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December 23, 2005
name='1'>Texas
Court Dismisses Pope From Sex Abuse Case
A U.S. judge in
Texas dismissed
Pope Benedict XVI from a civil lawsuit accusing him of conspiracy to
cover up
the sexual abuse of minors by a seminarian, ruling Thursday that the
pontiff
has immunity as a head of state, the Associated Press reported today.
U.S. District
Judge Lee Rosenthal cited a motion filed by the Justice Department,
known as
a "Suggestion of Immunity," in which the government said
allowing
the lawsuit to proceed would be "incompatible with the United
States’ foreign
policy interests."
href='http://www.law.com/jsp/article.jsp?id=1135245914903'>Read
more.
id='2'>2nd
Circuit: Proceeding Mandated before Loan Discharge
The 2nd U.S.
Circuit Court
of Appeals has adopted a rule on the validity of student loan
discharges in
bankruptcy by declaration, the New York Law Journal reported
today.
Taking a position on an issue that has split other circuits, the 2nd
Circuit
found that the failure of a student loan recipient to seek a
declaration of
hardship through an adversary proceeding in the bankruptcy court meant
that
his "liability on the loan survives the purported
discharge." The
opinion in Whelton v. Educational Credit Management Corp.,
04-4844-cv
was written by Judge J. Garvan Murtha, U.S. District Judge for the
District
of Vermont, sitting by designation. Murtha decided the case along with
2nd Circuit
Judges Guido Calabresi and Reena Raggi.
href='http://www.law.com/jsp/newswire_article.jsp?id=1135245909501'>Read
more (free subscription required).
Airlines
id='3'>Northwest:
No Money until 2010, Bankruptcy Expert Figures
Northwest Airlines Corp. likely won’t generate
"significant" money
until 2009 or 2010, even though it needs to spend billions to
upgrade its
planes, says an investment banker hired by the carrier to advise it
through
bankruptcy, the Associated Press reported today. John Luth,
president and
CEO of Seabury Group LLC, made the assessment of the airline’s
profitability
in special declaration, which supported the airline’s
application to reject
collective bargaining agreements with employees and a request to
modify retiree
benefits. Luth’s declaration showed up in court documents
filed on Wednesday
with the Bankruptcy Court in New York. Luth said that the
airline’s exit from
bankruptcy hinges on obtaining money for the airline during the
bankruptcy
period and the renewal of the carrier’s aging fleet of
aircraft. Northwest’s
120 DC-9 planes are, on average, almost 35 years old.
href='http://www.duluthsuperior.com/mld/duluthsuperior/business/13472709.htm'>Read
more.
In related news, Northwest Airlines Corp. got approval for two
financing
deals Thursday that will help the company add new planes and cut the
costs
of existing planes, the Associated Press reported yesterday. Airbus
and United
Technologies Corp.’s Pratt & Whitney Engine Division will
provide the
financing. The U.S. Bankruptcy Court in New York City agreed to keep
many
specific terms of the pacts—including the total number of
planes to
be financed—confidential for competitive reasons. There were
no objections
to the finance agreements, and an attorney representing
Northwest’s unsecured
creditors said he favored the deal. The deals give Northwest, of
Eagan, Minn.,
”a critical restructuring of its obligations for both planes
in service and
for ones to be delivered,” creditors committee attorney Scott
Hazen said.
It also limits claims Airbus can make against Northwest and returns
some cash
to the company, he said.
href='http://www.nytimes.com/aponline/business/AP-Northwest-Jets.html'>Read
more.
id='4'>Delta
Asks for Extension to File Plan
Citing in part the
time it
will take to further cut costs, Delta Air Lines Inc., the
nation’s third-largest
carrier, asked a bankruptcy court judge Thursday to give the company a
six-month
extension to file its reorganization plan, the Associated Press
reported today.
The Atlanta-based company, which filed for chapter 11 in New York on
Sept. 14,
currently has a Jan. 12 deadline to exclusively file its
reorganization plan
and a March 13 deadline to seek acceptance of the plan from creditors.
In a
filing with the court, Delta asked to extend the deadlines 180 days to
July
11 and Sept. 9, respectively. Delta had previously asked the court to
reject
its pilot contract so the airline could impose $325 million in
concessions on
its 6,000 pilots. But Delta asked the court to suspend the
company’s contract
rejection request because of a tentative agreement on temporary pay
cuts worth
as much as $152 million a year that the sides worked out earlier this
month.
href='http://www.nytimes.com/aponline/business/AP-Delta-Bankruptcy.html%0D'>Read
more.
id='5'>Court
Issues Ruling between Lucent Technologies and Winstar Trustee
A U.S. Bankruptcy
Court judge
has issued his ruling in a breach of contract and bankruptcy
preference action
originally brought by the trustee for Winstar Communications against
Lucent
Technologies in April 2001, a press release said yesterday. The
opinion, written
by Judge Joel B. Rosenthal, was issued Dec. 21 in the
U.S.
