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February 2, 2006
Asbestos
id='1'>Asbestos Bill Backers Set News Conference
The co-sponsors of legislation to create a $140 billion asbestos
injury fund are due to hold a news conference on Thursday as they seek
to rally support ahead of a possible U.S. Senate vote next week, Reuters
reported yesterday. Sen. Arlen Specter (R-Pa.) and Sen. Patrick Leahy
(D-Vt.) said that the event will include representatives of groups in
favor of the compensation fund. Senate floor debate on the measure is
due to begin Feb. 6, but senators from both parties have warned they may
try to block the measure. Speculation continued over the legislation's
prospects, with some observers arguing that President Bush had signaled
it was in trouble by failing to mention the measure in his State of the
Union address on Tuesday. Bush often talks of the need to curb excessive
litigation, and there are hundreds of thousands of asbestos claims in
U.S. courts. White House spokeswoman Dana Perino on Wednesday insisted
the president still cared about the issue.
href='http://today.reuters.com/investing/financeArticle.aspx?type=mergersNews&storyID=2006-02-01T223537Z_01_N01245137_RTRIDST_0_CONGRESS-ASBESTOS.XML'>Read
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id='2'>Pennsylvania Judge Stops Asbestos Plan
An Allegheny
County, Pa., judge yesterday halted a plan to use $1.3 million from the
county Clean Air Fund to remove asbestos from a redevelopment site in
Duquesne, Pa., the Pittsburgh Tribune-Review reported today.
Common Pleas Judge Judith L.A. Friedman extended an emergency injunction
that she granted last week to the Squirrel Hill-based Group Against Smog
& Pollution. Lawyers for the county now have 20 days to file written
arguments. GASP sued the county and county health department last month,
alleging that it is illegal to use money to aid the Regional Industrial
Development Corp. in demolishing 15 crumbling, asbestos-laden blast
furnaces on a former U.S. Steel site at Duquesne City Center. Friedman
noted in a memorandum to lawyers last week that use of the $7.5 million
Clean Air Fund 'is clearly not aimed at actual abatement of pollution
problems, but rather at monitoring and educating.' Health Department
spokesman Guillermo Cole said the injunction will have no effect on
other uses of the fund. He said he did not know what impact the lawsuit
will have on the Duquesne project.
id='3'>Enron Fudged Figures, Witness Says
The government's
first witness Wednesday in the federal fraud trial of former Enron Corp.
chiefs Kenneth Lay and Jeffrey Skilling said that earnings were altered
and meeting the expectations of Wall Street was of overriding importance
at the energy giant, the Daily Deal reported today. Mark Koenig,
50, the former investor relations chief, testified that press releases
about profits were doctored and that Enron founder and chairman Lay
wanted to bar one suspicious analyst from meetings. Koenig painted a
different portrait of CEO Skilling than his defense attorney presented
during opening statements Tuesday, saying he was involved in the
day-to-day operations of the company, including adjusting earnings to
meet Wall Street expectations. Koenig said Enron's stock price,
consensus earnings estimates and what analysts thought about the company
were 'very important' to both Skilling and Lay.
href='http://www.law.com/jsp/article.jsp?id=1138788314170'>Read
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id='4'>USG Clarification Issued
USG, in response to
an inaccurate report, announced that it has not declared a cash dividend
with respect to its common stock, BankruptcyData.com reported today. As
announced on Jan. 30, 2006, USG adopted a Reorganization Rights Plan,
commonly referred to as a 'poison pill,' which declares a dividend of
preferred stock purchase rights that, until certain triggering events
occur, attach to and cannot be traded separately from the company's
common stock. Under the new shareholder rights plan, if any person
acquires beneficial ownership of 5 percent or more of USG's voting
stock, shareholders other than the 5 percent triggering shareholder will
have the right to purchase additional USG common stock at half their
market price, thereby diluting the triggering shareholder. USG
shareholders who already own 5 percent or more of USG's common stock as
of Jan. 30, including Berkshire Hathaway Inc., will not trigger these
rights so long as they do not increase their percentage ownership of USG
common stock by more than an additional 1 percent while the plan is in
effect, other than pursuant to proportional participation in the $1.8
billion common stock rights offering also announced by USG on Jan. 30 to
provide funding to finance a portion of the payments in its proposed
plan to emerge from chapter 11 proceedings. The new rights plan will
expire on Dec. 31.
id='5'>United Airlines Bankruptcy Ranks as Costliest
United ranks as the
costliest airline chapter 11 to date, having racked up $324 million in
professional fees for outside
help with its case since filing for chapter 11 in December 2002,
according to a review of bankruptcy court documents, the Rocky
Mountain News reported today. That number will grow by millions of
dollars as the case winds down. It is estimated that United's
professional fees could surpass $340 million, which already ranks as the
most expensive case in the airline industry and could be one of the
costliest U.S. bankruptcies ever. The carrier's average monthly costs
for outside professional services have jumped each year since it filed
for bankruptcy - from $7.8 million in 2003 to $8.8 million in 2004 to
$10.3 million last year. United's bankruptcy costs are nowhere near
energy giant Enron Corp., whose expenses have exceeded $1 billion. And
another bankrupt airline, Delta, is spending about $13 million to $14
million a month on professional fees. 'These fees don't seem out of line
for a case of that size and magnitude,' said Thomas J. Salerno, a
bankruptcy attorney in Phoenix. 'It is the second-largest airline in the
country, after all.' The high fees associated with United's case - which
include payments to one lead attorney making up to $850 an hour - also
reflect an overall upward trend in bankruptcy costs. Professional fees
in large corporate cases have jumped about 25 percent in recent years,
experts say.
href='http://www.rockymountainnews.com/drmn/airlines/article/0,2777,DRMN_23912_4434776,00.html'>Read
more.
id='6'>U.S. Case on Insurers Is Expected
Civil and criminal
complaints are expected to be announced today against three former top
executives at a Berkshire Hathaway subsidiary, the General Reinsurance
Corporation, as well as a former senior executive of the American
International Group, according to people with direct knowledge of the
charges, the New York Times reported today. The individuals said
to be named in the complaints, to be announced by the Justice Department
and the Securities and Exchange Commission, are Ronald E. Ferguson,
General Re's former chief executive; Elizabeth A. Monrad, the former
chief financial officer; and Robert Graham, the former general counsel.
