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January 29, 2007
Airlines
Air Willing to Raise Bid for Delta
US Airways Group Inc. is
willing to increase its hostile takeover offer for Delta Air Lines Inc.
by $1 billion under certain conditions as part of a last-ditch effort to
win support from Delta creditors, the
size='3'>Wall Street Journal reported today.
The Tempe, Ariz.-based carrier said over the weekend that it would raise
its $9.8 billion cash-and-stock bid to about $10.8 billion if the
creditors’ committee approaches Delta with a demand that the
Atlanta-based airline open itself to due diligence by US Airways. To get
the additional $1 billion, all in cash, the committee also would have to
ask a bankruptcy judge to postpone a hearing next week on Delta's
restructuring plan. The group also would have to agree to support the
start of a formal antitrust review.
href='http://online.wsj.com/article/SB117003936948090842.html?mod=home_whats_news_us'>Read
more. (Registration required.)
name='2'>Senators Urge Heightened AG Scrutiny of Airline
Mergers
On the heels of a Senate
hearing to examine how airline mergers are likely to affect consumers,
two U.S. senators are urging Attorney General Alberto Gonzales to make
sure any potential consolidations in the industry are “carefully
and thoroughly” examined before being approved,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported on Friday. Sen. Herb Kohl (D-Wis.), chairman of the
Senate Judiciary Committee's antitrust subcommittee, and Sen. Orrin
Hatch (R-Utah) said in a letter to Gonzales on Thursday they have a
“firm expectation” that the U.S. Department of Justice will
investigate airline mergers of all sizes “with all due care and
vigor.” The senators said they are concerned about the effects of
a possible merger between US Airways Group Inc. and Delta Air Lines Inc.
on competition in the industry, although they noted that their intent on
sending the letter was not to express a firm position on the potential
transaction.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=17268'>Read
more. (Registration required.)
name='3'>Comair, Pilots Nearing Deadline
Comair, the Delta Air
Lines Inc. subsidiary and the union representing its 1,500 pilots enter
their final negotiations this week, the Associated Press reported
yesterday. Comair has said that it could impose concessions on its
pilots Friday if no agreement is reached by then. However, the company
probably won't take that action until a federal bankruptcy judge rules
on Comair's request that the court block pilots from striking. Comair
asked U.S. Bankruptcy Judge
size='3'>Adlai Hardin Jr. in December to bar
pilots from striking, but later asked the judge to postpone his ruling
while negotiations continued. The airline said it will ask the judge for
a decision on Thursday. The pilots have authorized union leaders to call
a strike if Comair throws out their contract and imposes $15.8 million
in annual concessions.
href='http://www.nytimes.com/aponline/business/AP-Comair-Pilots.html?pagewanted=print'>Read
more.
name='4'>Entergy Creditors to Choose Between Rival
Plans
Bankruptcy Judge
Jerry Brown
size='3'>approved two competing reorganization plans for Entergy New
Orleans to emerge from bankruptcy,
size='3'>Bankruptcy Law360 reported on Friday.
Judge Brown endorsed both the company’s strategy on Thursday and
the plan put forth by the unsecured creditors’ committee, leaving
the utility’s creditors with a difficult decision in the days
ahead. A hearing has been tentatively scheduled for May 3 through 4 to
determine exactly how the company will finance its exit from bankruptcy.
Entergy New Orleans, bankrupted by Hurricane Katrina, may solicit votes
for its plan but also must inform creditors about the committee’s
plan by March 1.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=17258'>Read
more. (Registration required.)
name='5'>Bankruptcy Judge Approves Interstate Bakeries
Extension
Interstate Bakeries
Corp., now in its third year under bankruptcy protection, has won a
four-month extension to file a chapter 11 plan,
face='Times New Roman' size='3'>Tulsa World
size='3'>reported on Sunday. Judge
size='3'>Jerry W. Venters of U.S. Bankruptcy
Court in
face='Times New Roman' size='3'>Kansas City
size='3'>,
size='3'>Mo.
Interstate's request to retain control of its bankruptcy case through
June 2. He also gave the company until Aug. 1 to lobby creditor support
for a plan. Interstate, the maker of Hostess Twinkies and Wonder Bread,
said it needed more time to find a replacement for interim CEO Tony
Alvarez of turnaround firm Alvarez & Marsal. Barring the extension,
the company's sole control of its bankruptcy case will end
Wednesday.
href='http://www.tulsaworld.com/BusinessStory.asp?ID=070127_Bu_E2_Bankr21422'>Read
more.
