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May 25, 2005
Specter Seeking Three Votes to Move Asbestos Measure
Senate Judiciary Chairman Arlen Specter (R–Pa.) is hoping to
draw the last three votes he needs to clear asbestos legislation through
the panel today after dealing with about 90 pending amendments to the
bill, CongressDaily reported. During the markup session,
senators will take up a manager’s package of amendments to the
bill that has been negotiated since the committee met last week. Through
the changes proposed in that package, Specter is hoping to pick up
enough support to clear the bill through committee and to a floor vote
when Congress returns from its Memorial Day recess. Specter has urged
members to only bring up the amendments they most want the panel to
consider.
Mortgage Applications Increased Last Week
Applications for U.S. home mortgages increased last week amid a rise
in purchasing and refinancing activity as mortgage rates eased, an
industry group said today, Reuters reported. The Mortgage Bankers
Association said its seasonally adjusted index of mortgage application
activity increased 4.3 percent to 729.6, partially offsetting the 10.5
percent decline during the previous week. Rates have declined 14 basis
points over the last two weeks. “While the number of refinance
applications increased … the dollar volume increased by more than
twice that amount, 13.5 percent, consistent with the idea that borrowers
with larger balance loans respond quickly to even small rate incentives
to refinance,” Jay Brinkmann, vice president, in the MBA’s
research and economics department, the newswire reported.
Study: Students’ Credit Card Debt Down
A study released Tuesday by college lender Nellie Mae found that 76
percent of undergraduate college students carried credit cards in 2004,
down from a peak of 83 percent in 2001, when the last survey was made,
the Washington Post reported. They carried an average of
four cards last year, and their outstanding balances averaged a total of
$2,169, the online newspaper reported. While a seemingly hefty number,
that was down from $2,327 in 2001 and $2,748 in 2000, though up from the
$1,879 average balance of 1998, the study found. The Nellie Mae study,
which is based on data from the nation’s main credit bureaus as
well as a survey of students, is often used as a benchmark of the
financial well-being of the nation’s college students. The latest
study found that more than half of the students got their first credit
card at age 18, although some waited until they were 21. Some 26 percent
said they were referred to a card company by their parents, 35 percent
responded to a direct mail solicitation from a card issuer and 18
percent signed up at a card vendor’s booth on campus. Most of the
others signed up on the Internet or responded to a telephone
solicitation. Read the full article at
href='http://www.washingtonpost.com/wp-dyn/content/article/2005/05/24/AR2005052401116_pf.html'>www.washingtonpost.com/wp-dyn/content/article/2005/05/24/AR2005052401116_pf.html.
Health Care Firms File for Chapter 7 Bankruptcy
Two South Bend, Ind. companies that provide health care claims
processing and consulting for major Northern Indiana employers have
filed for chapter 7 liquidation bankruptcy. National Health & Claims
Administrator and GS Consulting Services filed in U.S. Bankruptcy Court
in Delaware on Tuesday. Two of their three largest unsecured creditors
are AM General, the maker of the Hummer, which is owed $3 million; and
Memorial Health System of South Bend, owed $1.1 million.
US Airways
Union Opposes U.S. Air Severance Plan for Execs
Unions at US Airways Group Inc. opposed a company plan to offer up to
$55 million in enhanced severance and other benefits to retain top
officers and other salaried workers during its merger with America West
Holdings Corp., Reuters reported. “It is preposterous and
inequitable,” the Association of Flight Attendants said in
documents filed on Tuesday with the federal bankruptcy court in
Alexandria, Virginia. The group representing 8,000 active and furloughed
US Airways attendants said the proposal does not link payments to
performance goals and covers too many people.
US Airways Cuts Keep Coming at Airport
US Airways plans to eliminate 15 more nonstop flights out of
Pittsburgh International Airport in August, including routes to San
Diego and Seattle, reported the Pittsburgh Post Gazette.
The cuts, part of an ongoing local pullback, further distances
Pittsburgh from the days when it was US Airways’ largest hub and a
major East–West connector for the Arlington, Va.–based
airline. The carrier, which agreed last week to merge with Tempe,
Ariz.–based America West Airlines, is still the region’s
dominant carrier. But in the fallout from the 9/11 attacks that saw air
traffic plunge, it opted to shift more of its flights to bigger cities
along the East Coast. With the latest cuts, which begin Aug. 21, US
Airways will have shed more than 320 daily flights at Pittsburgh
International Airport since 9/11, leaving it with 221.
Talks Resume Between United, Machinists
Contract talks resumed Tuesday between United Airlines and its
machinists’ union, the last employee group without an agreement on
a long-term deal at the nation’s No. 2 carrier, the Associated
Press reported. The two sides are working against a deadline of May 31,
when an interim contract for the 20,000 ramp workers, food service
employees and customer-service agents expires. That also is the date a
bankruptcy judge has set to rule on United’s motion to break the
machinists’ contract, imposing terms unilaterally if there is no
agreement. Negotiators for United and the International Association of
Machinists and Aerospace Workers held discussions by telephone before
sitting down for scheduled face-to-face talks later at an undisclosed
location, the IAM said, AP reported. It was their first meeting since
last week, when three days of marathon talks failed to settle remaining
differences before the end of a bankruptcy court trial on United’s
bid to terminate the contract. Judge Eugene Wedoff could have ruled on
the motion Friday, but gave the sides until the end of the month to work
out a contract. The machinists’ union has threatened a strike if
the contract is abrogated.
U.S. Prosecutors Say Ebbers Shouldn’t Get New Trial
Prosecutors said on Tuesday that former WorldCom Inc. CEO Bernard
Ebbers should not get a new trial, arguing the court acted properly in
refusing to force the government to grant immunity to three prospective
defense witnesses, Reuters reported. Ebbers asked for a new trial after
he was convicted in March of orchestrating an $11 billion accounting
fraud that drove WorldCom into bankruptcy. He is set to be sentenced on
June 13 and faces up to 85 years in prison.
GM Debt Downgraded to ‘Junk’ by Second Rating
Agency
Fitch Ratings on Tuesday cut General Motors Corp.’s debt
ratings to “junk,” becoming the second agency to rate the
automaker below investment grade as high gasoline prices erode its Sport
Utility Vehicle sales, Reuters reported. The downgrade follows a similar
move by Standard & Poor’s on May 5 and will cement GM’s
status as a junk credit, raising borrowing costs and limiting its
options for raising funds.
Western Water Files Bankruptcy
Western Water Co. filed chapter 11 bankruptcy on Tuesday and said it
does not expect to file its annual report on time, the East Bay Business
Times reported. In a Securities and Exchange Commission filing, the
Point Richmond–based company, which manages, develops, sells and
leases water and water rights in the western United States, said it
intends to continue to operate the business. The company filed its
voluntary petition in the United State Bankruptcy Court for the Northern
District of California in Oakland.