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size='3'>October 31, 2006
size='3'>
id='1' name='1'>Delphi
Does Not Face Fine
Auto-parts supplier
Delphi Corp. and six individuals, including the company's former chief
financial officer, settled fraud charges with the Securities and
Exchange Commission, Reuters reported yesterday. The company, which is
under bankruptcy protection, was not subjected to a financial penalty
and agreed to the settlement without admitting or denying the charges,
the SEC said. The commission said
face='Times New Roman' size='3'>Delphi
size='3'>and former officers engaged in accounting improprieties that
led to several years of restated earnings. The SEC settled with six
individuals in the case and charged seven others with securities
violations.
href='http://news.yahoo.com/s/nm/20061030/bs_nm/autos_delphi_sec_dc_2'>Read
more.
Tosses Galvex Chapter 11 Case
Galvex Capital LLC’s
bankruptcy proceedings were converted to chapter 7 after a bankruptcy
court judge signed an order dismissing the steel maker’s chapter
11 case, Portfolio Media reported yesterday. Galvex had
petitioned for the dismissal of the chapter 11 proceedings late in
September, after the company successfully moved to convert the case to
chapter 7 and liquidate remaining assets. The company had filed a motion
arguing that remaining in chapter 11 served no constructive purpose and
that its sole remaining asset is its claim against the Galvex debtors,
which will require extensive litigation outside the bankruptcy
court’s jurisdiction.
name='3'>Comair Seeks to Impose Cuts on Pilots
Delta Air Lines Inc.
subsidiary Comair said that it plans to ask a bankruptcy court this week
to allow it to impose contract concessions on pilots if the two sides
cannot reach an agreement, the Associated Press reported yesterday.
Comair, based in
face='Times New Roman' size='3'>Erlanger
size='3'>,
size='3'>Ky.
needs labor concessions to emerge from chapter 11 bankruptcy. The
airline is seeking cuts from the pilots of $15.8 million in pay and
benefits changes, Comair spokeswoman Kate Marx said, adding that the
regional airline informed the Air Line Pilots Association, which
represents some 1,500 pilots, of their intention to file the motion
during a meeting in
w:st='on'>
size='3'>Washington
w:st='on'>
size='3'>D.C.
The two sides are scheduled to meet again today.
href='http://www.nytimes.com/aponline/business/AP-Comair-Pilots.html?pagewanted=print'>Read
more.
name='4'>Battle over
w:st='on'>San
Diego
Benefits Opens in Court
Attorneys arguing
over
Diego
benefits began opening statements yesterday in a case that will
determine how deep the city's financial short fall will remain,
the San Diego
Union-Tribune reported today. Superior Court
Judge Jeffrey Barton will weigh arguments from City Attorney Michael
Aguirre and lawyers representing employee unions regarding the legality
of benefits increases. Aguirre contends that half the pension system's
billion-dollar deficit could be wiped out if Judge Barton accepts his
position that the city entered into tainted deals while granting
increases in benefits twice in 1996 and 2002. In her opening remarks,
union attorney Ann Smith said that multiple city ordinances and two
legal settlements make it impossible for Barton to invalidate the
contracts that set the benefits increases.
href='http://www.signonsandiego.com/news/metro/pension/20061031-9999-1m31pension.html'>Read
more.
Nixes Oneida's Objections to Counsel's Fee
Bankruptcy Judge
Allan Gropper
size='3'>granted contested applications for more than $2 million in fees
and expenses in flatware maker Oneida Ltd.’s chapter 11
case, Portfolio
Media reported yesterday. Judge Gropper signed
an order on Friday mandating that Brown Rudnick be compensated for its
services as counsel for Oneida’s equity-securityholders’
committee. Last week, Judge Gropper also
awarded Imperial Capital LLC—the equity committee’s
financial advisor—$332,258 in fees and $69,380.98 to cover
expenses. Additionally, the court approved a payment of $112,595 for
fees to CCA Strategies, which provided actuarial services to the equity
committee.
w:st='on'>
name='6'>Kara
w:st='on'>
Homes
Gets OK to Sell Homes,
but $5 Million Loan Falls Through
While bankrupt Kara Homes
Inc. received permission Monday to complete the sale of nine houses, the
New Jersey-based home builder said that $5 million in financing the
builder thought it had lined up had fallen through late Friday,
the Asbury (N.J.) Park
Press reported today. The company said that
negotiations with the lender were scheduled to continue. The company
owes creditors $227 million, according to its bankruptcy filing.
