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Rep. Dooley To Introduce Asbestos Litigation Reform Bill This
Week
Rep. Calvin Dooley (D-Calif.) plans to introduce his version of asbestos
litigation reform legislation this week, probably Thursday, a Dooley
spokesman said, CongressDaily reported. Dooley's bill comes on
the heels of a separate bill unveiled last week by Rep. Chris Cannon
(R-Utah). Until recently, Dooley had been working with Cannon on a
bipartisan reform bill. The two have had a split over the degree to
which the asbestos litigation reform bill should contain tort reforms
designed to narrow the scope of defendants implicated in lawsuits. A
Dooley spokesman said the congressman had reviewed Cannon's bill, and
while 'there are a couple of places where we part ways ... we're still
looking to work with them as all of this still develops,' reported the
newswire.
Class Action Claims Top Legal Spot
With Sen. Dianne Feinstein (D-Calif.) and Senate Judiciary Chairman
Orrin Hatch (R-Utah) reaching a compromise in committee last week on
class action, the measure has now eclipsed other pending legal reform
bills such as asbestos litigation, CongressDaily reported.
Initially, asbestos litigation reform was widely seen as the more
palatable of the two business-backed legal reforms, according to the
newswire. Earlier this year, Hatch said he was pegging that bill's
chances above those of a class action bill, which he suggested would be
more at the mercy of the trial bar. However, the complex asbestos reform
bill has yet to be written -- something Hatch has said he plans to do
over the April recess -- and it appears susceptible to becoming bogged
down among a myriad of conflicting interests, CongressDaily
reported.
The Senate Judiciary Committee meets on Thursday for a class action
reform markup that was originally scheduled for last week.
Coincidentally, Thursday marks the deadline set by Hatch for when he
would accept private sector input on the asbestos litigation bill he is
drafting, the newswire reported. Class action lobbyists have yet to lock
in the commitments, but are utterly convinced they will have the 60
votes needed to weather any attempted filibuster, reported
CongressDaily.
Amerco Creditor to Drop Suit; Amerco Pledges Payment
Amerco said Nationwide Mutual Insurance Co. agreed to stop seeking
compensation for Amerco's failure to obtain an investment-grade rating
for $100 million in notes sold last year, Bloomberg News reported. In
exchange for dismissal of the lawsuit, Amerco agreed to continue
interest payments on the notes, which were sold in March 2002.
Nationwide alleged in a breach-of-contract suit filed on March 24 that
Amerco and its real-estate unit defaulted when they failed to obtain the
required rating on the securities. Amerco, reorganizing its debts in a
bid to avoid bankruptcy, has been working with lenders since missing a
$100 million principal payment in October. The missed payment triggered
a default on more than $1 billion in loans, reported the newswire.
Scrushy's Lawyer Blames Other HealthSouth Executives for
Fraud
Fired HealthSouth Corp. CEO Richard Scrushy is innocent, said his new
attorney,
Donald V. Watkins, who blames the alleged $2.5 billion fraud at the
company on officers who have already pleaded guilty, Bloomberg News
reported. The U.S. Securities and Exchange Commission charged Scrushy on
March 19 with securities fraud and last week with insider trading at the
largest U.S. operator of rehabilitation hospitals. Watkins said he is
not involved in settlement or plea negotiations with the SEC lawyers or
prosecutors on behalf of Scrushy, reported the newswire.
Eagle Food Files for Bankruptcy Protection Again
Eagle Food Centers Inc. filed for bankruptcy protection for the second
time in three years, Bloomberg News reported. The Milan, Ill.-based
company said it received a
commitment for $40 million in financing from Congress Financial Corp. of
Chicago, which has provided a credit line since 1995. Eagle last filed
for bankruptcy protection in February 2000 and emerged later that year.
Since that time, the company has faced increased competition, rising
labor costs, 11 percent interest payments on an $85 million bond issue
and a sluggish economy, Eagle said in papers filed in the U.S.
Bankruptcy Court in Chicago, reported the newswire.
