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February 20,
2007
w:st='on'>
name='1'>San Diego
face='Times New Roman' size='3'> Diocese Considers
Bankruptcy
The Roman Catholic
Diocese of San Diego said in a letter to parishioners that it is
considering declaring bankruptcy to avoid going to trial on more than
140 lawsuits alleging sexual abuse by priests, the Associated Press
reported today. The pastoral statement,
signed by Bishop Robert Brom, said if fair settlements can't be reached
with abuse victims, 'the diocese may be forced to file a chapter 11
reorganization.' If the diocese files for bankruptcy, it would become
the fifth in the nation to seek protection in the clergy sex abuse
scandal. Other diocese that have filed for
bankruptcy include
size='3'>Portland,
w:st='on'>
size='3'>Ore.
w:st='on'>
size='3'>Spokane
w:st='on'>
size='3'>Wash.
w:st='on'>
size='3'>Davenport
w:st='on'>Iowa
and
face='Times New Roman' size='3'>Tucson
size='3'>,
size='3'>Ariz.
href='http://news.yahoo.com/s/ap/20070219/ap_on_re_us/church_abuse_bankruptcy_3'>Read
more.
name='2'>Lawyers Ready for Business Bankruptcy Surge
Though business
bankruptcy filings are down by 45 percent and corporate debt default
rates remain near all-time lows, bankruptcy professionals are
anticipating that filings will increase in 2007, the
face='Times New Roman' size='3'>Chicago Tribune
size='3'>reported on Sunday. 'My experience over the last 20 years is
that what goes up, must come down,' said
size='3'>Jeff Marwil, a
w:st='on'>
size='3'>Chicago
with Winston & Strawn. The credit markets that Marwil and his peers
closely watch are enjoying one of the biggest expansions in recent
history. Companies are borrowing cheaply, as banks and investors such as
hedge funds are eager to lend. That has resulted in a flurry of
debt-driven corporate mergers, spinoffs and buyouts. It also means that
struggling companies were more able to refinance their debt and delay
fixing operational problems, which many analysts predict will soon come
to an end.
href='http://www.chicagotribune.com/business/chi-0702170269feb18,0,586082.story?track=rss'>Read
more.
name='3'>Perseus to Take Over Publishers’
Contracts
A bankruptcy court in
Delaware ruled yesterday that the Perseus Books Group could take over
distribution contracts for more than 100 book publishers left affected
by the bankruptcy filing of Advanced Marketing Services, the
New York Times
size='3'>reported on Saturday. Perseus successfully fended off a
challenge from National Book Network, which was also vying for the
distribution contracts of Advanced Marketing Services, a
size='3'>San Diego
that filed for bankruptcy protection on Dec. 29, reporting more than
$200 million in debt to dozens of publishers. Advanced Marketing
Services distributes books to price clubs including Sam’s Club and
Costco; a subsidiary, Publishers Group West, distributes books for
smaller publishers, including Grove-Atlantic and Avalon.
href='http://www.nytimes.com/2007/02/17/business/media/17book.html?pagewanted=print'>Read
more.
name='4'>Bankruptcy Judge Approves Air
w:st='on'>
size='3'>America Radio
w:st='on'>Sale
A
size='3'>U.S.
judge on Friday approved the sale of liberal talk-radio network
Air
size='3'>America
investment group led by
w:st='on'>New
York
Stephen L. Green for $4.28 million, Reuters reported on Friday. Without
the sale's immediate approval or a further extension of its borrowing
authority, the radio network would have been forced off the air, its
lawyers warned. Under the purchase plan approved by Judge
Robert Drain
size='3'>, Green-controlled investment entity Green Family Media LLC
would repay the $3.25 million Air
w:st='on'>
size='3'>America
since October, provide $500,000 in cash and repay $526,000 owed on the
network's lease of its corporate headquarters in
w:st='on'>
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/02/16/AR2007021600985_pf.html'>Read
more.
