June 11, 2004
United Reaches Deal with
Retirees on Benefits
United Airlines parent UAL Corp. said on Thursday it
has reached an agreement with retirees regarding changes to their
medical and life insurance benefits, Reuters reported. The agreement
covers more than 27,000 retirees and will contribute to savings of more
than $300 million through 2010 for the bankrupt No. 2 U.S. airline, it
said. Workers covered under the deal include retirees from the
Association of Flight Attendants, the International Association of
Machinists, the International Federation of Professional and Technical
Engineers, the Professional Airline Flight Control Association and the
Transport Workers Union. United in May announced it had reached a
separate deal with the Aircraft Mechanics Fraternal Association, the
newswire reported.
Adelphia Still Looking for
Bank to Handle Sale
Bankrupt cable TV operator Adelphia Communications
Corp. put itself up for sale in April, but a month and a half later it
has not yet hired bankers to conduct the process and is still sorting
through conflicts of interest on behalf of the candidates, Reuters
reported. Adelphia filed a plan in February to reorganize itself and
exit bankruptcy as an independent company. But intense pressure from
creditors and shareholders who felt the company had been undervalued
prompted it to put itself on the block. With interest rates on deal
financing expected to rise and competition from cable rivals
intensifying, Adelphia would be well-served to set up its sale process
as quickly as possible, several sources within the industry said this
week, the newswire reported.
Enron's Bankruptcy
Confirmation Hearing to Last Through Next Week
Enron attorneys will return
next week for nearly 30 hours of closing arguments over four days to
conclude the company’s bankruptcy confirmation hearing, the
company said Thursday, the Associated Press reported. Several current
Enron executives testified before U.S. Bankruptcy Judge Arthur Gonzalez
in New York about the extensive reorganization plan this week, including
restructuring expert Stephen Cooper, Enron's interim CEO. On Thursday,
attorneys scheduled 29 hours of closing arguments to be presented next
week.
Boutiques San Francisco
Doubles Its Losses
Boutiques San Francisco Inc.
said on Thursday that it doubled its losses in the latest quarter while
the company tried to restructure under bankruptcy protection, Reuters
reported. The retailer said its net loss widened to C$5.8 million ($4.3
million), or 50 Canadian cents per share, in the quarter ended May 1,
compared with a year-earlier loss of C$2.9 million, or 25 Canadian
cents. Revenues fell to C$26.8 million from C$42.6 million, reflecting
the sale or closing of more than half of its stores, the newswire
reported.
FCC Approves
Reorganization Plan for Wireless Band
The U.S. Federal Communications
Commission on Thursday approved a plan to reorganize a band of airwaves
in hopes of promoting further deployment of wireless high-speed Internet
access, Reuters reported. The band, which includes more than 190
megahertz of valuable spectrum, is primarily used by education
institutions for programs like distance learning and by companies
including Sprint Corp. and Nextel Communications Inc. The agency
approved a plan that would allow greater flexibility for using the
airwaves and continue to allow education organizations to lease their
spectrum in the band for commercial services, like wireless high-speed
Internet services, known as broadband.
Omni Facility Services
files for Chapter 11 bankruptcy protection
South Plainfield, N.J.-based
Omni Facility Services Inc. and its affiliates, including Remco
Maintenance Corp., have filed for chapter 11 bankruptcy protection with
the U.S. Bankruptcy Court in Manhattan, according to the Associated
Press. The privately held company listed assets of $80.3 million and
debts of more than $100 million in its bankruptcy petition. The company
owes $43.8 million on a credit line provided by Heller Financial and has
retained TRG Inc. as its turnaround adviser, court papers said, AP
reported. The company provides landscaping, architectural maintenance,
mechanical, janitorial and food plant sanitization services to
businesses. Omni, which employs 2,600 people, had 2003 revenue of $150
million, according to the filing.
Judge OKs Arrow Air
Bankruptcy Exit Plan
Miami-based Arrow Air said a
U.S. Bankruptcy Judge has approved its reorganization plan, so the
airline will move forward without bankruptcy protection, according to
the Business Journal. The airline said Chief U.S. Bankruptcy
Judge Emeritus A. Jay Cristol OK'd the plan. Arrow did not give much
detail on its reorganization plan except to say it provides a favorable
restructuring of the company and ensures strong future operations. The
company did say the management team under the plan includes Executive
Chairman and Director Guillermo Cabeza, and President Frank
Visconti.
Bankruptcy Court Judge Rules
That DIRECTV Can Market Its Service in Pegasus Territories; Judge Denies
Pegasus Motion for Relief
A federal judge in the U.S.
Bankruptcy Court in Portland, Maine yesterday entered an order denying
Pegasus's request to prevent DIRECTV from providing DIRECTV(R) service
directly to consumers in areas served by Pegasus Satellite Television
Inc., according to the Business Wire. The court's ruling allows DIRECTV
to market its service and acquire new customers in Pegasus territories.
On June 1st, DIRECTV Inc. and NRTC agreed to end NRTC's exclusive
DIRECTV service distribution contract effective immediately. In
connection with the agreement, NRTC's separate agreements with its
members and affiliates, including Pegasus, for sale of DIRECTV services,
were terminated, with an effective date of August 31, 2004. Pegasus
Satellite Communications Corporation and certain of its subsidiaries,
including Pegasus Satellite Television, Inc., filed a voluntary petition
for relief under chapter 11 June 2.
Countertop Maker
Formica Emerges from Chapter 11
Cincinnati-based Countertop maker
Formica Corp. on Thursday said it has emerged from chapter 11 under the
control of two private equity firms, more than two years after filing
for bankruptcy protection from creditors, Reuters reported. The company
said the firms—Cerberus Capital Management LP and Oaktree Capital
Management LLC—led a group of investors that bought the company's
shares for $175 million in cash, the newswire reported. It said it will
use substantially all of these proceeds to pay off secured lenders.
Formica also said it reduced its long-term debt load to about $160
million from more than $540 million.