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November
9, 2007
Mortgage
Lending
name='1'>Con Artists Target
Struggling Homeowners
The Better Business
Bureau has received
complaints from every state regarding 'foreclosure rescue' scams and has
issued an alert to
warn consumers to be cautious about foreclosure-rescue companies,
face='Times New
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Roman'
size='3'>USA Today reported. 'The sad part
about this particular
offense,' Ohio Attorney General Attorney Marc Dann said, 'is that (the
homeowners) lose
everything. You lose the little bit of money they had squirreled away,
you lose your house
and you lose your hope. How do you quantify that?' In a sweep in August,
Dann filed
complaints against six companies, including American Housing Authority
and Foreclosure
Assistance Solutions, and he says that he expects to bring a half-dozen
more cases in the
next few weeks. Regulators and law enforcement in many states are
targeting the two most
common forms of foreclosure rescue scams: 'equity skimming' and bogus or
fruitless
href='http://www.usatoday.com/money/economy/housing/2007-11-08-foreclosure-scams_N.htm?loc=i
nterstitialskip'>Read more.
name='2'>Jumbo Mortgage Loan
Guarantee Is Proposed
Federal Reserve Chairman
Ben Bernanke
yesterday proposed an idea to Congress to allow government-sponsored
entities Fannie Mae and
Freddie Mac to securitize jumbo-size mortgages, but have the federal
government guarantee
them, the Wall Street
Journal
reported today. Fannie and Freddie currently can buy
mortgages only up to
$417,000, and Congress -- so far -- hasn't acted to lift that limit
despite distress in that
market that has made jumbo mortgages at 'somewhat tighter terms and
higher prices,'
according to Bernanke. He suggested that Congress could consider
allowing the GSE’s to
buy mortgages of as much as $1 million from lenders, pay the government
a fee for
guaranteeing them and then turn them into securities to be sold to
investors. 'That would
be, I think, of some assistance to the mortgage market,' Bernanke said.
'From the federal
government's point of view, it would be taking on some credit risk,
which you may or may not
be willing to do.' He added, 'It would be a good idea to make the GSEs
ultimately
responsible for some, any excess losses, or some part of excess losses,
relative to the
href='http://online.wsj.com/article/SB119455499562686966.html?mod=hpp_us_whats_news'>Read
more. (Registration required.)
name='3'>American Home Mortgage
Allowed to Cancel Deferred Compensation Plan
Bankrupt lender American
Home Mortgage has
won a bid to cancel its deferred compensation plans after Bankruptcy
Judge
size='3'>Chris
size='3'>topher Sontchi approved a motion
calling for the plan's
assets to be returned to the company,
size='3'>Bankruptcy Law360 reported yesterday.
Several AHM
employees had objected to the company's request to cancel the plan,
claiming that they had
not been informed that the plan would be canceled if the company became
insolvent. However,
Judge Sontchi said that canceling the plan was in the best interest of
all parties involved,
ruling that “the relief requested in the motion is in the best
interests of the
debtors, their estates and creditors.”
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=39621'>Read
more.
(Registration required.)
name='4'>Levitz Furniture Seeks
Bankruptcy Protection Again
Home furnishings retailer
Levitz Furniture
yesterday sought bankruptcy court protection for the third time in just
over 10 years in an
effort to stay in business despite a lack of cash, the Associated Press
reported yesterday.
Levitz chapter 11 filing comes amid tough times for the furniture
business, which along with
homebuilders, construction suppliers and financial firms has been hit by
the housing
downturn. Forecasters expect
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p;amp;#10;Roman' size='3'>U.S.
size='3'>consumer spending on furniture and bedding to grow by just 1.5
percent this year,
making it the industry's worst showing since 2001, according to a
projection compiled by the
trade journal Furniture
Today. Levitz, previously known as Levitz Home
Furnishings Inc.,
filed for chapter 11 protection in September 1997 and emerged in
February 2001. During
another entry into bankruptcy in October 2005, the New York-based
company closed about 35
stores in the Northeast,
size='3'>California,
w:st='on'>
face='Times New Roman' size='3'>Minnesota
size='3'>and
href='http://www.nytimes.com/aponline/business/AP-Levitz-Bankruptcy.html?pagewanted=print'>R
ead more.
Company Files Bankruptcy
Hoboken Wood Flooring
LLC, the largest
independent distributor of hardwood flooring in the
w:st='on'>
size='3'>United
States, has filed
for chapter 7 and
will liquidate its assets, the Associated Press reported yesterday. The
Wayne, N.J.-based
company, which shut its doors on Monday, listed assets and debts of more
than $100 million
each, according to documents filed Wednesday in U.S. Bankruptcy Court in
Wilmington, Del.
Hoboken Wood Flooring decided to liquidate its assets after the
company's board determined
the company would be unable to obtain financing or to generate enough
cash to fund an
chapter 11 case, according to Chief Restructuring Officer Craig S. Dean,
a partner at
Chicago-based turnaround firm AEG Partners. Bankruptcy Judge
w:st='on'>
size='3'>Chris
face='Times New
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size='3'>topher S. Sontchi has scheduled an
initial hearing for
href='http://biz.yahoo.com/ap/071108/hoboken_wood_flooring_bankruptcy.html?.v=1'>Read
more.
name='6'>Solutia Nears Chapter 11
Exit
Solutia Inc. has secured
court approval of
its deal with a handful of unsecured creditors who will provide $250
million into the
recovering chemical company in exchange for backstop rights and the
chance to directly
purchase discounted new stock,
size='3'>Bankruptcy
Law360 reported yesterday. Solutia signed the
agreement last month
with UBS Securities LLC, Merrill Lynch & Co. Inc., a General Motors
Corp. pension fund,
and hedge funds Highland Capital Management, Longacre Fund Management
and Southpaw Asset
Management. Under the arrangement, the backstop investors will pay $175
million to be put
toward retiree pensions and $75 million that will cover other legacy
liabilities.
size='3'>They will buy any stock that other unsecured creditors,
noteholders and existing
stockholders don't buy in the new offering, in which the stock will sell
for $13.33 a share,
discounted from the $20 expected value. Solutia will get the $250
million even if the
offering is under-subscribed, the company said.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=39668'>Read
more.
