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March 31, 2006
name='1'>Proposed Pension Reporting Method Would Show Companies Have
More Debt
The board that writes
accounting rules for American business is proposing a new method of
reporting pension obligations that is likely to show that many companies
have a lot more debt than was reported before, the
face='Times New Roman' size='3'>New York Times
size='3'>reported today. In some cases, particularly at old industrial
companies like automakers, the newly disclosed obligations are likely to
be so large that they will wipe out the net worth of the company. The
panel, the Financial Accounting Standards Board, said the new method,
which it plans to issue today for public comment, would address a
widespread complaint about the current pension accounting method: that
it exposes shareholders and employees to billions of dollars in risks
that they cannot easily see or evaluate. The new accounting rule would
also apply to retirees' health plans and other benefits. The board is
moving ahead with the proposed pension changes even as Congress remains
bogged down on much broader revisions of the law that governs company
pension plans.
href='http://www.nytimes.com/2006/03/31/business/31pension.html?_r=1&oref=slo…'>Read
more.
House
Leader Says Pension Bill Stalled
House Majority Leader
John Boehner (R-Ohio) said that a final version of a
w:st='on'>
size='3'>U.S.
size='3'>pension reform bill is stalled and unlikely to be completed
before Congress leaves for a two-week spring recess, Reuters reported
yesterday. Boehner did not say what the disagreements were between House
and Senate negotiators who are trying to prepare a final bill to bolster
the creaking
w:st='on'>
size='3'>U.S.
size='3'>pension system that will not add to the problems of troubled
old-line industries such as autos, steel and airlines. As recently as
Tuesday, Boehner had said he hoped the pension bill would be completed
before the congressional recess, which begins at the end of next week.
However, a private meeting of key Republican negotiators late Tuesday
failed to resolve whether to make companies with poor credit ratings --
such as two of the Big Three U.S. automakers -- put more money in their
pension plans. A third of the Senate last week urged negotiators to
scrap the credit rating provision, saying it could 'further push
troubled companies toward bankruptcy.''
href='http://www.nytimes.com/reuters/politics/politics-congress-pensions.html…'>Read
more.
Refco
Judge Calls for Oversight Committee on Fees
A federal judge called
for the creation of a committee to oversee the fees collected by
attorneys, accountants and other professionals working on Refco Inc.'s
bankruptcy proceeding, the
size='3'>Wall Street Journal reported. At a
hearing in U.S. Bankruptcy Court for the Southern District of New York,
Judge Robert
Drain said he didn't want to take the more
severe step of appointing an independent examiner to supervise the
payment of fees. For the first time in the five months of the Refco
case, he expressed concern about costs related to divvying up the
commidity-brokerage firm's remaining assets. 'This is a check on
professionals' expectations regarding fees, and on the expectations of
customers for services,' he said.
name='4'>Ailing Health Care Company Gets Shot in the
Arm
The prognosis for
Curative Health Services Inc. got a little better as a bankruptcy court
gave the struggling company permission to go into emergency funds
pending an interim hearing next week,
size='3'>Portfolio Media reported yesterday.
Judge Stuart M.
Bernstein ruled, in an emergency bridge order,
that the health care company would be able to tap into the cash
collateral securing its lender claims if necessary. At the interim
hearing next Monday, the judge will mull over whether or not to expand
Curative’s cash collateral access and will also consider the
approval of a $45 million debtor-in-possession loan with General
Electric Capital Corp. on an interim basis. A final hearing is slated
for April 17 on the matter. The court’s decision comes as the
health care company recently filed for chapter 11 bankruptcy protection,
listing in its petition $255.6 million in debts and $155 million in
assets.
Autos
face='Times New Roman' size='3'>
name='5'>Delphi
size='3'> Prepares to Ask Judge to Void Labor
Contracts
Delphi Corp. is prepared
to ask a bankruptcy court judge to void its labor contracts today,
heightening prospects for a strike that could cripple its former parent
General Motors Corp, Bloomberg News reported today. The UAW has pledged
to strike if the contracts are nullified. A prolonged walkout may lead
to the bankruptcy of GM by cutting off the flow of auto parts from its
biggest supplier and shutting down its factories, analysts say. Delphi
Chief Executive Officer Steve Miller began demanding drastic wage and
benefit cuts following
size='3'>Delphi
petition. The union this week called Delphi's latest proposal
“devastating'' to
workers and their families.
