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November 4, 2002
Feingold, Others to Take Up Wellstone's Bankruptcy Fight
Sen. Russell Feingold (D-Wis.) pledged on Thursday that Senate opponents
of a pending bankruptcy reform conference report would step in to fill
the void left by the death last week of Sen. Paul Wellstone (D-Minn.),
who had vowed to hold off the bill's enactment as long as he could,
CongressDaily reported. 'Sen. Wellstone was a passionate opponent
of the unfair bankruptcy legislation that has been pending for the past
three Congresses,' Feingold said in a statement. 'Paul cared about the
average person in this country, and he understood how this bill will
devastate hard-working American families who face financial distress,'
added Feingold. 'When Congress returns, those of us who share his view
of this unfair bill will do all we can to carry on his fight against
it.' Sen. Feingold is one of a core group of opponents that includes
Sens. Edward Kennedy (D-Mass.) and Richard Durbin (D-Ill.).
A self-proclaimed champion of the 'little guy,' Wellstone was a
pivotal figure over the years in bucking the influential credit card
industry by helping erect procedural obstacles to prevent the enactment
of bankruptcy reform legislation. The bankruptcy measure is pending
before the House, and Senate Majority Leader Tom Daschle (D-S.D.) has
pledged to bring the legislation to the Senate floor during the upcoming
lame-duck session, providing the House manages to pass it. However,
opponents are hoping that just the threat of a procedural delay could be
enough to knock the bankruptcy measure off Congress' crowded
post-election schedule.
Unemployment Rate Rises to 5.7 Percent
The nation's unemployment rate edged back up to 5.7 percent in October,
indicating the employment market remains shaky, the Washington Post
reported. October's 5.7 percent jobless rate was up slightly from 5.6
percent in September, and businesses cut 5,000 jobs. It was the second
month in a row of payroll cuts, the Labor Department reported on Friday.
Cuts came largely in manufacturing, construction and temporary
employment services. Those job losses were largely offset by gains in
the service sector. The good news is that the country's employment
situation appears to be moderating, with the jobless rate nudging up and
down slightly in recent months instead of surging in one direction. But
economists are concerned about the lack of new jobs being created.
In the jobs report, the nation's factories continued shedding jobs
last month, cutting 49,000 positions. The pace of job losses has
increased, averaging 47,000 a month since July, compared with 20,000 a
month from April to July. Construction companies cut 27,000 jobs in
October, reflecting losses among special trade contractors. Temporary
employment firms lost 56,000 jobs in October, possibly reflecting the
weakness in manufacturing. Employment gains in services helped moderate
some of those cuts. Mortgage banking added 17,000 positions, bringing
the total new jobs created to almost 100,000 since the beginning of
2001. That reflects robust home sales and high levels of refinancing
spurred by low interest rates. Finance, insurance and real estate
companies added 34,000 jobs in October. The federal government also
added workers for the fifth month in a row, as officials work to
strengthen airline security and continue hiring people for the
Transportation Security Administration. Federal Reserve policy-makers
meet again on Wednesday, and some economists are looking for another
rate cut in response to concerns that economic growth could slow
dramatically in the final three months of this year. The Fed has kept a
key interest rate at a 40-year low of 1.75 percent since last
December.
US Airways 3rd Quarter Loss Narrowed on Reduced Costs But Revenue,
Traffic Drop
US Airways Group Inc.'s third-quarter net loss narrowed to $335 million
as the
seventh-largest U.S. carrier, which filed for bankruptcy protection in
August, cut workers, debt and flights, Bloomberg News reported. US
Airways' results pushed the ten major U.S. airlines' combined net loss
to more than $2.5 billion for the quarter. The
company filed for bankruptcy after high costs and increased East Coast
competition from low-fare rivals led to eight consecutive quarterly
losses. US Airways has tried to cut costs, workers and flights to adjust
to lower air travel demand.
US Airways Group narrowed its net loss for the third quarter, but
operating revenue and passenger traffic declined as weakness continued
across the industry, the Wall Street Journal reported.
