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July 30, 2007
name='1'>Marcal Settles with EPA for $3 Million
Bankrupt paper company
Marcal Paper Mills and the U.S. Environmental Protection Agency have
reached a $3 million settlement over pollution claims involving the
Diamod Alkali Superfund Site,
size='3'>Bankruptcy Law360 reported on Friday.
The
size='3'>U.S.
originally sought damages of $946 million, resulting from Marcal's
alleged pollution of an eight-mile section of the
w:st='on'>
size='3'>Passaic
face='Times New Roman' size='3'>River
size='3'>in
face='Times New Roman' size='3'>New
Jersey
settlement will be an allowed general unsecured claim in the
company’s bankruptcy proceeding. Of that total, $2.16 million is
alloted to the EPA for the response costs incurred in connection with
the site and the remaining $840,000 is reserved for the U.S.
Department of the Interior and the National Oceanic and Atmospheric
Administration for the cost of natural resource damage
assessment.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=30828'>Read
more. (Registration required.)
name='2'>Bankruptcy Filings Increase in
w:st='on'>
size='3'>Wisconsin
First Half of the Year
Bankruptcy filings
in
size='3'>Wisconsin were up
almost 50 percent in the first half of the year, fueled in part by
homeowners unable to cover monthly payments when their adjustable-rate
mortgages repriced upward, the
size='3'>Milwaukee Journal Sentinel reported
on Saturday. Through June, 7,667 bankruptcy petitions were filed
statewide, compared with 5,124 in the first six months of 2006,
according to court records. Though the increase is big on a percentage
basis, 2006 had the fewest bankruptcies in 12 years in the state. Even
though the law has changed, the typical factors that lead to bankruptcy
- divorce, job loss and medical crisis - remain the same,
but people who were sold mortgages they ultimately couldn't afford
are being factored into the rising number of filings in the state. The
jump in monthly mortgage payments, combined with other
debts, appears to be more than some consumers can handle.
'People didn't realize what they got into until too late,' said
Paul Swanson
size='3'>, a bankruptcy lawyer in
w:st='on'>
size='3'>Oshkosh
payment's going from $759 to $1,200, and they just give up.'
href='http://www.jsonline.com/story/index.aspx?id=639195'>Read
more.
Records Retools Exit Plan to Quell Critics
In an effort to appease
critics of its proposed chapter 11 exit strategy, bankrupt music chain
Tower Records has agreed to tweak its liquidation plan to give
stakeholders more say in the process,
size='3'>Bankruptcy Law360 reported on Friday.
The unsecured creditors’ committee lashed out last week at the
music retailer's plan, saying it barred them from having any input on
how the company litigated the asserted $77 million claims by its trade
vendor creditors. In a brief filed Wednesday in the U.S. Bankruptcy
Court for the District of Delaware, Tower said that the plan had been
clarified to require court approval of any settlement of the claims. The
plan would also stipulate that written quarterly reports be filed with
the court to keep creditors apprised of the status of the case, and
would allow for each of the three main stakeholders in the case,
including the creditors' committee, to appoint a “creditor
designee” as advocate.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=30790'>Read
more. (Registration required.)
More
Parts Producers Give Up on Auto Industry
An increasing number of
diversified manufacturers are abandoning the
w:st='on'>
size='3'>U.S.
size='3'>automobile industry, selling off auto-related businesses and
beefing up other parts of their portfolios, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. The exposure to the domestic automotive
business, battered by global competition that has already forced many
auto-component-only producers such as Tower Automotive Inc. and Delphi
Corp. into bankruptcy proceedings, has become too worrisome for these
producers, while other parts of their businesses are more promising. For
example, PPG Industries Inc., the Pittsburgh-based glass and coatings
manufacturer, recently hung a 'for sale' sign on its windshield business
and electronics company Motorola Inc. agreed last year to sell its
automotive sensor and control business for $1 billion to
size='3'>Germany
size='3'>'s Continental AG.
href='http://online.wsj.com/article/SB118575161039881718.html?mod=us_business_whats_news'>Read
more. (Registration required.)
