August 10, 2004
What the Fed May Consider at Tuesday
Meeting
The Federal Reserve will likely
push ahead with an increase in borrowing costs when it meets to set
interest rates today, despite signs of weakness in the economy,
most analysts believe, Reuters reported. All 20 economists surveyed by
Reuters on Friday after a disappointing July employment report predicted
a quarter-point rise in official rates to 1.50 percent from 1.25
percent, although the decision to raise rates will be more difficult
than it first seemed. It would be the second tightening in a cycle that
only got started in June, before a wave of data that dampened the
outlook for growth, the newswire reported.
UAL Seeks Deadline Extension to File Plan
United Airlines has asked the
U.S. Bankruptcy Court for another extension of the deadline for filing
its own exclusive reorganization plan, this time until Dec. 30, Reuters
reported. United has already had multiple extensions. In a court filing
late on Friday, United outlined a process that would get it out of
chapter 11 in several stages, including a significant reworking of its
business plan. Completing the process and other restructuring
initiatives 'may require six months or more,' the airline said.
Bankruptcy Judge Eugene Wedoff has previously granted only
month-to-month extensions on the exclusivity period during which no
creditors or others may file a competing reorganization plan, the
newswire reported.
Trump Casinos to File for Bankruptcy
Protection
Trump Hotels & Casino
Resorts plans to restructure under a bankruptcy protection plan that
would strip Donald Trump of his majority stake in the debt-burdened
company, the Associated Press reported. Under the plan announced on
Monday, DLJ Merchant Banking Partners, an arm of Credit Suisse First
Boston, and Trump would invest $400 million to help Trump Hotels &
Casino Resorts pay down its $1.8 billion in debt and cut interest
payments in half. Donald Trump, the chairman, chief executive and
largest shareholder, would see his stake in the company shrink from 56
percent to 25 percent, with Credit Suisse owning more than two-thirds of
the company.
Trump himself would contribute
nearly $71 million, $55 million of which would be in the form of a
co-investment with Credit Suisse and $15.9 million of which would come
from his Trump Casino Holdings notes. Trump would also give up trademark
rights to his name and likeness for use in connection with casino
operations, the newswire reported.
Delta Plans to Tap into Cash Reserves; Shares
Sink
Delta Air Lines, racing to cut
costs to avoid bankruptcy, on Monday said lower yields and higher fuel
prices have affected 2004 cash flow, prompting it to turn to cash
reserves to pay certain expenses, Reuters reported. The Atlanta-based
carrier said it expects its cash balance to decline during the remainder
of 2004 at a level consistent with the drop during the first half of the
year. Delta had $2.0 billion in cash at the end of the second quarter,
down from $2.7 billion at the end of 2003. Delta, which has said it
could be forced to file for bankruptcy if it cannot secure cost
reductions soon, has not outlined which expenses will be paid out of its
cash reserves, a Delta spokeswoman said. Analysts have said the company
could face a liquidity crunch as soon as this fall or winter, the
newswire reported.
Conseco Says SEC Settlement
Won't Affect Results
U.S. insurer
Conseco Inc., which emerged from bankruptcy last September, on Monday
said $5 million in fines, which its subsidiaries would pay to regulators
to resolve a probe into market timing, would not affect company
earnings, Reuters reported. Conseco said it had already set aside money
to deal with the fine, which is related to a unit of its predecessor
company. The fine would be paid to the U.S. Securities and Exchange
Commission (SEC) and the New York Attorney General. The company said the
settlement also calls for the SEC and New York Attorney General to file
a $10 million claim against the bankruptcy estate of the subsidiary at
the center of the investigation.
Ivaco to Sell Assets to Heico; Shares Get
Hammered
Ivaco Inc. agreed to sell its
assets to a subsidiary of the Heico Co. for C$375 million ($284 million)
on Monday, a move that triggered a sharp slide in shares the steelmaker
has already deemed worthless, Reuters reported. The sale comes less than
a year after the Montreal-based steelmaker entered bankruptcy
protection. Shares of Ivaco decreased 5 Canadian cents, or 47 percent,
to 5.5 Canadian cents on the Toronto Stock Exchange as the company
reminded shareholders that they will receive no value. Ivaco said
U.S.-based Heico would buy Ivaco and Ivaco Rolling Mills LP and
Ifastgroupe and Co. as part of the agreement that is expected to close
by the end of 2004, the newswire reported.
FCC Clears Way for Leap Wireless to Emerge From Bankruptcy
Leap Wireless International
Inc. expects to emerge from bankruptcy on Aug. 16 as a result of
the Federal Communications Commission (FCC) approving the change of
control of its wireless licenses, SanDiego.com reported.
