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February 27, 2006
CORRECTION
In February 15's Daily
Headlines story “Hawaiian Air Sues to Block Mesa from Initiating
Inter-Island Airline,” air carrier Mesa Air Group Inc. was
incorrectly identified as being bankrupt. ABI apologizes and regrets the
error.
As
Date with Playmate Approaches, High Court to Ponder Jurisdiction
Issue
Arguments will begin
Tuesday as the U.S. Supreme Court will hear oral arguments in Anna
Nicole Smith’s appeal of litigation stemming from her battle for a
share of the estate of her husband, Texan J. Howard Marshall II, who
died in 1995 at age 90, the
size='3'>Texas Lawyer reported today.
In Vickie Lynn Marshall
v. E. Pierce Marshal, the Supreme Court will
consider whether federal courts have jurisdiction in state probate
matters. Smith contends they do; Marshall argues they don't. Smith
obtained a federal district court judgment awarding her millions from
her husband's estate, while
size='3'>Marshall
size='3'>Texas
court judgment that gave the money to him. Kent Richland, a lawyer
from
Angeles
Maynard, an assistant
w:st='on'>
size='3'>U.S.
size='3'>solicitor general, will share in the argument time for Smith.
G. Eric
Brunstad Jr., a partner in Bingham McCutchen
in
size='3'>Hartford
w:st='on'>
size='3'>Conn.
for Marshall, the respondent. A total of 10 amicus briefs have been
filed in the appeal, with seven of them supporting respondent Marshall
and three for Smith. An amicus brief filed
by a group of bankruptcy law professors, including
face='Times New Roman' size='3'>Nancy Rapoport
size='3'>, dean of the University of Houston Law Center,
asked the Supreme Court to hold that the probate
exception does not affect the bankruptcy jurisdiction outlined in 28
U.S.C. §1334. 'This bankruptcy case should not be decided by
focusing on a decedent's estate,' the professors wrote in the
brief.
href='http://www.law.com/jsp/article.jsp?id=1140775515274'>Read
more.
name='3'>Solutia Gets More Bankruptcy Financing
Chemical products maker Solutia
Inc., which filed for chapter 11 in 2003, said it is getting an added
$300 million in financing to carry it through its bankruptcy
reorganization, the Associated Press reported on Friday. Solutia said
the overall commitment totals $825 million and matures in March 2007.
The funding represents a $300 million increase and more than a
nine-month extension over Solutia's current financing deal. Solutia said
the added funding will give it more liquidity for operations and the
ability to make its mandatory pension payments this year.
href='http://biz.yahoo.com/ap/060224/solutia_financing.html?.v=1'>Read
more.
name='4'>Calpine Receives $2 Billion in Funding Under
Debtor-in-Posession Credit Line
Power company Calpine Corp.
said it received funding for a $2 billion debtor-in-posession credit
line, allowing the company to pay its operating expenses during
bankruptcy, the Associated Press reported on Friday. Deutsche Bank and
Credit Suisse arranged the facility, which includes a $1 billion
revolving credit line, a $400 million term loan and a second $600
million term loan. The facility is secured with liens on all Calpine
debtors' unencumbered assets and junior liens on their encumbered
assets. Calpine filed for chapter 11 bankruptcy protection on Dec.
20.
href='http://www.moneysense.ca/news/company_news/shownews.jsp?content=D8FVM4U…'>Read
more.
name='5'>Winn-Dixie Seeks Another Extension to Complete
Reorganization Plan
Winn-Dixie Stores Inc.
says it needs an additional 30 days to complete its chapter 11
bankruptcy reorganization plan, an extension that could delay its exit
from bankruptcy past its June target date, the Florida
Times-Union reported on Friday. The Jacksonville, Fla.-based
supermarket chain is scheduled to file its reorganization plan by March
20. But in a motion filed Wednesday in U.S. Bankruptcy Court in
size='3'>Jacksonville
company is asking the court to extend the deadline by 30 days to April
19. In the motion, Winn-Dixie said the 30-day extension will help the
company reach agreement with its creditors’ committee on the plan.
