March 252004

Submitted by webadmin on Thu, 2004-03-25 00:00

March 25, 2004

Senate to Decide How to Proceed with Bankruptcy
Legislation

Senate Majority Leader Bill Frist (R-Tenn.) and Banking Chairman Richard
Shelby (R-Ala.) are in the process of deciding how to proceed with
bankruptcy legislation, a Frist spokeswoman said yesterday,
CongressDaily reported. The House voted in January to combine a
noncontroversial, Senate-passed bill providing bankruptcy relief to
family farmers with a House-passed bankruptcy bill that stalled in the
Senate last year amid controversy over Democratic-favored abortion
language. Frist has not yet decided whether to move the broader
bankruptcy bill to the Senate floor or proceed to conference on the
family farmers bill, the newswire reported.

Panel Urges Protection Against Credit Counseling Abuses

Citing evidence of 'alarming abuses' in the nonprofit credit counseling
industry, a Senate Governmental Affairs subcommittee recommended today
that the Senate consider modifying its pending bankruptcy bill to
strengthen protections against abusive credit counseling practices,
CongressDaily reported. In a
href='http://govt-aff.senate.gov/_files/032404psistaffreport_creditcounsel.pdf'>report
that accused three major credit counseling agencies of profiteering, the
Governmental Affairs Permanent Investigations Subcommittee also said the
Senate should consider expanding, or modeling new legislation on, the
1996 Credit Repair Organizations Act to protect consumers from abusive
practices by nonprofit credit counseling agencies. The report was based
on the panel's six-month investigation of major credit counseling
agencies.

Governmental Affairs Permanent Investigations Subcommittee Chairman
Norm Coleman (R-Minn.) said traditional credit counseling agencies had
operated successfully for decades, providing consumers with counseling,
educational services and debt management plans at little or no charge.
But he said the industry had undergone significant changes in recent
years, the newswire reported. 'New and aggressive credit counseling
agencies have changed the manner in which consumers are treated,'
Coleman said, adding that consumers have complained about excessive
fees, pressure tactics, a lack of counseling, ruined credit ratings and
other problems. View witness
href='http://govt-aff.senate.gov/index.cfm?Fuseaction=Hearings.Detail&Hearing…'>testimony.

Pension Conferees Agree to Relief Plan

House and Senate pension conferees said yesterday they agreed to include
narrow relief for multi-employer pension plans in the final bill,
CongressDaily reported. Conferees will determine as soon as today
how to target relief to the multi-employer plans that are suffering the
most financially, several lawmakers said. 'We want to give the remedy to
the sick,' said Rep. Robert Andrews (D-N.J.), one of the conferees, the
newswire reported. The relief probably will not depend on the industry
of a company in question, but rather on its financial condition, Andrews
added. But he said whatever criteria conferees select still would allow
a significant number of multi-employer plans to get pension aid.

4th Quarter GDP Number Unchanged

America's economy grew at a solid 4.1 percent annual rate in the fourth
quarter and is expected to do even better in the opening quarter of this
year, the Associated Press reported. The latest reading on gross
domestic product for the October-to-December quarter was the same as a
previous estimate made a month ago, the Commerce Department reported
today. That was consistent with economists' forecasts.

Economic growth in the current January-to-March quarter is expected to
be 4.5 percent, according to some analysts' forecasts. Growth in the
April-to-June quarter also should be around that pace, they said. Tax
refunds and other tax incentives should motivate consumers and
businesses to spend and invest more -- energizing the economy in the
first half of this year, economists said, the newswire reported.

U.S. Auditor-Client Ties Becoming Less Cosy

The bankruptcy of energy trader Enron Corp. in 2001 and the subsequent
related demise of audit firm Arthur Andersen has changed the
auditor-client relationship forever, accountants and industry experts
say, Reuters reported. 'Today, audit firms are more conscious of the
risk profile of their client base,' said Auditor-Trak's Richard Ossoff.
According to Auditor-Trak, there were a total of 221 auditor
resignations in 2003. In 82 instances, auditors publicly disclosed
reasons for resignations and in 13 cases they admitted disagreeing on
accounting policies. In 2004, there have been 35 resignations of
auditors, with nearly a third disclosing why they were unhappy, and
eight leaving over disagreements on accounting policies, Reuters
reported. Additional pressure is also being imposed by the newly created
Public Company Accounting Oversight Board, which as a guardian of the
audit industry is imposing strict quality controls on audit practices,
the newswire reported.

US Airways Still Needs Major Cost Cuts Says CEO

US Airways CEO David Siegel on Wednesday said the airline still needs to
cut costs dramatically to survive, adding that he was willing to make
sacrifices as the company seeks a new round of concessions from workers,
Reuters reported. Siegel said US Airways needs to reduce unit costs from
10 cents to 6 cents and have new labor agreements in place by this
summer to compete with low-cost carriers that are rapidly gaining market
share, the newswire reported. The airline, which emerged from bankruptcy
a year ago, still has among the highest unit costs, or costs per
available seat mile, in the industry. Low-cost carriers have unit costs
in the 6-cent range, the newswire reported.

Retiree Health Benefits Vex U.S. Airlines

Before last year, a flight attendant who spent his entire career with
UAL Corp.'s United Airlines could retire with an average pension of
$1,200 a month and a health-care plan costing as little as $20 a month
for a single person.

