href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='http://www.abiworld.org/AM/Images/headlines/headline.gif'>
June 18, 2007
name='1'>Moody’s Slashes Ratings on Bonds Backed by Subprime
Loans
Credit-rating firm
Moody's Investors Service slashed ratings on Friday on 131 bonds backed
by pools of subprime loans because of the high rates of defaults and
delinquencies among the underlying mortgages, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. The ratings company also said that it is
reviewing 247 bonds for downgrades, including 111 whose ratings it had
just lowered. All the bonds were issued as recently as last year. The
latest moves by Moody's affected around $3 billion worth of bonds, which
represent less than 1 percent of the over $400 billion in subprime
mortgage-backed bonds that were issued in 2006. Still, it was the most
aggressive action taken yet by any of the ratings companies and could
weigh on the already fragile subprime bond market. Some investors may be
forced to sell bonds whose ratings were cut to 'junk' from
'investment-grade,' and some may have to write down the values of the
downgraded bonds in their portfolios.
href='http://online.wsj.com/article/SB118213138637138666.html?mod=home_whats_news_us'>Read
more. (Registration required.)
w:st='on'>
name='2'>Arizona
size='3'> Bankruptcy Filings Increase
size='3'>Arizona bankruptcy filings
increased for the first five months of 2007 as 3,723 cases were filed,
compared to the 2,328 over the same time period in 2006, the
size='3'>East
w:st='on'>
size='3'>Valley
w:st='on'>
size='3'>Ariz.
Tribune reported today. That represents a 60
percent increase. “Any filing lag that was caused by that initial
rush is over, so I think probably people are now making an honest
assessment,”
size='3'>Terrence Miller, clerk of the U.S.
Bankruptcy Court of Arizona. Before the regulations, annual filings have
averaged 30,000 to 35,000 statewide, Last year, less than 6,500 were
filed. Read
more.
Files for Chapter 11
Ronco Corp., maker of the
Veg-O-Matic vegetable slicer and the Pocket Fisherman, filed for
bankruptcy two years after founder and television pitchman Ron Popeil
sold the iconic company for $56 million, Bloomberg News reported on
Saturday. Ronco sought protection from creditors owed more than $32.7
million. It listed $13.9 million in assets in chapter 11 papers
yesterday in U.S. Bankruptcy Court in
w:st='on'>
size='3'>Woodland Hills
size='3'>Calif.
Inventions, owed more than $11.7 million, and other companies owned by
Popeil are listed in court papers as Ronco's largest unsecured
creditors. According to a court filing, its current assets include
inventory of $7.7 million and $3 million in cash and uncollected bills.
The company said it generated $45 million of revenue last
year.
href='http://www.boston.com/business/personaltech/articles/2007/06/16/ronco_files_for_chapter_11?mode=PF'>Read
more.
name='4'>WorldCom Distributions Surpass $500 Million
Mark
The Securities and
Exchange Commission (SEC) passed the $500 million mark in its
distributions to the former shareholders of WorldCom Inc. affected by
the massive accounting fraud at the company uncovered in 2002,
Bankruptcy Law360
reported on Friday. The SEC disclosed on Thursday that it
had reached the half-billion mark and said that the agency expects to
distribute the remaining $250 million in settlement funds later this
year. “In the last four years, through this and other SEC
distributions, the
size='3'>Commission has returned nearly $2 billion to investor
victims,” said SEC Chairman Christopher Cox. “I anticipate
substantial additional distributions to investors in the near
future.”
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=26941'>Read
more. (Registration required.)
Investors Settle with Bank for $140 Million
Refco Inc. investors have
asked a court to sign off on a $140 million settlement with the bank
that allegedly helped sink the commodities broker,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported on Friday. If approved, the settlement will resolve
all claims by the shareholders against BAWAG P.S.K. Group, which loaned
former Refco CEO Phillip Bennett $430 million and was said to have
abetted the accounting fraud scheme that led to the company's bankruptcy
in 2005. The bank, they said, had agreed to the settlement despite its
dire financial trouble and the “immense pressure” it faced
to use its diminishing funds to resolve disputes with the U.S.
Attorney's Office in
w:st='on'>
size='3'>Manhattan
Refco's unsecured creditors. Under the terms of the settlement, which
was granted preliminary approval by the court in March, BAWAG will
cooperate with investors in their class action against other defendants,
which include Refco insiders and the company's bankers, lawyers and
auditors. The bank has already provided a “large cache of
documents” detailing the role of other defendants, the plaintiffs
said.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=26988'>Read
more. (Registration required.)
size='3'>Auto-Parts Maker Remy to File for
Bankruptcy
Remy International Inc.
said Friday that it intends to file a prepackaged chapter 11 petition
that would allow it to cut $360 million in debt, joining a growing
number of auto-parts companies that have had to resort to filing for
bankruptcy court protection, the Associated Press reported Friday. The
privately held
face='Times New Roman' size='3'>Anderson
size='3'>,
size='3'>Ind.
said that it reached a deal with two groups of bondholders to swap
debt for equity. The arrangement would wipe out Remy's existing
shareholders -- including Citicorp Venture Capital and Warren Buffett's
Berkshire Hathaway Inc. -- and put the company under the control of its
bondholders. Remy, which supplies parts to General Motors Corp. and
other big auto manufacturers, has been hit hard by rising raw-materials
costs and production cutbacks by some of its customers. At the end of
2006, Remy had total assets of $842.8 million and total current
liabilities of $1.2 billion. The company, spun-off from GM in 1994,
moved some of its production to
w:st='on'>
size='3'>Mexico
size='3'>as part of its cost-cutting efforts. In January, it sold its
diesel remanufacturing business to Caterpillar Inc. for $150
million.
