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House 'Conferees' Respond to Senate Offer
Today;
Time Magazine Feature Blasts Bill as Product of Campaign Cash
Members and staff
from the House Judiciary Committee working on the bankruptcy reform bill
are
expected to transmit a counter-proposal to their Senate counterparts
today.
Negotiations have been ongoing for months on a way to reconcile the
differences
between H.R. 833 (passed by the House last year) and S. 625 (passed by
the Senate
on Feb. 2) without the formation of an official conference committee.
Conferees
have not been named as the Senate bill has been tied up in procedural
knots over
unrelated provisions dealing with the minimum wage and business tax
breaks.
While details of the coming House proposal are not yet clear, it is
expected that
some substantial differences will still remain for the members to work
out. For
example, the House offer is not expected to budge from its position on
the
homestead exemption, which now allows states to 'opt out' from a
$250,000 cap on
equity that can be protected from the reach of creditors. The Senate
offer,
transmitted at the end of March, caps equity at $100,000 with no
provision for an
opt out. On lienstripping in chapter 13, the House is expected to offer
a ban
within five years for automobiles and 18 months for consumer goods. The
Senate
would permit lienstripping of consumer goods purchased more than six
months prior
to filing.
Reaching an accord is essential if the bill is to have any chance of
final action
this Congress. Earlier this week, Majority Leader Trent Lott (R-MS)
advised all
committee chairs that the time for freestanding measures to move this
year is
nearly over. The leadership in both House and Senate still hope to
attach the
'shadow' conference product to another conference report.
Meanwhile, the bill and those behind it have come under scrutiny from
one of the
cover stories in this week's Time magazine ('The Truth About
Bankruptcy'). The
10-page investigative report attacks the premise of the need for the
reform bills
and asserts that the legislation has moved as far as it has only due to
the
lender lobby's financial clout on the Hill.
Fla. Gov. Bush Signs Tobacco Bill
According to the
Associated Press, Gov. Jeb
Bush signed legislation yesterday to ease the pain for tobacco companies
facing a
possible multibillion dollar verdict in a Miami class-action lawsuit
they say may
force them into bankruptcy.
The measure, which took effect immediately, is meant to protect the
companies so
they can continue to pay Florida billions they owe the state from the
1997
settlement of a lawsuit seeking compensation for years of paying to
treat sick
smokers. The amount the companies owe is estimated at $13 billion over
the next
25 years. The state has gotten accustomed to having the money, about
$500 million
a year, for children's and elderly programs.
The measure signed by Bush caps the bond the companies would have to
post to
appeal the verdict at $100 million or 10 percent of the companies' net
worth,
whichever is lower. The law also sets up a mechanism by which lawmakers
may
begin selling off part of the future tobacco income to investors if they
choose
to do so.
GST May Seek Bankruptcy Protection
GST Telecommunications
Inc., Vancouver, Wash.,
announced late yesterday that it may seek bankruptcy protection because
its cash
balances have fallen faster than management expected and caused
liquidity
problems, according to Reuters. In a statement along with its first
quarter
earnings, the provider of communications infrastructure and services
said delays
on construction projects have caused it to defer some of its planned
receipts.
At the end of business on May 5, GST had cash and cash equivalents of
$16.8
million and restricted cash balances of $3.4 million. On March 31, cash
and cash
equivalents totaled $42.4 million. For the first quarter ended March
31, GST
reported a net loss of 70 cents per share on revenues of $63.7 million
vs. a net
loss of $1.44 per share on revenues of $60.6 million in the same quarter
of 1999.
Shares of GST ended trading up 1/32 at 3 on Nasdaq. The earnings
announcement
came after the market closed.
Ithaca Industries Announces Chapter 11 Filing
According to
a newswire report,
Wilkesboro, N.C.-based Ithaca Industries Inc., one of the nation's
largest
manufacturers of private-brand men's and boys' underwear and outerwear
and
women's underwear products, announced that it has filed for chapter 11
in the
U.S. Bankruptcy Court for the District of Delaware. Ithaca also
announced that
it has reached an agreement with its existing bank group on financing to
fund its
operations.
Bankruptcy Court Approves Results of Medical Facility
Auction
Primary Health
Systems Inc., Cleveland, announced that the U.S. Bankruptcy Court for
the
District of Delaware has approved the results of the court-ordered
auction of
three medical facilities held on May 1, according to a newswire report.
At the
auction, a high bid of $62.7 million for the three facilities was
submitted by
the Cleveland Clinic Foundation. However, by agreement of CCF, PHS was
permitted
to accept University Hospitals Health Systems' offer to purchase both
St. Michael
Hospital in Cleveland and Mt. Sinai-East in Richmond Heights as acute
care
full-service hospitals for a bid of $12 million plus other cash and
non-cash
considerations. The remaining facility, Mt. Sinai Integrated Medical
Campus in
Beachwood, will be purchased by CCF for $52.7 million.
AutoInfo Reschedules Disclosure Statement Hearing Date Regarding
Chapter 11 Plan
AutoInfo, Inc., Stamford, Conn., announced that the scheduled hearing
before the
Honorable Adlai S. Hardin, Jr., U.S. Bankruptcy Judge, originally
scheduled for
May 11 has been rescheduled for May 31. The meeting has been
rescheduled to
allow the company additional time to file an amended disclosure
statement.
Gulf States Steel/Panel
Agrees To
Extend Exclusivity
Gulf States Steel Inc. of Alabama (X.WMV)
agreed with
the noteholders' committee to a pared down one-month extension of the
exclusive
period during which it may file a chapter 11 reorganization plan. While
it
initially sought to extend its plan filing exclusivity two months to
June 30,
Gulf States agreed to only seek an extension through May 31 after the
noteholders' committee said that it supports a two-month extension,
subject to
its co-exclusivity rights under a July 7 adequate protection
stipulation.
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