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November 10, 2004
Delta to Cut 6,000-6,900 Jobs
Delta Air Lines today said it plans to eliminate between 6,000 and
6,900 jobs during the next 18 months, implement a 10 percent
across-the-board pay reduction and reduce employee benefits, Reuters
reported. Delta said it would issue as much as 75 million shares of
common stock as part of its restructuring plan.
ATA Gets $15.5 Million Cash, Avoids Liquidation
Bankrupt ATA Airlines will get $15.5 million from its home state of
Indiana by selling some assets to the state and then leasing them back,
thus avoiding liquidation, a state official told Reuters on Tuesday,
Reuters reported. In an attempt to save jobs and flights in the state,
the Indiana Transportation Finance Authority will borrow up to $15.5
million from Bank One to buy assets such as spare airplane parts, tools
and other equipment. It will then lease those assets to the Indianapolis
International Airport, which in turn would lease them back to ATA.
Wet Seal CEO Resigns, Sets Financing Deal
Wet Seal Inc. said on Tuesday that Chairman and CEO Peter Whitford
had resigned and the youth-oriented retailer had reached a deal to raise
$40 million as it struggles to win back shoppers and avoid bankruptcy,
Reuters reported. Foothill Ranch, Calif.–based Wet Seal also hired
retailing veteran Michael Gold, an executive who has run more than 400
retail clothing stores in Canada and the United States, as a consultant
to the company fighting to reverse a two-year sales slump.
Chapter 11 Filing Possible, Flyi Says
The parent of Dulles-based low-cost carrier Independence Air warned
for the first time yesterday that it will be “forced to
consider” a chapter 11 filing for protection from its creditors if
it cannot renegotiate aircraft lease payments of $83 million that it
owes in January, the Washington Post reported. Flyi Inc.
said unexpectedly high fuel costs and “fierce competition”
from larger rivals United Airlines, US Airways, Delta Air Lines and
Northwest Airlines caused Independence Air’s revenue to fall
“significantly below anticipated levels.”
Southwest Air Could Add 60 Jets in 2005
Southwest Airlines Inc. sees steady growth for the airline in a
struggling industry, and the low-cost carrier could add as many as 60
aircraft to its fleet this year, CEO Gary Kelly said yesterday, Reuters
reported. Southwest, which recently took delivery of its 400th aircraft,
has delivery and retirement plans that will result in it adding 29 net
aircraft to its fleet this year. Kelly said that apart from the
deliveries of new aircraft from Boeing, Southwest may consider used 737
models on the market, reiterating an interest in 737-800 planes operated
by bankrupt carrier ATA.
Briggs & Stratton Sets Reserve for Customer Debt
Briggs & Stratton Corp., which makes small engines, yesterday
said that it believes it has set adequate reserves to cover potential
losses from the bankruptcy of one of its top three original equipment
customers, Reuters reported. The company said in October that it had
added $10 million to its reserve to cover a $40 million accounts
receivable from a major customer that might become partially
uncollectable in the future. Murray Inc. filed for bankruptcy
reorganization yesterday and said it had secured debtor-in-possession
financing to continue operating through the sale of the company.
Adelphia Communications
Adelphia Investors Sue over Earnings ‘Conspiracy’
A group of Adelphia investors—whose aggregate losses in the
now-bankrupt cable company amounted to $50 million—now has filed
suit against Scientific–Atlanta and Motorola, charging the set-top
cable box manufacturers with engaging in a “conspiracy” to
inflate Adelphia’s earnings artificially, the Fulton County Daily
Report reported. Read the articles at
href='http://www.law.com/jsp/article.jsp?id=1099927166916'>www.law.com/jsp/article.jsp?id=1099927166916.
Creditors Devise Fallback Plan if Adelphia Assets Aren’t
Sold
The unsecured creditors of the Adelphia Communications Corporation,
which is trying to sell its assets, said yesterday that they had a
preliminary agreement on a plan to overhaul the company once it emerges
from bankruptcy, in case they are not satisfied with offers from
potential suitors, Bloomberg News reported. Under the plan, all
unsecured creditors would receive common stock in the new company, the
creditors’ committee said in a statement.
Toys R Us, Toy Makers Join to Fight Wal-Mart
Toy makers including Mattel Inc. are teaming up with Toys R Us,
supplying exclusive toys as a way to battle No. 1 toy retailer Wal-Mart
Stores Inc, CNBC reported. The arrangement will include the toy makers
helping to pay for advertising on these items, CNBC said.