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August 11, 2006
name='1'>Foiled Terrorist Plot Could Dampen Airline Industry
Recovery
The foiled terrorist plot
in
size='3'>London
size='3'>aimed at American carriers throws into doubt whether the
airline industry will be able to continue its nascent recovery,
the New York
Times reported today. Aviation experts said
yesterday that it was too early to tell the lasting effects of the new
threat, but they say the industry is unlikely to escape completely
unscathed. “The challenge is to deal with this latest concern
without tangling up the industry and still convincing people
they’re safe,” said Jan K. Brueckner, a professor of
economics at the
size='3'>of
size='3'>California
size='3'>Irvine
airlines are allowing passengers who have booked
w:st='on'>
size='3'>London
over the next several weeks to rebook without penalty.
Airlines are also waiving
restrictions like blackout dates and minimum-stay requirements to
accommodate customers with disrupted travel plans. Mike Boyd, president
of the Boyd Group, an aviation consulting and research firm, said the
cost of rebooking and reimbursing passengers would be a problem for
airlines like American, Continental and United that have numerous London
routes.
href='http://www.nytimes.com/2006/08/11/business/worldbusiness/11airlines.htm…'>Read
more.
name='2'>Judge Delays Ruling on Refco Creditors'
size='3'>
w:st='on'>Split
A bankruptcy judge
attempted to quell a heated dispute Thursday over controversial changes
to Refco Inc.’s creditors’ committee so that negotiations
can move forward on a $263 million settlement that would steer Refco
closer to emerging from bankruptcy,
size='3'>Portfolio Media reported yesterday.
U.S. Bankruptcy Judge
size='3'>Robert Drain pushed off a final
decision on bids from some committee members to revert back to the
original committee before a Justice Department official intervened with
last-minute changes.
size='3'>The acting U.S. Trustee in
w:st='on'>
York
nine-member committee into two groups as settlement talks headed toward
their last phase. He said he would allow the split committee to take on
most of its former responsibilities before the U.S. Trustee divided the
committee into two groups to separate Refco customers from other
creditors. The
case is Refco
Inc., case number 05-60006-rdd, in the U.S.
Bankruptcy Court for the Southern District of New York in
size='3'>Manhattan
size='3'>.
Court
Keeps Werner Exec Bonuses Sealed
A
w:st='on'>
size='3'>Delaware
size='3'>bankruptcy judge has sealed the record of the Werner Co. bid to
pay bonuses to nine executives because, the ladder -company's lawyers
argued, disclosure of the amounts to be paid 'may create low morale and
an unhealthy work environment,' the Associated Press reported yesterday.
Judge Kevin J.
Carey of the U.S. Bankruptcy Court in
size='3'>Wilmington
Tuesday granted Werner's request to seal the Aug. 17 hearing at which
the bonus plan will be considered. Last month, Carey signed off on extra
pay for mid-level supervisors and professional employees, but postponed
a decision on bonuses for nine senior managers, including company
insiders. The company’s creditors’ committee won a delay of
the hearing, which had been set for last week, so it would have time to
question Steve Richman, the company's chief executive, who is believed
to be one of the main beneficiaries of the bankruptcy bonus
program.
href='http://www.kiplingerforecasts.com/apnews/XmlStoryResult.php?storyid=221…'>Read
more.
Judge
Approves Riverstone’s Reorganization Plan
Riverstone Networks Inc.
received bankruptcy court approval Wednesday of its chapter 11
reorganization plan,
size='3'>Portfolio Media reported yesterday.
Under the terms of the ethernet-provider’s plan, shareholders can
expect a per-share recovery that meets or exceeds the stock's highest
trading price in the 15 months prior to the announcement of its $207
million sale to rival Lucent Technologies Inc. in February, according to
court documents. Under the plan, general unsecured claims will receive
full recovery plus any post-petition interest, and bondholders will be
reimbursed for fees and expenses. In addition, the company agreed to
hold $7 million in reserve to indemnify former Riverstone directors and
officers for any future legal costs.
Court
Approves Bonus for FLYi Employees
A federal bankruptcy
judge approved up to $1.4 million in employee bonuses Tuesday to entice
FLYi Inc.’s workers to stay with the bankrupt airline while it
liquidates, Portfolio
Media reported yesterday. According to
Judge Mary
Walrath of the U.S. Bankruptcy Court in
size='3'>Wilmington
w:st='on'>
size='3'>Del.
were needed to compensate a workforce being paid below-market wages and
to stop workers from moving to other companies.
face='Times New Roman' size='3'>The incentive program would affect
FLYi’s nine remaining full-time workers and three remaining
part-time workers, as well as a few open, entry-level positions that may
be filled. Under the plan, FLYi President Rick Kennedy will receive a
salary raise to $250,000 and a bonus equal to 40 percent of his new
salary. All other employees will get a bonus equal to 75 percent of
their salaries. Meanwhile, any employee let go before Oct. 31 is
entitled to a bonus equal to 150 percent of base compensation over a
four-month period.
