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October 24, 2005
name='1'>Bankruptcy
Filings Still Being Tallied
About a half
million Americans
may have filed for bankruptcy protection for the 10-day period ended
Oct. 16,
trying to beat the Oct. 17 deadline when a more restrictive bankruptcy
law took
effect, the Washington Post reported Saturday. The courts were
so inundated
with petitions that thousands have yet to be recorded, according to
Lundquist
Consulting, a California financial research firm that reports on case
information
collected daily. Lundquist said that there were 205,129 bankruptcy
filings late
in the week that ended Oct. 15, nearly double the number posted the
previous
week. But the company said that it anticipated another 300,000
petitions to
be recorded for the following week, reflecting the cases filed that
weekend
as well as the backlog of paper petitions that were submitted during
the period
but not yet posted. Normally, about 30,000 cases are filed in a
week.
id='2'>Illinois
Mass Torts Analyzed
Illinois
legislators are
back in Springfield, Ill., this week, and if pondering the
state’s lagging
economy, they’d be best served to read Steve Korris’
investigation
into Madison County’s latest asbestos lawsuit, the St. Claire
Record
reported yesterday. Korris’ reports offer a rare and revealing
look at
how such “mass torts” were seeded, incubated and prepared
specifically
to overwhelm an Illinois county courthouse. In this case, the
plaintiffs once
lived and worked for locomotive-maker Electro-Motive in Cook
County’s
western suburbs. Looking beyond the filing numbers, Korris has
provided a glimpse
at the individual accusers in these cases.
href='http://www.stclairrecord.com/arguments/argumentsview.asp?c=168702'>Read
more.
Airlines
id='3'>UAL
Change Approved by Court
UAL Corp. received
court
approval on an amended disclosure statement to its chapter 11
reorganization
plan, resolving objections by the Pension Benefit Guaranty Corp.
(PBGC) and
several other creditors over language in an earlier disclosure,
Pensions
& Investments reported Friday. Judge Eugene R. Wedoff
of the
U.S. Bankruptcy Court in Chicago authorized language in the amended
disclosure,
according to a court order, and the court scheduled hearings for Jan.
18-20
to consider confirmation of the carrier’s reorganization plan.
The PBGC
filed an objection to the earlier disclosure statement on Oct. 13,
stating that
terms of the initial version of the airline’s plan would impose
“onerous
restrictions” on the agency’s “ability to sell
securities
to be issued to PBGC under the proposed plan.” United
spokeswoman Jean
Medina said company officials “continue to be in talks with the
PBGC.”
id='4'>Southwest
Again to Fly to Denver
Southwest Airlines
will resume
service in Denver next year after a 20-year absence, the Associated
Press reported
today. Although Southwest has shunned Denver International Airport for
more
than a decade because of its high costs, the Dallas-based
carrier—in the
midst of an expansion—reconsidered because those costs have
declined.
It will compete head-to-head against United Airlines as it emerges
from bankruptcy
and Denver-based Frontier Airlines Inc., which together have about 75
percent
of Denver Iinternational Airport’s market. Details on when and
where it will
fly, and for how much, are scheduled to be released this week.
href='http://www.grandforks.com/mld/grandforks/business/industries/aviation/1…'>Read
the full story.
id='5'>Judge
Nixes Bankruptcy Request for Charter School
Former operators of
a California
charter school won a break this week when a federal judge rejected a
state attempt
to force its company into bankruptcy, the San Bernardino Sun
reported
today. The troubled Victorville, Calif.-based charter academy, now
defunct after
audits indicated the mismanagement of $23 million in state funding,
still faces
a separate lawsuit filed by the state and the school districts that
granted
the company its charter. Jack O’Connell, state superintendent of
public instruction,
ordered an audit of the California Charter Academy in March 2004. Last
April,
the state released the audit results, which alleged the misuse of
millions in
state funds and stated that the charter school received $23 million it
wasn’t
entitled to by converting private schools into charters and operating
illegal
satellite campuses and independent study programs. The audit also
showed $1.5
million in questionable credit-card purchases charged to the school
for health
spas, personal home-shopping purchases and jet skis.
href='http://www2.sbsun.com/news/ci_3140588'>Read
the full story.
id='6'>Executive
Office for U.S. Trustees to Address Credit Counseling
Mark Neal,
Assistant U.S.
