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November 24, 2004
MBIA Receives SEC Subpoena over Bankrupt Pennsylvania Entity
MBIA Inc., a large U.S. bond insurer, on Tuesday said U.S. securities
regulators are investigating a 1998 reinsurance arrangement it entered
into in connection with a bankrupt unit of Pittsburgh’s Allegheny
Health, Education and Research Foundation, Reuters reported. MBIA on
Nov. 18 had reported receiving subpoenas from the SEC and New York
Attorney General Eliot Spitzer seeking information about so-called
non-traditional or loss-mitigation insurance products. Such policies
have come under scrutiny as a possible way for companies to hide
financial losses. Several insurers have this month reported receiving
similar subpoenas. MBIA said it learned in a call it made to the SEC
after receiving its subpoenas that the agency’s probe includes
arrangements related to the bankruptcy of AHERF’s Delaware Valley
Obligated Group, the newswire reported.
Brobeck Trustee Ready to Settle With Ex-Partners
Brobeck’s bankruptcy trustee, Ronald Greenspan, is inviting the
partners to a meeting at which he will propose a settlement agreement
that would free the partners from litigation related to the firm’s
collapse, the Recorder reported. Greenspan said on Tuesday
that a time and place for the meeting has not been set, but he expects
it will be early next month. Read the full article at
href='http://www.law.com/jsp/article.jsp?id=1101136519733'>www.law.com/jsp/article.jsp?id=1101136519733.
Diocese Assailed over Bankruptcy Plan
Lawyers for victims of sexual abuse by priests contend the Roman
Catholic Diocese of Spokane, Wash., is avoiding its financial duty
through its
plan to file for bankruptcy protection, the Associated Press reported.
Attorneys Michael Pfau and Timothy Kosnoff, who represent dozens of
victims, said in a letter to Spokane Bishop William Skylstad that
victims of abuse have the same right to the financial resources of the
diocese as parishes and schools. Skylstad has said that he wants to
maintain the operation of parishes, schools and the church during the
bankruptcy process. Read the full article at
href='http://seattlepi.nwsource.com/local/200763_diocese23.html'>seattlepi.nwsource.com/local/200763_diocese23.html.
United’s Pilots Are Offered 2 Ways to Cut Their Wages
United Airlines is giving its pilots’ union two options, the
New York Times reported. They can accept 18 percent wage
cuts or they can agree to smaller cuts but also accept significant
changes in work rules. With either option, the airline, which has been
in bankruptcy for almost two years, told its pilots that it wants to be
able to impose additional wage cuts after it leaves chapter 11, if it
needs to do so. The demands are part of United’s bid for another
round of $725 million in wage and benefit cuts from its unions, the
newspaper reported.
Delta Grants Stock Options to Some Executives
Delta Air Lines said on Tuesday it gave incentive stock options to a
half-dozen top executives but none to CEO Gerald Grinstein, who
voluntarily relinquished his salary for the first and fourth quarters of
2004 to help the airline save money, Reuters reported. In a regulatory
filing, the airline said it granted about 330,000 stock options to CFO
Michael Palumbo and about 300,000 options to each of five other top
executives.
Dominion Resources: Court Approves USGen
Dominion Resources Inc. said on Tuesday that the U.S. Bankruptcy
Court for the District of Maryland approved its purchase of three
Northeast power stations from USGen New England Inc. for $536 million in
cash and another $120 million to reimburse other costs, Reuters
reported. The Richmond, Va.–based company said it expects capital
expenditures on average of $70 million to $95 million a year, with most
of that budgeted for environmental controls. In 2005 and 2006 the
expenditures are expected to be $230 million.
U.S. Airlines Pack Planes but Face Holiday Hangover
U.S. airlines estimate they will carry a record 16.3 million
passengers during Thanksgiving week, Reuters reported. Many flights will
be at or near capacity this weekend as well as on select dates through
the New Year’s holiday. But planes full of passengers do not solve
the industry’s problems this year, analysts said. Some low-cost
carriers, like profitable Southwest Airlines, could do well. But
struggling legacies like Delta Air Lines, American Airlines, US Airways
and United are expected to continue to have financial problems unless
fuel prices plunge unexpectedly, the newswire reported.
Moody’s Cuts Trump Atlantic City Ratings
Moody’s Investors Service on Tuesday cut the debt ratings for
Trump Atlantic City Associates after its parent, Trump Hotels and
Casino Resorts Inc., said it was filing for voluntary bankruptcy,
Reuters reported. Moody’s cut Trump Atlantic City Associates
senior implied rating to Caa2 from Caa1 and affirmed Trump Casino
Holdings LLC’s ratings including its senior implied rating, at
Caa1.