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March 14, 2006
name='1'>Kaiser Aluminum Bids to Preserve Net Operating
Losses
A month after being given the
green light to reemerge from its long-running bankruptcy, Kaiser
Aluminum Corp. has asked for a protective order prohibiting the Pension
Benefit Guaranty
Corporation and the voluntary employees' beneficiary association trusts
from making deals that could endanger the company’s ability to use
net operating losses,
size='3'>Portfolio Media reported yesterday.
The motion, filed in a
w:st='on'>
size='3'>Delaware
bankruptcy court last week, seeks court approval for the protective
order to be enforced “without prior approval of the court to
ensure the preservation of certain carryforwards of net operating losses
and to ensure that any such agreement will not delay the confirmation
process.” Kaiser says if the trusts dispose of or transfer their
claims to distributions under the company’s reorganization plan,
Kaiser’s ability to use the net operating losses could be severely
limited, thereby affecting the bankruptcy estate in violation of the
automatic stay. It could also force Kaiser to modify its reorganization
plan, which could delay the confirmation process, the company said in
court documents. The immediate case is Kaiser Aluminum
Corporation, case number 02-10429, in the U.S. Bankruptcy Court for
the District of Delaware.
name='2'>Allied Holdings Looks to Modify Collective Bargaining
Agreement
Allied Holdings announced that
some of its subsidiaries, including Allied Systems, Ltd., made a
proposal to the International Brotherhood of Teamsters to modify the
current collective bargaining agreement to allow Allied to emerge from
bankruptcy, BankruptcyData.com reported today. Allied's proposal would
reduce the current total compensation in the form of wages, health and
welfare premiums, and pension contributions paid to union employees by
approximately 14.5 percent, with only 2 percent in the form of wage
decreases. The proposal would also eliminate future increases to wages,
health and welfare, and pension contributions as contemplated by the
current collective bargaining agreement.
name='3'>Amcast Bids for Exclusivity Period Extension
Amcast Industrial Corp.
has asked a federal bankruptcy judge to extend its exclusive control
over its chapter 11 proceedings, a move that would grant the bankrupt
wheel maker the sole authority to develop a reorganization plan,
Portfolio Media
reported yesterday. If the bid is approved, Amcast, whose
current exclusivity period ends March 31, would have until Sept. 27 to
develop the plan and until Nov. 26 to lobby creditors to accept its
terms. In court papers filed last week in the U.S. Bankruptcy Court for
the Southern
District of Indiana, Amcast said the exclusivity extension is necessary
due to extensive negotiations with General Motors Corp. regarding
contractual pricing issues. Amcast says its ongoing unresolved dispute
with GM regarding pricing and volume has made its already large
bankruptcy case even more complex and that it needs additional time to
focus on its reorganization efforts. “Since the beginning of these
cases, the debtors have been forced to deal with issues and contested
matters raised by GM, which has added to the difficulty of focusing on
more mainstream reorganization efforts,” the company said in its
motion. A hearing on the matter is scheduled for March 29.
name='4'>Claims of Sex Abuse Soar in
w:st='on'>
size='3'>Spokane
size='3'>Diocese
The number of claims of
sexual abuse by priests in the Catholic Diocese of Spokane has jumped to
at least 176, more than double since the diocese filed for chapter 11
bankruptcy protection a year ago, the Oregonian
size='3'>reported today. The bankruptcy
court imposed a deadline for people to file claims by last Friday, and
at least 176 had been received, church lawyers said. Church attorney
Greg Arpin of
face='Times New Roman' size='3'>Spokane
declined Monday to give the exact number of claims,
saying they were being tabulated. Earlier this year, Bishop William
Skylstad offered $45.7 million to settle with 75 people who had filed
claims against the diocese. That offer requires the approval of the
bankruptcy court and the claimants as well as obtaining the money from
the assets of the small diocese. Much of the money is likely
to be raised from the 82 parishes and parishioners that make up the
diocese. The Association of Parishes, which represents the 82 parishes,
is worried the bankruptcy price tag will exceed $80 million. The diocese
initially estimated that more than 20 additional claims would be filed
before the deadline.