'The operating environment began to deteriorate further in September
with the threat of war, higher fuel prices, and a softening economy,'
David Siegel, US Airways president and chief executive, said in a
statement. Last week the airline announced plans to lay off 471 pilots
by May, in addition to previously reported plans to lay off 286 pilots
by late November. US Airways also plans to furlough 915 more flight
attendants by December, although most would be voluntary. The airline,
which had 10,000 flight attendants on Sept. 11, 2001, will have trimmed
their ranks by 3,675 should the latest cuts go through. If all the
furloughs go through, the company will have trimmed about 1,800 of the
6,000 pilots it had before the terrorist attacks added a heavy weight to
the sector's woes.
Asbestos Litigation 'Crisis' Returns to Supreme Court
Five years after declaring an 'asbestos litigation crisis,' the U.S.
Supreme Court is set
to consider arguments from companies that the situation has only
worsened, Bloomberg News reported. The justices on Wednesday will review
the $5.8 million Norfolk Southern Corp. was ordered to pay to six
retired workers. A West Virginia jury awarded the damages in part to
compensate the men for their fear of someday contracting cancer,
something the railroad says isn't allowed under federal law. Companies
say awards to relatively healthy people are draining a limited pool of
funds, depriving more deserving victims of adequate payment and driving
more than 50 companies, including W.R.Grace & Co. and Owens Corning,
into bankruptcy. Various estimates peg the total cost of asbestos claims
to businesses at $60 billion to $200 billion. 'Asbestos litigation is
not winding down, but instead is expanding to include healthier
claimants suing less culpable defendants,' the U.S. Chamber of Commerce
told the court.
ABB Mulls $1.1 Billion Asbestos Plan, Bankruptcy for Unit
ABB Ltd., Europe's biggest electrical-engineering company, said it may
pay $1.1 billion to settle more than 100,000 U.S. asbestos claims, a
move that would include placing a U.S. business into bankruptcy
protection, Bloomberg News reported. The payments would include $812
million in Connecticut-based Combustion Engineering assets and another
$300 million. ABB is talking to lawyers of those suing the company in
the matter, adding that the effort may take four to six months. ABB,
whose credit rating was cut to junk status yesterday by Moody's
Investors Service amid concern over mounting asbestos claims and
widening losses, has paid about $865 million for asbestos claims against
the unit since 1990. 'We believe chapter 11 can provide final resolution
to Combustion Engineering'' and ABB, said Chief Financial Officer Peter
Voser on a conference call. The plan would include a prepackaged
bankruptcy, whereby creditors agree in advance to a settlement, ABB
said. ABB's Voser said the accord would resolve all claims against ABB
Ltd. and its affiliates related to asbestos. He said he was 'confident'
the settlement would be reached. The final cost 'remains uncertain,'' he
said, declining to comment on how the company reached its estimate of
$300 million of additional costs.
Edison International Swings to Profit after 2001 Charge
Edison International swung to a third-quarter profit after a hefty
charge a year earlier from the sale of power plants, the Wall Street
Journal reported. The company raised its 2002 outlook for a second
time. The energy-holding company on Friday reported net income of $352
million, or $1.08 a share, compared with a net loss of $413 million, or
$1.27 a share, a year earlier. The company attributed the year-earlier
loss to the sale of two power plants in England to American Electric
Power Co., which produced a $1.15 billion charge against earnings.
The company's Southern California Edison utility, which nearly went
bankrupt last year during the California energy crisis, reported
earnings excluding items of $234 million for the latest third period, up
76 percent from a year earlier. The 2001 results exclude the recovery of
$518 million in previously incurred power costs. Southern California
Edison, like PG&E Corp.'s Pacific Gas & Electric, was on the
brink of a bankruptcy filing early last year as those two companies
couldn't raise prices for their customers even as wholesale electricity
prices soared sky high. Earnings at the company's unregulated merchant
unit, Edison Mission Energy, fell to $149 million from $180 million due
to $66 million in write-offs and lower power prices in the United
States.
