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November 15, 2005
name='1'>Frist
Cites Progress on Pension Bill Negotiations
Senate Majority
Leader Bill
Frist (R-Tenn.) said yesterday that there was progress on
comprehensive pension
legislation and it could reach the chamber’s floor by next week,
Reuters reported
today. Senate leaders were "very, very, very close" to an
agreement
to bring the bill to the floor, Frist told the Senate. The
bill’s chances improved
last week when Sens. Mike DeWine (R-Ohio) and Barbara Mikulski (D-Md.)
lifted
holds on the measure. The measure would tighten the rules that govern
how companies
fund their pension plans and seeks to avert a possible taxpayer
bailout of the
nation’s already troubled pension insurer, the Pension Benefit
Guaranty Corp.,
which has to pay the pensions of companies whose plans run
aground.
id='2'>Judge
Rejects Banks’ Plan in Owens Corning Proceedings
A bankruptcy judge
dealt
a setback yesterday to banks seeking to take the lead in Owens
Corning’s multibillion-dollar
chapter 11 case, the Toledo Blade reported today. The decision
was made,
although statements suggested that the Toledo firm’s hopes of
ending an impasse
between opposing creditor groups have dimmed. Judge Judith
Fitzgerald
extended the deadline for the firm to file a revised bankruptcy-exit
plan until
Jan. 31, rejecting a demand by bank creditors that the deadline be
extended
only until Dec. 31 and that they be given permission to automatically
file a
competing plan.
href='http://toledoblade.com/apps/pbcs.dll/article?AID=/20051115/BUSINESS03/5…'>Read
more.
id='3'>Chief
Catholic Bishop Defends Priests
The president of
America’s
Roman Catholic bishops defended American priests Monday, saying that a
"handful"
of miscreants who sexually abused minors have forced the rest of the
clergy
"to endure an avalanche of negative public attention," the
Associated
Press reported today. Bishop William Skylstad of Spokane, Wash., told
a meeting
of the U.S. hierarchy that despite the scandal and job pressures
caused by the
declining total of clerics, three recent surveys show a "high
level of
morale among priests." But Voice of the Faithful, an independent
reform
group with 30,000 lay members, criticized the bishops for lack of
consultation
with parishioners and inadequate outreach to abuse victims.
href='http://www.rutlandherald.com/apps/pbcs.dll/article?AID=/20051115/NEWS/5…'>Read
more.
Airlines
id='4'>Delta
Pilots Strike Could Doom Carrier
A strike threat by
Delta
Air Lines’ pilots, following a standoff with management
over proposed
wage cuts, has raised the prospect of the first shutdown of a major
U.S. airline
in seven years, MSNBC reported yesterday. At stake is the
carrier’s
survival. Delta agreed with that assessment, saying Monday that a
pilots’
strike would be “murder-suicide” and in effect put the
carrier
out of business.
Meanwhile,
href='http://www.ajc.com/business/content/business/delta/1105/15deltadispatch…'>Delta
Air Lines’ flight dispatchers agreed to pay cuts of about 10
percent and
benefit reductions to help the bankrupt carrier lower operating
costs. The
concessions were approved by members of the Professional Airline
Flight Control
Association, which represents 171 dispatchers at Atlanta-based
Delta, the
company said.
In other news, it’s a pivotal week for Delta Air Lines Inc,
the Associated
Press reported yesterday. The struggling carrier might release
details about
its finances in a regulatory filing today, its pilots plan a rally
today to
defend their contract and a bankruptcy hearing is set for tomorrow
on whether
to void that contract and allow deep pay and benefit cuts. The
pilots have
raised the prospect of a strike if the court rejects their contract.
Whether
they are able to do so legally, however, is a matter open for
question. Most
people connected to the case think that the judge will give the
sides up to
30 more days to reach an agreement.
id='5'>Northwest
Pilots Ratify Interim Pay Agreement
Pilots at Northwest
Airlines
have agreed to a 24 percent temporary pay cut while talks with the
bankrupt
airline over a permanent deal continue, the Air Line Pilots
Association said
on Monday, AirWise News reported today. The two-month
agreement, which
includes changes in sick leave and other terms, is contingent on
proportional,
temporary pay cuts for flight attendants and machinists, said Hal
Myers, a Northwest
pilot and spokesman for the union. The board of the Professional
Flight Attendants
Association has approved pay cuts, but the International Association
of Machinists
and Aerospace Workers has not. A bankruptcy judge is set to decide
tomorrow
whether to impose the temporary pay package for machinists.
href='http://news.airwise.com/story/view/1132056017.html'>Read
more.
