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November 3, 2006
name='1'>New Requirements and Misconceptions Potentially Steering
People Away from Bankruptcy
A year after
enactment, it remains unclear how many abusive bankruptcies the
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)
has actually prevented, but the new law has achieved a short-term
objective of reducing filings, MSNBC.com reported yesterday. While
bankruptcy filings for the twelve months since BAPCPA's enactment are
dramatically lower, the American Bankers Association expects
bankruptcies will eventually return to levels prior to the
implementation of the new bankruptcy sometime during 2007. 'A big
misperception was and continues to be that the new law abolished
bankruptcy,' said ABI Resident Scholar David Skeel. However, increased
costs and requirements may be steering some consumers in need away from
bankruptcy. 'Individuals are paying about twice as much in legal fees
[since the work required of attorneys increased substantially] and
filing fees have increased fourfold,' says Amy Boohaker, a bankruptcy
attorney in Sarasota, FL. 'People who are already broke are bearing the
brunt of BAPCPA's administration costs,'
href='http://www.msnbc.msn.com/id/15484752/'>Read more.
name='2'>NYRA Files for Bankruptcy Protection
The New York Racing
Association, the private entity that has held the state horse racing
franchise since 1955, filed for protection from creditors in bankruptcy
court Thursday, the Associated Press reported today. NYRA's hold on the
state franchise to run racing is scheduled to end Dec. 31, 2007. NYRA
has sought to require the state to release without restrictions $19
million of a $30 million state bailout authorized by the Legislature and
Gov. George Pataki, but the Pataki administration's racing committee has
wanted to release it in installments.
href='http://www.nytimes.com/aponline/sports/AP-RAC-NYRA-Bankruptcy.html'>Read
more.
name='3'>SEC Enforcement Cases Decline 9 Percent
The number of new
enforcement cases brought by the Securities and Exchange Commission fell
by 9 percent last year as the agency grappled with staffing cuts brought
on by a recent budget crunch, the Washington Post reported today. SEC
Chairman Christopher Cox said in a statement that the agency's work in
the fiscal year ended Sept. 30 had produced 'solid results for
investors,' including settlements of $800 million with insurance firm
American International Group Inc. and $400 million with District
mortgage giant Fannie Mae. The agency's reduced tally of 574 enforcement
actions included 91 cases against shell companies that failed to file
regular financial reports. Cox attributed the decline to temporarily
reduced staff levels. The SEC as a whole lost 155 employees last year --
including 43 in the enforcement unit -- compared with fiscal 2005.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/11/02/AR2006110201701_pf.html'>Read
more.
name='4'>Judge Allows Silicon Graphics to Shed Unnecessary
Claims
Helping Silicon
Graphics Inc. trim surplus claims after its recent emergence from
bankruptcy, Bankruptcy Judge Burton R. Lifland on Wednesday granted the
company's requests to eliminate invalid claims and reduce excessive
ones, Portfolio Media reported yesterday. Silicon Graphics first
presented the U.S. Bankruptcy Court for the Southern District of New
York with its list of unnecessary claims on Aug. 25. The company said
that claimants had filed approximately 700 proofs of claims against
Silicon Graphics during its bankruptcy, and that through a comprehensive
review, the company had found some that needed to be disallowed,
expunged, reduced or reclassified. Judge Lifland agreed to eliminate
over 140 claims.
name='5'>Court Tosses Hundreds of Claims against Calpine
A Manhattan
bankruptcy court has expunged hundreds of claims against Calpine Corp.,
relieving the embattled energy provider of potentially billions of
dollars in liabilities, Portfolio Media reported yesterday. On Tuesday,
Bankruptcy Judge Burton Lifland dismissed over 400 claims facing
Calpine, which totaled nearly $10 billion. The bankrupt energy provider
had filed a motion with the U.S. Bankruptcy Court for the Southern
District of New York in September, contending that a slew of claims were
invalid and should be dismissed. The claims expunged included numerous
duplicate claims, beneficial noteholder claims and equity interest
claims, according to court documents. The case is In re Calpine
Corporation et al., case number 05-60200, in the U.S. Bankruptcy Court
for the Southern District of New York.
name='6'>Delta Given Extension for Reorganization Plan
A bankruptcy judge
granted Delta Air Lines Inc. a deadline extension to file its
reorganization plan as it tries to emerge from chapter 11 by the middle
of next year, the Associated Press reported yesterday. The nation's
third-largest airline now has until Feb. 15, 2007, to file a plan and
until April 16, 2007, to solicit approval for the plan from creditors,
according to a court document dated Oct. 31. It is the third extension
Delta has sought.
href='http://news.cincypost.com/apps/pbcs.dll/article?AID=/20061103/BIZ/611030333'>Read
more.
name='7'>City of Waco Objects to Gardening Giant's Liquidation
Plan
As EG Liquidating Co.
