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December 20,
2006
CEO Wary of Antitrust Implications
Delta Air Lines
Inc.’s CEO Gerald Grinstein said that US Airways Group
Inc.’s $8.4 billion hostile takeover bid poses a bevy of antitrust
concerns, but said the embattled carrier would not necessarily shy away
from other merger opportunities,
size='3'>Bankruptcy Law360 reported
yesterday. Grinstein said that the US
Airways proposal has some 'some very unusual antitrust aspects to
it,” adding that those concerns only apply to the bid from US
Airways and that Delta would 'look at' any other proposal that comes
up.
size='3'>Grinstein’s concerns were echoed by Jim Weiss, an
attorney at Preston Gates & Ellis LLP and Delta’s principal
antitrust counsel. Weiss said during the conference call that the US
Airways/Delta proposal would encounter intense scrutiny by regulators
and that the risk that the merger could be denied over antitrust
concerns is quite high.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=15380'>Read
more. (Registration required.)
Records Wins Chapter 11 Extension
A bankruptcy judge on
Tuesday granted Tower Records’ request for an extension to
exclusively file its chapter 11 reorganization plan,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported yesterday. Judge
size='3'>Brendan L. Shannon extended the
bankrupt music retailer’s exclusivity period through March 26 and
the deadline for Tower Records to win creditor support for the plan was
also extended until May 25. Tower Records pointed out that it had
already obtained debtor-in-possession financing, conducted an asset
sale, downsized its business, established a claims bar date, and made
strides in repaying its senior secured debt, all since filing for
bankruptcy on Aug. 20.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=15376'>Read
more. (Registration required.)
name='3'>Amtrol Holdings Files for Chapter 11
Amtrol Holdings Inc., a
private company that manufactures parts for water, heating and
ventilation systems, filed for chapter 11 reorganization protection on
Monday in the U.S. Bankruptcy Court for the District of Delaware,
Bankruptcy Law360
reported yesterday. Amtrol’s bankruptcy filing was
precipitated by a failed recapitalization plan to avoid a $188 million
loan that was set to mature in December 2006. Amtrol tried numerous
times to sell all or part of the company with the last deal falling
through on Dec. 6. The company’s bondholders are owed about $97.8
million. They include Newport Global Advisors, Credit Suisse Securities
(USA) LLC and AIG Global Investment Corp. A group of lenders, led by
Barclays Bank PLC, will provide up to $115 million in
debtors-in-possession financing to the bankrupt company, the court
filing said.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=15320'>Read
more. (Registration required.)
Rejects Expenses in Dana Bankruptcy
Judge
face='Times New Roman' size='3'>Burton Lifland
size='3'>of the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Manhattan
a request for expenses incurred by lawyers and consultants working on
Dana Corp.'s bankruptcy reorganization, the Wall Street
Journal reported today. Judge Lifland approved
requests by lawyers and consultants for about $22 million in fees,
subject to a 20 percent holdback. However, he declined to approve their
expenses that total nearly $1 million, according to court
documents. Diana G.
Adams, the acting U.S. Trustee in
size='3'>New York
also objected to the same applications for fees and expenses. In court
papers,
size='3'>Adams
professionals have accumulated $41.7 million in fees and expenses since
the company tumbled into bankruptcy proceedings in March and asked Judge
Lifland to temporarily hold back 20 percent of the requested
fees.
href='http://online.wsj.com/article/SB116657943805055266.html?mod=us_business_whats_news'>Read
more.
Predicts Foreclosure for 1 in 5 Subprime Loans
A report released
yesterday by the Center for Responsible Lending said that about one in
five subprime mortgages made in the last two years are likely to go into
foreclosure, the New
York Times reported today. At that rate, about
1.1 million homeowners who took out subprime loans in the last two years
will lose their houses in the next few years, the report said. The
foreclosures will cost those homeowners an estimated $74.6 billion,
primarily in equity. Researchers examined more than six million
mortgages made from 1998 until the third quarter of 2006; the report is
the first nationwide study on the performance of subprime mortgages. It
includes projected foreclosure data for all major metropolitan
statistical areas. The highest default rates are expected to be in
cities in
size='3'>California
w:st='on'>
size='3'>Nevada,
w:st='on'>
size='3'>Michigan
Jersey
w:st='on'>
size='3'>Washington
w:st='on'>
size='3'>D.C.
href='http://www.nytimes.com/2006/12/20/business/20home.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
name='6'>Bankruptcy Court Rules in Favor of W.R.
Grace
A bankruptcy court ruled that
asbestos in attic insulation made by W.R. Grace & Co. did not pose
'an unreasonable risk of harm,' the Associated Press reported yesterday.
