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Hatch Lays Out Drafting Plan For Asbestos Litigation Bill
Senate Judiciary Chairman Orrin Hatch (R-Utah) said he plans to begin
drafting an asbestos litigation reform bill on April 10 and complete it
over the Easter recess, with the aim of marking up a bill shortly after
the recess, according to sources who met privately with Hatch on
Wednesday at the Capitol, CongressDaily reported. Hatch confirmed
in an interview afterwards that he would mark up a bill shortly upon the
senators' return from recess. One source at the meeting, which was
comprised of numerous executives of asbestos litigation defendant
companies and their insurers, said Hatch made it clear he intends to
draft a bill 'with or without' the participation of the industry
players, reported the newswire.
Suit Alleging Bank Hid Credit Card Fees Reinstated
An appeals court on Tuesday reinstated a class action that accuses a
bank of aggressively selling credit cards with hidden fees to low-income
consumers, the New York Law Journal reported. New York's
Appellate Division, 1st Department, said a trial judge had used the
wrong standard in summarily dismissing the suit. The plaintiffs, the
court said, had clearly pleaded sufficient facts to support a claim of
deceptive practices against First Consumers National Bank. The
plaintiffs allege the bank used high-pressure sales tactics to sell
credit cards to people who were likely to be rejected by most credit
card offers. In their complaint, the plaintiffs allege that ads for the
cards deceived customers by hiding fees, including annual fees, in a
disclosure statement with small type. To read the full article, point
your browser to
href='http://www.law.com/jsp/article.jsp?id=1048518194501'>http://www.law.com/jsp/article.jsp?id=1048518194501.
HealthSouth CFO Owens Pleads Guilty to Federal Fraud
Charges
HealthSouth Corp. Chief Financial Officer William T. Owens pleaded
guilty to
falsifying financial statements at the company, Bloomberg News reported.
Owens's plea will assist prosecutors in building a case against Chief
Executive Officer Richard Scrushy, who was accused by the Securities and
Exchange Commission last week of helping HealthSouth inflate earnings by
$1.4 billion and assets by $800 million since 1999. Former Chief
Financial Officer Weston Smith earlier pleaded guilty to securities
fraud, reported the newswire.
Fairchild Dornier Completes Sale of 328-Model Jet Business to
AvCraft
Fairchild Dornier GmbH completed the sale of its 328-model jet program
to U.S.-based AvCraft, Bloomberg News reported. About 200 jobs will be
preserved through the sale, Fairchild Dornier's insolvency administrator
Eberhard Braun said in a faxed statement. Fairchild Dornier, owned by
New York investment firm Clayton Dubilier & Rice Inc. and German
insurer Allianz AG, racked up $670 million in debt before filing for
protection from creditors. The company is still looking for a buyer for
its 728-
model jet business, reported the newswire.
WorldCom Had Net Income of $155 Million in January
WorldCom Inc. had net income of $155 million in January as
reorganization expenses fell, Bloomberg News reported. The earnings
compared with a net loss of $580 million in December, WorldCom said in a
statement. Sales slipped 1.8 percent to $2.16 billion from $2.2 billion.
WorldCom CEO Michael Capellas is seeking to rid the company of
unprofitable units and contracts, and lower costs in a bid to exit
bankruptcy this year. WorldCom, which plans to file a reorganization
plan by April 15, said costs related to that effort fell to $37 million
in January from $514 million in December, reported the newswire.
UNITED AIRLINES
UAL Has Feb. Net Loss of $367 Million, Meets Loan Terms
United Airlines parent company UAL Corp. had a net loss of $367 million
in February and said it met terms of its bankruptcy loans, Bloomberg
News reported. The airline also said its loss before interest, taxes,
depreciation, amortization and aircraft rent satisfied 'by a wide
margin'' the condition that the loss not exceed $964 million for the
period between Dec.1 and Feb. 28, reported Bloomberg. United reduced
labor expenses through temporary wage cuts and said the bankruptcy
filing hadn't hurt revenue as much as expected. The ability to postpone
some aircraft payments because of the chapter 11 protection from
creditors also helped, reported the newswire.
United Airlines, Machinists' Union Edging Closer To Pact
United Airlines may be moving closer to a cost-slashing labor agreement
with at least one of its big unions as its deadline for voiding
contracts in bankruptcy draws nearer, Dow Jones reported.The union
representing 27,000 customer service, ramp and security workers told
members it presented United with a proposal last week calling for $423
million in annual cost savings, or $2.54 billion over six years -- up
from its previous offer of $2 billion. While specifics of the proposal
weren't disclosed, that total isn't far below the company's request for
concessions from the union group: $445 million a year for a total of
$2.67 billion, reported the newswire.
