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February 17, 2006
name='1'>Pension Bill Faces Yet Another Hurdle as Senate Debates
Number of Conferees
Legislation overhauling
the nation's pension laws hit a snag Thursday in the Senate as a dust-up
over how many senators will sit on the House-Senate conference committee
has stymied the slow-moving bill, CongressDaily reported today.
Senate Majority Leader Frist offered Thursday to give Democrats six
seats on the conference committee and Republicans nine, but
a spokesman for Senator Harry Reid (D-Nev.) said he did not
think Democrats 'could accept such a differential.'
size='3'>Reid earlier had objected to a seven-five ratio, since
Democrats were scuffling over who would be named to the negotiating
table and Reid wanted to appoint at least six. The House, which must
wait until after the Senate names its negotiators to follow suit, began
the President's Day recess Thursday. Senate Rules Chairman Lott also
said time is running short for conferees to begin work, warning that if
conferees are named in the week following the recess, 'another week will
be frittered away.' He noted that after this week the Senate only has 25
days of session before April 15, the date by which companies must make
their first pension payments of the year and the de facto deadline
lawmakers have been operating under for clearing the bill. When the
conference does begin, lawmakers must iron out provisions that differ in
the House and Senate versions on new pension funding rules, as well as
regulations covering so-called cash-balance pension plans. Provisions in
the House bill also are aimed at using tax incentives to encourage
retirement savings.
Bank of America, as
administrative agent for the secured lenders, and the official committee
of unsecured creditors filed a joint preliminary objection with the U.S.
Bankruptcy Court to Refco’s motion to sell Refco F/X
Associate’s assets and equity interests in Forex Capital Markets,
BankruptcyData.com reported today. The objection states that the terms
of the “stalking-horse offer” made by the 65 percent owners
and managers of FXCM is “inadequate” and further maintains
that the offer is “so low that recoveries would be materially
higher oi FXA were wound down and its assets (including the
approximately $56 million in cash currently held by FXA) were
distributed, and the 35 percent equity interests in FXCM held by Refco
Group were retained for future sale.”
name='3'>Hedge Fund Wants Milbank Bounced from
w:st='on'>
size='3'>Meridian
11
A hedge fund with a huge
interest in Meridian Automotive System Inc.’s bankruptcy has
accused Milbank Tweed Hadley & Co. of exploiting insider information
in the case, demanding that the firm be ousted from the
automaker’s chapter 11 proceedings, Portfolio Media reported
yesterday. On Monday, Stanfield Capital Partners Inc., a New York-based
fund with $25 billion in assets under management, requested that Milbank
Tweed be ejected from the
the firm’s conflict of interest. The request was filed in the U.S.
Bankruptcy Court in Delaware, as various creditor groups continue to
wrangle for leverage in the company’s chapter 11 plan bargaining.
Stanfield allegedly discussed with Milbank a financial plan that would
enable holders of $175 million in second-lien debt to provide more
secured financing to
w:st='on'>
size='3'>Meridian
hedge fund said in its filing. That idea is now being tossed around, as
the debate rages over the best way to finance
w:st='on'>
size='3'>Meridian
bankruptcy exit. Milbank Tweed is representing the first-lien
debt-holders, who oppose the plan because it requires them to ease up on
their control of the company’s assets. Despite its heavy debt
load, which totals $650 million in institutional debt and $109 million
in trade debt, the company is still considered to be
face='Times New Roman' size='3'>viable.
name='4'>Commentary: A Chance for
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Congress must make sure
to continue the support for the Bush administration’s commitment
to rebuilding southern
w:st='on'>
size='3'>Louisiana
according to an editorial in the
size='3'>New York Times today. On Wednesday,
President Bush's Katrina czar, Donald Powell, called for $4.2 billion
more to help
face='Times New Roman' size='3'>Louisiana
residents save severely damaged homes and, in some cases,
rebuild in safer areas. Congress needs to approve this request quickly
for
size='3'>and the surrounding parishes to have a fighting chance at
anything but a patchwork recovery. Right now, homeowners who are tied to
wrecked homes by their mortgages may have no choice but to attempt to
rebuild on the same spots or to declare bankruptcy. This money will
allow the homeowners to raise and strengthen some houses and will help
those in the most dangerous places find safer places to live. Combined
with the earlier $6.2 billion in community development block grants, the
money asked for in the current request would give
w:st='on'>
size='3'>Louisiana
to begin dealing with 100,000 severely damaged and 67,000 less-damaged
homes.
