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July 24, 2007
New
Century Seeks $1 Million for Key Employees
Bankrupt New Century
Financial Corp. has sought permission to increase by roughly $1 million
two funds designed to compensate and retain current employees and
managers, Bankruptcy
Law360 reported yesterday. The wind-down
retention plan is focused on the roughly 200 remaining New Century
employees who have been tasked with aiding the company in its
liquidation. The amount needed for the fund is based on the employees'
salary plus overtime that the liquidation will require them to work,
according to the motion. The KERP is for high-level managers, whose job
descriptions have also changed since New Century filed for bankruptcy on
April 2. The case is
face='Times New Roman' size='3'>New Century Financial
Corp., case number 07-10416, in the U.S.
Bankruptcy Court for the District of Delaware.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=30381'>Read
more. (Registration required.)
Fund Object to Marcal's Disclosure Statement
Bankrupt Paper Company
Marcal Paper Mills Inc. on Friday received two new objections to its
disclosure statement, one filed by US Bank and one by American Capital
Strategies Ltd. (ACS) and American Capital Equity I, LLC,
Bankruptcy Law360
reported yesterday. Private equity firm ACS has a
minority stake in Marcal, with 209,254 shares of common stock
representing 8.11 percent of total equity, according to the objection.
US Bank, in its capacity as indenture trustee, also objected to Marcal's
disclosure statement on Friday, arguing that much of the language in the
disclosure statement that applied to the secured claims of series 1990
bondholders was inadequate. US Bank proposed several clarifications
involving those bondholders. The indenture trustee also objected to
Marcal's proposed solicitation procedures, arguing that the timetable
was too short to give all bondholders an opportunity to cast
ballots.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=30358'>Read
more. (Registration required.)
name='3'>Mining Cos. Agree to Pay for Site Cleanup
Newmont Mining Corp. and
bankrupt Asarco LLC have struck a settlement with the U.S. Department of
Justice worth close to $40 million, which will go toward paying for the
cleanup of a large mining site that has been polluted with over 2,000
waste piles, Bankruptcy
Law360 reported yesterday. According to the
pact, aimed at funding the cleanup of the California Gulch Superfund
in
size='3'>Leadville,
w:st='on'>
size='3'>Colo.
will pay about $6 million to the DOJ for the continued cleanup of the
site, as well as close to $5 million to refund the U.S. Environmental
Protection Agency for past cleanup costs, according to the Colorado
Department of Public Health & Environment. In addition, Asarco will
pay Newmont about $10 million. Newmont will use the money to clean up
the Black Cloud Mine, which is next to the superfund but not part of it,
and continue running a water treatment plant, which cleans the water
that is considered to have been a major source of pollution. For its
part, Newmont will pay roughly $10.5 million for natural resources
restoration and $9.5 million for cleaning the superfund site.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=30276'>Read
more. (Registration required.)
Gives Diamond Wholesaler More Time to Decide on Leases
A bankruptcy court has
allowed diamond jewelry wholesaler LID Ltd. an extra 90 days to decide
whether to keep its lease on its real property, but left the company's
motion to extend its exclusivity period hanging,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported yesterday. LID asked the bankruptcy court for an extra
160 days to file its reorganization plan free of competing plans on June
28, three months after the company filed for chapter 11. The motion on
the lease went unopposed and was granted in an order last Monday. The
motion on the exclusivity period, however, remains undecided after a
July 12 hearing on the extension was adjourned until July 25. The court
has granted a “bridge” extension in the meantime through
July 31.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=30375'>Read
more. (Registration required.)
w:st='on'>
name='5'>Detroit
face='Times



New
Roman' size='3'> Automakers and UAW Begin
Negotiations
Union leaders will meet
with negotiators from the three carmakers in the coming days to begin
exchanging contract proposals as the current pact, reached in 2003,
expires Sept. 14, the
size='3'>New York Times reported today. After
meeting with Ford officials, UAW president Ron Gettelfinger said
yesterday that he wanted the new contract to last four years, like the
one it is replacing, even though some analysts have suggested that a
shorter agreement would be in the carmakers’ interest.
