|
Consumer Confidence Plunges To Its Lowest Level in Years
Soaring energy costs, the prospect of war with Iraq and terrorism alerts
combined to send consumers' confidence in the economy plunging to its
lowest level in nearly a decade, the Wall Street Journal
reported. The drop in the Conference Board's index of consumer
confidence to 64 in February from a revised 78.8 in January -- to below
levels recorded in the 2001 recession -- illustrates how seriously
so-called geopolitical risks are hampering an already tenuous economic
recovery. 'Lackluster job and financial markets, rising fuel costs and
the increasing threat of war and terrorism, appear to have taken a toll
on consumers,' Conference Board economist Lynn Franco said in a news
release. 'This month's confidence readings paint a gloomy picture of
current economic conditions, with no apparent rebound on the short-term
horizon,' reported the Journal.
WorldCom Expects to Present Three-year Plan to Creditors
WorldCom Inc. will present to its creditors' committee within the next
few weeks a three-year plan that spells out business projections for the
telecommunications company, its lawyer told a bankruptcy judge on
Tuesday, Dow Jones reported. The business plan, which will give
creditors an idea of the company's value after bankruptcy, is part of
WorldCom's efforts for a quick emergence from chapter 11
bankruptcy-court protection. WorldCom's new chief executive, Michael
Capellas, has said the company aims to file a reorganization plan that
will divvy up ownership of the company among banks, bondholders, and
other creditors by mid-April, thus paving the way for its rehabilitation
as a normal company, reported the newswire.
EDS Abandons Talks With Alstom, Wants to Focus on Smaller
Deals
Computer services giant Electronic Data Systems Corp. (EDS) said it has
ended negotiations on a huge outsourcing contract, reflecting a
determination to reduce its reliance on 'megadeals' of greater than $1
billion, the Wall Street Journal reported. EDS has been under
pressure by investors to redirect its sales approach to deals with
near-term profitability and cash flow after several large contracts hurt
results last year. The company has seen profits and revenue hamstrung by
big deals with WorldCom Inc. and US Airways Group, both of which are
operating under chapter 11 bankruptcy protection, reported the
Journal.
Peregrine Systems Reaches Pact With Unsecured Creditors
Peregrine Systems Inc. and its unsecured creditors agreed to name
retired bankruptcy judge Ralph R. Mabey as mediator for the company's
chapter 11 reorganization, Dow Jones reported. In a press release, the
company said it requested Mabey's assistance in a filing Tuesday with
the U.S. Bankruptcy Court in Delaware. Mabey, a former bankruptcy judge
in Utah, is now in restructuring and bankruptcy practice at LeBoeuf Lamb
Greene & McRae LLP. The committee of creditors also agreed to stay
its motion to appoint a chapter 11 trustee. If the conditions of the
stipulation are met, the motion will be dismissed, reported the
newswire.
Atlantic Coast Air's Shares Fall After United Bankruptcy Ruling
Shares of Atlantic Coast Airlines Holdings Inc., a commuter airline,
fell as much as 31
percent after a bankruptcy judge rejected its motion to force United
Airlines to decide on a contract between the carriers, Bloomberg News
reported. Judge Eugene Wedoff in Chicago on Monday denied
Atlantic Coast's request to force UAL Corp.'s United to decide whether
to renew or reject the contract by Feb. 28. Dulles, Va.-based
Atlantic Coast operates United Express commuter flights for the larger
partner, which filed for chapter 11 bankruptcy protection in December,
reported Bloomberg.
Ha-Lo Agrees to Be Bought by H.I.G. to Emerge From Chapter
11
Ha-Lo Industries Inc. agreed to be bought by investment firm H.I.G.
Capital for $22 million in cash and notes to emerge from bankruptcy
protection, Bloomberg News reported. Ha-Lo cut jobs, sold units and
consolidated its order-management systems to return to profitability
after filing for chapter 11 bankruptcy protection in July 2001. The
Northbrook, Ill.-based company expects to complete the sale, which
requires approval from the U.S. Bankruptcy Court in Chicago, in April,
according to Bloomberg.