href='http://www.nytimes.com/2006/02/17/opinion/17fri2.html?_r=1&oref=slogin&…'>Read
more.
name='5'>Paul Weiss, Three Banks to Pay $180 Million in
size='3'>Boston
Settlement
Paul, Weiss, Rifkind, Wharton
& Garrison has agreed to pay part of a $180 million settlement of
claims arising from the 1998 bankruptcy of Boston Chicken Inc., the
New York Law Journal reported today Three investment banks also
participated in the settlement-Merrill Lynch & Co., Deutsche Bank
Securities and Morgan Stanley & Co.
size='3'>Paul Weiss and the banks denied any wrongdoing in the
settlement, the terms of which, including its apportionment, are
confidential. The court-appointed bankruptcy trustee for Boston Chicken,
Gerald K. Smith, sued Paul Weiss and the banks along with other
advisers, including accounting firm Arthur Andersen, which he alleged
participated in accounting and securities fraud that he claimed cost
investors in the fast-food chain over $1 billion.
size='3'>Most of the chain's assets were purchased by the McDonald's
Corp. in 2000 for $173.5 million.
href='http://www.law.com/jsp/article.jsp?id=1140084314781'>Read
more.
Glass
& Powder Files for Chapter 11 Protection
Richmond, Va.-based Glass
& Powder Boardshop, which abruptly closed its store in the
w:st='on'>
size='3'>Pump
face='Times New Roman' size='3'>Town
size='3'>Center
week, filed for bankruptcy protection to address financial and
operational issues, the
size='3'>Richmond Times-Dispatch reported
today. The retailer made the chapter 11 reorganization filing to
pre-empt a threat of legal action by the mall's owners. The company
listed $649,000 in assets -- mostly in inventory -- and $1.3 million in
liabilities, court records show. It owes $329,000 in bank loans and
$967,300 in unsecured debt to its suppliers and landlords. The Short
Pump mall is owed $110,000 in rent, and Forest City Enterprises Inc.,
one of the mall's developers, is due $49,800, the records show.
href='http://www.timesdispatch.com/servlet/Satellite?pagename=Common%2FMGArti…'>Read
more.
name='7'>Mediation Next in Queen Mary Bankruptcy
A series of mediation
sessions has been ordered in hopes of resolving issues in the bankruptcy
of Queen’s Seaport Development, Inc. and the future of
size='3'>Long Beach
Calif.’s icon, the Queen Mary, the Long Beach Gazette reported
yesterday. Judge Vincent Zurzolo ordered the
mediation at a hearing Monday in U.S. Bankruptcy Court. At the same
time, he extended the deadline until March 21 for QSDI to decide whether
to accept its lease with the city, and set a March 30 hearing date on a
proposed recovery plan filed by minority stockholders Bandero LLC. QSDI
went into bankruptcy protection last March after a dispute with the city
regarding rent credits led to filing of a notice of default of lease
payments. QSDI holds a long-term lease on the ship and the surrounding
55 acres; the ship itself is operated by the nonprofit RMS Foundation,
which is not in bankruptcy.
size='3'>QSDI has claimed rent credits under a 2001 agreement that the
city has said were improperly applied as the original $3.4 million
discrepancy has grown to nearly $5 million in the last year. The rent
credit dispute along with a question over the development rights to the
property surrounding the ship also must be resolved before the
bankruptcy case can be cleared in the mediation, according to
Zurzolo’s order.
href='http://www.gazettes.com/queen02162006.html'>Read more
.
name='8'>Volunteer Fire Dept. in
w:st='on'>
size='3'>Declares Bankruptcy
Columbus, Ohio's Old
Washington Volunteer Fire Department, mired in debt and in danger
of losing one of its engines, filed for bankruptcy to hold creditors at
bay, the Columbus
Dispatch reported today. The department owes
$150,000, including about $90,000 in loans on two firetrucks, Fire Chief
Nathan Laughman said this week.G. Thomas Manning, president of the Ohio State
Firefighters Association, said he is unaware of a similar situation.
