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November
28, 2007
Mortgage
Lending
name='1'>Foreclosures by Lender Investigated by
EOUST
The Executive Office of
the U.S. Trustees has subpoenaed Countrywide Financial, the
nation’s largest mortgage lender and loan servicer, to determine
whether the company’s conduct in two foreclosures in
southern
face='Times New Roman' size='3'>Florida
represented abuses of the bankruptcy system, the
New York Times
size='3'>reported today. The subpoenas for
Countrywide documents were issued in late October by the EOUST after the
agency announced an effort to move against mortgage servicing companies
that file false and inaccurate claims in foreclosure cases.
The inquiries stem from two chapter 13 cases in
size='3'>Florida
size='3'>U.S. T
size='3'>rustee is investigating claims and fees filed by Countrywide.
In court documents, the trustee said they intended to examine the
procedures Countrywide used to determine whether it had a valid
claim to the properties and that it had correctly calculated the amounts
it said the borrowers owed. The Trustee’s office has asked
Countrywide to produce a copy of the notes and mortgages, a payment
history on both loans and the correspondence it had with the
borrowers.
href='http://www.nytimes.com/2007/11/28/business/28lend.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
name='2'>Commentary: Mortgage Reform Bill Likely to Make
Homeownership More Difficult
The Mortgage Reform and
Anti-Predatory Lending Act of 2007, which looks to protect the poor from
market predators, will actually protect the poor from wealth, according
to a commentary from Scripps Howard News Service. The bill, which passed
out of the House earlier this month and is headed to the Senate, assumes
that when private individuals make mistakes they won’t take
responsibility to figure out what they did wrong and make adjustments.
The proposed legislation will lead to new and onerous regulations in the
business of making loans to consumers for purchasing homes, and as a
result, fewer loans will be made to the detriment low-income families
who the new regulations will supposedly protect.
href='http://www.scrippsnews.com/node/28240'>Read the full
commentary.
name='3'>Financial Firms Searching for New Sources of
Capital
Faced with massive losses
linked to the subprime-mortgage crisis and the accompanying credit
crunch, several of the nation's financial institutions -- from Wall
Street investment firms to bond insurers -- are assessing their need for
new sources of capital, the
size='3'>Wall Street Journal reported today.
That trend is likely to intensify in the coming months amid signs that
they could face billions of dollars in additional losses as the
mortgage-market fallout persists. With credit increasingly tight and the
stock market looking shakier, Wall Street may now see a round of
opportunistic deal-making. Bank of America, based in
w:st='on'>
size='3'>Charlotte
w:st='on'>
size='3'>N.C.
been one of the most opportunistic acquirers in the banking industry. In
the past couple of years, it has scooped up retail bank FleetBoston
Financial Corp., credit-card issuer MBNA Corp., wealth-management firm
U.S. Trust Co. and, most recently, LaSalle Bank.
href='http://online.wsj.com/article/SB119621680974306166.html?mod=hps_us_whats_news'>Read
more. (Registration required.)
name='4'>Owens Corning Settles
w:st='on'>
size='3'>Ohio
size='3'>Environmental Claims
Bankruptcy Judge
Judith Fitzgerald
approved insulation maker Owens Corning's settlement
with
size='3'>Ohio over the
treatment of contaminated sites on Monday in a dispute left over from
the company's bankruptcy,
size='3'>Bankruptcy Law360 reported yesterday.
For each site,
face='Times New Roman' size='3'>Ohio
will have an allowed unsecured claim of between $11,000
and $14,000 for past treatment costs. And Owens Corning will have to pay
the state half of its excess insurance proceeds from the Granville
site.
size='3'>Ohio will retain
the right to demand treatment of additional sites if they are deemed
polluted. In February, the company settled with the state of
size='3'>Illinois
million unsecured claim, to be paid into an
w:st='on'>
size='3'>Illinois
abatement fund, for immunity from asbestos-related damages.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=40957'>Read
more. (Registration required.)
name='5'>Adelphia Estate to Pay Comcast $9 Million
Comcast Corp., which
along with Time Warner Inc. agreed to purchase all the assets of
bankrupt cable company Adelphia Communications Corp., will receive $9
million in cash from the Adelphia estate and will drop its remaining
claims, Bankruptcy
Law360 reported yesterday. Judge
Robert E. Gerber
on Monday granted a nonappealable order for cash payment
in exchange for a waiver of the claims that Comcast would be permitted
under Adelphia's reorganization plan, which was approved in January and
finalized the following month. The deal, which is not yet final, would
also preempt, on the debtors' part, all further liability related to the
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=40937'>Read
more. (Registration required.)
Autos
name='6'>DOJ Drops Probe of Former Top
w:st='on'>
size='3'>Delphi
size='3'>Officials
The U.S. Department of
Justice confirmed yesterday that it will not file criminal charges
involving allegations of accounting fraud against nine former executives
of Delphi Corp.,
size='3'>Bankruptcy Law360 reported yesterday.
