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September 18,
2008
Public Company
Filings Surpass 2007 Total
The total number of
corporate public chapter 7 and 11 filings to date have surpassed those
for all of 2007, according to a press release yesterday from
BankruptcyData.com
size='2'>. The research firm reported that
there have been 81 public company filings this year as compared to the
78 filings recorded in 2007.
size='2'>BankruptcyData.com said that despite the recent up-turn, the
filing count for corporate bankruptcies still remains historically
low.
size='2'>The 2007 figure rose slightly from 2006’s low of 66, and
2008’s numbers will likely continue to climb, but will not likely
reach the record reached in 2001 (263 filings).
href='http://rds.yahoo.com/_ylt=A0WTTktpUtJIWFwBKCTQtDMD;_ylu=X3oDMTBjdmNoOTVjBHBvcwMyBHNlYwNzcg--/SIG=12djre3a6/EXP=1221829609/**http%3a//biz.yahoo.com/bw/080917/20080917005902.html%3f.v=1'>Click
here to read the press release.
name='2'>Central Banks Pump Cash into Market
The Federal
Reserve, the European Central Bank, the Bank of Japan and other central
banks significantly escalated the assistance offered to global money
markets today, coordinating efforts to ease monetary constraints
stemming from the turmoil emanating from Wall Street, the
New York Times
size='3'>reported. The Fed said in a statement that it had authorized a
$180 billion expansion of its temporary reciprocal currency
arrangements, known as swap lines, to allow banks to borrow more dollars
in markets at lower rates. The Fed also authorized increases in the
existing swap lines with the European Central Bank, up to $110 billion
from $55 billion, and the Swiss National Bank, up to $27 billion from
$15 billion.
href='http://www.nytimes.com/2008/09/19/business/worldbusiness/19centbank.html?_r=1&hp=&oref=slogin&pagewanted=print'>Read
more.
size='3'>
SEC
Issues Short-Selling Rules in Bid to Stop Manipulation
With stocks
tumbling, the Securities and Exchange Commission (SEC) launched an
effort aimed at making it harder for traders to improperly drive down
stock prices and announced plans to require hedge funds to share more
information about their trading, the
size='3'>Wall Street Journal reported today.
SEC Chairman Christopher Cox is seeking commission approval for an
emergency rule to require hedge funds and other large investors to
publicly disclose their short positions daily. Currently those investors
disclose their stock holdings only on a periodic basis. In addition, Cox
said that the agencies' enforcement investigations are expanding. The
SEC staff has already sent subpoenas to more than 50 hedge funds,
looking at market manipulation in financial stocks. The combination of
the trading and disclosure rules are responses to growing concerns that
short sellers are driving financial stocks lower in an effort to
send a message to the market that the SEC is watching.
href='http://online.wsj.com/article/SB122166007517347849.html'>Read
more. (Subscription required.)
name='4'>Creditors’ Committee Named in Lehman Bankruptcy
U.S.
Trustee Diana G.
Adams has appointed an unsecured creditors'
committee in the bankruptcy of Lehman Brothers Holdings Inc., and
Bankruptcy Judge James
M. Peck has granted several first-day motions
by the collapsed investment bank,
size='3'>Bankruptcy Law360 reported. The
committee will consist of Wilmington Trust Co., acting as an indenture
trustee, andthe Bank of NY Mellon, Shinsei Bank Ltd., Mizuho Corporate
Bank Ltd., the Royal Bank of Scotland PLC, Metlife and RR Donnelley
& Sons, according to a filing yesterday in the U.S. Bankruptcy Court
for the Southern District of New York. Only three of the committee
members were listed among Lehman's 30 largest unsecured creditors in its
bankruptcy petition. Shinsei was listed with an unsecured claim of $231
million, and Mizuho with a claim of $93 million. On Tuesday, Judge Peck
granted several of Lehman's first-day motions including the ability of
Lehman to continue receiving advances from JPMorgan Chase & Co. in
order to clear its trades.
href='http://bankruptcy.law360.com/articles/69542'>Read
more. (Subscription required.)
AIG
Directors Sued by Pension Fund over Mismanagement
Directors at American
International Group Inc., which is receiving an $85 billion bailout from
the U.S. government, were sued by a pension fund seeking to recover
losses it blamed on company mismanagement, Bloomberg News reported
yesterday. AIG's senior management and directors failed to implement
proper controls and monitor the risk of losses in the subprime market,
lawyers for the City of New Orleans Employees' Retirement System said in
a complaint filed yesterday in Delaware Chancery Court in Wilmington on
AIG's behalf. AIG officials, including CEO Robert Willumstad and lead
independent director Stephen Bollenbach, “utterly failed” to
monitor operations, according to the complaint. Directors allowed AIG to
market and extend subprime loans and insure subprime-related assets
without considering borrowers' ability to pay and with unreasonably high
risk of default, the pension fund said.
href='http://www.bloomberg.com/apps/news?pid=20601087&sid=adXJ4l5Zs33s&refer=home'>Read
more.
size='3'>
name='6'>Washington Mutual Said to Consider Sale
Washington
Mutual, the nation’s largest thrift, has begun exploring a sale in
the event that it cannot find some other way to raise additional
capital, the New York
Times reported today. Just last week, the
thrift said that it could survive on its own and return to
profitability, having attracted a large investment this year from TPG
Capital, formerly the Texas Pacific Group. However, a wave of selling
has engulfed the stocks of weakened financial institutions, adding to
TPG’s losses and undercutting Washington Mutual’s cushion.
