href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='/AM/Images/headlines/headline.gif'>
March 9, 2006
name='1'>Congressional Negotiators Start Work on Pension
Bill
Congressional negotiators began
work late on compromise legislation to reform the way corporate pensions
are funded and protect financially weak retirement plans covering
millions of people, Reuters reported yesterday. 'I am counting on my
colleagues to work through the issues swiftly,' said Sen. Mike Enzi
(R-Wyo.), named to chair the panel comprised of House and Senate
members. Enzi said he wanted deliberations completed by the end of March
and a final bill ready for votes by April 7, which is just prior to the
April congressional recess. Any compromise plan must be presented to
both chambers for final votes.
href='http://today.reuters.com/investing/financeArticle.aspx?type=fundsNews2&…'>Read
more.
Judge
Allows Amcast Creditors to Withhold Info
Judge Frank J. Otte,
overseeing wheel maker Amcast Industrial Corp.'s chapter 11, case has
ruled that the creditors' committee may limit the information it turns
over to creditors,
size='3'>Portfolio Media reported yesterday.
Judge Otte’s ruling means that the committee now has no obligation
to share any confidential, nonpublic or attorney-client privileged
information, giving it discretion to decide whether to share
confidential information.
size='3'>The order, filed Monday in the U.S. Bankruptcy Court for the
Southern District of Indiana, stated that the committee would not be
barred from sharing confidential information with a third party.
Amcast’s creditors' committee had argued that the provisions of
the BAPCPA are too vague in requiring creditors committees to share
information with creditors. In early February, the committee filed a
motion stating that the ambiguity of Section 1102(b)(3)(A) of the U.S.
Bankruptcy Code, which the BAPCPA provisions amend, and the lack of
legislative history had left it wondering whether and what information
it was required to provide to creditors. The immediate case is
size='3'>In re Amcast Automotive of Indiana Inc.
size='3'>and Amcast Industrial Corporation, case no. 05-33322,
in the U.S. Bankruptcy Court for the Southern District of
Indiana.
name='3'>Benchmark Homes Declares Bankruptcy
Benchmark Homes of
size='3'>Omaha
w:st='on'>
size='3'>Neb.
chapter 11 bankruptcy protection on Tuesday, according to msnbc.com
yesterday. The company said on Wednesday that the option is the best way
to get out from under the thousands of liens filed by contractors in the
last couple weeks. The company's president and founder, Jack Czerwinski,
committed suicide on Feb. 21, according to
w:st='on'>
size='3'>Omaha
Since then, the company has been trying to reassure business partners.
Son-in-law Robert Minton took over as the president of Benchmark two
weeks ago. More than 2,500 liens totaling at least $6.8 million have
been filed against Benchmark by contractors. After news of Czerwinski's
death spread, it took less than 24 hours for hundreds of liens to be
filed in Douglas and Sarpy counties. 'We plan on moving forward,
building homes in
face='Times New Roman' size='3'>Omaha
size='3'>, and helping this town grow,' Minton said adding that the
company never considered chapter 7 bankruptcy.
href='http://www.msnbc.msn.com/id/11727972/from/RSS/'>Read
more.
name='4'>Delphi Seeks to Retain
w:st='on'>
size='3'>Dickinson
Counsel
Still wrangling over the
details of its restructuring, bankrupt auto parts maker Delphi Corp. has
requested court permission to retain Dickinson Wright Pllc as its
intellectual property counsel, according to
size='3'>Portfolio Media yesterday. Delphi
filed the motion on Feb. 21 in U.S. Bankruptcy Court in
size='3'>Manhattan
that William H. Honaker be the principal assigned to the case. The
hourly compensation for the army of attorneys listed ranges from $395 to
$185, with the legal assistants earning between $160 and $90, according
to court documents. The recent request suggests that
w:st='on'>
size='3'>Delphi
for a slew of patents, possibly in hopes that the technology can help
accelerate the
size='3'>company’s emergence from chapter 11, where it has been
parked since October 2005.
size='3'>If the motion is approved, Dickinson Wright’s duties will
primarily revolve around patent preparation, according to the filing.
