|
Price Report Eases Deflation Worry
A rise in lodging and housing costs pushed underlying U.S. inflation up
in May at the fastest rate in nine months, the government said on
Tuesday in a report that soothed deflation fears, Reuters reported. At
the same time, falling energy costs kept overall consumer prices steady.
Other reports offered a glimmer of hope for struggling industry and
showed housing still buoyant. The Consumer Price Index (CPI), the most
widely used gauge of U.S. inflation, was unchanged last month, the Labor
Department said. But the so-called core CPI, which strips out volatile
food and energy prices, climbed 0.3 percent after two consecutive flat
readings. It was the biggest rise in the core index since a matching
gain in August, reported the newswire.
Snow Says Jobless Rate Has Not Yet Peaked
Treasury Secretary John Snow said on Tuesday that the U.S. unemployment
rate is 'unacceptably high' and may rise further before improving later
this year, Reuters reported. Speaking at a conference sponsored by Money
magazine, Snow said an expected pickup in economic growth in the second
half should soften current high rates of joblessness. 'Unemployment is
unacceptably high at 6.1 percent (in May), but it could well rise to 6.2
or 6.3 percent before the higher growth rates begin to bring it down,'
Snow cautioned. In prepared remarks, Snow said recovery prospects 'are
looking better and better,' reported the newswire.
Nelson Doubtful About 'Backstop' Provisions In Asbestos
Bill
Sen. Ben Nelson (D-Neb.) seemed doubtful on Tuesday that his ideas for
adding a 'backstop' provision to asbestos-reform legislation would gain
any traction with Judiciary Chairman Orrin Hatch (R-Utah),
CongressDaily reported. Nelson said his suggestions for
establishing a mechanism to ensure that the trust fund to compensate
victims of asbestos-related injuries does not run dry were 'all met with
some degree of resistance.'
The Judiciary Committee is slated to mark up the bill on Thursday,
although at least one Democratic senator is seeking a delay to give the
bill a chance to gain wider support among labor unions, who insist the
bill should include language ensuring that victim's claims do not drain
the fund. 'I'm still hopeful we'll be able to get it done this week,'
Nelson said, reported the newswire.
House Panel Debates Scope Of Fair Credit Reporting Law
As part of a continuing series of hearings on reauthorizing the Fair
Credit Reporting Act (FCRA), the House Financial Services Committee
yesterday debated whether FCRA should regulate employee background
investigations and if medical privacy is adequately protected under the
statute.
Meanwhile, at a U.S. Chamber of Commerce forum before the
subcommittee hearing, Financial Services Chairman Michael Oxley (R-Ohio)
said the subcommittee plans to hold its fifth and final hearing on FCRA
issues next week and mark up a bill after the July 4 recess, National
Journal's Technology Daily reported. Oxley said he and committee
leaders had not yet decided whether to introduce a measure that would
also seek to pre-empt states from passing broader financial privacy
legislation, instead of a 'clean' re-extension of the FCRA pre-emptions.
'Hopefully we will move out of the full committee before the August
recess and be prepared to go to the floor when we come back in
September,' said Oxley, reported CongressDaily.
WorldCom's MCI Creditors Appeal Electronic Data Settlement
Creditors of WorldCom Inc.'s MCI unit are appealing the settlement of a
disputed computer services contract between WorldCom and Electronic Data
Systems Corp. (EDS), Bloomberg News reported. Investors with claims
against MCI services and supply contracts argue that the $98.6 million
settlement favors Electronic Data at their expense and rewards the
Plano, Texas-based company for supporting WorldCom's reorganization
plan.
EDS sits on a creditors' committee that's steering WorldCom through
the largest bankruptcy case in U.S. history. It manages WorldCom's
computers under an 11-year contract signed in 1999. The modified
contract, approved June 4 by U.S. Bankruptcy
Judge Arthur J. Gonzalez, saves Ashburn, Va.-based WorldCom $83 million
a year, reported the newswire.
National Steel's Waste Settlement With EPA, Illinois
Approved
National Steel Corp. won bankruptcy court approval to settle a dispute
with the U.S. Environmental Protection Agency and the state of Illinois
over two landfills at
its Granite City, Ill.-based facility, Bloomberg News reported. The
settlement approved yesterday in Chicago by U.S. Bankruptcy Judge
John H. Squires requires National Steel to pay a $500,000 civil
penalty and close two landfills at the Granite City site. The dumps will
be closed under solid-waste regulations, rather than stricter
hazardous-waste rules, according to court papers.
National is wrapping up its affairs after selling most of its assets
last month for $1.05 billion in cash and assumed liabilities to
Pittsburgh-based U.S. Steel Corp. Mishawaka,
Ind.-based National Steel, with about 20 remaining employees, will
submit its plan to exit bankruptcy to the court by the end of the week,
the company's attorney Mark Berkoff said at a hearing. The $500,000
penalty will be a general, unsecured claim against the estate, so it
won't be clear how much money the government will collect until the
court confirms the bankruptcy plan.
