December 262006

 

size='3'>Judicial Council Criticizes LA Federal Judge for Intervening in

Bankruptcy Case

The judicial council of the
U.S. Ninth Circuit Court of Appeals in San Francisco last month ordered
U.S. District Judge Manuel Real be publicly reprimanded for his
intervention in a bankruptcy case, the Associated Press reported
Saturday. Real appealed the decision on Dec. 15. Real, who has served on

the federal bench in Los Angeles since 1966, allegedly seized control of

a bankruptcy case involving a defendant he knew, then allowed her to
live rent-free in a house she'd been ordered to vacate. The move cost
her creditors $35,000 in rent and thousands more in legal costs,
according to court documents. Real denied giving the defendant any
special treatment, and said he only interceded in the bankruptcy case
because he discovered that a pre-sentencing report from the criminal
case, which only he was allowed to release, had improperly been filed in

the bankruptcy court.

href='http://www.mercurynews.com/mld/mercurynews/news/breaking_news/16308222.htm'>Read

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Judge

Postpones Delphi Hearing after New Plan

Bankruptcy Judge Robert
Drain postponed a key hearing in the Delphi Corp. bankruptcy
case to Jan. 11 from Jan. 5, allowing more time for critics to compose
arguments against the auto-parts supplier's proposed $3.4 billion
bankruptcy-emergence equity deal with a group of investors led by
Appaloosa Management, according to the Wall Street Journal today.

The bankruptcy court must approve the deal by Jan. 22, or it can be
nullified by the Appaloosa group, according to a letter the hedge fund's

team sent to Delphi last week. Judge Drain changed the hearing date
following an alternative $4.7 billion funding plan proposed Thursday by
hedge fund Highland Capital, which says it owns about 8.8 percent of
Delphi's stock and has positioned itself as a rival to Appaloosa in the
battle to shape Delphi's future. GM, which spun off Delphi in 1999,
stands to hold about a 5 percent equity stake in the new Delphi under
Appaloosa's proposal.

In related news, last week's
deal with a consortium of outside investors was hailed in the media and
on Wall Street as the beginning of the last chapter in the Delphi
bankruptcy, The Oakland Press reported Sunday. However, the deal, which
will give the group 70 percent of the new Delphi stock, is contingent on

an agreement with the United Auto Workers. UAW President Ron
Gettelfinger issued a statement last week indicating that he wasn't
prepared to sign the agreement yet.

href='http://www.theoaklandpress.com/stories/122406/bus_2006122427.shtml'>Read

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Home
Products Wins Bankruptcy Court Approval for $60M Loan

Housewares maker Home Products
International Inc. has taken its first step toward court approval of its

debt-for-equity deal with its bondholders, winning interim court
approval of its $60 million bankruptcy loan to fund its business during
its chapter 11 case, the Associated Press reported Friday. Judge
Christopher S. Sontchi of the U.S. Bankruptcy Court in
Wilmington, Del., signed off on Home Products' debtor-in-possession loan

Thursday. Home Products filed for bankruptcy Wednesday, about one month
after the company missed a $5.6 million interest payment to bondholders.

The bulk of new loan is earmarked for senior lender Bank of America,
which is owed about $40 million on an earlier loan it made to the
company. The judge also signed off on Home Products' bid to pay trade
creditors' pre-bankruptcy claims rather than wait for confirmation of
the plan. Final hearings in the matter have been scheduled for Jan. 11.
Home Products, which makes household storage products under the 'Homz'
brand, blamed much of its financial problems were caused by rising raw
materials prices, particularly for plastic resin. The company listed
assets of $172.2 million and debts of $217.4 million in its bankruptcy
filing.

href='http://www.examiner.com/a-471579~Home_Products_wins_bankruptcy_court_OK_for__60M_loan.html'>Read