Gettelfinger also suggested that the companies could reorganize without
further sacrifices by the union, which agreed to cuts in medical
coverage at GM and Ford in 2005. He noted the $23 billion that Ford
raised recently by mortgaging most of its North American assets after
posting a $12.6 billion loss last year. The
w:st='on'>
size='3'>Detroit
must cut costs deeply to better compete with
w:st='on'>Toyota
and Honda of Japan, whose costs at nonunion plants in
the
face='Times New Roman' size='3'>United
States
than at their American counterparts.
href='http://www.nytimes.com/2007/07/24/business/24auto.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
name='6'>Commentary: Public Pension Systems Betting on Hedge
Funds
With a flood of baby
boomers set to retire soon, pension funds across the country are
shedding their stodgy stocks-and-bonds-only portfolios and ratcheting up
investments in hedge funds, the
w:st='on'>
size='3'>Washington
face='Times New Roman' size='3'>Post reported
today. 'There's an inconsistency between the concept behind hedge funds,
which is high-risk, high-return, and the concept behind pension funds,
which is little risk, guaranteed return,' said Massachusetts Secretary
of State William F. Galvin. 'Unfortunately, what's happening is,
increasingly, managers of pension funds -- most of whom have large debt
or potential debt in the future -- see this [investing in hedge funds]
as sort of a panacea for their growth needs.' An estimated 9,000 hedge
funds with assets of $1.4 trillion are making big bets on movements in
multiple markets -- stocks, bonds, commodities, currencies, futures and
derivatives. Some regulators see the rise of hedge funds, which borrow
as much as 10 times their cash holdings to execute their investment
strategies, as a double-edged sword. On one hand, they have become an
important source of capital to markets, allowing securities to be traded
efficiently and helping to spread risk across many investors. Meanwhile,
regulators are concerned that hedge funds could be making dicey bets
that, if they go wrong, could spread and strain entire financial
markets.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/07/23/AR2007072301728_pf.html'>Read
more.
name='7'>Senate Rejects Bid to Boost Competition for Student
Loans
The Senate moved toward
approving a four-year reauthorization of the Higher Education Act Monday
after rejecting a major expansion of the federal direct student loan
program to compete with private lenders, CongressDaily reported
today. The proposal to create the
supplemental program was rejected 53-38, with six Democrats joining
Republicans in opposition to the plan. Sen. Sherrod Brown (D-Ohio)
sponsor of the amendment, said that the government intervention was
needed to stop private lenders from charging interest rates of 18
percent or more in some cases. Brown said that if college costs
continued to soar, the private student loan market would outstrip direct
government student loans in the next seven years. Opponents of the
amendment said it would effectively scuttle the current $23,000 limit on
direct government loans and 'tilt the playing field' against the private
lenders. 'We do have to have a private market, and this would eliminate
it,' said Sen. Michael Enzi (R-Wyo.), charging that the amendment would
allow the government to fix interest rates.
name='8'>Founder Bids for
w:st='on'>
size='3'>Bankrupt
face='Times New Roman' size='3'>Kara
size='3'>Homes
Zuhdi Karagjozi, the
founder of Kara Homes Inc., is working with a home builder and a
private-equity firm to make an alternative bid for his bankrupt company,
the Asbury Park Press
(N.J.) reported today. The Teicher
Organization, an East Brunswick, N.J.-based developer, and The Patriot
Group, a private-equity group based in
w:st='on'>
size='3'>Darien
w:st='on'>
size='3'>Conn.
working on a proposal that would give unsecured creditors a larger
dividend than previously has been offered, said Stuart I. Teicher,
senior vice president and general counsel of Teicher. The parties, whose
identities were revealed at a hearing Monday, have yet to file a formal
plan with the bankruptcy court, but Teicher said a filing is 'imminent.'
East Brunswick-based Kara, one of the largest home builders in Monmouth
and Ocean counties, filed for chapter 11 bankruptcy in October after the
housing market slumped and the company couldn't repay creditors. It
reported assets of $350 million and liabilities of $227 million.
href='http://www.app.com/apps/pbcs.dll/article?AID=/20070724/BUSINESS/707240316'>Read
more.
name='9'>Shakur Estate Moves against Songs'
w:st='on'>
size='3'>Sale
Tupac Shakur's mother is
seeking to prevent his former label, Death Row Records Inc., from
selling the late rapper's unreleased recordings as part of a bankruptcy
settlement, the Associated Press reported today. Afeni Shakur sought an
injunction in federal bankruptcy court Friday claiming Death Row was
attempting to sell Shakur material that belonged to the rapper's estate.
Unreleased recordings should have been turned over to the estate as part
of a 1997 agreement with the record label, said attorney Donald N.
David, who represents the estate. Afeni Shakur and the company she
established, Amur Entertainment, requested an injunction after the label
failed to confirm the songs would not be included in the bankruptcy
settlement, David said. The court was expected to consider the request
within a month when it decides whether to permit the label to release an
album with the unreleased tracks to help pay off its debts.
href='http://www.nytimes.com/aponline/arts/AP-People-Tupac-Shakur.html?pagewanted=print'>Read
more.
href='http://www.nytimes.com/aponline/arts/AP-People-Tupac-Shakur.html?pagewanted=print'>
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