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July 23, 2007
name='1'>States Aim to Stem Tide of Home Foreclosures with Funds for
Refinancing
Hoping to slow the
quickening pace of home foreclosures, about a half-dozen states are
setting up funds to help homeowners with high-risk subprime mortgages
refinance to more-affordable loans, the
size='3'>Wall Street Journal reported today.
The states -- which include
face='Times New Roman' size='3'>Maryland
size='3'>,
size='3'>Massachusetts
Jersey
w:st='on'>New
York
face='Times New Roman' size='3'>Ohio
size='3'>and
face='Times New Roman'
size='3'>Pennsylvania
are expected to invest a total of more than $500 million in the effort.
State officials hope that it will be enough to keep some vulnerable low-
and moderate-income neighborhoods from sliding into decline. Some of the
programs will be similar to existing government-lending programs, in
which the state extends mortgages to homeowners and then sells those
home loans, in some cases to companies such as government-sponsored
mortgage-finance giants Fannie Mae and Freddie Mac. The state then
recycles the proceeds from the sales to make additional loans.
href='http://online.wsj.com/article/SB118514577717774422.html?mod=us_business_whats_news'>Read
more. (Registration required.)
Committee to Examine Consumer Protections
The House Financial
Services Committee will hold a hearing on Wednesday titled
“Improving Federal Consumer Protection in Financial Services
– Consumer and Industry Perspectives” on Wednesday,
according to a committee press release. The Committee will hear from
witnesses about how consumer protection at the federal level can be
improved, and whether the current regulatory structure is adequate for
handling unfair and deceptive financial practices. The hearing is a
follow-up to the June 13 hearing on consumer protection with the federal
financial regulators. The hearing will take place at 10 a.m. ET in
2128
face='Times New Roman' size='3'>Rayburn
size='3'>House
face='Times New Roman' size='3'>Office
size='3'>Building
Witness list to be announced.
href='http://www.house.gov/apps/list/hearing/financialsvcs_dem/ht07250710am.shtml'>Read
more.
Autos
name='3'>Opposition to Dana Deal with Unions
Mounts
Another Dana Corp.
creditor, Brandes Investment Partners LP, has joined the fight against a
deal between the bankrupt auto parts maker and its largest unions, the
United Steel Workers and the United Auto Workers,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported on Friday.
size='3'>Brandes argued that the motion in support of the deals doesn't
provide relevant information about anticipated distributions for equity
securityholders. Appaloosa, a New Jersey-based hedge fund, previously
filed an objection to the agreement on July 9. The court has yet to
rule, but in the meantime Appaloosa sent a letter to Dana's board of
directors, calling the negotiations between the USW and the UAW unions
“fundamentally flawed and, if continued, will yield far less than
the maximum recoveries available to stakeholders.”
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=30243'>Read
more. (Registration required.)
name='4'>Union Takes Step toward
face='Times New Roman' size='3'>Delphi
size='3'>Strike
A union representing more
than 2,000 of Delphi Corp.'s hourly workers said Friday it has told the
auto parts maker that it plans to terminate its contracts, a first step
toward a possible strike in October, the Associated Press reported on
Friday. The International Union of Electronic Workers-Communications
Workers of America said the notification, delivered in a letter earlier
this week, comes as contract talks have dragged on concerning job
security, wages and benefits. On Thursday,
w:st='on'>
size='3'>Delphi
toward emerging from bankruptcy protection when a court approved a
settlement with the United Auto Workers.
w:st='on'>
size='3'>Delphi
bankruptcy is expected before the end of the year. Deals still need to
be reached with five other unions representing a total of about 3,000
workers, including the IUE-CWA.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/07/20/AR2007072000733_pf.html'>Read
more.
name='5'>Senate Passes Student Loan Bill
The Senate passed
legislation on Friday to boost Pell grants by cutting $18 billion in
federal subsidies to banks that issue government-backed student loans
and set the stage for consideration of the Higher Education Act
reauthorization bill this week,
size='3'>CongressDaily reported on Friday. The
bill was approved 78-18 after an attempt to reduce the cut in lender
payments was defeated 62-35. As passed, the Senate legislation would
increase the current maximum Pell grant award of $4,310 annually to
$5,400 by 2011. It is similar to legislation passed last week by the
House. Both bills cap annual loan payments for students at a percentage
of their income, and provide loan forgiveness for those who go into
public service. While the House bill could cut interest rates on
federally backed student loans, the Senate bill would not, and the House
bill would increase Pell grants to $5,200 by 2011, $200 less than the
Senate proposal.
name='6'>Calpine Asks Court to Toss Towantic's
Bankruptcy
Calpine Corp. has asked a
judge to throw out the chapter 11 case of Towantic Energy LLC in order
to facilitate the closing of the sale of Calpine's membership interests
in the holding company,
size='3'>Bankruptcy Law360 reported yesterday.
Calpine purchased membership interests in Towantic in September 1999.
