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August 22, 2006
Autos
name='1'>Collins & Aikman Creditors Want Antitrust
Probe
The unsecured
creditors’ committee of bankrupt Collins & Aikman Corp. wants
to investigate DaimlerChrysler Corp., Ford Motor Corp. and General
Motors Corp.—the auto supplier’s largest customers—for
alleged violations of antitrust law, Portfolio Media
reported yesterday. The committee wants to inspect
documents from the companies and their advisors, including Stout Risius
Ross Inc. and BBK Ltd. The filing says that Collins & Aikman is
dependent on the automakers for its financial viability, and that the
automakers’ demands for price decreases and the imposition of more
onerous contractual terms and conditions were among the reasons Collins
& Aikman filed for bankruptcy. The case is
size='3'>Collins & Aikman Corp., case
number 05-55927, in the U.S. Bankruptcy Court for the Eastern District
of Michigan.
name='2'>Auto Parts Suppliers Brace for Harder
Times
Ford’s decision to
cut its production by the greatest amount in more than two decades
reverberated through the industry yesterday, with parts suppliers
feeling the brunt of the fallout, the New York Times
reported today. Pressure from Ford and General Motors to
keep prices low has stretched many suppliers close to the breaking
point, and for some smaller companies, “this short-term pain may
be enough to put them under,” said Martin King, an analyst with
Standard & Poor’s. John Murphy, an analyst with Merrill Lynch
in
size='3'>, said Visteon would be hit hardest by Ford’s cuts
because almost a quarter of its sales were to Ford’s North
American operations. At a recent automotive industry conference
in
size='3'>Mich.
Dauch, the chief executive of one parts supplier, American Axle and
Manufacturing, said the number of auto suppliers had fallen to 10,000
currently, from 30,000 in 1990. Dauch said as few as 4,000 might be left
by the end of the decade.
href='http://www.nytimes.com/2006/08/22/automobiles/22place.html?ref=business'>Read
more.
name='3'>Congoleum Insurers File Rival Chapter 11
Plan
Floor covering maker
Congoleum Corp. is facing a contest for control of the outcome of its
bankruptcy case with insurers and bondholders who have filed a rival
chapter 11 plan, Dow Jones Newswires reported yesterday. Continental
Casualty Co., Continental Insurance Co. and Congoleum's
bondholders’ committee outlined their chapter 11 plan in papers
filed Friday in a
face='Times New Roman' size='3'>New
Jersey
Mercerville, N.J.-based Congoleum filed its own chapter 11 plan Aug. 15
and said that the company and its asbestos creditors supported of the
plan. The U.S. Bankruptcy Court for the District of New Jersey will
review the competing Chapter 11 proposals at a Sept. 21 hearing in the
case, which began in December 2003.
href='http://www.chron.com/disp/story.mpl/ap/fn/4131574.html'>Read
more.
name='4'>Commentary: The Entitlement Panic
Though Laurence
Kotlikoff, an economist at
face='Times New Roman' size='3'>Boston
size='3'>University
predictions that the
w:st='on'>
size='3'>U.S.
size='3'>will go bankrupt because of $80 trillion in unfunded
entitlement promises have been gaining notoriety, there are many reasons
to doubt Kotlikoff's dire scenario, according to a
face='Times New Roman' size='3'>Wall Street Journal
size='3'>editorial today. For one thing, the
w:st='on'>
size='3'>U.S.
size='3'>fiscal 'balance sheet' isn't a static ledger and includes
assets as well as liabilities. While the
w:st='on'>
size='3'>U.S.
size='3'>national debt has climbed from $800 billion in 1981 to $5
trillion today, the nation's assets have climbed from $11 trillion to
$67 trillion over that same period. Include all private assets and
liabilities, and net national wealth has increased by $40 trillion over
the same period. In only the past four years,
w:st='on'>
size='3'>U.S.
size='3'>assets have risen by $13 trillion -- much of which will be
passed down to the next generation of workers to finance their parents'
benefits.
href='http://online.wsj.com/article/SB115620669096641701.html?mod=opinion_mai…'>Read
more. (Registration required.)
name='5'>Commentary: Public Pensions in Trouble
Public employee pension
plans are a financial time bomb in many states and localities, according
to an editorial in today’s
size='3'>New York Times. In
w:st='on'>
York City
independent actuary says his calculations suggest a potential future
shortfall of up to $49 billion. Unlike private business, public pension
funds have no uniform standard for reporting, raising the potential for
confusion and misinformation.
w:st='on'>New
York
alone in wrestling with pension burdens. But the sheer size of its work
force, with 180,000 municipal retirees and a quarter-million current
employees, makes it a useful harbinger of the coming financial storm
for local, state and federal governments.
href='http://www.nytimes.com/2006/08/22/opinion/22tue2.html'>Read
more.
EPA
Joins Motion Seeking Report in Solutia Case
An undisclosed report
detailing the environmental liabilities of bankrupt chemicals company
Solutia Inc. has prompted the
w:st='on'>
size='3'>U.S.
size='3'>government to join a motion filed by tort plaintiffs seeking
access to the liability analysis,
size='3'>Portfolio Media reported yesterday.
The “joinder” was filed on Friday by the U.S.
Attorney’s office for the Southern District of New York on behalf
of the Environmental Protection Agency and the Department of
Agriculture. According to the joinder, the U.S. Attorney’s office
wrote to the debtors in October 2005 seeking copies of the report soon
after learning of its existence as it appeared to attack the
government’s proofs of claim in the case.
size='3'> The case is
face='Times New Roman' size='3'>In re Solutia Inc. et al
size='3'>., case number 03-17949, in the U.S. Bankruptcy Court for the
Southern District of New York.
name='7'>Adelphia Reaches Agreement to Provide Less
Collateral
Adelphia Communications
Corp. has reached an agreement with Travelers Casualty &
Surety
size='3'>Co.
significantly reduce the amount of collateral it must pay for bonds that
back up its insurance policy,
size='3'>Portfolio Media reported yesterday.
