September 13
House Subcommittee to Hold Hearing on Consumer Financial
Services
The House Financial Services Capital Markets Subcommittee has
scheduled a hearing Tuesday on how best to improve transparency and
competition among credit rating agencies. The Financial Institutions
Subcommittee plans to hear testimony Wednesday on various financial
services issues from the perspective of consumers.
US Airways Tries to Reorganize for a Second Time
US Airways filed for bankruptcy protection yesterday for a second
time after workers refused to grant $800 million in cuts it had sought
to reduce its costs to the level of low-fare airlines, the New
York Times reported. The airline expressed confidence yesterday
that it could reorganize under chapter 11, but it is hobbled by
limitations on its ability to find financing. Over time US Airways may
be forced to end service to some of the nearly three dozen cities where
it is the only carrier. And if it fails to cut costs adequately,
especially by winning concessions from workers, it may not survive,
analysts said, the newspaper reported.
Southern Union Says Court OKs Enron Pipelines Sale
Natural gas company Southern Union Co. on Friday said a
U.S.Bankruptcy Court in New York approved its acquisition of Enron
Corp.’s U.S. pipelines for $2.45 billion, Reuters reported.
Southern Union and partner General Electric Co. won the natural gas
pipelines in an auction hosted by the bankruptcy court last week. The
final price represented a $100 million premium over the partners’
original bid of $2.35 billion for the pipelines, which were bundled into
CrossCountry Energy LLC. Enron rejected two other bids from the auction,
held last Wednesday at the bankruptcy court.
Delta
Creditors Refuse Delta’s Bid to Change Debt
Delta Air Lines Inc. on Friday said a group of bond holders refused
to change the terms of their securities, adding to the problems the
airline faces as it struggles to avoid bankruptcy, Reuters reported.
Shares and bonds of the carrier dropped on the news as investors feared
the company would have more difficulty than previously expected in
negotiating more favorable terms for its $20 billion of debt. Delta
earlier this week unveiled plans to cut up to 7,000 jobs and trim costs
by $5 billion a year by 2006. The airline is expected to gain at least a
portion of that savings from renegotiating the terms of its debt. Some
investors will likely be asked to trade their bonds for new securities
with lower face amounts, lower coupons, and longer maturities, analysts
said, the newswire reported.
Brandes Investment Holds 11.7 Percent Stake in Delta
Asset manager Brandes Investment Partners said today it has taken an
11.7 percent stake in Delta Air Lines Inc. as the troubled airline
struggles to avoid bankruptcy, Reuters reported. According to a filing
with the U.S. Securities and Exchange Commission (SEC), Brandes owned
14.7 million shares of Delta’s common stock as of Sept. 10. The
stake was reported in a “passive” filing with the SEC, which
does not require an investor to disclose details about when the shares
were bought or at what price. Brandes specializes in picking stocks it
thinks are trading below their true worth.
Bankruptcy Suit Settled
Litigation involving New Prime Inc. that rose from the bankruptcy of
Rocor Transportation has been settled, according to Nicholas Franke, a
bankruptcy attorney with Spencer Fane Britt & Browne LLP, the firm
announced in a press release. The litigation involved an $800,000 suit
against New Prime Inc. by Rocin Liquidation Estate, the successor to
Rocor Transportation, and a $1.2 million counter suit by New Prime
against Rocin. Rocor Transportation, the largest trucking company in
Oklahoma, filed for chapter 11 bankruptcy in August 2002. Subsequently,
the firm’s assets, valued at $17 million, were purchased by New
Prime Inc.of Springfield, Mo. New Prime did not make the final payment
due in the asset sale to Rocin Liquidation Estate and stopped paying
rent to Rocin for a Rocor terminal.
CKE Restaurants Falls
CKE Restaurants Inc. shares were off 7 percent today before the
opening bell, after the company that runs the Carl’s Jr. and
Hardee’s hamburger chains posted a second-quarter net loss,
Reuters reported. Shares of CKE fell to $11.50 on the INET electronic
brokerage system, down from their New York Stock Exchange close of
$12.38.
Unions Scramble Before Alitalia Deadline
Alitalia unions tried today to soften the blow from 5,000 planned job
cuts, just two days ahead of the Italian airline’s deadline to
either bow to restructuring or brace for bankruptcy, Reuters reported.
Pilots appeared to advance toward an accord, fueling market optimism
that Alitalia could win a new lease on life and sending its share price
4.4 percent higher in morning trade. Other labour leaders meeting today
were expected to demand help from Prime Minister Silvio Berlusconi,
union sources said, as political pressure piled on the government to
save the state-controlled flag carrier, the newswire reported.