“Although the company has made efforts to cut expenses and
improve revenue margins, the company has concluded that it has no viable
alternative but to seek a formal plan of reorganization under the
bankruptcy laws,” said Biomass president & CEO Lance B.
Jones.
Armstrong's Stock Continues to Bounce Back
After announcing a bid to reorganize its debts under federal
bankruptcy laws, Armstrong Holdings Inc. has steadily gained ground on
Wall Street, according to the Lancaster New Era. The
Lancaster, Pa.-based building-products maker's stock jumped 63 cents, or
41 percent, to close trading on the New York Stock Exchange Monday at
$2.13 per share. Volume was heavy as 2.4 million shares changed
hands.
Since the company filed chapter 11, Armstrong stock has jumped from
94 cents per share. The stock ended last week at $1.50 per share.
Still, Armstrong's stock remains far below its 52-week high of $36.81
per share. The company filed for chapter 11 under the weight of mounting
asbestos litigation.
Firstar Protesters Demand Justice, Retraction of Bankruptcy Law in
Wisconsin
Protesting against the alleged unfair actions of Firstar Bank, about 175
people joined together on the sidewalk in front of Firstar Bank in
Milwaukee, to call for a boycott in an effort to get Firstar to address
their issues with a bankruptcy law supported by the bank, according to a
newswire report. Firstar hired a lobbyist to push through new
bankruptcy legislation that was passed in 1998. The legislation
gives priority to banks to collect debts from bankrupt corporations,
instead of paying the workers any benefits and pay they may be entitled
to first. Due to this law, the workers are losing a great majority
of the pay and benefits their companies would have given them had the
law not been passed by state legislators, said Salvador deLeon,
organizer for Esperanza Unida, a community group that focuses on serving
minority, injured, under employed and unemployed workers.
'This law was snuck in and bought,” said Richard Oulahan,
director of Esperanza Unida. “It's bad public policy. Firstar
needs to take responsibility. They should change it.”
Other protestors stressed that this law could directly affect
students, since the company they currently work for or will work for in
the future may go bankrupt. In which case, they would not be entitled to
their pay or benefits over the bank's interests. According to the
organizers of the protest, Firstar has been unreceptive and has claimed
they supported a change is the bankruptcy law because it is the only way
they can lend money to small businesses.
Airline Allegiant Files For Bankruptcy
Allegiant Air Inc., a privately held jet air carrier providing scheduled
and charter operations in the West, announced yesterday that it filed
chapter 11, according to a Reuters report. The company, which
filed in the Fresno Division of the Eastern District of the U.S.
Bankruptcy Court, cited skyrocketing fuel costs as a cost of its
bankruptcy. Allegiant said it has furloughed a total of 112 full-time
and part-time employees and has retained a staff of 51 employees based
in Fresno, Calif. The company said its scheduled airline service
between Fresno and Las Vegas and its charter operations will continue
without interruption.
In addition to the filing, Allegiant Air said it is aggressively
pursuing its strategic alternatives, including additional funding, sale
of the company or partnerships to strengthen the company and its
financial position. The company has already arranged for a
debtor-in-possession (DIP) credit facility through one of its creditors
in order to help fund the bankruptcy reorganization efforts.
Money Woes Add to California Energy Shortage
With California's two largest utilities in an $8 billion hole that keeps
getting deeper, the state's energy crisis is starting to become as much
about a money shortage as inadequate power supplies, according to the
Associated Press. Although utilities said they remained solvent as
of yesterday, they acknowledged that bankruptcy is a possibility if
their lenders decide they won't be able to generate enough revenue to
pay the huge bills the utilities have rung up buying expensive
electricity during the last seven months.
“We continue to have the ability to make power purchases on
behalf of our customers,” said Pacific Gas & Electric Corp.
(PG&E) spokesman Ron Low. “But we cannot go on
indefinitely borrowing money to pay for our customers'
electricity.” The San Francisco-based PG&E, which runs
Northern California's primary utility, has paid $4.6 billion more for
electricity than it has collected from its customers since May.
The financial imbalance, created by a retail rate freeze imposed as part
of California's deregulated energy market, has been getting worse this
month, partly because a freeze on wholesale electricity prices was
lifted last weekend.
Power suppliers are getting nervous about the financial stability of
the cash-strapped utilities. About a dozen suppliers declined to sell
energy to California Wednesday unless they received cash on delivery
— a sign that they are worried about a bankruptcy.