Now, under a program for fresh retirees, a career-long United flight
attendant, under the best-case scenario, must pay around $130 a month
for health-care benefits until Medicare kicks in. And there's no longer
a cap on how high those monthly costs can rise. It's no wonder the
flight attendants, as well as other employees with UAL, are unhappy
about the company's proposal to put all of the older retirees on the new
package as the airline attempts to rid itself of a balance-sheet burden.
The airline continues to restructure under bankruptcy protection.

Provided by Daily Bankruptcy Review

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href='http://www.djnewsletters.com/trial-form.html?promo=TDBRABI2'>http://www.djnewsletters.com/trial-form.html?promo=TDBRABI2)

Copyright (c) 2003 Dow Jones & Company, Inc. All Rights Reserved

CI's Embratel Says Three Rivals Formed 'Cartel'

Brazil's leading long-distance carrier alleged Wednesday that the
country's top three fixed-line carriers have formed a 'cartel' and
broken laws governing competition in Brazil's telecommunications
industry. Purificacion Carpinteyro, vice president of Embratel
Participacoes SA, presented the allegations in a meeting Wednesday
afternoon in Brasilia, the capital, at the Secretary of Economic Rights,
or SDE, an antitrust unit of Brazil's Ministry of Justice, according to
a company spokesman. A copy of Carpinteyro's presentation to SDE
provided to Dow Jones Newswires includes allegations that the three
companies -- Tele Norte Leste Participacoes SA, or Telemar; a Brazil
unit of Spain's Telefonica SA; and Brasil Telecom Participacoes -- have
virtually identical wording and prices for certain proposed service
contracts and avoided directly competing with each other in a number of
situations.

Dynegy CEO to Add Chairman's Post

Dynegy Inc. on Wednesday said President and CEO Bruce Williamson will
add the title of chairman -- even as a number of companies move to
separate the chairman and CEO positions in a bid to improve corporate
governance, Reuters reported. However, the Houston energy company also
said it will name board member Patricia Hammick as lead director, in an
attempt to make sure the board operates independently of management.

Watchdog groups advocate the separation of the chairman and CEO roles,
and U.S. companies are slowly moving in that direction. According to a
March 2004 report from the Corporate Library, an organization that rates
corporate governance practices, 378 CEOs of companies in the benchmark
Standard & Poor's 500 index still chaired their own boards, down 4
percent from a year ago. At the same time, only 22 lead directors had
been appointed, the newswire reported.

Under Williamson, Dynegy has cut its debt and raised cash in an effort
to restore the health of its balance sheet while it struggles to deal
with the fallout of the bankruptcy of energy trader Enron Corp., the
newswire reported.

FTC Seeks Civil Penalty for Debt Collectors

The Federal Trade Commission (FTC) on Wednesday said it will impose a
$300,000 civil penalty on a debt collection company and its subsidiary
to settle charges of harassing and browbeating borrowers, Reuters
reported. The FTC said Capital Acquisitions and Management Corp., its
subsidiary, RM Financial Services Inc., and four principals violated
debt collection laws throughout the United States in trying to get
consumers to pay old debts. The collectors could not have claimed most
of the debts in court, for example, those that had been discharged in
bankruptcy proceedings, the FTC said, Reuters reported. The government
said the companies harassed consumers at their workplaces, used obscene
language, and misrepresented the amount and legal status of consumers'
debts, according to the newswire.

Air Canada In Talks Over Size Of Bombardier Jet Order

Air Canada said on Wednesday it was still in talks with Bombardier Inc.
over the size of its regional jets order, even though the aircraft maker
has secured financing for an entire firm order of 45 planes, Reuters
reported. Air Canada announced late last year it would split a 90
aircraft order between Bombardier and its arch-rival Embraer. The
airline, under bankruptcy protection for almost a year, said at the time
that the order could change following negotiations with both aircraft
manufacturers. A recent agreement on aircraft allocation between the
unions for Air Canada's mainline and regional pilots sparked speculation
that the carrier could cut its order from Bombardier to buy 15 more of
Embraer's larger regional jets, the newswire reported.

PG&E Unit Plans To Sell Stranded Cost Bonds: CEO

PG&E Corp. said on Wednesday that its bankrupt Pacific Gas and
Electric Co. unit plans to sell bonds backed by charges on customers'
utility bills, in a deal that analysts estimate could be somewhere
between $2.2 billion and $3 billion, Reuters reported. Pacific Gas and
Electric plans to exit bankruptcy during the week of April 12. The
utility filed for bankruptcy in 2001 during the California power crisis.
The charges on customers' bills will help repay the costs the utility
incurred during the crisis, the newswire reported.

Pacific Gas and Electric is taking the final steps necessary to exit
bankruptcy now, said Robert Glynn, PG&E Corp. chairman and CEO, in a
press statement coinciding with his speaking at the Morgan Stanley
Global Electricity & Energy Conference in New York.

PG&E Corp. also said it is on course to enter a period of stability
when its Pacific Gas and Electric Company unit exits from chapter 11
bankruptcy next month, Reuters reported. Glynn said that he believes the
terms and assurances contained in the nine-year settlement agreement
with the California Public Utilities Commission (CPUC) to resolve
Pacific Gas and Electric Company's chapter 11 case, establish a strong
foundation of financial and regulatory stability as the company moves
forward, the newswire reported. Roman''>