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June 21, 2006
USG Corp., the maker of
Sheetrock-brand wallboard, emerged from chapter 11 bankruptcy yesterday
and deposited $900 million in an asbestos litigation trust as its plan
of reorganization took effect, the Associated Press reported yesterday.
The U.S. Bankruptcy Court and U.S. District Court for
w:st='on'>
size='3'>Delaware
the plan last week, making way for the building materials company to
exit roughly five years of bankruptcy due to asbestos litigation. USG
said that it is beginning to repay creditors and fund an asbestos trust
that will compensate personal injury claimants. The company may deposit
up to $3.05 billion in the fund if Congress doesn't pass legislation
that would create a federal fund for personal injury claims related to
asbestos.
href='http://biz.yahoo.com/ap/060620/usg_bankruptcy_exit.html?.v=1&printer=1'>Read
more.
Airlines
name='2'>Northwest Seeks Extension to File Reorganization
Plan
Northwest Airlines Corp.
asked a
face='Times New Roman'
size='3'>U.S.
size='3'>bankruptcy court for an extension of about six months to
exclusively file a reorganization plan and seek approvals for it,
Reuters reported yesterday. Northwest asked a judge to extend until Jan.
15, 2007, the time it has to exclusively file a restructuring plan as
well as push back the deadline for soliciting acceptances for the plan
to March 16, 2007, according to court documents filed on Monday.
Competing plans cannot be filed during the exclusive periods, which are
currently scheduled to expire on July 13 and September 12, respectively.
The airline, which has been restructuring its operations under
bankruptcy protection from creditors since last September, is looking
for total annual savings of $2.5 billion before it emerges from
bankruptcy.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/06/20/AR20060…'>Read
more.
name='3'>FractionAir on the Brink of Bankruptcy
FractionAir Inc., a
Nashville, Tenn.-based company that sells fractional ownership in
corporate jets, is on the brink of filing for chapter 7 bankruptcy,
the Nashville
Post reported today. FractionAir's
size='3'>Philadelphia
size='3'>bankruptcy attorney,
size='3'>Robert Kargen, told owners, investors
and creditors that the company owes $19.5 million to unsecured and
secured creditors and has no assets. Of the $19.5 million, $14 million
is unsecured debt. Company representatives outlined a plan for owners to
get back at least some of their money, 22 cents on the dollar, meeting
participants said. But to get that, creditors must wait until late
summer of next year while the company tries to raise $15
million.
href='http://www.nashvillepost.com/news/2006/6/20/fractionair_on_brink_of_ban…'>Read
more.
Autos
name='4'>Court Deals Setback to Icahn’s Role in Dana
Bankruptcy
A bankruptcy judge
postponed by more than a month a hearing on rules for trading in the
stock and debt of
face='Times New Roman'
size='3'>Toledo
Corp., dealing a setback to billionaire Carl Icahn's bid to gain more
influence over the auto-parts maker's bankruptcy reorganization,
the Toledo
Blade reported today. Judge
face='Times New Roman' size='3'>Burton R. Lifland
size='3'>of the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Manhattan
size='3'>postponed the hearing until Aug. 9, ruling that a delay would
be in the best interests of Dana investors, creditors and shareholders.
The postponement was the second for the hearing, which had been set for
June 28. Meanwhile, the court approved Dana's plan to dissolve its
Mexican joint venture and assume full ownership of five axle and
driveshaft factories, giving the bankrupt firm more low-cost
manufacturing in
size='3'>North America
its operating margins.
href='http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20060621/BUSINESS…'>Read
more.
name='5'>Ratings Cut on GM Debt in Response to Loan
Plan
Two major rating agencies
cut the debt rating of General Motors further into junk status on
Tuesday after the company announced a plan to improve its liquidity by
refinancing $5.6 billion in loans, the
size='3'>New York Times reported today. GM,
which plans to eliminate 30,000 jobs and close 12 factories as part of
an extensive overhaul, said that it would offer banks collateral and
more favorable terms to extend its credit package through 2011. The
company's existing loans are scheduled to mature in 2008. Although the
proposal would remove uncertainty about GM's ability to obtain capital
during the overhaul, analysts said that unsecured bondholders would be
less likely to recover their investments in the event of a
bankruptcy.
href='http://www.nytimes.com/2006/06/21/business/21auto.html?_r=1&oref=slogin…'>Read
more.
name='6'>Ford May Miss 2008 Profit as Sales Slow
Ford Motor Co. may fail
to meet its goal of returning to profit in
w:st='on'>North
America
sales of sport-utility vehicles, according to officials at the world's
third-largest automaker, Bloomberg News reported today. Ford
officials said a jump in gasoline prices is hurting demand for SUVs, and
competition from General Motors Corp. and Toyota Motor Corp. are also
eroding sales of Ford's pickup trucks. Ford's
w:st='on'>
size='3'>U.S.
