been halted due to a lack of
raw materials. Parmalat Brasil filed for bankruptcy protection at the
end of January, struggling to pay suppliers and creditors. Ricardo
Goncalves, the president of Parmalat Brasil, has urged the government to
amend bankruptcy laws to give creditors guarantees on new loans to the
subsidiary. But so far the government has not offered Parmalat Brasil
any support. Instead, it has concentrated on trying to ensure milk
producers are protected from fallout from the scandal, reported the
newswire.

Parmalat Creditors Call for Vote

Financial creditors of insolvent food company Parmalat SpA are seeking
an unprecedented vote on any rescue plan before the Italian parliament
enacts a new insolvency decree on Feb. 26, Reuters reported. Italy
introduced the new decree, which bypassed the courts and prolonged the
period of creditor protection for the company, a day before Parmalat
filed for insolvency on Dec. 24. While European Union Competition
Commissioner Mario Monti backed the changes, which streamlined the
process and helped avoid any state aid package for Parmalat, creditors
are lobbying for a binding vote on any restructuring, reported the
newswire.

Bankruptcy Court Next for Canyon Club

Creditors of the troubled Canyon Club golf development filed a petition
in federal court on Friday to force the company into involuntary
bankruptcy, Jackson Hole Zone reported. The petition was filed in
the U.S. Bankruptcy Court for the District of Wyoming in Cheyenne. The
creditors include Canyon Club investors Allan Tessler and Edward Artzt
and contractors from Jackson Hole and elsewhere who were not paid for
their work. Judge Peter McNiff issued a summons, and Canyon Club Inc.
will have until Feb. 26 to respond with a motion or answer. If the
company does not respond, the bankruptcy will proceed. The petition asks
the court to impose chapter 7 bankruptcy.

Edgcomb has been attempting to build an 18-hole golf course and 63
homesites on a 359-acre parcel in the Snake River Canyon, five miles
south of Hoback Junction. The project is located in prime bald eagle
nesting habitat and has been plagued by controversy since its inception,
according to Jackson Hole Zone. New Roman''>