class=Section1>
class=MsoNormal>GOP
Plans to
Attach Bankruptcy
Legislation to
Transportation
Bill, Violence
Against
Women
Act
As the
promised "sweetener"
and in an
attempt to
win more
votes, Republicans
want to attach
the bankruptcy
legislation
(H.R. 833
and S. 3046)
to the
transportation
appropriation
bill (H.R.
4475) and
intend to
attach the
Violence
Against Women
Act (VAWA),
according
to the
style='mso-bidi-font-style:
normal'>CQ Daily Monitor. Women’s groups are urging Democrats and
the administration
to defeat the
package
and several
Democratic
senators,
including
Sen. Charles
Schumer
(D-N.Y.), plan
to do
whatever they
can to
defeat it.
"The
idea that they
would
hold the
Violence Against
Women Act
reauthorization
hostage…and
that it
will go
through only
as part of a
bankruptcy
bill is an
outrage,"
said Joan
Entmacher,
vice president
and director
of family
economic security
at the
National Women’s
Law Center.
"I
think it
shouldn't move
anywhere and
we'll do
everything we
can to
stop it,"
Schumer
said. Sen.
Paul Wellstone
(D-Minn.) says
he will
keep in
contact with
the White
House and
urge a
veto.
class=MsoNormal>But
Republicans
are holding
steady. Senate
Judiciary
Chairman Orrin
Hatch
(R-Utah) said
the president
and other
Democrats
want the
bankruptcy
legislation
and the
VAWA bill and
now is
time to prove
what is
really wanted.
"We’re
not going to
just pass
bills that the
Democrats
want. We're
not going
to just pass
bills Republicans
want," he
said.
style='mso-spacerun: yes'> "We're going to try to mesh them
together
so that both
of them
have some
support from
both sides and
we'll
do it in a
more bipartisan
way than it's
been done
in
years."
class=MsoNormal>Banking
Subcommittee
Pushes
for More
Disclosure
of Credit
Scores to
Consumers
Yesterday the
House
Subcommittee
on Financial
Institutions
held a
hearing on the
use of
credit scores
and the
push to allow
consumers
to have access
to their
scores. It was
determined
by the
subcommittee
that consumers
would
benefit from a
change
in the law.
However,
once consumers
have
access to the
numbers,
deciphering
the meaning
of those
numbers could
be confusing.
The subcommittee,
chaired by
Rep. Marge
Roukema
(R-N.J.), fully
agreed that
scores should
be disclosed
to consumers
and said that
although
"educated
consumers
are the best
consumers,
but they need
to understand
what they're
getting."
class=MsoNormal>Credit
card and
mortgage loan
decisions are
made on
the basis of
credit
score, yet
consumers
have no right
to review
their credit
scores,
and the Fair
Credit
Reporting Act
(FCRA)
does not
require that
credit bureaus
disclose
a credit score
with
a consumer's
credit
report. In
nearly 80
percent of all
mortgage
loan
decisions, the
credit score
is the
primary
determinant
on whether or
not a
consumer
receives the
loan or how
much their
interest will
be. Committee
members said
that if
consumers knew
their
score they
would know
which loans
they could
apply for and
at what
rates, thereby
saving
thousands of
dollars.
"By
providing consumers
with access to
their
credit score
and the
factors which
negatively
affect their
score,
we can help
consumers
improve—not
manipulate—their
credit
behavior,"
said Sen.
Charles Schumer
(D-N.Y.).
class=MsoNormal>But
raw numbers,
committee
members said,
won't
help consumers
because
no explanation
is available.
Rep. Harold
Ford Jr.
(D-Tenn.) said
his new
piece of
legislation,
H.R. 4644,
would amend
the Fair
Credit Reporting
Act, offering
"a
clear and
concise summation
of the risk
factors
which affected
a consumer's
credit along
with the
consumer's
credit report."
Consumers
would not
only receive
their credit
score, but
would also
receive a
breakdown
of what the
numbers
mean.
class=MsoNormal>All
members agreed
that
educating
consumers
about score
(who can
disclose the
score,
what
determines the
score and how
the report
is used) would
make
Americans
better consumers.
"As
consumers gain
more
information and
expand their
ability
to make their
own financial
decisions,
they are
relying more
and more
on their own
credit
to ensure
their financial
freedom,"
Ford
said. Roukema
concurred
and said,
"Educated
consumers are
better
consumers." Peggy
Twohig,
assistant director
for Financial
Practices
for the
Federal Trade
Commission,
said that
credit scoring
and other
automated
systems could
be of great
benefit
to consumers,
but also
noted that the
term
"credit
score"
might have
multiple
meanings.
