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May 24, 2006
Autos
size='3'>GM Seeks More Time for
face='Times New Roman' size='3'>Delphi
size='3'>Talks
General Motors is asking a New
York bankruptcy judge to adjourn hearings as long as two months to give
the company and its largest supplier, the Delphi Corporation, more time
to negotiate a union agreement and avoid a strike, Bloomberg News
reported today. The
request, made yesterday, seeks to adjourn hearings scheduled to resume
today on
size='3'>Delphi
labor contracts and force union workers to accept pay
concessions, GM spokesman Jerry Dubrowsk, said. The automaker wants
additional time to reach a consensual agreement because the United
Automobile Workers union has threatened to strike if the judge
gives
size='3'>Delphi
contracts. Judge Robert
D. Drain of Federal Bankruptcy Court in
size='3'>Manhattan
scheduled hearings for today and Friday.
href='http://www.nytimes.com/2006/05/24/business/24delphi.html?_r=1&oref=slogin&pagewanted=print'>Read
more.
size='3'>Dana’s Unsecured
size='3'>Creditors
Enlist Court’s Help
Scrambling to determine whether
they should file a formal complaint, the unsecured creditors of
beleaguered Dana Corp. are seeking court permission to investigate
whether the auto
supplier's lenders exercised unfair influence over the company’s
bankruptcy filing and financial arrangements,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. On Friday, Dana's unsecured
creditors’ committee asked to apply certain provisions of the
Bankruptcy Code in an attempt to force Dana's lenders to turn over
relevant documents and agree to in-person interviews. The unsecured
creditors have asked for the court’s help since previous efforts
to recover additional information from Dana’s lenders have proven
unsuccessful, according to the panel. Dana currently owes its lenders
more than $700 million due to a series of loans that took place before
the company’s early March bankruptcy filing.
face='Times New Roman' size='3'>Under the terms of Dana's current
debtor-in-possession loan, the company must meet those pre-bankruptcy
debts, but the unsecured creditors and other parties still have until
June 19 to formally oppose the deal.
id='3'>J.L. French Creditors
Target G.E. Over Default Interest
Creditors of J.L. French
Automotive Castings Inc. have targeted General Electric Capital Corp. in
a lawsuit, arguing that its first-lien lenders are already on deck
for a full recovery and should not also collect default interest
payments, Portfolio
size='3'>Media reported yesterday. The
creditors’ committee lodged a complaint in U.S. Bankruptcy Court
for the
District of Delaware in Wilmington against G.E. on Friday, and requested
that the bankruptcy judge scrap the interest payments, which have been
accruing since before J.L. French filed for bankruptcy protection in
February. The creditors claimed that “oversecured”
first-lien lenders are already expecting a full recovery and that the
interest payments are excessive. The first-lien lenders’ expected
compensation rankled creditors, who are set to collect a meager 7.4
percent of their claims. The case is
size='3'>J.L. French Automotive Castings Inc.,
filed Feb. 10, 2006, petition number 06-10119-MFW, in the U.S.
Bankruptcy Court for the District of Delaware in
w:st='on'>
size='3'>Wilmington
size='3'>.
id='4'>Retired Delta Pilots Ask
Court to Nix Deal
A group that represents some
retired Delta Air Lines Inc. pilots asked a bankruptcy court judge
Tuesday to reject the carrier's latest wage concession agreement with
its pilots union, the Associated Press reported yesterday. The Delta
Pilots' Pension Preservation Organization said in its objection that if
the agreement reached last month is approved it would set the stage for
drastically reducing certain pension benefits of the airline's 5,800
retired pilots. A hearing on the objection is scheduled for May 31, the
same day Delta's active pilots are scheduled to complete their voting on
the agreement, which the nation's third-largest carrier says would save
it an average of $280 million a year.
href='http://www.nytimes.com/aponline/business/AP-Delta-Pilots.html?pagewanted=print'>Read
more.
id='5'>Calpine Trustee Sues Philip
Morris for $364 Million
A trustee in Calpine
Corp.'s bankruptcy case has sued a financing arm of Philip Morris parent
Altria Group Inc. to recover $363.5 million and control of two idled
power plants, court papers show, Reuters reported yesterday. In a
complaint filed late Monday with the U.S. District Court in
size='3'>Manhattan
U.S. Bank N.A. said Philip Morris Capital Corp. agreed to the
appointment of a receiver to control the plants following a payment
default, which took place in January. U.S. Bank, a unit of U.S. Bancorp,
said a receiver ``is urgently needed to restore operations at the power
plants and, thereby, to preserve their value.''
href='http://www.nytimes.com/reuters/business/business-energy-calpine-lawsuit.html?pagewanted=print'>Read
more.
id='6'>Pliant Gets $200 Million
Exit Loan
Pliant Corp., a producer
of packaging products, is coming ever closer to wrapping up its chapter
11 proceedings after reaching an agreement with Merrill Lynch Commercial
Finance Corp. on a $200 million exit loan, Portfolio Media reported
yesterday. The package will replace Pliant’s pre-petition
revolving and debtor-in-possession credit lines from GE Capital Corp.
after it exits bankruptcy. Approximately $40 million of the loan will be
allocated to affiliate Pliant Corp. of Canada Ltd., while Mexican
affiliate Aspen Industrial SA and German affiliate Pliant Films Products
GmbH will receive $15 million. Australian affiliate Pliant Corp. Pty. Ltd. will
receive $5 million. The deal comes only two weeks after Judge
Mary Walrath
size='3'>of the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Delaware
Pliant authority to pay up to $1.2 million in fees. Judge Walrath gave
Pliant authority to pay the lenders up to $500,000 in “work
fees” and $700,000 in deposits.
id='7'>LG.Philips Creditors’
Committee Won't Have to Share Info
The creditors’
committee for bankrupt monitor manufacturer LG.Philips Displays USA Inc.
won’t be required to share confidential corporate information with
the creditors it represents, according to a ruling by a federal
bankruptcy judge,
size='3'>Portfolio Media reported yesterday.