size='3'>sales tumbled 27 percent for the mid-size Explorer SUV and 30
percent for the larger Expedition in this year's first five months, as
gasoline prices rose 34 percent. The Dearborn, Mich.-based automaker
lost $1.19 billion in the first quarter.
href='http://www.bloomberg.com/apps/news?pid=10000082&sid=a8GHp8c1Byw8#'>Read
more.
name='7'>Teamsters Want Allied Pay Cuts to Hit the
Road
As Allied Holdings Inc.
gears up to request an extension of its pay cuts for union workers, the
International Brotherhood of Teamsters is urging the bankruptcy court to
reject the company's proposal and authorizing local unions to consider
striking, Portfolio
Media reported yesterday. Allied Holdings
Inc., the largest auto hauler in the
w:st='on'>
size='3'>United States
size='3'>, won approval from the U.S. Bankruptcy Court in the Northern
District of Georgia in May to implement a 10 percent pay cut for union
workers in June and July. On June 23, the court will consider whether
Allied can extend the pay cuts for another three months and thereby gain
interim relief from its collective bargaining agreement with the
International Brotherhood of Teamsters. The proposal cuts 10 percent off
the current wages for all collective-bargaining employees of
Allied’s subsidiaries represented by the Teamsters and blocks a 3
percent pay raise that was scheduled to take effect in the beginning of
June.
name='8'>Union Requests Financial Information from
Bankrupt Pittsburgh Brewing
face='Times New Roman' size='3'>Co.
The union for workers at
Pittsburgh Brewing Company want a federal bankruptcy judge to appoint an
accountant to examine the brewery's books, the Associated Press reported
yesterday. The brewery, which makes Iron City Beer, filed for chapter 11
bankruptcy protection late last year and is now seeking contract
concessions as part of its reorganization plan. The union signed a
five-year contract with the brewery just last year, and union officials
say the lack of financial information makes it hard for investors to
decide whether to pump money into the brewery.
size='3'>U.S. Bankruptcy Judge
size='3'>M. Bruce McCullough will hold a
hearing July 18th on the union's request to have him appoint an
accountant in the case.
href='http://kdka.com/local/local_story_171075248.html'>Read
more.
SGI
CEO Finds Bankruptcy to be 'Positive Event'
Server, storage and
visualization vendor Silicon Graphics Inc's chairman and CEO, Dennis
McKenna, said that its filing of chapter 11 bankruptcy protection in
early May should be seen as a 'positive event,' ComputerWire.com
reported today. While McKenna conceded that employees and customers
might find the filing of chapter 11 bankruptcy protection 'unsettling,'
he was adamant that, 'we have gone from uncertainty to certainty.' The
company has been focused on cutting costs, renegotiating its debt
agreements and raising cash from divestitures where it can. Earlier this
month SGI filed its reorganization plan and announced that the
court had approved a real estate settlement that saw Google paying SGI
$319 million to buy its headquarters property and another building in
Mountain View, Calif.
href='http://www.computerwire.com/industries/research/?pid=4884E73A%2D01A2%2D…'>Read
more.
name='10'>Commentary: The
w:st='on'>New
Orleans
size='3'>Muddle
It has been almost 10
months since Hurricane Katrina battered the
w:st='on'>
size='3'>Gulf
face='Times New Roman' size='3'>Coast
size='3'>, and there is still no redevelopment plan for
size='3'>New Orleans
according to an editorial in today’s New York
Times. As Congress passed an emergency relief
bill, which President Bush signed into law, billions of dollars are
headed the city's way giving local leaders in
w:st='on'>New
Orleans
of
size='3'>Baton Rouge
chance to get it right. In large swaths of the city, houses still sit
empty, block after block. In many places, trash and flood-ruined
automobiles have yet to be cleared away. Now that Mayor Ray Nagin has
been re-elected, it is time to start spending the political capital his
victory earned him. His legacy will rest on the effectiveness of the
reconstruction and the safety and well-being of residents in the years
to come.
href='http://www.nytimes.com/2006/06/21/opinion/21Wed1.html?pagewanted=print'>Read
more.
w:st='on'>
name='11'>San Francisco
face='Times New





Roman'
size='3'> Plans Health Care Coverage for the
Uninsured
w:st='on'>San
Francisco
announced a plan to provide health care to the city's estimated 82,000
uninsured residents, which includes 16,000 workers without insurance,
the New York
Times reported today. The program, called the
San Francisco Health Access Plan, would not offer health insurance, but
rather finance the cost of services provided by hospitals, doctors and
health networks. According to a draft report, the program would cost
$200 million a year. The city would contribute $104 million by
redirecting money now used to pay for emergency care for the uninsured.
A legislative part of the plan would require businesses and nonprofit
groups with more than 20 employees to contribute $40 million. Some small
businesses oppose the legislation, saying the cost could force them into
bankruptcy.
href='http://www.nytimes.com/2006/06/21/health/policy/21brfs-001.html?pagewan…'>Read
more.