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May 22, 2006
name='1'>Experts Questioning Effectiveness of Credit Counseling
Requirement of Law
Experts are pointing out
that a basic problem with the credit-counseling requirement of the new
bankruptcy law is that consumers are already in dire financial straits,
with debts far outweighing income, and they have no choice but to file
for bankruptcy, the St.
Paul Pioneer Press reported yesterday. Steve
Bartlett, president of the Financial Services Roundtable, supports the
law but says it's flawed. 'Early on, most of the pre-bankruptcy
counseling is not especially useful because it's only occurring for
people right before they go into bankruptcy,'
w:st='on'>
size='3'>Bartlett
'The flaw is that the bankruptcy counseling is only occurring at the end
of the process, when you have little option.' Nationally, 150 approved
nonprofit agencies had led nearly 263,000 counseling conferences with
potential bankruptcy filers through May 10, according to the U.S.
Trustee Program. More than 25,000 people in Minnesota filed for
bankruptcy in 2005, but filings have tumbled to about one-third of 2005
levels statewide and nationally so far this year.
href='http://www.twincities.com/mld/pioneerpress/14623078.htm'>Read
more.
name='2'>Delay in Bankruptcy Decisions Allowing for Negotiations
at
size='3'>Delphi
Companies
Judges presiding over
bankruptcies involving Delphi Inc., Tower Automotive Inc., Northwest
Airlines Inc. and its commuter carrier Mesaba Airlines have delayed
ruling on rejecting labor contracts, opting for the companies and unions
to work out their differences rather than risk setting off a chain
reaction that cripples the automotive industry or parts of the airline
industry, the Detroit
Free Press reported yesterday. Only twice in
this decade has a bankruptcy judge tossed out a labor contract,
according to BNA Inc., a Washington, D.C.-based publisher and research
company: last year, when a judge voided labor contracts for
approximately 9,000 employees of U.S. Airways, and in 2004, when Horizon
Natural Resources Co., a coal producer in Ashland, Ky., was allowed to
cancel contracts covering about 800 active workers and 2,300
retirees. Samuel
Gerdano, ABI executive director, said
Judge Robert
Drain is looking closely at all the facts in
the
size='3'>Delphi
that the company is restructured with equitable sacrifices made by
all parties. 'Bankruptcy judges, by and large, don't decide cases based
on their legacy,' Gerdano said.
href='http://www.freep.com/apps/pbcs.dll/article?AID=/20060521/BUSINESS01/605…'>Read
more.
name='3'>Union Plays Key Role in
face='Times New Roman' size='3'>Delphi
size='3'>Bankruptcy
Since Delphi Corp.
threatened to rip up its labor contracts, some of the angriest public
rhetoric against the bankrupt auto parts giant has come from the
International Union of Electrical Workers, the industrial division of
the Communications Workers of America, the
size='3'>Washington Post reported today. Of
the six unions involved with
face='Times New Roman' size='3'>Delphi
size='3'>, the IUE-CWA was the first to authorize a strike against the
company and the only one to take out newspaper ads criticizing its
bargaining tactics. The IUE-CWA's most pressing issue is protecting the
8,500 jobs its members have at Delphi's
w:st='on'>
size='3'>U.S.
size='3'>plants. But the UAW has more to worry about than its
24,000
size='3'>Delphi
113,000 others at GM plants, which could be paralyzed if
size='3'>Delphi
strike.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/05/21/AR20060…'>Read
more.
Bawag
Nears Deal in Refco Probe
Federal authorities are
close to reaching a settlement with Bawag P.S.K. Group, the Austrian
bank tied to the collapse of
w:st='on'>
size='3'>U.S.
size='3'>futures broker Refco Inc., the
size='3'>Wall Street Journal reported today.
After several weeks of negotiations between Bawag officals and the
Justice Department and the Securities and Exchange Commission, it is
unclear whether the settlement will involve either a deferred or
nonprosecution agreement, under which Bawag would pay a penalty and
avoid criminal indictment, at least for the moment. Under the
settlement, Bawag could pay more than $600 million, some of which is
likely to go to Refco creditors and investors who have been pursuing
legal claims against the Austrian bank. An announcement could come as
soon as this week.
href='http://online.wsj.com/article/SB114825628083259108.html?mod=home_whats_…'>Read
more. (Registration required.)
name='5'>Pension Legislative Conference Still Slow in
Moving
Disagreement over
credit-rating language, an unenthusiastic reception from the business
community and even the negotiating styles of key congressional conferees
have stymied the rewrite of the nation's pension laws,
face='Times New Roman' size='3'>CongressDaily
size='3'>reported today. The pension conference began in early March,
and negotiators missed a self-imposed April 15 deadline for adopting a
conference report and are on track to miss a second deadline at the end
of this week. As if the pension bill's own issues were not complicated
enough, negotiators are weighing whether to attach a package of tax
provisions. Supporters of this strategy argue that the inclusion of a
'trailer' tax package of popular expiring temporary tax credits -- such
as for research and development and higher education expenses -- might
provide momentum for the pension bill. Tax writers like the idea of
finding a safe home for the tax 'extenders' on a conference package,
which cannot be amended. On the other hand, some pension negotiators
fear that adding tax breaks might increase the cost of the pension bill
and subject it to a budget point of order, which requires 60 votes in
the Senate to overcome.
