May 6, 2004
Groups Lobby Senate Not To Add Amendments To
Class Action Bill
Several business and financial services industry groups are urging
lawmakers not to attach minimum wage language or any other amendments to
a modified class action bill when it moves to the Senate floor next
month, CongressDaily reported. 'The
best chances for this bill, we think, are for it to go clean,' Scott
Talbott, the Financial Services Roundtable's vice president for tax
policy and counsel, said yesterday, the newswire
reported.
Senate Majority Leader Bill Frist (R-Tenn.) said on
Tuesday that he would allow Health, Education, Labor and Pensions
ranking member Edward Kennedy (D-Mass.) to offer an amendment to
increase the minimum wage during the class action
debate. Meanwhile, a coalition of more than 80 consumer, civil
rights and environmental groups is urging senators to vote against the
underlying bill, arguing that it would make it more difficult for
potential plaintiffs to seek redress through the class action system
when corporations violate state laws, the newswire reported.
Judge Approves Air Canada Deal with Deutsche Bank
An Ontario judge on Wednesday
approved Air Canada's agreement with Deutsche Bank AG to increase a
rights offering to creditors, easing the insolvent airline's search for
a new equity partner, Reuters reported. The judge had signaled he would
approve the deal on Tuesday when he gave the carrier permission to
search for a new equity partner, but waited a day before issuing a
formal ruling on the C$850 million ($620 million) restructuring plan.
Ontario Superior Court Judge James Farley acknowledged in his written
ruling that the deal was contingent upon several conditions, but he
indicated all parties in the case had little choice but to make it work,
the newswire reported.
Lea Fastow to Plead Guilty
in Enron Case
The wife of former Enron Corp. finance chief Andrew
Fastow is scheduled to plead guilty to a misdemeanor tax charge today,
Reuters reported. Lea Fastow, a former Enron assistant treasurer, is
expected to enter her plea before U.S. District Judge David Hittner at
10 a.m. CDT, according to court documents. It was unclear whether
Hittner would sentence her to prison immediately. Her guilty plea to the
misdemeanor charge of delivering a false tax return will avert a June 2
trial that neither the prosecution nor defense wanted. She faces a
prison sentence of no more than one year, the newswire
reported.
FERC Warns of 'Troublesome Conditions' in
California
The head of the Federal Energy
Regulatory Commission (FERC) on Wednesday said he was concerned about
'very troublesome conditions' in California's electricity market and
warned of a possible repeat of the state's 2000-01 energy shortage,
Reuters reported. 'There are some very troublesome conditions out
there,' FERC Chairman Pat Wood told reporters. 'We're clearly monitoring
that.' He pointed to low hydropower supplies on the West Coast and
above-normal temperatures as factors affecting the state's wholesale
electricity supply. 'It looks like the days of yore,' Wood said,
referring to California's power shortage of 2000-01 that spurred
blackouts and the bankruptcy of the state's biggest utility, the
newswire reported.
Reliant Energy Trims Loss,
Keeps Forecast
Power company Reliant Energy yesterday posted a
narrower quarterly loss and said it saw early signs that the depressed
electricity wholesale market is improving, Reuters reported. Excluding
discontinued operations, the Houston company reported a loss of 15 cents
per share, compared with a loss of 18 cents a share a year earlier.
Reliant, formerly Reliant Resources Inc., stood by its full-year
adjusted earnings per share forecast of 25 cents. The company reported
seeing indications that the wholesale market is rebounding, even though
market conditions were weaker in the first quarter than in the
year-earlier period. The company avoided bankruptcy last year by
securing a $5.9 billion refinancing package, and has indicated it could
sell assets to trim its debt, the newswire reported.
Exide Technologies Emerges from Chapter
11
Exide Technologies said on
Wednesday that it has emerged from chapter 11 bankruptcy protection and
expects its new common stock to begin trading on May 6 on the Nasdaq
system under the symbol 'XIDE,' Reuters reported. Under its
reorganization plan approved by a Delaware bankruptcy court on April 21,
Lawrenceville, N.J.-based Exide reduced its debt by about $1.3 billion,
or more than 70 percent, to about $540 million. Its annual interest
payments were reduced by about $70 million, the company said.
McLeodUSA Loss Widens, Moves to Conserve
Cash
Telephone company McLeodUSA Inc. on Wednesday posted a
wider first-quarter loss and revealed plans to sell assets and conserve
cash to help stem the effects of customer losses and declining revenues,
Reuters reported. The company said it would try to sell fiber assets and
has lowered its capital spending plans to save money. McLeodUSA said its
quarterly loss was $92.2 million, or 32 cents a share, compared with a
loss of $85.3 million, or 31 cents a share, a year ago. Revenue fell to
$193.6 million from $225.9 million. McLeodUSA said it lost more
customers than it signed up during the quarter. The company hopes to
make $50 million this year from selling fiber telephone lines it put in
the ground during the telecommunications spending boom of the late
1990s. McLeodUSA, which emerged from bankruptcy in 2002, abandoned a
plan to sell these assets around that time as it was able to sell other
non-core assets, the newswire reported.
