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April 28, 2006
WCI
Steel Says It Is Ready to Emerge from Bankruptcy
The United Steel Workers union
has ratified a new labor contract with WCI Steel Inc., allowing the
company to emerge from nearly three years of chapter 11 bankruptcy
protection, according to the company, the Associated Press reported
yesterday. The contract ratification was the final piece that WCI needed
to move forward as a reorganized company. It will emerge from bankruptcy
protection Monday, the company said. A federal bankruptcy judge
confirmed the company's reorganization plan March 30.Details about the
vote or labor contract were not released. Members of USW Local 1375
reached a tentative agreement with WCI noteholders in November. The deal
included provisions for 250 employee buyouts and would protect another
1,000 union-covered jobs.
href='http://www.ohio.com/mld/beaconjournal/14446238.htm?template=contentModu…'>Read
more.
Judge
Limits Claims Sales in Kaiser Case
Bankrupt Kaiser Aluminum
will be able to protect up to $85 million in tax write-offs after a
bankruptcy court judge ruled that the company has some say over the sale
of claims in its case,
size='3'>Portfolio Media reported yesterday. A
judge in the U.S. Bankruptcy Court for the District of Delaware ruled
that before the government’s Pension Benefit Guaranty Corp. (PBGC)
and two trusts for Kaiser retirees can sell their claims in
Kaiser’s bankruptcy case, they must first get approval from the
company. While the ruling allows some of the claims in the case to be
sold, it also restricts how many shares can be sold before
Kaiser’s reorganization plan is implemented. The plan sets aside
the majority of the reorganized company’s equity, 66 percent for
the two trusts, in exchange for the cancellation of retiree medical
benefits. The PBGC is set to receive 16 percent of the shares. The
immediate case is Kaiser
Aluminum Corporation, case number
02-10429,in
the
face='Times New Roman'
size='3'>U.S.
size='3'>Bankruptcy Court for the District of
Delaware.
Autos
name='3'>Tower Auto Granted Extension to File Reorganization
Plan
Tower Automotive Inc.
will get additional time to propose a plan to pay off its creditors, and
more time to lobby those creditors to back the plan, the Associated
Press reported today. An order Wednesday from the U.S. Bankruptcy Court
in
size='3'>Manhattan
size='3'>Novi
supplier until June 27 to file a chapter 11 plan of reorganization and
until Aug. 28 to gather creditor support. Tower Automotive has been
operating under chapter 11 protection since Feb. 2, 2005. The company
said it needed extra time because of the 'sheer size and complexity' of
its case. However, the plan depends on Tower's ability to strike new
cost-cutting deals with its customers, workers and retirees. That work
remains incomplete, the company said.
href='http://www.dfw.com/mld/dfw/business/14445545.htm?template=contentModule…'>Read
more.
name='4'>Collins & Aikman Seeks Plan
Extension
Busy cutting down its
operating expenses, bankrupt Collins & Aikman Corp. has requested an
additional 120 days to work on fleshing out its reorganization
plan, Portfolio
Media reported yesterday. As one of the
nation’s largest auto parts suppliers, the company asked the U.S.
Bankruptcy Court in
w:st='on'>
size='3'>Detroit
extension of its exclusivity
size='3'>period to file a chapter 11 plan in order to sort out a
particularly “large and complex” bankruptcy case. The
company has asked to extend its control over its plan from May 15 to
Sept. 12 and its sole right to lobby support from creditors from July 14
to Nov. 13.A hearing
on the proposed extension has been set for May 11, and the deadline for
objections has been scheduled for May 8. The auto parts supplier, which
filed for chapter 11 protection in last May, plans to emerge from
bankruptcy by the end of September as a stand-alone concern or by
auctioning off most of its properties in order to pay off creditors. The
case is Collins &
Aikman Corp., case number 05-55927, in
the
face='Times New Roman'
size='3'>U.S.
face='Times New Roman' size='3'> Bankruptcy Court for Eastern
District of Michigan.
name='5'>General Motors Entangled in Pay-for-Publicity
Dispute
A public relations firm
has apologized to General Motors after acknowledging that it may have
offered money to former Labor Secretary Robert B. Reich in exchange for
public comments supporting the automaker's employee buyout program,
the New York
Times reported today. The firm's president,
Richard Strauss of Strauss Radio Strategies in Washington, D.C., would
not say if other commentators were offered payment for public support of
the troubled automaker's buyout plan, which is intended to reduce
sharply its work force of 113,000 hourly employees. Neither Strauss nor
Reich would respond to questions about how much money might have been
offered. A spokesman for General Motors said the company had a strict
policy barring payment to outside commentators to promote its interests.
