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December 1, 2006
size='3'>Autos
id='1'>Tower Wins Eighth Exclusivity Extension
Bankruptcy Judge
Allan Gropper
size='3'>granted Tower Automotive Inc.’s eighth request to extend
its exclusivity period, giving the bankrupt auto parts maker until Feb.
2 to propose a plan to creditors,Bankruptcy
Law360 reported yesterday. Tower Auto was
expected to have a plan in place by Nov. 29, but it asked the U.S.
Bankruptcy Court for the Southern District of New York for an extension
one week ago, citing progress being made in its chapter 11 case. As part
of the extension, Tower Auto now has until March 30 to seek approval of
the impending plan. In a separate order issued the same day, Judge
Gropper granted a motion by Tower Auto to extend the company’s
deadline for assuming or rejecting its unexpired leases of
nonresidential real estate.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=14265'>Read
more. (Registration required.)
id='2'>Judge Approves
Settlement
A federal bankruptcy
judge on Thursday approved the settlement of accounting fraud charges
against Delphi Corp. and six people, including the auto-parts supplier's
former chief financial officer., the Associated Press reported
yesterday. JudgeRobert
Drain of the Southern District of New York
called the settlement with the Securities and Exchange Commission (SEC)
''fair and equitable'' and said it was in
w:st='on'>
size='3'>Delphi
SEC, in a filing in federal court in
w:st='on'>
size='3'>Detroit
charged former Delphi Chief Executive J.T. Battenberg and others with
participating in or aiding and abetting the company's fraud. It said on
Oct. 30 that it had reached a settlement with
w:st='on'>
size='3'>Delphi
Under the settlement, the Troy, Mich.-based company will not face
penalties because of its cooperation with investigators.
size='3'>Delphi
''without admitting or denying the Commission's allegations,'' the SEC
said at the time.
href='http://www.nytimes.com/aponline/business/AP-Delphi-Bankruptcy.html?pagewanted=print'>Read
more.
id='3'>Kerkorian Cuts His Holdings in General
Motors
Billionaire investor Kirk
Kerkorian sold another big chunk of his General Motors stock on Thursday
and may have sold the rest of his remaining shares in a late trade,
the New York
Times reported today. If so, the step would
end an 18-month saga that saw Kerkorian accumulate 56 million shares
(9.9 percent of GM), land an associate on the board, press the company
to speed its turnaround efforts and unsuccessfully try to maneuver the
company into an alliance with Renault and Nissan. GM’s turnaround
efforts will now rest solely on the shoulders of its chief executive,
Rick Wagoner, and GM’s management team, giving them the
independence they lacked under the scrutiny of a dissident
shareholder.
href='http://www.nytimes.com/2006/12/01/automobiles/01auto.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
id='4'>Interstate Fights to Control Board of
Directors
Still battling one of its
shareholders for power, Interstate Bakeries Corp. has asked a bankruptcy
judge to reappoint the company’s board members whose terms have
expired as the bakery giant seeks to thwart the selection of new
ones, Bankruptcy
Law360 reported yesterday. On Wednesday, the
maker of Hostess Twinkies and Wonder Bread filed papers in
size='3'>Delaware
court, arguing that fresh board members would not understand the company
and would only hinder its bankruptcy proceedings. In the motion,
Interstate contends that a new board would jeopardize its ability to
meet a Dec. 31 deadline to file belated financial reports in addition to
a Jan. 31 deadline to reveal its bankruptcy exit strategy. Interstate
Bakeries is particularly concerned that New York-based hedge fund
Brencourt Advisors intends to pack the board with nominees favorable to
its own interests, according to court documents.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=14327'>Read
more. (Registration required.)
w:st='on'>
id='5'>U.S.
face='Times New Roman' size='3'> Energy Biogas Files for Chapter
11
U.S. Energy Biogas Corp.
has filed for bankruptcy in
w:st='on'>
size='3'>Manhattan
its need to restructure a loan agreement set up by executives in 2004
that threatens to push the otherwise viable business into
insolvency, Bankruptcy
Law360 reported yesterday.
face='Times New Roman' size='3'>U.S. Energy Biogas Corp.’s
business is “operationally healthy,” but a loan agreement
negotiated by the company’s former management with Countryside
Power Income Fund has impaired USEB’s capital structure to the
point where bankruptcy is the best option, according to a company press
release. The Countryside loan is tying up $33 million of USEB’s
funds that could be better utilized, said USEB Chairman Asher E. Vogel.
