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January 3, 2008
name='1'>Rising Prices Put Pressure on Ailing
Economy
The price of oil briefly rose
to $100 a barrel for the first time yesterday and fresh evidence emerged
that the economy is slowing, the
size='3'>Washington Post reported today. To investors,
the news raised the specter of stagflation, the toxic mix of stagnant
economic growth and price inflation that made for hard times in the
1970s. The prices of wheat, soybeans and frozen concentrated orange
juice were all up sharply too as the dollar fell against the Japanese
yen and other currencies. The rising prices come as the nation's
manufacturing sector appears to be contracting, according to the
Institute for Supply Management, which surveys manufacturers. Its index,
released yesterday, fell to 47.7 in December from 50.8 in November, a
worse drop than even the most bearish analysts had predicted.
href='http://www.washingtonpost.com/wp-dyn/content/article/2008/01/02/AR2008010203033_pf.html'>Read
more.
name='2'>Fed Fears Worsening Credit Market
Federal Reserve policymakers
worried at their December meeting about the potential for a vicious
cycle to develop in which credit problems could worsen and force the Fed
to act more aggressively in cutting rates, the Associated Press reported
yesterday. Fed Chairman Ben Bernanke and all but one of his colleagues
agreed to trim the Fed key rate by one-quarter percentage point to 4.25
percent, a two-year low, at its Dec. 11 meeting. To bolster the economy,
many economists predict the Fed will slice rates yet again at its next
meeting, on Jan. 29-30, the first regularly scheduled gathering of
2008.
href='http://www.washingtonpost.com/wp-dyn/content/article/2008/01/02/AR2008010201859_pf.html'>Read
more.
Housing
Downturn
id='3' name='3'>With Builder in Bankruptcy, Buyers Are Left
Out
The collapse of Levitt &
Sons, a unit of the Levitt Corp., illustrates how the turmoil in real
estate is spreading far beyond subprime borrowers who cannot pay their
mortgages, the New York Times reported today. Levitt had a
fabled brand, decades of experience and enthusiastic customers with good
credit, but none of that was enough to save it. Paul S. Singerman,
Levitt’s bankruptcy lawyer, said that as the real estate market in
size='3'>Florida
absolutely unprecedented and catastrophic downturn,” the
builder’s customers across the Southeast became victims. At a
court hearing in
size='3'>Fort Lauderdale
face='Times New Roman' size='3'>Fla.
size='3'>Chris
Levitt’s largest creditor, agreed to provide $10 million to finish
at least 80 homes in
size='3'>Georgia,
face='Times New Roman' size='3'>Florida and
size='3'>South Carolina
href='http://www.nytimes.com/2008/01/03/business/03abandon.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
name='4'>Southern Star Mortgage Files for
Bankruptcy
New York-based Southern
Star Mortgage filed for chapter 11 on Dec. 21, nearly two weeks after
telling employees it would stop making loans after it had succumbed to
the downturn in the real estate market and the turmoil of the subprime
loan crisis,
size='3'>Newsday reported today. The company
was approved to lend in 32 states and the
w:st='on'>District of
Columbia
in
York
face='Times New Roman' size='3'>New Jersey
size='3'>,
size='3'>Florida
w:st='on'>
size='3'>California
w:st='on'>
size='3'>Connecticut,
size='3'>Texas
w:st='on'>
size='3'>Pennsylvania
size='3'>Massachusetts
size='3'>Maryland
w:st='on'>
size='3'>Illinois
size='3'>North Carolina
Only a minority of its loans were subprime mortgages. Southern Star
listed $7.2 million each in assets and liabilities, as well as 13
pending lawsuits against the company for misrepresentation, contract
violations and mortgage-related actions, among others.
href='http://www.newsday.com/business/ny-bzmort035523168jan03,0,1198149,print.story'>Read
more.
name='5'>New Century Looks for Exclusivity
Extension
Bankrupt subprime lender
New Century Financial Corp. says it has agreed with the unsecured
creditors’ committee on the structure of a chapter 11 plan to pay
its debts, but needs more time to finish drafting the liquidation plan,
the Wall Street
Journal reported today. In a filing Friday
with the U.S. Bankruptcy Court in Wilmington, Del., the company asked
the court to extend through Jan. 28 its exclusive right to file a plan.
