The vote came after two final hours of debate, with both proponents
and opponents sounding familiar themes from prior speeches. Bill sponsor
Charles Grassley (R-Iowa) urged some dozen wavering Democrats to
continue to support the bill in the face of a last minute phone campaign
by White House staff. Some 17 Democrats voted for the bill yesterday,
though this was fewer than when the bill passed on Feb. 2 by a vote of
83-14.
Leading Democratic opponents of the legislation contend that the
legislation is too harsh on consumer debtors with limited repayment
ability. In the final hours of debate yesterday, Sen. Paul Wellstone
(D-Minn.) accused the banking and credit card industries of 'blatant
hypocrisy' for aggressively soliciting new business, according to the
Associated Press. Wellstone cited an academic study published in the
spring that found that medical bills accounted for about 40 percent of
personal bankruptcy filings in 1999.
Senate Majority Leader Trent Lott (R-Miss.) promised earlier in
November that bankruptcy would be one of the last votes of the 106th
Congress and this appears to be the case. The president has 10 days to
sign or veto the bill once it is officially received, a process that
could take several days. Opponents of the bill are confident that
President Clinton will in fact veto the bill as threatened, leaving no
time for an attempted override vote. The vote today would be enough to
override the president, but it's unlikely that Democrats would hand
President Clinton such an embarrassing legislative defeat.
While consumer groups, unions and other opponents who claim the
legislation would hurt families hit by job losses, catastrophic medical
expenses or other unforseeable hardships criticized the bill's passage,
according to the Associated Press, the banking and retail credit
industries were jubilant.
The full text of the bill, yesterday's debate and the final recorded
vote are now available at ABI World.
Cosmetic Manufacturing Resources Files for Chapter 11
Zegarelli Group International Inc., Pico Rivera, Calif., announced that
Cosmetic Manufacturing Resources LLC, the company that purchased its
contract packaging business, has filed for chapter 11 protection,
according to a newswire report. In January, Zegarelli Group had entered
into an agreement with Cosmetic Manufacturing Resources, which would
make 24 payments of about $85,000 to Zegarelli Group beginning in
January 2001. Zegarelli group said that its present activities are very
limited, and without the funds expected from the settlement, it is
unlikely that operations can be expanded.
National Airlines Bankruptcy Could Deal Blow to Las Vegas
Tourism
Gaming analysts said yesterday that the Wednesday chapter 11 filing of
National Airlines Inc. (NAI), a major carrier to the Las Vegas area,
could greatly affect local tourism, prompting Harrah's Entertainment
Inc. to say on yesterday that it will write off some of its investment
in the company, according to Reuters. 'We believe the news could reflect
negatively on the gaming operators today because of inferences about
demand for air service to the Las Vegas market,' UBS Warburg analyst
Robin Farley wrote in a research note. National Airlines cited the
burden of escalating fuel prices as its primary reason for filing, but
said that its flights, which operate between Las Vegas and nine U.S.
cities, would continue to operate during the reorganization. Harrah's, a
casino operator that owns 48 percent of the Las Vegas-based airline,
said in a filing with the Securities and Exchange Commission that it 'is
currently evaluating the impact of NAI's filing on the carrying value of
the company's investment in NAI and related assets.' Harrah's interests
in the airline include an investment balance of $13.3 million as of
Sept. 30, letters of credit totaling $24.6 million, and $2.7 million in
prepaid tickets. Jason Ader, an analyst at Bear Stearns & Co., said
he believes the airline, which began operations in May 1999, 'will work
diligently to emerge successfully from bankruptcy.' Gaming analysts said
they also believe that other airlines could pick up some of the slack.
'While this is certainly not good news, it is not disastrous in our
view, as National plans to continue to fly its regular scheduled
routes,' Ader wrote. 'We expect the impact on visitation to the Las
Vegas market to be minimal.'
Iridium Satellites to Remain in Orbit
Citing the prospect of 'widespread anxiety' among the American public,
the Pentagon has found a $72 million solution that will avoid pulling
Iridium communications satellites out of their orbits, according to the
Associated Press. Instead of allowing Motorola Corp. to start
de-orbiting its 70 Iridium satellites this month, the Pentagon said it
will put them to use; it awarded a two-year $72 million contract to
Arnold, Md.-based Iridium Satellite LLC providing unlimited airtime for
20,000 government users of hand-held satellite telephones, including
military users worldwide. In announcing the contract award on Wednesday,
the Pentagon said it includes options that could bring the cumulative
value of the deal to $252 million through 2007, which will enable
Iridium Satellite to conclude its purchase of the satellite network of
Iridium LLC, whose primary financial backer was Motorola. Months ago,
Motorola, which failed to make a commercial success of its $7 billion
Iridium satellite telephone venture, said that it intended to start
de-orbiting the Iridium satellites unless it could find a buyer. The
Iridium deal, under which the Seattle-based Boeing Co. will operate the
satellite constellation, is pursuant to a Nov. 22 order of the U.S.