href='http://www.bloomberg.com/apps/news?pid=10000103&sid=aqh8izdUkV6Q'>Read
more.
name='6'>Court Endorses Amcast Extension
A federal bankruptcy
judge has extended Amcast Industrial Corp.’s sole right to file a
reorganization plan, allowing the bankrupt auto parts maker to retain
control over its chapter 11 proceedings, Portfolio Media
reported yesterday. On Wednesday, the judge approved Amcast’s
request, filed last week in the U.S. Bankruptcy Court for the Southern
District of Indiana. Amcast, whose exclusivity period was scheduled to
end Friday, will now have until Sept. 27 to develop the plan and until
Nov. 26 to lobby creditors to accept its terms. The extension bars other
parties from filing competing plans, allowing the struggling wheel
manufacturer to preside over its chapter 11 case for at least another
few months. Indiana-based Amcast, which makes wheels for General Motors
Corp.'s Chevrolet Corvette, filed for bankruptcy on Dec. 1, 2005. The
move came just four months after it emerged from a previous bankruptcy.
The case is In re Amcast
Automotive Of Indiana Inc.
size='3'>and Amcast Industrial Corp., case no.
05-33322, in the U.S. Bankruptcy Court for the Southern District of
Indiana.
White
& Case Fights for Equity Committee
When Appaloosa Management
took on the daunting task of establishing an equity committee in
the
size='3'>Delphi
proceedings, the hedge fund turned to bankruptcy firm White & Case
LLP to get the job done, according to
size='3'>Portfolio Media yesterday. With the
firm serving as counsel, Appaloosa lobbied the court to make a separate
committee on the grounds that
face='Times New Roman' size='3'>Delphi
size='3'>had not been truthful about its liabilities when it went
bankrupt last year.
size='3'>Delphi
unsecured creditors and the U.S. Trustee all disagreed with
Appaloosa’s attempts to form a committee, saying that a
stockholder recovery was impractical. But White & Case didn’t
think the matter was impractical. In fact, it seems the firm has made it
a top priority in recent years to find creative and dynamic ways to
represent stakeholders who wouldn’t normally be cast in the same
league as other parties in traditional bankruptcy
cases.
name='8'>Gardenburger Exits Bankruptcy Process
Gardenburger Inc., a
maker of meatless hamburgers and other vegetarian foods, exited
bankruptcy protection Thursday as a closely held company under the new
name of “Wholesome & Hearty Foods Co.,” Bloomberg News
reported yesterday. The company, which is based in
w:st='on'>
size='3'>Irvine
w:st='on'>
size='3'>Calif.
in
size='3'>Clearfield
owned by an affiliate of Annex Holdings I LP. Gardenburger filed for
bankruptcy in
face='Times New Roman' size='3'>Santa Ana
size='3'>,
size='3'>Calif.
October with about $20 million in assets and $40 million in debts,
including a $27 million convertible note held by New York-based Annex
Capital Management LLC.
size='3'>
href='http://deseretnews.com/dn/view/0,1249,635195737,00.html'>Read
more.
Court
OK’s Sale of North Carolina Pharmaceutical Company
The Delaware Bankruptcy
Court approved a
size='3'>Bangalore
size='3'>India
pharmaceutical firm to purchase the assets of bankrupt Nobex Corp. for
$5 million, the Triangle Business Journal
(
size='3'>Raleigh
w:st='on'>
size='3'>N.C.
reported yesterday. Biocon Ltd., which partnered with
Nobex to make an insulin pill and a cardiovascular disease pill, had
made a stalking-horse bid of $3.5 million for Nobex before the
bankruptcy court approved an auction of the Durham-based drug firm's
assets. Under the terms of the transaction, Biocon acquires all of
Nobex's assets and claims full ownership of both drugs the companies
developed together.
href='http://triangle.bizjournals.com/triangle/stories/2006/03/27/daily27.htm…'>Read
more.
name='10'>Winn-Dixie to Sell 12 Stores in
w:st='on'>
size='3'>Bahamas
Bankrupt supermarket
chain Winn-Dixie Stores Inc. said Thursday it was selling its 12 stores
in the
face='Times New Roman'
size='3'>Bahamas
size='3'>for $50 million to a company based there, the Associated Press
reported yesterday. The 12 stores, nine of which operate under the City
Markets banner and three under the Winn-Dixie name, were operated by a
wholly owned subsidiary of Winn-Dixie, W-D Ltd. It was the only
subsidiary of the Jacksonville, Fla.-based company that did not file for
bankruptcy protection in February 2005. The agreement calls for W-D Ltd.
to sell its majority interest in Bahamas Supermarkets Ltd. to BK Foods
Ltd.
href='http://www.nytimes.com/aponline/business/AP-Winn-Dixie-Bankruptcy.html?…'>Read
more.
