href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='/AM/Images/headlines/headline.gif' />
September 14,
2006
id='1'>Study: Bankruptcy Law Firm Market 'Largely
Fragmented’
A new study has found
that the market for bankruptcy law firms is far more competitive than
previously thought, casting doubt on the power of the biggest firms to
steer cases to individual bankruptcy courts, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. The study, which examined more than 200 large
public corporations that filed for bankruptcy between 2001 and mid-2005,
found that those companies hired 103 law firms as their lead bankruptcy
counsel. Conducted by
size='3'>Stephen J. Lubben, a law professor
at
size='3'>Seton
face='Times New Roman' size='3'>Hall
size='3'>University
size='3'>New Jersey
study concluded that the numbers indicated a 'largely fragmented'
market. The study will be published in the December issue of the
American Bankruptcy Institute Law Review.
href='http://online.wsj.com/article/SB115817383676362115-search.html?KEYWORDS=bankruptcy&COLLECTION=wsjie/6month'>Read
more. (Registration required.)
Rules 401(k) Contributions Not Always Protected under Chapter
7
The Ninth Circuit Court
of Appeals has ruled that individual debtors seeking chapter 7
bankruptcy protection are not always entitled to include voluntary
contributions to a retirement plan in calculating disposable
income, Portfolio
Media reported yesterday. However, the court
said that voluntary contributions to a retirement plan may be reasonably
necessary for some debtors, and courts must therefore conduct
fact-specific inquiries, which overturned the bankruptcy court’s
ruling. The case involves a consumer who filed for chapter 7 in 2003
with $11,124 in consumer credit card debt. According to court documents,
plantiff Lisa Hebbring earned $49,000 a year as a customer service
representative for SBC Nevada. The bankruptcy court dismissed the case.
The circuit court upheld that such payments were not necessary in this
case based on the plaintiff’s age (33) and financial status (she
had $6,289 in retirement savings).
Lets Silicon Graphics File Intel Motion under Seal
Bankrupt chip
manufacturer Silicon Graphics Inc. scored a small victory on Tuesday
when a federal judge approved the company’s motion to seal a
collaboration agreement entered into with Intel Corp.,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. In the agreement, Intel provides
SGI’s business plan with support in the development, marketing and
sale of SGI server systems based on Intel microprocessors. Judge
Burton R. Lifland
of the U.S. Bankruptcy Court for the Southern District of
New York authorized SGI to file a separate uncensored version of the
agreement under seal. The collaboration agreement requires that an Intel
motion containing details of a business contract between the two be
unavailable to the public to protect both technology companies’
interests.The case is
size='3'>Silicon Graphics Inc., case number
06-10977, in the U.S. District Court for the Southern District of New
York.
id='4'>Solutia, Committees Spar over Environmental
Liabilities
Bankrupt chemical
products maker Solutia Inc. has joined with its unsecured
creditors’ committee in objecting to a proposed order that would
stop the company from staying an adversary proceeding against
Solutia’s former parent company,
size='3'>Portfolio Media reported yesterday.
The objection, filed Tuesday, marks the latest development in a bitter
battle over the distribution of environmental legacy liabilities between
Solutia, Monsanto Co. and Pharmacia Corp. The equity committee lacks
standing to prosecute the adversary proceeding, Solutia and the
unsecured creditors argue, because the court has not found that Solutia
failed to adequately pursue claims against Monsanto and Pharmacia. The
case is In re
Solutia Inc. et al., case number 03-17949, in
the U.S. Bankruptcy Court for the Southern District of New
York.
id='5'>‘Air
w:st='on'>
size='3'>America
size='3'>Radio’ Expected to Declare
Bankruptcy
The liberal talk network
‘Air America Radio’ will announce a major restructuring
Friday that is expected to include a bankruptcy filing,
WorldNetDaily.com reported today. The struggling network could remain on
the air under the deal, but significant personnel changes already are
underway, ThinkProgress.org reported. Air
w:st='on'>
size='3'>America
size='3'>dismissed five employees yesterday, explaining they would be
given no severance without a capital infusion or bankruptcy.
href='http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=51962'>Read
more.
Records Names Lead Bidder
Tower Records designated
liquidating firm Great American Group of
w:st='on'>
size='3'>Woodland Hills
size='3'>Calif.