Pension Agency Opposes Bethlehem Steel Auction Plan
The Pension Benefit Guaranty Corp. (PBGC) -- a federal agency that
guarantees underfunded defined-benefit pension plans -- objected to
Bethlehem Steel Corp.'s plan to auction its assets to International
Steel Group, Dow Jones reported. In a filing with the U.S. Bankruptcy
Court in Manhattan, the PBGC said that including units that aren't in
bankruptcy in the sale to International Steel violates the U.S.
Bankruptcy Code and state law, Dow Jones reported. If the assets of
those units were included in the proposed transaction, 'the portion of
the transaction would be voidable as a fraudulent conveyance,' the court
papers said, reported the newswire. A hearing is scheduled for Thursday
on the proposed auction procedures and another is set for April 22 to
consider the actual sale.
American Pilots Union Says Furloughs Are in Bad Faith
The Allied Pilots Association, the collective bargaining agent for the
13,500 pilots of AMR Corp.'s American Airlines, alleges that the airline
is negotiating in bad faith by adding a furlough of 1,000 pilots to any
deal, Dow Jones reported. In a press release on Wednesday, the union
said that the airline's management now wants to furlough nearly 1,000
additional pilots without assigning any dollar value to those furloughs,
essentially asking for $660 million in cost cuts plus additional pilot
furloughs. As reported, executives of AMR have said that they must lower
costs by $4 billion a year, including $1.8 billion in labor concessions,
to stay in the air, reported the newswire. The pilots union said it
remains committed to identifying $660 million in cost savings in order
to help the company avoid bankruptcy. It expects the union board to vote
on a package of proposed changes to the collective bargaining agreement
no later than March 31, Dow Jones reported.
ADELPHIA
Adelphia's Planned Denver Move Is Opposed By Rigases,
Investors
Adelphia Communications Corp.'s plan to move its corporate headquarters
to Denver from Coudersport, Pa., is a waste of the bankrupt cable
television operator's resources, said John Rigas, who's charged with
defrauding the company he founded, Bloomberg News reported. The
relocation is being orchestrated for the convenience of Chief Executive
Officer William Schleyer and Chief Operating Officer Ronald Cooper, who
worked at the Denver offices of AT&T Broadband before joining
Adelphia, Rigas and three of his sons said in papers filed in U.S.
Bankruptcy Court in New York. Cooper
still lives in Denver, the Rigases say, reported the newswire. The
Adelphia equity shareholders' committee also opposes the move. The
committee said it's concerned the company will have to pay higher
salaries in Denver and that a 'wholesale replacement of headquarters
management'' might create transition problems for Adelphia, Bloomberg
reported. Adelphia, which sought bankruptcy protection in June, is
struggling to overcome more than $20 billion in debt and restore its
reputation as it tries to emerge from chapter 11.
Adelphia Business Solutions And Its Creditors Reach
Pact
Adelphia Business Solutions Inc. reached an agreement in principle with
its unsecured creditors and holders of its 12.25 percent senior secured
notes regarding its chapter 11 reorganization plan, Dow Jones reported.
In a press release on Wednesday, the company said the restructuring
would greatly reduce its debt and improve its operational
flexibility.
In court proceedings, Adelphia said it plans to 'shrink into
profitability,' a strategy it has pursued through a number of asset
sales and market exits over the past three months. Adelphia Business
Solutions filed for bankruptcy in March 2002, two months after being
spun off from its parent, Adelphia Communications Corp., which itself
filed for bankruptcy in late June, reported the newswire.
National Steel, AK Steel Agree To Extend Time For Auction
National Steel Corp. and AK Steel Corp. agreed to extend, by two weeks,
the deadline for submitting bids and holding an auction related to their
$1.13 billion acquisition proposal, Dow Jones reported. The extension
comes on the same day AK Steel was supposed to reach a labor contract
with the United Steelworkers union. That union contract is part of the
requirements for AK Steel to buy National Steel out of bankruptcy. In a
press release on Wednesday, National Steel said the bankruptcy court
approved moving the bid-submissions date to April 10 from March 27. The
auction date was moved to April 16 from April 2. Meanwhile, the court
also pushed back the date for a hearing, which would provide approval
for the sale of all of National Steel's assets, to April 21 from April
7, reported the newswire.
Chadbourne & Parke To Represent Spiegel's Creditors'
Panel
Law firm Chadbourne & Parke LLP has been hired to represent the
official committee of unsecured creditors in Spiegel Inc.'s bankruptcy
case, Dow Jones reported. The committee, appointed on Monday by the U.S.
Trustee administering the case, consists of nine members who are among
the largest unsecured creditors of the mail-order retailer. Among them
are Commerzbank AG, owed $103 million; Dresdner Kleinwort Wasserstein,
owed $92.5 million; and DZ Bank AG, owed $86 million. Downers Grove,
Ill.-based Spiegel filed a week ago to restructure itself under the
court's supervision. Its chapter 11 petition listed $1.74 billion in
assets and $1.71 billion in debts, reported the newswire. U.S.
