href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='/AM/Images/headlines/headline.gif' />
September 15,
2006
id='1'>Ford Offering 75,000 Employees Buyout
Packages
Ford Motor Co. agreed
Thursday to offer buyouts and other incentives worth as much as $140,000
each to its 75,000 hourly workers in the
w:st='on'>
size='3'>United States
size='3'>, the New York
Times reported today. The deal with the United
Automobile Workers comes after a similar offer at General Motors earlier
this year that was accepted by nearly a third of its union workers. It
is also the latest sign that
w:st='on'>
size='3'>Detroit
decided it needs to shrink to survive. Combined, the proposed buyouts
mean that nearly 200,000 hourly employees in the United States —
or three-quarters of those working on the assembly lines of
Detroit’s three car companies — have been offered deals to
give up their jobs this year. By contrast, nearly 1 million workers were
employed by
face='Times New Roman' size='3'>Detroit
automakers at their peak in 1978. The buyout offer has
increased the expectation that Ford will announce more plant closings
today, when it said it would disclose details of the next phase of its
sweeping plan to overhaul the company, called the Way Forward.
href='http://www.nytimes.com/2006/09/15/business/15ford.html?_r=1&oref=slogin…'>Read
more.
face='Times New Roman' size='3'>
id='2'>Delphi
size='3'> Bankruptcy Hearing Adjourned to Sept.
28
Bankrupt auto parts
supplier Delphi Corp said that a federal judge in
w:st='on'>
York
adjournment until Sept. 28 on a hearing on whether the company can throw
out its current labor contracts, Reuters reported today. Delphi said the
extension for the hearing, which had been scheduled to start on Monday,
would allow more time for discussions on a settlement with its labor
unions and General Motors Corp., the former owner of the parts
supplier.
id='3'>Dura Shares Drop on Bankruptcy Prediction
Shares of Dura Automotive
Systems Inc. tumbled to a new 52-week low Thursday after an analyst said
that a bankruptcy filing by the auto supplier is upcoming and that the
bankruptcy process will take longer than expected, the Associated Press
reported yesterday. Sarah Thompson of Lehman Brothers predicted that
Dura will file for bankruptcy within the 'next few months' and that no
additional coupon payments will be made on the company's subordinated
notes. That's good news for senior noteholders, because no additional
value would be distributed to subordinated noteholders through coupon
payments, but a potential fight over the company's valuation could drag
out the bankruptcy process, Thompson said. The analyst added that
production cuts recently announced by the Detroit-based automakers will
also hurt the company's finances.
href='http://biz.yahoo.com/ap/060914/dura_mover.html?.v=1&printer=1'>Read
more.
Judge
Approves $17 Million Congoleum Settlement
A federal court judge has
approved the settlement reached last month in the asbestos-related class
action suit filed against bankrupt flooring maker Congoleum Corp.,
paving the way for the financially strapped company to add another
$16.95 million to the trust established for asbestos victims,
Portfolio Media
reported yesterday. The $17 million settlement brings the
total amount of insurance settlements reached to $207 million, and the
company said it is continuing negotiations with other insurance
carriers. The case is
size='3'>Congoleum Corp., case number
03-51524, in the U.S. Bankruptcy Court of New Jersey in
size='3'>Trenton
size='3'>.
Airlines
id='5'>Delta, Northwest Eye Bankruptcy Exits
Delta Air Lines and
Northwest Airlines are still hacking away at costs and searching for the
means to exit bankruptcy, a year after both filed for chapter 11,
Reuters reported yesterday. The airlines, No. 3 and No. 5 respectively
in the
face='Times New Roman' size='3'>United
States
their time under court protection to slash labor costs and other
expenses, and to cut capacity. Atlanta-based Delta is seeking $3 billion
in increased revenue and cost cuts. The airline, which expects to save
nearly $400 million by restructuring aircraft leases and has cut pilot
costs by $280 million, is on track to achieve more than $2 billion of
its target by the end of this year. Meanwhile, Eagan, Minn.-based
Northwest seeks $2.5 billion in overall cost cuts. The carrier has
reached its goal of $1.4 billion in labor savings, but a dispute with
the flight attendants union threatens to reverse those achievements.
Both companies said that they are still planning to emerge from
bankruptcy in the first half of 2007.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/09/14/AR20060…'>Read
more.
id='6'>Judge: Mesaba Can't Impose Concessions
A federal judge ruled
Wednesday that Mesaba Airlines, a regional feeder carrier for Northwest
Airlines, can't impose concessions on its unionized workers, the
Associated Press reported yesterday. U.S. District Judge Michael Davis
ruled that the bankruptcy court erred in July when he granted the
airline the authority to nullify existing labor contracts with its
pilots, flight attendants and mechanics. The unions appealed, and Davis
concluded that Mesaba didn't negotiate in good faith and that it failed
a legal test requiring it to be 'fair and equitable' in spreading around
the pain of its bankruptcy restructuring.
w:st='on'>
size='3'>Davis
Mesaba should liquidate or negotiate.
href='http://news.yahoo.com/s/ap_travel/20060914/ap_tr_ge/mesaba_labor_1'>Read
more.
