August 19, 2004
DELTA
Delta CEO Presents
Long-awaited Plan to Board
Delta Air Lines CEO Gerald
Grinstein is presenting his long-awaited plan for the airline's future
to board members on Wednesday, the company said, a strategy that could
determine whether the struggling carrier can avoid bankruptcy, Reuters
reported. Shares of Atlanta-based Delta airline rose as much as 16
percent to their highest level in more than a week on speculation about
the company's restructuring plan. Delta has been racing to cut costs to
avoid chapter 11, a path several of its rivals have been forced to take.
Grinstein has been working on a strategic review since taking the helm
in January. The airline has said labor savings are a critical part of
its restructuring. The pilots' union on Wednesday said it expected to
receive details from management at a Thursday meeting on a possible
equity stake in the airline in exchange for pilot concessions, the
newswire reported.
Delta Seeks Permission to
Buy Back Certain Bonds
Delta Air Lines said on
Wednesday it was asking some of its bondholders for permission to buy
back certain kinds of bonds, as the airline seeks to restructure its
business outside of bankruptcy court, Reuters reported. Delta is seeking
permission from investors in certain equipment trust certificates and
pass through certificates, both of which are types of secured bonds used
to finance aircraft purchases, to remove restrictions to Delta's
purchasing or owning the bonds. The move may be a first step toward the
company restructuring its debt, an analyst said. The airline may look to
buy back some debt, and issue new debt, he added, the newswire
reported.
ATA Holdings Could Be Headed
For Bankruptcy
ATA Holdings Corp., the parent
of struggling ATA Airlines, faces a liquidity crisis that could push it
into bankruptcy by early next year, an analyst said on Wednesday,
Reuters reported. ATA said earlier this week that barring changes to its
aircraft lease agreements, it does not expect to have enough cash to
meet those obligations in the first quarter of 2005. The company also
said its cash balance will fall by $20 million in this year's third
quarter. 'There is a very high risk of bankruptcy at this point,' Clark
Orsky, a bond analyst for KDP Investment Advisors, said in an interview.
' In a statement issued on Wednesday, the airline said: 'ATA Airlines is
dealing with many of the same challenges currently affecting other
airlines, including record fuel costs and an anemic revenue environment.
Management and employees are working diligently to return the company to
profitability,' the newswire reported
Air Canada Stock
Drops on Review
Shares of Air
Canada fell
by more than half on Wednesday, after the Toronto Stock Exchange said it
was reviewing the company's stock to determine if it meets listing
requirements, Reuters reported. The exchange said it is reviewing Air
Canada's
common shares and class A nonvoting shares on an expedited basis, which
generally takes about two weeks. The exchange declined to elaborate on
the specifics of the review, but expectations are that Air Canada's
shares will be delisted once the airline obtains court approval of its
restructuring plan.
Court
Approves St. Paul $502.5
Million Asbestos Accord
Insurer St. Paul Travelers
Companies on Wednesday said a bankruptcy court approved a $502.5 million
asbestos settlement for all pending asbestos court actions against its
Travelers Property Casualty unit, Reuters reported. Settlement funds
include $445 million for claimants and $57.5 million in legal fees. The
payment will be made out of St.
Paul's existing reserves. The settlement approved
by the U.S. Bankruptcy Court for the Southern District of New York bars
similar future, asbestos-related direct actions against Travelers, the
newswire reported.
Parmalat's New Management
Sues Deloitte
The new management at insolvent Parmalat announced on Wednesday it
had filed suit against auditors Grant Thornton International and
Deloitte Touche Tohmatsu, accusing them of playing a role in the
conglomerate's near-collapse, the Associated Press reported. The suit
filed in Illinois is part
of a campaign by Parmalat's bankruptcy administrator, Enrico Bondi, to
recover money for the company's creditors by suing financial
institutions he alleges helped Parmalat's former executives to deceive
investors. Already, he has launched suits against Citigroup, UBS and
Deutsche Bank. Financial institutions have long asserted that they, too,
were fooled by fraud at Parmalat, and should not be held responsible,
the newswire reported.
