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February 21,
2007
face='Times New Roman' size='3'>
name='1'>Union
size='3'> Protests Dura's Executive Incentive
Plan
The union representing
workers at bankrupt Dura Automotive Systems Inc. has objected to an
incentive program that rewards executives for transferring close to
2,000 jobs to
size='3'>Mexico and
Europe
Law360 reported yesterday. The International
Union, United Automobile, Aerospace and Agricultural Implement Workers
of America, which represents 690 Dura workers, filed a motion Friday
objecting to the company’s incentive plan.
size='3'>Under the incentive program, 55 management employees will get
about $6.8 million for moving the manufacturing jobs, the motion said.
The auto supplier announced last year that it would close its facility
in
size='3'>Ind.
terminating 250 jobs, according to the motion. The plan still calls for
the transfer of another 1,260 positions, it said.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=18929'>Read
more. (Registration required.)
name='2'>Government Approves Grant for Entergy
size='3'>
Orleans
The federal government
has approved a $200 million grant for Entergy New Orleans, moving the
utility one step closer to emerging from bankruptcy,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported yesterday. Though there are still steps before Entergy
New Orleans receives the money, all of the essential government bodies
have now signed off on the Community Development Block Grant money,
according to the company. The funds have also been approved by the
Louisiana Recovery Authority, which oversees the state's recovery money,
as well as the state legislature and the New Orleans City Council. The
council must now endorse the hurricane-related expenses that Entergy has
submitted, with the help of a team of independent auditors, and approve
any future expenses, according to Entergy New Orleans.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=18910'>Read
more . (Registration required.)
name='3'>Plaintiffs Urge San Diego Diocese to Avoid Bankruptcy
Filing
Plaintiffs looking to sue
the Catholic Diocese of San Diego for allegedly allowing priests to
sexually abuse them as children protested yesterday as priests met to
discuss filing for bankruptcy before the first cases go to trial, the
Associated Press reported yesterday. The protestors said at a news
conference Monday outside the diocese headquarters that the bankruptcy
idea, first floated Sunday in a letter from Bishop Robert Brom to
parishioners, was simply a ploy to delay the civil trials. A leader of a
victim advocacy group said a bankruptcy filing would pit lay people
against those filing lawsuits. The first
w:st='on'>
Diego
for next week.
href='http://sfgate.com/cgi-bin/article.cgi?f=/n/a/2007/02/20/state/n122244S15.DTL'>Read
more.
name='4'>Northwest Offers Unions Preferred Stock
Unions involved in
Northwest Airlines Corp.’s bankruptcy proceedings have won a
concession from the carrier as referred stock issued to thousands of
union employees in 1993 will be honored,
size='3'>Bankruptcy Law360 reported yesterday.
Northwest agreed on Friday to give its flight attendants, ground workers
and mechanics that hold “Series C” preferred shares an
unsecured bankruptcy claim worth $277 million. The claim is one of the
10 largest unsecured claims in the company’s chapter 11
proceedings, and is still subject to court approval. The International
Association of Machinists and Aerospace Workers has a share worth $212.5
million, while the Association of Flight Attendants-CWA has a share
worth $64.8 million. When the company exits bankruptcy, currently
scheduled for the end of June, the unions could receive stock worth 66
to 83 cents on the dollar in the restructured company.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=18860'>Read
more. (Registration required.)
name='5'>Marcal Seeks Exclusivity Extension
Marcal Paper Mills Inc.
has asked the court in charge of its bankruptcy proceedings to extend
its exclusive right to file and seek support for its reorganization
plan, Bankruptcy Law360 reported yesterday. If U.S. Bankruptcy
Judge Morris
Stern signs off on Marcal’s request, the
debtor’s exclusive right to file a chapter 11 plan will be
extended to July 30, and its exclusive right to lobby for support of its
plan will be extended to Sept. 26. Marcal’s exclusive periods for
filing and soliciting support for a restructuring plan are currently
slated to expire on March 30 and May 29, respectively. A hearing on
Marcal’s extension bid is scheduled for March 16.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=18930'>Read
more . (Registration required.)
name='6'>Re-Opened Bankruptcy Case Centers on Loans to Senator
Clinton’s Brother
A federal judge has
reopened a bankruptcy case in which a trustee is demanding that one of
Sen. Hillary Rodham Clinton's brothers repay more than $100,000 in
purported loans from a carnival outfit whose owner was pardoned by
former President Bill Clinton, the
size='3'>Washington Times reported yesterday.
Anthony D. Rodham received $107,000 in payments from Tennessee-based
United Shows of America Inc. before the company went bankrupt in 2002,
according to court records. After court-appointed trustee Michael
Collins took over the company's finances, he obtained a default judgment
against Rodham, saying he 'received the benefit of the loans without
making any repayment.' Collins' collection effort spawned court actions
last year against Mr. Rodham in D.C. Superior Court and the U.S.
