February 11, 2000
Kevyn Orr Appointed Acting Director of EOUST
Kevyn D. Orr has been appointed Acting Director of the
Executive Office for United States Trustees (EOUST), effective Feb. 12,
to fill the vacancy created by the retirement of outgoing EOUST Director
Joseph 'Jerry' Patchan, according to the EOUST. Orr also has been
nominated as director of the EOUST. Since 1995 Orr has served as deputy
director of the EOUST, which is the Washington office of the U.S.
Trustee Program, an arm of the Justice Department that supervises the
administration of bankruptcy cases nationwide. Patchan, who served as
director for five years, announced Jan. 4 that he would retire effective
today. Prior to joining the EOUST, Orr worked with Patchan for four
years at the Resolution Trust Corp. where we was Assistant General
Counsel for Complex Litigation and Bankruptcy in 1994.
Abortion Foes Call Bankruptcy Bill Provision 'Selected
Punishment'
One of the amendments to S. 625 passed by the Senate would
prevent people found guilty of or charged with violence or harassment at
abortion clinics from declaring bankruptcy to avoid paying court
judgments. Joseph Scheidler, a Chicago anti-abortion activist, called
the amendment 'selective punishment,' Legal Times reported. He
has worked to make himself judgment-proof by transferring his house to
his daughter to protect his assets in the event of such a fine. Last
year a judge ordered he pay a $257,000 fine for his role in allegedly
harassing and intimidating patients at clinics in the Midwest. Scheidler
said that if the judgment had been larger, he would have filed for
bankruptcy; instead he borrowed $70,000 and used his house to secure the
rest of the money to pay the fine. Sen. Charles Schumer (D-N.Y.), who
sponsored the amendment, said 'We know what the policy is of these
violent extremists. They believe that they are morally superior to the
rest of us, that they have the right to take the law into their own
hands and use violence. Sen. Orrin Hatch (R-Utah) opposed the amendment,
stating that it 'could be used to press people who legitimately feel
otherwise than the abortion clinic does.' Republicans argued that
Schumer's amendment was an attempt to derail the bankruptcy reform bill.
Jeffrey Tassey, a lobbyist for the American Financial Services
Association (which supports the bill), said that the abortion debate
'wasn't a bankruptcy issue' and that pro-choice advocates were using
'bad bankruptcy policy' to achieve their political ends. Schumer's press
secretary denied Tassey's charge and said Schumer is committed to
protecting women who visited abortion clinics. She said that the ability
for protesters to discharge judgments would give them free rain to
harass. Schumer and pro-choice groups argue that abortion protesters are
taught how to hide their assets to be judgment proof. Betsy Cavendish,
legal director of the National Abortion and Reproductive Rights Action
League (NARAL) said, 'It's pretty clear that [bankruptcy] is an
important tactic for them.'
Yolanda Wu, an attorney for the National Organization for Women (NOW)
Legal Defense and Education Fund, said abortion activists' practices of
attempting to evade judgments by declaring bankruptcy is 'pretty
widespread.' However, the reported opinions suggest that current law
under ß523(a)(6) is broad enough to make these claims
non-dischargeable. In December, a bankruptcy court in Buffalo, N.Y.,
ruled that a when a court issues an injunction or restraining order in
clinic protest cases, then any action violating that order is the result
of willful and malicious injury, so as to make the claims
non-dischargeable.
Appeals Court Rules in Favor of FCC Over NextWave
Yesterday the Court of Appeals for the Second Circuit in New
York set aside a Jan. 31 bankruptcy court ruling that had blocked the
Federal Communications Commission (FCC) from cancelling NextWave Telecom
Inc.'s wireless licenses, Reuters reported. Hawthorn, N.Y.-based
NextWave won the 90 licenses at two 1996 government auctions, but unable
to raise the money needed, it filed chapter 11 in 1998. A bankruptcy
court ruled that NextWave could keep the licenses, but the appeals court
overturned that decision in November, and in January, the FCC announced
it would re-auction the rights. On Jan. 31, the bankruptcy court moved
to block the FCC from doing so. In its ruling yesterday, the appeals
court said it would hear further arguments in the coming weeks, but the
two-page order did not give any explanation for the reversal of the
bankruptcy court's Jan. 31 order. When the appeals court ruled in
November, it said that the FCC, not the bankruptcy courts, had
jurisdiction over the terms of and conditions of the licenses. The FCC
has announced that it wants to re-auction the licenses retrieved from
bankrupt or troubled carriers on July. NextWave officials said they were
disappointed in the latest ruling but also claimed victory saying that
the ruling 'will accelerate consideration of some important issues in
that proceeding.'
