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House Rules Committee Met Yesterday; Full House Action
Today
The House Rules Committee last night adopted a rule for the
consideration of H.R. 975 today that allows one hour of general debate
between proponents and opponents of the bill. The Committee has
authorized five amendments to be in order to be offered, including an
amendment in the nature of a substitute, to be offered by Ranking Member
John Conyers (D-Mich). A summary of the amendments can be found at
href='http://www.house.gov/rules/108rule975.htm'>http://www.house.gov/rules/108rule975.htm.
A special edition of the ABI Update will report on the outcome of House
action later today, should the House complete action.
Federal Reserve Leaves Interest Rates Unchanged
U.S. Federal Reserve policy-makers voted to leave a key interest rate
unchanged at a 41-year low, contending that uncertainties caused by a
pending Iraqi war were so extreme they could not gauge the economy's
prospects, Reuters reported. In a new and unusual turn of phrase that
left markets puzzled, U.S. central bank policy-makers pledged
'heightened surveillance,' implying they were ready to lower rates if
necessary. They next meet May 6, but could act earlier if the war goes
badly for the United States or the economy unravels.
Asbestos Agreement Deadline Arrives Without A Consensus
Intensive behind-the-scenes negotiations on asbestos litigation reform
were ongoing yesterday, as a two-week deadline imposed March 5 by Senate
Judiciary Chairman Orrin Hatch (R-Utah) for interested parties to reach
a consensus on a legislative approach was set to expire today,
CongressDaily reported. Although sources working the issue
concurred that a unanimous consensus among the competing interests
remains elusive, they said they were encouraged by the degree of
cooperation and level of engagement under way both on and off Capitol
Hill. Proponents of legislation said they are determined that a measure
be completed this year, reported the newswire.
DirecTV's Latin American Arm Files for Chapter 11
Protection
Satellite-television operator DirecTV Latin America LLC filed for
chapter 11 bankruptcy-law protection, as economic turmoil in South
America forced the company to restructure its costs and debts, the
Wall Street Journal reported. The company has been hurt by
recessions and strife in Argentina, Venezuela and Brazil that have
resulted in fewer subscribers. The currency in each of those countries
has significantly decreased in value compared with the U.S. dollar, and
while DirecTV Latin America is paid in the local currency, its costs are
denominated in dollars, reported the Journal. The filing was made
in the U.S. Bankruptcy Court in Wilmington, Del..
US Airways Wins Approval of Bankruptcy Recovery Plan
Arlington, Va.-based US Airways Group Inc. won a federal judge's
approval of a plan designed to let the airline exit bankruptcy by the
end of the month, Bloomberg News reported. U.S. Bankruptcy Judge
Stephen Mitchell accepted a recovery plan that lets the
seventh-largest U.S. airline hand over ownership to its creditors and
eliminates more than $10 billion in debt, the newswire reported. The
airline filed for bankruptcy in August as losses widened after the Sept.
11 terrorist attacks. Among the hurdles remaining for US Airways is
resolution of its bid to end a $2 billion pension plan. The carrier
wants to turn the pension obligations for 7,000 pilots over to the
Pension Benefit Guaranty Corp., a federal corporation. The company also
is negotiating to find a new processor to handle ticket sales made with
credit cards, Bloomberg reported.
The Wiz Wins Interim OK To Borrow $3.15 Million Under Pact
TW Inc. on Tuesday won interim authority to borrow up to $3.15 million
to pay employees and cover operating expenses through March 27, Dow
Jones reported. The financing is necessary because The Wiz operates
primarily on its cash and credit card receipts. The debtor company said
the nature of its business makes it unable to forecast expected receipts
on any given day, according to Dow Jones.
Judge Mary F. Walrath of the U.S. Bankruptcy Court in Wilmington, Del.,
granted the interim authority after The Wiz pared its request from a
motion for approval of a $20 million financing deal. A hearing to
consider further interim approval of the financing pact with Congress
Financial Corp. and other lenders is scheduled for 8:30 a.m. EST March
27, reported the newswire.
Globalstar Reaches Settlement With Loral Space &
Communications
Globalstar L.P. and Loral Space & Communications Ltd. have reached a
settlement that would help Globalstar move closer to court confirmation
of a reorganization plan, according to court papers obtained by Dow
Jones Newswires. According to a motion filed Monday with the bankruptcy
court overseeing Globalstar's case, Loral Space & Communications
would be allowed an $875 million claim in Globalstar's chapter 11 case,
reported the newswire. However, Loral Space & Communications's
allowed claim would be reduced to $437.5 million when the court approves
the settlement and confirms a reorganization plan for Globalstar. The
filing said Loral Space & Communications could be allowed $57
million of additional vendor financing claims, Dow Jones reported. The
U.S. Bankruptcy Court in Wilmington, Del., has scheduled a hearing on
the proposed settlement for April 9. Interested parties may file
objections through April 2.