Customers who have contracts for uncompleted homes are also listed as
creditors.
href='http://www.app.com/apps/pbcs.dll/article?AID=/20061031/NEWS/610310314'>Read
more.
name='7'>Goldman Builds Ambitious Role in Buyout
Realm
When corporate-buyout
firms turned to Goldman Sachs Group Inc. to borrow money to purchase
power producer Texas Genco Holdings Inc. for $3.65 billion in 2004, it
marked a shift in the world of buyout financing, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. Such loans traditionally have been the domain
of commercial banks, which have pools of customer deposits to lend out,
collecting interest and principal payments until they paid off. Both the
buyers and sellers of this kind of debt have changed. Private-equity
firms, which buy businesses with an eye toward improving and selling
them for a profit, used to issue bonds to finance such deals. Now they
are borrowing much more of their money from hedge funds and other big
investors -- and they are turning to investment banks to line up those
lenders.
href='http://online.wsj.com/article/SB116226415389708554.html?mod=home_whats_news_us'>Read
more. (Registration required.)
name='8'>Commentary: Targeting Hedge Funds
The prospect of
regulation by the
w:st='on'>
size='3'>U.S.
foreign governments in hedge funds has been increasing in the wake of
last month's implosion of Amaranth Advisors hedge fund, according to an
editorial in today’s
size='3'>Wall Street Journal. Senate Finance
Chairman Charles Grassley is circulating a letter to regulators looking
for suggestions on how to regulate hedge funds. Connecticut Attorney
General Richard Blumenthal is bidding to regulate hedge funds in the
same fashion that
face='Times New Roman' size='3'>New
York's Eliot Spitzer did
to the insurance industry. The German government wants the G-8 to take
up hedge-fund and private-equity regulation. A select committee of the
British Parliament is already examining regulations. Arthur Levitt, a
former head of the SEC who opposes more hedge-fund regulation,
nonetheless says he'd be surprised if Congress doesn't take up the issue
next year, no matter which party controls Congress.
href='http://online.wsj.com/article/SB116225542933208363.html?mod=opinion_main_review_and_outlooks'>Read
more. (Registration required.)
International
name='9'>U.K.
face='Times New Roman' size='3'>Debt Repayment Programs Erode Profits of
the Lenders
An unexpected surge in
cash-strapped British consumers taking advantage of debt repayment
programs that let them pay as little as 25 percent of their credit card
bills is causing headaches for U.S. and U.K. banks, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. Distressed borrowers offer to repay their
lenders a percentage of their debt over five years, under current
British law. If creditors holding 75 percent of the debt agree, the
other creditors must go along with the arrangement and forgive the rest.
This year, about 40,000 of these so-called Individual Voluntary
Arrangements are expected to be filed, quadruple the number in 2004.
More than 19,300 consumers in
face='Times New Roman' size='3'>England
and
w:st='on'>Wales
the first half of this year, up 153 percent from a year earlier,
according to British government data.
href='http://online.wsj.com/article/SB116226494859408575-search.html?KEYWORDS=bankruptcy&COLLECTION=wsjie/6month'>Read
more. (Registration required.)
Credit Managers Daily
Business News Report
The following articles
are taken from the Daily Summary of Troubled & Fast Growing U.S.
Companies published by Bastien Financial Publications.
For more of the latest business news visit
size='3'>http://dailybusiness.creditmanagers.biz
face='Times New Roman' size='3'>.
ABI Members receive a 50
percent discount when subscribing to the complete Daily
Summary.
size='3'>Coventry First
size='3'>,
size='3'>Philadelphia
size='3'>Pa.
Spitzer,
face='Times New Roman' size='3'>New
York
who charges the company with rigging bids and committing other acts of
fraud in buying up more than $3.6 billion in life-insurance
policies. Reportedly, a large number of
email messages and other documents show that
w:st='on'>
size='3'>Coventry
agreements that minimized how much
w:st='on'>
size='3'>Coventry would pay
in order to maximize brokers' fees.
size='3'>Exelon Corp
size='3'>., the
face='Times New Roman' size='3'>Chicago
size='3'>,
size='3'>Ill.
company, reported a third quarter net loss of $44 million, including an
operating loss of $45 million. Revenue slipped nearly 2%--to $4.4
billion. The quarter included $776 million in charges related mostly to
impairments.
size='3'>InterMune Inc
size='3'>., a
face='Times New Roman' size='3'>Brisbane
size='3'>,
size='3'>Calif.
technology company, reported a third quarter net loss of $29 million.
Its operating loss of $28.4 million included extra charges of $6.9
million related to a settlement. Revenue declined 15%--to $22.5
million.
size='3'>Pixelworks Inc
size='3'>., a Tualatin,
w:st='on'>
size='3'>Ore.
integrated circuits, reported a third quarter net loss of $10.1 million.
The results included restructuring and writedown charges of more than
$1.8 million. Revenue declined 22%--to $36.3 million.
size='3'>Schweitzer-Mauduit International
Inc., an Alpharetta,
w:st='on'>
size='3'>Ga.
tobacco paper, reported a third quarter net loss of $1.7 million. The
results included restructuring charges of $12.4 million. Revenue
declined 2.5%--to almost $162 million.
size='3'>Sypris Solutions Inc
size='3'>., a
face='Times New Roman' size='3'>Louisville
size='3'>,
size='3'>Ky.
electronics design and other services for government agencies, reported
a third quarter net loss of $800,000. Revenue declined 11 percent--to
$126 million.
size='3'>Greensboro,
w:st='on'>
size='3'>N.C.
firm, reported a third quarter net loss of $11.1 million. Its operating
loss of $11 million included restructuring and writedown-related charges
of $1.2 million. Revenue declined 7 percent--to $170
million.