September 292003

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September 29, 2003

US Court OKs NextWave Airwaves Sale to Cingular

A U.S. court on Thursday approved bankrupt NextWave Telecom Inc.'s
plan to sell wireless licenses covering 34 markets to Cingular Wireless
for $1.4 billion in cash, Reuters reported. The decision by a federal
bankruptcy court in White Plains, New York, boosts the wireless holdings
of Cingular, a joint venture of BellSouth Corp. and SBC Communications
Inc., in markets such as San Francisco, Los Angeles, Boston and Chicago.
Cingular was alone in submitting an offer for the licenses, which cover
about 83 million potential customers, after other suitors declined to
make a bid by the Sept. 23 deadline. Hawthorne, N. Y.-based NextWave
filed for bankruptcy in 1998 after paying only $500 million out of the
$4.7 billion it owed for scores of licenses it won at auctions held by
the Federal Communications Commission (FCC). About $714 million of the
proceeds from the Cingular deal will go to the FCC, while $660 million
will go to NextWave. The final $10 million will go into an escrow
account pending closure of the Cingular deal, reported the newswire.

Cone Mills Dissident Group Wins Vote for Slate

A dissident group of shareholders in Cone Mills Corp. on Thursday
said it won an 'overwhelming victory' for its slate of board nominees in
the bankrupt textile company, a move that may pressure the company to
abandon a deal to be sold, Reuters reported. The company's Shareholders'
Committee said shareholders representing more than 50 percent of the
company's shares voted for its nominees.

Cone Mills said on Sept. 24 that it filed for chapter 11 bankruptcy
protection and accepted an buyout offer from New York private investment
firm W.L. Ross & Co. worth $90 million, subject to higher offers and
bankruptcy court approval. Its shares were delisted from the New York
Stock Exchange last week. However, the shareholders group rejected the
deal and said it wants the company to seek other alternatives.

'This is a clear message to the Cone board,' said Marc Kozberg, a
dissident shareholder and Cone director. 'Cone shareholders want to see
the company reorganized, not sold to W.L. Ross. We are confident that
superior alternatives are available and intend to explore them fully,'
reported the newswire.

United Turned Down a Concession Package in Denver

Bankrupt United Airlines about a month ago rejected an offer from the
city of Denver that would have given it $10 million in concessions in
exchange for ceding some gates at Denver International Airport, the
mayor's spokeswoman said on Thursday, Reuters reported. 'That was a long
time ago, about a month ago. We are passed that,' said Lindy Eichenbaum
Lent, spokeswoman for Mayor John Hickenlooper. She said the mayor met on
Thursday with members of the board of directors at UAL Corp., parent of
the Chicago-based airline. 'It was a courtesy visit, not negotiations,'
she said, reported the newswire. The carrier and its parent filed the
largest bankruptcy in U.S. airline history in December.

Damaging Debt Deals Difficulties

Almost two-thirds of 2004 university graduates will face college debt
for the next 25 years of their lives, national statistics show,
Kansan.com reported. 'Many students are so far in debt and their
income is so low, there's not many options,' Michele Kessler, associate
director of Legal Services for Students said. According to the National
Center for Education Statistics, indebted students who graduated in 2000
owed an average of $17,785 just from loans.

Credit card debt among college students has skyrocketed over the past
decade because students increasingly have more than one credit card.
According to collegecreditcounseling.com, more than three-fourths of
undergraduates have a credit card and 32 percent of those have four or
more. Just under 15 percent have debt of $3,000 to $7,000, and almost a
tenth have debt more than $9,000. 'The worst-case scenario is for
students who are deeply in debt and are also on student loans,' Kessler
said. 'At that point, filing for bankruptcy may be the best solution.'
To read the full article, point your browser to
href='http://www.kansan.com/getstory.aspx?id=f5ef7eea-3f52-474f-a4c9-d04910a2…'>http://www.kansan.com/getstory.aspx?id=f5ef7eea-3f52-474f-a4c9-d04910a2….

Former Ernst & Young Partner Charged Under Sarbanes-Oxley Act

Federal prosecutors have charged a former Ernst & Young partner
with obstructing an investigation into a failed dot-com, making him one
of the first to be charged for that offense under 2002's Sarbanes-Oxley
Act, the Recorder reported. As part of an ongoing investigation
Thomas Trauger was arrested and appeared before U.S. Magistrate James
Larson Thursday. He was released on a $1 million bond and is expected to
plead not guilty during his next court appearance. Trauger is alleged to
have altered documents relating to the firm's audits of San
Francisco-based NextCard Inc., allegedly to provide a better basis for
Ernst & Young's conclusions about the company's financial health.
NextCard is now bankrupt. None of the charges derive from Trauger's work
on the NextCard audits themselves. 'He intends to fight these charges,'
said Trauger's lawyer, Edward Swanson of Swanson & McNamara. To read
the full article, point your browser to
href='http://www.law.com/jsp/article.jsp?id=1063212095697'>http://www.law.com/jsp/article.jsp?id=1063212095697.

