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Senate Finalizes Legislation on Asbestos Liability
Intense private-sector negotiations over asbestos liability are winding
down, as Senate Judiciary Chairman Orrin Hatch (R-Utah) plans to begin
finalizing legislation establishing a $108 billion trust fund to
compensate victims of asbestos-related illness, CongressDaily
reported. Hatch may begin circulating draft legislative language early
this week, sources said, with a possible bill introduction by the week's
end. Hatch said last week that the legislation would not establish a
federally funded 'backstop' that some had called for to ensure that the
trust fund does not run dry. Meanwhile, the House Judiciary Committee on
Thursday will hold a hearing on class action litigation reform
legislation. Like previous efforts, the bill would move most multistate
class action lawsuits to the federal courts, reported the newswire.
Key3Media Wins Court Approval to Get Creditor Backing
A federal judge said Key3Media Group Inc. may line up the support of
creditors for a
bankruptcy recovery plan, Bloomberg News reported. U.S. Bankruptcy Judge
Jerry Venters said the company can send its revised plan to creditors,
moving it a step closer to exiting chapter 11. Key3Media filed for
bankruptcy protection in February and said it would reduce debt by 87
percent to $50 million and transfer ownership to Thomas Weisel Capital
Partners. Key3Media lost revenue as trade show attendance fell with the
collapse of Internet and computer-related companies. 'The company
remains on schedule to complete its reorganization and emerge within the
next 45 days with a strong financial foundation,'' CFO Fredric Rosen
said in a statement, reported the newswire.
Enron Board Approves Creation Of an International Energy
Firm
Enron Corp.'s board approved a plan to establish a stand-alone
international energy company into which Enron intends to transfer its
interests in 19 foreign utilities, power plants and pipelines, the
Wall Street Journal reported. Under the plan, shares of stock in
the new company would be distributed to Enron's creditors. The company
had sought buyers for many of the assets but concluded that its
controversial financial structure, in which partial interests in many of
the assets had been sold to off-balance-sheet partnerships, contributed
to the discomfort of buyers that depressed prices in an already poor
market. 'We decided there's a greater return from operating the assets
rather than selling them,' said company spokesman John Ambler, reported
the Journal.
Laidlaw Announces $400 Million Debt Issuance
Laidlaw Inc. announced that it is planning an offering of $400 million
of senior notes to certain institutional investors in an offering exempt
from the registration requirements of the Securities Act of 1933 and the
prospectus requirements under Canadian securities laws, Canada Newswire
reported. The issuer of the notes will be Laidlaw International, Inc.,
the Delaware corporation that will emerge from bankruptcy as the
ultimate parent company of the Laidlaw businesses. Laidlaw intends to
use the net proceeds from the offering, together with anticipated
borrowings under Laidlaw's new senior secured credit facility, to fund a
portion of the distributions to creditors under Laidlaw's plan of
reorganization, reported the newswire.
Franklin Resources, David Tepper Sue Adelphia's Auditor, Banks
Franklin Resources Inc. and two hedge funds run by David Tepper filed a
complaint against Deloitte & Touche LLP and banks including
Citigroup Inc. and Credit Suisse
Group over their work for Adelphia Communications Corp., Bloomberg News
reported. In a 141-page suit filed in U.S. District Court in Buffalo,
N.Y., Tepper's Appaloosa Investment Ltd. and Palomino Fund joined with
Franklin's Mutual Series funds to seek recovery of 'hundreds of millions
of dollars in losses'' suffered when they
bought debt of Adelphia before it declared bankruptcy last June. The
funds, which buy bonds with below-investment-grade ratings, allege that
Deloitte & Touche and the U.S. brokerage units of more than 20 banks
helped Adelphia's management conceal
fraudulent finances and mislead investors. The suit also targets
Adelphia founder John Rigas, three sons and a son-in-law, reported the
newswire.
WorldCom May Sell Some Wireless Assets to BellSouth for $65
Million
WorldCom Inc. may sell some wireless assets to BellSouth Corp. for $65
million unless it receives a higher offer, both companies said,
Bloomberg News reported. BellSouth will buy licenses and equipment for
providing high-speed wireless Internet access, pending approval by a
bankruptcy judge, said BellSouth spokesman Jeff Battcher and WorldCom
spokeswoman Claire Hassett. The agreement was disclosed in a filing in
U.S. Bankruptcy Court in New York, they said. WorldCom Chief Executive
Officer Michael Capellas is selling some of the assets purchased by
former CEO Bernard Ebbers, who resigned in April, 2002, three months
before the company sought chapter 11 protection from creditors.
