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June 26, 2006
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id='1'>Pennsylvania
face='Times New Roman' size='3'> Constitutional Challenge to Debt
Relief Agency Provisions of BAPCPA Dismissed
The U.S. District Court
for the Eastern District of Pennsylvania dismissed a complaint on June
19 by a bankruptcy attorney in
w:st='on'>
size='3'>Lancaster
w:st='on'>
size='3'>Pa.
challenged the constitutionality of the debt relief agency provisions of
BAPCPA right after the new law became effective. Judge Juan
Sanchez found that the attorney had not demonstrated harm from real and
immediate enforcement of the provisions but was rather seeking a
non-justiciable advisory opinion. Judge Sanchez did not reach the
merits of the government's motion to dismiss under Rule 12(b)(6).
The case is Geisenberger
href='http://www.paed.uscourts.gov/documents/opinions/06D0744P.pdf'>Click
here to read the opinion.
id='2'>Bankruptcy Filings
in
size='3'>Texas
Sharply
Tarrant County,
Texas-area consumers are filing for bankruptcy at barely a quarter of
the numbers they did before last year’s big changes in the
country’s bankruptcy rules, a pattern that also appears to hold
true across Texas and the nation, according to a report in
Saturday’s Fort
Worth Star-Telegram. In the first five months
of 2006, there were 1,263 bankruptcy filings at the
w:st='on'>
size='3'>Fort Worth
size='3'>bankruptcy court. That was down 72 percent from the same period
in 2005 and also in 2004. Through May, the number of monthly filings has
ranged from a low of 233 in January to a high of 359 in March, compared
with more than 1,000 per month during the same period last year.
In
size='3'>Texas
nationally, figures are available only for the year’s first three
months. For that period, overall filings were down 69 percent in
w:st='on'>Texas
according to the American Bankruptcy Institute. “The big story is,
Congress wanted to suppress the number of filings, and they have
succeeded mightily,” said
w:st='on'>Sam
Gerdano
of the American Bankruptcy Institute. He said that nationally, about
10,000 bankruptcy filings are being made weekly, about one-third the
number in recent years.
href='http://www.dfw.com/mld/dfw/news/14896218.htm?source=rss&channel=dfw_news'>Read
more.
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id='3'>Arkansas
face='Times
New Roman'
size='3'> Courts, Attorneys Recovering from Fall Bankruptcy
Rush
In the two weeks before a
new federal bankruptcy law went into effect last Oct. 17, bankruptcy
courts in
face='Times New Roman' size='3'>Arkansas
experienced a 650 percent jump in filings from a year
earlier, the Arkansas
News reported yesterday.
face='Times New Roman' size='3'>Jean Rolfs,
clerk for the U.S. Bankruptcy Court for the Eastern and Western
Districts of
size='3'>Arkansas
normal flow of about 2,000 bankruptcy filings a month in
size='3'>Arkansas
to 8,145 between Oct. 1 and Oct. 16 with a flood of filings by people
hoping to avoid provisions of the new law. Filings dropped off
significantly after Oct. 17, but began to pick up again after the first
of the year, said Terry Lee, an attorney and federally appointed
bankruptcy trustee.
href='http://www.arkansasnews.com/archive/2006/06/25/News/336701.html'>Read
more.
id='4'>Adelphia Amends
size='3'>Sale
size='3'>Plans
Looking to speed up the
sale of its assets to Time Warner NY Cable and Comcast Corp. and appease
its creditors, Adelphia Communications Corp. has amended its sales
proposal, Portfolio
Media reported Friday. The changes were made
to appease the cable company’s creditors, who had objected to the
proposed $17.6 billion sale. Adelphia also modified its reorganization
plan to reflect the changes in the proposal. Under the original sales
agreement, which the creditors' committee supported, 16 percent of Time
Warner’s stock totaling nearly $5 billion would be distributed to
Adelphia’s creditors, with no restrictions. The creditors now
believe, however, that Comcast may sell its shares of
Time Warner on the market,
blocking Adelphia’s ability to distribute that stock until
February 2008.
id='5'>Stock Deal Key to
Owens
size='3'>Corning
from Bankruptcy
A $100 million payment
could be made as early as this week by Owens Corning as part of a key
financing deal that puts it on a trajectory to emerge from bankruptcy by
Oct. 31, the Toledo
Blade reported on Saturday. Major opposition
dissolved yesterday to a deal between the company and J.P. Morgan
Securities Inc. as part of which the
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York investment house has
agreed to purchase any unsold stock in a 72.9 million share-rights
offering. Proceeds of the sale of the new shares will be used to help
finance settlement of the complex asbestos-driven chapter 11 case.
