The Brew Crew lit up the Rocket for five runs in 5 2/3 innings and a big Stros comeback was thwarted as the Brew Crew held on for a 7-6 win on Friday night at the Juice Box.
Clemens uncharacteristically gave up three gopher balls, including a killer 3 run shot by Ben Grieve that landed in the first row of the Crawford Boxes. The Stros battled back gamely after being down 5-0, but Lidge lived dangerously in two innings of work and the Brewers were eventually able to push a run on a sac fly across in the top of the ninth for the game winner.
Tim Redding gets a rare start in the Saturday night game, and Pete Munro has been announced as the Stros’ starter in the Sunday matinee game.
Daily Archives: July 23, 2004
United busts pension plan payment
United Airlines announced today it would not contribute to employee pension plans while it remains in Chapter 11. This is the first in a number of bold moves that Chicago-based United must take in order to save the struggling airline billions in cash and make it more attractive to the private investors it needs to emerge from bankruptcy protection now that its request for federal subsidies has been rejected.
The action came a week after United skipped a $72.4 million pension payment that it owed to three of its four pension plans, and only a month or so before United faces baking hundreds of millions more in pension payments in September and October. Until that missed payment, United had met all of its pension obligations since filing for bankruptcy in December 2002.
Although difficult, United should go ahead and simply terminate the plans. The plans have enough assets to keep paying benefits to retirees in the short term, but none of the four plans has enough to assure that employees will receive future benefits they have already earned. If the airline abandons the plans, billions of dollars in liabilities for those future benefits will fall on the Pension Benefit Guaranty Corporation, a government-sponsored agency whose finances have already been heavily tapped by the collapse of pension plans at other bankrupt companies in the airline, steel and other industries.
As one would expect, leaders of United’s unions reacted with outrage over United’s decision but, as usual, offered no alternative to the probable liquidation that United faces if it kept making the pension payments. Greg Davidowitch, president of the flight attendants’ union local at United, demanded the following explanation: “Current management should explain to us why the flight attendants should continue to support their restructuring, if this is the best they could do.”
I can answer that one: “So that United can stay in business and provide you and the other flight attendants a job.”
In all likelihood, United’s action was probably a condition of the renewal of its bankruptcy financing (called “DIP financing”), which United advised its Chicago bankruptcy court yesterday that it had arranged. Private lenders and investors will not be willing to invest in United unless the pension obligation was either terminated or dramatically modified. United currently owes its pension plans an estimated $4.1 billion over the next five years.
United is big and many financial institutions have an interest in seeing that it continue as a going concern. However, United is in dire financial trouble, and at substantial risk of liquidation. Even with this latest move, it is not at all certain that United can — or should — make it.
Blakely decision prompts revised Enron indictments
The U.S. Supreme Court’s recent decision in Blakely v. Washington (prior posts here) — which has called into question the Constitutionality of both state and federal sentencing guidelines — has prompted Enron Task Force prosecutors to re-indict defendants in the two Enron criminal cases that are scheduled for trial in the near future.
The Enron grand jury this week reindicted the six people accused in what is known as the “Nigerian barge case” scheduled for trial in August before U.S. District Judge Ewing Werlein and the seven ex-Enron executives charged in the Internet broadband division case scheduled for trial in Houston federal court this October.
Included in both new indictments are allegations that each scheme caused the loss of more than $80 million, an allegation that can add years to a sentence under existing federal guidelines. The new indictments were spurred by the Blakely decision, which held that the state of Washington’s sentencing laws were unconstitutional because they only allowed judges, not juries, to consider factors that increased sentences. Some legal experts have speculated that the decision calls the Constitutionality of federal sentencing guidelines into question for the same reason.
Not explained by the Task Force in the new indictment is how the Nigerian Barge deal — which was a relatively small transaction involving about $12 million in allegedly illegal profit for Merrill Lynch — could have caused $80 million in damages to Enron.
George Mitchell funds grant for UT Alzheimer’s research
Longtime Houston oilman and real estate developer George Mitchell and his wife Cynthia have donated $2.5 million to the University of Texas Medical Branch at Galveston to fund the creation of the George P. and Cynthia Woods Mitchell Center for Alzheimer’s Disease Research, which will coordinate UTMB’s expanded research into Alzheimer’s disease. Mrs. Mitchell has suffered from Alzheimer’s over the past several years.
The new UTMB center will focus on Alzheimer’s but also will conduct research on similar degenerative neurological disorders such as Parkinson’s disease. The Mitchell donation will be combined with other donations and grants to intensify UTMB’s overall neurological research.
Although Mr. Mitchell has long been a major player in Houston independent oil and gas circles, he is best known as the developer and visionary of The Woodlands, the planned suburban community 30 miles north of downtown Houston that Mr. Mitchell started 30 years ago and which now is home to almost 100,000 residents.
Baylor threatens litigation against Methodist
The stakes in the ugly divorce between Baylor College of Medicine and The Methodist Hospital (earlier posts here) that has had medical officials in Houston’s famed Texas Medical Center chattering for months just zoomed through the roof.
As predicted here earlier, Baylor Board of Trustees Chairman Corbin Robertson Jr. sent Methodist’s board a letter on July 20 threatening legal action against the hospital if it doesn’t stop alleged illegal interference with Baylor’s medical business, putting its accreditation at risk by recruiting faculty under contract, evicting it from space, and refusing to negotiate a contract that would allot some faculty and residents to the hospital.
“Baylor and its longstanding programs at all affiliated hospitals will be damaged as a result of Methodist’s actions,” Robertson wrote in the July 20 letter. “It is our fervent desire to maintain or repair our relationship rather than engage in legal debates or worse, but you will, of course, understand the fiduciary obligation of the Baylor board to assure Baylor’s compliance with law and to safeguard our assets.”
Methodist officials reacted to the letter by calling its claims “highly offensive” and “not in the spirit of the Texas Medical Center,” and by saying they have no intention of altering their actions. The now open free-for-all between the two former institutional partners is a remarkable development within the Medical Center community, which has always prided itself on harmonious relations between its various member institutions.
The conflict between Methodist and Baylor has been escalating since the two institutions decided earlier this year to end their 50-year relationship in which Methodist served as Baylor’s primary teaching hospital for medical students and residents. St. Luke’s Episcopal Hospital is Baylor’s new primary teaching hospital, and Baylor is now building its own outpatient clinic. Methodist in turn recently entered into a relationship with Cornell University’s Weill Medical School, which is in New York.
In the wake of their split, conflicts have developed between Baylor and Methodist over a new affiliation agreement, Baylor’s use of space at Methodist, and over retention of staff and faculty physicians. After a Methodist official earlier this year stated publicly that Methodist hospital division chiefs ? most of whom also are Baylor department chairmen ? needed to choose between the two institutions, Methodist’s chief of surgery resigned from the hospital and Baylor’s chairman of pathology resigned from the college. More doctor fallout from the two institutions is expected.
Mr. Robertson’s letter focuses on rank-and-file Baylor faculty, most of whom are under contract. The letter contends that Methodist’s “aggressive recruiting” of those faculty members amounts to tortious interference with Baylor’s contractual relations.
Stay tuned on this front folks. As we say in the legal community: “Let’s get ready to rumble!”