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December 6, 2006
size='3'>Bankruptcy Filings Drop by Nearly a
Million for First Three Quarters of
size='3'>2006
The number of bankruptcies filed in the
first nine months of the year fell to a third of what they were last
year, the Associated Press reported yesterday. From January to
September, the total number of personal and business bankruptcies fell
by 68.5 percent to 443,750 from the 1.41 million in the same period last
year. This year's figure is the lowest since 1987. 'Today's numbers
confirm that we are seeing filing levels not present since the 1980s,'
said ABI Executive Director Samuel Gerdano. 'Congress clearly wanted to
reduce filings, but only time will tell if the 2006 trend is
sustainable.' The data, from the Administrative Office of the U.S.
Courts, shows that personal bankruptcy filings fell most sharply, by 69
percent, while commercial bankruptcies fell 45.9 percent. The tally of
personal bankruptcy filings fell to 429,522 from 1.38 million last year.
Business filings fell to 14,228 from 26,275.
size='3'>
href='http://www.chron.com/disp/story.mpl/ap/fn/4381272.html'>Read
more.
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here to read the ABI Press Release.
Chapter 11 Plan, Confirmation Draw Objections
Commodities broker Refco Inc.
filed a modified joint chapter 11 reorganization plan on Monday,
following objections to the court’s tentative approval of an
earlier version in October,
size='3'>Bankruptcy Law360 reported yesterday. At least
14 parties filed objections as of Friday’s deadline, including
former Refco customers, employees and liquidators of bankrupt Sphinx
Managed Futures Fund SPC, among others. The objections all stated the
need for additional provisions and specific edits to protect the
interests of the objectors.
size='3'>The customer class plaintiffs want the plan amended to protect
their rights in their class action suit. The Sphinx Funds liquidators
objected to the plan for other reasons, claiming it prevents them from
pursuing claims against third parties. A hearing on the objections has
been set for Dec. 15.
size='3'>
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=14514'>Read
more . (Registration required.)
Autos
name='3'>Dana Seeks Extension to File Chapter 11
Plan
Dana Corp. filed a motion
on Monday requesting an eight-month extension to file its chapter 11
reorganization plan,
size='3'>Bankruptcy Law360 reported yesterday.
Although Dana’s debtors have attempted to analyze business
operations and discover initiatives that could restructure deficient
parts of the company, Dana’s latest motion revealed that the
company needs more time for in-depth analyses. The auto parts supplier
cited many reasons it needed the extension, noting first that the 2007
business plan will not be available to committees until mid-December. In
the filing, the Ohio-based company requested an extension until Sept. 3
to file the reorganization plan, and through Nov. 2, to win creditor
support. The current filing deadline is January 3.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=14572'>Read
more . (Registration required.)
name='4'>New
$3.3 Billion
Delphi Corp., the nation's largest auto-parts
supplier, said it plans to announce today that it has booked $3.3
billion in new steering and half-shaft business so far this year, the
division's second-best sales year in its 100-year history, the
face='Times New Roman'>Detroit Free Press reported today. The
company, which filed for bankruptcy in October 2005, said it seeks to
emerge from bankruptcy in early 2007 and indicated that its new business
is spread across 16 global customers, and that no single customer
represents more than 50 percent of the total
business.
href='http://www.freep.com/apps/pbcs.dll/article?AID=/20061206/BUSINESS01/612060318&template=printart'>
face='Times New Roman' size='3'>Read more.
