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April 7, 2006
name='1'>Midwestern Congressmen Introduce Legislation Aimed at
Corporate Bankruptcies
Sen. Evan Bayh (D-Ind.)
and Rep. John Conyers (D-Mich.) introduced S. 2556 and H.R. 5113, the
'Fairness and Accountability in Reorganizations Act,' that would change
corporate bankruptcy law, the
face='Times New Roman' size='3'>Evansville
size='3'> (
face='Times New Roman' size='3'>Ind.
size='3'>) Courier & Press reported today.
The bill would require the bankruptcy court to approve stock options and
other elements of executive benefits. It would also allow the U.S.
Bankruptcy Court to consider the company's foreign assets. 'A company's
plan for success should involve all its workers, not just its top
executives,' Bayh said. 'When a company hits hard times, it's not right
for some executives to continue to enrich themselves at the expense of
the average worker.”
href='http://www.courierpress.com/ecp/news/article/0,1626,ECP_734_4602355,00…'>Read
more.
href='http://bayh.senate.gov/~bayh/releases/2006/04/06APR06pr.htm'>Click
here to read Sen. Bayh's and Rep. Conyers’ joint press
release.
Pensions
name='2'>Lawmakers Look at Broader Pension Help
House Republican Leader John
Boehner (R-Ohio) said that congressional negotiators are considering an
option that would give companies struggling to fund pensions more time
to do so, according to Reuters yesterday. Previously, lawmakers focused
on giving just the airline industry special help to pay off its pension
obligations over a longer period of time. Boehner said negotiators were
trying to map out a broader approach. “This idea of providing what
we call a third way for companies that are in trouble, does have merit.
We have to be very careful about how it is structured,'' he told
reporters. Boehner declined to give any details, such as how many years
companies would get to pay off pension obligations. Boehner said he and
House Ways and Means Chairman Bill Thomas (R-CA) “are opposed to
specific industry relief.''
href='http://www.nytimes.com/reuters/washington/politics-congress-pensions.ht…'>Read
more.
name='3'>Labor Union Official Notes Pension
Disparities
The AFL-CIO, pushing for more
federal regulation of lucrative corporate salaries and pensions,
released information Thursday about some of the richest executive
retirement deals in the country, the Associated Press reported today.
Richard Trumka, secretary-treasurer of the AFL-CIO, said average
executive pay at a company on the Standard & Poor's 500 is already
more than 400 times the average worker's wages. And many executives now
get multimillion-dollar 'supplemental executive retirement plans' at a
time that many companies are cutting back on reliable 'defined benefit'
retirement plans for workers, he said. Those retirement deals could run
as high as $6.5 million annually and may not reflect a company's
performance, Trumka said. He urged union supporters to push the SEC to
improve disclosure of executive pay and benefits. The labor federation,
he said, is urging the SEC to also require companies to publicize their
standards for tying strong job performance to executive pay.
href='http://seattlepi.nwsource.com/printer2/index.asp?ploc=t&refer=http://se…'>Read
more.
name='4'>Riverstone Judge Grants Executive Bonus
Program
A
w:st='on'>
size='3'>U.S.
size='3'>bankruptcy court has approved a $1.4-million bonus plan for
Riverstone Network Inc.’s top executives, while still allowing for
other parties to request the return of the contested bonus
payments, Portfolio
Media reported yesterday. U.S. Bankruptcy
Judge Christopher S. Sontchi gave the green light
earlier this week for the ethernet infrastructure provider to make
payments of up to a total of $1.4 million to 15 key executives. However,
the judge also cleared the way for the creditors’ committee,
equity committee and U.S. Trustee involved in Riverstone’s chapter
11 case to remedy, argue and object to any disgorgement of payments in
the future. Last week, Sontchi approved a separate $5.05-million
employee program for the company, but decided to postpone the hearing
for the management bonus plan after it drew fire from the equity
committee.The equity
committee claimed it had not received adequate information to evaluate
whether the bonus payments were fair and reasonable. The committee
raised questions over whether the bonus payments were necessary
considering that Riverstone’s chapter 11 case involves
liquidation.
name='5'>Federal Judge Approves $16 Million in Fees in Winn-Dixie
Bankruptcy
A federal bankruptcy
judge approved the payment of about $16 million in fees for attorneys
and consultants trying to help Winn-Dixie Stores Inc. emerge from
bankruptcy, the Associated Press reported yesterday. In a brief hearing,
U.S. Bankruptcy Judge Jerry Funk approved the fees, most of which cover
the final quarter of 2005. Financial advisers garnered the highest
amounts. XRoads Solutions Group received $4.42 million, followed by The
Blackstone Group at $3.1 million and KPMG LLP at $1.24 million. The two
law firms representing Winn-Dixie accounted for another $2.9 million,
with Skadden, Arps, Slate, Meagher & Flom receiving $1.93 million,
and Smith Hulsey & Busey, a
w:st='on'>
size='3'>Jacksonville
size='3'>Fla.
receiving $985,065.
href='http://www.law.com/jsp/article.jsp?id=1144330163053&rss=newswire'>Read
more.
name='6'>Collins & Aikman Plans to Exit Auto-Fabric
Business
Bankrupt auto-parts
supplier Collins & Aikman Corp. on Thursday said it plans to cut
about 1,200 jobs, or 7.5% of its work force, as part of a decision to
leave the automotive-fabrics business, the
size='3'>Wall Street Journal reported today.