'lead bidder' in its court-supervised bankruptcy sale, the
Sacramento Bee
size='3'>reported today. Firms are gearing up for the bankruptcy auction
of the legendary music retailer on Oct. 5 in
w:st='on'>
size='3'>Wilmington
w:st='on'>
size='3'>Del.
American Group was selected the “lead bidder” in order for
Tower Records to satisfy the terms of an $85 million loan it obtained
from its chief lender after filing for chapter 11 in August. While the
amount was not disclosed, the Great American bid was only for Tower's
inventory.
href='http://www.sacbee.com/103/story/23012.html'>Read
more.
w:st='on'>
id='7'>California
w:st='on'>
size='3'> Hospital
face='Times New Roman' size='3'> Heads for
Bankruptcy
The board of Doctors
Medical Center San Pablo/Pinole voted unanimously Wednesday to take the
hospital into bankruptcy as a last resort to keep it open, the
Contra Costa
(Calif.) Times reported today. However,
the board balked at closing the emergency room, deadlocking in a 2-2
vote. The hospital will downsize immediately, managers said, and will go
into something resembling a strike mode -- in effect, basing staffing on
a simulated scenario of a 10-day notice by a union of an impending
strike. Managers said they will seek to furlough employees rather than
lay them off. The hospital lost $1.5 million in July.
href='http://www.contracostatimes.com/mld/cctimes/news/15516077.htm?template=contentModules/printstory.jsp'>Read
more.
id='8'>Judge Grants Bankruptcy Trustee for
w:st='on'>
Louis
Franchisee
A bankruptcy judge
Wednesday approved the request by a
w:st='on'>
size='3'>Connecticut
fund for a chapter 11 trustee to take control of a St. Louis-area
operator of Wendy's fast-food restaurants, Dow Jones Newswires reported
yesterday. Bankruptcy Judge
size='3'>Barry Schermer in
w:st='on'>
Louis
Group LLC's request for a trustee to run WenAmerica LLC, which owns more
than 50 shuttered Wendy's restaurants. Charles Riske was appointed as
the trustee Wednesday, according to court papers. Judge Schermer also
ensured that the restaurants will stay closed for the time being by
denying SPCP's request to force parent Wendy's International Inc. to
continue supplying the franchisee. The judge's ruling sets up an Oct. 23
showdown between the hedge fund and Wendy's in bankruptcy court,
WenAmerica lawyer Ashley Lynn Narsutis said.
href='http://www.dfw.com/mld/dfw/business/15512088.htm'>Read
more.
Weighs New Trial against Tobacco Companies
A federal judge is
considering whether tobacco companies should be tried on the question of
whether they deceived smokers for years about the safety of light
cigarettes, the New York
Times reported today. After hearing a day of
arguments yesterday, Judge Jack B. Weinstein of the
w:st='on'>
size='3'>Federal District Court
size='3'>in downtown
size='3'>Brooklyn did not
indicate whether he would grant class-action status, but did ask lawyers
for the plaintiffs how they were determining the number of smokers
potentially affected and possible damages. In the case known as
Schwab (after the lead plaintiff, Barbara Schwab), lawyers
asserted that cigarette makers had deceived smokers into thinking that
light cigarettes, representing 45 percent of the market, were safer or
less addicting. Lawyers are seeking a national class action of tens of
millions of smokers and are proposing that tobacco companies pay damages
of $20 billion to $200 billion. Judge Weinstein is expected to decide
within several weeks whether to grant class-action status.
href='http://www.nytimes.com/2006/09/14/business/14tobacco.html?ref=business&pagewanted=print'>Read
more.
International
id='10'>French Auditor Calls for Urgent Pension
Reform
The Cour des
comptes,
face='Times New Roman'
size='3'>France's
public sector auditor, warned of the dire need to reform French pension
schemes for workers at state-owned companies,
face='Times New Roman' size='3'>Financial Times
(London) reported today. The
'régimes spéciaux' allow workers at state-controlled
companies, including La Poste, SNCF and the Banque de France, to retire
earlier with better pensions than staff in the private sector. Previous
attempts to reform the schemes triggered massive street protests and
crippling strikes by public sector trade unions.
href='http://msnbc.msn.com/id/14815881/'>Read
more.