The outstanding balance on the loan is about $90 million, and if USEB
were to repay that debt immediately, it would also have to pay a
“make whole fee,” which would amount to approximately $46
million, according to a sworn declaration by new USEB Chief Executive
Adam Greene.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=14263'>Read
more. (Registration required.)
Maker Files for Bankruptcy
Marcal Paper Mills Inc.,
a maker of toilet paper, kitchen towels, napkins and facial tissue,
filed for chapter 11 protection, the Associated Press reported
yesterday. The privately held company operated for four generations by
the Marcalus family said it has enough money to continue normal
operations, including ''on-going employee, supplier and customer
obligations.'' The
Park
''sufficient liquidity to operate and normalize relations with its
vendors in order to ensure timely service and merchandise flow to its
customers.'' In a statement, Chairman and Chief Executive Nicholas R.
Marcalus said, ''The price increases in energy have proven to be
immensely difficult. Demands by our lenders created liquidity pressures
which caused the company to file for the continued restructuring under
chapter 11.''
href='http://www.nytimes.com/aponline/business/AP-Marcal-Bankruptcy.html?pagewanted=print'>Read
more.
Meets with US Air, But Still Does Not Plan on Merger
Delta Air Lines Inc. said
on Thursday that it listened to a presentation by US Airways Group Inc.
regarding US Airways' $8.5 billion takeover offer, but repeated earlier
statements that it intends to emerge from bankruptcy as a stand-alone
carrier, Reuters reported yesterday.
w:st='on'>
size='3'>US
size='3'>Airways, which pitched its plan to Delta's senior management
and creditor committee representatives on Thursday, said in a separate
statement that it was pleased to have had the chance to discuss its
proposal. It was US Airways' first opportunity to speak directly to
Delta's unsecured creditors’ committee since making its offer on
Nov. 15.
href='http://www.nytimes.com/reuters/business/business-delta-usair-takeover.html?pagewanted=print'>Read
more.
In related news, Delta Air
Lines Inc. reported Thursday that it narrowed its loss in October to $88
million, the Associated Press reported yesterday. The nation's
third-largest carrier said its loss was equivalent to 45 cents a share
in the 31-day period and was smaller than its loss of $301 million for
the same month last year. It did not provide a per-share figure for the
loss a year ago. Excluding reorganization items, Delta said its latest
loss was $64 million. Delta recorded revenue of $1.43 billion in
October, according to a filing with the bankruptcy court. As of Oct. 31,
Delta had $2.7 billion in unrestricted cash on hand.
href='http://www.nytimes.com/aponline/business/AP-Delta-Bankruptcy.html?pagewanted=print'>Read
more.
id='8'>Ultimate Resort Wins Right to Buy Tanner & Haley
Assets
A federal bankruptcy
judge selected a bid Ultimate Resort LLC over the rival bid from
Preeminent Global Experience LP, according to Holly Etlin, Tanner &
Hanley's chief restructuring officer, the Wall
Street Journal reported today. During a
federal-court hearing in
w:st='on'>
size='3'>Bridgeport
w:st='on'>
size='3'>Conn.
