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June 28, 2006
Pensions
name='1'>Pension Conferees Still Well Short of
Agreement
Pension conferees leaving
a meeting Tuesday indicated that negotiators are still far apart on
several sticky issues, dimming hopes that the House and Senate would
produce an agreement before the Independence Day recess,
face='Times New Roman' size='3'>CongressDaily
size='3'>reported today. House Majority Leader John Boehner (R-Ohio) had
said earlier Tuesday that conferees might come to a substantive
agreement by week's end, then draft the conference report over the
recess and pass it when Congress returns from the break. But Boehner
indicated there were unresolved questions that have long stymied the
talks. 'There are significant issues, like the airlines, that are still
being discussed,' Boehner told reporters, referring to language in the
Senate bill that would give airline carriers extra time to stretch out
their pension payments.
name='2'>Vying Pension Accounting Methods Stir
Concern
w:st='on'>
size='3'>U.S.
size='3'>accounting rule makers are set to reopen deliberations next
month on a plan to bring pension and other retiree-benefit costs onto
corporate balance sheets by the end of the year, Reuters reported
yesterday. However, the biggest dilemma the standard setters may face is
how to measure those costs. Their current measurement proposal, while
supported by investors, has come under attack from companies and
actuaries. 'There is very little disagreement that the obligation should
be on the balance sheet, but there are some different views as to how
the obligation will be measured,' said George Batavick, a member of the
Financial Accounting Standards Board (FASB). The FASB proposed in March
that there should be full disclosure of current corporate funding of
pension and other retirement benefits onto balance sheets. The board
reasoned the change would improve transparency for investors, and
proposed that companies use an accounting measure known as the projected
benefit obligation (PBO) to define the number that will be added to the
balance sheet.
href='http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&s…'>Read
more .
name='3'>Former CBO’s Testimony Delivered Blow to Activity on
Asbestos Legislation
Douglas Holtz-Eakin
delivered a significant blow against the effort to revive
asbestos-reform legislation when he testified earlier this month that a
cost assessment of the measure he had provided in November as director
of the Congressional Budget Office (CBO) was unrealistic,
The Hill
size='3'>reported yesterday. Some say that the testimony was a
surprising reversal, but others note that since leaving the CBO
Holtz-Eakin has taken a position created by a $5 million grant from a
source adamantly opposed to the controversial legislation. Holtz-Eakin
is highly regarded on Capitol Hill, attracting praise from both sides of
the aisle. But the funding of his organization has raised some
conflict-of-interest concerns about his views on the pending
asbestos-reform bill. Senate Judiciary Committee Chairman Arlen Specter
(R-Pa.) is pushing to bring the bill to the floor for a vote, but Senate
Majority Leader Bill Frist (R-Tenn.) has said he will not do so unless
it clearly has enough support to pass. A previous effort by Frist to
pass the legislation fell a few votes short this year.
href='http://www.thehill.com/thehill/export/TheHill/News/Frontpage/062706/new…'>Read
more.
Judge
Turns Deaf Ear to Refco Creditors' Protests
The court-appointed
trustee for Refco Capital Markets Ltd. has received court approval to
hire three firms to represent the company, despite protests from a group
of creditors that fears the firm retention will hinder its chances of
recovering funds,
size='3'>Portfolio Media reported yesterday.
Judge Robert
Drain of the U.S. Bankruptcy Court for the
Southern District of New York approved the retention of law firm Skadden
Arps Slate Meagher
size='3'>& Flom and restructuring firms Goldin Associates and
AlixPartners. In giving trustee
size='3'>Marc S. Kirschner permission to hire
the firm, Judge Drain dismissed complaints from a group of non-RCM
creditors that claimed Kirscher’s “army of
professionals” would work against its best interest. The
creditors, led by Bear Stearns & Co. and Deutsche Bank Securities,
say they worry that the trustee for RCM is intentionally creating
conflicts of interest to prevent the opposing creditors from hiring the
same firms.
name='5'>Comair Seeks to Void Flight Attendants’
Contract
Comair has asked a
bankruptcy judge for a second time to void the regional airline's
contract with its flight attendants union, the
face='Times New Roman' size='3'>Cincinnati Enquirer
size='3'>reported today. The Erlanger, Ohio-based subsidiary of Delta
Air Lines filed the motion late Monday night, and hearings before
Judge Adlai
Hardin are scheduled for July 10 and 11
in
size='3'>White Plains
size='3'>N.Y.
