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July 27, 2007
Terminates W.R. Grace's Exclusivity Period
Bankruptcy Judge
Judith Fitzgerald
size='3'>terminated the bankrupt chemical manufacturer W.R.
Grace’s exclusivity period, saying in a motion that Grace has been
unable to forge an agreement or achieve a consensus with respect to
asbestos personal injury liabilities and certain asbestos-related
property damage claims despite over six years of exclusivity,
Bankruptcy Law360
reported yesterday. Judge Fitzgerald said that without an
agreement as to the asbestos personal injury liability, a January 2008
trial on estimation of asbestos personal injury liabilities must wrap up
before a reorganization plan can be confirmed.
face='Times New Roman' size='3'>In addition, Grace has not shown
additional cause for extension of exclusivity and termination of
exclusivity will not prejudice any party or adversely affect the
progress of the case pending estimation, Judge Fitzgerald said.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=30745'>Read
more. (Registration required.)
name='2'>Mortgage Lenders Network Creditors Get More
Time
Bankruptcy Judge
Peter J. Walsh
size='3'>extended the Aug. 2 deadline for Mortgage Lenders Network USA
Inc’s unsecured creditors’ committee to assert claims
against Residential Funding Co. LLC until Aug.31,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported yesterday. The committee asked for an additional 60
days to file claims against RFC and challenge RFC’s alleged liens
and claims, known as the “challenge deadline.” The unsecured
creditors objected to a motion earlier this month filed by RFC
requesting a protective order suspending discovery in an ongoing
investigation of the relationship between Mortgage Lenders and an
offshore affiliate, Emax Financial Group LLC. In the same objection, the
creditors requested an extension of the challenge deadline, granting the
committee and other parties additional time to file claims against RFC,
Mortgage Lenders' primary pre-petition warehouse lender.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=30662'>Read
more. (Registration required.)
size='3'>San Diego
size='3'> Catholics Ask Judge to Prevent
w:st='on'>
size='3'>Sale
Property
A group claiming to
represent more than 1 million Roman Catholics asked a bankruptcy judge
yesterday to prevent the
w:st='on'>San
Diego
or selling churches, schools and charities to settle sex-abuse cases,
the Associated Press reported yesterday. The group, Parishioners for
Churches and Schools, wants to join a trial set for this fall in federal
bankruptcy court that will determine whether parish properties can be
seized or liquidated through the Catholic Diocese of San Diego in any
settlement. If the motion for intervention by the parishioners' group is
granted, it would be the first such legal claim by parishioners in a
bankruptcy proceeding for a
w:st='on'>
size='3'>U.S.
size='3'>diocese, according to Thomas Califano, a lawyer for the
parishioners' group. More than 140 plaintiffs who claim they were abused
are seeking a settlement of about $200 million from the diocese. Their
attorneys have sued the diocese in the bankruptcy court for allegedly
shielding land and other holdings worth millions through transfers to
parishes and schools.
href='http://www.nytimes.com/aponline/us/AP-Church-Abuse-Bankruptcy.html?pagewanted=print'>Read
more.
Autos
name='4'>Dura Auction of Atwood Unit Approved
Dura Automotive Systems
Inc. has won bankruptcy court approval to invite competing bids for its
Atwood Mobile Products unit, which Insight Equity Holdings Inc. has
offered to buy for $160.2 million, the Associated Press reported
yesterday. The Rochester Hills,
w:st='on'>
size='3'>Mich.
maker is auctioning the division, which manufactures parts for
recreational vehicles, as part of its chapter 11 restructuring.