KMART
Kmart Says Ex-CEO Failed in His Duties, Mislead Board
Kmart Corp. said former Chief Executive Charles Conaway failed to
adequately perform his duties as the company headed into a cash crunch,
Bloomberg News reported. Conaway participated in a plan to
'systematically'' suspend payments to suppliers, Kmart said in documents
filed with the U.S. Bankruptcy Court in Chicago. He also failed to
provide the board with 'significant information'' about the nature of
the company's liquidity crisis in the second half of 2001, Kmart's
filings said, Bloomberg reported.
Kmart Expects Investor Group To Control 50 Percent Of New
Stock
Kmart Corp. expects that the investor group consisting of ESL
Investments Inc. and Third Avenue will control more than 50 percent of
the retailer's new stock upon its emergence from federal bankruptcy
protection, Dow Jones reported. According to court documents made
available on Tuesday, ESL holds about $1.6 billion of current unsecured
Kmart debt claims and Third Avenue holds another $178 million. The debt
together with a new investment of up to $353 million entitle the group
to the position, reported the newswire.
U.S. Govt. Tells Hutch, ST to Revise Global Crossing Bid
The U.S. government demanded assurances that a proposal by Hutchison
Whampoa Ltd. and a partner to buy a majority stake in bankrupt network
operator Global Crossing Ltd. won't compromise national security, said
people familiar with the matter, Bloomberg News reported. Hutchison and
government-controlled Singapore Technologies Telemedia Pte (ST) must
resubmit their proposal to buy a 61.5 percent stake in Global Crossing
for $250 million after the Committee on Foreign Investments in the
United States said it needed more evidence they could keep the 27-nation
fiber-optic network secure, Bloomberg reported.
Divine to File for Chapter 11
Divine Inc. and several of its units plan to file a voluntary petition
to reorganize under chapter 11 of the Bankruptcy Code, Dow Jones
reported. The business-services and software company said the filing
will help it protect operations while it works to restructure its
liabilities and resolve the issues facing its RoweCom Inc. unit. Due to
the bankruptcy filing, Divine postponed the release of its
fourth-quarter and 2002 financial results and a related conference call,
reported the newswire. In January, Divine said its RoweCom unit would
file for chapter 11 bankruptcy protection as part of a plan to sell the
unit to Ebsco Industries Inc.
General DataComm Gets Extension Of Cash Collateral Use
General DataComm Industries Inc. on Tuesday received a three-month
extension of its authority to use the cash collateral of its secured
lenders to fund operations, Dow Jones reported. The order signed by
Chief Judge Peter J. Walsh of the U.S. Bankruptcy Court in
Wilmington, Del., authorizes General DataComm to use the cash collateral
of Abelco Finance LLC and Foothill Capital Corp. through May 31. General
DataComm owed the lenders $31 million as of its Nov. 2, 2001, bankruptcy
filing, according to court documents, reported the newswire.
AT&T Canada's Restructuring Plan Approved By Court
AT&T Canada Inc. announced in a press release on Tuesday that the
Ontario Superior Court of Justice and the U.S. Bankruptcy Court have
both approved the company's restructuring plan, Dow Jones reported. The
company said that, having secured the necessary creditor and court
approvals, it expects to emerge from the Companies' Creditors
Arrangement Act proceedings on April 1, as an independent company, with
positive cash flow and net income, and no long-term debt, reported the
newswire.
Fleming To Cut 1,800 Jobs; SEC Launches Probe
Fleming Cos., the largest grocery distributor in the United States, will
slash 15 percent of its workforce, or about 1,800 jobs, because of the
loss of its largest customer, the bankrupt discount retailer Kmart
Corp., Dow Jones reported. The company also said the Securities and
Exchange Commission has declared a formal investigation into the
company's accounting and trade practices, reported the newswire.
