September 122008

size='3'>Senators Ask Fannie Mae and Freddie Mac to Temporarily Freeze
Foreclosures

Senate Banking Committee
members urged Fannie Mae and Freddie Mac, the mortgage companies placed
under federal control this week, to freeze foreclosures on loans in
their portfolios for at least 90 days, Bloomberg
News reported yesterday. "This action would provide immediate
relief to many homeowners" and let the companies "turn these
non-performing loans into performing assets to minimize losses,"
Senators Charles Schumer, Robert Menendez and other panel Democrats
said in a letter to the companies and the Federal Housing Finance
Agency, which is overseeing them under the government conservatorship.
The companies also should ease their policies on modifying mortgages,
the senators wrote.

href='redir.aspx?URL=http%3a%2f%2fwww.bloomberg.com%2fapps%2fnews%3fpid%3d20601087%26sid%3dasKybf_uOJJQ%26refer%3dhome'

target='_blank'>
Read more.

name='2'>Commentary: Tougher Bankruptcy Laws Bite
Lenders

Banks and other financial

outfits spent eight years and $40 million lobbying for BAPCPA, but those

changes to the Bankruptcy Code are forcing more troubled borrowers to
walk away from their homes and forcing lenders
to take a troubled property on their books, Business Week
reported yesterday. A paper released in July by U.S. Treasury researcher

David Bernstein found that 800,000 fewer homeowners have filed for
bankruptcy since the rules kicked in. A quarter of
those people, says the report, have likely had to give up their homes
as a result—boosting foreclosures nationwide at least 4 percent.
With the enactment of BAPCPA in 2005, only low-income borrowers qualify
for chapter 7 relief and fewer foreclosures can be
averted for struggling homeowners.

href='redir.aspx?URL=http%3a%2f%2fwww.businessweek.com%2fprint%2fmagazine%2fcontent%2f08_38%2fb4100036858078.htm'

target='_blank'>
Read more.

SEC
Opens Early Inquiry Into UAL Glitch

The Securities and
Exchange Commission (SEC) opened a preliminary inquiry into the
circumstances around UAL Corp.'s stock drop, the
Wall Street Journal reported today. The SEC is looking at whether

there was any improper behavior behind the release Monday of a 2002
Tribune Co. news story about UAL's bankruptcy filing, which was picked
up by Google Inc.'s automated news service. After
the old story resurfaced, UAL's stock fell to $3 from $12.50 in 15
minutes before trading was halted. The preliminary inquiry comes as the
agency has stepped up its efforts to combat the spreading of false
rumors.

href='redir.aspx?URL=http%3a%2f%2fonline.wsj.com%2farticle%2fSB122116243599624423.html%3fmod%3dus_business_whats_news'

target='_blank'>
Read more. (Subscription required.)

Oil
Driller Seeks Bankruptcy Protection

Oil- and gas-drilling
company Boom Drilling Inc. and three affiliates sought chapter 11
protection on Monday,
Bankruptcy Law360 reported yesterday. Boom Drilling's petition
listed assets in the $100 million to $500 million range, and liabilities

between $50 million and $100 million. Boom's filing comes amidst a
dispute with secured lender Laurus Master Fund
Ltd., which Boom says tried to sell off the company's assets. Boom owed

"Laurus and its assigns" more than $100 million (about $79.5
million in unpaid principal and about $21.5 million in past due interest

and fees) as of the petition date, according to a
motion Laurus filed in the Oklahoma court seeking an examination of
Boom President Tommy Weder under Rule 2004. The case is
In re Boom Drilling Inc., case number 08-13941, in the U.S.
Bankruptcy Court for the Western District of Oklahoma.

href='redir.aspx?URL=http%3a%2f%2fbankruptcy.law360.com%2farticles%2f68964'

target='_blank'>
Read more. (Subscription required.)

name='5'>Mattress Discounters Files Chapter 11 for a Second
Time

Thirty-year old retailer
Mattress Discounters filed for chapter 11 protection on Wednesday for
the second time in six years, the
Washington Post reported today. Mattress Discounters will
continue to operate the roughly 90 stores it owns in the Washington,
Baltimore and Richmond areas, chief executive Steve Newton said, but
will close all 50 of its money-losing locations in Massachusetts,
New Hampshire and Rhode Island by mid-October. According to its
bankruptcy filing, Mattress Discounters lost about $3 million in 2007 on

$122 million in revenue. In the first half of this year, the company
lost about $8 million on $49 million in revenue. The
losses have been driven by slumping sales and rising rents, Newton
said.

href='redir.aspx?URL=http%3a%2f%2fwww.washingtonpost.com%2fwp-dyn%2fcontent%2farticle%2f2008%2f09%2f11%2fAR2008091103255_pf.html'

target='_blank'>
Read more. (Registration required.)

