October 82003

Submitted by webadmin on Wed, 2003-10-08 00:00

border='0'>

October 8, 2003

House To Vote On Pension Bill; Senate Outlook Is Unclear

As the House prepares to vote today on legislation changing the way
companies determine the contributions they must make to their pension
plans, a Senate bill with similar provisions has not yet been slated for
a floor vote, leaving its fate unclear, CongressDaily reported.
Business groups have told lawmakers that legislation fixing the pension
rate is 'must-pass,' since a temporary fix is set to expire at the end
of this year. The pension bill passed by the Senate Finance Committee is
awaiting floor action, although the bill also includes a number of
broader reforms that some say may make it more difficult to pass in the
waning legislative days this year.

The bill authored by Senate Finance Chairman Charles Grassley
(R-Iowa) includes a variety of provisions, including a number intended
to protect employees from problems similar to those at failed energy
company Enron Corp. They include diversification rights for
employee-held company stock, better notification of 'blackout' periods
during which employees may not sell stocks, and tighter rules to prevent
executives from deferring taxes on compensation. The Senate bill also
has been delayed by the plan to mark up the bill a second time, allowing
the panel to address an issue in the bill that is unrelated to
pension-rate reform, that of corporate-owned life insurance. The panel
will mark up the bill again possibly late next week, and while the
markup will not affect the pension rate provisions, it could push a
floor vote to the end of the month at the earliest, reported the
newswire.

Consumer Debt Rose 5.2 Percent, Above Forecast for August

Consumer debt rose 5.2 percent, or $8.2 billion, in August, the Federal
Reserve said on Tuesday, Reuters reported. The gain exceeded
expectations, with August being the fifth consecutive month consumer
debt increased. The rise was led by a sharp increase in nonrevolving
credit, which includes loans for cars, mobile homes, education expenses
and vacations. The July increase for overall credit was revised to $6.1
billion from the initially reported rise of $6 billion. Wall Street
analysts had expected a smaller August gain of $6.5 billion.

The report on Tuesday was the first Fed release on consumer credit to
include student loans held by the federal government and SLM Holding,
the parent of Sallie Mae. Nonrevolving credit rose $7.0 billion after a
$5.6 billion increase in July. Strong auto sales had been expected to
give the category a lift, as terms continued to be easy for auto loans.
Nonseasonally adjusted figures showed the average interest rate on a car
loan from a finance company up slightly but still at a low 3.56 percent,
while the length of the average loan extended further, to 63 months.
Revolving credit, capturing charge and credit cards, rose $1.2 billion
in August after a $500 million increase in July.

Separately, a report released on Tuesday by the Cambridge Consumer
Credit Index showed that about a third of Americans have reduced their
use of credit cards. Economists have attributed the slowdown to
homeowners paying down credit-card debt by tapping their home equity and
to fading consumer confidence, CBS Market Watch reported. People
feel threatened by laytoffs, downsizing or outsourcing, the survey
said.

Supervalu Profit Up, Cautious on Outlook

Groceries distributor and retailer Supervalu Inc. on Wednesday reported
a 5.8 percent rise in quarterly profit as it gained customers from
bankrupt rival Fleming Cos. Inc., Reuters reported. But
Minneapolis-based Supervalu said rising employee benefit costs, slower
sales recovery and expenses to overhaul more than 50 stores would weigh
on earnings growth over the rest of the year.

Supervalu -- which runs more than 1,400 supermarkets under such names as
Cub Foods and Shop 'n Save -- said net income in the quarter ended Sept.
6 rose to $62.2 million, or 46 cents per share. A year earlier it
reported net income of $58.8 million, or 44 cents a share, reported the
newswire.

Bankruptcy Court OKs Pillowtex Asset Sale

Pillowtex Corp. on Tuesday said a bankruptcy court has approved GGST
Llc's bid of $128 million for substantially all of Pillowtex's remaining
assets, including plants, equipment and brands, Reuters reported. In a
statement, Pillowtex said it will work with GGST to complete the
transaction as soon as possible and anticipates a closing date within
the next 30 days. Kannapolis, N.C.-based Pillowtex was a designer,
marketer and producer of towels, sheets, rugs, blankets, pillows and
other home products.

Weirton Steel Aims to Exit Chapter 11 by Year End

Weirton Steel Corp. on Tuesday said it had filed a reorganization plan
to come out of bankruptcy by the end of this year and Fleet Capital
Corp. is providing it with $175 million in emergency financing, Reuters
reported. Weirton Steel, with 3,500 employees, sought bankruptcy
protection on May 19. Weirton's plan hinges on approval by a U.S.
bankruptcy court and the financing needs to be approved under the
Emergency Steel Loan Guarantee program. If Weirton exits bankruptcy it
will operate under reduced cost structure, the company said in a
statement. When it declared bankruptcy in the summer Weirton had said it
would be better able to seek reductions to 'legacy' employee costs and
other 'burdensome' contracts. On Tuesday it said: 'The company expects
to operate with a substantially lower cost structure by addressing
legacy and manpower issues as well as raw material costs,' reported the
newswire.

