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September 20,
2005
New
State
Law May Nix Asbestos Cases
Georgia lawyers are
gearing
up for a constitutional challenge to a new state law that could remove
nearly
3,000 asbestos cases from Fulton County dockets, the Fulton County
Daily
Report said today. The law was designed to stem the tide of
out-of-state
asbestos claims being filed in the state, said its primary sponsor,
Rep. David
E. Ralston (R-Ga.). The vast majority of asbestos cases in Georgia
have been
filed in Fulton, attorneys involved in the cases said. They estimated
that out-of-state
plaintiffs who were not exposed to asbestos in Georgia filed
approximately 90
percent of those cases. A lawyer defending the asbestos suits noted
that claims
in Georgia courts have originated from Alabama, North Carolina,
Wisconsin, Hawaii,
Texas, Nebraska and Pennsylvania.
href='http://www.law.com/jsp/article.jsp?id=1127133334895'>Read
the full story.
id='2'>Meetings
The Consumer Federation of America (CFA) and Providian Financial
News will
host a conference to release a new survey on consumers’
knowledge of
credit scores today at 10 a.m. Participants include CFA Executive
Director
Stephen Brobeck and Warren Wilcox, vice chairman of planning and
marketing
at Providian Financial. National Press Club, 14th and F Sts. NW,
Washington,
D.C. For more information, contact Jack Gillis at (202)
737-0766.
The Federal Open Market Committee (FOMC), the policy-making arm of
the Federal
Reserve, will meet in closed session today at 9 a.m. No location was
given.
The committee will release its decision at 2:15 p.m. For more
information,
call (202) 452-3204.
id='3'>Foamex
Files for Chapter 11
Foamex
International Inc.
filed for chapter 11 protection yesterday, reaching an agreement with
its creditors
that will let it deleverage its balance sheet, the maker of plastics
and cushioning
for beds, carpets and cars said, according to Reuters reports. The
company said
that it was seeking court approval for up to $240 million in
debtor-in-possession
financing. The company said that it has also received a commitment for
exit
financing from Bank of America upon its emergence from bankruptcy.
Foamex said
that it has reached an agreement in principle with certain members of
the committee
representing its senior secured noteholders that would eliminate about
$523
million of its outstanding bond debt. These noteholders would convert
their
debt into 100 percent of the equity of the new company, subject to
dilution.
If they vote to approve the plan, unsecured and subordinated
noteholders would
receive between 5 percent and 10 percent of the reorganized
company’s
equity. Under the agreement, there would be no recovery for equity
holders.
The company said that it expects day-to-day operations to continue as
usual
during the bankruptcy process.
Airlines
id='4'>US
Airways Sets Offering Terms
US Airways Group
Inc. set
the terms of its share offering at 8.5 million shares but did not set
a public
offering price, Reuters reported today. The airline said in an amended
filing
with the U.S. Securities and Exchange Commission that underwriters
Merrill Lynch
& Co. and Citigroup will have the option to buy an additional
1.275 million
shares to cover over-allotments. A federal judge on Friday approved US
Airways’
plan to exit bankruptcy and merge with America West Airlines Inc.,
capping US
Airways’ second bankruptcy restructuring in three years. US
Airways said
in the filing that it expects to receive $150 million in proceeds from
the offering,
which it will use for general corporate purposes, including the
possible redemption
or repurchase of other securities of the combined company.
id='5'>Delta
Lays Out Bankruptcy Financing, Makes Cuts
Delta Air Lines Inc. announced that it has
href='http://www.cfo.com/article.cfm/4420959?f=home_breakingnews'>received
a little more than $2 billion in post-petition financing
commitments,
including $1.7 billion in debtor-in-possession financing committed
by GE Commercial
Finance and Morgan Stanley, the Daily Deal reported
yesterday. On Friday,
Judge Prudence C. Beatty granted interim approval to
Delta’s
request to utilize up to $1.4 billion of the $1.7 billion. The court
also
granted interim authority for Delta to use $350 million of secured
post-petition
financing that American Express has agreed to provide. Amex’s
funding
replaces a $500 million advance payment that the company had made
for SkyMiles.
