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House Sponsors Plan To Offer New Bankruptcy Legislation
House Judiciary Chairman James Sensenbrenner (R-Wis.) plans today to
introduce this year's version of comprehensive bankruptcy legislation, a
spokesman for Sensenbrenner said, CongressDaily reported.
Sensenbrenner previously has said he intends this session to reintroduce
last year's bankruptcy conference report -- omitting the section on the
dischargeability of debts arising from certain protests at abortion
clinics (the so-called Schumer amendment). In its modified form, the
bankruptcy measure is expected to pass easily through the House.
However, it would run into trouble in the Senate, where Democrats have
held out the protest language as a must-have. The House Judiciary
Committee has scheduled an oversight hearing on the need for bankruptcy
reform legislation on Tuesday, which would be the first hearing of the
108th Congress on the subject. The full text of the bill will be posted
at ABI World as soon as it is available.
KMART
Ex-Kmart Execs Charged With Accounting Fraud
Two former executives at bankrupt retailer Kmart Corp. were charged on
Wednesday with committing a $42 million accounting fraud, Reuters
reported. The U.S. Securities and Exchange Commission and the Justice
Department said the two men involved were Enio Montini, a former senior
vice-president and general merchandise manager for the retailer's
drugstore business, and Joseph Hofmeister, a vice president within the
same division. The Kmart indictments are just the latest of more than a
dozen high-profile criminal proceedings brought against former
executives of some of America's biggest companies in the 15 months since
the collapse of energy trader Enron Corp., reported the newswire.
Judge Continues Kmart Ex-CEO's Motion On Insurance
Claim
A judge on Wednesday continued former Kmart Corp. Chief Executive
Charles C. Conaway's motion requesting that a company insurance policy
pay for his legal bills, saying that he should be treated like any other
Kmart executive with a similar claim, Dow Jones reported. Bankruptcy
Judge Susan Pierson Sonderby said Kmart's reorganization plan,
which the retailer hopes to confirm by the end of April, should provide
enough of a remedy for Conaway, who has been named as a defendant in
lawsuits by investors and employees and subpoenaed by the Securities and
Exchange Commission, reported the newswire.
UNITED AIRLINES
United Flight Attendants Propose Over $1 Billion In Cost
Cuts
United Airlines flight attendants on Wednesday proposed cuts that would
save the airline more than $1 billion in flight-attendant costs over the
next six years, Dow Jones reported. 'Our proposal provides
flight-attendant cost savings that enable the airline to achieve a
durable cost structure that is directly competitive with lower-cost
carriers in terms of overall flight-attendant costs,' the Association of
Flight Attendants said in a press release on Wednesday evening, reported
the newswire. Unless employees agree to large cuts, United, a unit of
UAL Corp. plans to ask a federal bankruptcy judge to void labor
contracts, as reported this week by the Wall Street Journal.
United Airlines' Financial Progress Ahead of Schedule
United Airlines' efforts to improve its finances have moved more rapidly
than its bankers expected just two months ago, a banking executive
familiar with the airline's financing said on Tuesday, the Washington
Post reported. As a result, the executive said, United has not even
used $100 million of the financing it arranged before filing for
bankruptcy protection. The banking executive said the airline had no
immediate need for the remaining $100 million. 'They're ahead of
schedule in terms of their cash flow. They have more cash than they
originally planned at this point in time,' he said, speaking on the
condition of anonymity, reported the Post.
