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Asbestos Talks 'Productive,' On Pace For Recess Drafting
Negotiations on asbestos litigation reform were proceeding yesterday,
with sources reporting that Senate Judiciary Chairman Orrin Hatch
(R-Utah) remains determined to finish assembling private sector input on
a bill by the end of this week, CongressDaily reported. Hatch has
said formal drafting will commence during the April recess. He remains
intent on crafting a bill that would channel asbestos claims to a
specialized federal court and use medical criteria to determine a
claimant's eligibility for an award, according to the newswire. The bill
would contain an administrative component, along the lines of a trust
fund proposed by some of the defendant companies, which could be
administered by special commissions, reported the newswire. Meanwhile,
Rep. Calvin Dooley (D-Calif.) is poised to introduce his own asbestos
litigation reform bill based on medical criteria on Thursday. Dooley's
bill will represent an alternative to a separate reform bill introduced
last week by Rep. Chris Cannon (R-Utah), reported the newswire.
Philip Morris Asks Judge to Cut Bond in Illinois Case
Philip Morris USA asked an Illinois judge to reconsider his order
requiring the company to post a $12 billion bond to appeal his verdict,
Bloomberg News reported. Lawyers for the Altria Group Inc. unit were
back in court on Tuesday before Judge Nicholas Byron, who ordered Philip
Morris to pay $10.1 billion in damages for deceiving smokers by
advertising 'light'' cigarettes as safer than ordinary ones. The company
wants Judge Byron to reduce the amount of the appeal bond. The judge
said he may take testimony from witnesses later this week before
deciding, reported the newswire.
Foster Wheeler Unit Seeks Bankruptcy Court Protection
Tray Inc., a unit of energy industry construction company Foster Wheeler
Ltd.,
sought bankruptcy protection from creditors in the face of a $54.3
million patent-infringement judgment, Bloomberg News reported. The
company, in papers filed in the U.S. Bankruptcy Court in Delaware on
Monday, listed less than $50 million in assets and less than $10 million
in debts. According to court papers, Clinton, N.J.-based Tray lost a
patent verdict last year in a lawsuit over chemical distillation
technology by a Koch Industries Inc. engineering unit. 'The judgment is
on appeal,'' Tray officials said in court papers, which also listed
'potential indemnification claims'' of $31.2 million sought by creditors
Gilbert Chen and Jim Shieh, reported the newswire.
WorldCom Gets OK To Enter Discount Plans With SBC
Communications
A bankruptcy judge on Tuesday authorized WorldCom Inc. to enter discount
pricing plans with SBC Communications Inc. that could save WorldCom $360
million over 60 months, according to a court order obtained by Dow Jones
Newswires. Judge Arthur J. Gonzalez of the U.S. Bankruptcy Court in
Manhattan also signed orders granting other WorldCom requests at a
hearing on Tuesday. WorldCom estimated that a discount plan with the
Southwestern Bell operating units will reduce monthly charges for the
circuits by $264 million over the 60-month term of the plan. The
bankruptcy court is scheduled to consider the extent of the discount
plans at a hearing on April 15, reported the newswire.
Ex-HealthSouth Employee Charged With Fraud, U.S. Attorney
Says
U.S. prosecutors have charged a ninth former or current HealthSouth
Corp. employee
as being part of a conspiracy to inflate company earnings by as much as
$2.5 billion, U.S. Attorney Alice Martin said in a press release,
Bloomberg News reported Eight current or former executives had
previously pleaded guilty to helping inflate company earnings. Some
implicated Richard M. Scrushy as the conspiracy's mastermind. He was
fired as HealthSouth's chief executive after the U.S. Securities and
Exchange Commission accused him and the company of accounting fraud on
March 19, reported the newswire.
Davel Communications Got $4.9 Million For Receivable Sale From
MCI
Davel Communications Inc. said it received $4.9 million on March 10 from
the sale of a portion of the accounts receivable bankruptcy claim for
'dial-around' compensation due from WorldCom Inc.'s MCI unit, Dow Jones
reported. Of the proceeds, roughly $1 million is for amounts from before
WorldCom filed for bankruptcy that were due for the second and third
quarters of 2002, according to an annual report filed on Friday with the
Securities and Exchange Commission. The company said it used around $3
million of those funds to pay part of the balance due under its senior
credit facility and plans to use $1 million, which is being held in
escrow by its senior lenders, to fund business initiatives, reported the
newswire.
Conseco Debt Holders Seek To File Alternate Reorganization
A group of Conseco Inc. preferred debt holders have asked a bankruptcy
judge for permission to file an alternate plan of reorganization, saying
that the company underestimated the value of its business in the
existing plan, Dow Jones reported. In court documents made available on
Tuesday, the group of preferred debt holders, which purport to represent
about $2.1 billion in claims in Conseco's bankruptcy case, said that
whether the current plan can be confirmed 'is open to serious question.'
The group also asked Judge Carol A. Doyle of the U.S. Bankruptcy Court
for the Northern District of Illinois to modify the 180-day exclusivity
period on the plan, which will expire on June 15, 2003, to allow time
for its alternate plan to be considered. The court has set May 28 as the
date for a confirmation hearing on the existing plan, reported the
newswire. A hearing on the matter has been set for April 14.
