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September 29,
2005
name='1'>Bankruptcy
Reform May Hurt Senior Managers
Senior managers
stand to
lose most at troubled companies once bankruptcy reform goes into
effect next
month, The Deal reported today. Stricter limits on retention
bonuses
and pressure to move swiftly through a bankruptcy could lead to
greater changes
in debtor management, Bruce Zirinsky, head of financial restructuring
at Cadwalader,
Wickersham & Taft (CWT), said Tuesday. BAPCPA will undermine the
current
emphasis on management as the key to reorganization when it takes
effect on
Oct. 17, Zirinsky said at a New York forum on the new law. An
amendment to §503
of the U.S. Bankruptcy Code will require managers to prove that they
have a
bona fide job offer at the same or better compensation to snare
a retention
bonus, he told about 75 professionals attending the CWT forum.
href='http://www.law.com/jsp/newswire_article.jsp?id=1127898310509'>Read
the full story.
id='2'>Minimum
Payments Up, But Not Because of BAPCPA
There is a lot of
misinformation
being circulated about an industry-wide change in credit-card minimum
payments,
the Northwest Herald said today. The fact is that by early next
year,
many credit-card users will see their minimum required payments go up.
Some
have seen a bump already. But the hike has nothing to do with BAPCPA.
A change
in how much you have to pay on your credit-card bill is not covered in
this
law. Companies are increasing minimum payments as a result of new
credit-card
lending guidelines issued by the Board of Governors of the Federal
Reserve System,
Federal Deposit Insurance Corporation, Office of the Comptroller of
the Currency
and Office of Thrift Supervision.
href='http://www.nwherald.com/BusinessSection/330616665569960.php'>Read
the full story.
id='3'>Delphi
Warns of Pension Cuts
Delphi Corp. sent a
letter
to its hourly employees warning them that
href='http://www.theoaklandpress.com/stories/092905/loc_2005092906.shtml'>pensions
could be at risk if the company files for bankruptcy, the
Oakland Press
reported today. The letter sent at the end of last week to
Delphi’s
12,000 hourly retirees spells out what will happen to hourly pension
benefits
if the company files for bankruptcy. If Delphi files for bankruptcy
and responsibility
for the company’s pension fund is transferred to the federal
Pension Benefit
Guaranty Corp., the maximum benefit for anyone retiring before the age
of 65
drops to $1,710 per month, the letter notes. "Delphi, by law,
must pay
for all pension benefits (that) may be at risk if the company faces a
severe
financial crisis," the letter says. Delphi retirees younger than
65 who
have retired under the 30-and-out contract provisions now typically
collect
roughly $3,000 per month, according to the United Auto Workers
contract summary.
The letter also has triggered a backlash among Delphi employees who
are now
asking for investigations by Congress and the Federal Trade Commission
to investigate
the company’s break from General Motors. In other news, the
looming bankruptcy
of Delphi would represent the
href='http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&s…'>biggest
bankruptcy to date in the ailing U.S. auto industry, credit
analysts said,
according to Reuters reports. Analysts predicted that all credit
investors would
lose from the bankruptcy and none would profit, even if they were
betting on
Delphi’s rivals, including former Ford Motor Co.unit Visteon
Inc.
id='4'>Adelphia
Amends Reorganization Plan
Adelphia
Communications Corp.
filed its third amended reorganization plan with the U.S. Bankruptcy
Court in
New York yesterday as it seeks to emerge from bankruptcy and complete
the sale
of its assets to Time Warner Inc. and Comcast Corp. later this year,
the Associated
Press reported yesterday. In a statement, the company said that it
expects significant
negotiations to continue that will result in changes. A disclosure
hearing in
court is expected next month, the company said.
href='http://www.ledger-enquirer.com/mld/ledgerenquirer/business/12767205.htm'>Read
more.
Airlines
id='5'>Boeing,
PBGC Named Delta Creditors
Boeing Co. and the
Pension
Benefit Guaranty Corp. are among the members of a committee formed
yesterday
to represent Delta Air Lines Inc.’s unsecured creditors, an
airline spokeswoman
said, according to Reuters reports. The seats will give Delta and U.S.
pensions
bailout agency votes in how Delta reorganizes after it filed for
bankruptcy
earlier this month. Also named were the Air Line Pilots’
Association,
United Technologies Corp.’s Pratt & Whitney unit, Coca-Cola
Co., Fidelity
Investments, Bank of New York, U.S. Bancorp and investment management
firm MacKay
Shields, Delta spokeswoman Kimberly Kriger said.
href='http://today.reuters.com/news/newsArticleSearch.aspx?storyID=238972%2B2…'>Read
more.
