Senate Invokes Cloture to Push for Final Passage
Senate Republican leaders yesterday forced a final vote on the
bankruptcy reform legislation as senators voted 67-31 to end debate,
according to the Associated Press. The Senate also agreed by
unanimous consent to begin six hours of debate on the measure this
morning and two final hours of debate tomorrow. The final vote to
adopt the measure is scheduled for 4 p.m. tomorrow. In mid-1999
and early this year, the House and Senate passed differing versions of
the legislation with veto-proof margins. The current compromise measure
cleared the House by voice vote on Oct. 12. For Democratic
opponents of the bill, yesterday’s vote was a bitter reversal from
early last month, when enough senators were out campaigning that GOP
leaders failed to muster the 60 votes needed to move to a final
vote. In yesterday’s brief floor debate, longtime opponent
Sen. Paul Wellstone (D-Minn.) called the bill “too
harsh.”
The bill has divided Democratic lawmakers in the Senate and House.
Its supporters in both parties, who have pushed such legislation for
three years, have received millions of dollars in campaign money from
banks and credit card companies this election year.
It wasn't immediately clear whether the rare post-election session
would run long enough to give the bill's supporters a chance to override
Clinton's promised veto. If the measure again wins a veto-proof majority
in the Senate, Clinton could choose to wait until Congress adjourns
before effectively vetoing it by not signing it, thereby depriving
lawmakers of the chance to override it in a new vote. By law, he has 10
days from passage of the legislation to wield his veto pen or not sign
it if Congress is out of session.
Nation's Top Divorce Lawyers Call On
Congress to Stop Passage of H.R. 2415
The nation's top divorce and matrimonial law attorneys yesterday urged
Congress not to approve a bankruptcy provision that would take monies
away from child support payments for credit card debts when individuals
declare bankruptcy, according to a newswire report.
“Children should come before credit card companies,” said
Charles C. Shainberg, president of the American Academy of Matrimonial
Layers president.
Currently child support and alimony have priority status, meaning
that all child support and alimony need to be paid before credit card
companies can collect their debts. Under the new bill, H.R. 2415,
the deferral or relief from credit card payments, known as
dischargeability, would be limited, so that children and credit card
payments would have the same priority and payments would be split
between them. “The way for the credit card companies to
improve their receivables is to limit the millions of cards they offer
to poor credit risks, not take money from women and children,”
said Linda Lea Viken, who chairs the Academy's Federalization of Family
Law Committee.
Another problem presented by the bill, Academy attorneys say, is that
past-due child support payments and alimony are not dischargeable, so
the person who has to make credit card payments in addition to alimony
and child support will keep falling farther and farther behind in his or
her total payments, eventually resulting in a chapter 7 bankruptcy
filing, or total insolvency.
Xerox at 18-year Low Amid Bankruptcy Fear
Xerox Corp. shares yesterday fell 20 percent, dropping to the lowest
level in more than 18 years, due to concerns that the world’s
largest copier company may be pushed towards bankruptcy with its latest
cash crunch, according to a newswire report. The shares fell $1.25
to $5, the lowest level since August 1982. The shares have dropped
78 percent since the start of the year, erasing about $12.8 billion from
Xerox's market value. “It's apparent that the market is
factoring in the fact that bankruptcy is in the realm of
possibility,” said Win Murray, an analyst with the Boston-based
Liberty Funds Group, which sold its Xerox shares several months ago.
Xerox has used three-quarters of a $7 billion credit line as of
October to fund operations because it has been unable to sell commercial
paper or short-term IOUs. The company is counting on the sale of
$4 billion in assets and $1 billion in cost cuts over the next year to
ease the cash crunch. Xerox said a ratings cut by Moody's Investors
Service hasn't derailed the plan. “We believe the turnaround
program is on track,” said Christa Carone, a Xerox spokeswoman.
“Liquidity remains sufficient to meet the company's current and
anticipated needs.”
Lernout & Hauspie Receives $20 Million
Interim Financing
The Belgian developer of voice recognition technology, Lernout &
Hauspie (L&H), received bankruptcy court approval on Monday for $20
million of interim debtor-in-possession (DIP) financing from General
Electric Co. financing arm GECC, according to a Reuters report.
The financing will cover L&H's operation costs for the next 15
days.