Towantic has no employees, day-to-day business operations or assets
other than the construction site land, various construction and air
permits and agreements with the town of
w:st='on'>
size='3'>Oxford
size='3'>relating to the development of the Towantic project, which
remains in early-stage development, according to Calpine's motion. After
filing for bankruptcy, Calpine decided to scrap the Towantic project in
light of the significant remaining construction costs. The decision
prompted General Electric Co., a prior co-developer of the Towantic
project, to make a bid to take over the project's development for
$300,000 in cash. GE also offered an additional $2.3 million if the
project is completed and the power plant reaches a commercial operation
date, and agreed to withdraw a $6.5 million claim against
Calpine.
size='3'>In exchange, Calpine agreed to resolve all claims asserted
against Towantic that are not being assumed or paid by
GE.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=30129'>Read
more. (Registration required.)
Records Creditors Voice Opposition to Liquidation Plan
Unsecured creditors in
the Tower Records bankruptcy have lashed out at the company's
liquidation plan, saying that it prohibits general unsecured creditors
from providing any input into how the company litigates pending trade
vendor claims,
size='3'>Bankruptcy Law360 reported on Friday.
The creditors' recovery is likely to be most affected by the trade
vendor litigation, but the plan does not provide a representative party
that can take over in overseeing the case when the official committee is
dissolved, the committee said. “Notwithstanding the purported need
for an independent person to 'decide' all of these issues, the general
unsecured creditors are the only constituency which will be completely
disenfranchised by this process,” it said. The court order
approving Tower Records' plan allows for objections from interested
parties to be filed through July 25. A confirmation hearing on the plan
is scheduled to begin on July 31.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=30208'>Read
more. (Registration required.)
Mobile Files for Chapter 11
Oasys Mobile Inc., which
provides games, ring tone and other content for mobile devices, filed
for chapter 11 bankruptcy with a pre-negotiated reorganization plan in
hand, the Associated Press reported on Friday. The plan, filed Wednesday
with the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Wilmington
w:st='on'>
size='3'>Del.
Oasys' senior lenders, RHP Master Fund Ltd. and LAP Summus Holdings LLC,
substantially all the common stock in the reorganized company, in
exchange for their claims of over $8.84 million. To allow the
cash-strapped company to keep operating during its stay in bankruptcy,
the lenders have agreed to provide the company with a $2.66 million
debtor-in-possession loan. Oasys listed assets of about $2.12 million
and debts of about $11.5 million in its chapter 11 petition.
href='http://www.chron.com/disp/story.mpl/ap/fn/4981668.html'>Read
more.
name='9'>SunRocket Leaves Void for Callers on
Internet
Although SunRocket was
tiny by the standards of the telecommunications industry, it has ensured
itself a place in the history of the digital era by being the first
significant Internet telephone provider to go out of business,
the New York
Times reported today. Its collapse raises
questions about what responsibility such companies have to their
customers — and about how they should be regulated, given how
essential many people consider phone service to be. The SunRocket
meltdown was further complicated because many customers paid $199
up-front for a year of unlimited service, and it is not clear if any of
them will receive a refund. Standard telephone companies are required to
give customers notice if they plan to stop service. However, companies
like SunRocket that use the infrastructure of the Internet to transmit
calls do not have to give such notice. Many industry analysts and former
policy makers said that the absence of broad regulations was, to a large
extent, desirable because it would allow the emerging Internet phone
industry to develop. While these experts said that the SunRocket
shutdown was clearly a big problem for customers, they said it might not
justify a spate of new regulation.
href='http://www.nytimes.com/2007/07/23/technology/23sunrocket.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
May Grow for Laid-Off Service Workers
Lawmakers are preparing
legislation that would significantly expand federal aid to the workers
whose jobs have been moved offshore or are lost to foreign imports,
the Washington
Post reported today. Under a Senate bill to be
introduced today, computer programmers, call-center staffers and other
service-sector workers who make up the vast majority of the nation's
workforce would for the first time be eligible for a generous package of
income, health and retraining benefits currently reserved for
manufacturing workers who lose their jobs to international trade.
Democrats say the expansion of the Trade Adjustment Assistance (TAA)
program would begin to reweave the social safety net for the 21st
century, as advances permit more industries to take advantage of cheap
foreign labor -- even for skilled, white-collar work. A similar bill is
nearing completion in the House, and Democrats hope to approve the
expansion before the program expires Sept. 30. Trade Adjustment
Assistance typically gets strong bipartisan support; Sen. Olympia J.
Snowe (R-Maine) is co-sponsoring the bill with Sen. Max Baucus
(D-Mont.).
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/07/22/AR2007072201214_pf.html'>Read
more.
International
name='11'>Australian Regulator Snares Record Number of Bankruptcy
Fraud Cases
Australia's personal bankruptcy
regulator said that a record number of offenders have been prosecuted
under the Bankruptcy Act in the past financial year, the Australian
Broadcasting Corp. reported today. The Insolvency and Trustee Service
(ITSA) says its more targeted approach has seen a 33 percent increase in
prosecutions Australia-wide. The national manager of the service's fraud
investigation unit, Jeff Hanley, says courts are becoming tougher on
bankruptcy fraud. 'The number of prosecutions themselves are up
primarily because ITSA has streamlined its investigations portfolio, to
the extent where we sort of look at problematic areas now, whether it be
geographical or in types of offences,' he said.
href='http://search.news.yahoo.com/search/news?p=bankruptcy&n=20&c=news'>Read
more.
href='http://search.news.yahoo.com/search/news?p=bankruptcy&n=20&c=news'>