Gauntlet Energy Files for Bankruptcy Protection
Gauntlet Energy Corp. said on Tuesday it had been granted bankruptcy
protection from its creditors, which will allow it to continue operating
while it restructures its finances, Reuters reported. The Calgary-based
oil and gas explorer said it had been granted protection in Alberta
under the Companies' Creditors Arrangement Act. The company said
Gauntlet's primary secured creditor supported the application to the
court.
The company said last week it was being sued for C$25 million on behalf
of shareholders who bought stock under a prospectus last November, which
raised C$25 million on sales of shares for C$7.80 each. Gauntlet stock,
halted prior to Tuesday's announcement, sank 9 Canadian cents to 14
Canadian cents on the Toronto Stock Exchange after trading resumed.
Williams Closes Williams Energy Partners Sale
Williams Cos. Inc. on Tuesday said it completed the sale of its majority
stake in Williams Energy Partners LP for about $510 million in cash, a
move that is part of the energy company's goal of selling assets to
raise cash and boost its financial health, Reuters reported. The Tulsa,
Okla.-based company sold its 55 percent stake in the partnership to a
group of private equity players including Madison Dearborn Partners,
Carlyle Group and Riverstone Holdings. The deal also removes $570
million of the partnership's debt from Williams' consolidated balance
sheet, the company said in a statement.
Williams said it expects to recognize a second-quarter pre-tax gain of
at least $270 million to $285 million from the deal. The range is lower
than the company's earlier projection of a gain of between $285 million
and $300 million because of higher-than-expected costs to transition
items like computer systems, according to a company spokesman. The gain
will be reported as part of the company's discontinued operations.
Several distressed energy companies have been forced to sell assets in
the past year in an effort to clean up their balance sheets or to avoid
potential bankruptcies, reported the newswire. Williams was near
bankruptcy last year before it was bailed out through last-minute
funding, including an investment by billionaire Warren Buffett.
Sale of A Novo Broadband Assets, Operations Complete
A Novo Broadband Inc. yesterday announced in a press release distributed
by Business Wire that on June 13, 2003, it completed the sale of
substantially all of its assets comprising its entire business
operations, to Teleplan Videocom Solutions Inc., a wholly owned
subsidiary of Teleplan Holding USA Inc. The sale was authorized and
approved by order of the U.S. Bankruptcy Court for the District of
Delaware entered on June 2, 2003. Under the terms approved by the
bankruptcy court, Teleplan acquired the assets and assumed certain
liabilities of A Novo Broadband in exchange for $1.8 million in
cash.
William Kelley, president of A Novo Broadband, said the company plans to
file a plan of liquidation pursuant to which it will distribute all of
its remaining assets, including net proceeds of this sale, to its
creditors. Kelley said that the sale did not include certain inventory
and other assets and that A Novo Broadband would continue its efforts to
dispose of its remaining assets. He said that A Novo Broadband does not
expect to make any distributions to its shareholders.
Read-Rite Files Petition for Chapter 7 Bankruptcy Protection
Read-Rite Corp., whose components are used in computer disk drives,
filed for bankruptcy protection under chapter 7 of the U.S. Bankruptcy
Code, Bloomberg News reported. Read-Rite announced the filing in a
statement distributed by PR Newswire.
NHL Approves Sale of Senators to Biovail's Melnyk
The National Hockey League's Board of Governors unanimously approved the
sale of the Ottawa Senators to Biovail Corp. Chairman Eugene Melnyk,
Commissioner Gary Bettman said, Bloomberg News reported. Melnyk received
court approval earlier this month to purchase the hockey team,
conditional on also being able to acquire the 18,500-seat Corel Centre,
the club's home arena. Bettman announced the league's approval of the
sale of the Senators, who had the league's best record last season,
after the board's meeting in New York. Melnyk is offering C$100 million
for the team and C$27.5 million for the arena and wants to purchase them
together, reported the newswire.
Former DLJ Executives Sued Over Their Role On AmeriServe
Board
The remaining corporate shell of AmeriServe Food Distribution Inc. sued
two former directors, accusing them of putting the interests of their
employer, brokerage Donaldson Lufkin & Jenrette Inc. (DLJ), ahead of
those of the distributor to fast-food restaurants.
DLJ, in addition to having two of its employees on AmeriServe's board,
helped AmeriServe with several security offerings, including a $200
million junk-bond sale just four months prior to AmeriServe's January
2000 filing for chapter 11 bankruptcy protection. The suit, filed on
Friday in Manhattan federal court, seeks 'hundreds of millions of
dollars' in damages from Peter Grauer and Benoit Jamar, the former board
members. Both were managing directors at DLJ units during AmeriServe's
fall.
