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October 2, 2006
name='1'>Legislation Would Shield Tithing from
Bankruptcy
The Senate unanimously
approved legislation early Saturday that would allow individuals who
have filed for bankruptcy to continue paying religious tithing and some
other charitable contributions, the
size='3'>Salt
face='Times New Roman' size='3'>Lake
Tribune reported yesterday.
Co-sponsored by Sen. Orrin Hatch (R-Utah), the bill was drafted in
response to a
face='Times New




Roman'
size='3'>New York
size='3'>bankruptcy judge's ruling in August that tithes to a church
were not allowed for an upper-income couple filing for bankruptcy until
they had repaid all of their other creditors, which was expected to take
five years. The bill, passed by the Senate working through Friday night
into the early hours of Saturday, was co-sponsored by Sen. Barack Obama
(D-Ill.) and seeks to clarify that Congress did not mean to prohibit
tithes or charitable contributions when it passed bankruptcy-reform
legislation last year.
href='http://www.sltrib.com/ci_4426387?source=rss'>Read
more.
w:st='on'>
name='2'>U.S.
face='Times New Roman' size='3'> Trustee Program Extends Waiver of
Credit Counseling and Debtor Education Requirements for Hurricane
Katrina Victims
The U.S. Trustee Program
on Sept. 21 announced that the temporary waiver of the credit counseling
and debtor education requirements for bankruptcy filers in the Eastern,
Middle and Western Districts of Louisiana and the Southern District of
Mississippi will be extended due to the continued effects of Hurricane
Katrina in those areas, according to the Executive Office of the U.S.
Trustees (EOUST). The Bankruptcy Code permits the EOUST to waive the
credit counseling and debtor-education requirements upon annual
review in judicial districts where approved credit counseling
agencies and debtor education courses are not adequate to serve
bankruptcy filers.
name='3'>Entergy Takeover Could Help New
size='3'>
w:st='on'>Orleans
Faced with the prospect
of residential electric and gas bills that could jump by $100 or more
per month,
face='Times New Roman' size='3'>New
Orleans
addition to its administrative responsibilities: a takeover of all or
part of its bankrupt and storm-shattered local power utility,
Entergy New Orleans, the
size='3'>New Orleans Times-Picayne reported
yesterday. A full-system buyout seems unlikely without the deal
including transfer to the city of lower-cost power contracts that the
parent company, Entergy Corp. City Council advisers determined that the
council's efforts to help the utility would be best used in other
undertakings, such as making sure that Entergy New Orleans gets a
portion of federal money about to be issued by the state.
href='http://www.nola.com/news/t-p/frontpage/index.ssf?/base/news-6/115968767…'>Read
more.
After
Massive Losses, Hedge Fund May Liquidate
Amaranth Advisors LLC,
the hedge fund that announced it had lost $6 billion just over a week
ago betting on natural gas prices, said it might liquidate if it cannot
find a buyer after its top candidate for a buyer just bowed out of
talks, Portfolio
Media reported on Friday. The leading
candidate was Citigroup Inc., which was reportedly in talks to buy a
stake in Amaranth until talks broke off on Thursday night. Citigroup and
Amaranth had been discussing giving Amaranth working capital and
Citigroup an ownership stake in the hedge fund. With Citigroup out of
the picture, it is more likely that Amaranth will
face='Times New Roman' size='3'>begin to liquidate its assets. The hedge
fund is believed to still have $3.5 billion in assets.
name='5'>Roberts’ Court May Be Defined in Second
Term
During the first term
under the leadership of Chief Justice John G. Roberts Jr., the justices
were able to find common ground with some regularity by agreeing not to
decide much, but that will likely change as the Supreme Court begins its
new term today, the New
York Times reported today. The 38 cases that
the court has agreed to decide offer few off-ramps, requiring instead
that the justices proceed to rulings that will define the new court. The
business community is watching several cases closely, particularly an
appeal of a $79.5 million award of punitive damages against the
cigarette maker Philip Morris, upheld by the Oregon Supreme Court on
behalf of the family of a smoker who died of lung cancer. The award is
far greater than the 10-to-1 ratio that the court’s most recent
decision, State Farm v.
Campbell in 2003, suggested as the outer limit
of due process. On the other hand, earlier cases concerned economic
rather than physical injuries. The court’s new membership aside,
this case is sufficiently distinctive in several ways so as to make the
outcome unpredictable.
href='http://www.nytimes.com/2006/10/02/washington/02scotus.html?ei=5094&en=7…'>Read
more.
Refco
Must Pay for Customer Suit Against Affiliate
A federal judge has
ordered Refco Inc. to pay more than $4.2 million in legal fees to
securities customers who argued that they contributed to Refco’s
reorganization process by suing one of Refco’s affiliated
debtors, Portfolio
Media reported on Friday. As a result of U.S.
