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January 26, 2010
Philadelphia Orchestra Considers
Financial Restructuring Options
size='2'>
Officials for the Philadelphia Orchestra are considering options for the
symphony and theater operator that may include a bankruptcy filing,
the Deal Pipeline reported
yesterday. The nonprofit organization's management pointed to
restructuring its debt so it can lower its accumulated deficit and
raising money for its recovery fund. The orchestra has a goal of $15
million and currently has $8 million in pledges. As of Nov. 30, 2009,
its total endowment was $112 million, less than half its goal of $250
million.
href='http://pipeline.thedeal.com/bi/deals/warning/View.dl?id=21670'>Read
more. (Subscription required.)
U.S. Opens Probe into
AIG's Payout to Partners
A U.S. government investigator is opening a probe into
disclosures made as part of the government's rescue of American
International Group Inc. when the company's trading partners were paid
billions in November 2008, the Wall Street Journal reported
today. Neil Barofsky, the special inspector general for the $700 billion
Troubled Asset Relief Program, plans to testify before the House
Oversight Committee tomorrow that he is investigating whether there was
any 'misconduct relating to the disclosure or lack thereof' surrounding
the deals, in which banks who had traded with the giant insurer got paid
in full on $62 billion in bets on soured mortgage securities. Barofsky
said he is also reviewing the Federal Reserve's cooperation with his
office. The Fed's New York office has been a main overseer of the U.S.
bailout of AIG. Wednesday's hearing will include testimony from Treasury
Secretary Timothy Geithner and the top lawyer from the Federal Reserve
Bank of New York, which Geithner headed when AIG was first
rescued.
href='http://online.wsj.com/article/SB10001424052748704762904575025973825013234.html?mod=WSJ_hps_LEFTWhatsNews'>Read
more. (Subscription required.)
Jobs Bill Might Divert
TARP Funds to Small Biz Efforts
The Senate's emerging job-creation bill might divert
billions of dollars in unspent bank bailout funds to free up small
business credit and ease pension funding requirements for cash-strapped
companies to meet payroll or buy equipment, CongressDaily
reported today. Those initiatives and others make up a package whose
price tag was in flux Monday, but was shaping up to be at least $82.5
billion based on a document circulating on Capitol Hill. To help offset
the cost of the package, $75 billion would be funded out of unspent
Troubled Asset Relief Program funding. Another $7.5 billion offset would
help companies with their pension obligations while also paying for
additional job-creation measures. Preliminary estimates show the
revenues would come from freeing up private capital that ordinarily
would go toward funding company pension plans. Since that money would no
longer be tax-deductible, the federal government could claim additional
corporate tax revenues and give firms a cash cushion at the same time.
The proposed package does not include a separate $40 billion -- also to
come out of remaining TARP funds -- that the plan would earmark to
create a loan pool for small-business lending, primarily through
community banks.
name='4'>GM CEO Whitacre to Keep Role Permanently, Repay Loans by
June
General Motors Co. Chairman
and Chief Executive Officer Ed Whitacre, who planned to hold the CEO
title only while he searched for a successor, said that he will keep the
job permanently at the request of the board, Bloomberg News reported
yesterday. Directors made the decision at a special meeting last week,
Whitacre said. Staying at the helm means Whitacre will oversee the
restructuring that began before he became chairman as GM exited
bankruptcy on July 10. The former AT&T Inc. chairman and CEO took
the chief executive
face='Times New Roman' size='2'>’
lang='RU'>s role at Detroit-based
GM on Dec. 1 when the board asked Fritz Henderson to step aside.
Whitacre reiterated yesterday that U.S. and Canadian government loans
will be repaid by June.
href='http://www.bloomberg.com/apps/news?pid=20601087&sid=aYSRgmwdrT_8&pos=6'>Read
more.
name='5'>Bankruptcy Judge Approves Fairbanks Diocese Revised
Bankruptcy Plan
After almost two years of negotiation between the
Fairbanks (Alaska) Catholic Diocese and a committee representing nearly
300 sexual abuse victims, the final details of the diocese
lang='EN'>’s third bankruptcy plan revision
were approved yesterday by Bankruptcy Court Judge Donald McDonald, the
Fairbanks Daily-News Miner reported today. The reorganization
plan, which is expected to be signed by the court within the next two
weeks, provides $9.8 million in compensation to be divided among abuse
victims. The missionary diocese raised the money primarily by selling
its properties to its own endowment fund. The diocese
lang='EN'>’s 46 parishes contributed
$650,000 and Alaska National Insurance Co., $1.4 million.
href='http://newsminer.com/view/full_story/5656479/article-Judge-approves-revision-of-Fairbanks-Diocese-bankruptcy-plan?instance=home_news_window_left_top_1'>Read
more.