Bankruptcy Judge Raps NY
Lawyer
A combative creditor and its
aggressive upstate attorney have drawn the wrath of a federal bankruptcy
judge in Albany the New
York Lawyer reported. In two recent decisions, Northern
District Judge Robert E. Littlefield Jr. said Northern Federal Credit
Union and Watertown attorney
David P. Antonucci pursued baseless challenges to consumer bankruptcies.
Judge Littlefield was particularly critical of Antonucci and his client
in the chapter 7 case of Gregory Eliopoulos, In re: Eliopoulos,
01-16950/04-90063. The judge said he cannot 'ignore the inference' that
the credit union and its attorney are abusing the Bankruptcy Code for
'improper purposes,' including harassment, intimidation and to 'send a
threatening message' to debtors contemplating financial relief through
bankruptcy. Read the full article at
href='http://www.nylawyer.com/news/04/08/081704b.html'>
http://www.nylawyer.com/news/04/08/081704b.html
United Airlines, Others
Agree To Cut Flights
At Chicago 's
O'Hare
Some
U.S airlines
agreed Wednesday to cut or limit flights at O'Hare International Airport
here after meeting with officials of the Department of Transportation
and Federal Aviation Administration. To ease congestion at the
world's busiest airport, domestic airlines will limit to 88 the number
of scheduled hourly arrivals between 7
a.m. and 8 p.m. ,
U.S. Transportation Secretary Norman Mineta said in a prepared
statement. Currently, as many as 132 flights per hour arrive at O'Hare
during peak times. The voluntary action takes effect Nov. 1 and
expires April 30,
2005.
Provided by Daily Bankruptcy
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Copyright (c) 2004 Dow Jones & Company, Inc. All Rights
Reserved
Law Backing 2-Sex Marriage Is
Upheld by Federal Judge
Upheld by Federal Judge
1996 federal law that defines
marriage as 'a legal union between one man and one woman' is
constitutional, a federal judge in
Tacoma ,
Wash. , ruled on Tuesday, the New
York Times reported. It is the first decision of a federal
court to address the constitutionality of the law, the Defense of
Marriage Act.
The
Tacoma decision arose
from a bankruptcy filing. Lee and Ann Kandu, two American women, were
married in British
Columbia in August 2003 and filed a joint
bankruptcy petition in
Tacoma two months later. The
Justice Department opposed the joint filing, saying the federal marriage
law forbade it. Read the article at
href='http://www.nytimes.com/2004/08/19/national/19gays.html?adxnnl=1&adxnnlx=1092916918-sttjsR1tz2GCvCuhMsHZIg'>
http://www.nytimes.com/2004/08/19/national/19gays.html?adxnnl=1&adxnnlx=1092916918-sttjsR1tz2GCvCuhMsHZIg
White-Collar
Wizard
Everyone says former WorldCom
chief executive Bernard Ebbers doesn't have a chance of winning his
trial for allegedly directing the largest accounting fraud in
U.S.
corporate history, the National Law Journal reported. But
his
lawyer, Reid Weingarten, thinks differently. A series of successes --
including the acquittal of former Tyco GC Mark Belnick -- has propelled
the Steptoe & Johnson partner onto the rich and rarefied list of the
top white-collar criminal defense lawyers in the country. Read the
article at
href='http://www.law.com/jsp/article.jsp?id=1090180347380'>
http://www.law.com/jsp/article.jsp?id=1090180347380
US Airways Chief Steps Up
Pressure for Concessions
The chairman of US Airways,
David G. Bronner, said yesterday that its employees must agree to a
third round of wage and benefit cuts worth $800 million in the next 30
days or the airline could be liquidated, the New York
Times reported. Absent a deal with US Airways' unions, Bronner,
who runs Alabama's pension
fund, said he would not invest any more money to rescue the airline. The
Alabama fund is the
largest shareholder in US Airways. Bronner's comments came as US Airways
made a new contract proposal to its pilots' union, the only labor group
in formal talks with the airline. Other unions, notably the
International Association of Machinists and Aerospace Workers, have been
reluctant to grant more cuts on top of the two rounds made while the
airline was in bankruptcy, the newspaper reported.