src='/Images/headlines/headline.gif' />
October 24, 2006
id='1'>Judge Blocks Threatened Strike at Mesaba
A bankruptcy judge
on Monday blocked a strike by unions at Mesaba Aviation Inc., clearing
the way for the feeder for Northwest Airlines Corp. to impose pay cuts
later this week, the Associated Press reported yesterday. Bankruptcy
Judge Gregory Kishel enjoined Mesaba's pilots, flight attendants
and mechanics from encouraging, permitting or taking any type of
work-stoppage action, including a strike, 'sick-out, slow-down or other
concerted refusal to perform normal employment duties.' His decision
leaves Mesaba free to cut employee pay on Thursday without fear of a
crippling work stoppage.
Mesaba has said it needs the pay cuts so it can compete with other
regional carriers for business from Northwest.
href='http://www.nytimes.com/aponline/business/AP-Mesaba-Labor.html?pagewanted=print'>Read
more.
id='2'>Commentary: If Company Goes Bankrupt, Don't Count on Your
Pension
Flight attendants
at Northwest Airlines, assembly-line workers at the Delphi Corporation
and thousands of employees at other companies in bankruptcy continually
see warnings that their companies might shut down their pension plans
and drop the liabilities on the federal government's Pension Benefit
Guaranty Corporation (PBGC), according to a commentary in today's New
York Times. They can also read about workers in similar straits
whose pensions were abruptly cut by one-fourth or even half and how the
PBGC itself faces a financial shortfall. When a company is in such
severe financial trouble that paying the pensions it owes could put it
out of business, it can turn the responsibility over to the pension
agency in a so-called distress termination. During the last 30 years,
the pension-guarantee program has taken on nearly 3,600 such plans
covering about 1.2 million people. 'The protection that is provided by
this insurance guarantee is an amazing safety net,' said Karen Ferguson,
the director of the Pension Rights Center, a Washington advocacy group
for employees. 'The downside is you can lose a big chunk of your
benefit.'
href='http://www.nytimes.com/2006/10/24/business/retirement/24pension.html?pagewanted=print'>Read
more.
id='3'>Court Sets Deadline for Claims in Davenport Diocese
Bankruptcy
The U.S. Bankruptcy
Court in the Southern District of Iowa set Feb. 6, 2007 for claims
against the Roman Catholic Diocese of Davenport as a part of the
diocese's bankruptcy case, the Associated Press reported yesterday. The
Davenport diocese filed for chapter 11 on Oct. 10 in an effort to deal
with the financial burden of more than 24 claims against it by people
alleging abuse by priests. The court has also called a creditors meeting
for Nov. 8 at the federal courthouse in Davenport.
href='http://www.whotv.com/Global/story.asp?S=5579207&nav=2HAB'>Read
more.
id='4'>Ex-Execs Want Delphi to Cover Legal Costs
Trying to find
funding to fight various lawsuits brought against them, former
executives of Delphi Corp. have asked a federal judge to force the
bankrupt auto parts maker to cover their legal costs, Portfolio
Media reported yesterday. In court documents filed on Thursday,
former CEO J.T. Battenberg, former CFO Alan Dawes and a host of other
ex-employees requested that Judge Robert Drain either force
Delphi to or allow a corporate insurer to advance their legal fees and
costs. The executives are the target of a securities class action filed
in the U.S. District Court in the Eastern District of Michigan, which
accuses them of '[turning] to fraud when they concluded that telling the
truth about the company's business performance would imperil their jobs
and bonuses.'
id='5'>Daewoo Granted Chapter 15 Protection
Creditors of
bankrupt Korean trading company Daewoo Corp. will have to put the brakes
on their plans to claim the company's assets, after a bankruptcy court
judge granted the company protection from creditor lawsuits,
Portfolio Media reported yesterday. Judge Robert Gerber
ruled that Daewoo's South Korean bankruptcy case takes precedence over
proceedings in the United States, a decision that protects the company
from U.S. lawsuits until the conclusion of the case in Korea. The ruling
blocks cases filed by the company's creditors, as well as staying a 2004
case filed in New York State Superior Court over a loan guaranteed by
Daewoo.
id='6'>Financial Education Course May Be Mandated for Indiana
College Students
Although Purdue
University offers elective courses on personal finance, a state-mandated
class for college and high school students may help alleviate Indiana's
high rate of bankruptcy, the Purdue Exponent reported yesterday.
Janet Bechman, Purdue extension plan of work and accountability
coordinator, said that Indiana does not require money-management
courses, but that states that do require such courses tend to have lower
bankruptcy filing rates. Sugato Chakravarty, a professor and associate
head of consumer sciences, said that a main concern of his students is
high interest rates on credit cards.
href='http://www.purdueexponent.org/index.php/module/Section/section_id/11?module=article&story_id=2515'>Read
more.
id='7'>Houston Candle Maker Files for Bankruptcy
Houston-based Home
Fragrance Holdings Inc. has filed for chapter 11 protection in the U.S.
