|
Senate Panel Stalls Legislation on Predatory' Lending
Practices
The Senate banking committee chairman is refusing to consider
legislation regarding so-called 'predatory' lending until the agencies
that regulate the problem define it more clearly, according to The
Washington Times. Sen. Phil Gramm, chairman of the Senate Committee
on Banking, Housing and Urban Affairs, released a committee staff
analysis of responses from nine federal regulatory agencies to inquiries
about the definition of 'predatory lending' and the data each agency has
collected about predatory lending. The ensuing report concluded, 'It is
difficult to understand how the regulators or Congress can formulate
proposals to combat predatory lending when there is not clear
understanding as to what it is.'
The staff report found that: the regulators do not have and did not
provide a definition of 'predatory lending'; the regulators do not have
systematic or organized data on predatory lending, and that the
collected data is anecdotal at best; the regulators are still in the
early data-gathering stage; the regulators blur the distinction between
subprime lending and predatory lending; and the regulators do not report
any lack of existing legal authority to penalize those abuses that they
identify.
'At least five bills have been introduced in Congress that purport to
address problems with predatory lending,' Gramm said. 'Before we take up
any legislation or establish new regulatory schemes, we will have to
address a more basic problem—defining predatory lending. If we act
hastily to stop predatory lending without knowing what it is, we could
end up cutting off legitimate loan sources and ending the home ownership
dreams of millions of Americans. I, for one, am not willing to take that
risk.'
John Garza, a Rockville, Md. bankruptcy attorney who often sees the
fallout from illegitimate home loans, said predatory loans are indeed
hard to pin down. 'It's so hard to define predatory lending,' he said.
'What might be predatory in one case might not be predatory in another
case.' You can read the report by clicking on the following link.
href='http://www.senate.gov/~banking/docs/reports/predlend/predlend.htm'>http://www.senate.gov/~banking/docs/reports/predlend/predlend.htm
Geneva Steel Company Files Plan of Reorganization
Geneva Steel Company (GNVSQ) announced yesterday that the U.S.
Bankruptcy Court for the District of Utah approved its plan of
reorganization on Aug. 24, according to a company press release. Geneva,
a Vineyard, Utah-based integrated steel mill, and the official committee
of bondholders in the company's chapter 11 case, proposed the plan
jointly. The plan will significantly reduce Geneva's debt burden and
provide additional liquidity in the form of a $25 million capital
infusion through the issuance of convertible preferred stock, a $110
million term loan that is guaranteed 85 percent by the U.S. government,
and a $125 million revolving line of credit. Geneva's pre-bankruptcy
unsecured creditors will receive, in lieu of cash payments,
substantially all of the common stock of the company and the right to
purchase the convertible preferred stock. In the event that creditors do
not purchase all of the preferred stock, Geneva has entered into a
standby purchase agreement that ensures that the full $25 million in new
capital will be raised.
Potential Buyer for Newhall Mall Pulls Out After Tenant Files
Bankruptcy
Newhall Land & Farming Co. said a prospective buyer for a California
shopping center has pulled out of the deal, citing a bankruptcy filing
by a movie theater operator that is a tenant at the mall, according to a
newswire report. The Valencia, Calif.-based Newhall (NHL) said it would
continue to look for buyers for the Valencia Town Center, one of the
largest shopping centers in northern Los Angeles. Although Newhall
didn't identify the potential buyer, the Los Angeles Times
reported that RREEF, a Chicago real estate investment firm, was in talks
to purchase the 800,000-square-foot enclosed mall and adjacent
property.
Edwards Theaters Circuit Inc., which has two theater complexes
totaling 21 screens and an IMAX 3D theater in the Valencia mall and
entertainment center, filed chapter 11 bankruptcy protection last week.
Rental income from Edwards represented about 16 percent of the center's
income for the first half of the year. Newhall, which doesn't know if
the theater leases will be affected by the bankruptcy filing, said
Edwards is current on all obligations.
Tokheim and Six Affiliates File for Bankruptcy
Tokheim Corp. (TOKM.OB), the world's largest provider of petroleum
dispensing products, filed for chapter 11 bankruptcy protection late
Friday together with six affiliates, according to a Reuters report. The
company filed a motion yesterday for authority to enter a $48 million
debtor-in-possession financing agreement. Tokheim said its $48 million
credit facility would be converted into a five-year revolving facility
after the company emerges from the restructuring process.
In court papers, Tokheim, of Fort Wayne, Indiana, listed assets of
$691.0 million and debts of $700.0 million and said that as of Aug. 16,
it had circulated a joint prepackaged plan of reorganization among
certain unidentified creditors. Indenture trustees for holders of $204.0
million and $50.0 million in notes respectively are listed as Deutsche
Bank of New York and Bank of New York Chicago.
Drkoop.com Expands Emergency Financing
Drkoop.com Inc. expanded its emergency equity financing by $7.5 million,
bringing the health website operator's cash infusion to $27.5 million,
according to The Wall Street Journal. The funding came from Prime
Ventures LLC, a Santa Monica, Calif. investment group comprised of
venture-capital firms. The group's representatives have taken over
management of drkoop.com. The financing was accomplished through the
private placement of preferred stock, convertible into shares of common
stock. The cash should keep drkoop.com going for at least 18 months.
Court Approves Pathmark Stores' Disclosure Statement
At a joint disclosure statement/plan confirmation hearing last Thursday,
a bankruptcy judge gave a recently appointed official equity security
holders committee until Thursday to test Pathmark Stores Inc.'s and its
bondholders' assumptions as to the company's value. Company counsel
Douglas P. Bartner of Shearman & Sterling told DBR Friday that the
court also approved the supermarket chain operator's disclosure
statement and the solicitation procedures to be implemented in
connection with plan voting. Before confirming the plan, however, Judge
Farnan gave Pathmark's equity committee one week, to Aug. 31, to study
the valuation of Pathmark compiled by company financial advisers
Wasserstein Perella & Co. and Houlihan Lokey Howard & Zukin
Capital, Bartner added.
Courtesy of
href='http://www.fedfil.com/bankruptcy/developments.htm'>The Daily
Bankruptcy Review Copyright © August 29,
2000.
size='3'>Thanks for visiting Today's Bankruptcy Headlines.
New articles are posted here each business
day.
|