Chemtura Moves to Thin $2.1 Billion in
Superfund Claims
With the aim of avoiding portions of $2.1 billion in potential
Superfund bills, bankrupt Chemtura Corp. has filed a broad objection to
the U.S. government's environmental claims, which the chemical maker
says unfairly stick it with the brunt of the liability, Bankruptcy
Law360 reported yesterday. The government has ignored other
companies' contributions to alleged environmental damage when
calculating Chemtura's liability for environmental damage at 21
Superfund sites, the company said in an omnibus objection filed Friday
in the U.S. Bankruptcy Court for the Southern District of New York. Of a
total of $10.1 billion in claims against the chemical maker, the bulk
are government Superfund claims for alleged liability under the
Comprehensive Environmental Response, Compensation and Liability Act,
Chemtura said. The bankruptcy is In re Chemtura Corp., case
number 09-11233, in the U.S. Bankruptcy Court for the Southern District
of New York.
href='http://bankruptcy.law360.com/articles/145342'>Read
more. (Subscription required.)
Accuride Noteholders Ordered to Reveal
Identities
Bankruptcy Judge Brendan L. Shannon has granted a motion from
Accuride Corp.'s equity holders' committee to bar a group of noteholders
from participating in the case until they identify themselves,
Bankruptcy Law360 reported yesterday. Members of the ad hoc
noteholder group will have to lodge verified statements revealing their
identities, the nature and amount of their claims and other pertinent
information pursuant to Bankruptcy Code Rule 2019, according to Judge
Shannon's ruling on Friday. Stressing it has a right to know the
identities of its adversaries, the equity holders' committee said that
the group should have registered under Rule 2019, which requires all
entities acting on behalf of other parties to disclose detailed
information.
href='http://bankruptcy.law360.com/articles/145332'>Read
more. (Subscription required.)
United Rentals Loses Preferential
Transfer Appeal
In a dispute over preferential transfers, a federal appeals court has
upheld a ruling requiring United Rentals Inc. to return payments it
received from Partitions Plus of Wilmington Inc. before its 2005
bankruptcy filing, Bankruptcy Law360 reported yesterday. A
three-judge panel of the U.S. Court of Appeals for the Fourth Circuit
rejected United's argument that the transfer was a
size='2'>“contemporaneous exchange for new
value,”
size='2'>which, under 11 U.S.C.A.
size='2'>§ 547 (c)(1), is an exception that
would allow United to keep the roughly $67,000 at issue. The court also
rejected United's argument that the chapter 7 trustee seeking to recover
the payment failed to show that United received more money in the
transfer than it would have through the bankruptcy. The dispute stems
from rental equipment United provided to Partitions Plus in 2004 for two
bonded projects to build a hospital and town center in North Carolina.
Partitions Plus paid its bill within 90 days before its bankruptcy
filing, and chapter 7 Trustee James Angell later sought to recover the
funds. Read
more. (Subscription required.)
Taco Del Mar Files for
Chapter 11
Taco Del Mar Franchising, a Seattle-based chain of
Mexican fast-food restaurants, filed for chapter 11 protection on
Friday, saying that it owes creditors between $1 million and $10
million, the Seattle Times reported yesterday. The
chain's roughly 225 stores in the U.S., Canada and Guam will continue to
operate, and individual Taco Del Mar franchisees are not in bankruptcy.
Larry Destro, who has been CEO since May, said he expects to slow growth
at the company, which lost $2.8 million between 2006 and 2008. It then
embarked on an expansion spree, signing up contractors known as 'master
developers' who paid for the right to find franchisees and spot new
locations. In exchange, the developers receive half of the franchisee's
initial fees and ongoing royalties. The number of restaurants mushroomed
to 270 by autumn 2008, Destro said.
href='http://seattletimes.nwsource.com/html/businesstechnology/2010863874_tacodelmar23.html'>Read
more.
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