Judge Approves Conseco Disclosure Statement
A judge on Tuesday approved Conseco Inc.'s disclosure statement, setting
the stage for the company to emerge from federal bankruptcy protection
later this spring, Dow Jones reported. Carmel, Ind.-based Conseco filed
for bankruptcy late last year after an aggressive acquisition strategy
left the company with more than $6 billion in debt. Conseco's proposed
reorganization plan would reduce the company's debt and trust preferred
obligations by more than $5 billion and its future annual interest
expense and distributions on trust preferred securities by about $380
million, reported the newswire.
Assets Of Fortel Inc. To Be Acquired By DivestCap Management
Corp.
Fortel Inc. filed for chapter 11 bankruptcy protection as part of an
agreement in which DivestCap Management Corp. will acquire the company
for $1.7 million cash and the assumption of about $8.6 million in
liabilities, Dow Jones reported. In a press release on Tuesday, Fortel
said it will continue day-to-day operations until the U.S. Bankruptcy
Court for the Northern District of California approves the sale. The
company filed for voluntary bankruptcy protection on Monday, reported
the newswire.
United Air Parent UAL Says Liquidation Is A Possibility
United Airlines parent UAL Corp. said liquidation is 'a distinct
possibility' for the world's second-largest carrier if it can't achieve
its proposed labor-cost reductions, Dow Jones reported. In a motion
filed late on Monday with the U.S. Bankruptcy Court in Chicago, asking
the judge to let the company void current labor contracts with its five
unions, UAL said the potential liquidation of United would have
'catastrophic' consequences for all of its stakeholders, particularly
employees, all of whom would lose their jobs. According to the newswire,
this appeared to be the first time United publicly acknowledged the
possibility of its liquidation, although airline executives and analysts
have fretted over the Chicago carrier's potential demise for months.
W.R. Grace To Stop Employees From Buying Company Stock For
401(k)
W.R. Grace & Co. said on Tuesday that it won't allow employees in
its 401(k) savings plan to make payroll contributions or transfer
balances from other funds into Grace common stock funds beginning in
April, according to an 8-K filed with the Securities and Exchange
Commission, Dow Jones reported. The company said it made the decision,
after consulting with company directors and outside consultants, because
the price of its stock no longer reflects the company's operating
results. Instead, traders speculate about the amount of Grace's asbestos
liabilities and what effect that will have on shareholders' equity in
its chapter 11 plan, the filing said, reported the newswire.
Spiegel Gets Court's OK For $150 Million In Interim Financing
A bankruptcy judge approved on Monday interim financing of $150 million
for Spiegel Inc., Dow Jones reported. The company, whose chapter 11
petition listed $1.74 billion in assets and $1.71 billion in debts, had
only $35 million available as of the filing. The company will use the
interim funding to keep it operating until a hearing scheduled for April
9 when it is expected to get approval for the full $400 million
bankruptcy loan. The debtor-in-possession financing is being provided by
Bank of America, along with Fleet Retail Finance Inc. and the CIT
Group/Business Credit Inc., reported the newswire.
America West Pilots Reject Labor Contract With Raise
Pilots at America West Airlines overwhelmingly rejected a tentative
labor contract that included an 11 percent raise, citing shortcomings in
job security and retirement benefits, the Wall Street Journal
reported. The rejection was striking, coming as other airlines ask
pilots for pay cuts amid tremendous turmoil in the industry. The pay
raise would have become effective when the contract was signed, and
pilots would have received a 3 percent raise in January 2005, reported
the online newspaper. America West Chairman and Chief Executive W.
Douglas Parker said he was disappointed with the vote, 'particularly
given the economic realities facing our industry and our company today,'
reported the Journal.
Caseload in Federal Courts Still Rising
In fiscal year 2002, the federal courts experienced an across-the-board
increase in the number of appellate, civil, criminal and bankruptcy
filings, with most categories registering record highs, the
Administrative Office of the U.S. Courts announced in a press release
today. The number of cases filed in the U.S. Courts of Appeals in 2002
rose 0.2 percent, while total civil and criminal filings in the U.S.
District Courts rose 9 percent. Bankruptcy filings for fiscal year 2002
(the 12-month period beginning October 1, 2001 and ending September 31,
2002) reached a record level, increasing 8 percent over fiscal year
2001. Total filings of both business and non-business bankruptcies
increased, with overall growth due to an 8 percent rise in non-business
petitions. In FY 2002, non-business filings rose under all chapters,
climbing 32 percent under chapter 11, 10 percent under chapter 13 and 7
percent under chapter 7. Business filings rose 2 percent, with a 9
percent growth in chapter 11, but a 15 percent drop in chapter 12, and 1
percent drops in chapters 7 and 13. Although a pending bankruptcy bill
in Congress may have encouraged some debtors to file bankruptcy
petitions, the overriding impetus for the increase most likely was high
consumer debt combined with slow economic growth. For additional
information, visit www.uscourts.gov.
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Today's Bankruptcy Headlines. New articles are posted here
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