Bankruptcy Proceedings

The government's pension insurance program is asking a federal court to give it control of the underfunded retirement plan of a company formerly owned by Global Crossing Ltd. Pensions of 5,500 workers and retirees of Frontier Corp. are short by $105 million, the Pension Benefit Guaranty Corp. estimates. The telecommunications company, based in Rochester, N.Y., was owned by Global Crossing until it was sold last year. The PBGC is asking the U.S.

Question: I'd like your opinion on investing in companies that have filed for bankruptcy, especially those in Chapter 11. I have tried to follow some of these companies in the newspaper but have had trouble finding information. Their stocks are especially cheap, but is it realistic to expect a return at some later date? Answer: In a word: no. Buying the stock of companies in bankruptcy proceedings is a loser's game.

Laid-off Enron Corp. workers have asked a Bankruptcy Court judge to give them a major voice in deciding how creditors are repaid and how the company will be restructured. Three separate groups of former employees have petitioned U.S. Bankruptcy Judge Arthur J. Gonzalez to be named an official creditor committee. The legal designation could give former workers significant leverage as the court oversees issues such as financial settlements with current Enron management and with other creditors.

Bucking a trend in the high-speed Internet business, Covad Communications Group Inc. said it plans to emerge from bankruptcy proceedings Thursday. A U.S. Bankruptcy Court in Delaware approved Covad's reorganization plan, which erases $1.4 billion of high-yield and convertible bondholder debt. Covad, like other broadband providers, ran into trouble last year as sources of capital dried up while the companies were in the midst of rapidly expanding their networks.

Questions about the safety of revenues pledged to repay California's upcoming electricity bond issue are worrying some big investors, which could translate into demands for higher interest rates on the mammoth offering. The central issue for managers of large mutual funds--prime customers for the deal--is whether the revenues pledged to repay the bonds will be safe from challenges in U.S. Bankruptcy Court.

Total Multimedia in Camarillo has received a final order closing the company's Chapter 11 reorganization proceedings. The final decree means the company has paid or settled all claims from its 1994 bankruptcy proceedings and has complied with the court-approved reorganization plan. "The action by the Bankruptcy Court granting TMM a final order is the end of a long process for our company and a first step in our reorganization," company President Mike Fernandez said.

Crown Books Corp., its sales slumping and its cash running low in the face of intense competition from the likes of Borders Group Inc. and Barnes & Noble Inc., said Tuesday it is in danger of failing and might seek the protection of bankruptcy proceedings. The Landover, Md.-based operator of 180 bookstores, including more than 50 in Southern California, said it is trying to renegotiate its financial arrangements with its main book vendors and its lenders to get more breathing room.

Las Vegas entertainer Wayne Newton insisted that he had nothing to do with the Renoirs, Dalis and a Matisse that were traded in an Irvine hotel parking lot two years ago for 110 pounds of cocaine, authorities said. The would-be drug dealer had receipts indicating that Newton had once purchased some of the artwork at a prestigious auction house, but still the singer didn't seek to claim them.

An angry federal judge demanded Monday to know why he was not warned before a bankrupt Reseda nursing home evicted its 63 residents late Friday night--an act that state officials declared illegal. U.S. Bankruptcy Judge Arthur M. Greenwald appointed a trustee to immediately take over the business operations of three other nursing homes managed by the same Arizona firm, including one in Alta Loma that is on the verge of shutting down if emergency funding does not materialize.

An Anaheim Hills man, already imprisoned for selling adulterated gasoline and violating California pollution and tax laws, was sentenced Tuesday to 51 months in federal prison for bankruptcy fraud. Gary Lazar, 49, who would have been eligible for parole from a state prison in February, will instead be transferred to a federal penitentiary to serve the additional time, under an order by U.S. District Judge Dickran Tevrizian. Lazar pleaded guilty in December to two counts of fraud for hiding $6.