RoweCom Gets Court Approval To Sell Operations To Ebsco
RoweCom Inc. , a unit of bankrupt software company Divine Inc., has
received approval from the U.S. Bankruptcy Court in Boston to sell its
assets to Ebsco Industries Inc., an attorney for the creditors'
committee in the case said. Christopher Panos, an attorney with Craig
& Macauley P.C. in Boston, said he expects the agreement to be
completed on Tuesday, reported the newswire.
DirecTV Latin America Sees $259 Million DIP Loan Use Until Feb
'04
DirecTV Latin America LLC said it expects to draw $258.8 million on its
proposed $300 million debtor-in-possession loan agreement until February
2004, Dow Jones reported. The company said it expects negative net cash
flow of $259.4 million for the same period, according to cash-flow
projections filed with the U.S. Bankruptcy Court in Wilmington, Del.,
and obtained by Dow Jones Newswires on Monday. DirecTV Latin America,
which filed for bankruptcy on March 18, has interim authority to borrow
up to $30 million under a debtor-in-possession financing agreement with
Hughes Electronics Corp. The company will seek final approval of the
$300 million DIP loan with Hughes on April 14, according to prior court
filings, reported the newswire.
Employee Group Buys Spectif Unit From Peregrine Systems
A group of Toronto-based employees of Peregrine Systems Inc. has
purchased Peregrine's Spectif Network Management Division for an
undisclosed sum, Dow Jones reported. In a news release, the newly-named
TSB Solutions Inc. said the purchase includes the Spectif product line,
customer base and assets of the former TSB International Inc., a
Toronto-based telecommunications management company that was purchased
and merged with Peregrine Systems in 2000. As reported, Peregrine filed
for bankruptcy on Sept. 22, 2002. In March 2003, the company filed an
amended plan of bankruptcy reorganization that still hasn't gained the
approval of bondholders, despite provisions that offer flexible payment
options and a stake in the reorganized company, reported the
newswire.
Recoton, Audio Speaker Maker, Files for Bankruptcy Protection
Recoton Corp. filed for bankruptcy protection and said it will sell its
remaining businesses and assets to pay off debt, Bloomberg News
reported. The company said it has received debtor-in-possession
financing from its existing lenders, led by Heller Financial Inc. and
General Electric Capital Corp, Recoton said in a statement distributed
by Business Wire. Terms of the financing require Recoton to sell its
remaining assets to pay off its debt. The company reported a loss of
$92.3 million for the first nine months of 2002 in its most recent
filing with the U.S. Securities and Exchange Commission, reported the
newswire. The chapter 11 filing was made in U.S. Bankruptcy Court in New
York.
Cannondale Wins Bankruptcy Court Approval for Asset Sale
Cannondale Corp. won bankruptcy court approval to sell substantially all
its assets to Pegasus Capital LLP, a private-equity firm that is its
largest secured creditor, Bloomberg News reported. Pegasus expects to
complete the purchase this month, Cannondale said in a statement
distributed by PR Newswire. Bethel, Conn.-based Cannondale filed for
chapter 11 protection from creditors on Jan. 29, reported the
newswire.
Fortel Signs Pact To Sell Substantially All Of Its Assets
Fortel Inc. said it has signed an asset-purchase agreement with
Divestiture Management Corp. to sell substantially all of its assets,
according to a Form 8-K filed on Tuesday with the Securities and
Exchange Commission, Dow Jones reported. Fortel has been under chapter
11 protection since March 18 in the U.S. Bankruptcy Court for the
Northern District of California. As reported, the sale to Divestiture
Management for about $1.3 million in cash and the assumption of about
$8.6 million in debts was part of the company's rationale for entering
bankruptcy, reported the newswire.
ENRON
Enron Officers' Pay Shows Need to Tighten Laws, Grassley
Says
Congress should tighten laws that let Enron executives shield their
salaries from taxes
without risk, the chairman of the Senate Finance Committee said,
Bloomberg News reported. Sen. Charles Grassley (R-Iowa) cited a report
on Enron Corp., whose top 200 executives avoided taxes by deferring $150
million in pay in the five years preceding the energy trader's
bankruptcy, as evidence of the need for action. Grassley said his panel
will consider bills to allow the Treasury to better oversee salary plans
and force executives to include bonuses and 'excessive compensation'' in
the assets of
bankrupt firms, reported the newswire.
Enron Examiner Finds No Fraud In Sweep Of Cash From
Unit
A bankruptcy-court examiner found no fraud in the cash transfers between
Enron Corp. and its now-defunct engineering subsidiary, despite
allegations that the former energy trader improperly swept up funds from
the unit, Dow Jones reported. Atlanta-based lawyer Neal Batson concluded
in a report released on Monday that he found 'no evidence of fraud,
malfeasance or other wrongdoing,' either by the Enron subsidiary,
National Energy Production Corp., known as Nepco, or by Enron in
connection with the company's centralized cash-management system,
reported the newswire.
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