March 9, 2004
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Pension Conference to Open Under Looming Veto
Threat
Conferees meeting for the first time Tuesday to negotiate
differences
between House and Senate versions of pension legislation may
face a
veto threat as they determine how much relief from pension
payments
they should grant struggling companies, CongressDaily
reported.
Senate conferees hope to preserve Senate-passed provisions
that would
provide pension relief to "multi-employers,"
although House
Republican conferees and the White House have objected to that
language.
While it may be a tough sell in the House, Senate supporters
are hoping
to preserve the provision, a Senate Democratic aide said.
During a meeting
of Senate conferees last week, Senate Majority Whip Mitch
McConnell
(R-Ky.) apparently expressed support for relief for
multi-employers,
the newswire reported. Also at issue is Senate-passed relief
from accelerated
payments that companies with underfunded pension payments must
make.
Senate supporters also say that with the approaching April 15
deadline
for companies to make their first pension payments of the
year, negotiators
will have to reach consensus quickly. Although White House
officials
have said they would recommend a veto if the final bill
provides companies
too much relief, "they would be hard-pressed to veto it
if it was
something a bit more than the clean bill they're looking
for,"
one Senate aide said, reported the newswire.
Ex-Adelphia Director Testifies in Fraud
Former Adelphia Communications Corp. Director Dennis Coyle
first learned
that members of the Rigas family had borrowed more than $2
billion from
the company during a board meeting in February 2002, according
to his
testimony yesterday at the fraud trial of John Rigas and two
of his
sons, the Associated Press reported. Former vice president of
finance
James Brown, who has pleaded guilty in the case, told the
directors
that the Rigases had borrowed roughly $2.28 billion under the
agreement,
Coyle recalled. In response to a question by prosecutors,
Coyle said
the debt was "way too large" for the Rigas-owned
entities
to support, based on their earnings. A month later, Adelphia
executives
disclosed the amount borrowed when the company's year-end
earnings were
released, triggering a lending crisis that drove the company
to file
for bankruptcy protection in the second quarter, AP
reported.
Kmart Names New Chief Marketing Officer
Kmart Holding Corp. on Monday announced the appointment of
Paul Guyardo
as senior vice president and chief marketing officer, the
Associated
Press reported. Guyardo, previously executive vice president
for television
and marketing at the Home Shopping Network, will report
directly to
CEO Julian Day and will be responsible for marketing,
advertising, promotions
and external communications, the company said. Guyardo is to
work closely
with Chief Creative Officer Lisa Schultz and Chief Apparel
Officer John
Goodman.
The announcement came three days after Martha Stewart was
convicted
of obstruction of justice and lying to the government about a
stock
transaction. Kmart, which has exclusive rights to the Martha
Stewart
Everyday brand, has relied on the celebrity homemaker's name
as one
of its key assets since emerging from bankruptcy last year, AP
reported.
U.S. Fund To Buy Slater Unit For $17 Million, Assume
Medical, Pension
Obligations
Insolvent Slater Steel is selling its Hamilton steel bar unit
to a U.S.
investment fund for $16.95 million and handing off about $24
million
in pension and medical benefit obligations as more than 220
jobs are
saved, the Associated Press reported. The sale price is 30
percent higher
than what Delaware Street Capital (DSC) had offered for
Hamilton Specialty
Bar last week.
DSC and the United Steelworkers union, which represents most
of Slater's
workers, have already reached a labor agreement that would see
224 of
the Hamilton unit's 350 unionized employees remain under new
ownership.
DSC had been anxious to complete a purchase quickly because
the long
months of bankruptcy-court protection have seen Slater's
customer base
erode by 40 percent, raising fears about the firm's ability to
operate
profitably, AP reported.
Shares of MCI Brazilian Division Soar Amid Speculation
Telmex Will
Bid for Carrier
Shares of MCI's Brazilian long-distance provider were up 4
percent Monday
on speculation that Mexican telecommunications giant Telmex
was submitting
a bid for the division, the Associated Press reported. MCI,
formerly
known as WorldCom, put the division, Embratel Participacoes
SA, on the
block last November as part of a reorganization plan approved
by a U.S.
Bankruptcy Court. Embratel and Telmex declined comment on
whether Telmex
had submitted a bid.
Arturo Elias, Telmex's director of strategic alliances and
corporate
communications, said last month that the Mexican company was
studying
a possible bid for Embratel and weighing other options if it
doesn't
get Brazil's largest long-distance provider. A second bidder
for Embratel
is a consortium of Brazil's three biggest fixed-line carriers:
Telemar,
a Brazil unit of Spain's Telefonica and Brasil Telecom
Participacoes.
