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Stakeholders Invited To Tuesday's Asbestos Bill Summit
Sen. Christopher Dodd (D-Conn.) yesterday issued invitations to a range
of stakeholders on asbestos litigation reform, asking them to attend
next Tuesday what has been billed as a 'summit' to help broker a
consensus on a bill, CongressDaily reported. Senate Judiciary
Chairman Orrin Hatch (R-Utah) met for two hours on Wednesday with a
number of executives for asbestos defendant companies, as well as their
insurers and reinsurers. Meanwhile, several Senate Democrats are
stepping up their interest in the asbestos litigation issue. In an
interview after his meeting with industry on Wednesday, Sen. Hatch told
CongressDaily that numerous Democrats, in addition to Sen. Dodd and
Judiciary ranking member Patrick Leahy (D-Vt.), had expressed an
interest in working with him on the bill, reported the newswire.
AMR May File Largest Airline Bankruptcy Next Week
AMR Corp.'s American Airlines, the world's biggest carrier, may be
pushed into bankruptcy protection as early as next week in part because
of the war in Iraq, people familiar with the matter said, Bloomberg News
reported. Fort Worth, Texas-based American Airlines has failed to cut
costs fast enough to match a drop in revenue that never fully recovered
from the Sept. 11 attacks and was exacerbated by the start of fighting
in Iraq. A bankruptcy reorganization would allow the airline to
restructure more than $27 billion in debt and stem losses that totaled
$5.27 billion in the past two years, the newswire reported. AMR is
negotiating terms of about $1.5 billion in bankruptcy financing from
Citigroup Inc. and other lenders to help fund operations while it
reorganizes under court supervision, the people said. American would be
the fourth major U.S. airline to file for chapter 11 protection in the
past year, following US Airways Group Inc., UAL Corp.'s United Airlines
and Hawaiian Airlines. The carriers have been hurt by an economic
slowdown, a travel slump caused by the Sept. 11 terrorist attacks and
now the war in Iraq.
UNITED AIRLINES
UAL Agreement With IRS on $365 Million Refund Approved by
Judge
A bankruptcy judge approved UAL Corp.'s agreement with the U.S. Internal
Revenue Service to release as much as $365 million in tax refunds owed
to the parent of United Airlines, Bloomberg News reported. United said
in court papers that the agreement would
let the IRS, which has $50 million in claims against the carrier,
maintain a freeze on $25 million of refund money. United's refund
request includes $262 million in tax credits from 1998 and 1999, plus
money from a tax dispute the airline won concerning aircraft costs from
1988 to 1990. United and its rivals have been trying to build cash
reserves to stay in business amid record losses, reported the
newswire.
United Airlines Reaches Tentative Agreement With Pilots
Union
UAL Corp.'s United Airlines and its pilots union reached a tentative
agreement on concessions to help the airline emerge from chapter 11
bankruptcy protection, the union said, Bloomberg News reported. United's
Air Line Pilots Association members will vote on the proposal by April
11, the union said in a statement. The union's top council has approved
the agreement, the union said, reported the newswire.
United's Aircraft Lease Trustee Asks Court For $32
Million
U.S. Bank National Association, a unit of U.S. Bancorp, petitioned the
federal bankruptcy court in Chicago on Wednesday to force UAL Corp.'s
United Airlines to pay $32 million in aircraft lease payments it says
are in default, Dow Jones reported. In an emergency motion released by
the court on Thursday, the bank said United made a March payment on 20
aircraft leased from Boeing Co. and Airbus, but didn't make payments on
10 other leases. According to a bankruptcy court order issued on Feb. 7,
the lease trustee said United is obligated to continue to make regular
payments under existing financing agreements for the aircraft it
continues to use. The order, to which United agreed, overrides any
condition in a chapter 11 bankruptcy that would allow the debtor to
suspend payments to creditors, the bank said, reported the newswire.
