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June 23, 2009
Agencies Reach Agreement on
Derivative Oversight
The two Federal agencies responsible for overseeing
financial trading have reached broad agreement for the first
time over how to regulate the vast market in derivatives,
the
size='3'>Washington Post reported today. At a
congressional hearing yesterday, Securities and Exchange Commission
Chairman Mary L. Schapiro proposed that her agency oversee derivatives
linked to stocks, bonds and securities, and that the Commodity Futures
Trading Commission oversee all other derivatives. Credit-default swaps,
which are linked to the value of bonds, would be overseen by the SEC
under the proposed agreement. Still being negotiated between the SEC and
CFTC is oversight of derivatives linked to indexes -- for instance,
speculating on whether the Dow Jones industrial average will rise or
fall. CTFC Chairman Gary Gensler wants to go a step further and require
that derivatives be traded on electronic exchanges, just as stocks are
traded on the New York Stock Exchange and the Nasdaq.
href='http://www.washingtonpost.com/wp-dyn/content/article/2009/06/22/AR2009062201970_pf.html'>Read
more.
href='http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=34ee16e5-5bf4-4bb1-85db-d05d911c08a0'>Click
here to read the prepared witness testimony from yesterday’s
hearing.
Chrysler Dealer Appeals
Franchise Terminations
A pair of former Chrysler LLC dealerships has filed an
appeal of a bankruptcy judge's order terminating their franchises and
those of more than 700 others as part of Chrysler's restructuring plan,
the Associated Press reported yesterday. Tarbox Motors Inc. of North
Kingstown, R.I., and Tarbox Chrysler Jeep LLC of Attleboro, Mass., filed
a notice in bankruptcy court on Friday, saying that they were appealing
the decision to U.S. District Court. Earlier this month, Bankruptcy
Judge
size='3'>Arthur Gonzalez ruled that Auburn
Hills, Mich.-based Chrysler LLC could terminate the franchise agreements
of 789 of its dealers as part of its restructuring plan. However,
dealers have argued that the move wouldn't save the company any
substantial money, and would result in the shuttering of hundreds of
dealerships and the elimination of thousands of jobs.
href='http://www.washingtonpost.com/wp-dyn/content/article/2009/06/22/AR2009062201891.html'>Read
more.
JPMorgan to Take on
Washington Mutual’s Savings Plan, Liabilities
Bankrupt thrift holding company Washington Mutual Inc.
and the buyer of its banking operations, JPMorgan Chase Bank NA, have
reached a settlement in a dispute over a WaMu employee retirement
savings plan with JPMorgan Chase agreeing to take over sponsorship of
the plan and assume certain liabilities,
face='Times






New
Roman'
size='3'>Bankruptcy Law360 reported yesterday.
The parties filed a motion Friday in the U.S. Bankruptcy Court for the
District of Delaware, asking the judge to approve the settlement
regarding the former WaMu employees’ 401(a) plan, which was part
of nearly $8 billion in assets claimed by both JPMorgan Chase and the
bankrupt company. While JPMorgan Chase asserted that it should take over
sponsorship of the plan, it initially sought to avoid assuming certain
liabilities for the plan stemming from the collapse of WaMu and
subsequent bankruptcy of WMI, according to the motion.
href='http://bankruptcy.law360.com/articles/107518'>Read
more. (Subscription required.)
after Asset Sale
Having sold its core assets and spent the money set
aside for its chapter 11 proceedings, former recreational vehicle
manufacturer Monaco Coach Corp. (MCC) on Friday urged a bankruptcy court
to quickly convert the case to a chapter 7 liquidation, Bankruptcy
Law360 reported yesterday. MCC closed the sale of its motor home
resorts on June 4, and announced that truck manufacturer Navistar Inc.
acquired the debtor’s RV manufacturing assets for approximately
$47 million. The new company, named Monaco RV LLC, a wholly owned
subsidiary of Coburg, Ore.-based Navistar, plans to resume production in
the coming months. The case is In re Monaco Coach Corp. et al.,
size='3'>case number 09-10750, in the U.S. Bankruptcy Court for the
District of Delaware.
href='http://bankruptcy.law360.com/articles/107549'>Read
more. (Subscription required.)
Creditors Look to Force
Vaccine Maker into Bankruptcy
Creditors of Protein Sciences Corp., which started
making a vaccine to protect humans against the H1N1 influenza virus last
week, filed a petition to force the company into bankruptcy to be
liquidated to satisfy claims, Bloomberg News reported yesterday.
Creditors filed an involuntary chapter 7 petition against the Meriden,
Conn.-based company listing claims of $11.7 million, according to court
documents filed today in U.S. Bankruptcy Court for the District of
Delaware. Protein Sciences said in a June 15 statement it started
manufacturing “the first and only” vaccine, PanBlok, that
would be able to combat the H1N1 influenza virus, for the next few
months. The closely-held company said it would be able to produce at
least 100,000 doses of the vaccine per week. The case is
face='Times






