href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='http://www.abiworld.org/AM/Images/headlines/headline.gif'>
name='1'>December 4, 2006
Commentary: Consumer
Financial Issues to Get Higher Profile under New Congressional
Leadership
As Democrats assume
control of 110
size='3'>th Congress in January, many
experts believe that consumer financial issues will receive a higher
priority on the legislative agenda, according to a commentary in
the Dallas Morning
News yesterday. Incoming House Speaker Nancy
Pelosi (D-Calif.) has promised to bring legislation to the floor within
the first 24 hours of the new Congress to boost the minimum wage to
$7.25 an hour from the current $5.15. In
addition, 'Next year holds great promise for
making progress in the battle against credit card abuses,' Sen. Carl
Levin (D-Mich.) said in a recent speech. 'The issue of credit card
practices directly impacts the financial stability of the middle class.'
Predatory mortgage lending also will be high on the list of issues for
Democrats as it is a top priority for Rep. Barney Frank (D-Mass.), the
incoming chairman of the House Financial Services Committee. 'Debt
collection is also in the crosshairs – the abuses, the aggressive
practices,' said Samuel
J. Gerdano, executive director of the American
Bankruptcy Institute. 'There will be a lot of oversight hearings. There
will be a lot of pressure on regulatory agencies to do more than what
they've done in the past.'
href='http://www.dallasnews.com/sharedcontent/dws/bus/stories/1204dnbusPerfiSide.225bd90.html#'>Read
more.
Autos
name='2'>Delphi-GM Talks Moving Forward
Court documents show
Delphi Corp. and former parent General Motors Corp. have exchanged
'draft agreements' during intense negotiations to help the Troy,
Mich.-based auto parts supplier emerge from bankruptcy, the
Detroit News
size='3'>reported on Saturday. GM has been trying to reach an agreement
with
size='3'>Delphi
creditors over the size of the automaker's obligation to its former
parts unit and its workers. GM has said it could be between $6 billion
and $7.5 billion. An agreement will likely include a guaranteed amount
of GM business for
size='3'>Delphi for a fixed period. GM
has also asserted billions in claims against
w:st='on'>
size='3'>Delphi
href='http://www.detnews.com/apps/pbcs.dll/article?AID=/20061202/AUTO01/612020385'>Read
more.
name='3'>Judge Approves Nearly $11 Million in Bonuses for Dana
Execs
Despite rejecting Dana
Corp.’s previous executive compensation plan, a federal judge has
approved its new motion to reward six executives with up to $11 million
in bonuses over the next two years,
size='3'>Bankruptcy Law360 reported on Friday.
If the bankrupt auto parts maker meets certain performance goals, Dana
CEO Michael Burns will receive $6.75 million in cash and stock bonuses,
while the other five executives will share up to $4.77 million in
bonuses. This stands in contrast to the $9.1 million in bonuses that
Burns alone would have received under the old plan. “The executive
compensation motion…is a true incentivizing package for senior
management and is wholly different than the initial proposal,”
Judge
size='3'>Burton R. Lifland of the U.S.
Bankruptcy Court in
w:st='on'>
size='3'>Manhattan
Thursday’s opinion. “The plan before the court today, unlike
the previous iteration, has no guaranteed payments to the CEO or senior
executives other than base salary and is a substantial retreat from the
original proposals,” he added.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=14394'>Read
more. (Registration required.)
name='4'>Radnor Completes
w:st='on'>
size='3'>Sale
Credit Bidder
Foam cup maker Radnor
Holdings Corp. has sold most of its assets to a private equity firm for
nearly $225 million, sealing a controversial deal that had been
challenged since Radnor filed for chapter 11,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported on Friday. Radnor entered chapter 11 in August, with
investment firm Tennenbaum Capital Partners LLC positioned to win its
assets in a “credit bid.” Tennenbaum invested $120 million
in the distressed company about a year ago. Santa Monica, Calif.-based
Tennenbaum bought two of the company’s flagship divisions, valued
at about $200 million. The firm said it would use them to mint a new
company dubbed WinCup Inc.—the same name currently used by one of
the defunct units.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=14355'>Read
more. (Registration required.)
