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June 6, 2006
Judge
Approves $41 Million for Delta Bankruptcy Lawyers,
Advisers
A bankruptcy judge Monday
approved $41.4 million in expenses and fees for services provided by
Delta Air Lines Inc. lawyers and advisers during the first 4 1/2 months
of the company's chapter 11 case, the Associated Press reported today.
The compensation excludes another $2.04 million requested by other firms
and $195,000 the judge has held back from the Atlanta-based airline's
auditor, Deloitte & Touche LLP, for work between Sept. 14, 2005 and
Jan. 31, 2006. The overall fees and expenses could reach $205.9 million
if the bills continue at the same rate until Delta exits bankruptcy,
which it expects to do by the summer of 2007. The total assumes Delta
exits the first day of summer next year, June 21. Also Monday,
Judge Adlai
Hardin denied a motion by the U.S. Trustee
Program to appoint an independent financial adviser to examine the fees
related to Delta's bankruptcy case. Hardin ruled that the appointment of
the examiner would be inappropriate and violate attorney-client
privilege because of the inevitable communication between an examiner
and the parties involved.
href='http://www.law.com/jsp/article.jsp?id=1149510922583&rss=newswire'>Read
more .
Autos
w:st='on'>
name='2'>Meridian
face='Times New Roman' size='3'> Asks Court for Fourth Extension of
Reorganization Plan
Nearly two months after
scoring a third extension on its reorganization plan, Meridian
Automotive Systems Inc. has put in a request to the bankruptcy court for
additional time to put together its emergence strategy,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. The auto parts manufacturer, which filed
for Chapter 11 last April, submitted an amended restructuring proposal
at the end of May in hopes of prolonging its exclusive restructuring
period for 61 days, until July 31. While some of the first-lien
debtholders objected to
w:st='on'>
size='3'>Meridian
last extended exclusive period for its reorganization plan, they have
not indicated whether they will try to block the company’s fourth
extension to protect itself from rival reorganization plans. The group
holds approximately $145 million of the company’s $303.4 million
first-lien debt. The deadline for objections to the plan is set for
Wednesday in the U.S. Bankruptcy Court for the District of Delaware. If
objections are made,
w:st='on'>
size='3'>Meridian
defend its extension request at a hearing on June 14.
face='Times New Roman' size='3'>
name='3'>Delphi
size='3'> Making Progress in Union Contract
Talks
Delphi Corp. said it is
making progress in talks with its unions that are aimed at avoiding a
possible termination of its labor contracts, Reuters reported yesterday.
The company and the unions adjourned to Friday the beginning of
testimony by unions to convince U.S. Bankruptcy Judge
face='Times New Roman' size='3'>Robert Drain
size='3'>that the contracts should remain intact. Jack Butler, Delphi's
lead lawyer, said
size='3'>Delphi
with six of its seven unions.
size='3'>The United Auto Workers, which represents about 24,000 hourly
workers, and the other unions are expected to call some 20 witnesses if
the
size='3'>Delphi
as scheduled.
href='http://www.nytimes.com/reuters/business/business-autos-delphi-contracts…'>Read
more .
name='4'>General Motors Showing Positive Signs Heading into Its
Annual Meeting
Even though General
Motors lost $10.6 billion last year and faces a particularly uncertain
future, GM shares are getting a boost as the odds of a lengthy
strike at the parts maker
diminishing, the New York Times reported today. On Monday,
lawyers for Delphi said negotiations had continued 'in earnest' over the
weekend with its six unions, including the UAW, which had rejected
Delphi's bid to cut wages to as low as $12.50 an hour, from about $28 an
hour. More good news came in a report last week by Harbour &
Associates, which detailed improvements in GM's manufacturing. Five of
the 10 most productive factories in the
w:st='on'>
size='3'>United States
size='3'>were GM plants, the Harbour report said. Moreover, GM said it
had improved its manufacturing efficiency by 30 percent since 1998, and
had closed almost 90 percent of the gap between its car plants and those
run by
long considered the world's most efficient automaker.
href='http://www.nytimes.com/2006/06/06/business/06auto.html?pagewanted=print'>Read
more
Judge
Blocks Lawsuit Against Adelphia Buyers
A bankruptcy judge has
stopped a small cable television channel from interfering in the
impending sale of bankrupt Adelphia Communications Corp. with an
antitrust lawsuit,
size='3'>Portfolio Media reported yesterday.
Judge Robert
Gerber granted that a motion by the cable
operator requesting that Florida-based the America Channel (TAC) be
prohibited from moving forward with a lawsuit against Time Warner Inc.
and Comcast Corp. over
size='3'>their expected joint acquisition of Adelphia. TAC filed suit in
a federal court in Minneapolis alleging that Time
Warner and Comcast, two of the largest cable companies in the nation,
engaged in bid-rigging and price-fixing in their bid to take
overAdelphia.
Undeterred by Gerber’s decision, TAC plans to ask the district
court in
face='Times New Roman'
size='3'>Minneapolis
vacate the bankruptcy judge’s ban at a hearing Tuesday. The
bankruptcy case is
size='3'>Adelphia Communications Corporation,
case no. 02-41729, in the U.S. Bankruptcy Court for the Southern
District of New York.
name='6'>Finova Sits Out Thaxton Class Action
Settlement
Three months after a
crucial stay was lifted, the noteholders of bankrupt financial services
outfit Thaxton Group Inc. have reached a $10 million partial class
action settlement over the allegedly fraudulent sale of $120 million
worth of debt to individuals,
size='3'>Portfolio Media reported yesterday.
