May 13, 2004
Pension Stakeholders
Agree to Form Working Group
Pension experts, employer groups
and consumer advocates have agreed to form an informal working group to
find consensus on cash-balance pension plans,
CongressDaily reported. The group met for the first time
yesterday to discuss the issue, according to a spokeswoman for Sen. Tom
Harkin (D-Iowa), and agreed to continue discussions throughout the
coming weeks. Cash-balance plans are intended to be more portable than
traditional pension plans, but lawmakers have been concerned that
employees have lost benefits when companies have switched from
traditional to cash-balance systems.
Meanwhile, the House Education
and the Workforce Committee and its Employer-Employee Relations
Subcommittee are planning to examine cash-balance plans as part of a
comprehensive pension overhaul bill the committee will draft. 'We plan
to pursue permanent solutions to preserve cash-balance pension plans as
a viable retirement security vehicle through a careful, deliberative
approach,' Committee Chairman John Boehner (R-Ohio) and Subcommittee
Chairman Sam Johnson (R-Texas) said in a joint statement, the newswire
reported.
Enron Employees to Get $85
Million in Partial Settlement
Former Enron employees who lost millions in retirement
money in the company's collapse would get $85 million in a partial
settlement of their lawsuit, attorneys said on Wednesday, the Associated
Press reported. Former directors agreed to pay $1.5 million to resolve a
related suit by the Labor Department. In a class-action suit, the
employees alleged that the energy company and its officers failed to
execute their duties in administering Enron's pension plan. The partial
settlement calls for the company employees who were trustees of the plan
to hand over an $85 million insurance policy that covered them against
liability. The partial settlement resolves the claims against Enron's
human resource staff and company directors, but not those against the
company itself, former Enron Chairman Kenneth Lay and former CEO
Jeffrey Skilling, the newswire reported.
Global Crossing Shares Rise As
Investor Buys Stake
Shares of Global Crossing Ltd.
rose 10 percent on Wednesday following news that Texas billionaire
Richard Rainwater had bought a 7.5 percent stake in the
telecommunications firm, Reuters reported. The shares had fallen more
than 40 percent since the company revealed an accounting problem last
month that threatened financing. According to a regulatory filing on
Monday, Rainwater began buying Global Crossing shares in March and
accelerated his purchases after the company's announcement of the
accounting investigation. Global Crossing emerged from bankruptcy in
December after Singapore Technologies Telemedia took a 61.5 percent
stake in the company for $450 million, the newswire reported.
Bank of America CEO
Comfortable with '04 View
Bank of America Corp. CEO
Kenneth Lewis on Wednesday said he is 'very confident and comfortable'
the bank will meet its 2004 profit forecast, though analysts say the
bank faces potential liability from lawsuits involving WorldCom Inc.,
Reuters reported. Lewis made his comments after Citigroup Inc. on Monday
said it will pay $2.65 billion to settle class-action claims that it hid
risks from holders and bonds and stock of WorldCom. It also said it
would boost litigation reserves by $6.7 billion. Analysts said these
actions raised the possibility that other banks facing WorldCom or other
class-action suits might face large payouts. New York Controller Alan
Hevesi said Bank of America and 16 other banks might owe $2.8 billion
more to WorldCom bondholders in light of the Citigroup settlement, the
newswire reported.
Wheeling Pittsburgh
Reports Narrower Loss
Steelmaker Wheeling Pittsburgh Corp., which emerged
from bankruptcy in August, said on Wednesday that its net loss narrowed
during the first quarter on improving prices for steel, Reuters
reported. The company reported a net loss for the first quarter of $6.6
million, or 70 cents a share, compared with $45.6 million a year
earlier. It said that the average selling price for steel shipped during
the quarter was $509 per ton, up from $437 in the fourth quarter. It
said it expects pricing to continue to be significantly higher in the
second quarter than in the first quarter, the newswire
reported.
Isle Of Capri Chicago Casino
Stopped By Illinois Attorney General
Illinois Attorney General Lisa Madigan on Tuesday said
she would stop Isle of Capri Casinos Inc. from building a Chicago-area
gambling hall, obstructing plans to close the state budget with
new casino money, Reuters reported. Madigan said Illinois would take
back the Emerald Casino license that Isle won in a controversial March
auction conducted by the state gaming board, although she admitted a
legal battle surrounding bankrupt Emerald could take years to resolve.
