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February 16, 2006
Sen.
Specter Expects Another Asbestos Vote
Sen. Arlen Specter (R-Pa.) said
the asbestos compensation bill he is co-sponsoring is 'very much alive'
and that Senate Majority Leader Bill Frist told him there would be
another vote on it, Reuters reported yesterday. Specter said he did not
think there could be another vote on his asbestos bill this week as a
revote would have to wait 'at least until after the recess' the Senate
is scheduled to take next week, Specter said he spoke with Tennessee
Republican Frist on Wednesday morning and 'He (Frist) said he'd have
another vote. He said he's looking forward to another vote.'
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/02/15/AR20060…'>Read
more.
Tower
Automotive Asks Bankruptcy Court for Lease Rejection
Auto parts
size='3'>supplier
face='Times New Roman' size='3'>Tower
size='3'>Automotive Inc. has asked the Bankruptcy Court to reject the
lease on its global headquarters in
w:st='on'>
size='3'>Novi
w:st='on'>
size='3'>Mich.
Crain’s Detroit Business reported yesterday. The lease is
scheduled to run through Oct. 2, 2007, for which Tower pays $6,596.54 a
month on the property. Bankruptcy court documents list Harrison
Properties L.L.C. of
w:st='on'>
size='3'>Corydon
w:st='on'>
size='3'>Ind.
lessor. The rejection becomes effective Feb. 28 unless an objection is
filed. Tower, the world's largest
manufacturer of vehicle frames, filed for chapter 11 protection
in
size='3'>New York City
February 2005. The company has already asked the court whether it can
reject a variety of its union contracts, and a hearing on that motion is
scheduled for Feb. 27. The United Auto Workers and other Tower unions
have voted to strike at nine plants around the
w:st='on'>
size='3'>Midwest
approved.
href='http://www.crainsdetroit.com/cgi-bin/news.pl?newsId=7969'>Read
more.
name='3'>Galvex Faces Opposition to Chapter 11
Dismissal
Steel maker Galvex, which
last week asked a bankruptcy court to dismiss its chapter 11
proceedings, may not have the smooth exit it anticipated,
Portfolio Media
reported yesterday. U.S. Trustee Deirdre
Martini has opposed the request, questioning the circumstances
that would allow the dismissal of the bankruptcy. Galvex, which filed
for bankruptcy in January after defaulting on an $84 million loan,
reached an agreement with its primary lender, Silver Point Capital, last
week, asking that its case be thrown out as a result. But Martini has
argued that there are still some questions to be answered regarding the
company’s finances, and has asked the bankruptcy court to deny
Galvex’s request.
size='3'>She said that the company has not furnished information about
the details of the deal with its lender, nor has it stipulated how it
will pay off unsecured creditors. Martini recommended that the judge
appoint a trustee to oversee the case until the specifics of the
agreement are secured. Galvex and four of its European subsidiaries
filed for bankruptcy protection earlier this month after being notified
by SPC that the company had defaulted on a $60 million letter of credit
and an $84 million senior loan. In its chapter 11 filing, the company
listed assets of between $1 and $10 million.
name='4'>Calpine’s Attempt to Reject Contracts Remains Unclear
According to S&P
Calpine Corp.’s
recent attempts to scrap contracts signed before its bankruptcy may
undermine bondholders' ability to recover their money from the power
producer, according to a report released by Standard &
Poor's, Portfolio
Media reported yesterday.
face='Times New Roman' size='3'>Given the history of power companies
attempting to reject power contracts in bankruptcy proceedings, S&P
says it is questionable whether Calpine can successfully reject these
contracts. Judicial precedent on the issue is murky, with recent cases
coming down on different sides as to which entity—the bankruptcy
court, the district court or the Federal Energy Regulatory
Commission—can determine whether debtors may reject energy
contracts. Calpine has been seeking permission to reject eight such
contracts, including an agreement with the Los Angeles Department of
Water Resources, in which Calpine supplies power to Pacific Gas &
Electric customers. Calpine estimates it will lose $1.2 billion if it is
forced to honor the purchased-power contracts, making it more difficult
to pay off its $18 billion debt. The company has indicated that the
ability to reject these significant energy contracts was an important
factor in its decision to start bankruptcy proceedings.
