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February 2, 2010
January Consumer Bankruptcy Filings
Decrease 10 Percent from December
size='2'>
The 102,254 consumer bankruptcies filed in January represented a 10
percent decrease nationwide from the 113,274 consumer filings recorded
in December, according to the ABI relying on data from the National
Bankruptcy Research Center (NBKRC). NBKRC
lang='EN'>’s data also showed that the
January 2010 consumer filings represented a 15 percent increase over the
88,773 consumer filings recorded in January 2009. Chapter 13 filings
constituted 30 percent of all consumer cases in January, representing a
2 percent increase from December.
href='http://www.abiworld.org/AM/Template.cfm?Section=Monthly_Bankruptcy_Statistics&Template=/MembersOnly.cfm&NavMenuID=3716&ContentID=46994&DirectListComboInd=D'>Click
here to view the monthly filing charts.
R.H. Donnelley Exits Chapter 11 under New
Name
Yellow Pages publisher R.H. Donnelley Corp. has exited bankruptcy after
a seven-month stay with a new name, Dex One Corp., the Deal
Pipeline reported yesterday. The Cary, N.C., directories publisher
announced yesterday that it had successfully reorganized its debt under
chapter 11 protection and has emerged as a publicly traded company, with
its shares to be traded on the New York Stock Exchange under the symbol
DEXO. 'We completed a very complex restructuring in less than a year,
eliminating more than $6 billion in debt and approximately $500 million
in annual interest expense,' Dex One chairman and CEO David C. Swanson
said. The company is named after its Dex brand of products, which offer
online and mobile yellow page directories services. Bankruptcy Judge
Kevin Gross of the U.S. Bankruptcy Court for the District of
Delaware in Wilmington confirmed its plan Jan. 12.
href='http://pipeline.thedeal.com/tdd/ViewArticle.dl?id=10005384423'>Read
more. (Subscription required.)
Administration's Latest Proposals Alter
Talks on Wall St. Reform
President Obama’s
proposals to tax and curb the activities of Wall Street have thrown an
unpredictable element into the debate over financial regulatory reform,
the New York Times reported today. They also have touched off an
intensive new round of lobbying and raised questions in Congress over
whether his plan will add urgency or merely bog things down. The new
White House approach has already prompted the Senate Banking Committee,
led by Senator Christopher J. Dodd (D-Conn.) to interrupt those
negotiations. The Senate Banking Committee will hold several hearings on
Obama’s proposals
and today the committee will hear from Paul A. Volcker, a former Federal
Reserve chairman who is the author of the administration's plan to curb
bank activities, along with Deputy Treasury secretary Neal S.
Wolin. Republicans on the committee said that Obama
lang='EN'>’s call for a bank tax was a
political response to the unexpected loss of a Massachusetts Senate
seat. Democrats, although more positive about the president
lang='EN'>’s remarks, were slow to embrace
the specifics of his proposals, like the tax.
href='http://www.nytimes.com/2010/02/02/business/02regulate.html?ref=business&pagewanted=print'>Read
more.
href='http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=54b42cc0-7ecd-4c0d-88c0-65f7d2002061'>Click
here for more information on the Senate Banking Committee's
hearing scheduled for today at 2:30 p.m. ET titled 'Prohibiting Certain
High-Risk Investment Activities by Banks and Bank Holding
Companies.'
Foreshadows a Crush of Foreclosures
The share of borrowers who are falling seriously
behind on loans backed by the Federal Housing Administration jumped by
more than a third in the past year, foreshadowing a crush of
foreclosures that could further buffet an agency vital to the housing
market's recovery, the Washington Post reported today. About 9.1
percent of FHA borrowers had missed at least three payments as of
December, up from 6.5 percent a year ago, the agency's figures show.
Although the FHA's default rate has been climbing for months and eating
into the agency's cash, the latest figures show that the FHA's woes are
getting worse even as the housing market shows signs of improvement. The
problems are rooted in FHA mortgages made in 2007 and 2008. Those loans
are now maturing into their worst years because failures most often
occur two to three years after a mortgage is made.
href='http://www.washingtonpost.com/wp-dyn/content/article/2010/02/01/AR2010020103527_pf.html'>Read
more.
U.S. music and entertainment company Muzak Holdings LLC said yesterday
that it had emerged from chapter 11 protection, Reuters reported
yesterday. The company said that investment firm Silver Point Capital
has become the majority equity owner of the reorganized company. Muzak,
which is known for its background music in stores, hotels and elevators,
sought court protection from creditors last February so that it could
restructure maturing debt. The company cut its debt by more than half to
$230 million during the bankruptcy. The company also has a $108.75
million exit finance facility from GE Capital Restructuring Finance,
Silver Point and MFC Global Investment Management.
href='http://www.reuters.com/article/idUSN0123149120100201'>Read
more.