Bankruptcy Court in Wilmington, Del.; the trial was completed this
past June.
The court’s decision will result in a judgment against the
company for approximately
$244 million, plus statutory interest and other costs. The company
said that
the verdict would result in a charge to earnings of approximately $300
million
for the company’s first fiscal quarter of 2006, which ends Dec.
31.
href='http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/…'>Read
more.
id='6'>Atkins
Can Exit Bankruptcy
Atkins Nutritionals
Inc.,
a maker of low-carbohydrate foods that was founded by diet doctor
Robert Atkins,
won court approval Wednesday of a reorganization plan that allows the
company
to exit bankruptcy after less than six months, Bloomberg News reported
yesterday.
U.S. Bankruptcy Judge Allan Gropper in New York
approved the
plan in a hearing held via telephone because of the city’s
transit strike. The
company intends to issue 10,000 shares of new common stock once the
plan becomes
effective. Eighty-four percent of the stock will go to those with
first-lien
claims, an attorney for Atkins said. Sixteen percent will go to
holders of second-lien
claims. Atkins died in 2003, after sustaining severe head injuries in
a fall.
id='7'>Delphi
Opposes Equity Committee
Delphi Corp. said
Wednesday
in a regulatory filing that a shareholder request to form an equity
committee
in its bankruptcy case is premature and that it’s "highly
unlikely"
holders of common shares would receive anything in the reorganization,
the Detroit
Free Press reported yesterday. The Troy, Mich.-based auto-parts
maker said
it believes its shares are worthless. According to the filing, the
request for
a committee came from Appaloosa Management LP, a hedge fund based in
Chatham,
N.J. In October, Appaloosa reported owning 9.3 percent of Delphi,
which filed
for bankruptcy Oct. 8. Delphi made its response to the committee
request in
a letter Dec. 19 to the trustee in its chapter 11 case. In its
response, Delphi
said its board of directors could represent all stakeholders in
maximizing their
recoveries in the company’s bankruptcy.
id='8'>Consumer
Spending, Incomes Climb in Nov.
Consumers’
spending and incomes
posted solid gains in November, giving retailers hopes for decent
Christmas
sales, while a key economic forecasting gauge flashed encouraging
signals for
2006, the Associated Press reported yesterday. The Commerce Department
reported
that personal spending rose 0.3 percent in November and was up an even
bigger
0.7 percent when inflation was removed. It was the best
inflation-adjusted showing
since July, when spending surged as consumers responded to attractive
auto sales
incentives.
href='http://www.washingtonpost.com/wp-dyn/content/article/2005/12/22/AR20051…'>Read
more.
id='9'>Enron
CAO May Strike Deal with Prosecutors
Enron’s
Chief Accounting
Officer Richard Causey is at the center of a still-evolving courtroom
drama
in which he could play a leading role in determining the criminal fate
of his
two more famous former bosses at the onetime energy giant, the
Wall Street
Journal reported today. Chairman Kenneth Lay, President Jeffrey
Skilling
and Causey are scheduled to be tried on conspiracy, fraud and other
charges
in connection with an alleged effort to lie to the investing public
about Enron’s
financial condition and business prospects. All three have pleaded not
guilty.
The trial is set to begin Jan. 17. Over the course of the continuing
Enron investigation,
there have been talks between prosecutors and Causey’s attorneys
about a plea
bargain by him. If Causey does reach a deal with the prosecutors, he
would be
a valuable government witness and change the trajectory of the trial.
As chief
accountant, he had detailed knowledge of the inner financial workings
of Enron,
which collapsed into bankruptcy proceedings in 2001 amid questions
about its
accounting and finances.
href='http://online.wsj.com/article/SB113530898996330295-email.html'>Read
more.
id='10'>Calpine
Asks Judge to Void Eight Contracts
Calpine Corp. asked a federal judge to void eight power-supply
agreements
as part of the company’s bankruptcy proceedings, including a
massive, politically
sensitive contract that serves the California utility Pacific Gas
& Electric
Co., the Associated Press reported yesterday. San Jose, Calif.-based
power
producer and marketer Calpine would lose $1.2 billion if forced to
supply
power through the expiration of all eight contracts, it said
Wednesday in
a filing with the U.S. Bankruptcy Court of the Southern District of
New York.