American Airlines Union Takes Issue With Pilot's Bankruptcy
Forecast
An American Airlines pilot's conclusion that the carrier could be forced
to file bankruptcy in May doesn't represent the position of the Allied
Pilots Association, the union said, Bloomberg News reported. The pilot's
assertion 'does not reflect any credible analysis from our financial
consultants, nor from the company that's been provided to us,'' said
Steve Blankenship, a spokesman for the union. 'It hurts all parties
involved when an official position isn't articulated,'' reported the
newswire
Burlington Industries Shareholder Seeks Shareholders'
Panel
A Burlington Industries Inc. shareholder has asked a court to appoint a
committee in the company's chapter 11 bankruptcy protection case to
represent shareholders, according to court papers obtained on Wednesday
by Dow Jones Newswires. Walker Rucker, who says he has beneficial
interests in at least 2.5 million of the fabric maker's 53 million
shares, said in a filing on Tuesday with the U.S. Bankruptcy Court in
Wilmington, Del., that the company isn't representing shareholders
adequately. He said shares would become worthless under the company's
proposed reorganization plan, even though $203.3 million in equity may
have existed when the company filed for chapter 11 two years ago,
reported the newswire.
'Stop Identity Theft Now' Educational Video Program Unveiled by
Justice Department Officials in Los Angeles
In an effort to protect the public and combat one of the
fastest-growing crimes in the country, the U.S. Attorney's Office and
the U.S. Trustee's Office in Los Angeles have developed an educational
video program called 'Stop Identity Theft Now,' the U.S. Attorney for
the Central District of California announced in a press release
yesterday. The 23-minute video, which is being made available to the
public at no charge on VHS tape and DVD, is the nation's first
comprehensive, proactive program that focuses on educating attendees
before they become victims.
The U.S. Trustee's Office, also an arm of the Justice Department, is
responsible for overseeing all bankruptcy filings in the nation. The use
of false names and social security numbers in bankruptcy filings is a
significant problem in the Central District of California. It damages
the credit records of innocent victims and creates an inaccurate
official bankruptcy court record. The U.S. Trustee now requires a photo
identification card and the social security number of every debtor when
they attend the required meeting of creditors. U.S. Trustee Maureen
Tighe stated: 'We have uncovered numerous identity problems through our
debtor identification program. It is essential to ensuring that people
do not use the bankruptcy system to hide their true identities or to
delay evictions and foreclosures in properties they wrongfully obtained
with false identities.'
Horizon Natural Resources Keeps Sole Right To File Plan
Horizon Natural Resources Co. has received a 60-day extension of the
period in which only the company may file a chapter 11 reorganization
plan, Dow Jones reported. The company said filing a plan within the
initial 120-day period would have diverted resources needed to preserve
the value of the company's assets. Judge William S. Howard of the U.S.
Bankruptcy Court in Ashland, Ky., signed an order on Monday that gives
the company the sole right to file a reorganization plan through May 13.
If Horizon Natural Resources files a plan by that date, other parties
will be further excluded from filing competing plans through July 11,
while the firm solicits votes for its plan, reported the newswire.
PG&E
Pacific Gas Estimates Future Operating Revenue
Once it is reorganized, Pacific Gas & Electric Co. anticipates
operating revenue in 2004 will be about $10.49 billion, producing pretax
income of $875.8 million, a regulatory filing on Wednesday said, Dow
Jones reported. The PG&E Corp. unit expects operating revenue to be
about $10.77 billion in 2005 and 2006 and $11.02 billion in 2007, the
8-K filing with the Securities and Exchange Commission said. PG&E
has said the reorganization plan, and the associated equity offering,
will ensure that Pacific Gas & Electric emerges from bankruptcy as
an 'investment grade company,' reported the newswire.
PG&E Submits Revised Schedule for Utility's Bankruptcy
Trial
PG&E Corp. and state regulators agreed on a revised schedule for
Pacific Gas & Electric's bankruptcy trial to allow additional review
of changes that PG&E made to the utility's reorganization plan last
week, Bloomberg News reported. PG&E and the California Public
Utilities Commission, which have proposed rival plans for Pacific Gas,
agreed to extend the bankruptcy trial through the end of April,
according to court documents. Pacific Gas, California's largest utility,
filed for chapter 11 protection in April 2001, reported the
newswire.
