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February 5, 2008
name='1'>January Consumer Bankruptcy Filings Increase 30 Percent
over Previous Year
w:st='on'>
size='3'>U.S.
size='3'>consumer bankruptcy filings increased more than 30 percent
nationwide in January from the same period a year ago, according to the
ABI relying on data from the National Bankruptcy Research Center
(NBKRC). While the consumer filings for January increased from the
previous year, the data showed that the overall January consumer filing
totals were flat from December. Chapter 13 filings constituted 40.05
percent of all consumer cases in January, a slight increase over
December. “With over one million more subprime adjustable-rate
mortgages due to reset during 2008, the payment shock for many
households could lead to higher bankruptcies this year,” said ABI
Executive Director Samuel J.
Gerdano. The overall consumer filing total for the 2007
calendar year (Jan. 1 – Dec. 31, 2007) reached 801,840, nearly a
40 percent increase from the 573,203 filings recorded during the similar
href='http://www.abiworld.org/AM/Template.cfm?Section=Monthly_Bankruptcy_Statistics&Template=/MembersOnly.cfm&NavMenuID=3716&ContentID=46994&DirectListComboInd=D'>Click
here to view the updated monthly consumer filing
charts.
Fed
Report Finds Loan Standards Tightening
A new Federal Reserve
survey of senior bank-loan officers shows that banks are tightening
lending standards for businesses and consumers - even beyond real estate
loans - and companies' demand for credit has weakened, the
Wall Street Journal
reported today. Although banks also reported some
tightening of lending requirements on credit cards and other consumer
loans, commercial and industrial loans have been the most severely
affected. One-third of the
w:st='on'>
size='3'>U.S.
size='3'>banks and about two-thirds of the foreign banks responding told
the Fed that they had tightened lending standards on commercial and
industrial loans during the three months ended Jan. 31. About half the
banks said that they have widened the spread between their cost of funds
and what they are charging borrowers.
href='http://online.wsj.com/article_print/SB120215178533541593.html'>Read
more. (Registration required.)
href='http://www.federalreserve.gov/boarddocs/SnLoanSurvey/200801/default.htm'>Click
here to read the Fed’s press release.
Mortgage
Lending
name='3'>New Century Files Chapter 11 Liquidation
Plan
New Century Financial
Corp. and its creditors filed a chapter 11 plan yesterday that does not
say how the company plans to pay creditors who have filed $35 billion in
claims against it, the Associated Press reported yesterday. Once one of
the country's largest subprime lenders, New Century raised only about
$235 million by selling assets in its bankruptcy liquidation, according
to documents filed Saturday in the U.S. Bankruptcy Court in
size='3'>Wilmington
w:st='on'>
size='3'>Del.
Century's chapter 11 plan said that negotiations are underway that could
cut the amount of claims filed in the case. Creditors filed $23.7
billion in secured claims and $10.5 billion in unsecured claims.
href='http://www.chron.com/disp/story.mpl/ap/fn/5511822.html'>Read
more.
name='4'>Housing Crisis Casts a Cloud over Sun
Belt
Formerly booming Sun Belt
cities are the epicenters of this economic downturn as many economists
believe that the cities like of
face='Times














New






Roman'
size='3'>Phoenix,
w:st='on'>Las
Vegas
face='Times New Roman' size='3'>Miami
size='3'>and
size='3'>San Diego
recession thanks to the
w:st='on'>
size='3'>U.S.
size='3'>housing downturn, the
size='3'>Washington Post reported today.
Within these regions, the pain is concentrated among people who
overextended themselves on mortgage debt to take advantage of housing
prices that seemingly did nothing but rise. Housing prices in
size='3'>Phoenix
dropped by double-digit percentages in the past two years. A steep
decline in construction jobs caused the record-low unemployment rate to
spike by a full point, to 3.9 percent, from May to December. Population
growth has slowed by half, and retail and office development are also
ebbing. 'We're
in recession because of the large concentration of resources in our
economy devoted to construction,' said Marshall J. Vest, director of the
Economic and
size='3'>Business
face='Times New Roman' size='3'>Research
size='3'>Center
size='3'>University of
size='3'>Arizona
size='3'>.
href='http://www.washingtonpost.com/wp-dyn/content/article/2008/02/04/AR2008020403270_pf.html'>Read
more.