A third identified bidder is Embratel's pension fund, Telos,
AP reported.
WorldCom filed for bankruptcy protection in July 2002,
following one
of the biggest cases of corporate fraud in American history.
Waterman Industries Files Chapter 11
Waterman Industries, a 92-year-old irrigation systems manufacturer,
announced Thursday the company has filed for chapter 11 bankruptcy
protection, Tulare Advance-Register reported. The announcement comes
nearly a week after Waterman's president, David Appling, said he hoped
the company could resume manufacturing soon. Bankruptcy papers for
Waterman Industries Inc. and Waterman Industries Sales Inc. were filed
on Tuesday. Last week, Appling said the company's problems stemmed from
a decision in 2002 to close Waterman's Exeter foundry.
Former Merrill Lynch Executives Want Enron Examiner's
Documents
Four former Merrill Lynch & Co. executives charged with conspiring to
help Enron Corp. inflate earnings say the bankruptcy examiner who
investigated Enron's collapse should share documents accrued during his
19-month, nearly $100 million probe, according to an Associated Press
article.
The examiner, Atlanta attorney Neal Batson, says in court filings
that he wants U.S. Bankruptcy Judge Arthur Gonzalez to allow him to hand
over e-mails and other documents to Enron or so-called third parties,
such as Merrill Lynch or other banks and brokerages, whose employees
granted interviews during the investigation. He also wants to destroy
whatever is left and be free of involvement in any Enron-related cases.
Last month Judge Gonzalez barred creditors and others from seeking
documents from Batson. But Judge Gonzalez's order said such information
must be turned over to the defense in any criminal case if a judge finds
it could help a defendant.
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L.L. Bean No Longer Interested In Buying Spiegel's Eddie Bauer
Chain
After sniffing around Spiegel Inc.'s Eddie Bauer brand for nearly a
year, L.L. Bean has decided it doesn't want to buy the national clothing
chain, according to an Associated Press article. 'We've decided that an
acquisition of this size, and this one in particular, is not in L.L.
Bean's best interests,' Bean's President Chris McCormick said Friday in
a memo to employees. Freeport, Maine-based L.L. Bean had been eyeing
Bauer since last spring, when Bauer's parent company Spiegel entered
bankruptcy protection and started to consider selling off the Eddie
Bauer brand, estimated to be worth as much as $200 million.
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Company Sues Supplier in Unusual Asbestos Case
Two big-city attorneys are scheduled to face off later this month in
a courtroom in Angleton, Texas, to begin a trial in an asbestos-related
suit in which the plaintiff wants up to $6 billion in damages, the Texan
Lawyer reported. California-based Kelly-Moore Paint Co. Inc. (KM) is
seeking $1.2 billion in actual damages and treble punitive damages from
Union Carbide Corp. and UCC's successor, Dow Chemical Co., for allegedly
not telling KM about the risks involved in using asbestos-containing
products. KM contends that UCC and Dow are liable to KM for the loss in
business value it suffered as a result of past and anticipated future
asbestos litigation. Read the full article.
Three Airlines Join United Express Unit
United Airlines said yesterday that three small regional carriers -
Chautauqua Airlines, Republic Airlines and Shuttle America - have joined
its United Express unit, the New York Times reported. The announcement
was seen as further evidence that regional carriers are evolving sharply
away from being independent airlines and toward mostly providing
capacity under contract to larger airlines.
Doug Hacker, United's executive vice president for strategy, said
that the agreements would enhance United Express's ability to provide
competitive low-fare service to smaller markets with connections from
hubs like Washington Dulles and Chicago O'Hare. Airline consultant
Michael Boyd said yesterday that United's agreement with the three
carriers was also a move to replace capacity that would be lost if
Atlantic Coast Airlines succeeds in withdrawing from a partnership in
which it provides regional service for United Express, the Times
reported.
Firm That Cloned Sheep Dolly Close To Bankruptcy
Therapeutics PLC, the British biotechnology company that created
Dolly the cloned sheep, is on the verge of declaring itself bankrupt
after a deal to take the company private fell through, the Associated
Press reported. PPL, which has been struggling financially since losing
support last year for major projects, had planned to delist from the
London Stock Exchange and give ownership to its executive directors in a
bid to stay afloat. But the company said on Monday that a key
shareholder had declined to support the plan.
'Therefore, the independent committee has decided not to proceed with
the proposal,' the company said in a statement, the newswire reported.
'The independent committee is not in discussions with any other party
concerning the sale of the company and it is therefore almost certain
that the group will be put into a members' voluntary liquidation.'
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