July 62007

July 6, 2007

Dana
Corp. Reaches Deal with Unions

Auto supplier Dana Corp.
has reached a settlement with its top two unions and received a planned
investment commitment for up to $750 million from a group led by private
equity firm Centerbridge Partners L.P., the
size='3'>Wall Street Journal reported today.
The moves eliminate key hurdles in forming Dana's exit from chapter 11
as the deal with the unions also lessens the possibility of a strike
that could disrupt production. Toledo, Ohio-based Dana sought to cut
wages and benefits and filed a motion with the court to cancel its labor
contracts, a move the United Auto Workers and United Steelworkers unions
said would lead to a strike if granted. The unions collectively
represent about 8,000 Dana workers - more than half of the company's
hourly
face='Times New Roman'
size='3'>U.S.
size='3'>work force. But the sides negotiated, with Centerbridge an
active party, and reached a deal that allows Dana to cease providing
non-pension retiree benefits. Instead, Dana will contribute up to $704
million plus $80 million in stock to trusts known as voluntary employer
benefit associations, which will manage those benefits. 
href='http://online.wsj.com/article/SB118370137544659042.html?mod=home_whats_…'>Read
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name='2'>Asurion Sues Amp'd over Premium Payments

Asurion Insurance
Services Inc. sued bankrupt telecom company Amp'd Mobile Inc. on
Tuesday, alleging that Amp'd had failed to turn over insurance premiums
it collected from customers to Asurion,
size='3'>Bankruptcy Law360 reported yesterday.
The two companies entered into an agreement in January 2006, under which
Asurion would provide Amp'd customers with insurance. Amp'd itself would
bill customers to collect insurance premiums, which it would then give
to the insurance company every month. However, Asurion said that Amp'd
failed to pay any premiums from January through May of
2007. Asurion
alleged that the unpaid premiums amounted to more than $2.6
million. In its complaint, the company asked for immediate payment of
the premiums or the imposition of a trust on the unpaid premiums, along
with punitive damages. 
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=28735'>Read
more. (Registration required.)

Alert
Cellular Files for Bankruptcy

Alert Cellular LLC, an
authorized retailer for Verizon Wireless and T-Mobile, has filed for
chapter 11 protection in the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Santa Barbara,

size='3'>Calif., the
Associated Press reported yesterday. The seller of cell phones and
related accessories listed assets and debts each in the range of $1
million to $100 million in its bankruptcy petition, filed Tuesday. JP
Morgan Chase was listed as Alert Cellular's largest unsecured creditor,
holding a $2.76 million claim because of a loan it provided the company.
Alert Cellular, of
face='Times New Roman' size='3'>Carpinteria
size='3'>,
size='3'>Calif., is
privately held by CEO David Eseke Jr. and his wife, Heidi. The company,
founded in 1995, operates more than 130 retail locations in 11
western
face='Times New


















Roman'
size='3'>U.S.
size='3'>states and employs over 700 people. According to its Web site,
Alert Cellular is one of the largest retailers in the western

size='3'>U.S. for
Verizon Wireless. 
href='http://www.forbes.com/feeds/ap/2007/07/05/ap3886381.html'>Read
more.

name='4'>Creditors Object to Portrait Corp.'s Amended
Plan

In motions filed Tuesday
in the U.S. Bankruptcy Court for the Southern District of New York, a
group of insurers known as CNA and another group of insurers known as
Kemper Insurance Companies filed limited objections to Portrait Corp.'s
amended reorganization plan, saying it did not contain sufficiently
specific information about their claims and releases,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported yesterday. More specifically, CNA, which includes
Continental Casualty Company, Transptortation Insurance Company and
Transcontinental Insurance Company, and Kemper both said said that
Portrait's sale motion and asset-purchase agreement indicate that the
buyer of the company's assets – Consumer Programs Inc. or CPI -
would be assuming all workers compensation liabilities, but it doesn't
contain specifics concerning how this is to be done. 
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=28678'>Read
more. (Registration required.)