Bankruptcy Judge Robert
Drain’s Wednesday order, Refco will pay
nine law firms $3,946,303.85 in fees and $330,455.57 in expenses. The
lion’s share of that total, almost $1.4 million, will go to Cleary
Gottleib Steen & Hamilton LLP. The
securities customers’ “substantial contribution” to
the chapter 11 proceedings centers on debtor Refco Capital Markets Ltd.
and the debtors’ intent to attempt to reorganize Refco Capital
Markets under chapter 11. The securities customers filed a motion to
convert Refco Capital Markets’ chapter 11 reorganization to a
chapter 7 stockbroker liquidation, and the
face='Times New Roman' size='3'>joinder parties signed on in support.
The moving customers and joinder parties contended that the motion led
to considerable expense arising from an extensive discovery process and
a six-day trial.
name='7'>Ex-Mortage Lender Officers Request Insurance
Funds
The former directors and
officers of mortgage lender American Business Financial Services Inc.,
which converted to chapter 7 in May 2005, are scrambling for additional
insurance funds to pay defense costs for lawsuits alleging fraud lodged
against them, Portfolio
Media reported on Friday. The group of
one-time directors and officers has asked the U.S. District Court for
the District of Delaware for unspecified amounts of funds to foot their
defense bill for civil lawsuits. In August, Judge
face='Times New Roman' size='3'>Mary F. Walrath
size='3'>granted up to $300,000 for defense expenses. She is set to rule
over the next set of insurance payments during an Oct. 18 hearing.
Objections are due Oct. 12.
Delta
Reports $11 Million Loss for August
Bankrupt Delta Air Lines Inc.
reported Friday that it lost $11 million in August, the Associated Press
reported on Saturday. The Atlanta-based company, which is the nation's
third-largest airline, said the net loss in the 31-day period was
equivalent to 6 cents per share. The loss represented a $147 million
improvement from the net loss of $158 million in August 2005, Delta
said. The airline said it recorded revenue of $1.60 billion in the month
of August. It said it spent $431 million on aircraft fuel, part of $1.54
billion in total operating expenses in the month.
href='http://news.yahoo.com/s/ap/20060930/ap_on_bi_ge/delta_bankruptcy_2'>Read
more.
name='9'>Billionaire Investor Drives Overhaul of
size='3'>
The man who has emerged
as pivotal in the talks to Delphi out of bankruptcy is David A. Tepper,
a blunt hedge-fund billionaire who has been a thorn in
w:st='on'>
size='3'>Delphi
the Wall Street
Journal reported on Saturday. Tepper is head
of Appaloosa Management, a $4.5 billion hedge fund that owns 9.3 percent
of
size='3'>Delphi
pushing a restructuring plan that could leave him in control of a far
bigger stake in
size='3'>Delphi
negotiations, the group is near an agreement under which Tepper would
inject billions of dollars more into Delphi and wind up controlling up
to one-third of Delphi's stock when it emerges from bankruptcy. An
agreement would end a bankruptcy court battle between Delphi, its
stockholders and creditors, and GM, which still has significant
financial ties to
size='3'>Delphi
href='http://online.wsj.com/article/SB115958066096878878-search.html?KEYWORDS…'>Read
more. (Registration required.)
In related
news,
size='3'>Delphi Corp. on Friday posted a $533 million net loss for
August in a limited monthly report for the U.S. Bankruptcy Court
in
York
Friday.
size='3'>Delphi
bankruptcy in October 2005, reported a cumulative $3.7 billion net loss
for the first eight months of 2006 in the limited report. The company
recorded charges of about $372 million for August for its early
retirement and buyout offers to unionized
w:st='on'>
size='3'>U.S.
size='3'>hourly workers. Overall 20,100 workers represented by
unions have chosen to leave the company through those programs. Net
sales totaled nearly $1.62 billion for August and about $11.86 billion
for the first eight months of 2006, Troy, Mich-based
w:st='on'>Delphi
name='10'>SeraCare Shareholders Denied Bid to Slow
Proceedings
A federal bankruptcy
judge denied SeraCare Life Sciences Inc. shareholders’ bid to
delay the company’s auction and exit-funding hearing on
Wednesday, Portfolio
Media reported on Friday. The group asked the
court on Sept. 20 to adjourn all dates and deadlines for counter bids,
objections, auctions and hearings on exit funding because SeraCare had
not yet filed final documentation regarding its alleged stalking horse
bid. On Sept. 8, the health care company
lost exclusive control over its chapter 11 case after Judge
Louise DeCarl Adler
in the U.S. Bankruptcy Court in
w:st='on'>
size='3'>San Diego
shareholders to file their own reorganization plan. SeraCare has since
sought court approval to modify its chapter 11 exit funding strategy,
hoping that the changes will enable it to retain control over its
bankruptcy case.
