Stability
of Bankruptcy Bill in Air During Election
Despite the last-minute lobbying push on behalf of the
bankruptcy legislation (H.R. 833), observers of the bill
say the chance of an agreement decreases the closer it
gets to Election Day, according to the CQ Daily Monitor. “The chances are diminished but not down to zero,”
said Henry Sommer, a Philadelphia attorney who does pro
bono work for the city's Consumer Bankruptcy Assistance
Project. “They're running out of time.”
The bill, designed to overhaul consumer
bankruptcy laws and make it more difficult for debtors
to walk away from their financial obligations, has been
negotiated in private. Before Congress adjourned for its
August recess, Democrats and Republicans traded some end-of-session
partisan jabs over the bill. Sen. Charles E. Schumer (D-N.Y.),
pushed language he inserted into the Senate-passed bill
that would make it more difficult for protesters at abortion
clinics to use bankruptcy protection to avoid paying court-imposed
fines. Abortion rights groups and the Clinton administration
have been adamant in retaining this language. Senate Judiciary
Chairman Orrin G. Hatch (R-Utah) has pushed language during
the informal conference negotiations that would limit
debtors’ ability to collect court-ordered attorney’s fees.
Another dispute concerns homestead exemptions, which deals
with the amount of home equity a debtor could shield from
creditors.
Republicans have made a compromise offer
to the Clinton administration, but the White House is
yet to respond. Consumer groups hope the administration
will reject the offer but are cautious about the prospects
and those who support the legislation continue to hope
that lawmakers will reach an accord. Creditors will continue
to push for a clean bill, specifically dropping the Schumer
and Hatch language, because they are confident that such
legislation would pass. In the latest Republican proposal
to the administration—via Majority Leader Trent Lott (Miss.)—both
provisions had been eliminated.
Trend-Lines
Files for Chapter 11 Protection
Trend-Lines Inc. Friday announced that the company and
its wholly owned subsidiary, Post Tool Inc., have filed
for chapter 11, according to a newswire report. The New
York-based woodworking tools and accessories company announced
in June that it was planning to divest itself of its golf
businesses in order to concentrate on its larger and more
profitable tool business. The company is currently negotiating
with one or more parties to sell its Golf Day businesses
and expects to conclude a transaction by early September.
Post Tool is a specialty retailer of power and hand tools
and related supplies.
United
Companies Reaches Agreement for Modified Reorganization
Plan
United Companies
Financial Corp. Friday announced that it has reached an
agreement to support a modified plan of reorganization
to be filed shortly by the company in connection with
the company’s chapter 11 cases, which are pending in the
U.S. Bankruptcy Court for the District of Delaware in
Wilmington, according to a newswire report. The equity
committee has agreed to withdraw its competing plan of
reorganization, and both the official committee of equity
security holders and such representatives of the holders
of subordinated debenture claims have agreed to withdraw
objections filed with the court to the previously announced
sale of United Companies' whole loan portfolio and residual
and other interests and servicing rights to EMC Mortgage
Corp. The Baton Rouge, La.-based United Companies is a
specialty finance company that historically provided consumer
loan products nationwide and currently provides loan services
through its lending subsidiary, UC Lending. The company
filed chapter 11 March 1.
Value
America Files for Bankruptcy
Value America
Inc. filed chapter 11 Friday, eliminating 185 jobs, and
discontinued its Internet retailing operations, according
to a newswire report. The Charlottesville, Va.-based company
said it needed to reorganize in order to concentrate on
developing its electronic services business, which provides
online ordering, billing and distribution for vendors
and manufacturers. “The decision to shut down our Internet
business was difficult,” Value America Chairwoman and
CEO Glenda Dorchak said. “It has become apparent that
the prospect for near-term profitability of a company
engaged exclusively in the retail side of the electronic
commerce industry is not assured.” Dorchack said the bankruptcy
filing should give Value America the "breathing room"
it needs to gear up its electronic services business.
In March, Value America reported a net loss of $143.5
million in 1999. Value America was a pioneer in Internet
retailing and at one time sold a variety of items, from
ice cream sandwiches to caviar and from furniture to CD
players. The company cut its work force in half last December
and narrowed its focus to Internet sales of computers,
electronics and office supplies.
Global
Files Chapter 11, Sells Assets to Burrups
Global Financial Press Inc., Global Financial Press of
South Florida Inc. and Global Documental Imaging Group
Inc. (collectively known as “Global”), as well as Burrups
Ltd., announced that Global has entered into a letter
of intent to sell substantially of its assets and business
to Burrups, according to a newswire report. In order to
implement the acquisition, Global filed chapter 11 on
Friday in the U.S. Bankruptcy Court for the Eastern District
of Pennsylvania in Philadelphia. Burrups, a subsidiary
of St. Ives plc and located in London, recently acquired
Packard Press Inc. Burrups said the acquisition of Global
would further develop its presence in the U.S. financial
printing market.