Wednesday, Ultimate Resort sweetened its original offer of $98 million
for Tanner & Haley's portfolio of high-end properties around the
world to $100 million, while Preeminent increased an original bid of
$108 million to $112 million, Etlin said. After an informal auction
earlier this month, Tanner & Haley and its unsecured
creditors’ committee selected Ultimate as the winning bidder for
Tanner & Haley's assets. But earlier this week, Preeminent submitted
a competing offer, which Judge Alan H. W. Shiff considered at
Wednesday's hearing.
href='http://online.wsj.com/article/SB116492200136337227-search.html?KEYWORDS=bankruptcy&COLLECTION=wsjie/6month'>Read
more. (Registration required.)
w:st='on'>
id='9'>U.S.
face='Times New Roman' size='3'> Investor to Take Over Bankrupt
Nici
A
size='3'>U.S.
take over Nici AG, the bankrupt maker of the official mascot for this
summer's soccer World Cup in
w:st='on'>
size='3'>Germany
the Associated Press reported yesterday. Nici announced the takeover by
a fund of the Greenwich, Conn.-based Strategic Value Partners group in a
statement late Thursday. The value of the transaction, which should be
completed by the end of the year, was not disclosed. Nici filed for
bankruptcy in May amid accusations of fraud by its former head. The
company, which is based in the Bavarian town of
w:st='on'>
size='3'>Altenkunstadt
employs about 500 people, held the exclusive European rights to produce
the World Cup's stuffed lion Mascot, Goleo.
href='http://www.kiplingerforecasts.com/apnews/XmlStoryResult.php?storyid=268623'>Read
more.
w:st='on'>
id='10'>Pittsburgh
face='Times New Roman' size='3'> Brewery Looking to Emerge from
Bankruptcy by Mid-February
Bankrupt Pittsburgh
Brewing Co. said Thursday it is close to an agreement to obtain
permanent financing from new investors and hopes to emerge from
bankruptcy in mid-February, the
size='3'>Pittsburgh Tribune-Review reported
today. Pittsburgh Brewing President Joseph R. Piccirilli said that the
investors are willing to put a sufficient amount of funds into the
145-year-old brewery that it can modernize the plant and market the
business. Piccirilli, who has owned the brewery since 1995, declined to
say how much new capital the company will receive, and in what form, but
said it was more than the $7 million the company said it needed in a
financial reorganization plan filed in mid-October.
href='http://www.pittsburghlive.com/x/pittsburghtrib/news/today/s_482130.html'>Read
more.
id='11'>Financial-Rule Overhaul Criticized by State
Prosecutors
A blue-ribbon report
calling for relaxation of some financial regulation and less-aggressive
civil and criminal investigations drew a rebuke from state prosecutors,
the Wall Street
Journal reported today. At the same time,
business groups and former regulators urged the Securities and Exchange
Commission and Congress to move forward with several of the suggestions,
saying existing rules and laws are handicapping U.S. financial markets.
The Committee on Capital Markets Regulation report, assembled by a group
of academics and executives, contains many recommendations that are
either already under way or under discussion in
w:st='on'>
size='3'>Washington
including plans to relax a rule requiring that companies have strong
internal controls over their financial reporting. However, it also
included some controversial ideas to strengthen shareholder rights,
limit the liability of auditors and curtail the role of state
authorities.
href='http://online.wsj.com/article/SB116493480209937513.html?mod=home_whats_news_us'>Read
more. (Registration required.)
id='12'>Maryland Judge Nullifies County Predatory Lending
Law
A
w:st='on'>
size='3'>Maryland
down a
size='3'>Montgomery
w:st='on'>
size='3'>County
authorized stiffer penalties against predatory lending practices, saying
the measure was beyond the county's authority under the
size='3'>Maryland
size='3'>constitution, the
size='3'>Washington Post reported today. The
law would have allowed fines of up to $500,000 against mortgage lenders
if it could be proved that they discriminated against minority borrowers
by giving them more expensive loans with onerous repayment terms. The
maximum fine had been $5,000.
size='3'>Lenders opposed the measure, saying it was too vague and
exposed them to financial risk. Dozens of lenders said the law would
force them to stop doing business in the county, raising the possibility
of less competition and higher interest rates. The American Financial
Services Association, a trade group representing mortgage lenders, sued
the county in February, arguing that states, not local governments, have
the authority to regulate mortgage lending.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/11/30/AR2006113001396.html'>Read
more.
id='13'>Credit Managers Daily Business News
Report
The following articles
are taken from the Daily Summary of Troubled & Fast Growing U.S.
