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October 27, 2004
Chapter 12 Signed by the President
Chapter 12, S. 2864, which restores bankruptcy protections for
farmers, was signed by the President on Oct. 25. This legislation
extends chapter 12 until June 30, 2005, retroactive to Jan. 1, 2004. The
retroactive provision would allow some farmers who filed under a
different chapter to convert to a chapter 12 filing if their bankruptcy
is not yet final.
October Consumer Confidence Lowest Since March
The U.S. consumer confidence index fell to 92.8 in October from a
revised 96.7 in September, the third decline in a row, the Conference
Board said Tuesday. It’s the lowest level since March. Economists
surveyed by CBS MarketWatch were expecting the index to fall to 93.4.
“Subdued expectations, as opposed to eroding present day
conditions, were the major cause behind October’s decline in
consumer confidence,” said Conference Board economist Lynn Franco,
in a prepared statement. “While consumers’ assessment of the
labor market this month showed a moderate improvement, the gain was not
sufficient to ease concerns about job growth in the months ahead,”
she said. The index also reflects earlier reports suggesting that
holiday spending will be off from 2003 levels.
ATA Airlines Seeks Bankruptcy Protection
ATA Airlines yesterday became the first major low-fare airline to
seek chapter 11 bankruptcy protection, a move that immediately set off a
bidding war for the company and its assets, the New York
Times reported. The airline, a subsidiary of the ATA Holdings
Corporation, said it would continue to operate normally. ATA said it
agreed to sell gates and slots at Midway in Chicago, LaGuardia in New
York and Reagan National Airport in Washington to AirTran, a low-fare
rival, for $87.6 million, the newspaper reported.
Delta Up on Financing, Analyst Upgrades
Shares of Delta Air Lines Inc. jumped 21 percent on Tuesday, as Wall
Street analysts said the possibility of a near-term bankruptcy
diminished with the carrier securing additional financing and
intensifying concession talks with its pilots, Reuters reported. JP
Morgan analyst Jamie Baker said in a research note that the $600 million
in financing from American Express Co. and an expected imminent
concession deal with pilots would likely dissuade the airline from
seeking bankruptcy protection, the newswire reported.
KB Toys to Close Up to 238 Stores
Bankrupt toy seller KB Toys Inc. said on Tuesday it plans to close
141 to 238 underperforming stores by the end of January as part of its
reorganization effort, Reuters reported. The Pittsfield,
Mass.–based company expects this will be the final round of store
closings before its projected emergence from chapter 11 bankruptcy in
early 2005. KB Toys said it will continue to operate about 600 stores
throughout the United States, Puerto Rico and Guam.
County May File for Bankruptcy
After a warning from its auditor that it could run out of cash as
soon as this week, Trinity County, Weaverville, Calif. is preparing for
the possibility of bankruptcy, redding.com reported. “The county
is certainly in the worst shape since I’ve been the auditor, but
this shouldn’t be a revelation for the board (of
supervisors),” Trinity County Auditor-Controller Brian Muir said.
Read the full article at
href='http://www.redding.com/redd/nw_local/article/0,2232,REDD_17533_3279717,00.html'>www.redding.com/redd/nw_local/article/0,2232,REDD_17533_3279717,00.html
(registration required).
WorldCom
Judge Delays Trial on WorldCom Bonds
A federal judge delayed the civil trial between former WorldCom Inc.
investors and 17 bond-underwriting banks until Feb. 28, the Wall
Street Journal reported. The seven-week postponement followed
last week’s delay in the criminal trial of former WorldCom Chief
Executive Bernard Ebbers. The class-action lawsuit, filed on behalf of
hundreds of thousands of bond and stock investors in U.S. District Court
in New York, contends that more than a dozen banks that underwrote about
$17 billion of WorldCom bonds in May 2000 and May 2001 didn’t
conduct adequate due diligence before bringing the securities to market.
The investors lost billions of dollars when the telecommunications firm
filed for bankruptcy in 2002 after a massive accounting scandal, the
newspaper reported.
MCI Offers States $160 Million to End Tax Dispute
MCI Inc. has informally offered a group of U.S. states $160 million
to settle back tax claims for $1.5 billion, according to sources
familiar with the situation, Reuters reported. But the states view the
company’s offer as much too low, said the sources, who requested
anonymity. The group of states has accused MCI of siphoning billions of
dollars of income from high-tax states to low-tax states.
Morgan Stanley to Arrange Trump Casino Debt Offer
Trump Hotels & Casino Resorts Inc. said on Tuesday that Morgan
Stanley would arrange $500 million in financing as part of a plan
announced last week to restructure company debt in bankruptcy court,
Reuters reported. The company headed by Donald Trump, who holds his real
estate assets in a separate company, said the financing would be secured
by first priority liens on nearly all its properties and would be enough
to allow potential expansion in additional markets.