April 9,
2004
Senate Passes Pension
Relief
The Senate sent to the president yesterday a pension bill conference
report that could save businesses $80 billion in pension payments over
the next two years, CongressDaily reported. The proposal,
backed by the White House, passed 78-19 and gave businesses a major
legislative victory. Bill supporters insisted that the bill would
preserve jobs and pensions for companies that would face bankruptcy if
forced to make large pension payments due April 15. 'Jobs that would be
lost will not be lost with this legislation,' said Senate Health,
Education, Labor and Pensions Chairman Judd Gregg (R-N.H.).
Democrats said they would have
preferred a conference report that included Senate-passed provisions
helping multi-employer pension plans, which are used in traditionally
unionized industries such as trucking and construction. Democrats,
however, could not reject the aid the bill provides companies that
sponsor traditional pension plans. 'At the end of the day, there are
urgent needs among those that the bill does cover that I could not turn
my back on,' said Sen. Kent Conrad (D-N.D), the newswire
reported.
Enron Gets Court OK Of
Auction Plans For MEGS LLC Unit
Enron Corp. received bankruptcy
court approval of bidding procedures to auction its MEGS LLC unit. A
court order signed yesterday by Judge Arthur Gonzalez of the U.S.
Bankruptcy Court in Manhattan also approved a breakup fee of 5 percent
of the purchase value for the lead bidder on the sale. Enron, which has
been in bankruptcy protection since 2001, solicited bids from about 40
potential buyers for MEGS, which owns about 29 miles of pipeline running
between the Mississippi Canyon and Marathon Oil Corp.'s production
platform in the Gulf of Mexico's South Pass, according to court papers
filed in March. MEGS isn't in bankruptcy protection.
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Air Canada Creditor
Protection Extended
An Ontario judge extended Air
Canada's court protection from creditors to May 21 yesterday and
endorsed a bigger role for monitor Ernst & Young after the airline's
chief restructuring officer resigned, Reuters reported. The insolvent
airline had faced an April 15 deadline to emerge from bankruptcy
protection, but sought an extension after Hong Kong magnate Victor Li
withdrew his $650 million ($490 million) rescue offer. Union officials
and creditors attending the court hearing in Toronto said the extension
was a positive development needed by the airline.
Economists Are More Hopeful About the Outlook
for Hiring
Economists lifted their forecasts
for job creation but not enough to change the outlook for unemployment
or suggest the economy is improving, the online Wall
Street Journal reported. The 55 economists who participated in the
latest Wall Street Journal Online economic-forecasting survey,
on average, expect the economy to add 177,000 jobs each month over the
coming 12 months. Two months ago, the group predicted growth of 155,000
a month through Election Day. Economists, on the whole, don't believe
the pickup in payrolls will spur much additional economic activity, the
newspaper reported.
Bankruptcy Examiner Files Report On DVI
Finances
There are facts supporting
many of the suspicions of wrongdoing at DVI Inc., according to a report
filed on Thursday by the accounting expert named to investigate
allegations of mismanagement and financial irregularities at the medical
finance firm. R. Todd Neilson filed his report with the bankruptcy court
overseeing DVI's chapter 11 bankruptcy case in Wilmington, Del. Neilson
found DVI 'engaged in a number of purposeful manipulations' of
guidelines for securitization deals that were a major source of the
company's income. The firm, operating in the suburbs of Philadelphia,
became 'addicted' to the cash flow from the funding vehicles, the
examiner said.
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Brakes Come Off
Mechanics' Asbestos Suits
Asbestos-related suits by
automobile brake mechanics are surging -- from 25,000 against Ford Motor
Co. in February 2003, to 41,500 a year later, reported the National
Law Journal. Lawyers say the suits will keep growing as the
latent effects of asbestos manifest themselves and more mechanics
fall ill. And manufacturers besides Ford are expected to face suits as
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American Air Fuel Burden Spurs Cost-cut Quest
American Airlines faces possibly $400 million in
added fuel expenses this year due to soaring oil prices, highlighting an
urgent need for more cost cutting companywide, a top executive said on
Thursday, Reuters reported. The airline was on the brink of bankruptcy
about a year ago but it reached last-minute concession deals with its
major labor unions, resulting in a substantial drop in its unit costs by
the end of last year.
