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July 11, 2005
Economy Continued Steady Growth in June
Job growth picked up last month and the U.S. unemployment rate fell
to its lowest level since September 2001, the government reported,
providing more evidence that the economy and labor market have settled
into a fairly steady expansion, the Washington Post
reported. Builders, health care providers, financial firms and other
employers together added 146,000 workers to the nation’s payrolls
in June, up from a gain of 104,000 in May, the Labor Department
reported.
Able Labs Raises Possibility of Bankruptcy
With all of its drugs recalled, Able Laboratories, the maker of
generic versions of Vicodin and other medicines, has raised the
possibility of bankruptcy, Newsday.com reported. Friday’s
announcement, made after financial markets had closed, capped a week
that saw federal regulators finish an inspection of the company’s
manufacturing facility and Able’s interim CEO, Robert G. Mauro,
resign. Able said in a statement on Friday night that the company was
preparing a response to the Food and Drug Administration’s
inspection and evaluating all options, “including the possibility
of seeking relief under the bankruptcy laws.”
United Rehires 600 Flight Attendants
United Airlines has rehired 600 flight attendants and expects to
bring back about 850 more later this year as increased passenger demand
means more planes are flying near capacity, a company spokeswoman said
Sunday, Reuters reported. The bankrupt airline, a unit of UAL Corp.,
said the 600 will return to work by Aug. 9, and the second group will be
brought back by the end of November. The flight attendants were laid off
following a downturn in airline travel in the wake of the Sept. 11, 2001
attacks.
Collins & Aikman Customers Help with Financing
Bankrupt auto interiors supplier Collins & Aikman said on Friday
its main customers have agreed to make loans, provide needed tools and
pay temporary price increases to continue its reorganization, Reuters
reported. Collins & Aikman, which filed for protection from
creditors in May, was forced to seek alternative financing after its
weak condition left it able to support only $150 million of $300 million
in debtor-in-possession financing from J.P. Morgan.
Prudential Cuts GM Earnings Estimate
Prudential Equity Group cut its 2005 earnings estimate for General
Motors Corp. (GM) on Friday, citing rising costs and inventory
adjustments at the automaker, Reuters reported. In a research note,
Prudential analyst Michael Bruynestyn said he sees GM losing 10 cents
per share this year, down from his previous estimate calling for a
75-cent gain. Wall Street analysts, on average, expect GM to post a loss
of 53 cents per share this year, according to Reuters Estimates.
Footstar Reaches Deal With Kmart
Footstar Inc. said on Friday it has reached a deal with Kmart Corp.
in the footwear retailer’s fight to regain rights to operate shoe
concessions at Kmart stores, Reuters reported. Under the agreement,
Footstar said it will pay Kmart $45 million to resolve existing claims
and compensate Kmart—a unit of Sears Holding Corp.—for sales
in Kmart’s Shoemart departments based on a percentage of sales
rather than a percentage of sales and profits, the newswire
reported.
Hawaiian Hosts First Post-bankruptcy Annual Meeting
Hawaiian Holdings, the parent company of Hawaiian Airlines, held its
first annual shareholders’ meeting on Thursday after coming out of
bankruptcy, Pacific.bizjournals.com reported. On the agenda was an
increase in number of capital stock from 62 million shares to 120
million shares; election of seven new board members; and approval of a
2005 stock incentive plan. The increase in stock will give the company a
reserve of authorized shares to issue to creditors.
Bankruptcy Judge Approves Composite Technology Corporation’s
Disclosure
Bankruptcy Judge John E. Ryan on July 6 approved the disclosure
statement filed by Composite Technology Corporation (CTC) detailing its
chapter 11 plan of reorganization, the company announced in a press
release. CTC filed a voluntary petition for reorganization under chapter
11 of the U.S. Bankruptcy Code on May 5, 2005. On the same day as its
bankruptcy filing, CTC filed its proposed plan of reorganization that,
if confirmed by the bankruptcy court, would pay its creditors in
full.
Wisconsin Bankruptcy Filings Rise
Bankruptcy filings in eastern Wisconsin rose nearly 13 percent in the
first half of the year, a surge lawyers and others say is driven by
worries that a pending change in law will make it more difficult for
consumers to go to court to erase huge debts, the Milwaukee
Journal Sentinel reported. Ron Moser, director of the non-profit
Consumer Credit Counseling Service of Racine, said there is no question
the increase in bankruptcy filings is due to concerns about the change
in law.