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Attorneys' Group To Join Asbestos Litigation Debate
The nation's largest lawyers group is jumping into the debate over
multibillion-dollar asbestos lawsuits and, in an unusual move, might
endorse efforts to limit who can sue, the Associated Press reported. A
plan to be debated at the American Bar Association's (ABA) winter
meeting -- beginning today in Seattle -- would put the 400,000-member
organization on the same side as big-business groups the ABA often
opposes. ABA President-elect Dennis Archer said massive asbestos
lawsuits have become a problem, and the association should not remain on
the sidelines as Congress considers limiting them later this year.
The ABA plan would not bar suits by people with cancer. It restricts
lawsuits to those with asbestos-related pulmonary disease and defines
what the medical standard is, reported the newswire. Many defense and
plaintiffs' lawyers have made huge amounts of money from asbestos suits.
About 600,000 asbestos-related lawsuits are in courts around the
country, and thousands more are being filed each year. Under the
proposal approved by an ABA commission, 90 percent of those cases would
be barred, critics say, the Associated Press reported.
Factory Orders Inch Up, Retail Sales Off
Orders for U.S. manufactured goods rose slightly in December,
boosted in part by defense orders, Reuters reported. The Commerce
Department reported on Tuesday that U.S. factory orders rose by 0.4
percent in December to $320.61 billion, after declining 0.8 percent a
month earlier. If defense-related items are excluded, however, factory
orders increased a smaller 0.2 percent. U.S. chain store sales were down
0.9 percent in the week ended Feb. 1 from the week before, breaking a
three-week run of higher demand, the Bank of Tokyo-Mitsubishi and UBS
Warburg said in a joint report, reported the newswire.
Cannondale Gets Interim Loan, Seeks Court OK For Sale
Bike manufacturer Cannondale Corp. has received interim approval
from the bankruptcy court handling its chapter 11 proceedings to borrow
up to $4.9 million to keep its business running, Dow Jones reported. The
debtor-in-possession loan is provided by CIT Group/Business Credit Inc.
and noteholder Pegasus Partners II L.P., according to court papers,
reported the newswire. A final hearing on the company's loan package has
been scheduled for Feb. 25 in the U.S. Bankruptcy Court in Bridgeport,
Conn. Under the financing deal, Cannondale is required to repay CIT
Group $688,900 in advances made prior to its bankruptcy.
Fleming CFO Says Bankruptcy Worries 'Ludicrous'
Fleming Cos., the nation's largest grocery distributor, doesn't risk
financial insolvency in the wake of losing its largest customer, Kmart
Corp., according to Fleming's financial chief, Dow Jones reported. 'That
notion is ludicrous,' Chief Financial Officer Mark Shapiro told Dow
Jones Newswires, when asked if Fleming might file for bankruptcy in the
wake of its announcement late on Monday that it had agreed to end its
grocery-supply agreement with Kmart.
Shares of Fleming Cos. fell as much as 25 percent after the company
announced that it is losing its biggest customer, bankrupt Kmart Corp.,
Bloomberg News reported. Fleming and Kmart announced the termination of
a 10-year supply contract after the close of regular U.S. markets on
Monday, reported the newswire.
Former Enron Employee Reaches Plea Agreement With
Prosecutors
A former Enron Corp. employee has reached a plea agreement with federal
prosecutors in California investigating energy-trading fraud, Bloomberg
News reported. Jeff Richter was expected in court on Monday, said Patty
Hansen, an FBI spokeswoman in San Francisco. She said he has reached a
plea agreement with the U.S. attorney's office.
The U.S. Justice Department is investigating whether energy traders
manipulated power prices in 2000 and 2001, when wholesale-power costs in
California surged and utilities sank in debt. Former Enron trader
Timothy Belden pleaded guilty in October to
taking part in a scheme that prosecutors said drove up power prices on
the West Coast, reported the newswire.
American Airlines Calls For $1.8 Billion In Employee Cost
Cuts
AMR Corp.'s American Airlines requested $1.8 billion in employee costs
cuts, citing its 'unsustainable current losses and the long-term need to
restructure its business,' Dow Jones reported. In a press release on
Tuesday, the airline said the cost-cutting plan is a result of pricing
actions by low-cost and bankrupt carriers putting 'unrelenting pressure'
on the company's financial situation. American Airlines said it needs an
estimated $4 billion in permanent annual savings to compete effectively
and return to profitability, reported the newswire.
Navigator Holdings, Unit Get Court OK To Use Cash Collateral
A bankruptcy court granted Navigator Holdings PLC and its Navigator Gas
Transport PLC subsidiary interim approval to use the cash collateral of
both a pre-petition lender, Credit Suisse First Boston Corp., and the
indenture trustees to Navigator Gas Transport's notes, Dow Jones
reported. U.S. Bankruptcy Judge Cornelius Blackshear signed an
interim order on Wednesday authorizing the companies to use the cash
collateral under terms of a budget through a final hearing on the
matter. According to court papers obtained by Dow Jones Newswires, a
final hearing is scheduled for Feb. 26 before the U.S. Bankruptcy Court
in Manhattan.
