March 152004

Submitted by webadmin on Mon, 2004-03-15 00:00

border='0'>

March 15,
2004

House to Hold Hearing on Pension Plans This Week

The House Education and the Workforce Employer-Employee Relations
Subcommittee will hold a hearing on Thursday on the status of
multi-employer pension plans commonly found in the construction and
trucking industries, CongressDaily reported. A spokesman for
Education and the Workforce Chairman John Boehner (R-Ohio) said the
hearing is part of a broader effort to review challenges in the
defined-benefit pension system. Boehner said staffers would spend part
of this week preparing background on issues that have divided conferees,
including Senate-passed provisions helping multi-employer plans. Pension
conferees will meet again when the Senate returns from its weeklong
recess.

Consumer Sentiment Slips in March

U.S. consumer sentiment dipped unexpectedly in early March as Americans,
worried about a lack of new jobs, grew more cautious about the prospects
for the economy, according to a survey released on Friday, Reuters
reported. The University of Michigan's preliminary reading of consumer
sentiment slipped to 94.1 in March from a final reading of 94.4 in
February, said market sources who saw the subscriber-only report.
Economists had forecast a slight improvement to 95.0, after a dramatic
decline in the index in February. 'These confidence surveys are
reflecting what people are reading -- that the economy is not creating
jobs,' said Avery Shenfeld, senior economist at CIBC World Markets.

Other early readings of consumer confidence for March already released
also showed a decline. Although economic growth has been robust in
recent months, the lack of substantial improvement in the labor market
could become a risk to the entire recovery, reported the newswire.

One in 73 U.S. Households Declared Bankruptcy In '03

One out of every 73 U.S. households filed for bankruptcy last year, a
record high, despite historically low interest rates, the American
Bankruptcy Institute said on Friday. Utah faced the highest
per-household bankruptcy rate -- one out of every 47 -- followed closely
by Tennessee, Georgia and Nevada. Alaska had the lowest rate last year,
just one filing for every 189 households.

MCI

MCI Reduces Earnings by $74.4 Billion

MCI on Friday reduced its combined pretax profits for 2000 and
2001 by $74.4 billion, in a restatement that brings the phone company
closer to putting the largest accounting fraud in U.S. history behind
it, Reuters reported. The company, which also filed 2002 results for the
first time, now expects to emerge from bankruptcy protection in April.
Analysts are still waiting for the company to post its 2003 results. MCI
said it is working on those numbers. While the restated figures take a
step toward putting the accounting fraud behind it, many analysts were
more interested in the 2003 results, which will give a more relevant
picture of MCI's post-bankruptcy health and possibly set the stage for
the embattled company to be acquired.

'This is all history that's irrelevant,' said Guzman & Co. analyst
Patrick Comack of the results released in the filing with the U.S.
Securities and Exchange Commission, the newswire reported. 'We need a
properly audited 2003 balance sheet to value this company.'

Oklahoma Attorney General Announces MCI Settlement

MCI agreed on Friday to settle a fraud case brought by Oklahoma by
creating 1,600 new jobs in the state and assisting prosecutors in their
case against former executives of the long-distance company, the
Associated Press reported. Oklahoma said the company had taken
'significant steps' toward reform following an accounting scandal that
plunged the company into the biggest bankruptcy in U.S. history.

'Since WorldCom's collapse a new company has emerged from the rubble. It
was never our intention to put the company out of business and MCI has
taken significant steps to clean its own house,' Attorney General Drew
Edmondson said. MCI had faced a March 29 preliminary hearing in Oklahoma
on charges contained in an indictment issued last year, AP reported.

MCI Agrees to Sell Its Stake in Embratel

MCI agreed to sell its controlling stake in Brazilian phone
carrier Embratel Participacoes SA to Telefonos de Mexico SA for $360
million, people familiar with the matter said, the Wall Street
Journal reported. MCI put its 51.8 percent voting stake in Embratel
up for sale in November, and Telmex, Mexico's biggest fixed-line
carrier, was considered the front runner. The deadline for offers was
Friday. MCI is selling its stake as part of a reorganization under
chapter 11 bankruptcy-court protection. The bankruptcy court and
Brazilian regulators must approve the deal, the online newspaper
reported.

United Happy With Discount Carrier

Ted, the Denver-based airline-within-an-airline, has filled about 82
percent of its seats in its first month of flying -- 7 percent to 10
percent above the carrier's forecasts, officials said this week, the
Associated Press reported. Bookings for March, April and May are also
exceeding projections, said Sean Donohue, Chicago-based United's vice
president for Ted. It's unclear how Ted is performing financially
because United won't release details. But Donohue said Ted aims to be
profitable in 2005 and so far has 'exceeded all of our business plan
goals.' Ted is part of United's effort to fend off competition from
discount carriers including Denver-based Frontier and to emerge from
bankruptcy by the end of June. The airline, launched Feb. 12, now flies
to eight cities from Denver and caps its fares at $299 each way,
excluding taxes.