Bankruptcy Judge Cornelius Blackshear in Manhattan has approved
interim financing of $150 million for the company.
FERC Finds Price Manipulation In Calif., Singles Out Enron
Federal energy regulators said yesterday that a 13-month investigation
had found widespread manipulation of natural gas and electricity prices
and supplies in California during 2000-2001, the Associated Press
reported. Pat Wood, chairman of the Federal Energy Regulatory Commission
(FERC), said that as a result of the manipulation, California would
receive more than the $1.8 billion in refunds recommended by a FERC
judge in December. The exact amount is to be determined in the coming
months. FERC singled out seven subsidiaries of bankrupt Enron Corp. and
five other firms for taking advantage of a dysfunctional market to reap
millions of dollars in unjust profits, reported the newswire.
Wheeling-Pittsburgh Steel Secures a Loan Guarantee
Wheeling-Pittsburgh Steel Corp. said that it has won a $250 million loan
guarantee that will help it emerge from chapter 11-bankruptcy protection
and install new steel making equipment, the Wall Street Journal
reported. The steelmaker, which has been under bankruptcy protection
since November 2000, is the third steel maker to win the federal aid
under the Emergency Steel Guarantee Loan Program. The loan program
provides a minimum 85 percent federal loan guarantee for the lender. In
addition to the federal loan guarantee, the states of Ohio and West
Virginia have agreed to provide financing of $12 million and $15
million, respectively, as part of the loan package, the company said,
reported the Journal.
Judge Rejects Kmart Bid For Extension To Dispose Leases
A bankruptcy judge rejected a motion on Wednesday by Kmart Corp. to
extend the time it has to market and sell a number of leases for stores
slated to be closed this year, Dow Jones reported. Judge Susan Sonderby
of the U.S. Bankruptcy Court for the Northern District of Illinois said
she lacked the authority to extend the deadline to dispose of 303 leases
to Nov. 25 -- a date set by Kmart. Kmart had wanted an extension of 270
days after its reorganization plan is approved by the court, arguing
that the leases were in 44 states and were in different retail settings
and varied real estate markets, making disposition of them difficult,
reported the newswire. A confirmation hearing on Kmart's reorganization
plan is scheduled for April 14.
Key3Media In Pact With Senior Secured Bank Debt Holders
Key3Media Group Inc. received final court approval for $30 million in
debtor-in-possession financing to be provided by Thomas Weisel Capital
Partners, Dow Jones reported. In a press release on Wednesday, Key3Media
said it also reached agreement with holders of its senior secured bank
debt with respect to the terms of a plan of reorganization. Following
the reorganization, the banks will remain lenders to Key3Media under
three-year secured notes. The trade-show company filed for chapter 11
bankruptcy protection in February due to declining attendance at its
signature Comdex trade show as well as the slumping technology industry,
reported the newswire.
PCD Inc. Gets Approval For Interim Cash Collateral Use
PCD Inc. won court approval to use up to $4.4 million of its lenders'
cash collateral on an interim basis pending a final hearing April 10,
Dow Jones reported. Judge Carol J. Kenner of the U.S. Bankruptcy Court
in Boston on Tuesday signed an interim order, with the consent of PCD's
lenders, authorizing the electronic connector maker to use the
collateral to continue to operate its business through the final
hearing. PCD owed its lenders, led by Fleet National Bank, about $42
million plus interest and fees when it filed for chapter 11 bankruptcy
on Friday, reported the newswire.
Actrade Financial Tech To Sell Company As Going Concern
Actrade Financial Technologies Ltd. said on Wednesday that its board of
directors intends to sell the company as a viable business, according to
a Form 8-K filed with the Securities and Exchange Commission, Dow Jones
reported. The company filed for chapter 11 bankruptcy protection on Dec.
12, 2002, in the U.S. Bankruptcy Court in Manhattan, listing up to $50
million in assets and $10 million in debts. In a press release contained
in the SEC filing, Actrade Financial Technologies said selling the
company while it is still operational would maximize the value for
creditors and stockholders.
Heartland Securities Files Chapter 11 In Manhattan
Heartland Securities Corp. filed for chapter 11 bankruptcy protection on
Wednesday with the U.S. Bankruptcy Court in Manhattan, Dow Jones
reported. The company's bankruptcy petition indicated it had assets of
$13.4 million and debts of $25.8 million as of Monday. The company
provides securities brokerage services to day traders. In court papers,
the company said a decline in the stock market and related market
activity prompted the bankruptcy filing. Heartland Securities also cited
the Sept. 11, 2001, terrorist attacks in the filing, saying the
company's offices, which were near the World Trade Center, were closed
for a week after the attacks, reported the newswire.
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