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September 8, 2006
id='1'>Courts Issue Initial Report on Workload Created by New
Bankruptcy Law
The Administrative
Office of the U.S. Courts has released its initial assessment of the
impact of BAPCPA on the federal courts. While some courts have reported
a significant increase in the work of the courts, bankruptcy
administrators and clerks offices, the full effect of the law's many
substantive changes have not been fully appreciated to date.
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the full report..
id='2'>Judge Sets Ebbers Prison Date
A federal judge in
Manhattan ordered former WorldCom Inc. Chief Executive Bernie Ebbers to
report to prison later this month to begin serving his 25-year sentence,
the Wall Street Journal reported today. In an order signed
Tuesday, U.S. District Judge Barbara Jones ordered Ebbers to report to
prison on Sept. 26 to begin serving his sentence, which was one of the
stiffest penalties handed out in a white-collar case in recent years.
The order doesn't specify which institution he is scheduled to report
to. Ebbers was convicted last year on securities fraud and other charges
in connection with what the government has described as the largest
accounting fraud ever. In upholding his conviction, the appellate court
said in July that the government's decision not to grant immunity to
three former WorldCom executives was 'consistent with legitimate
law-enforcement concerns' and that there was no evidence the government
manipulated the use of immunity 'expressly for tactical reasons.'
WorldCom emerged from bankruptcy protection in 2004 and has since been
acquired by Verizon Communications Inc.
id='3'>UAW Won't Strike Health Benefits Deal with Chrysler
Because it's in
better financial shape, DaimlerChrysler AG's Chrysler Group won't get
the same health care concessions that Ford Motor Co. and General Motors
Corp. got from the United Auto Workers, the union's president said
Thursday, the Wall Street Journal reported yesterday. Ron
Gettelfinger told reporters after a midday speech at the Detroit
Economic Club that the union analyzed Chrysler's finances and determined
the concessions weren't in the UAW's best interest. 'The company is in a
different situation than what Ford was in and what GM was in,' he said.
Chrysler spokesman David Elshoff said Thursday that negotiations are
still under way and he and couldn't comment. Chrysler officials have
said that concessions similar to those given to GM and Ford are
essential for the company to remain competitive. 'Health care costs are
our biggest single fixed cost,' Elshoff said. 'It does represent a
disadvantage for Chrysler Group, a disadvantage that no other carmaker
in America shares.'
href='http://www.nytimes.com/aponline/business/AP-UAW-Gettelfinger.html?ex=11…'>Read
more.
id='4'>Bankruptcy Ruling Could Limit Utah Tithers
A ruling last week
by Judge Robert E. Littlefield in U.S. Bankruptcy Court for the Northern
District of New York that some people going through bankruptcy may not
make charitable or religious contributions could affect whether hundreds
of Utahns who file for bankruptcy protection each year will be
prohibited from paying tithing or other contributions while they are in
bankruptcy, according to the (Utah) Desert Morning News. At one
filing per 39.5 households in 2005, Utah ranks No. 3 nationally in
bankruptcy filings. According to Kevin Anderson, standing chapter 13
trustee in Salt Lake City, the New York ruling will have no effect in
the short term for debtors filing for bankruptcy in Utah. Anderson added
that bankruptcy judges in Utah are favorable to allowing debtors to make
charitable contributions as it relates to the 1998 law. To date, no one
in Utah has objected to bankruptcy filers making such contributions. But
Henry Sommer, president of the National Association of Consumer
Bankruptcy Attorneys, said the New York ruling could offer creditors
ammunition in challenging bankruptcy debtors who choose to make
charitable contributions.
href='http://deseretnews.com/dn/view/0,1249,645199727,00.html'>Read
more.
id='5'>Arizona Bankruptcy Filings Hit Year-to-Date High
Bankruptcy filings
in Phoenix and Arizona hit their highest level so far this year in
August, the Business Journal of Phoenix reported yesterday. The
U.S. Bankruptcy Court for the District of Arizona reported 415 filings
in the Phoenix area and 617 for the entire district during the month,
which tops the previous high for the year in June, when 386 and 566 were
reported, respectively. Most of the Phoenix-area filings for the past
month, 321, involved chapter 7 liquidations, and there were seven
chapter 11 cases.
