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December 28, 2004
Airline CEO Slams Weekend Sick Calls
An “irresponsible and indefensible” protest by workers
who called in sick over the holiday weekend caused an “operational
meltdown” at US Airways, airline CEO Bruce Lakefield said Sunday,
The Charlotte Observer reported. Lakefield sent a strongly
worded message to employees in response to the fact that the bankrupt
airline was crippled over the weekend by more than three times the
expected number of sick calls from its flight attendants. An unusually
large number of baggage handlers at the airline’s Philadelphia hub
also called in sick. Union leaders representing flight attendants and
baggage handlers said there was no plan to slow down operations, but
analysts said the more difficult challenge would be restoring confidence
in the airline’s reliability after its labor problems wreaked
havoc with thousands of travelers’ Christmas plans. “All
they can do at this point is make sure there’s no
reoccurrence,” said Robert Mann, a New York aviation analyst and
consultant. “But the damage may already be done.” The
absences, compounded by bad weather, forced US Airways to cancel 427
flights between Thursday and Sunday. The airline canceled 504 flights
during all of October, the last month for which federal statistics are
available. The airline also failed to deliver thousands of bags to the
same destinations as their owners.
New York Councilman to File for Chapter 13 Bankruptcy
Protection
A Binghamton, N.Y., city councilman plans to file for chapter 13
bankruptcy in the near future, citing a substantial drop in sales at his
Chenango Street store, according to Binghamton’s Press &
Sun-Bulletin. John Cordisco, D–9th District, said yesterday
he will file for the reorganization of debt for his personal property as
well as Cordisco’s Corner Store. The councilman stressed, however,
that the filing does not mean he will shut his store or leave the city.
Cordisco, re-elected to a second four-year term in 2003, said Monday
night that his business and bottle redemption center suffered more than
a 60 percent drop in sales over the summer.
ABFS May File for Bankruptcy
American Business Financial Services Inc. of Philadelphia said last
week it may file for bankruptcy protection, citing that it
couldn’t get approval to sell unsecured notes from the Securities
and Exchange Commission, according to the Philadelphia Business
Journal. The company said in an SEC filing that it had $490
million in notes outstanding. It listed its unrestricted cash at $6
million. In addition, ABFS said it is in default of its lease in the
Wanamaker Building in Center City.
Review of WorldCom Bankruptcy Fees Continues
Southern District Judge Jed Rakoff said he is continuing his review
of overcharges arising out of the WorldCom bankruptcy, the New
York Law Journal reported. WorldCom, now MCI, emerged from
bankruptcy in April, having racked up hundreds of millions of dollars in
fees paid to lawyers, accountants, bankers and others that helped the
company navigate back to financial health. Early in the reorganization
process, Judge Rakoff required the firms to submit quarterly budgets to
MCI’s corporate monitor to prevent excessive billing, and Southern
District Bankruptcy Judge Arthur Gonzalez reviewed requests for fees and
expenses after they had been incurred, but the problems appeared when
Judge Rakoff issued a ruling earlier this month criticizing unnamed
firms of potentially overcharging MCI by $25 million. In his latest
ruling, issued Dec. 17, Judge Rakoff held that “it is apparent
that substantial payments will need to be paid back by certain of the
parties.”
VoiceIQ Wins Stakeholder Approval for Restructuring Plan
Calgary, Alta., software developer VoiceIQ Inc., operating under
bankruptcy-court protection, has won court and stakeholder approvals for
a restructuring plan that splits the firm in two and enables it to move
into the oil and gas business under a new name, according to a
cnews report. The plan gives major creditors less than a
third of the money owed to them, while shareholders maintain their
interest in the existing voice capture, digitization and compression
business, now called VIQ Solutions. Creditors owed up to $2,000 will be
repaid in full, but creditors owed more than $2,000 will get the first
$2,000 plus a pro rata share estimated at between 25 and 28 cents on the
dollar.
BICO Inc. Shares Now Trading on the OTC Bulletin Board
BICO Inc. announced that effective Dec. 23, its shares are quoted on
the Over The Counter Bulletin Board, according to a newswire report.
This is the final step in BICO’s completing its emergence from
chapter 11 bankruptcy protection, a step subsequent to the final closure
of the bankruptcy case earlier this month, which permitted BICO to focus
on implementing its new web phone-based business strategy. All BICO
shareholders will retain their shares in BICO common stock, which will
now trade on the Over the Counter Bulletin Board under the ticker symbol
BIKO.
Trump Hotels Receives $6M for California Casino Contract
Trump Hotels and Casino Resorts Inc., which filed for bankruptcy last
month, yesterday said it would sell a casino management license back to
a California Indian tribe for $6 million, according to Reuters. The
company said it had reached a deal to transfer its management agreement
for the “Trump 29 Casino” in Coachella, Calif., to the
Twenty-Nine Palms Band of Luiseno Mission Indians, its partner in the
tribal casino. The deal is subject to court and regulatory approval, the
New York–based company said in a statement. Trump Hotels has been
managing the California Indian casino—part of a booming regional
industry that has been seen as an emerging rival to Las
Vegas—since April 2002. Last week, Trump Hotels announced it had
arranged $500 million in post-bankruptcy financing. Under the
restructuring, negotiated with bondholders before the casino operator
filed for chapter 11 bankruptcy protection, bondholders would own about
two-thirds of the company and Trump’s personal stake would shrink
to about 27 percent from 56 percent.
Retail Consulting Services Retained for Athletes Foot Stores
Retail Consulting Services Inc. announced it has been retained by The
Athletes Foot Stores, a debtor in a chapter 11 case in the Southern
District of New York, as the debtor’s real estate consultant.
Retail Consulting Services will be marketing more than 100 retail store
leases nationwide that are set for auction on Jan. 13, 2005. Bids are
due on Jan. 11, 2005. Retail Consulting Services specializes in
restructuring, valuation and disposition of leased and fee owned
properties for national retailers.