The stumbling block holding up the plan involves payments to unsecured
creditors of different Winn-Dixie subsidiaries. While the proceedings
have been moving forward jointly as one big case, there were actually 23
Winn-Dixie subsidiaries that filed for chapter 11 protection along with
the parent company in February 2005. The unresolved issue is in regard
to whether the assets of all 24 companies that filed for bankruptcy be
consolidated in determining how much money is available to pay off
creditors or if each subsidiary should pay off its creditors separately
from its own assets. Winn-Dixie is trying to get creditors to agree on a
resolution before filing its plan.
href='http://www.jacksonville.com/tu-online/stories/022406/bus_21190900.shtml'>Read
more.
name='6'>Illinois Lawyers Think More Time Is Necessary to Judge
BAPCPA Changes
w:st='on'>
size='3'>Rockford
w:st='on'>
size='3'>Ill.
attorney’s said it’s going to take several more months to
judge the effectiveness of the new bankruptcy law, the
face='Times New Roman' size='3'>Rockford Register Star
size='3'>reported on Friday. “Almost all of the people we’ve
sent to counseling (under a provision of the new law) ended up filing
for bankruptcy anyway,” said William Balsley, a Loves Park-based
attorney. “The new means test hasn’t made a big difference.
I think only two of our clients couldn’t file Chapter 7 because of
it.” Attorney Tom Lester of Hinshaw & Culbertson in
size='3'>Rockford
size='3'>serves as a trustee in bankruptcy cases, does not believe the
law is helping. “I question the validity of requiring someone to
go to credit counseling to tell the consumer they can’t spend more
than they make,” Lester said. “Most people know that, but
with today’s healthcare costs and the easy access to credit cards,
they find themselves in distress very easily.”
href='http://www.rrstar.com/apps/pbcs.dll/article?AID=/20060224/BUSINESS04/10…'>Read
more.
LSU
Ag Center on Brink of Bankruptcy
The Louisiana State
University Agricultural Center, a research and extension center that
provides programs statewide, is close to bankruptcy, 2theadvocate.com
reported on Friday. Ag Center Chancellor Bill
Richardson said Friday he will ask the LSU system board next week for
permission to declare bankruptcy.
w:st='on'>
size='3'>Richardson
the Ag Center has had issues with its budget for more than five years.
The two hurricanes that hit
w:st='on'>
size='3'>Louisiana
cost the center $6 million to $8 million because of damaged facilities
and there have also been another 5.8 percent in budget cuts from the
state board of regents.
w:st='on'>
size='3'>Richardson
will also ask the board next week to fire tenured faculty and cut
programs if needed, but said it is too early to know how many faculty
members or may be cut.
href='http://www.2theadvocate.com/news/2367211.html'>Read
more.
IES
Unsecured Creditors Tap Weil Gotshal
The unsecured creditors
in the Integrated Electrical Services bankruptcy have brought in Weil,
Gotshal & Manges, after a bankruptcy court judge approved an
$810-an-hour fee for Weil partner Marcia
Goldstein,
size='3'>Portfolio Media reported on Friday.
The judge also approved a $735 an hour fee for Alfredo R.
Perez, a Weil attorney acting as the principal in the case, and
between $310 and $560 an hour for associates aiding in the
proceedings. Goldstein’s $810 fee echoes those recently
approved in several other bankruptcies.
size='3'>Refco tapped Skadden, Arps, Slate, Meagher & Flom LLP to
litigate its chapter 11 proceedings, getting the green light to pay
attorneys an hourly rate of between $585 and $830. Although hourly rates
in the IES case may be high, Goldstein may not collect them for very
long, as the electrical contractor is looking for a quick emergence.
Earlier this week, Dallas bankruptcy court Judge Barbara
Houser approved several of the company’s preliminary
motions, including routine first-day orders to continue paying employees
and vendors over the duration of the bankruptcy. The judge also approved
a request for a March 10 hearing on IES’ statement disclosing its
reorganization plan. The case is
size='3'>Integrated Electrical Services,
bankruptcy petition number 06-30602-bjh11, in the U.S. Bankruptcy Court
for the Northern District of Texas.
name='9'>Investor Asks Judge to Dismiss Riverstone
Bankruptcy
Charles L. Grimes, a major
shareholder of Riverstone Networks Inc,. has asked the court to dismiss
the telecommunication company’s bankruptcy case amid accusations
that the bankruptcy was not initiated in good faith, Portfolio
Media reported on Friday. Grimes alleged in court papers that the
routing equipment manufacturer is actually solvent and does not need to
file for chapter 11. California-based Riverstone sought bankruptcy
protection earlier this month in the U.S. Bankruptcy Court for the
District of Delaware in
w:st='on'>
size='3'>Wilmington
listing assets of $98.3 million and liabilities of $130 million. The
case is Riverstone
Networks Inc., case number 06-10110-CSS, in
the U.S. Bankruptcy Court for the District of
Delaware.
