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June 8, 2005
Tighter Rules Urged for Pension Plans
Congress should tighten and clarify rules requiring employers to fund
traditional pension plans, the head of Congress’s Government
Accountability Office told a Senate panel yesterday, the
Washington Postreported. Rules allow companies to use
different methods to compute a plan’s status, resulting in
“inconsistent, confusing and competing numbers that increase the
risk” that workers and regulators will fail to grasp that a plan
is in trouble before it is too late, U.S. Comptroller General David M.
Walker told a hearing of the Senate Finance Committee. Read the full
article at
href='http://www.washingtonpost.com/wp-dyn/content/article/2005/06/07/AR20050…'>www.washingtonpost.com/wp-dyn/content/article/2005/06/07/AR200506070165….
Specter’s Tenuous Coalition
Supporters of the asbestos bill are waiting to begin lobbying until
Senate Majority Leader Bill Frist (R–Tenn.) makes it clear if and
when he will bring the bill to the floor, CongressDaily
reported. Having the support of some labor groups is key to winning the
backing of Democrats. Although Democratic leaders oppose the asbestos
bill, many Democrats say they think they can vote for a bill that has at
least some union backing. Some observers note, though, that unions had
less of a hand in shaping the asbestos bill than business interests had.
The bill appears to have enough Democratic support—Sen. Dianne
Feinstein (D–Calif.) is a co-sponsor and Sen. Patrick Leahy
(D–Vt.) has said other Democrats have offered quiet
endorsements—to ward off a potential filibuster attempt. But a
group of conservative senators on the committee warned that unless
significant changes are made, they will not vote for the bill.
Bankruptcy Bill May Benefit Retail Landlords
The new bankruptcy law may turn out to be a plus for landlords who
own retail property while making it harder for struggling retailers to
emerge from bankruptcy protection, the Wall Street Journal
reported. The bill strengthens landlord rights in a number of ways,
including forcing retailers to make decisions on leases much more
quickly and moving landlords into a preferred class of creditors. Read
the full article at www.wsj.com
(subscription required).
Michael Jackson’s Other Battle: Staving Off Financial
Disaster
Pop singer Michael is embroiled in a critical battle over the future
of his financial assets, the Wall Street Journal reported.
Jackson’s other crisis is centered on escaping at least $270
million in debt. The financial fate of the former King of Pop now rests
in the hands of a New York-based investment firm that invests in
distressed debt. Last month, Fortress Investment Group LLC bought
Jackson’s loans outstanding from their holder, Bank of America
Corp. Read the full article at
href='http://www.wsj.com/'>www.wsj.com (subscription required).
Monsanto Investment in Solutia to Aid in Chemicals Cleanup
Monsanto Co. said it will invest as much as $250 million in Solutia
Inc., a chemicals company once affiliated with Monsanto, to help Solutia
pay for cleanup of chemical-pollution sites and possibly pave the way
for Solutia’s exit from chapter 11 bankruptcy protection, the
Wall Street Journal reported. Monsanto could wind up owning
a majority stake amounting to 52.7 percent of Solutia after
bankruptcy-court proceedings. Solutia sought bankruptcy-court protection
in December 2003 in part because of liabilities related to pollution at
chemical sites that accumulated over decades.
Adelphia Creditors Seek to Overturn Settlement
Adelphia Communications Corp.’s creditors are asking a
bankruptcy court to overturn three related agreements between the cable
company, the founding Rigas family and the government, the online
Wall Street Journal reported. In a request filed Monday in
the U.S. Bankruptcy Court in Manhattan, the company’s official
panel of unsecured creditors said new evidence suggests the
government’s case against Adelphia isn’t strong enough to
warrant the $715 million payment the cable provider agreed to make in
order to avoid litigation, according to court papers obtained on Tuesday
by Dow Jones Newswires.
UAL Shares Up More Than 16 Percent on Labor Savings
Shares of UAL Corp., parent of bankrupt United Airlines, gained more
than 16 percent on Tuesday, riding a wave of optimism that the company
will be able to cut its labor savings and emerge from chapter 11,
Reuters reported. The carrier, bankrupt since December 2002, aims to
exit chapter 11 in the fall. Deals with two key unions last week moved
the airline much closer to that goal.
U.S. Court Lets Case vs. Goldman Sachs Proceed
Goldman Sachs & Co. is set to face trial, accused of mishandling
the initial public offering of eToys Inc. after an appeals court on
Tuesday allowed a claim of breaching fiduciary duty to proceed, Reuters
reported. EToys sued Goldman Sachs, the lead underwriter of its 1999
IPO, in May 2002, accusing the investment bank of intentionally
underpricing the offering to win kickbacks—in the form of
investment banking business, brokerage commissions and other
benefits—from customers who profited when the shares rose.
Ramp Corp. Files for Chapter 11
Ramp Corp., a provider of health care connectivity software, on
Tuesday said it filed for reorganization under chapter 11, Reuters
reported. Ramp intends to continue to operate business and manage its
affairs as a debtor-in-possession, the New York–based company said
in a news release. Ramp said it had initiated steps to preserve capital
resources and would explore the possibility of selling the company or
one or more of its lines of business or seeking a merger partner.
Consumer Credit Rose $1.3 Billion in April
Consumers accelerated their borrowing by a less-than-expected $1.3
billion in April, as credit card borrowing declined for the second month
in a row, a Federal Reserve report showed today, Reuters reported. The
Fed said total consumer credit outstanding climbed in April to a
seasonally adjusted $2.131 trillion. The increase followed a revised
$6.9 billion increase in borrowing in March, up from the previously
reported climb of $5.5 billion. Market analysts polled by Reuters were
expecting a $7.0 billion rise in consumer credit in April. Nonrevolving
credit, reflecting closed-end loans for cars, boats, education expenses
and vacations, gained by $1.7 billion after a $7.4 billion rise in
March. Revolving credit, which includes credit and charge cards, fell by
$426 million in April after a drop of $569 billion the previous
month.
Creditors Seek to Put Falcon up for Auction
A group of unsecured creditors of bankrupt commercial furniture maker
Falcon Products Inc. are asking the St. Louis bankruptcy court for
permission to put the company up for auction, Reuters reported. In an
application filed last week, a group of creditors calling itself the
“official committee of unsecured creditors” asked the court
for permission to hire investment banking firm Morgan, Keegan & Co.
to look for companies that might want to buy Falcon and sell
Falcon’s assets if a bidder is found. The request has been opposed
by the company and 80 percent of Falcon’s creditors, the newswire
reported.
href='http://www.suntimes.com/output/business/cst-fin-payday06.html'>www.suntimes.com/output/business/cst-fin-payday06.html.