href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='/AM/Images/headlines/headline.gif' />
April 11, 2008
Airlines
name='1'>Frontier Airlines Files for Chapter 11
Frontier Airlines
Holdings Inc. and its subsidiaries filed for chapter 11 protection
today, saying that an 'unexpected attempt' by its principal credit card
processor to substantially increase a 'holdback' of customer receipts
threatened to severely impact Frontier's liquidity, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported. The Denver-based holding company for Frontier
Airlines said that it intends to continue normal business operations
throughout its reorganization process. Frontier said that its principal
credit card processor very recently and unexpectedly informed the
company that beginning April 11 it intended to start withholding
significant proceeds received from the sale of Frontier tickets. The
news comes after two other discount carriers, ATA Airlines Inc. and
Aloha Airgroup Inc., recently filed for bankruptcy and discontinued
operations, squeezed by soaring fuel prices and a slowing
economy.
href='http://online.wsj.com/article/SB120789547426507419.html?mod=hpp_us_whats_news'>Read
more. (Registration required.)
name='2'>ATA’s Mass Layoff Triggers Employment
Suit
A week after filing for
bankruptcy protection, ATA Airlines Inc. has been hit with a lawsuit
brought by a former employee who claims that the airline failed to give
workers enough notice before firing them as part of a mass
layoff, Bankruptcy
Law360 reported yesterday. Kevin Batman lodged
the suit in the U.S. Bankruptcy Court for the Southern District of
Indiana on Tuesday, accusing ATA and its Georgia-based parent company,
Global Aero Logistics Inc., of neglecting to provide at least 60 days of
advance notice of termination to him and about 1,000 other employees.
The suit is seeking to recover 60 days' worth of wages and ERISA
benefits, including 401(k) and pension plan contributions, for the
ex-employees.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=52722'>Read
more. (Registration required.)
name='3'>McCain Offers Outline of Economic Plan
Sen. John McCain
(R-Ariz.), offering his most detailed ideas to date on the economic
downturn, advocated that the government should play a bigger role in
easing the mortgage crisis, CNNMoney.com reported yesterday. McCain
introduced what he is calling his 'HOME Plan,' which blends elements of
government-backed mortgage rescue proposals by the Bush administration,
the Office of Thrift Supervision, House Financial Services Chairman
Barney Frank (D-Mass.) and Senate Banking Chairman
size='3'>Chris
(D-Conn.). Until now, McCain has not pushed for more government
intervention, saying that he wanted lenders to do for borrowers what
they are asking the government to do for them - offer help. To qualify
for McCain's HOME Plan, a borrower's home would have to be a primary
residence and the government would verify that the owner told the truth
about their financial situation that they would able to make a down
payment when they took out the original loan. Lenders would voluntarily
write down the loans based on the home's current market value and give
the borrower at least a 10 percent equity stake. If the borrower later
sells the home at a price higher than the refinanced loan, the lender
and the federal government each would receive a portion of the sales
price.
href='http://biz.yahoo.com/cnnm/080410/041008_mccain_econ_plan.html?.v=14'>Read
more.
name='4'>Democratic Leaders Continue to Shape Another Economic
Stimulus Package
House and Senate
Democratic leaders are readying a second economic stimulus package -- to
be voted on before Memorial Day -- that is likely to include extended
unemployment benefits, additional funds for state and local construction
projects, a temporary boost in federal Medicaid dollars and a food stamp
increase,
size='3'>CongressDaily reported today. The
proposal also might include a second set of tax rebates 'for low-income
and middle-income families, additional help and assistance,' said Senate
Health, Education, Labor and Pensions Committee Chairman Edward Kennedy
(D-Mass.), who met with Senate leaders and union presidents yesterday to
discuss the package. House and Senate leaders have not yet determined
whether the second stimulus package will move as a stand-alone measure
or be attached to a must-pass bill such as a supplemental defense
spending bill. House leaders appear to be leaning toward a stand-alone
bill, and Senate aides suggested that as the second stimulus package
grows, it might be more difficult to attach it to an unrelated
bill.