name='5'>Judge Dismisses
w:st='on'>
size='3'>Michigan
size='3'>Millionaire's Bankruptcy Case
The chapter 7 bankruptcy
case of Kevin Adell, the
size='3'>Michigan
to
size='3'>Fla.
was ordered to pay a $6.4 million judgment, was dismissed, according
to Naples Daily
News yesterday. U.S. District Judge
Alexander L. Paskay also denied Adell's request for
stay pending appeal, which means he is not under the protection of the
bankruptcy court for the first time in two years. His creditors now can
pursue his assets, including the Old Naples waterfront mansion he
purchased in 2003 for $2.8 million. Adell was ordered the judgment for
forcing the builder of his future $3.1 million home into involuntary
bankruptcy. A
face='Times New Roman' size='3'>Michigan
bankruptcy judge declared the bankruptcy bogus and
ordered Adell to pay the builder more than $4 million in compensatory
damages and $2 million in punitive damages.
href='http://www.naplesnews.com/news/2006/feb/15/judge_dismisses_millionaires…'>Read
more.
Birch
Telecom Is Close to Bankruptcy Exit
Birch Telecom said it
could exit bankruptcy by April 1 after a judge issued a key ruling,
the Kansas City
Star reported today. The U.S. Bankruptcy Court
in
size='3'>Delaware
Birch’s disclosure statement, allowing the
w:st='on'>
size='3'>Kansas City
size='3'>telephone company to begin soliciting votes on its
reorganization plan, said Allan Samson, a Birch executive. Final
approval of the plan could come during a confirmation hearing scheduled
for March. Birch
sells local and long-distance telephone and Internet services, primarily
focusing on small and medium-size businesses. In its reorganization
plan, Birch said its work force would be down to about 300 by the end of
this year and to 210 by 2008. With debts totaling about $150 million,
Birch sought bankruptcy protection last August. Birch has proposed
trimming its $108.6 million debt to lenders to about $35 million and
giving them the company’s equity.
href='http://www.kansascity.com/mld/kansascity/business/13882557.htm?template…'>Read
more.
w:st='on'>
size='3'>Florida
size='3'> Environmental Remediation Firm
Emerges from Bankruptcy
Handex Consulting and
Remediation, a Florida-based environmental services firm, has emerged
from bankruptcy and is under new ownership, according to WasteNews.com
yesterday. The company has purchased the assets essential to the
environmental remediation business formerly operated by Handex Group
Inc. A nonenvironmental venture capital group, Demco-Venco LLC,
purchased the former Handex Group in a plan approved by the U.S.
Bankruptcy Court in
w:st='on'>
size='3'>Orlando
owners offered employment to most of the former Handex Group team of
professionals.
href='http://www.wastenews.com/headlines2.html?id=1140025020'>Read
more.
name='8'>Bankruptcy Filing Buys Time for Closed Community
Center
A final-hour bankruptcy
filing pulled the
w:st='on'>
size='3'>Northern
face='Times New Roman' size='3'>Kentucky
Center
block Tuesday morning, the
size='3'>Kentucky Post reported yesterday.
The
size='3'>William
face='Times New Roman' size='3'>H.
w:st='on'>
size='3'>Martin
face='Times New Roman' size='3'>III
size='3'>Northern
face='Times New Roman' size='3'>Kentucky
Center
reorganization petition in U.S. Bankruptcy Court in
w:st='on'>
size='3'>Lexington
Monday afternoon to freeze all assets of the board and block the
foreclosure sale. The 74-year-old former school and longtime community
center in Covington’s, Ky., eastside neighborhood was scheduled to
be sold to pay outstanding debts, including more than $130,000 in
mortgages to two banks. The center was closed and padlocked in May 2003
after utilities were shut off because of unpaid bills, and the board
split into two rival factions.
href='http://news.kypost.com/apps/pbcs.dll/article?AID=/20060215/NEWS02/60215…'>Read
more.
