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April 27, 2006
Parts
Suppliers Pull Out of GM Contracts
Bankrupt auto parts maker
Collins & Aikman Corp. has asked a bankruptcy court for permission
to change some of its contracts with General Motors, echoing the moves
of several other struggling suppliers seeking to cut costs,
Portfolio Media
reported yesterday. The contracts in question require
Collins & Aikman to provide GM with cockpits, instrument panels and
center consoles for its vehicles. In 2005, the two companies amended the
contracts, so Collins & Aikman received better prices for the parts
it supplied to GM. Collins & Aikman has already changed several
similar contracts held with other automakers, including
size='3'>Toyota
In March,
size='3'>Delphi
if granted, would void half its contracts with GM, something that could
mean more financial stress to the beleaguered car
maker.
A bankruptcy court judge
ordered Delta Air Lines regional subsidiary Comair and its flight
attendants union to return to contract talks, rejecting a request by the
airline to void the attendants' contract to aid its chapter 11
reorganization, the Wall Street Journal reported today. By
demanding $8.9 million a year in 'non-negotiable' concessions from the
union, Comair had failed to meet Bankruptcy
Code requirements that it negotiate 'in good faith,' Judge
Adlai S. Hardin
said in a 25-page ruling Wednesday. The judge's ruling
marked a relatively rare formal rebuff of a bankrupt company's
contract-rejection request, which companies under chapter 11 court
protection wield against their unionized workers to win concessions. The
judge said that if the two sides remain unable to make a deal, Comair
could resubmit its request to reject the flight attendants' collective
bargaining agreement.
href='http://online.wsj.com/article/SB114609106726336895-email.html'>Read
more. (Registration required).
BAWAG
Says Refco Creditors' Suit Not Legitimate
Austrian bank BAWAG
P.S.K. said a $1.3 billion lawsuit against it by creditors of
size='3'>U.S.
size='3'>broker Refco was not legitimate, saying the bank was 'victim,
not perpetrator' in Refco's collapse, Reuters reported yesterday. BAWAG
Chief Executive Ewald Nowotny said in an interview with Austrian state
radio that BAWAG had done regular bank business with Refco but rejected
any suggestion that the bank may be linked to Refco's
collapse.
size='3'>Nowotny's remarks came a day after a group of Refco creditors
sued BAWAG in the
States
willing co-conspirator in the fraud that led to the broker's demise in
October and demanding its
w:st='on'>
size='3'>U.S.
size='3'>assets be frozen. BAWAG, a domestic retail bank owned by
size='3'>Austria
size='3'>'s trade union federation, came to international attention last
year when it surprisingly emerged as one of Refco's top
creditors.
href='http://today.reuters.com/investing/financeArticle.aspx?type=mergersNews…'>Read
more.
name='4'>Shareholders, Trustee Clash in
w:st='on'>
size='3'>Oneida
Bankruptcy
Stockholders in bankrupt Oneida
Ltd. are fighting to recoup their losses, but in court papers filed
Monday, the U.S. Trustee overseeing the chapter 11 proceedings
said that
size='3'>they’re wasting everybody’s time,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. Four institutions that own a total of
2,565,007 shares of
size='3'>Oneida
formally recognized committee to represent their interests in the
size='3'>bankruptcy proceedings that began on March 19. Their attorney,
Robert J. Stark, filed a motion requesting that the court appoint an
official equity committee on April 14.
size='3'>Diana G. Adams, U.S. Trustee for the
Southern District of New York, filed papers in opposition to the ad hoc
committee’s motion on Monday. She argued that the shareholders
hadn’t proven that establishing an official committee was
necessary to protect their interests, and since the company was
insolvent, those interests were negligible.
w:st='on'>Adams
rejected a request to appoint a committee to represent
the equity holders earlier this month.