The firm will aid the automotive company in the preparation and filing
of patent applications with the U.S. Patent and Trademark Office, in
addition to reviewing any correspondence between the agency and
size='3'>Delphi
Refco
Creditors Look to Block Bennett Legal Payout
Refco Inc. creditors have asked
a federal bankruptcy judge to prevent indicted former chief executive
Phillip Bennett from collecting insurance to help pay his legal costs,
Reuters reported yesterday. The futures and commodities broker said last
Oct. 10 that it suspended Bennett, saying he hid $430 million of bad
debt. Refco filed for chapter 11 protection a week later, and Bennett
was indicted on fraud and other charges in November. In court papers
filed late Tuesday, the creditors said Bennett should not be allowed to
draw on the liability insurance of Refco's directors and officers to pay
his personal legal costs. Instead, the creditors said, Refco should have
access to the money to defend itself in lawsuits, and potentially sue
former directors and officers. Bennett pleaded not guilty to eight
counts of conspiracy, fraud and other charges. He is also a defendant in
various civil actions.
href='http://www.nytimes.com/reuters/business/business-financial-refco-insura…'>Read
more.
face='Times New Roman' size='3'>
name='6'>Delphi
size='3'>, GM Near Cost-Cutting Pact with UAW
Delphi Corp. and General
Motors Corp. are nearing agreement on the broad points of a potential
deal with the United Auto Workers union that could ease fears of a
disruptive strike at
size='3'>Delphi
companies reduce labor costs, the
size='3'>Wall Street Journal reported today.
UAW leaders have summoned local officials at Delphi plants across the
country to come to
size='3'>Detroit
the UAW,
size='3'>Delphi
progress. While several key details remain to be worked out, the sides
are nearing agreement on broader issues that could include buyouts for
thousands of older workers at both GM and
w:st='on'>
size='3'>Delphi
familiar with the talks. It could also offer lump-sum payments known as
'buydowns' to
size='3'>Delphi
$25,000 to $50,000 a person, in return for accepting lower wages and
benefits in the future, these people said. No deal is imminent, but when
UAW-Delphi leaders from around the country convene in
w:st='on'>
size='3'>Detroit
Wednesday, they will be given many of the details for a potential
agreement. An agreement could have industrywide ramifications and even
serve as a model for fixing
w:st='on'>
size='3'>Detroit
auto makers and their former parts units.
href='http://online.wsj.com/article/SB114186163325493065-email.html'>Read
more.
name='7'>Botched Deal Follows AAIPharma's Solvency
After emerging from
chapter 11 bankruptcy protection, pharmaceutical firm AAIPharma Inc. has
hit a roadblock, with the company it sold a major unit to now accusing
it in court of failing to follow through on the sale,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported today. AAIPharma filed for bankruptcy in May 2005,
listing assets of $323.3 million and debts of $446.7 million. Its
reorganization plan was approved in January by Judge Peter J.
Walsh of the U.S. Bankruptcy Court for the District of
Delaware. The North Carolina-based drug maker emerged as a privately
held company after nine months of bankruptcy protection. It had $45
million in exit financing from an investor group that includes J.P.
Morgan Chase & Co. AAIPharma sold off its pharmaceutical division in
July 2005 to one of its largest customers, Xanodyne Pharmaceuticals Inc.
for $203 million. However, eight months
later the deal appears to have gone sour, according to court documents
filed by Kentucky-based Xanodyne. AAIPharma said in court papers that
Xanodyne accused it of breaching three agreements related to the
transaction, including the sales agreement itself. It is unclear how the
disagreement will affect the company’s emergence from
bankruptcy.
Airlines
name='8'>Judge Rules To Withhold Some Northwest
Fees
A
w:st='on'>
York
to withhold payment of a portion of
size='3'>approximately $15 million in fees racked up by attorneys,
bankers and
size='3'>consultants working to get Northwest Airline Corp. out of
bankruptcy from September 2005 to the end of December,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. Judge
size='3'>Allan Gropper’s call to hold
off 20 percent of the fees until a future date drew fire from attorneys
at Cadwalader, Wickersham & Taft, which are owed more than $6.4
million, the largest fee amount among the professionals.
