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October 27, 2006
Entergy Faces Competition
over Chapter 11 Plan
On the heels of bankrupt
utility Entergy New Orleans submitting a chapter 11 plan, an insurer in
the case is seeking to present its own restructuring proposal after
blasting the company’s submission,
size='3'>Portfolio Media reported yesterday.
On Tuesday, Financial Guaranty Insurance Co. filed papers in U.S.
Bankruptcy Court for the Eastern District of Louisiana contending that
it was ready to submit a chapter 11 plan that would help accelerate
payments to creditors, among other stipulations. Earlier this
week, Entergy New Orleans submitted a reorganization plan that
pledges to fully compensate its creditors while continuing to restore
the city’s electric systems. Under Entergy’s proposal, all
employee and retiree programs and benefits will
face='Times New Roman'
size='3'>remain in place, as will the make-up of the company’s
board.
size='3'>Autos
Tower Auto Gets Court
Approval for Plan Extension
A bankruptcy judge has
extended Tower Auto Inc.’s exclusive right to file its
reorganization plan and solicit the support of its creditors for the
seventh time, Portfolio
Media reported yesterday. Judge
Allan Gropper
size='3'>of the U.S. Bankruptcy Court for the Southern District of New
York said Wednesday that the company has until Nov. 30 to file its plan.
He also gave the company until Jan. 25 to win approval from its
creditors.Earlier
this month, lawyers for Tower Auto asked the court for the extension,
saying they have a confidential reorganization plan, but that a critical
aspect—an equity investment—is still being
negotiated.
Collins & Aikman
Receives Another Extension
A judge has given Collins
& Aikman approval for more time to file its exclusive plan to exit
bankruptcy protection,
size='3'>Portfolio Media reported yesterday.
Judge Steve
Rhodes of the U.S. Bankruptcy Court in
Michigan
proposal period is being extended from Oct. 27 to Dec. 27. He also
extended the solicitation period by 60 days to Feb. 27. The extension is
the sixth given to the company since it filed for bankruptcy protection
in last May.
Former
size='3'>Delphi
Civil Claims
The Securities and Exchange
Commission approved the filing of civil fraud claims against the former
chairman and chief executive of bankrupt auto-parts maker Delphi Corp.
and against its former chief financial officer in connection with
accounting improprieties, the Wall Street Journal reported
today. The five-member commission voted unanimously yesterday to approve
a settlement with Delphi, in which the auto-parts maker would settle
allegations of accounting improprieties that resulted in a multiyear
restatement of earnings and won't be subject to a penalty.
href='http://online.wsj.com/article/SB116190468845105376.html?mod=home_whats_news_us'>Read
more. (Registration required.)
Analysts Sound Note of
Caution on GM Cash Burn
Analysts cautioned that cash
burn is still stalling General Motors Corp.’s recovery despite the
fact that the company’s stock is up almost 80 percent and talk of
bankruptcy has receded after billions of dollars in cost cuts, Reuters
reported yesterday. GM burned $3.8 billion of cash in the third quarter,
compared with $2.3 billion a year earlier. “Weak cash flow outlook
keeps us skeptical (a) turnaround is underway,'' Goldman Sachs analyst
Robert Barry said on Thursday, a day after GM, which lost $10.6 billion
in 2005, posted an operating profit at the high end of Wall Street
expectations. Excluding one-time items, GM posted an operating profit of
93 cents per share, compared with an average Wall Street forecast of 45
cents per share.
href='http://www.nytimes.com/reuters/business/business-autos-gm.html?pagewanted=print'>Read
more.
DOV Pharmaceutical May File
for Bankruptcy
DOV Pharmaceutical Inc. said
that it was exploring initiatives to improve liquidity and that it may
be forced to seek bankruptcy protection, Reuters reported yesterday. The
biopharmaceutical company would initiate discussions with major
stakeholders regarding strategic alternatives, which include a
consensual restructuring of capital structure, DOV said in a statement.
Dov also said it will be delisted from the Nasdaq exchange from Oct. 27
for failing to meet the minimum market value of listed securities. As a
result of the delisting, the company was obligated to repurchase its
2.50 percent convertible subordinated debentures, due 2025, on or
prior to Nov. 11. However, DOV said it currently does not have the
capital to repurchase the $70 million in debentures.
href='http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-10-26T171036Z_01_BNG275947_RTRIDST_0_HEALTH-DOVPHARMACEUTICAL-UPDATE-2.XML'>Read
more.
Nellson Agrees to Chapter 11
Examiner
Moving to end a bid by
the U.S. Trustee's Office to appoint an independent outside trustee in
the acrimonious bankruptcy proceedings of Nellson Nutraceutical Inc.,
the diet candy bar maker has agreed to appoint an examiner in its
chapter 11 case,
size='3'>Portfolio Media reported yesterday.
The concession comes on the heels of harsh criticism from the U.S.
Trustee overseeing Nellson’s chapter 11 proceedings. On Oct. 10,
U.S. Trustee Kelly
Beaudin Stapleton filed a motion blasting the
debtors as “dishonest and incompetent” and asked the court
to appoint a chapter 11 trustee. However, in court documents filed
Wednesday, Nellson said there was no need for Stapleton’s motion
because it has already settled the trustee matter with Stapleton and its
creditors' committee.
Winn-Dixie Loses $24.6M for
Quarter
Winn-Dixie Stores Inc.
released its first-quarter financial statement Wednesday for the 12-week
period ending Sept. 20 as net sales were up, but the grocer still lost
$24.6 million, the
size='3'>Business Journal of Jacksonville
size='3'>reported yesterday. Net sales of $1.6 billion were up 12
percent compared with $1.5 billion for the first quarter ending Sept.