id='6'>Steel
Hearings Open
Two groups battling
for control
of WCI Steel remained resolute at the start of court hearings on the
future
of the Warren, Ohio, steelmaker, Vindy.com reported today. Neither
side was
swayed as they both revealed sweetened offers in opening statements
Monday before
Judge Marilyn Shea-Stonum in U.S. Bankruptcy Court in Akron,
Ohio. The
judge has set aside six days for testimony this week and next week and
is expected
to decide sometime later who will control WCI when it emerges from
bankruptcy
court protection.
href='http://www.vindy.com/content/local_regional/298011659735658.php'>Read
more.
id='7'>GM’s
Derivatives Show Rising Bets on Bankruptcy
Derivatives traders are increasing bets that
href='http://www.financialexpress.com/fe_full_story.php?content_id=108673'>General
Motors Corp (GM) may enter bankruptcy after the disclosure of
accounting
errors and four straight quarters of losses, the Financial
Express
reported yesterday. Traders last week demanded upfront payments in
addition
to annual premiums for derivatives contracts that protect owners of
the Detroit-based
company’s debt should it miss a payment or declare bankruptcy.
By doing
so, traders relegated GM to the same status as Delphi and Delta just
before
those companies defaulted. The annual cost of insuring $10 million
of GM debt
for five years with credit-default swaps rose to $1.7 million up
front plus
$500,000 a year on Nov. 10, compared with an annual premium of about
$1 million
earlier in the week, traders said. The debt-insurance contracts
changed hands
at about $260,000 at the start of the year.
Meanwhile, the already bleak outlook for GM became a little
gloomier late
last week when
href='http://www.law.com/jsp/newswire_article.jsp?id=1131714652449'>the
automaker said it would restate its 2001 earnings because of
accounting errors,
The Deal reported yesterday. GM said in a Securities and
Exchange Commission
filing that it overstated 2001 earnings by up to $400 million
because it erroneously
booked credits received from suppliers immediately, instead of over
time.
GM said that it would restate earnings for 2001 and perhaps for
subsequent
years before releasing its 2005 annual report next year. (Paid
registration
required to read full story.)
id='8'>Elite
Technical Inc. Sells Assets and Enters Bankruptcy
Elite Technical
Inc. announced
the appointment of a receiver by Elite’s bank effective Nov. 10,
CNNMatthews
said in a press release yesterday. The receiver has accepted an offer
to sell
all the assets, excluding accounts receivable, of the company to a
U.S.-based
cable manufacturer for $300,000 subject to any adjustment for a final
inventory
count. Any proceeds from accounts receivable will be applied against
the bank
facility first and then unsecured creditors, who are not expected to
be paid
in full.
href='http://www.ccnmatthews.com/news/releases/show.jsp?action=showRelease&se…'>Read
more.
id='9'>Fla.
Hospital Files for Chapter 11
The company that
runs Gadsden
Community Hospital filed for chapter 11 bankruptcy protection in
Florida, the
Tallahasee Democrat reported yesterday. Ethan Andrew Way, an
attorney
for Ashford Community Health Care Inc., said that the decision was
made to more
quickly resolve financial disputes between Ashford, the city of
Quincy, Fla.,
and the Gadsden County Commission.
href='http://www.tallahassee.com/mld/tallahassee/13168946.htm'>Read
more.
id='10'>Fla.
Tobacco Firm’s Chapter 11 Filing Won’t Stop Payment to
States
Miami-based
cigarette maker
Bekenton USA, which participated in the huge tobacco industry
settlement with
46 states, filed for chapter 11 bankruptcy protection last week, the
Daily
Business Review reported Friday. It claims that unfair application
of the
settlement has driven it into bankruptcy court. But the
company’s attorneys
say that won’t keep Bekenton from paying millions of dollars it
owes the states
under the agreement, first implemented in 1998 and designed to
reimburse the
states for Medicaid costs related to treating sick smokers.
href='http://www.law.com/jsp/newswire_article.jsp?id=1131640455592'>Read
more. (Paid registration required to read full story.)
id='11'>HSBC
Finance Hit by U.S. Bankruptcies, Katrina
Global bank
HSBC’s consumer
finance arm said that profits in the third quarter fell 40 percent
from the
previous quarter, hit by provisions related to Hurricane Katrina and
new U.S.
bankruptcy laws, Reuters reported today. HSBC Finance Corp., the
former Household
business bought by HSBC in March 2003 for $14.8 billion, said on
Monday that
net income in the July-September quarter fell to $281 million, down 14
percent
from a year earlier and compared with $472 million in the second
quarter.
href='http://today.reuters.com/news/newsArticleSearch.aspx?storyID=71827%2B15…'>Read
more.