Trustee in the Executive Office for U.S. Trustees, will be a featured
speaker
at the American Association of Debt Management Organizations’
Fall Conference
in Scottsdale, Ariz., Nov. 9, 2005, eMedia.com reported yesterday. Mr.
Neal
will discuss the status of applications and approvals, the details of
the applications
and the application process and the relationship to state laws. He
will be available
to discuss surety bond amount offsets and credits, employee
bonds/fidelity insurance
amount offsets and credits, counseling session content and duration,
certificate
security and form, fee levels, what constitutes “ability to
pay,”
reporting, notifications and audits.
href='http://www.emediawire.com/releases/2005/10/emw301069.htm'>Read
more.
id='7'>Bankruptcy
Reform May Mean More Evictions
Judge C. Allen
McConnell
signed an order suspending eviction proceedings begun by Windy Lake
Properties
LLC two weeks earlier after a tenant allegedly missed two rent
payments on a
house on Berdan Avenue in West Toledo, the Toledo Blade
reported yesterday.
But under BAPCPA, the ability of tenants to delay eviction by filing
for bankruptcy
will be curtailed. The reforms will change multiple sectors of the
housing industry.
Among those affected are residential landlords and tenants, shopping
center
owners, condominium and homeowners associations, and people who try to
shield
assets by squirreling them away in pricey residences in Florida and
other states
with debtor-friendly laws. The reforms did not affect previous
bankruptcy filings.
href='http://toledoblade.com/apps/pbcs.dll/article?AID=/20051023/BUSINESS05/5…'>Read
more.
id='8'>Diner
Manufacturer Files for Bankruptcy
Kullman Industries,
known
for its stainless-steel, glass-block and neon facades, has filed for
chapter
11 bankruptcy protection 78 years after Samuel Kullman founded the
company in
Newark, N.J., the Associated Press reported today. Kullman, now based
in Hunterdon
County, N.J., had expanded its modular construction methods to include
schools,
prisons and office buildings. The Culinary Archives and Museum at
Johnson and
Wales University in Rhode Island features a replica of a Kullman
facade at the
entrance to a diner exhibit.
id='9'>Guatemala
Probes Refco
Guatemala has launched an investigation into whether one of its
largest banks
is owed millions of dollars by bankrupt U.S.-based commodities
broker Refco
Inc., Reuters reported Saturday. In a bankruptcy filing earlier this
week,
href='http://money.cnn.com/2005/10/22/news/international/guatrefco.reut/index…'>Refco
listed Bancafe in Colombia as its fifth-largest creditor, owed $176
million.
The Colombian state-owned bank swiftly refuted the information, and
requested
that Refco correct it. Guatemala’s Bancafe Grupo Financiero
del Pais, a separate
company from the Colombian bank, has refused to comment on its
possible involvement
with Refco. Willy Zapata, Guatemala’s bank superintendent,
said on Friday
that Bancafe Grupo Financiero del Pais had no direct investments
with Refco,
but that he had begun an investigation into the bank’s
offshore operation.
In other news, the private equity firms looking at bidding for
Collins Stewart
Tullett, the money broker and securities business, have asked for
more time
to go through the financial firms’ books, following the
collapse into bankruptcy
of Refco, the U.S. futures broker, the U.K. Money Telegram
reported
Friday. The firms are pressing ahead with preparations for an offer
for Collins
Stewart. However, the demise of Refco has meant that they feel
obliged to
extend the due diligence process. Bankers close to Collins Stewart
have denied
that the sale of the business led by Terry Smith, the CEO, is in
jeopardy.
