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March 18, 2005
Republicans Close on Asbestos Fund
The main author of a plan to compensate asbestos victims from a $140
billion fund said on Thursday he was close to getting Republican backing
in the Senate Judiciary Committee for the legislation, Reuters reported.
“We are seeking to get a consensus bill. …We are very close
on the Republican side,” Sen. Arlen Specter (R–Pa.) told the
Judiciary Committee, which he chairs. Adding that he was talking to
Democrats, Specter asked panel members for a list of their concerns so
staff could work on them in the upcoming two-week congressional recess.
Specter is proposing to take asbestos injury claims out of the courts
and pay victims from a fund financed by business and insurers. The
committee’s ranking Democrat, Sen. Patrick Leahy (D–Vt.)
said he would keep working with Specter, the newswire reported.
Portman’s New Job Strands Pension Bill
The selection of Rep. Rob Portman (R–Ohio) to be the
administration’s top trade negotiator may have left the Democratic
co-sponsor of a planned pension bill in the lurch,
CongressDaily reported. Portman has sponsored a series of
pension and retirement-savings bills with Rep. Benjamin Cardin
(D–Md.), the latest of which was to have been unveiled as early as
this week. “I’m hoping to find another member interested in
filling the void,” Cardin said. Portman and Cardin had been
putting the finishing touches on pension legislation this week, but
Portman’s departure has put those plans on hold for now, Cardin
said, the newswire reported.
Toys R Us Agrees to Sell Company for $6.6 Billion
Toys R Us Inc. yesterday said it agreed to a $6.6 billion takeover
offer from two major private equity firms and a real estate group,
Reuters reported. The team of Kohlberg Kravis Roberts & Co., Bain
Capital and Vornado Realty Trust, who will own equal stakes in Toys R
Us, beat out Cerberus Capital Management to win the auction for the
entire company.
Ross, Sumitomo Set Up Bankruptcy Lending Unit
Buyout firm W.L. Ross & Co. and Sumitomo Mitsui Banking Corp.
yesterday said they set up a $300 million program to finance companies
reorganizing under chapter 11 bankruptcy protection in the United
States. The deal with the $2.5 billion W.L. Ross fund, led by bankruptcy
buyout veteran Wilbur Ross, will allow the Japanese banking giant to
expand its so-called debtor-in-possession financing program in the
United States. Under the deal, Sumitomo will put up all the cash and
Ross will manage it, the newswire reported.
T&N Pension Says Wide Gap in Federal–Mogul Talks
An offer by bankrupt U.S. auto parts maker Federal–Mogul to
pensioners of its UK unit is still short of the fund’s claims and
increases the chance of the British firm Turner & Newall being sold,
its trustee has said, Reuters reported. “Discussions with
Federal–Mogul and its creditors about a settlement of the pension
scheme’s claim have been continuing,” independent trustee
Tim Culverhouse of Alexander Forbes Trustee Services wrote in letter to
members, obtained by Reuters.
Winn-Dixie Creditor Files to Move Bankruptcy Case
An Alabama beverage bottler has filed a motion to move the Winn-Dixie
Stores bankruptcy case from New York to Florida, the Tampa Bay
Business Journal reported. Buffalo Rock Co., a Birmingham,
Ala.–based bottler for Pepsi Bottling Groupproducts, asked the
U.S. Bankruptcy Court for the Southern District of New York to transfer
the case to a Southeastern district, preferably to the Middle District
of Florida, which includes Orlando, Jacksonville and Tampa.
Jacksonville-based Winn-Dixie owns 920 stores, including locations
throughout the Bay area.
Retirement, the Federal Way
The experiences of federal employees enrolled in the Thrift Savings
Plan show how giving investors control over their retirement savings can
have varying results, the New York Times reported. Read the
article at
href='http://www.nytimes.com/2005/03/18/business/18thrift.html'>www.nytimes.com/2005/03/18/business/18thrift.html.
Proposed Rules Offer Help for Some Troubled 401(k) Plans
Investors in 401(k) plans will soon have two fewer pitfalls to worry
about, thanks to two new sets of rules proposed by Department of Labor
in recent months, the online Wall Street Journal
reported.
The first proposal, to take effect this month, requires employers to
automatically roll over small 401(k) plan balances for workers who leave
the company. This is expected to limit the number of workers who cash
out their 401(k) savings and spend the money before reaching retirement.
The second proposal, just released last week, aims to help workers in
“orphaned” 401(k) plans—where the employer has
abandoned the plan, often due to bankruptcy—to gain access to
their money more quickly than before, the online newspaper reported.
Airlines Lobby for Pension Relief
High fuel prices and the prospect of a pension overhaul backed by the
Bush administration are escalating a push by several financially
troubled airlines to win some relief from massive pension payments, the
Wall Street Journal reported.
Delta Air Lines executives, employees and retirees yesterday sought
support from lawmakers for legislation that would let airlines stretch
out pension payments over as many as 25 years. Northwest Airlines and
AMR Corp.’s American Airlines are lobbying for similar changes,
which could help the airlines avoid a taxpayer-funded bailout if their
financial condition continues to deteriorate, the newspaper
reported.
US Airlines Face Billions in Extra Fuel Costs
U.S. airlines face billions of dollars in extra costs from soaring
fuel prices, with American Airlines, Delta Air Lines and Continental
Airlines bearing the brunt of the rise, regulatory filings show, Reuters
reported. The incessant climb in fuel prices, which hit a record on
Thursday, could threaten to push more major carriers into bankruptcy,
adding to the woes of the industry which suffered some $10 billion in
losses last year.
McLeodUSA Shares Fall 46 Pct, Seeks Buyer
McLeodUSA Inc. shares plunged more than 45 percent on Thursday after
the telecommunications company warned that it seek protection from
creditors if debt restructuring talks were unsuccessful, Reuters
reported. The regional phone company, which is 58 percent owned by
buyout firm Fortsmann Little & Co., said late Wednesday it hired
advisers to review its strategic options, including a possible sale,
confirming earlier press reports.
Citigroup Brings Fraud Claims Against Parmalat CEO
Citigroup Inc. on Thursday said it sued Enrico Bondi, the newly
installed CEO of Parmalat SpA, accusing him of fraud, negligent
misrepresentation and taking money owed to the world’s largest
bank, Reuters reported. Citigroup filed its counterclaims in response to
a lawsuit brought last summer by Bondi, Parmalat’s administrator
at the time, in a New Jersey state court. Bondi, who was named chief
executive on Tuesday, sued to recover $10 billion from Citigroup.
Bankruptcy Reform and You
A CBSNews.com article explains how the changes in bankruptcy reform
bill will affect the average consumer. Read the article at
href='http://www.cbsnews.com/stories/2005/03/17/earlyshow/contributors/raymar…'>http://www.cbsnews.com/stories/2005/03/17/earlyshow/contributors/raymar….