href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='/AM/Images/headlines/headline.gif'>
August 23, 2006
Judge
Approves Delta Pension
Deal
A bankruptcy judge approved an
agreement between Delta Air Lines Inc. and a group of retired pilots
that paves the way for the airline to pay $9 million in pension
obligations, the Associated Press reported yesterday. The deal was
presented ahead of a hearing that begins next Friday, when Delta will
ask the court to terminate its obligations under qualified pension
plans. The company anticipates heated opposition from retired pilots who
oppose the motion. The pilots group, the Delta Pilots' Pension
Preservation Organization, represents about 2,850 of 5,300 retired
pilots and withdrew earlier objections to reach a deal with the airline
late last month.
href='http://www.nytimes.com/aponline/business/AP-Delta-Bankruptcy.html?pagewanted=print'>Read
more.
In additional news, Delta
Air Lines said it is seeking bids for its regional jet service,
including for routes flown by current affiliates, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported. The proposal, which covers as many as 143 aircraft,
adds to the pressure that big airlines are exerting on small jet
operators to cut the rates they charge major carriers to fly their
passengers. Several airlines, including UAL Corp.'s United Airlines and
Northwest Airlines, have used competitive bidding to squeeze regional
affiliates for cheaper prices. The Delta bidding proposal adds to the
urgency for cost cuts being sought by the airline's own subsidiary,
Comair, which is in a protracted fight with its unions over contract
concessions aimed at lower costs. Delta's proposal puts out to bid 27
70-seat jets and an undetermined number of 50-seat jets flown by
Comair.
href='http://online.wsj.com/article/SB115628409328142625.html?mod=us_business_whats_news'>Read
more. (Registration required.)
id='2'>Commentary: Dana’s
Bankruptcy Draws Attention to BAPCPA’s KERP
Provisions
Dana Corp.’s
executive bonuses are not just drawing scrutiny to the company’s
bankruptcy case, but to the viability of the BAPCPA provisions looking
to limit executive retention bonuses, according to a
face='Times New Roman' size='3'>Kansas City Star
size='3'>commentary today. Dana Corp., an auto parts maker, is facing
lawsuits claiming that it manipulated its books to hide rising costs
before it filed for bankruptcy early this year. It is also considering
reducing or eliminating retiree health benefits, while executives,
including chief executive Michael J. Burns, want guaranteed
multimillion-dollar payouts. Critics say that Dana ignored the
provisions of the new law showing that the executive is “essential
to the survival of the business” and that he or she has a bona
fide competing offer from another company. There is no claim that Burns
or his colleagues have other job offers, and some creditors question
whether competitors are “actively seeking members of a management
team that led Dana to financial distress.”
href='http://www.kansascity.com/mld/kansascity/business/15336004.htm?source=rss&channel=kansascity_business'>Read
more.
id='3'>Radnor Holdings Files for
Bankruptcy
Radnor Holdings Corp., a
manufacturer of foam cups and containers, has filed for chapter 11 and
has lined up a pending sale of most of its assets, the
face='Times New Roman' size='3'>Philadelphia Business Journal
reported yesterday. The company said that it entered into
an agreement to sell substantially all of its assets, including its
WinCup and StyroChem businesses, as a going concern to an affiliate of
Tennenbaum Capital Partners, a
w:st='on'>Santa
Monica
w:st='on'>
size='3'>Calif.
investment firm that has invested in Radnor. Radnor has also arranged
for $103 million in debtor-in-possession financing.
href='http://www.bizjournals.com/philadelphia/stories/2006/08/21/daily15.html?from_rss=1'>Read
more.
id='4'>Shareholders Seek End to
SeraCare Chapter 11 Control
An ad hoc equity
committee will ask a judge Thursday to end SeraCare Life Sciences
Inc.’s exclusivity period to submit a sole plan,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. The unofficial shareholder committee, which
owns approximately 28.5 percent of SeraCare shares, said it plans to
make its request in the U.S. Bankruptcy Court for the Southern District
of California. The court had given Seracare until Oct. 25 to lobby for
creditors’ support of its plan. The equity panel also wants to
petition the judge to lift the stay so it can submit a summary action in
California Superior Court to demand an annual shareholders meeting. The
panel has claimed repeatedly that the five-member board has violated the
law by neglecting to convene an annual shareholders' meeting for more
than 18 months.
id='5'>Pfizer Asks Judge to
Reconsider Vote Dilution
Pfizer Inc. and its unit
Quigley Co. have asked a federal judge to reconsider his recent decision
to dilute the chapter 11 plan votes of claimants who had previously
agreed to reduce their asbestos claims, Portfolio Media
reported yesterday. U.S. Bankruptcy Judge Stuart
Bernstein’s Aug. 9 decision to dilute the votes of those
claimants resulted in Quigley’s reorganization plan not having
enough creditor support to move forward. He said their votes should be
reduced by 90 percent. In their filing, creditors asserted that
pebankruptcy agreements to subordinate distributions don't deprive the
creditors of the right to vote and that a creditor's right to vote
depends on whether the creditor holds the claim and not on the
creditor’s economic interest in the claim. The case is
Quigley Co.
Inc., case number 04-15739-smb, in the U.S.
Bankruptcy Court for the Southern District of New
York.
id='6'>Securities Plaintiffs Object
to Refco Bankruptcy Ruling
A court order permitting
bankrupt futures brokerage Refco Inc. to pay off $127.5 million in
intercompany claims has raised the ire of the lead plaintiffs in a
securities suit pending against the company, Portfolio
Media reported yesterday. The plaintiffs filed
an objection to the Aug. 10 order on Monday in the U.S. Bankruptcy Court
for the Southern District of New York, claiming that the court erred in
granting Refco’s motion. The ruling allowed Refco subsidiary Refco
Securities LLC to repay Refco Capital LLC about $127.5 million, a debt
incurred as a result of a series of transactions between the two
entities before Refco’s collapse. However, the plaintiffs in the
securities suit pending against RCM have objected to the
multimillion-dollar payments by RSL, alleging that the court failed to
conduct an adequate investigation of the circumstances before handing
down a ruling.
id='7'>Fischer Imaging Files for
Chapter 11
Fischer Imaging Corp.
of
size='3'>Denver
chapter 11 bankruptcy protection Tuesday, one day after reaching an
agreement to sell all of its assets, the Denver Business Journal
size='3'>reported today. The Denver-based medical equipment manufacturer
said that it will immediately move to have the sale of its remaining
assets to Byers Peak Inc. approved by the bankruptcy court, and
that it would move to convert the chapter 11 filing into a chapter
7 after the sale to
w:st='on'>
size='3'>Byers
face='Times New Roman' size='3'>Peak
goes through.
size='3'>The company posted a big drop in revenue for the first half of
the year, dropping to $12.5 million from $25.6 million a year earlier.
The company posted a net loss for both periods, although the loss fell
to $3.3 million from $15.7 million in the first half of 2005.
href='http://denver.bizjournals.com/denver/stories/2006/08/21/daily25.html?jst=b_ln_hl'>Read
more.
size='3'>California Couple Pleads Guilty to
Bankruptcy
Fraud
A former
w:st='on'>Point
Loma,
face='Times New Roman' size='3'>Calif.
size='3'>, couple, who authorities said hid more than $1 million in an
offshore bank account, filed for bankruptcy and then sailed off
to
size='3'>Mexico
guilty to bankruptcy fraud in
w:st='on'>San
Diego
yesterday, the San Diego
Union Tribune reported today. Terry and Susan
Brunning agreed to forfeit the million-dollar bank account, as well as
their sailboat. They were living on the boat when Mexican officials
arrested them in
size='3'>Puerto Vallarta in July 2003
on a
Diego
indictment. They fought extradition for 2½ years while jailed
in
size='3'>Mexico City
eventually made it to the Mexican Supreme Court, which ordered them
returned to the
w:st='on'>United
States
December. In their initial bankruptcy petition, the couple claimed
assets of $1,041 and debts of $228,002, although the Internal Revenue
Service later determined that they also owed $1.7 million in back
taxes.
href='http://www.signonsandiego.com/news/metro/20060823-9999-1m23brun.html'>Read
more.
International
id='9'>Court Upholds Yukos
Bankruptcy Ruling
A court has upheld the
decision by a meeting of Yukos Oil Company creditors to declare the
company bankrupt, rejecting an appeal lodged by Yukos, according to the
Russian News and Information Agency today. Yukos, once
w:st='on'>
size='3'>Russia
largest oil company, was declared bankrupt August 1 after three years of
litigation with tax authorities over the company's tax arrears. The
Yukos group, whose founder Mikhail Khodorkovsky is serving an eight-year
prison term after being convicted for fraud in May 2005, now faces a
total of $16.6 billion in claims from creditors, including Rosneft-owned
former production unit Yuganskneftegaz ($4.07 billion), the Federal Tax
Service ($11.6 billion), Rosneft ($482 million) and more than 20 other
companies.
href='http://en.rian.ru/business/20060823/53034667.html'>Read
more.
href='http://en.rian.ru/business/20060823/53034667.html'>