NBA
Pulls Out of Talks between Debt-Ridden Team and Arena
Owners
The NBA pulled out of
negotiations Thursday between the Portland Trail Blazers and Rose Garden
owners intended to help sell the debt-ridden team and its home arena,
the Associated Press reported yesterday. Last month, Blazers owner Paul
Allen said the team was hemorrhaging money and appealed for a public
partnership to keep it afloat. Allen suggested he may have to sell the
team if a solution could not be found. The arena was originally financed
by Allen without public money. But the team's sister company, Oregon
Arena Corp., declared bankruptcy in 2004 and Allen chose to give up
ownership rather than continue to pay interest on construction debt. As
a result, team revenue has declined sharply, along with ticket sales,
down by a third from five years ago. Allen has estimated the team will
lose some $100 million over the next three seasons. In a statement
released Thursday, commissioner David Stern said the league has
attempted for the past six weeks to broker a deal ''to sell the team and
the arena to one of several prospective purchasers that we have
identified.''
href='http://www.nytimes.com/aponline/sports/AP-BKN-Trail-Blazers-NBA.html?pa…'>Read
more.
name='12'>Church Sex Abuse Costs Rise Despite Drop in New
Allegations
The U.S. Conference of
Catholic Bishops said the financial costs of the sex abuse scandal in
the Roman Catholic Church rose dramatically in 2005, even as the number
of new allegations fell, the
size='3'>Washington Post reported today.
Releasing an annual report on their efforts to prevent abuse of minors
by priests, the bishops said U.S. dioceses spent $399 million last year
on legal settlements with sex abuse victims and $68 million on lawyers'
fees, psychological counseling and related expenses -- about three times
more than they paid in 2004. The church's cumulative expenditures on sex
abuse claims in the
w:st='on'>United
States
approaching $1.5 billion. Bishop William S.
Skylstad, president of the bishops' conference, said he has both 'a
sense of progress' and 'a great sense of the continuing impact of the
sexual abuse crisis' because his own diocese of
w:st='on'>
size='3'>Spokane
w:st='on'>
size='3'>Wash.
bankruptcy.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/03/30/AR20060…'>Read
more.
w:st='on'>
name='13'>New York
w:st='on'>
size='3'> Church
face='Times New Roman' size='3'> Declares
Bankruptcy
The troubled St. James
Church of God in Christ, based in Middletown, N.Y. and run by the Rev.
William Best, filed for bankruptcy this week, on the eve of a
foreclosure on Best's house and as Best negotiates the creation of a new
church in the Town of Wallkill, the
size='3'>Hudson Valley (N.Y.) Times Herald-Record
size='3'>reported today. The church has been suffering financial
troubles for years, and the bank first took foreclosure action on
the
face='Times New Roman' size='3'>Hoover
Drive
2005. This is not the first time the Pentecostal church has filed for
chapter 11 as the church filed for bankruptcy in January 2002 after Best
lost most of his congregation.
href='http://www.recordonline.com/archive/2006/03/31/news-dcbestmoney-03-31.h…'>Read
more.
International
name='14'>British Pension Deficits Decreased in
March
British pension fund shortfalls
among 200 companies dropped sharply in March due to strong stock markets
and a rise in bond yields that had a dramatic impact on how deficits are
measured, monthly data showed, according to Reuters yesterday. Deficits
among firms listed on the FTSE All-Share index fell to
£51 billion as at March 29
from £73 billion at the end of February, hitting the lowest
level in almost two years, according to Aon Consulting. Big
deficits have been blamed by many British firms for closing pension
schemes to new staff or cutting back on benefits.
href='http://today.reuters.co.uk/news/newsArticle.aspx?type=businessNews&stor…'>Read
more.