"It is
important for
consumers
to understand
that they
have not been
simply
assigned one
universal
credit score
based on
information
contained
in their
credit report,"
she said.
style='mso-spacerun: yes'>
class=MsoNormal>Creditors
Join
Bankruptcy Proceeding
Against
National Finance
Two
more creditors
yesterday
joined an
involuntary
bankruptcy
proceeding
against
National Finance
Corp., the
Halfmoon,
N.Y., lender
that closed
its doors in
December,
according to
the Times Union. Fleet National Bank of Boston and Nationwide
Insurance
Co. of
Gainesville,
Fla., have
both filed
petitions in
bankruptcy
court to join
in the
bankruptcy
filed against
NFC last
month. Nationwide
Insurance
claims it
is owed $2,604
by NFC.
It could not
immediately
be determined
how much
Fleet claims
it is owed.
Rochester,
N.Y., attorney
Christopher
Schueller,
who is
representing
the bank,
could not
be reached for
comment.
SFX Sports
Group Inc.
of New York
City, First
American
Credco of Poway,
Calif., and
First American
Flood Data
Services
of Austin,
Texas, were
the original
creditors
to file
against NFC,
claiming they
are owed
more than
$600,000.
NFC employed
telemarketers
to sell
mortgage loans
to consumers
nationally,
including
people with
spotty credit
histories.
The company,
which had
been
experiencing financial
troubles,
failed to
find a buyer
and shut
down a few
days before
Christmas. NFC
also
has been
granted an
extension in
its response
deadline in
the matter.
The date,
which originally
was Aug. 31,
has been
pushed back to
Oct.
3.
class=MsoNormal>Hilco
to Close All
78 Golf
Day Stores
Hilco
Merchant Resources
LLC was
appointed as
agent by the
Massachusetts
bankruptcy
court to
dispose of
approximately
$49 million at
retail
of inventory
in the
remaining 78
Golf Day
stores in
California,
Connecticut,
Delaware,
Maine,
Massachusetts,
New Hampshire,
New Jersey,
New York and
Pennsylvania,
according to a
newswire
report.
Stanley D. Black,
Chief
Executive Officer
of Trend-Lines
Inc.,
the parent
company of
the
Chicago-based Golf
Day stores,
stated that,
"When we
filed
for bankruptcy
protection
we never
envisioned
the closing of
Golf
Day
stores." Hilco
Merchant
Resources and
its affiliates
provide
strategic
financial
services for
retailers,
distributors,
manufacturers,
lenders,
venture capitalists,
investment
bankers and
the
professionals that
serve
them.
class=MsoNormal>Creditors
to Receive
100% of the
Equity of
Singer N.V.
The first
amended
joint
reorganization
plan of the
Singer Company
N.V. and its
affiliated
debtors and
debtors-in-possession
(DIP) was
confirmed
by the U.S.
Bankruptcy
Court for the
Southern
District of
New York
on Aug. 24,
and became
effective on
Sept. 14,
according to a
newswire
report. A new
corporate
entity in the
Netherlands
Antilles,
Singer N.V.,
is now the
parent company
owning certain
of the
businesses
formerly
owned by The
Singer
Co. N.V.,
including
the Singer
brand name.
The Singer Co.
N.V.
and 44 of its
subsidiaries
and affiliates
filed
chapter 11
petitions
in the U.S.
Bankruptcy
Court for the
Southern
District of
New York
on Sept.12 and
13, 1999.
class=MsoNormal>Video
Update Inc.
Begins Reorganization
Proceedings
Video
Update Inc.
announced
yesterday
that the U.S.
Bankruptcy
Court for the
District
of Delaware
approved
all of the
company's
first-day
motions, according
to a newswire
report.
Among other
things,
the court
authorized
St. Paul,
Minn.-based
Video Update
to finance
its
post-petition operations
through an
interim cash-collateral
order in order
to pay
any and all
outstanding
wages and
related benefits
to its
employees. Video
Update's
Chairman and
Chief
Executive Officer,
Daniel Potter,
said,
"The
court's orders
will enable
the company
to comfortably
finance
its operations
while
we reorganize
in chapter
11. We are
particularly
pleased that
the court
has allowed us
to honor
our
obligations to loyal
employees. We
also intend
to continue
our commitment
to our
millions of Video
Update
customers—we
expect no
interruption
in service as
we continue
this
process.''
class=MsoNormal>Time
Warner Telecom
Receives
Bankruptcy
Court Approval
to Acquire GST
Assets
Time
Warner Telecom
Inc. yesterday
announced
they have
received approval
from the U.S.
