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U.S. Senate Wants Monthly Reports On Corporate Stock
Options
The U.S. Senate is considering legislation that would require the
Securities and Exchange Commission to help Congress keep tabs on
corporate officers and directors, Dow Jones reported. The provision
would require the SEC to provide a monthly report to Congress on every
corporate officer or director exercising more than $100,000 in stock
options in that month. The provision is included in legislation written
by the Senate Appropriations Committee and being considered in the
Senate. 'The committee is concerned that corporate insiders are
enriching themselves at the expense of the corporations for which they
work and the stockholders,' the committee wrote in a report accompanying
the bill, reported the newswire. The committee notes that corporate
officers, by exercising stock options immediately before a company's
financial collapse, 'may actually contribute to the bankruptcy of
teetering corporations.' The provision is just one aspect of a plan to
boost consumer confidence through more stringent oversight of the
nation's companies, Dow Jones reported.
US AIR
US Air Gets Court OK For Bond Trustee To Disburse Funds
A bankruptcy court has authorized US Airways Group Inc. to enter a
settlement that will allow the trustee for some of its revenue bonds to
disburse up to $19 million to bondholders, Dow Jones reported. In an
order signed on Friday, Judge Stephen Mitchell of the U.S.
Bankruptcy Court in Alexandria, Va., approved a settlement that provides
for the parties to split $22 million in revenue bond funds that haven't
yet been distributed to the airline, the newswire reported. The bonds
were issued to help the airline make improvements at Philadelphia
International Airport. US Airways will get $3 million of the $22 million
under the deal. The rest of the funds will be disbursed by the bond
trustee, HSBC Bank USA, to pay fees and bondholders pursuant to the
terms of the bond indenture, reported the newswire.
US Airways, United Enhance Marketing Pact
US Airways Group Inc. and UAL Corp.'s United Airlines expanded their
code-share agreement to include certain flights to and from Pittsburgh
and Denver, Dow Jones reported. In a press release on Monday, the air
carriers said US Air customers now have access to 188 new flight
segments to the West and Southwest through Denver. United customers can
travel on 79 new flight segments from Pittsburgh to Latin America.
Code-share agreements allow an airline to place its marketing code on
flights operated by a partner, enabling one carrier's customers to fly
to cities served by the partner airline. US Air and United, both
operating in bankruptcy, began code-shared flights earlier this month,
reported the newswire.
Arbitrator Confirms $100 Million Powerex Claim Against Alcan
Inc.
An arbitrator ordered Alcan Inc. to pay $100 million to Powerex in a
contract dispute related to Enron Corp., Dow Jones reported. As a
result, Montreal-based aluminum producer Alcan expects to record a
fourth-quarter charge. In a press release, Alcan said that under a
current standstill agreement with Powerex, no action will be taken to
enforce or set aside the decision, pending negotiations, reported the
newswire.
Last March, the judge presiding over Enron's bankruptcy case agreed to
allow Powerex, a former Enron customer, to pursue the payment of more
than $100 million in Enron-related obligations from Alcan, in connection
with a 1997 electricity-supply contract, reported the newswire. Powerex
is the trading arm of provincially owned utility British Columbia
Hydro.
WorldCom Ends Aid Contracts With Charities, Trade Groups
Bankrupt telecommunications giant WorldCom Inc. has canceled contracts
that provide revenue to 100 charitable and trade groups, court records
show, the Associated Press reported. The company negotiated a discounted
phone service rate with the groups and then marketed that rate to the
groups' members. Every time a customer signed up for the discounted
service, the group received a commission. WorldCom announced its
intention to cancel the contracts in a filing earlier this month with
the U.S. Bankruptcy Court in New York. 'These were marketing
arrangements, and as times change, so must these kinds of agreements,'
said WorldCom spokeswoman Julie Moore, reported the newswire.
Adelphia Names Veteran Cable Executives CEO, Operating
Chief
Adelphia Communications Corp. said on Friday it has decided to hire
veteran cable executives William Schleyer and Ron Cooper to lead the
sixth-largest U.S. cable television operator out of bankruptcy, Dow
Jones reported. U.S. Bankruptcy Judge Robert Gerber in New York
has yet to approve the hiring. Once approved, Schleyer, former chief
executive of AT&T Broadband, will hold the same position at Adelphia
and head its board. Cooper, also a former AT&T Broadband executive,
will become Adelphia's chief operating officer. Schleyer will succeed
Chairman and Chief Executive Erland 'Erkie' Kailbourne, who has held
both positions since May following the departure of Adelphia's prior
management. Kailbourne will continue to serve as a member on the board,
reported the newswire.
Enron Probes Now Focus on Tax Deals (Washington
Post)
For more than a year, investigations of Enron Corp.'s massive collapse
have dug into a web of partnership deals that allowed the company's
executives to inflate earnings, hide debt and, in some cases, profit
personally, the Washington Post reported. Now Enron's
controversial and equally covert tax transactions are moving into the
spotlight. A court-appointed bankruptcy examiner has been investigating
Enron tax deals as part of his broader inquiry into Enron's financial
dealings, according to people involved in the inquiry. Enron records
show that those undisclosed tax deals added more than $1 billion in
'paper' profits to Enron's financial statements between 1996 and the
company's bankruptcy filing in December 2001, helping it boost its stock
price. To read the full article, point your browser to
href='http://www.washingtonpost.com/wp-dyn/articles/A19049-2003Jan20.html'>www.washingtonpost.com.
