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June 20, 2006
id='1'>Employers, Unions Anxious
about Pension Legislation Talks
Corporate employers and labor
unions said that they were worried about a new Capitol Hill proposal to
tighten the definition of when pension plans are at risk of default in
order to trigger requirements to provide more funding, Reuters reported
yesterday. 'This is core to whether companies can stay in (the pension
system) or not,' said Lynn Dudley, vice president for retirement policy
at the American Benefits Council, which represents large employers with
pension plans. Speaking after the latest negotiating session on Monday,
House Majority Leader John Boehner said they had 'not quite' agreed on a
definition of which pension plans were at risk of default.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/06/19/AR2006061900918_pf.html'>Read
more.
Autos
face='Times New Roman'
size='3'>
id='2'>Delphi
File Reorganization Plan
A
size='3'>U.S.
judge on Monday extended bankrupt auto parts maker Delphi Corp.'s sole
right to file a reorganization plan for its
w:st='on'>
size='3'>U.S.
size='3'>operations by about six months to February, Reuters reported
yesterday. Delphi, which filed the biggest bankruptcy in
size='3'>U.S.
history in October, asked the U.S. Bankruptcy Court in
w:st='on'>
York
earlier in June, citing the sheer size and complexity of its chapter 11
restructuring. The previous deadline
was Aug. 5, but Delphi said that it needed more time to complete plans
that include wage and benefit cuts for U.S. hourly workers, thousands of
job cuts for salaried and hourly workers and plant closings or sales. A
hearing into the labor-contract request started in May, but has been
suspended until August while
face='Times New Roman' size='3'>Delphi
size='3'>continues talks with its unions. A hearing into the GM contract
request has been put off until August as well.
href='http://in.news.yahoo.com/060619/137/657ey.html'>Read
more.
id='3'>PBGC, GE Capital
Object to
size='3'>Meridian
Disclosure Statement
Federal pension
regulators objected Friday and General Electric Capital Corp. objected
Monday to Meridian Automotive Systems Inc.’s disclosure statement,
MarketWatch.com reported yesterday. The disclosure statement is set for
a court hearing June 27. If approved, the report will be sent out to
voters as the
face='Times New Roman' size='3'>Michigan
car-parts maker launches the first stage of proceedings
it hopes will end with a confirmed chapter 11 plan in
place. However,
objections to the disclosure statement from the federal Pension Benefit
Guaranty Corp. and General Electric Co.'s GE Capital may complicate
approval of the chapter 11 plan.
href='http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BBC8C08D2%2D07D0%2D4060%2DBB17%2D0E3A68AD47A4%7D&dist=rss&siteid=mktw&print=true&dist=printTop'>Read
more.
id='4'>Riverstone Wins Extension on
Liquidation Plan
The former Riverstone Networks
Inc. has received an extension to its chapter 11 liquidation plan after
the ethernet provider requested additional time to decide how to divide
the proceeds from its $207 million sale to rival company Lucent
Technologies
size='3'>Inc., Portfolio
Media reported yesterday. The company, which
filed for bankruptcy protection on Feb. 7 and is now known as RNI Wind
Down Corp., won an extension on its liquidation plan through July 12 in
the U.S. Bankruptcy Court for the District of Delaware on Friday. It
also received court approval for an extension through Sept. 8 to
encourage creditors to support the plan, which will map out how they
will be paid.
Refco
Creditors Receive
Clearance to Expand Their Probe of Collapse
A bankruptcy judge has
cleared the way for Refco Inc. creditors to expand their investigation
of the commodities company's 2005 collapse, ordering several former
Refco executives and insiders to provide information about lost company
assets, the Wall Street
Journal reported today. The investigation by
Refco's creditors’ committee has allowed it to obtain $750 million
in settlements for Refco so far. Last month the committee sought to
expand its probe, saying that it had identified several former Refco
executives who might have knowledge about the location of assets lost in
the company's demise. On Friday, Judge Robert Drain
size='3'>of the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Manhattan
several of those executives to hand over documents the committee had
requested.
href='http://online.wsj.com/article/SB115076306696784679.html'>Read
more. (Registration required.)
In related news, an
investor in the Sphinx Managed Futures Fund (SMFF) appealed the $263
million settlement between SMFF and Refco Inc., claiming that the fund
used money from defrauded investors to make the payment,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. The Masonic Hall and Asylum Fund, a
charitable organization based in New
w:st='on'>
size='3'>York
SMFF, which is run by PlusFunds Group Inc., defrauded its investors and
then used their funds to settle a dispute with Refco’s creditors.
