February 11, 2004
Senate Negotiations Continue On Pension Bill Conference
Senate Majority Leader Bill Frist (R-Tenn.) and Minority Leader Tom
Daschle (D-S.D.) are negotiating to go to conference on legislation
changing the formula companies use to calculate their pension
contributions, CongressDaily reported. Both chambers have passed
pension legislation, but Democrats are resisting a conference until they
have assurances Republicans will not exclude Democrats or add unrelated
provisions during conference. Daschle said yesterday Democrats are
prepared to move forward with the pension bill, given the right
agreement. 'Sen. Frist has indicated that he is prepared to insist that
we be full partners in conference,' Daschle said. A Frist spokeswoman
said the two were negotiating, and Frist has been looking for ways to
move the pension bill.
The bill's Senate version includes special breaks not included in
the House version for airlines and steel manufacturers. Senate Health,
Education, Labor and Pensions Chairman Judd Gregg (R-N.H.) said
conferees could adjust its language to alleviate some Bush
administration concerns, reported the newswire. The administration has
opposed the extra relief from 'deficit reduction contributions' by
airlines, steel companies and other companies that may apply for payment
waivers.
Sensenbrenner Urges Insurers To Hold Democrats Accountable
House Judiciary Chairman James Sensenbrenner (R-Wis.) on Tuesday
accused Senate Democratic opponents of legislation to overhaul the
nation's class action, asbestos litigation, medical liability and
bankruptcy laws of playing 'raw politics' with those issues and urged a
group of insurance lobbyists to hold them accountable for their votes,
CongressDaily reported. 'Remember who your friends are and
remember who your enemies are, because only through a change in the
membership of the Senate ... will we be able to get the 60 votes
necessary to shut off a filibuster, get it passed and get it placed on
the president's desk,' Sensenbrenner said during a speech to the Council
of Insurance Agents and Brokers. Sensenbrenner said the class action
bill probably has a better chance of enactment than other litigation
reform efforts, reported the newswire.
Fannie Mae, Lenders Aim to Revive U.S. Mobile Homes
Fannie Mae and a consortium of lenders aim to revive a U.S.
manufactured housing industry that has been battered in recent years by
high loan defaults and a big inventory of repossessed homes, Reuters
reported. 'We want to strengthen the market for manufactured housing
financing, and eliminate predatory and anti-consumer features that have
contributed to instability in the marketplace over time,' Fannie Mae
Chairman and CEO Franklin Raines said on Tuesday in a statement. Fannie
Mae and the lending group will make it more affordable to obtain a
mortgage to buy a manufactured home, the company said. At the end of the
2003 third quarter, Fannie Mae had exposure to $8.8 billion of
manufactured home loans, according to Fannie Mae spokesman Alfred King,
reported the newswire. High loan losses had forced manufactured home
lenders like Conseco Finance and makers like Oakwood Home Corp. into
bankruptcy. According to the U.S. Census, shipments of new manufactured
homes last year totaled 130,900 units, down from 2002's 168,500 and an
industry peak of 373,100 in 1998, reported Reuters.
Tower Records Gets Nod to Use Funds, Pay Creditors
Tower Records received bankruptcy court approval to use its
debtor-in-possession financing and pay pre-petition general unsecured
creditors, the retailer's privately-held parent company said yesterday,
Reuters reported. MTS Inc. and its music and entertainment chain on
Monday filed for chapter 11 bankruptcy protection, burdened by too much
debt and hammered by competition from large retailers, Internet music
downloading and piracy.
U.S. Judge Gives Avianca More Time
Colombian airline Avianca S.A. won at least one more month yesterday
to come up with its own rescue plan after promising a U.S. bankruptcy
judge that it would work more closely with creditors, Reuters reported.
The airline formally asked judge Allan Gropper last month to put back a
Jan. 30 submission deadline to March 30, the fifth time it had sought
more time to present its restructuring proposals. Avianca's creditors
had objected to the request, but Gropper postponed a hearing on the
application until March 8 after private discussions at his New York
chambers. 'We expect to show significant progress by March 8,' Avianca
attorney Ronald Barab said of negotiations with potential investors.
Avianca has a U.S. subsidiary, which allowed it to seek chapter 11
proceedings last March to try to renegotiate at least $269 million in
debt while continuing to operate. High fuel costs and slack demand
stemming from the political and economic crises in Venezuela and
Argentina lead to the crisis at Avianca, reported the newswire.
American Pilots' Union President Won't Run Again
The president of the union that represents pilots at American Airlines,
who helped strike concession contracts with the carrier, will not run
for reelection, the union said yesterday, Reuters reported. John Darrah,
the head of the Allied Pilots Association, said that after hammering out
deals about a year ago that helped save carrier from bankruptcy, it was
time to move on and have new leadership at the union. 'It would be for
the best to have a new team and a new beginning,' Darrah said. Darrah
said the deals that saved American $1.8 billion a year in labor costs
bought the carrier some time but the AMR Corp. unit still has a lot of
work ahead of it to achieve financial stability. The pilots' union,
about 12,000 strong, agreed to $660 million in annual cuts in wages and
benefits, reported the newswire.
Air Canada Unions Fight to Preserve Pension Plans Despite New
Investor
Unions representing Air Canada employees say they may try to replace its
new controlling investor rather than accept proposed changes to their
pension plans, the Associated Press reported. 'What we're asking the
courts to do is open up the process, so that the other six (investor
groups) that Air Canada chose not to be at the table maybe get a chance
to get back at the table and we get some discussions,' Ron Fontaine of
the International Association of Machinists and Aerospace Workers said
at a news conference Tuesday.
Hong Kong businessman Victor Li's Trinity Time Investments was picked as
Air Canada's equity partner over Wall Street investment firm Cerberus
Capital Management after a prolonged process that ended late last year.
Li's company agreed to invest $650 million for a 30 per cent stake in
the airline. Trinity spokesman Harold Gordon said the bankruptcy court
approved the contract making Trinity the equity sponsor, and the company
has a binding agreement with the airline, AP reported.
And Michael Carney, a business professor at Concordia University, says
Ontario Superior Court Justice James Farley, who is overseeing the
airline's restructuring, would be reluctant to reopen the equity
investment process. 'I would think the court would want to keep Victor
Li's equity in place and ultimately I think that pension plan issue can
be resolved,' said Carney, reported the newswire.
Adelphia Wants More Time For Filing Bankruptcy Plan
Cable giant Adelphia Communications Corp. wants to extend the deadline
for filing its chapter 11 turnaround plan to mid-April, the
WGALChannel.com reported. The court last granted an extension in
November. The cable-television company said it's made significant
progress since then. A hearing on the request is scheduled for March
2.
The filing gives Adelphia time to reorganize its finances without the
threat of lawsuits or competing plans from creditors. Adelphia said it
has started reviewing 17,000 submitted claims against the company
totaling more than $3 trillion. The company said it expects to file its
plan and disclose how it will pay creditors 'in the coming weeks.'
Adelphia filed for chapter 11 protection in June 2002.
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