Under the FCC order, the company will transfer nine of its spectrum
licenses to the Leap Creditor Trust, as called for in the company's plan
of reorganization. Interested parties have until Sept. 14 to appeal or
seek reconsideration of the FCC order.
The company, spun out of
Qualcomm Inc. in 1998 to offer its Cricket wireless alternative to
residential phone service, was swallowed by its own debt and sought
protection from its creditors in April 2003. The company paid high fees
for its licenses in highly competitive FCC auctions and the costs of
customer acquisitions exceeded expectations.
Solutia Advisers Oppose JP
Morgan Request for Investigation
Advisers and attorneys objected
to efforts by JP Morgan Chase Bank to request documents and interviews
with staff related to Solutia Inc.'s chapter 11 case. JP
Morgan, serving as indenture trustee for certain Solutia debenture
holders, asked the court last month to allow it to investigate
Rothschild Inc., Kroll Zolfo Cooper, Winston & Strawn LLP and
Debevoise & Plimpton. JP Morgan is investigating Solutia seeking
information to support its assertion that Solutia improperly stripped
certain liens protecting the debentures. The advisers all filed
objections Aug. 2 and 3 to the proposed investigation, saying it was
duplicative since JP Morgan already had leave to investigate Solutia and
because it wasn't related to finding hidden or unknown assets Solutia
might hold.
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Copyright (c) 2004 Dow Jones Company, Inc. All Rights
Reserved
Pilots at United Promise to
Fight Pension Change
Pilots at United Airlines,
angered at the prospect of seeing their pension plans replaced with less
generous versions, vowed yesterday to use all legal means available to
fight such a move, the New York Times reported. But United,
which filed for bankruptcy protection in December 2002 and is trying to
obtain billions of dollars in financing so that it can reorganize,
replied that 'nothing has been or will be immune' as it re-examines its
costs.
Former Enron Chief Seeks Separate
Trial
Lawyers for Kenneth L. Lay, the
former chairman and chief executive of Enron filed motions yesterday
asking a
federal judge to separate his criminal fraud case from those of other
charged defendants and to order a trial by Sept. 14, the New York
Times reported. The motions, made in
Federal District
Court in
Houston, are the beginning
of Lay's battle against the criminal indictment brought against him last
month, charging him with fraud in a series of actions and statements he
made mostly in the final weeks before the collapse of Enron in December
2001.
Bankrupt Dairy Giant Sues Deutsche
Bank
Parmalat, the bankrupt Italian
dairy giant, sued Deutsche Bank on
Monday for 17 million euros ($21 million), the latest in a series
of lawsuits by the company against its former bankers, the
Washington Post reported. Parmalat's government-appointed
administrator, Enrico Bondi, is suing the Italian branch of Deutsche
Bank to recover money Parmalat repaid the German bank on credit lines in
December, the same month the company defaulted on billions of euros of
bonds. Parmalat said it might file another lawsuit against Deutsche Bank
to recover an unspecified amount of money related to bond sales that
Deutsche Bank handled for Parmalat.
MCI May Write Down Value of
Assets
MCI Inc. disclosed yesterday
that it may have to reduce the value of some of its assets to reflect
the continuing decline of its consumer long-distance business, the
Washington Post reported. Any write-down is likely to be
regarded on Wall Street as a sign the company has lost confidence in its
core long-distance business, analysts said. However, in the short run,
the accounting would help the carrier's financial profile by lowering
the depreciation costs it must carry on its balance sheets related to
equipment.
MCI Pushes to Settle $2
Billion Tax Claim
MCI Inc. now is pushing to
settle back tax claims with a group of states that are seeking as much
as $2 billion, a source familiar with the situation said on Monday,
Reuters reported. MCI had renewed its effort to settle the state tax
claims now pending in federal bankruptcy court, said the source. This
marks a shift from the strategy MCI used in April, when it accused the
states of using 'abusive' tactics to wring money from it, the newswire
reported.
U.K. Pension
Issue Bogs Down Federal-Mogul's Bid to Emerge
U.S. financier
Carl Icahn, one of the most prominent 'corporate raiders' of the 1980s,
is at the heart of a showdown over the future of nearly 40,000
United
Kingdom workers' pensions, the Wall Street Journal
reported. Icahn -- who
once owned oil giant Texaco and air carrier Trans World Airlines and now
is starting a hedge fund -- is the largest bondholder at Federal-Mogul
Corp. of
Southfield, Mich., an auto-parts supplier in the Detroit suburb that
could emerge from chapter 11 bankruptcy reorganization later this year.
Bondholders, led by Icahn, would then own 49.9 percent of the company
and control the board. Read the article at
href='http://www.wsj.com/'> 'http://www.wsj.com' (subscription required).
