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March 3, 2006
name='1'>Bankruptcy Credit Counseling Gets Mixed
Reviews
Reviews have been mixed for the
credit counseling sessions required under the new bankruptcy law that
took effect in the fall of 2005, according to Bankrate.com today, which
spoke to bankruptcy experts, financial industry experts and counselors,
and attended counseling sessions. Supporters say the counseling sessions
are doing what BACPCA intended -- putting more information into
consumers' hands. Critics say that the sessions are a hodgepodge, with
services spread unevenly across the country and an unclear fee structure
for the services, and that counselors occasionally cross the line into
improperly giving legal advice. 'At this point, it is too early to tell
all of the outcomes that will evolve from this provision,' says Steve
Bartlett, president and CEO of the Financial Services Roundtable, a
trade association of consumer credit and finance companies. Records show
that slightly more than 38,000 people filed for bankruptcy between Oct.
17, when the new law went into effect, and the end of the year, making
them, and all subsequent filers, subject to the counseling
sessions.
href='http://www.bankrate.com/brm/news/debt/20060303b1.asp'>Read
more.
face='Times New Roman' size='3'>
id='2'>Delphi
face='Times New Roman' size='3'> Asks Court to Deny Bid for
Shareholder Panel
Delphi Corp. reiterated
that its stock is worthless and asked a
w:st='on'>
York bankruptcy
court to bar
investors from designating a committee to represent shareholders,
Portfolio Media
reported yesterday.
face='Times New Roman' size='3'>Delphi
size='3'>, which filed for chapter 11 protection on Oct. 8, 2005, noted
in court documents that hedge fund Appaloosa Management L.P. did not
succeed in demonstrating the company’s solvency. In its regulatory
filing Tuesday,
size='3'>Delphi lost $121 million on
sales of $1.47 billion in January. Delphi, an auto-parts manufacturer
based in
face='Times New Roman' size='3'>Troy
size='3'>,
size='3'>Mich.
financial documents, which show a shareholder deficit of about
$6.4 billion
and a decline in recent trading prices of its public securities, provide
further evidence that its equity cannot recover in its bankruptcy
case.
size='3'>Delphi
committee and General Motors Corp. also opposed Appaloosa’s
proposal for a committee.
id='3'>Congoleum to File New
Chapter 11 Plan
Congoleum Corp. intends
to file a new reorganization plan on March 17 that will request a
size='3'>New Jersey
court to stop litigation against its insurance companies so that a vote
can be made on the plan,
size='3'>Portfolio Media reported today. The
company has already dealt with disputes with some of its insurers who
will contribute to a trust fund, which was established under the chapter
11 plan to compensate individuals who have been harmed by its asbestos
products. But other insurers contend that the company’s plan
allows asbestos claimants to collect too easily. In order to assess its
liability to asbestos claimants, Congoleum decided to file a lawsuit
against the insurers in
w:st='on'>New
Jersey
suit centers around whether Congoleum or its insurers acted improperly
by negotiating an international settlement of asbestos claims before the
company filed for bankruptcy in 2003. The amendments to its
reorganization plan make the state court proceedings unnecessary,
according to Congoleum. It also will modify the plan to
keep some creditors
from filing suit against Congoleum if it votes for the plan. Its
negotiations with bondholders over the plan are still underway,
according to a Securities and Exchange Commission filing.
id='4'>Owens
size='3'>Corning
size='3'>Shareholders Face Obstacles to Meeting
Owens Corning
shareholders are plowing ahead in their attempt to gain a voice in the
fiberglass manufacturer’s long-standing bankruptcy case, asking a
federal court to force a bankruptcy judge to rule on whether they can
sue in state court to compel the company to hold its first annual
shareholders meeting in more than five years,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. Shareholders are eyeing legislation that,
if passed by Congress, would lift billions of
dollars in debt off the company’s shoulders, transferring it
instead to a national asbestos trust. The
meeting would allow shareholders the possibility of ushering in new
directors who would be willing to keep the company in its bankrupt
status until Congress votes on the legislation. In its filing with
a
size='3'>Delaware district
court this week, the committee said that even though it is entitled to
pursue an action in state court compelling Owens Corning to conduct the
shareholders meeting, it filed a motion seeking permission anyway out of
“deference for the bankruptcy court.” But the bankruptcy
court has refused to rule on that motion, according to the
committee’s petition. The bankruptcy court action is
Owens Corning, A Delaware
Corporation, case no. 00-03837, in the U.S.