Airlines' Pension Problems Growing (Washington
Post)
According to a report issued this week by Fitch Ratings, a New
York-based research firm, the nation's larger airline carriers are
staggering under a combined pension-funding shortfall of $18.9 billion,
reported the Washington Post. United Airlines, the world's
second-largest carrier, has a shortfall of $4.1 billion, Fitch
estimated. At US Airways, the gap is $3.1 billion. To read the full
article, point your browser to
href='http://www.washingtonpost.com./'>www.washingtonpost.com.
Kmart Expects Board Replacements
Kmart Corp., which is operating under protection of the federal
bankruptcy laws, expects its creditors will replace its board of
directors, the Associated Press reported. Kmart chief restructuring
officer Ron Hutchison told the Detroit News the plan would be
given to a federal bankruptcy judge in Chicago on Friday. The court must
approve the change. Replacing the board is part of plans for the company
to emerge from chapter 11 bankruptcy proceedings on April 30, Hutchison
told the newspaper, reported the newswire. Kmart's nine-member board has
presided over much of the retailer's financial troubles in the past
several years and has come under intense criticism.
Conseco's Bankruptcy Battle Continues
Conseco's bankruptcy case continues to work slowly through a Chicago
courtroom, with few major developments expected before a Feb. 28
court-supervised auction of its beleaguered finance unit, the
Indianapolis Star reported. Chapter 11 papers for Conseco Finance
were filed almost simultaneously with those of its Carmel-based parent
company on Dec. 17, reported the Star. The nation's largest
mobile home lender fell victim to credit problems during four months of
talks between Conseco and its lenders to restructure $6.5 billion in
debt. But bad loans and other troubles incurred after Conseco bought the
Minnesota-based unit in 1998 are largely blamed for Conseco's overall
downfall.
Last week, Conseco attorneys sought the court's permission to employ the
Baker Botts law firm as special counsel for a formal investigation by
the Securities and Exchange Commission. The SEC is looking into
Conseco's accounting practices -- in particular how it tallied
interest-only securities and servicing rights -- before and during the
spring of 2000, just before the resignations of co-founder Stephen C.
Hilbert and former chief financial officer Rollin K. Dick, reported the
newspaper.
To view the motion submitted by Kirkland and Ellis, click here:
href='/headlines/GeneralNotice1.pdf'>http://www.abiworld.org/headlines/GeneralNotice1.pdf
Airlines Lobby Congress to Change Labor Union Laws
As they struggle to stay aloft financially, the nation's largest
airlines are financing a campaign to significantly weaken the
negotiating power of their unions, the Denver Post reported.
Major carriers -- including United Airlines Corp. -- want Congress to
change labor laws so that unions and management submit to binding
arbitration when they're unable to reach contract agreement. That would
eliminate the possibility of strikes, airline lobbyists say, preventing
unions from obtaining wages and benefits that airlines say they can't
afford. The change would affect pilots, flight attendants, mechanics and
other union workers for almost every airline. 'It's such an overreaction
in light of all the concessions we've made,' said Duane Woerth,
spokesman for the Air Line Pilots Association. 'If the airlines had
lobbied this hard for tax relief, we'd have it by now,' he said,
reported the newspaper. Airlines as a group lost more than $9 billion
last year, with the largest carriers losing the most. With Republicans
in control of the U.S. House and Senate, airlines and their lobbyists
see a unique opportunity to act now. To read the full article, point
your browser to www.denverpost.com.
Midway Airlines Seeks Extension for Reorganization Plan
Midway Airlines has asked a bankruptcy court judge to extend the
deadline for filing its reorganization plan by 90 days, the
Herald-Sun reported. In October, Judge A. Thomas Small ordered
the Morrisville airline to file the plan by Jan. 30 detailing how it
will return to business, or face possible liquidation. In the months
since, Midway solidified its regional jet agreement with US Airways and
returned to the air on Jan. 1 as a commuter affiliate for the airline.
And in a document filed today in the U.S. Bankruptcy Court in Raleigh,
N.C., Midway said it 'will be in a much better position to propose a
meaningful plan when it has the results of several months of operation.'
The airline asked that the deadline be pushed back to April 30, reported
the newspaper.
Retailers Face Challenge to Reinvent Midrange Chains
The store closings and consolidation announced on Thursday by owners of
Macy's and Rich's department stores are just the loudest and latest
signals of wrenching change in an industry that is likely to keep
shifting, the Atlanta Journal-Constitution reported. With their
futures at stake, some retailers are taking the path of reinvention. In
the past several weeks, both J.C. Penney and Kmart have made wholesale
cuts, shedding tens of thousands of jobs. Last week, Federated
Department Stores Inc. announced plans to close seven metro Atlanta
Macy's stores, reopening two as Bloomingdale's. Many retail experts,
including Michele Aquino, former vice president of Saks Fifth Avenue at
Phipps Plaza, say, 'It's about time.' The clock is indeed ticking for
troubled retailers who long refused to reinvent themselves. To read the
full article, point your browser to
href='http://www.ajc.com/'>www.ajc.com.
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