href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='/AM/Images/headlines/headline.gif'>
September 6,
2006
size='3'>Autos
name='1'>Dana’s Executive Bonus Plan Ruled
Illegal
Bankruptcy Judge
Burton R. Lifland ruled yesterday that Dana
Corp.’s plan to pay millions of
dollars in retention bonuses to top company officials violates the new
bankruptcy law and cannot go forward, the New York Times reported today.
The plan had drawn objections from Dana’s creditors, shareholders
and unions, as well as the U.S. Trustee . The
company argued that the pay was needed, saying it feared that important
executives would be lured away because Dana was paying them well below
the market value for their services. Dana contended that the proposed
pay plan was not an illegal retention plan because it also set
performance targets. Until Judge Lifland’s ruling, no bankruptcy
judge had struck down a proposed pay plan for executives on the ground
that it violated the new provision, which bars retention payments for a
corporate insider unless the executive has another job offer.
href='http://www.nytimes.com/2006/09/06/business/06dana.html?_r=1&ref=busines…'>Read
more.
name='2'>Ford Brings in Outsider to Help Run the
Company
William Clay Ford Jr.
took the unusual step on Tuesday of hiring an executive with no auto
industry experience to help run Ford Motor Company, the
face='Times New Roman' size='3'>New York Times
size='3'>reported today. While Ford will remain chairman of the company,
he gave up the titles of chief executive and president to Alan R.
Mulally, a top executive of Boeing. Ford said he planned to remain the
public face of the company, but gives Mulally the responsibility of
solving Ford’s many problems, including falling sales, slumping
profits and the loss of market share to its Asian rivals. The company
has already begun closing 14 plants and cutting 30,000 jobs under a
turnaround plan called the Way Forward. Even so, Ford executives are
preparing an expanded blueprint of the restructuring program, set to be
unveiled later this month, which may call for more job cuts, plant
closings and reductions in spending.
href='http://www.nytimes.com/2006/09/06/business/06ford.html?ei=5094&en=dad52…'>Read
more.
Delta
Gets Court Approval to End Pilot Pension Plan
A
w:st='on'>
size='3'>U.S.
size='3'>bankruptcy court on Tuesday allowed Delta Air Lines Inc. to
terminate its pilots' defined benefit pension plan, clearing a major
hurdle in its restructuring plans, Reuters reported yesterday. The
airline must now seek the approval of the Pension Benefit Guaranty Corp.
(PBGC) to end the plan that covers more than 13,000 active and retired
Delta pilots and their beneficiaries. Delta said no timetable had been
set for getting PBGC’s approval, but said it wants to end the plan
effective Sept. 2. Atlanta-based Delta, which has been operating under
bankruptcy protection since last September, had argued that continuing
the plan would jeopardize its ability to emerge from chapter 11.
href='http://www.nytimes.com/reuters/business/business-airlines-delta.html?pa…'>Read
more.
name='4'>Bankruptcy Filings Increase Once Again in
size='3'>
City
While congressional reforms
helped bankruptcy filings plunge to the lowest levels in 20 years during
the first half of 2006, reports from Kansas City, Mo.-area experts show
that the bankruptcy numbers there are steadily increasing, the Kansas
City Star reported today. “What I’m
seeing is a slow trend upward to pre-reform levels,” said U.S.
Bankruptcy Judge Robert
Berger in
w:st='on'>
size='3'>Kansas City
w:st='on'>
size='3'>Kan.
Berger acknowledged the bankruptcy-reform law made it harder and
costlier to file, “what hasn’t changed is that there are
still a lot of people with financial stresses in their lives.”
Experts say if you took the 8,000 cases filed in
w:st='on'>
size='3'>Kansas City
the first two weeks of October 2005 and spread them over the first six
months of 2006, the monthly average would amount to nearly 1,500 filings
— consistent with the monthly averages over the last five years.
'For us it was almost six months of filing in that first two-week period
in October,” recalled John Cisternino, chief deputy clerk of the
Bankruptcy Court in
w:st='on'>Kansas
City
href='http://www.kansascity.com/mld/kansascity/business/15446916.htm?source=r…'>Read
more.
name='5'>Silicon Graphics Asks Court to Approve Exit
Financing
High-end computer
manufacturer Silicon Graphics Inc. said it hopes to win court approval
to borrow $115 million from two lenders for its exit financing,
Portfolio Media
reported yesterday. In court documents filed Friday in
the U.S. District Court for the Southern District
of
size='3'>, Silicon Graphics said that General Electric
size='3'>Capital Corp. is willing to lend it up to $30 million in a
senior secured revolving credit facility. Morgan Stanley Senior Funding
Inc. has offered $85 million under a senior secured term loan facility.