several new rounds of talks since Judge Hardin essentially ordered both
sides back to the bargaining table in April, Comair said the company and
its flight attendants union remain about $1.7 million apart.
href='http://news.enquirer.com/apps/pbcs.dll/article?AID=/20060628/BIZ01/6062…'>Read
more .
name='6'>Silicon Graphics Gets $130 Million in DIP
Loans
A bankruptcy court
approved up to $130 million in debtor-in-possession loans from several
bondholders for Silicon Graphics Inc., allowing the high-end computer
manufacturer to proceed with its chapter 11 restructuring,
Portfolio Media
reported yesterday. SGI will use the loan to finance
company operations during its bankruptcy, pay off $76 million to
pre-bankruptcy lenders Wells Fargo and Ableco Finance, and pay off $28
million it owes under another DIP loan from the same bondholders,
Quadrangle Master Funding Ltd., Watershed Technology Holdings LLC and
Encore Fund LP. After falling into bankruptcy protection in early May,
Silicon Graphics Inc. submitted its reorganization plan to the
bankruptcy court, setting the course for its emergence from from chapter
11. SGI, based in
face='Times New Roman' size='3'>Mountain View
size='3'>,
size='3'>Calif.
plan on June 16 in the U.S. Bankruptcy Court for the Southern District
of New York, and says it hopes to slash its debt by about $250
million.
name='7'>Court OKs Adelphia Asset
w:st='on'>
size='3'>Sale
Rivals
After weeks of wrangling,
Adelphia Communications Corp. has received permission to sell its assets
to Time Warner Corp. and Comcast Corp., Portfolio
Media reported yesterday. Judge
Robert Gerber
size='3'>of the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Manhattan
Tuesday that he would grant Adelphia’s wish to detach the asset
sale from the rest of the company’s chapter 11 proceedings. Time
Warner and Comcast had agreed in principle to the $17 billion sale last
year, but creditor infighting slowed the filing of Adelphia’s
reorganization plan. With a July 31 deadline before the buyers could end
their offer, the cable provider decided last month to expedite the sale
process under § 363 of the Bankruptcy Code.
name='8'>Meridian Delays Hearing on Heels of New Pact
A bankruptcy court has
agreed to push back a hearing related to Meridian Automotive Systems
Inc.’s case in anticipation of the beleaguered auto supplier
filing a third amended plan of reorganization,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. Earlier this week,
w:st='on'>
size='3'>Meridian
U.S. Bankruptcy Court for the District of Delaware to postpone a hearing
intended to evaluate the company’s latest disclosure statement and
entertain objections to the motion. The hearing, originally scheduled
for June 27, has now been moved to July 17, following the recent
“consensual agreement” the company reached with its major
creditor constituency classes. The Michigan-based auto parts
manufacturer intends to file yet another amended plan of reorganization
as well as an amended disclosure statement and needs more time to
prepare, according to
w:st='on'>
size='3'>Meridian
size='3'>.
name='9'>Stepdaughter Asks Court to Lift Convicted Killer’s
Bankruptcy Stay
Convicted killer Michael
Peterson filed bankruptcy just to avoid a civil trial, an attorney for
Peterson's stepdaughter claims, WRAL.com reported yesterday. In court
documents filed last week on behalf of Caitlin Atwater, attorney Jay
Trehy asked the court to have Peterson's stay lifted. He said Peterson's
'bad-faith filing of his bankruptcy petition accomplishes no legitimate,
financial purpose' and that he did it only to avoid his court-allowed
deposition and the wrongful-death trial. Peterson was convicted in 2003
of first-degree murder in connection with the death of his wife,
size='3'>Atwater
Kathleen Peterson. Peterson filed for bankruptcy just three days before
the civil suit was to go to trial.
href='http://www.wral.com/news/9436495/detail.html'>Read more
.