Real Estate
name='5'>Commentary: Housing Downturn Threatening the
Economy
A potential credit crunch
precipitated by the housing downturn and rising default rates is
threatening the current economic expansion that began in 2003, according
to an editorial Saturday in the
size='3'>Wall Street Journal. As Federal
Reserve Chairman Ben Bernanke noted in his Senate testimony this week,
the economic damage from the real estate slide has so far been contained
to housing. But in addition to the pain that homebuilders have
experienced, banks and mortgage brokers are increasingly feeling the
pinch, especially in the subprime sector. The delinquency rate on
subprime mortgages, now above 10 percent, is near record levels. Banks
that bought up those loans for securitization are now demanding to be
repaid, meaning that smaller institutions who thought they'd sold off
their exposure are finding themselves on the hook, in some cases forcing
href='http://online.wsj.com/article/SB117168292816312064.html?mod=opinion_main_review_and_outlooks'>Read
more. (Registration required.)
name='6'>Sharp Drop in Housing Starts Adds to Fear of Wider
Economic Impact
A sharp drop-off in new
home construction is adding to concerns that the housing downturn's
impact could linger well into this year and eventually seep into the
wider economy, the Wall
Street Journal reported on Saturday. Builders
slashed construction of new homes last month to the lowest level in
nearly a decade, a move that underscores the severity of the sector's
slump and signals it will likely continue to be a drag on the economy at
least through mid-year. New homebuilding activity was down 14.3 percent
in January from December and 37.8 percent from January 2006
levels.
href='http://online.wsj.com/article/SB117163237243411149.html?mod=hpp_us_pageone'>Read
more. (Registration required.)
OKs SeraCare Chapter 11 Plan
Bankruptcy Judge
Louise DeCarl Adler
signed off on SeraCare Life Sciences Inc.'s chapter 11
plan, which will allow the biotech company to pay off all of its
creditors in full and exit bankruptcy protection under the ownership of
its existing shareholders, the Associated Press reported on Friday. The
U.S. Bankruptcy Court in
w:st='on'>San
Diego
the company's reorganization plan, which includes a $20.2 million rights
offering. Under the chapter 11 plan, SeraCare will pay in full all of
its debt, including settlements with the government and with
shareholders stemming from securities-fraud claims.
href='http://www.chron.com/disp/story.mpl/ap/fn/4559518.html'>Read
more.
Approves New Interstate Bakeries CEO
Interstate Bakeries Corp.
received permission Friday to name a new chief executive, two months
after the board of directors’ opponents insisted that a change in
leadership would allow the bakery giant to finally exit bankruptcy
protection, Bankruptcy
Law360 reported on Friday. Craig Jung will
succeed Tony Alvarez II, who has been the company's CEO since September
2004. In addition, the bankruptcy court judge approved the
company’s motion to extend its post-petition debtor-in-possession
financing facility to Feb. 9, 2008, from June 2.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=18827'>Read
more. (Registration required.)
name='9'>Allied Seeks Sixth Extension to File Plan
Allied Holdings Inc. has
asked a
face='Times New Roman'
size='3'>Georgia
size='3'>bankruptcy court for a 60-day extension to file and seek
support for its reorganization plan,
size='3'>Bankruptcy Law360 reported on
Friday.If
approved by Bankruptcy Judge
size='3'>C. Ray Mullins, the company’s
exclusive right to file a restructuring plan would be extended through
April 25, and its exclusive rights to lobby for plan support will be
extended through June 21. This will be Allied’s sixth extension
request since filing for chapter 11 protection in July 2005. The
bankrupt auto transporter pointed to the complexity of its
bankruptcy case, including complicated labor issues, as justification
for the extension requested.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=18754'>Read
mo re. (Registration required.)
name='10'>Restaurant Chain Files for Chapter 11
Specialty Restaurant
Group, the company that owns Silver Spoon Café and L&N Seafood
Grill, has filed for chapter 11 protection and owes millions to
creditors across the
face='Times New Roman' size='3'>United
States
w:st='on'>
size='3'>Knoxville
size='3'>(
face='Times New Roman'
size='3'>Tenn.
Sentinel reported today. SRG's debts include a
$11.2 million bank loan, a $2.5 million debt to the Internal Revenue
Service and $700,725 to Ruby Tuesday. In its filing, SRG lists assets of
between $10 million and $50 million and a similar range of
debts.
href='http://www.knoxnews.com/kns/business/article/0,1406,KNS_376_5364039,00.html'>Read
more .
