June 23, 2004

Frist Confirms Senate
Delay On Class Action Measure



Despite an agreement weeks ago to move a bipartisan class action bill to

the floor immediately after the Senate completes work on the FY05
defense authorization bill, Majority Leader Bill Frist (R-Tenn.) said on

Tuesday he would postpone consideration of the class action measure
until after the July Fourth recess, CongressDaily reported.
Frist said the class action bill would be the next order of business
when the Senate returns from recess the week of July 5.



UNITED AIRLINES



United
Submits Third Request for Assistance to Loan
Board

Five days after its last bid
was rejected, United Airlines filed a revised application with a federal

loan board yesterday, its third attempt to win assistance that would
help it emerge from bankruptcy, the New York Times reported. In a

letter to the Air Transportation Stabilization Board, the airline
reduced its loan guarantee request to $1.1 billion from the $1.6 billion

it had sought until last week, according to the newspaper. In addition
to the loans guaranteed by the government, United pledged to find $500
million from a lender willing to extend credit without a government
promise to repay the money if United fails.

UAL Loan Guarantee
Request May Meet Favorable Political Winds

United Airlines faces a more
favorable political climate in its campaign to win government approval
of $1.6 billion in loan guarantees, but even that might not be
sufficient to get the government to say yes. Changes at the top of the
Treasury Department, along with White House efforts to keep one of
Illinois's Senate seats in Republican hands and carry the state in the
presidential election, give United pressure points it lacked when it
last tried to win loan-guarantee approval. In 2002, when the
three-person Air Transportation Stabilization Board voted to reject the
application, the Treasury Department's representative was adamantly
opposed to the guarantees and was shielded from political influence by
then Treasury Secretary Paul O'Neill.



Last week the board turned down the loan guarantees again. The Treasury
Department's current representative, Undersecretary Brian Roseboro, took

a hard line against the loan guarantees, according to individuals
familiar with the matter. After the Thursday meeting, the agency issued
a statement saying that if United submitted 'an improved application,'
the agency 'is open to reconsidering it.' As reported in the story
above, United is now seeking $1.1 billion.

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UBS, Quadrangle Poised
To Win Adelphia Work

Bankrupt cable operator
Adelphia Communications Corp. is close to choosing UBS AG and Quadrangle

Group LLC, a private media and communications investment firm, as
advisers on the potential sale of its assets, Reuters reported.
Adelphia, which is reorganizing under bankruptcy protection, agreed in
April under pressure from its creditors and shareholders to consider a
sale of the company. The selection has been marred by perceived
conflicts of interest on behalf of nearly all of the candidates, and
Adelphia has searched for disinterested parties that will be approved by

its U.S. Bankruptcy Trustee and its shareholders and creditors, the
newswire reported.

The Italian Government
Approves Alitalia's Bridge Loan

The Italian government gave
Alitalia the go-ahead on Tuesday to obtain a loan worth up to 400
million euros ($480 million), enabling the airline to stay afloat for
the immediate future, Reuters reported. The loan, which still needs the
approval of the European Commission, will be guaranteed by the state and

will run an initial six months extendable by a further six months
maximum. The money will give Alitalia management breathing room as they
work on a restructuring plan that is due to prepare the way for an
eventual capital increase. The European Commission can veto anything it
judges to be illegal state aid, but Italian Prime Minister Silvio
Berlusconi's government is confident that it will approve the loan,
which is expected to be issued by a consortium of banks, the newswire
reported.

Parmalat Wants U.S. Court to
Protect Assets

Parmalat Finanziaria SpA on
Tuesday asked a U.S. Bankruptcy Judge for an injunction to prevent
creditors from seizing U.S. assets, as the food group restructures in
Italy, Reuters reported. The company and 22 affiliates asked Judge
Robert Drain of the bankruptcy court in Manhattan to temporarily
restrain and, ultimately, permanently block creditors from interfering
with Parmalat's restructuring outside the United States. Parmalat made
its request six months after filing for insolvency in Italy, and four
months after its U.S. dairy units filed in the United States for chapter

11 bankruptcy protection. Parmalat on Monday submitted its turnaround
plan to Italian Industry Minister Antonio Marzano, and approval may come

by early July, the newswire reported.

HealthSouth Gets Waiver On
Debt Default

HealthSouth Corp. said on
Tuesday that holders of a majority of its notes have agreed to waive a
default on all $2.6 billion of its outstanding public debt, Reuters
reported. The Birmingham, Ala.-based operator of rehabilitation and
surgery centers defaulted on its bonds after a $3 billion accounting
fraud left it unable to file audited financial statements, one of the
conditions of its bonds. HealthSouth has been making interest payments
on its debt. The company had reached terms with its creditors on June 8
after the company agreed to increase a payment to creditors to allow the

default to be remedied. Some creditors were threatening to accelerate
the demand for repayment on the bonds, the newswire reported.

ENRON

Enron Received
Higher CrossCountry Bid – Creditors

Enron Corp., which is selling
assets to raise cash as it works to emerge from bankruptcy, received a
higher offer for its CrossCountry Energy unit from an unidentified
'investment-grade company,' Enron's largest creditors told a bankruptcy
court, Reuters reported. On May 21, the company said it had received an
offer worth $2.2 billion for CrossCountry, a collection of its prized
North American natural gas pipelines, from Texas oil tycoon Oscar Wyatt
and some financial partners, including Citigroup Inc.

On May 27, Enron creditors
filed motions asking the court to approve the Wyatt deal and establish a

$25 million break-up fee if the deal broke down. Now, in a court hearing

scheduled for Thursday, Enron's largest unsecured creditors will seek
permission from U.S. Bankruptcy Judge Arthur Gonzalez to accept the new
offer instead of the bid from NuCoastal LLC, the Wyatt-led
consortium.

Enron Prosecution:
A Work in Progress (Law.com)

Andrew Weissmann, who heads the

Enron Task Force, contends the prosecution has made considerable
progress in the past two years, including the high-profile pleas of
former CFO Andrew Fastow and his wife, the Texas
Lawyer reported. The next big step in the prosecution may be
the Nigerian barge trial, set for Aug. 16. The results could be a
bellwether of the strength of the prosecution's other cases. Read the
article at 

href='http://www.law.com/jsp/article.jsp?id=1087501805577'>http://www.law.com/jsp/article.jsp?id=1087501805577.

Defense Sees Bias In
Case Against Ex-Adelphia CFO Timothy Rigas

The case against former
Adelphia Communications Corp. Chief Financial Officer Timothy Rigas
hinges largely on uncorroborated, biased testimony, his lawyer told
jurors in an abbreviated court session Monday afternoon. As he wrapped
up his closing statement, Paul Grand pointed out that prosecutors did
not ask one witness -- former Investor Relations Ddirector Karen
Chrosniak -- about meetings that former Executive Vice President of

Finance James R. Brown said she attended. Brown testified in May
that he, Tim Rigas, Karen Chrosniak and others had various meetings
between 2000 and 2002 to discuss fraudulent manipulations of Adelphia's
results.



'I think that the case against Tim Rigas truly comes down to Jim Brown
and Karen Chrosniak,' Grand said. 'The most significant fact for you to
weigh about Jim Brown and Karen Chrosniak is that they did not even
corroborate each other even though one of them repeatedly testified to
having dirty conversations with the other.'

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