Hartford Courant from Hartford, Connecticut • Page 118

BOTH SIDES 1st ed SECTION WEDNESDAY APRIL 3, 1991 D6 LEGALS )t gtounmt Legislators kill auto insurance reform proposals 1 By DIANE LEVICK Courant Staff Writer Connecticut legislators Tuesday killed major parts of an auto insurance reform package and supported only one proposal without guaranteeing a rate rollback. The action by the insurance and real estate committee portends debate elsewhere in the legislature and raises questions about how much relief from rising premiums consumers can expect this year. The committee Tuesday also passed a bill to regulate companies that try to control health-care spending by reviewing patients' care. On auto insurance, legislators voted 15-4 to ban a practice that often doubles the amount of money consumers can collect on their policies when injured by uninsured drivers. The practice, called "stacking," bases the payout on the number of cars on a policy.

For instance, a driver may have a policy that is supposed to pay up to $300,000 for injuries when his car is hit by an uninsured motorist. If the driver has two cars on that $300,000 policy, he can collect up to $600,000. The practice was authorized by Connecticut courts. The move to ban stacking drew praise from the insurance industry and criticism from trial lawyers. Insurers say the practice has meant higher premiums for consumers.

The industry won't say how much premiums would drop if stacking was eliminated, though "considerable" savings could be expected, said Craig Leroy, president of the Insurance Association of Connecticut, a trade group. The Connecticut Trial Lawyers Association was disappointed the insurance committee didn't mandate a specific rollback, said R. Bartley Halloran, a past president of the association. The bill on stacking now goes to the legislature's judiciary committee, where some legislators and lawyers believe it will be defeated. In a 10-10 tie, the insurance committee defeated a broader reform package, pushed by the insurance industry, that would have required a 40 percent reduction in premiums.

The rollback would have applied only to the parts of policies that consumers are required to buy, not to insurance that pays for damage to the policyholder's car. The package also would have required auto insurers to get prior approval for rate changes for one year. Many legislators, however, objected to a proposal in the package that would have strictly limited lawsuits for damages from auto accidents. The plan would have allowed accident victims to sue only in cases of very serious injury as defined in Please see Legislators, Page D2 Dow up 63.86 points; 3 indexes set records Associated Press AFTER SENTENCING Former Vernon Savings and Loan owner Don Dixon talks to journalists in Dallas after he was sentenced Tuesday to a five-year prison term for his December 1990 conviction on 23 counts of bank fraud. He Was also ordered to repay $577,000.

He was convicted of illegally spending money from the Texas thrift on a California beach house and for prostitutes. However, U.S. District Judge Joe Fish said Dixon's six-week trial did not prove Dixon was responsible for Vernon's $1.3 billion failure. With Dixon is his wife, Dana. Another Colonial bankruptcy Oak Harbor partnership owns apartments in Indianapolis Station expects to close Bankruptcy court gives WHCT-TV week's extension By STEPHEN M.

WILLIAMS Courant Staff Writer The management of WHCT-TV, Channel 18, believes it will be forced to liquidate the Hartford television station next week and is now preparing to do so, a lawyer for the station said Tuesday. Thomas A. Gugliotti said it was unclear when the station would be forced to go off the air. He made his statement after U.S. Bankruptcy Judge Robert L.

Kre-chevsky agreed to postpone until next Tuesday a final decision on whether the station would be liquidated to pay off its $11.6 million in debts. The station is owned by Astroline Communications which has been operating under Chapter 11 bankruptcy protection from creditors since 1988. Under Chapter 11, a company stays in business while it works out a court-approved plan to repay debts. Astroline's creditors, including such major television programmers as Lorimar, Orion and MCA, want the filing converted to Chapter 7, which would force liquidation. If the television station is liquidated, the Federal Communications Commission will have to decide what to do with its broadcast license which cannot be sold without a functioning television station.

In the meantime, Astroline is exploring how best to wind down the station's operations, Gugliotti said. "You can't instantaneously turn this thing off," Gugliotti said. "Between now and next Tuesday, we are trying to find out what needs to be done." This includes informing the station's 30 employees and making sure they are paid through Tuesday. In addition, the station's equipment has to be shut down in a manner that would not damage it. Generally, when a television station is liquidated and the broadcasting equipment is sold, the license is returned to the FCC, said Alan Glasser, a staff lawyer in the television branch of the FCC.

Ironically, if the license does revert to the FCC, it very likely would be subject to a 1987 freeze on granting new television licenses, Glasser said. If a sale of the television station can be arranged before the liquidation, the buyer would have to apply to the FCC for approval. A deal to sell the television station fell through in August. "What we wanted to sell was an operating television station," Gugliotti said. "Once you turn the equipment off and stop operating you lose that opportunity." Astroline had requested a 10-month period to line up a buyer for the station, but the creditors would Please see WHCT-TV, Page D2 Western Union is proposing name change Associated Press UPPER SADDLE RIVER, N.J.