Approves Collins & Aikman Disclosures
Bankrupt auto parts maker
Collins & Aikman Corp. received court approval of its disclosure
statement Thursday, allowing the company to move forward with plans to
sell off its operations and assets,
size='3'>Bankruptcy Law360 reported on Friday.
A spokesman for Collins & Aikman said the company managed to resolve
all objections to the disclosure statement in its hearing before
Judge Steven
Rhodes in U.S. Bankruptcy Court for the
Eastern District of Michigan Thursday. After approving the disclosure
statement, Judge Rhodes set a confirmation hearing on Collins &
Aikman’s reorganization plan for April 19.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=17279'>Read
more. (Registration required.)
name='7'>GMAC's Mortgage Losses May Be Costly for GM
The decision General
Motors Corp. made late last week to delay its fourth-quarter earnings
report reflects in part the toll a volatile U.S. mortgage market has
taken on its recently divested GMAC Financial Services lending unit,
the Wall Street
Journal reported today. GM, which announced
Thursday that it wouldn't report its results as scheduled tomorrow
because of accounting problems and the need to finalize GMAC numbers,
sold 51 percent of GMAC for $14 billion to Cerberus Capital Management.
The deal closed Nov. 30, and accountants for GM and Cerberus have since
been examining the financial records to make sure the $14.4 billion
tangible net book value ascribed to GMAC at the time is reliable. If the
value is higher or lower, GM or Cerberus may need to pay out certain
settlements. Lehman Brothers auto analyst Brian Johnson on Friday said
that complications related to estimating the value of GMAC's ResCap
mortgage unit could cost the auto maker $300 million to $400 million in
cash charges in the first half.
href='http://online.wsj.com/article/SB117003002189890643.html?mod=home_whats_news_us'>Read
more. (Registration required.)
name='8'>Werner’s Unsecured Creditors Look to Buy Stake in
Company
Unsecured creditors of Werner
Co. say they would like a chance to buy part of the bankrupt ladder
maker, which already has a $175 million offer from a group of secured
creditors, the Associated Press reported on Friday. Unsecured creditors
signaled last week they won't stand in the way of the sale as long as
they get an opportunity to buy 9.9 percent of Werner for $12 million.
Werner has asked the court to extend until March 9 the company's
exclusivity period during which the company alone is permitted to
propose a chapter 11 plan. Its request is contingent upon an agreement
that, by Feb. 15, Werner will file a motion to approve procedures for
the chapter 11 sale.
href='http://www.forbes.com/feeds/ap/2007/01/26/ap3367102.html'>Read
more.
WGI
Among Chapter 11 Success Stories
Five years after
Washington Group International emerged from bankruptcy, its second in
six years, it has been a success story as it has thrived and
continue to grow, the
size='3'>Idaho Statesman reported today. The
Boise, Idaho-based engineering and construction giant filed for
bankruptcy protection for a second time on May 16, 2001, as company
leaders blamed the bankruptcy on an acquisition that brought with it
significant undisclosed liabilities. When Washington Group emerged from
its second bankruptcy Jan. 25, 2002, investors had again lost millions,
and about 4,000 employees had lost their jobs. Today, WGI remains
debt-free and continues to book millions in new projects. Earnings have
increased an average of 16 percent a year, and company leaders say
earnings for 2006 should be $75 million to $85 million when they are
reported in March. 'It's like a hospital emergency room,”
said
size='3'>John Penn
with Texas-based Haynes and Boone and the immediate past president of
the American Bankruptcy Institute. “A lot of people go in. Some
never come out, some come out but are never quite the same, and some
come out and do well.'
href='http://www.idahostatesman.com/102/story/69173.html'>Read
more.
name='10'>Commentary: Senator Campaigns for Tort
Reforms
Sen. Charles Schumer
(D-N.Y.) said last week that tort law abuse is making
w:st='on'>
size='3'>America
size='3'>less economically competitive and that reforms need to be made,
according to a Wall
Street Journal editorial today. Schumer held a
press conference last week with New York Governor Eliot Spitzer and New
York City Mayor Mike Bloomberg to discuss the ways that regulation is
driving financial business from
w:st='on'>
size='3'>U.S.
