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May 5, 2009
Consumer
Bankruptcy Filings Top 125,000 in April
U.S. consumer bankruptcy filings
increased 36 percent nationwide in April from the same period a year
ago, according to ABI, relying on data from the National Bankruptcy
Research Center (NBKRC). The overall April consumer filing total of
125,618 represented a 3.5 percent increase from the March total of
121,413. Chapter 13 filings constituted 26 percent of all consumer cases
in April, slightly above the March rate.
href='http://www.abiworld.org/AM/Template.cfm?Section=Monthly_Bankruptcy_Statistics&Template=/MembersOnly.cfm&NavMenuID=3716&ContentID=46994&DirectListComboInd=D'>Click
here to review the monthly consumer filing charts.
Autos
Chrysler
Approved to Tap Federal Loans; Creditors Object to Fiat
Agreement
Bankruptcy Judge
face='Cambria' size='3'>Arthur Gonzalez
size='3'>yesterday approved Chrysler's request to begin using $4.5
billion in government loans, a key step in the automaker's plan to
emerge quickly as a stronger, global company, the
face='Cambria' size='3'>Washington Post
size='3'>reported today. While the government financing was approved at
yesterday’s hearing, Chrysler’s lenders, who hold a portion
of the $6.9 billion in senior loans to Chrysler, objected to the
transfer of the automaker's assets to a new company that will be jointly
owned by Fiat of Italy, the United Auto Workers and the governments of
Canada and the United States.Chrysler is asking for a hearing that would
clear the way for a sale of assets to be held as soon as May 21.
href='http://www.washingtonpost.com/wp-dyn/content/article/2009/05/04/AR2009050403586_pf.html'>Read
more.
Analysis:
GM Bankruptcy Probable as Obama Shields UAW Benefits
General Motors Corp. may be more likely
to end up in bankruptcy based on the Obama administration’s
willingness to place Chrysler LLC into court protection to safeguard
union health care benefits, Bloomberg News reported yesterday. With GM
and its biggest bondholders at odds over resolving $27 billion in
unsecured claims by a June 1 deadline, the Chrysler model indicates that
President BarackObama may resort to bankruptcy to end any impasse over
that debt, said Martin Fridson, CEO of New York-based credit investment
firm Fridson Investment Advisors.GM bondholders proposed on April 30
they get a 58 percent ownership stake in the Detroit-based automaker in
exchange for their $27 billion in unsecured claims. Bondholders are
objecting to GM’s proposal that they get a 10 percent share of GM
equity while a union health fund would get $10 billion in cash and as
much as a 39 percent stake for $20 billion in unsecured claims.
href='http://www.bloomberg.com/apps/news?pid=20601103&sid=aCRwRYakxQSI&refer=us#'>Read
more.
Financial Servcies
Fewer
Banks Are Tightening Their Lending Standards
Although credit conditions remain
strained, an April survey of loan officers by the Federal Reserve found
a smaller number of banks were tightening loan standards compared with a
few months ago, the Wall Street
Journal reported today. The Fed said that 40
percent of the 53 domestic banks it surveyed between March 31 and April
14 said that they tightened standards on commercial and industrial
loans, a smaller percentage than the 65 percent that said in January
that they tightened standards. About 65 percent of banks said that they
tightened standards for commercial real estate loans, from 80 percent in
January. It was the first time since October 2007 that the percentage of
banks tightening standards on commercial real-estate loans fell below 70
href='http://online.wsj.com/article/SB124147933935685143.html#mod=testMod'>Read
more. (Subscription required.)
Senate
Bill Would Allow Regulation of Derivatives
Sens. Carl Levin (D-Mich.) and
Susan Collins (R-Maine) unveiled legislation Monday that would give
federal regulators the authority to regulate the derivatives
markets,
size='3'>CongressDaily reported today. The
bill would repeal provisions in federal law, including the Commodity
Futures Modernization Act of 2000, to give regulators interim authority
to regulate the multitrillion-dollar derivatives market. Critics have
blamed a lack of oversight on the downfall of American International
Group, which bet heavily and lost billions of dollars on credit-default
swaps.
Unfreeze Credit Receives a $10 Billion Boost
The Federal Reserve's Term
Asset-Backed Securities Loan Facility (TALF)got a boost as companies
rushed to issue nearly $10 billion of bonds and as credit markets rode
the same wave of optimism that sent stocks soaring, the
face='Cambria' size='3'>Wall Street Journal
size='3'>reported today. The program is designed to unfreeze the credit
markets by increasing the amount of credit available to consumers. While
TALF got off to a slow start when it began in March, a small group of
investors yesterday asked JPMorgan Chase & Co. to put together a
bond offering backed by credit card loans that is eligible for the
program. The $5 billion deal is the largest yet of the TALF-eligible
offerings, according to Barclays.
href='http://online.wsj.com/article/SB124148044305885211.html#'>Read
more. (Subscription required.)
