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November
29, 2007
name='1'>Senate Banking Chairman to Offer Bankruptcy Reform
Bill
Senate Banking
Chairman
size='3'>Chris
(D-Conn.) said yesterday that he planned to introduce a bankruptcy
reform bill that would give new relief to individuals overwhelmed by
mortgage, medical and student loan debt, Reuters reported
yesterday. Dodd said that his bill would
allow judges to consider the individual circumstances of debtors in
bankruptcy cases so that families and children are protected. The bill
would ensure that medical debts can always be discharged in bankruptcy
and that mortgages can be restructured to help borrowers stay in their
homes, he said. Student loans would also be dischargeable under the
bill, and child support and alimony payments would be settled first.
'Our bankruptcy laws should not punish these vulnerable members of our
society, but instead should help them get back on their feet while
protecting them and their families from added suffering at the hands of
creditors,' Dodd said.
href='http://news.yahoo.com/s/nm/20071128/pl_nm/bankruptcy_congress_dc_1'>Read
more.
href='http://dodd.senate.gov/index.php?q=node/4147/print'>Click here
to read Dodd’s press release.
name='2'>Commentary: Congressional Action Needed on GSE Regulatory
Reforms
Unless the Senate acts
quickly on regulatory reform legislation for government-backed lenders,
which passed the House in May, analysts are beginning to question the
continued solvency of Fannie Mae and Freddie Mac given the continued
troubles in the housing market, according to a commentary in
today’s Wall
Street Journal. The House passed H.R. 1427,
the Federal Housing Finance Reform Act, months ago to give the regulator
of these government-sponsored enterprises important new powers,
including authority to wind down the GSEs in an orderly way in the event
of insolvency. Without that power, Congress will have no choice but to
bail out the institutions, which have portfolios of almost $3 trillion
and capital of $65 billion, with as much or more taxpayer money than it
used to bail out the S&L industry only 15 years ago.
href='http://online.wsj.com/article/SB119630488772207416.html'>Read
more. (Registration required.)
name='3'>Homebanc Receives 4-Month Exclusivity
Extension
Bankruptcy Judge
Kevin Carey
size='3'>signed off on an order granting Homebanc's request to extend
its exclusive right to propose a chapter 11 plan for 122 days —
through April 7, 2008 — and pushed back the deadline after which
Homebanc's exclusive rights to solicit support for its plan would expire
June 4, 2008, Bankruptcy
Law360 reported yesterday. The initial
exclusive filing and solicitation periods for Homebanc, which filed for
bankruptcy on Aug. 9, were slated to expire on Dec. 7 and Feb. 5, 2008,
respectively.
size='3'>Prior to filing for bankruptcy, Homebanc employed more
than 1,000 people, but is now operating with only 30 workers, the motion
said. When Homebanc sought chapter 11 protection in August, it serviced
48,300 loans worth about $8 billion, according to the motion.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=40979'>Read
more. (Registration required.)
L.
Tersigni Consulting Files Chapter 11 Liquidation Plan
L. Tersigni Consulting,
the consulting firm under investigation for bill-padding in a number of
major bankruptcy cases, intends to liquidate its assets and go out of
business, the Associated Press reported yesterday. The firm, which
sought protection under chapter 11 two weeks ago, filed its proposed
liquidation plan in the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Bridgeport
w:st='on'>
size='3'>Conn.
came as federal bankruptcy monitors prepared to appoint an examiner to
investigate claims that the firm's deceased leader, Loreto Tersigni,
improperly inflated bills. The company's bankruptcy filing shows L.
Tersigni had assets of $2.2 million and debts of about $250,000, the
bulk of which is owed to unsecured creditors, which the company intends
to pay back in full. However, that figure doesn't include how much the
firm may ultimately have to pay back to its former clients.
href='http://www.chron.com/disp/story.mpl/ap/fn/5335870.html'>Read
more.
size='3'>Autos
name='5'>Indiana AG Balks at Dana's Reorganization
Plan
Indiana Attorney General
Steve Carter filed an objection on Tuesday to Dana's third amended plan
on behalf of the Indiana Department of Environmental Management, arguing
that the proposal could unfairly restrict the Hoosier state's ability to
force the Ohio-based company to rectify certain environmental
violations, Bankruptcy
Law360 reported yesterday. The
size='3'>Indiana
focuses on the environmental situation that has arisen at facilities
that Dana ran throughout
size='3'>Indiana, particularly on one
that Dana operated in the eastern city of
w:st='on'>
size='3'>Angola
size='3'>from 1945-1997. To compel cleanup action, the
w:st='on'>
size='3'>Indiana
size='3'>department filed a $14 million proof of claim against Dana in
September 2006 and the two sides have been in talks even since to settle
upon a dollar amount that would great enable the payout of claims from
the plan. However, Dana wants the
w:st='on'>
size='3'>Indiana bureau to
release the supplier from all future liability, which the environmental
agency has refused to do at this point.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=41092'>Read
more. (Registration required.)
