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Supporters Prepare for Another Bankruptcy Reform Push
Bankruptcy reform legislation will be resurrected in the 108th
Congress by House and Senate Judiciary Committee chairmen intent on
giving it another go, CongressDaily reported. House Judiciary
Chairman James Sensenbrenner (R-Wis.) pledged in an interview in
December to bring the measure up again next year. He said it would be a
bill similar to this year's failed vehicle, with the key exception being
the removal of a contentious provision that would prohibit people
convicted of violence against abortion clinics from using the bankruptcy
laws to avoid paying fines. However, Sam Gerdano of the
American Bankruptcy Institute believes that the bill will be
changed from the start. He noted that the House 'may be able to' move
the bill unchanged, 'but you certainly can't do that in the Senate,' he
said, especially given the one-vote margin in the Senate Judiciary
Committee.
Overall, incoming Senate Judiciary Chairman Orrin Hatch's (R-Utah)
resolve will be crucial, since the Senate will be the crucible of the
measure's staying power, sources noted, according to
CongressDaily. 'The 60-vote solution is not going away,' said one
lobbyist. 'We'd probably muster enough -- but it might take a little
while.' But that assumes the Senate would agree to take the House-passed
bill. Jacobo Rodriguez, a financial services analyst for the Cato
Institute, said he believed that slim majority or no, the GOP would be
unable to resist the temptation to toughen the bill in the industry's
favor. At the same time, Democrats are apt to block any measure that
fails to contain the abortion-related language advanced by Sen. Charles
Schumer (D-N.Y.), reported the newswire.
International Steel Offers $1.5 Billion for Bethlehem
International Steel Group Inc., the company investor Wilbur Ross created
last year by buying the mills of bankrupt steelmakers, offered $1.5
billion for most of the assets of Bethlehem Steel Corp., Bloomberg News
reported. A definitive agreement is being negotiated and will be
completed in a week to 10 days, International Steel said in a statement.
International Steel said it believes it has the backing of Bethlehem
management and the biggest U.S. steel union, reported the newswire.
International Steel said the purchase, its largest, would make it North
America's biggest producer of steel, with more than 16 million tons
shipped a year. U.S. Steel Corp., the biggest U.S. steelmaker, shipped
9.8 million tons in 2001. Other companies have turned away from bidding
for Bethlehem because of its labor costs, Bloomberg News reported.
Creditors Reach Settlement with ABT
Grass and alfalfa seed producers with claims against bankrupt seed
industry giant AgriBioTech (ABT) are in line to receive checks from
three banks in early 2003 under a settlement approved by a Nevada
bankruptcy judge on Dec. 20, Capital Press reported. Seed producers with
secured and unsecured claims against ABT will share as much as $20
million under a deal struck between creditors and Bank of America,
Deutsche Financial Services and Branch Bank and Trust, reported the
online news service. The settlement, which was agreed to in a mediation
session earlier in December, enables the parties to avoid a costly and
lengthy trial that, with appeals, could have dragged on for as long as
three years, according to Deborah Williamson, a San Antonio,
Texas, attorney who represented creditors. U.S. Bankruptcy Judge
Gregg Zive served as mediator for the eight-hour session on Dec.
2.
Attorneys representing creditors said growers will receive between 38
and 45 cents on the dollar from the first round of litigation. The total
depends in part on the state a grower resides in and whether the grower
holds secured or unsecured claims. Ford Elsaesser, a Sand Point,
Idaho, attorney who represented alfalfa seed growers in the proceedings,
said that growers in Idaho are expected to receive less than growers in
Oregon and California, which have some of the strongest lien laws in the
United States, reported Capital Press. To read the full article, point
your browser to
href='http://www.capitalpress.info/main.asp?Search=1&ArticleID=640&Se…'>http://www.capitalpress.info/main.asp?Search=1&ArticleID=640&SectionID=….
