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April 1, 2008
Subcommittee to Examine Limited Means Test Exemption for Military
Personnel
The House Judiciary
Subcommittee on Commercial and Administrative Law today will consider
legislation (
href='http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h4044ih.txt.pdf'>H.R.
4044) amending BAPCPA to establish a limited exemption from the
means test for qualified active-duty military. The first panel will
feature H.R. 4044's sponsor Rep. Janice Schakowsky (D.-Ill.) and
co-sponsor Rep. Dana Rohrabacher (R-Calif.). Witnesses for the second
panel include ABI Resident Scholar
size='3'>Jack Williams, Raymond C. Kelly,
national legislative director of AMVETS and Ed Boltz, of the Law Offices
of John T. Orcutt, P.C. The hearing is scheduled for 2 p.m. ET in room
2141 of the
face='Times New Roman' size='3'>Rayburn
size='3'>House
face='Times New Roman' size='3'>Office
size='3'>Building
size='3'>.
href='http://judiciary.house.gov/hearings.aspx?ID=197'>Read
more.
name='2'>Senate Set to Vote on Democrats' Housing Stimulus
Package
The Democrats' housing stimulus
href='http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:s2636pcs.txt.pdf'>S.
2636) being voted on today blends several provisions aimed at easing
the foreclosure crisis, such as providing $4 billion to communities to
purchase and rehabilitate foreclosed homes, allowing bankruptcy judges
to modify the mortgages of chapter 13 debtor’s primary residences
and improving disclosure of subprime mortgage loans so borrowers won't
be surprised by big payment increases, the Associated Press reported.
The underlying measure faces uncertain prospects as rival Democrats and
Republicans spar over how much of a debate to have on the proposal. It
seemed likely that Republicans would again block the bill, as they did
Feb. 28. The White House, Republicans and some Democrats are opposed to
a plan to change bankruptcy laws to allow judges to cut interest rates
and reduce what's owed on troubled borrowers' mortgages, saying it would
force lenders to tighten their standards and raise interest rates.
Democrats say they're open to some GOP options, such as a bill by Sen.
Johnny Isakson (R-Ga.) to award $15,000 tax credits to people who buy
and move into foreclosed homes.
href='http://www.nytimes.com/aponline/us/AP-Congress-Housing.html?scp=6&sq=bankruptcy&st=nyt'>Read
more.
name='3'>Groups Attack Administration’s Plan to Overhaul
Financial Regulatory System
Small banks, state
officials and other groups began an assault on the Bush administration's
sweeping plan to overhaul the nation's financial regulatory system,
the Wall Street
Journal reported today. Treasury Secretary
Henry Paulson yesterday formally announced calls for consolidating bank
regulations, creating a new type of insurance charter, improving the
oversight of mortgage lending and allowing the Federal Reserve to branch
into more corners of finance. Other groups expressing early opposition
include credit unions, which are concerned that a single depository
regulator would force them into a structure dominated by traditional
banks. Smaller banks worry that the creation of a single banking
regulator will favor the desires of their bigger competitors. State
prosecutors complain that a proposal to create a national insurance
regulator would substitute their vigilance with weak federal
oversight.
href='http://online.wsj.com/article_print/SB120697114969676991.html'>Read
more. (Registration required.)
UBS
to Write Down another $19 Billion
UBS, the largest Swiss
bank, said today that it would write down another $19 billion related to
'
face='Times New Roman'
size='3'>U.S.
size='3'>real estate and related structured credit positions' and that
Marcel Ospel, its chairman, would step down, the
face='Times New Roman' size='3'>New York Times
size='3'>reported. UBS said the write-down would result in a
first-quarter loss of about 12 billion Swiss francs, or $12 billion, and
that it would seek new capital of about $15 billion, the second time it
has announced plans to raise new funds since the credit crisis began.
The bank's board proposed that Peter Kurer, currently general counsel
for the bank, take over as chairman, pending shareholders' approval at a
meeting on April 23. The news came as Deutsche Bank, the biggest German
lender, also said today that it expected a first-quarter loss of about
$3.9 billion on write-downs of U.S. real
estate loans and assets.
href='http://www.nytimes.com/2008/04/02/business/worldbusiness/02ubs.html?_r=1&hp=&oref=slogin&pagewanted=print'>Read
more.
name='5'>Court Gives
GM, Pension Deals
Bankruptcy Judge
Robert Drain
size='3'>yesterday approved auto parts maker Delphi Corp. to extend
until April 15 an agreement that allows it to transfer billions of
dollars of union pension liabilities to former parent General Motors
Corp., Reuters reported. The agreement, along with pension funding
waivers with the Internal Revenue Service, were set to expire yesterday.
