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August 1, 2005
Bankruptcy Law Implementation Rules Draft Released
The Advisory Committee on Bankruptcy Rules has released its draft of
rules to implement BAPCPA. The proposed Interim Rules and Forms will be
presented to the Advisory Committee at its meeting in Washington, D.C.,
Aug. 3–4, 2005. If approved by the Advisory Committee, the
proposed interim rules will be transmitted to the Committee on Rules of
Practice and Procedure and the Judicial Conference for approval and
transmission to the courts for adoption through standing or general
orders by each of the courts. The proposed Interim Forms will be
transmitted to the Standing Committee and the Judicial Conference for
adoption as Official Forms. To read the draft, go to
href='http://www.uscourts.gov/rules/CPA2005.html'>http://www.uscourts.gov/rules/CPA2005.html.
U.S. Senate’s Frist Intends to Pass Asbestos Bill
Senate Majority Leader Bill Frist (R–Tenn.) said on Friday that
he intends to get legislation creating a $140 billion asbestos
victims’ compensation fund approved by the chamber this autumn,
Reuters reported. “It is my intention to bring that bill to the
floor and pass it this fall,” Frist said of the asbestos bill as
the Senate wound up its work ahead of a summer recess. A bipartisan bill
to create the asbestos compensation fund was approved by the
Senate’s Judiciary Committee in May. But with doubts remaining
about how much support it has in either party, Frist has not brought it
to the Senate floor.
In other news, the U.S. Mine Safety and Health Administration
proposed Friday to toughen its 27-year-old asbestos exposure
limit—a threshold so weak that it impeded the discovery of a
health disaster from a Montana vermiculite mine, the Sacramento
Bee reported Saturday. Since 1994, MSHA has allowed miners to be
exposed to 20 times more of the potentially deadly or disabling fibers
than is permitted for non-mining workers. Public health experts have yet
to identify a safe exposure level to asbestos.
Atkins Nutritionals Files for Bankruptcy as Low-carbohydrate Trend
Fades
Atkins Nutritionals Inc. filed for bankruptcy protection in New York
as consumer interest in low-carbohydrate foods faded, Bloomberg News
reported. The company listed assets of $301 million and liabilities of
$325 million in papers filed with the U.S. Bankruptcy Court in New York.
Atkins owes UBS Securities LLC and other lenders roughly $301 million
under a 2003 loan, according to the papers filed yesterday. “The
low-carb fad has gone,” said Michael Steib, a consumer-goods
analyst for Morgan Stanley in London. “Dieting habits are very
short-lived. It came very quickly and disappeared very quickly.”
Foodmakers including Unilever and Kraft Foods Inc. were hurt in 2003 and
2004 as U.S. consumers began to monitor their weight by limiting their
sugar intake, as is advocated by Atkins’ diet plan.
Bankruptcy Costs, Fuel Reduce US Air Earnings
Bankrupt US Airways Group Inc. reported Friday that its
second-quarter losses increased from a year ago by 82 percent as
bankruptcy-related items and higher fuel prices wiped away the
airline’s savings in labor costs, Star News Services reported
Saturday. The carrier said it hopes to receive bankruptcy court approval
in September for its planned merger with America West Airlines, which
was announced in May. The Justice Department and Air Transportation
Stabilization Board—a unit of the Treasury
Department—already have approved the deal.
In other news, United Airlines expects to submit two important
documents early next week—a disclosure statement and a plan of
reorganization—to the bankruptcy court overseeing its
restructuring. the Rocky Mountain News reported Saturday.
The reorganization plan will outline how United intends to settle claims
against it and detail how it aims to land financing to get out of
chapter 11. In coming weeks, United also will file an in-depth,
five-year financial forecast.
