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June 19, 2006
w:st='on'>
name='1'>U.S.
face='Times New Roman' size='3'> Lawmakers Mull Stricter Pension
Reforms
w:st='on'>
size='3'>U.S.
size='3'>lawmakers are discussing a new proposal to tighten the
definition of when corporate pension plans are in enough financial
trouble to require more contributions, Reuters reported on Saturday.
House and Senate conferees, who are trying to find alternatives to
the controversial Senate language, have come up with a proposal that
would designate any plan at risk of default if it is less than 70
percent funded, Capitol Hill aides said. One catch is that the
funding percentage would be calculated by a strict 'termination
liability' formula, assuming that the plan would end immediately and all
participants would retire at the earliest opportunity and take the most
expensive benefits. Some company lobbyists have already contacted
lawmakers to say that the provision would unfairly redefine plans that
are now considered responsibly funded as poorly funded.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/06/16/AR2006061601395_pf.html'>Read
more.
In related news, Sen. Johnny
Isakson (R-Ga.) said Friday that a provision offering special relief for
the airline industry 'absolutely' remains part of a pension reform bill
being crafted by House-Senate negotiators, the Atlanta
Journal-Constitution reported on Saturday. Isakson, chief sponsor
of the airline amendment, said that overall legislation to tighten rules
on pensions has 'about a 60-40 chance' of winning final passage within
th next few weeks. If it were to pass with an airline provision,
financially strapped carriers would get more time to replenish their
underfunded pension plans. Delta executives say that unless Congress
passes a pension bill this summer, it might also move to terminate a
larger pension plan covering 91,000 current or retired ground workers
and flight attendants.
href='http://www.ajc.com/business/content/business/delta/stories/0617bizpensions.html'>Read
more.
Airlines
name='2'>Delta Takes Steps to Avert Mass Retirement of
Pilots
Delta Air Lines said that
it planned to terminate the pension plan covering 13,000 active and
retired pilots and some spouses, a move intended to save billions of
dollars and also prevent an exodus of pilots that could have brought
much of the carrier's operations to a halt, according to the
New York Times
size='3'>on Saturday. If Delta had not begun steps to terminate the
plan, an unusual set of circumstances could have prompted as many as
1,000 Delta pilots to retire as early as July 1. They would have pulled
hundreds of millions of dollars out of the plan, and, by their absence,
grounded a big portion of Delta's fleet.
href='http://www.nytimes.com/2006/06/17/business/17delta.html?pagewanted=print'>Read
more.
name='3'>Northwest Paid Bankruptcy Counsel in
Advance
A court filing by the Northwest
Airlines Corp. showed that the airline paid its lead bankruptcy law firm
almost $1 million for bankruptcy expenses five months before it filed
for chapter 11 protection, the Associated Press reported on Saturday.
While commonplace for companies considering bankruptcy to get legal
advice in advance, Northwest's payments came when executives said
bankruptcy was a risk, but not a certainty, and were using the threat of
bankruptcy to pressure workers to take concessions. On April 7, 2005,
Northwest made three payments totaling $974,940 to Cadwalader,
Wickersham & Taft, its lead bankruptcy counsel, for
bankruptcy-related services, according to a court filing the airline
made late Thursday. Northwest declined to comment Friday on why it began
paying Cadwalader five months before its bankruptcy filing, and declined
to say when it made the decision to file for bankruptcy.
href='http://www.forbes.com/business/services/feeds/ap/2006/06/16/ap2821445.html'>Read
more.
Autos
face='Times New Roman' size='3'>
name='4'>Delphi
size='3'> Reaches Deal to Offer Buyouts
Delphi Corp. has reached
an agreement with its second-largest union and General Motors Corp. to
offer buyouts to hourly workers that is similar to an earlier deal with
the United Auto Workers union, the Associated Press reported on
Saturday. The auto parts supplier announced the agreement with the
International Union of Electronic Workers-Communications Workers of
America and GM,
size='3'>Delphi's former parent and
its largest customer, late Friday. GM has agreed to provide financial
support under the proposed plan, which is subject to bankruptcy court
approval,
size='3'>Delphi
hourly workers represented by the IUE-CWA are eligible to participate.
Some may be offered a lump sum payment of $35,000 to retire,
size='3'>Delphi
employees may decide to accept buyout packages ranging from $40,000 to
$140,000. GM spokeswoman Toni Simonetti said Saturday that the automaker
will split the cost with
size='3'>Delphi
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/06/17/AR2006061700285_pf.html'>Read
more.
name='5'>Commentary: 'Rightsizing' GM
General Motors is now in
the midst of the largest and trickiest ‘rightsizing’ or when
a company shrinks its resources to match its prospects, according to a
commentary in the Wall Street
Journal today. GM has finally abandoned
its annual expectation that new products in its pipeline will create an
apotheosis, an expectation that has traditionally led it to reduce
capacity reluctantly and inadequately.
href='http://online.wsj.com/article/SB115067799753383788.html?mod=opinion_main_commentaries'>Read
more. (Registration required.)
name='6'>Commentary UAW President has Difficult Road
Ahead
Ron Gettelfinger, 61,
elected last week to a second and final four-year term as UAW
president, faces the task of rallying his members when the auto
industry is mired in declining profits and tethered to an uncertain
future, according to a
size='3'>New York Times commentary yesterday.