NYRA
Bankruptcy Close to Resolution

New York Racing
Association is expected to emerge from bankruptcy on Friday, signaling a

new start for the entity that has run Saratoga Race Course, Belmont
Park, and Aqueduct since 1955, ThoroughbredTimes.com
reported yesterday. The state Racing and Wagering Board is expected to
approve a new certificate of incorporation for NYRA on Friday during a
meeting at the board's Schenectady, N.Y., headquarters. NYRA filed for
chapter 11 protection on Nov. 2, 2006. Subsequently,
state officials claimed that the tracks belonged to the state, which
NYRA disputed. Fearing a negative ruling, former Governor Eliot Spitzer
in September 2007 reached a nonbinding memorandum of understanding with
NYRA to keep it in place for another 30 years.
The new franchise calls for the state to assume ownership of the
tracks. By doing so, the state will be liable for a series of upcoming
property tax payments totaling several million dollars for Belmont,
Aqueduct and Saratoga. The state will also forgive more
than $130-million in old loans and interest payments.

name='7'>Fortunoff Bankruptcy Dismissed by Court

A New York court granted
struggling jewelry retailer Fortunoff permission on Thursday to dismiss
its chapter 11 bankruptcy case, Reuters reported yesterday. Fortunoff
was purchased in March by NRDC Equity Partners,
owner of the Lord & Taylor department store chain. It had asked the

U.S. Bankruptcy Court for the Southern District of New York to dismiss
its bankruptcy case after reaching an agreement with a group of its
creditors. "It is entirely reasonable under the circumstances
to approve the stipulation and to dismiss the case," Judge
James Peck told the court. Fortunoff owed its junior secured
lenders more than $19 million. Fortunoff also received approval to
reject any remaining contracts or leases, and to deny all pending
motions to allow claims.

href='redir.aspx?URL=http%3a%2f%2fwww.reuters.com%2farticle%2fbondsNews%2fidUSN1126307820080911'

target='_blank'>
Read more.

name='8'>Lehman Brothers Put Up for Sale

A day after Lehman
Brothers sought to assure Wall Street that it could survive on its own,
the beleaguered investment bank, urged on by federal officials, bowed to

mounting pressure yesterday and put itself up
for sale, the New York Times reported today. As confidence in
Lehman continued to drain away on Thursday, the bank reached out to
several potential buyers, including Bank of America and Barclays. Lehman

hopes to strike a deal within days. In each case,
the suitors are seeking help from the Federal Reserve to help make an
acquisition palatable. They want the Fed to guarantee a part of Lehman's

troubled assets, similar to the way it backstopped the emergency sale of

another foundering bank, Bear Stearns, in
March.

href='redir.aspx?URL=http%3a%2f%2fwww.nytimes.com%2f2008%2f09%2f12%2fbusiness%2f12lehman.html%3f_r%3d1%26oref%3dslogin%26ref%3dbusiness%26pagewanted%3dprint'

target='_blank'>
Read more.

name='9'>Washington Mutual Looks to Assure Investors

Washington Mutual Inc.,
scrambling to restore investor confidence after days of anxiety, took
the unusual step of releasing third-quarter financial projections that
it says show the thrift bank has enough liquidity and
capital to ride out the banking crisis, the Wall Street Journal
reported today. WaMu said late yesterday that it had about $50 billion
in liquidity from "reliable funding sources" and reported that

retail deposit balances at the end of August "were
essentially unchanged" from the end of 2007. A third-quarter
provision for loan losses is expected to be $4.5 billion—lower
than the $5.9 billion set aside in the second quarter. The Seattle-based

bank said that its total loan-loss reserve is expected to climb
to $10.3 billion at the end of the third quarter, up from $8.5 billion
June 30.

href='redir.aspx?URL=http%3a%2f%2fonline.wsj.com%2farticle%2fSB122117161562825455.html%3fmod%3dhps_us_whats_news'

target='_blank'>
Read more.

International

name='10'>British Tour Operator XL Leisure Declares
Bankruptcy

British Tour Operator XL
Leisure entered into bankruptcy proceedings Friday, the latest firm to
suffer from a run-up in energy prices and a struggling economy,
according to a MarketWatch report. An estimated 85,000 travelers
were left stranded. XL joins a number of carriers including Silverjet,
Maxjet and Oasis Hong Kong Airlines that have gone under. XL was mostly
held by the Icelandic businessman Bjorgolfur Gudmundsson, who also owns
the British soccer club West Ham United.
The firm's fleet of 21 aircraft was grounded. XL's French and German
airlines are not affected by the move.

name='11'>German Sewing Machine Maker Files for
Bankruptcy

Sewing machine maker
Pfaff filed for bankruptcy yesterday after a failed effort to save a
company that CEO Josef Kleebinder has said is 40 million euros ($56
million) in debt, the Associated Press reported yesterday.
A last-ditch effort in recent months to recover from more than 20
million euros ($27 million) in write-downs failed, the company said.
Pfaff manufactures personal and industrial sewing machines as well as
heat-sealing equipment at plants in Kaiserslautern,
southwest of Frankfurt, Germany, and Taicang, China. The company said
that it would move quickly to sell its factory in China.

href='redir.aspx?URL=http%3a%2f%2fbiz.yahoo.com%2fap%2f080911%2fgermany_pfaff_bankruptcy.html%3f.v%3d1'

target='_blank'>
Read more. (Registration required.)

name='12'>Alitalia Unions Won't Accept Plan; Bankruptcy
Looms

Alitalia SpA's labor
unions failed to agree to a government-backed rescue plan for the
airline by yesterday's deadline, pushing the state-controlled carrier
closer to bankruptcy, Bloomberg News reported today.
The unions oppose the 3,250 job cuts and the sale of unprofitable
assets such as the airline's cargo and maintenance businesses demanded
by an investor group led by Piaggio & C. SpA Chairman Roberto
Colaninno. The businessman and his partners have pledged
to invest 1 billion euros ($1.4 billion) to try and save the airline.
Union opposition led Air France-KLM Group to drop a bid to buy the
carrier in April.

href='redir.aspx?URL=http%3a%2f%2fwww.bloomberg.com%2fapps%2fnews%3fpid%3d20601085%26sid%3daVoOlbp91Iqw%26refer%3deurope'

target='_blank'>
Read more. (Registration required.)