One of the nation's oldest and most familiar corporate names may be going the way of the telegraph with which it is linked. Western Union the 140-year-old company that helped link America by wire but recently abandoned the telecommunications business, has proposed changing its name to counter bad publicity because of continuing financial problems. In a proxy statement issued last week for its annual shareholders meeting, the company proposed New Valley Corp. as a new name. New Valley is part of the company's original name the New York and Mississippi Valley Printing Telegraph Co.

Western Union President Robert J. Amman said "adverse publicity" surrounding the debt-plagued company's fiscal woes has been a burden on its two remaining profitable services money transfer and priority mail. The divisions are run by the subsidiaries Western Union Financial and Western Union Priority Services. Western Union Corp. needs to raise $42.2 million by June 15 to make payments on high-yield bonds, Amman has said, or the former tele-Please see Western Union, Page DC t.

morning. The bankruptcy filing automatically halts all legal proceedings against the partnership, including the foreclosure sale, which had been authorized by an Indiana court. If the foreclosure sale had gone through, investors in the partnership probably would have lost their entire investment. They also might have been forced to pay extra federal income taxes to make up for tax write-offs they took after investing in the partnership in 1982. "This is an appropriate, necessary and positive effort to protect the assets," said Tom Drohan, a spokesman for West Hartford-based Colonial.

Colonial's two founding partners, Jonathan Googel and Benjamin Sisti, are the managing partners of the Oak Harbor Associates partnership. be no assurance that the company will be successful in such efforts," TWA said in a filing with the SEC known as a 10-K. If it can't restructure its costs, TWA said it "will consider its alternatives and may determine that its best alternative is to elect to obtain protection from its creditors under Chapter 11 of the Bankruptcy Code or it may be required to do so by its creditors." Orders for durable goods big-ticket items expected to last more than three years slipped 0.3 percent, to $117.5 billion. It was the third decline in the last four months, including a 2 percent drop in January. Orders for non-durable products fell for the fourth straight month, down 0.8 percent, to $115.8 billion after a 1.1 percent decline in January.

And orders for non-defense capital goods, often a barometer of business plans to expand and modernize, slipped 0.7 percent following an 11.9 percent plunge a month earlier. "When aircraft orders are excluded from non-defense capital goods, the decline was an even more severe 3.9 percent," said Marilyn Schaja, an economist with Donaldson, Lufkin Jenrette Securities Corp. in New York. The slump in the manufacturing sector has cost more than 1 million Associated Press NEW YORK Stock prices climbed sharply Tuesday, boosted by computer-driven trading that pushed several market indexes to record highs. The Dow Jones average of 30 industrial stocks shot up 63.86 points, to 2,945.05.

But the Dow did not join the Standard Poor's 500-stock index, the New York Stock Exchange composite index or the NASDAQ index in setting records. Advancing issues outnumbered declining ones by more than 5-to-2 in nationwide trading of New York Stock Exchange-listed stocks, with 1,193 up, 447 down and 428 unchanged. Volume on the floor of the Big Board came to 189.53 million shares, up from 144.01 million Monday. Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 226.93 million shares. Analysts and traders said there was no fundamental economic reason for the market's rise.

They said it may have been sparked in part by stronger bond prices and a climb in stock prices abroad. "We have lots of buyers and not a By PAMELA KLEIN Courant Staff Writer Another Colonial Realty Co. limited partnership filed for bankruptcy Tuesday, just hours before the apartment complex owned by the partnership was scheduled to be sold at foreclosure. The Oak Harbor Associates Limited Partnership, which owns an 852-unit apartment complex in Indianapolis, filed for protection from creditors under Chapter 11 of the federal bankruptcy laws in U.S. Bankruptcy Court in Hartford.

Under Chapter 1 1, the partnership says it wants to remain in operation while working out a debt repayment plan. Tuesday's filing was not a surprise because a foreclosure sale of the property was scheduled for this lot of sellers, and that makes for higher prices," said Dudley Eppel, managing director of equity trading at Donaldson, Lufkin Jenrette Securities Corp. "The tone is very strong." Prices were pushed higher late in the session by computerized trading, which takes advantage of differences between the price of stock futures and the value of the underlying stocks themselves, said Hugh Johnson of First Albany Corp. The effect is to prompt traders to buy stocks. "This doesn't appear to be a market that is driven by investors, it is driven by traders," Johnson said.