Judge Judith Wizmur's formalized an oral order on Friday that
stopped all debt collection efforts in Belgium against L&H.
The Belgian court hearing L&H’s request for bankruptcy
protection will make a decision on Friday. L&H lawyers last
week said they were concerned about possible court orders in Belgium
that would have placed the company's Dictaphone shares with a
receiver. L&H and two affiliates, Dictaphone and L&H
Holdings USA — formerly Dragon Systems Inc. — filed for
chapter 11 protection Nov. 29 in the U.S. Bankruptcy Court in Delaware,
listing assets of $2.3 billion and debts of about $500 million.
Judge Wizmur will reconvene the hearing to consider L&H's
remaining requests that she approve orders allowing the company to
continue normal business operations. Judge Wizmur has also
scheduled a hearing for Dec. 20 on whether to grant final approval of
$35 million in DIP financing that includes the $20 million interim
financing approved Monday, the source said.
Decora Industries Files Pre-Negotiated
Chapter 11 Petition
Decora Industries Inc. yesterday announced that it has filed a chapter
11 petition in the U.S. Bankruptcy Court in Delaware, according to a
newswire report. The Fort Edward, N.Y.-based company expects to
emerge from bankruptcy by March 31. Decora reached a lockup
agreement with an unofficial committee of note holders. This
represents about 70 percent of the outstanding principal amount of notes
to exchange the senior secured notes for substantially all of the equity
of a reorganized Decora. This agreement should enable the company
to consummate the exchange through an expedited, pre-negotiated
bankruptcy. Decora is a leading manufacturer and marketer of
self-adhesive consumer surface-covering products including the prominent
brands, Con-Tact® and d-c-fix®.
General Cinema Terminates Lease At Lake Mary
Shopping Center
Equity One Inc. yesterday announced that it had finalized the
termination of the 35,000-square-foot General Cinema lease at the Lake
Mary Shopping Center in Orlando, Fla. in connection with General
Cinema's bankruptcy proceedings, according to a newswire report. As a
result of the termination, Equity One will receive $1.53 million of
termination fees and related payments to be paid by Harcourt General
Inc.
The lease termination will reduce Equity One's annual revenues by
about $770,000 representing about 2.3 percent of Equity One's total
revenues on an annualized basis. Equity One is in preliminary
discussions with various theater operators to secure a suitable tenant
for this space, which is fully equipped as an eight-screen
multiplex. Equity One Inc. is a self-administered, self-managed
real estate investment trust that acquires, renovates, develops and
manages community and neighborhood shopping centers.
CyberHighway, CTCTelecom, Inc. File Motion
to Dismiss USURF Bankruptcy
USURF America Inc., a provider of Fixed-Wireless Internet access
products, including Quick-Cell (TM), yesterday announced that its ISP
subsidiaries, CyberHighway Inc., and CTC Telecom Inc., have filed a
joint motion to dismiss the involuntary bankruptcy filed in the U.S.
Bankruptcy Court, District of Idaho, according to a newswire
report. All other petitioning creditors have also joined in the
motion to dismiss. The parties anticipate that Bankruptcy Judge Jim D.
Pappas will approve the motion and dismiss the case. The joint motion to
dismiss the bankruptcy proceeding is part of a comprehensive settlement
agreement reached between CyberHighway Inc. and CTC Telecom Inc.
Moody's Cuts Loews Cineplex, Warns It May Default
Loews Cineplex Entertainment Corp. yesterday saw its credit ratings cut
to low junk grades by Moody's Investors Service, according to a Reuters
report. In cutting the New York-based Loews' ratings, the credit
rating agency cited what it called the company's “very tight
liquidity position” and the “growing possibility” that
Loews will miss a February interest payment due to bondholders.
Loews has said it is not in compliance with various terms of a credit
agreement, and that its banks have given it until Friday to comply.
Loews is one of several theater operators that took on too much debt
by building too many megaplexes and failing to close enough older
theaters. Loews and its competitors, several of which have filed for
bankruptcy protection this year, also suffered from this summer's weak
box office. Though Moody's said Loews should survive the
industry's current travails, it said there is an increased
“urgency” for the company, which has more than 2,900 screens
and is the largest publicly traded U.S. theater operator, to restructure
or seek bankruptcy protection.
