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February 19,
2010
lang='RU'>
name='1'>Dodd to Offer New Finance-Overhaul
Bill
Senate Banking Committee
Chairman Christopher Dodd (D-Conn.) plans to introduce a new
financial-overhaul bill next week, giving a boost to the White House's
effort to toughen regulations governing the country's banks, the
Wall Street Journal reported
today. Under the Dodd bill, the role of the Federal Deposit Insurance
Corp. would be expanded slightly; it would oversee all state-chartered
banks instead of sharing that responsibility with the Federal Reserve.
The bill would require more transparency for exotic financial products
such as derivatives and create a mechanism for breaking up large
financial companies without taxpayer-funded bailouts. It also would
include new disclosure requirements for certain hedge funds. The House
passed its version of new financial rules in December, but differences
between Democrats and Republicans over what the rules should do have
slowed progress in the Senate. The Dodd bill would, among other things,
establish a council of regulators to monitor emerging risks to the
economy, and a new banking regulator to oversee nationally chartered
financial companies. Last week, Dodd and Sen. Bob Corker (R-Tenn.)
agreed to begin negotiating key parts of the proposal in hopes of
securing a bipartisan deal.
href='http://online.wsj.com/article/SB10001424052748703315004575073583254421168.html?mod=WSJ_business_whatsNews#printMode'>Read
more. (Subscription required.)
name='2'>Magna Entertainment Files Reorganization
Plan
Magna Entertainment Corp., the largest
operator of horse racetracks in North America, yesterday filed its
reorganization plan in which all administrative and priority claims
would be paid in full in cash on the effective date, the
size='2'>Deal Pipeline reported yesterday.
Secured creditors would receive either a cash payment, reinstatement of
their claims or the return of the collateral securing their claims.
Creditors with claims on assets that have been or will be sold at
auction would receive a share of the sale proceeds after distributions
have been made to unsecured creditors. Magna anticipates enough
distributions for certain secured creditors, including BMO Nesbitt Burns
Inc. and Wells Fargo Bank NA, to receive a full recovery. Bankruptcy
Judge Mary F. Walrath
size='2'>is scheduled to consider the disclosure statement outlining the
plan of the Aurora, Ontario-based company on March 23.
href='http://pipeline.thedeal.com/tdd/ViewArticle.dl?id=10005391832'>Read
more. (Subscription required.)
name='3'>Commentary: Complex Loans Didn't Cause the
Crisis
Regulatory reform that can improve
competition and consumer choice in financial services is long overdue,
but no new federal bureaucracy such as the Obama administration's
proposed Consumer Financial Protection Agency (CFPA) is needed to bring
that about, according to a commentary by Prof.
size='2'>Todd Zywicki of George Mason
University Law in today's Wall Street
Journal. The administration is incorrect,
according to Zywicki, in claiming that such an agency would have
prevented the present financial crisis and is necessary to prevent the
next crisis. During the housing boom bankers made a raft of
extraordinarily foolish loans as some were the result of lenders
defrauding borrowers, but probably at least as many were the product of
borrowers defrauding lenders, Zywicki said. The financial crisis
resulted primarily from the rational behavior of borrowers and lenders
responding to misaligned incentives, according to Zywicki, not fraud or
borrower stupidity.
href='http://online.wsj.com/article/SB10001424052748704804204575069102749893246.html?mod=WSJ_Opinion_LEFTTopOpinion#printMode'>Read
more. (Subscription required.)
Judge Gives
Tribune until March 31 to File Chapter 11 Plan
lang='RU'>
Tribune Co. yesterday won a court order allowing it to retain control
of its chapter 11 case until March 31, less time than the embattled
media company originally said it needed to quell strife among its
creditors, Dow Jones Daily Bankruptcy
Review reported today. Bankruptcy Judge
Kevin Carey gave the
publisher of the Los Angeles Times, Chicago Tribune and other newspapers
an additional month to reach a deal and get a chapter 11 plan on file
with the court. Tribune originally insisted it needed to stay in sole
charge of its bankruptcy case until June 8, but the company reined in
its request. Creditors are fighting over the prospect of a lawsuit over
the 2007 leveraged buyout that added $8 billion to the company's debt
load. Judge Carey on Thursday pushed off until the end of March the two
disputes involving the potential lawsuit over the leveraged
buyout.