HealthSouth Says It's in Default on Bank Credit Line
HealthSouth Corp. said it is in default under a $1.25 billion credit
facility after failing to reach an agreement with lenders, Bloomberg
News reported. The company won't be able to make a $17.2 million
interest payment to holders of some of its notes or cover about $350
million in bonds due April 1, HealthSouth said in a statement, Bloomberg
News reported. HealthSouth faces bankruptcy if it can't convince lenders
to restructure its debt. A group of banks led by J.P. Morgan Chase &
Co. froze the credit line last week and are blocking the company from
making payments on debt held by other investors, reported the newswire.
'That would give the bondholders the right to place them in
bankruptcy,'' Standard & Poor's analyst David Peknay said. 'The
banks may not want to extend themselves further from a risk standpoint
and it might be to their benefit if the company files for bankruptcy,''
reported the newswire.
The Wiz Stores Operator Wins Approval to Begin Closing
Stores
TW Inc., operator of The Wiz retail electronics stores, won bankruptcy
court approval to begin closing its 17 stores in New York, New Jersey
and Connecticut, Bloomberg News reported. The Plainview, N.Y.-based
company, which was bought by closely held GBO Electronics Acquisition
LLC in March, sought bankruptcy protection on March 14 to sell its
assets and pay creditors, Bloomberg News reported. GBO bought the
retailer from Cablevision Systems Corp., which decided to shed the
unprofitable business and exit the consumer electronics business. Sales
didn't materialize as quickly as the company expected, and it
encountered competition from bigger chains such as Best Buy Co. and
Circuit City Stores Inc., investors have said, reported the
newswire.
Broadwing Wins Debt Restructuring Accord, Posts $2.38 Billion
Loss
Broadwing Inc. said banks and investors agreed to a debt restructuring
that gives the company more time to pay off loans and enough cash until
at least 2006, Bloomberg News reported. The plan will reduce debt by
$500 million, Broadwing said in a statement. The Cincinnati-based
company also reported a fourth-quarter net loss of $2.38 billion, or
$10.92 a share, after writing down assets at a unit being sold, reported
the newswire.
Wheeling-Pittsburgh's $250 Million Loan Guarantee Approved
Wheeling-Pittsburgh Steel Corp. said the government approved its request
for a $250 million loan guarantee, Bloomberg News reported. The company
wants to use the guaranteed loan to emerge from bankruptcy protection,
it said in a release distributed by PR Newswire. Among other things, the
company wants to invest in a $110 million electronic arc furnace that
will make its steel production more cost efficient, the company said.
Earlier this month the federal Emergency Steel Loan Guarantee Board
rejected the company's original application because the risk of default
was too high. The revised application included additional contributions
from the company's creditors, suppliers and the states of West Virginia
and Ohio, reported the newswire.
Court Authorizes FAO To Pay Fees For Exit Financing
FAO Inc. on Thursday won emergency authority to pay $836,000 in
commitment fees to get $77 million in exit financing agreements the toy
retailer needs to fund its reorganization plan and its emergence from
chapter 11 bankruptcy, Dow Jones reported. FAO has also obtained $35
million in equity financing commitments, $8 million more than is
required under the proposed chapter 11 reorganization plan. Thursday's
order, signed by Judge Lloyd King of the U.S. Bankruptcy Court in
Wilmington, Del., authorizes FAO to pay up to $536,000 in fees to Fleet
Retail Finance Inc. and up to $300,000 in fees to Back Bay Capital
Funding LLC, according to Dow Jones. The exit financing is an integral
part of FAO's proposed chapter 11 plan. Judge King will consider
confirmation of the plan on April 4, reported the newswire.
Combustion Engineering Wants New Unsecured Creditors' Panel
Combustion Engineering Inc. is asking the bankruptcy court overseeing
its chapter 11 case to disband and reconstitute the unsecured creditors'
committee, saying the creditors on the committee aren't representative
of the overall creditor constituency, Dow Jones reported. If the court
decides not to fully reconfigure the committee, Combustion Engineering
asked that the committee be expanded to include two or more additional
seats for creditors that voted in favor of the company's proposed
reorganization plan, reported the newswire. The company filed for
bankruptcy on Feb. 17, along with a prenegotiated reorganization plan
and disclosure statement, to deal with millions of dollars in
asbestos-related personal injury claims.