Funds Target of Senate Judiciary Chairman
Senate Judiciary Chairman Arlen
Specter (R-Pa.) made one last attempt yesterday to highlight his crusade
for greater hedge fund regulation before he turns over his gavel at the
end of the year, touting his proposal to allow prosecutors more freedom
to investigate insider trading cases and provide more protection for
whistleblowers,
size='3'>CongressDaily reported yesterday. Specter said
he was still troubled by what he termed lax SEC enforcement of the
trillion-dollar hedge fund industry, singling out an insider-trading
probe of Morgan Stanley's chief executive. His proposal would require
more disclosure for hedge funds, such as their investment objectives and
strategies, baseline performance, side agreements, potential risks and
frequency of audits. The bill also would require funds to register with
the SEC if more than 5 percent of its capital is from pension funds or
small investors and adopt a code of ethics to prevent the wrongful
release of nonpublic material information. Associate Deputy Attorney
General Ronald Tenpas said his department found problems with the
proposal, such as the elimination of the requirement in current law that
a person charged with insider trading must have a 'duty' in carrying out
that information. Tenpas said that eliminating such a requirement could
potentially subject people to criminal charges who innocently come upon
valuable information and trade on it.
name='6'>Satelites Mexicanos Flies Out of Chapter 11
After less than five
months in chapter 11 protection, Mexican radio and telecommunications
company Satelites Mexicanos S.A. de C.V. has emerged from bankruptcy,
Bankruptcy Law360 reported yesterday. The company exited
through a debt-for-equity swap on Nov. 30 under a pre-negotiated plan
confirmed in late October by Judge
size='3'>Robert Drain of the New York Southern
Bankruptcy Court. Noteholders of $203.39 million in senior secured
floating notes exchanged them for $234.4 million in first-priority
senior secured notes, due in 2011. Creditors with $320 million in
unsecured notes traded them for $140 million of second-lien notes, set
to mature in 2013. The Mexican government, which held a 24 percent stake
in SatMex, will receive new Series A and Series N common stock, which
will in turn give them 4 percent of the equity and 10 percent of the
voting rights.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=14541'>Read
more. (Registration required.)
name='7'>Silver Point Asks
w:st='on'>
size='3'>USA
size='3'>Commercial to Disclose Bids
The lead bidder for
bankrupt lender USA Commercial Mortgage Co.’s portfolio of small
business loans has requested that the debtors provide information about
competing bidders before the auction scheduled for tomorrow,
Bankruptcy Law360
reported yesterday. SPCP Group LLC, an affiliate of
Greenwich, Conn.-based hedge fund SilverPoint Capital, filed an emergency motion
requesting that USA Commercial comply with bid procedures on Thursday.
Judge Linda B.
Reigle granted Silver Point’s motion and
ordered a hearing on the matter today. Silver Point said USA
Commercial’s “unreasonable refusal” to disclose
information about competing bids was the motivating factor behind the
motion.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=14529'>Read
more . (Registration required.)
name='8'>HSBC Warning Ominous for
w:st='on'>
size='3'>U.S.
size='3'>Lenders
HSBC, the world's third-largest
bank by market value after Citigroup Inc. and Bank of America Corp.,
said that
face='Times New Roman'
size='3'>U.S.
results might worsen from the third quarter, when higher loan losses
crimped overall revenue growth, Reuters reported yesterday. Experts have
warned all year that a slowing
w:st='on'>
size='3'>U.S.
borrowing costs would lead to an increase in bad loans by homeowners and
other borrowers. In 2003, HSBC paid about $14.8 billion for Household
International Inc., which lent to many people with below-average credit
histories. Now named HSBC Finance Corp., the bank's North American
operations last year generated 31 percent of total profit, but 65
percent of bad loans. Many have cautioned that loan losses will increase
as economic growth moderates and bankruptcy filings rise to more normal
levels. Read more.
href='http://www.nytimes.com/reuters/business/business-mortgages-warning.html?pagewanted=print'>Read
more.
name='9'>Federal Appeals Court Rejects Class Action Against
Banks
A federal appeals court ruled
yesterday that certain Wall Street banks
size='3'>,
public offerings of technology companies during the market boom of the
late 1990s and cheating small investors out of hundreds of millions of
dollars, will not
have to face a huge securities class-action lawsuit, the
face='Times New Roman' size='3'>New York Times reported
today. The investment banks faced making payments of billions of dollars
to settle the accusations — if they chose not to risk a trial
— involving potentially millions of investors, lawyers involved in
the case said. The ruling also raises the prospect that earlier
settlements in the case, in particular a $425 million agreement with J.