name='10'>Creditors Approve of
w:st='on'>
size='3'>Louisville
size='3'>Lawyer's Bankruptcy Plan
A group of creditors and
a federal bankruptcy trustee have agreed on a proposed settlement for
a
size='3'>Louisville
size='3'>attorney whose statewide law firm went under in 2003, the
Associated Press reported yesterday. Judge Joan
Cooper said that she will decide within a
couple of days whether to approve the settlement after she heard
arguments on the case of attorney Ron Sheffer yesterday in federal
bankruptcy court in
w:st='on'>
size='3'>Louisville
Sheffer opened law offices in cities across the state, including
size='3'>Paducah
w:st='on'>
size='3'>Lexington
w:st='on'>
size='3'>Louisville
size='3'>Henderson
firm staggered in the late 1990s because Sheffer borrowed money from
banks based on what he thought the firm would earn later, legal experts
said. Sheffer filed for bankruptcy in June 2003, listing assets of $1
million with $16.6 million in liabilities.
href='http://www.kentucky.com/mld/kentucky/news/state/14917716.htm?template=c…'>Read
more .
name='11'>Court Says Prosecutors Pressure White-Collar Defendants
Unfairly
In a decision that
bolsters white-collar defendants facing criminal investigations, a
federal judge said prosecutors can't pressure companies to stop paying
legal bills for indicted employees, the Wall Street
Journal reported today. The ruling, by a judge
overseeing the KPMG LLP accounting fraud case in a
w:st='on'>
York
concluded that federal prosecutors gain an unfair advantage and violate
the due process of indicted employees by pressuring their employers to
refuse to pay their legal costs. The decision strikes down a key lever
used by the government in several recent criminal
investigations.
href='http://online.wsj.com/article/SB115141611054391845.html?mod=hps_us_page…'>Read
more . (Registration required.)
name='12'>Lawyer Fired by SEC to Testify to Senate
Panel
The Senate Judiciary
Committee will hear testimony today from witnesses that include a fired
Securities and Exchange Commission lawyer who has accused the agency of
derailing his investigation of suspected insider trading by a prominent
hedge fund, the New York
Times reported today. The hearing is an
indication of Congress's concern about the growing influence of hedge
funds over the financial markets. The testimony from the former SEC
lawyer, Gary J. Aguirre, will be the first time he has spoken publicly
about his accusations, disclosed last week in the
face='Times New Roman' size='3'>New York Times
size='3'>, that for political reasons, SEC officials impeded his inquiry
on Pequot Capital Management, a $7 billion hedge fund overseen by the
long-time trader Arthur J. Samberg. Today's hearing is not expected to
focus on Mr. Aguirre's case, but on broader issues, like how hedge funds
might use their investing power to manipulate the securities
markets.
href='http://www.nytimes.com/2006/06/28/business/28hedge.html?_r=1&oref=slogi…'>Read
more .
International
name='13'>Court Postpones Yukos Bankruptcy
Hearing
A Moscow court agreed Tuesday
with a court-appointed supervisor's request to delay until August
bankruptcy hearings against OAO Yukos, the stricken oil company that was
once Russia's largest, according to the Associated Press yesterday.
Arbitration Court Judge Pavel Markov upheld a motion by Eduard Rebgun
and set an Aug. 1 date for the next session to consider whether to
formally declare the company bankrupt. Rebgun said he had logged 457
billion rubles ($17 billion) in creditors' claims so far, with tax
authorities claiming the largest portion of that sum. Western banks
holding nearly $500 million of Yukos' debt in March asked the Russian
court to declare the company bankrupt. It later emerged that state-owned
oil giant OAO Rosneft agreed in December to purchase the debt.
href='http://biz.yahoo.com/ap/060627/russia_yukos_bankruptcy.html?.v=1&printe…'>Read
more .
name='14'>Hungarian Bankruptcy Act Amendments to Take Effect July
1
Changes made last year
to
face='Times New Roman'
size='3'>Hungary
size='3'>'s Bankruptcy Act will come into effect on July 1, the
Budapest Business
Journal reported today. The amendments will
make it harder for companies to escape their debtors, but it will also
give troubled companies more time to pay off their debts. The amendments
give
size='3'>Hungary
authority over indebted companies in cases where Hungarian creditors or
suppliers have brought a bankruptcy case to court even if the company's
headquarters is not in
w:st='on'>
size='3'>Hungary
All that is required is for the company's main business operations to be
inside the EU. The measure also prevents the management of companies on
the brink of bankruptcy from setting up another headquarters in order to
escape the power of the Hungarian court.
href='http://www.bbj.hu/main/news_13759_bankruptcy+act+amendments+to+take+eff…'>Read
more .
href='http://www.bbj.hu/main/news_13759_bankruptcy+act+amendments+to+take+eff…'>