(Registration required.)
Autos
face='Times New Roman'
size='3'>
name='7'>Delphi
size='3'> Deal in Jeopardy
Appaloosa Management LP,
the lead investor in
a deal that would have pumped up to $2.55 billion into the Troy-based
supplier, said in a
filing yesterday that it has terminated its agreement because certain
conditions were not
met, the Detroit Free
Press
size='3'>reported today. The filing comes after Delphi changed its
reorganization plan to
reduce the cash paid out to General Motors Corp. and lower the estimated
share price
of
size='3'>Delphi stock.
face='Times New Roman' size='3'>Delphi
size='3'>made the changes to
win a $6.8-billion loan to help it exit chapter 11. In Delphi's plan
with Appaloosa, the
private equity firm led a group of investment banks and other private
equity groups to buy
up to $2.55 billion in preferred and common
w:st='on'>Delphi
size='3'>stock.
face='Times New Roman' size='3'>In recent weeks that plan has been
changed, resulting in
investor Goldman Sachs saying it was no longer part of the deal.
href='http://www.freep.com/apps/pbcs.dll/article?AID=/20071109/BUSINESS01/711090326'>Read
more.
name='8'>Ford, Seeing Progress
in Turnaround Plan, Intends to Keep Volvo
With buyers lined up to
bid for its Land
Rover and Jaguar brands, Ford Motor said yesterday that it had decided
to keep Volvo, at
least for now, and would make an effort to fix the money-losing Swedish
carmaker, the
New York Times
size='3'>reported
today. Ford’s chief executive, Alan R. Mulally, said that the
company was not seeking
a buyer for Volvo, even though it had adopted a strategy of focusing on
its core domestic
brands as part of its North American turnaround. Meanwhile, Ford said
that it expected to
sell Land Rover and Jaguar by early 2008. The company did not name
potential buyers, but
preliminary offers were made by half a dozen companies, including TPG, a
private investment
group formerly known as the Texas Pacific Group, and Tata Motors of
India, people with
direct knowledge of the bidding process said.
href='http://www.nytimes.com/2007/11/09/business/09ford.html?_r=1&oref=slogin&ref=bu
siness&pagewanted=print'>Read more.
Approves
Fabrikant's Disclosure over Objections
Despite one creditor's
lingering
reservations, diamond jewelry wholesaler M. Fabrikant & Sons Inc.
finally got court
approval of its disclosure statement on Wednesday, paving the way for a
vote on the chapter
11 plan it jointly filed with creditors.
size='3'>Bankruptcy Law360 reported yesterday.
Judge
Stuart Bernstein
handed
down his order after postponing a decision several times in the last
week so that plan
proponents could make revisions to the statement. Bernstein set a number
of filing deadlines
and sketched out voting procedures with his following order. The debtors
must send out
ballots and copies of the statement and plan by today. Votes,
administrative claims and
objections to the plan must be cast by Dec. 7, responses must be filed
by Dec. 13 and a
confirmation hearing is set for Dec. 19.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=39667'>Read
more. (Registration required.)
name='10'>InPhonic Seeks
Bankruptcy Protection during Its
w:st='on'>Sale
InPhonic, which sells
wireless products and
services, sought bankruptcy protection after it agreed to be bought by a
private-equity
firm, Bloomberg News reported yesterday. InPhonic listed assets of
$120.9 million and debt
of $179.4 million in chapter 11 documents filed yesterday in U.S.
Bankruptcy Court in
size='3'>,
w:st='on'>
size='3'>Del.
size='3'>InPhonic, which hired the investment banking firm Lazard last
month to explore a
possible sale, plans to sell its assets to an affiliate of
Philadelphia-based Versa Capital
Management, the company said. Seven affiliates of InPhonic also filed
for bankruptcy
protection yesterday. The company, which began operations in 1999, asked
that the cases be
jointly administered by the court.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/11/08/AR2007110802164_pf.htm
l'>Read more.
International
name='11'>Italian
Airline Risks Bankruptcy if
w:st='on'>
face='Times New Roman' size='3'>Sale
size='3'>Fails
w:st='on'>
face='Times New Roman'
size='3'>Italy
size='3'>'s transport minister yesterday said that the country’s
largest airline,
Alitalia SpA, could have to file for bankruptcy in a few months if
government attempts to
sell a controlling stake fail, the Associated Press reported yesterday.
'If we're not able
to sell Alitalia in an acceptable manner within the next two to three
months, we'd run the
serious risk of bankruptcy,' Transport Minister Alessandro Bianchi said.
The Italian
government has been struggling to sell its 49.9 percent stake in
loss-making Alitalia. A
tender organized by the treasury was scrapped in July after all the
potential bidders
gradually pulled out, saying the sale terms didn't give them enough
freedom to implement a
restructuring strategy. Beset by high operating and fuel costs, stiff
competition from
budget airlines and persistent labor strikes, Alitalia's net loss rose
to 626 million euros
in 2006 from 168 million euros a year earlier after it booked a hefty
write-down to cover
the depreciation in value of its aging fleet.
href='http://www.forbes.com/feeds/ap/2007/11/08/ap4318930.html'>Read
more.