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February 1, 2005
Foes of Class-Action Bill Vow to Fight for Amendments
Opponents of a bipartisan class-action bill said yesterday the
measure is likely to pass when it moves to the Senate floor next week,
CongressDaily reported. But they vowed to push for
amendments addressing civil rights, employment protections and other
issues. Public Citizen—which is part of a coalition of consumer,
environmental and civil rights groups fighting the bill—said it is
urging senators to support an amendment by Sen. Jeff Bingaman
(D–N.M.) stating that federal judges would have the authority to
certify class-action cases based on state consumer laws. Opponents of
the bill also are pushing for an amendment by Sen. Edward Kennedy
(D–Mass.) to exempt civil rights and wage-and-hour cases from the
bill, the newswire reported.
Senators Propose Bill to Remake U.S. Pensions, Vow More Changes
Senators Charles Grassley (R–Iowa) and Max Baucus
(D–Mont.) reintroduced bipartisan pension legislation to require
companies to recalculate their retirement-fund contributions, Bloomberg
News reported. Under the measure, companies would factor in
workers’ ages when figuring out their contributions. The bill also
would expand protection for retirees and workers by letting them shift
their pension contributions out of company stock. The bill is an attempt
to replace a formula due to expire this year. Under the temporary fix,
companies with underfunded pensions contribute $80 billion less to their
workers’ pensions.
Senate to Hold Hearing on the Role of Credit-rating Companies
The Senate Banking Committee plans to hold hearings on Feb. 8 to
examine the role of credit-rating companies such as Moody’s
Investors Service, Standard & Poor’s and Fitch,
CongressDaily reported. Some lawmakers, company executives
and investors have questioned the reliability of the ratings the firms
issue. They pointed to the high ratings maintained on Enron Corp. until
days before the energy trader filed for bankruptcy. The panel listed the
examination of the potential conflict of interests between credit rating
agencies and the companies that they rate, among their list of
priorities for this session.
Judge OKs Cuts for UAL Pilots, Attendants
UAL Corp. yesterday won court approval for wage cuts for United
Airlines’ pilots and flight attendants worth $311 million
annually, clearing a hurdle in its bid to exit bankruptcy protection by
the year-end, Reuters reported. The rulings by U.S. Bankruptcy Court
Judge Eugene Wedoff move United a step closer to achieving $725
million in annual labor savings it says it needs to exit chapter 11. The
deals cut the pilots’ pay by 11.8 percent and the flight
attendants’ pay by 9.5 percent, the newswire reported.
Parmalat
U.S. Bankruptcy Court Gives Parmalat 3 More Months
A U.S. bankruptcy court has granted bankrupt Italian food group
Parmalat three more months to keep U.S. creditors at bay, extending an
injunction until May, the court’s Web site said yesterday, Reuters
reported. The U.S. Bankruptcy Court for the Southern District of New
York said it extended until May 5 an injunction known as Section 304,
which allows debtors to block U.S. creditors’ moves on their U.S.
assets.
Parmalat Sells Archway Cookies to Catterton
Parmalat Finanziaria SpA’s U.S. bakery unit sold its U.S. and
Canadian cookie businesses, including the Archway and Mother’s
brands, to private equity firm Catterton Partners for an undisclosed
sum, Reuters reported. The transaction is part of the Parmalat’s
plan to sell non-core assets after it filed for insolvency in December
2003.
Catterton said the acquisition from the North American Bakery Group
of Parmalat Dairy & Bakery Inc. includes regional and private label
brands, as well as Archway and Mother’s. The business will be
renamed Archway & Mother’s Cookie Co., the newswire
reported.
US Airways’ Loss Widens to $236 Million as Fares Decline
US Airways Group Inc., operating under bankruptcy protection, said
its fourth-quarter loss more than doubled to $236 million as competition
pushed fares lower and jet-fuel prices increased, Bloomberg News
reported. The net loss grew to $4.30 a share from $98 million, or $1.82
a share, a year earlier, the Arlington, Va.–based company said in
a statement today. Sales fell 5.9 percent to $1.66 billion from $1.76
billion.
Fuel costs for US Airways and its regional units rose 57 percent to
$322 million as average fare per mile fell 12 percent to 13.42 cents.
Most larger carriers also reported losses as average fuel prices rose 64
percent and excess capacity held fares to 17-year lows. US Airways is
trying to cut $1.5 billion from annual spending in bankruptcy
reorganization.
Polaroid Sale to Petters Wins U.S. OK
U.S. antitrust officials said yesterday they would not oppose the
sale of Polaroid Holding Co. to Petters Group Worldwide, a consumer
products marketing company, Reuters reported. U.S. antitrust officials
have ended their review of the deal without taking any action to block
it, the U.S. Federal Trade Commission said in a notice. Privately owned
Petters agreed earlier this month to acquire Polaroid for $426 million
in cash. Polaroid filed for bankruptcy protection in 2001.
U.S. Growth Rate May Be Revised
United States economic growth figures for the fourth quarter may be
revised because of a miscalculation by Canada’s statistics agency,
a spokesman for the Bureau of Economic Analysis at the Commerce
Department said yesterday, Reuters reported. While the error by the
agency, Statistics Canada, is expected to increase United States gross
domestic product in the October-to-December quarter, a spokesman for the
bureau said the effect was not yet clear.
Ebbers Was No Accountant, Ex-Officer at WorldCom Says
The former controller at WorldCom testified yesterday that he never
knew CEO Bernard J. Ebbers to make an accounting decision as the company
faced financial problems and began hiding billions of dollars in
expenses, the Associated Press reported. The witness, David Myers,
commented as Ebbers’s lawyer, Reid Weingarten, elicited testimony
that portrayed his client as a likeable and approachable leader.
Oglebay Norton Emerges from Chapter 11 Bankruptcy
Oglebay Norton Co. a producer of minerals and industrial materials,
yesterday emerged from bankruptcy protection, Reuters reported. Oglebay
Norton said under the chapter 11 reorganization plan, the claims of
trade creditors will be paid in full except for holders of the
company’s senior subordinated notes and holders of claims related
to the sale of the MLO business in April 2000. The company said
according to the plan, two board members have stayed on while all the
others have resigned. The new board consists of seven members.
Adelphia Bids Roll In
Two pairs of bidders submitted offers for Adelphia Communications
Corp. by a late-Monday deadline and a handful of investors and
second-tier cable firms competed for the company, nine months after it
first agreed to consider a sale, Reuters reported. Comcast Corp. and
Time Warner Inc. made a widely-anticipated joint offer to buy the entire
company that will likely be the favorite to win, sources close to the
situation said. Leveraged buyout shops Kohlberg Kravis Roberts & Co.
and Providence Equity Partners also decided to make a joint bid for the
company, sources said, the newswire reported.