May 24, 2004
Senate To Take Up Class Action
Senate Majority Leader Bill Frist (R-Tenn.) announced on Friday that
the Senate will delay completion of the FY05 defense authorization bill
and instead will take up class action legislation when the chamber
returns on June 1 from its Memorial Day recess.
Bankruptcy Growth Rate
Slowed in First Quarter
Bankruptcy filings in the
federal courts rose 2.7 percent in the 12-month period ending March 31,
2004, according to data released on Friday by the Administrative Office
of the U.S. Courts. Bankruptcy filings rose from 1,611,268 in the
12-month period ending in March 2003 to 1,654,847 in the same time
period in 2004. The number of filings, however, was 0.4 percent down
from the record 1,661,966 bankruptcy cases filed during fiscal year
2003, the 12-month period ending September 30. Bankruptcy filings
typically lag general economic conditions by 12-18 months.
Non-business filings for March
2004 totaled 1,618,062, up 2.8 percent from the total non-business
filings of 1,573,720 filings in the 12-month period ending March 31,
2003. Business filings in March 2004 totaled 36,785, down 2.0 percent
from the 37,548 business filings in the 12-month period ending March 31,
2003.
The number of bankruptcies
filed during the second quarter of the fiscal year 2004 (January1, 2004
-March 31, 2004) was 407,572, up 3.6 percent up from the 393,348 filings
for the first quarter of fiscal year 2003 (October 1, 2003 -December 31,
2003). However, this number is down 1.3 percent from the 412,968 filings
in the second quarter of the fiscal year 2003 (January1, 2003 -March 31,
2003).
Air Canada's Court Protection Extended to Sept.
30
An Ontario judge extended Air
Canada's bankruptcy protection to Sept. 30 on Friday, after it won
crucial concessions from a holdout union, allowing the insolvent
national carrier to complete its restructuring, Reuters reported. The
extension comes after a last-minute deal on Thursday with the Canadian
Auto Workers union, which represents about 5,900 customer service
employees, that ended a fight over cost-cutting that had threatened the
airline's reorganization plan.
Enron To Sell Pipelines To NuCoastal for $1.8
Billion
Enron Corp. on Friday said it
is selling its prized pipeline assets for $1.8 billion to a consortium
led by Texas natural gas tycoon Oscar Wyatt, in another move by the
energy trader to raise funds to repay creditors, Reuters reported.
NuCoastal LLC, Wyatt's partnership that includes affiliates of
Citigroup, Kelso & Co. and ArcLight Capital Partners LLC, will also
assume $430 million in outstanding debt belonging to CrossCountry
Energy. CrossCountry is the company Enron formed in June 2003 to hold
its interests in three natural gas pipeline systems -- Transwestern
Pipeline Company, Citrus Corp. and Northern Plains Natural Gas Company.
The deal is expected to close in the fourth quarter, the newswire
reported.
United Reaches Benefits Deal
with Mechanics Union
United Airlines said on Friday
it has reached an agreement with the union that represents its mechanics
on proposed changes to retiree benefits as it seeks to exit bankruptcy
protection, Reuters reported. Negotiations on the benefits issues are
ongoing with other unionized groups, bankruptcy attorney James
Sprayregen said at a U.S. Bankruptcy Court hearing in Chicago.
Mechanics are now represented by the Aircraft Mechanics Fraternal
Association. Sprayregen also said United did not have an indication of
when the Air Transportation Stabilization Board would rule on its
request for backing of $1.6 billion of a $2 billion loan, the newswire
reported.
HealthSouth Extends Offer to
Noteholders to May 27
HealthSouth Corp. said on
Friday it was extending for another week through May 27 the deadline for
noteholders to accept the company's cash offer in exchange for waiving a
credit default from last year, Reuters reported. On Thursday, a majority
of two groups of creditors rejected the company's offer. Last week,
HealthSouth said a majority of two other groups accepted the offer,
which would give noteholders $13.75 in cash per $1,000 in principal.
HealthSouth was involved in an accounting scandal last year that led to
guilty pleas by several former company executives and the indictment of
its founder.
DPL Inc. Gets Request from
SEC for Documents and Info.
Ohio-based DPL Inc. said the
Securities and Exchange Commission has asked it to voluntarily provide
documents and information regarding matters raised by a company
employee. According to a Form 8-K filed May 17 with the SEC, DPL said it
is cooperating fully with the SEC's requests. As reported, company
Controller Dan Thobe alleged in a memo that DPL executives hid
compensation from shareholders, put the company at risk of scrutiny by
the Internal Revenue Service, billed the company for enormous
undocumented travel expenses and enforced a corporate culture of
excessive secrecy from their homes in Florida.
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For Game High-yield
Investors, Casino Bonds May Be Play
The high-yield bond market may
look like a bad bet right now, but some people like the odds in the
gaming sector. The market as a whole has dropped about 3
percent since the beginning of the month, as some strong economic
data, including a robust April payrolls report, fanned expectations that
the Federal Reserve will raise interest rates. The concerns prompted
investors to pull money out of high-yield mutual bond funds, which lost
$2.15 billion in outflows in the week ended May 12 alone, according to
AMG Data Services in Arcata, Calif. The market has stabilized as
equities also found their footing and investors in the market are
looking for bargains. Some are touting casino bonds.
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