But despite that, the company faces yet another
unforeseen fiscal challenge as it is minimally hedged on its jet fuel
purchases in the second half of this year, according to CFO James
Beer.
Reebok Buys Skate Maker Hockey Co.
Reebok International Ltd. said on Thursday it will buy
Hockey Co. Holdings Inc., Canada's last big independent hockey equipment
and apparel maker, for $204 million plus debt, Reuters reported. Canton,
Mass.-based Reebok will pay C$21.25 in cash for each share of Hockey Co.
Reebok said it will also assume about $125 million in debt and that the
boards of directors of both companies had unanimously approved the deal.
Hockey Co. filed for chapter 11 bankruptcy protection in the United
States in 1995 after losses at its toy and fitness
businesses.
Penthouse Strikes Deal To Ease
Reorganization
Penthouse International said on
Wednesday it has agreed with a principal stockholder to a deal covering
the sale of preferred stock that clears a hurdle in its bankruptcy
reorganization, Reuters reported. Penthouse said stockholder Luis
Enrique Molina will acquire 75 percent of the Class A preferred stock
shares of Penthouse unit General Media Inc. 'This transaction paves the
way and significantly enhances the ability of Penthouse and Molina to
obtain confirmation of our plan of reorganization,' Claude Bertin,
executive vice president of Penthouse, said, the newswire
reported.
Kaiser To Sell Alpart Stake
For $215 Million
Kaiser Aluminum Corp. on
Wednesday said it will sell its 65 percent interest in Jamaican alumina
refinery joint venture Alpart to Rual Trade Limited, a member of RUSAL
Group, for $215 million, Reuters reported. The auction will be on April
20, said Kaiser, which filed for chapter 11 bankruptcy protection in
2002.
MCI Asks Court To
Postpone Embratel Sale Hearing
MCI has asked the U.S. Bankruptcy Court handling the
sale of its controlling stake in Brazil's Embratel to postpone a hearing
until April 27, from the scheduled date of April 13, BNamericas.com
reported. A court spokesperson could not confirm whether the court has
accepted the request or not, but its web site, updated on Thursday,
still had the hearing scheduled for April 13.
On Wednesday, the Calais Participações
consortium modified its original US$550mn bid to say it will pay MCI
US$360mn even if the sale is not authorized by Brazilian authorities
before July 8, 2005.
TelCove Exits
Bankruptcy
Canonsburg, Pa.-based TelCove, a communications
provider previously known as Adelphia Business Solutions, has emerged
from chapter 11 bankruptcy, the Triangle
Business Journal reported. The Business Journal reported in
March that a U.S. Bankruptcy Court had approved settlement agreements
between TelCove and Adelphia Communications Corp. that would allow
TelCove to exit bankruptcy in early April.
TelCove's CFO Ed Babcock said in March that the
settlements, which include a $60 million cash payment by Denver,
Colo.-based Adelphia to TelCove, could lead to growth in TelCove's
Raleigh office. TelCove said Wednesday that it will operate as a private
company that is majority owned by Bay Harbour Management L.C.
Americal Files For
Bankruptcy Protection
Americal Corp., the maker of Peds brand socks and
hosiery, has filed for chapter 11 bankruptcy protection and plans to
sells its Peds brand to an auction bidder within the next 60 to 90 says,
the Triangle Business Journal
reported. The company has reached an agreement 'in principle' to sell
the Peds brand to a stalking horse bidder. The company told employees in
March that it had an impending debt payoff due to competitor Sara Lee
Corp. from a failed joint venture project the companies had invested in
the 1980s. Americal has obtained financial commitments to continue
operations. It expects to emerge from bankruptcy shortly after the sale
of the Peds brand. The bankruptcy papers were filed April 7 with the
U.S. Bankruptcy Court for the Eastern District of North Carolina in
Raleigh.