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September 19,
2006
id='1'>Judge Approves
size='3'>Rogers
Settlement in Refco Case
A federal judge has
approved an agreement between Refco Capital Markets and two investment
funds that will allow a settlement between RCM and its customers to move
forward, Portfolio
Media reported yesterday. In documents filed
Friday with the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Manhattan
Judge Robert
Drain said a court-appointed trustee of RCM
had negotiated a “fair and reasonable” outcome. Originally,
the two investment funds, both of which are affiliated with commodities
trader Jim Rogers, held up a deal that would allow customers of Refco to
recover $2.3 billion lost as a result of the commodities broker’s
bankruptcy. However, Rogers Raw Materials Fund LP and Rogers
International Raw Materials Fund LP gave up their fight in late July and
joined the customers’ settlement, which was subject to court
approval.
Autos
id='2'>Dana Urges Judge to
Reconsider Incentive Plans
Auto parts maker Dana
Corp. has asked a bankruptcy court to reconsider a ruling that denied
proposed incentive packages for the company’s executives,
questioning whether the compensation plans actually violate the
Bankruptcy Code,
size='3'>Portfolio Media reported yesterday.
The motion, filed in the U.S. Bankruptcy Court for the Southern District
of New York, asks Judge
size='3'>Burton R. Lifland to reconsider the
plan, which would cost the company almost $10 million in bonuses
designed to retain key executives through the restructuring process. The
company also said in the court filing that it has been in talks with the
parties that had objected to the compensation package, in a
reconsideration and clarification of the order denying that the bonuses
may help ameliorate relations. Dana’s incentive plan, which would
have given CEO Michael Burns $4 million and five other executives about
$1 million each, faced stiff opposition from the start, most notably
from Diana G.
Adams, the U.S. Trustee overseeing the
bankruptcy. The case is
size='3'>In re Dana Corporation et al., case
number 06-10354, in the U.S. Bankruptcy Court for the Southern District
of New York.
id='3'>Tower Automotive
Details Costs for
face='Times New Roman' size='3'>Ohio
Parts Plant Closing
Bankrupt auto frames and
structures
size='3'>producer
face='Times New Roman' size='3'>Tower
size='3'>Automotive Inc. said on Monday it expects about $9.2 million in
costs to close a plant in Upper Sandusky, Ohio, where it has 135
employees, Reuters reported yesterday. Tower expects to consolidate the
work into its other plants in
face='Times New Roman' size='3'>North America
size='3'>under a plan to cut excess capacity and exit bankruptcy. The
moves will start immediately and are expected to be completed early in
2007, Tower said. The company expects $1.1
million of employee-related costs, $4.3 million for asset impairment
charges, $1.5 million for other noncash charges and $2.3 million of
other costs. Tower said it expects $3.4 million of future cash
expenditures.
GM
Reportedly Discussed
Merger with Ford
Executives at GM and Ford
Motor, according to a trade journal report, held discussions about a
partnership or merger this year, the New York Times
reported today. Managers from the two companies began
meeting in July, according to yesterday’s
face='Times New Roman' size='3'>Automotive News
size='3'>. The discussions are no longer occurring, the report said, and
no further action is expected. Both
companies declined to confirm the discussions. News that the two
automakers would even consider a broad partnership comes as
size='3'>Detroit
from both companies’ plans to cut thousands of jobs and close
dozens of plants as part of their turnaround efforts. Profits have been
elusive for
face='Times New Roman'
size='3'>Detroit
automakers, most recently because high gasoline prices have cut into
sales of their lucrative sport utility vehicles and pickup
trucks.
href='http://www.nytimes.com/2006/09/19/business/19auto.html?pagewanted=print'>Read
more.
id='5'>Chrysler Plans Major Cuts
in Second-Half Production
Chrysler Group will
implement 'significant' production cuts in the third and fourth quarters
in response to bloated
w:st='on'>
size='3'>U.S.
size='3'>inventories, which are leading the company to forecast a
wider-than-expected third-quarter loss, the Wall Street Journal
reported yesterday. Chrysler spokesman Jason Vines said the company will
expand the cuts beyond the 65,000 to 75,000 vehicles initially projected
for the period, but declined to give specifics. Chrysler, the
size='3'>U.S.
of DaimlerChrysler AG, has posted a string of profitable quarters dating
back to 2003 as the benefits of a deep restructuring and a revised
lineup of vehicles have taken hold. However, the company's momentum is
hitting the brakes, with executives forecasting a $1.5 billion loss for
the third quarter.
href='http://online.wsj.com/article/SB115860421671866502.html?mod=home_whats_news_us'>Read
more. (Registration required.)
id='6'>Steel Parts Corp. Files
for Chapter 11
Steel Parts Corp.
announced that it filed for chapter 11 due to worsening conditions in
the automotive supplier marketplace and unsustainable debt,
Autochannel News
reported today. The Detroit-based company filed for
bankrupcy in the Eastern District of Michigan in Detroit on
Friday.
href='http://www.theautochannel.com/news/2006/09/18/022257.html'>Read
more.