name='5'>Starwood Capital Submits Investment Proposal That Would
Take Extended Stay Out of Bankruptcy
/>
An investor group led by Starwood Capital Group made a proposal on
Wednesday to take Extended Stay Inc. out of bankruptcy, an offer that
comes as the hotel chain is close to finalizing a competing investment
deal, Dow Jones Daily Bankruptcy
Review reported today. An Extended Stay said
yesterdat that the company will evaluate the Starwood offer and weigh it
against a rival proposal from Paulson & Co. and Centerbridge
Partners to provide new financing. Jacqueline Marcus, Extended Stay's
bankruptcy lawyer, said at a court hearing that the company is 'very
close' to completing the investment agreement with Paulson and
Centerbridge, which would form the basis of its bankruptcy
restructuring. Bruce Zirinsky, a lawyer for the Starwood group, told
Bankruptcy Judge James Peck
size='2'>that Starwood has completed its due diligence and expects to
meet with Extended Stay to discuss the proposal.
name='6'>Icahn Takes over Fontainebleau's Las Vegas
Hotel
Investor Carl Icahn took ownership of
the unfinished Fontainebleau Las Vegas Resort yesterday, paying its
bankrupt owner about $104.6 million in cash, Reuters reported yesterday.
Icahn also forgave about $49 million in debtor-in-possession financing
as part of the deal. Fontainebleau filed for bankruptcy protection last
June after lenders cut off access to nearly $800 million of construction
funds. The 3,800-room casino resort, toward the northern end of the Las
Vegas Strip, has already cost $2 billion. The case is
size='2'>In re Fontainebleau Las Vegas
size='2'>Holdings LLC, U.S. Bankruptcy Court, Southern District of
Florida, No. 09-21481.
href='http://www.reuters.com/article/idUSN1822668120100218'>Read
more.
name='7'>General Growth Looks to Raise Public Capital to Fund
Bankruptcy Exit
General Growth Properties is looking
to raise $1 billion to $2 billion from public markets to fund its exit
from bankruptcy, Reuters reported yesterday. Simon Property Group on
Tuesday made an offer for General Growth that it valued at $10 billion,
and has stepped up pressure on General Growth to begin talks with it
soon. General Growth believes that the trigger behind Simon's move to go
public was the worry that the company would succeed in raising the funds
it needs to exit from bankruptcy in a few weeks. General Growth has been
in talks with investors for months and has been approached by numerous
parties, including Brookfield Asset Management, interested in financing
the company as opposed to acquiring it.
href='http://www.reuters.com/article/idUSN1821967420100218'>Read
more.
name='8'>Oil Field Service Provider Files for Chapter
11
Oil field services provider Remedial
PCL filed for chapter 11 protection on Wednesday after failing to reach
a deal with its unsecured creditors, Reuters reported yesterday. The
company listed Goldman Sachs Group Inc. as its second largest
shareholder with a 16 percent stake, while Sweden's JCE Group was the
largest shareholder with a stake of 28.7 percent, according to the
filing. Remedial listed both assets and debt in the range of $100
million to $500 million. The case is In re Remedial (Cyprus) Public Co.
Ltd, U.S. Bankruptcy Court, Southern District of New York (Manhattan),
No: 10-10782.
href='http://www.reuters.com/article/idUSSGE61H0IN20100218'>Read
more.
name='9'>Fed Move May Signal End to Easy Bank
Profits
News yesterday that the Fed would
raise the interest rate that it charges banks for temporary loans was
seen by lenders as a sign that their long, profitable period of ultralow
rates was coming to an end, the New York
Times reported today. The move suggested that
policy makers believed the nation’s banks had healed enough to
withdraw some of the extraordinary support that the government put in
place during the financial crisis. Even though the Fed had telegraphed
its intention to raise the largely symbolic discount rate, the timing of
the move, coming between scheduled policy meetings, caught some
economists by surprise.
href='http://www.nytimes.com/2010/02/19/business/economy/19banks.html?ref=business&pagewanted=print'>Read
more.
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