'I’ve been in firefighting for 38 years,' he said. 'I have never
heard of one of them filing for bankruptcy.' Old
w:st='on'>
size='3'>Washington
size='3'>’s revenue last year totaled about $8,000 for service
contracts and $25,000 from bingo after expenses. A 0.5-mill fire levy
generates $16,000 a year, but that money is split with another nearby
fire department, the chief said. If Old Washington can’t recover
from its difficulties and would have to cease operations, the closest
fire department to this village of 200 residents is in
w:st='on'>
size='3'>Lore
face='Times New Roman'
size='3'>City
miles south of town. Judge John E. Hoffman Jr. of the
U.S. Bankruptcy Court in
w:st='on'>
size='3'>Columbus
handling the case. A meeting of creditors is scheduled for March
7.
href='http://www.dispatch.com/print_template.php?story=dispatch/2006/02/17/20…'>Read
more.
name='9'>Icahn’s Bid to Probe GB Holdings
Denied
Billionaire financier
Carl Icahn has been barred from reviewing the books of bondholders and a
minority shareholders of the bankrupt GB Holdings Inc., the
owner-in-part of
face='Times New


Roman'
size='3'>Atlantic City
Sands Casino, according to
size='3'>Portfolio Media yesterday. In the
bitterly contested case, a federal bankruptcy judge this week denied
Icahn’s bid to investigate whether the bondholders and minority
shareholder should be allowed to file their own reorganization plans for
the company and potentially gain control of the Sands
Casino.The
company’s unsecured creditors' committee, which represents the
bondholders, objected to Icahn’s bid on the grounds that Icahn was
attempting to harass creditors into settling potential litigation
against him. GB Holdings filed for chapter 11 bankruptcy protection last
September, claiming $47.3 million in debt. Last month, the company's
exclusive chapter 11 plan rights were slashed by the judge, giving
bondholders a chance to propose their own plans to try to bring the New
Jersey-based Sands Casino back under GB Holdings' control. Ownership of
the Sands Casino was previously transferred from GB Holdings to Atlantic
Coast Entertainment Holdings Inc. in an exchange offer. Thatcompany now
owns the Sands Casino through an Icahn-controlled affiliate, ACE Gaming
LLC. GB Holdings bondholders call the exchange “fraudulent”
and say that their proposed reorganization plans will establish a
litigation trust to prosecute that claim.
name='10'>Failed Mortgage Company’s COO Gets
Sentenced
One of the executives who
presided over the collapse of MCA Financial Corp. was sentenced Thursday
to five years in prison for conspiracy and mail fraud, the Associated
Press reported today. U.S. District Judge John Feikens also ordered Lee
P. Wells, 45, of
w:st='on'>
size='3'>Grosse
face='Times New Roman' size='3'>Pointe
size='3'>Shores
pay $242 million in restitution to investors who purchased MCA's
securities and banks that funded the company's operations. Wells, MCA's
former president and chief operating officer, also must serve three
years of supervised release after his prison term. Wells pleaded guilty
to the conspiracy and mail fraud charges in July 2002. A federal grand
jury had indicted him on charges of making false statements to the
Securities and Exchange Commission, as well as mail, wire and bank
fraud. According to the indictment, Wells and other executives
fraudulently sold investments in mortgages and land contracts that MCA
had assembled into investment pools. The company was swamped by bad
mortgage loans and placed into bankruptcy in February 1999, one month
after it was seized by the Michigan Financial Institutions
Bureau.
href='http://www.nytimes.com/aponline/business/AP-Financial-Fraud.html?pagewa…'>Read
more .
Airlines
size='3'>Judge Extends Deadline for Northwest
and Unions
size='3'>
The bankruptcy judge
overseeing Northwest Airlines Corp.'s financial reorganization efforts
gave the carrier and its unions more time to come up with a consensual
agreement over their hotly debated collective bargaining agreements, the
Associated Press reported yesterday. JBankruptcy judge
face='Times


New
Roman' size='3'>Allan Gropper, who is
overseeing the case, had until today to come up with a decision
regarding the carrier's request to do away with collective bargaining
agreements with its employees. He pushed back that decision until the
close of business on Feb. 24, allowing the carrier and its unions more
time to negotiate. According to the order issued by Gropper,
representatives of the pilots union, the carrier's flight attendants
union and Northwest's attorneys agreed to extend the period in which
both sides have to come to an agreement.
href='http://news.yahoo.com/s/ap/20060216/ap_on_bi_ge/northwest_bankruptcy_1&…-'>Read
more .
