Dot.Com Job Cuts Rose 19 Percent in
December
The Wall Street Journal reported today that the number of dot.com
layoffs accelerated in December, increasing 19 percent from
November’s record total according to a study. December marked the
seventh straight month of consecutively increasing cuts in Internet
jobs, according to job-placement firm Challenger, Gay & Christmas
Inc.
The firm said U.S. companies announced plans to cut 10,459 jobs in
December, up from 8,789 in November. The past several months have seen a
rash of layoffs at Internet companies, which have been cutting work
forces in the face of an economic downturn. More dot.com companies
have gone out of business as venture-capital funding and other financing
dries up.
Bradlees Confirms Chapter 11 Bankruptcy
Discount retailer Bradlees Inc. confirmed Tuesday that it will go
out of business, putting almost 10,000 people out of work, according to
the Associated Press. The Braintree, Mass.-based company announced it
has filed for chapter 11 bankruptcy protection in New York and agreed to
sell its remaining inventory to Gordon Brothers Retail Partners LLC. The
company expected all of its 105 stores to close within eight weeks, said
company spokesman Fred McGrail. A phaseout of its headquarters and
distribution functions will begin this week. The company expects to keep
its sales staff through this process, and a bankruptcy court judge has
approved severance payments, which will be at least two weeks pay,
McGrail said.
The company said it filed for bankruptcy protection because of a general
economic downturn, including rising interest rates and higher gas and
heating oil prices, that have left customers with less disposable
income. The company also said new competition, unseasonable weather in
the first half of the year, and the tightening of trade credit
contributed to its inability to operate profitably.
Ponder Merges With N-Vision Technology Inc.
The Houston-based Ponder Industries Inc. announced on Tuesday in a
company press release that it has received confirmation of its plan of
reorganization from the U.S. Bankruptcy Court, Southern District of
Texas. Under the approved reorganization plan Ponder will liquidate its
remaining assets for the benefit of its creditors through a continuing
Liquidating Trust and be released and discharged from any and all
claims.
As part of the reorganization, the company will merge with N-Vision
Technology Inc., a Houston-based firm. Under the terms of the merger,
Ponder shareholders will receive one share of N-Vision stock for every
20 shares of Ponder they currently own. Current shareholders of N-Vision
stock will receive one share of reorganized company stock for every
share they currently own. The reorganized company will be a publicly
traded company organized and existing under Delaware law, known as
N-Vision Technology Inc.
N-Vision Technology Inc. is a technology based company involved in
the development of oil and gas reserves as well as providing geophysical
services to the industry through its wholly owned subsidiary Southern
3-D Exploration Inc.
Finova Credit Ratings Slide, Bankruptcy an Option
The credit ratings of Finova Group Inc. and its units were slashed
after the troubled lender said for the first time it may need to seek
bankruptcy protection if a plan that would excuse it from paying back
all of its own debt falls through, according to Reuters.
Standard & Poor's (S&P) and Moody's Investors Service
downgraded Finova's ratings after the Scottsdale, Ariz.-based Finova on
Thursday raised the possibility of a court-supervised
“reorganization.” Finova, which lends mainly to small- and
medium-sized businesses, according to a recent securities filing, has
about $11.3 billion of bank and public bond debt.
Finova on Thursday said that it and Leucadia National Corp. plan to
propose a “comprehensive restructuring” to Finova's bank
lenders and public debtholders. Leucadia, a New York-based holding
company, agreed last week to invest up to $350 million in Finova. The
company said substantially all of its lenders will have to agree to the
restructuring for Finova to avoid possible “reorganization under
protection of the courts.” In a filing with the Securities and
Exchange Commission last Thursday, Leucadia said Finova has about $4.7
billion of bank debt and about $6.6 billion of public bond debt.
KCS Energy Agrees with Creditors on Reorganization
Independent energy producer KCS Energy Inc. said Tuesday it reached
an agreement with its creditors on an amended reorganization plan that
should allow it to soon emerge from chapter 11 bankruptcy protection,
according to Reuters.
