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November
26, 2007
Meat Files Bankruptcy after September Recall
Topps Meat Co. filed for
bankruptcy protection two months after beginning the second-biggest beef
recall in
w:st='on'>
size='3'>U.S.
size='3'>history, Bloomberg News reported on Friday. The company didn't
provide specific financial details in its filing in U.S. the Bankruptcy
Court in Newark, N.J., only listing
assets and debt of between $1 million and $100 million with nearly
10,000 creditors. The recalled products, more than 21.7 million pounds
of ground beef, sickened about 40 people in eight states, according to
the U.S. Centers for Disease Control and Prevention. The case is
In re Topps
Meat, 07-27196, U.S. Bankruptcy Court,
District of New Jersey (
w:st='on'>
size='3'>Newark
href='http://www.bloomberg.com/apps/news?pid=20601103&sid=ardC0.GlGJlo'>Read
more.
name='2'>Appaloosa Reaches Settlement with Dana Corp. over
Reorganization Plan
Hedge fund Appaloosa
Management LP said Friday that it will stop trying to block a bid by
Centerbridge Capital Partners to pump $790 million into Dana Corp.'s
bankruptcy exit, the Associated Press reported on Saturday. Appaloosa
Management said Dana's unsecured creditors’ committee agreed to
support the hedge fund's application to receive $2 million for expenses
it incurred during its participation in Dana's bankruptcy proceedings.
Last week, the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Manhattan
size='3'>authorized Dana to send its chapter 11 plan to creditors for a
vote by Nov. 28. The centerpiece of that plan is a $790 million capital
infusion, with Centerbridge as lead investor.
href='http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20071124/BUSINESS03/71124016'>Read
more.
Mortgage
Lending
name='3'>Countrywide Looks to Federal Home Loan Bank to Weather
Credit Crisis
Countrywide Financial
Corp. has primarily relied on the Federal Home Loan Bank in
size='3'>Atlanta
afloat through the credit crisis as the bank has provided funding at a
time when many private resources have turned away, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today.
size='3'>The nation's 12 home loan banks, though privately owned, were
chartered by Congress to finance housing and benefit from a widespread
belief the government would bail them out in a crisis. The
size='3'>home loan bank has helped to keep Countrywide in business since
mid-August, when investors' fears over default risk shut off mortgage
lenders' ability to raise money through commercial paper or other
short-term borrowings. Countrywide has replaced that funding mainly by
tapping the Atlanta bank, where its borrowings totaled $51.1 billion as
of Sept. 30, up 77 percent from three months earlier.
href='http://online.wsj.com/article/SB119603725035603459.html?mod=us_business_whats_news'>Read
more. (Registration required.)
name='4'>Citigroup Pressed to Modify Mortgages
Influential groups that
counsel low-income borrowers are ratcheting up pressure on Citigroup and
others to offer struggling homeowners more favorable terms on their
existing loans, the Wall
Street Journal reported today. The pressures
Citigroup faces mirror those on other mortgage servicers, who have
become targets for criticism that the mortgage industry isn't doing
enough to clean up problems arising from years of careless lending to
subprime borrowers with shaky credit. Citigroup, however, may have a
bigger mess on its hands than many after it bought servicing rights in
September to a problematic $45 billion mortgage portfolio. It announced
a commitment to 'help distressed borrowers remain in their homes,'
working with Acorn Housing Corp., a nonprofit group that counsels low-
and moderate-income home buyers. But with 46,000 borrowers already in
default, Citigroup is struggling with the magnitude of the portfolio's
problems, and its relations with Acorn are fraying.
href='http://online.wsj.com/article/SB119603917642103489.html?mod=us_business_biz_focus_hs'>Read
more. (Registration required.)
name='5'>Recession Fears Weigh on Markets
Battered stock and bond
markets are sending an increasingly ominous signal that a
size='3'>U.S.
size='3'>recession could be near, the
size='3'>Wall Street Journal reported today.
