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Senators Ready for Bankruptcy Talks Today
A bipartisan group of senators will assemble this afternoon for their
first face-to-face debate on at least two issues that stand in the way
of the agreement on bankruptcy overhaul legislation, according to the
CQ Daily Monitor. Many who have been following the legislation
said they are not optimistic that today's meeting will clear remaining
roadblocks. 'It's going to take a lot of cooperation, and I didn't
notice a lot of cooperation before [Memorial Day recess],' said ABI
Executive Director Samuel J. Gerdano. Sen. Charles E. Schumer (D-N.Y.)
and House Judiciary Committee Chairman Henry J. Hyde (R-Ill.) continue
to disagree on a Senate-passed provision that would prevent those
charged with violence against abortion clinics to use bankruptcy to
discharge these debts. While Hyde and other Republicans want the wording
to be more general and include 'willful and malicious threat of serious
bodily injury,' Democrats have argued that with that wording, most
abortion clinic violence would not be covered. Senators are also at an
impasse over a provision added to the Senate bill by Senate Judiciary
Chairman Orrin G. Hatch (R-Utah) that would amend a federal law intended
to protect consumers from abusive debt collectors by limiting the
ability of some debtors to collect attorney fees in lawsuits where the
debtors have accused the debt collectors of harrassment. Republicans are
continuing to look toward the digital signatures legislation (S. 761)
and the rural television measure (H.R. 1554) as possible vehicles for
the bankruptcy bill, since the Senate version includes a minimum wage
increase and a business tax break package, and therefore cannot be
formally conferenced.
$17 Million Lottery Winner Files for Chapter 11
Former coworkers of Leslie Bowe claim the $17 million Florida Lottery
winner has entered bankruptcy court to keep them from collecting $5
million they feel is rightfully theirs, according to the Miami Daily
Business Review. In March, Bowe filed for chapter 11 in Miami,
asking Bankruptcy Judge Robert A. Mark to allow him to sort out
his affairs, pay off creditors and start over. In 1994, Bowe and seven
coworkers are said to have entered into an oral agreement in which they
would pool their money and purchase lottery tickets. Bowe took the money
and bought the tickets. Then on Sept. 17, 1994, one of the five
purchased tickets had all six winning numbers, and Bowe laid claim to
the $32 million prize. He shared the winnings with another winner, but
not with his coworkers. Bowe's former colleagues claim they were misled.
Last Friday, six of his colleagues, who were earlier rewarded a share of
his lottery winnings in Circuit Court, are calling Bowe's bankruptcy
claim a 'litigation tactic.' The petition filed by Bowe's former
colleagues charges that Bowe filed for bankruptcy solely as a way to
appeal the court judgment against him without having to post a mandatory
bond. They further argue that Bowe still has plenty of money.
'The purpose of chapter 11 is where you have a number of creditors
and a debtor who has rehabilitation would produce a payment,' said
Arthur Rice, an attorney for the coworkers. Bowe's assets, according to
court documents, include a home valued at more than $600,000 and
personal property of nearly $11 million, mostly from winnings, and a
Mercedes-Benz valued at more than $40,000. Bowe owns a non-operational
business called Dugout USA Inc., which operated indoor batting cages and
sold sports merchandise. He claims the business lost close to $300,000
in three years and that he ceased operations in April. Despite the
shutdown, he continues to pay the $8,000 a month to rent space and said
he has no immediate plans to either liquidate or re-open. His creditors
say that money could be used to pay them. Bowe said he will appeal,
arguing that the winning ticket was one that he bought from his own
pocket and not from the pool. He also said that his colleagues believed
him at the time. 'They spoke the truth to begin with, and now they want
to lie for their own benefit,' said Bowe. 'The only recourse to protect
myself and give me some benefit is that [bankruptcy] filing.'
Stage Stores's $450 Million DIP Facility Approved
On Friday, Hon. Wesley W. Steen (S.D. Texas) approved a number of
first-day motions and a debtor-in-possession (DIP) facility of $450
million for Houston-based Stage Stores Inc., which filed for chapter 11
on Thursday in Houston along with two subsidiaries. The DIP facility is
funded by a group of banks for which CITICORP USA INC. is the agent.