"The deal is still on course," said one.
id='10'>More
Skystar Bankruptcy Woes
The questions
continue to
mount in the wake of Skystar’s chapter 7 bankruptcy
filing—especially
in regards to engine orders and the payments/deposits a growing number
of customers
claim to have made for them, Aero-News.net reported today. Complaints
have been
relayed over alleged orders placed for engines in which large
deposits, some
of them for the full value of the engine, were made, with delivery
dates quoted
weeks and months away. Engine manufacturer Rotax states that it was
not paid
for any engines that remains unshipped and that Skystar was one of the
few companies
given limited credit terms for engine orders.
href='http://www.aero-news.net/index.cfm?ContentBlockID=f204853c-a342-47b7-87…'>Read
more.
id='11'>Nursery
Files for Bankruptcy
Weston Nurseries in
Hopkinton,
Mass., has filed for bankruptcy as a feud continues between the two
brothers
who own it, the Boston Globe reported Saturday. The company
filed for
chapter 11 bankruptcy protection on Oct. 14 in the U.S. Bankruptcy
Court in
Worcester, Mass. Wayne and Roger Mezitt have often disagreed over the
company’s
strategy in recent years as it has faced growing competition from
”big box"
stores that sell garden supplies. One brother said that he
doesn’t expect the
filing to result in any layoffs of the 40 year-round employees or the
200 seasonal
employees.
href='http://www.boston.com/news/local/articles/2005/10/23/nursery_files_for_…'>Read
more.
id='12'>The
Evolution of the Dot-com
Just two years ago,
one of
the fastest-growing companies in the Dayton, Ohio, area was TooHome
Inc. The
Beavercreek-based online seller of home improvement products was
posting annual
revenue growth in the triple digit percentages. Its splash was the
biggest among
several Dayton dot-coms that took off during the local technology boom
in the
late ’90s. But in January 2004, TooHome filed for chapter 11
bankruptcy protection
and included 119 pages of creditors. Many of the other local dot-coms
have also
shut down as the Internet hype has faded, the Dayton Business
Journal
reported today. Still, there are some survivors. Several dot-coms have
adapted
their business models so they are not so dependent on Internet sales,
and there
is even a new crop of Internet-based companies that are launching.
href='http://wichita.bizjournals.com/industries/high_tech/e_commerce/2005/10/…'>Read
the full story.
id='13'>Dana
Cuts More Signs of Trouble in Auto Parts Industry
Dana Corp. added to
cutbacks
by the struggling auto parts industry, saying Thursday that it will
eliminate
5 percent of its salaried work force, close two plants in Virginia and
sell
parts of its business to sharply reduce costs. The company said last
month that
it expected changes after cutting its profit forecast for the year in
half as
the industry comes to grips with soaring steel and energy costs and
overcapacity.
Dana plans to narrow its product line by selling businesses that
employ about
9,800 people worldwide. The company will focus on its light- and
heavy-vehicle
drivetrain products and sealing and thermal products. The Dana
announcement
comes less than two weeks after another parts supplier, Delphi Corp.,
filed
for bankruptcy and as other suppliers close plants and cut jobs across
North
America.
href='http://www.wric.com/Global/story.asp?S=4010592=1ugWWA4v%20'>Read
more.
id='14'>American
Business Stipulation Filed
Documents were
filed in the
U.S. Bankruptcy Court in Philadelphia for the American Business
Financial case
seeking an approval of a stipulation between the chapter 7 trustee and
the chapter
11 professionals, BankruptcyData.com reported today. The stipulation
is seeking
approval to agreed upon terms for compensation and reimbursement of
expenses
by chapter 11 professionals. The agreement states that the final fee
applications
of the professionals shall be deemed granted, and the payment schedule
is as
follows: 25 percent of the allowed compensation shall be deferred
until $60,000,000
has been distributed to pre-petition claimants, and 75 percent of the
allowed
compensation shall be deemed as administrative claims. The stipulation
is subject
to final court approval.