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November 1, 2004
Delta Air Lines Pilots Begin Voting on Concessions Deal
Delta Air Lines pilots have started voting on a new concessions deal
which could save the airline from going into bankruptcy, the Associated
Press reported. Under the new agreement, pilots would have their
salaries
cut by a third and no pay raise for at least five years. Delta Air Lines
was looking for $1 billion in concessions from its pilots, which it
claims
would give it space to avoid bankruptcy. Voting is expected to close on
Nov. 11 with a simple majority vote needed for the agreement to
be ratified. In return for the cuts, pilots will be able to buy up to 15
percent of the airline’s stock, reports the Associated Press.
University of Calif., Lehman Reach Settlement
The University of California said on Friday that Lehman Brothers has
agreed to pay $222.5 million to settle a class action suit for the
bank’s role in the sale of Enron Corp. securities to it and other
plaintiffs, Reuters reported. The settlement is the largest and latest
by the university against Wall Street banks for alleged
misrepresentations in the sale of Enron stocks and bonds. Last July, the
university—the lead plaintiff in the class action
suit—settled with Bank of America for $69 million. In July 2002,
it reached an agreement with the international arm of former accounting
firm Arthur Andersen, which advised Enron, for $40 million.
National Energy Emerges from Bankruptcy Protection
National Energy & Gas Transmission Inc. on Friday said it has
emerged from bankruptcy protection, Reuters reported. The company said
that as a result of its emergence from bankruptcy, PG&E Corp., which
previously held 97 percent of the company’s common stock, is no
longer its parent company. In the past several months, the company has
announced the separate sales of each of its major operating business
units and expects to cease operations during 2005. Under the
reorganization plan, National Energy will issue 100 percent of its
equity and $1 billion in notes to its unsecured creditors and other
financial institutions.
Canada Says May Be Time to Open Airline Market
Canada’s transport minister said on Friday it may be time to
open Canada’s airline market as it mulled whether to lift foreign
ownership restrictions on the country’s carriers, Reuters
reported. “For nearly a quarter of a century, the federal
government’s air policies have been built on protecting what we
have, rather than building something better, protecting against loss of
service, against the loss of our national flag carrier,” Jean
Lapierre said in prepared notes for a speech to an airline industry
conference in Toronto. “The time for this approach is over. Now is
the time to build an aggressive, forward-looking, market-driven
framework that will help the industry compete regionally and
globally,” he added, the newswire reported.
Federal Bankruptcy Court Approves Galey & Lord Sale
A federal bankruptcy court has approved the sale of Galey & Lord
Inc. to Patriarch Partners LLC, company officials said Friday, the
Associated Press reported. The transaction is expected to close Nov. 8.
Patriarch is expected to acquire all of Galey & Lord’s assets
for $40 million in cash and the assumption or refinancing of certain
secured obligations, contracts, employee obligations and administrative
liabilities. Galey & Lord entered voluntary bankruptcy protection in
August and the company’s board of directors agreed in July to a
buyout by Patriarch Partners.
Bishop Warns That Diocese Could Face Bankruptcy
If attorneys for the Roman Catholic Diocese of Spokane, Wash., do not
reach a settlement with dozens of alleged victims of clergy sex abuse,
the diocese may be forced to declare bankruptcy, the bishop said, the
Associated Press reported. Bishop William Skylstad issued the warning in
a letter sent to parishioners in preparation for settlement talks this
week with 28 alleged victims of a former priest who has admitted
sexually abusing boys. The first of five lawsuits alleging that the
diocese did not do enough to protect children from Patrick
O’Donnell is scheduled for trial Nov. 29, the newswire
reported.
Deal Lets Euro Disney Avoid Bankruptcy
Euro Disney avoided bankruptcy on Tuesday by striking a deal with its
banks and bondholders to restructure its €2.4 billion ($2.7
billion) in debts through deferred repayments, the Daily
Variety reported. But the theme park operator was forced to
improve the terms offered to hedge funds holding some of its bonds in
order to win their support. Changes include an increase of about 2
percent in the interest rate on $554 million of its senior debt, plus
shortening the repayment schedule of its senior debt by two years to
2012.
Hollywood Casino Begins Bankruptcy Process
Hollywood Casino and some of its creditors reached a deal on Saturday
that starts the chapter 11 bankruptcy process in a federal court in
Shreveport and ensures that contractors used to build the gaming
property will be paid, shreveporttimes.com reported.
Hollywood will make bond payments and pay after the closing of the
sale, which likely will be next year, said John Hull, president and CEO
of the casino’s managing partner, HCS I Inc.