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January 24, 2005
U.S. Consumer Sentiment Sinks in January
Consumer sentiment eroded in January, according to researchers at the
University of Michigan, CBS MarketWatch reported. The
consumer sentiment index fell to 95.8 in January from 97.1 in December.
The decrease was below the consensus forecast of Wall Street economists
who had expected sentiment to rise to 97.4.
Specter to Introduce Asbestos Legislation Tomorrow
Senate Judiciary Chairman Arlen Specter (R–Pa.) tomorrow plans
to introduce legislation for a $140 billion asbestos trust fund,
CongressDaily reported. Specter has circulated several
drafts of the bill, which has yet to receive a response from industry
stakeholders. Business groups have agreed to that overall funding level,
but labor unions have said more is needed to compensate victims of
asbestos-related diseases. Specter hopes to move the bill through
committee for a Senate floor vote in February, the newswire
reported.
US Air Machinists, the Holdouts, Approve Benefit, Pay
Reductions
US Airways Group Inc.’s machinists union voted on Friday to
approve pay and benefit cuts that will save the airline $353 million
annually, but will cost thousands of union members their jobs, the
Associated Press reported. Friday’s vote by the machinists union
gives US Airways an overall reduction of more than $1 billion in its
annual labor costs, the level management said was necessary to be viable
in an increasingly competitive industry.
United Airlines
United Airlines Gets 3 More Months to File Plan
United Airlines on Friday won court approval for another three months
to file its bankruptcy reorganization plan without interference from
other parties, Reuters reported. Bankruptcy Judge Eugene Wedoff
extended United’s exclusivity through April 30. The current
extension was due to expire Jan. 31. The carrier, a unit of UAL Corp.,
said the extension would allow it to continue “without
disruption” efforts to secure final cost cuts from labor and
finalize other restructuring agreements. Creditors supported the
extension of exclusivity, the airline said, the newswire reported.
United Air Sees Bankruptcy Exit in Fall
The chief executive of United Airlines said he expects the carrier to
emerge from bankruptcy in the autumn, the Chicago Tribune
reported in its Sunday edition. United Air’s Glenn Tilton told the
newspaper the airline “will emerge from bankruptcy in the fall a
different company.” Labor groups have already approved $2.56
billion in concessions to help the carrier restructure, and the airline
is seeking another $725 million in annual labor cost reductions by the
end of January.
Separately, a Wall Street Journal article discusses
corporate perks for senior executives and focuses on United Air CEO
Tilton. Read the full article at
href='http://www.wsj.com/'>www.wsj.com (subscription required).
WestPoint Stevens Files Reorganization Plan
WestPoint Stevens Inc. on Friday said it has filed a proposed
reorganization plan with a bankruptcy court under which it would be
authorized to issue 42 million shares of new common stock, Reuters
reported. The company, in the plan filed on Thursday with the U.S.
Bankruptcy Court for the Southern District of New York, said it will use
“commercially reasonable efforts” to assure that the
reorganized company’s common stock is “listed on a national
securities exchange or a qualifying interdealer quotation system.”
West Point, Ga.–based WestPoint filed for chapter 11 protection
from creditors in June 2003, the newswire reported.
Court Hearing Takes Place Concerning Owens Corning’s Asbestos
Liability
A federal court hearing about the size of Owens Corning’s (OC)
asbestos liability concluded last week, although a decision isn’t
expected for a few weeks, Toledoblade.com reported. Judge
John Fullam, who heard the case in U.S. District Court, agreed to accept
post-hearing briefs from the various parties, said Stephen Krull,
OC’s chief counsel. He set a deadline of Feb. 7 for the briefs,
and gave opposing parties until Feb. 18 to reply. OC faces 181,000
claims now and 600,000 claims or more in the future, one expert said,
according to the Blade.
American Business Financial Files for Bankruptcy
American Business Financial Services Inc. said on Friday it filed a
voluntary petition to restructure its debts under chapter 11 of the U.S.
Bankruptcy Code, a move designed to address liquidity issues and obtain
financing to support its lending business, Reuters reported. The
Philadelphia-based mortgage banker said that, subject to approval from
Delaware federal bankruptcy court, it received a commitment for $500
million of debtor-in-possession financing from Greenwich Capital
Financial Products Inc.