Companies published by Bastien Financial Publications.
For more of the latest business news visit
http://dailybusiness.creditmanagers.biz. 
ABI Members receive a 50
percent discount when subscribing to the complete Daily Summary. Enter
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subscriber form.
size='3'>Allina Hospitals and Clinics cut a
total of at least 310 jobs at its headquarters in
w:st='on'>
size='3'>Minneapolis
its
face='Times New Roman' size='3'>Abbott
size='3'>Northwestern
w:st='on'>
size='3'>Hospital
far this year, due to a decrease in reimbursements and higher operating
costs.
size='3'>Centillium Communications Inc.,
a
size='3'>Fremont
w:st='on'>
size='3'>Calif.
of integrated circuits, reported a third quarter net loss of $2.9
million. Revenue declined 20%--to $16 million.
size='3'>Dollar General Corp.'s stock price
slipped 6% on news that the Goodlettsville, Tn.-based discount retailer
wrapped up a strategic review of its real-estate and said it plans to
close about 400 of its poorer-performing and higher-cost stores in
fiscal 2007, or about 5% of its locations.
size='3'>The company will also slow down the rate of opening new stores
as it upgrades its mix of locations. The
cost of the closures will result in $74 million in pretax costs and some
$64 million in markdown expenses, but the firm also hopes to sell about
$300 million in inventory by the end of this year.
size='3'>Also by the end of the year, Dollar General wants to have
opened 600 new stores and then proceed with 300 new ones next year and
400 in 2008. After that, the company will resume a more aggressive
expansion goal of perhaps 700 new stores per year beginning in
2009.
size='3'>Ford Motor Co. provided more details
about its financial situation, now projecting a cash outflow of $10
billion from its automotive operations and another $7 billion related to
its reorganization plan. That will halve its
cash reserves of about $35 billion, which it recently boosted through an
$18 billion financing package backed up by its North American
assets. The
w:st='on'>
size='3'>Dearborn
carmaker will burn through half of its reserve by 2009 as it pares back
its hourly workforce by 40% through voluntary incentives. Some 38,000
workers have accepted buyouts as part of the company's efforts to slash
annual costs by $5 billion.
size='3'>Metavante Inc., a Brown Deer,
size='3'>Wis.
size='3'>technology-services provider, announced it will reduce its
payroll by 180 employees (3% of its workforce) as part of a plan to
reduce expenses. Metavante, a unit of
Marshall & Ilsley Corp. of
w:st='on'>
size='3'>Milwaukee
provides account processing, Internet bill-paying and related
services.
size='3'>Revlon Inc., the
w:st='on'>
size='3'>Manhattan
w:st='on'>
size='3'>N.Y.
company, wants to raise $100 million through a rights offering and
replace a term loan in an effort to reduce its long-term debt, which
stood at $1.4 billion as of the end of its third quarter. Its Revlon
Consumer Products Corp. operating unit will replace an $800 million term
loan with a five-year $840 million facility.
size='3'>The company, operating in the red for eight years, has been
trying to turn itself around, recently overhauling its management and
announcing an 8% cut in its workforce.
size='3'>Volkswagen AG, the German-based
automaker, warned that its North American business may not reach the
breakeven point until 2009, a year later than earlier projected, partly
because of weak sales in the
w:st='on'>
size='3'>U.S.
unfavorable exchange rates because of the sagging U.S.
dollar. To help boost its North American
operations, VW has been trying to spur sales of some models that it
manufactures in
w:st='on'>
size='3'>Mexico
size='3'>by lowering sticker prices. While
VW remains profitable overall, the auto manufacturer reported $170
million in operating losses in the third quarter in
w:st='on'>North
America