Judge Judith
Fitzgerald of U.S. Bankruptcy Court in
size='3'>Wilmington
w:st='on'>
size='3'>Del.
indicated that she will sign off once several procedural issues are
resolved, set a hearing for Thursday on the matter.
href='http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20060624/BUSINESS03/606240341'>Read
more.
id='6'>Equity Committee
Fights
size='3'>Oneida
size='3'>Settlement
The equity committee of
bankrupt flatware maker Oneida Ltd. is fighting the company’s
proposed $50 million settlement with the Pension Benefit Guaranty Corp.
(PBGC), saying the amount should be cut by about half,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported on Friday. Originally, the proposed settlement
agreement in the reorganization proceedings of
w:st='on'>
size='3'>Oneida
result in a $56.2 million unsecured claim for the PBGC. That amount has
since been lowered to just over $50 million, and still must be approved
by a judge.
face='Times New Roman' size='3'>Oneida
has already won court approval to abandon its main
pension plan, allowing the struggling company to dump responsibility for
more than 1,800 participants onto the PBGC. The company’s primary
defined-benefits pension plan, which covers 862 active employees, 634
retirees and 382 former employees, is estimated to be underfunded by $40
million. However, the equity committee alleges the PBGC used an
incorrect scenario to reach the settlement figure, which it says is off
the mark by nearly $25 million.
id='7'>Mesaba Unions Team Up to
Fight Cuts
Separate union leaders
for about 1,400 Mesaba flight attendants, pilots and mechanics are
sharing everything from legal experts to strike strategies as they try
to scale back proposals for wage and benefit cuts as the company
reorganizes under chapter 11 bankruptcy, the
size='3'>Detroit Free Press reported today.
Today, Mesaba is due in a
w:st='on'>
size='3'>Minneapolis
size='3'>courtroom to ask a bankruptcy judge, for a second time, to
throw out contracts for those workers, allowing the carrier to impose
wage and benefit cuts. All three unions say that they would strike if
the airline implemented terms, a move Mesaba says would be illegal,
though the courts have yet to rule on that issue.
href='http://www.freep.com/apps/pbcs.dll/article?AID=/20060626/BUSINESS05/606260374&template=printart'>Read
more.
id='8'>Farmland Creditors to
Receive Payments
Payments totaling $12
million were sent to creditors on Friday of bankrupt Farmland
Industries, bringing the total paid to unsecured creditors to more than
100 cents on the dollar, the
size='3'>Kansas City Star reported on Friday.
The payments mark the sixth and last distribution to creditors and
represent one of the rare instances of creditors in a chapter 11
bankruptcy case being made whole. Kansas City, Mo.-based Farmland, whose
remnants are now known as Reorganized FLI Inc., spiraled into chapter 11
bankruptcy in May 2002 after incurring debt of $1.9 billion and
experiencing feeble fertilizer sales.
href='http://www.kansascity.com/mld/kansascity/business/14880989.htm?template=contentModules/printstory.jsp'>Read
more.
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id='9'>Arizona
face='Times
New Roman' size='3'> Concert Promoter
Files for Chapter 11
A
w:st='on'>Tucson
concert promoter and his
w:st='on'>
size='3'>Phoenix
have filed for bankruptcy after creditor claims totaled more than $44
million, KVOA.com reported Saturday. Bradley J. Nozicka of
size='3'>Tucson
of
size='3'>Phoenix
chapter 11 bankruptcy last week claiming assets of $10 million to $50
million with liabilities in the same range. Nozicka and Galyon filed
chapter 11 bankruptcy for five businesses: City Limits Inc.; Corporate
and Leisure Event Productions Inc.; BF Consulting L.L.C.; Old Pueblo
Sounds L.L.C.; and Hawthorne Development L.L.C.
href='http://kvoa.com/Global/story.asp?S=5073526&nav=menu216_2'>Read
more.