New
Rules Pushing Turnaround Execs Out the Door
Tightened bankruptcy
regulations may be preventing troubled
w:st='on'>
size='3'>U.S.
size='3'>manufacturing industries from attracting turnaround executives
and retaining key players on management teams,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. Some attorneys and turnaround executives
are already seeing the negative effects of BAPCPA and claim that the
regulations are pushing struggling companies into an increasingly
precarious position.
size='3'>As the regulations stipulate that a company can offer enhanced
compensation to a key executive only if the executive secures a job
offer elsewhere, they are giving key management players incentive to
walk away from the job, according to
size='3'>Michael Buenzow, a turnaround
executive at consulting firm FTI Palladium Partners. These bankruptcy
regulations will continue to play a critical role in the Delphi Corp.
and Dana Corp. bankruptcy cases as executives look for huge concessions,
as well as those companies with a large unionized labor, including the
auto, steel and airlines industries.
name='6'>Heartland Partners to File Bankruptcy,
Liquidate
Heartland Partners, a
real estate limited partnership with roots dating to 1847, said it plans
to liquidate after it files in the near future for chapter 11 bankruptcy
protection, Reuters reported yesterday. Chicago-based Heartland posted a
$4.7 million net loss in 2005. It has reported being in a handful of
disputes, including with a former chief executive it said has claimed to
be owed $12 million. Heartland expects to file for protection from
creditors with the U.S. Bankruptcy Court in the Northern District of
Illinois. Its CMC Heartland subsidiary is a successor to the Milwaukee
Road Railroad, founded in 1847 when James Polk was
w:st='on'>
size='3'>U.S.
size='3'>president.
href='http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&s…'>Read
more.
name='7'>Hurricane Victims
w:st='on'>
Banks
As homeowners along
the
face='Times New Roman' size='3'>Gulf
size='3'>Coast
recover from the devastation of hurricanes Katrina and Rita, some say
mortgage lenders are refusing to turn over insurance proceeds while
demanding immediate payment on overdue loans, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. Hurricane victims in
w:st='on'>
size='3'>Louisiana
size='3'>Mississippi
filed nearly 1,000 complaints with state regulators claiming
mistreatment by mortgage lenders. About 800 of the complaints have been
resolved, often as a result of mediation initiated by
regulators.
size='3'>Most lenders have ended initial grace periods encouraged by
federal regulators that allowed borrowers to stop making regular monthly
payments on their loans, and they now are working out procedures on a
case-by-case basis. Some homeowners are using insurance proceeds to
cover outstanding payments on destroyed homes, but because the insurance
checks typically are made out to both the homeowner and the mortgage
holder, homeowners often must send the full proceeds to the lender and
wait for the balance to be returned. As of Dec. 31, the most recent data
available, nearly 76,000 homeowners in
face='Times New Roman' size='3'>Louisiana
size='3'>and
face='Times New Roman'
size='3'>Mississippi
fallen at least 90 days behind on mortgage payments or were facing
foreclosure, according to the Mortgage Bankers Association.
href='http://online.wsj.com/article/SB114610053487737154-email.html'>Read
more.
size='3'>(Registration required).
Bush
to Meet Big 3 Automakers for Talks on Fuel Issues and
Pensions
President Bush, who
touched a nerve this year when he told Detroit carmakers to build
'relevant' vehicles, will meet with the companies' leaders next month,
according William Clay Ford Jr., the chief executive of Ford Motor,
the New York
Times reported today. People involved in
planning the meeting said it would focus on three areas: energy and the
environment; costs like pensions and health care premiums that add
hundreds of dollars to the price of a
w:st='on'>
size='3'>Detroit
how currency issues affect the Japanese automakers. The meeting is
expected to take place on May 18 at the White House. It would be the
first time during his presidency that Mr. Bush has met collectively with
Mr. Ford, Rick Wagoner of General Motors and Thomas W. LaSorda of
Chrysler. Toyota Motor, which ranks fourth in American sales behind
Chrysler, and which is considering sites for its eighth North American
assembly plant, said it was not invited.
href='http://www.nytimes.com/2006/04/27/automobiles/27auto.html?_r=1&oref=log…'>Read
more.
name='9'>Former TV Star Pays $14.5 Million to Save
Estate
Actor Don Johnson has
paid $14.5 million to save his 17-acre
w:st='on'>
size='3'>Woody
face='Times New Roman' size='3'>Creek
ranch from a foreclosure sale, the Associated Press
reported today. The former 'Miami Vice' and 'Nash Bridges' star had
until noon Tuesday to make good on a delinquent debt to D.A. Shaw
Laminar Lending Inc. Fourteen acres of his estate would have been
auctioned off Wednesday on the steps of the Pitkin County Courthouse if
he missed the deadline, deputy public trustee Carol Foote said. Three
acres and the guesthouse would have been auctioned off May 10. Papers
filed in Pitkin County District Court by D.A. Shaw earlier this year
claimed Johnson's two companies failed to make timely payments on a
$10.6 million loan, given to Johnson's companies in August 2004 as they
emerged from chapter 11 bankruptcy.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/04/27/AR20060…'>Read
more.