Meanwhile, United is planning to rehire 100 furloughed mechanics in San
Francisco during the next couple of months as a result of new business
at its San Francisco Maintenance Center, located near San Francisco
International Airport, the newswire reported.

US Airways and ATSB Restructure Loan

US Airways Group Inc. has reached an agreement with the Air
Transportation Stabilization Board (ATSB) to revise the terms of the $1
billion loan that was made to US Airways Inc., upon its emergence from
chapter 11 on March 31, 2003, the company announced in a press release
on Friday. Under the agreement, US Airways prepaid $250 million, causing
the remaining outstanding loan balance to be reduced to $726 million.
The pre-payment has been made to the lenders on a prorated basis to both
the ATSB guaranteed (90 percent) and non-guaranteed (10 percent)
portions of the loan. The ATSB's exposure therefore was reduced by $225
million, and Bank of America and Retirement Systems of Alabama received
$6.25 million and $18.75 million, respectively.

In exchange for this prepayment, the financial covenants contained in
the loan were modified through 2005. The revised covenants require that
US Airways significantly narrow its losses in 2004 and return to
profitability in 2005. The company and the ATSB also agreed to modify
other terms and provisions, including lifting certain restrictions on
the company's ability to pursue asset sales, according to the press
release.

Tower Records Will Ask to Emerge from Bankruptcy
Today

Tower Records is expected to emerge from its financial reorganization as
early as today, sources said on Friday, the Associated Press reported.
The company has scheduled a hearing today in a Delaware bankruptcy court
for a ruling on its reorganization plan, and could emerge from
bankruptcy the same day, said Los Angeles investment banker Lloyd Greif.
'This will probably be at lightning speed, 35 days,' said Greif, hired
nearly a year ago to sell the firm. 'I think it's a reflection of the
fact that Tower is in good shape.' Greif said the chapter 11
reorganization has helped the hunt for a buyer, the newswire
reported.

The reorganization plan allows Tower to trim $80 million of its $110
million debt by allowing creditors to assume 85 percent ownership of the
company. Tower's founding Solomon family will retain 15 percent of the
company it founded in 1960.

The 93-store chain has been battered by changes in the music industry,
including free music downloading on the Internet.

PG&E Sets Date To Exit From Bankruptcy

Pacific Gas & Electric Co., California's largest utility, said it
plans to exit from bankruptcy the week of April 12, the San Mateo County
Times reported. PG&E proposed the new date in a bankruptcy court
filing on Friday and said that it will emerge from chapter 11 protection
no later than May 15. The utility also said it will sell $6.7 billion in
bonds secured by a first mortgage on utility properties to help pay
creditor claims of $12 billion as it emerges from bankruptcy protection.
Lehman Brothers Holdings Inc. and UBS AG will manage the offering,
PG&E said in a statement.

Rebranding Becomes New Feature of Chapter 11 Makeovers

Scandal-plagued companies operating under bankruptcy protection are
getting more than a financial makeover. Businesses with damaged
reputations increasingly are renaming and rebranding themselves to patch
tattered identities. In the past 24 months, Adelphia Business Solutions
Inc., a former Adelphia Communications Corp. spinoff, was reborn as
TelCove. Enron Corp.'s remaining properties have been split into two
entities and renamed Prisma Energy International LLC and CrossCountry
Energy. And when WorldCom Inc. emerges from bankruptcy this spring as
MCI Inc., it reclaims an unblemished name as it sheds $35 billion in
debt.

Provided by Daily Bankruptcy Review (
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

Creditors Say Court Shouldn't Give Loral More Time To File
Plan

Loral Space & Communications Ltd.'s creditors said the company
shouldn't get more time to file a plan for its reorganization because it
hasn't made much progress eight months into its bankruptcy case. In
fact, since Loral filed for chapter 11 protection, many new problems
have arisen, the committee of unsecured creditors in the case said in
court papers Wednesday. The value of Loral's sale of its North American
satellites to Intelsat Ltd. has fallen by $170 million, the company's
Telstar 4 satellite has failed in orbit, problems have arisen with its
Telstar 14 satellite and the company dropped and damaged its Spainsat
satellite during transport, the committee said.

Roman''>
color='#000000'>
size='3'>Thanks for visiting Today's Bankruptcy Headlines.
New articles are posted here each business
day.