Bankruptcy Judge Kevin
Carey signed off Tuesday on the rules for an
auction of the Atwood unit and scheduled an Aug. 15 hearing to review
results of the sale. Competing bids are due Aug. 8 for an Aug. 14
auction.
href='http://www.forbes.com/feeds/ap/2007/07/25/ap3951877.html'>Read
more.
name='5'>Commentary: UAW's Health Care Stance Could Make or
Break
face='Times New Roman'
size='3'>U.S.
size='3'>Carmakers
Apart from collective
amnesia over how to make hit cars,
w:st='on'>
size='3'>America
size='3'>'s former Big Three auto makers are teetering on the brink of
bankruptcy and will need to contain ever-escalating health care
expenses, according to a commentary in today’s
face='Times New Roman' size='3'>Wall Street Journal
size='3'>. Every car they produce, they plaintively assert, contains
$1,500 in health costs that their Japanese competitors don't face. While
it is not within the power of United Auto Workers President Ron
Gettelfinger to save GM, Ford and Chrysler, it is certainly within his
power to kill them. Closing the competition gap with Japanese auto
makers now, Gettelfinger insists, requires not more concessions by auto
workers - but a Japanese-style government health care system for all
workers. UAW workers still enjoy a health-care deal that no one else
in
size='3'>America
href='http://online.wsj.com/article/SB118549957416479849.html?mod=opinion_main_commentaries'>Read
more. (Registration required.)
name='6'>Ford Swings to Second Quarter Profit
Ford Motor Co.'s surprise
second-quarter profit gave CEO Alan Mulally some breathing room for his
turnaround effort, but the company faces a rough ride in its core
America
the year, the Wall
Street Journal reported today. Ford yesterday
reported a $750 million second-quarter net profit - pulling its
year-to-date earnings to $468 million, or 22 cents a share, in a period
when Wall Street had expected deep losses. The company had been
projecting an operating loss of nearly $3 billion for the full year, but
lifted its guidance yesterday as it now expects to improve the bottom
line, due to lower interest expenses and better results in its
lending arm. Ford also confirmed that it is looking to sell its Jaguar
and Land Rover luxury brands. It also said it is conducting a strategic
review of its Volvo brand, the third brand in its Premier Automotive
Group. Ford CFO Don Leclair said it is 'probable' Jaguar and Land Rover
will be sold.
href='http://online.wsj.com/article/SB118519926928474943.html?mod=home_whats_news_us'>Read
more. (Registration required.)
name='7'>Ex-Official Is Expected to Return to
Chrysler
Three years after he left
Chrysler, Wolfgang Bernhard is coming back to become the chairman of the
new Chrysler once Cerberus Capital Management completes its purchase of
the automaker from DaimlerChrysler, the
size='3'>New York Times reported yesterday.
Thomas W. LaSorda will remain as Chrysler’s CEO, a position he has
held since the beginning of 2006. Chrysler is expected to name the
members of two boards, one for the auto company and another for a
holding company that is set to be created, when the sale is complete and
that may occur as early as next week.
href='http://www.nytimes.com/2007/07/27/business/27chrysler.html?ref=business&pagewanted=print'>Read
more.
name='8'>Solutia’s Exclusivity Extension Request Still
Undecided
A hearing on whether to grant
bankrupt chemical company Solutia Inc.'s request for a twelfth extension
to its exclusivity period concluded yesterday with no decision having
been made. Bankruptcy Law360 reported yesterday. “The
hearing today was very busy and in fact will be continued on Aug.
1,” said a Solutia spokesman. “Exclusivity was granted
through that date and then will be considered at the Aug. 1
hearing.” If Solutia’s motion is approved by the court, its
exclusive filing period will end Dec. 31 and its deadline for winning
creditor support will be Feb. 29, 2008. Solutia's shareholder and
bondholder committees have objected to the motion, however, saying a
twelfth extension would be gratuitous. In court documents filed Monday,
the equity holders’ committee asked the court to end the
exclusivity period and allow it to file a competing restructuring
proposal.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=30678'>Read
more. (Registration required.)
name='9'>Bankrupt AMS Objects to $18 Million in Publishers'
Claims
Bankrupt book marketer
Advanced Marketing Services Inc. has asked a bankruptcy court for an
order throwing out more than $18 million in allegedly duplicate claims
by creditors, Bankruptcy
Law360 reported yesterday. The company, which
filed for chapter 11 in December 2006 and is operating as debtor in
possession thanks to a $75 million loan from Wells Fargo, said that the
claims by scores of independent publishers were either filed against the
wrong debtor, were identical to other claims or were
redundant. Many of
the claims under dispute, the company argues, have been wrongly filed
against AMS and should be reclassified as claims against subsidiary PGW.
