size='3'>Lawyer Says Madoff Gave Asset List to SEC
Former Nasdaq Stock Market
Chairman Bernard Madoff gave the Securities and Exchange Commission
(SEC) a list of his personal assets, but investors may have to wait to
learn whether the filing contained any clues as to the whereabouts of
their missing billions, the Wall Street Journal reported
Wednesday. The disgraced money manager, now under house arrest, had
faced a court-ordered deadline of Dec. 31 to turn over a detailed
accounting of his homes, stock holdings, bank accounts and other
business interests. The list was also supposed to include the names and
locations of any bank or brokerage accounts holding whatever remains of
his clients' money. The SEC confirmed that it had received the filing,
but it declined to reveal details or make the documents available to
journalists. The list was not filed publicly in any of the courts
handling the Madoff case, and SEC spokesmen said no decision had been
made as to whether part or all of the asset disclosure would ultimately
be made public. Madoff's attorney, Ira Sorkin, said his client was
abiding by the court order, but the attorney would not comment further.
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more (subscription required).
Entertainment Gets Three-Week Extension to Restructure
Debts
Trump Entertainment Resorts
Inc. has until Jan. 21 to negotiate a debt restructuring after 70
percent of its bondholders and a bank agreed to extend the deadline
following a missed interest payment, Bloomberg News reported yesterday.
The forbearance agreement means that holders of most of its $1.25
billion in notes and Beal Bank Nevada, which it owes $490 million, won't
exercise their default rights for coupon or principal payments for at
least another three weeks. An earlier 30-day grace period to make an
interest payment or renegotiate terms with bondholders expired
yesterday. The Atlantic City, N.J.-based casino owner, founded by Donald
Trump, skipped a $53 million coupon payment due Dec. 1, saying it needed
to conserve cash and hold talks with lenders. Gambling revenue in
Atlantic City fell 6.7 percent in 2008 through November as the recession
deterred tapped-out gamblers and slot-machine competition from nearby
states wooed others.
href='http://www.bloomberg.com/apps/news?pid=20601087&sid=ar.Wuha_deR0&refer=home'>Read
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name='3'>Treasury Maintains Leeway in Auto Aid
The Treasury Department has
given itself wide latitude in aiding U.S. automakers under formal
guidelines published yesterday for its bailout of the industry, The
Washington Post reported yesterday. Rather than setting
detailed terms in advance, the Treasury 'will determine the form, terms,
and conditions of any investment made pursuant to this program on a
case-by-case basis,' according to the description of the Automotive
Industry Financing Program. The Treasury will similarly decide what
companies are eligible for funding on a case-by-case basis based in part
on 'the importance of the institution' to the auto industry. Already the
Treasury has pledged $17 billion for General Motors and Chrysler, and $6
billion to help GMAC, the auto finance company. The first $4 billion of
the GM loan was paid to the company yesterday. The vague language in the
formal description of the program could leave room for the government to
support auto parts suppliers or finance companies other than GMAC.
href='http://www.washingtonpost.com/wp-dyn/content/article/2008/12/31/AR2008123102880.html'>Read
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National Will Merge with West Virginia Bank
The investors who control
Abigail Adams National Bancorp, the parent company of the troubled Adams
National Bank, have decided to merge it with a West Virginia bank that
they also control in a deal designed to ensure that Adams National can
weather the financial crisis, The Washington Post reported
yesterday. Premier Financial Bancorp will buy Washington, D.C.-based
Abigail Adams for stock valued at $10.9 million, the companies said
yesterday. Adams National is the third local bank to agree to be sold in
two months, following the purchase of Chevy Chase by Capital One
Financial and the Provident Bank's purchase by M&T Bank. Charlotte,
N.C.-based Wachovia is in the process of being sold to Wells Fargo. The
deal signifies the creation of a company with consolidated assets of
approximately $1.2 billion, with about $950 million in total deposits
and $800 million in total loans, the companies said. The impact for
customers of Adams National, which has five branches in Washington and
one in Silver Spring, Md., will not be immediate.
href='http://www.washingtonpost.com/wp-dyn/content/article/2008/12/31/AR2008123103050.html'>Read
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name='5'>Report: Fannie Says IndyMac Has $1B in Mortgage
Obligations
Fannie Mae said it believes
that IndyMac has obligations to repurchase around $1 billion of home
mortgages that failed to meet Fannie's standards, the Wall Street
Journal reported today. Banks that sell loans to Fannie or its
smaller rival, Freddie Mac, must make 'representations and warranties'
that those loans meet certain quality standards. If not, the lenders can
be forced to buy the loans back. A spokesman for Fannie said the company
is working with the Federal Deposit Insurance Corp. (FDIC) to resolve
the issue. A consortium of private equity and hedge fund firms,
including J.C. Flowers & Co., is reportedly close to a deal to buy
the assets of IndyMac. The FDIC, which took control of IndyMac in July
2008, is seeking a buyer.
href='http://www.reuters.com/article/ousiv/idUSTRE5010F020090102'>Read
more.
