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June 5, 2006
name='1'>Judges Frustrated with New Bankruptcy Law
Across the country,
federal bankruptcy judges have begun to express frustration with the
Bankruptcy and Abuse Prevention and Consumer Protection Act of 2005
according to In
These Times magazine today.
“Unquestionably, this is the most poorly written piece of
legislation that I or anyone else has ever seen,” says U.S.
Bankruptcy Judge Keith M. Lundin , who has overseen
cases in
face='Times New Roman' size='3'>Tennessee
since 1977. Many opponents of the new law hope that
judicial frustration over how to interpret its hundreds of sections will
help fuel a backlash and allow a future Congress to knock out
provisions, such as the credit counseling, that have made filing for
bankruptcy more onerous. Although the prospects for revisiting the
Bankruptcy Code are not bright, some experts believe congressional
inertia might be overcome if some of the biggest supporters of the 2005
reform conclude it’s not creating a financial windfall. The new
law “has made life a lot more difficult for people in
size='3'>America
size='3'>who are having hard times,” according to bankruptcy
attorney James Chapman.
href='http://www.inthesetimes.com/site/main/article/2662/'>Read more
.
name='2'>Bankruptcy Not a Bargaining Chip in
w:st='on'>
size='3'>Delphi
Chief Says
Former Secretary of Labor
F. Ray Marshall is calling on U.S. Judge
size='3'>Robert Drain to uphold the collective
bargaining agreements between Delphi Corp. and its unions so the parties
can “bargain to impasse,” the
w:st='on'>
size='3'>Youngstown
size='3'>(
face='Times New Roman' size='3'>Ohio
size='3'>) Daily Business Journal reported
today.
size='3'>Marshall
expert witness for the United Auto Workers, which along with
Delphi’s six other unions is objecting to
w:st='on'>
size='3'>Delphi
its collective bargaining agreements and revamp its retiree pension plan
under Sections 1113 and 1114 of the Bankruptcy Code. He is now a
professor of economics and public affairs at the
w:st='on'>
size='3'>University
size='3'>Texas
size='3'> and served as labor secretary in the Carter
administration from 1977 to 1981. “Employers cannot be allowed to
substitute bankruptcy proceedings for good-faith
negotiations,”
w:st='on'>
size='3'>Marshall
his declaration, a document filed with the court that sets forth his
expected testimony. The hearing on the motion resumes today in U.S.
Bankruptcy Court for the Southern District of New York.
href='http://www.business-journal.com/FormerLaborChieftoTestify.asp'>Read
more.
name='3'>Bawag to Settle with
w:st='on'>
size='3'>U.S.
size='3'>ver Refco Fallout
In a bid to avoid a
criminal indictment in the
w:st='on'>
size='3'>United States
size='3'>, Austrian lender Bawag PSK Group has settled out of court with
federal regulators for an amount that may exceed
face='Times New Roman'>$600 million for its alleged role
in the collapse of futures broker Refco Inc.,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported on Friday. Austrian trade union OEBG, Bawag’s
owner, said the terms of the settlement agreement will be revealed next
week. The settlement could cost Bawag as much as $675 million and could
include a demand that an investment bank be appointed to oversee the
sale of Bawag, set to take place later this year, according to Austrian
media reports. Talks between the bank, the U.S. Department of Justice
and the U.S. Securities and Exchange Commission have been ongoing for
several weeks. Bawag has been targeted in several lawsuits over its
Refco connections, including a $430 million loan to former Refco chief
Phillip R. Bennett, just days before the New York-based broker’s
insolvency was announced.
Green
Thumb Wins Easy Gardener Assets
Green Thumb Acquisition
Corporation, an affiliate of Bayside Capital, bought bankrupt Easy
Gardener Products Ltd.'s assets at auction this week for $60.5 million,
according to a statement from Easy Gardener, Portfolio Media
reported on Friday. The sale was approved during a Friday
hearing before Judge
size='3'>Kevin Gross of the U.S. Bankruptcy
Court for the District of Delaware in
w:st='on'>
size='3'>Wilmington
purchase price consisted of more than $23.4 million in cash, plus the
principal and interest owed to the company’s senior secured
revolving and term lenders and minus certain fees, according to Easy
Gardener. Green
Thumb ended up paying more than $3 million more than its stalking-horse
bid, which is a first bid by a buyer chosen by the bankrupt
company.
w:st='on'>
name='5'>Virginia
w:st='on'> High
School
size='3'> Students Cash in on CARE Financial Literacy
Seminar
U. S. Bankruptcy
Judge David
Adams, with help from a Justice Department
officer who oversees bankruptcy filings and a consumer bankruptcy
lawyer, launched a local financial literacy campaign at Granby High
School (Norfolk, Va.) on Wednesday with an hour-long discussion about
credit cards, checking accounts and budgeting, the
face='Times New Roman' size='3'>Virginian-Pilot
size='3'>reported on Friday. One person who appeared before him in U.S.
