Copyright 2002 The Washington Post
The Washington
Post
May 23, 2002, Thursday, Final Edition
SECTION: FINANCIAL; Pg. E02
LENGTH: 1142 words
HEADLINE:
Bankruptcy Reform Snagged
BODY:
A
major bankruptcy overhaul bill stalled again when lawmakers trying to reconcile
Senate and House versions failed to agree on a provision banning
abortion protesters or other demonstrators from using
bankruptcy laws to avoid paying court-ordered fines. The two
major negotiators on the issue -- Sen. Charles E. Schumer (D-N.Y.), who favors
the provision, and Rep. Henry J. Hyde (R-Ill.), who does not -- will continue to
seek a compromise. But chances of a final agreement on the issue, the last
hurdle for the legislation, remain uncertain.
Freddie
Mac and other issuers of asset-backed securities will be allowed to keep some
obligations off their books under an exemption to new rules intended to restrict
the use of special-purpose entities like those that helped Enron mask much of
its debt. The Financial Accounting Standards Board is under pressure from
lawmakers and regulators to limit the use of special-purpose entities but was
concerned the rules may disrupt the asset-backed securities industry, FASB
Chairman Edmund L. Jenkins said.
Most major power wholesalers --
including El Paso, Dynegy, Duke Energy, Reliant, Mirant and Williams Cos. --
denied manipulating California's energy market in filings with federal
regulators who are investigating Enron's role in last year's crisis. About 150
power sellers had to tell the Federal Energy Regulatory Commission by yesterday
whether they used tactics similar to Enron's, once the biggest energy trader.
Enron memos show it created fake congestion on California's power lines to boost
profit and used other methods that might have inflated prices.
An Arthur
Andersen partner testified in the firm's obstruction-of-justice trial that he
warned colleague David B. Duncan to keep papers related to Enron on Oct. 31 in
case federal investigators asked for them -- after Duncan ripped a page off a
document and told him it was "another smoking gun" and the firm did not need it.
David Stulb said Duncan had a "deer-in-the-headlights quality." The same day,
Stulb said he told lawyer Nancy Temple that Duncan needed "guidance" because it
appeared he did not understand the consequences of getting rid of documents.
Duncan pleaded guilty last month to obstructing justice. The Andersen trial is
deep into its third week.
ImClone Systems said Samuel Waksal resigned as
president and chief executive. He is being succeeded in both posts by Harlan
Waksal, his brother. ImClone also said it and Bristol-Myers Squibb will begin
new human trials of ImClone's once highly touted cancer drug Erbitux in their
continued effort to win regulatory approval.
Qwest Communications
International's credit rating was cut to junk by Standard & Poor's. The
ratings agency said the western U.S. telephone company may not be able to fend
off its competition. It also cited a lack of investor confidence in management,
pending shareholder lawsuits and investigations into the company's accounting by
the Securities and Exchange Commission.
An Atlanta bankruptcy lawyer has
been appointed to investigate the web of transactions that led to Enron's
collapse and the accountants, law firms and banks that advised the energy
company. If U.S. Bankruptcy Court Judge Arthur Gonzalez approves the selection,
Neal Batson would receive sweeping powers to investigate Enron's special-purpose
entities, off-balance-sheet partnerships and accounting irregularities. Enron
filed the largest Chapter 11 case in history on Dec. 2.
Global Crossing
and its creditors were given more time by a bankruptcy judge to reach an
agreement with the two companies that have made a combined offer to buy the
ailing fiber-optic network operator. Global Crossing and its creditors were
still debating the value of the company's assets with the bidders, Hutchison
Whampoa and Singapore Technologies Telemedia, sources said. The deadline was
extended to tomorrow.
WorldCom, struggling to raise cash to pay its
debt, won a $ 1.5 billion loan after it agreed to make more frequent repayments,
people familiar with the matter said. WorldCom will announce details of the
terms today, said Brad Burns, a spokesman for the second-biggest long-distance
telephone company.
Microsoft said it issued a software patch to fix a
serious security flaw in its Windows operating system for corporate network
computers that could let a hacker delete data or change a computer system. The
company rated the flaw "critical," its highest risk rating, for computer
workstations running on Windows NT 4.0 and Windows 2000, according to a security
bulletin sent by e-mail.
The Department of Defense has bought the
independent version of Stars & Stripes, putting the rights to the veterans'
newspaper under a single owner for the first time since World War II.
The Energy Department announced a tougher efficiency standard for home
air conditioners, replacing a more ambitious regulation issued in the final
weeks of the Clinton administration. Under the new standard, manufacturers will
have to make central home air conditioners 20 percent more efficient beginning
in 2006.
Japan's finance minister indicated Japan sold its
currency, moving to stem a three-month, 7.4 percent rally against the dollar
that may erode earnings for exporters and prolong a recession. Japan's first
intervention in eight months was prompted by the yen's rally to a 5 1/2-month
high after a report suggested exports led the economy back to growth for the
first time in a year. Currency gains threaten to eat into profits of companies
such as Toyota and derail that recovery.
Argentina's economy minister
said the nation and the International Monetary Fund should be able to reach an
agreement by the end of next month to unlock badly needed new loans. Argentina
wants up to $ 9 billion in new IMF loans to help stabilize an economy that has
been rocked by a massive default on its foreign debt, a botched currency
devaluation and a six-month banking freeze.
Austin Grill, a
Bethesda-based Tex-Mex chain with six restaurants in the D.C. area, said it has
made an offer to buy Prandium, the bankrupt California company that owns the Chi
Chi's restaurants. Austin Grill said it would reorganize Prandium's debt of
about $ 230 million and possibly convert some of its Chi Chi's restaurants to
the Austin Grill concept.
US Airways Group said it wants annual profit
improvement of $ 1.9 billion on average over the next seven years through a
restructuring and cost reduction plan. The Arlington-based carrier's goal is
part of a plan to satisfy requirements for securing a federal loan guarantee,
the airline said in a filing with the Securities and Exchange Commission. The
carrier declined to provide details.
Compiled from reports by the
Associated Press, Bloomberg News, Dow Jones News Service and Washington Post
staff writers
LOAD-DATE: May 23, 2002
