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March 12, 2007
w:st='on'>
name='1'>Duberstein
Court
size='3'> Renaming Bill Set to Advance
A bill to rename the U.S.
Bankruptcy Courthouse in
w:st='on'>
size='3'>Brooklyn
w:st='on'>
size='3'>N.Y.
late Chief Judge Conrad B. Duberstein is on the House of Representatives
calendar for action on Monday. The bill,
H.R. 430, is expected to pass on a voice vote.
size='3'>Senate action is also hoped for soon.
size='3'>The Conrad B. Duberstein National Bankruptcy Memorial Moot
Court Competition, sponsored by ABI and St. John's University School of
Law, starts Saturday, and concludes on March 19 at the District Court of
the Eastern District of New York.
href='http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h430rh.txt.pdf'>Click
here to read the text of H.R. 430.
Orders Hedge Fund Data in Northwest Bankruptcy Case
Bankruptcy Judge
Allan Gropper
size='3'>denied a request on Friday by a group of hedge funds that
wanted to keep trading data secret in Northwest Airlines Corp.
proceedings, Reuters reported on Friday. A group of 13 funds, including
Owl Creek Asset Management, Citadel Investment Corp., Marathon Asset
Management and Sandell Asset Management, control about 27 percent of
Northwest's shares. Those shares are to be canceled when the airline
exits bankruptcy later this year. The funds, which sought to establish
an ad hoc shareholders' committee in Northwest's bankruptcy process, had
argued the equity has value and should not be canceled. As part of the
process of seeking court approval for the ad hoc group, the hedge funds
were asked to disclose not only their holdings in the airline, but at
what prices they bought the securities. The funds argued that the
information was irrelevant to the case and confidential because it would
reveal their investment strategies.
href='http://asia.news.yahoo.com/070309/3/2ypqx.html'>Read
more.
New
Century's Lenders to Cut Off Funding
New Century Financial
Corp. disclosed today that all of its bank lenders had either cut off
their short-term funding to the beleaguered home lender or notified the
company of their intent to do so, the
size='3'>Wall Street Journal reported today.
The move came after New Century received notices of default from eight
of its lenders -- including Morgan Stanley, which extended the company
an emergency financing package last week. New Century said it has
received notices of default from lenders including Bank of America
Corp., Citigroup Inc., Credit Suisse Group, Goldman Sachs Group and
Morgan Stanley. It also said some of those lenders are accelerating the
company's obligation to buy back all outstanding mortgage loans financed
under their respective funding agreements. If all the company's lenders
demand repurchases, the obligation could come to $8.4 billion, a burden
the company said it can't meet and could result in a forced liquidation
of the loans and other assets.
href='http://online.wsj.com/article/SB117369890345734007.html?mod=home_whats_news_us'>Read
more. (Registration required.)
In related news, New
Century's swift rise and fall illuminates how Wall Street investment
banks such as Morgan Stanley and hedge funds awash in cash helped fuel a
binge in subprime lending that prolonged the housing
boom, according to a commentary in the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. The lenders made themselves vulnerable by
relying heavily on outside mortgage brokers and gunning for growth even
as the boom faded. The Wall Street banks supplied the money to keep them
on a roll, readily gobbling up loans and turning them into securities
that global investors were avid to put into their portfolios. New
Century, an 11-year-old company that billed itself as 'a new shade of
blue chip,' has become a symbol of excess in lending to subprime
borrowers, people with weak credit records or high debt in relation to
their income. The company has imploded over the past few months as
defaults surged and accounting misdeeds surfaced. New Century's share
price last week dropped 78% to $3.21 as some traders bet a bankruptcy
court filing is near.
href='http://online.wsj.com/article_print/SB117366027973133733.html'>Read
more. (Registration required.)