href='http://biz.yahoo.com/ap/070615/remy_bankruptcy.html?.v=1'>Read
more.
name='7'>British Bank Denied Claim against Enron
English bank
Standard Bank London PLC was denied permission on Wednesday to amend an
earlier claim or file a new late claim against bankrupt energy company
Enron Corp., Bankruptcy
Law360 reported yesterday. Standard had
entered into a deal with one of Enron’s subsidiaries, Enron North
America Corp., in 2000 to swap assets. It secured the deal through a
guarantee, underwritten not by ENA but by parent corporation Enron. When
the company filed for chapter 11 protection in 2001, Standard filed a
claim against ENA before the 2002 deadline established by the court. As
part of the claim it submitted the guarantee from Enron, but did not
file a separate claim against the parent company.
face='Times New Roman' size='3'>The court had already said at the
beginning of the proceeding that creditors were required to file
separate claims against each debtor. Thus, in order to file a claim
based on the guarantee, Standard would have been required to file a
claim against Enron.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=26957'>Read
more. (Registration required.)
Ron
Goldman's Father Can Seek Rights to O.J. Simpson's Book
A federal bankruptcy
judge on Friday ruled that the father of Ron Goldman can pursue the
publishing rights to a book by O.J. Simpson, which speaks in
hypothetical terms about the 1994 murders of Goldman and Simpson's
ex-wife, Nicole, CNN.com reported on Friday. The rights to the book,
which the former football star titled 'If I Did It,' are owned by
bankrupt Lorraine Brooke Corp., run by Simpson's daughter, Arnelle.
Judge A. Jay
Christol accused Simpson of setting up the
company in his children's names in a scheme to 'defraud his creditors.'
He ruled that Fred Goldman, who filed a wrongful-death lawsuit against
Simpson in 1997 after Simpson was cleared of criminal charges in the
murders, is now the corporation's largest creditor. That civil suit
found Simpson liable for the deaths, and ordered him to pay $33.5
million in damages.
href='http://www.cnn.com/2007/LAW/06/15/oj.book/index.html'>Read
more.
w:st='on'>
name='9'>Sale
size='3'>of Jaguar, Land Rover Brands May Take Ford a Few
Months
Ford Motor Co. expects a
sale of its Jaguar and Land Rover brands to take at least a month and
possibly longer, as the auto giant seeks to drum up interest in the
two
face='Times New Roman' size='3'>United
Kingdom
from financial buyers, the
size='3'>Wall Street Journal reported today.
The
size='3'>Dearborn,
w:st='on'>
size='3'>Mich.
has had preliminary talks with Cerberus Capital Management LP about
selling the brands to the private-equity company, but the discussions
have been inconclusive. In May, Cerberus agreed to buy 80 percent of
the
face='Times New Roman'
size='3'>U.S.
of DaimlerChrysler AG. Industry analysts increasingly expect the company
will off-load one or both of the units as it seeks to refocus on its
North American operations, which are piling up big losses as high
gasoline prices discourage sales of large pickup trucks and
sport-utility vehicles.
href='http://online.wsj.com/article/SB118212907128838636.html?mod=us_business_whats_news'>Read
more. (Registration required.)
name='10'>TROUBLED COMPANIES IN THE NEWS
1000’s of companies lose
money or experience some form of difficulty each
quarter.
The business news
articles below are taken from the
size='3'>Daily Summary of Troubled & Fast Growing U.S. Companies and
Other Business News published by Bastien
Financial Publications.
To begin receiving the COMPLETE
Daily e-Summary, that emails you information on over 70 such companies
each morning, email
face='Times New Roman' color='#0000ff'
size='3'>steve@creditnews.com
size='3'>your name, company name, address, phone and fax.
We’ll set you up within 24 hours.
The
size='3'>ABI
is only $99 for an annual subscription.
size='3'>Indicate “
face='Times New Roman' size='3'>ABI
size='3'>CODE 27” in your email.
size='3'>Cygne Designs Inc., the
size='3'>New York
maker, reported a first quarter net loss of $1.3 million, on a slight
revenue decline–to $20.8 million. This compares with a loss
of $976,000 for the same period one year earlier.
size='3'>Jaclyn Inc., the West
size='3'>New York
w:st='on'>
size='3'>N.J.
maker, reported a third quarter net loss of $1.4 million on a 24% sales
increase–to $34.7 million. The loss, which compares with a
$22,000 loss for the same period one year earlier, includes charges of
$2 million related to a settlement.
size='3'>Majesco Entertainment Co., an Edison,
N.J. developer of videogames, reported a second quarter net loss of $1.3
million, compared with an $839,000 profit in the year-ago second
quarter. The recent results included $2.5 million in extra charges for
litigation settlement and impairment. Revenue jumped 30%–to $14.6
million.
size='3'>Ronco Corp., a
w:st='on'>
Valley, Ca. seller of
kitchen gadgets, filed Chapter 11. The filing, in the U.S.
Bankruptcy Court in
w:st='on'>
size='3'>California
listed assets and liabilities of $13.9 million and $32.7 million
respectively. Ronco said that it will continue operations normally as it
restructures and that it doesn’t plan on laying off any employees.
The firm’s largest creditor, Veg-O-Matic king Ron Popeil, sold the
company to its current owners two years ago for $55 million, of which he
is still owed $11.8 million.
size='3'>Valence Technology Inc., an Austin,
Tx. maker of batteries, reported a fiscal net loss of more than $22.2
million. That’s down from a $32.7 million loss a year ago.
Revenue slipped 3%–to $16.7 million.
Winnebago Industries Inc., a Forest City, Ia.
manufacturer of motorhomes, reported its third quarter net income
declined 14%–to nearly $11.3 million. Sales increased 5%–to
$232 million.
href='http://business.guardian.co.uk/story/0,,2098101,00.html'>