The rest should be disallowed in their entirety, having been asserted
before or amended, and consequently superseded by subsequent claims, the
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=30712'>Read
more. (Registration required.)
Hedge Funds
name='10'>Bear Stearns Seizes Most of Collapsed Hedge Fund's
Collateral
Putting another nail in
the coffin of the troubled High-Grade Structured Credit Strategies hedge
fund, lenders at Bear Stearns Cos. have seized most of the fund's
collateral following its failure to meet a recent margin call,
the Wall Street
Journal reported today.
face='Times New Roman' size='3'>Bear's move came after more than a week
of waiting for additional cash or collateral to repay Bear's $1.6
billion line of credit, leaves the High-Grade fund with little or no
remaining capital and few assets of any value. Both the High-Grade fund
and a more-leveraged sister fund have seen the value of their holdings
decline precipitously in recent weeks, as the market for risky subprime
mortgages, on which the funds bet heavily, has weakened. Bear is now
saddled with some of the same troubled securities that hobbled the hedge
fund and is in the process of unwinding the more leveraged fund, known
as the High-Grade Structured Credit Strategies Enhanced Leverage Fund,
and plans to do the same with the less-leveraged fund.
href='http://online.wsj.com/article/SB118548311834379313.html?mod=us_business_whats_news'>Read
more. (Registration required.)
name='11'>FERC Accuses Amaranth of Manipulation
The Federal Energy
Regulatory Commission (FERC) accused collapsed hedge fund Amaranth
Advisors LLC and two former traders of manipulating the
size='3'>U.S.
size='3'>natural gas market early last year, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. The allegations come a day after the Commodity
Futures Trading Commission filed similar accusations against the fallen
fund and its top trader, Brian Hunter and announced action against other
firms. FERC said that Amaranth's manipulation was accomplished through
trades made on Nymex Holdings Inc.'s New York Mercantile Exchange in
February, March and April 2006. The Amaranth case is one of the
first times that FERC has used its new enforcement authority under the
Energy Policy Act of 2005 to prosecute market manipulation.
href='http://online.wsj.com/article/SB118549781151479774.html?mod=us_business_whats_news'>Read
more. (Registration required.)
name='12'>Commentary: The Beltway Credit Market
As it has been a tough
week so far for financial markets, as a credit scare and rising oil
prices have battered investor confidence, lawmakers in Washington, D.C.
should heed the warning of the markets and swear off its bearish policy
considerations, according to an editorial in today’s
Wall Street
Journal. Credit spreads are widening as
lenders grow more cautious, but so far only to what can be called more
normal levels of risk assessment. The narrow spreads of earlier this
year were unsustainable, and in any case were pushing some deals far out
on the risk curve. More worrisome is the hostility to growth on Capitol
Hill as a bipartisan cast of Senators wants to raise taxes on 'carried
interest,' which means on hedge funds and private equity partnerships.
With this new element of political risk, no one should be surprised to
see buyout deals such as the Cerberus purchase of Chrysler harder to
finance.
href='http://online.wsj.com/article/SB118549887465479640.html?mod=opinion_main_review_and_outlooks'>Read
more. (Registration required.)
name='13'>Global Markets Tumble as Credit Worries
Deepen
Stock prices tumbled on
Wall Street and across much of the rest of the world yesterday, driven
sharply lower by worries over slowing economic growth in the
size='3'>United States
size='3'>and worsening borrowing conditions that could make everything
from huge corporate buyouts to buying a new home more difficult,
the New York
Times reported today. It was the worst one-day
decline on Wall Street since markets plunged worldwide in late February
after an investing scare in
w:st='on'>
size='3'>Shanghai
occurred amid the biggest volume of trading on the New York Stock
Exchange in five years. Meanwhile, there are various signs of weakness
in the American economy and new difficulties in borrowing for many
homeowners and companies that are highly leveraged or have poor credit.
With the growing distress in credit markets, securities backed by risky
mortgages have been a top concern. They are held by pension funds, hedge
funds and many other investors around the world. Until recently, most
policy makers and analysts argued that even if the market for those
bonds collapsed, no major firm was likely to be seriously injured.