The Masonic Hall Fund has asked a
w:st='on'>New
York district court to
review the ruling that approved the settlement, handed down earlier this
month by U.S. Bankruptcy Court Judge Robert Drain. In previously
approving the settlement, Judge Drain chastised those who had attempted
to thwart the agreement. The creditors claim the funds were
inappropriately transferred out of Refco by PlusFunds Chairman
Christopher Sugrue, a former Refco executive.
id='6'>Pliant Strikes Deal with Key
Holders
Taking another step
toward emerging from bankruptcy protection, Pliant Corp. has come to an
agreement with representatives of its key classes of bondholders and
shareholders, Portfolio
Media reported yesterday. The film and
packaging producer, which filed for chapter 11 protection on Jan. 3 in
the U.S. Bankruptcy Court for the District of Delaware, reached
agreement terms that include a 0.225 percent increase in the interest
rate of existing first-lien notes, a $4 million cash consent fee for
second-lien noteholders and a 1.5 percent increase in the new preferred
equity to senior subordinated notes. As part of the agreement, key
bondholders and shareholders have decided to withdraw their objections
to the confirmation of Pliant’s reorganization
plan.
Airlines
id='7'>Delta to End Pilots'
Pension Plan
Delta Air Lines said that it
was notifying the Pension Benefit Guaranty Corp. (PBGC) that it intended
to end its pilots' pension plan, Reuters reported yesterday. The request
to terminate the defined-benefit plan would be effective Sept. 2. The
airline will also need the approval of the U.S. Bankruptcy Court before
it can terminate the plan, which if allowed to continue could cost it
more than $1 billion near term. 'Unless the pilot plan is terminated,
Delta cannot successfully restructure,' its CEO, Gerald Grinstein, wrote
in a letter to members of Congress Friday.
href='http://www.nytimes.com/2006/06/20/business/20air.html'>Read
more.
id='8'>Comair to Ask Judge to
Impose Concessions
Delta Air Lines Inc.
subsidiary Comair said that it will again ask a judge to impose contract
concessions on flight attendants the airline says are vital to its
bankruptcy recovery, the Associated Press reported yesterday. The
company has softened its demands on its flight attendants and the two
sides have made progress in negotiations in the past few weeks, Comair
spokeswoman Kate Marx said. But the sides haven't reached a tentative
agreement on a new contract, and the airline will file a new motion next
week asking U.S. Bankruptcy Judge
size='3'>Adlai Hardin to decide whether the
latest Comair proposal is fair, Marx said. The International Brotherhood
of Teamsters, which represents the flight attendants, is prepared to go
back to court if necessary, union spokeswoman Noa Oren said.
href='http://www.nytimes.com/aponline/business/AP-Comair-Flight-Attendants.html?pagewanted=print'>Read
more.
id='9'>Equity Committee Can’t
Hire Two Firms, OCA Says
Orthodontic Centers of
America Inc.’s (OCA) and Bank of America have filed separate
objections with the bankruptcy court over the official committee of
equity security holders hiring a second law firm as lead counsel,
Portfolio Media
reported yesterday. The committee is seeking court
approval to retain
face='Times New Roman' size='3'>Bell
size='3'>Boyd & Lloyd as its lead counsel, in addition to using
Adams and Reese as local counsel. According to court documents, both OCA
and Bank of America, acting as an administrative agent for the lenders,
are opposed to the equity committee hiring two law firms to represent
it, the cost of which will be added to OCA’s debt. In a separate
filing, Bank of America supported OCA’s arguments that the equity
committee did not need to hire a second firm. The case is
In re OCA Inc. et
al., case number 06-10179, in the U.S.
Bankruptcy Court for the Eastern District of
Louisiana.
id='10'>Financing in Place for
Western Medical Buyout
Providential Holdings
Inc. received a commitment for $5.5 million to help finance its purchase
of bankrupt Western Medical Inc., the Business Journal of
Phoenix reported yesterday. Phoenix-based
Western Medical, which sells medical equipment and provides related
services, filed for chapter 11 reorganization earlier this month. The
money from Northern Healthcare Capital LLC would include a $2.5 million
revolving working capital line that could be increased to accommodate
future sales growth.
href='http://www.bizjournals.com/phoenix/stories/2006/06/19/daily5.html?t=printable'>Read
more.
International
id='11'>Brazilian Bankruptcy
Judge Approves Employee Purchase Bid for Airline
A Brazilian bankruptcy
judge approved an offer by an employee-led group to buy
size='3'>Varig
size='3'>Brazil
biggest international airline, after getting guarantees the buyers have
enough money to finance the transaction, Bloomberg News reported
yesterday. Rio de Janeiro Bankruptcy Judge Luiz Roberto Ayoub cleared
the bid for the carrier's assets provided the group, NV Participacoes,
pays Varig $75 million within 72 hours as a part of $125 million of cash
in offer. The money will be used to make back payments on aircraft
leases in effort to avert seizure of more than half the airline's fleet.
Ayoub approved the proposal more than 10 days after holding an auction
of Varig's assets to help generate enough cash to keep the airline's
planes flying.
href='http://www.bloomberg.com/apps/news?pid=10000086&sid=aKfL1PaEh8To&refer=latin_america#'>Read
more.