He said the market appeared to feed off its own momentum, drawing even more traders as well as institutional investors who have been looking for a place to put their cash. About 3:30 p.m., the Dow's climb set off one of the NYSE "circuit breakers," which restricts computerized trading when the Dow rises by 50 points. The market's rise seemed to be a repudiation of Monday's session, when the Dow fell 32.67 points to close at 2,881.19. The drop was caused in part by a report that showed the economy remained in a Please see Program, Page D4 ing wage and benefit cuts and changes in union work rules with its employees. The latest disclosure came in the Mount Kisco, N.Y.-based airline's annual report to the Securities and Exchange Commission, which requires public companies to detail significant financial developments to the investing public.

Although privately held, TWA has preferred stock that is traded. TWA hires bankruptcy lawyers in case restructuring fails TWA Chairman Carl Icahn was in a meeting and not immediately available when called for comment Tuesday evening. TWA said it must restructure and reduce its "substantial obligations" to bond holders, equipment renters and employees "in order to be a long-term competitor in the airline industry." While it "presently intends to pursue restructuring efforts, there can The bankruptcy filing lists debts of nearly $22 million, including mortgages to Security Pacific National Bank of Los Angeles, Connecticut National Bank of Hartford and Burritt Interfinancial Bancorp of New Britain. Googel and Sisti also are listed as creditors who are owed $5.8 million. There are at least five other Colonial-sponsored investment partnerships that have filed for bankruptcy in recent months.

Colonial, Googel and Sisti were forced into bankruptcy in September. Colonial has converted its case to a Chapter 11 filing and is trying to work out a repayment plan with creditors. Googel and Sisti have denied that their personal finances should be subject to bankruptcy court authority, and their cases are pending. In preparation for that eventuality, TWA said it had hired bankruptcy counsel. The filing did not say when the law firm, Jones Day, had been hired.

Just a day earlier, TWA said it lost $478.6 million in 1990 before taking one-time gains such as asset sales into account. The net loss of $237.6 million compared with a net loss of Please see TWA, Page D6 jobs in the past two years, including 127,000 in February, according to Labor Department statistics. Orders for electronic and other electrical equipment jumped 10.8 percent, recovering from a 7.8 percent drop a month earlier. That was offset by an 8.6 percent drop in industrial machinery and equipment orders that wiped out a 6.3 percent gain in January. Orders for primary metals rose 1.1 percent, but failed to recoup a 9.1 percent loss the previous month.

Transportation orders were off 0.1 percent after dropping 6.1 percent a month earlier. Excluding this category, orders fell 0.6 percent. Shipments of factory goods were off 0.5 percent, to $233.4 billion, also their fourth consecutive decline. Unfilled orders were unchanged at $526.9 billion. Inventories also were unchanged, at $388.5 billion, following declines in December and Factory goods orders fall for 4th month Gold prices Associated Press WASHINGTON Trans World Airlines Inc.

said Tuesday that it has hired legal advisers in case the troubled carrier's restructuring attempts fail and it is forced to seek Chapter 11 bankruptcy protection from creditors. TWA, which a day earlier said it lost $237.6 million in 1990, disclosed it has been unsuccessful in negotiat Today's data DOW JONES AVERAGE (Tuesday's close) 30 Industrials 2,945.05 Up 63.86 T-BILLS 12-month 6.34 (average) 6-month 5.79 3-month 5.80 MORTGAGES (Average, based on local survey) Adjustable, 1 yr 9.29 Fixed, 30 yr 9.81 Inside Bankruptcy filing A Bristol home builder files in bankruptcy court for protection from creditors. Page D2. Japanese growth Industrial production grows much faster in Japan than in the U.S., a report says. Page D2.

Gold prices were $358.50 in the Tuesday settlement price on the New York Commodity Exchange. DOLLARS PER TROY OUNCE 365 Flnni 360 Mr iiif! 355 i u. -1 1 1 1 1 1 li I 'M nihil! 350 19 20 21 22 25 26 27 28 1 2 Associated Press WASHINGTON Orders for ac- tory goods fell in February for the fourth consecutive month, the gov- i ernment said Tuesday. Analysts said the 0.5 percent drop was another sign that the manufacturing sector remained in a recession. "Certainly, in this series of numbers, there doesn't seem to be any sign of a trough or bottom in the recession," said Gilbert Benz, an economist with Swiss Bank Corp.

in New York. The Commerce Department said orders for durable and non-durable goods fell to $233.2 billion after shrinking 1.6 percent a month earlier. Factory orders have not risen since peaking at $255 billion last October. Benz said he was concerned not only that "big-ticket" durable orders fell, but also that orders for nondurable goods declined..