In related news, Dana
Corp. said Tuesday that it had procured $2 billion in exit financing,
putting it in position to emerge from chapter 11 by the end of
January, Bankruptcy
Law360 reported yesterday. The exit financing,
underwritten by Citigroup Global Markets Inc., Lehman Brothers Inc. and
Barclays Capital, will consist of a $650 million asset-based revolving
credit facility and a $1.35 billion term loan facility, Dana said. The
Toledo, Ohio-based company added that the facilities were secured by
substantially all of the assets of Dana and most of its domestic
subsidiaries.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=41051'>Read
more. (Registration required.)
name='6'>Judge Cautions Dura to Arrange Exit
Financing
Bankruptcy Judge
Kevin Carey
size='3'>said yesterday that he won't consider confirming Dura
Automotive Systems Inc.'s chapter 11 plan until the company has lined up
a $425 million loan to finance its exit from bankruptcy, the Associated
Press reported yesterday. Judge Carey canceled a Dec. 6 confirmation
hearing on the auto-parts company's reorganization plan, saying there
was no point in moving forward with the plan until Dura obtains the
necessary financing. Dura, based in
w:st='on'>
size='3'>Rochester Hills
size='3'>Mich.
in bankruptcy proceedings since October 2006. It sought to exit chapter
11 protection by the end of the year, but it has encountered difficulty
obtaining financing amid the recent crunch in credit markets.
href='http://biz.yahoo.com/ap/071128/dura_automotive_bankruptcy.html?.v=1'>Read
more.
British Bankers Plead Guilty in Case Tied to Enron
After more than two years
awaiting trial in the
w:st='on'>United
States
Enron-related charges, three British bankers pleaded guilty yesterday in
federal court here to one count each of wire fraud, the
face='Times New Roman' size='3'>New York Times
size='3'>reported today. In an agreement reached with the government,
Giles Darby, David Bermingham and Gary Mulgrew acknowledged conspiring
with Enron’s chief financial officer, Andrew S. Fastow, to enrich
themselves at the expense of National Westminster Bank of
size='3'>England
then their employer and is now part of the Royal Bank of
size='3'>Scotland
size='3'>. The three men were indicted on seven counts of wire fraud in
2002, and a jury trial was set for January. They faced 35 years in
prison. In exchange for the guilty pleas, prosecutors will now recommend
href='http://www.nytimes.com/2007/11/29/business/29enron.html?ref=business&pagewanted=print'>Read
more.
name='8'>Struggling E*Trade Gets Help from Hedge Fund
E*Trade Financial Corp.,
which is ensnared in the mortgage crisis, said it is getting a $2.55
billion cash infusion from Citadel Investment Group in a bid to restore
confidence and liquidity in the discount brokerage, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. In a plan overseen by the federal Office of
Thrift Supervision, Citadel will make a two-part investment in E*Trade,
which is based in
face='Times New Roman' size='3'>New
York. The first component
is the purchase of E*Trade's entire $3 billion portfolio of asset-backed
securities for a value of around $800 million. The second component is
the purchase of $1.75 billion worth of 10-year notes, paying an annual
interest rate of about 12.5 percent. After regulatory approvals, Citadel
is expected to own almost 20 percent of E*Trade, including the
approximately 3 percent of the broker it already holds, and gain a seat
on the company's board.
href='http://online.wsj.com/article/SB119630834657507587.html?mod=hps_us_whats_news'>Read
more. (Registration required.)
SEC
Rules against Director Candidates by Investors
The Securities and
Exchange Commission ruled yesterday that public companies could block
investors from putting director candidates on corporate ballots, a major
setback for shareholders seeking a greater say in boardroom affairs,
the New York
Times reported today. In a 3-to-1 vote split
along political lines, the three Republican members, including the
chairman,
size='3'>Chris
supported giving corporations the right to bar director candidates
nominated by shareholders from proxy ballots. The vote ended nearly a
year of debate between business groups and union and pension funds over
the influence investors should have in the boardroom. Cox has
pledged to consider the issue again next year, but despite several
last-ditch efforts by pension funds, he decided to move ahead with the
vote yesterday to eliminate the need to go to court to clarify the
issue.
href='http://www.nytimes.com/2007/11/29/business/29proxy.html?ref=business&pagewanted=print'>Read
more.
Official Hints at Another Rate Cut
Federal Reserve vice
chairman Donald Kohn opened the door to an interest-rate cut next month,
representing a Fed acknowledgment that the financial-market turmoil that
started this summer remains a threat to the economy, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. Kohn said that recent turbulence in the credit
markets has 'partly reversed some of the improvement in market
functioning' that was seen last month. 'The degree of deterioration
that's happened over the last couple of weeks is not something I
personally anticipated,' he added. Kohn and other Fed officials are
increasingly worried that banks, stung by losses from soured mortgage
bets, will, as he put it, 'adopt a more defensive posture in granting
credit, not only for house purchases, but for other uses as
well.'
href='http://online.wsj.com/article/SB119625591612606522.html?mod=hpp_us_whats_news'>Read
more. (Registration required.)
href='http://online.wsj.com/article/SB119625591612606522.html?mod=hpp_us_whats_news'>