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Airlines

name='4'>Northwest, Mesaba Explore Merger

Officials at Northwest Airlines

Corp. are in talks to acquire Mesaba Airlines, a regional carrier that
operates exclusively for Northwest but is currently a separate company,
the Associated Press reported Friday. While talks are still preliminary,

a deal could establish continuity for regional travelers, create jobs
and give more financial security to Mesaba, which followed Northwest
into bankruptcy protection in October 2005. Northwest spokesman Bill
Mellon said if the transaction is completed, Mesaba would become a
wholly owned subsidiary of Northwest. Mesaba, which has served La
Crosse, Wis., is owned by MAIR Holdings Inc. of Minneapolis, which did
not file for bankruptcy protection when Mesaba entered chapter 11.
Mesaba and Northwest said in statements that they want to 'conclude a
more definitive agreement' with each other.

href='http://online.wsj.com/article/SB116672470001956886-email.html'>Read

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US

Air Dismisses Delta's Post-Bankruptcy Forecast

Delta Air Lines' projection
that it will be worth as much as $12 billion when it emerges from
bankruptcy is 'unrealistic,' US Airways Chief Executive Doug Parker said

Thursday as his company pushed ahead with its hostile bid to buy Delta,
the Pioneer Press (Minn.) reported Friday. Parker said his
company's analysis of Delta's stand-alone plan values Delta at $5.5
billion to $6.9 billion. He also said that while US Airways generally
agrees with Delta's profit projections for 2007, his company believes
Delta's projections beyond that are too rosy. Parker also said that his
Tempe, Ariz.-based company strongly believes that its $8.3 billion offer

to buy Atlanta-based Delta will pass regulatory scrutiny.

name='6'>Comair Gets OK to Impose Pilot Wage Cuts

A federal bankruptcy judge
ruled Thursday that Delta Air Lines subsidiary Comair can impose wage
cuts and changes in work rules for the regional airline's 1,500 pilots,
the final holdouts in the airline's plan to trim labor costs as part of
its restructuring, the Pioneer Press (Minn.) reported
Friday. Pilots have threatened to strike if concessions are imposed on
them. U.S. Bankruptcy Court Judge Adlai Hardin gave Comair
permission to throw out its contract with the pilots. Comair has been
seeking concessions of $15.8 million a year as part of its restructuring

plan to save $70 million annually. Comair's plan also includes
concessions from its flight attendants and mechanics. Comair, like its
Atlanta-based parent, filed for Chapter 11 bankruptcy in September
2005.

name='7'>  Judge Delays Adelphia Decision

The federal judge overseeing
Adelphia Communications' chapter 11 bankruptcy proceedings said a
decision in the case may not be issued before Dec. 31, according to a
Broadcast Newsroom newswire report Friday. Judge Robert J. Gerber

of the U.S. Bankruptcy Court for the Southern District of New York
requested that the settlement parties inform him of whether they will
execute a waiver of the deadline for the effective date contained in the

reorganization plan. On July 31, substantially all the assets of
Adelphia were sold to Time Warner Cable and Comcast.

size='3'>  Geneva Steel Trustee Settles with

Ex-CEO

Geneva Steel's bankruptcy
court-appointed trustee James T. Markus has agreed to settle

his dispute with the steel mill's former chief executive Ken Johnsen,
The Salt Lake Tribune reported Thursday. Markus had filed a
motion with the U.S. Bankruptcy Court for Utah seeking permission to pay

Johnsen $930,000 to settle the former manager's claims against Geneva
Steel and its assets. Markus and Johnsen have been at odds since last
year when the trustee filed a complaint in the U.S. Bankruptcy Court
accusing the company's former chief executive officer of putting his
personal financial interests above those of the now defunct steel mill.
Markus also agreed to settle claims brought in a separate action against

Geneva's board for what were allegedly 'wrongful acts and omissions' by
directors. Geneva filed for chapter 11 in 1999, only to emerge from that

filing to again seek a bankruptcy court reorganization two years later.
Johnsen, who joined Geneva in 1991 as manager of special projects, was
named president and chief executive in April 2001, just eight months
before the company shut down its operations amid a flood of low-cost
imported foreign steel.
href='http://www.sltrib.com/business/ci_4883775'>Read
more.