Technology
id='7'>Adelphia Revises Chapter
11 Plan, Disclosure Statement
Bankrupt Adelphia
Communications Corp. has made a few changes to its fifth amended
reorganization plan and accompanying disclosure statement after drawing
criticism from the U.S. Trustee, equity-holders and note-holders
involved in the case,
size='3'>Portfolio Media reported yesterday.
The cable provider filed the modifications to its plan and statement in
the U.S. Bankruptcy Court for the Southern District of New York on
Monday after it reached settlements with note-holders and some of the
administrative agents in the case. Adelphia said its changes are
“incremental to the compromise among other important creditor
groups,” in which as much as $1.08 billion will be transferred
from certain creditors of some of Adelphia’s subsidiaries to
certain unsecured senior and trade creditors of the parent corporation.
A hearing on Adelphia’s disclosure statement supplement is
scheduled for today.
id='8'>Internet Telephone
Company Files for Chapter 11
Troubled Internet
telephony provider Zultys Technologies has filled for chapter 11 in the
Northern District of California , Computer Reseller News reported
size='3'>yesterday. The first creditors' meeting is set for
the Oct. 4.
href='http://www.channelweb.co.uk/crn/news/2164449/zultys-files-chapter'>Read
more.
id='9'>eLinear Files for
Bankruptcy
eLinear Inc., an IT
consulting and technology infrastructure company, said that it has filed
for chapter 7 in the U.S. Bankruptcy Court for the Southern District of
Texas, the Houston
Business Journal reported
yesterday. The troubled technology company
recently announced it had closed its
w:st='on'>
size='3'>Texas
and reduced its workforce to three contract employees who were retained
to help the company wind down its operations. The company has been
rocked by recent executive resignations and a delisting warning from the
American Stock Exchange. Signs of trouble began surfacing in September
2005 when eLinear reduced its staff by about 20
percent.
id='10'>Involuntary Bankruptcy Filed
for Centrix Financial
Centrix Financial, the
former title sponsor of the Grand Prix of Denver, has been pushed toward
bankruptcy by three creditors who claim they are owed more than $4.6
million, the Denver
Post reported today. IFC Credit Corp.,
Suntrust Leasing and Wells Fargo Equipment Finance initiated a chapter
11 filing for Centrix in the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Denver
size='3'>. The companies, which leased
equipment, software and other products to Centrix, have not been paid
for 'a number of months,' said Lee Kutner, an attorney for the
creditors. Centrix provides auto loans to subprime borrowers. The
company has struggled financially over the past year, cutting its
workforce from 1,500 to 500.
href='http://www.denverpost.com/ci_4357074?source=rss'>Read
more.
Alabama
Medical Center
Files for Chapter
11
face='Times New Roman' size='3'>Carraway
size='3'>Methodist
face='Times New Roman' size='3'>Medical
size='3'>Center
filed for bankruptcy protection Monday afternoon, but officials said the
hospital would continue to operate normally, the
w:st='on'>
size='3'>Birmingham
size='3'>(
face='Times New Roman' size='3'>Ala.
size='3'>) News reported today. Carraway has
been for sale for more than five years, and most health care experts
watching the situation did not expect any potential buyers to offer a
purchase price high enough to cover Carraway's significant debt.
Carraway has about $144 million in debt, $132 million of which is
secured bond debt and a secured line of credit owed to AmSouth Bancorp
and bond insurer Ambac Assurance, according to court filings. Ambac is
owed the majority of the $132 million secured debt, although Carraway
officials could not elaborate on the specific amount.
href='http://www.al.com/news/birminghamnews/index.ssf?/base/news/11586577454680.xml&coll=2'>Read
more.
id='12'>Former - Enron Exec
Gets 2 1/2 Years in Prison
A former high-ranking Enron
Corp. trading and retail energy executive was sentenced to 2 1/2 years
in prison for insider trading in connection with the energy company's
financial collapse, the Associated Press reported yesterday. David
Delainey, who pleaded guilty in October 2003, had admitted to
participating in schemes to manipulate earnings to please Wall Street.
Prosecutors said he sold $4.25 million in stock throughout 2001 when he
knew of a wide-ranging scheme to make Enron appear financially robust
and inflate the company's stock. Delainey had faced up to 10 years in
prison, but prosecutors recommended he receive a sentence on the
lower end of the guideline range due to his cooperation in their
investigation of Enron's collapse.
href='http://www.nytimes.com/aponline/business/AP-Enron-Delainey.html?pagewanted=print'>Read
more.
id='13'>Legislation Would Direct
Panel to Study Hedge Fund Regulation
In another move to
increase congressional oversight of hedge funds, Rep. Michael Castle
(R-Del.) has sponsored legislation that would establish a presidential
working group to study the largely unregulated trillion-dollar industry
and make recommendations on whether to mandate greater disclosure
requirements,
size='3'>CongressDaily reported
today. Castle, an influential member of the
Financial Services Committee, said he was motivated to act because he
wants to prevent any similar scandals from occurring in the hedge fund
industry like those that afflicted the mutual fund industry three years
ago, when New York Attorney General Eliot Spitzer charged major firms
with late trading and market timing. Castle also noted that hedge funds,
typically private funds for the wealthy that engage in more risky
strategies such as short-selling, are attracting more varied clientele
such as pension funds and university endowments.