The hearing on confirmation of the company’s reorganization plan
is set for Sept. 19, the same day the company plans to request approval
for its exit financing. The case is Silicon Graphics
Inc., case number 06-10977, in the U.S.
District Court for the Southern District of New York.
IRS,
Trustee Object to Owens Corning's Chapter 11 Plan
Owens Corning’s chapter
11 plan has received a number of objections in recent days, as a Sept.
18 confirmation hearing on the bankrupt fiberglass maker’s plan
approaches, Portfolio Media reported yesterday. In the past
week, at least 15 objections have been filed regarding Owens
Corning’s proposed restructuring plan, by parties including the
Internal Revenue Service, the U.S. Department of Labor and the U.S.
Trustee overseeing the company’s chapter 11 proceedings. The
DOL’s objection is based on the “overly broad release
language” contained in the proposed plan, which the DOL contends
could allow third-party nondebtors to shirk their fiduciary duties
mandated by the Employee Retirement Income Security Act of 1974 (ERISA).
The IRS, which maintains a $17.6 million secured tax claim, also filed
an objection to the proposed plan’s confirmation.
face='Times New Roman'>The case is
face='Times New Roman' size='3'>In re Owens Corning, et
al., case number 00-03837, in the U.S.
Bankruptcy Court for the District of Delaware.
Court
Approves Three-Five Bankruptcy Plan
Three-Five Systems Inc.
has received approval for its chapter 11 reorganization plan, the
Phoenix Business
Journal reported today.
size='3'>The U.S. Bankruptcy Court for the District of Arizona also
approved a settlement between Three-Five, its subsidiary TFS Electronic
Manufacturing Systems Inc., unsecured creditors and
w:st='on'>EMS
landlord CGSNW-Willows LLC. The company filed for
bankruptcy protection in 2005 and continues to wind down operations. The
effective date of the reorganization plan is expected to be Sept.
11.
href='http://phoenix.bizjournals.com/phoenix/stories/2006/09/04/daily11.html?…'>Read
more.
name='8'>Supreme Court Appeal Expected in IBM Pension
Case
Plaintiffs expect to
appeal to the U.S. Supreme Court a high-profile case that had exonerated
International Business Machine Corp.'s (IBM) cash-balance pension plan,
MarketWatch.com. A federal appeals court in
w:st='on'>
size='3'>Chicago
reconsider the case on Sept. 1. Three of the appellate court judges had
ruled earlier in August that the IBM plan does not discriminate against
older workers. In its decision, the Seventh Circuit Court of Appeals
in
size='3'>Chicago
lower court decision that said IBM's cash-balance pension discriminated
against older workers. The case has been closely watched because a
number of companies had been concerned about the legality of their
plans. As of 2003, about 1,200 companies in the
w:st='on'>
size='3'>U.S.
size='3'>offered hybrid pensions covering about seven million
workers.
href='http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid…'>Read
more.
Judge
Orders All Lawsuits Against Rap Music Producer to be Filed by
October
A
w:st='on'>Los
Angeles
ordered that all claims against
w:st='on'>
size='3'>Marion
Knight must be filed with the bankruptcy court by Oct. 31, SOHH.com
reported yesterday. Knight and his record label, Death Row Records,
filed for chapter 11 this past April. Death Row is presently being run
by a court-appointed trustee, while Knight is managing the company as a
debtor-in-possession.
href='http://www.sohh.com/articles/article.php/9731'>Read
more.
International
name='10'>Lawsuits May Unravel BAWAG-Refco
Settlement
A spate of
size='3'>U.S.
size='3'>lawsuits over Bank Für Arbeit und Wirtschaft AG’s
(BAWAG) entanglement with Refco Inc.’s bankruptcy may end up
threatening the sale of the Austrian bank, Portfolio Media reported
yesterday. VR Global Partners, a Russian hedge fund group, has lodged a
complaint in opposition to the out-of-court settlement BAWAG made with
Refco creditors to resolve its alleged involvement that led to
Refco’s bankruptcy filing last October. BAWAG maintained that the
complaint was not likely to affect the court settlement, which was
approved by the court in June. On top of VR Global’s complaint,
two
face='Times New Roman'
size='3'>U.S.
size='3'>investors have disclosed that they plan to file lawsuits
against BAWAG in connection to its role in Refco’s collapse,
according to the Austrian daily
size='3'>Wirtschaftsblatt.