Nine
Attorneys General Reach Settlement with Finance Company over Fraud
Claims Against Bankrupt NorVergence Telecommunications
Michigan Attorney General
Mike Cox announced that he and the attorneys general of eight other
states, the Georgia Governor's Office of Consumer Affairs and the
District of Columbia have reached a settlement agreement with BB&T
Leasing Corp. (BB&T) in connection with a widespread
telecommunications fraud involving NorVergence, Inc., a bankrupt New
Jersey-based telephone equipment and service company, according to a
press release yesterday. As NorVergence was forced into bankruptcy in
June 2004 and its customers were left without service, finance companies
maintained they were still responsible for the five-year rental
agreement payments. Customers who did not pay faced being sued or
threatened with suits in the states in which the finance companies have
their corporate headquarters- in most cases, a distant and inconvenient
forum for the NorVergence customers. Other states participating in the
settlement are
size='3'>Connecticut
size='3'>Delaware
size='3'>Georgia
size='3'>Illinois
w:st='on'>
size='3'>Maryland
w:st='on'>
size='3'>Massachusetts
Hampshire
w:st='on'>
size='3'>Pennsylvania
Island
w:st='on'>
size='3'>District of Columbia
size='3'>.
href='http://biz.yahoo.com/prnews/060215/dew017.html?.v=35&printer=1'>Read
more.
name='10'>Analysts Say a Strike at
face='Times New Roman' size='3'>Delphi
size='3'>Could Cripple GM
As the deadline for
Delphi Corp. to ask a court to void its union contracts edges closer,
analysts worry a strike at the auto parts maker – GM’s
largest supplier -- would deepen the financial crisis at the automaker,
Reuters reported yesterday. Bankrupt Delphi Corp. has threatened to ask
the court to void its contracts with the United Auto Workers union if it
cannot reach an agreement by Friday to lower labor costs. This could
result in a strike, which could shut down plants and force GM to burn
through billions of dollars, according to analysts. 'A work stoppage
that shuts down GM's North American operations would result in cash burn
of around $5 billion per month,' JP Morgan analyst Himanshu Patel wrote
in a research note. The world's largest automaker lost $8.6 billion in
2005 due to high labor and commodities costs, loss of
size='3'>U.S.
size='3'>market share to foreign rivals and sluggish sales of sport
utility vehicles. If talks fail and a bankruptcy court tosses out
size='3'>Delphi
union workers could strike the auto parts maker -- a move that would
halt GM production quickly, hampering new vehicle launches critical to
GM's success.
href='http://go.reuters.com/newsArticle.jhtml?type=businessNews&storyID=11229…'>Read
more.
name='11'>Commentary:
w:st='on'>
size='3'>Retailers
face='Times New Roman' size='3'>Fight
size='3'>State
Care Mandates to Avoid Possible Bankruptcies
w:st='on'>
size='3'>America
size='3'>'s retailers announced last week that they aren't especially
keen to follow the steel, airline and perhaps the auto industries into
bankruptcy court, according to a Wall
face='Times New





Roman'
size='3'>Street Journal editorial today. The
announcement came in the form of two federal lawsuits filed by the
Retail Industry Leaders Association against the state of
size='3'>Maryland
size='3'>Suffolk County
York
'Wal-Mart' laws that both jurisdictions recently passed, which would
require a few large companies to pay more for their workers' health
care. The common denominator is that all of these laws largely single
out non-union employers. The union strategy is to force any competitive,
non-unionized company to incur the same labor-induced costs as their own
beleaguered employers. Unionized grocers such as Safeway, Albertson's
and Kroger have been losing the fight against their lower-cost
competitors, and shedding jobs in the process. In the past decade, more
than two dozen supermarket operators have sought bankruptcy court
protection or liquidated. The union goal is to stop this bleeding by
dragging the Wal-Marts and Costcos to their cost level. The courts,
however, have routinely struck down state laws that mandate particular
benefits. In one well-known 1980 case, the Ninth Circuit Court of
Appeals struck down a
w:st='on'>
size='3'>Hawaii
requiring employers to provide workers with comprehensive health
care.
href='http://online.wsj.com/article/SB114005770876575502-email.html'>Read
more.
name='12'>Katrina's Lingering Effects on
w:st='on'>
Orleans
size='3'>Lawyers
Whatever the size of the
firm these
face='Times New Roman' size='3'>New
Orleans
-- whether it is a solo practice, a large operation or somewhere in
between -- the path their lives have taken five months after the
storm-like-no-other has been marked with despondency and with hope,
the National Law
Journal reported today. 'Everything's in
limbo,' said Gary Elkins, a tax and real estate lawyer at 10-attorney
Elkins PLC. About 7,500 attorneys had offices in the
w:st='on'>
Orleans
Hurricane Katrina, but the number of attorneys now in the area is
unclear. The legal service directory Martindale.com lists the number of
attorneys with
face='Times New Roman' size='3'>New
Orleans
5,352. Courts have since opened in the area,
but mail service is spotty, hampering correspondence between the courts
and attorneys and among attorneys themselves.
href='http://www.law.com/jsp/law/sfb/lawArticleFriendlySFB.jsp?id=11399115182…'>Read
more.
