Child Support Association Urges Clinton to Sign
Bankruptcy Bill
The National Child Support Enforcement Association (NCSEA) yesterday
urged President Clinton to sign the bankruptcy reform legislation (H.R.
2415), saying the domestic relations provisions of the bill will improve
the collection of child support and advance the interests of children,
according to a company press release. The association, which works
to ensure that children receive financial and emotional support from
both parents, said the bill curtails the abuses of bankruptcy protection
used by debtors to avoid or delay the payment of child support. It
also prevents a debtor who stops paying support from realizing any
benefit from the bankruptcy process and insures that if the bankruptcy
process is successfully completed, support debt will be paid.
Wireless Companies Bid $501.2 Million in
Auction’s First Day
Wireless companies seeking access to airwaves bid $501.2 million during
the first two rounds of yesterday’s Federal Communications
Commission (FCC) auction, according to the Wall Street
Journal. The FCC began auctioning 422 licenses, covering 195
markets to 87 qualified bidders. Some experts expect the auction
to fetch the largest amount of money ever for the FCC. The most
money an FCC spectrum auction received was $10 billion in 1996, but the
agency never saw most of it since a large number of the wireless
companies went bankrupt trying to make the license payments.
Dismissal of Bankruptcy Case Dooms Colorado Metal
Recycler
Recycling Industries Inc., a metals-recycling firm based in Englewood,
Colo., ceased operations and laid off most of its employees, according
to the Denver Post. The decision came Friday after a U.S.
Bankruptcy Court judge in Colorado dismissed the bankruptcy cases of the
company and its 21 subsidiaries. Recycling Industries and its
subsidiaries filed for chapter 11 bankruptcy protection in February
1999. “One of the main reasons the court dismissed the
bankruptcy cases was the failure of Recycling Industries’
creditors to agree to a plan of reorganization,” said attorney
Harley J. Goldstein.
The company and its subsidiaries submitted three reorganization
plans. After the court's ruling, Recycling Industries' fate was up
to its secured lenders. The company closed its doors after lenders
and debtors weren't able to agree on how to fund its continued
operation. It is not known if the shutdown is permanent.
Covad to Slow Growth, Cut Losses
High-speed Internet access company Covad Communications Inc.
yesterday outlined plans to slow its growth in order to save cash and
cut its losses, but its stock fell after it said revenues through 2001
would fall below Wall Street expectations, according to a Reuters
report. Covad's stock has lost 93 percent of its value this year
amid a broad sell-off in technology stocks. Covad is one of
several Internet-access companies that have been hurt as their customers
have failed to pay for services received or have declared
bankruptcy.
The Santa Clara, Calif.-based company said it would concentrate on
filling its existing network with more customer traffic rather than
adding new lines and extending its geographic reach. It also plans
to focus on serving financially secure customers, renegotiating some
client contracts and exiting others, and reducing its exposure to
customers who cannot pay their bills.
Lernout & Hauspie to Appeal Belgian Ruling
Troubled Belgian speech technology company Lernout & Hauspie Speech
Products NV (L&H) yesterday said its board had unanimously voted to
appeal for concordaat — similar to U.S. chapter 11 bankruptcy
protection — in Belgium, according to a Reuters report.
Meanwhile, the U.S.-Belgian shareholder group said yesterday that a
court had approved its demand that L&H not sell assets or use them
as collateral for a loan without the approval of a special board.
Deminor, a consultancy representing more than 1,000 L&H minority
shareholders, said a Belgian commercial court had agreed on the creation
of an administrative board to review L&H's legal and financial
documents and conduct an inventory of the voice recognition technology
developer's assets.
L&H this month won an order in a U.S. court protecting it from
creditors. It sought protection in the United States after a consortium
of five banks called in hundreds of millions of dollars in loans.
L&H, which plans to restate its results for the last two-and-a-half
years after irregularities were found in them, faces investigations by
U.S. and European regulators. It is also facing lawsuits from U.S.
investors.
CenterSpan Wins Scour Asset Auction
CenterSpan Communications Corp. won an auction in federal bankruptcy
court yesterday with a $9 million cash and stock bid for the technology
assets of Scour Inc., a bankrupt Internet search engine company sued by
music and movie studios for copyright infringement, according to a
Reuters report. CenterSpan, a developer of peer-to-peer software,
bested rival bidders Liquid Audio Inc. and privately-held Listen.com
with its $9 million bid consisting of $5.5 million cash and stock worth
$3.5 million.
Scour filed for bankruptcy in October. The company has about $4
million in debt, but could be liable for up to $250 billion in damages
from the copyright infringement lawsuit. As a condition of the
auction, the bidders agreed not to use technology that would trigger
more litigation. The sale will give CenterSpan control of Scour's assets
but not make it responsible for Scour's legal liabilities.
Suge Knight Ordered to Pay $10 Million
Jailed music mogul Marion “Suge” Knight and Death Row
Records have been ordered to pay $10 million in punitive damages to
Lamon Brumfield and Ken Brumfield for interfering with their contract
with a rapper, according to the Associated Press. Tuesday's
verdict came from the same jury that last week ordered that the
Brumfields be paid $4.34 million in compensatory damages. Knight's
attorney, David Kepner, called the verdicts
“inappropriate.” Both Kenner and Death Row Records
said they would appeal.
Rapper Kurupt signed with Death Row in 1993 when he already had a
deal with Lamont Brumfield's Rapp Central Productions and Ken
Brumfield's Hoodsta-4-Life Publishing. The Brumfields, who are
brothers, sued in 1995. Kurupt was dropped from the lawsuit after
he filed for bankruptcy.
Virginia Company Acquires Iridium Assets
A private company that plans to market its service to the government and
industrial users acquired dozens of satellites and other assets of the
failed Iridium global communications network yesterday, according to the
Associated Press. The San Jose, Calif.-based Iridium paid $25
million for the system that cost more than $5 billion to develop but
failed to attract enough business to stay afloat. Iridium offered
telephone service from anywhere on the planet. Bulky handsets and
atmospheric rates alienated potential customers, and the company fell
short of its goal of a half-million subscribers. Iridium, which
built the system, filed for bankruptcy in August 1999 and planned to
de-orbit the satellites.
Service will begin immediately for the Defense Department, which last
week awarded a two-year $72 million contract to Iridium Satellite for
unlimited airtime for 20,000 government users of the hand-held satellite
telephones. The Pentagon contract was one of the keys to
finalizing the deal. By the end of the first 2001 quarter, the
company will offer service to subscribers in targeted industries.