id='12'>Thomas
H. Lee Sues Ex-Refco Execs
Thomas H. Lee
Partners sued
former executives of Refco Inc. on Monday as the private-equity firm
tries to
recover millions of dollars in losses stemming from the derivatives
broker’s
recent bankruptcy, Marketwatch reported today. The lawsuit, filed by
the Thomas
H. Lee Equity Fund V, L.P. in U.S. District Court for the Southern
District
of New York, seeks to recoup at least $245 million from ex-Refco CEO
Phillip
Bennett, former Executive Vice President Santo Maggio and Tone Grant,
who was
head of Refco before Bennett.
href='http://www.marketwatch.com/news/story.asp?siteid=mktw&dist=moreover&gui…'>Read
more.
id='13'>Possible
Buyouts at Delphi
General Motors
Corp. (GM)
and the United Auto Workers (UAW) are discussing the possibility of
having the
car maker offer buyouts to encourage older workers at Delphi Corp.,
GM’s former
parts division, to retire, people familiar with the matter said, the
Wall
Street Journal reported yesterday. Such a deal could help Delphi,
which
is operating under bankruptcy protection, pare its payroll and ease
the transition
to retirement for some of the auto supplier’s 34,500 UAW
workers, the Wall Street
Journal reported today. GM isn’t under any obligation to buy out
Delphi workers,
but such buyouts could help reduce the threat of a strike and labor
uncertainty
stemming from Delphi’s bankruptcy filing.
href='http://online.wsj.com/article/SB113202550707097262-search.html?KEYWORDS…'>Read
more.
International
id='14'>EU
Bankruptcy Laws ‘Too Strict’
European bankruptcy
laws
are too strict and need to be reformed—possibly in line with the
U.K.’s
new rules—a senior EU official said yesterday, Accountancy
Age
reported today. Speaking at a conference in London to make the start
of Enterprise
Week and the launch of an awards scheme to recognize European
entrepreneurship,
Heinz Zourek, the European Commission’s director general of
enterprise and industry,
said that the rules are "extremely severe in comparison with
other parts
of the world."
href='http://www.accountancyage.com/accountancyage/news/2146064/eu-bankruptcy…'>Read
more.
id='15'>Challenge
to Asbestos Ruling
Insurers will try
today to
challenge a High Court ruling that maintained a right to compensation
for sufferers
of pleural plaques, one of the less serious asbestos-related
conditions, the
U.K.’s Financial Times reported yesterday. The issue has
implications
for tens of thousands of workers and for some of the big insurers,
including
Norwich Union and Zurich which, with the Department of Trade and
Industry acting
for the defunct British Shipbuilders, brought the test cases in the
first place.
href='http://news.ft.com/cms/s/a5ffe014-54b2-11da-826c-00000e25118c.html'>Read
more.
id='16'>Parmalat
Board Confirms Bondi as CEO
Parmalat SpA,
struggling
to recover from a fraud scandal, said today that its board of
directors confirmed
the appointment of turnaround expert Enrico Bondi as chief executive,
Forbes.com
reported today. Bondi, who has served as Parmalat’s
government-appointed administrator,
was named to be CEO by shareholders at a meeting earlier this month.
href='http://www.forbes.com/home/feeds/ap/2005/11/15/ap2337143.html'>Read
more.
id='17'>Canadian
Student Loan Bankruptcy Forms Proposed
The Canadian
government is
proposing legislation that would reduce the time a graduate with
government
student loans would have to wait before declaring bankruptcy, the
Canadian United
Press reported yesterday. Bill C-55, which is still several months
away from
being passed into law, would permit borrowers who have shown financial
hardship
the ability to discharge their loans after seven years instead of the
current
10. Gilles Gauthier, director of Corporate and Insolvency Law Policy
at Industry
Canada, said that the federal government was concerned that "[the
current
legislation] was too harsh because the various relief measures that
exist under
the Canada student loan program can take about seven years to be
completed."
href='http://www.brockpress.com/media/paper384/news/2005/11/15/News/Loan-Bank…'>Read
more.
id='18'>Appeals
Court Dismisses Last-Minute Motion from Stelco’s Debenture
Holders
A group of Stelco
Inc.’s
debt-holders lost a last-minute bid to be named a distinct creditor
class yesterday,
a move that would have given them the power to vote down the
steelmaker’s restructuring
plan today, the Canadian Press reported today. A three-judge panel of
the Ontario
Court of Appeal dismissed the convertible debenture holders’
request after squeezing
them into court for an urgent hearing. The urgency comes as the
Hamilton, Ont.-based
company is scheduled to hold a creditor vote on its restructuring plan
Tuesday,
after 21 months in bankruptcy protection.
href='http://www.canada.com/news/business/story.html?id=f28f5e13-cc14-4ab1-8f…'>Read
more.