id='6'>ATA
Pilots Approve Contract
ATA Airlines pilots
and flight
mechanics voted to approve a three-year contract that includes a
potential 4
percent ownership stake in the airline, the Washington Post
reported
today. The new contract included $84 million in long-term concessions
by about
800 pilots and flight mechanics. Other contract terms included the
continuation
of previous pay cuts until the end of 2006, when salaries will begin
rising
to 7 percent less than 2003 rates. The union said that that amounted
to a pay
cut of as much as 40 percent for flight crew members, who had voted
this month
to authorize a strike. The deal was approved by 59 percent of those
voting,
the Air Line Pilots Association said.
id='7'>Bankruptcy
Tests Airlines’ Loyalty to Pension Funds
Northwest
officials have
said that they hope to preserve the pension benefits employees have
accrued
so far, the Associated Press reported today. Delta officials have not
said that
they plan to terminate their plans, but that their future will largely
depend
on the airline’s ability to fund them. If the carriers take the
next step
of turning over the plans to the federal government, tens of thousands
of other
highly paid employees and retirees at the carriers could face sharp
cutbacks
in their monthly retirement checks.
href='http://www2.dailybulletin.com/business/ci_3067133'>Read
more.
id='8'>Northwest
Misses Payment to Mesaba
Northwest Airlines
Corp.
missed a payment for Mesaba flights a month after failing to pay the
regional
carrier $19 million for flights made in the last two weeks of August,
the Associated
Press reported yesterday. Mesaba does nearly all of its business with
Northwest,
which shares a portion of its passenger revenue with the smaller
airline. The
unpaid money represents close to one month’s revenue for Mesaba.
The missed
payments pose a more immediate and grave threat to Mesaba, which
employs 3,950
people. One analyst said that the company will have to weigh job cuts
and other
cost reductions, and that a bankruptcy filing by Mesaba is not out of
the question.
Read
more.
id='9'>NWA
Filing May Stop MAC Suit
A joint lawsuit
that Eagan,
Minneapolis and Richfield, Minn., filed against the Metropolitan
Airports Commission
(MAC) earlier this year may take the latest hit from Northwest
Airlines’
bankruptcy, the Pioneer Press reported today. The airline
believes that
its bankruptcy effectively stops the cities’ lawsuit, which
centers on
the soundproofing of homes under flight paths. Although the three
cities originally
sued only the commission, which owns and operates Minneapolis-St. Paul
International
Airport, Northwest later fought to join the lawsuit. A district judge
gave both
sides until tomorrow to file briefs on what they believe the impact of
bankruptcy
will be.
href='http://www.twincities.com/mld/pioneerpress/12767267.htm'>Read
the full story.
id='10'>Friedman’s
of Georgia Exits Chapter 11
The U.S. Bankruptcy
Court
for the Southern District of Georgia approved Friedman’s Inc.
disclosure
statement and amended reorganization plan yesterday, the Rapaport
News
reported. Friedman’s said that its court-approved plan and
statement earned
the support of the company’s official committee of unsecured
creditors,
as well as the agreement of Harbert Distressed Investment Master Fund
LTD. Harbert’s
agreement to fund a litigation trust for the benefit of unsecured
creditors
in the amount of $8 million, and a claims administration trust of
$500,000,
was credited for building consensus to approve the plan.
href='http://www.diamonds.net/news/newsitem.asp?num=13339&type=all&topic=all'>Read
more.
id='11'>Inex
Pharmaceuticals Fights Petition
Inex
Pharmaceuticals Corp.,
a specialist in anti-cancer drugs, says it will fight a bankruptcy
petition
filed Tuesday in British Columbia Supreme Court, the Canadian Press
reported
yesterday. The Vancouver-based firm said that noteholder Stark Trading
and Shepherd
Investments International Ltd. filed a petition seeking to have Inex
declared
bankrupt and its property sent into receivership. Stark, a U.S.-based
hedge
fund, wrote a letter to Inex earlier this month demanding $24.6 (U.S.)
million
in repayment, alleging that the drug company has defaulted on debt
commitments.
href='http://www.canada.com/national/nationalpost/news/story.html?id=b2aa5f2c…'>Read
the full story.
id='12'>European
Court Backs U.S. Bank in Parmalat
A preliminary
opinion from
Europe’s top court yesterday backed Bank of America in its fight
with
the administrators of Parmalat over which European jurisdiction should
oversee
the winding-up of the collapsed Italian dairy group’s Irish
offshoot,
Business Credit Management UK reported today. An
advocate-general at
the European Court of Justice recommended that the winding-up of
Eurofood, the
Irish unit, should be carried out under Irish law—the course
sought by
Bank of America and other creditors. Parmalat’s administrators
had been
pressing to oversee the unit’s liquidation in an Italian court.
The opinion
was greeted with disappointment by many insolvency lawyers and
specialists,
who had been hoping that the case would provide guidance on what
should happen
when different parties and courts involved in a European insolvency
make rival
claims over jurisdiction.
href='http://www.creditman.biz/uk/members/news-view.asp?newsviewID=5212&id=1&…'>Read
more.