The Houston-based company, which focuses on the Mid-Continent and
Gulf Coast regions, said it will raise at least $25 million in preferred
equity and replace its two current bank facilities with a single new
credit facility, under the plan. On the date the plan takes effect,
current shareholders will retain 100 percent of KCS's common stock, all
past due interest on senior notes and senior subordinated notes will be
paid, trade creditors will be paid, and the company will repay $60
million of its senior notes, KCS said.
The remaining $90 million principal amount of its senior notes and
$125 million principal amount of its senior subordinated notes will be
renewed under amended indenture provisions, but without a change in
interest rates, the company added. The maturity date of the subordinated
notes will be amended from Jan. 15, 2008 to Jan. 15, 2006, the company
noted. In connection with the reorganization plan, which is subject to
bankruptcy court approval, KCS is arranging the private placement of $25
million of preferred stock, convertible into common stock at $3 a
share.
California Utility Hearings Continue Today; Davis, Greenspan,
Summers Meet
At its headquarters in San Francisco the California Public Utilities
Commission (PUC) will continue its emergency hearings today to address
issues surrounding the state's energy crisis, according to a newswire
report. The agency is evaluating the financial situation of the state's
two major utility companies before deciding how to handle the current
legislative rate freeze.
Pacific Gas and Electric Co. and Edison International both say they
are on the verge of bankruptcy. Together, the companies claim to be $8
billion in debt from paying exorbitant rates to wholesale power sellers
in order to get the energy needed to supply consumers in California. The
commission called on Thursday for an independent audit of the
companies.
At the emergency hearings, the commission will determine the veracity
of the economic distress claims and establish whether the companies'
1997 investments in equipment and power plants have been paid off. A
current law calls for rates to be frozen until March 2001 – unless
the outstanding costs are paid in advance, in which cases the rates
could be raised earlier. The PUC will determine whether it is in the
public interest for the utility companies to sell off remaining
generation facilities and how power from those facilities may be
sold.
California Gov. Gray Davis met yesterday with Federal Reserve
Chairman Alan Greenspan and U.S. Treasury Secretary Lawrence Summers for
more than two hours about the California electricity crisis, which has
left the country's richest state threatened with power outages,
according to Reuters. “They gave me about two hours of their time,
and suffice it to say they agreed that this was one of the more
intractable problems they’ve seen in the short-term, but we will
get through this with more conservation and bringing more supply
online,” said Davis in an interview with Nightly Business Report
on national public television.
Paul Harris to Close Indianapolis Store
Women's clothier Paul Harris plans to close its flagship store in
downtown Indianapolis as part of its effort to emerge from bankruptcy,
according to the Associated Press. Paul Harris executives announced this
fall plans to close about 50 stores nationwide, but had delayed making a
decision about the store.
'The downtown Indy store was a significant store for us. We thought
it was a significant store to the community,' said Richard Hettlinger,
the chain's chief financial officer. 'This was extremely difficult for
us. We did not want to make that decision.' The Indianapolis-based
company filed for protection under chapter 11 of U.S. bankruptcy law in
October after months of watching its stock price and profits drop.
WWF Throws in the Towel on Vegas Casino
on Tuesday it will sell its WWF Hotel and Casino for $11.2 million
– about $2 million more than it paid for the resort in 1998 with
grand plans to build a wrestling-themed establishment on the site,
according to Reuters.
The WWF picked up the 193-room resort – formerly known as the
Debbie Reynolds Hotel and Casino – at a bankruptcy auction after
Reynolds failed to make the place profitable. A year after announcing
plans for a $100 million wrestling-themed resort on the site, however,
the WWF has also thrown in the towel, said Judd Everhart, spokesman for
the Stamford, Conn.-based WWF.
“After we bought it, we realized it just wouldn't meet our
expectations of being able to provide our brand of entertainment on the
right scale,” he said. “So we decided to sell
it. We have no immediate plans to purchase other property in Las
Vegas, but I couldn't rule that out.” The WWF said it expects to
report a gain of about $1 million on the sale.