Two
Get Prison in Baptist Foundation Collapse
Two top executives with
the now-defunct Baptist Foundation of Arizona, which collapsed in 1999
in the largest nonprofit bankruptcy in
w:st='on'>
size='3'>U.S.
size='3'>history, were sentenced to prison terms on Friday for their
convictions on fraud charges, Reuters reported on Saturday. Former
Baptist Foundation president William Crotts, who was found guilty in
July of fraud and knowingly conducting an illegal enterprise after the
longest criminal trial in
w:st='on'>
size='3'>Arizona
was sentenced to eight years in prison. Thomas Grabinski, the
foundation's former legal counsel who was convicted of the same charges
after the 10-month trial, was sentenced to six years in prison. The jury
acquitted both men on 23 counts of theft, and a judge later dismissed
two fraud counts.
href='http://news.yahoo.com/s/nm/20060930/us_nm/crime_baptist_dc_3'>Read
more.
name='12'>Bankruptcy Hearing for
w:st='on'>
size='3'>Arizona
Kreme Franchisee Postponed
Bankruptcy proceedings
for an Arizona Krispy Kreme franchisee were put on hold Friday to make
sure former employees are notified about creditor hearings, the
size='3'>Arizona
w:st='on'>
size='3'>Republic
size='3'>reported yesterday. The first meeting of creditors in Rigel
Corp.'s chapter 7 bankruptcy case was rescheduled to Oct. 31. Rigel,
with offices in
face='Times New Roman' size='3'>Tempe
size='3'>,
size='3'>Ariz.
franchisee of Valley Krispy Kreme stores, which closed unexpectedly Aug.
11. Tony Mason, the
w:st='on'>
size='3'>Phoenix
trustee appointed to oversee the liquidation of Rigel's assets to pay
creditors, rescheduled the meeting so Rigel's employees, who have not
been able to claim their final paychecks, could attend.
href='http://www.azcentral.com/business/articles/1001biz-talker1001.html#'>Read
more.
name='13'>Radnor Holdings Gets Approval for Bankruptcy
Financing
Radnor Holdings Corp. has
received bankruptcy court approval for $103 million in
debtor-in-possession financing, the
size='3'>Philadelphia Business Journal
size='3'>reported on Friday. The packaging and food containers company
was granted the approval Sept. 22 in the U.S. Bankruptcy Court for the
District of Delaware. The company said roughly $64 million of the
financing was used to repay the company's outstanding balance under its
pre-petition revolving credit facility, and the remainder will continue
to be used to satisfy the company's operating and bankruptcy-related
obligations, including payment of employee wages and benefits and
payments to suppliers for goods and services received after the chapter
11 filing.
href='http://philadelphia.bizjournals.com/philadelphia/stories/2006/09/25/dai…'>Read
more.
w:st='on'>
name='14'>Florida
face='Times




New
Roman' size='3'> Condo Converter Files
for Chapter 11
Buffeted by the slowing
real estate market, an Orlando, Fla.-area apartment-to-condominium
converter filed for chapter 11 reorganization Friday, the
Orlando Sentinel
reported on Saturday. Main Street USA Inc., and two
subsidiaries, PYC Development One LLC and PYC Development 4 LLC, listed
$28 million in debt. Main Street USA lost more than $3 million in
deposits in an effort to purchase two other Orlando-area apartment
complexes for conversion to condos. The case
has been assigned to Judge Arthur B. Briskman in
w:st='on'>
size='3'>Orlando
href='http://www.orlandosentinel.com/business/orl-condos3006sep30,0,3846117,p…'>Read
more.
w:st='on'>
name='15'>Pennsylvania
w:st='on'>
size='3'> Hospital
face='Times New Roman' size='3'> Files for Chapter
11
A month after
size='3'>Tyrone
face='Times New Roman' size='3'>Hospital
size='3'>revealed that millions in losses had left it financially
crippled, the nonprofit and its wholly-owned subsidiary, Tyrone Medical
Associates, filed Friday for chapter 11 bankruptcy in federal court,
the
size='3'>Altoona
size='3'>(
face='Times New Roman' size='3'>Pa.
size='3'>) Mirror reported yesterday.
According to petitions filed in U.S. District Court in
w:st='on'>
size='3'>Pittsburgh
w:st='on'>
size='3'>Tyrone
face='Times New Roman'
size='3'>Hospital
Tyrone Medical Associates each claim to have assets of less than $50,000
and debts from $500,000 to $1 million. The hospital lost $3.9 million in
the last fiscal year, which ended June 30, a trend it has experienced
each year since it was last profitable in 2000.
href='http://www.altoonamirror.com/News/articles.asp?articleID=5274'>Read
more.
International
name='16'>British Airways Pension Deficit Widens to $3.9
billion
British Airways
Plc,
size='3'>Europe
airline, on Friday said its pension deficit grew to £2.1 billion
($3.9 billion) from £928 million despite a doubling of its
contributions and a recovery in the stock market, MarketWatch.com
reported on Friday. The news was a surprise, as analysts expected the
new estimate to come in between £1.5 billion pounds and £1.8
billion. The airline said the trustees have confirmed that annual
contributions of £497 million would be needed to fund the scheme
unless changes to future benefits proposed earlier this year are
introduced. BA in March proposed lifting the retirement age of its staff
to 65 years for cabin crew and 60 years for pilots from a current
compulsory retirement age of 55. At the time, the airline said that
tackling the pension deficit would also include a slower accrual rate
and a 2.5 percent cap on annual pension increases. In exchange, BA
proposed paying £500 million to tackle the deficit.
href='http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B1B3E5DA9-CC0B-…'>Read
more.