The extension wouldn't apply to the creditor committee, which in July
won court permission to file its own plan. Instead of proposing a plan
of its own, the committee has been working with New Century on a joint
plan.
href='http://online.wsj.com/article/SB119932192054663753.html?mod=us_business_whats_news'>Read
more. (Registration required.)
name='6'>Mortgage Lenders Network Seeks Extension
Mortgage Lenders Network
USA Inc. is asking the court overseeing its chapter 11 proceedings for a
90-day extension of its exclusive period for filing a reorganization
plan, Bankruptcy
Law360 reported yesterday. Mortgage Lenders
filed a motion on Monday seeking Bankruptcy Judge
face='Times New Roman' size='3'>Peter J. Walsh's
size='3'>approval of the extension, marking the third time the company
has asked to have its exclusive rights extended since it filed for
bankruptcy in February 2007. The debtor's exclusive filing and
solicitation rights were slated to expire on Jan. 2, 2008, and March 3,
2008, respectively.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=42982'>Read
more. (Registration required.)
name='7'>Oakwood Homes Seeks Bankruptcy
Protection
Oakwood Homes LLC, a
residential and commercial builder in
w:st='on'>
size='3'>Georgia
is seeking bankruptcy protection from creditors, Bloomberg News reported
yesterday. The company, based in
face='Times New Roman' size='3'>Woodstock
size='3'>,
size='3'>Ga.
debt and $31.6 million in assets in chapter 7 documents filed Dec. 28 in
the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Atlanta
size='3'>.
Autos
name='8'>Federal-Mogul Emerges from Bankruptcy
Federal-Mogul Corp., a major
auto-parts supplier, said Wednesday it has emerged from chapter 11
protection after more than seven years, the Associated Press reported
yesterday. Southfield, Mich.-based company, which declared bankruptcy in
October 2001, said that it emerged from chapter 11 protection on Dec. 27
and plans a public listing of its shares. As part of its reorganization
plan, Federal-Mogul issued 49.9 million Class A common shares to holders
of its pre-bankruptcy notes and certain other unsecured claims. It also
issued 50.1 million Class B common shares. The company said it intends
in the near term to have its Class A stock listed.
href='http://www.businessweek.com/ap/financialnews/D8TTSEL00.htm'>Read
more.
href='http://www.businessweek.com/ap/financialnews/D8TTSEL00.htm'>
name='9'>Judge Approves Extension of Dura Chapter 11
Loan
Dura Automotive Systems
Inc. has won a one-month extension of loans that are financing its
bankruptcy reorganization, but said it is looking for a deal that would
provide it with financing until the end of June, the Associated Press
reported yesterday. The Rochester Hills,
w:st='on'>
size='3'>Mich.
company has suffered a series of setbacks recently because of tighter
credit conditions. Last month, a confirmation hearing on its
reorganization plan was canceled because of the company's inability to
obtain $425 million in loans to finance its exit from bankruptcy. Last
week, Bankruptcy Judge
size='3'>Kevin Carey approved an extension of
Dura's bankruptcy loans until Jan. 31.
href='http://www.chron.com/disp/story.mpl/ap/fn/5421479.html'>Read
more.
name='10'>GM Says It Is Likely to Post Drop in Retail
Sales
General Motors Corp.'s
sales chief indicated yesterday the auto maker would report a drop in
retail vehicle sales for 2007, the latest sign that the sluggish
size='3'>U.S.
size='3'>economy is hampering the company's turnaround efforts,
the Wall Street
Journal reported today. The company had hoped
to sell at least three million vehicles to individuals in 2007 but has
acknowledged it will fall short of that goal. It is also trying to cut
less-profitable 'fleet' sales to rental-car companies. Through the end
of November, GM had retail sales of 2.6 million vehicles, and on average
it had retail sales of about 240,000 vehicles a month.