P. Morgan Chase and a $1 billion guaranteed proposed deal with the
issuers of the new shares that was still pending approval by the judge
in the case, could be nullified.
href='http://www.nytimes.com/2006/12/06/technology/06wall.html?_r=1&oref=slogin&ref=business&pagewanted=print'>
size='3'>Read more.
name='10'>Deadlock Broken on Revising Audit Rule
Regulators have reached
an agreement in principle on how to revamp a contentious accounting rule
that cost businesses millions of dollars more than anticipated, removing
a pair of major stumbling blocks attacked by consumer advocates, the
Washington Post reported today. The Public Company
Accounting Oversight Board, which oversees the audit industry, plans to
meet Dec. 19 to present its revised version of the regulation, officials
said yesterday. The rule, which mandates that auditors review corporate
financial controls, is the most disputed part of the Sarbanes-Oxley law.
The accounting board's chairman, Mark Olson, said the new proposed
guidance, which attempts to focus auditors on areas of highest risk,
would more closely align the costs of the measure with its
benefits.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/12/05/AR2006120501374_pf.html'>
face='Times New Roman' size='3'>Read more.
name='11'>Credit Managers Daily Business News
Report
1000’s of companies lose
money or experience some form of difficulty each
quarter.
Below are just a few of these
companies, taken from the latest Daily e-Summary of
Financially-Challenged U.S. Companies.
To begin receiving the COMPLETE
Daily e-Summary, that emails you information on over 70 such companies
each morning, email
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size='3'>Airbus SAS, the European
aircraft-manufacturing consortium, is undertaking a nearly $15.5 billion
program to develop and market its 300-seat A350 XWB airliner, about 50%
more than it earlier projected, in order to compete with U.S.-based
Boeing Co.'s 787 Dreamliner jet. Airbus, getting permission from parent
company European Aeronautic Defence & Space Co. to go ahead with the
aircraft, will fund the A350 development partly through cash flow, but
the funding will also depend greatly on a recently announced Airbus
restructuring plan to reduce costs and develop products more quickly.
Airbus could also go to capital markets for part of the
financing.
size='3'>Ford Motor Co.,
w:st='on'>
size='3'>Dearborn
w:st='on'>
size='3'>Mich.
its Automotive Components Holdings climate-control unit to Valeo SA, a
French auto-parts supplier, for an undisclosed amount. Ford said that
the sale of the unit, which will have revenue this year of about $450
million, is an important step in its efforts to reduce its losses
in
size='3'>North America
size='3'>.
size='3'>Harris Bank in
w:st='on'>
size='3'>Illinois
of BMO Financial of Toronto, Ontario, will trim its payroll to reduce
costs. Industry observers believe that
Harris will cut between 150 and 250 jobs in order to bring its costs in
line with industry averages, although some suspect that the number of
layoffs could be much higher than that.
size='3'>Rex Stores Corp., a Dayton,
Ohio-based retailer of stereos and other home appliances, reported its
third quarter net income declined 30%--to $4.8 million, on a 7% drop in
sales--to $85.2 million. Its income from continuing operations slumped
49%--to $3.6 million, including a $460,000 gain from the sale of real
estate. Rex has about 220 stores in more than thirty-five
states.
size='3'>SCM Microsystems Inc., a
size='3'>Fremont
w:st='on'>
size='3'>Calif.
smartcard readers and other digital devices, reported a third quarter
net loss of $3.9 million, nearly twice its loss in the year-earlier
period. Revenue fell nearly 9%--to $7.4 million.
size='3'>During the just ended quarter, the company moved some of its
operations to
w:st='on'>
size='3'>Germany
size='3'>.
size='3'>Toll Brothers Inc., a Horsham,
Pa.-based luxury homebuilder, reported its fourth quarter net profit
slumped 44%--to $174 million, on a 10% drop in revenue--to $1.8
billion. The company warned that its fiscal
profit for 2007 could drop by as much as 62%, although it also expressed
some hope that the housing market will turn
around.