TSR Reportedly Declares Bankruptcy
TSR Wireless, a pager service provider and retailer of wireless
devices, yesterday reportedly declared chapter 7 bankruptcy and halted
its operations, leaving 2.5 million subscribers in limbo and 1,700
people jobless, according to The Record of Hackensack, N.J.
It wasn't immediately clear where the bankruptcy might have been filed.
No TSR filing was recorded yesterday at the U.S. Bankruptcy Court in
Newark, the court closest to TSR's headquarters in Fort Lee, N.J.
While the bankruptcy will likely disrupt paging services for TSR
customers, the wireless network operators who carried TSR's traffic
might offer to honor service contracts in a bid to win those customers
permanently. The privately owned company has more than 2.5 million
pagers in service and more than 275 stores nationwide. The company
bills itself as the nation's sixth largest pager carrier.
Babygear.com Closes Down
E-tail store Babygear.com posted a
note on its web site yesterday notifying customers that it has filed for
chapter 7 bankruptcy protection, according to a newswire report.
“[Babygear.com is] unable to take orders, ship orders or issue
credits,” the posting said. “Any further matters will be
handled by the court.” Babygear was backed by media site
iVillage, which sold its iBaby e-commerce to Babygear in July and took a
stake in the company. Dozens of customers say the company owed
them products or refunds. Some customers of Babygear said that they had
tried for weeks to obtain refunds after merchandise they paid for never
arrived.
Kaiser Group International Announces
Confirmation of Reorganization Plan
Kaiser Group International Inc. yesterday announced that the
U.S. Bankruptcy Court for the District of Delaware overruled all
remaining objections to the company’s amended reorganization plan,
according to a newswire report. The court also signed an order
confirming the reorganization plan. The Fairfax, Va.-based company
expects the plan to become effective in about 10 days. Kaiser also
plans to file next week with the Securities and Exchange Commission a
current report summarizing the terms of the plan and how it will be
implemented.
Dorsey Files For Bankruptcy
Dorsey Trailers Inc. yesterday announced that it has filed for chapter
11 bankruptcy in the Middle District of Alabama, according to a newswire
report. John L. Pugh, Dorsey Chief Executive Officer, said,
“We have been unsuccessful in negotiating a line of credit with
our lender in order to continue operations.” Although the
company is based in Atlanta, the filing was made in Alabama because the
majority of the Dorsey's assets and employees are in Alabama.
U.S. Northwest Power Prices Soar, Bankruptcies Feared
Prices for electricity in the U.S. Northwest skyrocketed
yesterday, sparking renewed talk that the region's power markets are
broken and concern that some marketers may be on the brink of
bankruptcy, according to a Reuters report. “Marketers who
are short may not be in business for much longer,” one Northwest
power trader said. “We are worried about the credit of the
people we are trading with. It is not a good situation.”
Prices for electricity at the key Northwest hub of Mid-Columbia
soared as high as $1,200.00 per megawatt hour (MWh) yesterday, up from
$500.00-$525.00 per MWh on Monday and an already steep $290.00-$305.00
on Friday. The rise in prices came amid concern about whether it
will be possible to generate enough power in the U.S. West to meet
demand, with loads expected to rise with forecasts of extreme cold to
arrive either late this week or early next week.
Unidigital Gets Third Interim OK To Use Cash Collateral
For the third time, Unidigital Inc. has received interim approval from
the bankruptcy court to use the cash collateral of its pre-petition
secured lenders, according to counsel for the media services company.
While objections to the company's cash collateral use motion were filed
by several parties including the creditors' committee and the U.S.
Trustee acting in the case, Neil Glassman of The Bayard Firm said that
they were all resolved. The Nov. 16 hearing before Judge Mary F.
Walrath in the U.S. Bankruptcy Court in Wilmington, Del., had been
billed as a final hearing. Judge Walrath, however, entered a third
interim order authorizing the company's cash collateral use through Dec.
15, Glassman told DBR.
Courtesy of
href='http://www.fedfil.com/bankruptcy/developments.htm'>The Daily
Bankruptcy Review Copyright © December 5,
2000.
Thanks
for visiting Today's Bankruptcy Headlines. New articles are posted here
each business day.
|
