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August 10, 2006
id='1'>Bankruptcy Filings
in
Carolina
Percent
Bankruptcy filings have
fallen 63 percent in
w:st='on'>South
Carolina
lawyers and credit counselors attribute to the new bankruptcy law, the
Associated Press reported yesterday. Only 2,788 individuals and
businesses filed bankruptcy petitions in U.S. bankruptcy courts
in
Carolina
months of the year, down from 7,571 in the first half of last year.
Chapter 7 filings were down from 3,519 during the first half of last
year compared with 722 during the same period this year. Chapter 11
filings totaled just 15 bankruptcies in the first half of the year, the
lowest for the six-month period in at least 10 years. Last year, there
were 21 filings during the period.
href='http://www.dailycomet.com/apps/pbcs.dll/article?AID=/20060809/APN/608090821'>Read
more.
Airlines
id='2'>Ruling Delayed as Strike
Nears at Northwest
A federal bankruptcy
judge delayed a ruling yesterday on whether to bar flight attendants
from a strike that would disrupt flights at Northwest Airlines, the
Associated Press reported yesterday. Judge Allan L.
Gropper heard arguments over a preliminary
injunction to prevent any type of strike action, which the flight
attendants plan to begin on Tuesday. Judge Gropper also considered a
request by the flight attendants’ union to change the terms of a
concessions deal the airline imposed. Rick Thornton, a spokesman for the
Association of Flight Attendants, said the judge was expected to issue
his ruling in the case on Monday.
href='http://www.nytimes.com/2006/08/10/business/10air.html?pagewanted=print'>Read
more.
id='3'>Delta Posts $2.2
Billion Loss in 2
size='3'>nd
size='3'>Quarter
Delta Air Lines Inc., the No. 3
U.S. carrier, reported a wider second-quarter loss of $2.21 billion even
as higher ticket prices and fuller planes drove up revenue, the
Associated Press reported yesterday. For the three months ended June 30,
Atlanta-based Delta said its net loss amounted to $11.18 a share,
compared with a loss of $388 million, or $2.64 a share, in the same
three-month period a year ago. The prior-year loss included $6 million
in dividends that accrued for preferred shareholders. Excluding
reorganization items, the airline said it earned $179 million in the
second quarter, including $4 million related to an income tax provision,
according to a Delta filing with the Securities and Exchange Commission.
Revenue in the quarter rose 9.6 percent to $4.66 billion from a year
ago.
href='http://news.cincypost.com/apps/pbcs.dll/article?AID=/20060810/BIZ/608100304'>Read
more.
Autos
id='4'>Automakers Intensify
Recovery Efforts
Top executives of General
Motors Corp. and Ford Motor Co. yesterday sought to make the case that
their strategies for turning around financial and sales losses are
gaining traction, despite rising gasoline prices, slumping truck sales
and an uncertain economic outlook, the Wall Street
Journal reported today. Ford North American
chief Mark Fields, speaking at an industry conference in
size='3'>Traverse City
size='3'>Mich.
the auto maker will announce details of its updated restructuring plan
in late September and that plan will be 'a combination of both' new cost
cutting and accelerating the existing plan that was scheduled to cut as
many as 30,000 jobs by 2012. Separately, top executives from GM outlined
their case that turnaround plans for the world's No. 1 auto maker by
production are making steady progress.
href='http://online.wsj.com/article/SB115512775308031002.html?mod=us_business_whats_news'>Read
more. (Registration required.)
id='5'>Concerns Raised
over
size='3'>Delphi
Contracts
Two hedge funds have
asked a federal bankruptcy judge to exercise caution when
considering
size='3'>Delphi
nearly $5 billion worth of auto supply contracts with General Motors
Corp., Portfolio
Media reported yesterday. Appaloosa Management
L.P. and Harbinger Capital Partners expressed concern on Tuesday that a
'wholesale' rejection of GM contracts could lead the auto giant to seek
massive amounts of damages from its former unit, according to court
documents. A hearing is scheduled next week for U.S. Bankruptcy
Judge Robert
Drain to consider
w:st='on'>
size='3'>Delphi
thousands of contracts with the world’s largest
automaker.
id='6'>Collins & Aikman
Moves to Avoid $31 Million Claim
Auto parts manufacturer
Collins & Aikman Corp. is seeking bankruptcy court approval to sell
its stake in an unprofitable joint venture and evade a $31 million claim
against it in the process,
size='3'>Portfolio Media reported yesterday.
If the motion is approved, Collins & Aikman will be allowed to sell
its 69 percent ownership of a venture it entered into with Mobis Alabama
LLC. Mobis would buy out the rights for $3.92 million in cash, then pay
an additional $7.54 million to settle an intercompany claim and drop the
$31.24 million claim it filed against Collins & Aikman. The U.S.