Furr's Restaurant Group Seeks Chapter 11 Bankruptcy
Protection
Furr's Restaurant Group Inc., which operates 75 cafeterias in nine
states, filed for bankruptcy amid slumping sales and more than $31.2
million in losses in the first three quarters of 2002, Bloomberg News
reported. Furr's has said it suffered 'a serious decline'' during the
second quarter, and losses in the 13-week period were more than $23.6
million, according to a quarterly report to the U.S. Securities and
Exchange Commission. The company in September hired William
Snyder, a corporate turnaround consultant, as chief executive
officer after Craig Miller resigned as president and CEO. The
Richardson, Texas-based company sought chapter 11 protection in the U.S.
Bankruptcy Court in Dallas and said its restaurants remain open. Furr's
operates cafeterias under its own name and as Bishop's, and owns Dynamic
Foods, a food preparation, processing and distribution unit based in
Lubbock, Texas, reported the newswire. Robert Dangremond, a
principal at turnaround consulting firm AlixPartners LLC became a
director of Furr's in February 2001. The company's board also includes
Barry Ridings, co-head of corporate restructuring at Lazard
Freres & Co., and William Nightingale of Stamford, Conn.-based
turnaround consulting firm Nightingale & Associates LLC.
US AIRWAYS
US Air to Reduce Operations, Schedule at Orlando Airport
As part of its restructuring efforts, US Airways Group Inc. is reducing
the size of its operations and flight schedule at Florida's Orlando
International Airport, according to papers filed late on Friday with the
U.S. Bankruptcy Court in Alexandria, Va., Dow Jones reported. US Airways
said it will reduce the number of gates it leases at the airport to six
from 15. It will also look to downsize facilities it leases to support
its flight services, such as ticket counter offices, baggage claim
facilities, administrative offices and club facilities. The airline said
the move will save it about $18 million over the remaining lives of the
leases -- for savings of $3 million a year, reported the newswire.
In Friday's court papers, US Airways asked U.S. Bankruptcy Judge
Stephen Mitchell for approval to end its leases at the Orlando
airport and to enter a new operating agreement or lease for only the
premises it needs for ongoing operations. The airline said its business
plan anticipates that future operations will include service at the
airport. It said it has been working with the airport authority for the
past four to six weeks to negotiate a new operating agreement and to
facilitate the surrender of the premises that the airline won't
re-lease, according to the newswire. Judge Mitchell is scheduled to
consider the airline's request at a hearing on Jan. 16, Dow Jones
reported.
US Air Loss for November Widens to $117.6 Million
US Airways Group Inc. reported a net loss of $117.6 million in November,
compared with a $45.6 million net loss in October, according to a
monthly operating report the airline filed on Monday afternoon with the
bankruptcy court handling its chapter 11 case, Dow Jones reported.
Operating revenue dropped to $519.3 million during November, compared
with $572.4 million in October. In addition to operating expenses, the
November report listed $36.6 million in other expenses, including $11.4
million in reorganization items. According to the report, the company
paid $3.6 million during November for professional fees and
out-of-pocket expenses. US Airways has been reorganizing under chapter
11 protection since August.
United Cuts Last-minute Fares to Lure Business Fliers
In an effort to get business travelers flying again, United Airlines
said Monday it is reducing the expensive, last-minute tickets used by
such passengers by as much as 40 percent indefinitely, Dow Jones
reported. The move by the UAL Corp. unit, operating under bankruptcy
court protection, is the latest and among the most significant from a
major U.S. carrier in the airlines' efforts to slash pricey business
fares.
'Most of the major carriers have been experimenting with lower business
fares in a limited number of markets for the past several quarters,'
said Samuel Buttrick, airline analyst at UBS Warburg LLC in Stamford,
Conn., reported the newswire. 'United's initiative today represents by
far the broadest reduction in business fares in terms of the number and
importance of markets involved,' said Buttrick, reported Dow Jones.