August 10, 2004
What the Fed May Consider at Tuesday
Meeting
The Federal Reserve will likely
push ahead with an increase in borrowing costs when it meets to set
interest rates today, despite signs of weakness in the economy,
most analysts believe, Reuters reported. All 20 economists surveyed by
Reuters on Friday after a disappointing July employment report predicted
a quarter-point rise in official rates to 1.50 percent from 1.25
percent, although the decision to raise rates will be more difficult
than it first seemed. It would be the second tightening in a cycle that
only got started in June, before a wave of data that dampened the
outlook for growth, the newswire reported.
UAL Seeks Deadline Extension to File Plan
United Airlines has asked the
U.S. Bankruptcy Court for another extension of the deadline for filing
its own exclusive reorganization plan, this time until Dec. 30, Reuters
reported. United has already had multiple extensions. In a court filing
late on Friday, United outlined a process that would get it out of
chapter 11 in several stages, including a significant reworking of its
business plan. Completing the process and other restructuring
initiatives 'may require six months or more,' the airline said.
Bankruptcy Judge Eugene Wedoff has previously granted only
month-to-month extensions on the exclusivity period during which no
creditors or others may file a competing reorganization plan, the
newswire reported.
Trump Casinos to File for Bankruptcy
Protection
Trump Hotels & Casino
Resorts plans to restructure under a bankruptcy protection plan that
would strip Donald Trump of his majority stake in the debt-burdened
company, the Associated Press reported. Under the plan announced on
Monday, DLJ Merchant Banking Partners, an arm of Credit Suisse First
Boston, and Trump would invest $400 million to help Trump Hotels &
Casino Resorts pay down its $1.8 billion in debt and cut interest
payments in half. Donald Trump, the chairman, chief executive and
largest shareholder, would see his stake in the company shrink from 56
percent to 25 percent, with Credit Suisse owning more than two-thirds of
the company.
Trump himself would contribute
nearly $71 million, $55 million of which would be in the form of a
co-investment with Credit Suisse and $15.9 million of which would come
from his Trump Casino Holdings notes. Trump would also give up trademark
rights to his name and likeness for use in connection with casino
operations, the newswire reported.
Delta Plans to Tap into Cash Reserves; Shares
Sink
Delta Air Lines, racing to cut
costs to avoid bankruptcy, on Monday said lower yields and higher fuel
prices have affected 2004 cash flow, prompting it to turn to cash
reserves to pay certain expenses, Reuters reported. The Atlanta-based
carrier said it expects its cash balance to decline during the remainder
of 2004 at a level consistent with the drop during the first half of the
year. Delta had $2.0 billion in cash at the end of the second quarter,
down from $2.7 billion at the end of 2003. Delta, which has said it
could be forced to file for bankruptcy if it cannot secure cost
reductions soon, has not outlined which expenses will be paid out of its
cash reserves, a Delta spokeswoman said. Analysts have said the company
could face a liquidity crunch as soon as this fall or winter, the
newswire reported.
Conseco Says SEC Settlement
Won't Affect Results
U.S. insurer
Conseco Inc., which emerged from bankruptcy last September, on Monday
said $5 million in fines, which its subsidiaries would pay to regulators
to resolve a probe into market timing, would not affect company
earnings, Reuters reported. Conseco said it had already set aside money
to deal with the fine, which is related to a unit of its predecessor
company. The fine would be paid to the U.S. Securities and Exchange
Commission (SEC) and the New York Attorney General. The company said the
settlement also calls for the SEC and New York Attorney General to file
a $10 million claim against the bankruptcy estate of the subsidiary at
the center of the investigation.
Ivaco to Sell Assets to Heico; Shares Get
Hammered
Ivaco Inc. agreed to sell its
assets to a subsidiary of the Heico Co. for C$375 million ($284 million)
on Monday, a move that triggered a sharp slide in shares the steelmaker
has already deemed worthless, Reuters reported. The sale comes less than
a year after the Montreal-based steelmaker entered bankruptcy
protection. Shares of Ivaco decreased 5 Canadian cents, or 47 percent,
to 5.5 Canadian cents on the Toronto Stock Exchange as the company
reminded shareholders that they will receive no value. Ivaco said
U.S.-based Heico would buy Ivaco and Ivaco Rolling Mills LP and
Ifastgroupe and Co. as part of the agreement that is expected to close
by the end of 2004, the newswire reported.
FCC Clears Way for Leap Wireless to Emerge From Bankruptcy
Leap Wireless International
Inc. expects to emerge from bankruptcy on Aug. 16 as a result of
the Federal Communications Commission (FCC) approving the change of
control of its wireless licenses, SanDiego.com reported.
Under the FCC order, the company will transfer nine of its spectrum
licenses to the Leap Creditor Trust, as called for in the company's plan
of reorganization. Interested parties have until Sept. 14 to appeal or
seek reconsideration of the FCC order.
