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November 30, 2005
name='1'>Calpine Worsens on Bankruptcy Fears
Credit investors yesterday braced for a possible imminent
bankruptcy of Calpine Corp. by sending the cost to insure the ailing
power producer's debt in the next month up fourfold after news of a
management shake-up, Reuters reported yesterday. The cost of insuring
Calpine's debt with credit-default swap contracts that mature on Dec. 20
leaped to 50 percent the amount insured as an upfront payment yesterday,
from 12 percent before the company announced the departure of its CEO,
according to a trader. Calpine named lead director Kenneth Derr as
chairman and acting CEO, and replaced CEO Peter Cartwright, and named
Eric Pryor interim CFO, replacing Robert Kelly. A Calpine spokeswoman
declined to comment on the potential for bankruptcy.
href='http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-11-29T204228Z_01_N29561578_RTRIDST_0_MARKETS-CREDIT.XML'>Read
more.
id='2'>Many Cash In on Delphi
When Delphi Corp. filed for bankruptcy last month, the auto-parts
giant said that it had run out of money and was forced to demand massive
layoffs and wage cuts for its rank-and-file workers, the Detroit
News reported today. But even as Delphi is asking its employees to
cut their hourly pay from about $27 to $12.50, the company is paying top
dollar to a battery of lawyers and restructuring consultants. It's the
largest industrial bankruptcy in U.S. history and is shaping up to be
one of the most expensive, as well. The fees range from $835 an hour for
the senior attorney at Delphi's lead law firm to a proposed $15 million
payout to an investment banking firm when the Troy, Mich.-based auto
supplier emerges from chapter 11.
href='http://www.detnews.com/apps/pbcs.dll/article?AID=/20051130/AUTO01/511300432/1148'>Read
more.
Meanwhile, Delphi can enter into amended agreements with its
critical suppliers, a bankruptcy judge ruled yesterday, which may help
the company cut costs and debt while continuing to supply automakers
during its chapter 11 restructuring, the Northern Alabama Times
Daily reported today. The decision was one that Delphi and the
United Auto Workers (UAW). The UAW, which represents 24,000 of Delphi's
35,000 hourly U.S. workers, said that the motion will prevent production
interruptions that jeopardize jobs.
href='http://www.timesdaily.com/apps/pbcs.dll/article?AID=/20051129/APF/511290782&cachetime=5'>Read
more.
id='3'>California City on Verge of Bankruptcy
Banks could hit Gardena, Calif., this week with hefty penalties
for failure to pay $25.6 million in debt, the Associated Press reported
today. Most of the long-overdue bill, equal to more than three-fourths
of the annual municipal budget, dates to a decision a dozen years ago:
Despite repeated warnings of the financial risk, local officials pushed
their city into the insurance business. The unprecedented for-profit
company they founded, Municipal Mutual Insurance Co., is now under state
supervision. To stay afloat, city officials have considered declaring
bankruptcy, raising taxes or even closing a city department.
href='http://www.dailynews.com/news/ci_3263113'>Read more.
id='4'>Airlines
US Airways Goes
for New Airbus Jets
US Airways Group will go ahead with its plans to buy 20 of
Airbus's next new plane, becoming the first U.S. airline to order the
A350, Marketwatch reported yesterday. The delivery of the planes will
start in 2011 and run through 2014, according to Airbus, which is 80
percent owned by European Aeronautic Defence and Space Co and 20 percent
href='http://www.investors.com/breakingnews.asp?journalid=33187177&brk=1'>Read
more.
id='5'>Judge Approves Delta Request to Sell Planes
A U.S. Bankruptcy Court judge approved Delta Air Lines Inc.'s
request to sell some of its airplanes and to reject an Atlanta office
lease, the Associated Press reported today. Judge Prudence
Carter Beatty said yesterday that she would allow Delta to sell
an undisclosed number of aircraft including include Boeing 737, Embraer
120 and Boeing 767 models. It was not evident whether Delta already has
a buyer for the aircraft or how much it might get for them. No details
were disclosed on the office lease.
href='http://www.chinadaily.com.cn/english/doc/2005-11/30/content_499181.htm'>Read
more.
id='6'>Court OKs Aloha Bankruptcy Plan
A U.S. Bankruptcy Court approved a reorganization plan yesterday
to bring Aloha Airlines out of bankruptcy, hours after the company
reached a tentative contract agreement with its pilots, the Associated
Press reported today. With a contract ratification vote expected later
this week, the airline is now positioned to emerge from bankruptcy as
early as Dec. 15, the carrier said. The plan by Burkle's Yucaipa Cos.
