style='color:black'>House Expected to Propose a Compromise
on H.R. 833
House
lawmakers are expected to propose
a compromise on the bankruptcy legislation
(H.R. 833), which would open the doors
to more negotiations, the CQ
Daily Monitor reported. Senate
Majority Leader Trent Lott (R-Miss.)
said yesterday that he hopes a conference
report on the bill could be completed
within two weeks, even though the
day before he had threatened to write
off the bill if Paul Wellstone (D-Minn.),
the bill's chief opponent, insisted
on forcing procedural votes. "If
we have to have procedural votes,
we will certainly have to do that,
but I believe we can prevail over
Wellstone," Lott said. "That's
assuming that they get a bill that's
got broad support." Minority
Leader Tom Daschle (D-S.D.) dismissed
Lott's warning of the legislation's
failure, saying, "Nobody should
say the objection of one Democratic
colleague is the only reason why we're
not getting this done." Republicans
have been counting on Daschle to move
the legislation forward, since one
the measure's beneficiaries, Citicorp
Inc., is based in Daschle's home state
of South Dakota. "Whatever it
takes to get past Wellstone, Daschle
will figure it out for us," said
Charles E. Grassley (R-Iowa). But
Wellstone vowed to stand firm, saying,
"At this moment, I won't back
down."
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style='color:black'>Florida Passes Tobacco Bill Package
The
Florida state Senate has passed a
package of bills meant to protect
the money the state gets each year
from embattled cigarette makers, the
Associated Press reported yesterday.
The legislation, which was sent Tuesday
to the House, is aimed at addressing
the issue that an impending punitive
damage award in a class-action suit
in Miami could bankrupt the tobacco
companies. Due to its 1997 settlement
of a lawsuit meant to reimburse the
state for treating sick smokers, Florida
expects to receive more than $13 billion
from the industry over the next 25
years. However, bankruptcy filings
by the tobacco companies could jeopardize
the industry's settlement payments
to Florida, which is counting on the
money to pay for programs for children
and the elderly. One of the bills
passed would cap the bond amount of
$100 million, or 10 percent of their
net worth, that the companies would
have to put up to appeal the damages
in the Miami class action suit. The
Senate passed the measure 37-2, sending
it to the House, and also passed a
measure to levy a new wholesale tax
on all cigarette companies except
those paying Florida as part of the
settlement, the idea being to keep
companies from going out of business
only to be replaced by new companies
selling cigarettes that don't have
to pay into the settlement. "We
have a long way to go in negotiating
between the two chambers," said
Rep. Carlos Lacasa, the Miami Republican
behind the bill. The two-month legislative
session is scheduled to end tomorrow.
style='color:black'>Datapoint to Sell Assets to CallCentric
Datapoint
Corp., San Antonio, has agreed to
sell its global operations and its
name to Europe-based CallCentric Ltd.
for $49.5 million in cash as part
of its chapter 11 restructuring, filed
yesterday in the U.S. Bankruptcy Court
in the District of Delaware, according
to Reuters. The communications networking
systems provider listed assets of
$1.6 million and debts of $109.2 million,
including $108.3 million in fixed
liquidated unsecured debt held by
more than 1,000 creditors; CallCentric
will also assume $10 million in debt.
Datapoint owns at least 20 percent
of the stock of 31 corporations, named
either Datapoint, Inforex or Computer
Terminal, and 80 percent of the stock
of CoreByte, a Web-based e-mail software
developer, but petitions were not
filed for these affiliates. Datapoint
said yesterday that it had a non-binding
agreement with bondholders to use
the cash proceeds of the sale to make
equity distributions to bondholders
and holders of common and preferred
stock and to pay creditors.
style='color:black'>CWT Specialty Stores Taking Bids for Assets
CWT
Specialty Stores Inc. announced on
Tuesday that is was soliciting bids
through May 12 for certain trademarks
and servicemarks, according to a newswire
report. Hon.
style='mso-bidi-font-weight:normal'>Jeffry H. Gallet, U.S. Bankruptcy Court
for the Southern District of New York,
is overseeing the bidding of the ladies
apparel retail chain, which includes
such trademarks as Cherry & Webb
and Cherry's Café. Those interested
in purchasing any of these marks or
who require further information should
contact Jack Hazan at (212) 730-9700,
ext. 803, or Irwin Dayan at ext. 871,
or e-mail the debtor at hexagongroup@aol.com.
Lawrence Gottlieb of the New York
firm of Kronish, Lieb, Weiner &
Hellman LLP is an attorney for the
unsecured creditors' committee.
