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April 28, 2005
Economy Grows at Softest Pace in 2 Years
The U.S. economy grew at its softest pace in two years during the
first quarter of this year, slowing to a 3.1 percent annual rate of
expansion as consumers and businesses curbed spending, the Commerce
Department said today, Reuters reported. The expansion in gross domestic
product was the weakest since a 1.9 percent pace during the first
quarter of 2003 and was a surprisingly sharp deceleration from the 3.8
percent rate registered in the fourth quarter of 2004. Wall Street
economists had forecast first-quarter GDP would grow at a relatively
more robust 3.6 percent rate.
Specter Trying to Form Coalition on Asbestos Bill
Senate Judiciary Chairman Arlen Specter (R–Pa.) heads into
today’s markup of asbestos legislation hoping a coalition of
committee members on both sides of the aisle will hold together,
allowing him to fight significant amendments and send the long-debated
bill to the floor, CongressDaily reported. As of Wednesday,
the bill had the support of six Republicans and two Democrats on the
panel, and attention was focused on the undecided members who will
resolve the bill’s fate. In what is expected to be a long markup
session, Specter is likely to face proposed amendments on such issues as
including medical criteria to determine who is eligible for compensation
and how much parties would pay into the proposed trust fund, the
newswire reported.
Justices Skeptical of DOJ’s Claims about Andersen Document
Retention
The accounting firm appeared yesterday to have won key support on the
Supreme Court for its challenge to the law that led to its post-Enron
collapse, the Legal Times reported. Several justices seemed
unsympathetic to the Justice Department’s argument that Andersen
violated a federal witness-tampering statute when one of its lawyers
reminded employees about its document retention policy in October 2001,
just before the spreading Enron scandal enveloped Andersen,
Enron’s accounting firm. Read the full article at
href='http://www.law.com/jsp/article.jsp?id=1114592709785'>www.law.com/jsp/article.jsp?id=1114592709785.
United Air to Settle Pension Claims for $1.5 Billion
United Airlines would grant federal pension insurers up to $1.5
billion in securities to settle bankruptcy claims and clear the way for
the carrier to shed its employee retirement plans, Reuters reported. The
airline, a unit of UAL Corp., and the Pension Benefit Guaranty Corp.
said on Friday they had reached an agreement for the agency to assume
control of the four pension plans, which are severely underfunded.
Tyco Ex-Chief, in Shift, Takes the Stand
Dennis Kozlowski, the former CEO of Tyco International took the stand
to declare his innocence at his retrial yesterday, a surprising reversal
in strategy from his first trial, at which he did not testify, the
New York Times reported. Kozlowski is on trial on larceny
accusations and other charges. Read the full article at
href='http://www.nytimes.com/'>www.nytimes.com.
The ‘Sheriff’ of MCI
Every time MCI resumes discussions over whether to merge with Qwest
Communications International Inc. or Verizon Communications Inc., it is
doing so under the close watch of former SEC chairman Richard C.
Breeden, who was appointed to watch over MCI in 2002, the
Washington Post reported. Ashburn, Va.–based MCI is
run under 78 rules Breeden laid out to safeguard against capricious and
self-serving management decisions. It consults three separate investment
banks and two law firms that prepare cost-benefit analyses with every
new offer. Read the full article at
href='http://www.washingtonpost.com/wp-dyn/content/article/2005/04/27/AR20050…'>www.washingtonpost.com/wp-dyn/content/article/2005/04/27/AR200504270228….
KPMG Ousts Executive, Partners
Accounting firm KPMG LLP this week fired a senior executive who had
headed its tax-services division as it promoted tax shelters earlier
this decade, another sign of the pressure KPMG is facing as
law-enforcement officials investigate the now-contentious sales effort,
the Wall Street Journal reported. The New York firm also
dismissed two partners who had sat on its 15-member board, the latest
personnel change tied to the tax-shelter scrutiny.
ABB Says Asbestos Process Moving Along Smoothly
Swiss engineering group ABB’s efforts to address its asbestos
problems are moving along smoothly, its CEO said today, adding he could
not comment on the timing of a possible conclusion, Reuters reported.
ABB last month agreed to pay an additional $232 million to claimants.
The money was on top of the $1.2 billion that ABB had already agreed to
contribute to a settlement under an earlier plan that was thrown out by
a U.S. court last year.
GoldStar Files for Bankruptcy Protection
GoldStar Emergency Medical Services Inc. on Tuesday filed for
bankruptcy protection in a federal court, according to a press release
from the company, the Lufkin Daily News reported. The
company has provided primarily non-emergency ambulance and medical
transport services in Lufkin and Nacogdoches since 2001. A voluntary
petition for reorganization under chapter 11 of the U.S. Bankruptcy Code
was filed on Tuesday in the U.S. Bankruptcy Court for the Southern
District of Texas.
China to Push 1,828 State Firms into Bankruptcy
China’s government will push 1,828 ailing large and medium
state-owned enterprises into bankruptcy from 2005 to 2008, the Xinhua
news agency said on Wednesday, Reuters reported. The targeted firms had
together posted losses of 150 billion yuan ($18.12 billion) in 2003 and
had run up 1.22 trillion yuan ($147.5 billion) of debt by 2003, Xinhua
said.
Tucscon Diocese Bankruptcy Filing Seeks to Cap Payout for Sex-abuse
Claims at $20 Million
The Roman Catholic Diocese of Tucson has filed an amended bankruptcy
organization plan, seeking to cap its payout for sex-abuse claims at $20
million, the Associated Press reported. A plaintiffs’ lawyer said
the amount wasn’t enough and vowed to challenge the proposal.
Initial payments to alleged abuse victims would range from $100,000 to
$600,000, depending on the severity of the abuse, according to the
amended plan filed on Monday.
Lawrence Friedman to Resign as Director of Executive Office for U.S.
Trustees
Lawrence A. Friedman announced in a press release that, effective
April 30, 2005, he will resign from his position as Director of the
Executive Office for U.S. Trustees to pursue opportunities in the
private sector. Friedman took office as Director on March 4, 2002.
“Larry has distinguished himself by his unflagging dedication to
improving the integrity of America’s bankruptcy system, and I
thank him for his leadership and service to the Department,”
Attorney General Alberto Gonzalez stated in the press release. The
United States Trustee Program is the component of the Justice Department
that protects the integrity of the bankruptcy system by overseeing case
administration and litigating to enforce the bankruptcy laws.