href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='/AM/Images/headlines/headline.gif' />
March 30, 2006
id='1'>Tracing Refco's Ruin Leads Probe to
size='3'>
Six months into the
investigation of what led to Refco's demise, inquiries of
the company's dealings have broadened and are now focusing on the
flow of money through Refco's vast operations, including its
unregulated
size='3'>Bermuda
investigators are treating as the epicenter of Refco's problems,
the Wall Street
Journal reported today. Lawyers and others
working on behalf of Refco creditors are scrutinizing intercompany money
transfers at the Bermuda unit, Refco Capital Markets Ltd., which offered
Refco clients higher rates of return, less scrutiny, and more generous
loans for trading than did Refco's regulated futures or stock-trading
units. The purpose of the
allow sophisticated investors to trade securities such as
emerging-market debt, with Refco acting as an informal exchange and
providing loans so that the traders could increase their risk. The unit
attracted hundreds of clients, including hedge funds and other big
investors from around the globe. But people familiar with Refco Capital
Markets say bankruptcy lawyers are trying to determine whether some of
the unit's client money was tapped by Refco to fund its expansion,
specifically a string of acquisitions of trade-processing, or clearing,
firms.
href='http://online.wsj.com/article/SB114368881094811981-email.html'>Read
more. (Free registration required).
Autos
id='2'>Dana’s DIP Loan Extended to 24
Months
Recently bankrupt Dana
Corp., concerned with the potential for lengthy chapter 11 proceedings,
has received a six-month extension on its debtor-in-possession (DIP)
loan, according to
size='3'>Portfolio Media yesterday. The
original terms of the loan guaranteed $1.45 billion over 18 months, but
Dana told a bankruptcy court that it may need funds for a longer period
of time. Dana’s creditors’ committee worked with the DIP
lenders to extend the loan to 24 months. The creditors also secured the
right to investigate Dana’s pre-bankruptcy finances, including
liens. The committee has also questioned some financial decisions made
after the chapter 11 filing, including Dana’s motion to continue
paying salaries that some say gives de facto approval to an incentive
plan proposed just before the company petitioned for
bankruptcy.
id='3'>Next Stop for
Courts
maker, and its largest union, the United Automobile Workers, agreed on
the point that the company was likely to ask a bankruptcy court judge to
let it set aside its labor contracts and impose sharply lower wages and
benefits, the New York
Times reported today.
w:st='on'>
size='3'>Delphi
still hoped to reach a deal with the union, but a UAW spokesman said it
expected the company to file its request with the court on Friday, the
deadline it has set for an agreement. The two sides continue to talk,
a
size='3'>Delphi
Williams, said: 'Our focus is to get an agreement, but if we can't get
an agreement by the 31st, we will file.' A bankruptcy court judge is not
likely to hear
size='3'>Delphi
of imposing lower wages for several weeks, and a ruling may take 60 days
or more. As if sending a signal that the union was in no rush to
confront
size='3'>Delphi
local union officials this week that a decision on whether to hold
strike authorization votes would be made later.
href='http://www.nytimes.com/2006/03/30/business/30place.html?_r=1&oref=slogi…'>Read
more.
In related news, analysts
said that a decision by Delphi Corp. to cancel its labor contracts would
result in heavy consequences for the auto industry, including pushing
its largest customer, General Motors Corp., closer to chapter 11
bankruptcy, the Associated Press reported yesterday. Delphi, the largest
auto parts supplier in the United States, first threatened to ask a
bankruptcy judge to cancel its union contracts in December but has
delayed that action three times so it can continue talks with its unions
and GM, its former parent.
deadline to act is Friday, and spokesman Lindsey Williams said Wednesday
that, so far, the company is sticking to that deadline.A resolution
appears unlikely. GM spokesman Jerry Dubrowski said Wednesday the
automaker hasn't settled with
face='Times New


Roman'
size='3'>Delphi
GM's agreement is critical, because Delphi is depending on GM to
supplement its wage offer and offer one-time payments of $50,000
to
size='3'>Delphi
wage cuts.
href='http://news.yahoo.com/s/ap/20060329/ap_on_bi_ge/delphi_unions_1&printer…-'>Read
more.
GM
Moves Closer to Selling 51 Percent Stake in GMAC
General Motors Corp.
moved closer to striking a deal to sell a majority stake in its finance
arm, General Motors Acceptance Corp., to an investor group led by
Cerberus Capital Management, the
size='3'>Wall Street Journal reported today. A
transaction would be a milestone for GM, which would be giving up
control of the 87-year-old unit at a time when it faces enormous
financial stress. GM's board has yet to give its final approval for the
GMAC deal. Separately, GM said late yesterday it was in talks to sell
most of its nearly 8 percent stake in Japanese car maker Isuzu Motors
Ltd. to a pair of trading houses, continuing its wave of overseas
divestitures. At current market price, that stake would be valued at
about $340 million.
href='http://online.wsj.com/article/SB114366082416611407-email.html'>Read
more (free registration required).
w:st='on'>
id='5'>Meridian
face='Times New Roman' size='3'> Pleads for 60-Day
Extension
Beleaguered Meridian
Automotive Systems Inc. has asked the bankruptcy court for a two-month
extension in its quest to file a reorganization plan, admitting that
talks with creditors have proved to be “at times,
difficult,” Portfolio Media reported yesterday. The
auto-parts supplier filed the request this week in U.S. Bankruptcy Court
in
size='3'>, seeking to extend its exclusive right to file a restructuring
plan until May 31. The period of exclusivity was originally slated to
expire on March 31. The
w:st='on'>Michigan
size='3'>auto-parts manufacturer is also hoping for more time to win
creditor support for the plan, asking to push back that deadline till
July 31.
face='Times New Roman' size='3'>Meridian
filed for Chapter 11 bankruptcy in April 2005 and has
struggled to dissuade creditors from completely jumping ship and hastily
selling the business. The case is
size='3'>Meridian Automotive Systems Inc.,
case number 05-11169-MFW, in the U.S. Bankruptcy Court for the District
of Delaware.