Northwest’s counsel piled up 15,347.4 hours of work and more than
$432,000 in expenses, including overtime meals, computerized research,
court expenses and transcript fees, during the period. Gropper told the
court that 20 percent should not be a problem for attorneys making
millions in the field. He added that a bankruptcy case involves
thousands of people who need to take pay and benefits
cuts.
size='3'>The case is Northwest Airlines Corporation and
size='3'>Northwest Airlines Corp., et al.,
case no. 05-17930, in the U.S. Bankruptcy Court in the Southern District
of New York.
name='9'>Judge Urged to Hold Comair to Contract
The union representing
Comair flight attendants asked a bankruptcy judge late Wednesday to deny
the airline's request to void its contract with about 1,000 flight
attendants, the New York Times reported today. Comair has not
shown that its reorganization efforts would fail without the $8.9
million in cuts it wants from the union, according to the document,
filed by the International Brotherhood of Teamsters late Wednesday in
U.S. Bankruptcy Court in
w:st='on'>New
York
being instituted in order to undo a deal the carrier regrets -- its
flight attendant contract,' the motion says.
face='Times New Roman'>'Comair seeks to reduce its flight
attendants' pay rates and other benefits so it can enjoy the savings
associated with those reductions. The company's motion is a classic
example of employer abuse of bankruptcy.' The union contends that Comair
is a profitable carrier and has used 'dubious' figures to show an
operating loss. Comair is a subsidiary of
size='3'>Delta Air Lines Inc., which filed for Chapter 11 bankruptcy
protection in September. Comair asked a federal bankruptcy judge last
month to reject the contract with the union, the only labor group that
has not agreed to concessions with the regional airline.
href='http://www.nytimes.com/aponline/business/AP-Comair-Flight-Attendants.ht…'>Read
more.
w:st='on'>
name='10'>Kirkland
face='Times New Roman' size='3'> Files Big Tab for UAL Bankruptcy
Work
Law firm Kirkland &
Ellis, bankruptcy counsel to United Airlines parent UAL Corp., filed its
final fee application on March 6 for its work on the largest,
longest-running airline reorganization in history, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today.
size='3'>Kirkland
to approval by the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Chicago
$99,807,894.10. The $93.7 million in fees and $6.1 million in expenses
cover
size='3'>Kirkland
from Dec. 9, 2002, through Jan. 20 of this year. According to its
filing, more than 300
w:st='on'>
size='3'>Kirkland
worked on the bankruptcy. The amount Chicago-based
w:st='on'>
size='3'>Kirkland
the court to approve is among the largest fees ever generated by a law
firm for a single bankruptcy proceeding. New York-based Weil, Gotshal
& Manges generated $150 million in the Enron Corp. bankruptcy. The
fees reflect the increasing size of companies that have filed for
chapter 11 protection in recent years. 'Bankruptcy fees have increased
at a rate of 7 percent per year from 1998 through 2003, for cases
confirmed in those years,' says
size='3'>Lynn LoPucki, a bankruptcy professor
at UCLA School of Law. 'The fees being generated in these large
bankruptcies are the biggest fees in history and the courts aren't doing
much to control them.' The amount is also the highest of any of the fees
being requested by the numerous law firms, investment banks, and other
professional-services firms that worked on the bankruptcy.
href='http://online.wsj.com/article/SB114187776933493452-email.html'>Read
more.
Top
U.S. Bishop Accused of Sex Abuse
A woman has accused the
president of the U.S. Conference of Catholic Bishops of sexually abusing
her more than four decades ago when she was a child, the Associated
Press reported yesterday. Bishop William Skylstad issued a statement
Wednesday categorically denying the accusation, saying he has not
violated the vow of celibacy he took 47 years ago. The claim was filed
against the Roman Catholic Diocese of Spokane on Dec. 27 by a woman who
said she was under the age of 18 when Skylstad sexually abused her at
St. Patrick's Parish and at
w:st='on'>
size='3'>Gonzaga
face='Times New Roman'
size='3'>University
size='3'>from December
size='3'>1961 to December 1964. The diocese is one of three in the
nation that filed for bankruptcy protection to deal with claims of
sexual abuse by clergy. Skylstad last month offered to settle with 75
victims for $45.7 million. The woman's claim was filed as a result of
the bankruptcy 'proof of claims' process, the diocese said.
href='http://hosted.ap.org/dynamic/stories/C/CHURCH_ABUSE_SPOKANE?SITE=CADIU&…'>Read
more.