href='http://www.oregonlive.com/news/oregonian/index.ssf?/base/news/114230673…'>Read
more.
name='5'>Commentary: GM Bankruptcy Risk Exposes Imbalance in Booming
Default Swaps
Time is running out for
the $12.4 trillion credit derivatives market to clean up its act as the
potential for history's biggest corporate debt default looms, Bloomberg
News reported yesterday. The possible bankruptcy of General Motors Corp.
has exposed flaws in trading of so-called credit default swaps because
the number of contracts has outstripped the bonds they insure. The
Federal Reserve Bank of
w:st='on'>New
York
deficiencies in credit-derivatives trading could threaten the stability
of financial markets in the event of a major default. The 10
biggest
face='Times New Roman'
size='3'>U.S.
size='3'>banks, including Citigroup Inc., Goldman Sachs Group Inc. and
JPMorgan Chase Inc., have about $600 billion of credit derivatives,
according to the Fed. Marilyn Cohen, the president of Envision Capital
Management in
face='Times New Roman' size='3'>Los
Angeles
concerned the flood of credit derivatives may skew prices in the bond
market. 'God forbid if GM files for bankruptcy,'' says Cohen, who
oversees $225 million of bonds, including those of GM's finance unit.
'What will it do to the market? We have nothing but questions, and no
answers.''
href='http://www.bloomberg.com/apps/news?pid=10001060&sid=ajZmEd0TdAKo&refer=…'>Read
more.
name='6'>Fastow Leaves Stand Insisting Lay and Skilling
Knew
Andrew S. Fastow, Enron's
former chief financial officer, ended his testimony on Monday, still
insisting that Jeffrey K. Skilling and Kenneth L. Lay joined him in
telling investors that Enron was profitable and healthy when all of them
knew otherwise, the New
York Times reported today. Defense lawyers for
Skilling and Lay, two former Enron chief executives, continued to paint
Fastow as a serial liar who had little proof that the former chiefs knew
that partnerships directed by Fastow were being used to hide debt and
manipulate earnings. Fastow struggled to further corroborate his
testimony about the so-called Global Galactic list of illicit side deals
he said he made with one of the former chiefs, Skilling, to guarantee
profits. Fastow, considered a major government witness, stepped down
from the witness stand in the trial's seventh week. He has pleaded
guilty to conspiracy and agreed to serve 10 years in prison in exchange
for cooperating with prosecutors and testifying in the trial of
Skilling and Lay, who are accused of conspiring to defraud Enron
while enriching themselves.
href='http://www.nytimes.com/2006/03/14/business/businessspecial3/14enron.htm…'>Read
more.
Airlines
name='7'>Delta Likely to Cut Pilots' Pension Plan
An attorney representing
Delta Air Lines said the carrier is likely to terminate its underfunded
pilots-pension plan and foist the liability onto the federal government,
a move that would further increase the burden on the nation's pension
insurer, the Wall Street
Journal reported today. Jack Gallagher, a
lawyer at Paul, Hastings, Janofsky & Walker LLP representing Delta
at an arbitration hearing to decide if Delta may abandon its current
contract with more than 6,000 pilots, told the panel it is 'more likely
than not' that the airline would follow carriers such as UAL Corp.'s
United Airlines and US Airways Group Inc. that terminated underfunded
pension plans and shifted their obligations to the Pension Benefit
Guaranty Corp. Delta's plan has $1.89 billion in assets but is funded
only to 54 percent of its liabilities, according to the company. Bruce
Simon, a lawyer for the Air Line Pilots Association, or ALPA, which
represents Delta pilots, told the arbitration panel that any agreement
with the
face='Times New Roman' size='3'>Atlanta
airline or congressional intervention isn't likely to
rescue the shaky plan. The three-person arbitration panel is expected to
rule by April 15 on whether Delta will be allowed to abandon its pilot
contract.
href='http://online.wsj.com/article/SB114229165560397053-email.html'>Read
more.
name='8'>Northwest Buys Ex-Rival's License
Northwest Airlines said
that it had purchased the operating certificate of FLYi, the parent of
the defunct carrier Independence Air, in a move that might speed the
development of a subsidiary airline for Northwest, which filed for
bankruptcy protection in September, Reuters reported yesterday.