GM spokesman Steve Harris said that General Motors, through outside
public relations firms, did try to provide news organizations with the
names and contact information for independent specialists who might
support its policies — in this case, the buyout offers — but
that they received no compensation. Read
more.
name='6'>Bank of
w:st='on'>
size='3'>America
w:st='on'>
Court
Refco
Fearing that Refco
Inc.’s spending has spiraled out of control, Bank of America has
asked for a judge to intervene and set up a committee to curb the
bankrupt futures broker’s skyrocketing expenditures,
Portfolio Media
reported yesterday. The bank, an agent for Refco’s
secured creditors, filed the request earlier this week after becoming
alarmed by the roughly $42 million in fees and expenses Refco has
incurred since filing for bankruptcy protection last October.
“[Refco] simply cannot long sustain professional costs of this
magnitude,” said Bank of America in a court filing with the U.S.
Bankruptcy Court for the Southern District of New York. “There is
no apparent source for the payment of professional expenses,” the
filing further stated. The bank has suggested that U.S. Bankruptcy
Judge Robert
Drain set up a budget committee to monitor the
expenses, with the committee consisting of unsecured bondholders and
secured creditors. Judge Drain holds a “positive view” of
the proposal, according to Bank of America, but has yet to render an
official decision on the matter.
Court
Approves Adelphia's $1.2 Billion Credit Payments
U.S. Bankruptcy
Judge Robert
Gerber approved Adelphia Communications
Corp.'s $1.23 billion in interest payments to unsecured creditors, a
step toward its acquisition by Time Warner Inc. and Comcast Corp, the
Associated Press reported today. Earlier this month the company
announced that it modified its reorganization plan to try to resolve a
dispute among some creditors, adding that it needed to complete its
assets sale by July 31. Adelphia, the nation's fifth-largest cable
television company, remained out of the disputes between creditors at
the direction of the U.S. Bankruptcy Court but proposed the plan with
court permission after some failed to agree to terms.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/04/28/AR20060…'>Read
more.
Easy
Gardener Gets OK to Tap DIP Loan
Cash-strapped Easy
Gardener Products Ltd. got an infusion of capital last week when a
federal bankruptcy judge conditionally approved its plan to borrow on
its debtor-in-possession loan, in a ruling that allayed its proposed
buyer's concerns about the lawn and garden product maker’s
liquidity, Portfolio
Media reported yesterday. Judge
Kevin Gross’
interim approval—if it stands— will mean that
Easy Gardener will be able to borrow $8 million more than
previously expected from LaSalle Credit LLC. The line of credit had been
capped at $25 million, but will now be increased to $33 million,
according to Dick Grandy, a spokesperson for Easy Gardener. A final DIP
loan hearing is scheduled for the afternoon of May 16. The extra capital
will help sustain Easy Gardener as it works out the sale of its assets
and deals with approximately 3,500 creditors and interested parties. The
case is In re Easy
Gardener Products Ltd., case no. 06-10396, in
the U.S. Bankruptcy Court for the District of
Delaware.
name='9'>Solutia Wins Six-Month Extension on Chapter 11
Plan
Solutia Inc., a maker of
glass products, nylon and other specialty products, was granted a
six-month extension of its exclusive right to file a chapter 11
plan, Portfolio
Media reported yesterday. The decision will
help the company stave off the threat of a group of
face='Times New Roman'>noteholders filing a rival plan.