However, banks now find themselves taking on more loans because they had
promised to do so if the loans could not be sold and the market for some
types of securities has all but vanished.
href='http://www.nytimes.com/2007/07/27/business/27cnd-stox.html?_r=1&adxnnl=1&oref=slogin&ref=business&adxnnlx=1185538609-AcfR5qQqb+dX7/blY1iSgQ&pagewanted=print'>Read
more.
name='14'>Allegations from Porn Star Add Twist to Ronco
Bankruptcy
Ronald Craig Stone,
currently the CFO of bankrupt of Ronco Corp., faces allegations from
porn star Jill Kelly of misappropriating funds and driving her adult
movie company, Jill Kelly Productions, into bankruptcy, Dow Jones News
Wires reported yesterday. Stone was fired after the company filed for
bankruptcy in Aug. 2005. He joined Ronco - founded by Ron Popeil -
shortly afterward. Ronco, a
size='3'>Simi Valley,
w:st='on'>
size='3'>Calif., gadget maker, last
month sought protection from its creditors in the U.S. Bankruptcy Court
in
size='3'>Woodland Hills,
size='3'>Calif.
company, which owes its creditors about $32.7 million, has said it
intends to sell its assets. Richard F. Allen, a former Ronco CEO who
also is a shareholder, now is arguing in court papers that Stone's
$400,000 salary should not be paid until a 'full investigation' is
completed of the misappropriation claims and other allegations of
misconduct by Stone, including insider trading at Ronco.
href='http://www.chicagotribune.com/business/chi-070726-ronco-bankruptcy,0,3855361.story?track=rss'>Read
more.
Operator Files for Chapter 11
Salon and day spa
operator Klinger Advanced Aesthetics Inc. sought chapter 11 protection
from creditors Wednesday in the U.S. Bankruptcy Court in
size='3'>Newark
w:st='on'>
size='3'>N.J.
Associated Press reported yesterday. Klinger Advanced employs about 300
people in 11 salons and day spas in seven states, including its flagship
location in Short Hills, N.J. The spa operator, formerly known as
Georgette Klinger, listed assets and debts each in the range of $1
million to $100 million in its bankruptcy petition. Among creditors
holding the largest unsecured claims against Klinger and its affiliates
are: Cigna HealthCare, $370,237; Raspberry Red, $223,872 and Janoff
& Olshan Inc., $206,099. Affiliates of Klinger Advanced that also
filed for chapter 11 protection are: Anushka Boca Acquisition Sub LLC,
Anushka PBG Acquisition Sub LLC, Dischino Corp., Georgette Klinger LLC,
GK Acquisition LLC and Wild Hare Acquisition Sub LLC.
href='http://www.chron.com/disp/story.mpl/ap/fn/5001857.html'>Read
more.
International
name='16'>Taiwan
face='Times New Roman' size='3'>'s BenQ Considers Filing Counterclaims
against Insolvent German Unit
BenQ Corp. said that it
is considering filing counterclaims against German subsidiary BenQ
Mobile GmbH & Co and its insolvency administrator Martin Prager,
AFXNews.com reported yesterday. Prager had earlier initiated two
lawsuits against BenQ in a court in
w:st='on'>
size='3'>Munich
two separate payments of approximately €14.2 million and
€68.9 million. BenQ Mobile's insolvency case resulted from
the
face='Times New Roman'
size='3'>Taiwan
size='3'>parent company's decision in September 2006 to cease further
investment in the German mobile handset unit, which used to be Siemens
AG's handset operations, taken over by BenQ more than a year earlier.
BenQ said the lawsuits filed by Prager had to do with certain accounts
payable made by BenQ Mobile to the parent company in 2006, which the
unit now demands to be returned. It said, however, BenQ believes the
relevant payments demanded by Prager had been made as ordinary payments
for goods sold, it said in a filing with the Taiwan Stock
Exchange.
href='http://www.forbes.com/markets/feeds/afx/2007/07/25/afx3949136.html'>Read
more.
href='http://www.forbes.com/markets/feeds/afx/2007/07/25/afx3949136.html'>
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=30510'>
href='http://search.news.yahoo.com/search/news?p=bankruptcy&n=20&c=news'>