|
Sen. Specter to Chair Hearing on Impact of U.S. Airways Bankruptcy
on Pension Plans
Sen. Arlen Specter (R-Pa.) will chair a hearing of the Labor, Health and
Human Services (HHS) and Education Appropriations Subcommittee on the
effect of the U.S. Airways bankruptcy on employee pension plans today at
3 pm in the124 Dirksen Senate Office Building, Washington, D.C.
Witnesses include Steven Kandarian, executive director, Pension Benefit
Guaranty Corp.; James Keightley, general counsel, Pension Benefit
Guaranty Corp.; Jim Roddey, chief executive, Allegheny County, Pa.;
David Siegel, president and chief executive officer, U.S. Airways; Duane
Woerth, president, Airline Pilots Association; and Bill Pollock,
chairman, U.S. Airways Master Executive Council, Airline Pilots
Association.
Card Solicitations May Have Hit 4 Billion in 2002
Credit card direct-mail acquisition letters totaled 375 million pieces
in October, the second highest monthly total last year behind June's 379
million, Mintel's Comperemedia reported, according to Collections and
Credit World. As a result, Chicago-based Comperemedia is estimating
that 2002's mail volume reached 4 billion letters, 8 percent higher than
the 3.7 billion letters mailed in 2001. 'Issuers used balance-transfer
offers to appeal to debt-burdened consumers,' said Susan Wolfe, Mintel's
vice president. And subprime issuers, beset by financial problems,
continued mailing letters, but switched to new prospects, Wolfe says.
Last year's final numbers will be available in February.
FAO, Owner of FAO Schwarz and Zany Brainy, Seeks Bankruptcy
FAO Inc., owner of the FAO Schwarz and Zany Brainy toy-store chains,
filed for bankruptcy protection amid continuing losses and tightened
credit, Bloomberg News reported. The company, best known for its
flagship FAO Schwarz store that sells high-priced toys on New York's
Fifth Avenue, said in December it had asked Wells Fargo Retail Finance
LLC to relax recently imposed restrictions. The company, formerly Right
Start Inc., bought FAO Schwarz in January for $58 million and changed
its name to FAO. It bought Zany Brainy out of bankruptcy in September
2001, Bloomberg News reported. King of Prussia, Pa.-based FAO listed
assets of $257.4 million and debts of $238.3 million in its chapter 11
petition in the U.S. Bankruptcy Court in Wilmington, Del.
Supreme Court Rejects Automakers' Asbestos-case Transfer
Request
The three largest U.S. automakers lost a U.S. Supreme Court bid to shift
almost 20,000 asbestos lawsuits against them to a single federal judge,
Bloomberg News reported. The justices, without comment, refused to hear
arguments from DaimlerChrysler AG, Ford Motor Co. and General Motors
Corp. The automakers are fighting claims that thousands of mechanics and
other workers got sick handling asbestos-lined brakes made by
Federal-Mogul Corp., which is in bankruptcy. The high court rejection
means the companies will have to wage duplicate battles against the
suits in different courts around the country. The automakers say there's
insufficient scientific evidence linking the brakes and other parts to
asbestos-related illnesses, reported the newswire.
Buffalo Sabres Seek Bankruptcy Protection; NHL's 2nd in a
Week
The Buffalo Sabres, operated by the National Hockey League since June
when former owner John Rigas was accused of stealing from Adelphia
Communications Corp., filed for bankruptcy protection, said team
spokesman Michael Gilbert, Bloomberg News reported. The NHL filed on
behalf of the team four days after the Ottawa Senators sought relief
from creditors in Canada's courts. The Sabres have $238 million in debt
and assets of $68 million, the Buffalo News reported without citing its
sources. The newspaper reported that the team received about $60 million
in revenue for the year ended Aug. 31, according to Bloomberg News.
Mitchell Files for Personal Bankruptcy
Former Maryland state Sen. Clarence M. Mitchell IV filed for personal
bankruptcy last week, listing assets of $50,000 and debts of up to
$500,000, the Baltimore Sun reported. The chapter 7 bankruptcy
petition was filed last Tuesday in the U.S. Bankruptcy Court in
Baltimore and lists five creditors, including an investment firm that
figured in an ethics probe of the Baltimore Democrat while he was a
state senator. Mitchell was defeated by more than a 2-1 margin in last
fall's Democratic primary. He subsequently became a paid adviser to the
campaign of Gov.-elect Robert L. Ehrlich Jr., reported the
newspaper.