Morton Holdings, 2 Units File for Chapter 11 Bankruptcy in
Delaware
Morton Holdings LLC, a joint venture of Morton Industrial Group Inc. and
Quilvest Custom Plastics, filed for chapter 11 bankruptcy protection on
Friday with the U.S. Bankruptcy Court in Wilmington, Del., Dow Jones
reported. Morton Industrial Group's annual report from April 1 said
Morton Holdings is 49 percent-owned by Morton Industrial Group and 51
percent-owned by Quilvest Custom Plastics. That filing said Quilvest
Custom Plastics is an affiliate of a significant shareholder of Morton
Industrial Group. Morton Holdings' Morton Custom Plastics LLC subsidiary
and Morton Lebanon Kentucky IBRB LLC, a unit of Morton Custom Plastics,
also filed chapter 11 petitions on Friday. Each of those unit's filings
cited assets and debts of $10 million to $50 million each.
Neither Morton Industrial Group nor Quilvest Custom Plastics filed for
bankruptcy on Friday. Corporate resolutions filed with Morton Holdings'
petition said that Morton Industrial Group is the sole manager of Morton
Holdings. Morton Custom Plastics' chapter 11 petition also said General
Electric Capital Corp., a unit of General Electric Co., has a $31.7
million claim related to a bank loan. Of that amount, $6.7 million is
unsecured. The forbearance agreements were for Morton Custom Plastics,
and Morton Industrial Group has no liability on the unit's debt to GE
Capital, according to the Oct. 15 filing. The resolutions authorized the
three firms under bankruptcy protection to execute an asset purchase
agreement with Wilbert Inc. under negotiated terms, which weren't
disclosed. The board authorized Morton Holdings and the subsidiaries to
hire Casas Benjamin & White LLC as their financial adviser and to
seek approval of debtor-in-possession financing, but a proposed lender
wasn't specified.
Morgan Group, 2 Units to Liquidate Under Chapter 11 Bankruptcy
Protection
Morgan Group Inc. and two of its operating units filed voluntary chapter
11 bankruptcy petitions recently and intend to liquidate their assets,
according to a filing on Friday with the Securities and Exchange
Commission, Dow Jones reported. The company and the two subsidiaries,
Morgan Drive Away Inc. and TDI Inc., made their filings on Oct. 18 with
the U.S. Bankruptcy Court in South Bend, Ind. The cases, which have been
consolidated and will be jointly administered, have been assigned to
Judge Harry C. Dees, the filing said. Elkhart, Ind.-based Morgan
Group ceased operations on Oct. 3 when its liability insurance expired
and it was unable to secure replacement insurance. The two units manage
the delivery of manufactured homes, trucks, specialized vehicles and
trailers. Morgan Group is a holding company.
Judge Dees signed an order on Oct. 24 that granted Morgan Group interim
authority to obtain limited debtor-in-possession financing and use the
cash collateral of pre-petition lender GMAC Commercial Credit LLC. The
company will use the funds to meet payroll and other operating expenses.
The order said that without the use of cash collateral, 'there will be
no reasonable prospect that (Morgan Group) would be able to survive long
enough to complete its orderly liquidation.' The company may obtain
advances of up to $150,000 to fund operating expenses under terms of a
budget. As a result of that loan, Morgan Group's cash collateral use is
limited to some proceeds from the sale of its manufactured housing
division and the sale of personal property, the order said. The order
set a final hearing on the matter for Nov. 22 before the South Bend
court.