Sets Hearing in Chrysler Supplier Dispute
A bankruptcy court judge
set a hearing date of Feb. 13 to weigh arguments between Chrysler LLC
and Plastech Engineered Products Inc., in a dispute that has already led
the automaker to close four assembly plants, Reuters reported yesterday.
Bankruptcy Judge Phillip
Shefferly set a deadline of Feb. 11 for all
parties to file their pleadings in the dispute and will hear arguments
on Feb. 13 and 14. Chrysler, which terminated its contracts with
Plastech, wants the court to allow it to take control of tooling
equipment it tried to seize on Friday before Plastech filed for
bankruptcy to stop the automaker. Chrysler said that it has already
closed four assembly plants and the rest of its operations could quickly
grind to a halt if it does not get that equipment to other suppliers.
Plastech said in court documents that many of the moldings Chrysler
wants to take are attached to entire assembly lines used to build parts
for other customers.
Allows Auction for MAXjet Airways
Bankruptcy Judge
Peter J. Walsh
size='3'>authorized MAXjet Airways Inc., the all-business-class airline,
to auction itself under conditions that have raised the concerns of the
U.S. Trustee monitoring the case, the Associated Press reported
yesterday. Judge Walsh approved MAXjet’s sale procedures and said
that MAXjet could waive existing terms or impose new terms for bidders
as it deemed necessary without the need for further court approval.
However, Judge Walsh will require the airline to notify the U.S.
Trustee, Kelly Beaudin
Stapleton of changes to give her the chance to
object. Last week, Stapleton asked the court to reject the MAXjet
proposal and also objected to the quick timeline of the auction, which
she said raised the question of the adequacy of the marketing
process. MAXjet had
requested that an auction take place within two weeks of its receiving
court permission. Judge Walsh scheduled the auction for Feb. 20. Bids
will be due Feb. 13, two days later than MAXjet had proposed.
name='7'>Asarco Looks to Sell All Assets
Copper-mining company
Asarco LLC, which has been in bankruptcy for more than two years, said
yesterday that it will sell all of its assets and has established a
process for interested buyers to submit offers, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. Asarco didn't identify interested buyers in
court papers, but it said it has held discussion with six bidders who
have expressed interest in the
w:st='on'>
size='3'>Tucson
w:st='on'>
size='3'>Ariz.
Asarco filed for chapter 11 protection in August 2005, weighed down by
labor disruptions and billions of dollars in environmental and
asbestos-related liabilities. It owns three copper mines in
size='3'>Arizona
as refining and smelting operations.
href='http://online.wsj.com/article/SB120218431091443559.html'>Read
more. (Registration required.)
name='8'>Furniture Retailer Files for Chapter 11
Wickes Furniture Co., hit
by the downturn that has hit furniture retailers in the wake of the
housing industry's big slump, filed for chapter 11 protection on Sunday,
the Chicago Tribune reported yesterday. Wickes, based in
size='3'>Wheeling
w:st='on'>
size='3'>Ill.
Partners Inc., a
face='Times New Roman' size='3'>Boca Raton
size='3'>,
size='3'>Fla.
firm that specializes in leveraged buyouts and other transactions. In
its filing with the federal bankruptcy court in
w:st='on'>
size='3'>Wilmington
w:st='on'>
size='3'>Del.
that it has assets of between $10 million and $50 million, and estimated
its liabilities at between $50 million and $100 million.
href='http://www.chicagotribune.com/business/chi-mon-wickes-furniture-bankruptcy-wiks-0204feb04,0,1762750.story?track=rss'>Read
more.