West Virginia Gas Utility Files for
Bankruptcy
Though the state West
Virginia Public Service Commission convinced Clay County Circuit Judge
Richard Facemire to take away control of Valley, Beechy and Wagner gas
companies from
face='Times New Roman'
size='3'>Pennsylvania
size='3'>businessman John Habjan, Valley Gas filed for bankruptcy to
derail the shift in ownership, the Associated Press reported on
Friday. Facemire had appointed
Charleston-based Mountaineer Gas to manage the utilities' finances and
operations, but permission to assume control must now be granted by the
bankruptcy court. While the PSC plans to seek that permission as soon as
possible, Mountaineer doesn't plan to take over Beechy or Wagner unless
it gets control of Valley as well, operations director Danny Chandler
said. 'We have to wait until we get approval to be the receiver for all
three because of the way the companies are intertwined.'
href='http://biz.yahoo.com/ap/070216/gas_problems_bankruptcy.html?.v=1'>Read
more.
name='12'>Daimler Prepares to Sell or
Spin Off Chrysler
DaimlerChrysler AG is
moving forward with preparations to sell or spin off the Chrysler Group,
raising the prospect that it could auction off the embattled
size='3'>U.S.
size='3'>unit in the coming months, the
size='3'>Wall Street Journal reported today.
The company said it has already received several expressions of
interest from around the world for Chrysler since saying last week that
it was considering 'all options' to turn around the unprofitable
operation. DaimlerChrysler has also said it is interested in using
alliances and partnerships to help Chrysler cut costs and expand sales
in fast-growing international markets. It is already talking to General
Motors Corp. about joining forces to develop a large sports-utility
vehicle.
href='http://online.wsj.com/article/SB117182196717512572.html?mod=home_whats_news_us'>Read
more. (Registration required.)
name='13'>Commentary:
w:st='on'>
size='3'>Florida
Disaster Insurance Gamble
Florida legislators voted
last month in an emergency session to lower insurance rates, primarily
in South Florida, by pledging tens of billions in public money to
affected homeowners if a major hurricane or two strikes again, according
to a Washington
Post commentary today. Since neither the
state's catastrophe fund nor the state-chartered insurance company has
anywhere near enough money on hand to pay the claims they may now be
required to pay after a major hurricane, the measure is considered a
gamble, even by proponents. Though last year's hurricane season was
mild, insurance markets across the Southeast have been roiled by the
aftermath of the disastrous seasons of 2004 and 2005. Several insurers
have pulled out of storm-prone regions; state legislators in
size='3'>Louisiana
size='3'>Mississippi
sought ways to hold premiums down without driving away any more
companies.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/02/19/AR2007021900859.html'>Read
more.
name='14'>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.
To begin receiving the COMPLETE
Daily e-Summary, that emails you information on over 70 such companies
each morning, email
face='Times New Roman' color='#0000ff'
size='3'>steve@creditnews.com
size='3'>your name, company name, address, phone and fax.
We’ll set you up within 24 hours.
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Blair Corp., a
w:st='on'>
size='3'>Warren
face='Times New Roman'
size='3'>Pa.
clothes and home products, reported its fourth quarter net income sank
75%--to $5.9 million. Revenue declined 8%--to $119 million. For the
year, its net income tumbled 99%--to $220,000, on a nearly 7% revenue
decline--to $426 million.
size='3'>Ford Motor Co., Dearborn, Mi., is
falling short of some of its Way Forward restructuring targets,
according to an internal report. The auto manufacturer said that
it missed retail sales goals in January by more than 10,000 vehicles and
that it will likely miss its marketshare goals for both February and
March. While the carmaker did succeed in reducing material costs by a
targeted $400 million in January, it will miss targets established for
February and March.
size='3'>SanDisk Corp., a
w:st='on'>
size='3'>Milpitas
maker of flash storage card products, announced it will reduce its
payroll by 10%, amid weakened demand because of a glut of its products
on the market. The manufacturer, which will lower its prices in
the first quarter, is also cutting its CEO's salary by a fifth and
freezing salaries for other employees. SanDisk, which will incur
restructuring charges of between $15 million and $20 million, hopes that
its cutbacks will save it up to $35 million a year.
size='3'>SMF Energy Corp.,
w:st='on'>
size='3'>Fort Lauderdale
Fl., reported a second quarter net loss of $1.9 million. Revenue
declined 17%--to $55.2 million.
size='3'>Visteon Corp., the Dearborn, Mi.
automotive supplier, reported a fourth quarter net loss of $39
million. Not including interest, taxes and restructuring costs,
the firm's operating loss for the quarter was $37 million, a significant
improvement over its $119 million loss in the year-earlier fourth
quarter and better than had been expected by analysts, causing investors
to push up its stock price 7% on the news. Revenue for the quarter
slipped nearly 1%--to $2.8 billion. Due partly to lowered production by
its former parent company, Ford Motor Co., Visteon said it will break
even at best in 2007. For the year, it lost $163 million on a 33%
revenue decline--to $11.4 billion. The quarter and year included
restructuring and impairment charges of $60 million and $117 million
respectively.