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July 3, 2007
name='1'>Solutia Asks Judge to
Approve Pact with Monsanto
Solutia Inc. has asked
the court overseeing
its chapter 11 proceedings to approve two settlement deals the bankrupt
chemical products
maker says are integral to shedding legacy liabilities and paving the
way to a successful
restructuring of the company,
size='3'>Bankruptcy
Law360 reported yesterday.
size='3'>Monsanto
would assume all of Solutia's legacy tort liabilities and a substantial
portion of Solutia's
environmental liabilities under the agreement. The liabilities at issue
in this case include
environmental remediation claims for sites polluted by chemicals like
dioxin, as well as
personal-injury claims for exposure to chemicals.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=28414'>Read
more. (Registration required.)
name='2'>Marcal Takes Issue with
$1 Billion EPA Claim
Bankrupt paper company
Marcal Paper Mills
Inc., which filed its reorganization plan last week, has objected to a
nearly $1 billion
government claim that could complicate its emergence from chapter
11,
face='Times


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New
Roman' size='3'>Bankruptcy
Law360
reported yesterday. Though the U.S. Environmental
Protection Agency has
acknowledged that many companies were responsible for the pollution, it
said it could charge
a single contributor for the entire cleanup under the Superfund law.
Marcal would then
ostensibly file contribution claims against the other companies. In its
June 25
reorganization plan, Marcal said it had secured a $60 million investment
from private equity
firm Apollo Capital Management LP and that it hoped to emerge from
chapter 11 by the
fall.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=28392'>Read
more. (Registration required.)
name='3'>Calpine Takes Aim at
Rosetta in $400 Million Suit
Calpine Corp. is taking
Rosetta Resources
Inc. to court for allegedly underpaying Calpine by an estimated $400
million when the energy
giant sold its oil and gas assets to the independent oil and gas company
for $1.05
billion, Bankruptcy
Law360
size='3'>reported yesterday. Calpine said it had learned that the assets
sold to
Rosetta—which included substantial natural gas reserves in
w:st='on'>
size='3'>California
size='3'>’s
size='3'>Sacramento
w:st='on'>Basin
Texas, the Gulf of
Mexico, and the
Mountains—were inadequately
assessed at the time of
the July 2005 transaction. Calpine added that the sale ultimately
exacerbated its financial
crisis because it eliminated one of Calpine’s most significant
hedges against natural
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=28494'>Read
more. (Registration required.)
Bankruptcy-Exit Loan
ASC Inc. is asking a
court to approve
financing that would let the company exit bankruptcy while keeping its
business running as a
going concern, the Associated Press reported yesterday. The
w:st='on'>
size='3'>Southgate,
w:st='on'>
face='Times New Roman'
size='3'>Mich., maker
of automobile sunroofs needs more than $3 million to keep operating
through the end of this
month, according to its July budget filed Friday with the financing
request. Noteholder
American Specialty Car Holdings LLC has agreed to provide ASC's
bankruptcy-exit financing,
which will allow the manufacturer to continue operating its assembly
plant in
size='3'>Lansing,
w:st='on'>
face='Times New Roman' size='3'>Mich.
after
the company is sold. Bankruptcy Judge Thomas
J. Tucker hasn't yet scheduled a hearing on
the matter.
href='http://biz.yahoo.com/ap/070702/asc_bankruptcy.html?.v=1'>Read
more.
Risk Control after Hedge Fund Collapse
In the wake of the
meltdown of two prominent
internal hedge funds, executives at Wall Street firm Bear Stearns Cos.
plan to strengthen
the risk controls in their money-management unit, the
face='Times New Roman'
size='3'>Wall Street Journal reported
today. The company says
its priority is giving the parent company greater oversight of the
money-management
division, a unit with $60 billion under management that includes hedge
funds, private equity
and bond funds. Last
month, two of the
division's hedge funds, the High-Grade Structured Credit Strategies Fund
and the High-Grade
Structured Credit Strategies Enhanced Leverage Fund, imploded after bets
on the market for
subprime home loans went bust.
href='http://online.wsj.com/article/SB118342047164556014.html?mod=home_whats_news_us'>Read
more. (Registration required.)
name='6'>MediCor Files for Chapter
11
MediCor Ltd. filed for
chapter 11 protection
yesterday in the U.S. Bankruptcy Court in
w:st='on'>
w:st='on'>
size='3'>Wilmington
size='3'>,
size='3'>Del., listing
debts of $121 million,
the Associated Press reported yesterday. In the filing on Friday, it
listed Sirius Capital
of Las Vegas as its top unsecured creditor, asserting a disputed claim
for more than $43
million. MediCor's bankruptcy petition listed seven affiliates that are
also filing for
protection from creditors, including International Integrated Inc., a
company based in
the
size='3'>British Virgin
Islands. The North Las Vegas,
Nev.-based company makes and
sells products for medical specialties for plastic surgery and
dermatology
services.
Facilities Commitment with Morgan Stanley
Bally Total Fitness Holding
Corp., which is
planning to file for chapter 11 bankruptcy, said yesterday that Morgan
Stanley Senior
Funding Inc. will arrange for $292 million of super-priority secured
debtor-in-possession
(DIP) and senior secured exit credit facilities, Reuters reported
yesterday. These provide
for a $50 million revolving credit facility and a $242 million term
loan, the fitness center
operator said. The DIP facility will refinance the existing senior
credit facility and
provide working capital during the pendency of its planned chapter 11
bankruptcy case, Bally
said.
w:st='on'>
face='Times New Roman' size='3'>
name='8'>Texas
face='Times


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Roman'
size='3'> Resort Files for
Bankruptcy
A
w:st='on'>
face='Times New Roman' size='3'>West Texas
size='3'>resort billed
by its owner as an exclusive desert getaway for the rich and famous
filed for bankruptcy
protection, the Associated Press reported yesterday. The filing came a
day before a
size='3'>Connecticut real
estate loan company
was set to foreclose on an unpaid $12.5 million loan and sell at auction
the 25,000-acre
Lajitas, the Ultimate Hideout resort. According to the chapter 11
filing, Lajitas Resort
Ltd. claims it owes more than $1 million to its top 20 largest unsecured
creditors,
including about $40,000 to the Golf Channel. The debt to Prime Assets
Funding, the
size='3'>Greenwich,
w:st='on'>
face='Times New Roman'
size='3'>Conn., company
that lent Lajitas the $12.5 million more than a year ago, was not listed
in the
href='http://www.boston.com/news/local/connecticut/articles/2007/07/02/texas_resort_avoids_f
oreclosure_with_bankruptcy_court_filing/'>Read
more.
with Lenders
Movie Gallery Inc. said
yesterday that it has
failed to meet terms of its senior credit facility, sending its stock
below $1 a share and
triggering speculation that the movie rental chain was on the verge of
bankruptcy, Reuters
reported yesterday. Movie Gallery, which has seen same-store sales
plunge for the past year
as it loses market share to online DVD rentals, said it was in talks
with its lenders on a
possible waiver, amendment, forbearance or similar agreement. The
company said it would
accelerate store closures and consolidations and may put itself up for
sale. It has fully
drawn the remaining availability of its credit revolver and has about
$50 million of cash on
hand. Movie Gallery, whose market capitalization dropped late on Monday
to about $27
million, has total liabilities of $1.4 billion.
href='http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-07
-02T231233Z_01_N02376372_RTRIDST_0_MOVIEGALLERY-DEBT-UPDATE-2.XML'>Read
more.
name='10'>Goldman Family Buys
Rights to O.J. Book
The family of Ron Goldman has
purchased the rights
to O.J. Simpson's canceled book, ''If I Did It,'' from a court-appointed
bankruptcy trustee
in a settlement reached yesterday, the Associated Press reported. The
book rights will be
held in the name of Ron Goldman LLC, Goldman family attorney David Cook
said. The Goldmans
own the copyright, media rights and movie rights. They also acquired
Simpson's name,
likeness, life story and right of publicity in connection with the book,
according to court
documents. According to the settlement, the Goldmans must pay the
bankruptcy trustee 10
percent of the first $4 million in gross proceeds and a percentage of
all proceeds beyond
href='http://www.nytimes.com/aponline/arts/AP-Simpson-Lawsuit.html?pagewanted=print'>Read
more.
name='11'>Massey Ordered to Pay
Nearly $220 Million
A jury yesterday ordered
Massey Energy Co.
and a subsidiary to pay more than $219 million in damages to
Wheeling-Pittsburgh Corp. in a
contract dispute, the Associated Press reported yesterday. Wheeling-Pitt
sued Massey
subsidiary Central West Virginia Energy Co. in April 2005, claiming it
failed to deliver
104,000 tons of metallurgical-grade coal per month to the steelmaker as
required under a
contract that extended to 2010. Wheeling-Pitt's lawsuit indicated that
Central West Virginia
Energy blamed production problems for the shortfalls. Instead,
Wheeling-Pitt claims that
Central West Virginia Energy started diverting coal from its contract to
the spot market to
take advantage of higher prices.
face='Times New Roman'
size='3'>Central West Virginia Energy
has supplied
Wheeling-Pitt with metallurgical coal since 1993. In 2002, while
Wheeling-Pitt was in
bankruptcy, a new agreement was signed and approved by a federal
bankruptcy judge that
extended the contract through 2010.
href='http://www.nytimes.com/aponline/business/AP-Wheeling-Pitt-Massey.html?pagewanted=print
'>Read more.
International
name='12'>Parmalat Ordered to
Face Investor Lawsuit
A
w:st='on'>
w:st='on'>
size='3'>Manhattan
federal judge has rejected Parmalat SpA's request to
dismiss an investor
class-action lawsuit stemming from the Italian dairy company's December
2003 collapse in an
accounting scandal, Reuters reported yesterday. The ruling is a defeat
for Chief Executive
Enrico Bondi, who is trying to distance the reorganized Parmalat from
prior management, and
is seeking billions of dollars of damages from the company's former
bankers. In a June 28
ruling, U.S. District Judge Lewis Kaplan said the reorganized Parmalat
'expressly agreed'
when it emerged from
size='3'>Europe's largest bankruptcy
in 2005 to assume the
old Parmalat's liabilities for fraud that the investors alleged. Kaplan
also rejected
Bondi's contention that the investors waited too long after learning of
the alleged fraud to
file claims against the reorganized Parmalat. He said that procedural
developments in the
case pushed back their filing deadline.
href='http://money.cnn.com/2007/07/02/news/companies/parmalat_suit.reut/index.htm?section=mo
ney_email_alerts'>Read more.
name='13'>FSA Set to Voice
Concerns on British Subprime Lending Market
The British Financial
Services Authority
(FSA) will raise concerns over the practices of brokers and lenders
working in subprime
mortgages when it publishes the results of a review of the market on
Wednesday, Reuters
reported today. Trouble in the
w:st='on'>
size='3'>U.S. subprime market
has not spread to
the
face='Times New Roman'
size='3'>United Kingdom
size='3'>, where
lenders have been less aggressive in their lending practices. However
FSA has said it plans
to increase focus this year on sectors of the mortgage market where
risks to consumers are
greater -- including lifetime mortgages and the subprime market. The FSA
has in the past
acknowledged differences between the U.K. and U.S. markets, but the head
of its retail
markets division, Clive Briault, said in May that parallels cannot be
ignored, as concerns
grow that even a slowdown in U.K. house price rises could expose
over-extended
href='http://today.reuters.co.uk/news/articlebusiness.aspx?type=businessNews&storyid=200
7-07-03T091221Z_01_L03304062_RTRUKOC_0_UK-FSA-SUBPRIME.xml'>Read
more.
href='http://today.reuters.co.uk/news/articlebusiness.aspx?type=businessNews&storyid=200
7-07-03T091221Z_01_L03304062_RTRUKOC_0_UK-FSA-SUBPRIME.xml'>