Thaxton announced the settlement on Monday, putting to rest the
group’s claims against accountant Cherry Bekaert & Holland LLP
and law firm Moore & Allen PLLC. Under the terms of the settlement,
the defendants will now shell out an estimated $9.35 million to
Thaxton’s subordinated noteholders to resolve their part in the
scandal. But the recent settlement does not end the litigation facing
primary defendant Finova Capital Corp., though legal action against the
company will no longer be pursued on a classwide basis, according to
Thaxton. The high-risk lender collapsed in a $242 million meltdown amid
charges that the company and Finova committed securities fraud. Thaxton
Group owes roughly $123 million to parties that bought junk bonds from
the company.
name='7'>Mirant Attorneys Must Defend $365 Million in
Fees
Professionals that worked
on Mirant Corp.’s chapter 11 case will be heading back to court,
this time to defend charging $365 million in fees over the course of the
company’s bankruptcy,
size='3'>Portfolio Media reported yesterday.
Mirant, a Georgia-based energy company, emerged from nearly three years
of bankruptcy protection in January with $6 billion in equity and a 90
percent recovery for unsecured creditors. The professionals responsible
for the turnaround must now participate in a series of hearings to
justify their million-dollar paydays. The fees themselves have not
raised much ire, with the battle centering on the bonuses requested by
various attorneys. Mirant’s lawyers have asked the court for
permission to create a $4 million bonus pool, and the energy
company’s financial advisor, Blackstone Group, has asked for $3
million in bonuses. Lawyers who represented shareholders in the
proceedings are seeking $6 million in addition to their hourly
fees.
name='8'>Criminal Probes in Enron Scandal May Be Set to Wind
Down
The ongoing federal
investigation of Enron Corp. has produced criminal charges against 32
people, however it is not clear if it will produce additional charges
against anyone else, the
size='3'>Wall Street Journal reported today.
The four-month trial of former Enron Chairman Kenneth Lay and former
President Jeffrey Skilling on conspiracy and fraud charges was viewed as
a culmination of the federal criminal probe that began in the wake
Enron's collapse into bankruptcy in December 2001. Theoretically, the
federal Enron Task Force still has lots of potential targets for
criminal charges, some of whom came up during the Lay/Skilling
trial. Court filings in that case said that about 100 individuals have
been identified as co-conspirators of the two men. Of those criminally
charged, 16 have pleaded guilty, eight have been convicted at trial, two
have been acquitted and the rest are awaiting trial.
href='http://online.wsj.com/article/SB114955897839572195.html'>Read
more . (Registration required.)
name='9'>AT&T, Cox May be Tried over Collapse of Internet
Service Provider
A
w:st='on'>
size='3'>Delaware
refused to dismiss a lawsuit accusing Cox Communications and Comcast of
unfairly manipulating the fortunes of At Home, a Redwood City,
Calif.-based Internet service provider that went bankrupt in 2001, Dow
Jones Newswires reported today. The ruling means the two cable companies
could face trial on allegations they contributed to the demise of At
Home, which filed for bankruptcy in 2001 and ceased commercial
operations in 2002. Monday's ruling came in a Delaware Court of Chancery
case that rests on the premise that the cable companies that among them
controlled 63 percent of the voting power in At Home owed a fiduciary
duty to the company that called for them to treat it fairly. It was
brought by a trustee for bondholders who went unpaid in At Home's
bankruptcy case.
href='http://www.mercurynews.com/mld/mercurynews/business/14750906.htm?source…'>Read
more .
name='10'>Fewer Employers Offering Pension Plans
Only 37 of the nation's
100 largest companies offered traditional pensions to new hires last
year, the Seattle
Post-Intelligencer reported today. That's down
from 42 in 2004, 50 in 2002 and 89 in 1985, according to benefits
consultant Watson Wyatt. House- and Senate-passed bills give employers
incentives to offer 401(k)-style 'defined contribution' retirement plans
and provide for automatic enrollment of new employees who can put their
investments on autopilot. Thirty-six percent of those with less than a
year's tenure participated in their company 401(k) plan last year, an
increase of 6 percentage points from 2004, according to Hewitt
Associates. Where employers automatically enrolled new hires,
participation jumped 14 percentage points.
href='http://seattlepi.nwsource.com/business/272859_employeesavings06.html'>Read
more .
International
name='11'>OAO Yukos Bids to Retain Control of $20 Billion
Business
Facing more than $29.5
billion in claims and possible liquidation in a Russian bankruptcy
court, OAO Yukos this week proposed an outline for a restructuring plan
that would leave the struggling Russian oil company in control of its
core business, Portfolio
Media reported yesterday. The outline, filed
this week with the U.S. Bankruptcy Court in the
face='Times New Roman' size='3'>Southern District of New York, proposes
that Yukos’ core assets be left intact as a viable ongoing company
with an enterprise value in excess of $20 billion, according to court
documents. It also proposes to create a cash pool separate from the
company to pay out its more than $29.5 billion in claims from the
Russian government and other creditors. The pool would be funded by the
sale of Yukos’ ancillary assets, including its $4.2 billion stake
in Sibneft, another Russian oil company, $3.6 billion of Yuganskneftegaz
(YNG) preferred stock and $1.1 billion of Arctic Gas assets, according
to court documents. Under the proposed outline, any claims that are not
paid out of the cash pool by March 2008 will be paid out via the cash
flow-generating capacity of the company’s remaining core
assets.