Atlanta-based BellSouth would use the purchase to help it sell a wider
range of services to customers to counter a decline in local lines,
Bloomberg reported.
Air Canada Pilots Agree to Take a 10 Percent Pay Cut in June,
July
Pilots at Air Canada agreed to take a 10 percent pay cut in June and
July to help the airline reduce costs as it restructures in bankruptcy
proceedings, Bloomberg News reported. The Air Canada Pilots Association
also expects to enter negotiations with the company May 12 on further
wage reductions, said Don Johnson, president of the union. The carrier
requested an immediate 10 percent pay cut last week. Air Canada, which
sought bankruptcy protection in April, is seeking to shave C$2.4 billion
in annual
costs as part of its effort to return to profitability. The airline
expects the carrier's unions to provide concessions worth C$770 million,
equal to about 26 percent of current labor costs, Bloomberg
reported.
Kmart's Bankruptcy Led to Investor Mistakes, SEC Says
Kmart Corp.'s exit frombankruptcy this week didn't turn out to be the
Blue Light Special that some investors had hoped, Bloomberg News
reported. The Securities and Exchange Commission has received complaints
from investors who snapped up the retailer's shares last month after a
federal judge approved the company's plan to wipe out $7.8 billion in
debt. The investors didn't realize that Kmart was issuing new stock that
would make the old shares worthless, the SEC said. 'This is an issue
that we tend to see when large companies emerge from bankruptcy,'' said
Susan Wyderko, head of the SEC's investor protection office. 'People are
watching the newspapers and looking to buy something that will rise in
value relatively quickly.'' The problem is growing, the SEC said,
because online discount brokerages -- which are popular with many small
investors -- don't intervene with advice the way a broker might,
reported the newswire.
Boeing, Hawaiian Wait for Judge to Rule on Management
Boeing Co.'s bid to oust Hawaiian Airlines Inc.'s management is in the
hands of a federal judge after two days of hearings over claims top
executives at the 12th-largest U.S. carrier enriched themselves at
creditors' expense, Bloomberg News reported. U.S. Bankruptcy Judge
Robert J. Faris in Honolulu said he 'will rule promptly'' on Boeing's
request to replace Hawaiian Chairman John W. Adams and other executives
with a trustee. Hawaiian Air officials have said they did nothing
improper and that Boeing's move, if successful, could force the airline
to shut down. 'Denying the motion is the least likely'' of three
possible options, Farris said at the hearing. Faris said appointing a
bankruptcy examiner is a third alternative to appointing a trustee or
ruling for Hawaiian. He encouraged the companies to negotiate a
settlement while he considered his decision, reported the newswire.
Spiegel Creditors Must Provide More Info. To Get Screening Wall
The judge overseeing Spiegel Inc.'s Chapter 11 bankruptcy case is
seeking more information before agreeing to establish a 'screening wall'
that would allow some unsecured creditors to trade the mail-order
retailer's securities. Spiegel's unsecured creditors committee on April
10 filed a motion seeking to set up the screening wall. The request, not
unusual in bankruptcy cases where there is a large number of publicly
held securities, would enable the committee members to establish
information-blocking procedures to trade securities for clients or for
themselves without violating fiduciary duties in the case. Judge
Cornelius Blackshear of the U.S. Bankruptcy Court in Manhattan said in a
filing Wednesday that he requires more information on specific committee
members and their potential trading practices before he will approve the
request. Judge Blackshear expressed concern the proposal would benefit a
limited number of committee members 'to the potential detriment of
unsecured creditor body as a whole.'
Provided by Daily Bankruptcy Review (
href='http://www.djnewsletters.com/dbr2.html'>www.djnewsletters.com/dbr2.html)
Copyright (c) 2003 Dow Jones & Company, Inc. All Rights Reserved
US Trustee Files Coram Healthcare's Reorganization Plan
The U.S. trustee overseeing the Coram Healthcare Corp. bankruptcy case
has filed a reorganization plan outlining how the company's creditors
will be paid.
According to court papers, Trustee Arlin M. Adams' plan would be funded
by cash on hand and a $56 million cash contribution from the company's
noteholders. All general unsecured creditors would receive full
reimbursement of their claims on debts incurred before the company filed
for Chapter 11 protection in August 2000.
Provided by Daily Bankruptcy Review (
href='http://www.djnewsletters.com/dbr2.html'>www.djnewsletters.com/dbr2.html)
Copyright (c) 2003 Dow Jones & Company, Inc. All Rights Reserved
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