name='5'>Commentary: Housing Market Downturn to Continue to Affect
Investors
Unnerved by mounting
losses in mortgage- related investments, investors have started to shun
tens of billions of dollars in corporate debt offers as well — and
seem likely to go on doing so for months to come, according to an
editorial in today’s
size='3'>New York Times. That would stanch the
flow of easy money that has fueled the leveraged buyout boom, which
would, in turn, expose the extent to which stocks have also come to
depend on cheap credit. Stocks took a dive last week because debt-driven
buyouts had long boosted the share prices of targeted companies. The
fallout of housing-related turmoil is also likely to extend beyond
financial markets. Among the deals that faltered last week were the $7.4
billion buyout of the Chrysler Group and the $5.6 billion purchase of
the Allison Transmission unit of General Motors. Unless investor capital
is forthcoming, it could become increasingly difficult for the
automakers to avoid bankruptcy. At the same time, the housing slump has
also driven down analysts’ monthly forecasts for car and truck
sales to levels not seen in nearly a decade.
href='http://www.nytimes.com/2007/07/30/opinion/30mon1.html?_r=1&oref=slogin&pagewanted=print'>Read
more.
name='6'>Calpine Considers Alternative Chapter 11
Plan
Calpine Corp. told
regulators Friday that it is considering an alternative reorganization
plan after being approached by unnamed parties that have proposed
offering guaranteed recoveries to stakeholders of the bankrupt
utility, Bankruptcy
Law360 reported on Friday.
face='Times New Roman' size='3'>Calpine said in a filing with the U.S.
Securities and Exchange Commission that “certain parties”
have recently contacted it about potentially sponsoring an alternative
plan of reorganization premised upon a structure that will provide
guaranteed distributions to the debtors’ stakeholders. Calpine
said that with the assistance of its investment banker, Miller Buckfire
& Co., it has initiated a process to gauge potential
investors’ interest in sponsoring such a guaranteed distribution
plan that would not compromise what the company believes is an
appropriate balance sheet upon emergence. In order to allow time for
Calpine to evaluate the prospects of a guaranteed distribution plan and
for potential plan sponsors to conduct due diligence in connection with
making any plan sponsorship commitments, the company is simultaneously
filing a notice adjourning the Aug. 8 hearing date until Sept. 11, the
filing added.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=30781'>Read
more. (Registration required.)
name='7'>Asarco Parent Moves to Block Cleanup
Settlement
Asarco LLC's parent
company has moved to block the miner's proposed $35.3 million settlement
with federal and state officials over a mining site cleanup, arguing it
does not serve the best interests of its creditors,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported on Friday. Asarco struck a deal with the U.S.
Department of Justice, the Colorado Department of Public Health &
Environment and Newmont Mining Co. earlier this month, agreeing to pay
the three to fund cleanup of the expansive California Gulch Superfund
in
size='3'>Leadville,
w:st='on'>
size='3'>Colo.
size='3'> But in ratifying the pact, Asarco “flatly
ignored” expert evidence provided by its parent company, Asarco
Inc., that suggested the government grossly inflated its $200 million
claims, Asarco said in its motion, filed on Thursday in the U.S.
Bankruptcy Court for the Southern District of Texas. The federal
government claimed $15.3 million in past cleanup costs for the
California Gulch, $118.7 in future expenses and $65.4 million in natural
resource damages costs, said Asarco, whic has estimated that the
costs are worth $13.5 million total.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=30777'>Read
more. (Registration required.)
name='8'>Buyout Firm Hits Mayer Brown with $245 Million Refco
Suit
The private equity firm
that owned a controlling interest in failed commodities brokerage Refco
Inc. has filed a $245 million lawsuit against Mayer, Brown, Rowe &
Maw, accusing the law firm of helping to conceal transactions that led
to Refco's collapse, the
size='3'>New York Law Journal reported
today. Boston-based buyout firm Thomas H.