Automakers Sue Over Asbestos Maneuver

The three largest United States automakers have sued to block Honeywell
International Inc. from transferring its Bendix brake unit to the
bankrupt Federal-Mogul Corporation, contending the transaction would
unfairly saddle the car companies with increased asbestos liabilities,
Bloomberg News reported. Honeywell seeks to use the transaction to
extricate itself from more than 50,000 asbestos lawsuits against Bendix.
Federal-Mogul filed for bankruptcy protection in October 2001 to resolve
about 360,000 asbestos suits and future claims by establishing a trust
to pay victims. Claims against Bendix would be channeled into the trust,
possibly freeing Honeywell from liability.

The three car companies, General Motors, Ford and DaimlerChrysler,
are defendants with Bendix in suits by people who say asbestos used in
auto parts made them sick. Such suits will cost the carmakers as much as
$1.2 billion, UBS estimated last year. As companies block asbestos suits
in bankruptcy court, claims against solvent companies have risen.

'This appears to be the first challenge to the expansive use of an
asbestos-channeling injunction and it will be closely watched,' said
Janice Grubin, a bankruptcy lawyer with Golenbock, Eiseman, Assor, Bell
& Peskoe in New York. The automakers filed the suit Wednesday in
United States Bankruptcy Court in Wilmington, Del., reported the
newswire.

Judge Postpones Mirant Hearing On Brazos Power Contract

The judge overseeing Mirant Corp.'s chapter 11 bankruptcy proceeding
postponed until Wednesday a hearing on the energy company's effort to
reject a power agreement with the Brazos Electric Power Cooperative
Inc., according to court documents. The two sides are attempting to
negotiate a settlement in advance of the hearing, representatives from
both organizations said on Thursday. 'We are continuing to negotiate
with them,' said Clifton Karnei, Brazos Electric's general manager and
executive vice president.

Allegheny Auditor Casts Doubt on Company's Future

Allegheny Energy Inc.'s auditor cast doubt in a delayed annual report on
Thursday about the electric utility's ability to stay afloat, but
Allegheny said it could pay its debts, Reuters reported. In its
long-delayed 2002 annual report, the Hagerstown, Md.-based company said
its auditor, PriceWaterhouseCoopers, issued a 'modified opinion that
indicates there is substantial doubt about Allegheny's ability to
continue as a going concern.' Allegheny CEO Paul Evanson said the
auditor's comments did not reflect concerns about liquidity at
Allegheny, which is carrying $5.2 billion in debt and has averted filing
for bankruptcy this year.

'We have adequate funds to meet all the remaining debt obligations in
2003,' Evanson said in an interview. 'We were late in our financial
reporting.' Evanson said Allegheny will continue to work on reducing its
debt and was considering raising cash through further asset sales and a
sale of stock. He said the company was 'not at this point' considering a
merger or strategic partnership, reported the newswire.

Court Approves Special Metals Reorganization Plan

Special Metals Corp. said on Thursday a U.S. court approved its plan of
reorganization, Reuters reported. The producer of high-performance
nickel-based alloys said that based on the approval by Judge William
Howard of the U.S. Bankruptcy Court for the Eastern District of
Kentucky, it will proceed to implement its plan of reorganization. Its
target date bankruptcy emergence is Oct. 20.

Bankruptcy Court Okays Financing for DVI

Bankrupt medical finance company DVI Inc. said it won court approval on
Thursday for up to $148 million of financing to keep it operating as it
tries to pay creditors by liquidating assets, Reuters reported. DVI
filed for bankruptcy in August after discovering apparent improprieties
in its financial dealings, which prevented it from securing new
financing. Ableco Finance LLC and Goldman Sachs Credit Partners will
provide the debtor-in-possession financing, DVI said in a statement. The
U.S. Bankruptcy Court for the District of Delaware provided interim
approval for the facility. The new debtor-in-possession facility
replaces a previously approved $20 million facility, reported the
newswire.

ABB Holds its Ground in Asbestos Settlement Appeal

Swiss engineering firm ABB Ltd. held its ground on Thursday as it fights
an appeal of its $1.2 billion asbestos settlement, according to the
company's lawyer, Reuters reported. The company will file a brief in
response to fourteen appeals that have been filed against ABB's
settlement before Thursday's court approved deadline, according to David
Bernick, a lawyer at firm Kirkland & Ellis, which represents ABB.
'The brief will say, in essence, that Combustion Engineering, ABB,
representatives of current claimants and representatives of future
claimants worked together to craft a plan that garnered virtually
unanimous support. And the only objectors represent special interests
who are simply interested in defeating any plan,' Bernick said, reported
the newswire. In July, a U.S. district court approved ABB's proposed
settlement of asbestos claims, but parties opposed to it appealed the
settlement to a higher court. Roman''>

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