21, 2005. The loss for Winn-Dixie, which filed for chapter 11 bankruptcy
in February 2005, was down from the $552.5 million loss in the first
quarter in fiscal year 2005. A confirmation hearing for Winn-Dixie's
reorganization plan was held Oct. 13, but a decision on whether the
company will pull out of bankruptcy has not yet been issued.
href='http://jacksonville.bizjournals.com/jacksonville/stories/2006/10/23/daily32.html?jst=b_ln_hl'>Read
more.
SEC Facing Wide Review of
Practices
The Securities and
Exchange Commission (SEC), under scrutiny for its handling of an
insider-trading case involving a prominent hedge fund, will be the
subject of a broad review by the investigative arm of Congress, the
Government Accountability Office (GAO), the New York Times reported today.
Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) last
month asked the office in a letter to conduct a review of the commission
because he was growing concerned, he said, about whether it is
“faithfully adhering to its mission.”
size='3'>Last week, the GAO accepted Grassley’s request that it
review two SEC divisions: its enforcement unit, which brings civil
securities suits, and the office of compliance, inspection and
examination, which oversees money managers, brokerage firms, stock
exchanges and other regulated entities.
href='http://www.nytimes.com/2006/10/27/business/27sec.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more .
International
BAWAG Indictments
Handed Down in
w:st='on'>
w:st='on'>Austria
w:st='on'>
size='3'>Vienna
have indicted the former chief executive officer of BAWAG PSK, along
with eight other executives, in connection to the alleged mishandling of
funds that led to billions of euros in losses for the Austrian bank and
contributed to Refco Inc.’s collapse, Portfolio Media reported
yesterday. On Wednesday, the indictment against the group became public,
revealing that officials had filed embezzlement and fraud charges with
an investigatory magistrate, the Wall Street Journal reported.
Austrian officials contend that nine executives 'intentionally abused
their positions of trust at BAWAG' and cost the bank 1.44 billion euros
($1.81 billion) through a series of shady transactions and a cover-up
scheme, according to the indictment.
Credit Managers Daily
Business News Report
The following articles
are taken from the Daily Summary of Troubled & Fast Growing U.S.
Companies published by Bastien Financial Publications.
For more of the latest business news visit
size='3'>http://dailybusiness.creditmanagers.biz
face='Times New Roman' size='3'>.
ABI Members receive a 50
percent discount when subscribing to the complete Daily
Summary.
size='3'>Abitibi-Consolidated Inc., the
big
size='3'>Quebec
size='3'>forest-products firm, reported a third quarter net loss of
$43.2 million, including an operating loss of $43.2 million. Revenue was
down 13%--to $1.1 billion.
size='3'>Align Technology Inc., a
size='3'>Santa Clara
w:st='on'>
size='3'>Calif. maker of
dental products, reported a third quarter net loss of $10.3 million.
Revenue declined 4%--to $49 million.
size='3'>DaimlerChrysler AG says that it's
considering all possibilities for realigning its Chrysler Group unit in
the
face='Times New Roman'
size='3'>U.S.
including idling facilities and cutting jobs.
size='3'>Further, the chief financial officer of the German-based
carmaker, Bodo Uebber, did not rule out the possibility of putting
Chrysler up for sale. In addition,
DaimlerChrysler reported its third quarter net income sank 37%--to $676
million. Revenue declined 8%--to $44
billion. Daimler's Chrysler Group lost
nearly $1.5 billion in the quarter, amounting to about a $3,000 loss on
each vehicle it produced.
size='3'>Electronics For Imaging Inc., a
Foster City, Calif. maker of hardware and software for printing systems,
reported a third quarter net loss of $27.3 million. Revenue declined
3%--to $138 million.
size='3'>General Motors Corp.,
size='3'>Detroit
w:st='on'>
size='3'>Mich.
third quarter net loss of $115 million, a significant improvement over
its $1.7 billion loss a year ago. The recent
results included special net costs of $644 million.
size='3'>Revenue rose 3.5%--to $48.8 billion, helped along by sales of
new trucks and a buyout program that reduced operating
costs. Separately, GM is reportedly making
progress on issues with its former parts unit, bankrupt Delphi Corp.,
although resolving problems stemming from the separation of Delphi could
leave GM responsible for up to $7.5 billion, pretax, related to pension
and healthcare benefits for
face='Times 

New Roman'
size='3'>Delphi
size='3'>workers.
size='3'>Gymboree Corp., a Burlingame,
Calif.-based retailer of children's apparel, is closing seventeen of its
Janeville stores by the end of the fiscal year.
size='3'>HomeBanc Corp.,
w:st='on'>
size='3'>Atlanta
w:st='on'>
size='3'>Ga.
that it cut 8% of its general and administrative staff, mostly at its
headquarters, in an effort to reduce costs by $19 million. The firm also
revised its third quarter earnings projections, now looking at a loss
for the quarter of up to 8 cents a share, compared to an earlier
projection of a loss of at most 4 cents a share.
size='3'>Mills Corp.'s stock price shot up 14%
on news that Gazit-Globe Ltd., an Israeli real-estate firm, has proposed
pumping $1.2 million into the troubled
w:st='on'>
size='3'>Chevy Chase
w:st='on'>
size='3'>Md. mall real
estate company in order to gain full control of the company. In another
development, Mills, still facing cash problems, warned that it won't pay
third and fourth quarter dividends, in order to be in compliance with
provisions of loan terms with Goldman Sachs Group Inc.
size='3'>RadioShack Corp., a
w:st='on'>
Worth,
w:st='on'>
size='3'>Texas
consumer electronics, reported a third quarter net loss of $16.3
million. The results included charges of $29 million for writing down
the value of its kiosk business and $18 million in turnaround
expenses. Sales fell 11%--to just over $1
billion.