Hospitals
w:st='on'>
name='4'>Mercy
w:st='on'>
size='3'> Medical
w:st='on'>
size='3'>Center
face='Times New Roman' size='3'>Files for
Bankruptcy
After years of financial
struggle, Our Lady of Mercy Medical Center in the north
size='3'>Bronx
court protection on Thursday, the New York Daily News reported
on Friday. At the same time, it asked for federal bankruptcy court
permission to sell most of its assets to
w:st='on'>
size='3'>Montefiore
w:st='on'>
size='3'>Medical
face='Times New Roman'
size='3'>Center
has entered into an asset purchase agreement with Mercy. The 369-bed
nonprofit medical center's chapter 11 petition listed assets of
$91.2 million and liabilities of $151.5 million as of December
2005. To fund its
continuing operations during the restructuring, including payments to
employees, vendors and suppliers, Mercy said, it has secured a
commitment for financing. It said it expects to obtain the necessary
regulatory approvals and consummate a transaction with Montefiore or
another bidder within five to six months.
href='http://www.redorbit.com/news/display/?id=865098#'>Read
more.
name='5'>Judge Endorses Commitment Letter for
w:st='on'>
size='3'>Bankrupt
face='Times New Roman'
size='3'>Hospital
size='3'>System
Bankruptcy Judge
Adlai Hardin
size='3'>has approved a commitment letter between
w:st='on'>St.
Vincent
face='Times New Roman'>
w:st='on'>
size='3'>Catholic
face='Times New Roman' size='3'>Medical
size='3'>Centers
General Electric Capital Corporation, which has pledged to provide $300
million in exit financing to the bankrupt hospital system
face='Times New Roman' size='3'>, Bankruptcy Law360
size='3'>reported on Friday. The letter details a post-confirmation $300
million exit financing facility and also authorizes the payment of fees,
reimbursement of expenses and indemnification in relation to another fee
letter agreement, according to court documents. Last month, the hospital
system filed its chapter 11 reorganization plan, laying out plans to
construct a new cutting-edge hospital in
w:st='on'>Greenwich
Village
mid-2007.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=20219'>Read
more. (Registration required.)
Approves Collins & Aikman’s Settlement with
Nissan
Bankruptcy Judge
Steven Rhodes
size='3'>has accepted a settlement agreement between Nissan Motor Co.
and Collins & Aikman Corp., a move that bolsters the bankrupt auto
parts maker’s reorganization plan,
size='3'>Bankruptcy Law360 reported on Friday.
Details of the settlement Collins & Aikman reached with Nissan North
America Inc. were sealed. In its motion asking for approval of the
settlement in February, Collins & Aikman said that the settlement
agreement would facilitate the sale of its Carpet & Acoustics
business. If the terms of the agreement are met, the bankrupt company
said both companies would resolve all pre- and post-petition claims.
Nissan would continue its relationship with Collins & Aikman and, in
return, Collins & Aikman will continue to “obtain beneficial
payment terms from Nissan.” As part of the deal, Nissan will throw
its support behind the company's proposed chapter 11 plan.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=20179'>Read
more. (Registration required.)
name='7'>Bankruptcy Judge Releases San Diego Diocese Funds for
School
A federal judge
overseeing the bankruptcy of the Roman Catholic Diocese of San Diego
agreed to release funds on a temporary basis for construction of a new
high school, the Associated Press reported on Friday. Judge
Louise DeCarl
Adler
size='3'>ruled Thursday that the diocese can withdraw approximately $2.7
million to cover construction costs until April 11, when another hearing
is scheduled. Attorneys representing more than 140 people claiming they
were sexually abused by priests had challenged the school project,
accusing the diocese of using it to shrink the amount of money available
to compensate victims. Diocese officials said the money from the ALSAM
Foundation was a four-year interest-free loan.
href='http://www.mercurynews.com/news/ci_5399500'>Read
more.
size='3'>Malden
face='Times New









Roman'
size='3'> Mills Seeks Chapter 7 after $44 Million
w:st='on'>
w:st='on'>Sale
Malden Mills Industries
Inc., the bankrupt fleece manufacturer, has asked a Massachusetts judge
to convert its chapter 11 case to a chapter 7 proceeding, setting the
stage for a final wind-down after selling its assets for $44
million, Bankruptcy
Law360 reported on Friday. In a document filed
March 7,
size='3'>Malden
Kramer Levin LLP told Judge
size='3'>Joel B. Rosenthal that the conversion
would ease problems linked to the company’s liquidation
negotiations with creditor General Electric Capital Corp. Malden Mills
agreed in February to sell the bulk of its assets to Philadelphia
private equity firm Chrysalis Capital Partners, which plans to continue
operating the textiles firm under the name Polartec—the popular
brand of fleece that Malden Mills invented. A hearing on the company's
request for a chapter 7 conversion is scheduled for March 15.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=20176'>Read
more. (Registration required.)