Bankruptcy Court in Houston, the Houston Business Journal reported
yesterday. A candle designer and manufacturer, the company produces
between 12 million and 15 million candles per year. Home Fragrance
Holdings has ceased production and is soliciting offers for the sale of
all or part of the company while it begins to shutter its local
facility.
href='http://houston.bizjournals.com/houston/stories/2006/10/23/daily21.html'>Read
more.
id='8'>Enron's Skilling Is Sentenced to 24 Years
Jeffrey K. Skilling
was sentenced to 24 years and 4 months in prison for his role in the
pervasive fraud and conspiracy that led to the bankruptcy of Enron,
closing the book on the government's prosecution of top executives at
the former energy company, the New York Times reported today. Skilling's
sentence narrowly missed being the longest one ever handed down to a
white-collar criminal. That record still belongs to Bernard J. Ebbers,
the former chief executive of WorldCom, who was sentenced to 25 years
last year for his role in the $11 billion fraud that led to that
company's collapse.
href='http://www.nytimes.com/2006/10/24/business/24enron.html?ref=business&pagewanted=print'>Read
more.
id='9'>California Couple Sentenced in Bankruptcy Fraud Case
A former Point
Loma, Calif., couple who hid their assets from a bankruptcy judge were
sentenced to prison by a San Diego federal judge yesterday, the San
Diego Union Tribune reported yesterday. Mexican police arrested Terry
and Susan Brunning aboard a yacht in Puerto Vallarta in July 2003. The
couple owned two Postal Annex franchises in Point Loma but declared
bankruptcy in 2002, claiming debts of $228,002 and assets of $1,041.
Investigators with the Internal Revenue Service and a trustee appointed
by a San Diego bankruptcy judge determined that their true assets topped
$1 million, including a 1981 Rolls-Royce, a 1990 Jaguar, a $155,000
promissory note and the $350,000 yacht. Judge Napoleon Jones sentenced
Terry Brunning to 33 months in prison and his wife, Susan Brunning, to 6
months. Susan Brunning has completed her punishment and was expected to
be freed soon. The judge ordered Terry Brunning to serve an additional
120 days of custody in a halfway house.
href='http://www.signonsandiego.com/news/metro/20061024-9999-1m24brunning.html'>Read
more.
Credit Managers Daily Business News Report
The following articles are taken from the Daily Summary of Troubled &
Fast Growing U.S. Companies published by Bastien Financial
Publications.Ê For more of the latest business news visit
href='http://dailybusiness.creditmanagers.biz'>http://dailybusiness.creditmanagers.biz.
ABI Members receive a 50 percent discount when subscribing to the
complete Daily Summary.
id='10'>Banta Corp., a Wisconsin provider of printing and
supply-chain management services, is shutting down certain facilities,
including a book-printing plant in Eden Prairie, Mn. The Eden Prairie
shutdown will result in the loss of seventy-two jobs.
id='11'>DaimlerChrysler AG, in a move to bring its Chrysler
Group operations in the U.S. 'back on track', is considering shutting
down a plant in Newark, De.
id='12'>EchoStar Communications Corp. lost a round in court
when a federal district judge in Florida issued a nationwide injunction
that blocks the firm from broadcasting local sports and other local
television programming to hundreds of thousands of subscribers in
various areas, in connection with a dispute with News Corp.'s Fox
Network.
id='13'>Ford Motor Co., Dearborn, Mich., reported a
preliminary third quarter net loss of $5.8 billion, as it continues
struggling with high expenses and weak sales in North America. Its loss
from continuing operations was $1.7 billion. The carmaker added that it
will restate financial results going back to 2001 to correct certain
derivatives accounting.
id='14'>General Motors Corp., Detroit, Mi., reported that
third quarter worldwide unit sales fell 3 percent--to 2.3 million
vehicles. That follows a 2.3 percent decline in vehicle sales in the
first six months of the year.
id='15'>Hines Horticulture Inc., an Irvine, Calif. grower of
plants, is laying off 140 workers at its operations in Miami, Fla. by
the end of November. The firm is also reportedly negotiating to sell
certain of its operations.
id='16'>Madison Keats, a Charlotte, N.C.-based investment
banking concern, shut down its operations, where is has been operating
in the red for the past two years.
id='17'>San Jose Mercury News in California will trim
its workforce by about 100 employees, about 8 percent of its staff,
including forty newsroom workers. Also, the Philadelphia Inquirer
and the Daily News, its sister newspaper, issued a memo warning
that 'some layoffs' will occur. Both the Inquirer and the Daily News
suffered significant job cuts last year. The newspapers were acquired
by MediaNews Group earlier in the year.