name='10'>Bankruptcy Haunts Winston & Strawn in Corruption
Case
Bankruptcy attorneys at
law firm Winston & Strawn LLP have been accused of potential bias
for allegedly declining to sue a debtor who is also a witness in the
firm’s high-profile defense of former
w:st='on'>
size='3'>Illinois
George H. Ryan, Portfolio Media reported on Friday. The witness
is Edward McNally, an interim U.S. Attorney for the Southern District of
Illinois. He provided key testimony earlier this month for Winston &
Strawn in the firm’s pro bono defense of Ryan in a
widespread fraud and conspiracy trial. McNally is also a prime target
for a lawsuit from Winston & Strawn since it handles the bankruptcy
of McNally’s former employer, according to Assistant U.S. Attorney
Zachary Fardon, who brought the potential conflict of interest to light
in order to beef up his case against Ryan.
face='Times New Roman' size='3'>Fardon took his complaint to the judge
after a Chicago Tribune article tipped him off that Winston
& Strawn held a “financial hammer” over McNally’s
head and could sue him for hundreds of thousands of dollars for failing
to pay up what he owes to creditors. Winston & Strawn attorneys told
the judge they knew nothing about McNally’s connection to their
firm through the alleged bankruptcy debt.
name='11'>Trustee Opposes Anchor Glass Disclosure
Statement
The U.S. Trustee in Anchor
Glass Container Corp.’s chapter 11 case objected to the
company’s disclosure statement on grounds that it lacks vital
information, Portfolio Media reported on Friday. The trustee
claimed the statement lacks essential financial attachments needed for
creditors to evaluate whether to approve the plan. Although Anchor Glass
plans to file its financial statement before the hearing on the
disclosure statement Tuesday, the trustee said without the information,
the trustee and creditors cannot properly evaluate the plan.
name='12'>Commentary:
w:st='on'>San
Diego
New Champion
face='Times New Roman' size='3'>Executive
size='3'>Assistant
face='Times New Roman' size='3'>City
size='3'>Attorney Don McGrath thinks
w:st='on'>
Diego
at the possibility of entering into a chapter 9 bankruptcy, according to
a column in the Voice of
San Diego today. With speculation that the
required pension contribution could be as high as $300 million, many are
concerned that such a payment would cripple the city. Take $300 million
away -- what amounts to roughly one-third of the city's entire General
Fund -- and you're left with a government further unable to provide the
infrastructure, services and daily emergency help for which residents
pay taxes in the first place. The city's retirement system has ordered
its staff to prepare for the possibility. The port and airport -- two
entities that are lucky enough to participate in the city's beleaguered
pension system -- have both indicated they are considering ways to sever
ties with the city out of a concern of the potential for bankruptcy. 'I
know it's not popular. Bankruptcy is not a good word to many people. But
I don't see how we can make it out of this without some sort of
reorganization,' McGrath said.
href='http://www.voiceofsandiego.org/site/pp.asp?c=euLTJbMUKvH&b=278122'>Read
more.
w:st='on'>
name='13'>Louisville
face='Times New Roman' size='3'> Orchestra Talks Bring no Consensus
on Funding
Three days of mediated talks
between the Louisville Orchestra's officials and its musicians did not
resolve the orchestra's financial difficulty but did produce an
agreement to meet again, the Louisville Courier-Journal reported today.
The additional negotiations will continue the effort to keep the
orchestra out of chapter 7 bankruptcy. Last month the orchestra's
management broke off talks with the musicians over a new contract to
replace the one that will expire Sept. 1. Management and the board have
said that the orchestra is facing a $500,000 shortfall this season. On
Jan. 30 the board agreed with its musicians to seek mediation, but
emphasized that unless there was an agreement, it likely would file for
chapter 7 bankruptcy liquidation by early April.
href='http://www.courier-journal.com/apps/pbcs.dll/article?Date=20060227&Cate…'>Read
more.
Airlines
name='14'>Mesaba Creditors Ask Judge for Future
Protection
Mesaba Aviation’s
unsecured creditors have asked the court to guarantee that the bankrupt
regional carrier does not promote the interests of parent company ahead
of their own, Portfolio
Media reported on Friday. In a motion filed
Thursday, the committee of unsecured creditors warned the court not to
give the struggling airline, a regional carrier for Northwest Airlines
Corp., carte blanche regarding its forthcoming reorganization plan.