name='5'>Lenders Flip-Flop on Adelphia's Plan, Draw
Opposition
The judge overseeing
Adelphia Communications Corp.’s chapter 11 proceedings has decided
to hold a hearing on an emergency motion to vacate a stipulated order
that would allow some of Adelphia’s secured lenders to change
their votes to accept the company’s reorganization plan,
Bankruptcy Law360
reported on Friday. Thursday, attorneys for a group of
Adelphia bondholders filed notice of a Dec. 6 hearing on the issues
raised in the bondholders' emergency motion. The motion claims the
stipulation at issue runs afoul of bankruptcy law by allowing members of
the ad hoc committee of nonagent secured lenders to alter their votes
without holding a hearing or disclosing considerations that might have
been given in exchange for the changed votes. Bankruptcy Judge
Robert Gerber
size='3'>initially signed off on the stipulation on Nov. 21, holding
that it was in the best interest of the debtors to let certain nonagent
secured lenders who had voted to reject Adelphia’s fifth amended
restructuring plan change their votes.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=14389'>Read
more. (Registration required.)
name='6'>Bankruptcy Judge Told
w:st='on'>
size='3'>Kara
face='Times New Roman' size='3'>Homes
Needs Financing Deal to Survive
The chief restructuring
officer for beleaguered builder Kara Homes Inc. today told a bankruptcy
judge that a $2.6 million loan from Bear Stearns is the only funding
available to the company, the
size='3'>Asbury Park Press reported on
Friday.
face='Times New Roman' size='3'>Kara
size='3'>Homes
trying to convince Judge
size='3'>Michael B. Kaplan to allow the loan
to go through so it will have enough money to pay administrative costs,
rent, insurance and security for its developments. Two weeks ago, Judge
Kaplan allowed Kara to receive $350,000 of that loan, putting off the
rest of the money because of a dispute with Kara's bank
creditors.Those
creditors have objected to the financing plans, arguing that Bear
Stearns would take control of major decisions for the builder.
href='http://www.app.com/apps/pbcs.dll/article?AID=/20061201/NEWS/61201015'>Read
more.
GAO
Report Shows Credit Unions Lagging in Service to Poorer
Customers
A Government
Accountability Office (GAO) report released Friday showed that credit
unions are not doing as good of a job as banks in serving lower-income
customers, spurring a leading congressional critic to question whether
the credit union industry still deserves its tax-exempt
status,
size='3'>CongressDaily reported on Friday.
House Ways and Means Chairman Bill Thomas (R-Calif.) said the GAO
findings show that the more than $500 billion industry still needs to
make a better case to justify its tax-exempt status. 'Congress has a
responsibility to ensure that tax-exempt entities are fulfilling the
purposes for which they were created,' said Thomas. 'One of the reasons
cited for the need for credit union tax exemption is that they would
serve those of modest means, yet GAO found that banks continue to serve
a higher percentage of low- and moderate-income households than credit
unions.'
w:st='on'>
name='8'>L.A.
Abuse Cases
Almost five years after a
sex scandal erupted within the Roman Catholic Church, the nation's
largest archdiocese announced Friday that it will pay $60 million to
settle 45 lawsuits alleging sex abuse by priests, the
face='Times New Roman' size='3'>Washington Post
size='3'>reported on Saturday. The deal, which involves incidents
alleged to have occurred before 1955 and after 1986, constitutes the
largest settlement made by the archdiocese and follows years of legal
battles waged under the leadership of Cardinal Roger Mahony. The
archdiocese still faces more than 500 lawsuits by other individuals
alleging sexual abuse. Sex abuse by Roman Catholic priests has cost
the
face='Times New Roman'
size='3'>U.S.
size='3'>church at least $1.5 billion since 1950. Four dioceses
--
size='3'>Tucson
size='3'>Spokane
w:st='on'>
size='3'>Wash.
w:st='on'>
size='3'>Portland
w:st='on'>
size='3'>Ore.
w:st='on'>
size='3'>Davenport
w:st='on'>Iowa
-- sought bankruptcy protection from a flood of lawsuits
with only
face='Times New Roman' size='3'>Tucson
emerging from the process.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/12/01/AR2006120100603.html'>Read
more.