The U.S. Bankruptcy Court for the District of Delaware recently denied a
plaintiff's motion for a summary judgment on asbestos claims. The
plaintiffs contend Grace's Zonolite Attic Insulation was contaminated
and sickened people who were exposed to its asbestos fibers. The court
ruled the plaintiffs did not prove the fibers unreasonably dangerous. A
January court conference to determine the status of asbestos claims
against Grace is scheduled.
href='http://billingsgazette.net/articles/2006/12/19/news/state/43-grace.txt'>Read
more.
London-based HSBC
Holdings PLC is facing rising problems with its
size='3'>U.S.
portfolio nearly four years after its acquisition of Household
International Inc., a
w:st='on'>
size='3'>U.S.
size='3'>lender that specialized in subprime loans, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. Last month, the
w:st='on'>
size='3'>U.S.
size='3'>unit said a portfolio of consumer loans it acquired recently
had quickly soured and HSBC underscored this month that the loan
situation was worsening. While unexpected rise in delinquency rates in
mortgage-related debt will be secured with collateral, the bank is
worried that it could lead to further losses in unsecured credit card
loans.
href='http://online.wsj.com/article/SB116658293042555361.html?mod=us_business_whats_news'>Read
more. (Registration required.)
International
name='8'>Eurotunnel Board Settles on Financing
Plan
Eurotunnelhas selected
the financiers for its restructuring plan, only days after a majority of
bondholders followed through on their promise to sign off on the
company’s proposal to reorganize nearly $12 billion in
debt, Bankruptcy
Law360 reported yesterday The Eurotunnel board
on Monday chose an enlarged consortium of Goldman Sachs Group Inc.,
Deutsche Bank AG and Citigroup Inc. to serve as the financial backers
for the safeguard plan. Under the terms of the financing proposal,
Eurotunnel will be granted a long term loan of £1,500 million and
€1,965 million, equivalent to a total of £2.84 billion that
will be repayable, by tranche, between 35 and 43 years, according to the
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=15339'>Read
more. (Registration required.)
name='9'>TROUBLED COMPANIES IN THE NEWS
1000’s of companies lose
money or experience some form of difficulty each
quarter.
The business news
articles below are taken from the
size='3'>Daily Summary of Troubled & Fast Growing U.S. Companies and
Other Business News published by Bastien
Financial Publications.
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size='3'>your name, company name, address, phone and fax.
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size='3'>American Superconductor Corp.'s stock
price skidded more than 9% after the Westborough,
w:st='on'>
size='3'>Mass.
warned of a greater-than-anticipated loss for fiscal 2007.
The company cited payment delays and delays in other
projects. The company develops high-temperature superconductor
wires.
size='3'>DaimlerChrysler AG, the German-based
carmaker, has seen the United Auto Workers' union's president announce
that the UAW will look again at the financial situation at
DaimlerChrysler's Chrysler Group unit, indicating that the union may
further extend concessions on healthcare costs to help the U.S. unit
weather its current losses.
size='3'>First Aviation Services Inc.,
a
size='3'>Westport
face='Times New Roman' size='3'>Conn.
seller of reconditioned aircraft parts, reported a third
quarter net loss of $4.2 million. Revenue declined 4%--to $32.4
million.
size='3'>Hovnanian Enterprises Inc., a Red
Bank, N.J. homebuilder, reported a loss of $115 million in its fourth
quarter, compared to net income of $168 million in the year-earlier
period. The results, which were hurt by the depressed housing market,
included $315 million in land-option writeoffs and inventory
impairments. Revenue in the period slipped 1.5%--to $1.75 billion, while
its margins shrank.
size='3'>LeapFrog Enterprises Inc., an
Emeryville,
face='Times New Roman' size='3'>Calif.
educational-products firm, is trimming the payroll at its
ShoolHouse division by sixty positions as part of a plan to return to
profitability next year. LeapFrog, which lost almost $50 million in its
third quarter, will take a related fourth quarter charge of $3
million.
size='3'>Power Integrations Inc., a
size='3'>San Jose
w:st='on'>
size='3'>Calif.
manufacturer, expects that its shares will be delisted from trading on
Nasdaq, for failing to file financial reports on time.
size='3'>Quantum Fuel Systems Technologies Worldwide Inc
size='3'>., an
face='Times New Roman' size='3'>Irvine
size='3'>,
size='3'>Calif.
fuel storage and delivery devices, reported a second quarter net loss of
$89.3 million, including a goodwill impairment loss of $72.3 million.
Revenue declined 42%--to $36.6 million.