Carolina Unemployment Fund Near Insolvency
South Carolina's unemployment
benefits fund is expected to be empty if Gov. Mark Sanford does not
request a federal loan that would keep benefit payments running through
March, U.S. News and World Report said on Wednesday. Sanford
has resisted requesting the $146 million loan until the unemployment
agency agrees to meet his requests for a state audit and increased data
reporting on the state's 77,000 unemployed. South Carolina Republican
state legislators are reportedly rather unhappy with Sanford; one
lawmaker called it a 'heartless and cruel act.'
name='7'>Credit Freeze Cuts Dealmaking by 29 Percent
With the virtual collapse of
credit markets and the drying up of money from private equity firms,
2008 turned out to be a very slow year for mergers and acquisitions,
according to today's Washington Post. Globally, there were
37,445 deals totaling $3.3 trillion, down 29 percent from record volume
in 2007, according to Dealogic, a data research firm in New York. In the
United States, the value of deals dropped 29 percent to $1.1 trillion.
The value of mergers and acquisitions was largest in the U.S. financial
sector as the credit crisis spurred linkups. The sector did $157.9
billion in deals, with Bank of America's $44.4 billion acquisition of
Merrill Lynch accounting for the lion's share. The health care and
consumer-products industries, which did $138.6 billion and $135.6
billion in deals respectively, ranked next, according to Dealogic. The
company's data extends to Dec. 22. Dealogic plans to release an updated
year-end report early next week. In the United States, the number of
buyouts dropped roughly 32 percent to 635 deals valued at $61 billion
from 930 deals valued at $375 billion in 2007. Financial industry
buyouts were the largest in value, at $15.6 billion. By comparison, the
utility and energy sector, which led 2007, had deals valued at $46.43
billion.
href='http://www.washingtonpost.com/wp-dyn/content/article/2009/01/01/AR2009010101783.html'>Read
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name='8'>Analysis: Slumping U.S. Steel Industry Looks to
Stimulus
The steel industry, having
entered the recession in the best of health, is emerging as a leading
indicator of what lies ahead: As steel production goes—and it is
now in collapse—so will go the national economy, according to an
analysis in yesterday's New York Times. That maxim once
applied to Detroit's Big Three car companies, when they dominated
American manufacturing. Now they are losing ground in good times and
bad, and steel has replaced autos as the industry to watch for an early
sign that a severe recession is beginning to lift. The industry itself
is turning to government for orders that, until the September collapse,
had come from manufacturers and builders. Its executives are waiting
anxiously for details of President-elect Barack Obama's stimulus plan,
and adding their voices to pleas for a huge public investment
program—up to $1 trillion over two years—intended to lift
demand for steel to build highways, bridges, electric power grids,
schools, hospitals, water treatment plants and rapid transit. New
spending should provide an immediate jolt to the steel business, which
has already gone through the painful makeover now demanded of
automakers. Steel mills were closed, companies were consolidated,
hundreds of thousands lost their jobs and the survivors agreed to
concessions. As a result, productivity shot up and so did profits, to
record levels in the first nine months of this year. Even as the economy
wobbled, steel held its own. But then the recession hit in force. Steel
goes into nearly everything made in America, from homes and office
buildings to cars, appliances and light bulb sockets, and as
construction and manufacturing wound down, so did the output of steel,
plunging 50 percent since September.
href='http://www.nytimes.com/2009/01/02/business/02steel.html?_r=2&ref=business'>Read
more.
name='9'>Pilgrim's Pride Gets up to $450M in DIP
Financing
A bankruptcy judge gave the
go-ahead for Pilgrim's Pride Inc. to incur up to $450 million in
debtor-in-possession financing as the poultry giant seeks to reorganize
under chapter 11, BankruptcyLaw360.com reported Wednesday.