Northwest has said it hopes to start a new carrier that will fly smaller
planes than those in the current mainline fleet.
w:st='on'>
size='3'>Independence
low-fare airline, ceased operations in January under the weight of high
fuel prices and stiff competition. FLYi filed for bankruptcy protection
last year. 'By purchasing the FLYi certificate, Northwest hopes to
accelerate the development of this subsidiary, which will create job
opportunities for furloughed Northwest Airlines pilots,' the airline
said in a statement.
href='http://www.nytimes.com/2006/03/14/business/14air.html'>Read
more.
International
name='9'>YUKOS Bankruptcy Hearing Set for March
28
A
w:st='on'>
size='3'>Moscow
start hearing the bankruptcy case of stricken Russian oil firm YUKOS on
March 28, earlier than anticipated, Reuters reported yesterday. On
Friday, YUKOS said its bank creditors, led by
w:st='on'>
size='3'>France
Generale, had filed a petition at a
w:st='on'>
size='3'>Moscow
have the firm declared bankrupt. Russian agencies reported on Monday
that the Moscow Arbitration court would start the hearing on March 28.
'The arbitration court was unusually quick to react, which means YUKOS
would cease to exist pretty soon,' said a Russian trader, who actively
trades the highly volatile YUKOS stock. YUKOS, with its assets already
frozen in
w:st='on'>
size='3'>Russia
has been seeking to sell off non-Russian assets to pay off its creditor
banks and has resisted bankruptcy. The 14
banks including Deutsche Bank, Citigroup, ING, BNP Paribas and
Commerzbank are claiming around $480 million, the remainder of $1
billion lent to YUKOS before its troubles began in 2003. Analysts say
the case may pave the way for a takeover of what is left of YUKOS by the
Russian state, which has crippled the firm with back-tax bills running
to around $30 billion, some $10 billion of which is still
outstanding.
href='http://asia.news.yahoo.com/060313/3/2h9qb.html'>Read
more.
w:st='on'>
name='10'>U.S.
face='Times New Roman' size='3'> Veteran Taking Over as Stelco
Emerges from Bankruptcy
Rodney Mott will replace
Courtney Pratt as president and chief executive officer of troubled
Stelco Inc. when the Hamilton, Ont.-based company near the end of March,
when the company expects to emerge from two years of bankruptcy
protection, the CBC News reported yesterday. Mott is a steel-industry
veteran who has survived major restructurings at such major American
companies as US Steel, Pechiney and Nucor. He is currently a consultant
to Tricap Management Ltd., a major Stelco shareholder and the
restructuring arm of Brookfield Asset Management (formerly Brascan
Corp.). 'He is a highly regarded industry leader with the skills and
experience to enhance our success going forward and create opportunities
and value for all of our stakeholders,' said Pratt, who will continue
with Stelco as chairman.
href='http://www.cbc.ca/story/business/national/2006/03/13/stelco-060313.html…'>Read
more.
name='11'>Indonesian Government Moves to Rescue Garuda Airlines from
Bankruptcy
The Indonesian government has
agreed to save its national flag carrier, Garuda, and Merpati Nusantara
Airlines from bankruptcy, according to Radio Singapore International
today. The Finance Ministry will reportedly prepare a written guarantee
to bring to the House of Representatives for consultation, after which a
portion of the national budget will be used to pay Garuda’s debts.
Garuda is believed to owe creditors a total of $644 million.
href='http://www.rsi.sg/english/newsline/view/20060314183856/1/.html'>Read
more.