And, cash-draining pension payments and persistently high fuel costs
are making a chapter 11 bankruptcy filing by Delta Air Lines Inc. all
but inevitable this fall, bizjournals.com reported. The Atlanta-based
carrier has lost more than $10 billion over the past four years, and
many industry watchers believe Delta will file for bankruptcy protection
before October. That date is key because the airline will be coming off
the lucrative summer travel season with a little extra cash that Delta
needs as it heads into the slow winter months, and it would let Delta be
“grandfathered in” under current bankruptcy laws before more
strict laws kick in Oct. 17. Even officials at Delta’s main hub at
Hartsfield-Jackson Atlanta International Airport have quietly put the
airline on a “60-day watch,” meaning that they believe
it’s possible Delta may file bankruptcy within the next two
months.
Western Oregon Catholics Named Defendants in Bankruptcy Case
About 80,000 Catholic households in western Oregon will soon get
notice that they have been named defendants in the Archdiocese of
Portland’s bankruptcy case, Catholic News Service
reported Friday. The legal move emerged as a way to make progress on a
central question of the case: Who owns Catholic parishes and schools?
Catholic households are to be notified of the action this summer by mail
and newspaper ads. Both the archdiocese and the committee representing
scores of sex abuse plaintiffs agreed to the plan.
AOL Latin America Files for Bankruptcy
America Online Latin America Inc. has filed for bankruptcy protection
after losing $1 billion, the Associated Press reported. From 1.4 million
paying subscribers at its 2002 peak—based mostly in Argentina,
Brazil, Mexico and Puerto Rico—AOL Latin America was down in March
to about 400,000 subscribers. The failure is a result of getting into
the area’s Internet boom late, underestimating the competition and
a stubborn reliance on strategies more suited to the U.S. market,
analysts say. AOL “was basically trying to transport their
business model intact into Latin America,” Gartner analyst Juan
Fernandez said. “A lot of what differentiated AOL in the U.S.
particularly really didn’t relate well in Latin
America.”
Analysts: Winn-Dixie May Have to Cut Further
As Winn-Dixie Stores Inc. prepares to sell 102 stores for $45.6
million, some analysts say the grocer could be forced to put more
locations on the block than planned. “This was like having a yard
sale to get your mortgage payment,” said David Livingston, an
independent grocery consultant. “What Winn-Dixie got was
indicative of what they were expected to get. If they start selling off
better stores, they might get a few more dollars.” Winn-Dixie CEO
Peter Lynch has supported the Jacksonville-based grocer’s smaller
footprint but has not discounted possible changes. Livingston and other
analysts questioning the company’s long-term survival have
suggested the grocery chain will be forced to slice more stores from its
remaining 587 locations.
Former Conseco Treasurer Files for Personal Bankruptcy
James S. Adams, former treasurer for Conseco Inc., filed for Chapter
7 bankruptcy liquidation Friday in U.S. District Court in Indianapolis.
Adams estimated his assets at $1 million to $10 million and estimated
his debts at $10 million to $50 million, the Indianapolis
Star reported Saturday. Adams was fired from Conseco in September
2002 for failing to repay millions in company-backed stock loans and
interest payments. Conseco since has sued Adams to recover the debt,
which Conseco now estimates at more than $30 million. Adams is the third
borrower under the stock-loan program to file for bankruptcy. David R.
Decatur, a former Conseco director, filed Chapter 11 bankruptcy in May
2004. Maxwell E. Bublitz, the former chief of investments for Conseco
Inc., filed Chapter 7 bankruptcy in May 2005.
Bankruptcy Reform May Hinder Court, Pro Bono Work
The federal bankruptcy reform bill that will go into effect in
October has attorneys worried about a significant impact on their
ability to provide pro bono and reduced-fee legal work for clients, the
Business Journal of the Greater Triad Area reported
yesterday. New requirements would require attorneys who file papers on
behalf of a client to personally guarantee the accuracy of the
information contained in the petition. That burden will likely
discourage many specialized lawyers from taking on a case for free or at
a reduced rate. To read the full story, go to
href='http://msnbc.msn.com/id/8783273/'>http://msnbc.msn.com/id/8783273/.