Northwest, the number four
w:st='on'>
size='3'>U.S.
size='3'>carrier, filed for bankruptcy in September 2005, with Mesaba
following suit shortly thereafter. Northwest is a major owner of Mair
Holdings, Mesaba's parent company. Anticipating future problems, the
creditors officially expressed their concern that Mesaba would allow
Mair Holdings to retain its interests in the company while failing to
pay creditors in full. The filing came in response to Mesaba’s
request to extend its exclusive control over the chapter 11 case. The
carrier wants to be able to file its reorganization plan through August
10 and to have until October 9 to secure creditor support. The
creditors’ committee has said that it doesn't oppose the extension
but simply wants to ensure that it isn't 'implemented in such a way as
to grant an unfair negotiating advantage' to Mesaba. The case is
Mesaba Aviation
Inc., U.S. Bankruptcy Court for the District
of Minnesota, case number 05-39258.
name='15'>Judge Gives Northwest Airlines and Two of Its Unions More
Time to Reach Agreement
Judge
face='Times New Roman' size='3'>Allan L. Gropper
size='3'>, the U.S. Bankruptcy Court judge hearing the Northwest's
Section 1113(c) motion regarding its labor agreements with the Air Line
Pilots Association (ALPA) and the Professional Flight Attendants
Association (PFAA), has issued an order extending the 1113 period
through the close of business on March 1, 2006, according to a Northwest
press release on Friday. The three parties agreed to an additional
extension during a conference with the judge. Northwest and the two
unions told the judge that they have continued to make progress on
negotiating new contracts.
size='3'>The trial on Northwest's Sections 1113(c) and 1114 motions
began in bankruptcy court on Jan. 17 and was adjourned on Feb. 3. On
Feb. 16, Judge Gropper gave the parties an extension so that
negotiations could continue. The parties have been negotiating new
contracts since shortly after Northwest declared bankruptcy in
mid-September of last year.
href='http://biz.yahoo.com/prnews/060224/cgf040.html?.v=26&printer=1'>Read
more.
name='16'>Commentary: Delta Putting the Squeeze on
Comair
Delta Air Lines' filing
to void Comair flight attendants' contract risks provoking a second
strike to go with one already threatened by Delta pilots, according to a
commentary in the
size='3'>Cincinnati Inquirer today. Delta
officials say they'd rather their pilots and flight attendants consent
to concessions than be compelled by court cancellation of contracts. One
surprising development is that Delta reported Comair lost $120 million
in 2005. That news could further narrow Delta's options if it seeks to
downsize by spinning off its regional subsidiary. About 4,000 of
Comair's 7,000 workers are based in the Cincinnati/Northern Kentucky
hub. Despite union skepticism over Comair's reported losses, Comair
flight attendants and Delta pilots ought to do all they can to ensure
that the airline survives and returns to profitability.
href='http://news.enquirer.com/apps/pbcs.dll/article?AID=/20060227/EDIT01/602…'>Read
more.
International
name='17'>Business at Odds with CBI Criticism of Pensions
Plan
Criticisms by the Confederation
of British Industry of Lord Turner
size='3'>’s
pension proposals are unfounded and do not reflect the views of most
businesses according to a survey of almost 1,000 employers, the
Financial Times
reported yesterday. Under the Turner proposals, companies
would be required to contribute 3 percent of salaries into the new
national pensions savings scheme (NPSS) if their employees opted to join
the scheme. The survey by the Chartered Institute of Personnel and
Development found that more than 80 per cent of employers
had “
size='3'>no intention of changing their existing pension
size='3'>”. Only 1
percent said they would “
face='Times New Roman' size='3'>opt for the NPSS to cut
costs.” Employers were also
“
size='3'>twice as likely to say that the proposed 3 percent contribution
towards occupational pensions is too low, as to say it is too
high.”
size='3'>The CBI argues there must be an equal right for businesses and
employees to opt out of the scheme, and that there will be pressure from
employees for wage increases to compensate for new and additional
pension contributions.
href='http://news.ft.com/cms/s/354255f0-a6ec-11da-b12c-0000779e2340.html'>Read
more.
name='18'>Beleaguered Chinese Soccer Team Facing
Bankruptcy
China’s
professional soccer league is close to losing its second top-flight team
in a month after beleaguered Liaoning FC was ordered to clear millions
of yuan in debt before the 2006 season kicks off in two weeks time or be
suspended from the Chinese Super League,
size='3'>Shanghai Daily reported yesterday.
Liaoning FC is reportedly under debt to the tune of 20 million yuan
($2.5 million), including outstanding salaries to players and expiring
loans to banks. Zhang Shuguang, general manager of Liaoning FC, said
that it was almost impossible to bail the club out of its debt woes on
such a short notice, even hinting at the possibility of
liquidation.
href='http://www.shanghaidaily.com/art/2006/02/27/244475/Beleaguered_Liaoning…'>Read
more.
href='http://www.shanghaidaily.com/art/2006/02/27/244475/Beleaguered_Liaoning…'>