The markets, however, haven't swayed Federal Reserve officials and most
private economists from their view that the nation's economy can escape
a downturn and get back on a steadier course.
face='Times New 

Roman'>
size='3'>Though it rose during Friday's shortened trading day, the Dow
Jones Industrial Average -- at 12980.88 -- is 8.4 percent below its
all-time high, set in October. Safe-haven Treasurys, meanwhile, have
rallied as investors have lost confidence in a quick resolution of
the
size='3'>U.S. housing slump
and mortgage crisis, which are behind many of today's economic worries
in both the United States and
w:st='on'>
size='3'>Europe
makers said that they expected
w:st='on'>
size='3'>U.S.
size='3'>economic growth to pick up as housing hits bottom and financial
markets gradually resume more-normal functioning. Officials at the
central bank see the
w:st='on'>
size='3'>U.S.
size='3'>economy growing between 1.8 percent and 2.5 percent next year,
according to minutes from their most recent meeting. 'Economists are
extremely bad at predicting turning points, and we don't pretend to be
any better,' Fed Chairman Ben Bernanke told Congress earlier this
month.
href='http://online.wsj.com/article/SB119602701188603294.html?mod=hps_us_mostpop_viewed'>Read
more. (Registration required.)
International
name='6'>Virgin Group Selected by
w:st='on'>
size='3'>U.K.
size='3'>Treasury to Take Over Northern Rock
A consortium led by
Virgin Group Ltd. was selected as the preferred bidder to take over
British mortgage bank Northern Rock PLC, the
size='3'>Wall Street Journal reported today.
The announcement comes after government officials and directors of
Northern Rock spent the weekend sifting through various proposals to
save the bank, which experienced the
w:st='on'>
size='3'>United Kingdom
size='3'>'s first run on a bank in a century after it was forced to turn
to emergency funding from the Bank of England in September to remain
afloat. Virgin Group, founded by Sir Richard Branson, one of the
size='3'>U.K.
entrepreneurs, formed a group to bid for Northern Rock that
includes
size='3'>U.K.,
size='3'>U.S. and
Asian investors. Sir Richard's team includes AIG Financial Products
Corp., a division of
w:st='on'>New
York
American International Group Inc., and WL Ross & Co., the investment
firm of Wilbur Ross, a corporate-restructuring specialist.
href='http://online.wsj.com/article/SB119601930366403200.html?mod=hpp_us_whats_news'>Read
more. (Registration required.)
name='7'>HSBC Restructures Two SIVs
HSBC Holdings PLC, the
United Kingdom's biggest bank by market value, said today that it would
move two of its structured investment vehicles onto its balance sheet
and provide up to $35 billion in funding as it doesn't expect a
near-term resolution of the funding problems faced by the vehicles that
it and other banks hold, the
size='3'>Wall Street Journal reported today.
London-based HSBC said it is moving its two SIVs, Cullinan Finance and
Asscher Finance, onto its balance sheet to prevent a forced liquidation
of what it called 'high-quality assets.' The bank said that after the
restructuring, the new vehicles will be funded either by commercial
paper backed by a 100 percent liquidity facility, or by term financing,
both to be provided by HSBC itself.
href='http://online.wsj.com/article/SB119607380689703811.html?mod=us_business_whats_news'>Read
more. (Registration required.)
name='8'>Private Equity Faces More Scrutiny from British
Government
The House of Commons
Treasury Select Committee plans another inquiry into
w:st='on'>
size='3'>Britain
size='3'>'s private equity industry, which continues to fend off
criticism over its secretive nature and swelling profits, Reuters
reported on Friday. The Committee on Dec. 11 will listen to the views of
David Walker, former Chairman of Morgan Stanley International and author
of an industry-commissioned report aimed at making private-equity firms
more transparent. The inquiry will continue, although more sessions or a
final deadline have not been scheduled yet, Chairman of the Select
Committee John McFall said on Wednesday.
href='http://investing.reuters.co.uk/news/articleinvesting.aspx?type=mergersNews&storyID=2007-11-21T123618Z_01_L21241914_RTRIDST_0_PRIVATEEQUITY-HEARING.XML'>Read
more.
href='http://investing.reuters.co.uk/news/articleinvesting.aspx?type=mergersNews&storyID=2007-11-21T123618Z_01_L21241914_RTRIDST_0_PRIVATEEQUITY-HEARING.XML'>