name='9'>Creditors File Reorganization Plan Looking to Sell
Le-Nature Assets
Creditors of bankrupt
Le-Nature's Inc. filed a reorganization plan on Friday, looking to pay
off the company's debts by selling its assets, which they say could
fetch $40 million, the Associated Press reported on Saturday. They also
called for bankruptcy trustee R. Todd Nielson to be replaced and broader
powers given to a replacement to sell the company's assets and sue its
former executives. Le-Nature's, a maker of bottled waters, teas, juices
and nutritional drinks, was forced into bankruptcy last year after a
judge ruled that founder and CEO Gregory J. Podlucky and other directors
may have engaged in criminal conduct by misreporting financial
information. A federal investigation also is under way. The plan, filed
in U.S. Bankruptcy Court in
w:st='on'>
size='3'>Pittsburgh
from an agreement between secured and unsecured creditors, bondholders
and lending institutions that own much of Le-Nature's $700 million
debt.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/03/10/AR2007031001376_pf.html'>Read
more.
name='10'>Arthur Andersen to Pay $73 Million in Enron
deal
A federal judge gave
final approval Friday to a $72.5 million settlement between Arthur
Andersen and investors who sued the accounting firm over its role in the
2001 collapse of Enron, Reuters reported on Friday. U.S. District Judge
Melinda Harmon signed the final order at a brief hearing held in
size='3'>Houston
effectively ending the now-defunct accounting firm's involvement in the
$40 billion class-action lawsuit. Arthur Andersen was convicted in June
2002 of obstruction of justice for its role in the Enron collapse. The
U.S. Supreme Court later overturned the conviction, but the accounting
firm is now virtually out of business. The settlement was initially
reached in September. So far, lead plaintiff University of California
Board of Regents has recovered more than $7.3 billion, including $2
billion or more each from Canadian Imperial Bank of Commerce , J.P.
Morgan and Citigroup.
href='http://money.cnn.com/2007/03/09/news/companies/anderson_enron.reut/index.htm?section=money_email_alerts'>Read
more.
name='11'>Troubles Hit Real Estate at High End
While Wall Street and
foreign investors benefiting from a weak dollar seemed to be holding up
the luxury real estate market even as the low-end fractured, there are
signs that some high-end real estate developers are also being hit by
the slowdown, the New
York Times reported on Saturday. A condo-hotel
developer, who was a partner with celebrities in selling luxury perches
from
size='3'>Miami
w:st='on'>
size='3'>Chicago
the Royal Palm Hotel in
w:st='on'>
size='3'>Miami
w:st='on'>
size='3'>Fla.
Friday. The missed deadline places another luxury condo project into the
hands of bankers specializing in troubled mortgages. Jack McCabe, a real
estate consultant in
w:st='on'>Deerfield
Beach
w:st='on'>
size='3'>Fla.
would be more troubles for developers, lenders and title insurance
companies. “This is the first of what will probably be several
high-end developers who had a number of luxury projects,” he said.
The developer, Robert Falor, planned to turn 160 of the Royal
Palm’s more than 400 rooms into condo-hotel units with a
Maxim-themed bar operated by Cindy Crawford’s husband, Randy
Gerber, in the same complex. According to a report this week by the
rating agency Standard & Poor’s, Falor, whose company is
Robert Falor Investments, did not sell any condos and has put the hotel
up for sale.
href='http://www.nytimes.com/2007/03/10/business/10real.html?pagewanted=print'>Read
more.