Christian M. Milton, the former head of A.I.G.'s reinsurance operations,
is also expected to be named in the complaints. Since early last year,
federal prosecutors have been investigating General Re and A.I.G. for
financial improprieties relating to transactions that artificially
inflated A.I.G.'s reserves by $500 million in 2000 and 2001, which are
the transactions that are at the center of the SEC and Justice
Department investigations. New York Attorney General, Eliot Spitzer is
also investigating improprieties at A.I.G. and has filed a civil fraud
complaint against A.I.G. and its former chief executive, Maurice R.
Greenberg, as well as the former chief financial officer, Howard I.
Smith. Federal prosecutors in Manhattan are also investigating whether
Mr. Greenberg may have tried to manipulate A.I.G.'s share price shortly
before he stepped down from the company's helm. Mr. Greenberg has denied
any wrongdoing; A.I.G. has been expected to seek a settlement with
federal and state regulators.
href='http://www.nytimes.com/2006/02/02/business/02insure.html?_r=1&oref=slogin&pagewanted=print'>Read
more.
id='7'>Hyatt Waikiki owner files Chapter 11
The owner of the
Hyatt Regency Waikiki Resort & Spa filed for chapter 11 bankruptcy in
U.S. Bankruptcy Court in Honolulu, according to Pacific Business News
yesterday.
The company, Azabu Buildings Co., is under pressure from creditors who
are attempting to foreclose on the 1,230-room hotel on Kalakaua Avenue.
Azabu Buildings, whose parent company is based in Japan, acquired the
hotel in November 1986. Azabu Buildings said its debt resulted 'from
troubled real estate transactions in Japan related to the 'bubble'
economy of the early 1990s.' The company declined to discuss the amount
of its debt.
id='8'>Arraignment Scheduled for Six Former San Diego Pension
Trustees
A superior court
arraignment is scheduled for six former pension trustees accused of
conflict-of-interest in connection with their votes to underfund the San
Diego's pension system, FoxNews6 reported yesterday. Ronald Saathoff,
Cathy Lexin, Terri Webster, Mary Vattimo, Sharon Wilkinson and John
Torres were bound over for trial Jan. 13 after a four-week preliminary
hearing. Judge Frederic Link said the law under which the defendants are
charged prohibits public officials from participating in a contract in
which they have a financial interest. The statute was intended to
eliminate temptation and any appearance of impropriety, the judge said.
The judge ordered the defendants to stand trial on one felony count
each, calling additional counts cumulative. A 20-count indictment
returned Jan. 6 alleges the defendants devised a scheme to deprive other
trustees, members of the pension board and the citizens of San Diego of
their right to honest services. The defendants are accused of deceiving
fellow trustees by concealing material information about the retirement
system, including the fact that Saathoff would receive an increase in
his yearly retirement of more than $25,000 if its board enacted the
so-called 'Manager's Proposal.'
href='http://www.fox6.com/news/local/story.aspx?content_id=007E21AD-8778-4053-8131-72FCCEEC93B0'>Read
more.
id='9'>Adelphia Purchase Hurdle Cleared
U.S. antitrust
authorities said Tuesday they had approved plans by Time Warner Inc. and
Comcast Corp. to buy bankrupt cable operator Adelphia Communications
Corp., Reuters reported yesterday. The Federal Trade Commission said its
bureau of competition had closed its investigation into the deal without
taking action following a seven-month investigation. In April 2005,
Adelphia accepted a buyout offer from Time Warner and Comcast valued at
an estimated $17.6 billion in cash and stock. The deal is still awaiting
approval by the Federal Communications Commission. 'In addition to the
remaining local government approvals that have not yet been obtained,
the focus of our attention now turns to the FCC, where we hope for a
prompt ruling that this sale is in the public interest,' said Bill
Schleyer, chairman and chief executive officer of Adelphia, in a
statement. The FTC's five commissioners did not vote on the matter. But
in a statement, three commissioners, including chairman Deborah Majoras,
said they agreed with the decision to close the investigation.
href='http://money.cnn.com/2006/02/01/news/companies/adelphia.reut/index.htm'>Read
more.
International
id='10'>Australian City Council Faces Bankruptcy
The Palerange, New
South Wales Council is on the verge of bankruptcy with funds expected to
run out by June 30, 2006, the Queanbeyan Age reported today.
Palerang Mayor Maclachlan confirmed that council presently had
approximately $400,000 in operating funds. This figure has also been
confirmed by general manager Peter Bascomb. However, Mayor Maclachlan
said council was not bankrupt 'but we have had to reduce services.'
Palerang councillor and former Palerang and Yarrowlumla Shire Mayor
Terry Bransdon said Palerang Council had an extremely tough road ahead
and may, as the Boundaries Commission said when assessing its long-term
viability, 'be only viable in the short- to medium-term.'
href='http://queanbeyan.yourguide.com.au/detail.asp?class=news&subclass=local&story_id=455957&category=Council&m=2&y=2006'>Read
more.