src='/AM/Images/headlines/headline.gif' />
February 24, 2005
Senate Majority Leader Supports Bush Effort to Curb Frivolous
Lawsuits
Senate Majority Leader Bill Frist (R–Tenn.) said on Monday that
he will keep pushing for measures to limit “predatory
lawyers” from pursuing frivolous lawsuits, excessive fees and
unlimited punitive damages against U.S. businesses and health care
providers, Knight-Ridder reported. “U.S. businesses are at a huge
disadvantage,” Frist told leaders of the Chattanooga (Tenn.) Area
Chamber of Commerce and Chattanooga Manufacturers Association. “We
have a class-action litigation system that is out of balance and not
serving the interests of consumers or the country as a whole.”
Three days after President Bush signed the biggest change in tort reform
laws in more than a decade, Frist vowed to work for more measures to
help limit consumer bankruptcies, control the costs of asbestos and gun
litigation and cap medical malpractice judgments. He said he hopes such
measures help business by reducing the costs of debt writeoffs, tort
litigation and defensive medical procedures, which now equal about
$1,000 a year for every American. “The window of opportunity to
act is limited,” said Frist, who plans to retire from the U.S.
Senate at the end of next year. Critics of such reform contend that
complaints of abuse are overstated and often stem from businesses, not
consumers.
href='http://www.hoovers.com/free/news/detail.xhtml?ArticleID=NR200502241180…'>Read
the full article.
U.S. Treasury’s Snow Sees Economy in “Good
Shape”
A slim gain in the U.S. January consumer price index, and what may be
stronger overall growth than originally reported, point to a thriving
economy, U.S. Treasury Secretary John Snow said on Wednesday, Reuters
reported. “The economy”s in good shape,” he told
reporters at a briefing. Snow said low inflation, confirmed by
today’s CPI number, good GDP growth, and a possible upward
revision to the fourth quarter based on the stronger performance on
exports are among positive economic trends. Rising revenues together
with budget belt-tightening means the U.S. government would be on track
to achieve President George W. Bush’s goal of trimming the deficit
to around $260 billion by 2008—if Congress approves the spending
cuts Bush advises, Snow said. “We recognize the deficit, we need
to continue to focus on the deficit,” he said.
Judge Nixes Competing Trump Bankruptcy Plan
A judge on Wednesday refused to allow shareholders to file a
competing bankruptcy plan for Trump Hotels & Casino Resorts Inc.,
eliminating a key obstacle to court confirmation of the casino
company’s chapter 11 reorganization, the Associated Press
reported. U.S. District Judge Judith Wizmur denied a motion by the
Official Committee of Equity Security Holders to strip Trump Hotels of
the exclusive right to propose a plan to get out of bankruptcy. The
Equity Committee, which represents holders of Trump Hotels common stock,
contends that the reorganization plan crafted by the company gives
Chairman Donald J. Trump millions of dollars in benefits at the expense
of investors. Trump Hotels, which operates three casinos in Atlantic
City and a riverboat in Gary, Ind., filed chapter 11 on Nov. 21. A
confirmation hearing on its reorganization plan is slated to begin April
5.
Winn-Dixie Says Court Clears Payment of Wages
Supermarket chain Winn-Dixie Stores Inc. on Wednesday said it
received court approval to keep paying wages to workers and take other
actions that will help it operate under bankruptcy protection, Reuters
reported. The Jacksonville, Fla.–based company said it also was
cleared to pay vendors for goods and can access up to $600 million of
its new $800 million credit facility from Wachovia Bank. All 920
Winn-Dixie stores in the United States and Bahamas are open, the company
added. Winn-Dixie filed for chapter 11 bankruptcy protection earlier
this week.
Court Approves Kaiser Disclosure Statements for Subsidiaries
Kaiser Aluminum announced in a press release that, with some
clarifying modifications, the U.S. Bankruptcy Court for the District of
Delaware has approved the amended disclosure statements for two separate
liquidating plans relating to the subsidiaries through which the company
has conducted certain alumina operations in Jamaica and Australia. The
company expects to file amended plans and disclosure statements
containing these modifications within the next few days. None of the
modifications is expected to affect any of the proposed distributions
previously contained in the prior filed documents. Approval of these
disclosure statements marks the point from which solicitation and voting
on the liquidating plans can begin. The court has scheduled a hearing to
begin on April 13 to consider confirmation/approval of the two
liquidating plans.
U.S. Rests Fraud Case Against Ebbers
Lawyers defending former WorldCom Inc. CEO Bernard Ebbers against
criminal fraud charges called a company whistle-blower as their first
witness on Wednesday after U.S. prosecutors wrapped up their case
following 16 days of testimony, Reuters reported. Cynthia Cooper, former
vice president of audit who brought WorldCom’s $11 billion
accounting tricks to light, testified that external auditors approved
the telecommunications company’s accounting in early 2001 and
2002. Under questioning by a defense attorney, Cooper said auditor
Arthur Andersen made presentations to the company’s audit
committee at which it gave a “green light” to procedures and
practices used by WorldCom. Lawyers for Ebbers have argued that their
client was unaware of the fraud, pointing out that auditors never
alerted him to any potential problems. Cooper, who shared Time
magazine’s 2002 Persons of the Year award with two other
whistle-blowers, also testified that Ebbers often gave
“brief” answers during shareholder meetings and passed off
technical questions to the company’s finance chief. Defense
lawyers made a failed bid for a mistrial on Wednesday, saying
prosecutors failed to prove WorldCom’s accounting violated
generally accepted accounting principles (GAAP).
Further Problems Discovered at Fannie Mae
Federal regulators investigating Fannie Mae’s accounting
practices have discovered additional problems, including serious
deficiencies in internal controls, the Associated Press reported. An
eight-month investigation by the Office of Federal Housing Enterprise
Oversight (OFHEO), which supervises Fannie Mae, last year found serious
accounting problems at the biggest U.S. buyer of home mortgages as well
as earnings manipulation and lax internal controls. The SEC ordered
Fannie Mae in December to restate its earnings back to 2001, a
correction estimated at $9 billion. Now OFHEO has informed Fannie
Mae’s board of additional problems including accounting for
securities and loans, and practices to spread the impact of income and
expenses over time, Fannie Mae said in a statement. “Fannie
Mae’s board and management are addressing the issues and
questions,” the statement said. Spokesmen for OFHEO had no
comment, the newswire reported.