name='12'>Ford Is Close to a Deal to Shed Aston Martin Sports
Cars
The Ford Motor Company is
expected to sell Aston Martin, maker of the upscale British sports cars,
to a group of investors that includes the racing mogul David Richards
and a pair of Kuwaiti companies, the
size='3'>New York Times reported today. Ford,
which put Aston Martin up for sale last August, will retain a 15 percent
stake in the brand. The deal is worth about $868 million, a figure first
reported by The
Financial Times. Aston Martin is the first
nameplate sold by Ford since it announced a restructuring plan last year
that it calls the Way Forward. Ford, the second-largest American
automaker behind General Motors, lost $12.7 billion in 2006.
href='http://www.nytimes.com/2007/03/12/automobiles/12aston.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
International
w:st='on'>
name='13'>Toronto
face='Times New Roman' size='3'> Developer Files for
Bankruptcy
A high-profile
size='3'>Toronto
has filed for bankruptcy protection after a $10 million dispute with a
theater producer over a condo-hotel development, the United Press
International reported on Friday. Harry Stinson and prominent producer
David Mirvish have locked horns over a 51-story condo-hotel that Mirvish
financially backed. Two Stinson companies involved in the building owe
more than $17 million with a Mirvish company the main secured
creditor, The Toronto
Star reports. The filing was triggered because
Mirvish demanded the $10 million, which was overdue, Stinson
said.
href='http://www.upi.com/NewsTrack/Business/20070309-011707-8829r/'>Read
more.
name='14'>Germany
face='Times New Roman' size='3'> Lifts Pension Age to 67 Amid
Protests over Joblessness
German lawmakers voted to lift
the retirement age to 67 from 65, amid union protests over the
government's record on cutting unemployment for Germans over 50,
Bloomberg News reported on Friday. Chancellor Angela Merkel's coalition
pushed the provision through the lower house of parliament in Berlin
today, meaning that anyone born after 1964 -- just under half Germany's
82 million population -- will have to wait up to two years more before
they qualify for the national pension. The changes come in from 2012,
raising the retirement age in stages.
href='http://www.bloomberg.com/apps/news?pid=20601100&sid=aoRtHZjWtpRI&refer=germany'>Read
more.
name='15'>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.
To begin receiving the COMPLETE
Daily e-Summary, that emails you information on over 70 such companies
each morning, email
face='Times New Roman' color='#0000ff'
size='3'>steve@creditnews.com
size='3'>your name, company name, address, phone and fax.
We’ll set you up within 24 hours.
Receive an ABI
member’s discount of 50% off the $500 annual subscription
fee. Indicate “ABI CODE 27” in
your email.
size='3'>American Eagle Outfitters Inc., a
Warrendale,
face='Times New Roman' size='3'>Pa.
size='3'>apparel retailer, reported its fourth quarter net income jumped
40%–to $150 million. Sales rose 27%–to $973 million. Results
were boosted by strength at its aerie by American Eagle brand, an
intimate apparel line that is aimed at college-age women. The retailer
is confident that it could have more than 350 standalone aerie stores by
2012, including fifteen new locations planned for this year. Now with
more than 900 stores in the
face='Times New Roman' size='3'>U.S.
size='3'>and
w:st='on'>
size='3'>Canada
the company wants to open as many as forty more of its flagship American
Eagle locations and a dozen of its Martin + Osa outlets this year. For
all of 2006, the company’s net income increased 32%–to $387
million, on a 20% jump in sales–to nearly $2.8
billion.
size='3'>BJ's Wholesale Club Inc., a
size='3'>Natick
discount retailer of food and other merchandise, reported its fourth
quarter net income sank 77%–to $11.9 million, dragged down by
restructuring charges of 44 cents a share. Sales rose 13%–to $2.4
billion, including a 1.5% increase in same-store sales. For the year its
net income fell 44%–to $72 million, on a 7% sales
increase–to $8.3 billion. The company added that full-year profit
for 2008 will be in the range of Wall Street
estimates.
size='3'>California Coastal Communities Inc.,
an
size='3'>Irvine, Ca. land
developer, reported its fourth quarter net income plummeted 95%–to
$1.2 million. Revenue fell 75%–to $24.2 million. For
the year its net income sank 80%–to $5.6 million, on a 26% revenue
decline–to $95.7 million.
size='3'>Colllins & Aikman signed a deal
to sell a large portion of the assets of its North American Plastics
unit to Cadence Innovation as part of its Chapter 11 reorganization.