Trustee Asks to Have FrontLine Capital Converted to Chapter 7
The U.S. Trustee overseeing the FrontLine Capital Group chapter 11
reorganization said it wants the case converted to a chapter 7
liquidation, Dow Jones reported. A hearing on the issue is scheduled for
Dec. 4 in the U.S. Bankruptcy Court in Manhattan. In court papers, the
trustee said FrontLine Capital Group has breached its statutory and
fiduciary duty by failing to file operating reports, which is a part of
the U.S. Trustee's operating guidelines. Court papers said FrontLine
Capital Group hasn't filed an operating report since its bankruptcy case
started on June 13. The company's failure to report financial data has
prevented parties involved with the case from monitoring the company's
performance and its prospects for reorganization, court papers said. The
trustee, Carolyn S. Schwartz, said she wants to see the case converted
to chapter 7 or dismissed altogether. FrontLine Capital Group's
bankruptcy petition listed assets of $13.6 million and debts of $234
million.
Former eToys Wins Confirmation of Chapter 11 Liquidation
Plan
The former eToys Inc. won confirmation of its plan of liquidation on
Friday after a bankruptcy judge found it had revised the document to
comply with a court order, Dow Jones reported. Confirmation comes two
weeks after Judge Mary F. Walrath of the U.S. Bankruptcy Court in
Wilmington, Del. said she would confirm the plan as soon as eToys made
several revisions to the document. The process was delayed when a group
of former shareholders, led by Robert K. Alber, filed objections to plan
confirmation and a motion to take control of the company. On Friday,
Judge Walrath overruled the objections and denied the motion to hand
over former eToys to the former shareholders, saying it was too late to
consider such a motion. While in chapter 11, the company completed
various sale and other transactions, including selling the eToys name,
logo and trademarks to KB Holdings LLC. The plan calls for a liquidation
of the debtor company's remaining assets. The liquidation proceeds will
be distributed to creditors of former eToys's chapter 11 estate. The
debtor already has sold substantially all of its assets in various sale
agreements. More than 87 percent of the former eToys's voting creditors
support confirmation of the liquidation plan, according to court
documents.
Under the terms of the liquidation plan, former eToys will pay $9.16
million -- about 77 percent - of allowed senior unsecured claims. The
company proposes to pay $7.91 million, or roughly 5.2 percent, of
allowed unsecured note claims and $8.88 million, or about 10.4 percent,
of allowed other unsecured claims, according to the disclosure
statement. Holders of allowed priority nontax claims will receive 100
percent of their $900,000 in claims under the proposed plan. The debtor
also contemplates paying 100 percent of $100,000 in secured claims and
100 percent of $63,000 in convenience claims. All equity interests in
former eToys will be canceled and shareholders will receive nothing
under the proposed plan.
XM Satellite Up 8 percent Amid Talk of Financing Deal
XM Satellite Radio shares on Friday rallied 10 percent for the second
day amid talk that the company will announce some kind of financing deal
before its Nov. 14 third-quarter conference call, Dow Jones reported.
Rival Sirius Satellite Radio Inc. announced a recapitalization plan
earlier this month that helped stave off bankruptcy. Given that XM
Satellite only has enough cash to finance itself until the first quarter
of next year, there are expectations that XM Satellite will follow suit,
said Steve Mather, analyst at Sanders Morris Harris. According to XM's
latest 10-Q filing with the Securities and Exchange Commission, the
company has about $101 million in cash and cash equivalents and total
current assets of about $271.9 million. Mather estimated the company
spent about $85 million to $90 million in the third quarter.
ENRON
Enron Allowed to Stop Legal Aid to Some Former
Employees
A bankruptcy court has allowed Enron Corp. to stop paying legal fees for
former employees who are cooperating with government investigations but
are not targets of probes, Dow Jones reported. Late last year, Enron
made the unprecedented move for a bankrupt company of hiring a law firm
to provide counsel for about 250 employees and former employees
participating in federal, state and local inquiries. It has cost the
failed energy company over $8 million. Hit by legal and other fees
approaching $200 million in bankruptcy proceedings, Enron asked a
bankruptcy court in New York for permission to drop fees for former
employees, and the court on Thursday agreed. Current Enron employees
will retain the counsel of law firm Swidler Berlin Shereff Friedman.
Employees who were uncomfortable with Enron's choice of law firm have
been allowed to choose their own attorneys and be reimbursed.