Enron Investors May Question Citigroup's Weill, Rubin
Enron Corp. shareholders who sued Citigroup Inc. for allegedly helping
the bankrupt energy trader hide debt in off-the-books partnerships
probably will ask Chief Executive Officer Sanford J. Weill to testify in
the case, the investors' chief lawyer said, Bloomberg News reported.
Robert Rubin, chairman of Citigroup's executive committee, and Michael
Carpenter, former head of investment banking at the bank's Salomon Smith
Barney unit, may also be questioned under oath about what they knew
about Enron's finances, said the investors' lead lawyer, William Lerach,
in an interview, according to the newswire.
Enron investors are preparing to call witnesses and demand relevant
evidence now that the federal judge in charge of their case has rejected
a request by Citigroup, J.P. Morgan Chase & Co. and six other
investment banks to dismiss the suit. Shareholders claim they lost about
$25 billion as Enron's shares collapsed and the energy trader filed for
bankruptcy in December 2001, reported the newswire.
UAL Seeks Court Order to Protect CFO from Deposition
UAL Corp., parent of United Airlines, has asked the judge overseeing its
bankruptcy case here for a court order to prevent State Street Bank
& Trust Co. from taking a deposition of the airline's chief
financial officer, Dow Jones reported. In a filing late last week, UAL
said State Street's request to depose CFO Frederic Brace is
'unnecessary, duplicative and unduly harassing,' reported the newswire.
The issue centers around State Street's request to sell the 13 million
shares of UAL stock it holds as trustee to the airline's employee stock
ownership plan. State Street said the stock price was sure to decline
over time and that it needed to sell immediately, according to Dow
Jones. But UAL said such a large stock sale could alter ownership
control and in turn cost the company billions in future tax breaks.
Earlier on Monday, UAL said it gave permission for State Street to sell
the shares after determining that the move would not alter the company's
ownership structure. According to UAL's motion, State Street has refused
to withdraw its deposition request on the matter even though the bank
had the opportunity to question Brace at a Dec. 30 hearing and the
company has made another executive available for questioning, reported
the newswire. UAL has also said that it doesn't expect to call Brace to
testify at the airline's Jan. 15 hearing. A hearing has been set for
Monday, reported Dow Jones.
Two Banks Holding Up Allegheny Debt Restructuring Deal
Two unidentified U.S. regional banks are holding up a debt-restructuring
deal between Allegheny Energy Inc. and its creditors that would allow
the power company to avoid a bankruptcy filing, Dow Jones reported. As
reported by the Wall Street Journal, representatives of the
company and important creditor groups have agreed on the framework for a
deal under which existing lenders and bondholders would inject about
$470 million into the company, which would solve Allegheny's liquidity
problems. In exchange, creditors would receive collateral on about $1.7
billion of existing credit, which is currently unsecured. According to
market sources, the two regional banks, which are part of a 20-bank
syndicate led by Citigroup Inc. and J.P. Morgan Chase & Co., just
want to exit the credit instead of participating in a restructured
facility. Bankers on Friday were optimistic that some type of resolution
could be found, possibly as soon as next week, reported the
newswire.
Budget Group OKs Terms to Sell European Operations to Avis
Europe
BRAC Group Inc., formerly known as Budget Group Inc., has agreed to
terms governing the proposed sale of its remaining businesses in Europe,
the Middle East and Africa to Avis Europe PLC, according to court papers
obtained on Monday by Dow Jones Newswires. BRAC Group-which last year
sold almost all of its car rental assets to Cendant Corp.-said it agreed
to a term sheet on Thursday 'in anticipation of executing' a purchase
agreement for the sale 'shortly.' Terms provide for Avis Europe to pay
$20 million in cash for assets that include interests under a trademark
license agreement and third-party franchise or license agreements,
reported the newswire. Avis Europe would provide a $1.2 million loan for
some of BRAC Group's European affiliates to use until the sale closes.
Amounts due under the loan could be forgiven under the sale deal,
according to the filings with the U.S. Bankruptcy Court in Wilmington,
Del., which is handling BRAC Group's chapter 11 case, reported Dow
Jones. A hearing on proposed competitive auction procedures is scheduled
for Wednesday, reported the newswire.