id='6'>Ex-Reagan Aide Reportedly under SEC Probe
The Securities and
Exchange Commission has notified former Collins & Aikman chief executive
David Stockman he could face civil charges related to financial
statements he made to investors before the auto parts company filed for
bankruptcy last year, according to a published report, Reuters reported
today. Securities regulators were looking at the role Stockman, budget
director under President Ronald Reagan, and other former executives
played in alleged financial irregularities at Collins & Aikman Corp. A
federal grand jury in New York last month subpoenaed the company's
financial statements for 2000 to 2005 and accounting documents related
to customer and supplier rebates. Southfield, Mich.-based Collins &
Aikman filed for bankruptcy protection from creditors in May 2005, only
days after it warned of a significant liquidity crunch. Stockman
resigned from the company five days before the bankruptcy.
href='http://money.cnn.com/2006/09/08/news/newsmakers/stockman.reut/index.htm'>Read
more.
id='7'>Judge Threatens Latham with $10M in Sanctions
A federal
bankruptcy judge has warned Latham & Watkins and one of its clients that
he will impose $10 million in sanctions unless the firm can show good
cause for its bid to compel a $1.4 million payment in a long-simmering
legal battle stemming from a trademark dispute, Portfolio Media
reported yesterday. In court documents filed on Aug. 14 in the U.S.
Bankruptcy Court for the Eastern District of California, U.S. Bankruptcy
Judge Brett Dorian said that the pretrial statement filed by Latham on
behalf of its client, Entrepreneur Media Inc., 'fails to state that any
evidence will be offered' in support of its claims. He ordered Latham to
appear at an Oct. 18 hearing to show why the claims stated in the
complaint should not be dismissed, and why $10 million in sanctions
should not be ordered against the firm and its client. The request is
the latest contentious move in the ongoing legal wrangling between
Latham's client EMI, the publisher of Entrepreneur magazine, and Scott
Smith, the former owner of EntrepreneurPR, a public relations firm The
case is Entrepreneur Media Inc. v. Smith, case number 01-02219,
in the U.S. Bankruptcy Court for the Eastern District of California.
id='8'>Enron Sells Its Final Major Asset
Enron Corp.
completed the sale of its last major asset Thursday with the closing of
a $2.9 billion deal to sell Prisma Energy International, a group of
international power plants and pipelines, to a private equity firm, the
Associated Press reported yesterday. However, Enron still has some
interests in assets and ongoing bankruptcy-related litigation. 'There is
a collection of smaller assets that are in the process of being valued,
but nothing of any monumental size,' Enron spokesman Harlan Loeb said.
Enron first announced its plan to sell Prisma's 15 assets in 11
countries to Ashmore Energy International Ltd., a private equity firm
majority owned by funds managed by London-based Ashmore Investment
Management Ltd., in May.
href='http://www.theeagle.com/stories/090806/business_20060908031.php'>Read
more.
In related news, a district court ruling has given the country's
largest investment banks the opportunity to appeal a bankruptcy court
ruling that could wipe out some of their claims in the ongoing Enron
Corp. bankruptcy case, Portfolio Media reported yesterday Merrill
Lynch & Co., Citibank and Barclays PLC, among others, will have until
Tuesday to appeal a decision by bankruptcy court judge Arthur
Gonzalez that would eliminate claims by creditors found to have
engaged in inequitable conduct. The ruling would also apply to banks
that had purchased claims in the bankruptcy from Enron creditors, even
if the purchasing institution had not been accused of malfeasance.
id='9'>Trustee Objects to Adelphia's Plan
The U.S. Trustee
involved in Adelphia Communications Corp.'s chapter 11 restructuring has
joined the growing list of interested parties to object to the bankrupt
cable company's proposed disclosure statement, Portfolio Media
reported yesterday. In court documents filed Wednesday with the U.S.
Bankruptcy Court in Manhattan, trustee Diana G. Adams said the
feasibility of the disclosure statement and accompanying reorganization
plan could not be analyzed until additional information on
administrative and fee claims was provided. She further objected that
Adelphia did not provide a legal basis for the exculpation and release
of several third parties. Several objections have been filed to
Adelphia's disclosure plan, with opponents claiming that Adelphia, which
had pledged to remain neutral in creditor disputes, had gone back on its
promise in order to push the plan through. The case is Adelphia
Communications Corp. et al., case number 02-41729-reg, in the U.S.
Bankruptcy Court for the Southern District of New York.