Delta will use the financing to retire its pre-petition loans and
pay fees
and expenses. The rest of the $1.4 billion will reportedly be used
for working
capital.
In other news, Delta CEO Gerald Grinstein said yesterday that the
carrier
would notify staffers of cuts in pay and benefits this week as it
wades through
bankruptcy, according to Reuters. Grinstein told the Senate panel
that Delta,
which has slashed thousands of jobs in recent years, also plans more
layoffs,
but he did not give figures, saying the company was in talks to
determine
the number of planes it would keep or give up. Grinstein said that
Delta planned
to shrink its domestic service while expanding its international
service.
The company said it would use more wide-body planes on global
routes. There
is a "reasonably good chance" that Delta could maintain
its pension
plan if the airline were allowed to spread out the funding over 25
years,
he said, but "it is a risk."
id='6'>Independence
Taxis Toward Bankruptcy
Independence Air is
expected
to be the next airline to fly into bankruptcy—perhaps as early
as today,
the Detroit News reported today. The Virginia-based airline,
which launched
16 months ago with one-way fares as low as $29, is expected to file
for chapter
11 to reorganize or liquidate under chapter 7, analysts said. A
bankruptcy filing
by Independence Air would show that even low-cost
airlines—especially
those without solid cash reserves—are struggling to survive the
crisis
buffeting the U.S. airline industry. The airline has cut flights and
has never
achieved its original growth targets, but the company’s presence
has helped
drive down fares.
href='http://www.detnews.com/2005/business/0509/20/A01-320682.htm'>Read
more.
id='7'>ATA
Airlines, Pilots in Tentative Deal
Bankrupt ATA
Airlines and
the union representing its pilots have reached a tentative deal
providing for
wage, benefit and work rule concessions, Reuters reported yesterday.
The airline
said that in exchange, pilots would receive stock options in the
company when
it emerges from chapter 11 later this year or early in 2006. Members
of the
Air Line Pilots Association, the union representing ATA pilots, will
begin voting
on ratification of the agreement early next week with a targeted
conclusion
to the vote of Sept. 30, 2005. If ratified, the new contract will take
effect
on Oct. 1, 2005 and become amendable on Sept. 30, 2008.
id='8'>Delphi
Shares Slide
Shares of Delphi
Corp. skidded
yesterday amid concerns that it could seek bankruptcy protection, the
Detroit
News Auto Insider said yesterday. Shares fell 49 cents, or 13
percent, to
close at $3.37 on the NYSE. Last week, Delphi CEO Robert S.
"Steve"
Miller repeated the possibility that Delphi could file for bankruptcy
if it
doesn’t get help from General Motors Corp. and the United Auto
Workers.
id='9'>Foss
Riles for Bankruptcy; CEO Resigns
Stephen Foss, the
longtime
CEO of Foss Manufacturing Co. in Hampton, N.H., has resigned after
allegations
of fraud within the company led its chief lender to tighten its cash
flow and
push the firm into bankruptcy, according to court papers, the New
Hampshire
Union Leader reported yesterday. Foss Manufacturing allegedly lied
daily
to CapitalSource Finance LLC over at least several months,
“fraudulently
inducing CapitalSource into overadvancing millions of dollars for the
benefit
of the (company) and its insiders,” wrote Charles Powell, a
Manchester
attorney representing CapitalSource. Foss employs about 375, most in
Hampton.
No layoffs are expected, according to Andrew Schwartz, a Boston
attorney representing
the company.
href='http://www.theunionleader.com/articles_showa.html?article=60653'>Read
the full story.
id='10'>U.K.
Mortgage Lending Picks Up, Credit Card Debt Dips
U.K. mortgage
lending picked
up while credit card lending slumped during August, indicating that
while the
property market has stabilized, consumer spending remains weak, a
survey from
the British Bankers Association reported, according to AFX News
Service. Seasonally
adjusted net mortgage lending—gross lending minus
repayments—was
£4.3 billion in August, up from £3.7 billion in July and
much more
in line with the average of £4.4 billion over the previous six
months.
At the same time however, consumer credit lending was weak, the BBA
said. Credit
card lending in August fell for the second time in five months, by
£146
million.