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March 4, 2005
Cloture Filed to Cut Off Debate; Specter Floats Idea of Raising
Bankruptcy Fees to Pay Judges
The Senate Leadership today (Friday) filed for cloture to cut off
debate on the bankruptcy bill (S.256). The vote on the motion would be
Tuesday. If 60 Senators vote in favor, final passage could come quickly
thereafter.
Senate Judiciary Chairman Arlen Specter (R–Pa.) yesterday
proposed increasing bankruptcy filing fees to pay for 26 new judges and
to offset other costs associated with the Senate bankruptcy bill,
CongressDaily reported. Specter’s amendment would
increase filing fees under chapter 7 of the Bankruptcy Code from $155 to
$200, and chapter 11 filing fees from $800 to $1,000. Without those
increases the bill could be subject to a budget point-of-order, he
said.
The chamber rejected a series of Democratic amendments on Thursday,
including language by Minority Whip Richard Durbin (D–Ill.) to bar
high-cost mortgage lenders from using the bankruptcy courts to collect
debts on loans they made in violation of federal predatory lending laws.
Durbin’s amendment failed, 58–40. Meanwhile, the Senate
expects to debate competing minimum wage amendments on Monday. These
votes will occur late on Monday.
Negotiations on Asbestos Bill Continue
Republican members of the Senate Judiciary Committee said after an
informal meeting yesterday that they are confident that the committee
will pass an asbestos bill, CongressDaily reported.
Judiciary Chairman Arlen Specter (R–Pa.) said he plans to consider
the suggestions Republican members made after discussing them with key
Democrats. Sen. Lindsey Graham (R–S.C.) said Republicans
acknowledged that a final bill “is not going to satisfy the
hardest of the hard-right Republicans.” Graham and other
Republicans said they discussed the proposed trust fund that would be
used to compensate victims of asbestos-related illnesses to prevent
cases from returning to the court system—something business groups
have complained about. Specter did not announce any additional meetings
or a markup, but said an April floor vote is still possible, the
newswire reported.
Ebbers’ Defense Counsel Shifts Focus to Sullivan
In the second day of closing arguments yesterday in the fraud trial
of former WorldCom CEO Bernard Ebbers, defense attorney Reid Weingarten
tried to narrow the government’s case to its chief witness, former
WorldCom CFO Scott Sullivan, the New York Law Journal
reported. Every allegation in the government’s case, Weingarten of
Steptoe & Johnson told jurors at the beginning of his four-hour
closing argument, relies on a “highly impeachable source.”
Read the full article at
href='http://www.law.com/jsp/article.jsp?id=1109859528735'>www.law.com/jsp/article.jsp?id=1109859528735.
Surprising Vigor for Retail Sales in February
Sales increased 4.2 percent at retail stores open at least a year,
according to the Goldman, Sachs & Company retail composite index,
released yesterday, the New York Times reported. That
exceeded the expectations of Wall Street analysts, who had predicted a
rise of 3.3 percent.
“Certainly, in the first quarter the economic picture improved,
and weekly employment results were better; they broke out of a sideways
trend they had been in for roughly a year,” said Kennard Perkins,
the president and chief statistician at Retail Metrics, a research firm
that compiles analysts’ estimates, the newspaper reported.
WorldCom Settlement to Cost Bank of America $460.5 Million
Bank of America Corp. agreed to pay $460.5 million to settle a suit
brought by investors of the former WorldCom Inc. who lost billions when
the telecommunications company filed for bankruptcy in 2002 after an
accounting scandal, the Wall Street Journal reported. The
settlement by the Charlotte, N.C.–based company, which ranks third
in assets among U.S. banks, came two weeks before the scheduled start of
a civil trial against Wall Street underwriters, WorldCom’s outside
directors and its former auditor, Arthur Andersen LLP.
Cheap Bailouts Hamper Distressed Debt Investors
Cheap cash is helping faltering European companies avoid
restructuring and bankruptcy and is forcing a re-think among investors
that specialize in distressed companies, investors and analysts say,
Reuters reported. Already in 2005 a number of distressed companies have
either borrowed their way out of trouble, exploiting cheap credit from
banks and funds, or cleared their debt through asset sales to bidders
with private equity cash or cheap debt, the newswire reported.
Verizon Wireless Gets Nod to Buy NextWave Licenses
The U.S. Federal Communications Commission said on Thursday it has
approved Verizon Wireless’s plan to acquire wireless licenses from
bankrupt NextWave Telecom Inc. for $3 billion, Reuters reported. Verizon
Wireless has said the licenses cover 23 U.S. markets and would be
acquired through the purchase of NextWave after it completes its
bankruptcy reorganization.
Frank’s Nursery Files Chapter 11 Reorganization Plan
Frank’s Nursery & Crafts Inc., once the largest U.S.
specialty retailer devoted to lawn and garden products, on Thursday said
it filed its chapter 11 reorganization plan with the Manhattan
bankruptcy court, and has completed going-out-of-business sales at its
stores, Reuters reported. The Troy, Mich.–based company expects
under the plan to keep about 40 real estate parcels. Existing
shareholders would fund the plan with up to $120 million of convertible
notes, plus a $20 million equity investment. Frank’s said it has
sold or rejected substantially all of its leases.
Bankruptcy Plan Confirmed for National Benevolent
Association
Haynes and Boone LLP announced yesterday in a press release that
the joint plan of reorganization for the National Benevolent Association
of the Christian Church (Disciples of Christ) and certain of its
affiliates (“NBA”) has been confirmed by the Honorable
Ronald King of the United States Bankruptcy Court for the Western
District of Texas. The joint plan was submitted by the NBA and the
Creditors Committee. Under the joint plan, unsecured creditors will be
paid no less than 102 percent of the amount they were owed when NBA
filed its bankruptcy cases.
U.S. Judge Reaffirms YUKOS U.S. Case Dismissal
A U.S. Bankruptcy Judge on Thursday reaffirmed her previous ruling to
dismiss embattled Russian oil company YUKOS’s U.S. bankruptcy
filing, Reuters reported. Last week, Bankruptcy Judge Letitia Clark
ruled that YUKOS’s efforts to seek bankruptcy rotection and its
dispute over a $27.5 billion tax bill levied by Russian authorities did
not belong in the U.S. courts.
Health Essentials Solutions Files for Bankruptcy Protection
A Louisville company under federal investigation is seeking
bankruptcy protection, saying the probe ruined its financial outlook,
the Associated Press reported. Health Essentials Solutions filed for
federal chapter 11 protection on Tuesday. The company dropped plans for
a public stock offering after federal agents raided its offices for
evidence of fraud last fall.