Gumi Expected to Reach Debt-Waiver Agreement
Protracted talks among creditor banks on a debt-forgiveness plea by
the Tokyo-based general contractor Kumagai Gumi Co. will soon reach a
resolution, the president of Sumitomo Bank said on Tuesday, according to
the Associated Press.
The details of a debt-waiver agreement “will likely be worked
out by the end of this week,” Yoshifumi Nishikawa told a news
conference. As Kumagai Gumi's largest creditor, Sumitomo Bank has been
seeking to muster support from other creditors for the contractor's
reconstruction plan, which entails a sharp cost-cutting plan.
''At present, there are a few banks which have not yet made up their
minds on what form they would provide assistance in,'' Nishikawa said.
He added, however, that all the banks that Sumitomo has asked to
cooperate ''have developed a deep understanding of the contents of the
reconstruction plan.''
The troubled construction company is asking its 15 creditor banks to
forgive more than 400 billion yen in loans to get out of its liability
quagmire, which has taken a heavy toll on its corporate presence and
health. Sumitomo Bank is being asked to waive claims on 234 billion yen,
Shinsei Bank, the reincarnation of the failed Long-Term Credit Bank of
Japan (LTCB), some 100 billion yen, and the other 13 creditors a total
of 116 billion yen, Kumagai Gumi officials have said. The 13 include
Sumitomo Trust & Banking Co. and regional banks such as Gunma Bank
and Fukui Bank.
Founded in 1898 by the Kumagai family, the general contractor
specializes in large-scale civil engineering projects, including dams
and tunnels. The company fell into solvency woes as a result of its
excessive investments at home and abroad during the late 1980s
asset-inflated bubble economy.
Anicom to File for Bankruptcy Protection
Anicom Inc. announced that it has already started to liquidate its
assets and intends to file for protection with the U.S. Bankruptcy
Court. The company, which has been under investigation for accounting
'irregularities' since July 2000, further announced that it had agreed
to sell its Canadian operations to Tricontinental Communications Ltd.,
of Vancouver, B.C., for an undisclosed price.
American Pad's Trading Ceased
American Pad & Paper Company announced that it will cease public
trading of all shares of its common stock effective Dec. 22, 2000. The
company has been operating under chapter 11 protection since Jan. 14,
2000.
GST Telecom Announces Extension
GST Telecommunications Inc. announced that on Dec. 19, the company
and its subsidiaries and Time Warner Telecom Inc. agreed to extend the
date by which either party could terminate their Sept. 11, 2000 Asset
Purchase Agreement under Section 8.2(b) of that agreement from Dec. 20,
2000 to Noon Eastern Time on Jan. 12, 2001. This date was previously
extended from Dec. 1, 2000 to Dec. 20, 2000 through a motion approved by
the U.S. District Court for the District of Delaware on Dec. 6, 2000.
GST has been operating under chapter 11 protection since May 17.
Laclede Steel Announces Sale, Confirmation
Laclede Steel Company announced that on Dec. 18, the company's
subsidiary, Laclede Mid America Inc., sold substantially all of its
assets to Leggett & Platt Inc. for $24.5 million. The purchase price
is subject to adjustment in certain circumstances. The company also
announced that on Dec. 15, 2000, the U.S. Bankruptcy Court, Eastern
District of Missouri Eastern Division, confirmed the company's Restated
Second Amended Joint Plan of Reorganization, which calls for –
among other things – all of the company's currently outstanding
preferred stock, no par value (416,667 shares outstanding) and common
stock, $0.01 par value (4,056,140 shares outstanding) to be canceled on
the effective date of the plan with no payments to be made on claims
arising from or related to such equity interests.
After the effective date, the company, which has been operating under
chapter 11 protection since Nov. 30, 1998, will be authorized by its
amended and restated certificate of incorporation to issue 8,000,000
shares of common stock, $0.01 par value per share. In addition,
4,400,000 shares of new common stock will be issued and outstanding
immediately following the effective date and 600,000 options for new
common stock will be issued to non-management employees one year after
the effective date.
