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March 5, 2007
name='1'>Congressional Hearing Focuses on Alleged Credit Card
Industry Abuses
The Homeland Security and
Governmental Affairs Permanent Subcommittee on Investigations will hold
a hearing Wednesday into alleged abuses of the credit card
industry. Subcommittee Chairman Carl Levin (D-Mich.) has been a
consistent critic of the industry, which he complains takes advantage of
poor and at-risk consumers,
size='3'>CongressDaily reported today.
Levin’s panel will hear from the three largest credit card
issuers, Bank of America Corp., JPMorgan Chase & Co., and Citigroup
Inc. as well as consumer witnesses. The American Bankers Association
said it would work with lawmakers and regulators for strengthened
disclosure requirements for customers about their monthly bills, but
some lawmakers like Levin want to go further to curb some lending
practices found to be abusive by many consumer
activists.
Supports Dana Bid to End Non-Union Retiree Benefits
A group of Dana Corp.
bondholders is supporting a motion by the bankrupt auto parts maker to
end the non-pension benefits supplied to non-union retirees,
Bankruptcy Law360
reported on Friday. Dana wants to unilaterally terminate
the benefits to non-union retirees and non-union active employees who
were hired on or before Dec. 31, 2003. The company, which filed its
motion Feb. 13, claims it would save about $36 million this year and
eliminate a “very large balance sheet liability” if granted
relief. The ad hoc
committee said the relief was both warranted and permissible under the
Bankruptcy Code, adding it would cut ongoing costs, increase the value
of Dana’s assets, reduce the overall claims pool and increase
distributions to creditors.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=19735'>Read
more. (Registration required.)
w:st='on'>
name='3'>Portland
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Roman'
size='3'> Diocese Gag Order to Remain in
Place
Less than three months
after brokering a deal between the Roman Catholic Archdiocese of
Portland and alleged victims of sexual abuse, a federal bankruptcy judge
has tossed a bid to lift a gag order that prevents public discussion of
the details surrounding the diocese’s chapter 11
proceedings, Bankruptcy
Law360 reported on Friday. U.S. Bankruptcy
Judge Elizabeth
Perris said in an order filed on Thursday that
no party, attorney or insurer participating in the mediation process
shall make any comment outside of court proceedings about the claims,
adversary proceedings, chapter 11 proceedings, mediation process, or
resolution of cases or claims until a reorganization plan is confirmed.
Perris said that the plan’s proponents could still solicit votes
on the plan so long as all communications are directed solely to holders
of claims and interests entitled to vote on the plan and the
communications do not disclose the dollar amount of any individual claim
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=19665'>Read
more. (Registration required.)
name='4'>Comair Pilots Yield to Tentative Concessions
Deal
Comair Inc. pilots have
conceded to pay cuts and other concessions in a deal with the Delta Air
Lines Inc. unit as the struggling airline attempts to exit from chapter
11, Bankruptcy
Law360 reported on Friday. Friday’s
tentative agreement put Comair on track to slash costs by $40 million
within the next four years, and the airline expects to emerge from
bankruptcy protection along with Delta in late April or May. The Air
Line Pilots Association said 770 members, or 69 percent, voted in favor
of the deal, while 350 members, or 31 percent, voted against the
agreement.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=19663'>Read
more. (Registration required.)
name='5'>Creditor Groups Oppose Werner Breakup Fee
A group of second-lien
lenders that are looking to buy Werner Co. has asked a bankruptcy court
to reject the ladder maker's request to provide a breakup fee in
connection with the auction, calling the move unnecessary,
Bankruptcy Law360
reported on Friday. The lenders argued that Werner does
not need to offer a breakup fee if their group is chosen to serve as the
lead bidder or stalking horse at auction. The second-lien lenders
currently lead the potential bidders with a $261.75 million offer for
the company, submitted under the name WH Acquisition Co., which is
comprised of Trust Co. of the West, Schultze Asset Management LLC, Milk
Street Investors LLC and Levine Leichtman Capital Partners II LP.
However, the second-lien lenders face some competition, as a group
of Werner’s first-lien lenders recently submitted a $255.8 million
offer, which requires a breakup fee.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=19734'>Read
more. (Registration required.)
face='Times New Roman' size='3'>
name='6'>Yucaipa
size='3'> Cos. to Take over Allied Holdings under Bankruptcy
Plan
Allied Holdings Inc., the
biggest
face='Times New
Roman'
size='3'>U.S.
size='3'>hauler of new cars, will be taken over by billionaire Ron
Burkle's Yucaipa Cos. under a jointly filed reorganization plan,
Bloomberg News reported yesterday. Leaders of the Teamsters union,
representing 3,300 Allied drivers nationwide, have approved the deal in
spite of a 15 percent wage cut, saying it's the best the employees can
do. By taking over Allied, Los Angeles-based Yucaipa would control
between 60 to 70 percent of the
w:st='on'>
size='3'>U.S.