name='6'>LG.Philips Asks Court for Permission to
Liquidate
Troubled CRT television
producer LG.Philips Displays USA has asked for court permission to
convert its bankruptcy case from a chapter 11 to a chapter 7 liquidation
after failing to find a buyer for its assets,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported Friday. The company has been under threat of a chapter
7 liquidation since April, after creditors threatened to deny cash
collateral if the company did not meet certain terms. Creditors pointed
out that in May 2004, LG.Philips stated that its debt was around $20
million. Now, less than two years later, the company’s obligation
has suddenly ballooned to $573 million, which raised suspicion. The
company, with between $50 million and $100 million in assets,
filed for
bankruptcy on March 15, though it did not cite a reason. The case
is
size='3'>LG.Philips Displays USA Inc., case
number 06-10245-bls, in the U.S. Bankruptcy Court for the District of
Delaware.
name='7'>Adelphia Banks Oppose Motion to Limit Defense
Funds
Adelphia Communications
Corp.’s banks and unsecured creditors are at odds over the flow of
funds to lenders for defense expenses stemming from loans to the cable
provider prior to its bankruptcy filing,
size='3'>Portfolio Media reported on Friday.
The unsecured creditors said in court papers that lenders have already
taken approximately $100 million for indemnification claims and should
not receive additional funds. But in multiple objections filed Wednesday
by the lenders, banks argued that the creditors’ request should be
rejected because it fails to take into account the legal costs from
lawsuits that the unsecured creditors' committee had started. The
committee is suing hundreds of banks for allegedly being aware of and
participating in the fraud executed by Adelphia's founders, the Rigas
family. A hearing has been scheduled for May 26 in the U.S.
Bankruptcy Court in
w:st='on'>
size='3'>Manhattan
case is Adelphia
Communications Corporation, case no. 02-41729,
in the U.S. Bankruptcy Court for the Southern District of New
York.
name='8'>Federal Judge Refuses to Mediate Refco Document
Spat
A federal judge in
size='3'>Manhattan
decided to stay out of a bankruptcy feud between Refco Inc.’s
creditors and the investment banks that underwrote the company’s
initial public offering for $583 million in August 2005,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported on Friday. Although the IPO underwriters asked the
federal judge to mediate a dispute over whether the underwriters need to
turn over confidential papers to Refco’s creditors, U.S. District
Judge Gerard Lynch denied the motion, ruling that the bankruptcy matter
should be handled by Refco’s bankruptcy judge. In their
investigation of the company’s collapse due to an accounting
scandal last October, Refco’s creditors have demanded in
the
face='Times New Roman'
size='3'>U.S.
face='Times New Roman'> Bankruptcy Court in
size='3'>Manhattan
underwriters provide them with documents about their relationships with
Refco in the five years leading up to the IPO. The federal matter
is In re Refco
Inc., case number 1:06-cv-01888-gel, in the
U.S. District Court for the Southern District of New York. The
bankruptcy case is In re
Refco Inc. et al., case no. 05-60006, in the
U.S. Bankruptcy Court for the Southern District of New
York.
name='9'>Bankrupt Art Marketer Heads to Liquidation
A bankruptcy judge on May
16 converted International Galleries Inc.'s chapter 11 reorganization
into chapter 7 liquidation, although the trustee in the case said the
business could still be purchased, the
size='3'>Dallas Business Journal reported
yesterday. Trustee Dan Lain said he
asked Judge Barbara
Houser to make the switch because the matter
can be handled more economically in chapter 7.
size='3'>Lain, of the
w:st='on'>
size='3'>Dallas
firm Lain, Faulkner & Co. P.C., is in talks with two bidders
for Addison-based IGI. One group is out of
w:st='on'>
size='3'>Virginia
Paul Myer, the former head of the
face='Times New Roman' size='3'>Addison
size='3'>multi-level marketing firm, which sold high-end reproductions
of art. Lain said each party has presented an offer and that he has
submitted counter-offers.
href='http://msnbc.msn.com/id/12911594/'>Read
more.
name='10'>Bankruptcy Court Approves Pinnacle Deal to Buy St. Louis
Casino
U.S. Bankruptcy Court
in
Louis
Pinnacle Entertainment Inc. to purchase the President Casino on
the
size='3'>St. Louis
size='3'>riverfront for about $31.5 million, Pinnacle said Friday, the
Associated Press reported Friday. Las Vegas-based Pinnacle is in the
midst of building a $350 million casino near the President, the only
current casino in the city and one of five in the
w:st='on'>
Louis
needs licensing approval from the Missouri Gaming Commission and final
approval from the court of the debtors' bankruptcy plan. President
Casinos Inc., the riverboat casino's parent company, has been under
bankruptcy protection since 2002.
href='http://www.dfw.com/mld/dfw/business/14621743.htm'>Read
more.