endorsed a study declaring that tort reform is the single biggest key to
retaining
w:st='on'>
size='3'>U.S.
size='3'>leadership in global finance. Schumer himself has a mixed
voting record on tort reform. As a former Representative, he voted for
the Securities Litigation Reform Act in 1995, but opposed an attempt to
go further in the next Congress. As a Senator, he's voted against
asbestos-litigation reform and class-action reform. However, as the
McKinsey report commissioned by Schumer and Bloomberg notes, settlements
of securities class actions have been rising every year for years. In
2005, the total bill hit $3.5 billion, excluding the $6.2 billion in
WorldCom-related settlements alone.
href='http://online.wsj.com/article/SB117002852704690625.html?mod=opinion_main_review_and_outlooks'>Read
more. (Registration required.)
name='11'>TROUBLED COMPANIES IN THE NEWS
1000’s of companies lose
money or experience some form of difficulty each
quarter.
The business news
articles below are taken from the
size='3'>Daily Summary of Troubled & Fast Growing U.S. Companies and
Other Business News published by Bastien
Financial Publications.
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face='Times New Roman' color='#0000ff'
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size='3'>your name, company name, address, phone and fax.
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size='3'>Beazer Homes USA Inc.,
size='3'>Atlanta
w:st='on'>
size='3'>Ga.
first quarter net loss of $59 million. The results included pretax
restructuring charges of $120 million. Revenue declined 27%--to $806
million. The firm added that it hasn't yet seen 'any meaningful
evidence' that the housing sector is headed for a sustainable
recovery.
size='3'>CSP Inc., a
w:st='on'>
size='3'>Billerica
w:st='on'>
size='3'>Mass.
of information-technology solutions, was warned by Nasdaq that it could
be delisted, as a result of failing to file its annual report on time.
The company, which earlier received an extension for filing until 1/16,
now hopes to file its results by 2/2.
size='3'>Ford Motor Co.'s CEO, Alan Mulally,
said that the
size='3'>Dearborn
w:st='on'>Mich.
carmaker will focus on becoming a much smaller company,
which would possibly result in the firm falling from second to fourth
place among manufacturers in the
w:st='on'>
size='3'>U.S.
size='3'>market, behind General Motors Corp., Toyota Motors Corp. and
Chrysler Group. Ford, coming off its recently reported 2006 loss
of $12.7 billion, including $5.8 billion in the fourth quarter, is going
ahead with a massive restructuring that calls for shuttering sixteen
plants and cutting 44,000 jobs in North America.
size='3'>Genesis Aircraft Support Inc.,
a
size='3'>Houston
w:st='on'>Texas
firm which recently filed Chapter 11, is moving its
headquarters to
face='Times New Roman' size='3'>Dallas
as part of its restructuring. The company, which
continues to operate, will try to turn itself around, but at the same
time company executives are reportedly talking with a number of
potential suitors that may want to acquire Genesis or its assets.
Before the company filed Chapter 11, it said it would close its
operations in
size='3'>Detroit
size='3'>Atlanta
w:st='on'>
size='3'>Ga.
workforce from 370 to 255 employees.
size='3'>Kulicke & Soffa Industries Inc.
size='3'>,
face='Times New Roman' size='3'>Willow Grove
size='3'>,
size='3'>Pa.
first quarter net income tumbled 81%--to $4.9 million. Revenue declined
26%--to $152 million. The company provides assembly equipment for
semiconductor manufacturers.
size='3'>Laclede Group Inc., a
size='3'>St. Louis
w:st='on'>
size='3'>Mo.
reported its first quarter net income fell 27%--to $19.1 million.
Revenue declined 22%--to $539 million.
size='3'>Overland Storage Inc., a
size='3'>San Diego
w:st='on'>
size='3'>Calif.
data-storage products, reported a second quarter net loss of $8.9
million. Revenue declined 23%--to $46.8 million.
size='3'>Trident Microsystems Inc. said that
it will take noncash charges of between $40 million and $50 million
related to stock-option grants. Trident, headquartered in
size='3'>Santa Clara
also won a request to extend a deadline for filing its financials until
4/2, as it restates results for the years 1994 through
2006.
size='3'>Unifi Inc., a
w:st='on'>
size='3'>Greensboro
w:st='on'>
size='3'>N.C.
reported a second quarter net loss of $16.5 million, including
asset-writedown charges of $2 million. Revenue declined 18%--to $157
million.