Airlines
name='13'>Northwest Fate May Hang on Bankruptcy Judge’s
Decision
Union negotiations at
Northwest Airlines are in a critical phase this week, with a judge
expected to rule Friday on whether the company can throw out contracts
with pilots and flight attendants, the Associated Press reported today.
If Bankruptcy Judge
size='3'>Allan Gropper in
w:st='on'>
York
its contracts, the nation's fourth-largest carrier would be free to
impose new rules on pilots and flight attendants. Besides pay cuts,
Northwest wants to start a subsidiary to handle small-jet flying and
wants to hire more nonunion foreign nationals for many of its flights
to
size='3'>Asia
they may strike if the carrier is released from its contracts, work
stoppages wouldn't happen right away. The pilot strike vote runs through
Feb. 28, and flight attendants won't finish voting until March 6. The
pilots' union has said talks are likely to continue beyond Friday's
ruling. Northwest, which filed for bankruptcy protection in September,
has said a strike could kill it, which would put pilot pensions at risk
and that a strike would be illegal under the Railway Labor Act, which
lays out a lengthy pre-strike procedure that hasn't been followed at
Northwest.
href='http://www.nytimes.com/aponline/business/AP-Northwest-Labor.html?pagewa…'>Read
more.
International
size='3'>Shareholder and Lender Look
to
face='Times New Roman' size='3'>Force
St.
size='3'>Croix Businessman into Involuntary
Bankruptcy
A flurry of court filings
during the last few days has opened the newest battle in the contentious
exchange between
size='3'>St. Croix
Prosser, former shareholder Greenlight and lender Rural Telephone
Finance Cooperative, the Virgin Islands Daily News reported
yesterday. On Friday, former shareholder Greenlight Capital filed
late-night electronic petitions in
w:st='on'>
size='3'>Delaware
to force Prosser and two of his companies, Emerging Communications Inc.
and Innovative Communication Co. LLC, into involuntary bankruptcy in an
effort to collect a $130 million court judgment related to a 1998 stock
sale. The action stems from a behind-the-scenes agreement reached last
year between Greenlight and RTFC, a Virginia-based for-profit lender,
that crafted a plan to force the Prosser companies into bankruptcy and
collect millions of dollars. The Greenlight filing of the bankruptcy
petitions will not affect the operations or employees of EmCom
subsidiary Innovative Communication Corp., which is based in the
Islands
find that EmCom, ICC-LLC and Prosser are insolvent before changes in the
makeup or operations of any ICC-related entities could take
place.
href='http://www.virginislandsdailynews.com/index.pl/article_home?id=13296184'>Read
more .
size='3'>Two Changes to
size='3'>Canada
size='3'>’s Pension Bill Would Avert Strike,
w:st='on'>Union
Union leader Sid Ryan
says it will take two things to avert a province-wide strike over a bill
on municipal employees' pension reform, the Toronto Star reported
today. One would be eliminating from
the employee side of the pension corporation a group representing
managers. The other would be scrapping a requirement that there be a
two-thirds majority vote in order to improve benefits. At issue is Bill
206, an act to revise the Ontario Municipal Employees Retirement System
(OMERS). Canadian Union of Public Employees, Ontario, (CUPE) workers
will walk off the job at midnight on the day the government begins final
debate on the bill, which could be as early as next week.
href='http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/…'>Read
more.
name='16'>Health Ministry to Revise Korean Pension
Law
The Ministry of Health
and Welfare has decided to revise the national pension law this year
into a system under which the public should pay more and will be given
less pension, the
size='3'>Donga reported today. Health and
Welfare Minister Rhyu Si-min reported its major plans for 2006,
including the above-mentioned measure, to President Roh Moo-hyun at the
Gwacheon Government Complex yesterday.
href='http://english.donga.com/srv/service.php3?bicode=040000&biid=2006021642…'>Read
more.
href='http://english.donga.com/srv/service.php3?bicode=040000&biid=2006021642…'>