Details on the asset bid from Cadence will be made available
later.
size='3'>Culp Inc., a
w:st='on'>
Point,
w:st='on'>
size='3'>N.C.
upholstery fabrics, reported a third quarter net loss of $2.2 million,
including $2.1 million in restructuring charges. Revenue was down
9%–to $55.7 million.
size='3'>EFJ Inc., an Irving, Tx. maker of
radio and radio-security systems, reported a fourth quarter net loss of
$7.8 million. Revenue fell 20%–to $23.9 million. For the year it
lost $6.8 million, including a $1.6 million writeoff. Revenue
increased 2%–to $96.7 million. EFJ’s products are used in
the law-enforcement, military and government sectors.
E
face='Times New Roman' size='3'>xxon Mobil Corp.
size='3'>, the big Texas-based oil company, outlined how it plans to
spend its pile of cash, stemming partly from a $39.5 billion profit last
year. Chairman and CEO Rex Tillerson, said that his company will boost
investments in oil and natural-gas projects to more than $20 billion
annually over the next three years, hoping to add a million barrels a
day of oil and gas to its current production. Exxon will also continue
buying back shares, continuing its program over the past five years
during which time it has bought back some $58 billion of its
stock.
N
face='Times New Roman' size='3'>eenah Paper Inc.
size='3'>, an Alpharetta,
w:st='on'>
size='3'>Ga.
manufacturer, returned to a profit in 2006, reporting net income of
$62.5 million, up from a net loss of $29.7 million in 2005. Sales
in the recent year reached $594 million, up from $535 million a year
ago. The 2006 results were boosted by after-tax gains of $77.5
million related to timberland sales. Separately,
w:st='on'>Neenah
announced plans to close a money-losing fine-paper
facility in
face='Times New Roman'
size='3'>Massachusetts
size='3'>.
size='3'>Rocky Brands Inc., a Nelsonville, Oh.
maker of men’s and women’s footwear, reported a fourth
quarter net loss of $80,000. Sales fell 6%–to $70.6 million. For
the year its net income fell 63%–to $4.8 million, on an 11%
revenue decline–to $264 million.
size='3'>Saks Inc.,
w:st='on'>
size='3'>Birmingham
reported fourth quarter net income of $21.5 million, a turnaround from a
$2 million loss in the year-earlier fourth quarter. Sales jumped
17%–to $955 million. The retailer cited better marketing and
success in its efforts to match inventory to local markets, as it also
cited some success in marketing to older women shoppers. While its
margins were still relatively low, Saks hopes that it can boost its
operating margin from its current level of about 2.1% to 8% over the
next three years. For the year its net income surged 140%–TO $53.7
million, while sales rose 6%–to $2.9 billion. The quarter and year
included charges of $4.4 million and $12.4 million
respectively.
size='3'>Sirius Satellite Radio Inc.’s
CEO, Mel Karmazin, speaking before the House Energy and Commerce
subcommittee, tried to clarify his promise about not raising prices for
satellite radio service, as he continues trying to convince authorities
to approve his company’s plan to acquire
face='Times New Roman' size='3'>XM Satellite Radio Holdings
Inc. of
w:st='on'>
size='3'>Washington
w:st='on'>
size='3'>D.C.
billion. There apparently was some confusion regarding earlier
statements about whether Mr. Karmazin would hold prices or add more
radio programs for subscribers. Mr. Karmazin added that he supports a
plan that would pay musical artists to allow satellite radio subscribers
to record music off the radio.
Sirius is headquartered in
w:st='on'>
size='3'>Manhattan
w:st='on'>
size='3'>N.Y.
size='3'>Walgreen Co., the
w:st='on'>
size='3'>Deerfield
chain, was hit with class-action litigation that charges the company
with discriminating against black managers in store assignments. The
Equal Employment Opportunity Commission said that there have been more
than twenty complaints about discrimination against black
managers.