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March 1, 2005
Bankruptcy Backers Prepare to Fight Amendments, Filibuster
As the Senate began debate yesterday on a bipartisan bill to overhaul
the nation’s bankruptcy laws, Democrats prepared to offer numerous
amendments on issues like corporate bankruptcy abuse, identity theft and
financial hardships resulting from illness or military service,
CongressDaily reported. Some Democratic opponents also have
said they plan to filibuster the bill, according to Sen. Orrin Hatch
(R–Utah). Monday’s floor action was limited to opening
statements, but many amendments and possible roll call votes are
expected today.
U.S. Chamber of Commerce Urges Passage of Bankruptcy Bill
“The Bankruptcy Abuse Prevention and Consumer Protection Act of
2005 is an important piece of bipartisan legislation…that will end
the abuse and restore personal responsibility to the United States
bankruptcy system. S. 256 closes loopholes in current law that encourage
fraudulent debtors to take advantage of the system and avoid paying
their debts while passing them on to everyday Americans who pay for
every bankruptcy of convenience through higher prices and interest
rates,” the Chamber said in a press release. Read the full
statement at
href='http://www.uschamber.com/issues/letters/2005/050228s256keyvote.htm'>www.uschamber.com/issues/letters/2005/050228s256keyvote.htm.
White House Supports Bankruptcy Bill
“These common-sense reforms to the nation’s bankruptcy
laws,” the White House said in a statement yesterday, “will
help curb abuses of bankruptcy protections, reduce uncertainty in
financial markets through improved financial contract netting rules,
increase financial education to prevent unnecessary filings and help
avoid future credit problems, promote international trade through
coordination of cross-border insolvency cases, and provide increased
protection for family farmers facing financial distress.” Read the
article at
href='http://www.nytimes.com/2005/03/01/business/01bankrupt.html'>www.nytimes.com/2005/03/01/business/01bankrupt.html.
Coalition Urges Speaker to Push Bankruptcy Reform
The Blue Dog Coalition last week announced in a press release the
Coalition’s endorsement of H.R. 685/S. 256, the Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005, and urged Speaker Dennis
Hastert (R–Ill.) to move quickly in bringing this important
legislation to the floor.
The Blue Dogs—a group of 35 Democrats from across the nation,
voted overwhelmingly to pass bankruptcy reform during the
108th Congress, and have endorsed H.R. 685 this year.
“We can all agree that it is important to provide protections for
consumers in debt and those with legitimate bankruptcy claims; however,
the current system is broken,” writes the Blue Dog Coalition in a
letter to Speaker Hastert. “An overhaul of the Bankruptcy Code is
needed to ensure that those with the means to pay at least some of their
debts are not able to wipe their debts clean by gaming the
system…,” the Coalition said. Read the letter at
href='/pdfs/bluedog.pdf'>www.abiworld.org/pdfs/bluedog.pdf.
Judge Approves $125 Million Investment in US Airways
A federal bankruptcy judge in Virginia has approved plans by Air
Wisconsin Airlines Corp. to invest $125 million in US Airways Group
Inc., US Airways said yesterday, Reuters reported. The equity stake is
structured as a debtor-in-possession loan. US Airways can draw $75
million immediately and the balance in two equal installments at a later
date. The airline hopes to exit bankruptcy by June 30, and is seeking at
least another $125 million in equity as part of its restructuring
plan.
Parmalat May Proceed on Citigroup Suit, Judge Says
A New Jersey judge yesterday ruled Parmalat Finanziaria SpA may
proceed with its $10 billion fraud lawsuit against Citigroup Inc.,
Reuters reported. The decision by Judge Jonathan Harris of Bergen County
Superior Court is a blow to Citigroup’s efforts to fend off claims
by Parmalat, which believes the bank was partially responsible for its
collapse. Citigroup had sought to dismiss the lawsuit brought by
Parmalat administrator Enrico Bondi. It contended the lawsuit lacked
merit and that the New Jersey court had no jurisdiction to hear the
case. Bondi said Citigroup had enough of a presence in the state to
justify the lawsuit there.
Former WorldCom CEO Ebbers Takes Witness Stand
Former WorldCom Inc. CEO Bernard Ebbers took the witness stand in his
criminal trial yesterday to defend himself against charges that he
orchestrated an $11 billion accounting fraud at the company, Reuters
reported. Ebbers told jurors that he left responsibility for the
company’s finances to others. Ebbers said he left detailed
accounting decisions to Scott Sullivan, the former CFO who pleaded
guilty to fraud and implicated his boss during earlier testimony, the
newswire reported.
Utility Exposes Enron Greed at Its Core
A Washington Post article focuses on the release of
exclusive tapes that portray lust for profit and lack of concern for
consumers at Enron. Read the article at
href='http://www.washingtonpost.com/wp-dyn/articles/A61253-2005Feb28.html'>www.washingtonpost.com/wp-dyn/articles/A61253-2005Feb28.html.
Ford’s Lending Practices Challenged in a Lawsuit
Ford Motor Credit, the division of Ford Motor Company that makes car
loans, is being taken to court in a class-action suit contending that
the company’s lending practices allow dealers to discriminate
against minorities, the New York Times reported. In the
first trial over discriminatory practices in auto lending, a federal
judge in Nashville will begin hearing a case that accuses Ford dealers
of discriminating against minorities by tacking on additional percentage
points that raise the overall interest rate on their loans.
Friedman’s Completes DIP Financing Transaction
Friedman’s Inc., a jewelry retailer that filed to restructure
its finances under chapter 11 bankruptcy protection in mid-January, said
today that it closed a $125 million post-petition financing facility on
Feb. 25, Reuters reported. The company said it received a commitment
letter from Citicorp USA, Inc. and Citigroup Global Markets, Inc. for up
to $150 million in debtor-in-possession financing.