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September 24, 2004
Interstate Bakeries Gets OK for Interim Funding
Bankrupt Interstate Bakeries Corp. received court approval yesterday
for financing that will allow it to keep paying employees and vendors
while it seeks to reorganize, Reuters reported. U.S. Bankruptcy Judge
Jerry Venters gave interim approval to access a $200 million financing
package provided by JPMorgan Chase Bank and agreed to allow the
nation’s largest wholesale bakery company to use up to $50 million
of that over the next month to keep operations afloat.
MCI CEO Says No Plan to Split Businesses for Sale
MCI Inc. CEO Michael Capellas said on Thursday it has no plans to
break up its businesses for a possible sale, dismissing media reports
that the company was looking for potential buyers, Reuters reported.
“Somebody said we had intentions of breaking up the network and
possibly selling off our global assets, but we have no intentions of
doing that whatsoever,” Capellas said in a speech to the Boston
College Chief Executives’ Club. Earlier this week, sources
familiar with the situation told Reuters that the No.2 U.S.
long-distance telephone and data services company has hired J.P. Morgan
Chase & Co. and Lazard to search for a buyer, the newswire
reported.
Trump Aims to Seek New Casino Backers
Trump said in an interview that he aimed to forge a new deal with
bondholders and was also considering taking the company private or
selling some assets. Trump’s casino company, Trump Hotels and
Casino Resorts Inc., said on Wednesday that it and DLJ Merchant Banking
Partners had scrapped a plan that would have provided the company with a
$400 million cash infusion and restructured the company’s $1.8
billion in debt in a “prepackaged” bankruptcy. Trump did not
rule out a restructuring in bankruptcy court but said it was too early
to say if he would take that route, the newswire reported.
United Airlines
UAL Posts $56 Million Net Loss for August
Bankrupt UAL Corp., parent of United Airlines, on Thursday reported a
net loss of $56 million for August, including $11 million in
reorganization expenses, Reuters reported. The carrier said its August
operating loss was $12 million. UAL has been operating under chapter 11
protection since December 2002. The Elk Grove Village, Ill.-based
airline said high fuel prices and weaker fares due to heavy competition
continued to weigh in August, the newswire reported.
United Provides an Idea of Worker Pension Losses
In a bankruptcy court yesterday, United Airlines described how a
possible pension termination would affect its tens of thousands of
employees and retirees, the New York Times reported. In an
informational brief, the airline said that it did not want to play down
the “profound implications” of such a step. But at the same
time, United asserted, the consequences “may not be as dire for
most plan participants as they might fear,” the newspaper
reported.
Former Hawaiian Airlines Head Settles With SEC
A partnership managed by former Hawaiian Holdings Inc. Chairman John
Adams has agreed to pay $2.5 million to settle findings that Adams
failed to disclose disappointing financial results at the now-bankrupt
Hawaiian Airlines prior to a 2002 tender offer, the U.S. Securities and
Exchange Commission (SEC) said on Thursday, Reuters reported. AIP LLC, a
partnership managed by Adams that was Hawaiian Airlines’ majority
shareholder, received more than $17 million in a June 2002 tender offer
in which Hawaiian Airlines repurchased $25 million in stock from its
shareholders, the SEC said. Adams also personally sold shares in the
tender offer through his minority stake in AIP, said Marc Fagel, co-head
of enforcement in the SEC’s San Francisco office, the newswire
reported.
US Airways to Ask Court to Cut Union Workers’ Pay 23
Percent
US Airways plans to ask a bankruptcy court judge today to impose
emergency pay cuts of 23 percent on its major unions, which have refused
the company’s demand for $800 million in contract concessions, the
New York Times reported. The airline, in letters sent to
its unions yesterday, also said it would reduce or stop contributions to
some employee retirement plans and would end its commitment to keep 279
aircraft in its fleet. It made the pledge to keep the aircraft when it
emerged from bankruptcy protection last year, the newspaper
reported.
American Airlines to Miss Revenue Goal
The AMR Corporation, the parent of American Airlines, said late
Wednesday that it would probably not meet its revenue forecasts for the
busy August travel season because of the hurricanes in Florida and the
Caribbean, and that high fuel prices were causing it problems, Reuters
reported. The airline has also reached an agreement with its bank group
to ease requirements for the third and fourth quarter of this year for
an $834 million credit agreement, it said in a filing with the
Securities and Exchange Commission.
Witness Tells of Hearing Talk About Merrill-Enron Side Deal
A former credit analyst at Merrill Lynch & Company testified
yesterday that in 1999, she heard several executives of her firm discuss
a side deal that the government says was at the heart of a criminal
conspiracy to bolster the energy company’s earnings illegally, the
New York Times reported. In her testimony, the analyst,
Tina Trinkle, said that she had participated in a conference call with
several of the defendants, and heard that Enron had said it would buy
back an investment it wanted to sell to Merrill within six months if no
other buyer could be found.
Delta to Sell Planes, Spare Engines to Fedex
Delta Air Lines on Thursday said it reached a deal with FedEx Express
to sell eight McDonnell Douglas MD11 aircraft and four spare engines for
delivery in 2004, Reuters reported. The sale, subject to certain
conditions, is part of Delta’s effort to simplify its fleet, the
airline said. Delta is trying to cut costs and revamp its business to
avoid a bankruptcy filing.
New Air Canada Stock to Begin Trading Oct. 4
Shares of ACE Aviation Holdings Inc., the new holding company for Air
Canada, will begin trading on Oct. 4, the company said on Thursday,
Reuters reported. The airline canceled its old shares as part of its
restructuring under bankruptcy protection from which it will emerge on
Sept. 30. The new voting shares will trade on the Toronto Stock Exchange
under the symbol ACE.B, Air Canada said.