Bankruptcy Court for the Southern District of New York.
AutoInfo Finalizes Merger with Sunteck Transport Co., Emerges from
Bankruptcy
Stamford, Conn.-based AutoInfo Inc. today announced that it has secured
new financing totaling $575,000 in the form of 10-year 12 percent
convertible debentures and has consummated the acquisition of Sunteck
Transport Co. Inc. in exchange for 10 million shares of AutoInfo Common
Stock, pursuant to a merger agreement dated June 22, according to a
newswire report. As a result, AutoInfo's chapter 11 reorganization plan,
conditionally confirmed by the bankruptcy court on Aug. 1, will take
effect without further action by the court. The $575,000 financing was
provided by certain officers, directors and other parties and will be
used as working capital to support planned business expansion. Sunteck
is a non-asset-based supply chain logistics company, and its services
include ground transportation coast to coast, warehouse services, air
freight, and rail and ocean freight.
ElderTrust Permitted to Remain on NYSE
Kennett Square, Pa.-based ElderTrust, a real estate investment trust,
said yesterday that the New York Stock Exchange (NYSE) has granted its
request to remain a listed stock after the company met listing criteria,
according to Reuters. The elderly housing provider said that as of Nov.
27 it had met the NYSE's requirements of a market capitalization
exceeding $15 million, and a share value exceeding $1 for 30 consecutive
trading days. ElderTrust said the NYSE will re-evaluate its listing
status on Jan. 11, one week after the company has its bankruptcy court
hearing. The NYSE noted that ElderTrust's plans to meet listing criteria
are heavily dependent on whether the company reaches agreements with
Genesis Health Ventures Inc. and the Multicare Companies, as well as
obtaining bankruptcy court approval of these agreements, the company
said.
Pillowtex Receives Court Approval of $150 Million in DIP
Financing
Dallas-based Pillowtex Corp., which filed for chapter 11 protection on
Nov. 14, announced yesterday that it has received final bankruptcy court
approval for $150 million in debtor-in-possession (DIP) financing from a
group of lenders led by Bank of America, according to a newswire report.
'The DIP financing facility will be a significant source for liquidity
for Pillowtex,' said President and Chief Operating Officer Anthony T.
Williams. Pillowtex, with annual sales in excess of $1.4 billion,
manufactures and markets home furnishings and operates a network of
manufacturing and distribution facilities thoughout the United States
and Canada.
RBX Corp. Files for Bankruptcy
Citing financial woes due to long-term debt, labor disputes and other
problems, the parent of Rubatex Corp., RBX Corp., reported that it
intends to file today for chapter 11 reorganization, prompted by the
Dec. 6 filing of an involuntary bankruptcy petition by bondholders who
had not received interest payments, according to the Roanoke Times
& World News. RBX Corp., headquartered in Roanoke, Va., has
about 1,500 employees nationwide and about 770 in the Virginia towns of
Bedford, Roanoke and Buchanan, where the company operates Groendyk
Manufacturing Co. Despite fears that the filing could devastate the
town's economy, Bedford City Manager Craig Meadows said he hopes Rubatex
Bedford, the city's largest employer and site of Rubatex's original
plant, will continue to be a major presence. 'The city is concerned as
to what impact this action may have on Rubatex's Bedford operations,'
said Meadows. 'Until the company provides further information as to
their plans, the city remains hopeful that the ongoing labor dispute
will soon be resolved.' However, RBX said that the filing should not
immediately affect local operations. 'We expect this filing to have
little or no impact on our operations,' said Timothy Bernlohr, RBX
executive vice president. 'We have asked the court for, and expect to
receive, permission to continue to pay employee salaries, wages and
benefits as usual. We will continue to fulfill customer orders, and
aggressively seek new business in our markets served.' RBX manufactures
closed cell foam and custom mixed rubber compounds.
Bid4Assets and Schottenstein Bernstein Capital Group Selling
Assets of Broadband Infrastructure Group
Silver Spring, Md.-based Bid4Assets and Great Neck, N.Y.-based
Schottenstein Bernstein Capital Group announced today that they have
been commissioned to auction the assets of St. Louis-based Broadband
Infrastructure Group, according to a newswire report. The auction will
include more than $1.5 million in high-end computer equipment and
components, including HP servers and 3Com switches, Netopia routers,
Dell Towers, HP Vectra VL400 workstations, monitors, laptops and
more.
Broadband Infrastructure Group (BIG), founded in 1999, was a business
developer for high speed Internet companies, describing itself as the
first broadband-focused, networked services platform that actively
managed a portfolio of broadband infrastructure companies. Information
about the sale and details of the assets can be found at
href='http://www.bid4assets.com/big'>www.bid4assets.com/big.
