January 72010

reorganization plan, the company will liquidate debtor affiliates
Alameda Investments LLC and Liberty Holdings Group LLC. A liquidation
trust was funded with $5 million in cash and joint venture interests for

creditors. Holders of $717 million in financial lender claims, $48.6
million in bond indemnity claims and $176 million in general unsecured
claims will get a pro-rata share of restructured debt and equity. The
restructured debt will be secured by all of reorganized Woodside's
assets. Woodside estimated the first two groups on average will recover
70.4 percent, while the unsecureds are expected to recoup 7.4 percent of

their claims, though exact recoveries will vary by affiliate. 

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representatives, consumer advocates and other observers agreed that
Senate Banking Chairman Christopher J. Dodd's (D-Conn.) announcement to
retire boosts the chances of the financial regulatory overhaul bill
passing this year, the Washington Post reported today.
Consumer advocates and financial lobbyists, who have long been at odds
over the direction of financial reform, each held out hope Wednesday
that a politically unencumbered Dodd might shape legislation more in
line with their interests. In November, Dodd unveiled a draft financial
regulatory overhaul bill that adopted many of the administration's
proposals but also put him at odds in certain areas with both the
administration and House lawmakers, as well as several moderate
Democrats on his own committee. Though talks between Dodd and Senate
Banking Committee ranking member Richard Shelby (R-Ala.) initially broke

down, the two announced a return to the bargaining table last month.
Dodd's decision to retire means that Sen. Tim Johnson (D-S.D.) is likely

to take over as chairman of the banking panel in the next Congress.
Johnson suffered a brain hemorrhage in 2006 that impaired his speech and

forced him to use a motorized scooter. However, Johnson's condition has
improved, and a Senate staffer said that top Democrats didn't see his
health as an impediment. Johnson is known as a champion of the credit
card industry, as many card issuers have based their operations in South

Dakota to take advantage of the state's absence of caps on the interest
rates companies can charge. When the Senate passed a credit card reform
bill in May, Johnson was one of just five senators -- and the only
Democrat -- who voted against it. 

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report in today's New York Times. The minutes of the
Federal Open Market Committee’s mid-December meeting, released
yesterday, reflected a lingering wariness about the strength of the
recovery in light of high unemployment and substantial slack in the
economy. Concern over housing also deepened yesterday with the release
of new data showing that long-term interest rates were rising rapidly
from their historic lows, while mortgage applications to purchase houses

were falling. Applications are now at their lowest level in 12 years.
The Fed has been buying $1.25 trillion of mortgage-backed assets to ease

lending markets and keep longer-term rates low — a program that is

winding down and scheduled to end by March 31. The program was
successful for much of last year, pushing mortgage rates below 5
percent, to levels not seen since the early 1950s. Many economists say
the end of the program will push rates back up from a half point to a
full point, adding to the cost of a house and diminishing the pool of
buyers.

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during a recent review that losses on commercial real estate loans pose
the biggest risk to U.S. banks this year, troubling smaller lenders, but

unlikely to threaten the entire financial system, Bloomberg News
reported yesterday. “Losses from commercial real estate will be
quite high by historic standards,” said Eugene Ludwig, former
Comptroller of the Currency who is now chairman of Promontory Financial
Group, a consulting firm to financial institutions. The default rate on
commercial mortgages held by U.S. banks more than doubled to 3.4 percent

in the third quarter, according to Real Estate Econometrics LLC, a
property research firm in New York. Default rates in the first three
quarters of 2009 have been the highest since 1993, according to the
firm. Banks and investors held about $3.5 trillion of commercial real
estate debt in June 2009, with about $1.7 trillion of that total on the
books of banks and thrifts, according to Fed data. About $500 billion of

the loans will mature each year over the next few years, Fed officials
say. Regional banks are almost four times more concentrated in
commercial property loans than the nation’s biggest lenders,
according to data compiled by Bloomberg on bailout recipients. 

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predicted yesterday that GM would both become profitable and repay its
government loans this year, the New York Times reported
today. He added that the company was committed to paying back $6.7
billion in federal government loans by June. GM has received $50 billion

in federal aid in the last year, but most of that debt has been
converted to equity in what Whitacre said was now essentially a private
company. The federal government owns 60 percent of GM’s shares,
and an important goal of Whitacre’s is to position the company for

a public stock offering that would help taxpayers recoup some of their
investment. Whitacre said that an offering could be made by the end of
this year, but declined to be more specific about that
timetable. 

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Corp.'s board could vote next week to propose tying the fees lenders pay

the agency for deposit insurance to the risk profile of compensation
packages for executives, the Wall Street Journal
reported today. Banks with compensation structures the FDIC views as
less risky, such as those that allow firms to claw back pay from
executives, could be given a break on the fees they pay on deposit
insurance. Firms that have pay structures the FDIC views as giving
officials an incentive to put the company at more risk could be forced
to pay more. The proposal is in an early stage, but it represents the
latest government effort to curb financial companies' pay structures.
Federal officials have criticized banks for offering too many incentives

to loan officers and traders with little regard for whether loans or
trades eventually went sour. Federal Reserve officials are working on a
separate plan to curb the incentives and bonuses banks pay certain
employees. 

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debtor, Trump and the noteholders allege that the plan put forward by
Icahn and the bank does not address how Icahn intends to operate the
casinos and fails to disclose the possibility of antitrust delays for
Icahn's acquisition of the debtor as he is also about to become the
owner of a competitor casino, the Tropicana. Judge Wizmur  also
approved voting procedures for the competing plans in her order and a
deadline for objections to the plans is set for Feb. 12 with a
confirmation hearing set for Feb. 16. 
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defendant BH S&B Holdings LLC bought the assets of Steve &
Barry's Manhattan LLC. Three months after the transaction, employees
were terminated without notice, the suit says. A day after the Nov. 17,
2008, firings, the plaintiffs filed suit under the Worker Adjustment and

Retraining Notification Act in federal court. Then, on Nov. 19, 2008, BH

S&B Holdings LLC and a related entity, BH S&B Intermediate
HoldCo LLC, filed a Chapter 11 petition. The WARN Act action was refiled

as an adversary proceeding but was reinstated in the district court in
February. 
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have approved a stalking-horse bid from Genband Inc for certain of its
Internet telephony assets and set dates for an auction, Reuters reported

today. Nortel sought court approval on Dec. 28 to sell certain carrier
Voice over Internet Protocol (VoIP) technology for $282 million to
Texas-based Genband, whose bid is setting the floor price for the assets

in an auction supervised by the bankruptcy court. Qualified bidders can
submit higher or better offers by February 23, for an auction scheduled
for February 25. 

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