Judge Prudence Carter
Beatty of the U.S. Bankruptcy Court in
size='3'>Manhattan
Solutia’s sole right to file a plan to Oct. 10 from April 25. The
deadline to lobby for creditor’s support for the reorganization
plan was also extended from June 5 to Dec. 11. Solutia had filed a
turnaround plan in February, but said it needed extensions to block the
possible filing of a rival plan by J.P. Morgan Chase & Co., which is
in a dispute with the company. J.P. Morgan Chase is currently acting as
a trustee for a group of noteholders who are involved in a separate
legal battle over the status of a claim for more than $450
million.
name='10'>Bankruptcy Fight for '60s Pop Star Jay
Black
A federal bankruptcy
trustee argued Wednesday that he was entitled to auction off the rights
to the name Jay and the Americans to pay off the debts of Jay Black, the
lead singer of Jay and the Americans, Newsday
size='3'>reported yesterday. The trustee, A. Scott Mandelup, also
said in U.S. Bankruptcy Court in Central Islip that he should be given
the right to bar Black from using the name Jay Black or Jay Black and
the Americans professionally, so as not to create competition with the
names that were sold. Mandelup said the only significant assets that
Black, who recorded such golden-oldies as 'Cara, Mia,' had were the
rights to names, and it was only fair to his creditors that they be sold
to repay his debts. Black, who has made hundreds of thousands of dollars
a year since 2002, owes $500,000 in back taxes to the IRS and
w:st='on'>
size='3'>State
back to 1993, and several thousand dollars to credit-card companies,
Mandelup said.
href='http://www.southflorida.com/news/ny-bzjay0427,0,5577353,print.story?col…'>Read
more.
name='11'>Bankruptcies Reduced to a Trickle in
w:st='on'>Long
Island
Although filings have
begun to slowly pick up in the last two months, the number of bankruptcy
petitions on
size='3'>Long Island
historic rates, according to today’s Long Island Business
News. In the six months leading up Oct. 17,
2005, when the new law took effect, the U.S. Bankruptcy Court for the
Eastern District of New York, which covers Long Island and
size='3'>Brooklyn
26,000 individual and corporate petitions. In the six months since, the
number has dropped to less than 2,400, according to statistics provided
by the court. Filings have ground nearly to a halt in
w:st='on'>
size='3'>Nassau
w:st='on'>
size='3'>Suffolk
Six months before the change-over, there were more than 7,300 business
and individual filings. In the most recent six months, there have been
little more than 1,000, compared to more than 3,200 during the same time
span a year before.
href='http://www.libn.com/article.htm?articleID=34965#'>Read
more.
name='12'>Veritec Exits from Bankruptcy
Veritec Inc., a Golden Valley,
Minn.-based developer and provider of high data density bar coding for
the manufacturing and security industries, today received court
approval to exit from bankruptcy, according to a company press release
yesterday. According to the reorganization plan, all shareholders shall
retain 100 percent equity and all creditors shall receive 100
percent of their negotiated claims. Going forward, the company said
it has no debts and sufficient cash available to operate its forward
business. Read
more.
name='13'>Historic West Virginia Hotel Set for
Auction
A historic Wheeling,
W. Va., hotel will be back on the auction block in early May since
U.S. Bankruptcy Judge
size='3'>Ronald Pearson lifted the chapter 7
protection for the current ownership of the McLure House, WOWK-TV.com
(Wheeling, W.Va.) reported today. The 155-year-old hotel has been closed
for more than two weeks after losing phone service. A foreclosure
auction was halted in mid-April after the ownership, Wheeling City
Center LLC, filed for chapter 7 for a second time. The initial filing
resulted in former Bankruptcy Judge L. Edward Friend II signing an order
Feb. 27 to dismiss chapter 11 reorganization proceedings because
Wheeling City Center LLC lacked the financial resources to pay its
mortgage to Bayview Financial of Coral Cables,
w:st='on'>
size='3'>Fla.
has been rescheduled for May 2 at
w:st='on'>
size='3'>Wheeling
city/county building.
href='http://wowktv.com/story.cfm?func=viewstory&storyid=10473'>Read
more.