S&P Cuts US Airways Ratings, Outlook Is
Negative
Standard & Poor's Ratings Services said today it
lowered its ratings on US Airways Group Inc. and its US Airways Inc.
subsidiary, including lowering the corporate credit ratings to 'CCC+'
from 'B-', and removed all ratings from CreditWatch, Reuters reported.
'The downgrade was based on the difficult challenge faced by US Airways
as it seeks to rapidly lower its operating expenses in response to
mounting pressure from low-cost competitors,' said Standard & Poor's
credit analyst Philip Baggaley. The company is seeking further major
cost-saving concessions from its labor groups, who already took pay cuts
in 2002 and 2003, and failure to conclude those negotiations
successfully over the next several quarters could force US Airways to
undertake significant asset sales and/or file for bankruptcy a second
time. During this process there is also some risk that US Airways will,
as part of its overall restructuring, seek to renegotiate public debt
obligations, the newswire reported.
Oregon Files Motion In Enron Bankruptcy
Oregon Treasurer Randall Edwards and Attorney General
Hardy Myers filed a motion on Monday in the Enron Corp. bankruptcy
seeking to elevate Oregon's claims above the claims of creditors who may
have participated with Enron's former management in the decisions that
caused Enron to go bankrupt, the Portland
Business Journal reported. To date, creditors have filed over 24,000
claims in the bankruptcy case, representing over $900 billion. The state
of Oregon has submitted claims totaling nearly $420 million in direct
and indirect losses to the Oregon Public Employee Retirement Fund and
for penalties arising from violations of Oregon law in the manipulation
of the West Coast energy market, the Business Journal reported.
class='t1'>Broadband Wireless International Closes Bankruptcy
Broadband Wireless International Corporation announced
yesterday in a press release that the corporation has emerged completely
from its bankruptcy and is now free to consider proposals from potential
financiers as well as substantial business opportunities. The
corporation has been under chapter 11 in the U.S Bankruptcy Court for
the Western District of Oklahoma since December of 2001.The corporation
also cancelled its transaction with Enhancement Holdings LLC, Stanley
Holdings Business Trust and its officers and directors and has hired
Charles McCrea of McCrea, Martin, Allison to dissolve the relationship
and seek restitution for the corporation. The Board will inform the
shareholders as to what was actually achieved while under contract with
Enhancement Holdings LLC and Stanley Holdings Business Trust, according
to the press release.
Solutia Announces Changes in
Leadership
Solutia Inc. announced yesterday in a press release
several changes in its senior management, effective immediately. Jeffry
N. Quinn, Solutia's current senior VP, general counsel and chief
restructuring officer, has been named president and CEO. Quinn has also
been elected to the company's Board of Directors. Luc De Temmerman, the
current VP and general manager of Solutia's Performance Products
division, has been named senior VP and COO. De Temmerman will remain the
head of the Performance Products division and assume broader
enterprise-wide responsibilities. James M. Sullivan, the company's
current VP and corporate controller, has been named senior VP and
CFO.
U.S. Looking at Citigroup's
Accounting in Argentina
Citigroup said yesterday that the Securities and
Exchange Commission (SEC) was investigating possible accounting
irregularities related to its banking business in Argentina from 2001 to
2003, the New York Times reported.
Citigroup disclosed the investigation in a quarterly earnings report
filed with the SEC yesterday and said the agency planned to begin
hearing nonpublic testimony on the matter this month, the newspaper
reported.
Trump Hotels Dig Deep for Cash
to Shore Up a Teetering House
Trump is essentially placing a high-stakes bet that
his casinos will generate enough cash over the next few weeks to make a
$73.1 million debt payment that is due at the end of the month, the
New York Times reported. Trump's
company reported a first-quarter loss of nearly $49 million, about twice
its loss a year earlier. He says he is willing to cede control of the
company and his job as CEO to secure a $400 million cash infusion from
an investment bank, an arrangement that would be subject to the approval
of the company's bondholders, the newspaper reported.
Services Growth Hits Record in
April
A key reading of the U.S. services sector showed a
surprising rise in April, reaching a new record and offering more
evidence of economic revitalization, an industry survey showed
yesterday, Reuters reported. The Institute for Supply Management's (ISM)
non-manufacturing index rose to 68.4 in April from 65.8 in March, above
Wall Street estimates of a dip to 64.0. The survey showed expansion in
new orders and employment and almost all areas of the services sector,
including everything from restaurants and hotels to banks and airlines,
which constitutes about 80 percent of the U.S. economy. The report
complemented a strong ISM manufacturing survey released earlier this
week, with the two sets of data together pointing to an economy that is
growing, the newswire reported.