Foster Wheeler Hires New Finance Chief After Joseph Doyle
Quits
Foster Wheeler Ltd., whose auditor has raised concerns about its ability
to stay
in business, hired Kenneth Hiltz as chief financial officer after Joseph
Doyle quit, Bloomberg News reported. Foster Wheeler said Hiltz will help
the company trim debt and better manage its cash. The company has fired
workers and renegotiated loans to avoid bankruptcy and rebuild
credibility after former executives priced contracts too low, analysts
have said. The company reported its fifth straight quarterly loss last
month and restated results for the past three years, reported the
newswire.
Mills Corp. Opposes Terms Of Spiegel's DIP Loan Pact
Mills Corp. has opposed Spiegel's debtor-in-possession financing
agreement, saying that some terms of the pact violate the company's
rights under its leases with the mail-order retailer, Dow Jones
reported. In an objection filed with the bankruptcy court on Thursday,
Mills said a final DIP order should provide assurance that Spiegel will
continue to meet its rent obligations. If the company were to miss rent
payments, the landlord wants its interests in the retailer's estate to
be adequately protected. Another group of Spiegel's landlords filed a
similar objection on Wednesday, reported the newswire.
Rand McNally Emerges From Chapter 11
Map maker Rand McNally & Co. has emerged from federal bankruptcy
protection, the company said on Monday, the Associated Press reported.
Rand McNally shed more than $250 million in debt during the two-month
chapter 11 restructuring, said Peter Nolan, a managing partner at
Leonard Green & Partners, a Los Angeles-based equity firm that now
owns a majority stake in the company. Rand McNally filed for protection
on Feb. 11 to shed the debt that had hampered its growth and limited its
ability to attract investors. 'Rand McNally can now focus on growing its
pre-eminent brand and operations, and Leonard Green is committed to
supporting this growth,' Nolan said in a statement, reported the
newswire.
AMERICAN AIRLINES
American Airlines Will Reduce Its Capacity
AMR Corp.'s American Airlines plans to reduce its capacity in May,
joining several fellow carriers who have cut their flights due to
economic conditions and the war in Iraq, Dow Jones reported. In a press
release on Monday, the airline said it will fly about 2 percent fewer
domestic flights during the month, while international flights will be
about 13 percent lower than planned. Last week, American reached
tentative agreements with all three of its unions, averting a possible
bankruptcy filing. Pilots, mechanics and flight attendants signed
tentative agreements giving the company $1.8 billion in annual labor
savings. American had set a March 31 deadline, saying it would have to
seek chapter 11 bankruptcy protection if it couldn't reach deals,
reported the newswire.
Concessions Prove a Tough Sell To American Airlines
Workers
The contract concessions that AMR Corp.'s American Airlines tentatively
won from its unions have run into so much employee resistance that union
leaders are coming back to management to ask for changes, the Wall
Street Journal reported. Leaders of American's three unions agreed
last week to a package of concessions that would save the airline a
total of $1.8 billion a year. American, the world's largest airline,
says if it doesn't get the concessions, it will file for chapter 11
bankruptcy-court protection. Last week, the airline was within minutes
of filing in New York before union leaders approved tentative
agreements. Voting on those agreements, which require majority approval,
will be completed on Monday with results to be announced a week from
Tuesday, reported the Journal. To read the full article, point
your browser to www.wsj.com (subscription
required).
SLI Inc. Seeks Court OK Of Settlement With M Capital
SLI Inc. is seeking bankruptcy court approval of a $400,000 settlement
with M Capital LLC, Dow Jones reported. As reported, SLI in March
terminated the agreement to sell its miniature lighting business to an
affiliate of M Capital LLC for about $100 million and now plans to
reorganize as a going concern. SLI filed for chapter 11 bankruptcy
protection last September. The company said in a motion with the U.S.
Bankruptcy Court in Wilmington, Del., that it reached a settlement with
M Capital regarding claims associated with the terminated sale
agreement. The settlement would result in two payments of $200,000 each
to M Capital and a mutual release agreement between the company and M
Capital, if approved by the court, reported the newswire.