Judge Drain allowed the pension funding waivers with the IRS to be
extended through April 7.
size='3'>Delphi
extend letters of credit provided to the Pension Benefit Guaranty Corp.
until April 22 and increase their size by $2.5 million.
size='3'>Delphi
contributions to the pensions during the reorganization and said in
court papers that it could face penalties of more than $1.4 billion
without extensions.
size='3'>Delphi has sought $6.1
billion of exit financing, including up to $2.825 billion of loans from
GM. An investor group led by Appaloosa Management LP has backed a $2.55
billion equity plan to support the reorganization as well.
href='http://www.reuters.com/article/ousiv/idUSN3144956820080401'>Read
more.
href='http://www.reuters.com/article/ousiv/idUSN3144956820080401'>
Says W.R. Grace Bankruptcy Filing Doesn't Shield
w:st='on'>
w:st='on'>Montana
Bankruptcy Judge
Judith Fitzgerald
refused to shield
w:st='on'>
size='3'>Montana
lawsuits over allegations it failed to protect residents from the
dangers posed by W.R. Grace & Co.'s mining operations, the
Wall Street Journal
reported today. Judge Fitzgerald rejected a bid for an
injunction barring lawsuits against the state by people who say they
were harmed by asbestos from the chemical company's
w:st='on'>
size='3'>Libby
w:st='on'>
size='3'>Mont.
ruling signed last week and filed Monday with the U.S. Bankruptcy Court
in
size='3'>Wilmington
w:st='on'>
size='3'>Del.
that lawsuits against
w:st='on'>
size='3'>Montana
alleged failures in policing the Grace mines don't present a direct
threat to the company's bankruptcy proceedings. Allegations against the
state of
face='Times New Roman' size='3'>Montana
include negligence and failure to warn residents and mine
workers about allegedly lethal contamination at the mining operation,
which ran until 1990.
href='http://online.wsj.com/article/SB120701470802679263.html?mod=us_business_whats_news'>Read
more. (Registration required.)
Files for Bankruptcy Protection
Ampex Corp., an audio
recording company and data-storage system maker, filed for chapter
11 protection on Sunday as its pension liabilities outpaced earnings,
the Associated Press reported yesterday. Ampex got support for the move
before its filing from most of its major creditors, including Hillside
Capital Inc., which has agreed to provide new financing that can be used
for working capital once the company emerges from bankruptcy.
href='http://biz.yahoo.com/ap/080331/ampex_bankruptcy.html?.v=1'>Read
more.
name='8'>Advertising Agency Files Pre-Packaged Chapter
11
Interep National Radio
Sales Inc. and 14 affiliates revealed that they filed a pre-packaged
chapter 11 on Sunday, seeking to restructure the company's balance sheet
to manage anticipated liabilities from bonds that come due July
1, Bankruptcy
Law360 reported
yesterday. The company filed the petition in consultation with the
company's two largest bondholders, Oaktree Capital Management LP (OCM)
and Silver Point Capital LP, who also furnished Interep with a new, $25
million credit facility.
size='3'>According to one Interep filing, the bondholders own a
“substantial majority” of Interep's 10 percent senior
subordinated notes, due July 1. The petition
estimates that 1,000 to 5,000 creditors hold $100 million to $500
million in claims. The company also says it has $50 million to $100
million in assets.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=51631'>Read
more. (Registration required.)
name='9'>Hawaiian Governor Tries to Intervene in Aloha Bankruptcy
Case
Hawaii Gov. Linda Lingle
said yesterday that the state has petitioned the bankruptcy court to
prevent Aloha Airlines from ceasing passenger operations for at least
another month, the
size='3'>Honolulu Advertiser reported today.