name='9'>Fortunoff to be Acquired for $100 Million as It Enters
Chapter 11
Struggling jewelry and
furniture chain Fortunoff announced yesterday that it was filing for
chapter 11 protection and would be acquired for $100 million by the
group that owns Lord & Taylor department stores,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported yesterday. NRDC Equity Partners, which purchased Lord
& Taylor from Macy's for $1.2 billion in 2006, will buy Fortunoff
and has given it a $10 million letter of credit to allow the chain to
continue to purchase inventory. In its filing in the U.S. Bankruptcy
Court for the Southern District of New York, Fortunoff, which has 21
stores in the
size='3'>New York
w:st='on'>New
Jersey
w:st='on'>
size='3'>Connecticut
size='3'>tristate area, said that both its assets and liabilities are in
the $50 to $100 million range.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=45975'>Read
more. (Registration required.)
w:st='on'>
name='10'>U.S.
face='Times New Roman' size='3'> Trustee
Appointments
Donald F. Walton was
appointed as U.S. Trustee for Region 21 and Robert D. Miller Jr. was
appointed as acting U.S. Trustee for Region 18, according to an EOUST
press release on Friday. Walton was previously appointed acting U.S.
Trustee for Region 21, which includes Georgia, Florida, Puerto Rico and
the U.S. Virgin Islands on Sept. 1, 2007, while also serving as Acting
Principal Deputy Director of the Executive Office for U.S. Trustees.
Miller has headed the U.S. Trustee Program’s office in
size='3'>Spokane
w:st='on'>
size='3'>Wash.
serve on an interim basis for Region 18, encompassing
w:st='on'>
size='3'>Washington
w:st='on'>
size='3'>Oregon
w:st='on'>
size='3'>Montana
w:st='on'>Idaho
and
w:st='on'>
size='3'>Alaska
also announced that Ilene J. Lashinsky was reappointed as U.S. Trustee
for the District of Arizona (Region 14) and that Richard F. Clippard was
reappointed as U.S. Trustee for
face='Times New Roman' size='3'>Tennessee
size='3'>and
face='Times New Roman' size='3'>Kentucky
(Region 8).
International
name='11'>Suitor Ends Bid for Northern Rock
Olivant Advisers, one of
two possible suitors for Northern Rock, the troubled British mortgage
lender, dropped out of the bidding yesterday saying that it had failed
to devise an offer that would satisfy both it and the government,
the New York
Times reported today. The move increased the
chances for the Virgin Group, which submitted a takeover proposal before
the yesterday’s deadline. Northern Rock, which owes the Bank of
England more than £25 billion ($49 billion) in emergency loans,
could also continue to operate on a stand-alone basis with the help of
the current management or be brought under government control. Northern
Rock ran into trouble in September as the credit squeeze and the
subprime crisis in the
w:st='on'>United
States
cash shortage and then a run on the bank.
href='http://www.nytimes.com/2008/02/05/business/worldbusiness/05rock.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
href='http://www.nytimes.com/2008/02/05/business/worldbusiness/05rock.html?_r=1&oref=slogin&ref=business&pagewanted=print'>
name='12'>SEC Probes French Bank
Société
Générale's woes extended across the Atlantic, as
size='3'>U.S.
launched a probe into stock sales by a bank board member just as
size='3'>France's
government blamed the institution's recent €4.9 billion ($7.3
billion) trading loss on lax internal controls, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. Mirroring an investigation opened last month
by
face='Times New Roman'
size='3'>France
stock-market watchdog, Autorité des Marchés Financiers, the
U.S. Securities and Exchange Commission is investigating sales of stock
by Société Générale board member and American
investor Robert A. Day and two foundations associated with him, people
familiar with the matter said. The French regulator has said in recent
legal filings that Day, chairman and founder of U.S.-based Trust Company
of the West, and the foundations sold about €140 million of shares
on Jan. 9, 10 and 18. Day sold a majority stake in TCW to
Société Générale in 2001 and still maintains a large
stake in the bank, owning close to 1.9 million shares.
href='http://online.wsj.com/article_print/SB120213912011540779.html'>Read
more. (Registration required.)