GM to
Slow Production of Big SUVs
General Motors Corp.
Chief Executive Rick Wagoner said the company will slow production of
its new lineup of large sport-utility vehicles during the second half of
the year to cope with rising inventory as average
w:st='on'>
size='3'>U.S.
size='3'>gasoline prices stay at more than $3 a gallon, the
Wall Street Journal
reported today. The move highlights the risks in GM's
strategy of relying on its lineup of large SUVs to propel its North
American turnaround in the near term. The new SUV lineup has powered
GM's improved financial results this year since launching in January.
However, sales of SUVs have sagged as
w:st='on'>
size='3'>U.S.
size='3'>consumers have adjusted to gas prices that, while low by world
standards, are up 28 percent from a year ago and are close to the
inflation-adjusted high reached in the early 1980s.
href='http://online.wsj.com/article/SB115522092004432192.html?mod=home_whats_…'>Read
more. (Registration required.)
In related news, GM CEO
Rick Wagoner predicted that complex negotiations with parts
supplier
size='3'>Delphi
eventually will lead to a settlement on wage and benefit reductions, the
Associated Press reported today. Speaking at the Center for Automotive
Research Management Briefing Seminars in
w:st='on'>
size='3'>Traverse City
Mich., Wagoner said an agreement would not be reached quickly.
Despite the prospect of lengthy talks, Wagoner said he is confident that
an agreement will be reached, avoiding a strike that could be
catastrophic to GM. Wagoner's comments came the day before another
federal bankruptcy court hearing was scheduled on
w:st='on'>
size='3'>Delphi
union contracts. However,
Thursday that it requested the hearing be delayed until Aug. 17 to allow
further discussions with its unions, GM and other shareholders.
href='http://www.nytimes.com/aponline/business/AP-GM-Delphi.html?pagewanted=p…'>Read
more.
w:st='on'>
name='7'>Ohio
size='3'> Experiences Sharp Decrease in Bankruptcy
Filings
Through the first seven
months of the year, filings were down about 70 percent in both the
w:st='on'>
size='3'>Canton
w:st='on'>
size='3'>Ohio
U.S. Bankruptcy Court, the
size='3'>Akron Beacon Journal reported
yesterday. Last year, a record of nearly 21,000 bankruptcy cases were
filed in the area as 11,070 filed in
face='Times New Roman' size='3'>Akron
size='3'>and 9,797 in
w:st='on'>
size='3'>Canton
Nationally, filings are the lowest they've been in decades; according
to the American Bankruptcy Institute, fewer than 117,000 cases were
filed for the first three months of the year, representing the lowest
quarterly total since 1985.
href='http://www.ohio.com/mld/ohio/business/15240267.htm?template=cobrandArti…'>Read
more.
w:st='on'>
name='8'>Alabama
face='Times



New
Roman' size='3'> Retirement Community Files for
Bankruptcy
Carlton Cove, a
size='3'>Huntsville
w:st='on'>
size='3'>Ala.-
retirement and long-term-care community that filed for bankruptcy
protection Wednesday, is seeking to renegotiate nearly $70 million in
bond debt, the
size='3'>Huntsville Times reported today.
Daniel Shields, Carlton Cove's executive director, said the move will
give it time to work with bondholders to ease debt payments of about $5
million a year. David Scruggs, chief financial officer for
Connecticut-based RLS Management, which manages the facility, estimated
that Carlton Cove would be under chapter 11 protection for four to eight
months. The bond debt stems from the land purchase and construction of
the facility. Repayment has been a struggle because Carlton Cove's
occupancy rate has been well below projections provided to its lenders
in 2001. In its bankruptcy filing, Carlton Cove reported $78 million in
liabilities and $41 million in assets.
href='http://www.al.com/news/huntsvilletimes/index.ssf?/base/news/11552879791…'>Read
more.
International
name='9'>British Bankruptcy Cases Increasing
The British Department
for Constitutional Affairs (DCA) said that 15,796 people petitioned for
bankruptcy between April and June this year, an increase of nearly 10
percent from the same period last year, BBC.com reported today. The DCA
said that the number of bankruptcy petitions from creditors fell, but
was outweighed by a 20 percent rise in debtor petitions. Nearly 2,800
businesses filed for bankruptcy between April and June, a decrease of 18
percent from the same quarter of 2005. The DCA figures echo statistics
issued by the government's Insolvency Service last week. A record 26,000
people filed for bankruptcy in
w:st='on'>
size='3'>England
w:st='on'>Wales
quarter of 2006, a 66 percent increase from the previous year, according
to the Insolvency Service.
href='http://news.bbc.co.uk/2/hi/business/4782987.stm'>Read
more.
href='http://news.bbc.co.uk/2/hi/business/4782987.stm'>