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March 28, 2005
Armstrong to Appeal Judge’s Decision
After getting a surprising detour last month, Armstrong World
Industries has taken the first legal steps toward finding a new way out
of bankruptcy, Knight Ridder reported. Armstrong has filed court papers
saying it will appeal the decision of U.S. District Judge Eduardo C.
Robreno, who found the Armstrong reorganization plan illegal. The
Lancaster, Pa.–based company also filed court papers asking that
Armstrong remain the only entity allowed to propose a plan. In the
meantime, it’s unclear whether Armstrong’s plan ultimately
will be upheld by the courts or whether Armstrong will have to devise an
alternate plan, the company said, according to the newswire. Armstrong
filed for bankruptcy in December 2000 to resolve a glut of lawsuits
alleging personal injury from asbestos insulation it once sold.
Delta Seeks Pension Law Exemption
Delta Air Lines is joining the fight to change pension laws, hoping
to get a special exemption for the airline industry, according to the
Cincinnati Enquirer. The airline is using its front-line
workers to push its cause, which company officials say is a necessary
step to avoid bankruptcy. The Atlanta-based carrier is trying to get
Congress to give the airline industry a provision letting all carriers
stretch out their required payments into defined benefit plans for an
extended period of time. That would help Delta and other carriers avoid
large payments to such plans as they shift into different types of
pension benefits. Delta paid $450 million into its defined benefit fund
last year and is expected to pay another $400 million this year,
although the company has warned that bankruptcy could be possible within
a year because of its continued economic troubles.
href='http://www.hoovers.com/free/news/detail.xhtml?ArticleID=NR20050319700.3…'>Read
the full article.
State Faces Bankruptcy and Gridlock, Legislators Warn
California faces bankruptcy and debilitating ballot-box wars unless
lawmakers and Gov. Arnold Schwarzenegger solve the budget crisis, say
two East Bay legislators, Contra Costa Times reported.
Mounting debt and a $4 billion annual loan payment that comes due next
year could send the state into federal court receivership, moderate
Assemblyman Joe Canciamilla (D–Pittsburg), told the Contra Costa
Taxpayers Association on Friday.
href='http://www.montereyherald.com/mld/montereyherald/news/11238009.htm'>Read
the full article.
Some Creditors Make Illegal Demands on Active-duty Soldiers
Americans heading off to war are facing demands from companies trying
to collect on debts that, by law, they cannot enforce, the New
York Times reported.
href='http://www.nytimes.com/2005/03/28/national/28military.html'>Read
the full article.
Saving for the Future
As of 2001, a federal analysis of households with at least one worker
from age 21 to 64 concluded that 28 million did not have a retirement
savings account of any kind, the Washington Post reported.
href='http://www.washingtonpost.com/wp-dyn/articles/A5723-2005Mar27.html'>Read
the full article.
The Brown Schools Inc. Files for Chapter 7 Liquidation in
Delaware
The Brown Schools Inc. on Friday filed for chapter 7 liquidation in
U.S. Bankruptcy Court in Wilmington, Del., the online Wall Street
Journal reported. Brown Schools filed for liquidation along with
24 affiliates, including its CEDU Schools unit. It reported assets of
under $10 million and debt between $10 million and $50 million,
according to court papers.
Judge Rules for Northwest Air Unions
The New York Supreme Court ruled last week that Northwest Airlines
breached agreements with two of its unions when it failed to redeem
preferred shares it issued to them more than a decade ago in return for
concessions that helped the carrier avoid a bankruptcy-court filing, the
Wall Street Journal reported. The decision comes as
Northwest seeks another round of concessions. Read the full article at
www.wsj.com (subscription
required).
Hawaiian Airlines Pilots Reject New Contract
Hawaiian Holdings Inc.’s Hawaiian Airlines’ pilots union
voted to reject a contract agreement with the bankrupt carrier, citing
changes to retirement benefits, rising medical costs and
“excessive management bonuses,” union officials said Friday,
the Associated Press reported. Hawaiian’s court-appointed trustee
said the airline may be forced to go to court to get an agreement so
that the carrier may emerge from chapter 11 bankruptcy protection under
a court-approved reorganization plan, the newswire reported.
Mirant Amends Reorganization Plan
Bankrupt energy company Mirant Corp. said it amended its proposed
reorganization plan in U.S. Bankruptcy Court, Reuters reported. The
company, which filed its original plan of reorganization in January,
said it filed the amended plan, as well as an amended disclosure
statement, on Friday. It still expects to emerge from bankruptcy by
mid-year 2005. Mirant said that a hearing on the disclosure statement is
currently scheduled for April 20, the newswire reported.
Global Crossing Sells Services Unit for $25 Million
Global Crossing Ltd. on Friday said it agreed to sell its Trader
Voice telecom services unit to WestCom Corp. for $25 million, Reuters
reported. The formerly bankrupt telecommunications provider said it
expects to net $22 million in cash proceeds from the deal, after fees
and retained liabilities. The transaction is expected to close in the
second quarter, subject to regulatory approvals, the newswire
reported.
Stelco Delays Filing 2004 Results Until Mid-April
Stelco Inc. will miss a deadline to file its 2004 financial results
because of delays stemming from its bankruptcy protection proceedings,
but it will file by mid-April, the steelmaker said on Thursday, Reuters
reported. Under securities laws, Canada’s biggest steelmaker was
due to file financial statements by March 31. But the steelmaker needs
more time to review bids for several subsidiaries, which could impact
the carrying value of the assets in its report.
Shareholders Approve Kmart’s Acquisition of Sears
Shareholders on Thursday voted to approve Kmart Holdings
Corp.’s $12.3 billion acquisition of Sears, Roebuck and Co.,
Reuters reported. Preliminary results show the deal, spearheaded by
Kmart Chairman Edward Lampert, garnered 69 percent of Kmart shares
outstanding and more than 99 percent of the shares actually voted, Kmart
said. Lampert’s hedge fund, ESL Investments, is the largest holder
of both Kmart and Sears shares.