The
size='3'>Troy
w:st='on'>
size='3'>Mich.
to close four
size='3'>North Carolina
employ more than 1,100 people and try to sell a fifth plant in
size='3'>Texas
decision, which will require bankruptcy court approval. Despite a
previous cost-cutting and consolidation plan, the fabrics division,
which makes seat and interior roof material, was projected to post a
loss this year amid a $50-million decline in sales. Collins blamed the
tough sledding on changing consumer tastes and higher raw-materials
costs. Collins & Aikman plans to close three plants in
size='3'>Roxboro
w:st='on'>
size='3'>N.C.
size='3'>Farmville
w:st='on'>
size='3'>N.C.
of September, when it has projected it will emerge from bankruptcy
protection, spokesman David A. Youngman said.
href='http://online.wsj.com/article_print/SB114434716565219033.html'>Read
more.
name='7'>Shareholder Activism Comes to Chapter 11
While shareholders are
usually wiped out when a company seeks bankruptcy protection, some hedge
fund activists say that system is ripe for abuse, the Street.com
reported yesterday. Recently, David Tepper, founder of the hedge fund
Appaloosa Management, made headlines after seeking and obtaining the
creation of an official equity committee for
w:st='on'>
size='3'>Delphi
petitioning for the creation of an equity committee with Dana
Corp. Experts say that the size and the
complexity of bankruptcy cases play a big part in the emergence of
equity committees. 'It's a trend,' said Robert Stark, bankruptcy partner
at law firm Brown Rudnick. 'Since Enron, WorldCom and Adelphi, cases are
getting bigger and more complex, and there has been recognition that
shareholders should have rights.'
href='http://www.thestreet.com/markets/hedgefunds/10277660.html'>Read
more.
name='8'>Adelphia Begs Court co Allow Intervention
Fearing a delay to its
exit from bankruptcy, Adelphia Communications Corp. is trying to
intervene in creditor disputes that have haunted its chapter 11
proceedings and are currently jeopardizing approval of the cable
giant’s reorganization plan,
size='3'>Portfolio Media reported yesterday.
Adelphia filed the request in U.S. District Court for the Southern
District of New York this week, arguing that its involvement was
necessary due to the “critical stage” of the bankruptcy.
Adelphia has been in chapter 11 since 2002, following a massive
accounting fraud scandal allegedly engineered by disgraced Adelphia
founder John Rigas and several of his sons. The disagreement has
endangered Adelphia’s asset sale to one-time rivals Time Warner
Inc. and Comcast Corp. for $17.6 billion in cash and stock, a key
component of the reorganization proposal. If the sale does not go
through by July 31, Adelphia faces a $440 million termination
fee.
Court
Endorses Congoleum Insurance Settlement
In a much-needed boost to
Congoleum Corp., a federal bankruptcy judge has approved the
company’s $1.4-million settlement with Harper Insurance Ltd.,
aiding the floor manufacturer’s efforts to pay off thousands of
claims over cancer-causing asbestos,
size='3'>Portfolio Media reported yesterday.
Judge Kathryn Fergus of the U.S. Bankruptcy Court in
w:st='on'>
Jersey
proposal earlier this week, marking the latest in a slew of agreements
reached by Congoleum and its insurers. Congoleum has taken a less
combative approach in its relationship with insurers over the last few
months in hopes of passing its reorganization plan. Under the approved
agreement, Harper, formerly known as Turegum Insurance Co., will fork
over $1.4 million to help settle the asbestos claims that drove
Congoleum into chapter 11 bankruptcy in late 2003. The money will be
used to fund the company’s trust, which was established
specifically to resolve the asbestos claims.
w:st='on'>
name='10'>Bankrupt
w:st='on'>
size='3'> Kentucky
w:st='on'> Trade
School
size='3'> Said to Owe U.S. $32 million
w:st='on'>
size='3'>Decker
face='Times New Roman'
size='3'>College
the federal government $32 million, according to a new bankruptcy claim
that accuses the trade school of financial aid fraud, the
Louisville
Courier-Journal reported today. The latest
claim from the U.S. Department of Education is among 580 filed totaling
more than $33.9 million, according to the bankruptcy
trustee.The
claims also include one filed by William Weld, Decker's former chief
executive, who resigned last year to seek the Republican gubernatorial
nomination in
face='Times New Roman' size='3'>New
York
claim that he secured Decker debt. The deadline for filing claims is
Monday, said Robert Keats, the
w:st='on'>
size='3'>Louisville
overseeing the bankruptcy.
