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February 11, 2005
Senate Approves Class-action Bill Without Amendments
The Senate approved a compromise class-action bill yesterday after
rejecting several Democratic amendments,
CongressDaily reported. The legislation, approved
72–26, will move to the House floor next week, according to a
spokesman for House Majority Leader Tom DeLay (R–Texas). The House
is expected to approve the bill without amendments. DeLay and House
Judiciary Chairman James Sensenbrenner (R–Wis.) promised last week
to expedite passage of the Senate bill “without alteration”
if senators refrained from amending it.
Supporters of the bill contend the current class-action system mainly
benefits plaintiffs’ attorneys and is unfair to defendants and
consumers. Opponents of the bill—ncluding trial lawyers and a
coalition of consumer, environmental and civil rights groups—argue
it would make it more difficult for plaintiffs to seek redress against
corporate wrongdoers.
Tighter Bankruptcy Law Favored
Republican leaders in Congress began clearing the way yesterday for
swift passage of legislation backed by the credit card industry and
opposed by consumer groups that would make it harder for consumers to
wipe out debt through bankruptcy, the Washington Post
reported. Now two nearly identical bills have been introduced in
Congress in the last week that are essentially the same as what House
and Senate negotiators worked out in the last Congress, but lacking the
controversial abortion amendment. The absence of the amendment, plus the
Republican leadership’s decision to begin deliberation now, early
in the legislative cycle, has industry officials and lawmakers hoping a
bill can become law within weeks.
href='http://www.washingtonpost.com/wp-dyn/articles/A15399-2005Feb10.html'>Read
the full article.
Negotiations on Asbestos Proposal Continue
Senate Judiciary Committee Republicans yesterday asked for further
changes in a proposed $140 billion fund to compensate victims of
asbestos exposure, Sen. John Cornyn (R–Texas) said,
Reuters reported. Senate Judiciary Chairman Arlen Specter
(R–Pa.) met with his GOP colleagues to gauge support for his
latest asbestos proposal. “It was very good and constructive.
Everyone was very frank and specific about what their concerns were. But
everyone remains committed to getting a bill out,” said Cornyn,
who added that Specter “hopefully” would modify his draft
bill. Democrats have publicly supported that draft, while conservative
Republicans have become more critical of it. Cornyn said concerns remain
over making sure the awards from the proposed fund were offset by
compensation already paid under other plans, such as through a
workers’ compensation plan.
MCI
Ebbers Avoided Verizon Deal, Sullivan Says
Bernard J. Ebbers, the former CEO of WorldCom, and his finance chief,
Scott D. Sullivan, backed out of preliminary merger talks with Verizon
Communications in 2001 to avoid having to open the company’s books
to outsiders, according to testimony yesterday from Sullivan, the
New York Times reported. That summer, Sullivan said, he and
Ebbers were in merger talks with their counterparts at Verizon
Communications. But the two sides had not yet started a due diligence
process that would have allowed Verizon to inspect WorldCom’s
confidential accounts, the newspaper reported.
Verizon–MCI Talks Advance
Talks between Verizon Communications Inc. and MCI Inc. advanced
yesterday, and the two companies could announce a deal in the next few
days, according to people close to the situation, the Wall Street
Journal reported. Key issues, including exact price and who will
run certain operations, remained uncertain last night. But these people
said those matters could be worked out soon. Movement toward a deal has
gathered momentum, the online newspaper reported.
Krispy Kreme Shares at New Low on Bankruptcy Fears
Shares of Krispy Kreme Doughnuts Inc. slid 16 percent to an all-time
low on Thursday as investors worried that the doughnut chain may be
headed for bankruptcy, analysts said, Reuters reported. Krispy Kreme,
hit by sluggish doughnut sales and a U.S. Securities and Exchange
Commission accounting probe, warned this week of a possible cash crunch
if it is not able to secure additional funding by the end of March.
Winn-Dixie Loss Widens; Bankruptcy Worries Increase
Winn-Dixie Stores Inc. yesterday reported a wider quarterly loss that
triggered a 36-percent drop in its share price, casting new doubts about
the future prospects of the grocer, Reuters reported. The supermarket
chain, founded in 1925, posted a fiscal second-quarter loss of $399.7
million, or $2.84 a share, compared with a loss of $79.5 million, or 57
cents a share, a year ago. Its latest results left analysts wondering
how long Winn-Dixie can avoid filing for bankruptcy protection, the
newswire reported.
Ultimate Electronics Shareholders Object to Loan Terms
Two shareholders of newly bankrupt retailer Ultimate Electronics Inc.
are contesting terms of its proposed bankruptcy financing that they say
give too much leverage to its recently installed chairman, Mark Wattles,
Reuters reported. Atticus Capital and Contrarian Capital Management,
which together hold a more than 15 percent stake in Ultimate
Electronics, said in a court filing on Wednesday that terms of a loan
offered by Wattles could effectively require the company to obtain his
consent to operate and emerge from bankruptcy.
Perry Ellis Gets Approval for Tropical Buy
Apparel company Perry Ellis International Inc. said yesterday it
received bankruptcy court approval to buy certain assets of the U.K.
subsidiary of Tropical Sportswear International, Reuters reported. The
deal, valued at $88.5 million in cash, is expected to close before Feb.
26 and will be funded by proceeds from Perry Ellis’ senior credit
facility.
Airport Cart Firm Files Chapter 11
Leading airport baggage cart vendor Smarte Carte said it has filed
for a prepackaged chapter 11 bankruptcy protection from creditors,
Reuters reported. Smarte Carte Inc., which provides carts to passengers
at airports from Milan to Newark, filed for bankruptcy in federal court
in Delaware on Thursday, listing over $100 million in assets and
liabilities.
Under the plan, asset management firm Black Diamond Capital
Management, Smarte Carte’s largest lender, will end up owning 72
percent of the company’s new stock as its $163 million in debt is
converted into equity, Black Diamond and Smarte Carte said in a joint
press release.