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November 26 , 2003
No Bankruptcy Bill in Omnibus Spending Measure
Congress adjourned yesterday for the first session of the 108th Congress
without any further action on the bankruptcy bill (H.R. 975). The House
plans to reconvene on Dec. 8 to pass the $328.1 billion omnibus, even if
the Senate version remains stalled and not likely to come up until
January.
Pension Fund Relief Plan Fails to Clear the Senate
A measure that would have let the nation's businesses defer
tens of billions of dollars in pension contributions over the next two
years failed to clear the Senate yesterday evening, disappointing
companies that have been pushing all year for help with their depleted
pension funds, the New York Times reported.
Earlier in the day, senators from both parties said they thought they
had found an acceptable way to give companies a break on their pension
bills - an arrangement that they thought would be acceptable to members
of the House as well. But the measure required unanimous consent in the
Senate, and late yesterday, with legislators trying to leave for the
Thanksgiving holiday, a small number of senators were still withholding
their support. As a result, the Senate broke for the Thanksgiving recess
with no progress on the pension issue and no sign of whether it would be
possible to enact legislation by the end of the year. Companies that
offer pension plans are now operating under an interim break that will
expire at the end of the year. If no new replacement measure is enacted,
the companies' mandatory contributions will balloon, reported the
Times.
Economy Booms Ahead on Investment Surge
Robust business and consumer spending powered the U.S. economy ahead in
the third quarter, the government said on Tuesday in a report also
showing the biggest jump in corporate profits in more than a decade,
Reuters reported. Gross domestic product (GDP) grew at an 8.2 percent
annual rate, more than double the second quarter's 3.3 percent gain. A
month ago, the Commerce Department estimated that GDP had grown at a 7.2
percent rate in the third quarter. Reinforcing an impression that a
stronger-paced recovery was gaining traction, a separate private-sector
report found consumer confidence reached a year-high peak in November,
supported by hopes of improved hiring prospects. The New York-based
Conference Board said its index of consumer confidence climbed to 91.7,
its highest level since September 2002, from a revised 81.7 in
October.
WCI Steel to Idle Silicon Electrical Steel Line
WCI Steel Inc. on Tuesday said it would idle its silicon electrical
steel production line on Jan. 31 due to falling sales and profit
margins, Reuters reported. The integrated steelmaker said the move could
affect as many as 50 out of 1,800 employees. WCI said the use of
alternative products and the migration of customer production to Mexico
and Asia reduced demand for its silicon electrical steels. On Sept. 16
WCI filed a voluntary petition for chapter 11 bankruptcy protection from
creditors and is currently restructuring as part of efforts to re-emerge
as a stronger company, reported the newswire.
Exide Technologies Extends Chapter 11 Plan Exclusivity, DIP
Loan
Exide Technologies received bankruptcy court approval to amend
its debtor-in-possession loan agreement to extend the deadline for the
battery maker to emerge from bankruptcy protection, an Exide spokesman
told DBR Tuesday. With the ruling, Exide's loan pact has been changed to
allow it to exit chapter 11 protection as late as Feb. 15 without
defaulting. Exide's lenders had already agreed to push the date out, but
the company needed the court to approve the change. The U.S. Bankruptcy
Court in Wilmington, Del., also granted the company additional
exclusivity for its reorganization plan, the spokesman said. The
extension, coming over the objection of Exide's committee of unsecured
creditors, prevents other parties involved in the case from filing
competing plans through Dec. 18.
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DVI Creditors Sue U.S. Bank To Block Asset Liquidation
The committee representing DVI Inc.'s unsecured creditors sued
to stop U.S. Bank N.A. and others from selling off assets of one of the
finance company's affiliates.
Through the maneuver, the creditors' committee is seeking to protect a
possible $30 million to $50 million recovery for creditors. According to
the suit, filed Monday in the U.S. Bankruptcy Court in Wilmington, Del.,
U.S. Bank, Nomura Credit & Capital Inc., Fairway Finance Corp. and
Harris Nesbitt Corp. plan to liquidate DVI Business Credit Receivables
Corp. III, after a forbearance agreement ends Dec. 3.
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KEVN Files for Bankruptcy
KEVN Inc., parent company of the Rapid City FOX affiliate KEVN-TV, has
filed for chapter 11 protection in the U.S. Bankruptcy Court in Rapid
City, S.D., the Rapid City Journal reported The company's owner filed
for chapter 11 bankruptcy on Thursday, Nov. 20, to fend off legal action
by the station's largest creditors, according to a news release from
KEVN.
According to the bankruptcy documents, Finova Capital Corp. of
Scottsdale, Ariz., holds $5 million in mortgages and liens on KEVN
Inc.'s real estate, building and equipment. It holds most of KEVN's $6.7
million in liabilities. The company listed its assets at $7.3
million.
Special Metals Bankruptcy Could End Today
Kentucky-based Special Metals Corp. has settled its dispute with a
federal agency and could end its bankruptcy this morning, the
Herald-Dispatch reported. The company and the Pension Benefit
Guaranty Corp. (PBGC) have reached a compromise in their disagreement
over which pension plans the PBGC will take over and which ones the
company will retain. That dispute prevented the company from securing
the exit financing, or the funding it will need to continue operations
once it is no longer under the protection of the U.S. Bankruptcy Court
in Lexington, Ky.
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