href='http://www.courier-journal.com/apps/pbcs.dll/article?Date=20060407&Cate…'>Read
more.
name='11'>Pittsburgh Home Improvement Executive Faces Bankruptcy
Fraud Charges
The former president of
a
size='3'>Pittsburgh
improvement firm was indicted Wednesday by a federal grand jury on a
charge of bankruptcy fraud, the
size='3'>Pittsburgh Post-Gazette reported
today. Andrew F. Andros, 44, former owner of Builders Choice Remodeling
in Stanton Heights, Pa., filed a chapter 7 bankruptcy petition in
November 1999 and was discharged in April 2001. Throughout the
proceedings, according to the Criminal Investigation Division of the
IRS, he concealed the existence of various financial accounts with
Ameritrade, E Trade and Spectra Fund. The
w:st='on'>
size='3'>U.S.
size='3'>attorney's office would not reveal how much money he had
invested in the accounts.
href='http://www.post-gazette.com/pg/06097/680324-53.stm'>Read
more.
w:st='on'>
name='12'>West
w:st='on'>
size='3'> Valley
face='Times New Roman' size='3'> Symphony to File
Bankruptcy
The West Valley Symphony,
which closed its doors Feb. 6, says it will file for chapter 7
bankruptcy protection after falling short in a two-month struggle to
raise enough money to pay off creditors, the
w:st='on'>
size='3'>Arizona
w:st='on'>
size='3'> Republic
size='3'>reported today. The symphony has outstanding obligations of
$78,000 with only enough cash to pay limited operating expenses before
bankruptcy. The symphony, which had suffered financial difficulties,
shut down in February after 38 years of continuous performances. After
the shutdown, the symphony board tried to raise enough money to avoid
bankruptcy by asking for money from past donors and charitable
organizations, but the effort was unsuccessful.
href='http://www.azcentral.com/news/articles/0406gl-nwvsymphony06-ON.html'>Read
more.
w:st='on'>
name='13'>Tennessee
face='Times New Roman' size='3'> Music Retailer Files for
Bankruptcy
Strings & Things Inc,
a Memphis, Tenn.-based a music equipment store, filed for chapter 7
bankruptcy protection, the
size='3'>Memphis Commercial Appeal reported
today. The company has liabilities of $1.1 million and assets of about
$84,000, according to documents filed in U. S. Bankruptcy Court.
href='http://www.commercialappeal.com/mca/business/article/0,1426,MCA_440_460…'>Read
more.
name='14'>Regulators to Issue Warning on Mortgages
As the real estate market
slows, some mortgage lenders are trying to prop up profits by relaxing
lending standards for certain types of loans, endangering borrowers and
financial institutions, according to a top banking regulator, the
Washington Post
reported today. John M. Reich, director of the Office of
Thrift Supervision, warned that some lenders are making it too easy for
unsophisticated borrowers to take on risky nontraditional mortgages that
they may not fully understand. Reich said regulators are 'closely
monitoring' the growth of loan types in which the payments can suddenly
double, creating a payment shock that could force borrowers into
foreclosure if housing values were to fall and could also cause
financial losses for the lenders who make the loans.
face='Times New Roman' size='3'>Reich called the increase in such
lending troubling. He noted that regulators are crafting a specific
guidance that will restrict the use of these loans. It could be issued
within the next few months.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/04/06/AR20060…'>Read
more.
International
name='15'>Yukos Executive Arrested in
size='3'>
w:st='on'>Russia
Prosecutors said that an
executive recently assigned to saving
w:st='on'>
size='3'>Yukos
size='3'>Russia
former biggest oil producer, from bankruptcy has been arrested on
charges of embezzlement and money-laundering, the Associated Press
reported yesterday. Vasily Aleksanian was being interrogated by
prosecutors, a spokeswoman for the general prosecutor's office said.
Charges officially were filed against him, his lawyer, Gevorg Davgyan,
said later Thursday, according to the RIA Novosti news agency. Earlier,
the Simonovsky court had ruled that prosecutors could launch criminal
proceedings against Aleksanian, who was appointed vice president at
Yukos last week after heading its legal department. Russian law requires
that prosecutors receive court permission to file charges against a
former lawyer. A spokeswoman for the general prosecutors’ office
said Aleksanian had been detained as a suspect and was being
interrogated by prosecutors.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/04/06/AR20060…'>Read
more.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/04/06/AR20060…'>