January 22, 2004
Bankruptcy Bill Procedural Rumors
Capitol Hill sources report that the House leadership is considering
using the recently passed chapter 12 extension bill as a vehicle for the
larger omnibus reform bill. The farm bankruptcy measure passed the
Senate just before the end of the first session and is now pending in
the House. (Chapter 12 again expired at the end of 2003). The House
could then take up this non-controversial bill, attach the contents of
H.R. 975 as previously passed, and call for a conference with the
Senate, thus circumventing the need for an otherwise contentious Senate
floor consideration of H.R. 975 as a separate bill. Republicans in both
the House and Senate would control the conference and conference bills
usually pass on a straight up or down vote without further amendment.
H.R. 975 has been stalled in the Senate, since passed by the House with
over 300 votes last spring.
Frist Outlines Agenda Once Omnibus Spending Bill Passes
The Senate is debating the omnibus spending bill, with $328 billion in
discretionary spending -- marking a 3 percent increase over FY03. A
cloture vote is set for today, and Democrats are expected to end their
filibuster and allow the measure to pass, CongressDaily reported.
Frist said once the omnibus bill is passed, the next bill would be
pension reform, which would change the rate companies must use to
calculate pension contributions, and then class action reform. But he
said the class action bill could be postponed, as he is committed to
bringing the reauthorization of the Transportation Equity Act for the
21st Century to the floor the first week of February. In his floor
statement, Frist focused largely on the economic impacts of each piece
of legislation on the agenda, arguing that tort reform and asbestos
litigation could save the federal government billions of dollars,
reported the newswire.
Oversight Subcommittee To Examine OCC Exemption Rule
A House Financial Services subcommittee plans to hold a hearing next
week on the Office of the Comptroller of the Currency's (OCC)
controversial final rule exempting national banks from many state
consumer protection laws, CongressDaily reported. The rule,
issued earlier this month, also would establish new federal
anti-predatory lending standards for national banks and restrict state
agencies' authority to take actions against those banks.
Oversight and Investigations Subcommittee Chairwoman Sue Kelly
(R-N.Y.) said she was 'disappointed' that the OCC finalized the new
regulations without first making them available for review by lawmakers,
despite 'significant questions and concerns' that many congressional
Republicans and Democrats had raised. Kelly said a predatory lending
measure recently approved in her home state is among the consumer
protection laws that would be nullified under the new OCC
regulations.
The new OCC pre-emption rule would exempt national banks from most
state laws from which nationally chartered thrift institutions already
are exempt under Office of Thrift Supervision rules. Those pre-empted
state laws pertain to real estate lending, other types of lending and
deposit taking.
Housing Starts Post Best Year Since '78
U.S. builders broke ground on new homes at a faster-than-expected pace
in December, closing out the best year for housing since 1978 on an
upbeat note, a government report showed on Wednesday, Reuters reported.
The Commerce Department said December housing starts rose 1.7 percent to
a seasonally adjusted 2.088 million annual rate, the quickest pace since
February 1984. The gain defied Wall Street analysts' expectations for a
decline in starts and was led by a gain in multi-family dwellings.
Single-family housing starts actually dipped slightly from the November
rate. November starts were revised slightly lower, to a 2.054 million
rate from the initially reported 2.070 million pace. However, in a sign
that the market is not yet ready to retreat, building permits -- a gauge
of future residential construction plans -- also posted a gain in
December, rising 3.3 percent to a 1.924 million rate. 'Very low interest
rates, improving economy, improving labor market and that bodes well for
housing,' said Rick Egelton, deputy chief economist with BMO Financial
Group in Toronto, reported the newswire.
US Airways Pilots to Meet with Management Soon
The union representing US Airways pilots on Wednesday said talks with
the company on cutting costs further and increasing productivity could
begin within the next few days, Reuters reported. The union, which
agreed to major concessions last year to help the airline survive, has
been fighting management for months for details on the company's
finances and business plan. US Airways emerged from bankruptcy last
March after eight months in chapter 11, but the Arlington, Va.-based
carrier is still struggling with some of the highest costs in the
industry and is looking to sell a variety of assets.
'Whether or not we would agree to concessions is a point somewhere down
the road,' said Jack Stephan, a spokesman for the US Airways unit of the
Air Line Pilots Association, reported the newswire. 'We haven't agreed
even to negotiate. But we have agreed to talk and to discuss what's
going on.'
Debt Load Forces Wickes Into Bankruptcy
Struggling lumber distributor Wickes Inc. has filed for chapter 11
bankruptcy protection, hoping to restructure its burdensome debt load
and emerge as a profitable company, reported Crain's Chicago
Business. The Vernon Hill, Ill.-based company posted a third-quarter
loss of $3.3 million, or 40 cents per share, and in September was
delisted from the Nasdaq SmallCap Market for failing to meet the
exchange's market value or profitability standards. In court documents
filed Tuesday in the U.S. Bankruptcy Court for the Northern District of
Illinois, Wickes listed total assets of $155 million and total
liabilities of $168 million. A Wickes spokesman said Wednesday the
company doesn't have a specific restructuring plan in place or a
timetable for emerging from chapter 11. But Wickes has received
commitments from undisclosed lenders for $100 million in
debtor-in-possession (DIP) financing, which will replace its current
credit line and allow it to operate while it is in chapter 11. The
company may need to sell or close more plants in non-core markets, the
spokesman said, but could not elaborate.
Enron's Former Accountant Surrenders to FBI in Houston
Enron Corp.'s former top accountant Richard A. Causey surrendered to
federal authorities today on charges related to the disgraced energy
giant's 2001 collapse, the Associated Press reported. Causey had been
expected to turn himself in and appear in federal court in Houston two
weeks ago on charges stemming from the Justice Department's two-year
Enron investigation. Last week, the Fastows pleaded guilty in their
separate cases -- he to two counts of conspiracy, she to one count of
filing a false tax return. The Fastows' guilty pleas needed to be
secured before moving on to Causey, sources close to the investigation
said on Wednesday, reported the newswire.
Southwest Net Jumps 56 Percent As Business Travel Recovers
Southwest Airlines Co.'s earnings jumped 56 percent in the fourth
quarter as business travel recovered, but it warned that cost pressures
and slower bookings could weigh on the next quarter, the Wall Street
Journal reported. The low-cost carrier reported today its net rose
to $66 million, or eight cents a share, compared with $42.4 million, or
five cents a share, a year earlier. Revenue climbed 8.6 percent to $1.52
billion, from $1.4 billion.
'As the economy recovers and demand for business travel increases, our
unit revenue trends gradually continue to improve,' said James F.
Parker, vice chairman and chief executive, reported the online
newspaper. 'As expected, we are experiencing some cost pressures.'
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