Dallas-based Fleming said it would cooperate with the investigation,
which began as an informal inquiry in November.
Hearing On US Airways Pilot Pension Plan To Continue on
Friday
A hearing on US Airways Group Inc.'s request to replace its pension plan
for pilots with another plan will continue on Friday, company spokesman
Dave Castelvetter told Dow Jones Newswires on Tuesday. A hearing on the
request began on Friday before Judge Stephen Mitchell of the U.S.
Bankruptcy Court in Alexandria, Va. The hearing continued on Monday, but
testimony wasn't completed. US Airways will continue to present
testimony on the matter on Friday, after which the pilots are expected
to present their case, reported the newswire. Pilot groups have opposed
the request.
Court OKs Classic Communications Settlement With DirecTV
Classic Communications Inc. received approval from the bankruptcy court
handling its chapter 11 case to sign a settlement with DirecTV Inc., Dow
Jones reported. According to a Feb. 14 ruling from the U.S. Bankruptcy
Court in Wilmington, Del., obtained on Tuesday by Dow Jones Newswires,
the company received approval to pay $745,965 to satellite television
provider DirecTV to settle a dispute over programming provided to
correctional facilities. Classic Communications will pay the amount on
the 11th day following court approval of the settlement.
Spiegel Ordered by U.S. to Liquidate Its Credit Card Business
Spiegel Inc., the owner of Eddie Bauer stores and the Spiegel catalog,
was ordered by the Office of the Comptroller of the Currency to start
liquidating its credit-card business, Bloomberg News reported. The
company won't meet requirements on two of the securities backed by the
bankcard debt and is in danger of defaulting on a third that is backed
by the credit-card receivables, according to a regulatory filing,
reported Bloomberg. The cards are issued by Spiegel's First Consumers
National Bank division.
Judge OKs Arbitration For NRG, FirstEnergy In Plant Sale
A U.S. Bankruptcy Court judge said on Tuesday that FirstEnergy Corp. may
pursue arbitration over a failed, $1.5 billion sale of four power plants
to developer and trader NRG Energy Inc., the companies said, Dow Jones
reported. FirstEnergy called off the sale last August, when it became
clear NRG, a financially troubled unit of Xcel Energy, couldn't complete
the deal. FirstEnergy said then it reserved the right to seek damages,
which it said in a filing with the U.S. Bankruptcy Court for the
District of Minnesota are 'anticipated to be several hundred million
dollars,' reported the newswire. NRG, which faces an involuntary
bankruptcy petition in the Minnesota court, filed with FirstEnergy in
support of the arbitration request last week.
FAO Asks For Authority To Auction 70 Store Leases
FAO Inc. is asking a bankruptcy court for authority to auction 70 store
leases in an effort to bring more funds into its chapter 11 estate, Dow
Jones reported. FAO said an auction of the leases is 'critical' to
maximizing the value of the estate. The company wants to auction the
leases on March 20. The toy retailer suggests a bid deadline of March 17
and a sale objection deadline of March 26. FAO is asking the U.S.
Bankruptcy Court in Wilmington, Del., to consider the sales at a hearing
on March 27, according to court documents, Dow Jones reported.
Allegheny Gets $2.4 Billion in Loans to Avert Bankruptcy
Allegheny Energy Inc., a U.S. utility owner that defaulted on debt and
energy-trading contracts last year, got $2.4 billion in new loans to
repay obligations and help avert bankruptcy, Bloomberg News reported. A
portion of the loans will be used to refinance $1.64 billion in debt
held by Allegheny Energy Supply, its wholesale power-generation
business, the company said in a statement. The agreement will provide
$470 million in new funding to the unit, which will pledge assets,
mostly power plants, as security.
Thanks for visiting
Today's Bankruptcy Headlines. New articles are posted here
each business day.
|