Bankruptcy Court in
w:st='on'>
size='3'>Norfolk
had accumulated 17 cards and more than $250,000 of debt but had no
assets left.
size='3'>Debera Conlon, assistant U.S. Trustee
in
size='3'>Norfolk
students to carefully read credit card contracts when shopping for a
card. They should pay particular attention to the grace period available
before a monthly payment is due because these periods, she said, have
been steadily shrinking. The presentation to
w:st='on'>Granby
students was modeled on a program created by Judge
Thomas Ninfo , a federal bankruptcy judge in
size='3'>Rochester
w:st='on'>N.Y.
Bankruptcy judges and bankruptcy lawyers in
size='3'>Richmond
w:st='on'>
size='3'>Harrisonburg
using this Credit Abuse Resistance Education Program (CARE) at high
schools in those cities last year.
href='http://home.hamptonroads.com/stories/print.cfm?story=105315&ran=11932'>Read
more .
name='6'>Commentary: Raising a Generation of Bankruptcy
Filers
According to a Junior
Achievement poll, one of every 10 teenagers uses credit cards and some
of the most frequent users are as young as 13,
size='3'>according to a
size='3'>Miami Herald commentary on Friday.
Given that it could take 10 years to get one's bad credit back on track,
this poses a serious impediment for the next generation trying to live
the American Dream. Junior Achievement joined the Allstate Foundation
for its 2006 Interprise Poll on personal finance, released in April.
Poll results should make permissive parents want to consider setting
some boundaries as the Junior Achievement found that 59.3 percent of
teens polled have made online purchases with credit cards.
href='http://www.miami.com/mld/miamiherald/news/opinion/14720943.htm'>Read
more .
name='7'>Bankruptcies Drop in
w:st='on'>Western Michigan
Nearly eight months after
new bankruptcy rules took effect, filings in the federal court district
that includes
face='Times New Roman' size='3'>Lansing
size='3'>,
size='3'>Mich.
dropped to their lowest levels in at least 10 years, the
face='Times New Roman' size='3'>Lansing State Journal
size='3'>reported today. Fewer than 1,500 bankruptcy cases were filed
during the first three months of the year in U.S. Bankruptcy Court for
the Western District of Michigan in
face='Times New Roman' size='3'>Grand Rapids
size='3'>, which includes
w:st='on'>
size='3'>Clinton
Ingham counties. It was the first time since 1995 that total filings
dropped below 2,000 cases for a quarter, court statistics show.
Bankruptcies spiked for the last three months of 2005 to 7,886 cases as
filers rushed to beat the tougher rules that took effect Oct. 17, 2005,
which follows the national trend. 'There are definitely fewer people
coming in here,' said Robert Kempf, a partner in the
Lansing-based
face='Times New Roman' size='3'>Bankruptcy
size='3'>Law
face='Times New Roman'
size='3'>Center
think a lot of people out there don't think they can file, so they're
just not even looking at it as an option.'
href='http://www.lansingstatejournal.com/apps/pbcs.dll/article?AID=/20060605/…'>Read
more .
Airlines
name='8'>Delta to Seek End to Pilots' Pension
Plan
Delta Air Lines Inc. will file
a request to terminate its pilots' defined benefit pension plan 'fairly
soon,' Chief Executive Gerald Grinstein said in an interview Friday in
which he also talked about employee pay cuts, his future and whether a
merger is a good idea, the Associated Press reported on Friday.
Grinstein said the company planned to seek termination of the pension
“fairly soon.' He said the third-largest airline in the U.S. is
keeping the pilots' union informed about the discussions with the
Pension Benefit Guaranty Corp. Grinstein also said that Delta has no
plans to ask its pilots for a third pay cut, and he dismissed the idea,
at least for now, that the bankrupt company could merge with another
carrier.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/06/02/AR20060…'>Read
more .
w:st='on'>
name='9'>U.S.
face='Times New Roman' size='3'>Airlines Fuel a Recovery by Grounding
Unprofitable Flights
Despite the burden of
record fuel prices, major
w:st='on'>
size='3'>U.S.
size='3'>airlines are staging a recovery from five years of brutal
losses, something many analysts and airlines didn't think possible as
recently as six months ago, the
size='3'>Wall Street Journal reported today.