Gettelfinger's plans are to step up the union's organizing drive, which
in the past has not been enough to offset steep job losses at the auto
companies, and to wield its political clout for broader changes
in
size='3'>, D.C. Neither, however, addresses the union's true
quandary. “He is trying to safeguard what the UAW has obtained for
its members and he has to be intelligent and not to deny reality,' said
Bruce S. Raynor, general president of Unite Here, a union that
represents hotel and other service workers.
href='http://www.nytimes.com/2006/06/18/business/yourmoney/18uaw.html?pagewanted=print'>Read
more.
size='3'> Silicon Graphics Files
Reorganization Plan
After filing for
bankruptcy a little over a month ago, Silicon Graphics Inc. submitted
its reorganization plan to the bankruptcy court, setting the course for
the high-performance computer company to emerge from chapter
11, Portfolio
Media reported Friday. Silicon Graphics, based
in
size='3'>Mountain View,
size='3'>Calif.
plan Friday in the U.S. Bankruptcy Court for the
Southern District of New York and hopes to reduce its debt by about $250
million. The company also said that the bankruptcy court granted its
settlement with Goldman Sachs Group Inc. to reduce and eventually remove
its lease obligations at
face='Times New Roman' size='3'>Amphitheatre
size='3'>Technology
w:st='on'>
size='3'>Center
size='3'>Crittenden
w:st='on'>
size='3'>Technology
w:st='on'>
size='3'>Center
size='3'>Mountain View
deal will trim down Silicon Graphics’ facilities-related cash
obligations annually by $15 million to $20 million beginning in July and
will supply the computer company with about $19 million in additional
liquidity, according to the company.
name='8'>Trustees Opposed to
Bankruptcy Settlement for Kentucky
size='3'>Lawyer
U.S. Bankruptcy Trustees
are opposed to a settlement for a
w:st='on'>
size='3'>Louisville
w:st='on'>
size='3'>Ky.
lawyer, whose firm filed bankruptcy with
$16.6 million in debt, that would pay most of his creditors less than 2
cents on the dollar, the Associated Press reported yesterday. Federal
regulators said in court records that the $394,583 settlement would
allow Ron Sheffer to 'purchase' a discharge. Sheffer, 67, has been
blocked from discharging his debts because a federal bankruptcy judge
ruled that he fraudulently diverted assets to his wife. A hearing is
scheduled for June 27 in U.S. Bankruptcy Court in
w:st='on'>
size='3'>Louisville
the proposed agreement, Sheffer would pay $80,000 to
w:st='on'>
size='3'>Ohio
face='Times New Roman'
size='3'>Valley
$114,583 to Franklin Bank & Trust Co. of Simpson County. Sheffer's
wife and his son would pay $200,000 to the Chapter 7 trustee, who would
divide it among other creditors. In court papers, the U.S. Trustee said
that would be unfair because Ohio Valley would be paid 32 percent of the
amount it is owed and Franklin 4 percent, while the other creditors, who
are owed a combined $13.7 million, would get only 1.4 cents on the
dollar.
href='http://www.kentucky.com/mld/kentucky/news/14849396.htm?template=contentModules/printstory.jsp'>Read
more.
name='9'>Talk of Bankruptcy Dies Down in
size='3'>
Diego
It has been three
years since talk of bankruptcy began in San Diego, spurred by the city's
billion-dollar pension shortfall, but nothing has occurred since then,
the San Diego
Tribune reported today. Even though the city's
potential for insolvency came up repeatedly during the 2004 and 2005
mayoral races, city officials now take pains to avoid the word
“bankruptcy.” Mayor Jerry Sanders says the city is not in
danger of going bankrupt, while Councilwoman Toni Atkins believes
size='3'>San Diego
faced that fate. She labels the insolvency speculation “political
posturing.” However, a number of experts within the city
questioned whether
face='Times New Roman' size='3'>San Diego
is being realistic about its recovery from the financial
and legal fallout from the pension system's $1.43 billion pension
deficit.
href='http://www.signonsandiego.com/uniontrib/20060619/news_1n19bankrupt.html'>Read
more.
href='http://www.signonsandiego.com/uniontrib/20060619/news_1n19bankrupt.html'>