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July 21, 2005
Sen. Specter Says No Asbestos Vote Soon
A bill to create a $140 billion asbestos compensation fund is not
expected to come up on the Senate floor before the August recess, the
legislation’s co-author, Sen. Arlen Specter (R–Penn.), said
yesterday, according to a Reuters story in the Washington
Post. Specter said that he did not expect Senate Judiciary
Committee Chairman Bill Frist (R–Tenn.) to have time to address
the issue before then.
Senate Panel to Work on Pension Bill Next Week
The pensions of struggling U.S. airlines would be dealt with
“more strictly” than those carriers had hoped in legislation
to be introduced soon, the chairman of the Senate Finance Committee said
on Tuesday, Reuters reported. Sen. Charles Grassley (R–Iowa), gave
no details of the pension bill’s provisions, but said it would be
introduced this week so the Finance Committee can review the bill next
Tuesday, July 26. “We’re putting out a pension bill on
Friday,” Grassley told reporters.
Business Likely to Back Roberts
Supreme Court nominee John Roberts is likely to win the support of
business groups, despite arguing an antitrust case against Microsoft on
behalf of state attorneys general, reported CNN/Money yesterday. The
Bush administration reportedly consulted with business groups about the
list of nominees in an effort to build support for Roberts’
confirmation.
Greenspan Says Fed to Keep Raising Rates
Alan Greenspan told lawmakers yesterday that the U.S. growth outlook
was solid and the Fed will keep lifting interest rates, Reuters
reported. But he warned “significant uncertainties” confront
this positive prospect, including high energy prices, labor costs, the
future path of long-term interest rates and the danger this could spell
for the country's housing market. “Our baseline outlook for the
U.S. economy is one of sustained economic growth and contained inflation
pressures,” he told the House of Representatives Financial
Services Committee in the first of two days of semiannual testimony on
the economy and monetary policy. “In our view, realizing this
outcome will require the Federal Reserve to continue to remove monetary
accommodation. This generally favorable outlook, however, is attended by
some significant uncertainties that warrant careful scrutiny.”
Top Delta Executives Debate Filing for Bankruptcy
After aggressively seeking to keep Delta Air Lines out of bankruptcy
court, the carrier’s senior management is debating the
company’s efforts to save itself, as several top executives and
board members in recent weeks have warned Chief Executive Gerald
Grinstein that the current turnaround plan may be futile and that
avoiding chapter 11 soon will be impossible, the Wall Street
Journal reported. At the same time, Delta executives have been
told that large portions of “bankruptcy-proof” special
pensions—granted in 2002 to keep executives at the carrier while
it tried to reverse its losses—might be wiped out if Delta filed
for court protection from creditors under chapter 11. That has stirred
concern among top management that Delta could suffer an accelerated
departure of key personnel—with not only executives but other
workers taking the cue to exit before a possible bankruptcy-court
filing.
Enron Case: Jury Acquits on Some Charges, Deadlocks on Most
A federal court jury on Wednesday acquitted three former Enron Corp.
broadband executives of some charges but deadlocked on the remaining
charges involving them and two other executives, the Associated Press
reported. The five were on trial for their alleged roles in making the
failed broadband venture appear strong to investors to boost the
company’s stock price. Former broadband CEO Joseph Hirko was
acquitted on insider trading and money laundering counts, and former
strategist Scott Yeager was acquitted of conspiracy and security and
wire fraud counts. In addition, software engineer Rex Shelby was
acquitted of insider trading.
href='http://www.law.com/jsp/article.jsp?id=1121850321106'>Read the full
story.
DuPont Sued for $5 Billion Suit Over Teflon Risks
A $5 billion class action lawsuit is being filed against DuPont Co.
saying the chemical giant long failed to warn consumers about the
dangers of a Teflon chemical, the Associated Press reported yesterday.
The plaintiffs want DuPont to spend $5 billion to replace the cookware,
impose a Teflon warning label and create two funds to pay for medical
monitoring and more scientific research.
Republic Raises Funds for US Airway Assets
Republic Airways Holdings Inc. is offering 7.75 million shares of its
common stock at $12.60 per share, the Charlotte Business
Journal reported. The company plans to use the proceeds to buy
commuter slots and gates, ERJ-170 aircraft and other assets from US
Airways Group Inc., which is operating under chapter 11 of the
Bankruptcy Code. The new company will take the US Airways name and be
headed by America West Chief Executive Doug Parker, who has been named
CEO and chairman of the new company. Once integrated, the new carrier
plans on maintaining its hubs in Charlotte, N.C., Philadelphia and
Phoenix, along with secondary hubs in Las Vegas and Pittsburgh.
Northwest, Mechanics Ponder Possible Strike
Government mediators released Northwest Airlines and its mechanics
from contract negotiations on Wednesday, triggering a 30-day cooling off
period that could lead to a strike if the two parties fail to agree on a
cost savings plan, Reuters reported. The White House, which has the
authority to temporarily block a work stoppage, said it was keeping a
close eye on the contract dispute. The Aircraft Mechanics Fraternal
Association said its members, which include mechanics, cleaners and
custodians, could legally strike at any time after 12:01 a.m. EDT on
Aug. 20.
