February 29, 2000
Personal Income Increased .7 Percent in January
The Commerce Department reported that personal income climbed
.7 percent in January, while consumer spending rose .5 percent, The
Wall Street Journal reported. The increase in personal income last
month reversed a recent trend of consumer spending outpacing income. The
increase in personal income, which includes wages, interest and
government benefits, was boosted by pay increases for federal civilian
and military personnel, agricultural subsidies and cost of living
adjustments for Social Security and other factors. Meanwhile, consumer
spending shows few signs of easing. On Capitol Hill last week Federal
Reserve Chairman Alan Greenspan warned of a 'wealth effect' created when
household wealth, spark by continued stock market gains, increases
faster than income, leading consumers to spend more than their earnings
would typically allow.
Consolidated Growers & Processors Files Chapter 7
Consolidated Growers & Processors Inc. (CGP), the first
international industrial hemp company, recently filed for chapter 7
protection, according to a newswire report. An attorney for the company
said that it was forced to seek bankruptcy protection 'due to
circumstances beyond the control of the company.' During the first year
of operations in Canada, the company said that the Manitoba Securities
Commission made it extremely difficult for the company to complete its
fund raising for nearly 10 months due to an 'unofficial investigation'
of the company's purported imported activities raising money from
Dauphin farmers. In January, Revenue Canada 'without warning or notice
attached' the company's bank account. A spokesperson for Consolidated
Growers said, 'industrial hemp is such a fabulous opportunity for
Canadian farmers, and CGP had such great potential, but it's too bad we
had to set up business in Manitoba. All Canadian growers were only
charged a fraction of their seed costs in spring 1999 and still owe
money to the company.'
Planet Hollywood Expects Effective Date Shortly
Planet Hollywood International Inc. previously announced
confirmation of its chapter 11 reorganization plan and said yesterday
that it continues to negotiate and finalize certain actions and
agreements to implement the plan, according to a newswire report. The
Orlando, Fla.-based company expects that these steps will be completed
and the plan effective date will be within the next two weeks.
Pacific International Enterprises Closer to Exiting Chapter
11
Pacific International Enterprises Inc. (PCIE), Long Beach,
Calif., announced that it is steadily moving toward reorganization and
emerging from chapter 11 protection, according to a newswire report. The
company said it has endured 'assaults launched' from its landlord as
well as the secured lien holders. PCIE obtained a preliminary injunction
against its landlord, KCDK LLC, and then secured the court's agreement
to halt any foreclosure proceeding by the landlord. PCIE has filed a
motion for summary judgment against the landlord, France Sports Mfg., JM
Murray, LT Murray, individuals, Key Bank of Washington and Keycorp
Leasing Ltd. The motion seeks to have the court determine the ranking of
the security interest of all the concerned parties. The court's decision
will effectively settle the various ranking disputes and allow the
company to proceed with a contract that would provide PCIE with the
funds needed to emerge from chapter 11.
ICO Global Communications Announced March 12 Launch of
Satellites
ICO Global Communications announced yesterday that the first
spacecraft in its series of global communications satellites is
scheduled for launch aboard a sea launch vehicle on March 12, according
to a newswire report. London-based ICO was established in January 1995
as a private company to provide global mobile personal communications
services by satellite. It filed for chapter 11 protection last August.
In October, telecommunications pioneer Craig McCaw and his affiliates,
Teledesic and Eagle River Investments LLC, agreed to lead a group of
investors that will provide up to $1.2 billion to ICO to enable the
company to emerge from bankruptcy. Earlier this month, the parties
completed a definitive agreement to proceed and initiated a $275 million
second-round investment in ICO. ICO's CEO Richard Greco said, 'The
launch of ICO's first satellite will represent a tangible milestone for
our employees, our vendors and our company, which has undergone a
transformation over the past six months. With the recent progress we
have made in our financial restructuring led by Craig McCaw, ICO is now
focusing on the business of building a system that will offer seamless,
high-quality communications services to customers worldwide.'
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Morgan Stanley Cites Bankruptcy Reform Legislation in Raising
Credit Card Rating
Morgan Stanley, New York, said Monday that it raised its rating
on credit card company MBNA Corp. to 'strong buy' from 'outperform,'
according to a newswire report. Morgan Stanley cited these factors: 1)
bankruptcy reform legislation could be an extra benefit; 2) MBNA is
taking affinity-group contracts away from Bank One Corp. and benefiting
from better pricing and fewer mailings; and 3) MBNA has intriguing
Internet strategy benefiting from its card relationships.
Coho Energy Provides Update on Proposed Reorganization
Plan
Coho Energy Inc., Dallas, announced that the record date for
the rights offering proposed under its bankruptcy reorganization plan
has been set at the close of business on March 6, according to a
newswire report. Last November the company filed its reorganization
plan, and on Feb. 15, it and the Unsecured Creditors' Committee filed
the First Amended and Restated Joint Plan of Reorganization. At a Feb. 4
hearing, the court approved the disclosure statement and scheduled the
confirmation hearing for March 15. The disclosure statement and plan
were mailed to holders of interests in the chapter 11 filing for vote on
Feb. 14, and the deadline for ballots to be submitted is March 10.
Bankruptcy Fraud Defendants Sentenced
Dan Webber, U.S. Attorney for the Western District of Oklahoma,
announced that Jesse Joseph Maynard and Samuel Bruce Love were sentenced
to prison terms of 78 months and 63 months respectively, based on their
convictions for bankruptcy fraud, embezzlement by trustee and conspiracy
to commit bankruptcy fraud, the Department of Justice announced. They
were ordered to pay $7 million in restitution and to serve three-year
terms of supervised released after their terms of imprisonment. Maynard
and Love were convicted last September following a jury trial. The
charges were based on the wrongful diversion, transfer and concealment
of assets of First Assurance & Casualty Co. Ltd., an offshore
insurance company formerly licensed in the Turks & Caicos Islands;
Maynard and Love were principals of the company. Webber said, 'This case
involved not only the looting of an insurance company, to the detriment
of its policy holders and others, but also the fraudulent manipulation
of the bankruptcy system.' First Assurance sold insurance in the United
States through surplus line brokers. It filed for chapter 11 protection
in Oklahoma City, Okla. after the revocation of its charter in the Turks
& Caicos Islands. During the bankruptcy, Maynard and Love continued
to act for the company's debtor-in-possession. Assets were fraudulently
transferred or concealed by the defendants during this period. The case
was investigated by the FBI following a referral from the Office of the
U.S. Bankruptcy Trustee.
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