January 26, 2004
Senate Democrats Prepare To Battle House Bankruptcy Bill
Move
Several Senate Democrats plan to fight House leaders' efforts to move a
controversial, House-passed bankruptcy bill to conference without a
prior Senate floor vote on the measure, Senate Democratic sources said
on Friday, reported CongressDaily. 'Senate Democrats would insist
on the right to offer [floor] amendments to improve the bill,' said a
spokesman for Senate Judiciary ranking member Patrick Leahy (D-Vt.).
'This is not going to work. We're not going to give up our rights.'
House leaders plan to insert the text of the bipartisan 'Bankruptcy
Abuse Prevention and Consumer Protection Act,' which the House approved
last March on a 315-113 vote, into a noncontroversial, Senate-passed
bill authorizing a six-month extension for chapter 12 of the Bankruptcy
Code, which provides bankruptcy relief to family farmers.
The House is scheduled to vote on the combined measure on Wednesday. If
the House approves the legislation, House leaders would then send it to
the Senate and request a conference. 'We need to get this thing done,' a
Hastert's spokesman said, noting that the Senate has not taken up the
House-passed bankruptcy bill. He also pointed out that a similar measure
came close to enactment during the 107th Congress, but 'couldn't get to
the final finish line.' The House had rejected the conference report on
that previous bankruptcy bill, because it included controversial
language that would have prevented abortion protesters from filing for
bankruptcy to avoid paying fines for disruptive activity at clinics. The
current House-passed bankruptcy bill does not include that language,
which was based on an amendment by Sen. Charles Schumer (D-N.Y.). But
Schumer 'continues to believe his amendment is an important part of
bankruptcy reform,' a Schumer spokesman said, reported the newswire.
U.S. Officials May Seek Veto of Pension Bill
Senior administration officials warned the Senate on Friday that they
would advise President Bush to veto special help for airlines and steel
companies as part of broader pension funding relief, Reuters reported.
In a letter to Senate Republican Leader Bill Frist (R-Tenn.), members of
the board at the agency said they would recommend Bush veto any
legislation that would 'exacerbate systemic pension plan underfunding,'
the newswire reported. The Senate is considering an amendment providing
extra help for airlines and some steel companies as part of a bill
offering $25.5 billion in pension relief over two years.
The letter from Labor Secretary Elaine Chao, Treasury Secretary John
Snow and Commerce Secretary Donald Evans, board members of the Pension
Benefit Guaranty Corp. (PBGC) that insures corporate pensions,
emphasized that the administration supported the underlying bill, H.R.
3108. By assuming a higher rate of return on pension fund investments,
the bill provides temporary relief for all companies with traditional
'defined benefit' pensions, while a longer-term solution to pension
underfunding is sought. But the letter to Frist said it would be
irresponsible to add any provisions that would worsen underfunding. 'If
H.R. 3108 were amended to do so, we as the PBGC board would recommend
that the president veto the legislation.'
The Senate started debate on the legislation on Thursday knowing that
the White House was strongly opposed to the extra relief, but senators
argued that the companies badly needed the help, with some of them
facing possible bankruptcy. For airlines and steelmakers facing
'catch-up' payments on severely underfunded plans, the proposed
amendment to the bill offers billions of dollars of extra help, allowing
them to pay 20 percent of what they owe in the first year and 40 percent
in the second year. The Senate is expected on Tuesday to pass the
pension relief legislation, CongressDaily reported.
Class Action Bill Not Expected to Move This Week
A modified version of the controversial class action bill that last year
fell one vote short of the 60 votes needed to break a Democratic
filibuster is unlikely to move to the Senate floor this, a spokeswoman
for Majority Leader Bill Frist (R-Tenn.) said, CongressDaily
reported. Frist's spokeswoman said the Senate 'most likely' would not
take up the class action bill until after it completes action on the
reauthorization of the Transportation Equity Act for the 21st Century.
The transportation bill is expected to move to the floor Feb. 2.
Supporters of the class action bill have said they are optimistic about
its prospects for passage, now that three Senate Democrats who had
previously voted to block action on the measure have announced their
support based on a compromise reached in November.
Adelphia May Seek $8 Billion Loan to Exit Bankruptcy
Glenwood Village, Colo.-based Adelphia Communications Corp. has asked a
federal judge for permission to negotiate an $8 billion loan from
Deutsche Bank AG to help pay creditors and get out of bankruptcy,
Bloomberg News reported. Adelphia is also in talks with creditors about
a bankruptcy recovery plan that includes a long-term business strategy
and a description of how more than $20 billion worth of debt would be
paid, the company said in a filing in U.S. Bankruptcy Court in New York.
The new loan ''would be one of the largest of its kind ever
syndicated,'' Adelphia said in the filing. The loan's size means
Adelphia ''must deal with a limited universe of major financial
institutions that have the wherewithal and relationships to lead such an
effort,'' the filing said. Adelphia has a Feb. 17 deadline to submit its
reorganization plan to the court. The company has said it hopes to come
out of bankruptcy this year. It sought chapter 11 bankruptcy protection
in June 2002 amid allegations that former CEO John Rigas and two sons
looted the company.