car hauling market. In December, Yucaipa acquired Performance
Transportation Services Inc., a bankrupt hauler based in
size='3'>Wayne,
w:st='on'>
size='3'>Mich
plan must still pass a vote of Allied's union drivers and be approved by
U.S. Bankruptcy Judge C. Ray Mullins in
size='3'>Atlanta
href='http://www.bloomberg.com/apps/news?pid=20601103&sid=a8aT7MbVXKqU'>Read
more.
w:st='on'>
name='7'>Hawaiian
w:st='on'>
size='3'> Hospital
face='Times New Roman' size='3'> Files for Chapter
11
face='Times New Roman' size='3'>Kahuku
size='3'>Hospital
hospital on Oahu's
w:st='on'>
size='3'>North
face='Times New Roman'
size='3'>Shore
filed for chapter 11, the Associated Press reported yesterday. The
filing is part of a prearranged agreement between the hospital and state
to appropriate emergency funding and place hospital operations under
state control. The hospital has about $3 million in debt and has been
operating at an average annual loss of about $1.2 million.
href='http://www.kpua.net/news.php?id=10905'>Read
more.
name='8'>Commentary: As the Mortgage Crisis Spirals, Casualties
Mount
While the explosive
growth in subprime lending turned mortgage bankers and brokers into
multimillionaires seemingly overnight, an escalating crisis in the
market is threatening a wide band of people and companies, the
New York Times
size='3'>reported today. Foremost are the poor and minority homeowners
who used easy credit to buy houses that are turning out to be too
expensive for them now that mortgage rates are going up, but the pain is
also being felt widely throughout the business world. Large companies
that bought subprime lenders during the boom, like H&R Block and
HSBC, are now scrambling to sell them or scale back their exposure. Many
investors are also likely to suffer: Wall Street firms made billions in
fees, commissions and trading revenue from packaging and selling
subprime mortgages to them as bonds.
href='http://www.nytimes.com/2007/03/05/business/05lender.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
name='9'>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.
face='Times New Roman' size='3'> We’ll
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your email.
size='3'>Amicas Inc., a
w:st='on'>
size='3'>Boston
medical imaging and software company, reported a fourth quarter net loss
of more than $1.1 million. Revenue fell 20%--to $11.4 million. For the
year it lost $1 million on a 6% revenue decline—to $49.4
million.
size='3'>Countrywide Financial Corp., the
biggest home-mortgage lender in the
w:st='on'>
size='3'>U.S.,
has reported sharp increases in late loan payments, including loans held
by borrowers with relatively good credit records. The Calabasas, Ca.
firm said that payments on prime home-equity loans at least 30 days
late, as of the end of last year, were up 1.6%. Payments on subprime
mortgage loans jumped 19%.
size='3'>ESS Technology Inc., a Fremont,
Ca. designer of multimedia chips, reported a fourth quarter net loss of
$10.4 million. Revenue fell 52%--to $21.3 million. For the year it
lost $44.1 million on a 45% drop in revenue—to $100 million. Both
the quarter and fiscal results included restructuring impairment charges
of $42.7 million.
size='3'>Ford Motor Co., which reported a loss
of $12.6 billion for its most recent fiscal year and which recently
mortgaged certain assets in order to obtain financing, is selling its
Automotive Protection Corp. unit to an affiliate of Stone Point Capital
of
size='3'>Greenwich,
w:st='on'>
size='3'>Ct.
undisclosed amount.
size='3'>General Motors Corp.,
size='3'>Detroit
raising worries among investors that it may be overexposed to weakness
in the subprime lending market. It’s not clear how much GM is
exposed to the subprime lending market, but GM is sensitive to the fate
of the mortgage industry overall. Recently GM’s chief financial
officer, Frederick Henderson, said that a weak mortgage sector could
force GM to a settlement related to the book value of its GMAC unit,
which GM recently sold a majority stake in to an investment group. The
carmaker has also said that it will delay filing its financial
results.
size='3'>Leapfrog Enterprises Inc., an
Emeryville, Ca. maker of toys, reported a fourth quarter net loss of $46
million. Revenue fell 26%--to $183 million. For the year it
lost $145 million on a 23% revenue decline—to $502
million.
size='3'>Nabors Industries Inc., a Houston,
Tx. contract oil-drilling concern, announced that it found through, an
internal review, that it had misdated certain stock-option grants going
back as far as 1991.
size='3'>PRG Schultz International Inc.,
an
size='3'>Atlanta,
w:st='on'>
size='3'>Ga.
recovery audit services, reported a fourth quarter net loss of $2.9
million. Revenue fell 3%-to $70.5 million. For the year it lost $21.1
million on a 9% revenue decline—to $266 million. The quarter and
year included restructuring charges of nearly $2 million and $14.2
million respectively.
size='3'>Steinway Musical Instruments Inc.,
a
size='3'>Waltham, Ma. Maker
of musical instruments, reported its fourth quarter net income tumbled
79%--to $1.1 million while sales fell 14%--to $106 million. For
the year it lost $670,000 on a 1% sales decline—to $385
million.