The ruling is the latest in a string of similar disputes in which
committees and creditors have sought clarification of recent changes to
the U.S. Bankruptcy Code that called for committees to provide 'access
to information' to the creditors they represent. The amendments to the
Code, passed last year, have caused similar concerns about the extent of
information-sharing in the bankruptcy proceedings for Dana Corp., Refco
Inc. and Amcast Industrial Corp. The companies’ committees,
including that for LG.Philips, said that business would be damaged if
sensitive corporate information was passed along to creditors and that
the executives would not be as forthright in their dealings with the
committees. The case is
size='3'>LG.Philips Displays USA Inc., case
number 06-10245, in the U.S. Bankruptcy Court for the District of
Delaware in
face='Times New Roman'
size='3'>Wilmington
size='3'>.
id='8'>Huge Drop in
size='3'>Arizona
size='3'>Bankruptcy Filings
The number of bankruptcy
filings in
face='Times New Roman' size='3'>Arizona
dropped dramatically in the first four months of 2006 in
the wake of the new bankruptcy law, the Associated Press reported
yesterday.
face='Times New Roman' size='3'>Arizona
experienced only 1,777 cases, including 1,374 chapter 7
filings from January through April 2006. The state reported 10,592
filings for the same period in 2005, according to the U.S. Bankruptcy
Court of Arizona. ‘‘For April, we're almost 84 percent below
what we had for the same month last year,'' said Terrence Miller, clerk
of the U.S. Bankruptcy Court of Arizona. Charles Sabo, a bankruptcy
attorney in
face='Times New Roman' size='3'>Tempe
size='3'>, said the volume of bankruptcy filings was
‘‘virtually dead'' for about four months, but has
picked up slightly last month and this month.
href='http://www.mohavedailynews.com/articles/2006/05/24/news/business/biz1.txt'>Read
more.
PBGC
Takes Over Bankrupt
Brewer's Pension Plan
The Pension Benefit
Guaranty Corp. (PBGC) said on Tuesday that it assumed responsibility for
one of Pittsburgh Brewing Co.’s pension plans as a part of the
brewer's chapter 11 bankruptcy reorganization, the Associated Press
reported yesterday. The maker of
w:st='on'>
size='3'>Iron
face='Times New Roman' size='3'>City
beer has liabilities of about $24 million for the plan
but assets of only about $12 million, according to the PBGC. The agency
will be responsible for about $11 million of the financially troubled
brewer's $12 million shortfall. The pension plan covers more than 500
current and former employees. Last year, Pittsburgh Brewing asked the
PBGC to take over one of its two pension funds, saying it had lost $1.2
million from operations since 2002 and would be forced to close unless
it was relieved of the obligation.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/05/23/AR2006052301047_pf.html'>Read
more.
id='10'>Buehler's Shareholders
Approve Reorganization Plan
Buehler Foods Inc.
announced Wednesday that its reorganization plan has been approved by
the company's creditors, the
size='3'>Bedford (
w:st='on'>Ind.
size='3'>reported today.
size='3'>The plan includes dividing the company into two separate
corporations. As part of the reorganization effort, Associated Wholesale
Grocers, the supplier to Buy-Low stores, will provide Buehler Foods Inc.
with a $15 million term loan and trade credit. Integra Bank will provide
Buehler Inc. with approximately $6.5 million in financing. Moran Foods,
the largest supplier to Save-A-Lot stores, will provide the reorganized
company with trade credit.
href='http://www.tmnews.com/articles/2006/05/23/sections/business/business42.prt'>Read
more.
id='11'>Commentary: Disaster
Unemployment Benefits Set to Expire as Congress Adjourns
Congress only has a few
days to extend the federal disaster unemployment benefits set to expire
next week for some 80,000 people still out of work because of Hurricanes
Katrina and Rita. Both houses have only a few days left to extend this
much-needed aid, according to a
size='3'>New York Times editorial today. The
average benefit is $104 a week for people who lost everything nine
months ago. The
estimated cost for a 13-week extension is $125 million. Financing for
the additional benefits is already built into the overall disaster
budget, so it requires no special appropriation. All that is needed is
for lawmakers to pass the measure.
href='http://www.nytimes.com/2006/05/24/opinion/24weds4.html?pagewanted=print'>Read
more.
id='12'>Study Finds 'Extensive'
Fraud at Fannie Mae
Fannie Mae engaged in
'extensive financial fraud' over six years by doctoring earnings so
executives could collect hundreds of millions of dollars in bonuses,
federal officials said yesterday in a report that portrayed a company
determined to play by its own rules, the
size='3'>Washington Post reported yesterday.
Regulators at the Securities and Exchange Commission and the Office of
Federal Housing Enterprise Oversight, in announcing a settlement with
Fannie Mae that includes $400 million in penalties, provided the most
detailed picture yet of what went wrong at the congressionally chartered
firm. Their report
portrayed the Washington, D.C.-based mortgage funding giant as governed
by a weak board of directors, which failed to install basic internal
controls and instead let itself be dominated and left uninformed by
chief executive Franklin Raines and Chief Financial Officer J. Timothy
Howard, who both were later ousted.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/05/23/AR2006052300184_pf.html'>Read
more.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/05/23/AR2006052300184_pf.html'>