In court documents filed Friday with the U.S. Bankruptcy Court in
size='3'>Manhattan
Adelphia said it wants to lower payments to Travelers from $61.2 million
to $12.5 million. Travelers has consented to the new indemnity contract
because Time Warner Inc. and Comcast Corp., which last month bought
Adelphia’s assets for $12.5 billion in cash and around 16 percent
of Time Warner Cable’s total common equity in stock, are expected
to have replacement bonds issued. Also on Friday, Adelphia filed its
fifth amended reorganization plan and accompanying disclosure statement
that, if approved, should help it finally emerge from bankruptcy
protection by the end of this year.
name='8'>Lawsuits Target Bankrupt Hedge Fund's Early
Pullouts
Lawyers for Bayou Group
LLC, a hedge fund that collapsed last year, have sued to recover money
from investors who pulled out in the fund's final two years, saying they
'knew or should have known' of its fraud, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. The lawsuits were filed in federal bankruptcy
court in
face='Times New Roman' size='3'>White Plains
size='3'>,
size='3'>N.Y.
LLP, which represents the Bayou estate in federal bankruptcy court, at
the direction of estate manager
size='3'>Jeff Marwil of Jenner & Block
LLP. Some of the defendants are clients of
a
size='3'>Memphis
size='3'>investment-advisory firm that tied to Bayou that could
have given them a window into the events preceding the mid-2005
collapse. Last fall, Bayou's two principals, Samuel Israel III and
Daniel Marino, pleaded guilty to fraud charges, admitting to faking
returns and audits and draining money from the funds. In court papers,
authorities said more than $300 million had been invested in Bayou
funds, but only $100 million remained.
href='http://online.wsj.com/article/SB115621287849341876-search.html?KEYWORDS…'>Read
more. (Registration required.)
name='9'>Logging Co. Files for Chapter 11 with $264 Million in
Liabilities
Inland Fiber Group LLC
filed for chapter 11 protection Friday with total assets of $81.9
million and debts of $264.4 million listed in its filing,
Portfolio Media
reported yesterday. The company also submitted a
prenegotiated reorganization plan that it hopes will be approved by the
end of the year. Under the terms of the reorganization plan, the logging
company’s bondholders will receive nearly 69 percent, or $158.3
million, of the principal amount of their notes. Inland Fiber will pay
for this by selling some of its assets, including its seed orchard, for
$83 million to Richard Wendt. The company’s insurance carriers
will contribute an additional $8.3 million to the bondholders. To fund
the rest of the settlement, parent company American Forest Resources
will sell more than $60 million in assets to third parties in
size='3'>Washington
In return for the money, about 70 percent of the bondholders agreed to
vote in favor of the reorganization plan. The case is
face='Times New Roman' size='3'>Inland Fiber Group LLC
size='3'>, case number 06-10884, in the U.S. Bankruptcy Court for the
District of Delaware.
name='10'>Analyst: Trans World Likely Buyer of
w:st='on'>
size='3'>Bankrupt
face='Times New Roman' size='3'>Tower
Records
Trans World Entertainment
Corp., a national music-store chain, is the most likely buyer of
financially strapped Tower Records, according to a music industry
consultant, the
size='3'>Sacramento Business Journal reported
yesterday. Barry Sosnick, president and founder of Earful.info, a music
industry consulting firm and veteran of music retail mergers and
acquisitions, said that Trans World would keep some of Tower's 89 stores
operating. Sacramento, Calif.-based Tower Records filed late Sunday for
bankruptcy protection for the second time in less than three years, and
will likely be sold within the next two months. On Monday, Tower also
announced an agreement for $85 million in debtor-in-possession financing
with its current bank group, CIT Group.
href='http://biz.yahoo.com/bizj/060821/1334375.html?.v=2'>Read
more.
name='11'>Iconix Plans to Acquire
w:st='on'>
size='3'>London
Brand
Iconix Brand Group Inc.
said that it plans to acquire the London Fog brand from London Fog Group
Inc. for $30.5 million in cash and $7 million in Iconix stock, Reuters
reported yesterday. The deal, expected to close on Aug. 28, is subject
to certain conditions including final approval from
w:st='on'>
size='3'>Nevada
bankruptcy court, the owner of fashion brands like Joe Boxer and
Candie's said in a statement. Iconix also said that it will enter into a
license agreement with outerwear maker Herman Kay Bromley in which
Herman Kay will hold the license for men's and women's outerwear and
women's suits in the
w:st='on'>United
States
size='3'>.
name='12'>Commentary: Veto Halts Curbs on Credit Card
Policies
Last week, New York Gov.
George Pataki vetoed a bill that would have made his state the first to
take action against the credit card 'universal default' policies,
according to a
size='3'>Washington Post commentary yesterday.
Consumer groups have been trying to get legislation passed in Congress
as well as state legislatures to restrict a credit card company from
raising interest rates on its customers, even those who are current in
their monthly payments. This is due to the fact that those customers may
be late in paying other creditors (such as another credit card company
or utility) or have taken on so much debt that their credit scores drop.
So far, all their efforts have been unsuccessful.
href='http://blog.washingtonpost.com/thecheckout/2006/08/veto_halts_curbs_on_…'>Read
more.