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January 31, 2005
Senate to Hold Hearing on Asbestos on Wednesday
Senate Judiciary Chairman Arlen Specter (R–Pa.) is planning
this week to discuss one of the more contentious issues complicating
negotiations over a proposed asbestos bill, CongressDaily
reported. The bill would create a trust fund to compensate victims of
asbestos-related illnesses, and disagreement has focused on how to
compensate victims exposed to both asbestos and silicon dusts. Insurers
and defendant companies have argued that the bill should distinguish
between asbestos and silicon injuries, fearing victims might be paid
twice. During a Wednesday hearing, Specter will hear from stakeholder
groups about how to resolve the issue, the newswire reported.
Senate Judiciary to Mark Up Class Action Legislation on
Thursday
The Senate Judiciary Committee is scheduled to meet on Thursday to
mark up a bipartisan bill to overhaul the rules for class-action
lawsuits, CongressDaily reported. Majority Leader Bill
Frist (R–Tenn.) has said it will be the first bill to move to the
floor after the Senate completes action on the president’s Cabinet
nominations. The bill would move many class-action lawsuits from state
courts to federal courts, where more strict rules would govern the
cases.
The U.S. Chamber of Commerce and other supporters of the bill contend
the current class-action system mainly benefits trial lawyers and is
unfair to defendant companies. But opponents, including trial lawyers
and a coalition of consumer, environmental and civil rights groups,
argue the bill would make it more difficult for potential plaintiffs to
seek redress against corporate wrongdoers. The legislation is identical
to last year’s compromise class-action bill, which had the support
of more than 60 senators, but stalled after Republican and Democratic
leaders could not agree on unrelated amendments, the newswire
reported.
Federal Reserve Is Expected to Continue Raising Rates
Notwithstanding new evidence released on Friday that economic growth
has slowed in recent months, the Federal Reserve appears poised to
continue raising interest rates for most if not all of this year, the
New York Times reported. Analysts almost unanimously
predict that the Fed will increase rates on Wednesday by another
quarter-point, to 2.5 percent, and most expect the central bank to
repeat past statements about raising rates at a “measured”
pace, the newspaper reported.
Personal Incomes Jump on Microsoft Dividend
The personal income of Americans went up during December in its
biggest increase ever, elevated by the payment of a special dividend to
shareholders by Microsoft Corp., the online Wall Street
Journal reported. Personal income increased 3.7 percent, after
rising a revised 0.4 percent in November, the Commerce Department said
today. Income was originally seen going up 0.3 percent in November.
Personal consumption rose 0.8 percent, after increasing a revised 0.4
percent. Spending was initially seen going up 0.2 percent in
November.
UAL Mechanics Reject Labor Deal
The union representing mechanics at bankrupt United Airlines on
Friday said its members overwhelmingly rejected proposed wage and
benefit cuts and voted to call a strike if the court alters the current
contract, Reuters reported. The Aircraft Mechanics Fraternal Association
said in a statement that members rejected a tentative agreement that
would have reduced their wages and benefits. The rejection further
complicates in the carrier’s plans to exit bankruptcy. Its members
also voted in favor of calling for a labor strike if the court changes
the conditions of the existing labor agreement, reached in 2003, which
already contains concessions, the newswire reported. United, a unit of
UAL Corp., said it would try to terminate the mechanics’ current
labor contract. The No. 2 U.S. carrier, which has been under chapter 11
protection since December 2002, has said it needs an additional $725
million in annual labor savings to exit bankruptcy. Labor groups have
already approved $2.56 billion in concessions to help the carrier
restructure.
Kaiser Aluminum Seeks to Resolve Injury Claims
Houston-based Kaiser Aluminum, which is under chapter 11 bankruptcy
protection, on Friday filed a proposal to resolve personal injury claims
and demands, Reuters reported. The proposal, filed with the U.S.
Bankruptcy Court in Delaware, is between Kaiser and other parties
concerning the plan of reorganization the company expects to file within
the next several months. It is subject to the approval of lenders. Among
other provisions, Kaiser would contribute $13 million to a trust that
will assume the liability for covered personal injury claims.
DLJ Files $26 Million Claim in Trump Hotels Bankruptcy Case
A would-be savior whose deal to help rescue Trump Hotels & Casino
Resorts fell apart last year is now attempting to block the casino
company’s chapter 11 bankruptcy reorganization, claiming it is
owed $26 million, the Miami Herald reported. DLJ Merchant
Banking Partners III, which unsuccessfully negotiated a $400 million
bailout for the cash-strapped casino company in August, says its
contract contained a clause providing that if Trump reached an
alternative deal with someone else by Dec. 1, 2004, it would have to pay
a $25 million transaction fee to DLJ. Read the full story at
href='http://www.miami.com/mld/miamiherald/business/national/10759099.htm'>www.miami.com/mld/miamiherald/business/national/10759099.htm.
Adelphia Board’s Choices Complicate a Bidding Process
As bids for Adelphia’s cable systems come due today, a joint
bid from Time Warner and Comcast remains the one to beat, the New
York Times reported. But investors and analysts are warning that
Time Warner and Comcast could be overpaying at the $17.5 billion asking
price. And Adelphia is weighing other options, including selling pieces
to financial buyers or simply keeping its assets and emerging from
bankruptcy proceedings, the newspaper reported.
WorldCom Ex-Controller Says Ebbers Cited His Own Difficulties
The former controller of WorldCom Inc. testified on Friday that
Bernard Ebbers exhorted finance managers in a 2001 meeting to cut costs
and turn around the business, saying his personal wealth was at stake,
the online Wall Street Journal reported. “He said,
‘I’m sure all of you guys are aware of my personal
situation,’” David Myers said on his second day of testimony
in the accounting fraud trial of Ebbers in U.S. District Court in
Manhattan, the online newspaper reported.