June 15, 2004
Democratic Co-sponsors Ask
Frist For Class Action Parameters
Four Democratic co-sponsors of the Senate class action bill have urged
Majority Leader Bill Frist (R-Tenn.) to ensure a 'fair and reasonable
debate' on amendments when the bill moves to the floor, after the Senate
completes its work on the FY05 defense authorization bill,
CongressDaily reported. 'We ... believe it is prudent to
begin to identify likely amendments on both sides of the aisle before
debate even commences and determine whether time agreements could be
reached to manage the consideration of amendments in a fair and
efficient manner,' Sens. Thomas Carper (D-Del.), Herb Kohl (D-Wis.),
Charles Schumer (D-N.Y.) and Christopher Dodd (D-Conn.) told Frist last
week in a letter. The four Democrats also urged the Senate to 'more
effectively utilize Monday and Friday sessions' and plan to vote
'throughout the day and evening' on amendments. The bill would change
the rules for class action lawsuits, moving many cases from state to
federal court, where more stringent rules would govern them.
Utility: Enron Manipulated
Energy Market Practically Every Day During Power Crisis
Enron manipulated the energy market
practically every day during the 2000-01 power crunch and gouged Western
customers for at least $1.1 billion, according to audiotapes and
documents released Monday, the Associated Press reported. The latest
release by the Snohomish Public Utility District provides another
glimpse into how Enron allegedly rigged the market at the same time
millions of Californians were suffering blackouts and paying sky-high
electricity bills. The utility wants an administrative law judge to
order Enron to surrender up to $2 billion in ill-gotten gains.
California politicians want Enron to reimburse customers there at least
$8.9 billion. The latest documents show Enron manipulated the market on
473 of 537 days from January 2000 to June 2001, the utility said, the
newswire reported.
NES Hires Former United Airlines
Executive As New CEO
NES Rentals ended months of
speculation last month by naming former United Airlines COO Andrew
Studdert as its new CEO, the Rental Equipment Register. Former CEO
Joseph Guillion, who left the company last fall, had also come to the
rental industry in October 2002 after a career in the airlines
industry.
Before joining United Airlines,
Studdert established Andrew Studdert & Associates, a private
information technology consultancy and served as executive vice
president for First Interstate Bancorp, then the seventh largest bank in
the United States. Studdert replaces interim CEO Duff Meyercord, an
executive with the Carl Marks Consulting Group, which guided NES'
restructuring efforts. The company emerged from chapter 11 bankruptcy in
February.
Pilots Union Balks at Delta's
Demands
To avoid bankruptcy court Delta
has asked pilots for a 30 percent pay cut and work-rule changes that
equal about a 45 percent reduction, or roughly $900 million annually,
the Knight Ridder reported. The Air Line Pilots Association claims
Delta's demands are far more than it needs. The union has offered
concessions that equal about a third of Delta's target. 'There are many
other factors affecting Delta's ability to be profitable, including
rocketing fuel prices' and lower fares, union spokeswoman Karen Miller
said. 'The pilots are just a small part of the overall
equation.'
WH Smith Bidder Plays Down
Snag; Talks Continue
Private equity firm Permira is
still talking to WH Smith about a 940 million pound bid, but a deal
could be months away as the two sides resolve a dispute over the U.K.
retailer's pension fund, Reuters reported. Shares in WH Smith PLC fell
2.6 percent to 340-1/4 pence at 0930 GMT on fears Permira might drop its
takeover plans because of a row over the British newspaper and
stationery retailer's 200 million pounds pension fund shortfall. WH
Smith agreed late April to let Permira look at its books and conduct due
diligence after receiving a preliminary approach worth 940 million
pounds ($1.7 billion). Permira is still analyzing WH Smith's books, the
newswire reported.
Adelphia Defendant
Testifies of Recent Pay From Ex-chief
Michael C. Mulcahey, a former
assistant treasurer for Adelphia Communications who is on trial for
fraud, testified yesterday that John J. Rigas, a co-defendant, had paid
him more than $100,000 over the last year as a consultant, Bloomberg
News reported. An assistant United States attorney, Judd Lawler,
suggested the payments colored Mulcahey's testimony. Mulcahey said the
payments did not affect his credibility. Two of Rigas's sons, Michael
and Timothy, are also on trial. The Rigases and Mulcahey are accused of
hiding $2.3 billion in debt, stealing Adelphia cash and lying about
revenue and operations before the company's bankruptcy in June
2002.
In Bankruptcy, United Airlines Forges a Path
to Better Service
UAL Corp.'s 18-month stay in bankruptcy
court has helped the airline regain something that it lacked for over a
decade: impressive customer service, the Wall
Street Journal reported. Now, that improvement could be crucial for
United as it awaits impending word from a federal panel that will shape
its financial future. In the past 24 months, United has soared to among
the best from near-worst in customer service. In 2002 and 2003, its
arrival punctuality was the best among the major hub-and-spoke airlines.
Though United fell to fourth place in the first quarter, its arrival
performance rebounded to No. 1 in April.
Ranch Capital To Take
Control Of Hawaiian Airlines
An investment group led by Ranch Capital
LLC has purchased a majority stake of bankrupt Hawaiian Airlines' parent
company in a deal that also calls for CEO John W. Adams to resign, the
Associated Press reported. San Diego-based Ranch Capital bought 10
million shares in Hawaiian Holdings
Inc. from AIP LLC, the companies announced late Monday.
AIP, which retains four million shares
of Hawaiian Holdings, received $4.14 per share, reflecting the market
price of the stock when negotiations began. The stock rose nine cents
Monday to close at $5.19 on the American Stock Exchange.
Delta to Suspend Some Song
Flights
Delta Air Lines, struggling to
cut costs and avert filing for bankruptcy protection, plans to suspend
nearly one third of the flights at its low-fare carrier Song in
September, The Wall Street Journal reported. The airline
will drop 41 of Song's 140 daily flights in September, the newspaper
said. Delta officials said they plan to restore the flights in
October, the Journal reported. Atlanta-based Delta has warned
it could seek bankruptcy protection if it cannot cut costs. Last year,
it created the Song unit in an effort to fend off competition from
discount rivals.
Francis of Asbestos
An article in the Review and Outlook section of the
Wall Street Journal discusses the
role of the mediator, Duke University law professor Francis McGovern, in
the litigation that revolves around Owens Corning's bankruptcy and the
ongoing war over who will walk away with the lion's share: the
commercial creditors who hold much of the former asbestos maker's debt,
or the plaintiffs' lawyers representing those claiming asbestos-related
injuries. Read the article at
face='Times New Roman' size='3'>www.wsj.com (subscription
required).