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Bill to Curb Class-Action Lawsuits Introduced in Senate
As anticipated, Sens. Charles Grassley (R-Iowa) and Herb Kohl (D-Wis.),
along with Judiciary Chairman Orrin Hatch (R-Utah) yesterday unveiled
legislation to stop 'unfair and abusive class action settlements that
ignore the best interests of injured plaintiffs,' CongressDaily
reported. The cornerstone of the bill is a provision making class
actions removable from state to federal court by a defendant if the
total damages exceed $2 million and parties include citizens from
multiple states. Currently, class lawyers can avoid removal if
individual claims are for less than $75,000, or if just one class member
is from the same state as a defendant. The Senate measure also proposes
to require that all class notices and notice of proposed settlements be
written in easily understood terms and include the amount and source of
attorneys' fees, according to CongressDaily. It also would
require that courts scrutinize class action attorneys' fees in
settlements where the plaintiffs get non-cash relief to ensure that the
settlements are fair to plaintiffs, reported the newswire.
Whirlpool Swings to a Loss On Restructuring Charges
Whirlpool Corp. swung to a fourth-quarter loss as it recorded
restructuring charges and a hefty write-off of aircraft-lease assets
resulting from UAL Corp.'s bankruptcy filing, Dow Jones reported. The
maker of home appliances on Wednesday reported a net loss of $29
million, or 42 cents a share, compared with net income of $21 million,
or 31 cents a share, a year earlier. Excluding charges, Whirlpool said
it earned $113 million, or $1.64 a share. Whirlpool said the
restructuring activities in North America, Europe, Latin America and
Asia since December 2000 have cost a total of $373 million, and are
expected to save more than $200 million a year when fully implemented,
reported the newswire.
Bethlehem Steel CEO Says ISG Deal May Close By April
Bethlehem Steel Corp. said on Wednesday that it has reached an agreement
in principle with International Steel Group for the sale of
substantially all of Bethlehem's assets, in a deal that could close by
April, Dow Jones reported. The agreement, if approved by Bethlehem's
board of directors and the bankruptcy court, would be subject to a sale
and auction process in the bankruptcy court. The proposal goes to
Bethlehem's board for review at a special meeting on Saturday, reported
the newswire. Bethlehem, Pa.-based Bethlehem Steel filed for chapter 11
bankruptcy protection on Oct. 15, 2001.
GenTek Seeks Court Approval Of DIP Loan Pact Worth $60 Million
GenTek Inc. is asking the bankruptcy court overseeing its case to
approve a total of $60 million in debtor-in-possession financing through
a group of lenders led by J.P. Morgan Chase Bank, Dow Jones reported.
Under the proposed pact, GenTek would receive up to $50 million through
letters of credit, and its Canadian affiliate, Noma Co., would get a $10
million revolving credit facility, according to court papers. The $50
million for GenTek would include about $30 million of pre-petition
letters of credit, reported the newswire.
GenTek, which filed for bankruptcy protection on Oct. 11, has been using
the cash collateral of JP Morgan Chase Bank and other pre-petition
lenders to fund its own operations. The U.S. Bankruptcy Court in
Wilmington, Del., has scheduled a hearing on the proposed DIP financing
for Feb. 18, Dow Jones reported.
Tokheim Seeks Court OK To End Employment Deals
The bankruptcy court handling the chapter 11 proceedings of Tokheim
Corp. said it will consider a request by the company to end various
employment, severance and other agreements to save money, Dow Jones
reported. According to court papers obtained on Wednesday, the company
said it hopes to save more than $3 million by ending a series of
employment agreements. The company said it wants to cancel some
agreements with former employees that require severance payments from
$3,500 to $16,000 a month for a remaining total of $425,000, court
papers said, reported the newswire.
Seven Seas Petroleum Gets Nod To Sell Assets Of Units
A bankruptcy judge approved the sale of some assets of Seven Seas
Petroleum Inc.'s subsidiaries and granted the chapter 11 trustee in the
case the power to close the transaction, an attorney representing the
trustee said, Dow Jones reported.