Spiegel Emerges from Bankruptcy With Media Blitz, New
Catalog
After 10 months of bankruptcy protection, Downers Grove, Ill.-based
Spiegel Inc. is overhauling its struggling 99-year-old home and apparel
catalog, the Morning Call reported. The Big Book's rebirth will
be backed by TV ads for the first time in a decade. The revamped
400-page catalog will be mailed to more than 3 million consumers
starting this week.
The retailer, which also owns the Eddie Bauer stores and the Newport
News catalog, collapsed into bankruptcy in March after executives
increased sales by giving shoppers easier access to credit. In the 10
months since, Spiegel has cut jobs, changed management and auditors, and
closed everything from 14 percent of its Eddie Bauer stores to a
customer service center. Spiegel has nearly $1.5 billion in debts, owed
mostly to large U.S. and German banks. A plan of reorganization is
scheduled to be filed next month, though Spiegel is likely to request an
extension, reported the newspaper.
Open-wheel Fate Left in Hands of Bankruptcy Judge
The fate of open-wheel racing in North America now is in the hands of
U.S. Bankruptcy Judge Frank J. Otte, the Miami Herald reported.
On Wednesday in Indianapolis, he will decide what will become of most of
the assets of Championship Auto Racing Teams (CART), which declared
chapter 11 bankruptcy last month. Two entities have made bids: a group
of three CART team owners and the Indy Racing League, the online
newspaper reported. To read the full article, point your browser to
href='http://www.miami.com/mld/miamiherald/sports/7791531.htm'>http://www.miami.com/mld/miamiherald/sports/7791531.htm.
Great Plains Airlines Files for Bankruptcy
Tulsa, Okla.-based Great Plains Airlines filed for chapter 11 bankruptcy
protection on Friday, the Associated Press reported. The airline said it
would immediately suspend scheduled flights and cut an undisclosed
number of jobs. The airline flew several routes in and out of
Albuquerque, N.M. However, the company will still provide charter
service while under bankruptcy protection. Rio Grande Air, which
partnered with Great Plains as a code-share partner, will continue
service during Great Plains' proceedings. Rio Grande Air provides
service between Albuquerque, Taos, and Alamogordo.
Reptron to Emerge from Bankruptcy With Reduced Debt
Reptron Electronics Inc., an electronics manufacturing services company,
reported that its second amended plan of reorganization under chapter 11
of the Bankruptcy Code was confirmed by the U.S. Bankruptcy Court on
Jan. 14, according to a press release. Under the confirmed plan of
reorganization, the company's unsecured class of creditors that includes
its existing convertible notes, will receive new notes with a total
principal amount of $30 million. The existing notes, along with all
accrued and unpaid interest, will be cancelled. The unsecured class of
creditors will also receive 95 percent of the common shares of the
reorganized company. Existing common shareholders will receive the
remaining 5 percent of the common shares of the reorganized company.
Court to Rule on Halliburton Insurers Feb. 11
Halliburton Co. on Friday said a bankruptcy court will rule Feb. 11 on
whether insurers can participate in its chapter 11 proceedings, part of
its plan to limit asbestos liabilities, Reuters reported. If the
Pittsburgh bankruptcy judge allows insurers to participate in the
hearing, scheduled for May 10 through May 12, it could 'substantially'
delay the chapter 11 process, and may result in a revision of the plan,
Halliburton said in a Friday regulatory filing, the newswire reported.
The Houston-based energy company believes insurers should foot more than
$2 billion of its $4.3 billion asbestos settlement. But insurers contend
Halliburton's actions are an illegitimate use of the bankruptcy
system.
Halliburton said the insurers are seeking to dismiss the bankruptcy
proceedings of two Halliburton units -- DII Industries and Kellogg Brown
& Root -- which filed for chapter 11 last month as part of a plan to
limit the parent company's liability.
Federal Bankruptcy Court Finds Dr. Steven M. Scott in Contempt
PhyAmerica announced in a press release that on January 21, 2004,
the Federal Bankruptcy Court in Baltimore, Maryland held Dr. Steven M.
Scott in contempt of court due to Dr. Scott's violations of a
Preliminary Injunction. The Preliminary Injunction, issued by the Court
on December 19, 2003, prohibits Dr. Scott, for one year or further order
from the Bankruptcy Court, from: (1) meeting with current employees
and/or affiliates of PhyAmerica and from making any representations or
statements concerning the former, current or future operations of
PhyAmerica; (2) communicating with any party to a Provider Contract or
any Provider about the operations of PhyAmerica; and (3) taking any
further actions to procure, service, impair or otherwise interfere with
the North Broward District contracts and the relationship between the
North Broward District and PhyAmerica.
The Court held that there were at least two instances where Dr. Scott
had acted in violation of the Preliminary Injunction and announced that
the determination of actual damages caused by these violations would
occur at a hearing to be scheduled in the future.
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