name='10'>Deal Struck to Overhaul
w:st='on'>
size='3'>Colorado
Largest Pension Plan
Legislators, public-employee
groups and the Colorado Public Employees Retirement Association (PERA)
have struck a late compromise to reform the state's largest pension
plan, the Denver Post reported today. Colorado Sen. Paula
Sandoval (D-Denver) introduced a late bill Wednesday that combines
elements from a measure she introduced earlier in the session with
elements of a bill from Sen. Dave Owen, R-Greeley. The new measure
diverts 0.5 percent of public-employee pay raises over the next six
years to stabilize PERA's $11.3 billion funding shortfall, borrowing
from the '3 percent solution' that the Owen bill, which had the backing
of the governor, originally offered. Employee groups, represented by the
Colorado Coalition for Retirement Security, agreed to give up a portion
of employee raises to win their key demand - that future hires receive
the same pension benefits as current employees.
href='http://www.denverpost.com/business/ci_3756088'>Read
more.
International
name='11'>One in Seven British Consumers Advised to File for
Bankruptcy
Recently released
statistics showed that only one in seven British consumers contacting a
debt charity for help during the first three months of the year were
advised to file for bankruptcy, the
face='Times New Roman' size='3'>Manchester
size='3'>(
w:st='on'>
size='3'>England
Evening News reported today. The Consumer
Credit Counseling Service (CCCS), which is contacted by around 1,000
people a week who carry average debt of over £30,000, said no one
it helped was recommended to take out a debt consolidation loan. One in
10 people were able to continue meeting their repayments after they had
received advice and only needed help with budgeting. The group said the
most common recommendation it made was for people to go on to a
debt-management plan. Only 14 percent of the people who called were
advised to file for bankruptcy, the CCCS said.
href='http://www.manchesteronline.co.uk/men/business/s/211/211719_one_in_seve…'>Read
more.
w:st='on'>
name='12'>U.K.
face='Times New Roman' size='3'> Business Bankruptcies Hit Historic
High
The United Kingdom recorded
4,818 corporate failures in the first three months of 2006, a rise over
the previous quarter by 15.3 percent and the highest quarterly increase
since 1999 according to a press release today from Experian. More than
4,800 companies failed during the first quarter of 2006, compared with
4,180 in the first quarter of 2005. Voluntary liquidations increased by
3.9 percent over the same period, administration orders by 55 percent,
compulsory liquidations by 26.5 percent and receiverships by 9.7
percent. Only voluntary arrangements fell, by 24.2 percent. Of the 34
industries surveyed by Experian, 22 recorded an increase in business
failures in the first quarter of 2006. Most noticeably, among the larger
sectors, these included building and construction (up 17 percent),
information technology (up 39 percent), food manufacturing (up 26
percent), media (up 35 percent), food retailing (up 52 percent),
non-food retailing (up 48 percent), business services (up 33 percent),
property (up 85 percent) and motor traders (up 68 percent).
href='http://www.prnewswire.co.uk/cgi/news/release?id=169387'>Read
more.
name='13'>Arrest Warrant Sought for Hyundai
Chairman
Korean prosecutors
Thursday requested an arrest warrant for Hyundai Motor Co. Chairman
Chung Mong-Koo amid a bribery and slush-fund scandal that has
rocked
face='Times New Roman' size='3'>South
Korea
automaker, the Associated Press reported today. Prosecution spokesman
Kang Chan-Woo said that the arrest warrant was requested for Chung,
while his son, Kia Motor's Corp. President Chung Eui-Sun would continue
to be investigated without being detained. Prosecutors have been
investigating the Hyundai Automotive Group since last month over the
suspicion that it embezzled money from affiliates to create a slush
fund and used the money, via at least two lobbyists, to seek favors from
the government. The investigation is taking a toll on Hyundai's
operations, Gadacz said. Hyundai has delayed a signing ceremony for its
planned factory in the
size='3'>Czech
face='Times New Roman' size='3'>Republic
size='3'>, while Kia has indefinitely put off breaking ground on its
first
size='3'>U.S.
in
face='Times New Roman'
size='3'>Georgia
size='3'>.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/04/27/AR20060…'>Read
more.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/04/27/AR20060…'>