Rigas
Assets Transferred to Adelphia under SEC Deal
A federal court has transferred
all but two of the cable properties owned by the disgraced
face='Times New Roman'>Rigas family to Adelphia
Cablevision LLC as part of a settlement deal with the Securities and
Exchange Commission and the Department of Justice,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. With those assets in Adelphia’s
possession, the bankrupt cable provider will file voluntary chapter 11
petitions for them so they can be jointly administered with the
bankruptcy case of Adelphia and its units in the bankruptcy court of New
York’s Southern District, the company said in an SEC filing. As
part of its chapter 11 reorganization plan, Adelphia is selling its
assets to one-time rivals Time Warner Inc. and Comcast Corp. for $17.6
billion in cash and stock. The case is
size='3'>Adelphia Communications Corporation,
case no. 02-41729, in the U.S. Bankruptcy Court Southern District of New
York.
id='7'>Buehler Foods Prepares to Exit Bankruptcy
Buehler Foods officials
said the company's pending emergence from chapter 11 bankruptcy
protection would result in a more competitive company, the
size='3'>Evansville
size='3'>(
face='Times New Roman' size='3'>Ind.
size='3'>) CourierPress reported today.
Buehler Foods will operate the company's 24 Buy-Low
locations. Associated Wholesale Grocers,
Buy-Low's major supplier, is lending Buehler Foods $15 million and
providing trade credit. Buehler Inc. will also receive $6.5 million in
financing from Integra, and Moran Foods, a Save-A-Lot supplier, will
provide the company with trade credit.
href='http://www.courierpress.com/ecp/ebj/article/0,2578,ECP_19916_4579595,00…'>Read
more.
Delta
Job Cuts Occur Earlier than Planned
Delta Air Lines, in the
midst of trying to persuade its pilots to accept pay cuts totaling $305
million a year, said that it was cutting administrative and management
employment by 1,000 positions, or about 20 percent, the
face='Times New Roman' size='3'>New York Times
size='3'>reported today. The reductions are part of a previously
disclosed plan to reduce overall employment at Delta by 7,000 to 9,000
jobs. The airline, based in
w:st='on'>
size='3'>Atlanta
operating under bankruptcy court protection since last September, had
initially said it would eliminate those jobs by the end of 2007. But it
said yesterday that it now expected to do so by the end of this year.
Delta currently employs about 52,000 people, a spokeswoman, Chris Kelly,
said. Pilots are
threatening to strike if their contract is voided, and they have
counter-offered about $140 million in pay cuts. A strike could result in
a liquidation of Delta. Talks are continuing.
href='http://www.nytimes.com/2006/03/30/business/30delta.html?pagewanted=print'>Read
more.
w:st='on'>
id='9'>Maine
Municipalities
The unexpected bankruptcy
of P.P.COM has left 11 municipalities, school districts and non-profit
organizations without the oil, gas and diesel they paid for, the
Maine Morning
Sentinel reported today. Oil dealer P.P.COM
owes a total of about $17 million, with some of that due to its supplier
and the rest to its customers. Included in the long list of creditors
are the state of
size='3'>Maine
w:st='on'>Waterville
of
size='3'>Belgrade
w:st='on'>Sidney
and
face='Times New Roman'
size='3'>Oakland
Legislators may have a role in making sure that whatever gaps exist now
are corrected before the next heating season.
w:st='on'>
size='3'>Maine
General can also play a role now to make sure that the towns, school
systems and other small creditors of P.P.COM are treated fairly in the
bankruptcy proceedings.
href='http://morningsentinel.mainetoday.com/view/columns/2585867.shtml'>Read
more.
International
id='10'>Stelco to Exit Bankruptcy Protection
Friday
The court-appointed monitor in
Stelco Inc.’s bankruptcy case issued a report saying the company
is still on track to emerge from bankruptcy on Friday, the Canadian
Press reported yesterday. Stelco's restructuring plan will likely be
implemented on Friday, wrote Alex Morrison of Ernst & Young, who was
appointed by the Ontario Superior Court to watch over Stelco's affairs
since the steel maker entered bankruptcy protection two years ago. He
added that his duties will likely continue for months to come and that a
July 17 court hearing has already been scheduled with respect to certain
financial matters. The report also noted that Stelco will pay $32.5
million into its pension deficit for the last six months of this year,
in addition to a lump-sum payment it is making. It will pay $65 million
per year between 2007 and 2010, and $70 million per year between 2011
and 2015.
href='http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/…'>Read
more.
id='11'>Invensys Plans to Clear £325 Million Pension
Shortfall
Engineering group Invensys
announced a nine-year plan to eliminate the £325m deficit in its UK
pension fund, the London Guardian reported today. It will pay
£105m into the fund immediately, £20m over each of the next
two years and then £35m a year, adjusted for inflation, until the
deficit has been eliminated. Invensys said yesterday that as a result of
the £105m payment it expected to pay only a small, risked-based
levy into the Pension Protection Fund.
href='http://business.guardian.co.uk/print/0,,329446020-108725,00.html'>Read
more.
href='http://business.guardian.co.uk/print/0,,329446020-108725,00.html'>