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
Conseco Says Several Parties Interested In GM Building
Conseco Inc. has heard from several interested parties regarding its
sale of the GM Building in New York and has already received at least
one informal offer of about $1.1 billion, the company's chief financial
officer said on Monday. Eugene M. Bullis said during open-court
testimony that, despite the strong interest, the company hadn't yet
received a formal letter of intent from any party to purchase the posh
property, located at the southeast corner of Central Park. Conseco, of
Carmel, Ind., and real-estate mogul Donald Trump partnered in 1998 to
buy the skyscraper for $878 million. A three-person arbitration panel
earlier this year awarded Trump's 50 percent stake in the building to
Conseco after months of fighting over the property between the two.
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
Eagle Food Centers to Begin Sale of Assets in Bidding
Process
Eagle Food Centers Inc., which owns 59 supermarkets in Illinois and
Iowa, said it will start the sale of substantially all of its assets in
a bankruptcy court bidding process, Bloomberg News reported. The company
plans to close nine Eagle Food stores including its BOGO's store by the
end of the supermarket's fiscal second quarter, Eagle Food said in a
statement distributed by PR Newswire. It will continue to develop a
reorganization plan to maintain and operate its stores.
The Milan, Ill.-based company filed for bankruptcy protection in April
for the second time in three years. Eagle Food last filed for bankruptcy
protection in February 2000 and emerged later that year. Since that
time, the company has struggled with increased competition, rising labor
costs and a sluggish economy. A court hearing is scheduled for June 27
to consider the company's proposed bidding procedures and store closing
request, reported the newswire.
Lehman Could Face Liability Of $80 Million in Pending Case
Lehman Brothers Holdings Inc. faces potential liability of more than $80
million in pending bankruptcy proceedings involving a now-defunct
home-equity lender, an amount that could dwarf the $5.1 million that a
federal jury on Monday ordered it to pay in a related case, Reuters
reported.
Lehman's role as a financial backer of First Alliance Corp., an Irvine,
Calif., mortgage lender, has come under scrutiny in two cases pending
before a federal judge in Santa Ana, Calif. One is a class-action
lawsuit in which 4,500 borrowers of its 'subprime' loans accused both
First Alliance and Lehman of fraud. Borrowers alleged that First
Alliance lured low-income, largely elderly homeowners to sign up for
home-equity loans that carried hidden and exorbitant borrowing costs,
and that Lehman -- which provided a credit line to First Alliance and
packaged its loans and sold them to investors -- aided the fraud,
reported the newswire.
The second case that looms for Lehman is a pending claim by the
bankruptcy trustee charged with liquidating First Alliance, Reuters
reported. First Alliance filed for chapter 11 protection under the
Bankruptcy Code in March 2000 and has since been liquidating its assets
and returning the proceeds to creditors. In that case, a trustee is
seeking repayment of approximately $83 million, which represents about
$77 million in loans plus interest, that Lehman has been paid in stages
as one of First Alliance's creditors, the newswire reported.
Bankrupt NextCard Submits Plan to Liquidate
NextCard Inc., the Internet credit card company that entered bankruptcy
protection last year, filed plans with a U.S. Bankruptcy Court this week
to liquidate its assets, Reuters reported. In a disclosure statement on
the liquidation plan filed with a bankruptcy court in Delaware on
Monday, total claims against the company were listed at $464 million,
but the company objects to several claims, notably a $397 million claim
as part of a shareholder lawsuit. NextCard filed for chapter 11
bankruptcy in November 2002, reported the newswire.
Cross Media Marketing Files Chapter 11
Cross Media Marketing Corp. said on Tuesday that it has filed chapter 11
under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the
Southern District of New York and it planned to liquidate, Reuters
reported. The provider of direct marketing through e-mail, direct mail
and the Internet said it has secured debtor-in-posession financing from
senior lenders that would 'fund the orderly liquidation of the company's
assets.' The interim order for the debtor-in-possession financing and
for the company's use of cash collateral was approved by the bankruptcy
court, the company said, reported the newswire.
Air Canada's Survival Hanging on Pilots' Dispute
A long simmering dispute over seniority between two factions of pilots
at Air Canada threatens to unravel the airline's attempts to obtain
cost-cutting concessions and stave off bankruptcy, industry watchers and
union executives said on Tuesday, Reuters reported.
At issue is a dispute over seniority that dates back to Air Canada's
takeover of Canadian Airlines three years ago. A first attempt to merge
both pilots groups was contested by the Canadian Airlines pilots, who
felt they lost too much. But the latest ruling, handed down on Monday by
the Canadian Industrial Relations Board, has outraged the original Air
Canada pilots as having swung too far the other way. The seniority lists
are seen as crucial to pilots, as they determine pay scales and the type
of aircraft flown. The fight over seniority could jeopardize the
airline's plans to win wage concessions as a prelude to restructuring,
reported the newswire.
Thanks for visiting
Today's Bankruptcy Headlines. New articles are posted here each business
day.
|