id='7'>Final Mediation Sessions Begin in
w:st='on'>
size='3'>Spokane
Bankruptcy
Lawyers representing the
Catholic Diocese of Spokane, Wash., and victims of clergy sexual
abuse met yesterday in
w:st='on'>
size='3'>Reno
w:st='on'>
size='3'>Nev.,
attempt to settle bankruptcy claims, the Associated Press reported
yesterday. Little is known of the results of two previous rounds of
mediation as Bankruptcy Judge
size='3'>Gregg Zive in Reno issued a gag order
on all parties. Bankruptcy Judge
size='3'>Patricia Williams of Spokane is
overseeing the case and plans to hold final hearings and sign off on
a reorganization plan early next year.
href='http://www.kxly.com/news/index.php?sect_rank=1§ion_id=559&story_id=…'>Read
more.
id='8'>Court Approves Owens
w:st='on'>
size='3'>Corning
size='3'>Payments
A bankruptcy court has
clarified its order granting Owens Corning’s motion to enter into
senior credit commitments and pay all associated fees,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. The U.S. Bankruptcy Court for the District
of Delaware ruled that Owens
w:st='on'>
size='3'>Corning
all fees payable to escrow agents, underwriters, placement agents and
bookrunners. The court also granted the company permission to
“fund into escrow an amount equal to all interest that will accrue
on the senior notes,” and stipulated the terms for creating and
administering the escrow account. The order confirmed a July ruling by
the court, which granted initial approval to Owens Corning’s
requests. It also reaffirmed the Sept. 18 hearing date for the
company’s reorganization plan.
Refco
Reaches Tentative Agreement with Its Creditors
In a move that
will bring Refco Inc. closer toward emerging from bankruptcy, the
commodities broker has reached an oral agreement with its main
creditors, Portfolio
Media reported yesterday. Lawyers told
Judge Robert
Drain at the U.S. Bankruptcy Court for the
Southern District of New York that they had reached a final agreement,
but had not gone through all formalities involved, such as printing the
required documents. The agreement includes bondholders and creditors of
Refco Capital Markets. Under the terms of the deal, secured bank lenders
would recover all of the nearly $650 million they lent, while
bondholders would recover more than 80 percent of their
money.
id='10'>Air
w:st='on'>
size='3'>America
No Plans for Bankruptcy
Financially strapped Air
America Radio acknowledged that it had laid off a few employees but
insisted it has no plans to declare bankruptcy, the Associated Press
reported yesterday. 'If Air
w:st='on'>
size='3'>America
size='3'>had filed for bankruptcy every time someone rumored it to be
doing so, we would have ceased to exist long ago,' Jaime Horn, a
spokeswoman for the liberal talk show network, said in a statement. 'It
may be frustrating to some that it hasn't happened.' Horn said there
were 'a handful of layoffs' that followed a move of the network's
size='3'>New York
from WLIB-AM to WWRL-AM, a station with a less powerful signal. The
network has suffered from financial woes during its 2 1/2 years on the
air, as reflected in Horn's statement about past bankruptcy rumors. Last
year, the network became involved in a financial scandal when
authorities said that $875,000 from a community center largely financed
by government grants and contracts wound up going to Air
size='3'>.
href='http://news.yahoo.com/s/ap/20060914/ap_on_en_ot/air_america_3&printer=1'>Read
more.
w:st='on'>
id='11'>New
Jersey
Filing for
Bankruptcy
w:st='on'>
size='3'>Kessler
face='Times New Roman'
size='3'>Hospital
file for chapter 11 just days after a proposed affiliation arrangement
with South Jersey Healthcare fell through, the
face='Times New Roman' size='3'>Vineland Daily (N.J.) Journal
reported today. Kessler President and CEO Michael
Gonnella said that patient services won't be interrupted during the
reorganization. According to financial records filed with the American
Hospital Directory,
w:st='on'>
size='3'>Kessler
face='Times New Roman'
size='3'>Hospital
$3.6 million in operating income for 2004. It lost $5.9 million in
operating income for 2003. Its net income loss for 2004 was $1.9 million
while its net income loss for 2003 was $3.1 million. Financial data for
2005 was not available.
href='http://www.thedailyjournal.com/apps/pbcs.dll/article?AID=/20060915/NEWS…'>Read
more.
id='12'>FASB to Issue Retooled Rule for Valuing Corporate
Assets
Accounting rulemakers
have wrapped up an overhaul of a tricky but important method of valuing
corporate assets, despite some critics' warning that the change could
reopen the door to abuses like those seen at Enron Corp., the
Wall Street Journal
reported today. The Financial Accounting Standards
Board's (FASB) new rule will require companies to base 'fair' values for
certain items on what they would fetch from a sale in an open market to
a third party. In the past, firms often would use internal models to
determine the value of instruments that didn't have a readily available
price. FASB prohibited that practice after Enron used overly optimistic
models to value multiyear power contracts in a bid to pad earnings. The
ban was meant to give the board time to come up with a new
approach for determining fair values. The accounting rulemakers say
the new standard will give companies, auditors and investors
much-needed, and more nuanced, guidance on how to measure market
values.
href='http://online.wsj.com/article_print/SB115828639109763950.html'>Read
more. (Registration required.)
International
id='13'>Aerobox Seeks Bankruptcy Protection
British air cargo
container firm Aerobox said that it has suspended its shares and is
putting its operating subsidiary into bankruptcy protection, the
Associated Press reported today. Aerobox said its subsidiary, AeroBox
Composite Structures, will seek chapter 11 protection in the
under chapter 11. The group announced earlier this week
that it was urgently looking for new finance after debenture-holder
Laurus Master Fund withdrew its $3 million revolving debt
facility.
href='http://uk.biz.yahoo.com/15092006/214/aerobox-seeks-bankruptcy-protectio…'>Read
more.