US Airways Group Reports $1.64 Billion Net Loss For 2002
US Airways Group Inc. on Thursday reported a net loss of $1.64 billion,
or $24.20 a share, for the period ending Dec. 31, in an annual report
filed with the Securities and Exchange Commission, Dow Jones reported.
Total operating revenue for the company fell to $6.97 billion for the
period ending Dec. 31, compared with total operating revenue of $8.28
billion during the same time in 2001. US Airways has been under chapter
11 bankruptcy protection in the U.S. Bankruptcy Court in Alexandria,
Va., since Aug. 11. US Airways said weak economic conditions that
started in 2001 continued throughout 2002. The company said its
financial decline was prompted by the Sept. 11 terrorist attacks and a
drop in high-yield business traffic, which the company said was down
significantly before the attacks, reported the newswire.
Separately, Bloomberg News reported that US Airways is reducing capacity
because of the effects of the war in Iraq. The airline will decrease
total departures by 4 percent, US Airways said in a statement
distributed by PR Newswire.
Touch America Could Face Bankruptcy After Arbitration Ruling
Touch America Holdings Inc. said it may seek bankruptcy protection after
an arbitrator ruled that it owes Qwest Communications Corp. $59.6
million plus interest, Bloomberg News reported. If the company needs to
pay Qwest the amount awarded, it would hurt its liquidity and it may
need to seek outside financing or find ways to increase its cash flow,
Touch America said in a release distributed by PR Newswire. The company,
which had $20.5 million in cash as of yesterday, doesn't know whether it
will be able to do that, it said, reported the newswire.
Fleming Says It Needs Extra Financing to Pay Vendors
Fleming Cos. said it needs to secure new short-term financing in order
to pay vendors after existing lenders declined to extend further credit,
Bloomberg News reported. Fleming, which this month lost an exclusive
contract to supply retailer Kmart Corp., its biggest customer, also said
it is seeking a 15-day extension from the Securities and Exchange
Commission to a March 28 deadline for it to file its annual report for
the fiscal year ended Dec. 28, reported the newswire.
Corning to Record $200 Million in Costs for Asbestos
Settlement
Corning Inc. will record after-tax costs of about $200 million in the
first quarter for an asbestos settlement, Bloomberg News reported. The
company reached agreement with representatives of asbestos claimants for
the settlement of all current and future asbestos claims against Corning
and Pittsburgh Corning Corp., Corning said in a statement distributed by
Business Wire.
Hearing On NRG Chapter 11 Dismissal Pushed Back 2 Weeks
A hearing in the U.S. Bankruptcy Court on whether to dismiss an
involuntary bankruptcy petition against NRG Energy Inc. has been delayed
two weeks, attorneys involved in the case said on Thursday, Dow Jones
reported. Chief Judge Gregory F. Kishel of the U.S. Bankruptcy Court for
the District of Minnesota was expected to hold a hearing and possibly
rule on the matter on Thursday. But the hearing instead focused on a
request by Northeast Utilities subsidiary Connecticut Light & Power
for access to documents behind a settlement in the involuntary case, the
attorney's said. Judge Kishel rescheduled the hearing on the dismissal
for April 10, reported the newswire.
Olympic Pipe Line Files For Chapter 11 Bankruptcy Protection
Citing costs from a firestorm in which three people died after gasoline
leaked into a creek in Bellingham, Olympic Pipe Line Co. has filed for
bankruptcy protection, the associated Press reported. The company filed
the chapter 11 petition for reorganization on Thursday. Lawyers and
company officials said Olympic would maintain operations without any
layoffs, complete critical safety improvements on schedule and pay fines
and penalties resulting from the pipeline rupture and fire despite the
filing, reported the newswire.
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