DOJ's investigation centered on former top officials of the troubled
Troy, Mich.-based auto parts supplier, including former Delphi chairman
and CEO J.T. Battenberg III and former chief financial officer Alan
Dawes. The probe investigated an alleged accounting scheme that some
claimed helped land the auto parts supplier into bankruptcy. Though DOJ
dropped their probe, several of Delphi’s officials, including
Battenberg, still face charges that they engaged in or abetted schemes
that the SEC says led to material misstatements of
w:st='on'>
size='3'>Delphi
condition.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=40913'>Read
more. (Registration required.)
name='7'>Financing Set for Dana to Exit from
Bankruptcy
Dana Corp. said yesterday
that it has commitments for $2 billion in financing as it tries to exit
from chapter 11 by the end of January, according to the
w:st='on'>
size='3'>Toledo
size='3'>(
face='Times New Roman' size='3'>Ohio
size='3'>) Blade today. The financing,
underwritten by Citigroup Global Markets Inc., Lehman Brothers Inc., and
Barclays Capital consists of a $650 million asset-based revolving credit
facility and a $1.35 billion term loan. The company said the money will
be used to repay its debtor-in-possession credit facility, make payments
required upon exit from bankruptcy and provide working capital. The
commitment letter remains subject to bankruptcy court
approval.
name='8'>Dura Searching for Chapter 11 Exit Loans
Dura Automotive Systems Inc.
said yesterday that it has the necessary creditors' votes in hand, but
still needs $425 million in debt financing to get out of bankruptcy, the
Associated Press reported yesterday. The Rochester Hills, Mich.-based
auto-parts company is racing the clock because its current
bankruptcy-financing deal expires on Dec. 31. Dura also faces a Dec. 6
court hearing on whether its chapter 11 exit plan should be approved by
a judge. Approval could be delayed if financing isn't lined up by then.
Dura needs to borrow at least $300 million to pay off its chapter 11
loans and other debt that would come due at the time it emerges from
bankruptcy.
href='http://www.forbes.com/feeds/ap/2007/11/27/ap4378573.html'>Read
more.
Approves Calpine Settlements
Bankruptcy Judge
Burton Lifland
size='3'>yesterday approved two settlements worth millions of dollars
between Calpine Corp. and its creditors that will help the company move
forward in its effort to exit bankruptcy by early next year, the
Associated Press reported yesterday. The San Jose, Calif.-based company
has been working to settle conflicts with creditors to clear the way for
the company to exit bankruptcy before the end of January. The company
has said it could lose an $8 billion financing package if it doesn't
emerge from chapter 11 protection by Jan. 31. The settlements approved
yesterday involved holders of Calpine's first-lien debt and
first-priority CalGen debt. The first-lien debtholders, who already have
been paid $646 million, contended they were entitled to a $97 million
pre-payment penalty and an additional $13 million in damages. To settle
the dispute, Calpine agreed to grant those bondholders a $50.5 million
secured claim and a $34 million unsecured claim. Judge Lifland is
scheduled to hold hearings in mid-December on the company's chapter 11
plan.
href='http://www.chron.com/disp/story.mpl/ap/fn/5332619.html'>Read
more.
name='10'>Supreme Court to Hear Case of Lost 401(k)
Funds
The issue of
whether
face='Times New Roman'
size='3'>U.S.
size='3'>workers can sue to recover money lost because of mistakes by a
retirement fund's administrator came before the Supreme Court on Monday
in a case that could shape the pension rights of 70 million
employees, Los Angeles
Times reported yesterday. The case began when
James LaRue, a management consultant from
w:st='on'>
size='3'>Texas
lost $150,000 from his 401(k) retirement account when the plan's
administrators ignored his instructions to move his money from a
high-risk stock fund into government bonds in 2001. LaRue sued his
employer, DeWolff, Boberg & Associates, but his claim was thrown out
before a trial because, according to the lower courts, the federal law
governing pensions and benefits does not allow individuals to sue over
losses in their retirement accounts. During Monday's oral argument, the
justices seemed divided over whether to allow employees like LaRue to
sue over losses in their retirement funds. It will be several months
before a decision will be handed down in the case of
face='Times New Roman' size='3'>LaRue v. DeWolff, Boberg &
Associates.
href='http://www.latimes.com/business/investing/la-na-scotus27nov27,1,6250481,print.story?coll=la-headlines-business-invest&ctrack=2&cset=true'>Read
more.
International
size='3'>Norwegian Investment
HouseDeclares
Bankruptcy
Oslo-based investment
house Terra Securities ASA declared bankruptcy today after national
regulators moved to revoke its license for failing to inform Norwegian
townships of the high risks of their
w:st='on'>
size='3'>U.S.
size='3'>investments, the Associated Press reported today. Four small
townships in northern
w:st='on'>
size='3'>Norway
size='3'>had been embroiled in a conflict with Terra over losses, saying
the brokerage failed to inform them of the high risk of 451 million
kroner ($82 million, €56 million) in investments placed through
the American financial giant Citibank. All four of the townships had
borrowed money against expected future income from municipal
hydroelectric plants, and invested in complex funds in part based on
risky subprime mortgages in the
w:st='on'>
size='3'>United States
size='3'>. A sharp decline in the
w:st='on'>
size='3'>U.S.
size='3'>subprime market would have forced the townships to invest even
more money under the terms of their contract. The Financial Supervisory
Authority of Norway, a government agency, notified Terra that it
intended to revoke all of its licenses to manage investments in
href='http://biz.yahoo.com/ap/071128/norway_brokerage_bankruptcy.html?.v=1'>Read
more.
href='http://biz.yahoo.com/ap/071128/norway_brokerage_bankruptcy.html?.v=1'>