Randall Rios told Dow Jones Newswires on Wednesday that Judge
Wesley W. Steen of the U.S. Bankruptcy Court in Houston approved the
sale on Monday. Rios serves as general bankruptcy counsel for Ben
Floyd, the chapter 11 trustee appointed by the court to oversee
Seven Seas Petroleum. Judge Steen signed a court order on Monday that
said the purchase price was the highest and best offer for the assets.
It was necessary to close the transaction promptly to preserve value for
Seven Seas Petroleum, its estate and its creditors, according to the
order, reported the newswire. The proceeds of the sale will be
distributed to Seven Seas Petroleum only under a reorganization plan or
an additional court order, the filing said.
Borden Chemicals Gets Confirmation Of Liquidation Plan
Borden Chemicals & Plastics Operating L.P. on Tuesday won
confirmation of a chapter 11 liquidation plan, which calls for the
dissolution of the company after almost two years in bankruptcy
protection, Dow Jones reported. Chief Judge Peter J. Walsh of the
U.S. Bankruptcy Court in Wilmington, Del., confirmed the plan and said
he would sign a revised order on Wednesday, said Michael R.
Lastowski, an attorney with Duane Morris LLP, the firm representing
Borden Chemicals & Plastics Operating. The company already has sold
most of its assets in various deals, including sales of $42.4 million
and $29 million for manufacturing facilities, Dow Jones reported.
Creditors Can File Plan To Liquidate Lernout & Hauspie
Some creditors of Lernout & Hauspie Speech Products NV have won the
right to file a chapter 11 plan to liquidate the company, according to a
court ruling obtained on Wednesday, Dow Jones reported. U.S. Bankruptcy
Judge Judith H. Wizmur, who is handling L&H's chapter 11 case, has
authorized a committee representing unsecured creditors to propose its
own liquidation plan for the defunct speech and language technology
company. L&H hasn't filed a response to the committee's emergency
request, according to the court docket, but the request was supported by
a bank group consisting of KBC Ban NV, Fortis Bank NV, Dexia Bank
Belgium, Deutsche Bank NV and Deutsche Bank AG, reported the
newswire.
United Unveils Part of Transformation Plan
Bankrupt United Airlines on Wednesday revealed some of its plans for
transforming itself, including intentions to launch a completely
separate low-cost unit with cheaper fares for leisure travelers, Reuters
reported. United is sticking by its plan for a low-cost 'airline within
an airline,' first discussed a few months ago, even though its unions
have criticized the notion of a legally separate division. The so-called
'transformation plan' being unveiled is separate from a plan of
reorganization, which will be needed to emerge from bankruptcy
protection. That will come later in the process, United said on a
telephone hotline to employees, reported the newswire.
G-Zone Enterprises Has Retained Keen Realty in Chapter 11
Proceedings
G-Zone Enterprises has retained Keen Realty LLC to market and dispose of
their indoor driving range located in La Vista, Neb., Keen realty
announced in a press release distributed by Business Wire. G-Zone
Enterprises filed for chapter 11 protection on January 29, 2002, in the
U.S. Bankruptcy Court for the Eastern District of Michigan. Keen Realty
is a real estate firm specializing in restructuring real estate
portfolios and selling excess assets.
U.S. Energy Companies Face $100 Billion Debt Bill
U.S. energy companies have more than $100 billion in debt coming due
this year, much of which will have to be refinanced if more bankruptcies
are to be avoided, a Federal Energy Regulatory Commission official said,
Bloomberg News reported. Utilities, power producers and pipeline
companies have $84 billion in short-term debt and more than $20 billion
in long-term obligations maturing in 2003, said William Hederman,
director of the commission's market-monitoring office. They have another
$20 billion due in each of the following three years, he said, reported
the newswire.
Delta Air May Begin Talks With Union to Cut Pilot Costs
With UAL Corp., US Airways Group Inc. and AMR Corp. aiming to slash
labors costs, Delta Airline's chief executive suggested for the first
time that the No. 3 airline is moving toward talks with its pilots'
union about cutting expenses, the Wall Street Journal
reported.
Speaking at the Goldman Sachs Annual Transportation Conference, Leo F.