Federal-Mogul Wins Approval Of $28.1 Million Sale
Federal-Mogul Corp. on Wednesday won approval of the $28.1 million sale
of its U.S. camshafts business to China-based automotive components
concern Asimco, Dow Jones reported. Judge Randall J. Newsome of the U.S.
Bankruptcy Court in Wilmington, Del., approved the sale after
Federal-Mogul reported it hadn't received any competing bids at a sale
auction. Under the terms of the purchase agreement, Asimco is to give
Federal-Mogul $28.1 million for assets at facilities in Michigan and
Indiana that are used to make camshafts for vehicle engines,
Federal-Mogul said in documents, reported the newswire. Federal-Mogul
has been under bankruptcy protection since October 2001. The company and
its creditors recently agreed to divide ownership, ending months of
conflict over finances and asbestos liability.
Weirton Steel Says Cost-saving Plan Would Keep It Out of
Bankruptcy
Weirton Steel Corp. expects that its cost-cutting plan will be
successful, but confirmed an Associated Press report that the company
said it could file for bankruptcy if retirees don't make health-care
concessions. The AP reported on Wednesday that Weirton is seeking to
change health-care benefits to retirees. According to a letter mailed to
workers, the company said it 'may be forced into bankruptcy or
liquidation' if they don't accept the changes.
Allegheny May Have To Restate 9 Months of Unaudited Financial
Data
Allegheny Energy Inc. has found more errors in its financial statements
and may have to restate unaudited financial data it released for the
nine months ended Sept. 30, Dow Jones reported. 'The company's
comprehensive review of its financial records is continuing. Since the
filing of unaudited financial statements for the period ending Sept. 30,
2002, the company has discovered additional errors,' Chief Financial
Officer Bruce Walenczyk said in a webcast analyst conference on
Wednesday, reported the newswire.
Integrated Health Services Resolves Objections To Asset Sale
Integrated Health Services Inc. on Wednesday resolved all 32 objections
to its proposed $110.5 million asset sale and to the adequacy of its
disclosure statement for a reorganization plan, Dow Jones reported. The
debtor company will file a revised disclosure statement next week, with
provisions resolving several objections, said Arthur Steinberg, an
attorney with Kaye Scholer LLP, the firm representing Integrated Health.
If no further objections arise, Judge Mary F. Walrath of the U.S.
Bankruptcy Court in Wilmington, Del., can approve the adequacy of the
disclosure statement without reconvening the hearing, reported the
newswire.
ADELPHIA
Court Sets Deadline To File Claims Against Adelphia
Business
The court overseeing Adelphia Business Solutions Inc.'s chapter 11
bankruptcy protection case has set April 2 as the deadline for creditors
to file proofs of claim in the case, Dow Jones reported. Judge Robert
E. Gerber of the U.S. Bankruptcy Court in Manhattan also approved
procedures that creditors must follow when submitting claims, according
to a court order obtained by Dow Jones Newswires. The April 2 bar date
applies to claims against Adelphia Business Solutions that arose before
the firm filed for bankruptcy on March 27, 2002. It also applies to
pre-bankruptcy claims against the company's indirect subsidiaries that
filed for bankruptcy on June 18, 2002, reported the newswire.
Adelphia CEO Says He Might Not Serve If Judge Cuts Proposed
Pay
Adelphia Communications Corp.'s choice for chief executive and chairman,
William Schleyer, testified that he might not accept a judge's reduction
of his maximum pay of $24.6 million over three years to run the bankrupt
company, Bloomberg News reported. A group of Adelphia shareholders want
U.S. Bankruptcy Judge Robert Gerber to reject or alter a pay
package they call excessive. Shareholders also object to the hiring of
Ronald Cooper as chief operating officer for up to $16.2 million over
three years. Both men used to run AT&T Broadband and were hired by
the board of the No. 5 cable-television operator last month, subject to
Gerber's approval, reported Bloomberg.