Bankruptcy
Court for the
District
of Delaware
for Time
Warner Telecom
to purchase
substantially
all GST
assets for
$690 million,
according to a
newswire
report. The
court approved
the definitive
purchase
agreement
between GST
and Time
Warner Telecom
following an
auction
for GST assets
that
concluded Aug.
25. "By
the end of
2001, we
expect to grow
from
22 to 44
markets,"
said Larissa
Herda,
Time Warner
Telecom's
President and
CEO. This
will include
offering
services in 14
Tier
1 markets. We
expect
to close this
transaction
within 60-90
days, depending
upon
regulatory and
other
approvals."
class=MsoNormal>The
Littleton,
Colo.-based
Time Warner
Telecom
has also
received commitments
from its banks
to provide
$1.2 billion
of additional
financing for
the GST
acquisition,
capital
expenditures,
and general
working
capital purposes.
This includes
$525 million
of secured
financing
from The Chase
Manhattan
Bank and
Morgan Stanley
Dean Witter
and a $700
million
unsecured bridge-financing
facility from
Morgan
Stanley Dean
Witter,
Lehman
Brothers Inc.
and The Chase
Manhattan
Bank. Time
Warner Telecom
Inc. builds
local and
regional
optical networks
and delivers
"last-mile"
broadband
data, Internet
access and
voice for
businesses.
class=MsoNormal>Waivers
for Loews
Delay Bankruptcy
Struggling
movie-theater
operator Loews
Cineplex
Entertainment
Corp.
yesterday won
a 90-day
waiver on its
debt as
it battles to
stave
off the
bankruptcy crisis
that is
plaguing the
industry,
according
to a newswire
report.
The New
York-based Loews
Cineplex said
its lenders
agreed to
extend the
restrictions
on its
senior secured
credit
facility,
giving it
access to the
money
it needs to
meet financial
obligations.
The group
said talks
would continue
about a
long-term solution.
style='display:none;mso-hide:all'>
class=MsoNormal>There's
no word yet on
whether
Loews
stakeholders Sony
and Universal
ultimately
will kick in
some cash
to stabilize
the circuit
for a longer
term, but
it's expected
that the
newly won
waivers—from
debt-to-cash
flow mandates
and the
like—will allow
Loews to stay
out of
bankruptcy
court for
at least a few
months.
"There
are no guarantees
in life,"
cautioned
Loews'
strategic planning
vice-president, Mindy
Tucker. But
she added
that a
bankruptcy filing
is
"highly unlikely."
The New
York-based company
said it's
trying to
secure
additional equity
investment as
a longer-term
means of
solving its
problems,
which are
similar to
those roiling
the entire
exhibition
industry.
"The
company at any
time
still could
choose to
go into
bankruptcy,"
said analyst
David Londoner
of the ABN
AMRO investment
firm in New
York. "But
today's action
kind
of implies
that Loews'
banks are
willing to
live with
promises that
Sony or
Universal may
put some money
into
it if
necessary."
class=MsoNormal>Creative's
Purchase of
Aureal's
Assets
Approved
Creative
Technology
Ltd. yesterday
announced
that the U.S.
Bankruptcy
Court for the
Northern
District of
California
in Oakland
entered the
final order
approving
the sale to
Creative
of
substantially all
of the assets
of Aureal
Semiconductor
Inc.,
including
patents, trademarks
and other
intellectual
property,
according
to a newswire
report.
The sale will
also include
settlement of
all outstanding
litigation
claims between
Aureal and
Creative.
Creative will
pay $28
million in
cash, plus
two new shares
of Creative
stock for
every 100
outstanding
shares of
Aureal stock,
or 208,079
shares of
Creative stock.
"Since
Creative
would not be
able to
recover
significant
damages given
Aureal's
bankruptcy,
there was
no upside in
continuing
this
protracted litigation.
As a result,
we believe
that this
outcome is
the best we
could have
expected," said
Craig McHugh,
president
of Creative
Labs Inc.
Creative
Technology
Ltd. is a
global leader
in PC
entertainment
products,
while Creative
markets its
solutions
to consumers
and system
integrators,
with worldwide
distribution
through
traditional
marketing
channels, OEMs
and the
Internet.