Burlington Industries Sees Summer Chapter 11 Emergence
The bankruptcy court overseeing Burlington Industries Inc.'s chapter 11
filing extended the bidding deadline for the company to July 10, Dow
Jones reported. The company, which filed for bankruptcy in November, has
been seeking a buyer since Berkshire Hathaway Inc. withdrew its $579
million bid in late February. The court had previously set a May 28
deadline to submit bids and an auction date of June 3. In a press
release Monday, Burlington Industries said the court approved modified
bidding procedures that will extend the date of the bidders' auction to
July 21, reported the newswire. The court also extended Burlington's
period of exclusivity to solicit acceptances of its reorganization plan
through July 31. Burlington said it has made significant progress in
plans for its chapter 11 emergence, which it expects to occur this
summer.
Air Canada Names Former Bombardier Head Vice Chairman
Air Canada appointed former Bombardier Inc. CEO Robert E. Brown as vice
chairman as the airline plans its bankruptcy reorganization, Bloomberg
News reported. Brown will replace John Fraser on May 13, Air Canada said
in a statement. Fraser will remain on Air Canada's board until his
retirement at the next annual meeting, company spokeswoman Laura Cooke
said. Air Canada sought bankruptcy protection on April 1 after demand
for travel suffered from an economic slowdown, the Sept.11, 2001,
attacks and war in Iraq. After a fourth-quarter loss of C$364 million
($246 million), Air Canada failed to win C$650 million in concessions
from unions, reported the newswire.
Airline Layoffs Are Raising New Questions About Safety
With four North American airlines having filed for bankruptcy protection
and others dangerously close, passengers worry that safety could become
the next casualty, the Wall Street Journal reported. No accidents
have been linked so far to maintenance mistakes due to cutbacks at any
carrier. And regulators, striving to shore up public confidence in the
troubled commercial aviation system, say they have stepped up federal
oversight. But with the industry's financial crisis pushing thousands of
mechanics and engineers out of jobs, safety specialists inside and
outside the government are fretting over early warning signs. As
carriers increasingly look to shift maintenance to outside vendors,
worker morale and spare-parts inventories in their own maintenance shops
are steadily declining, reported the Journal. To read the full
article, point your browser to www.wsj.com
(subscription required).
Court Approves FAO Restructuring While Company Secures
Financing
A judge approved FAO Inc.'s bankruptcy-reorganization plan as the
upscale toy retailer completed a broader-than-expected round of store
closures and secured $107 million in financing, the Wall Street
Journal reported. The support package, secured 83 days after FAO
filed for bankruptcy-court protection from creditors, includes $30
million in stock financing from a group of investors led by the
company's controlling shareholders. In a statement, FAO bankruptcy
attorney David Levene called the quick reorganization a 'remarkable
achievement,' reported the online newspaper.
Adelphia Reorganizes Regional Units
Adelphia Communications Corp. said on Monday it is consolidating its
seven regional units into five and expanding the size and authority of
its regional management teams, the Associated Press reported. Adelphia
filed for chapter 11 bankruptcy protection on June 25. The Central
Region will be based in Charlottesville, Va., the Southeast Region in
West Palm Beach, Fla., the California Region in Woodland Hills, Calif.,
and the Western Region in Monument, Colo. The company is moving its
corporate headquarters from rural Pennsylvania to Denver.
CellPoint Files For Chapter 11 Bankruptcy In Nevada
CellPoint Inc. filed for chapter 11 bankruptcy protection on Monday in
the U.S. Bankruptcy Court in Reno, Nev., according to a regulatory
filing, Dow Jones reported. The company said in its chapter 11 petition
that its assets and debts each ranged from $10 million to $50 million.
CellPoint, based in Sweden, sells mobile location software and
platforms. The petition indicated it had about 28.2 million shares of
stock outstanding. In a press release in October 2002, Sweden's
Stockholmborsen exchange said it would delist CellPoint's shares due to
the company's unstable financial situation and uncertain future.
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