Midland Steel Products Files Chapter 11 Petition In Delaware
Midland Steel Products Solon Co. filed for chapter 11 bankruptcy
protection in Delaware on Monday, listing assets of $10 million to $50
million and liabilities of less than $10 million, Dow Jones reported.
Rouge Steel Co. is Midland Steel's largest unsecured creditor, with an
$860,213 claim, according to documents submitted to the U.S. Bankruptcy
Court in Wilmington, Del., reported the newswire. Key Equity Capital is
the largest equity holder with 65,250 shares, according to court
documents.
Colorado Springs Symphony Files for Bankruptcy
The Colorado Springs Symphony Orchestra filed for chapter 11 bankruptcy
protection as expected Friday, putting the remainder of its current
season - and possibly its survival - in jeopardy, reported the
Colorado Springs Gazette. According to the Gazette, the
symphony has not canceled any concerts yet, but officials told the
Gazette that only two pops concerts with rhythm-and-blues
musician Ray Charles are likely to go forward as planned. Last week, the
orchestra said it would declare bankruptcy if the musicians union did
not accept a bailout plan that included a 10 percent pay cut. By
Thursday evening, the musicians had agreed to discuss the plan, but not
to accept it. Further negotiations, the Gazette says, will
determine whether the orchestra emerges from bankruptcy or
dissolves.
Congoleum to File for Bankruptcy to Wipe Out Asbestos
Liability
Congoleum Corp., a maker of sheet and tile flooring, said it will file
for bankruptcy protection to wipe out its current and future asbestos
liability, Bloomberg News reported. Congoleum officials said in a
statement that it seeks to emerge from chapter 11 protection within six
months after setting up a trust that will compensate claimants for
health problems linked to asbestos in some of its products. Asbestos
suits already have forced more than 60 companies into bankruptcy since
1982, including 20 since January 2000, the Rand Institute reported in
September. Such suits will eventually cost businesses and insurers more
than $200 billion, the policy research group estimated, reported the
newswire.
WorldCom Considers Name Change
WorldCom Inc., which has seen its reputation ruined by a $9 billion
accounting scandal and history's largest bankruptcy filing, is
considering changing its name, Dow Jones reported. 'It's certainly
something that we're considering and it's something that we're taking
very seriously,' said spokeswoman Julie Moore. Reuters reported on
Friday that WorldCom may switch to the name MCI, which currently houses
the company's consumer long-distance business. Moore declined to say
whether MCI or names of other WorldCom businesses, such as UUNet, are
being considered.
Kmart to Close about 330 Stores, Cut 25,000 Workers
Kmart Corp. will close about 330 stores and fire more than 25,000
workers in the biggest cost-cutting move since it declared bankruptcy a
year ago, the Detroit Free Press reported in its Tuesday edition,
Dow Jones reported. According to people familiar with the bankruptcy
case, fewer than 10 stores in Michigan will be closed, but one of
Detroit's two Kmarts will be among those shut down. Kmart executives
told store managers from California to the Carolinas to be prepared for
the news from the company's Troy headquarters today, managers said,
according to the article. Kmart spokesman Jack Ferry said the company
expects to finish evaluating its 1,833 stores by mid-January and to seek
bankruptcy court approval to close some of them at a Jan. 28 hearing in
Chicago, reported the newswire.
Systech Retail Systems File Chapter 11
Systech Retail Systems Inc. filed voluntary petitions for chapter 11
bankruptcy court protection in North Carolina and Ontario, Dow Jones
reported. A $1.7 million debtor-in-possession financing commitment --
obtained from its existing secured lenders Integrated Partners Limited
Partnership One and Park Avenue Equity Partners L.P. -- will allow the
company to continue business operations, subject to court approval,
reported the newswire. In a press release on Tuesday, the company said
it decided to file for bankruptcy because 'one creditor obtained a
judgment that proved too disruptive' to its reorganization efforts.
Systech has been restructuring since early 2001. In the second half of
2002, an informal financial and operational restructuring sponsored by
its senior stakeholders saw the closure of offices, the consolidation of
operations, rationalization of inventory and significant workforce
reductions, reported the newswire.
Thanks for visiting Today's Bankruptcy Headlines. New articles
are posted here
each business day.
|
