October 242000

Change Expected in Bankruptcy Filings for
Financial Institutions

The House is expected to consider banking legislation today
that would alter the way some financial contracts are handled when
financial institutions declare bankruptcy, according to the CQ Daily
Monitor.  The legislation, H.R. 1161, would end a controversial
effect that bankruptcy filings have on derivatives contracts and other
financial instruments.  Current law states that if one side of the
contract declares bankruptcy, that party could receive money from the
second company.  The solvent company, however, would have to wait
in line with other creditors to receive payment from the bankrupt
company.  The legislation would dissolve the contract when one side
declares bankruptcy.  The bill would also give the Federal Deposit
Insurance Corp. additional flexibility to determine the most appropriate
method for resolving a failing bank or thrift institution.

It is to be considered under suspension of the
rules, which prohibits amendments and limits debate.  The measure
was initially incorporated into H.R. 4541, a bill that would reauthorize
and overhaul the Commodity Exchange Act.  The House passed the
measure last week but now faces opposition in the Senate.

PageNet Stakeholders Accept Reorganization
Plan and Merger with Arch Wireless

Paging Network Inc. (PageNet) yesterday announced that its
banks, bondholders and shareholders have all voted to accept the
company’s chapter 11 reorganization plan under chapter 11,
according to a newswire report. The plan includes PageNet's proposed
merger with Arch Wireless Inc.  Arch and PageNet announced their
merger agreement last November. The merger will include an exchange of
Arch common stock for PageNet's senior subordinated notes as well as a
spin-off to PageNet's shareholders and bondholders of 80.5 percent of
the stock of PageNet's wireless solutions subsidiary, Vast
Solutions.