size='3'>  Bankruptcy Trustee Reaches
Settlement with Former Law Firm Partners

Bankruptcy Trustee Marc P.
Gertz and more than 70 former partners, law firms and insurers of the
former Cleveland-based law firm of Arter & Hadden have reached a
settlement of claims made in a 16-count complaint that was filed by the
trustee in the U.S. Bankruptcy Court for the Northern District of Ohio
against the partners and their new law firms, according to a newswire
report today. The settlement, which still requires approval by the
bankruptcy court, calls for the defendants and their insurers to pay
$9.25 million to the trustee; the defendants deny any wrongdoing. Arter
& Hadden closed its doors on July 15, 2003, owing millions of
dollars in pension obligations and other debts to creditors. Gertz was
appointed as chapter 7 trustee in January 2004 and conducted an 18-month

investigation into the cause of the firm's demise. The investigation by
Gertz, his attorneys and forensic and information technology experts led

to the filing of the complaint, which alleged improper year-end
compensation distributions to the partners and other misconduct.

href='http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=%2Fwww%2Fstory%2F12-26-2006%2F0004496712&EDATE='>Read

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size='3'>  Dana Seeks Bankruptcy Court
Approval to Move Business from Sypris

Unable to get an important
supplier to cut prices, Dana Corp. is seeking bankruptcy court approval
to divert its business to other suppliers that can provide at a better
price the components it needs to make auto parts, the Associated Press
reported Friday. Dana, based in Toledo, Ohio, buys components for nearly

$200 million from Sypris Technologies Inc. every year, making Sypris the

company's largest supplier. In court documents Thursday, Dana said the
pricing for those components, which are supplied under long-term
contracts, is above what it could get elsewhere. A hearing on the
company's request is scheduled for Jan. 10.

size='3'>  Air America Still Flying in
Wisconsin

The troubled Air America
network received a modest vote of confidence last week when a Madison,
Wis., radio station decided to keep it on the air, The New York
Times reported Monday. WXXM-FM in Madison rescinded its
decision to drop Air America in favor of a sports format and continue to

carry the liberal-bent talk network for another year. The decision came
after a petition drive launched by an area student after WXXM's initial
decision to ground Air America. The network, which was launched as an
alternative to the ubiquitous conservative-talk format, is in bankruptcy

and seeking a buyer. Supporters say they are confident Air America will
get over the rough period and settle into a more stable
situation.

size='3'>  Wisconsin Magazine Print Shop
Closes

The closure of a printing
company that printed magazines, including TV Guide, and direct-mail
pieces has left 380 people without a job in Mazomanie, a town of 1,400
northwest of Madison, the Associated Press reported Monday. Sunny
Industries permanently closed its printing presses on Friday, leaving
the Dane County community without one of its largest employers.
President Mike Spitz said then that he hoped to keep the company going
by finding new investors, and that he has one month to do so, but that
it appears unlikely. The company filed for receivership earlier this
year after months of financial problems. Two companies, CIT
Group/Equipment Financing of Tempe, Ariz., and General Electric Capital
Corp., of Stamford, Conn., filed separate suits against it last summer,
claiming it owes them more than $7 million on printing equipment and
related costs.

International

  Air Madrid Files for
Bankruptcy

SpainÕs Air Madrid has
filed for bankruptcy, stranding thousands of passengers over the
weekend, EuroNews.net reported Friday. IATA, the airline industry trade
association, is due to meet with Air Madrid to work out repayments of
13.5 million euros from ticket sales in November and December. It is
estimated that the airline's debts could amount to 39 million euros.
Analysts were skeptical about a plan by Air Madrid's workers to try to
get the financing necessary to relaunch it.