Ltd. takes steps toward winding down, the city of Waco has raised
objections to the gardening company's first amended liquidation plan,
Portfolio Media reported yesterday. The Waco Independent School District
claimed Wednesday in the U.S. Bankruptcy Court for the District of
Delaware that EG Liquidating, which filed for chapter 11 in April, did
not make good on Texas property taxes in 2006. Waco alleged that the
liquidation plan provisions fail to provide 'fair and equitable
treatment' to its secured tax claim. Waco demanded no less than full
distribution to its claim from the tax reserve, and said the secured
claim was entitled to express retention of all property tax in the
proceeds of the sale of EG Liquidating until all taxes, penalties and
interest protected by those liens have been paid. The case is In re EG
Liquidating Company Ltd., case number 06-10396 in the U.S. District
Court for the District of Delaware.
name='8'>Interstate Bakeries to Settle SEC Investigation
Bankrupt snack cake
maker Interstate Bakeries Corporation said Thursday that it had agreed
to settle an investigation brought by the U.S. Securities and Exchange
Commission over its workers compensation reserves, Portfolio Media
reported yesterday. The settlement includes a cease-and-desist order
against future violations of record keeping and internal controls and
reporting provisions. The Missouri-based company admitted no wrongdoing
as part of the settlement. The settlement still awaits SEC approval. IBC
announced in January 2005 that the SEC had issued a formal order of
private investigation related to the company's audit committee
investigation into its workers compensation reserves, among other
reserves. The case is Interstate Bakeries Corp., case number 04-45814,
in the U.S. Bankruptcy Court for the Western District of Missouri.
name='9'>Alabama Country Club Files for Bankruptcy
Riverchase Country
Club filed for chapter 11 protection in the U.S. Bankruptcy Court in
Birmingham on Monday, the Birmingham (Ala.) News reported today.
Wachovia Bank is the largest creditor, owed $3.2 million. Exact
schedules of assets and liabilities haven't yet been filed. Other
creditors listed in Riverchase's court filing include Alabama Power Co.,
owed $11,145, and institutional restaurant vendor Sysco, $11,300.
href='http://www.al.com/business/birminghamnews/index.ssf?/base/business/1162549725301510.xml&coll=2'>Read
more.
name='10'>Ex-Leader of Computer Associates Gets 12-Year Sentence and
Fine
The former chief
executive of Computer Associates International, Sanjay Kumar, was
sentenced yesterday to 12 years in prison and fined $8 million for
orchestrating a $2.2 billion accounting fraud at the software company,
the New York Times reported today. Because he pleaded guilty in April to
securities fraud and obstruction of justice charges, Mr. Kumar, 44, had
faced a maximum sentence of life imprisonment. While District Judge I.
Leo Glasser found such punishment as excessive, he repeatedly rebuked
Kumar for helping inflate the company's sales figures in 1999 and 2000,
as well as lying to federal investigators and authorizing a bribe to a
potential witness. Kumar's fine, the judge said, has been deferred until
restitution is determined next year. He is scheduled to report to prison
href='http://www.nytimes.com/2006/11/03/technology/03computer.html?ref=business&pagewanted=print'>Read
more.
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.Ê For more of the latest business news visit
href='http://dailybusiness.creditmanagers.biz/'>http://dailybusiness.creditmanagers.biz.
ABI Members receive a 50 percent discount when subscribing to the
complete Daily Summary.
AGCO Corp., the Duluth, Ga. maker of
agricultural equipment, reported its third quarter net income tumbled
81%--to $5.4 million. The results included restructuring charges of
$900,000. Sales slipped 4%--to just under $1.2 billion.
Huttig Building Products Inc., a St. Louis, Mo. distributor of
building materials, reported a third quarter net loss of $9.1 million,
while sales slipped 3%--to $294 million.
InFocus Corp., a Wilsonville, Or. maker of projectors,
reported a third quarter net loss of $19.4 million, including extra
charges of $850,000. Revenue declined 38%--to $81.2 million.
Quixote Corp., a Chicago, Ill. maker of road barriers,
traffic-control devices and related products, reported a first quarter
net loss of $5.9 million. The results included nonrecurring charges of
$5.1 million. Revenue declined 13%--to $34.2 million.
Rock of Ages Corp., a Graniteville, Vt. maker of cemetery
memorials, reported a third quarter net loss of $110,000, including an
operating loss of $160,000. Revenue declined 14%--to $20.6 million.
Washington Mutual Inc., a Seattle, Wash. banking firm, is
trimming the payroll at its South Natomas, Wa. facility by sixty-five
employees as part of a companywide restructuring.