Group of Enron Creditors Say Court Costs Grow
Unwieldy
Some creditors in the Enron Corp. bankruptcy are sounding new alarms
about the burgeoning costs of the proceedings, the Wall Street
Journal reported. The protests follow a recent court filing by
Enron, the fallen energy company, projecting that professional fees for
the first 13 months of the bankruptcy will total $306 million. All told,
according to the projections, administrative costs during the period
will be $773 million, or nearly $60 million a month. In papers filed in
the U.S. Bankruptcy Court in Manhattan last week, 18 oil and gas company
creditors of Enron's principal subsidiary, Enron North America Corp.,
object that this 'administrative burn rate' is 'inordinately high,' and
is unnecessarily depleting Enron's assets. Compounding concerns of these
creditors, who collectively refer to themselves as the Dunhill Group, is
the prospect that the bankruptcy proceedings are far from over. Stephen
Cooper, Enron's chief executive, said through a spokesman that he hoped
the proceedings would end 'before the end of next year.' To read the
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Napster Gets Final OK of Loan from Prospective Purchaser
Napster Inc. on Friday won final approval of a $250,000 loan the debtor
company will use to cover expenses while it negotiates a sale of
substantially all of its assets in a proposed $5 million deal, Dow Jones
reported. Napster projects $200,000 in costs through Nov. 22 and $50,000
through Dec. 24, according to a budget submitted to the court. Without
the loan, the debtor company would have to liquidate its assets. Napco
Acquisition LLC is both the lender under the $250,000 loan and the
prospective purchaser. Napco Acquisition is an affiliate of an
undisclosed public company that has asked to remain unidentified until
an asset purchase agreement is signed, said Hobart G. Truesdell, the
trustee overseeing Napster's estate. Napster won emergency approval to
borrow up to $200,000 under the loan on Oct. 21. Chief Judge Peter J.
Walsh of the U.S. Bankruptcy Court in Wilmington, Del. scheduled a
hearing to consider approval of the sale at 9:30 a.m. EST on Nov. 27.
Judge Walsh also scheduled a hearing at 11 a.m. EST on Nov. 14 to
consider the debtor company's treatment of certain executory
contracts.
Teleglobe Seeks Approval Of $70 Million Replacement DIP
Loan
Teleglobe Communications Corp. is seeking court approval for a $70
million replacement debtor-in-possession loan with Madeleine Corp. and
its affiliate, Madeleine LLC, Dow Jones reported. With the existing
facility set to expire Nov. 30 and the lenders' lack of interest in
renewing the loan, Teleglobe Communications said in court papers filed
on Wednesday that it would face 'severe liquidity constraints and likely
be unable to operate going forward' without an uninterrupted source of
DIP funding. The proposed facility would replace the company's $30
million DIP facility with its Canadian parent Teleglobe Inc., a unit of
BCE Inc. The company said it's 'imperative' that it get the replacement
DIP financing to continue operating, thereby maximizing the value of its
estate. Madeleine is an affiliate of one of the members of TLGB
Acquisition LLC, the entity formed by Cerberus Capital Management L.P.
and TenX Capital Partners LLC to buy Teleglobe's core voice and data
business. The $155.3 million sale was approved in early October by both
the Ontario court overseeing Teleglobe's bankruptcy proceedings and the
U.S. Bankruptcy Court in Wilmington, Del., which is presiding in
Teleglobe Communications's chapter 11 case. The existing DIP financing
limits the borrowing to $20 million.
