August 242009

href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='/AM/Images/headlines/headline.gif' />

August 24, 2009

Caraustar Emerges from
Bankruptcy

Paperboard manufacturer Caraustar Industries Inc. has
met the conditions of its chapter 11 plan and emerged from bankruptcy
protection as a private company with $135 million eliminated from its
debt load,

size='3'>Bankruptcy Law360 reported on Friday.

The plan, confirmed earlier this month, took effect Thursday, according
to a notice filed in the U.S. Bankruptcy Court for the Northern District

of Georgia. The company said that it has closed on a new $75 million
revolving credit facility with General Electric Capital Corp. The new
facility will provide the company with more than adequate liquidity to
meet its working capital needs, including any future capital
investments, Caraustar said. 
href='http://bankruptcy.law360.com/articles/117828'>Read
more. (Subscription required.)

Accredited Creditors Stop
Objecting to $22 Million Deal

Accredited Home Lenders Holding Co.’s (AHL)
unsecured creditors’ committee has withdrawn its objection to the
bankrupt company's $22 million settlement in a long-running securities
class action, Bankruptcy Law360 reported on
Friday. The original cause of the objection related to a settlement with

a class of securities plaintiffs who claimed that the subprime mortgage
lender's weak lending standards led to heavy stock losses that would
decimate AHL's insurance policies. AHL and the securities plaintiffs
reached their settlement in April, and the district judge overseeing
that case asked for bankruptcy court approval of the deal. The company
said its four directors and officerspolicies, with a total limit of $40
million, would cover the settlement costs.The unsecured creditors did
not give a reason for the withdrawal of their objection in a motion
filed Thursday in the U.S. Bankruptcy Court for the District of
Delaware. 
href='http://bankruptcy.law360.com/articles/117792'>Read
more. (Subscription required.)

Reader’s Digest Files
for Chapter 11 Protection

The Reader’s Digest Association said today that
it had filed for prepackaged chapter 11 plan as part of its
restructuring, the Associated Press reported. The privately held
publisher of the monthly magazine and dozens of other titles said the
filing only affects its operations in the United States. The move by the

company comes after it announced earlier this month that it would file
for bankruptcy protection within 30 days and got more than 80 percent of

its senior secured lenders on board with the planned chapter 11
reorganization. Reader’s Digest is looking to cut its debt from
$2.2 billion to $550 million, giving lenders control of the company in
return. The publisher has struggled with a heavy debt load since
Ripplewood Holdings, a New York private equity firm, led a consortium of

investors in a $1.6 billion buyout of the company in 2007. 

href='http://www.nytimes.com/2009/08/25/business/media/25reader.html?ref=business&pagewanted=print'>Read

more.

Commentary: Americans Risk
Coming Up Short on Retirement with Decreased 401(k)
Investments

While most Americans were not saving enough for
retirement before the financial crisis, the current economic downturn
has highlighted, and heightened, the risk of Americans coming up short
on the financial needs for their retirement, according to a

face='Times New Roman'>New York

Times editorial today. Even with recent stock
market upswings, account balances are roughly 25 percent lower than
before the crash. Some employees will end up with smaller account
balances because they reduced contributions when times got tough,
according to the editorial. Fidelity Investments, which manages 11.2
million 401(k) accounts, reported recently that from mid-2008 through
the first quarter of 2009, more employees reduced their contributions
than increased them. That trend reversed in the second quarter, but
overall, employees are still contributing less of their pay than they
did last year. Additionally, some employers have cut their 401(k)
matches as the economy has tanked. So both employees and employers
pulled back, just as stocks were getting cheaper. 

href='http://www.nytimes.com/2009/08/24/opinion/24mon1.html?ref=opinion&pagewanted=print'>Read

more.

Six Flags Would Be Owned by
Lenders Under Proposal

Six Flags Inc., the bankrupt theme park owner, would
be taken over by its lenders according to its reorganization plan filed
on Friday, Bloomberg News reported on Friday. Lenders would be given 92
percent of the new stock to be issued under the proposal and a $600
million new term loan in exchange for canceling about $1.13 billion in
debt, Six Flags said in court papers. Noteholders owed $400 million
would get 7 percent of the new stock and collect between 8 percent and
12 percent of what they are owed. Other unsecured creditors owed $1.35
billion would get 1 percent of the stock, which would be worth between
0.4 percent and 0.6 percent of what they are owed. The lead case
is
size='3'>Premier International Holdings Inc.,
09- 12019, U.S. Bankruptcy Court, District of Delaware
(Wilmington). 

href='http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPiLLmSHA91M#'>Read

more.

Proponents of Banning
Mandatory Arbitration Get Assist from Industry

Proponents of banning mandatory arbitration clauses in

consumer contracts received a boost this summer when a major bank
scrapped the procedure with credit card disputes and a major arbiter
settled charges that it concealed its ties to debt-collection
services,

size='3'>CongressDailyreported on Friday.
Consumer activists say their drive for a bill to give a proposed
Consumer Financial Protection Agency the authority to ban such contracts

in financial products such as credit cards has been buffeted after the
National Arbitration Forum, the nation's second-largest arbitration
firm, halted its practice in consumer disputes in a settlement with the
Minnesota attorney general's office. Minnesota Attorney General Lori
Swanson sued the Forum, contending that it hid its ownership ties to a
hedge fund that runs a debt-collection agency that stood to benefit from

its 200,000 annual proceedings.