Judge
Urged to Deny Wachovia's Musicland Protest

Musicland Holdings
Corp.'s  informal trade vendors’
committee urged a bankruptcy court to overrule Wachovia's objection to
Musicland's distribution scheme laid out in its bankruptcy plan,
Bankruptcy Law360
reported yesterday. Musicland, which opted for
liquidation rather than reorganization, is currently in the midst of
trying to pay out its remaining $19.7 million. But Wachovia raised an
objection that Musicland does not have enough cash to meet a possible
loss on a $25 million lawsuit. In May, a group of entertainment
companies sued Wachovia and another banks over a last-minute $25 million
loan paid to Musicland Holding Corp. four months before the retailer
filed for bankruptcy. 
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=28564'>Read
more. (Registration required.)

SEC
Investigation of New Century Now 'Formal'

New Century Financial
Corp., a collapsed subprime lender that is liquidating in bankruptcy,
said yesterday that the Securities and Exchange Commission (SEC) has
elevated its investigation of the company to formal status, Reuters
reported yesterday. The formal probe now gives the SEC subpoena power,
and New Century said that it is cooperating with the agency. In an SEC
filing, New Century said the agency orally advised the company's outside
counsel on June 21 of the formal probe. New Century previously said that
the SEC's Pacific regional office notified it on March 12 of a
preliminary investigation. Irvine, Calif.-based New Century was the
largest independent
w:st='on'>
size='3'>U.S.
size='3'>provider of subprime mortgages before filing for chapter 11
protection on April 2 amid mounting customer defaults. 
href='http://money.cnn.com/2007/07/05/news/companies/sec_new_century.reut/ind…'>Read
more.

name='7'>Manager to Liquidate Fund after Heavy
Redemptions

Heavy redemptions from
investors concerned about their holdings of subprime mortgage securities
claimed the Galena Street Fund of the Braddock Financial Corporation as
the latest hedge fund victim, Reuters reported yesterday. Braddock, a
top-performing bond hedge fund manager based in Denver, said yesterday
that it would liquidate the $300 million fund after redemptions slashed
its assets by a quarter since 2006, the chief executive officer, Harvey
B. Allon, said. The fund’s closing comes just days after United
Capital Markets Holdings suspended redemptions on its funds exposed to
the risky subprime mortgages. Reports that losses in subprime mortgages
were wreaking havoc with hedge funds, especially last month, “just
made investors nervous about being invested in the subprime market at
all,” Allon said. 
href='http://www.nytimes.com/2007/07/06/business/06fund.html?pagewanted=print'>Read
more.

name='8'>Commentary: Hedge Fund Boom Differs from the Dot-Com Era in
a Number of Ways

Despite the comparison to
the Dot-com bubble of the late 1990’s, the current hedge fund boom
is one of a breed of large, institutional firms that seem to be more
focused on gathering assets and delivering stable but unremarkable
returns with low volatility, the
size='3'>New York Times reported today. This
strategy seems to make sense, especially considering that the hedge fund
party seems set to continue. JPMorgan estimates that defined-benefit
plans will move 30 to 50 percent of their assets from traditional stock
portfolios to alternatives, including hedge funds. 
href='http://www.nytimes.com/2007/07/06/business/06insider.html?_r=1&oref=slo…'>Read
more.

Ronco
Bankruptcy Exposes Rift between Ex-CEO, Current
Management

The bankruptcy of
household gadget seller Ronco Corp. has lifted the lid off a bitter spat
between the company's current and former chief executives that involves
allegations of fraudulent billing, wasteful spending and insider
dealings, the Associated Press reported yesterday. Ronco, maker of the
Veg-O-Matic and the Pocket Fisherman, is in the midst of a nasty fight
with former CEO Richard F. Allen, who has alleged that a

size='3'>Houston investment
bank didn't properly look into the company's dire financial situation
before lining up a group of investors in 2005 to buy Ronco from founder
Ron Pompeil. Allen said in court papers that the investment bank,
Sanders Morris Harris Inc., or SMH, failed to carry out due diligence
and inform investors that the company had just $250,000 in cash at the
time the deal was completed. 
href='http://biz.yahoo.com/ap/070705/ronco_bankruptcy.html?.v=2'>Read
more.

href='http://biz.yahoo.com/ap/070705/ronco_bankruptcy.html?.v=2'>