Mullin said Delta was watching the moves of other airlines at it relates
to labor costs. 'We're hanging out there with a hugely expensive pilot
contract,' he said. 'We're going to have to have some conversations to
see what we can do about it,' reported the Journal.
Trustees, EPAs Fight Wheeling-Pittsburgh Plan Statement
Two industrial revenue bond trustees, along with two governmental
environmental agencies, have filed objections to Wheeling-Pittsburgh
Corp.'s chapter 11 plan disclosure statement, according to court papers
obtained on Wednesday by Dow Jones Newswires. Bond trustees SunTrust
Bank and First Union National Bank say the disclosure statement doesn't
indicate how the steelmaker would treat their claims under its proposed
reorganization plan. The U.S. Environmental Protection Agency and the
Ohio Environmental Protection Agency say the disclosure statement
describes a plan that would improperly treat penalty claims less
favorably than similar unsecured claims. U.S. Bankruptcy Judge William
Bodoh will consider whether to approve Wheeling-Pittsburgh's disclosure
statement at a hearing on Friday in Youngstown, Ohio, Dow Jones
reported.
WorldCom Wins Court Permission to Sell Ebbers's Former
Shipyard
WorldCom Inc. won court permission to sell a shipyard once owned by
founder and former Chief Executive Officer Bernard Ebbers, Bloomberg
News reported. Clinton, Miss.-based WorldCom got a green light from U.S.
Bankruptcy Judge Arthur Gonzalez to sell the Intermarine Savannah
Shipyard, in Georgia, to Palmer Johnson Savannah Inc., according to
court documents filed yesterday. Terms of the sale weren't disclosed in
the filing.
Coram Is Battleground For 'Vulture' Investors
A Wall Street Journal article discusses how two moguls of
distressed debt, Chicago billionaire Sam Zell and New York hedge-fund
manager Stephen Feinberg, are locked in a battle for control of Coram
Healthcare Corp. To read the article, point your browser to
href='http://www.wsj.com'>www.wsj.com (subscription required).
Law, Business Groups Face Infighting on Asbestos Litigation
Infighting among powerful law and business groups has erupted over
attempts to impose a legislative fix on the vexing problem of asbestos
litigation, the Wall Street Journal reported. Two main camps have
coalesced around rival approaches: One wants a multibillion dollar trust
fund that would disburse damage awards to those with asbestos-linked
injuries -- who would accept payment in exchange for forfeiting their
right to sue; the other would establish strict medical criteria that
would limit who is eligible to sue for damages. To read the full
article, point your browser to www.wsj.com
(subscription required).
U.S. Steel Won't Attempt To Top Bid for National Steel
U.S. Steel Corp. says it will not attempt to top its rival's bid for the
assets of ailing National Steel Corp. during a scheduled
bankruptcy-court hearing today in Chicago, the Wall Street
Journal reported. Instead, the country's biggest steelmaker is
betting on its ability to forge a labor pact with the United
Steelworkers of America and then, if conditions warrant, put in a higher
bid than AK Steel Corp.'s offer for National Steel. AK Steel's offer
includes $925 million in cash and $200 million in the assumption of
liabilities. U.S. Steel offered $650 million in cash, $100 million in
stock and the assumption of $200 million in liabilities, reported the
Journal.
FirstEnergy Asks To Proceed With Arbitration
FirstEnergy Corp. asked the U.S. Bankruptcy Court in Minnesota on
Wednesday for permission to pursue arbitration with Xcel Energy Inc.
unit NRG Energy over a failed $1.5 billion sale of power plants, Dow
Jones reported.
FirstEnergy called off the sale of four northern Ohio power plants to
NRG last August, after it became clear the financially troubled power
generator and trader couldn't complete the deal, according to Dow Jones.
In December, FirstEnergy decided to keep the plants after bids by
alternative buyers fell short of NRG's purchase price. In a Wednesday
filing with the court, where NRG is now fending off an involuntary
chapter 11 petition by former executives, FirstEnergy estimated it has
been damaged 'in an amount anticipated to be several hundred million
dollars,' reported the newswire.
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