Foreign Firms Show Interest
in Failed U.S. Banks

The sale of the operations of failed Guaranty Bank in
Texas on Friday to the U.S. division of a Spanish bank signals that
foreign banks can succeed in the auctions for collapsed U.S. lenders,
the
size='3'>Wall Street Journal reported today.
Banco Bilbao VizcayaArgentaria SA on Friday became the first foreign
company to buy a failed U.S. bank in this crisis; on Friday, federal
regulators shut down Guaranty. Other foreign banks with a U.S. presence
interested in acquiring failing U.S. banks include French bank BNP
Paribas SA through its San Francisco subsidiary, Bank of the West;
Toronto-Dominion Bank, through its Portland, Maine, subsidiary, TD Bank;

and Rabobank, the El Centro, Calif., subsidiary of Rabobank Group of
Utrecht, Netherlands. So far, 106 banks have failed in the two years
since the financial crisis erupted, 81 this year and 25 in 2008. 

href='http://online.wsj.com/article/SB125107229558052583.html'>Read
more. (Subscription required.)

Senator Seeks Broad SEC
Market Study

Sen. Ted Kaufman (D-Del.) is expected today to call
for the Securities and Exchange Commission (SEC) to review all forms of
current stock-market structure, signaling the broadest statement yet
from a legislator in the continuing debate over the growth in
high-frequency trading, the

face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. In a letter to be sent to SEC Chairman Mary
Schapiro, Kaufman said that regulatory moves in the past decade have had

the unintended consequence of making the stock market too fragmented,
possibly giving high-speed traders an advantage over retail investors.
Kaufman wrote that there are now a series of potential conflicts of
interest on Wall Street trading desks trying to serve both retail
clients and high-frequency firms. 
href='http://online.wsj.com/article/SB125108149844652889.html'>Read
more. (Subscription required.)

Clunker Owners Seek
Last-Minute Trade-Ins

Customers looking to take advantage of the U.S.
government's 'Cash for Clunkers' trade-in program hit car dealerships
over the weekend, trying to get in before it ends today, the

size='3'>Washington Post reported today. The
program allows consumers to trade in gas-guzzlers for a voucher worth up

to $4,500 toward the purchase of a new vehicle. Dealers must essentially

front the money until they are reimbursed by the government, and many
have yet to receive those reimbursements. Many dealerships stopped
accepting clunker trade-ins on Friday or Saturday because they were
worried about getting their paperwork submitted before the program ends
at 8 p.m. ET today. The $3 billion program was expected to last until
Labor Day, but the government said late last week that it was shutting
it down because most of the money has been spent and it needs to process

paperwork to reimburse dealerships. 

href='http://www.washingtonpost.com/wp-dyn/content/article/2009/08/23/AR2009082301775_pf.html'>Read

more.

Ricketts Family Wins
Auction for Chicago Cubs

After a sale process that lasted more than two years,
Tribune Co. Friday sold the storied Chicago Cubs baseball team and
related assets in a deal valued at $845 million, the
face='Times New Roman'>Wall
Street Journal reported today. Under the deal,

the family of financier Tom Ricketts will take control of the team, its
home park of Wrigley Field and Tribune's roughly 25 percent stake in
Comcast SportsNet. Tribune will keep a 5 percent interest in the Cubs, a

stake that will help limit the company's taxes on the sale. The sale is
a relief to Tribune, which has been operating in bankruptcy protection
since December. Tribune said the deal requires approval from Major
League Baseball and the bankruptcy court. Tribune's bankruptcy filing
didn't include the Cubs, but as part of the sale to Ricketts, the entity

holding most of the Cubs also will file for chapter 11 so the franchise
won't be weighed down by Tribune's financial obligations. Tribune said
that it expects the bankruptcy court to weigh approval of the Cubs sale
early in the fourth quarter this year. 
href='http://online.wsj.com/article/SB125089094663350251.html'>Read
more. (Subscription required.)

Coyotes Hometown Seeks to
Block Gretzky Claim

The City of Glendale, Ariz., is attempting to block
hockey legend and Phoenix Coyotes coach Wayne Gretzky from collecting
his $9.3 million claim in the team’s bankruptcy case, the

size='3'>Wall Street Journal reported on
Saturday. Glendale, home to the Coyotes’ rink Jobing.com Arena,
said in court papers that the debts owed to Gretzky are “not
enforceable obligations.” Few other details are available because
most of the city’s protest was filed under seal. The city did,
however, ask for a final determination over what is owed to Gretzky
before a planned Sept. 10 court-supervised auction for the team. 

href='http://blogs.wsj.com/bankruptcy/2009/08/21/coyotes-hometown-says-don%e2%80%99t-pay-gretzky-claim/tab/print/'>Read

more. (Subscription required.)

International