Law Firm Neal, Gerber Sets up Bankruptcy Practice

Chicago law firm Neal, Gerber & Eisenberg said on Tuesday it is
setting up a bankruptcy practice and said it poached seven attorneys
from cross-town rival Freeborn & Peters for the unit, Reuters
reported. Among the attorneys are three former Freeborn partners: Joseph
Frank, Frances Gecker and Thomas Wolford. The other four attorneys were
not identified. The incoming team has experience in working with the
creditors community and has been involved in some high-profile
restructurings such as those of United Airlines, Conseco and Comdisco,
it said.

Neal, Gerber & Eisenberg is among several U.S. law firms that have
boosted their bankruptcy and restructuring practices in recent years
amid the fall of high-profile companies such as Enron Corp., WorldCom
and United Airlines, reported the newswire.

U-Haul Parent Amerco Sees January Bankruptcy Exit

Amerco Inc., the parent of truck rental company U-Haul International
Inc., on Tuesday said it filed a bankruptcy reorganization plan, and
hopes to exit chapter 11 in January, Reuters reported. The chapter 11
plan, filed on Monday with the U.S. Bankruptcy Court in Reno, Nevada,
contemplates providing 'full payment' to creditors, without diluting
shareholders. Such an outcome would be welcome for creditors, who often
recover a fraction of their money in a bankruptcy, and for shareholders,
who often see their holdings wiped out.

'If the company is able to emerge from bankruptcy in the way it
describes, it would certainly be unique,' but emergence would be the
first step of many, said Philip Walker, senior director at credit rating
agency Fitch Ratings. 'Ultimately,' he said, 'we think Amerco would like
to reestablish itself in the public and private debt markets that
management has historically accessed to fund the business,' he said,
reported the newswire.

Enron Backlash Fuels Oregon Move to Public Power

Voters in one Oregon county will soon vote on whether the time has come
for the Enron bankrupt company to leave town, Reuters reported.
Multnomah County voters will receive ballots by mail in about two weeks
that - while not mentioning Enron by name - will ask whether a people's
utility district should be formed. The county includes the city of
Portland and its biggest electric utility, Portland General Electric
(PGE), a subsidiary of Houston-based Enron. Dan Meek, a public interest
attorney working with the Oregon Public Power Coalition, said Enron had
engineered 'the largest electric rate hike in Oregon history,' involved
PGE in illegal market manipulation and gutted many of its employees'
retirement funds. 'It is just an entire range of outrages by Enron,' he
said, explaining the forces driving the public power initiative. Last
month PGE said it has proposed paying $8.5 million to settle allegations
that it helped parent Enron manipulate electricity markets during the
California energy crisis, reported the newswire.

Mesa Prepared to Sweeten Atlantic Deal

Mesa Air Group Inc., in the early stages of an unsolicited bid for
Atlantic Coast Airlines Holdings Inc., on Tuesday said it is prepared to
take its proposal directly to shareholders and sweeten the offer through
cash or other means, Reuters reported. Shares of Atlantic Coast and Mesa
rose 7.7 percent and 4.6 percent, respectively, on the Nasdaq on Tuesday
afternoon.

Va.-based Atlantic Coast has said only that it is reviewing the Mesa
offer. 'I think we have to move quickly,' said Mesa Chairman and Chief
Executive Jonathan Ornstein on a conference call with analysts and
reporters. He put his company's likelihood of buying Atlantic Coast at a
'reasonable chance of success.' The proposed $512 million all-stock
offer for United Airlines' feeder Atlantic Coast, unveiled on Monday,
would create the largest U.S. regional airline, reported the
newswire.

Republic Engineered Products Files For Chapter 11 In Ohio

Republic Engineered Products Holding LLC and some affiliates filed
for chapter 11 protection from creditors in U.S. Bankruptcy Court in
Akron, Ohio, on Monday.

The specialty bar steel maker listed assets of $481 million and
liabilities of $467.9 million in the petition. Units Republic Engineered
Products LLC and Blue Steel Capital Corp. also filed petitions with the
court, according to papers obtained by Dow Jones Newswires. The company
said in a recent Securities and Exchange Commission filing that it was
in default on a loan and was negotiating with various creditors.

Court Confirms GenTek Chapter 11 Reorganization Plan

Gentek Inc. on Tuesday won bankruptcy court confirmation of its plan
to exit chapter 11 with a restructured balance sheet. The plan confirmed
by Chief U.S. Bankruptcy Judge Mary F. Walrath cancels the existing
common stock and hands about 92.4 percent of the new common stock to
senior secured lenders. The maker of auto parts and wire and cable
assemblies owed its senior lenders about $756 million, according to
documents filed in the case.

Thanks for visiting
Today's Bankruptcy Headlines. New articles are posted here each business
day.