name='11'>Local
w:st='on'>
size='3'>Iowa
Shows Strong Results
The economy of
size='3'>Black
face='Times New Roman' size='3'>Hawk
size='3'>County
w:st='on'>
size='3'>Iowa
strong during the first quarter of 2006, despite rising fuel costs,
according to the
size='3'>Waterloo Cedar-Falls Courier
size='3'>yesterday. Six of eight economic indicators regularly tracked
by the Courier showed improvement from a year ago. The county's average
4.6 percent jobless rate for the quarter was the lowest since 2002
and a significant turnaround from the five-year high of 5.3 percent for
the same quarter a year ago. Total average employment for the quarter
--- 89,500 --- was at a five-year high, according to Iowa Workforce
Development. Bankruptcies plummeted in the first quarter from record
highs last year, dropping from a then- record 250 to 53 for the first
quarter.
href='http://www.wcfcourier.com/articles/2006/05/21/business/local/3bb8ee1d34…'>Read
more.
name='12'>Commentary: Very Rough Justice in Milberg
Case
The indictment of
Milberg Weiss breaks new ground in alleging that many of the firm's
class-action suits, which plaintiffs were allegedly paid off, aren't
just unethical but have been illegally manufactured, according to an
editorial in today’s
size='3'>Wall Street Journal. In order to file
a securities suit, tort firms require a 'lead plaintiff' who was
actually harmed and seeks to represent thousands of other unnamed
shareholders. According to prosecutors, Milberg Weiss was paying
millions of dollars in kickbacks to its lead plaintiffs. The Milberg
indictment is nonetheless a watershed moment for the
w:st='on'>
size='3'>U.S.
size='3'>legal system. It comes at the same time that judges have begun
to expose the corruption behind asbestos and silicosis suits, which are
also being probed by a federal grand jury in
w:st='on'>
York
Department is doing the right thing in trying to clean up corrupt tort
practices. The risk is that its chosen means of indicting an entire firm
might allow some of the guilty to skate while innocents lose their
jobs.
href='http://online.wsj.com/article/SB114825293056759049.html?mod=opinion_mai…'>Read
more. (Registration required).
size='3'>San Diego
w:st='on'>Pension
w:st='on'>Board
w:st='on'>Rejects
w:st='on'>City
Retirement Fund Obiligations
City Attorney Michael
Aguirre clashed Friday with members of
w:st='on'>
Diego
the panel's president stopped him from questioning an expert who studied
the retirement fund's obligations and investment performance, the
San Diego
Union-Tribune reported on Saturday. Board
President Peter Preovolos refused to allow the city attorney to seek
answers from the expert, actuary Gene Kalwarski, about his experience
with pension funds as large as the San Diego City Employees Retirement
System. The pension board unanimously accepted Kalwarski's report, but
only after the confrontation between Aguirre and Preovolos. The actuary
found that the system continued to run a deficit – he pegged it at
$1.39 billion in the fiscal year that ended June 30, but its slide in
recent years has been halted.
href='http://www.signonsandiego.com/news/metro/pension/20060520-9999-2m20pens…'>Read
more.
International
name='14'>Debt Problem Soars as One Million British Face Threat of
Bankruptcy
A million people in
Britain could be on the verge of bankruptcy, while one in five adults,
or eight million, have unsecured debt of more than £10,000,
according to a recent report, the
size='3'>London Guardian reported on Saturday.
Research by YouGov for debt consultancy Thomas Charles suggests that 1.7
million people often struggle to meet their debt payments. Nearly a
million of those could have problems meeting their obligations every
month. Bank of England figures last year showed the amount of personal
debt in
face='Times New Roman'
size='3'>Britain
size='3'>had broken through the £1 trillion mark, with people
encouraged by low interest rates and the easy availability of credit.
Much of that debt is mortgage, or secured debt, but a growing proportion
is unsecured credit card or overdraft debt.
href='http://www.guardian.co.uk/frontpage/story/0,,1780385,00.html'>Read
more.
name='15'>British Panel Says Pension Plan Must Be
Simple
A proposed new pension plan to
persuade British citizens to save for their pensions must be simple and
cheap to run if it is to succeed, a parliamentary panel said on Sunday,
according to a Reuters report yesterday. The House of Commons' Treasury
Committee's report comes days before the government is due to release
eagerly-awaited proposals for reforming Britain's pension system to cope
with a looming crisis caused by an aging population. The government is
expected to draw on the ideas of a panel of experts headed by Adair
Turner, who called for higher state spending on pensions coupled with a
new National Pensions Savings Scheme (NPSS) that workers would
contribute to. In a report on the proposed NPSS, the Treasury Committee
said the scheme's management fees should be as low as possible. It also
called for more study of the market impact of such a scheme and urged
the government to look at new ways to make people more aware of the
'long-term financial value of occupational pension schemes.'
href='http://today.reuters.co.uk/news/newsArticle.aspx?type=topNews&storyID=2…'>Read
more.
href='http://today.reuters.co.uk/news/newsArticle.aspx?type=topNews&storyID=2…'>