August 152006

August 15, 2006

name='1'>Attorney Suggests Parishioners Contribute to Spokane
Diocese Settlement

An attorney representing
people who allege they were sexually abused by priests says Catholics in
Eastern Washington can settle their church's sex-abuse crisis and
bankruptcy for $60 million -- half of which he suggests could come from
parishioners, the Associated Press reported yesterday. Bishop William
Skylstad already has $30 million at his disposal from asset sales,
insurance settlements and pledges from Catholic Charities and related
organizations. Attorneys representing various parties in the bankruptcy
are known to be considering the plan following the bankruptcy court's
rejection of an earlier settlement agreement proposed by Skylstad, which
provided for $35 million in
w:st='on'>
size='3'>Spokane diocese
funds and indicated parishioners might have to cover the balance. A
small daily sacrifice by fewer than one in four Catholics could end the
bankruptcy and resolve this dark chapter in the church's history, said
Michael Pfau, another attorney representing victims. Attorney
Ford Elsaesser, who represents the Association of
Parishes in the bankruptcy, declined to comment on the
proposal.
href='http://www.insurancejournal.com/news/west/2006/08/14/71420.htm'>Read
more.

name='2'>Dana’s Incentive Plan Draws Fire from
Creditors

Creditors of Dana Corp.
said that the auto parts supplier’s executive bonus plan could
create a “windfall” for six top executives if they are able
to direct the company to slash workers’ retirement
benefits, Portfolio
Media reported yesterday. The creditors
opposed the plan in a filing with the U.S. Bankruptcy Court in the
Southern District of New York, signifying that Dana has made little
headway in gaining creditors’ support for its incentive plan to
keep top executives from leaving the company while in
bankruptcy.
size='3'>Creditors contended that the changes benefit the executives at
the expense of creditors and workers. They claimed that the company
was determined to modify its retiree medical and life insurance plans.
The alleged plan gives executives an incentive to make the company
reduce workers’ benefits and cut a series of company contracts. A
hearing on the executive compensation plan is set for Sept.
5.

Refco
Trustee Bids for Broader Objection Rights

Just days after a federal
bankruptcy judge allowed a split in Refco Inc.’s creditors’
committee, the acting U.S. Trustee in the case is moving to retain her
right to object to fees paid to an investment bank employed by the
unsecured creditors’ committee,
size='3'>Portfolio Media reported yesterday.
U.S. Trustee Diana G.
Adams said in court documents filed late last
week that she should be allowed to object to payments made to Houlihan
Lokey Howard & Zukin, which is putting together the “commonly
supported view of the financial facts” in Refco’s chapter 11
proceedings. Creditors have proposed a $7 million increase in
Houlihan’s transaction fee on top of the firm’s current
$150,000 monthly fee, as well as an additional $50,000 monthly fee and a
new transaction fee for services in connection with transactions
involving Austrian bank Bank Für Arbeit und
face='Times New 

Roman'>
size='3'>Wirtschaft AG (BAWAG). Under the terms of Houlihan’s
current retention order, the U.S. Trustee has the right to object only
to monthly fees, but
size='3'>Adams argued that the
proposed order should be revised to provide that she retain the right to
object to the payment of all components of the compensation
structure.

name='4'>Bankruptcy Costs Contribute to Calpine’s 2nd Quarter
Losses

Bankrupt energy producer
Calpine Corp. reported that it lost $817.8 million in the second
quarter, bringing total losses so far this year to $1.4 billion,
the San Francisco
Chronicle reported today. The second-quarter
loss amounted to $1.71 per share. In the same three months last
year, San Jose's
Calpine lost $298.5 million, or 66 cents per share. The company recorded
$655.1 million in charges related to the bankruptcy, most of it tied to
long-term electricity contracts the company has either backed out of or
tried to reject since its decision to file for bankruptcy court
protection in December.  Calpine also spent
$40.1 million on legal, financial and administrative assistance related
to its bankruptcy. 
href='http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/08/15/BUGMSKIGPQ1…'>Read
more.

