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May 9, 2005
Senate Resumes Asbestos Markup This Week
The Senate Judiciary Committee on Thursday will resume its markup of
asbestos legislation and is hoping to wrap up work on the long-debated
bill, CongressDaily reported. The panel halted its markup
before last week’s recess when Democrats invoked a rule stating
that committees cannot meet for more than two hours while the Senate is
in session. Dozens of amendments await committee members, and Judiciary
Chairman Arlen Specter (R–Pa.) is still trying to gather the votes
he needs to clear the bill.
Almost Two Thirds of Americans Support New Tougher Bankruptcy Law,
According to the Cambridge Consumer Credit Index
More than six out of ten Americans (64 percent) support the recently
enacted bankruptcy legislation, according to the Cambridge Consumer
Credit Index. Thirsty-six percent of Americans are not in favor of the
toughened bankruptcy rules. Though a clear majority of Americans are in
favor of the new law, support for it has weakened from June 2003, when
the Index found that 73 percent were in favor of toughened bankruptcy
laws and 27 percent opposed it. The latest survey also found that 80
percent of Americans say the new law would deter them from filing for
bankruptcy, while 20 percent would be more inclined to file for
bankruptcy if they were overwhelmed with debt.
MCI Holders Again Balk at Verizon Bid
MCI Inc. is facing a new round of shareholder dissent over its
decision to accept an $8.44 billion takeover bid from Verizon
Communications Inc. rather than a $9.74 billion offer from Qwest
Communications International Inc., the Wall Street Journal
reported. Qwest and its bankers are talking to large MCI shareholders
and believe there could be enough support to vote down the Verizon deal
if there is another option on the table, according to people close to
the situation. A vote by MCI holders on the Verizon offer could be held
as soon as late June or early July.
Merger Talks Gain Momentum Between US Air, America West
Merger negotiations between US Airways Group Inc. and America West
Holdings Corp. picked up momentum last week, with the carriers hoping to
hammer out a deal ahead of America West’s annual meeting May 17,
the Wall Street Journal reported. Several potential
investors in a merger are studying a proposed business plan that
foresees the combined company operating under the US Airways brand and
focusing attention on Midwestern markets while introducing flights to
Hawaii.
United’s Exit from Chapter 11 Could Be Complicated by
Ruling
As three unions threatened to strike if UAL Corp. jettisons pensions
and voids labor contracts, a federal appeals court here issued a ruling
that could prolong efforts by UAL’s United Airlines to emerge from
bankruptcy protection, the Wall Street Journal reported.
Friday’s decision by the Seventh Circuit Court came as the airline
will meet with its unions in bankruptcy court this week. The ruling
might complicate negotiations with United’s aircraft lessors and
creditors that are necessary for the company to step out of bankruptcy
protection. It also raises the possibility that lessors could repossess
as many as eight of United’s planes, the newspaper reported.
AaiPharma to Sell Units, Start Chapter 11
Ailing drugmaker AaiPharma Inc. said today that it has entered a pact
to sell its pharmaceuticals divisions for $170 million, according to a
regulatory filing, Reuters reported. The asset purchase agreement, which
it entered into on Friday, is contingent upon AaiPharma starting chapter
11 bankruptcy proceedings within four days after entering into the
agreement.
Auto Downgrades Add to U.S. Junk Bond Market’s Woes
The downgrades of Ford Motor Co. and General Motors Corp. to
speculative status have cast another shadow over the struggling U.S.
junk bond market, and it may be some time before the full impact is
known, Reuters reported. Junk or high-yield bonds have not weakened
dramatically since Standard & Poor’s on Thursday caught the
market by surprise by downgrading the two largest U.S. automakers to
junk status. But the high-yield market could remain volatile as
investors assess the impact of the automakers’ downgrades and deal
with ongoing worries about interest rates, inflation and a backlog of
supply waiting to be sold, said Brian Arsenault, high-yield strategist
at Morgan Stanley, the newswire reported.
Hedge Funds Get Greenspan Warning on Leverage
The hedge fund industry received a warning from Federal Reserve
Chairman Alan Greenspan on Thursday to play responsibly to help protect
market liquidity, Reuters reported. For months, market analysts,
economists and others have been concerned that a disaster might be
brewing in the $1 trillion hedge fund industry as managers borrowed
money when it was cheap and now are being squeezed as interest rates
rise, the newswire reported.
Parmalat Keeps U.S. Bankruptcy Shield, Judge Says
A U.S. bankruptcy court judge on Thursday granted Parmalat
Finanziaria SpA nearly four more months to keep U.S. creditors at bay
while it reorganizes in Italy, a court filing shows, Reuters reported.
Judge Robert Drain of the U.S. bankruptcy court in Manhattan extended to
Aug. 31 from May 5 a preliminary injunction that allows Parmalat to
block U.S. creditors from interfering with its Italian restructuring.
Parmalat has received several extensions, most recently in January.
Credit Card Minimum Payments to Double
According to Crystal Gomoke with Consumer Credit Counseling Service,
“The Office of the Comptroller of the Currency has asked credit
card companies to increase the minimum monthly payment they are
requiring consumers to pay from 2 percent of the balance each month to 4
percent of the balance,” KCBDNews.com reported. Gomoke says the
average consumer has $10,000 in credit card debt, which means they pay
$200 minimum and, with this increase, they’ll pay $400.
The reason the government has pushed for this change is that a
quarter of all credit card holders pay only the minimum monthly payment
each month, Gomoke explains, “If you pay only the minimum payment
on credit cards each month, you’ll be paying on them for an
average of 30 years. This is trying to get it down to a point where you
will pay off debt in a reasonable period of time, closer to 10 to 12
years.”
Oregon Parishes Battle to Keep Assets
Roman Catholic parishes and schools are competing with alleged
victims of clerical sex abuse to claim assets held by the Archdiocese of
Portland, the first in the country to file for bankruptcy because of
abuse settlements, the Associated Press reported. Read the full article
at
href='http://news.yahoo.com/s/ap/20050508/ap_on_re_us/portland_archdiocese_2'>news.yahoo.com/s/ap/20050508/ap_on_re_us/portland_archdiocese_2.