Washington Mutual is working with Goldman Sachs to assess its
options.
href='http://www.nytimes.com/2008/09/18/business/18wamu.html?ref=business&pagewanted=print'>Read
more.
size='3'>
name='7'>Congressman Says More Government Bailouts Might Be
Necessary
size='3'>
More government
bailouts of companies and financial institutions might be necessary to
help stabilize the economy, House Financial Services Chairman Barney
Frank (D-Mass.) said yesterday as he announced plans to hold a hearing
next week to examine the need for additional intervention,
CongressDaily
size='3'>reported. 'Apparently, the private market is so messed up that
it may not be able to function unless there is systematic federal
relief,' Frank said. His comments came as both parties reacted to
Tuesday's $85 billion bailout of insurance giant American International
Group.
name='8'>Regulators Try to Change Accounting Rules to Match Needs
/>
Federal officials
issued a raft of proposed and final rules this week aimed at shoring up
the weakened financial markets and strengthening the eroding balance
sheets of banks, the New
York Times reported today. Regulators at four
agencies that oversee the nation’s banks and savings associations
on Monday and Tuesday proposed a significant change in accounting rules
to bolster banks and encourage widespread industry consolidation by
making them more attractive to prospective purchasers. The action by the
Federal Deposit Insurance Corp., the Comptroller of the Currency, the
Office of Thrift Supervision and the Federal Reserve provides more
favorable accounting treatment of so-called good will, an intangible
asset that reflects the difference between the market value and selling
price of a bank.
href='http://www.nytimes.com/2008/09/18/business/18regulate.html?ref=business&pagewanted=print'>Read
more.
size='3'>
name='9'>Congressional Leaders Say $25 Billion Auto Package Likely
to Be Folded into Continuing Resolution
Senate Majority
Leader Harry Reid (D-Nev.) confirmed that Democratic leaders will likely
include $25 billion in loan guarantees for domestic automakers in a
continuing resolution spending bill instead of a proposed economic
stimulus package,
size='3'>CongressDaily reported
yesterday. Reid has been discussing the
loans as well as the stimulus and the continuing resolution with House
Speaker Pelosi. He said he supports an auto aid package because he
believes it will save jobs. The loans, authorized as part of energy
legislation approved last year, are designed to help U.S. automakers and
suppliers retool their factories to speed production of electric and
other alternative-fuel vehicles.
face='Times' size='2'>
name='10'>Hurricanes Push Florida Developer into Chapter 11
Bray &
Gillespie Management LLC filed for chapter 11 protection on Sept. 12
after having its Florida hotels battered by hurricanes, battling to get
insurers to cover the damage and watching the real estate market
founder, Bankruptcy
Law360 reported. Bray & Gillespie, which
filed for bankruptcy along with 78 affiliates and related entities, have
$400 million in secured debt, about $6.5 million in nondisputed
unsecured debt and about $10 million in disputed unsecured debt. The
debtors' biggest secured creditor is Arbor Realty Funding LLC, which is
owed $95 million, according to Bray & Gillespie. The next largest is
Wachovia Bank NA, which is owed $70 million, while RAIT CRE CDO I Ltd.
is owed $33.7 million, and Marshall Investment Corp. is owed $23
million. The case is In
re Bray & Gillespie Management LLC, case
number 08-5473 in the U.S. Bankruptcy Court for the Middle District of
Florida. Read
more. (Subscription required.)
name='11'>Bayou Reaches Settlements in 32 Adversary Cases
Bayou Group LLC asked
for approval of settlements totaling nearly $2.5 million in 32 adversary
proceedings against Bayou Hedge Fund investors who cashed out prior to
the fund's collapse, Bankruptcy Law360 reported. The 32
investors all pulled out of the fund in 2003 and 2004, more than two
years prior to the firm's chapter 11 filing in May 2006, according to
last Friday’s motion asking for approval of the settlement
agreement filed in the U.S. Bankruptcy Court for the Southern District
of New York. Bayou Group filed an amended restructuring plan in
December. Former Bayou head and co-founder Samuel Israel is serving 20
years in prison for bilking investors out of $450 million prior to the
bankruptcy filing. Israel faked his own death earlier this year to avoid
prison time, then turned himself in to authorities in
Massachusetts.
href='http://bankruptcy.law360.com/articles/69536'>Read
more. (Subscription required.)
name='12'>Morgan Stanley in Talks with Wachovia and Other
Institutions
Morgan Stanley
sought shelter from the growing financial storm yesterday, entering
preliminary merger talks with Wachovia Corp. and other banks as a
seventh straight decline in the company's share price sent the stock to
its lowest level since 1998, the
size='3'>Wall Street Journal reported today.
As much as Morgan Stanley is suffering, Wachovia faces its own uncertain
future. Saddled with a mountain of troubled adjustable-rate mortgages
inherited through its 2006 takeover of Golden West Financial Corp.,
Wachovia has seen its financial condition weaken and its stock price
plunge. Morgan Stanley is also exploring preliminary tie-ups with a
range of other banks around the globe.
href='http://online.wsj.com/article/SB122168156315148901.html'>Read
more. (Subscription required.)
href='http://online.wsj.com/article/SB122168156315148901.html'>