California Counties Struggling with Pension Shortfalls
Wrestling with an added $1-billion projected shortfall to Orange
County, California’s retirement system, the board of supervisors
on Tuesday said it would consider enrolling its workers in alternative
systems, the Los Angeles Times reported. Supervisors also
gave county officials the final go-ahead to refinance $600 million in
county bankruptcy debt, allowing the county to retire its debt 10 years
early, at a significant savings. On Tuesday, the San Diego
Union-Tribune reported that the San Diego City Council has
unanimously authorized the city to take preliminary steps toward a
court-ordered takeover of its troubled employee pension system. A San
Francisco-based law firm, Heller Ehrman, will look into hiring a
receiver for the system and report back to the council next week on
whether the process is viable and how it could take place.
Arizona Investment Group Reaches $4.8 Million Settlement with
Auditing Company
An Arizona investment group has reached a $4.8 million settlement
with an auditing company accused of misleading Arizona governments into
keeping their money with a failing firm, reported KPHO.com. In 2002, a
local government investment pool run by the state Treasury Department
lost $131 million in taxpayer money that it had staked on National
Century Financial Enterprises when the securities firm filed for Chapter
11 bankruptcy protection. The investment group filed suit in federal
court against several of National Century’s business partners,
with Deloitte and Touche, the firm’s auditor, among them.
Scottsdale lost $7.7 million when National Century filed for bankruptcy
and would receive $257,000 under the settlement.
Terabeam Wireless Agrees to Purchase Assets of Proxim Corporation;
Ensures Continued Delivery of Wi-Fi and Broadband Wireless Access
Solutions
Terabeam Wireless, the business name of YDI Wireless Inc. and Proxim
Corporation, leading providers of Wi-Fi and broadband wireless
equipment, jointly announced yesterday that they have entered into an
asset purchase agreement whereby Terabeam will acquire substantially all
of the assets of Proxim, said a Terabeam news release yesterday.
Terabeam and Proxim entered into the asset purchase agreement after
Proxim declared Terabeam the high bidder in the court-approved auction
held in connection with Proxim's chapter 11 bankruptcy filing.
Canada Judge Orders No Seizure of Ravelston Assets
A Canadian judge issued an order on Tuesday designed to stop the U.S.
Department of Justice from using U.S. racketeering law to seize assets
held by the insolvent holding company of toppled newspaper baron Conrad
Black, Reuters reported. The decision could help clear the way for RSM
Richter, the court-appointed receiver that now controls Black’s
closely held Ravelston Corp. Ltd., to sell part of Ravelston’s 78
percent stake in newspaper holding company Hollinger Inc.
AaiPharma to Sell Drug Unit to Xanodyne for $209 Million
AaiPharma Inc., which filed for bankruptcy protection in May,
Wednesday said it agreed to sell its pharmaceuticals division to
Xanodyne Pharmaceuticals Inc. for $209.3 million, the Associated Press
reported. Xanodyne was the winning bidder in an auction approved by the
bankruptcy court.
Pirates, Club Reach Agreement Over Trophy
A bankrupt club has agreed to return the 1979 World Series trophy to
the Pittsburgh Pirates if the team helps the group sell the rest of its
memorabilia, the Associated Press reported. The Pirates and the former
Allegheny Club reached a deal Tuesday regarding the ownership of the
trophy, now on loan to the Western Pennsylvania Sports Museum at the
Sen. John Heinz Pittsburgh Regional History Center. But the club’s
creditors and the bankruptcy court judge must approve the deal before it
can move forward.
href='http://www.nytimes.com/aponline/sports/AP-BBN-Pirates-Trophy.html'>Read
the full story.
Discount Bridal Service Filing for Bankruptcy
Discount Bridal Service, which operates a Baltimore warehouse, is
filing for bankruptcy, leaving pending bridal gown orders unfinished,
the Baltimore Sun reported. At the end of last week, the
company sent an e-mail to dealers saying the company had been
experiencing extreme hardships and was closing. The e-mail states that
all money for orders placed after June 15 will be left up to the court.
Orders after June 27 were never processed and customers and dealers will
receive their money back in the mail. The company’s lawyer said
that Discount Bridal Service will release more information on the
decision when the chapter 7 bankruptcy is filed by the end of next
week.
Boca Credit Firm Sells Client List after Going into Bankruptcy
Itself
Professional Credit Consultants Inc., a nonprofit debt management
program, sold its client list to Consolidated Credit Counseling Services
(CCCS) on Friday. The sale came after the Boca Raton–based company
filed for chapter 7 bankruptcy earlier this month, the South
Florida Sun-Sentinel reported. CCCS has agreed to pay
Professional Credit’s estate $120 for each client who agrees to
use its services and successfully makes a first payment.