Bankruptcy counsel are Andrew E. Jillson and Lynnette R. Warman
of Jenkens & Gilchrist PC, Dallas. Stage Stores sells brand-name
apparel, accessories, cosmetics and footwear to small communities in the
U.S., primarily under the names Stage, Bealls and Palais Royal.
AutoInfo Inc. Announces Statement Regarding Its Chapter 11
AutoInfo Inc. announced yesterday that the reorganization hearing
scheduled to be held before the Bankruptcy Judge Adlai S. Hardin
Jr. (E.D.N.Y.) tomorrow has been rescheduled for June 27, according
to a newswire report. 'The hearing date has been rescheduled to allow us
additional time to file our amended disclosure statement and plan of
reorganization,' said William Wunderlich, president and chief executive
officer of AutoInfo. The Stamford, Conn., company's plans are to be
based on assumptions involving judgments with respect to future
economic, competitive and market conditions.
PennCorp Reorganization Plan Confirmed
PennCorp Financial Group Inc. announced yesterday that the U.S.
Bankruptcy Court for the District of Delaware has confirmed its plan of
reorganization, according to a newswire report. The New York-based
company anticipates the consummation of the plan and the closing of the
recapitalization transaction to occur by June 19. PennCorp received
votes in favor of the plan from holders of approximately 90 percent of
its two outstanding series of preferred stock. Under the terms of the
plan, stockholders will receive one share of common stock, and all
existing shares of the company's common stock will be cancelled for no
value. Any and all other claims and liabilities of the company will be
paid in accordance with their terms. PennCorp is an insurance holding
company that underwrites and markets life insurance and accident and
sickness insurance. The company filed for chapter 11 in February.
APBnews.com Fires a Staff It Can't Pay
In the latest fallout of struggling dot-com enterprises, editors and
reporters in the New York office of APBnews.com gathered yesterday to
hear they were fired, according to The Washington Post. After
weeks of searching for $25 million in capital to keep the two-year-old
operation going, company officials said they could no longer pay the
bills for one of the most successful start-up media sites on the
Internet. Employees can continue to work as volunteers through the end
of the week in the hope that some type of deal can be arranged. 'APB
Online was in the midst of its third round of financing in March when
the market's valuation of Internet companies drastically declined,' said
Chairman and Chief Executive Officer Marshall Davidson. 'The gods must
have been against us, the dot-com gods,' said Robert Port, a senior
editor. 'This is a crazy environment.' More than half of the company's
staff volunteered to keep the site going while it continues to seek
funding from major media companies; media giant News Corp. has expressed
its interest. 'I think this is why a lot of people are staying, because
they're thinking, 'This can't be,'' said Port. 'We're still alive and
kicking...We have what is arguably the best content site on the
Internet.' The site's news staff last year won the Society of
Professional Journalists' Sigma Delta Chi Award for excellence for
deadline reporting.
Phillip Services Report Completion of Reorganization
Phillip Services Corp. yesterday announced its audited fresh start
balance sheet as of March 31, according to a newswire report. 'With our
financial reorganization behind us, we have removed the uncertainty that
hampered our performance and business growth over the past year,' said
Phillip President and Chief Executive Officer Anthony Fernandes. The
Hamilton, Ontario, company emerged from its financial reorganization on
April 7. Last June, the company and its subsidiaries filed a voluntary
application to reorganize under the Companies' Creditors Arrangement Act
in Canada and a voluntary petition under chapter 11 of the U.S.
Bankruptcy Code.
Joan and David Seek
Employee Retention Bonuses, Severance
Bankrupt shoe retailer Joan and David Helpern Inc. is seeking the
Manhattan Bankruptcy Court's approval for severance pay for workers at
its closing stores and a $93,500 employee retention bonus package for
executives. In its motion, Joan and David expressed concern that
employees would leave
during a critical time of the company's reorganization if the severance
packages and bonuses weren't approved. 'Such a loss would significantly
harm the debtor's negotiations with prospective purchasers, which are at
a critical stage,' the company told the court.
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2000.
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