Democrats Say Nominee Will Be Hard to Defeat
The White House and its allies opened their campaign to confirm Judge John G. Roberts Jr. to the Supreme Court with a mix of persuasion and pressure yesterday as Senate Democrats plotted strategy for responding to a nomination they conceded could be hard to defeat, the Washington Post reported today. Several liberal interest groups, nevertheless, have begun mobilizing opposition to Roberts. Read the full story.
Grassley Pension Proposal to Use Yield Curve, Aid Airlines
The pension bill that Senate Finance Chairman Charles Grassley (R-Iowa) will introduce tomorrow will include elements of administration proposals such as the use of a "yield curve" formula for calculating how much companies must contribute to their pension plans, CongressDaily reported. Under the administration proposal, the use of that formula would result in higher pension payments to the Pension Benefit Guaranty Corp. (PBGC). The bill also would permit companies to offer their employees investment advice to help manage their retirement savings, but unlike the House version approved by the House Education and the Workforce Committee, it would not allow the same company to offer both investment advice and investments to workers. The Senate bill also includes a package of post-Enron changes that Grassley previously introduced aimed at ensuring that employees can diversify their 401(k) plans. The staff said the bill will contain provisions aimed at giving relief to struggling airlines, but details of those provisions were not available.
Separately, Federal Reserve Chairman Alan Greenspan said today at a Senate Banking Committee hearing that any more moves by companies to dump troubled pension plans on the PBGC would be troubling but should not threaten the economy, the Associated Press reported. The Fed chief was asked by Sen. Jim Bunning (R-Ky.) what the impact on the economy would be if more companies were to dump their pension plans on the PBGC, which is running a record deficit of $20 billion. An additional burden for the PBGC "clearly is negative," Greenspan told Bunning. Greenspan added, however, that he did not foresee the pension system's financial problems threatening the health of the economy at this point.
Lawyers Face New Challenges on Asbestos
Plaintiffs' lawyers, long accustomed to public criticism and lawmakers' wrath, now face a new and more dangerous adversary in federal prosecutors, the New York Times reported yesterday. The latest evidence that the government may be increasingly willing to pursue these lawyers comes in the bankruptcy of a company overwhelmed by asbestos claims. Recently filed court documents show that federal prosecutors in Manhattan may have begun to investigate the conduct of three law firms: Baron & Budd of Dallas; Ness, Motley, Loadholt, Richardson & Poole of Mount Pleasant, S.C. (a law firm in the process of disbanding); and Weitz & Luxenberg of New York.
The documents -- which surfaced in the bankruptcy case of G-1 Holdings, formerly the GAF Corp., a manufacturer of roofing material -- show that lawyers for G-1 have met with prosecutors from the U.S. Attorney's Office in Manhattan in recent months. The documents also show that the company's lawyers have turned over records of extensive interviews with former employees of the three plaintiffs' firms in which some employees described coaching potential claimants and noted efforts to influence doctors' diagnoses.
The investigation is potentially explosive because asbestos litigation has been a hugely costly problem for companies and an almost inconceivably profitable business for plaintiffs' lawyers. About 730,000 people have filed claims for asbestos-related injuries, costing a total of $70 billion as of 2002, according to the RAND Corp., which estimates that a little less than a third of the total went to plaintiffs' lawyers. And since 1976, asbestos liability has contributed to the bankruptcy of more than 70 companies, including Bethlehem Steel, Owens Corning and W.R. Grace, the Times reported.
Consumer Spending Outlook Dampens as Back-To-School Season Approaches
The rising tax burden and continued slowdown in home price growth will put pressure on U.S. consumer spending during the upcoming back-to-school retail sales season, according to Deloitte Research’s Leading Index of Consumer Spending. Federal tax revenues rose 32.3 percent over the past 12 months, resulting in a decrease in 2005 budget deficit estimates while straining consumer purchasing power. “The improvement in tax revenues points to a stronger economy but puts a lid on consumer spending growth,” says Carl Steidtmann, chief economist of Deloitte Research and author of the monthly index. “Likewise, the dramatic slowdown in home price appreciation in recent months should reduce concern over a housing bubble, but weakens one of the most important drivers of consumer spending. As the economy becomes more self-sustaining, the future direction of consumer spending will increasingly depend on the strength of the labor market. Therefore, retailers should remain cautious as the back-to-school season approaches,” continued Steidtmann, according to the report.
The index, comprising four components -- tax burden, initial unemployment claims, real wages and real home prices – fell in June to 3.81 percent, from a downwardly revised gain of 3.95 percent in May.
Donít Miss "Best of New York" AUDIOCONFERENCE
How do you put an insolvent chapter 11 debtor to rest? What are your alternatives if you cannot confirm a “normal” plan? Find out by participating in ABI’s “Best of New York” audioconference at 1:00 p.m. on Aug. 31, 2005.
This audioconference will explore both traditional and non-traditional ideas including case dismissal, entry of a “bifurcation order,” a “virtual” chapter 7 proceeding in the chapter 11 proceeding, taking a “shot” at operating an administratively insolvent chapter 11 proceeding without a bifurcation order, and confirmation of a plan for an administratively insolvent estate. The program features Judge Stuart M. Bernstein and attorneys Scott L. Hazan, Andrew A. Kress, Deirdre A. Martini and Joseph Samet.
Register online today!
Register Now for ABI's New Investment Banking Program
In an exciting new format and location, the 2005 Investment Banking Program, held Sept. 8-9 at the Four Seasons Hotel in Las Vegas, will offer a unique approach to understanding the role of investment bankers in insolvency and restructuring. The case study will dramatize the many perspectives of parties-in-interest as they examine strategic alternatives and seek the highest value for an insolvent company. Leaders in the industry will play the role of the major constituents as they work through the case study in this day-long program. Register before July 23 and save $50!
Register online today!
ABI World Tutorial Highlights Search Engine
A new online tutorial focuses on the capability of ABI’s search engine. The tutorial features a visual demonstration of how to use the online search engine and locate documents quickly and easily on a particular bankruptcy topic within the thousands of articles, reports, publications, court documents and many other sources available at the ABI World web site. This is the third in a series of tutorials that highlight the many resources and services available at ABI World.
Latest Job Postings at ABI Career Center
Check out the ABI
Career Center. The Center is a one-stop site for job seekers and employers
in the insolvency community. Career Center resources are available free
to both employers and job seekers. New positions are featured daily. The
latest listings include: