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April 19, 2006
Autos
id='1'>Ford Urges Bankruptcy
Reform for Auto Parts Sector
A Ford Motor Co.
executive said
w:st='on'>
size='3'>U.S.
size='3'>automakers should be granted a special provision under
bankruptcy law that protects them from damaging production disruptions
if key suppliers fail, Reuters reported yesterday. Tony Brown, Ford's
senior vice president for global purchasing, said the loophole would
grant automakers access to proprietary tooling technology if suppliers
are in bankruptcy. Tying up expensive tools in the lengthy bankruptcy
process would trigger costly shutdowns for both automakers and companies
in the supply chain, said Brown, who directs more than $90 billion in
parts and materials purchasing for Ford. The recent reform of
size='3'>U.S.
'didn't reform things enough in our opinion,' Brown said, noting that
Ford was lobbying
w:st='on'>
size='3'>U.S.
size='3'>lawmakers for the special provision. Brown conceded he was
seeking special treatment for the troubled
w:st='on'>
size='3'>U.S.
size='3'>auto industry, which has been rocked by the bankruptcy of major
suppliers including Delphi Corp. and Tower Automotive Inc.
href='http://news.yahoo.com/s/nm/20060418/bs_nm/autos_ford_reform_dc_1'>Read
more.
The tens of thousands of
General Motors workers who face decisions about the company's buyout
offers before an early June deadline are getting a crash course in
medical cost-benefit analysis, according to today’s
New York Times
size='3'>. The prospect of losing General Motors health coverage can be
terrifying for workers who went straight from high school into factory
jobs and have few good prospects for employment beyond the assembly
line. The biggest lump sum the company is dangling is $140,000, payable
to workers with at least 10 years on the job who are willing to walk
away without continuing benefits. Since GM has not added many new
workers since the early 1990s, about 95,000 workers fall into that
category. For those with less than 10 years at the company —
currently about 18,000 union workers — the buyout would be
$70,000. 'The
chances that GM goes bankrupt is still 50 percent,' said Dietmar
Ostermann, an auto industry expert who is a senior partner at PRTM, an
international management consulting firm. 'A strike at
w:st='on'>
size='3'>Delphi or GM will push GM
over the edge.' If GM files for bankruptcy, all health care
benefits could be trimmed.
href='http://www.nytimes.com/2006/04/19/business/19calculus.html?pagewanted=print'>Read
more.
In related news, the auto
industry's efforts to rein in employee health costs is drawing an
expensive reaction, as union workers and their spouses hurry to Michigan
doctors for elective procedures before they lose their comprehensive
medical benefits, the
size='3'>New York Times reported today.
Hospitals, doctors and insurers have all noticed a surge in demand for
elective surgery since last year when Rick Wagoner, the chief executive
of General Motors, led a public relations campaign to prepare auto
workers for health care cutbacks, and
face='Times New Roman' size='3'>Delphi
size='3'>, the GM parts supplier, filed for bankruptcy protection. Hip,
knee and shoulder replacements at the Henry Ford Health System were 'up
20 percent in the second half of last year and remain strong,' said
Robert Riney, chief operating officer of the system, the largest
hospital group in the Detroit area.
href='http://www.nytimes.com/2006/04/19/business/19health.html?_r=1&oref=slogin&pagewanted=print'>Read
more.
face='Times New Roman'
size='3'>
id='3'>Delphi
size='3'> Puts $59 Million into Pension
Plans
Delphi said it has
contributed about $59 million to its domestic pension plans as union
bargainers this week craft a counter-offer to Delphi Corp.’s deep
pay and job cuts, the
size='3'>(
face='Times New Roman' size='3'>Ohio
size='3'>) Tribune Chronicle reported today.
The auto parts maker also said it has received more time from lenders to
file its financial statements and make deposits for a plan to trim its
hourly work force. Negotiators for 8,500 International Union of
Electrical Workers-Communications Workers of America at Delphi were
scheduled to be in
face='Times New Roman' size='3'>Troy
size='3'>,
size='3'>Mich.
and longer if needed to fashion their contract proposal to the
company. IUE-CWA
officials expect to have a counter-offer before Friday. The pension plan
contributions is part of $300 million in minimum funding that was due
Friday, the company said. It said it is permitted under chapter 11 to
contribute part of the amount due after its October bankruptcy filing.
The unpaid portion remains payable as a claim and will be determined in
the company’s reorganization plan, it said.
href='http://www.tribune-chronicle.com/business/articles.asp?articleID=2821'>Read
more.
id='4'>Anchor Glass Exits Chapter
11
Anchor Glass Container
Corp.'s proposed reorganization plan was confirmed by the U.S.
Bankruptcy Court of the Middle District of Florida's Tampa Division,
the Tampa Bay Business
Journal reported yesterday. Tampa, Fla.-based
Anchor is the third largest manufacturer of glass containers in
the
face='Times New Roman' size='3'>United
States
expects to emerge from chapter 11 in early May 2006. Under the terms of
the reorganization plan, Anchor's senior secured noteholders will own
the majority of the company's equity and Anchor will exit chapter 11 as
a privately held company. Exit financing commitments in the amount of
$145 million for a term loan and $70 million for a revolving credit
facility have been received from Credit Suisse. Unsecured creditors will
receive a cash distribution of approximately $8.6 million. Based on
current estimates, unsecured claims approximate $120 million. Current
equity holders will receive no distribution, and their shares will be
cancelled.
href='http://tampabay.bizjournals.com/tampabay/stories/2006/04/17/daily18.html?t=printable'>Read
more.
w:st='on'>
size='3'>
id='5'>Oneida
Committee
Shareholders of bankrupt
flatware maker Oneida Ltd. have asked a judge to form an official equity
committee, claiming that the creditors committee will not challenge the
company as it reorganizes,
size='3'>Portfolio Media reported today.
“There is a very good chance that, absent the appointment of an
official equity committee, [
w:st='on'>
size='3'>Oneida
cases will appear from hindsight as a rigged proceeding,”
equity-holders said in a court filing. Under the terms of the
pre-packaged reorganization plan that
w:st='on'>
size='3'>Oneida
its chapter 11 petition, secured creditors are slated to be repaid
completely. Equity-holders say that the guarantee of full recovery will
prevent creditors from questioning any of the steps
w:st='on'>
size='3'>Oneida
toward reemergence. Equity-holders have also questioned the fairness of
the pre-packaged reorganization plan itself. A hearing on the
shareholders’ request will be held on May 1. The case is
Oneida Ltd.
size='3'>, chapter 11 petition number 06-10489-alg, in the
w:st='on'>
size='3'>U.S.
size='3'>Bankruptcy Court for the Southern District of New
York.
Delta
Deal May Spark Quicker
Turnaround of Legal Fees
Customers may not be the
only ones slated to benefit from the surprise turnaround deal that has
possibly been forged between Delta Air Lines and its pilots
union, Portfolio
Media reported yesterday. Coming just weeks
after the U.S. Trustee overseeing the carrier’s bankruptcy
proceedings made a bid to withhold portions of legal fees, the tentative
deal may mean that a slew of law firms involved in the case are one step
closer to netting millions of dollars in profits from the case. Last
month, U.S. Trustee
size='3'>Deirdre Martini asked the judge in
the case to hold back part of the payments for work on the early stages
of the case until some professionals provide more information about
their fees. This week, however, Delta narrowly averted what would have
been a crippling strike when it reached a tentative deal on pay and
benefit cuts, a sudden turnaround in what seemed to be an inevitable
meltdown in negotiations between the embattled carrier and its
disgruntled workers. That could mean that nine law firms involved in the
proceedings—who have already petitioned for court approval of
almost $41.2 million in initial work completed during the first four and
a half months of the case—could see a paycheck sooner than expected.