  Slovak Air Carrier Near
Bankruptcy

Slovakia's small national air
carrier is near bankruptcy due to the reluctance of the country's
government to cover the company's debts to its Austrian owner, the
Associated Press reported Friday. Slovenske Aerolinie's operations will
be halted by the end of the year if the government fails to pay a 171
million-crown (US$6.3 million) debt to Austrian Airlines, the company's
majority owner, Transport Minister Lubomir Vazny said in a statement.
Austrian Airlines saved Slovenske Aerolinie from bankruptcy in 2004. In
a ministry statement, Vazny said that the Cabinet of the Prime Minister
Robert Fico has postponed the decision about the air carrier's debts
until mid-January. Slovenske Aerolinie operates only two aircraft and
flies to Brussels and Moscow.

  Pricewaterhouse Faces
Claim in Yukos Case

Russian tax authorities filed a

suit against the local branch of PricewaterhouseCoopers, accusing it of
producing a false audit for fallen oil company OAO Yukos, Reuters
reported Monday. PwC said yesterday that the firm acted strictly in line

with the Russia's legislation and was ready to defend its position in
court. The report in question dated from 2002, before the demise of
Yukos, once Russia's largest and most profitable oil company. Yukos was
hit with billions of dollars of tax-evasion claims in 2003, but many
analysts linked the company's fall to Kremlin forces exacting punishment

for the political ambitions of its key owners, now serving prison terms
in Siberia. YukosÕ remaining assets are due to be auctioned off in
2007 to cover its back-tax debts.

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  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 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
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ASAT Holdings
Ltd., a Hong Kong, China manufacturer of semiconductor
housings, reported a second quarter net loss of $8.3 million. Revenue
declined 4%--to $41 million.

Belden, a maker of
signal-transmission products, will cease production at its facilities in

both Wheeling, Il. and Point-Claire, Quebec by the middle of 2007. The
shutdowns, part of a worldwide effort to reduce production, will affect
325 employees and result in severance charges of between $10 million and

$12 million and pretax noncash asset-impairment charges of between $3
million and $5 million, to be taken in the fourth quarter.

Comarco Inc., an
Irvine, Ca. provider of wireless network monitoring products, reported a

third quarter net loss of $650,000, including an operating loss of
$650,000. Revenue declined 16%--to $11.4 million.

Delphax Technologies
Inc., a Bloomington, Mn. provider of digital print production
systems, reported a fourth quarter net loss of $5.7 million. Revenue
declined 7%--to $11.8 million. For the year, it lost $9.6 million on a
nearly 6% revenue decline--to $48.7 million. The quarter and year
included restructuring charges of $2.1 million and $2.5 million
respectively.

DiVosta Building
Corp., which has been buffeted by the downturn in the housing
sector, plans to cut the payroll at its headquarters operations in Palm
Beach Gardens, Fl. by more than 200 workers. That follows 135 job cuts
announced at its unit in Sarasota, Fl. in November.

Shiloh Industries
Inc., a Valley City, Oh. manufacturer of steel blanks and
related products, reported a fourth quarter net loss of $6 million.
Revenue declined 11%--to $158 million. For the year, its net income
tumbled 73%--to $7.1 million, while fiscal revenue slipped 2%--to $620
million. Both the quarterly and fiscal results included $7.1 million in
extra charges related to restructuring, asset impairment and a
settlement.

Stepan Co., a
Northfield, Il. supplier of chemicals, warned that it will incur a
fourth quarter loss of between $5 million and $6 million as a result of
severance costs at its European operations and the delayed effects of
increased prices for raw materials. In last year's fourth quarter,
Stepan lost $500,000.

TeamStaff Inc., an
Atlanta, Ga. medical staffing company, reported a fourth quarter net
loss of $17.2 million, including an operating loss of $17.1 million.
Revenue declined 8%--to $18.3 million. For the year, it lost $13.2
million, including an operating loss of $18.2 million. Fiscal revenue
increased 46%--to $75 million.

For more information on
companies throughout the U.S. that are facing the challenge of today's
competitive marketplace, e-mail
href='mailto:steve@creditnews.com'>steve@creditnews.com or call

800-407-9044.