The company, spun out of
Qualcomm Inc. in 1998 to offer its Cricket wireless alternative to
residential phone service, was swallowed by its own debt and sought
protection from its creditors in April 2003. The company paid high fees
for its licenses in highly competitive FCC auctions and the costs of
customer acquisitions exceeded expectations.
Solutia Advisers Oppose JP
Morgan Request for Investigation
Advisers and attorneys objected
to efforts by JP Morgan Chase Bank to request documents and interviews
with staff related to Solutia Inc.'s chapter 11 case. JP
Morgan, serving as indenture trustee for certain Solutia debenture
holders, asked the court last month to allow it to investigate
Rothschild Inc., Kroll Zolfo Cooper, Winston & Strawn LLP and
Debevoise & Plimpton. JP Morgan is investigating Solutia seeking
information to support its assertion that Solutia improperly stripped
certain liens protecting the debentures. The advisers all filed
objections Aug. 2 and 3 to the proposed investigation, saying it was
duplicative since JP Morgan already had leave to investigate Solutia and
because it wasn't related to finding hidden or unknown assets Solutia
might hold.
Provided by Daily Bankruptcy
Review
href='http://www.djnewsletters.com/trial-form.html?promo=TDBRABI2'>
http://www.djnewsletters.com/trial-form.html?promo=TDBRABI2
Copyright (c) 2004 Dow Jones Company, Inc. All Rights
Reserved
Pilots at United Promise to
Fight Pension Change
Pilots at United Airlines,
angered at the prospect of seeing their pension plans replaced with less
generous versions, vowed yesterday to use all legal means available to
fight such a move, the New York Times reported. But United,
which filed for bankruptcy protection in December 2002 and is trying to
obtain billions of dollars in financing so that it can reorganize,
replied that 'nothing has been or will be immune' as it re-examines its
costs.
Former Enron Chief Seeks Separate
Trial
Lawyers for Kenneth L. Lay, the
former chairman and chief executive of Enron filed motions yesterday
asking a
federal judge to separate his criminal fraud case from those of other
charged defendants and to order a trial by Sept. 14, the New York
Times reported. The motions, made in
Federal District
Court in
Houston, are the beginning
of Lay's battle against the criminal indictment brought against him last
month, charging him with fraud in a series of actions and statements he
made mostly in the final weeks before the collapse of Enron in December
2001.
4>Bankrupt Dairy Giant Sues Deutsche
Bank
Parmalat, the bankrupt Italian
dairy giant, sued Deutsche Bank on
Monday for 17 million euros ($21 million), the latest in a series
of lawsuits by the company against its former bankers, the
Washington Post reported. Parmalat's government-appointed
administrator, Enrico Bondi, is suing the Italian branch of Deutsche
Bank to recover money Parmalat repaid the German bank on credit lines in
December, the same month the company defaulted on billions of euros of
bonds. Parmalat said it might file another lawsuit against Deutsche Bank
to recover an unspecified amount of money related to bond sales that
Deutsche Bank handled for Parmalat.
MCI May Write Down Value of
Assets
MCI Inc. disclosed yesterday
that it may have to reduce the value of some of its assets to reflect
the continuing decline of its consumer long-distance business, the
Washington Post reported. Any write-down is likely to be
regarded on Wall Street as a sign the company has lost confidence in its
core long-distance business, analysts said. However, in the short run,
the accounting would help the carrier's financial profile by lowering
the depreciation costs it must carry on its balance sheets related to
equipment.
MCI Pushes to Settle $2
Billion Tax Claim
MCI Inc. now is pushing to
settle back tax claims with a group of states that are seeking as much
as $2 billion, a source familiar with the situation said on Monday,
Reuters reported. MCI had renewed its effort to settle the state tax
claims now pending in federal bankruptcy court, said the source. This
marks a shift from the strategy MCI used in April, when it accused the
states of using 'abusive' tactics to wring money from it, the newswire
reported.
>U.K. Pension
Issue Bogs Down Federal-Mogul's Bid to Emerge
U.S. financier
Carl Icahn, one of the most prominent 'corporate raiders' of the 1980s,
is at the heart of a showdown over the future of nearly 40,000
United
Kingdom workers' pensions, the Wall Street Journal
reported. Icahn -- who
once owned oil giant Texaco and air carrier Trans World Airlines and now
is starting a hedge fund -- is the largest bondholder at Federal-Mogul
Corp. of
Southfield, Mich., an auto-parts supplier in the Detroit suburb that
could emerge from chapter 11 bankruptcy reorganization later this year.
Bondholders, led by Icahn, would then own 49.9 percent of the company
and control the board. Read the article at
href='http://www.wsj.com/'> 'http://www.wsj.com' (subscription required).