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November 22, 2004
Class Action Legislation Not Included in Omnibus Bill
A Senate-written provision that would have overhauled the rules for
class action lawsuits was among the items that were not included in the
omnibus spending package, CongressDaily reported. That
bill, which stalled in July during a battle over unrelated amendments,
would have moved many class action lawsuits from state courts to federal
courts, where more stringent rules would have governed the cases. The
White House and Senate are likely to take up new class action measures
next year.
Latest Brobeck Settlement Stalls After Objections
A U.S. bankruptcy judge delayed ruling on a proposed settlement
between Brobeck, Phleger & Harrison’s estate and Citibank FSB
after objections were raised by former Brobeck partners, the
Recorder reported. Under the deal, Citibank would take
$2.85 million in cash as full payment for the $8.2 million still owed by
Brobeck’s estate. At a hearing Friday before Judge Dennis Montali,
attorneys for a group of former partners said the deal would breach
their loan agreement with Citibank, saying it could only be assigned to
another financial institution. Read the full article at
href='http://www.law.com/'>www.law.com.
Trump’s Casino Operations File for Bankruptcy
Donald Trump’s casino operations filed for bankruptcy on Sunday
in an expected move that would allow the group to restructure the
company’s debt and overhaul its casinos, Reuters reported. Under
the voluntary bankruptcy filing, Trump Atlantic City Associates, which
is 99 percent owned by Trump Hotels & Casino Resorts Inc., listed
$1.3 billion in debt and $1.5 million in assets. It marks the second
bankruptcy for Trump’s casino empire.
Airline Union Protests Job Cuts
One of American Airlines’ big unions says the carrier has
broken a promise that management would share the pain of job and salary
cuts equally with rank-and-file workers, the Wall Street
Journal reported. A consultant hired by the Transport Workers
Union found that union jobs were cut by 18.1 percent from December 2002
to April of this year, compared with 12.7 percent for managers who work
with mechanics and other TWU members. The consultant also said American
Airlines data showed that mechanics had their pay cut 15 percent while
managers who supervised them had an average pay cut of 5.5 percent in a
restructuring last year. Company executives credited the restructuring
with saving the airline from bankruptcy, the online newspaper
reported.
Judge to Mull UAL Bid to Void Labor Pacts
A federal bankruptcy judge on Friday agreed to consider a motion by
United Airlines to cancel its union contracts to save $725 million a
year, Reuters reported. Judge Eugene Wedoff said he would weigh
United’s bid to throw out labor agreements if the company was
unable to reach voluntary agreements on concessions with its unions in
the meantime. The airline, which has been operating under chapter 11
protection since December 2002, also won 60 more days during which the
company can file its exclusive reorganization plan with the court. The
company is expected to seek another extension, the newswire
reported.
Conseco Sues Former Officers to Recover $15 Million in Loans
Conseco Inc., a life insurer that exited bankruptcy last year, sued
three former officers and directors, including ex-Chief Accounting
Officer James Adams, to recover $15 million they borrowed to buy company
stock, Bloomberg News reported. The suit, filed in State Supreme Court
in New York, seeks repayment of $7 million from Adams, $3.35 million
from former Conseco Capital Management Chief Executive Maxwell Bublitz
and $4.7 million from ex-director James Massey. It also seeks interest.
While Conseco was restructuring during bankruptcy, it repaid the loans
because it co-guaranteed them, the suit says, the newswire reported.
U.S. Taxpayers Should Save Pension Agency, Says UAW Official
Taxpayers should rescue the agency that backs U.S. corporate pensions
by covering its losses from pension failures in the airline and steel
industries, a United Auto Workers (UAW) official said on Friday, Reuters
reported. UAW legislative director Alan Reuther estimated it would cost
between $20 billion and $40 billion to cover the pension liabilities in
the airline and steel industries that the Pension Benefit Guaranty Corp
(PBGC) has absorbed or expects to absorb shortly.
PG&E $3 Billion Bond Issue Cleared By State Regulators
California regulators on Friday issued an order clearing the way for
Pacific Gas & Electric to issue $3.0 billion in energy recovery
bonds, Reuters reported. The San Francisco-based utility, a unit of
PG&E Corp., ran up billions of dollars of debt when it bought power
for its customers during California’s 2000–2001 energy
crisis and filed for chapter 11 bankruptcy protection, the newswire
reported.