Madigan had said that Isle planned to build in a suburb of Chicago,
Rosemont, that appeared to have organized crime connections, the
newswire reported.
Halliburton May Sell KBR Units
After Bankruptcy
Halliburton Co. is expected to sell most of its
Kellogg, Brown & Root division, analysts and bankers say, once the
unit emerges from bankruptcy and the company solves its asbestos
problems, Reuters reported. The energy services company would attract a
higher stock price by shedding KBR construction and outsourcing
activities, which tend to have thin margins, according to those who
track the company. One Houston investment banker, who asked not to be
named, said Halliburton has long considered a KBR spin-off, but asbestos
litigation forced the company to delay any moves, the newswire
reported.
UAL Seeks Court Approval to
Extend DIP Loans Through Year-end
UAL Corp. is seeking bankruptcy
court permission to extend the maturity of its debtor-in-possession loan
agreements six months through Dec. 31 to ensure that it will have
funding in place during its chapter 11 reorganization. The proposed
amendments would also cut the interest rates of the loans, reduce the
total outstanding commitments and corresponding obligations of UAL, and
revise capital expenditures and covenants for earnings before interest,
taxes, depreciation, amortization and rent, according to court papers
filed Friday by the company. In court papers filed on Friday and
obtained on Tuesday by Dow Jones Newswires, UAL said the changes would
provide the United Airlines parent with enhanced operational and
financial flexibility that will, among other things, allow it to
decrease and manage its costs, and to manage its operations, much more
effectively.
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Spiegel Has Until
September to File Chapter 11 Plan
Catalog retailer Spiegel Inc.
received more time to file a turnaround plan, without the threat of
creditors pushing competing plans to reorganize the company. According
to an order by Judge Cornelius Blackshear of the U.S. Bankruptcy Court
in Manhattan on Tuesday, Spiegel has until Sept. 7 to file the chapter
11 plan. The deadline for the company to solicit creditor votes on the
plan was extended until Nov. 8, according to court papers. The extension
fulfilled Spiegel's request, filed in April, saying it needed the
additional four months to focus on the planned sale of its Eddie Bauer
unit before negotiating further with creditors.
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BEVsystems
International Inc. Granted Motion to Convert Case to Chapter
11
BEVsystems International Inc. announced in a press
release yesterday that the United States Bankruptcy Court for Middle
District of Florida granted its motion to convert the chapter 7
bankruptcy proceeding to a chapter 11 bankruptcy proceeding. Rand Gray,
CEO of the company, stated, 'This is expected good news for our company.
We can now move forward with our business objectives, restructure our
debt and concentrate on the sales and distribution of our product,'
according to the press release.
Defense at Adelphia
Trial Portrays Witness as a Liar
A defense lawyer began an attack yesterday against
the government's witness in the fraud trial of John Rigas and two of his
sons, depicting the witness as a self-described skilled liar whose
testimony was tainted, the New York
Times reported. The attack on the witness credibility,
which came in Federal District Court in Manhattan, was anticipated
because of his crucial role in the government's case against John Rigas,
Adelphia's founder, Timothy Rigas, Michael Rigas and Michael Mulcahey.
All four are charged with bank fraud, securities fraud and conspiracy in
connection with the financial collapse of Adelphia, which filed for
bankruptcy protection in 2002, the Times reported.
DT Industries Files For Bankruptcy
Industrial equipment maker DT
Industries Inc. today filed for chapter 11 bankruptcy protection, saying
the move would help preserve jobs and maintain its operating businesses,
Reuters reported. The Dayton, Ohio-based company said that subject to
approval of the bankruptcy court, it has plans in place to operate its
business during the course of the bankruptcy proceedings.
face='Times New Roman' size='3'>The company said it has agreed to sell
to Assembly and Test Worldwide Inc. substantially all of the assets of
its three subsidiaries and all of the issued and outstanding
capital stock of its DT Assembly & Test Europe GmbH subsidiary in
Germany, the newswire reported.