Bankruptcy Court in
w:st='on'>
size='3'>Alexandria. U.S.
Bankruptcy Judge Marian
F. Harrison on Jan. 30 granted a request by
Collins to reopen the case.
href='http://washingtontimes.com/metro/20070219-110615-7375r.htm'>Read
more .
name='7'>Winn-Dixie Posts Loss after Emerging from
Bankruptcy
Grocery store chain Winn-Dixie
Stores Inc. said Tuesday it recorded a loss of almost $10 million in the
eight weeks since it emerged from bankruptcy, the Associated Press
reported yesterday. The company said it posted a loss of $9.9 million
after emerging from bankruptcy protection on Nov. 21. In the 8 weeks
before the company ended its bankruptcy protection, it earned a profit
of $296.7 million. The company said its results for the full quarter
were boosted by a gain of $188.2 million for the discharge of
liabilities associated with the company's exit from chapter 11 and a
$144.8 million gain related to the revaluation of assets and
liabilities. The company also said it now has about $500 million of
liquidity, including $367 million of borrowing available under a new
credit agreement and $133 million of cash and cash equivalents.
href='http://biz.yahoo.com/ap/070220/earns_winn_dixie.html?.v=1&printer=1'>Read
more .
name='8'>Pension Gap Divides Public and Private
Workers
Retired government
workers are twice as likely to get a pension as their counterparts in
the private sector, and the typical benefit is far more generous,
USA Today
size='3'>reported today. The nation's 6 million retired civil servants
received a median benefit of $17,640 in 2005, according to the
Congressional Research Service. Eleven million private-sector retirees
covered by traditional pensions got $7,692. Governments' generosity
could have serious consequences for taxpayers and pensioners. Some
states, including
size='3'>Illinois,
w:st='on'>
size='3'>Indiana
w:st='on'>
size='3'>Michigan
w:st='on'>New
Jersey
w:st='on'>Ohio
and
w:st='on'>West
Virginia
retirement systems that may require huge tax increases, spending cuts or
even defaulting on promised benefits. The
w:st='on'>
size='3'>U.S.
size='3'>government has a bigger unfunded liability for military and
civil servant retirement benefits ($4.7 trillion) than it does for
Social Security ($4.6 trillion).
href='http://www.usatoday.com/news/nation/2007-02-20-pensions-cover_x.htm?csp=34'>Read
more.
name='9'>Payday Lenders Working to Avoid Regulations through
Voluntary Actions
The payday-lending
industry, on the defensive in state legislatures and Congress, is trying
to head off more regulation by voluntarily limiting advertising and
offering a once-a-year break to borrowers who don't pay back loans
quickly, the Wall Street
Journal reported today. Nearly 13 states have
effectively banned payday lending and the other 37 regulate the practice
to varying degrees. However, demand for small, short-term loans appears
to be soaring, and just about every state is debating whether the
accessibility and comparative ease of payday loans outweigh the risk for
consumers of falling further into debt. The industry, which generates
roughly $40 billion in loans each year, is regulated at the state
level.
href='http://online.wsj.com/article/SB117202735038914495.html?mod=home_whats_news_us'>Read
more. (Registration required.)
name='10'>Movie Gallery Looks to Funding to Avoid
Bankruptcy
Movie Gallery Inc. said that it
expects $900 million in funding to refinance its entire senior secured
credit facility, a move that may help the No. 2 U.S. movie rental chain
avoid bankruptcy, Reuters reported today. The debt-laden company also
said it expects same-store sales to fall 2.9 percent and operating
income of $24 million for the fourth quarter. Movie Gallery sees fiscal
2006 revenue of $2.54 billion. The proceeds of the financing will also
be used to replace existing letters of credit, provide working capital
and pay other expenses, the company said in a statement. Movie Gallery
said the credit facilities have a five-year maturity, and the
transaction, arranged by Goldman Sachs Credit Partners L.P., is expected
to close by March 15.
name='11'>Supreme Court Tosses Award in Philip Morris
Case
In a 5-4 ruling, the U.S.
Supreme Court on Tuesday threw out nearly $80 million in punitive
damages ruling against Philip Morris, CNN.com reported yesterday. The
case, Philip Morris USA
v. Williams, was argued last October before
the high court and tested the power of juries to impose large punitive
awards against tobacco and other large corporations in product-liability
cases. The damages had been awarded in a lawsuit brought by the family
of an
who died from a smoking-related disease. In their ruling, the majority
of the justices followed recent precedent that punitive damages should,
in most cases, match 'actual' damages and sent the case back to
the
size='3'>court for reconsideration.
href='http://money.cnn.com/2007/02/20/news/companies/philip_morris/index.htm'>Read
more.