Lee Partners filed a 50-page complaint against Mayer Brown Thursday in
federal court in
face='Times New Roman' size='3'>Manhattan
(07 Civ. 6767). In the suit, Lee said Mayer Brown handled
17 fraudulent transactions at the behest of Refco's executives between
2000 and 2005. Lee is seeking at least $245 million on claims of
securities fraud, common law fraud and negligent misrepresentation. Lee
is also charging violation of the Racketeer Influenced and Corrupt
Organization Act. A successful RICO claim would entitle Lee to treble
damages.
href='http://biz.yahoo.com/law/070730/c1929bee255360fa82a166fe77dde6d6.html?.v=1'>Read
more.
w:st='on'>
name='9'>Pittsburgh
face='Times New Roman' size='3'> Brewing Buyer Wants More Time for
Takeover
The group attempting to buy
Pittsburgh Brewing Co. out of bankruptcy asked a federal judge for
another 45 days to finalize the takeover, the Associated Press reported
on Saturday. Pittsburgh Brewing Acquisition LLC said deadlines were due
to expire this week, but that it needs more time to negotiate final
terms with bankers, investors and government officials. The group has
renamed the company Iron City Brewing Co.
size='3'>The former Pittsburgh Brewing, maker of
w:st='on'>
size='3'>Iron
face='Times New Roman' size='3'>City
and other beers, sought bankruptcy court protection in
December 2005 after the Pittsburgh Water and Sewer Authority threatened
to shut it down over more than $2 million in unpaid bills. U.S.
Bankruptcy Judge M. Bruce McCullough approved the
bankruptcy plan in June after months of negotiations between the company
href='http://biz.yahoo.com/ap/070727/pa_brf_pittsburgh_brewing.html?.v=1'>Read
more.
name='10'>Bally Noteholders Agree to Chapter 11 Plan
Bally Total Fitness Holding
Corp. said on Friday that it has received the required number of votes
in favor of the chapter 11 reorganization plan, Reuters reported on
Friday. The company also said that it was unable to reach an agreement
on an alternative restructuring plan that a group of shareholders had
proposed earlier in July. The shareholders -- four private equity funds
-- have outlined a different restructuring plan for the ailing company
and had agreed to complete due diligence by July 20, the Chicago-based
company said earlier. Bally said health club operations and memberships
will remain unaffected through the process.
name='11'>Commentary: Lessons from the Student Loan
Scandal
Trust in student lending
advisors has been shaken by recent disclosures about financial aid
officers receiving junkets, consulting fees and kickbacks courtesy of
the loan industry, owning stock in loan companies and steering business
through “preferred lender” lists, the
face='Times New Roman' size='3'>New York Times
size='3'>reported yesterday. “Students and families had assumed
that the advice they were getting on financial aid and loans from
college officials was based on that person’s experience and
knowledge and on what would work best for that student,” says
Robert M. Shireman, president of the Institute for College Access and
Success, in Berkeley, Calif. Legislation is pending in Congress, and the
Department of Education has proposed rules governing the relationship
between lender and college. Now new concerns
have surfaced about whether lenders use fair criteria to assess
applicants for private, or “alternative,” loans. According
to the College Board, such loans accounted for 20 percent of educational
borrowing for the 2005-6 school year, up from 4 percent a decade
earlier. Ultimately, all this attention should benefit borrowers. But
for now, students (and parents) scrambling to get loans for next
year’s tuition bills must navigate this intimidating and
labyrinthine industry.
href='http://www.nytimes.com/2007/07/29/education/edlife/pappano.html?pagewanted=print'>Read
more.
name='12'>Ex-Qwest CEO Gets Six Years in Prison
Former Qwest Communications CEO
Joe Nacchio was sentenced to six years in prison Friday for making $52
million in illegal stock sales while a multibillion-dollar accounting
scandal brought the telecommunications company to the brink of
bankruptcy, the Associated Press reported on Saturday. U.S. District
Judge Edward Nottingham also ordered Nacchio to forfeit the $52 million
within 15 days, imposed a maximum $19 million fine and ordered him to
serve two years' probation after serving his sentence. The judge denied
Nacchio's request to be granted bail while he appeals his conviction. He
ordered Nacchio to report to authorities within 15 days once a federal
prison is chosen for him.
href='http://news.yahoo.com/s/ap/20070727/ap_on_bi_ge/qwest_nacchio_sentencing_25'>Read
more.
href='http://news.yahoo.com/s/ap/20070727/ap_on_bi_ge/qwest_nacchio_sentencing_25'>
href='http://search.news.yahoo.com/search/news?p=bankruptcy&n=20&c=news'>