name='5'>LoveSac Exits from Bankruptcy

LoveSac Corp., the Salt Lake
City-based furniture company founded by the winner of Richard Branson's
'Rebel Billionaire' TV show, has exited bankruptcy protection, Dow Jones
Newswires reported today. The company, which makes 'oversize' stuffed
furniture, similar to bean bags, filed for bankruptcy protection in
January. It emerged Thursday from chapter 11 after selling its assets to
the private investors that control the company. SAC Acquisition, an
investment vehicle controlled by the company's preferred shareholders,
agreed to pay $600,000 in cash for the company. The SAC Acquisition
group includes Walnut Investment Partners LP, Walnut Private Equity Fund
LP, Brand Equity Ventures II LP, Hauser 41 LLC and Millevere Holdings
Ltd. SAC also will contribute $150,000 to a liquidation trust for
settlement of potential litigation and 1 percent, or at least $150,000,
of the gross receipts of LoveSac for the next year and a half.
href='http://deseretnews.com/dn/view/0,1249,645193156,00.html'>Read
more.

w:st='on'>
name='6'>U.S.
face='Times New Roman' size='3'> Wants Ex-Enron Chief to Pay
Lay’s Share, Too

Federal prosecutors say
Jeffrey K. Skilling, the former Enron chief executive, is liable not
only for his own ill-gotten gains but also for those of the late Kenneth
L. Lay, the New York
Times reported today. In a court filing on
Friday in
face='Times New Roman'
size='3'>Houston, the
government said Skilling was liable for the criminal “proceeds
attributable to all co-conspirators, indicted or unindicted,”
including Lay’s portion. Sean Berkowitz, the director of the
Justice Department’s Enron Task Force, wrote in the filing that
the government had shown a conservative approach by not going after
Skilling for additional forfeiture from the other conspirators. The
government made a request on Friday that Judge Simeon T. Lake III
of Federal District Court
in
face='Times New Roman' size='3'>Houston
enter a $182.8 million judgment against Skilling, who was
convicted in May on 18 counts of fraud and conspiracy and one count of
insider trading. Enron, the former energy-trading giant, collapsed into
bankruptcy in December 2001. 
href='http://www.nytimes.com/2006/08/15/business/businessspecial3/15enron.htm…'>Read
more.

name='7'>AmeriDebt Founder Accused of Hiding Funds

The founder of AmeriDebt Inc.,
the Germantown, Md.,-based credit-counseling firm that was accused of
bilking its former customers, continues to defy a court order by hiding
his assets from investigators, according to recent court filings, the
Associated Press reported today. In filings last week in U.S. District
Court, a court-appointed receiver investigating Andris Pukke's financial
holdings said it will ask a federal judge this month to determine
whether the founder of the now-defunct AmeriDebt should be held in
contempt of court for allegedly using friends and family to cover up his
holdings. Lawyers for Pukke denied the accusations, saying that the
investigation into Pukke's assets has uncovered no hidden funds and that
the receiver has 'personal animus' for Pukke and his legal team. 
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/08/14/AR20060…'>Read
more.

International

name='8'>Mexican Telecom Co. Files for Bankruptcy

Satelites Mexicanos, S.A.
de C.V., a Mexican radio and telecom company, has filed for chapter 11
protection in Manhattan, listing assets of $906 million and debts of
$743 million, Portfolio
Media reported yesterday. Satelites Mexicanos
is at the forefront of satellite services in
w:st='on'>
size='3'>Mexico and is
looking to expand throughout
face='Times New Roman' size='3'>Latin America
size='3'>, according to court papers. Forty-nine percent of the
company’s revenue comes from customers in the
w:st='on'>
size='3'>United States
size='3'>, the company’s bankruptcy petition says. The company
filed for chapter 11 protection in the United States 
size='3'>because of the large number of American debtholders in SatMex
and because the
w:st='on'>
size='3'>U.S.
size='3'>court’s ruling would carry more weight with creditors
around the world, said Luc Despin, counsel for the debtors. The case is
In re Satelites
Mexicanos S.A. de C.V., case number 06-11868
before the U.S. Bankruptcy Court for the Southern District of New
York.