FCC Chairman Bill Kennard, who testified before a Senate Budget
Committee hearing yesterday, said that taxpayers could lose billions of
dollars, and the promise of new communications services, if the licenses
continue to be tied up in bankruptcy court, the Associated Press
reported. 'Spectrum belongs to the American public. It's a national
resource,' he said. Kennard said that allowing bankrupt companies to
hold onto the licenses, and eventually pay only a portion of what they
bid, undermines the process. Kennard advocated for legislation that
would ensure that the government gets back licenses from companies that
file for bankruptcy protection. (See the text of William Kennard's
statement at
href='http://www.senate.gov/%7Ebudget/republican/about/hearing2000/kennard.htm'
target='window2'>http://www.senate.gov/~budget/republican/about/hearing2000/kennard.htm.)
Sen. Judd Gregg (R-N.H.) and others have pushed for such legislation in
the past. Gregg said that NextWave is 'trying to beat down the taxpayers
by going into bankruptcy court.' NextWave rejects the argument that it
filed in order to reduce what it owed to the government; instead, it
blames the FCC license policy for its financial problems. NextWave COO
Raymond Dolan also chastised the FCC for not accepting the company's
offer to pay for the licenses so that they can be put to use for
consumers.
N.U. Pizza Holding Files Chapter 11
N.U. Pizza Holding Corp., Los Angeles, has filed for chapter 11
protection, and company officials anticipate the reorganization could
take up to a year, according to a newswire report. The company will be
doing a late filing for its second quarter 10Q, but limited resources
have prevented the company from holding its annual shareholders
meeting.
Court Approves Distribution of Casmyn's Disclosure
Statement
Casmyn Corp., Agoura Hills, Calif., announced that on Feb. 3
the Bankruptcy Court for the Central District of California approved the
second amended disclosure statement describing the second amended
reorganization plan and authorized distribution of documents to
creditors and common and preferred shareholders, according to a newswire
report. The Unsecured Creditors' Committee recommends the plan and that
other creditors and shareholders vote to accept the plan. Ballots must
be received by March 17, and a confirmation hearing has been scheduled
for March 31. Copies of the plan, disclosure statement and other
solicitation materials are online at
href='http://www.wsilaw.com/'>http://www.wsilaw.com.
Richard Wynne of Wynne Spiegel Itkin, Los Angeles, is
the company's bankruptcy counsel.
Harnischfeger Announces Results of Beloit Sale Hearing
Harnischfeger Industries Inc., Milwaukee, announced the results
of a sale hearing held before the bankruptcy court in Delaware earlier
this week, according to a newswire report. At the hearing, the court
approved three sales transactions involving Beloit Corp. assets: Paper
Aftermarket and Roll Covers Division--Valmet Corp.; Paper
Technology--Mitsubishi Heavy Industries Inc.; and Pulp and Finishing
Divisions--Groupe Laperriere & Verreault Inc. Sales of the assets
remain subject to certain closing conditions. Previously the court
approved the sale of Beloit's OASIS business and Woodyard Division.
Harnischfeger is pursuing the sale and liquidation of the remaining
Beloit assets, including primary manufacturing facilities in Beloit,
Wis., and Rockton, Ill., and certain overseas paper machinery
manufacturing business. Robert N. Dangremond, chief
restructuring officer and a principal of Jay Alix & Associates, is
directing the Beloit sale process. Harnischfeger and its subsidiaries
filed chapter 11 last June.
Court Grants Jitney-Jungle Interim Exclusivity Extension
The court has extended the exclusive plan periods of Jitney-Jungle
Stores of America Inc. (X.JIT) on an interim basis while it considers
the supermarket operator's recent request to extend the periods for an
additional 120 days. In a motion filed Feb. 2, the company asked the
U.S. Bankruptcy Court in New Orleans to extend until June 12 its
exclusive period for filing a plan and until Aug. 14, its exclusive
period for soliciting votes to the plan. The periods are scheduled to
expire 120 and 180 days after the company's Oct. 12 petition date, or
Feb. 9 and April 9, respectively. In an order from Feb. 2, U.S.
Bankruptcy Judge T.M. Brahney III temporarily extended the exclusive
periods until resolution of the company's request. The court has
scheduled a hearing on the matter for Feb. 25.
Courtesy of
href='http://www.fedfil.com/bankruptcy/developments.htm'>The
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February 11, 2000.
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