April 19, 2000
Judge Orders Framework for Global Tobacco
Settlement
A New York federal judge has ordered
plaintiffs' attorneys and tobacco companies to draw up a framework for a
global settlement that could end all major tobacco litigation in the
country, including a pending class-action suit before the judge on
behalf of all U.S. smokers with lung cancer, The Wall Street
Journal reported. 'The time for bringing a close to tobacco
litigation is nigh,' U.S. District Judge Jack B. Weinstein said. The
ruling, deemed an unusual attempt by a single judge to end the
escalating legal battle, calls for all tobacco litigation to be handled
at once, and the judge recommended expanding the class action to include
all people with smoking-related illnesses in the U.S., not just those
with lung cancer, 'so that tobacco litigation may be fully resolved in a
comprehensive fashion.' 'It was certainly unexpected,' said Philip
Morris associate general counsel William Ohlemeyer. 'Obviously, we're
going to have to look at the order and look at the law, but it's not
something that anyone can disregard out of hand, regardless of how
strong we feel our defenses are.' Judge Weinstein's ruling comes on the
heels of a class-action suit on behalf of Florida smokers now on trial
in Florida; concerns have been raised that any damages awarded from the
suit could bankrupt the tobacco industry. Prior to the Florida case,
tobacco-injured victims were encouraged by appellate courts to pursue
legal action individually. Judge Weinstein, who has six tobacco cases
pending before him, told the lawyers in the cases to select
representatives and 'begin preliminary discussions designed to set
a framework for settlement negotiations,' and requested that both sides
choose a mediator, saying he will appoint one himself 'if agreement
cannot be reached.'
CLARK Material Receives Court Approval for
Up to $45 Million in DIP Financing
CLARK Material Handling Co. announced yesterday that it received
interim court approval for up to $45 million of debtor-in-possession
financing from Congress Financial Corp., according to a newswire report.
The financing will increase to up to $50 million upon entry of a final
order from the bankruptcy court. 'With this financing now in place,
CLARK is well-positioned to receive all goods and services from its
vendors and to pay for them on a timely basis, to fulfill the needs of
its dealers and customers, and to move forward competitively in its
markets,' said Dr. Martin M. Dorio Jr., CLARK's chairman and chief
executive officer. 'The financing sends a clear message to our vendors
that CLARK will meet its post-chapter 11 filing obligations. It also
makes a clear statement to our dealers that CLARK has the financial
resources to meet their needs by providing the quality products and
services they require.' CLARK and certain of its U.S.-based
subsidiaries, including Blue Giant Corp. and Hydrolectric Lift Trucks
Inc., had filed voluntary chapter 11 petitions in the District of
Delaware.
Tripp Lite Purchases Assets of Bankrupt
Interex, XLR8 Subsidiary
Tripp Lite, a Chicago, Ill.-based manufacturer of power protection
equipment, announced yesterday that it has purchased the assets of
Interex, a computer accessories manufacturer, as well as its
Atlanta-based XLR8 subsidiary, which manufactures CPU upgrades for the
Apple Macintosh, according to a newswire report. XLR8 is to operate as a
separate division in Atlanta. 'We have been working with Tripp Lite over
the last few months as the acquisition was formalized,' said XLR8
general manager Jack Kolk. 'They are committed to expanding XLR8 and
have already funded ongoing research and development, prototypes, builds
and continued operational growth.' Interex filed for chapter 11 in
January, blaming its financial problems primarily on a salesman who
allegedly falsified orders. In March, Interex bankruptcy attorney
Edward J. Nazar told creditors that Tripp had purchased the
largest claim against the company as a prelude to acquiring its assets.
XLR8's products include Carrier ZIF, a CPU upgrade that allows for easy
swapping of PowerPC chips, and InterView, a USB video-capture device.
XLR8 is the second Mac CPU upgrade vendor to be financially saved; in
February, Newer Technology announced that it had received financial
assistance from manufacturing partner Tri-M Technologies.
Mexico Congress May Soon Vote on Banking
Reforms, Bankruptcy Bill
Yesterday, a lawmaker reported that deputies of Mexico's ruling
party and of the conservative opposition have reached a deal that may
allow the lower house of Congress to vote on key banking sector reforms
next week, according to Reuters. The accord could allow a vote on a new
bankruptcy bill and a law on loan guarantees by next week; the
bankruptcy bill has already been approved by the Senate while the loan
guarantee law would still have to go through the upper house. Both bills
are seen as crucial if the banking sector is to continue lending; the
banking industry is beginning to pull itself out of the problems it had
following a slew of bad debts subsequent to the 1994-95 peso crisis. The
reforms have been stuck in Congress because of disagreements over how to
ensure that lenders would still be protected once banks' rights to
demand loan guarantees and to seize lenders' assets are strengthened.
The bottom fell out of the bank lending industry in Mexico after the
peso crash pushed up interest rates and sparked an onslaught of
defaults. The government has spent an estimated $100 million since 1995,
or 20 percent of gross domestic product, trying to keep the financial
sector afloat, and Mexican banks say the loan guarantee and bankruptcy
reforms are essential if they are to relax their conservative credit
policies.