Key3Media Wins Interim Approval of $12.5 Million DIP Loan
Key3Media Group Inc. late on Tuesday won interim approval of a $12.5
million debtor-in-possession loan the company will use to pay employees,
critical vendors and other operating expenses, Dow Jones reported.
Key3Media, which filed for chapter 11 bankruptcy protection Monday,
needs to draw down $10 million on Wednesday. The initial draw will be
used, in part, to fund this week's payroll, said David M. Friedman, an
attorney representing Key3Media. Up to $2.92 million will go to critical
vendors such as convention centers, caterers, and event producers,
reported the newswire. Judge Jerry W. Venters of the U.S. Bankruptcy
Court in Wilmington approved the interim loan despite objections from
two pre-petition secured lenders. Key3Media produces and manages the
promotion of a portfolio of trade shows and conferences like Comdex for
the information technology industry.
NRG Energy Faces Distressed Sale of European Operations
NRG Energy Inc. faces a distressed sale of its European operations if
the ailing U.S. utility company goes ahead with a potential chapter 11
bankruptcy filing, an analyst at credit-rating agency Standard &
Poor's Corp. told Dow Jones Newswires on Tuesday. Xcel Energy Inc.,
NRG's parent company, has said its troubled subsidiary is heading toward
a chapter 11 bankruptcy filing. NRG Energy is still in negotiations with
its creditors, and said no decision had been made about its debt
restructuring. An NRG Energy spokeswoman said a bankruptcy filing,
'should in no way compromise or disrupt our ability to serve our
domestic or international customers,' reported the newswire.
Court to Consider UAL Employee Retention Plan, CEO Pay Package
UAL Corp., parent of United Airlines, and its flight attendants will
meet in court this week regarding the proposed pay package for the
airline's chief executive and a separate retention plan proposed for
other managers, Dow Jones reported. UAL, in a motion filed on Dec. 9,
asked Judge Eugene R. Wedoff to approve a five-year employment
agreement with Chief Executive Glenn F. Tilton that includes a starting
annual base salary of $950,000, a $3 million signing bonus, stock
options and relocation expenses. UAL also filed a motion to institute a
key employee retention program. To read the full article, point your
browser to www.wsj.com (subscription
required).
Atlantic Express Seeks More Time To File Chapter 11 Plan
Atlantic Express Transportation Corp. is asking a bankruptcy court for a
three-month extension to its exclusive periods to present its chapter 11
liquidation plan and to lobby support for the plan. According to court
papers obtained on Monday by Dow Jones Newswires, the company seeks to
extend the plan-filing period to May 1 and the vote-solicitation period
to July 1. The current plan-filing period expires on Feb. 17, while the
vote-solicitation period expires on April 16. The U.S. Bankruptcy Court
in Manhattan will consider the extension request at a hearing on Feb.
11, reported the newswire.
Regal to Buy Half of Hoyts Theaters
Regal Entertainment Group, the No. 1 U.S. movie theater chain, on
Tuesday posted higher fourth-quarter earnings and said it would buy more
than half of Hoyts Cinemas Corp.'s theaters, Reuters reported.
Knoxville, Tenn.-based Regal said the acquired theaters, which generate
80 percent of Hoyts' cash flow, will give it a presence in the Boston
market area, the only top-10 market area where it currently has no
theaters. Regal was formed by Colorado billionaire Philip Anschutz, who
acquired Regal Cinemas, United Artists Theaters and Edwards Theaters and
brought them out of bankruptcy after overbuilding of multiplex theaters
in the late 1990s forced numerous operators to collapse, reported the
newswire.
Level 3 Completes Purchase of Genuity
Level 3 Communications said on Tuesday that it completed acquisition of
bankrupt Internet infrastructure company Genuity Inc. at about half the
initial price, the Associated Press reported. Level 3, which operates a
global fiber-optic communications network, announced in November it
planned to pay $242 million in cash for Genuity and assume many of the
firm's long-term operating agreements. Level 3 said at the time the
actual price could be reduced. On Tuesday, the companies announced the
deal had closed but said the price had fallen to $60 million in cash
plus $77 million in cash prepayments to vendors for services in 2003,
subject to further adjustments, reported the newswire.