Lingle said that the airline should keep operating unless (1) Aloha has
exhausted all possibilities of finding a buyer for its flight operations
or financing to reorganize the airline, (2) it doesn’t have the
cash or resources to operate for another month, (3) the views of the
unsecured creditors’ committee have been received and considered,
(4) Aloha has complied with the state’s dislocated worker’s
law and (5) the court determines that Aloha and its secured lenders
filed for chapter 11 in good faith. The
administration also said today that the federal government has concerns
over the sale of cargo and contract services, which may also impact
Aloha’s plans to move forward with the shutdown. However, in case
the petition fails, the governor said that the state has activated a
rapid response team to help the 3,500 Aloha employees and their
families.
href='http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20080331/BREAKING01/80331046/-1/LOCALNEWSFRONT'>Read
more.
name='10'>Havard Endowment Eyes Palco Land
Harvard Management Corp.,
which stewards
size='3'>Harvard
face='Times New Roman' size='3'>University
size='3'>'s $35 billion endowment, is considering purchasing tracts of
Pacific Lumber Co.'s
w:st='on'>
size='3'>California
size='3'>(Palco) redwoods forests,
size='3'>Bankruptcy Law360 reported yesterday.
Palco made the disclosure on Thursday in a motion in its chapter 11
case, which asked for sanctions against a separate coalition of
interested buyers of over 200,000 acres of company land. That alliance,
which includes environmental groups such as the Save-the-Redwoods
League, is guilty of a 'willful failure to comply with subpoenas,'
according to Palco.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=51644'>Read
more. (Registration required.)
name='11'>Judge Dismisses Levitz Bankruptcy
Bankruptcy Judge
Burton Lifland
size='3'>signed an order on Friday dismissing the chapter 11 cases of
Levitz Furniture Inc. and its subsidiaries,
size='3'>Bankruptcy Law360 reported yesterday.
Levitz filed the motion to close the case after successfully completing
the claims distribution process at the end of February. The company
distributed a total of $70,000 to allowed unsecured claimants, in
addition to assuming, assigning or rejecting all leases and paying
the
face='Times New Roman'
size='3'>U.S.
size='3'>rustee quarterly fees.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=51577'>Read
more. (Registration required.)
name='12'>Fedders, Banks Hit with $150 Million Misconduct
Suit
Creditors of bankrupt air
conditioner-maker Fedders North America Inc. on Thursday filed a lawsuit
seeking up to $150 million in damages against several of Fedders'
officers and outside lenders, who they say dragged Fedders into
bankruptcy through various forms of misconduct,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported yesterday. The suit, which the creditors threatened in
January, targeted CEO Michael Giordano and several members of his
family, as well as the company's directors and four of its outside
lenders — Goldman Sachs Credit Partners LP, Bank of America NA,
General Electric Capital Corp. and Highland Capital Partners
LLC.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=51646'>Read
more. (Registration required.)
name='13'>Mortgage Company Averts Bankruptcy
Thornburg Mortgage Inc.,
a residential-finance company hit hard by the credit crunch, said
yesterday that it had succeeded in raising new capital to stave off
bankruptcy, the Wall
Street Journal reported today. Thornburg, a
real estate investment trust specializing in making large mortgages to
people with good credit, said that it had raised $1.35 billion through
selling bonds, warrants to purchase its common shares and interests in
certain mortgage assets. Buyers of the bonds will get 18 percent
interest initially and warrants to buy Thornburg shares for a penny a
share. Thornburg said last night it had received $1.15 billion of the
proceeds from the offering. The remaining $200 million of the offering
proceeds is being held in escrow and will be delivered to the company
upon the completion of a tender offer for its preferred stock. The
company plans to use the proceeds from the offering to satisfy a
capital-raising requirement set by its lenders, who gave the company an
extension through yesterday to raise $948 million or risk losing
funding.
href='http://online.wsj.com/article/SB120702004554279649.html?mod=us_business_whats_news'>Read
more. (Registration required.)
Secretary Resigns
HUD Secretary Alphonso
Jackson announced yesterday that he will resign on April 18, citing his
intent to focus on private and family matters without mentioning
criminal investigations into whether he showed favoritism in awarding
HUD contracts,
size='3'>CongressDaily reported. The FBI has
been examining the connections between Jackson and a friend who was paid
nearly $400,000 by HUD for serving as a construction manager in
size='3'>New Orleans
Hurricane Katrina.
face='Times New Roman'
size='3'>Jackson's troubles
prompted Senate Banking Chairman
face='Times New Roman' size='3'>Chris
size='3'>topher Dodd (D-Conn.) and Senate Transportation-HUD
Appropriations Subcommittee Chairwoman Patty Murray (D-Wash.) earlier
last month to call for his resignation.