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February 28, 2005
Senate Begins Debate on Bankruptcy Bill Today
Senate debate on the bankruptcy bill begins this afternoon,
CongressDaily reported. The financial services industry has
been pushing for the legislation for eight years, arguing it would
reduce abusive and frivolous filings while preserving bankruptcy
protection for those who genuinely need it. Opponents argue the bill
would harm consumers with a legitimate need for bankruptcy
protection.
The bill is similar to bankruptcy legislation that has passed the
House or Senate a combined 11 times since 1997. It failed in the Senate
during the last two sessions after approval of amendments by Sen.
Charles Schumer (D–N.Y.) that would have prevented abortion
protesters from filing for bankruptcy to avoid paying fines for criminal
activity at clinics. Schumer’s amendment had broad Senate support
in past sessions, but House GOP leaders firmly oppose it. This time
around, some senators who supported the amendment previously say they
will vote against it, the newswire reported.
House, Senate to Consider Pension Legislation
The administration’s proposal to overhaul pension policy will
get a closer look in both chambers: the Senate Finance Committee plans a
Tuesday hearing and the House Education and the Workforce Committee will
hold a Wednesday hearing, CongressDaily reported. Senate
Finance Chairman Charles Grassley (R–Iowa) has introduced a
pension proposal; House Education and the Workforce Chairman John
Boehner (R–Ohio) is preparing his own bill.
Senate to Mark Up Asbestos Bill This Week
Senate Judiciary Chairman Arlen Specter (R–Pa.) hopes to mark
up an asbestos bill Thursday, although he is unsure he has the votes to
clear it through the panel, CongressDaily reported. Specter
will meet Tuesday with Judiciary Committee Republicans to discuss their
concerns about the long-stalled legislation.
Income Off 2.3 Percent, Spending Flat
U.S. consumer spending was unchanged in January, below expectations
for a small rise, as purchases of motor vehicles and parts declined
sharply, a government report showed today, Reuters reported. The
Commerce Department said personal income fell 2.3 percent in January
after hitting a record in December on a big dividend payout by Microsoft
Corp. Excluding that one-time dividend impact and other factors,
personal income rose 0.5 percent in January compared with a 0.6 percent
gain in December, the department said.
PG&E Backs 2005 Earnings View
PG&E Corp. on Friday reaffirmed its 2005 earnings from operations
projection and issued a forecast for 2006 which was at the low end of
analysts’ expectations, Reuters reported. CEO Peter Darbee also
told analysts that its recently restored dividend could be in the lower
half of its 50 to 70 percent target payout ratio over the next five
years as the company invests in its utility business. The San
Francisco–based company reiterated its projection for 2005
earnings from operations of $2.15 a share to $2.25 a share and issued a
2006 forecast of $2.30 a share to $2.40 a share, the newswire
reported.
United Posts Operating Loss in January
United Airlines on Friday reported an operating loss of $151 million
for the month of January, and a net loss of $326 million, Reuters
reported. UAL Corp., the parent company of United, said mainline
passenger unit revenue rose 3 percent from a year earlier. Unit costs
rose 1 percent overall, while costs excluding fuel fell 6 percent, it
said. The airline also said its debtor-in-possession lenders are not
requiring it to meet a specific covenant for January.
MCI
Ebbers Plans to Take Stand in Own Defense
Former Worldcom Chief Bernard J. Ebbers is likely to testify in his
own defense today, a move aimed at persuading jurors that he
didn’t participate in the $11 billion fraud that crippled the
company he founded, the Wall Street Journal reported. If
Ebbers takes the stand, legal experts said his defense lawyers are
likely to focus on his journey from humble beginnings to head of one of
the world’s largest telecom companies—an approach previewed
in opening statements that referred to the former chief executive as the
embodiment of the American dream. They also would be expected to
highlight his lack of formal business education, the online newspaper
reported.
MCI Touts Verizon Deal, to Study Revised Qwest Bid
Long-distance telephone company MCI Inc. on Friday touted its $6.75
billion deal to be bought by Verizon Communications Inc. but said it
would thoroughly analyze a revised $8 billion bid by Qwest
Communications International Inc., Reuters reported. Qwest’s
revised bid, which did not offer more cash for MCI stock as expected,
was deemed disappointing by one major MCI shareholder, and Qwest’s
shares fell more than 6 percent. In a conference call to discuss
fourth-quarter earnings, MCI CEO Michael Capellas vowed the company
would “do our utmost” to complete the Verizon deal quickly
and said the deal made the most sense for MCI, the newswire
reported.
Aloha Says MatlinPatterson to Provide Up to $90 Million
Aloha Airlines Inc. said distressed debt investor MatlinPatterson
Global Opportunities Partners II LP agreed in principle to provide up to
$90 million in funding for the bankrupt Hawaiian airline, Reuters
reported. Aloha and its parent, Aloha Airgroup, which filed for chapter
11 bankruptcy protection in December, didn't disclose further details
about the agreement with MatlinPatterson, whose latest $1.6 billion fund
that aims to take controlling stakes in bankrupt or distressed
enterprises.
Federal Reserve Releases Banking Industry Third Quarter Report
A new report for the Federal Reserve shows the U.S. banking industry
in good health through late 2004, as the Senate is about to consider
bankruptcy legislation that is a priority for commercial banks. Total
assets of reporting bank holding companies rose $245 billion (2.5
percent), to just less than $9.9 trillion, in a third quarter that was
characterized by continuing merger activity among banking organizations,
reactions to changes in the interest rate environment, and tepid
financial markets. More than half of the increase in assets ($144
billion) was accounted for my loans, primarily those secured by
commercial real estate and those extended under home equity lines of
credit and credit cards. Provisions for credit losses remained modest,
as already low nonperforming assets and net charge-off ratios fell
further during the quarter. For more information, visit
href='http://www.federalreserve.gov/publications.htm'>www.federalreserve.gov/publications.htm.
Listworks Files for Chapter 7 Bankruptcy
The Listworks Corp. filed a petition for chapter 7 bankruptcy relief
on Feb. 18 with the U.S. Bankruptcy Court Southern District of New York
in White Plains, N.Y., dmnews.com reported. Listworks closed Feb. 1. The
company was founded in 1982, and in 2003 it reportedly was purchased by
a group of investors and three employees, including Walter Monzi, who
was president/CEO at the time of the closure.
The court documents feature a list of 402 creditors that reads like a
list industry directory, though no dollar amounts owed are included.
Truss manufacturer files for bankruptcy
Lumber company Trussway Ltd. has filed for chapter 11 bankruptcy
protection, but its Spotsylvania County plant anticipates no changes,
Fredericksburg.com reported. The company will attempt to reduce its
funded debt and accrued interest from $108 million to approximately $65
million. According to Hedrick, Trussway anticipates emerging from
chapter 11 on April 17.