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August 31, 2006
id='1'>Judge Grants Exclusivity Extension to Silicon Graphics
A federal bankruptcy judge has granted high-performance computer maker Silicon Graphics Inc. another four months to wield sole control over its reorganization process, Portfolio Media reported. On Wednesday, Judge Burton R. Lifland of the U.S. Bankruptcy Court in Manhattan granted the extension request, pushing back the deadline for the company to submit a chapter 11 proposal from Sept. 5 to Dec. 29. The court also stretched out the computer maker's exclusive right to gain creditor support for its plan until Feb. 28, 2007, well beyond the original expiration date of Nov. 4. The move comes less than a month after Judge Lifland approved SGI’s disclosure statement, after a last-minute amendment vitiated a claim that the disclosure didn’t contain enough information about LG Electronics' patent infringement claims against the company. The case is In re Silicon Graphics Inc. et al., case number 06-10977, in the U.S. Bankruptcy Court for the Southern District of New York.
Autos
id='2'>Collins & Aikman Files Reorganization Plan
Bankrupt U.S. auto interiors supplier Collins & Aikman Corp. said that it had filed its reorganization plan late Wednesday, Reuters reported today. The plan, filed with the U.S. Bankruptcy Court for the Eastern District of Michigan, must still be approved by creditors and calls for emerging from chapter 11 protection by the end of February. The decision does not foreclose the possibility of a sale or merger at a later time for Southfield, Mich.-based Collins & Aikman, which filed for bankruptcy protection in the United States in May 2005 and in Europe weeks later.
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In related news, Collins & Aikman Corp. received some relief on Tuesday after a bankruptcy judge authorized the company to defer paying $28.8 million in interest and fees, Portfolio Media reported yesterday. Judge Steven Rhodes of the U.S. Bankruptcy Court in Detroit told the company that it would make the deferred payments in January 2007. Collins & Aikman asked the court last week for permission to defer interest payments and fees that were due through December, saying that deferring the payments would help ensure it has enough money to complete its reorganization. The case is Collins & Aikman Corp., case number 05-55927, in the U.S. Bankruptcy Court for Eastern District of Michigan.
id='3'>Trustee Objects to Dana’s $6 Million Incentive Plan
The U.S. Trustee involved in the chapter 11 case of Dana Corp. has filed an objection to the company’s proposed incentive plan, hoping to block the bankrupt auto parts maker from paying almost $6 million to retain key executives, Portfolio Media reported. Diana G. Adams, the U.S. Trustee overseeing the bankruptcy, claims that the proposed incentive plan violates the new §503 of the bankruptcy code “designed specifically to limit and restrict lavish insider retention and severance bonuses.” Adams claims that Dana sought to gain approval for its incentive program by circumventing Section 503 by avoiding any mention of the provision and by labeling the funds as “incentive” payments rather than bonuses. Earlier this month, Dana’s creditors said that the plan could create a “windfall” for six top executives if they are able to direct the company to slash workers’ retirement benefits. The case is In re Dana Corp., et al., case number 06-10354, in the U.S. Bankruptcy Court for the Southern District of New York.
Airlines
id='4'>Attendants Press for Strike at Northwest
Northwest Airlines flight attendants yesterday discounted the chance of further negotiations on a new labor contract and urged a federal judge to allow the union to strike, the Washington Post reported today. The request followed a decision Friday by U.S. District Judge Victor Marrero in New York to bar the approximately 9,000 flight attendants from disrupting operations during the final week of the summer travel season.
"Our informal negotiations with Northwest over the past few days reveal that meaningful negotiations are not possible at this juncture," Edward J. Gilmartin, a lawyer for the Association of Flight Attendants, said in a letter to the judge. No formal talks have taken place since Marrero imposed the injunction, and neither side has scheduled new negotiations. Read more.
id='5'>Delta Posts First Profit Since Bankruptcy Filing
Delta Air Lines said it made a $69 million profit in July, its first time in the black since it went into bankruptcy last year, the Atlanta Journal-Constitution reported today. Delta’s July results were in stark contrast to the $41 million loss the company experienced during the same month in 2005. Outside of huge non-cash charges that caused Delta's monthly results to swing wildly, the carrier's results have been on the upswing as rising fares and savings from its restructuring efforts have helped offset high jet fuel prices. The carrier said its net income, excluding bankruptcy expenses and other charges was $99 million in July, $140 million than a year earlier. The company also noted that a hearing on its motion to shed the pilots’ deeply underfunded pension plan is scheduled to begin Friday in the U.S. Bankuptcy Court in White Plains, N.Y. Read more.
id='6'>Judge Endorses Saint Vincent’s Hospitals Deal with Labor Groups
With the sale of several of Saint Vincent's hospitals pending, a judge has signed off on the bankrupt New York hospital chain’s agreement with a number of labor groups, Portfolio Media reported yesterday. On Tuesday, Judge Adlai Hardin, Jr. of the U.S. Bankruptcy Court for the Southern District of New York approved the deal prior to the closing of the sale of a pair of hospitals. The approval comes almost two months after Judge Hardin endorsed the sale of Queens, N.Y.-based Mary Immaculate Hospital and St. John's Hospital to Wyckoff Heights Medical Center. The case is Saint Vincent Catholic Medical Centers of New York, case number 05-14945-ash, in the U.S. Bankruptcy Court for the Southern District of New York.
id='7'>Trustee Objects to Refco Unit’s Settlement
id='8'>Trustee Sought in Riverstone Bankruptcy
The Office of the U.S. Trustee said that they have reason to believe there has been fraud, dishonesty or criminal conduct in the management of the former Riverstone Networks Inc., and are asking that a trustee be appointed for the company, Dow Jones Newswires reported yesterday. The agency has asked a bankruptcy judge to appoint a chapter 11 trustee to take over management of RNI Wind Down Corp., the cash-stuffed corporate shell left in bankruptcy after the equipment maker's operations were sold to Lucent Technologies Inc. in April. RNI Wind Down has more than $250 million to pay out to creditors next month under a chapter 11 plan that is scheduled for confirmation Sept. 12.
The motion to have a chapter 11 trustee appointed, filed Tuesday, is set to be heard Sept. 7. Read more.
id='9'>Oneida Reorganization Plan Confirmed
Oneida Ltd. announced that its chapter 11 plan was confirmed by the U.S. Bankruptcy Court for the Southern District of New York, according to a company press release today.
Oneida's reorganization plan provides for the conversion of 100 percent of its Tranche B loan, representing approximately $100 million, into equity of the newly reorganized company. The plan also includes $170 million in senior secured long-term credit facilities, consisting of an $80 million asset-based revolving credit facility and a $90 million term loan that will refinance Oneida's Tranche A debt and provide the company with additional liquidity to continue to grow its business. The company is expected to emerge from chapter 11 by Sept. 12. Read more.
id='10'>Commentary: Storms Pass, but Insurance Worries Stay
All along the coasts, from Texas to New England, insurers suffering from hurricane jitters are raising rates and cutting back on coverage, the New York Times reported today. But nowhere is the situation more severe than in Florida, particularly in South Florida and in the Florida Panhandle, where storms in recent years have added billions to the insurers’ losses. Even a mild tropical storm, such as Tropical Storm Ernesto, reminds the insurance industry of the risk involved in underwriting insurance in Florida and makes them even more cautious, said J. Antonio Villamil, the chairman of Gov. Jeb Bush’s council of economic advisers and the chief executive of the Washington Economics Group, an economic and business consultant in Coral Gables, Fla. State officials have been struggling to restrain rising prices, but they know the more pressure they put on company profits, the more the companies will cut back on the amount of coverage they offer. Read more.