General Growth Seeks
Exclusivity Extension
size='2'>
Mall owner General Growth Properties Inc. has sought a six-month
extension to exclusively file its reorganization plan, Reuters reported
yesterday. In a court filing dated Jan. 29, the company said that the
proposed extension will help maintain progress in its chapter 11 cases
as it undertakes a series of steps to raise capital and maximize value.
If approved, General Growth will have until late August to file its
reorganization plan. Its current exclusivity period ends in late
February. The company's equity holders' committee supported the
extension, and talks with the creditors' committee on the matter were
still ongoing, the filing said. The bankruptcy case is
size='2'>In re General Growth Properties Inc., U.S. Bankruptcy
Court, Southern District of New York, No. 09-11977.
href='http://www.reuters.com/article/idUSSGE6102M620100201'>Read
more.
name='7'>Redstone, Midway Board Dodge Fiduciary Breach
Claims
Bankruptcy Judge Kevin Gross on Friday
dismissed breach-of-fiduciary-duty claims brought by Midway Games Inc.'s
creditors' committee against members of its board of directors, saying
that the directors aren't liable for the video game maker's 'deepening
insolvency' before it filed for chapter 11, Bankruptcy Law360
reported yesterday. The creditors' complaint, which was filed against
former controlling shareholder and media mogul Sumner Redstone, the
investor's privately controlled company National Amusements Inc.,
members of Midway's board and current Midway controlling shareholder
Mark E. Thomas, leveled various claims including fraudulent transfer,
corporate waste, breach of fiduciary duty and unjust enrichment. The
creditors' claims stem from what they called a
face='Verdana' size='2'>“series of
disastrous and ill-advised financial transactions
face='Verdana' size='2'>” that pushed Midway
into chapter 11 in February 2009, according to the adversary complaint
filed in May. The adversary case is Official Committee of Unsecured
Creditors of Midway Games Inc. et al. v. National Amusements Inc. et
al., case number 09-50968, in the U.S. Bankruptcy Court for the
District of Delaware.
href='http://bankruptcy.law360.com/articles/146897'>Read
more. (Subscription required.)
name='8'>Reader's Digest to Delay Bankruptcy
Emergence
Reader's Digest Association
Inc. said yesterday that it would delay its emergence from bankruptcy
after Britain's pension regulator said that it would not approve a
pension fund agreement related to the U.S. publisher's British
subsidiary, Reuters reported yesterday. Reader's Digest Association
Ltd., the British entity, had reached an agreement with the trustees of
its pension plan and the British Pension Protection Fund to resolve its
pension fund deficit. The agreement was contingent on approval from
Britain's pensions regulator, which said it will not approve the pension
application. The issue is specific to the British entity and does not
involve any other RDA company, Reader's Digest said. RDA UK is required
to pay $7.4 million in pension obligations annually, but did not
generate enough free cash flow to make the payments, Reader's Digest
said in court documents.
href='http://www.reuters.com/article/idUSN0115130320100201'>Read
more.
Entertainment Seeks More Time to File Bankruptcy Plan
Magna
Entertainment Corp., which has pushed back the sale of its Maryland
assets, is seeking an extension for filing its plan to exit bankruptcy
as it works to finalize negotiations with creditors, Dow Jones
Daily Bankruptcy Review reported today.
Magna, which operates horse racetracks, wants a court to push back the
deadline for filing its restructuring proposal to the end of April so it
can hammer out a plan built around a key settlement with creditors. The
settlement, announced last month, resolves a lawsuit between unsecured
creditors, owed about $250 million, and MI Developments Inc., Magna's
majority shareholder. Under the deal, creditors are slated to receive
$96.5 million and potentially additional proceeds from the sale of
Magna's racetracks in exchange for dropping the lawsuit, which claims
that MI Developments blocked crucial sales of Magna assets while making
loans to the company in a bid to keep control over it.
name='10'>Extended Stay Court Examiner Seeks More Time for
Probe
The court appointed examiner who is
probing the collapse of U.S. hotel chain Extended Stay asked the
bankruptcy court yesterday for additional time to complete his
investigation, Reuters reported yesterday. Ralph Mabey, a former
bankruptcy judge who was appointed as the examiner, said that he was
seeking an additional 21 days to conduct the investigation, as he has
had some difficulty in obtaining necessary witnesses, documents and
other information that he had hoped to obtain consensually. Extended
Stay filed for bankruptcy protection in June saying it was
'significantly over-leveraged' and that projected cash flows could not
continue to service its more than $7 billion in debt. In September, a
U.S. bankruptcy judge approved a request by the U.S. Trustee for an
examiner to be hired to probe questions surrounding the purchase and
financing of the lodging chain. The examiner, who was originally
expected to file his report on February 19, asked for a delay until
March 12.
href='http://www.reuters.com/article/idUSTRE61101A20100202'>Read
more.
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