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style='color:black'>SSA Enters Into Asset Purchase Agreement
System
Software Associates Inc., a Chicago
software and services provider, and
Gores Technology Group, an international
technology and management company,
announced yesterday that they have
entered into a definitive asset purchase
agreement providing for the previously
announced sale by SSA of substantially
all of its assets to a newly formed
subsidiary of Gores for a total of
roughly $52 million in cash and 25
percent of the common stock, according
to a newswire report. SSA said that
it has reached agreement with its
senior secured lenders on the terms
of a debtor-in-possession loan facility
and has filed a voluntary chapter
11 petition in the District of Delaware.
The proposed debtor-in-possession
facility would provide SSA with up
to $5 million of new funding for operations
through May 26. Gores transaction
completion is scheduled for mid-June.
style='color:black'>ICO Global Gets Court Approval for Reorganization
ICO
Global Communications, New York, announced
yesterday that it received reorganization
approval from the bankruptcy court,
according to a Dow Jones newswire
report. The communications company
also said the reorganization plans
were approved by more than 95 percent
of its creditors and shareholders,
and that ICO is expected to exit from
chapter 11 in mid-May. ICO had filed
for chapter 11 several weeks after
Hughes Electronics Corp. and other
investors failed to raise $600 million.
style='color:black'>Milford Man Sentenced for Concealing Property From Creditors
A
Milford, Mass., man was sentenced
yesterday in federal court for concealing
his ownership of real property from
his bankruptcy creditors, according
to a newswire report. U.S. Attorney
Donald K. Stern announced that Alan
Rosen, 57, was sentenced yesterday
by U.S. District Court Judge Nathaniel
M. Gorton to six months of home confinement,
followed by one year of probation
and a $5,000 fine. A prosecutor stated
that Rosen, who had pled guilty to
one count of bankruptcy fraud in January,
had purchased property in Milford
in 1991 with his then-girlfriend;
in 1992, he deeded the property to
her, and in 1993, she deeded the property
back to him, but he held the deed
and did not record it at the registry
of deeds until 1998, two years after
his bankruptcy proceeding was over.
From 1991-98, Rosen made all the payments
relating to the property and claimed
all the relevant tax deductions on
his income tax returns. The prosecutor
also told the court that Rosen filed
a bankruptcy petition in 1996, but
failed to disclose his ownership of
the Milford property or the existence
of the 1993 deed, and that his trustee
only learned of the property in 1998
when Rosen attempted to sell it for
a profit of between $60,000-$70,000.
Canadian
Fiddler MacIsaac Will Sell Assets
Yesterday,
creditors said that Ashley MacIsaac,
the Cape Breton, N.S. fiddler who
recently joked that was going bankrupt,
then in fact filed shortly after,
will be able to keep his prized fiddles,
but they will sell other assets to
pay off his sizable debt, according
to a Canadian newswire report. The
25-year-old musician filed weeks ago
listing assets of $119,000 and liabilities
of $305,633.68. MacIsaac claims he
received poor financial advice that
ultimately left his corporation, Ancient
Music Ltd., in dire shape. "I
assumed I had good faith with the
people I was working with," he
said. "I never thought things
were going in a direction that would
lead me to bankruptcy." The musician
could lose everything but his instruments,
which can't be seized because of a
certain exemption. His financial problems
began when he screamed obscenities
during a Halifax, N.S. rave, outraging
many in the audience and prompting
the cancellation of concerts across
the country. Subsequently, MacIsaac
phoned a Halifax newspaper to say
he was going bankrupt, only to later
claim he made the whole thing up.
However, some in the music industry
have said that he could realistically
pull through. "That money's peanuts,"
said Larry LeBlanc, Canadian editor
for Billboard
magazine. "He could put out an
album and go out and fill those dates.
Three months of hard work would pay
that off. It's just another chapter,
like watching a mini-serial."
style='color:black'>LaRoche Industries Files Chapter 11
LaRoche
Industries, a family-owned chemicals
manufacturer in Atlanta, filed for
chapter 11 yesterday in the District
of Delaware, listing assets of $404.7
million and debts of $448.3 million,
according to Reuters. The company
said in court papers that it had an
agreement for $25 million in debtor-in-possession
financing from a syndicate of banks
for which Chase Manhattan Bank is
the agent. In March, the company said
it had begin discussions with its
bank lenders and bondholders about
restructuring to reduce debt and had
hoped to avoid bankruptcy with the
support of its lenders as well as
price increases in January. A trial
is scheduled for May 15 on allegations
by Elf Atochem's North American unit
that LaRoche infringed Elf's patent
for separating contaminants produced
in the manufacture of the chlorofluorocarbon
HCFC-14b.