In related news, lawyers,
accountants, consultants and advisers to bankrupt Northwest Airlines
have requested $15.1 million in fees for their work in the long-running
bankruptcy
size='3'>proceedings amid increasing tension between the airline and its
workers over collective-bargaining agreements,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. Boies, Schiller & Flexner, the firm
representing the embattled airline, made the request in a document filed
this week in
w:st='on'>
size='3'>U.S.
size='3'>bankruptcy court, along with other professionals involved in
the case, including law firm Cadwalader, Wickersham & Taft, auditors
Ernst & Young and investment bank Lazard Freres & Co.
Judge Allan Gropper is
scheduled to rule on the fees in early March. The case is
Northwest
Airlines
face='Times New Roman' size='3'>Corporation et al.
size='3'>, case no. 05-17930, in the U.S. Bankruptcy Court in the
Southern District of New York.
face='Times New Roman' size='3'>
name='12'>Union
size='3'>: Delta Plan Bad for Employee Morale
The union for Delta Air Lines
Inc. pilots warned that court approval of as much as $14 million in
severance payouts to officers and directors terminated because of the
company's reorganization could hurt efforts to reach an agreement on
more pilot concessions, the Associated Press reported yesterday. The Air
Line Pilots Association said the Atlanta-based airline's Feb. 8
bankruptcy court request for the severance plan would be bad for
employee morale and would threaten the company's reorganization process
if approved. The union said the nation's third-largest airline is 'tone
deaf' to the effects that a severance program for a select group would
have on the remainder of the work force. Delta has been seeking $325
million in new concessions from its 6,000 pilots. It recently offered to
lower the request to $315 million. The pilots are currently offering
about $115 million in new annual concessions. The pilots union said in
its objection Thursday that approval of the company's severance proposal
could hurt negotiations over the new pilot concessions. The pilots union
has said it will strike if the contract is thrown out.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/02/16/AR20060…'>Read
more .
name='13'>Aloha Air Prepares to Depart Bankruptcy
At a turbocharged pace
for an airline bankruptcy, Aloha plans to emerge from reorganization
around noon today with new owners, a $63 million cash infusion that it
will use to pay off existing liabilities, a $15 million term loan and a
$20 million revolving line of credit it can tap if necessary, the
Honolulu
Star-Bulletin reported today. Aloha, which
filed for bankruptcy on Dec. 30, 2004, will spend the remainder of this
year refocusing on the airline, particularly its 3,500 employees, and
planning for the future, said David Banmiller, president and chief
executive of Aloha Airlines.
href='http://starbulletin.com/2006/02/17/news/story02.html'>Read
more .
International
name='14'>More Canadian Firms Seek Pension Cuts
Canadian regulators are
reporting a marked increase in companies asking for approval to cut
pension plan benefits, the Toronto Star reported today.
Nicholas Le Pan, superintendent of financial institutions, says his
office has already approved a half-dozen requests, affecting 7,000 to
8,000 plan members. Reductions have been in the range of 10 percent so
far. Le Pan estimates some three-quarters of pension plans do not have
enough assets to support all benefits earned to date, largely due to low
interest rates and longer life spans.
w:st='on'>
size='3'>Ottawa
the pension plans for roughly 500,000 employees and retirees from such
industries as airlines, railways, financial institutions and
telecommunications. Most are putting in extra money to eliminate pension
plan deficits.Le Pan
said his office would support changes in regulations, perhaps
temporarily, to help pension plans deal with increased deficits. One
idea his office would support, he said, would be to let pension sponsors
buy letters of credit from banks to cover any shortfall in assets should
the company fail.
href='http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/…'>Read
more .
name='15'>Japanese Condominium Developer Enters Bankruptcy
Procedings
The Tokyo District Court
began court-led bankruptcy procedures Thursday for condominium developer
Huser Ltd., according to the
size='3'>Japan Times today. Huser is embroiled
in the quake-resistance data falsification scandal that broke last
November. The bankruptcy proceedings come after about 300 owners of
units in nine Huser condominium buildings with substandard earthquake
resistance asked the court last month to take the step to protect
Huser's assets to compensate them. The request for a bankruptcy
declaration is aimed at preventing assets of the Tokyo-based company
from dissipating and allowing them to be distributed equally among
creditors, the buyers' group said earlier. The bankruptcy proceedings
will suspend a damages suit Huser filed last month with the same court.
The condo developer is demanding 13.9 billion yen ($117 million) in
damages from 18 local governments, accusing them of failing to properly
check quake-proofing data when screening its projects.
href='http://search.japantimes.co.jp/cgi-bin/nn20060217a3.html'>Read
more .
href='http://search.japantimes.co.jp/cgi-bin/nn20060217a3.html'>