Calpine customers with threatened contracts are Edison International
unit
Southern California Edison, Acadia Power Partners, PG&E unit
Pacific Gas
& Electric Co., Reliant Energy Electrical Solutions, and the
Northern
California Power Agency and Strategic Energy, which is the retail
supply subsidiary
of Great Plains Energy.
In another development, Calpine said Thursday that
href='http://www.nytimes.com/glogin?URI=http://www.nytimes.com/aponline/busin…'>U.S.
Bankruptcy Judge Burton Lifland has approved the
company’s
request to spend up to $500 million of a $2 billion credit line from
Deutsche
Bank and Credit Suisse First Boston. The company will use the
money to
fund its ongoing operations during the early stages of a bankruptcy
case expected
to last two to three years. Calpine’s effort to get out of its
long-term power
contracts is likely to face fierce opposition in California, a focal
point
of the company’s operations.
id='11'>Refco
Seeks OK on Payments for Key Staff
Refco Inc., the
commodities
broker that collapsed amid a fraud scandal, asked a judge to authorize
$1.4
million in payments to 32 employees it considers essential for
”winding down”
its operations, the Associated Press reported yesterday. The money
will help
persuade the employees not to desert Refco in the next three months,
the company
said in a filing made Wednesday in U.S. Bankruptcy Court in Manhattan.
The company,
which filed for bankruptcy protection in October following the
disclosure that
then-CEO Phillip R. Bennett had secretly moved $430 million in debts
to an entity
he controlled, sold its flagship business and other key assets to
raise funds
to creditors. Key employees with ”the knowledge and expertise
necessary to
lead the wind-down” of Refco’s operations will receive a
year-end bonus equal
to four months’ base salary, the company said.
International
id='12'>Stelco’s
Worth about Half Shareholders’ Estimate
Stelco Inc. will be
worth
between C$635-785 million when it emerges from bankruptcy in February,
about
half of what shareholders estimate, the court-appointed monitor
overseeing the
bankruptcy said, Bloomberg News reported yesterday. Ernst & Young
LLP, the
accounting firm overseeing the bankruptcy, recommended that Ontario
Superior
Court Judge James Farley approve a restructuring plan
that
will leave existing shareholders with nothing. Current shareholders of
Hamilton,
Ontario-based Stelco plan to ask Farley on Jan. 17 to throw out the
company’s
plan because they say the company is worth as much as C$1.3 billion,
according
to a Navigant Consulting Inc. report commissioned by Pollitt & Co.
on behalf
of the stockholders.
href='http://www.bloomberg.com/apps/news?pid=10000082&sid=aJdkQdkhZcQQ&refer=…'>Read
more.
id='13'>Turin’s
Olympics Committee Could Face Bankruptcy
The organizing
committee
for the Turin Olympics in Rome could face bankruptcy procedures if a
64-million-euro
shortfall is not covered, the government supervisor for the games said
on Wednesday,
according to the Associated Press today. Mario Pescante said that the
government
is still considering a scratch-card lottery game that could produce 20
million
euros in revenues for the Feb. 10-26 games. Financial help from
regional authorities
and companies in the Turin area is also being sought. Italian media
reported
on Wednesday that a special commissioner could take over as emergency
chairman
of the organizing committee (TOROC) under the first step in bankruptcy
procedures.
That could happen if TOROC fails to approve its budget at a Jan. 10
board meeting.
TOROC chief Valentino Castellani called another meeting yesterday
about the
situation, depending on the outcome of Wednesday’s Cabinet
session. The
shortfall stems from Italy’s draft budget for next year, which
does not include
the government’s final 40 million euro allocation to Olympic
organizers. The
budget draft also scrapped the scratch-card lottery game.
id='14'>Ford
Injects $2.1 Billion into Jaguar to Fund Revamp
Ford Motor Co. has
injected
£1.2 billion into its unprofitable Jaguar luxury division to
help pay
for a reorganization at the company, Bloomberg News reported today.
Ford made
the investment by buying preference shares in the wholly owned unit,
Jaguar
spokesman Don Hume said in a phone interview today. The Coventry,
England-based
carmaker posted a 2004 pretax loss of £430 million. Jaguar last
year ended
manufacturing at a U.K. plant, fired 1,150 workers, and scrapped a
plan to build
200,000 vehicles. Ford does not have a target for when Jaguar will
break even.
The division may cut production to 80,000 units next year, according
to CSM
Worldwide, a Detroit-based market researcher.
href='http://www.bloomberg.com/apps/news?pid=10000102&sid=auqwbYoLj1wI&refer=…'>Read
more.