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June 1, 2006
Delta Air Lines' pilots union
yesterday approved a 14 percent pay cut, eliminating a key hurdle in the
airline's struggle to restructure under chapter 11 bankruptcy protection
and emerge from court supervision by mid-2007, the Washington
Post reported today. After more than six months of
often-contentious labor talks, 61 percent of Delta's 6,000 pilots agreed
to $280 million-a-year in pay and benefits cuts as part of a 3 1/2-year
contract. In addition to the pilot agreement, the bankruptcy court judge
yesterday removed another potential obstacle to Delta's transformation
by ruling against the Pension Benefit Guaranty Corp.’s objection
to Delta's proposal to terminate its pension plan.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/05/31/AR2006053100892_pf.html'>Read
more.
id='2'>Quigley Claimants Win Right
to Probe Insurance Pacts
A group of asbestos
claimants have won bankruptcy court permission to examine the insurance
policies held by bankrupt Quigley Co. Inc. and corporate parent Pfizer
Inc., delaying the unit’s chapter 11 plan confirmation hearing
indefinitely, Portfolio
Media reported yesterday. Judge
Stuart M. Bernstein
of the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Manhattan
ruled that a group of claimants can subpoena records from Quigley
connected to the insurance settlements involving it, Pfizer and four
insurance companies. The news comes only a week after Quigley, despite
the protests of insurance companies, decided to push forward with a
reorganization plan that will establish a trust to pay asbestos-related
injury claims to help siphon off the claims from Pfizer. In the wake of
Bernstein's ruling, the confirmation hearing on the company’s
chapter 11 reorganization plan has now been postponed.
id='3'>Bankrupt
size='3'>Arizona
to Pay More to Abuse Victims
A federal bankruptcy
judge has approved an additional $1.5 million for 20 people with valid
claims they were sexually abused as children by Roman Catholic Diocese
of Tucson priests, the
size='3'>Arizona Daily Star reported today.
The additional funds will bring the per-person total payout to those
with the most serious abuse claims as high as $700,000, minus legal
fees. Additional payments are possible as more money from a settlement
pool becomes available. Judge
size='3'>James M. Marlar on Wednesday
authorized the additional payments, which will come out of the $22.4
million settlement pool that was created as a resolution to the
diocese's chapter 11 bankruptcy case.
href='http://www.azstarnet.com/sn/printDS/131654'>Read
more.
id='4'>Concern Raised
for
face='Times New Roman'
size='3'>USA
size='3'>Capital Investors
A spokeswoman for
investors is raising concerns that lawyers and professionals hired for a
federal bankruptcy case involving a
w:st='on'>
size='3'>Nevada
lender will leave clients with little from the $962 million they've
invested, the Associated Press reported today. Donna Congelosi, head of
an informal investor group based in
w:st='on'>
size='3'>Reno
Nev., is concerned with the designation of separate attorneys for
three investor committees in the USA Capital bankruptcy case. Attorney
and professional fees are expected to be drawn from USA Capital assets.
On Friday, the U.S. Trustee's office objected to having the same
attorneys speak for investors in two separate funds operated by USA
Capital as well as investors who hold fractional interests in individual
mortgage loans that USA Capital originated.
face='Times New Roman' size='3'>
href='http://news.rgj.com/apps/pbcs.dll/article?AID=/20060601/BIZ08/606010321/1071/BIZ'>Read
more.
id='5'>Adelphia Says Vote on
Bankruptcy Plan Extended
Cable operator Adelphia
Communications Corp. said on Wednesday the bankruptcy court has extended
the voting deadline to accept or reject its modified fourth amended
joint plan of reorganization, Reuters reported yesterday. Adelphia said
the date has been extended to 4 p.m. on June 19 from June 5.
w:st='on'>
id='6'>New
York
size='3'> Nonprofit Uses Chapter 11 to Halt
Foreclosure
A nonprofit company
affiliated with the Loretto network, a provider of services to the
elderly, is using bankruptcy protection to stave off foreclosure on an
adult-care facility it owns in
w:st='on'>
size='3'>Utica
w:st='on'>
size='3'>N.Y.
Syracuse
Post-Standard reported today. Loretto-Utica
Properties Corp., which owns the building that houses the
size='3'>Loretto
face='Times New Roman' size='3'>Utica
size='3'>Center
for chapter 11 last year. The company reported that it had $4.05 million
in assets and $28.53 million in debt. The assets consist mainly of the
property, and the biggest part of its debt is a $20.96 million mortgage
held by GE Capital Healthcare Financial Services, according to court
documents. Loretto President James Introne said Loretto-Utica Properties
has not been able to keep up with its mortgage payments and went to
bankruptcy court after GE Capital told it of plans to foreclose on the
center.
href='http://www.syracuse.com/business/poststandard/index.ssf?/base/business-3/1149152685120720.xml&coll=1'>Read
more.
One
Guilty and One Acquitted
in Enron Broadband Trial
In the sixth day of
deliberation, a federal jury convicted one of two former executives of
Enron's Broadband unit yesterday in connection with a $111 million
accounting fraud, the
face='Times New Roman' size='3'>New York Times
size='3'>reported today. The executive, Kevin A. Howard, 43, the former
chief financial officer, was found guilty of five counts of fraud,
conspiracy and falsifying records. A second executive, Michael W.
Krautz, 37, a former accountant at Enron Broadband Services, was
acquitted of the same charges. Prosecutors accused Howard and Krautz of
setting up sham deals to manufacture millions in earnings from a failed
video-on-demand deal. The broadband unit dissolved when Enron declared
bankruptcy in 2001.
size='3'>
href='http://www.nytimes.com/2006/06/01/business/businessspecial3/01enron.html?_r=1&oref=slogin&pagewanted=print'>Read
more.
International
id='8'>Canadian Data Storage
Security Company to Declare Bankruptcy
Kasten Chase, which provides
data storage security products, said on Wednesday it will declare
bankruptcy after efforts to find a buyer or fix its financial situation
failed, Reuters reported yesterday. The Canadian company said it will
cease operations and assets will be assigned to a bankruptcy trustee to
handle creditor obligations. Once a trustee is assigned on Wednesday,
the company said its directors will resign.
href='http://ca.news.yahoo.com/s/31052006/6/n-business-kasten-chase-declare-bankruptcy-halts-ops.html&printer=1'>Read
more.
id='9'>Citigroup Proposes
Alternate Plan to Eurotunnel Bondholders
Eurotunnel has announced
an eagerly anticipated deal to restructure its massive debt, in a move
that the company says will spare it from bankruptcy, but Citigroup is
trying to lure Eurotunnel’s bondholders away from the proposed
deal, Portfolio
Media reported yesterday. Citigroup’s
plan would sweeten the pot for Eurotunnel investors by allowing less
dilution of shares, said a source close to the negotiations. Citigroup
wants Eurotunnel’s bondholders and shareholders to know that there
are alternatives to the proposed deal, the source went on to say. If the
proposed plan isn’t agreed to, Eurotunnel will file for
bankruptcy, said Jacques Gounon, Eurotunnel’s chairman, at a press
conference in
face='Times New Roman' size='3'>Paris
on Wednesday.