Finance Officials Examine Credit Crisis
The world's top financial
officials, shaken by a credit crisis that has roiled markets around the
world, are working on regulatory reforms that they hope will restore
confidence in the markets, the Associated Press reported today. They are
considering ways to boost transparency, strengthen the role of credit
rating agencies and bolster cooperation between regulatory authorities
in major countries. Those proposals will be explored today when finance
ministers and central bank presidents from
w:st='on'>
size='3'>Japan
size='3'>Germany
size='3'>Britain
size='3'>France
size='3'>Italy
size='3'>Canada
in
size='3'>Washington,
w:st='on'>
size='3'>D.C.
discussions to be led by Treasury Secretary Henry Paulson and Federal
Reserve Chairman Ben Bernanke. The International Monetary Fund said in
reports this week that worldwide losses could approach $1 trillion over
the next two years and the turmoil had already pushed the
size='3'>United States
size='3'>, the world's largest economy, into a recession and raised the
risks of a global downturn to one in four.
href='http://www.nytimes.com/aponline/us/AP-Credit-Crisis.html?sq=bankruptcy&st=nyt&scp=5&pagewanted=print'>Read
more.
Home
Retailer Expected to File for Bankruptcy
Linens 'n Things Inc., a
home-furnishings retailer caught by an increasing debt load and
shrinking housing market, is expected to file for chapter 11 protection
by Tuesday, the Wall
Street Journal reported today. A Linens 'n
Things filing would mark one of the first major retailers to seek
bankruptcy protection in this economic downturn. The New Jersey-based
retailer, which sells home products like towels, bath rugs and kitchen
appliances, has about 590 stores in 46 states and employs 17,000 people.
Linens would also be one of the largest buyouts to go bust since the
credit crisis took hold last summer. In February 2006, Apollo Management
LP acquired Linens for $1.3 billion. The housing crisis made the
home-furnishings space ultracompetitive, and the debt on the company's
balance sheet gave it diminished flexibility to ride out the
downturn.
href='http://online.wsj.com/article/SB120788502599307497.html?mod=hpp_us_whats_news'>Read
more. (Registration required.)
Gallery Expects to Exiting from Bankruptcy in Second
Quarter
Movie Gallery Inc. said
yesterday that a federal bankruptcy court had approved its
reorganization plan and it expects to emerge from chapter 11 protection
early in the second quarter, Reuters reported yesterday. The Dothan,
Ala.-based company, which is the second-largest video-rental company
in
size='3'>North America
February that it planned to close 400 Movie Gallery and Hollywood Video
stores in addition to the planned closure of over 500 unprofitable
stores announced in September. As previously announced, the
reorganization plan provides for exit financing providing Movie Gallery
with $100 million and a facility providing up to $25 million of letters
of credit for trade vendors, among other things.
href='http://sg.news.yahoo.com/rtrs/20080409/tbs-moviegallery-7318940.html'>Read
more.
name='8'>Commentary: Moody's Uncharacteristic Shift into Rating
Mortgage-Backed Securities
A decade ago, as the
housing market was just beginning to take off, Moody's Investors Service
was a small player in analyzing complex securities based on home
mortgages, but it is now under scrutiny as it focused on these
investments during the recent housing boom, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. By the height of the mortgage-securities frenzy
in 2006, Moody's had pulled even with its largest competitor, rating
nine out of every 10 dollars raised in these instruments, and it gave
many of the bonds its coveted triple-A rating. Now, Moody's and the
other two major rating firms, the Standard & Poor's unit of
McGraw-Hill Cos. and the Fitch Ratings unit of Fimalac SA, are under
fire for putting top ratings on securities that ultimately collapsed in
value. Investors, many of whom relied on ratings to signal which
securities were safe to buy, have lost more than $100 billion in market
value. Investigators from Congress, the Securities and Exchange
Commission and several state attorneys general are examining the rating
firms' practices.
href='http://online.wsj.com/article_print/SB120787287341306591.html'>Read
more. (Registration required.)