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January 27, 2005
Class Action Legislation Markup Scheduled for Next Week
Senate Judiciary Chairman Arlen Specter (R–Pa.) urged committee
members yesterday to refrain from offering contentious amendments during
next week’s markup of a bipartisan bill overhauling the rules for
class action lawsuits, CongressDaily reported. The panel
plans to take up the bill next Thursday, and Specter said he hopes to
finish the markup that day. He asked members to hold all controversial
amendments until the bill moves to the floor. Meanwhile, a coalition
opposing the bill has asked the committee to hold a public hearing
before voting on it. “While the question of revising the class
action system has been on the docket for the last few years, it has not
had a public hearing since 2002,” the Alliance for Justice, Public
Citizen, and several other coalition members said on Tuesday. The bill
would move many class action lawsuits from state courts to federal
courts, where more stringent rules would govern the cases.
House to Consider Bankruptcy in the First Half of This Year
The House will act on a series of bills from the 108th
Congress early this year, with hopes of clearing the legislative table
in preparation for the larger debate over Social Security overhaul,
CongressDaily reported. Aides listed bankruptcy legislation
as one of the bills to move during the first half of this year. After
class action, Senate aides expect tsunami relief legislation to be
brought to the floor, followed by bankruptcy legislation, the newswire
reported.
House GOP Releases New Assignments
House Speaker Dennis Hastert (R–Ill.) yesterday released a
nearly complete list of Republican committee assignments for the
109th Congress, after approval by the House Republican
Conference. The members on the judiciary panel include Reps. Dan Lungren
(R–Calif.), Bob Inglis (R–S.C.), Darrell Issa
(R–Calif.), Trent Franks (R–Ariz.) and Louis (Louie) Gohmert
(R–Texas).
Halliburton Completes $5.33 Billion Restructuring
Halliburton and its subsidiaries completed one of the largest
mass-tort restructurings in history on Jan. 20, 2005, with the
creation and funding of two settlement trusts that will be responsible
for the companies’ asbestos and silica on a going-forward basis,
it was announced in a press release.
Under the plan that became effective on Jan. 20, Halliburton and
its subsidiaries have funded the two trusts with $2.775 billion in cash
for current settled claimants and contributed stock, notes and cash with
a value of over $2.5 billion to the trusts for use in paying future and
unsettled claimants. Under the plan, Halliburton and its subsidiaries
are protected from future asbestos and silica claims by a permanent
channeling injunction issued by the U.S. Bankruptcy Court for
the Western District of Pennsylvania.
US Airways Gets Reprieve, But Faces Obstacles
US Airways has achieved its target of cutting $1 billion in labor
costs, but it still faces obstacles to exit bankruptcy by mid-year,
Reuters reported. US Airways says its challenges are “no
different” than those faced by rivals. But while all carriers face
similar problems, industry experts agree the consequences of US
Airways’ falling short could be irreversible, the newswire
reported.
ATA Cutting Back in Indiana; US Airways to Close 3 Offices
Two of the nation’s troubled airlines announced changes
yesterday for cities where they have long played a major role, the
New York Times reported. ATA Airlines said it was sharply
reducing the number of cities it served from Indianapolis, its home
base. US Airways said it would close three customer service offices,
including two outside Pittsburgh, where it is dismantling a hub. The
airline said it would consolidate the operations into a center in
Winston-Salem, N.C.
Vital Signs Return to HealthSouth
Unlike Enron and WorldCom, HealthSouth has avoided bankruptcy by
avoiding default on its bonds, placating bankers and restoring morale
among employees, the New York Times reported. Read the full
href='http://www.nytimes.com/2005/01/27/business/27health.html'>www.nytimes.com/2005/01/27/business/27health.html.
Grocery Chain Files for Bankruptcy
Foods Ltd. filed a chapter 11 bankruptcy petition on Monday in
the Western District Court of Arkansas in Fayetteville, the
Arkansas
Democrat-Gazette reported. Attorney Jill R. Jacoway of
Fayetteville filed the petition for Market Foods Ltd. LLC, listing
Arkansas Valley State Bank of Broken Arrow Okla.; Community Bank of
Rogers; IFC Credit Corp. of Morton Grove, Ill.; KingsPointe Village LLC
of Tulsa; and Western Finance and Lease of Devils Lake, N.D., as
creditors. A downturn in the Tulsa economy and a 50 percent cut in
weekly sales are to blame for the company’s failure to meet its
rent on the KingsPointe Village location in December, according to a
statement released by Market Foods last week, the newspaper
reported.
Chile’s Retirees Find Shortfall in Private Plan
Chileans are finding that their pension system, which President Bush
has cited as a model for his overhaul of Social Security, is falling
short of expectations, the New York Times reported. Read
the full article at
href='http://www.nytimes.com/2005/01/27/business/worldbusiness/27pension.html'>www.nytimes.com/2005/01/27/business/worldbusiness/27pension.html.
WorldCom Complexity an Issue at Trial
Prosecutors in the trial of Bernard J. Ebbers, the former CEO of
WorldCom, called their first witnesses yesterday in federal court in
Manhattan and peppered them with questions about accounting and the
telecommunications industry, the New York Times reported.
The questioning and cross-examination of Douglas Webster, an executive
at MCI, and Adam Quinton, an analyst at Merrill Lynch, offered a glimpse
of the tactics the prosecution and defense will probably use.
Prosecutors tried to simplify WorldCom’s business while the
defense highlighted its complexity, the newspaper reported.
Tort Reform Roadmap
President Bush is making civil justice reform an early priority of
his second term, the Wall Street Journal reported. The
optimal fix would involve movement toward a British-style system. That
would curb incentives to bring the lawsuits that are bankrupting
companies and individuals, driving up insurance premiums and increasing
health-care costs. Read the editorial at
href='http://www.wsj.com/'>www.wsj.com (subscription required).