Mall Owners Prosper Despite Retail Weakness
As the holiday selling season approaches, mall owners are seeing green,
even as their retailer tenants see red, Reuters reported. While
retailers brace for what could be another weak holiday shopping season
and blame slumping sales, in part, on fewer people visiting malls,
landlords are insulted by locked-in, long-term lease agreements with the
stores. But analysts warn that if sluggish holiday sales spark a wave of
store closings or bankruptcies in the new year, landlords will fell the
pinch and retail real estate investment trusts (REITs) could be in for a
rude awakening. REITs are publicly traded companies that own a group of
properties and usually specialize in one sector such as shopping centers
or offices. Richard Moore, REIT analyst at McDonald Investments, says
mall owners weather the ups and downs of sales in the short term because
most leases are locked in for seven to 10 years. Malls and shopping
centers have been one of the few property sectors to do well in the past
year as a sagging U.S. economy has hurt office building owners and a hot
housing market has held back business for apartment building owners.
'The issue is whether or not we see store closings or retail
bankruptcies after the holiday season,' said David Shulman, REIT analyst
at Lehman Brothers. 'Should that happen, there would be an obvious
diminution of cash flow to retail oriented REITs.'
Simon Property's Earnings Boosted by $8.6 Million Enron
Settlement
Simon Property Group Inc., the world's largest mall owner, exceeded
analysts' earnings estimates for the third-quarter with the help of an
$8.6 million settlement payment from Enron Corp., Bloomberg News
reported. The settlement, stemming from the termination of a contract
for Enron to provide energy-management services to Simon, equated to 3
cents a share in earnings, analysts said. Simon had funds from
operations, a measure of cash flow, of 94 cents a share, exceeding the
expectation of 93 cents of analysts surveyed by Thomson First Call.
Enron filed for bankruptcy protection in December. The payment, approved
by the bankruptcy court, allowed Simon to catch up on its profits from
reselling energy to mall tenants in the first nine months of the year,
said Shelly Doran, vice president of investor relations. Simon owns, has
a stake in or manages 186 million square feet of malls and community
shopping centers, including the Mall of America in Bloomington, Minn.,
the nation's largest shopping mall.
Kmart Could Close 567 Stores After Holidays
Kmart Corp. could close 567 stores nationwide after the end of the
holiday season, Dow Jones reported. The bankrupt Troy, Mich.-based
retailer, which closed 283 stores in April, has made a list of 567
stores that it may close early next year. Unnamed sources told the
Atlanta Business Chronicle that the list is 'tentative, and not
all the stores may actually darken once Kmart makes an official
decision.' A few of the Atlanta Business Chronicle's sister publications
under American City Business Journals Inc. cited specific stores on the
list that were under consideration for closing. The Tampa Bay
Business Journal, for instance, named 12 specific locations in the
Tampa Bay, Fla., area that were on the list, and said the list's total
included 40 stores throughout Florida. 'We do not have a list of stores
slated to be closed,' Kmart spokesman Jack Ferry said, asked about the
report. 'We're in the preliminary stages of evaluating our store base as
part of the restructuring.' Kmart is still in the process of 'evaluating
all operations,' Ferry said, including comparable-sales performance at
each of its stores, which currently number about 1,800. 'The one
critical component of the analysis is the year-end sales results of the
stores, and that won't be known, obviously, until after the holiday
season.'
Federal-Mogul Invests $50 Million in Champion Spark Plugs in
Europe
Federal-Mogul Corp., which is in bankruptcy protection from creditors,
decided against selling its Champion spark plug and windshield-wiper
businesses and instead will invest $50 million to expand them in Europe,
Bloomberg News reported. The company will spend the money over five
years to refit factories and develop better manufacturing for steel and
ceramic materials used in spark plugs, said Joe Felicelli,
Federal-Mogul's senior vice president for worldwide aftermarket
operations. Earlier this year, the company had considered selling the
product lines. Federal-Mogul has sold some assets since its October 2001
bankruptcy filing, including the sale of a camshaft factory in Mexico to
Canada's Linamar Corp., and its Signal-Stat emergency and signal lights
business in March.