LLC and Gault's Aloha Aviation Investment Group LLC depended on the
pilots ratifying the agreement.
href='http://www.miami.com/mld/miamiherald/business/national/13288781.htm'>Read
more.
id='7'>Kaiser Votes Reported
Kaiser Aluminum announced that all classes of creditors entitled
to vote on its reorganization plan have accepted it, BankruptcyData.com
reported today. The court has scheduled hearings on Jan. 9. and Jan. 10,
2006, to consider confirmation of the plan and hear any unresolved
objections.
id='8'>Interstate Bakeries Reports Low Sales
Interstate
Bakeries Corp., the maker of Hostess Twinkies and Wonder Bread, reported
yesterday its lowest level of monthly sales since filing for bankruptcy
protection more than a year ago, and said that it lost $19 million, the
Washington Post reported today. For the four weeks ending Oct.
15, the Kansas City-based company said that it took in $231.8 million in
revenues, a three percent decline from the $239.3 million in sales
reported last month. The previous low was $238.2 million reported in
January.
href='http://www.washingtonpost.com/wp-dyn/content/article/2005/11/29/AR2005112901229.html'>Read
more.
id='9'>Florida Bank Hit With $11.5 Million Verdict; Galveston Jury
Says Ocwen Federal Bank Forced Woman into Bankruptcy
A Galveston
County, Texas, jury has awarded a Texas City woman $11.5 million after
finding that West Palm Beach, Fla.-based Ocwen Federal Bank engaged in
unfair, unlawful and deceptive business practices in its servicing of
her home equity loan, according to a news release yesterday. In February
2002, Davis, 64, took out a $31,000 home equity loan on the Texas City
residence where she had lived since 1942. Ocwen acted as the servicing
agent on the loan. In 2003, Ms. Davis became ill and spent four days in
the hospital, which forced her to miss one loan payment. Ocwen
eventually foreclosed on Ms. Davis' home, and she filed for chapter 13
protection.
href='http://galvestondailynews.com/story.lasso?ewcd=047e39178c88cb9d'>Read
more.
id='10'>Footstar Agreements Announced
Footstar announced that it has reached an agreement with its
creditors on the terms of a reorganization plan, BankruptcyData.com
reported today. The agreement calls for unsecured creditors to be paid
in full with 4.25 percent annual post-petition interest and Stockholders
will retain all equity interests. The company also announced that
it has entered into an amended credit agreement with a consortium of
lenders led by Fleet National Bank.
id='11'>International
Israel's Disaster
Squad on Brink of Bankruptcy
A Jewish charity whose volunteers rush to the scene of every
suicide bombing in Israel is facing bankruptcy following the decline in
Palestinian terrorism, the U.K. News Telegraph reported today.
Members of Zaka were among the first to arrive at every attack, atrocity
in accordance with Jewish law. The Organizations's coverage of Israel
was so extensive they became known as "The Fourth Emergency
Service" after the police, fire and ambulance services. But the
de facto end of the Palestinian intifada earlier this
year has led to a large reduction in charitable donations.
href='http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2005/11/30/wmid30.xml&sSheet=/news/2005/11/30/ixworld.html'>Read
more.
id='12'> Cayman Island Firms Sue Bank of America, Seeking
Nearly $1 Billion
Food Holdings, Dairy Holdings and Parmalat Capital Finance made
claims of fraud, negligent misrepresentation and breach of fiduciary in
two lawsuits filed last week. The Associated Press reported. The
plaintiffs argue that the Charlotte, N.C.-based bank and its
subsidiaries worked with Parmalat executives to conceal the dairy and
juice giant's insolvency through financial transactions that generated
millions of dollars in fees for the bank. Bank of America says it
believed that it was dealing with a strong, honest and profitable
company, and had no knowledge of the fraud perpetrated by Parmalat and
its senior management.