Judge Dennis M. Lynn of the U.S. Bankruptcy Court for the Northern
District of Texas had previously given interim approval for $365 million
in financing from the Bank of Montreal. The financing, combined with
cash generated from ongoing operations, will allow the company to
satisfy its obligations, including payment of employee wages and
payments to vendors, Pilgrim's Pride said. According to court papers,
the debtors will pay an interest rate of 8 percent plus the bank's base
rate on the DIP loans.
href='http://bankruptcy.law360.com/articles/81460'>Read more
(subscription required).
name='10'>U.S. Bankruptcy Court Approves WaMu
President
A U.S. bankruptcy court has
granted a request from Washington Mutual to appoint Robert Williams as
president of the bankrupt savings and loan, Reuters reported Wednesday.
At a bankruptcy court hearing on Tuesday, Washington Mutual was approved
for its request to retain Williams through March 14, 2010, in line with
the terms set forth in his offer letter. Williams had served as senior
vice president and corporate treasurer of Washington Mutual Bank since
February 2005. WaMu had previously said in court documents that
Williams' employment was essential to successfully complete its
outstanding tasks. The company filed for bankruptcy protection in
September and sold its key assets to JPMorgan Chase & Co.
href='http://uk.reuters.com/article/marketsNewsUS/idUKBNG41768320081231'>Read
more.
name='11'>Count Me In's CEO Says Bankruptcy Not An
Option
Count Me In Corp. (CMI) founder
and CEO Terry Drayton admits to sloppy financial management and says
he's determined to find investors so he can pay back $5 million to
sports organizations across the country that used his company to collect
online donations and registration fees, The Seattle Times
reported yesterday. Drayton said he was close to a deal in September.
Negotiations fell apart after a New Jersey soccer club filed a federal
suit seeking payment of $142,000, money Drayton said he doesn't have.
He's in talks with three investment groups, but says he worries that
they could also back out now that three sports organizations in Alaska
have filed a petition with the U.S. Bankruptcy Court in Seattle seeking
to force CMI into involuntary bankruptcy. Those groups are seeking
payment of nearly $175,000. If he's forced into bankruptcy, Drayton
said, none of his clients will get their money back because his company
doesn't have assets to liquidate. Several local little league presidents
said they're furious that CMI continued to collect fees until a couple
of weeks ago, knowing the company was in dire financial straits. They
praised CMI's software and technical support but said they feel robbed.
href='http://seattletimes.nwsource.com/html/localnews/2008579311_countmein01m.html'>Read
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name='12'> LyondellBasell May Seek Chapter 11
LyondellBasell Industries, a
chemicals maker controlled by the investor Len Blavatnik, may file for
bankruptcy as a way to restructure debt that financed its $12.7 billion
merger a year ago, Bloomberg News reported yesterday. The company hired
an executive to oversee a restructuring in case it seeks court
protection and said its private-equity owners had denied a request for a
loan, according to a regulatory filing Wednesday. The chemicals maker is
struggling with a collapse in home and auto sales that has depressed
demand for things as diverse as car bumpers and paint. LyondellBasell's
lenders face losses of more than 90 cents on the dollar as it joins
Harrah's Entertainment, the Realogy Corp. and GMAC in seeking to
restructure the debt-fueled buyouts of the last two years. The company
said its Lyondell Chemicals Company unit asked a finance affiliate of
the Access Group, Mr. Blavatnik's private equity firm, to extend it
credit as part of a March loan agreement, but was denied. LyondellBasell
is in 'selective default' after postponing $280 million of interest
payments and faces a 'rapidly weakening liquidity position' with $26
billion of debt, Standard & Poor's analysts said. The company said
it is 'not currently in default according to its agreements with its
lenders.' The company was formed in the 2007 acquisition of the Lyondell
Chemical Company by Basell, a takeover that created one of the world's
biggest plastics makers just as the auto industry was beginning its
longest sales decline in 17 years.
name='13'> Sunwest Affiliates File for
Bankruptcy
Sunwest Management Inc.'s
company founder and CEO Jon Harder filed chapter 11 bankruptcy on New
Year's Eve, capping a tumultuous 2008 for the Salem, Ore.-based
senior-housing manager, the Oregon Statesman Journal reported yesterday.
Harder's personal bankruptcy was prompted by lawsuits aimed at Harder
and other company executives. A court judgment led to the garnishment of
Harder's accounts and there was the expectation that more judgments soon
would follow, Sunwest officials said. Sunwest manages a portfolio of
more than 250 senior housing projects, which serve more than 17,000
elderly residents. Hundreds of limited liability companies, backed by
groups of individual investors, have provided financing to grow the
business.
href='http://www.statesmanjournal.com/article/20090101/NEWS/901010336/1001'>Read
more.