Jazztel Shareholders Fail to Weigh Effects of Dilution
Following court approvals over the past two weeks in New York and London
of a debt-for-equity swap at Jazztel PLC, the struggling
alternative-telecom carrier, bondholders are set to finally take control
of 88 percent of the company's soon-to-be-enlarged equity, the Wall
Street Journal reported. This means that Jazztel shares will be
massively diluted, although the deal virtually eliminates the company's
debt burden and prevents a bankruptcy that would have wiped out the
equity entirely. Despite the planned expansion of the company's shares
outstanding to about 520 million from the current 62 million, which has
been in the works for months, shareholders continue to value the company
as if there wasn't a dilutive steamroller bearing down on them. During
October, the shares even rose about 20 percent as the final approvals
for the debt-restructuring plan, which shareholders also agreed to,
rolled in.
WorldCom Is a Good Buy, to a (Very) Few Investors
Buy WorldCom? On the surface, few bets seem less appealing: The company
acknowledged an accounting fraud that turned out to be the largest in
corporate history, the Wall Street Journal reported. It is under
bankruptcy-court protection. The stock, delisted, is a candidate for
wallpaper. However, some adventurous big guns in the investment world
are snapping up WorldCom debt, sensing value in the troubled company and
maybe even a chance to gain some control of the company. David Matlin,
one of the most successful investors in distressed debt, and Carlos
Slim, considered Latin America's wealthiest man, have been accumulating
big positions in the company's cut-rate bonds. Other savvy investors who
specialize in so-called distressed debt also have been building
positions in WorldCom Inc., traders say. The purchases, which have
helped send WorldCom's bonds climbing to as high as 18 cents on the
dollar from 13.5 cents over the past 10 days, are creating a buzz on
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United Reaches Tentative Pact with Transport Workers Union
For the second time over the weekend, UAL Corp.'s United Airlines
reached a tentative agreement with one of its unions, the Transport
Workers Union (TWU), on labor cost savings as a part of its financial
recovery plan, Dow Jones reported. The TWU, which represents
meteorologists, is one of five labor groups negotiating with management
at the airline. Late on Friday, the committee for the Air Line Pilots
Association agreed to as much as $2.2 billion in wage cuts over five and
a half years, including an 18 percent pay cut. Last month, a coalition
of United Airlines unions, including flight attendants and machinists,
said they would support $5.8 billion in concessions over five years,
which the airline sought as part of efforts to secure government aid and
cut costs. Without lower expenses and a loan, the airline had said it
may have to seek bankruptcy protection before the end of the year.
Specific pay cuts and other contract changes were left up to the
individual unions.
Network Commerce Files for Chapter 11 Bankruptcy Protection
Internet company Network Commerce Inc., founded by a former Microsoft
executive, filed for chapter 11 bankruptcy protection on Friday after
mounting losses throughout its eight-year history, the Associated Press
reported. Network Commerce once employed more than 650 people and had a
stock market value of more than half a billion dollars. Between 1998 and
2001, Network Commerce reported net losses of $564 million. At the
beginning of this year, its workforce was 65 people and it finished the
second quarter with $1.6 million in cash. Network Commerce, formerly
TechWave and ShopNow.com, was founded by former Microsoft executive
Dwayne Walker. It started out building e-commerce storefronts, including
BuySoftware.com and TryAndBuy.com.
XeTel Chapter 11 Filing Lists $37 Million in Assets, $34 Million in
Debts
Circuit board maker XeTel Corp.'s voluntary chapter 11 petition in the
U.S. Bankruptcy Court in Austin, Texas, lists $37 million in assets and
$34 million in debts, Dow Jones reported. The chapter 11 petition was
filed on Oct. 21, and the company continues to operate on a limited
basis, the SEC filing said. XeTel's SEC filing also said that it has
signed an agreement with Celestica Acquisition Corp. to sell a portion
of its assets for $2.25 million. The sale would involve the transfer of
various customer contracts, inventory and fixed assets along with the
assumption of certain liabilities and hiring of employees. A hearing on
the sale has been scheduled for Nov. 25 in Austin. Proceeds from the
sale would be used to pay creditors, but the company's stockholders
won't receive any distribution at the conclusion of the company's
chapter 11 proceedings.
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