Stress
Tests Likely to Reveal Banking Declines on Commercial Real
Estate
As the government prepares to
release the results of its bank 'stress-tests,' many analysts are
expecting the results to highlight the woes from commercial real estate
loans that are piling up at large and small banks alike, the
Wall Street journal
size='3'>reported today. In the worst-case scenario, federal regulators
examining the 19 largest U.S. banks are projecting losses of up to 12
percent on commercial real estate loans over two years. Such losses
likely would cause a greater risk of failure at small and medium banks
because they tend to have disproportionally more exposure to commercial
realestate loans than giant institutions. While regulators have
indicated they won't allow the 19 stress-tested banks to fail, that
group doesn't include more than 500 banks with assets of less than $1
billion that have too much exposure to commercial real estate and are at
the most risk of failing, according to an analysis by Foresight
Analytics LLC.
href='http://online.wsj.com/article/SB124148130773284927.html'>Read
more. (Subscription required.)
NetVersant
Receives Approval to Convert to Chapter 7
Unable to fund an exit plan and
continue as a going concern, bankrupt NetVersant Solutions Inc. received
court approval on Thursday to convert its chapter 11 case to a chapter 7
proceeding, Bankruptcy
Law360 reported yesterday. Bankruptcy
Judge Peter J. Walsh
issued the order on Thursday approving NetVersant's
request for conversion and a chapter 7 trustee was appointed Friday.The
Houston-based network infrastructure company sought to convert to
chapter 7 in a motion March 31, saying it had insufficient resources to
fund its own liquidation plan.The bankruptcy case is
face='Cambria' size='3'>In re NetVersant Solutions Inc.
size='3'>, case number 08-12973, in the U.S. Bankruptcy Court for the
District of Delaware.
href='http://bankruptcy.law360.com/articles/99775'>Read
more. (Subscription required.)
Plaza Hotel
Sues Trump in Bid for Casino Rent
Plaza Hotel Management Co. on
Friday filed an adversary complaint against bankrupt Trump Entertainment
Resorts Inc. and others, in a bid to collect rent payments out of the
cash collateral raised through the Trump Resort and Casino in Atlantic
City, N.J., Bankruptcy
Law360 reported yesterday. The suit also names
Beal Bank, U.S. Bank and others. Plaza, which owns the land under the
Trump Resort and Casino, said that the cash collateral order states that
the debtors would have the right to use and occupy the leased premises
without paying the rent that has accrued since the company filed for
chapter 11 if the value of the collateral declines and if the debtor's
post-petition revenues become less than sufficient to satisfy all
administrative claims.
href='http://bankruptcy.law360.com/articles/99655'>Read
more. (Subscription required.)
Judge
Approves Magna Entertainment’s Asset Sale
BankruptcyJudge
face='Cambria' size='3'>Mary Walrath yesterday
approved the proposed sale procedures for certain assets of horse track
owner Magna Entertainment Corp., the Associated Press reported
yesterday. The sale plan approved includes Santa Anita Park in
California, Remington Park in Oklahoma City, Thistledown in Ohio and
Portland Meadows in Oregon. The plan also includes Ontario-based MEC's
interest in Lone Star Park in Texas.While Magna took Pimlico Race Course
in Baltimore and other assets in Maryland off the auction block last
week, an attorney for the company said it may decide later to sell those
href='http://www.washingtonpost.com/wp-dyn/content/article/2009/05/04/AR2009050401825.html'>Read
more.
Co. Postpones Threat to Close Boston
Globe
After gaining concessions from
all but one of the Boston
Globe’s labor unions, the
New York Times
size='3'>Co. yesterday postponed its threat to start the process of
closing the
size='3'>Globe, leaving the newspaper’s
immediate future resting on talks with the largest union, the Boston
Newspaper Guild, the New York
Times reported today. No further talks were
scheduled as yet with the guild, which represents more than 600
Globe
size='3'>employees in the newsroom, advertising and some business
offices.Under a federal plant-closing law, the company is required to
give formal notice 60 days before shutting down the
face='Cambria' size='3'>Globe, which it says
is on a pace to lose $85 million this year. Times
Co. is seeking wage and benefit givebacks to cut $20 million in annual
costs at the Globe and other concessions that would allow it to
cut more in the future, such as abolishing lifetime job guarantees for
more than 400
face='Cambria' size='3'>Globe
size='3'>employees.
href='http://www.nytimes.com/2009/05/05/business/media/05paper.html?dbk=&pagewanted=print'>Read
more.
International
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