AirGate's IPCS Unit Gets Interim OK For Cash Collateral
AirGate PCS Inc.'s IPCS Inc. unit received court permission on Tuesday
to use the cash collateral of its pre-petition lenders on an interim
basis, pending a final hearing on April 7, Dow Jones reported. IPCS has
an emergency need to use the cash collateral to pay wages and other
operating expenses, and to afford it time to negotiate and seek approval
for further cash collateral use or debtor-in-possession financing, Judge
W. Homer Drake of the U.S. Bankruptcy Court in Atlanta said in an
interim order on Tuesday, reported the newswire. IPCS blamed its
financial difficulties primarily on Sprint Corp. and its Sprint PCS
wireless group, for which it provides network services in portions of
the Midwest.
Separately, Standard & Poor's Ratings Services said in a press
release yesterday that it lowered its corporate credit rating on
wireless carrier IPCS Inc. to 'D' from 'CC' and removed it from
CreditWatch following the company's recent bankruptcy filing.
Northwest Airlines Asks Pilots To Accept 20 Percent Pay Cut
Northwest Airlines Corp. has asked pilots to accept about a 20 percent
pay cut as the nation's fourth-largest carrier intensified its drive to
cut labor costs, the Associated Press reported. Pilots' wage scales
would be rolled back to pre-1996 levels under a cost-cutting proposal
from the airline, said Mark McClain, chairman of the executive council
of the Northwest Airlines Air Line Pilots Association. In addition, the
airline could save money with work rule changes, benefit reductions and
other moves, reported the newswire. The Eagan, Minn.-based airline
presented its giveback proposal to the pilots' union Tuesday.
Safety-Kleen Gets More Time To Sell Plan To Creditors
The bankruptcy court handling the chapter 11 proceedings for
Safety-Kleen Corp. has given the company a 90-day extension of its
exclusive right to lobby creditors for a reorganization plan, Dow Jones
reported. According to a ruling on Friday from the U.S. Bankruptcy Court
in Wilmington, Del., obtained by Dow Jones Newswires, the company will
have until May 30 to solicit votes in support of its reorganization
plan. Safety-Kleen had filed a reorganization plan with the court on
Nov. 27, and its exclusive solicitation period had been set to expire on
Friday.
Kaiser Aluminum Gets Court OK To Sell California Office
Complex
The court handling Kaiser Aluminum Corp.'s chapter 11 case has
authorized the company to sell its interests in property in Oakland,
Calif., for about $65.6 million, according to a court order obtained on
Wednesday by Dow Jones Newswires. U.S. Bankruptcy Judge Judith
Fitzgerald approved a sale agreement between the aluminum products
maker and Summit Commercial Properties. The agreement, which had been
subject to higher offers through an auction, provides for Kaiser
Aluminum to sell its interests in an Oakland office building complex
known as the Kaiser Center, reported the newswire.
Laidlaw Names New Directors as It Prepares to Exit Bankruptcy
Laidlaw Inc., North America's biggest bus company, named a new board of
directors a month after a bankruptcy court approved its reorganization
plan to emerge from chapter 11 bankruptcy, Bloomberg News reported.
Laidlaw, which runs the Greyhound bus line, has operated under
bankruptcy protection in the United States and Canada since June 2001
after defaulting on $3.6 billion of debt. The Burlington, Ontario- based
company plans to emerge from bankruptcy protection in April and the new
board should hold its first meeting soon after, said Laidlaw President
and Chief Executive Officer Kevin Benson, reported the newswire.
Conseco Finance Auction Postponed To Next Week
A Friday auction for the sale of Conseco Inc.'s finance arm has been
moved to next week due to the number and complexity of the bids
submitted, a spokeswoman said late on Wednesday, Dow Jones reported.
Brenda Adrian said the court-supervised auction will technically open on
Friday but that it will be immediately adjourned to Tuesday, March 4.
Adrian said the final sale hearing for Conseco Finance is still
scheduled for March 5, the same date that the court will consider
Conseco's disclosure statement, a written document designed to help
creditors evaluate the company's reorganization plan, reported the
newswire.
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