New
Roman'
size='3'>In re Protein Sciences Corp.,
09-12151, U.S. Bankruptcy Court, District of Delaware
(Wilmington).
href='http://www.bloomberg.com/apps/news?pid=20601103&sid=aR0F8OUy6K9c'>Read
more.
11 Protection
Satellite-launch services provider Sea Launch Co.
and five affiliates filed for chapter 11 protection, citing
liquidity concerns and recurring losses from operations, Reuters
reported yesterday. Sea Launch listed assets of up to $500 million and
liabilities of more than $1 billion in its filing. The Long Beach,
Calif.-based company said that it intends to explore the sale of one or
more of its divisions. Sea Launch, which offers commercial space launch
capabilities from the Baikonur Space Center in Kazakhstan, is owned by
among others, Boeing Co., Russia's RSC Energia and Norway's Aker ASA.
The case In re Sea
Launch Co LLC et al., U.S. Bankruptcy Court,
District of Delaware. No. 09-12153.
href='http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSBNG17593820090623'>Read
more.
JPMorgan Aims to Liquidate
Home Lender
Creditors led by a unit of JPMorgan Chase & Co.
are pushing to liquidate bankrupt mortgage lender Accredited Home
Lenders Holding Co., claiming that the company is burning off as much as
$10,000 per day and has sold its one asset of any possible value to
an insider without a proper auction,
face='Times






New
Roman'
size='3'>Bankruptcy Law360 reported yesterday.
In a motion filed in the U.S. Bankruptcy Court for the District of
Delaware on Friday, JPMorgan Chase Bank NA and two structured investment
vehicles owned by Kodiak Funding LP argue that the sale of Accredited's
mortgage servicing platform should be blocked and that the mortgage
lender should be liquidated to preserve what little value was left for
creditors. The parties are also asking that Judge
face='Times New





Roman'>
face='Times






New
Roman'
size='3'>Mary F. Walrath appoint a trustee to
oversee the liquidation and preserve as much value as possible for
creditors and for the judge to limit the time for Accredited to object
to their motion.
href='http://bankruptcy.law360.com/articles/107554'>Read
more. (Subscription required.)
Bankrupt Telecom Company
Sues Paul Weiss for $140 Million
Metromedia International Group Inc. filed a $140
million malpractice suit against Paul Weiss Rifkind Wharton &
Garrison LLP for “injecting ambiguity” into a certificate of
designation it drafted for the telecommunications holding
company,
size='3'>Bankruptcy Law360 reported
yestereday. The Charlotte, N.C.-based company's allegations relate to a
September 1997 certificate of designation for its preferred stock, which
Paul Weiss drafted, negotiated and filed. Metromedia contends that the
COD contained an error allowing preferred shareholders to “double
dip” from their preferred stock in the event of conversion to
common stock. That mistake, in turn, sparked a post-merger appraisal
dispute and a $188 million judgment on June 5 against Metromedia,
according to the malpractice suit.
href='http://bankruptcy.law360.com/articles/107495'>Read more.
(Subscription required.)
Madoff Lawsuits Add Details
about Fraud
Three lawsuits filed yesterday provided new details
about what regulators say went on inside Bernard L. Madoff’s
long-running Ponzi scheme, including information about who might have
helped perpetuate the fraud for so long, the
face='Times New Roman' size='3'>New York Times
size='3'>reported today. In one lawsuit, the Securities and Exchange
Commission filed civil fraud charges against Stanley Chais, a prominent
California money manager and one of Madoff’s earliest investors,
accusing Chais of deceiving his clients and ignoring obvious signs of
fraud. The second civil fraud case, also filed by the SEC, contended
that three senior executives at the Cohmad Securities Corporation, a
small brokerage firm co-founded by Madoff, knowingly helped finance the
Ponzi scheme and conceal it from regulators for years. The third suit,
filed in federal bankruptcy court by the trustee
face='Times New Roman'>Irving
Picard, also named Cohmad and its three senior
executives, along with more than a dozen of its current or former
employees. It seeks to recover millions of dollars in fees and profits
the defendants received from Madoff over the years.
href='http://www.nytimes.com/2009/06/23/business/23madoff.html?_r=1&ref=business&pagewanted=print'>Read
more.
Coyotes' Sale Deadline
Shifts as New Bid Arises
Bankruptcy Judge
face='Times






New
Roman'
size='3'>Redfield T. Baum moved up the
deadline for the proposed sale of the Phoenix Coyotes as Chicago Bulls
and White Sox owner Jerry Reinsdorf promised a bid in a hearing
yesterday that would keep the team in Arizona, the Associated Press
reported yesterday. The new deadline for the sale is Aug. 5. The NHL
said that it could meet that deadline but the city of Glendale, Ariz.,
said it didn't think a new lease agreement could be worked out by then.
Judge Baum set a fallback date in September for a bid to relocate the
team to Hamilton, Ontario, if a local sale fails to go through.
href='http://www.washingtonpost.com/wp-dyn/content/article/2009/06/22/AR2009062202622.html'>Read
more.
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