name='14'>Lenders Push Home-Equity Deals
While home-equity
borrowing has been a boon to consumers in recent years, rates on
home-equity lines of credit at a five-year high is slowing demand,
spurring lenders to keep their business growing with new promotions,
rate cuts and other offers, the
size='3'>Wall Street Journal reported
yesterday. Wells Fargo & Co. launched a new program last month that
cuts the rate on home-equity loans and lines of credit by between 0.375
and 0.5 percentage point for customers who also have a Wells Fargo
checking account. Bank of America Corp. is sending out 'customer reward'
certificates that give borrowers up to half a percentage point off their
rate if they take out a home-equity line of credit. PNC Financial
Services Group Inc. is offering $25 PNC Bank Visa gift cards -- and, in
some cases, two free airline tickets -- to borrowers who take out a new
home-equity loan or line of credit. Rates on home-equity lines of credit
currently average 8.33 percent, according to HSH Associates in
size='3'>Pompton Plains
size='3'>N.J.
low as 4.64 percent two years ago, and are at their highest levels since
2001. Rates on home-equity loans have also increased, to 7.96 percent
from 6.75 percent over the same period.
href='http://online.wsj.com/article/SB114610765358037336-email.html'>Read
more. (Registration required).
face='Times New Roman' size='3'>
name='15'>Union
'Super-Pension'
w:st='on'>
size='3'>America
size='3'>'s largest labor union on Thursday attacked what it called
Pfizer's 'super-pension' for Hank McKinnell, chairman and chief
executive, the Financial
Times reported today. At the
size='3'>U.S.
annual shareholder meeting in
w:st='on'>
size='3'>Lincoln
w:st='on'>
size='3'>Neb.,
union said Mr McKinnell's pension did not reflect performance, calling
it merely 'pay for pulse' policy. Pfizer's shares, of which the union is
a shareholder, have declined more than 40 percent in five years.
McKinnell's pension package is valued at $83 million, or $6.5 million a
year. He is expected to retire in two years. His salary was kept flat
this year and his bonus fell 7 percent, giving a combined total of $6
million excluding options and other benefits. The union pointed to
McKinnell's chairmanship at Business Roundtable, the big-business lobby
group, and sought to juxtapose the lobby group's support for privatizing
Social Security, the federal public pension system and McKinnell's
large, defined pension benefit.
href='http://msnbc.msn.com/id/12517221/'>Read
more.
New
Chief for Mortgage Finance Agency
The White House said that James
B. Lockhart III, the deputy commissioner of the Social Security
Administration, would be nominated to lead the agency that oversees the
mortgage finance giants Fannie Mae and Freddie Mac, Reuters reported
yesterday.Congress is in the process of considering legislation that
would create a new regulator after multibillion-dollar accounting
scandals at both companies. The Office of Federal Housing Enterprise
Oversight is completing a special examination of Fannie Mae's accounting
problems, which is likely to lead to a restatement of profit of up to
$11 billion. The agency was criticized by some lawmakers for failing to
prevent Freddie Mac's accounting problems, which resulted in a $5
billion restatement. Lockhart, 59, was sworn in as deputy commissioner
of Social Security in 2002. He served as executive director of the
Pension Benefit Guaranty Corp.
href='http://www.nytimes.com/2006/04/28/business/28fannie.html?_r=1&oref=slog…'>Read
more.
w:st='on'>
name='17'>Massachusetts
face='Times New Roman' size='3'> May Remove Pension Fund
Board
w:st='on'>
size='3'>Massachusetts
considering removing the entire board of the Middlesex Retirement System
in the wake of an investigation by the state's inspector general that
found the board rigged construction bids in favor of a contractor
friendly with board members, the
size='3'>Boston Globe reported today. Removal
of the board, which runs one of
w:st='on'>
size='3'>Massachusetts
largest pension funds, would be unprecedented. The inspector general's
report, obtained by The Globe, chronicles the use of ''fabricated' bids
to ensure that the reconstruction of the Middlesex headquarters in
Billerica, Mass., went to a Westford contractor close to two board
members. ''The board's actions in this matter represent a profound
breach of public trust and a misuse of beneficiaries' money,' Inspector
General Gregory W. Sullivan said in an 11-page letter to the Public
Employee Retirement Administration Commission, or PERAC, which oversees
the state's 106 public pension systems.
href='http://www.boston.com/news/local/massachusetts/articles/2006/04/28/stat…'>Read
more.
href='http://www.boston.com/news/local/massachusetts/articles/2006/04/28/stat…'>