Legacy carriers like American Airlines and Delta Air Lines are
increasingly unwilling to fly half-empty aircraft to stay competitive on
a given route just for the sake of feeding their nationwide networks.
Though their recovery is still in its early stages and could be derailed
by a further run-up in oil prices or other factors, the airlines' new
emphasis on profitability appears to be paying off. The six largest
legacy carriers, including AMR Corp.'s American, Continental Airlines,
Delta, Northwest Airlines, UAL Corp.'s United Airlines and US Airways
Group, are putting far fewer planes in the sky these days, streamlining
their fleets and pushing up prices where they can. New statistics for
2005 show those airlines had a combined mainline operating fleet of
2,747 aircraft, down 21 percent from the 3,469 they had at the end of
2000, according to the Air Transport Association.
href='http://online.wsj.com/article/SB114947003698171143.html?mod=home_whats_…'>Read
more . (Registration required.)
name='10'>Experts Say More Cost-Cutting is Needed at
UAL
Airline industry experts say
that United Airlines' parent, UAL Corp., four months out of bankruptcy,
must focus on additional cost cuts or risk losing its advantage over
airlines currently restructuring under court protection, Reuters
reported today. For now, the company, which slashed costs by $7 billion
a year, has a competitive edge in the industry, these analysts say. But
restructurings by rivals Delta Air Lines and Northwest Airlines under
chapter 11 bankruptcy could make UAL's savings seem less impressive.
“United's cost advantage is slowly diminishing as other
bankruptcies move ahead with new cost-cutting plans,'' DePaul University
transportation expert Joe Schwieterman said of the No. 2 U.S.
airline.
href='http://www.nytimes.com/reuters/business/business-airlines-ual-outlook.h…'>Read
more.
name='11'>Global Airline Industry to Post $3 Billion Loss for
2006
Airlines around the world
are expected to lose a combined $3 billion this year compared with $3.2
billion in 2005 as the high price of fuel continues to hurt
profitability, according to an International Air Transport Association
(IATA) forecast, the
size='3'>Wall Street Journal reported today.
However, more efficient use of fuel and other cost-cutting efforts are
expected to lift the industry's operating profit to $7 billion from $4.3
billion last year, IATA projected. The industry's total fuel bill is
forecast to rise 23 percent this year to $112 billion, based on a
forecast of a barrel of oil at $66, the IATA said.
w:st='on'>
size='3'>U.S.
size='3'>carriers are forecast to make combined losses of $5.2 billion
this year, while European carriers will make a combined profit of $1.3
billion. Airlines from the Asian-Pacific region are forecast to make net
profit of $1.7 billion, IATA said.
href='http://online.wsj.com/article/SB114949188183671320.html?mod=home_whats_…'>Read
more . (Registration required.)
International
name='12'>Court Grants Parmalat More Time
Still trying to recover
from the massive accounting fraud dubbed “Europe’s
Enron,” Italian dairy conglomerate Parmalat Finanziaria SpA has
scored a four-month extension of a
w:st='on'>
size='3'>U.S.
size='3'>court protection order against its creditors,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported on Friday.
size='3'>The food and dairy giant revealed the news on Friday,
announcing that the temporary protective order had been pushed back to
Sept. 12. At that time, a new hearing will be held to determine whether
the temporary measure should be converted into a permanent protection
order, according to a statement released by Parmalat. The measure, which
has already been extended several times, was supposed to finally expire
on June 2 until the judge's latest reprieve.
name='13'>Pension Mortgages Becoming Attractive Again for
British
Pension-linked mortgages fell
out of favor for many British following the stock market crash of
2000-03, but higher contribution limits have cast them in a more
attractive and compelling light, Reuters reported today. Mike Warburton
of accountants Grant Thornton makes the point that higher contribution
limits make it possible for high earners to make proper provision for
their pension and save a little extra for their mortgage with tax relief
of up to 40 percent. A high proportion of mortgages are now advanced on
an interest-only basis and the Financial Services Authority is concerned
about how borrowers will pay off these loans. Until recently few
borrowers even bothered to ask, and simply reminded the home buyer that
it is their responsibility to ensure that a means of repayment is in
place.
href='http://today.reuters.co.uk/news/newsArticle.aspx?type=personalFinanceNe…'>Read
more .
href='http://today.reuters.co.uk/news/newsArticle.aspx?type=personalFinanceNe…'>