August 62004

Submitted by webadmin on Fri, 2004-08-06 00:00

August 6, 2004

Suit Accuses Halliburton of Fraud in Accounting

Four former finance employees at the Halliburton Company contend that

high-level and systemic accounting fraud occurred at the company from
1998 to 2001, according to a new filing in a class-action lawsuit on
behalf of investors who bought the company’s shares, the New

York Times reported. The filing accuses the company of accounting

improprieties that go far beyond those outlined by the Securities and
Exchange Commission in its civil suit against Halliburton, which the
company settled on Tuesday, paying $7.5 million.

Enron

Enron Case Judge Called Tough, Fair

The prosecution of Enron Corp.'s Kenneth L. Lay and Jeffrey K.
Skilling is entering a new phase, as the investigation into the energy
giant collapse makes way for trial, the Washington
Post reported. Presiding over the cases against Enron's
former leaders is U.S. District Judge Simeon T. Lake III, who will
consider his first big decision next week when lawyers for the
government and the defendants fight over a trial date in his Houston
courtroom.

Whether a Houston jury hears evidence in one blockbuster trial or a
series of smaller cases will be up to a 60-year-old judge who, according

to former colleagues, is known for his quick mind and even temper, the
newspaper reported.

Enron Seeks Help in Pension Battle

Enron Corp. asked the U.S. Bankruptcy Court in New York late
Wednesday to block the Pension Benefit Guaranty Corp. (PBGC) from taking

over its four underfunded pension plans, the Wall Street
Journal reported. The latest move reflects heightened hostilities

between the energy company, which has been operating under bankruptcy
protection since December 2001, and the PBGC. The outcome will determine

whether roughly 17,000 former Enron employees will receive their entire
pensions or a smaller amount. Read the full article at
href='http://www.wsj.com/'>www.wsj.com (subscription required).

Ex-Enron Aide Pleads Guilty in Power-crisis Case

A former Enron Corp. trading executive pleaded guilty to charges that

he manipulated energy markets during California's power crisis,
the Associated Press reported. John Forney is the third Enron official
to plead guilty to manipulating electricity prices from Enron's
now-defunct trading office in Portland, Ore. The crisis played a role in

Pacific Gas & Electric Co.'s bankruptcy and will leave
California consumers paying abnormally high electricity prices for
years, the newswire reported.

MCI Posts $71 Million Loss, Has Plan for Cash

MCI Inc. reported a $71 million loss for the second quarter as the
Ashburn, Va.-based phone company announced a large dividend designed to
disburse some of the cash it accumulated during the almost two years it
spent in bankruptcy, the Washington Post reported. During
the bankruptcy process, when the company was not required to pay
interest on its debt, MCI's cash on hand rose to $6 billion. Under
MCI's plan of reorganization, the board was required to review its
reserves and determine whether it had excess cash. In a vote held
yesterday, the board determined there was $2.2 billion in excess cash
and voted to return it to shareholders in the form of a
40-cent-per-share dividend.

New Group Swells Bankruptcy Court: The Middle-Aged

Since the 1960s, personal bankruptcy has often been a haven for the
young and struggling, the Wall Street Journal reported.
Bankruptcy lawyers say younger and less-educated people tended to
accumulate too much debt while starting families and jobs, without a
savings cushion to carry them through lean times. No government agency
tracks the age of bankruptcy filers, but the rule of thumb, say those
who’ve worked in and studied the field, was the older the group,
the fewer the filers. Read the full article at
href='http://www.wsj.com/'>www.wsj.com (subscription required).

Dan River to Face Tougher Climate After Bankruptcy

Textile maker Dan River Inc. hopes to emerge from bankruptcy
protection by year's end just as quotas providing some
protection from imports are set to expire, the Associated Press
reported. The company recently filed a reorganization plan outlining how

it will restructure its finances. But it has yet to tell the court how
it will survive in a battered industry that will face more challenges on

Jan. 1, when international quotas limiting low-cost foreign competition
vanish, the newswire reported.

Delta Air Lines' Pilots Blast $1 Billion Concessions
Proposal

Tensions escalated in the cost-cutting standoff between Delta Air
Lines and its pilots union, with the union chief accusing the ailing
carrier's management of attempting to gouge pilots
by seeking $1 billion a year in concessions, the Wall Street
Journal reported. John Malone, head of the Air Line Pilots
Association units leadership committee at Delta, denounced a
concessions proposal made last week by the airlineas a set of
demands that far exceed the economic situation the company faces
according to a letter sent to the carrier's 7,500 pilots
yesterday. The letter is the latest sign of the looming battle between
the airline and its only major unionized employee group. Delta insists
deep expense cuts are needed to avert a bankruptcy-court filing. Read
the full article at www.wsj.com
(subscription required).

Airlines on Pace for Record Flight Delays

U.S. airlines are on pace to set a record for lateness, with
government figures on Thursday showing that the nations travel
rebound in the first half of 2004 was accompanied by a sharp increase in

flight delays, Reuters reported. Big U.S. airports were busier than
ever, with 3.5 million arrivals and departures for the first six months
of the year. Delayed flights also were noticeably higher through June,
compared with the same period in 1999 and 2000 when air traffic
congestion and passenger frustration were at an all-time high,
Transportation Department figures showed, the newswire reported.

Mirant Can Try to Cancel Pepco Contracts, Court Says

Mirant Corp., a bankrupt power provider, can proceed in its bid to
cancel money-losing contracts to supply electricity to Pepco Holdings
Inc.'s utility in Washington D.C., a federal appeals court ruled,
Bloomberg News reported. Mirant is trying to repudiate its contracts to
sell power to Pepco, owner of a utility that serves 700,000 customers in

Washington and its Maryland suburbs. Mirant wants to break the agreement

to help it pay creditors owed at least $11 billion and exit the
11th-biggest bankruptcy in U.S. history.

A federal appeals court in New Orleans yesterday threw out a
lower-court ruling that gave orders of the Federal Energy Regulatory
Commission precedence over bankruptcy court rulings when insolvent
companies such as Mirant try to reject wholesale power-supply contracts.

The appeals court ruling opens the way for bankruptcy courts to trump
the agency when power suppliers seek protection from creditors, the
newswire reported.

Brazil Petrobras Eyes Enron's Electricity Plant Eletrobolt,
Report Says

Brazil's Petroleo Brasileiro, or Petrobras, is in talks to buy
control of a 380-megawatt thermoelectric plant owned by Enron Corp.,
local financial daily Valor Economico said Thursday. Petrobras, which
owns a minority stake in the plant, known as Eletrobolt, has been in
talks with creditors of the U.S. energy company over the acquisition of
the $250 million gas-fired plant since last year. Eletrobolt is a
merchant plant in Seropedica in Rio de Janeiro state which went online
in 2001.

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Noteholders Defend Horizon Natural Resources Credit Bid Rights

A noteholder group that is the lead bidder for most of the assets of
Horizon Natural Resources Inc. disputed objections to its right to tack
onto its cash bid more than $400 million of debt owed on notes it holds.

The noteholder group, which formed Newcoal LLC to bid on the majority of

the coal company's existing mining operations, said its purchase
offer provides Horizon Natural with $523.4 million in cash, assumed
liabilities and assignment of liens. That figure is on top of up to
$407.7 million of notes Newcoal will surrender in a credit
bid, using debt it is owed by Horizon Natural to add to its offer
for the assets. This consideration, including the noncash credit
bid portion, is real value to the debtors & creditors and
estates, Newcoal's filing said, noting what is owed on the
notes must be paid under bankruptcy law before more junior creditors can

see any return.

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