Bankruptcy Court in the District of Delaware. The federal court action
is In re Owens Corning
Et Al., case no. 1:06-CV-00136, in the U.S.
District Court in the District of Delaware.
Attorneys Request $6.8
Million in Fees
Three months of chapter
11 proceedings could cost Tower Automotive up to $6.8 million, the total
amount that the professionals working on the bankruptcy case have asked
the judge to approve,
size='3'>Portfolio Media reported yesterday.
The attorneys representing Tower and its creditors committee have asked
for court approval of their expenses for the three-month period that
ended Jan. 31, which totaled $6.8 million. Kirkland & Ellis, which
represents Tower in the proceedings, has asked for $2,260,547. Foley
& Lardner, the firm serving as Tower’s special labor
negotiation counsel, is seeking $331,674, while Tower’s special
counsel, Varnum Riddering Schmidt & Howlett, has asked for $393,114.
Tower’s independent auditor, Deloitte & Touche, has requested
a fee of $1,481,017, while Ernst & Young, its internal auditor, has
requested $785,563. Akin Gump Strauss Hauer & Feld, which represents
the creditors committee in the case, is seeking $669,491, and the
committee’s financial advisor, Houlihan Lokey Howard & Zukin,
has asked for $472,883. A hearing on the fees will be held on March 21.
The case is Tower
Automotive, case number 05-10601-alg, in
the
face='Times New Roman'
size='3'>U.S.
face='Times New Roman' size='3'> Bankruptcy Court for the Southern
District of New York.
id='6'>Dealership’s
Bankruptcy Filing Puts Lawsuit on Hold
The General Motors
Acceptance Corp. lawsuit against Mountain Chevrolet, an automobile
dealership, based East Liverpool, Ohio, was put on hold because the
dealership has filed bankruptcy, according to a ruling county Common
Pleas Court Judge David Tobin, the Lisbon (Ohio) Morning Journal
size='3'>reported today. GMAC, GM's financing arm, filed a lawsuit in
January against Mountain Chevrolet for allegedly being $2.4 million in
default on its financial obligations. As part of the lawsuit, GMAC
obtained a temporary restraining order stopping Mountain Chevrolet from
divesting itself of vehicles. Mountain Chevrolet's attorneys argued that
the chapter 11 filing automatically put on hold any other lawsuits filed
against the company, and Judge Tobin agreed.
href='http://www.morningjournalnews.com/news/story/033202006_new07news02.asp'>Read
more.
NY
Racing Association to
Receive State Loan to Avoid Bankruptcy
The state Lottery
Division will advance the New York Racing Association $20 million to
stabilize the finances of the thoroughbred track operator under terms of
legislation given final passage Wednesday by the state Senate in
size='3'>Albany
w:st='on'>
size='3'>N.Y.
Business Review reported yesterday. NYRA said it needs the money to
avoid bankruptcy, which state leaders said they wanted to avoid because
of the havoc it might play legally with NYRA's franchise. Under terms of
a deal between the Legislature and governor, the $20 million would have
to be repaid by Dec. 31, 2007, to the state, with 4 percent interest
added. Officials said the revenues to repay the loan will be generated
at a still-unopened gambling hall at Aqueduct, N.Y., featuring slot
machine-like video lottery terminals.
href='http://www.bizjournals.com/albany/stories/2006/02/27/daily26.html?from_rss=1'>Read
more.
id='8'>Lawyer in
w:st='on'>
Contractor Bankruptcy Bows Out
A bankruptcy judge has
granted a
face='Times New Roman' size='3'>Bergen
size='3'>County
size='3'>lawyer's request to be relieved as counsel for a defunct
construction company accused of bilking $2 million from a Little Ferry
boat manufacturer, North Jersey.com reported today.
w:st='on'>
size='3'>Hackensack
size='3'>attorney Ronald I. LeVine had asked U.S.