Bankruptcy Court for the Eastern District of Michigan in
size='3'>Detroit
consider the agreement in a hearing on Aug. 17.
id='7'>Tower Looks to Shed
Asbestos Liability
w:st='on'>
size='3'>Bankrupt
face='Times New Roman' size='3'>Tower
Automotive Inc. has revealed it is seeking court approval
to sell an 86-acre plot of land partially contaminated with
asbestos, Portfolio
Media reported yesterday. If the
land—located in
w:st='on'>
size='3'>Milwaukee
w:st='on'>
size='3'>Wis.
its defunct manufacturing facilities didn’t need substantial
environmental remediation, its fair market value would be $7.5 million,
court documents say. However, Tower estimated its value at $2 million
due to the need for environmental remediation. Potential buyers
will have to post a $1 million letter of credit in
addition to the purchase price in order to secure their obligation to
clean up the site, according to court papers. Tower will also have to
pay a 4 percent broker’s fee. Tower filed a motion Friday asking
U.S. Bankruptcy Judge Alan Gropper to approve the sale
of the land, which is part of a 148-acre parcel of real estate owned by
the debtor.
id='8'>Tentative Agreement Reached
in Adelphia Investor Suit
In the latest development
in the fallout over the accounting fraud at Adelphia Communications
Corp., a federal court has given tentative approval to a $250 million
agreement by 39 financial institutions that would settle a securities
class action suit,
size='3'>Portfolio Media reported yesterday.
The proposed settlement was revealed in recent securities filings that
granted initial approval by the U.S. District Court for the
Southern
size='3'>District of
w:st='on'>New
York
slated to be reviewed for final approval at a Nov. 10 hearing. Wachovia
Corp., which acted as an underwriter and lender in certain Adelphia
securities offerings, said in a filing with the U.S. Securities and
Exchange Commission last Friday that its share of the class action
settlement, if approved, would be approximately $1.25 million. The bank
added that other private civil actions had not yet been settled. This
week, Bank of America also confirmed the proposed settlement in
an SEC filing,
saying that it was one of the 39 financial institutions that would
collectively make the $250 million pre-tax payment to the settlement
class.
SEC
Urges Case Against Refco
Brokers to Move Forward
The Securities and
Exchange Commission urged for the case against three former Refco Inc.
securities dealers accused of fraudulently trading shares of software
maker Sedona should move forward,
size='3'>Portfolio Media reported yesterday.
“They followed their customer’s directions to depress the
price of Sedona’s stock by ‘selling short’ massive
amounts of the stock in a manner designed to conceal the identity of
their customer and their own wrongdoing,” SEC attorneys said in
the brief. The suit, filed in early April,
alleges that Andreas Badian collaborated with former Refco Inc. brokers
Jacob Spinner, Mottes Drillman and Jeffrey Graham. The brokers have been
charged by the SEC with a short-selling scheme to ruin a software
company to benefit a Swiss client.
id='10'>Court Approves Conversion of
Insurance Groups’ Bankruptcy to Chapter 11
The U.S. Bankruptcy Court
in the Northern District of Alabama approved Vesta Insurance Group's
motion to convert its involuntary chapter 7 petition filed on July 18 to
a chapter 11 filing, BankruptcyData.com reported yesterday. The District
Court of Travis County, Texas, issued a permanent injunction on Aug. 1
against the company's six
w:st='on'>
size='3'>Texas
size='3'>subsidiaries, which were placed in liquidation. Units in
size='3'>Hawaii
w:st='on'>
size='3'>Florida
consented to similar orders in their respective state Courts. The
Alabama Bankruptcy Court scheduled a creditors meeting on Sept. 12 and
established Dec. 11 as the final date by which interested parties must
file proofs of claim.
id='11'>Judge Refuses to Drop
Charges in Stock Option Backdating Case
A federal magistrate declined
Wednesday to dismiss a criminal case against the first two executives
charged in connection with the backdating of stock options, ruling that
there were enough accusations for the case to continue, the Associated
Press reported yesterday. Gregory L. Reyes, former chief executive of
San Jose, Calif.-based Brocade Communications Systems, and Stephanie
Jensen, former vice president of human resources, were charged July 20
with securities fraud. The Justice Department said the backdating of
stock options was part of the cause for the company to restate financial
results for fiscal years 1999 through 2004, cutting 20 cents a share off
reported earnings. The two defendants were ordered to appear on Aug. 30
for another hearing to determine whether there was enough evidence for a
href='http://www.nytimes.com/2006/08/10/business/10brocade.html?_r=1&oref=slogin&pagewanted=print'>Read
more.
Backs Delay in Rule on
Small-Company Audits
The Securities and Exchange
Commission, bowing to complaints that the Sarbanes-Oxley Act puts too
big a burden on small companies, said yesterday that the deadline for
them to comply with new auditing rules should be put off until the end
of next year, Bloomberg News reported today. The SEC proposed a
six-month delay to the July 15, 2007, date for small companies to start
reporting whether financial controls promote accurate reports and
prevent fraud. The companies could also wait until the end of 2008 to
have outside auditors test and certify their controls.
href='http://www.nytimes.com/2006/08/10/business/10sec.html?pagewanted=print'>Read
more.
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