International
name='12'>Judge Finalizes Settlement in Parmalat
Case
A federal judge finalized
a settlement agreement between Deloitte & Touche and bankrupt
Italian dairy company Parmalat SpA Tuesday, ordering Deloitte to make an
initial payment of $130 million no later than Friday,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported yesterday. Deloitte
w:st='on'>
size='3'>Italy
size='3'>last month agreed to settle allegations that it contributed to
Parmalat’s collapse for $149 million. Judge Denise Cote of the
U.S. District Court for the Southern District of New York also said in
the order Tuesday that anyone entitled to a settlement credit should use
a “capped proportionate share” formula. The formula would be
used to determine damages owed after taking account for prior
settlements.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=18932'>Read
more . (Registration required.)
name='13'>TROUBLED COMPANIES IN THE NEWS
1000’s of companies lose
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quarter.
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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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Daily e-Summary, that emails you information on over 70 such companies
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size='3'>steve@creditnews.com
size='3'>your name, company name, address, phone and fax.
We’ll set you up within 24 hours.
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your email.
Applied Innovation Inc.,
a
size='3'>Dublin, Oh.
provider of hardware and software, reported a profit of $738,000 for its
quarter ended 12/31, down from $818,000 in the year-earlier period.
Sales sank 40%--to nearly $5.1 million. For the year, its profit was up
55%--to $3.25 million, on a 4% decline in revenue--to $30.6
million. Applied's products are used to monitor upgrades and
expansions of telecom networks.
size='3'>DaimlerChrysler AG, the German-based
carmaker, is now reportedly actively looking to sell its
face='Times New Roman' size='3'>Chrysler Group
size='3'>unit in the
w:st='on'>
size='3'>U.S.
is reportedly putting together financial data to present to suitors
regarding Chrysler Group's worth. The German parent company has
already received a number of expressions of interest for Chrysler Group,
which according to preliminary estimates could have a value of somewhere
between $6.5 billion and $13 billion. Some skeptics, however, say that
Chrysler Group has virtually no value because of its increased losses
and legacy of expensive union contracts. However, while some
shareholders are pushing for a sale or spinoff, the fate of Chrysler may
ultimately lie with DaimlerChrysler CEO Dieter Zetsche and how
determined he is to hold on to the
w:st='on'>
size='3'>U.S.
size='3'>carmaker. He has recently said that 'all options' are on
the table for Chrysler Group but he has traditionally stood behind
the
face='Times New Roman'
size='3'>U.S.
size='3'>unit.
size='3'>Lund International, a Suwanee,
size='3'>Ga.
for the automotive aftermarket, is shutting down its Trenz Accessories
unit in
face='Times New Roman'
size='3'>Bakersfield
as part of a restructuring. The move will affect thirty
workers.
size='3'>PepsiAmericas Inc., a
size='3'>Minneapolis
down its Kentuckiana Division headquarters as part of a consolidation of
its
size='3'>Kentucky
size='3'>Indiana
size='3'>operations. Overall, the company has consolidated fourteen
operating divisions into seven and shut down regional headquarters
in
size='3'>Chicago
w:st='on'>St.
Louis,
w:st='on'>Mo.
and
face='Times New Roman'
size='3'>Cleveland,
Oh. PepsiAmericas is the world's second-biggest distributor of
Pepsi products.
size='3'>Temple University Health System
size='3'>in
face='Times New Roman' size='3'>Philadelphia
size='3'>,
size='3'>Pa.
will reduce its payroll by 500 employees (about 6% of its workforce) in
a cost-cutting move. The company has projected a deficit of $27
million for 2007, out of a budget of about $1 billion.
size='3'>3D Systems Corp., a Rock Hill, N.C.
maker of printers, laser devices and other equipment, reported a third
quarter loss of $11.3 million, compared to earnings of $533,000 in the
year-earlier period. Revenue fell slightly--to $31.5 million. The
company was earlier subject to being delisted from the Nasdaq Stock
Market after delaying filings of its financial report for the quarter
ended 9/30, but the firm has since filed an amended 10-Q
report.
size='3'>XM Satellite Radio Holdings Inc.
size='3'>and Sirius
Satellite Radio Inc.'s $11.4 billion merger
plan will face serious scrutiny from the Federal Communications
Commission, and later the Justice Department, as the nation's two main
satellite-radio companies must satisfy a decade-old regulatory rule
requiring that they ensure a merger will maintain competition in the
market and that the merger not result in higher prices for consumers.
But perhaps an even bigger hurdle will be radio broadcasters, who say
that they will oppose a merger on the grounds that FCC regulations
specifically rule out such a teamup. Two years ago, the National
Association of Broadcasters argued vigorously against XM's attempt to
purchase WCS Wireless Inc., which would have added more frequencies to
XM. That deal eventually did collapse. But remaining independent
has been financially difficult for Manhattan, N.Y.-based Sirius and XM
of Washington, D.C. In trying to go it alone, Sirius and XM's
combined losses totaled $2.9 billion in 2004 and 2005, and the two
companies expect to rack up further losses of upwards of $1.8 billion
for 2006.