Bankruptcy Judge Kathryn C. Ferguson for permission to withdraw because
of his client's 'lack of cooperation' and refusal to pay for escalating
services beyond the initial $2,000 retainer. LeVine was retained last
June by Angela Farinola to represent her business, United Mechanical
Construction Co., in what appeared to be a routine chapter 7 liquidation
petition. The lawyer soon discovered that Hobby World Development Inc.,
a company run by followers of the Rev. Sun Myung Moon, was trying to
recover $2 million it claimed was siphoned from the construction of a
boat factory by Farinola's husband. The couple's liabilities included
$1.6 million in mortgage loans, more than $910,000 in taxes and
court-ordered restitution, and the $2 million disputed claim by Hobby
World.
href='http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjczN2Y3dnFlZUVFeXk1MCZmZ2JlbDdmN3ZxZWVFRXl5Njg4OTQ3MSZ5cmlyeTdmNzE3Zjd2cWVlRUV5eTM='>Read
more.
id='9'>Commentary:
size='3'>Connecticut
to Prepare to Pay Teacher’s Pension
With 40 percent of
size='3'>Connecticut
teacher corps projected to retire in the next decade, it will be
critical for lawmakers to plug a growing hole in their pension fund,
according to an editorial in the
size='3'>Hartford Courant today. The state's
failure to keep up with its responsibility to contribute adequately to
the fund has stretched the gap between assets and liabilities to more
than $5 billion.
face='Times New Roman'
size='3'>Connecticut
current level of pension support is among the four lowest in the
nation. One proposed solution backed by the
teachers union and some legislators is to amend the state constitution
to mandate adequate annual contributions. Another suggestion is to use
$246 million of the projected budget surplus to make up for a projected
shortage in the pension fund this year and next, however; with an
outstanding debt of more than $5 billion, the surplus is a myth.
href='http://www.courant.com/news/opinion/editorials/hc-pension.artmar03,0,3591114.story?coll=hc-headlines-editorials'>Read
more.
id='10'>Former Enron
Executive’s Testimony
w:st='on'>
Court
Former Enron Corp. Chief
Executive Jeffrey Skilling told other top executives 'they're on to us,'
when a small analyst firm produced a research note critical of the
company's sales to partnerships run by then-Chief Financial Officer
Andrew Fastow, a former top executive testified, the Associated Press
reported yesterday. Minutes before that, Skilling said at the May 2001
meeting, attended by company founder Kenneth Lay, that he had 'brought
Andy here' to talk about those partnerships, called LJM1 and LJM2.
'Fastow said, 'LJM is a good deal for me,'' Kevin Hannon, then chief
operating officer of the company's flailing broadband unit, told jurors
in the trial of Lay and Skilling. Skilling’s response to the
comment was 'they're on to us,' Hannon said. 'It seemed to indicate the
investment community was beginning to understand how Enron made money.'
Hannon's statements were a potentially devastating blow to the
defendants as their lawyers have maintained that Lay and Skilling did
nothing wrong and there was no fraud at Enron besides the theft of money
by Fastow and two other former executives.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/03/02/AR2006030200836_pf.html'>Read
more.
International
id='11'>Stelco Bankruptcy
Protection Extended
An
w:st='on'>
size='3'>Ontario
extended bankruptcy protection for Stelco Inc. until March 31, but it
ordered the Canadian steelmaker to sign off on key restructuring
commitments in two weeks, Reuters reported yesterday. The company hopes
to emerge from bankruptcy protection by March 31. It was initially
granted protection under the Companies' Creditors Arrangement Act in
January 2004. Stelco's stay in bankruptcy protection was due to expire
at midnight on March 3, but Ontario Superior Court Judge
James Farley granted it the four-week extension so it
could continue working toward getting key documents signed by all
parties to its restructuring deal. Judge Farley said he wants key
documents signed by March 17.
href='http://ca.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-03-02T174713Z_01_N02281604_RTRIDST_0_BUSINESS-MINERALS-STELCO-COL.XML&archived=False'>Read
more.
href='http://ca.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-03-02T174713Z_01_N02281604_RTRIDST_0_BUSINESS-MINERALS-STELCO-COL.XML&archived=False'>