International
w:st='on'>
name='12'>Germany
face='Times New Roman' size='3'> Affirms Higher Retirement Age,
Pension Freeze
German Chancellor Angela
Merkel's Cabinet approved plans to make people work for longer and
freeze annual pension payments for two more years to boost state coffers
strained by an ageing population and high unemployment, Bloomberg News
reported yesterday. One week after
size='3'>Germany
size='3'>reported that unadjusted joblessness held at more than 5
million in February for a second month since Merkel took office on Nov.
22, her Cabinet ratified plans to increase the age at which workers can
draw state retirement benefits to 67 years from 65 years by 2029. The
Cabinet decision reflects the fact
w:st='on'>
size='3'>Germany
size='3'>'s pension system, which accumulated a 4 billion euro ($4.8
billion) shortfall last year, is buckling under increasing life spans
and a dwindling birth rate. By 2030, more than a third of Germans will
be older than 60, Labor Minister Franz Muentefering said today when
presenting the report in Berlin, calling for 'adjustments'' in the
pension system. German pensioners, who've received no increase in
benefits for the past two years, will now see their payouts frozen
through 2007. By law, pensions have to mirror annual wage increases and
a freeze amounts to lower payouts given consumer price rises and next
year's planned increase in value-added tax to 19 percent from 16
percent.
href='http://www.bloomberg.com/apps/news?pid=10000100&sid=ahen.cMe74bc&refer=…'>Read
more.
name='13'>UK Pension Liabilities in Public Sector Close to
£1,000 Billion
Public sector pension
liabilities are now close to £1,000 billion, far higher than the
government’s own estimate issued last week, according to a
calculation by consultants Watson Wyatt, the
size='3'>Financial Times reported yesterday.
Last week, new figures from the Government Actuary’s Department
estimated taxpayers would have to pay £530 billion to pay
government pension promises, up from the previous estimate of £460
billion. However, Stephen Yeo, senior consultant at Watson Wyatt, said
the key factor in the new, higher estimate of the cost of public sector
pension promises, £960 billion, was the use of a more up-to-date
discount rate used to calculate liabilities payable many years into the
future. A small part of the rise, about £28 billion, reflected the
use of higher estimates of longevity. Yeo said that because public
sector pensions were guaranteed by government, the AA-rated corporate
bond rate used to discount liabilities was too high and produced a
smaller calculation of future liabilities. A more appropriate rate would
be that on the current index-linked government bond. “The market
puts a price on promises made by government to pay money in the
future,” Yeo said. “That number comes out in the
[government] gilts market.”
href='http://news.ft.com/cms/s/332d64f6-aeeb-11da-b04a-0000779e2340.html'>Read
more.
name='14'>Former Parmalat Chairman Testifies at
Trial
In a packed courtroom on
Tuesday, Calisto Tanzi, the founder and former chairman of Parmalat,
said he felt 'pain and remorse' for his role in the company's collapse,
but mostly blamed the company's banks for fostering a drug-like
dependence on credit, the
size='3'>New York Times reported yesterday. In
his first testimony in the Parmalat trial, Tanzi read from a statement,
painting his version of how the regional Italian dairy grew to be one of
the biggest in the world and then collapsed under 12.5 billion euros of
hidden debt. He and 15 others are accused of market manipulation,
obstructing a regulator's investigation and falsifying audits. Tanzi
mostly focused on the role played by Parmalat's international banks,
specifically Chase Manhattan Bank and Bank of America. Parmalat
collapsed Dec. 19, 2003, after revelations that a bank account said to
hold almost $5 billion did not exist. An independent auditor later found
that Parmalat had been doctoring its accounts for more than a decade and
that the company had net debt - debt minus liquid assets - of 14.3
billion euros ($17.2 billion). The company had claimed it had net debt
of only 1.8 billion euros.
href='http://www.nytimes.com/2006/03/08/business/worldbusiness/08web-parmalat…'>Read
more.