Metromedia International Doesn't Declare Preferred Stock
Divident
Metromedia International Group Inc., seeking a possible restructuring,
won't declare a dividend on its 7.25 percent cumulative convertible
preferred stock for the quarterly dividend period ending Dec. 15, Dow
Jones reported. In a press release on Monday, the owner of various
interests in communications and media businesses in Eastern Europe said
it filed its Form 10-Q for the third quarter. On Sunday, the company
said it continues to doubt its ability to continue as a going concern,
lacking the cash needed to fund operations over the next 12 months as
well as an $11.1 million note payment due at the end of March. The
company, which had $9.8 million in cash on Oct. 31, first warned of its
going-concern doubt in April. Metromedia said bankruptcy is a
possibility if it can't resolve its liquidity issues, Dow Jones
reported.
Diane E. Tebelius Appointed U.S. Trustee for Washington, Oregon,
Montana, Idaho, Alaska
Diane E. Tebelius has been appointed U.S. Trustee for Washington,
Oregon, Montana, Idaho, and Alaska effective Dec. 30, 2002, the
Executive Office for United States Trustees (EOUST) announced in a press
release yesterday. 'It is a pleasure to announce the appointment of
Diane Tebelius as U.S. Trustee for Region 18,' said EOUST Director
Lawrence Friedman. 'Her extensive experience in both civil and criminal
enforcement, including more than 15 years as an Assistant United States
Attorney in Seattle, will prove invaluable to the program as we strive
to ensure the integrity of the bankruptcy system.' Tebelius has served
as an Assistant United States Attorney in Seattle since 1986, focusing
on tax and bankruptcy fraud cases. She was an attorney in the Tax
Division of the U.S. Department of Justice in Washington, D.C., from
1983 to 1986, and Special Counsel to the U.S. Senate Budget Committee
from 1981 to 1983.
Heritage-Crystal Clean Sues Safety-Kleen for $400 Million
Safety-Kleen Corp. has been sued by a competing company that alleges
Safety-Kleen used anticompetitive practices since filing for bankruptcy,
Dow Jones reported. In a press release on Monday, Heritage-Crystal Clean
LLC, a privately held regional parts cleaner company, said it was
seeking $400 million in damages. Heritage-Crystal's suit, filed in the
U.S. District Court for the Northern District of Illinois, claims that
Safety-Kleen has made false and misleading statements about
Heritage-Crystal and has been hindering competition. Heritage-Crystal
said Safety-Kleen has about an 85 percent market share in the parts
cleaners market. Columbia, S.C.-based Safety-Kleen filed for bankruptcy
in June 2000, listing assets of $4.45 billion and liabilities of $3.14
billion, reported the newswire.
Judge Approves Conseco Finance Bidding Procedures
The judge overseeing Conseco Inc.'s bankruptcy proceedings tentatively
approved on Monday bidding procedures for its Conseco Finance Corp.
unit, setting up a potential sale by March 5, Dow Jones reported. Judge
Carol A. Doyle verbally agreed to the motion after considerable
negotiations by several parties, after the company received a total of
seven objections, including one from the U.S. Trustee's office.
Meanwhile, an attorney for Conseco told Dow Jones that another party had
emerged as a possible bidder for Conseco Finance, though he declined to
provide details, reported the newswire. CFN Investment Holdings LLC, a
joint venture comprising Fortress Investment Group, J.C. Flowers &
Co. and Cerberus Capital Management, was named last month in the initial
motion as the leading bidder for Conseco Finance.
Dollar Amount of Chapter 11 DIP Loans Jumped 25 Percent in 4th
Quarter
The dollar amount of chapter 11 debtor-in-possession loans approved by
U.S. Bankruptcy Courts surged for the second straight quarter as some of
the nation's largest debtor companies won approval of billion-dollar
loans needed to help them pay employees, suppliers and other operating
costs, Dow Jones reported. In the fourth quarter of 2002, courts across
the country approved interim and final DIP loans totaling roughly $4.61
billion, a 25 percent jump compared with about $3.7 billion in the
previous quarter, according to information compiled by Dow Jones
Newswires. The fourth-quarter figures are almost triple the dollar
amount of DIP loans approved by courts in last year's second
quarter.
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