Sun World International Gets Court OK For $15 Million Interim DIP
Loan
Sun World International Inc., which filed for chapter 11 protection last
week, received interim bankruptcy court approval to borrow up to $15
million under a $40 million debtor-in-possession financing agreement,
pending a final hearing, Dow Jones reported. U.S. Bankruptcy Judge David
N. Naugle signed the order last Friday, saying the funding is 'essential
to prevent irreparable harm' to Sun World International and to continue
the firm's business operations. Judge Naugle scheduled a final hearing
for March 3 before the U.S. Bankruptcy Court in Riverside, Calif.,
according to court papers obtained by Dow Jones Newswires.
Second Lender Emerges For AmeriKing Financing
AmeriKing Corp.'s hearing on a proposed $10 million debtor-in-possession
loan was continued on Tuesday after a second lender emerged saying it is
willing to participate in the financing, Dow Jones reported. Fleet
National Bank, AmeriKing's pre-petition secured lender, is negotiating
with Burger King Corp. about the $10 million loan. AmeriKing is
currently funding operations with the cash collateral of Fleet National
and its other pre-petition lender, but the company's authority to use
the cash collateral expires on Feb. 10. In addition, AmeriKing continued
a motion seeking approval of a key employee retention program, which the
company planned to finance with proceeds from the DIP loan, reported the
newswire.
Adelphia Interviews Must Be Delayed in Bankruptcy, Judge Rules
Adelphia Communications Corp. founder John Rigas and two of his sons
must wait until next year to question five witnesses who will testify
against them at a criminal fraud trial, a U.S. bankruptcy judge ruled,
Bloomberg News reported. Prosecutors sought to delay questioning as the
Rigases seek an end to an asset freeze imposed in bankruptcy court,
where Adelphia sought chapter 11 protection last June. John Rigas and
his sons face trial next January on charges of defrauding Adelphia of
$2.5 billion, reported the newswire.
Warnaco Group Emerges From Chapter 11 Bankruptcy
Warnaco Group Inc., the maker of Calvin Klein jeans, Speedo swimsuits
and Olga bras, emerged from bankruptcy after repaying creditors with new
shares and shedding about $2.2 billion in debt, Bloomberg News reported.
The New York-based clothing maker sought chapter 11 bankruptcy
protection in June 2001, unable to pay debt from acquisitions and
licensing agreements. During the reorganization, Warnaco changed
management, renegotiated licensing deals, sold assets and closed retail
stores, reported the newswire. U.S. Bankruptcy Judge Richard Bohanon
approved the company's plan to come out of chapter 11 on Jan. 16.
Court OKs Verso's Acquisition Of Clarent's Assets
Verso Technologies Inc. said late on Tuesday the bankruptcy court
overseeing Clarent Corp.'s pending chapter 11 reorganization has
approved Verso's $9.8 million buy of substantially all of Clarent's
business assets, Dow Jones reported. The transaction, which Verso plans
to finance using cash and unspecified notes, is expected to close before
Feb. 13, according to a Verso press release. Atlanta's Verso provides
integrated switching services for communications-service providers and
Clarent supplies softswitch and enterprise-convergence services.
Uniroyal Tech Asks For Court OK To Change Retiree Benefits
Uniroyal Technology Corp. is seeking bankruptcy court approval to modify
benefits payments to retirees due to distressed financial condition, Dow
Jones reported. Uniroyal Technology has been under chapter 11 protection
in the U.S. Bankruptcy Court in Wilmington, Del., since Aug. 25. A
hearing on this issue has been scheduled for Feb. 12 in Wilmington, Del.
Court papers said 'an unrelenting cash burn' drained the company's
reserves and forced it into bankruptcy. To continue operations, the
company obtained a debtor-in-possession loan, which came with budget
guidelines, reported the newswire.
Metromedia Fiber Gets Court OK For Sales; Could Top $60
Million
The court handling Metromedia Fiber Network Inc.'s chapter 11 case has
authorized the company to sell some of its Internet exchange facilities
and land in Reston, Va., according to court papers obtained Tuesday by
Dow Jones Newswires. Proceeds from the two sales may exceed $60 million.
Over half that amount is slated for senior bondholders, who have agreed
to allow the company to use cash on which they hold liens. The
fiber-optic network builder filed for chapter 11 bankruptcy protection
on May 20, 2002, saying it had overbuilt while expanding its
businesses.
Economic Woes Hit Law Firms
Law firms, commonly seen as islands of security and stability to their
employees, are proving vulnerable to the turbulence in the economy, the
New York Times reported. Squeezed between their clients and their own
lawyers' wage demands in tough times, some firms are collapsing under
the pressure. Big corporate clients are battling to keep costs down,
while the firms' costs for lawyers, staff and technology are rising. At
the same time, partners are often unwilling to accept declining pay, and
they defect. To read the full article, point your browser to
href='http://www.nytimes.com/2003/02/05/business/05LAW.html'>http://www.nytimes.com/2003/02/05/business/05LAW.html.
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