href='http://online.wsj.com/article/SB119931183784463281.html?mod=hpp_us_whats_news'>Read
more. (Registration required.)
name='11'>ACandS Nears Bankruptcy Exit
ACandS Inc., an insulation
contractor that collapsed into bankruptcy with $3 billion in asbestos
liability, has entered the final stage of its five-year-long chapter 11
restructuring, the Associated Press reported yesterday. The company, a
unit of Lancaster, Pa.-based Irex Corp., recently filed its disclosure
statement, which calls for $500 million in insurance settlements to
resolve the asbestos liabilities. ACandS sought chapter 11 protection in
September 2002, at the height of the race to bankruptcy by companies
swamped with asbestos-related personal-injury claims. At the time,
ACandS had already settled 247,000 asbestos claims, but had 300,000
pending claims.
href='http://biz.yahoo.com/ap/080102/acands_bankruptcy.html?.v=1'>Read
more.
name='12'>Pacific Lumber Allows Exclusivity Period to
End
The debtors in Pacific
Lumber Co.'s chapter 11 case have accepted the end to their exclusivity
period, ceding to certain creditors' requests to file alternative plans
for reorganization,
size='3'>Bankruptcy Law360 reported yesterday.
The debtors filed a proposed order that would terminate their
exclusivity with respect to three prominent creditors, including the
unsecured creditors’ committee. If the order is signed by
Bankruptcy Judge Richard
S. Schmidt, it would allow the committee,
indenture trustee the Bank of New York Trust Company NA and Marathon
Structured Finance Fund LP to file alternative reorganization plans. It
would bar other parties from filing their own plans.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=43018'>Read
more. (Registration required.)
name='13'>Calpine Seen Well Positioned after
Bankruptcy
With its low
carbon-emitting fleet, the future looks bright for bankrupt power
company Calpine Corp. after its emergence from chapter 11, which is
expected in a few weeks, Reuters reported yesterday. After it exits
bankruptcy protection, Calpine will be the nation's largest independent
power producer, having nearly 24,000 megawatts of generating capacity,
mainly fired by natural gas, which makes Calpine an attractive
investment, analysts say. Calpine secured its exit financing before the
subprime mortgage debacle hit credit markets this summer, making it
unlikely the power company could receive as attractive terms if it
needed an extension or a replacement, given the credit environment. On
Dec. 19, a
w:st='on'>
size='3'>U.S.
size='3'>bankruptcy court confirmed Calpine's reorganization plan,
setting an enterprise value of $18.95 billion for the company.
href='http://uk.reuters.com/articlePrint?articleId=UKN024273220080102'>Read
more.
International
name='14'>Ukraine
face='Times New Roman' size='3'>'s State-Run Energy Firm Near
Bankruptcy
Ukraine Prime Minister
Yulia Tymoshenko said that its state-run
energy company Naftogaz is on the verge of bankruptcy and a special
commission will be formed to try to save the group, Interfax news agency
reported yesterday. Tymoshenko met with the company's new chairman, Oleg
Dubina, who estimated the company's losses for 2007 at 5 billion hryvnia
($1 billion). A key export route for Russian gas to Europe,
size='3'>Ukraine
on
size='3'>Moscow for its gas
supply and Tymoshenko has accused her predecessors of agreeing to
shadowy deals with Russian partners to appease the Kremlin.
size='3'>Russia
forcing higher prices on
w:st='on'>
size='3'>Ukraine
size='3'>in 2005 after it cut off its supplies to the country.
href='http://news.yahoo.com/s/afp/20080102/bs_afp/ukrainegasenergydistresscompanynaftogaz_080102190217'>Read
more.
href='http://news.yahoo.com/s/afp/20080102/bs_afp/ukrainegasenergydistresscompanynaftogaz_080102190217'>