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January 6, 2005
Businesses Unhappy with Draft Asbestos Bill
Businesses facing asbestos claims are unhappy with the latest draft
bill aimed at limiting their liability, even as President George W. Bush
yesterday increased pressure on parties to broker a deal, Reuters
reported. Bush said Congress needed to act this year to improve the
system handling the huge volume of asbestos claims, which he said were
beyond the capacity of U.S. courts. “They need to act and get the
job done. I look forward to signing an asbestos reform in 2005,”
the president said in
Collinsville, Illinois.
U.S. Chamber of Commerce chief Thomas Donohue indicated trouble with
current efforts, saying a draft bill for a privately financed national
asbestos compensation fund has “gone too far” and is too
expensive. Donohue said the author of the proposal, incoming Chairman of
the Senate Judiciary Committee Arlen Specter (R–Pa.), should
change the bill or business leaders who have backed a compensation fund
would search for other ways to limit their liability, the newswire
reported. Specter said on Tuesday he planned to hold a hearing next week
on his draft legislation.
10 Ex-Directors from WorldCom to Pay Millions
Ten former directors of WorldCom have agreed to pay $18 million of
their own money to settle a class-action lawsuit by investors who lost
hundreds of millions of dollars when the company collapsed in July 2002,
the New York Times reported. The agreement with the
directors, which is part of a $54 million settlement with plaintiffs led
by the New York State Common Retirement Fund, is an unusual concession.
Directors have always relied on their company’s insurance to cover
costs associated with securities cases and settlements, the newspaper
reported.
US Airways
US Airways Flight Attendants Approve Givebacks
Flight attendants at US Airways approved a concession agreement
yesterday that will help the bankrupt airline save $94 million annually
as it tries to cut costs, Reuters reported. The Association of Flight
Attendants said 71 percent of eligible members voted on the proposed
deal with 63 percent favoring the agreement to cut pay by 9 percent.
US Airways, Machinists Head to Bankruptcy Court
US Airways and its machinists union go to bankruptcy court today,
Reuters reported. Judge Stephen Mitchell of the U.S. Bankruptcy Court in
Alexandria, Virginia, planned to rule on the airline’s motion to
throw out the contract covering nearly 9,000 mechanics and related
workers if the work group and the carrier failed to agree on a package
of voluntary concessions. Mitchell has not indicated which way he will
rule, but he previously said he wanted the airline to survive. In
October, he approved temporary pay cuts of 21 percent for most union
workers at the seventh-biggest domestic airline.
Southwest Will Fill US Airways’ Pittsburgh Gap
Low-fare Southwest Airlines will start service to Pittsburgh
International Airport in May, taking advantage of US Airways Group
Inc.’s major service cuts there, the Wall Street
Journal reported. The move into Pittsburgh underscores
Southwest’s rapid growth at a time when many other airlines are
simply trying to survive. The low-cost airline has remained profitable
throughout the industry’s downturn of the past several years, the
online newspaper reported.
U.S. Gets Tough on Failure to Repay Student Loans
Years after a political outcry over high levels of student-loan
defaults, the Education Department has become one of the toughest debt
collectors, the Wall Street Journal reported. A 1998 change
in federal law made it extremely difficult for people to escape student
loans through personal bankruptcy. The Education Department also can now
seize parts of borrowers’ paychecks, tax refunds and Social
Security payments without a court order, the online newspaper
reported.
Hawaiian Airlines Settles Lawsuit against Former Chairman and
CEO
Hawaiian Airlines has agreed to a settlement in a lawsuit against its
former chairman and CEO John Adams, Airline Industry
Information reported. According to the airline’s trustee
Joshua Gotbaum, the move closes a “sorry chapter” in the
airline’s history and is expected to aid the airline’s
bankruptcy reorganization. The lawsuit was an attempt to recover $28
million paid to Adams and other shareholders and insiders, according to
the Associated Press.
Delta Price Cut May Heat Up Fare War—Analysts
News that Delta Air Lines Inc. cut its fares by 50 percent on some
flights may fuel a low-fare revolution that could cripple or kill
costlier carriers, analysts said yesterday, Reuters reported. The
Atlanta-based airline cut fares by up to 50 percent for travel in the
continental United States. The carrier, which is struggling to avoid
bankruptcy, said it lowered its fares to better compete with low-cost
rivals such as JetBlue Airways and Southwest Airlines. Delta’s
price cutting may signal a quickened pace of restructuring by the legacy
carriers into leaner operations, analysts said, the newswire
reported.
Monsanto Net Loss Narrows, Shares Fall
Monsanto Co. yesterday posted a narrower quarterly net loss as the
agricultural chemicals and crop company took a reserve of $284 million
for legal problems, but saw a jump in seed sales, Reuters reported.
Monsanto, whose shares fell 3 percent, acknowledged it was still
struggling with strong competition and declining sales in the herbicide
market, as well as the potential liabilities tied to its former
nonagricultural chemical concerns. Results in the latest quarter
included a $284 million reserve for liabilities tied to Monsanto’s
former affiliate, Solutia Inc., a chemical concern now in bankruptcy,
the newswire reported.