NY
Hospital Closure Plan Sends Shock Through Medical
Communities
The
w:st='on'>
York's Commission on
Healthcare in the 21st Century plan to close hospitals and reduce staff
at others has angered doctors and staff at institutions on the closing
list, the Associated Press reported yesterday. Many expressed
indignation that the state would try to save money by closing small
hospitals and transferring patients to big competitors where care is
generally more expensive. Sixteen facilities would be forced to close by
mid-2008 in a bid to reduce a statewide glut of hospital beds. Dozens
more would be required to merge, downsize or change the type of care
they offer. Close to 7 percent of the state's hospital beds would be
taken out of service and at least 6,400 people could be put out of work.
The plan is moving fast toward approval; it already has the support of
both Gov. George Pataki and governor-elect Eliot Spitzer and will become
law if the legislature doesn't vote to block it by the end of the
month.
href='http://www.nytimes.com/aponline/us/AP-NY-Hospital-Closures.html?_r=1&oref=slogin&pagewanted=print'>Read
more.
name='10'>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.
For more of the latest business news visit
http://dailybusiness.creditmanagers.biz. 
ABI Members receive a 50
percent discount when subscribing to the complete Daily Summary. Enter
“ABI Member” in the comments section when you fill out the
subscriber form.
size='3'>Catalyst Semiconductor Inc.,
size='3'>Sunnyvale
w:st='on'>
size='3'>Calif.
its second quarter net income tumbled 81%--to $180,000. Revenue declined
4%--to $16.3 million.
size='3'>ChoicePoint Inc., an Alpharetta
size='3'>,
face='Times New Roman' size='3'>Ga.
size='3'>provider of identification and credential-verification
services, took its ChoicePoint Precision Marketing unit off the selling
block after failing to get sufficiently high offers for it.
Meanwhile, ChoicePoint is still trying to divest its Bode
Technology Group unit in
size='3'>Springfield
w:st='on'>Va.
and its EquiSearch operations in
w:st='on'>
size='3'>White Plains
size='3'>N.Y.
In its most recent quarter, ChoicePoint reported a loss
of $72.2 million on revenue of $247 million.
size='3'>Ford Motor Co.,
w:st='on'>
size='3'>Dearborn
w:st='on'>
size='3'>Mich.
gained some breathing room with its planned $15 billion package of
loans, but the company could be paying higher than other companies might
for similar loans. Reportedly, the rates
being negotiated are somewhat high, with Moody's Investors Service
rating the new loans at a speculative Ba3 rating.
size='3'>Meanwhile, Standard & Poor's graded the new loans even
lower, with a junk-B rating.
size='3'>H&R Block Inc., the
size='3'>Kansas City
w:st='on'>
size='3'>Mo.
size='3'>tax-preparation company, reported a second quarter net loss of
more than $156 million. Revenue declined 7%--to $563 million. The firm
continued losing money at its mortgage-lending operations and will
decide in next year's first quarter whether to sell the
unit.
size='3'>Indus International Inc., an
size='3'>Atlanta
w:st='on'>
size='3'>Ga.
management software, reported a second quarter net loss of $570,000.
Revenue declined 15%--to $28 million.
size='3'>McDATA Corp., a
w:st='on'>
size='3'>Broomfield
w:st='on'>
size='3'>Colo.
size='3'>manufacturer of switches, routers and other products, reported
a third quarter net loss of $26.3 million. The results included
restructuring and impairment charges of $6.5 million. Revenue declined
7%--to $156 million.