id='7'>Adelphia's
size='3'>Sale
a Blow
An attempt by management
of Adelphia Communications Corp. to resolve a battle between two
opposing creditor factions through a settlement suffered a setback, as
one of the groups denounced the proposal in a letter to Adelphia's
board, the Wall Street
Journal reported yesterday. Under the contract
the three signed last year, that deal, valued at $16.9 billion, has to
close by July 31, which can't happen until a bankruptcy court approves
Adelphia's reorganization plan. To speed up the process, Adelphia's
management last week proposed a plan to settle the battle over roughly
$2 billion in proceeds between owners of debt in Adelphia's holding
company and those holding notes issued by one of its subsidiaries,
Arahova Communications Inc. Under the plan, Arahova creditors would get
$1.04 for every $1 of notes they hold, while holding creditors would get
between 14 cents and 43 cents. In its letter to the board, a committee
of holding-company noteholders calls on the board to abandon the
settlement plan and to 'stop pandering' to the Arahova creditors. 'We do
not know whether the debtors' conduct reflects incompetence, conflicts
of interest, a calculated attempt to force a compromise by influencing
market prices or manufacturing a confirmation crisis, or some other
explanation that eludes us,' the letter states.
href='http://online.wsj.com/article/SB114537287591828733.html'>Read
more. (Registration required).
Ohio
EMS Company Files for
Chapter 11
The default on a $1.5
million bank loan used to finance a divorce settlement has sent Pellin
Emergency Medical Services to bankruptcy court to stop a creditor from
towing away its ambulances, the
size='3'>Youngstown Business Journal reported
today. Pellin filed for chapter 11 hours after agents of JPMorgan Chase
Bank appeared April 11 at the company’s headquarters and
“attempt[ed] to levy upon and tow [its] ambulances,” court
documents state. Five ambulances and four other vehicles were
confiscated but were returned following the bankruptcy filing. “We
didn’t miss any trips. We were able to meet the needs of all our
patients,” said Vanessa Pellin, company owner. Total assets and
liabilities were not listed in the chapter 11 petition. First-day
bankruptcy motions stipulate that the company has attempted since
October to refinance its loans with Chase Bank, and has “made
significant payments to its unsecured creditors.” Following a
hearing Monday, U.S. Bankruptcy Judge
size='3'>Kay Woods granted the company’s
motions to use cash collateral, pay insurance premiums and pre-petition
wages and salaries.
href='http://www.business-journal.com/PellinFilesChapter11.asp'>Read
more.
w:st='on'>
size='3'>
id='9'>Florida
face='Times


New
Roman' size='3'> Bankruptcy Felon Receives Year in
Prison
A
w:st='on'>
size='3'>Florida
filed for bankruptcy 18 times using nine different Social Security
numbers in the past decade was sentenced Monday to a year in prison by a
federal judge, the
size='3'>Orlando Sentinel reported today. Enid
Alameda, who already was serving probation on state charges of insurance
fraud and grand theft, had pleaded guilty to one count of making a false
oath and account in connection with a bankruptcy proceeding. She signed
a plea agreement with prosecutors in January that spared her and the
government a trial.
href='http://www.orlandosentinel.com/news/local/orange/orl-mcfbriefs19_306apr19,0,5522601,print.story?coll=orl-news-headlines-orange'>Read
more.
International
id='10'>Yukos Withdraws Appeal in
Bankruptcy Case
Yukos has withdrawn an
appeal of a court decision to take on a bankruptcy lawsuit against the
embattled oil firm brought initially by a group of Western banks,
Interfax
size='3'>reported, citing unidentified officials at
w:st='on'>
size='3'>Moscow
Arbitration Appeals Court, according to today’s
face='Times New Roman' size='3'>Moscow Times.
Yukos has previously said it would appeal all rulings in the bankruptcy
case, which was taken over by state oil giant Rosneft days after it
began. Other Yukos appeals still pending include the court's decision to
put Yukos under the supervision of a court-appointed manager, Eduard
Rebgun, until June 27. At the end of the period, Rebgun will recommend
whether Yukos should be dismantled or restructured. Yukos also continues
to contend the court's decision to allow the case to be taken over by
Rosneft. The hearing of those appeals was adjourned until Wednesday for
technical reasons. It was unclear if Yukos was planning to withdraw
those appeals as well.
href='http://www.themoscowtimes.com/stories/2006/04/19/042.html'>Read
more.
href='http://www.themoscowtimes.com/stories/2006/04/19/042.html'>