id='10'>Tension over Private
Pensions in
w:st='on'>Arizona
Some big local employers
are short on funding retirement nest eggs; at least 16 of Southern
Arizona's large employers have underfunded pension and benefit programs,
leading some Arizona workers to worry they won't get what they were
promised in retirement, the
size='3'>Arizona Daily Star reported
yesterday. A recent Standard & Poor's study examined the status of
pension plans and other retirement benefits, including medical benefits,
of companies listed on the S&P 500. Together, the 500 companies have
more than $461 billion in obligations that are not funded, the study
found. Of those 500 companies, there are 20 that employ more than
500
size='3'>Arizona-
residents. Sixteen of those 20, representing 29,000 current workers
in
Arizona
deficit, the study says.
size='3'>Read
more.
id='11'>Status of San Diego Pension
Benefits Unclear
The legality of increased
pension benefits for
w:st='on'>San
Diego
unclear after a tentative ruling Friday by a Superior Court judge,
the San Diego
Union-Tribune reported on Saturday. Though he
didn't confirm or reject the contested benefits, Judge Jeffrey Barton
did raise a number of questions about City Attorney Michael Aguirre's
case. Barton's 11-page ruling asked for a number of clarifications,
including whether current and former employees are party to the lawsuit
and whether he can rule on the benefits if they are not. He also
suggested that the city could be exposed to much greater liability
should the benefits and other agreements with employees be declared
illegal. Barton said he will hear arguments about the ruling
today.
href='http://www.signonsandiego.com/news/metro/pension/20060624-9999-1m24pension.html'>Read
more.
International
id='12'>Varig Sale to
Employee Group Canceled by
w:st='on'>
size='3'>Brazil
size='3'>Judge
Varig's sale to an
employee group formed to purchase the bankrupt Brazilian airline was
canceled by a bankruptcy judge after the bidders failed to make a $75
million down payment on Friday, Bloomberg News reported on
Friday.
size='3'>Rio de Janeiro
Court Judge Luiz Roberto Ayoub, who has handled Varig's bankruptcy for a
year, told journalists in
w:st='on'>Rio de
Janeiro
today whether to accept a purchase offer for the carrier's operating
assets made Friday by Varig's former cargo unit, Varig Logistica SA. The
failure of the employee group's offer moves Varig, as Vaicao Aerea
Rio-Grandse is known, closer to liquidation. The company is out of cash,
using credit card receivables to pay for jet fuel, according to supplier
Petroleo Brasileiro SA. Most of its remaining fleet will probably be
grounded as early as tonight under June 21 ruling by U.S. Bankruptcy
Court Robert Drain in
w:st='on'>
York.
face='Times New Roman' size='3'>
href='http://www.bloomberg.com/apps/news?pid=10000086&sid=ap4bAC313O5k'>Read
more.
id='13'>AXA Joins Move to Stave
Off Eurotunnel Bankruptcy
AXA Private Equity has
joined a group of investment banks and hedge funds that have agreed to
underwrite a controversial £1bn convertible bond issue aimed at
staving off the bankruptcy of Eurotunnel, the
face='Times New Roman' size='3'>London Independent
size='3'>reported on Saturday. The debt-laden operator of the Channel
Tunnel also revealed yesterday it was in talks with a further British
financial institution about joining the underwriting group, alongside
Goldman Sachs, Macquarie Bank and two hedge funds. Under the financial
rescue plan agreed by the Eurotunnel chairman, Jacques Gounon, the
Anglo-French group would be able to write off more than half of its
crippling £6.2bn of debts.
href='http://news.independent.co.uk/business/news/article1096084.ece'>Read
more.
id='14'>British Civil Servants
Face Rise in Pension Cost
Half a million British
civil servants could be forced to contribute more to their final salary
pension schemes but will still be allowed to retire at 60 under new
government proposals, the
size='3'>Financial Times reported today.
Hilary Armstrong, the Cabinet Office minister, is planning to cap
employer contributions to the civil service pension scheme at 20
percent, just above the current average of 19.4 percent, with staff
covering over half the future cost increases stemming from rises in
longevity. The proposed curbs reflect mounting concern in government
that the pension guarantees for public sector workers could undermine
cross-party support for a wide-ranging overhaul of pension
policy.
href='http://www.ft.com/cms/s/6d8acf5c-04af-11db-8981-0000779e2340.html'>Read
more.
href='http://www.ft.com/cms/s/6d8acf5c-04af-11db-8981-0000779e2340.html'>