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December 13, 2005
name='1'>PBGC
Head Urges Congress to Overhaul Pensions System
Congress must
overhaul the
system of insuring private pensions to avoid a massive taxpayer
bailout, the
head of the nation’s pension insurer said Monday, the Associated
Press reported
today. The Pension Benefit Guaranty Corp. is not in an immediate cash
crunch,
but eventually will be unable to meet its obligations to retirees if
the law
is not changed, Bradley Belt, the federal agency’s executive
director, said
in a speech. Belt spoke amid uncertainty over a pension overhaul bill
in the
House. House Majority Whip Blunt, the acting majority leader, said
last week
the bill was off the chamber’s agenda until next year. Ways and
Means Chairman
Thomas and Education and the Workforce Chairman Boehner are still
hoping the
House might vote on the bill before the end of the year. The Senate
adopted
its version of the legislation last month.
id='2'>GM
Bankruptcy Possible
A bankruptcy by
General Motors
Corp. is not "far-fetched" if present trends at the company
persist,
Standard & Poor’s said on Monday, shortly after cutting
world’s largest
automaker’s ratings deeper into junk territory, Reuters reported
today. The
downgrade and S&P’s comments initially sent GM shares and
bonds lower as
investors fretted about the rising risk that the company will have
trouble repaying
its debt. GM spokeswoman Gina Proia said that the automaker has no
strategy
or intention to declare bankruptcy. S&P cut GM’s corporate
credit rating
by two notches to "B," five steps below investment grade,
from "BB-minus."
The outlook is negative, meaning the rating is likely to be lowered
again over
the next two years. S&P’s rating on GM is the lowest of the
three major
rating agencies.
href='http://today.reuters.com/news/newsArticleSearch.aspx?storyID=12528%2B13…'>Read
more.
id='3'>Federal
Vioxx Suit Ends With Mistrial
A federal judge
yesterday
declared a mistrial in the nation’s first federal Vioxx trial
after a Southern
District of Texas jury was unable to decide on a verdict, the
Texas Lawyer
reported yesterday. U.S. District Judge Eldon Fallon of New Orleans,
who was
presiding over the suit in Houston because of Hurricane Katrina damage
to New
Orleans, declared the mistrial in Evelyn Irvin Plunkett, et al. v
Merck &
Co. The nine-member jury started deliberations at about noon on Dec.
9. Read
more.
Airlines
id='4'>Aloha
Faces Snag in Bankruptcy Emerge
Aloha Airlines
faces a last-minute
snag in its plans to emerge from bankruptcy this week, the Associated
Press
reported yesterday. The company says further delay could shut down the
airline.
The Pension Benefit Guaranty Corp. has notified the U.S. bankruptcy
court that
it will appeal confirmation of Aloha’s reorganization plan in
court. Aloha had
planned to terminate four of its employee pension plans Wednesday and
to emerge
from bankruptcy Thursday. An emergency hearing on the pension appeal
is scheduled
in the court today. Read more.
id='5'>Delta
Company Objection Filed
Delta Air Lines
filed an
objection with the U.S. bankruptcy court to the motion of DP3 Inc.
(the Delta
Pilots’ Pension Preservation Organization), seeking a court
order directing
the 2004 examination of the company and certain officers,
BankruptcyData.com
reported today.
id='6'>Refco
Conversion Sought
Numerous interested
parties
filed a joint motion as the Moving Customer Group with the U.S.
bankruptcy court
seeking an order converting the Refco Capital Markets chapter 11
reorganization
proceedings to chapter 7 stockbroker liquidation under subchapter III,
BankruptcyData.com
reported today. The motion also seeks court appointment of an interim
trustee
for Refco Capital Markets. The motion maintains the cause for
conversion exists
because the Refco Capital Markets in ineligible to be a chapter 11
petitioner
since a "stockbroker cannot be a chapter 11 debtor." The
court scheduled
a Jan. 31, 2006, hearing to consider the motion.
id='7'>Friedman’s
Inc. Emerges From Chapter 11
Friedman’s
Inc. announced
that the company’s reorganization plan became effective on
December 9, marking
its emergence from chapter 11, a press release said yesteday.
Friedman’s has
met all requirements to emerge from bankruptcy, and the implementation
of the
court-approved plan brings to a conclusion the company’s
financial restructuring.
In conjunction with its emergence from chapter 11, the company also
closed on
its new $125 million exit financing facility provided by CIT Group,
Inc., which
has a five-year term and will be used to fund payments to be made in
accordance
with the company’s plan, for ongoing working capital needs, and
for general
corporate purposes.
href='http://biz.yahoo.com/prnews/051212/nym219.html?.v=17'>Read
more.
id='8'>Ultimate
Electronics Plan Confirmed
The U.S. bankruptcy
court
confirmed Ultimate Electronics’ reorganization plan,
BankruptcyData.com reported
today. The plan provides for the establishment of a consolidated
entity for
the purpose of liquidating remaining assets. The plan administrator
will serve
as the company’s only officer and director.
id='9'>Chicago
Firm Experiences Drop In Bankruptcy Inquiries Since Law Change
David Siegel, an
established
Chicago bankruptcy attorney, states "it could take anywhere from
six months
to one year before bankruptcy filings rise to the pre-reform
level,” in
a press release yesteday. His consumer bankruptcy law firm handled 44
percent
fewer bankruptcy inquiry calls since the law change. There was also a
decrease
in Internet inquiries at www.bankruptcylawyerschicago.com. The trend
seems to
be universal as bankruptcy lawyers throughout the country are
reporting a drastic
loss of new business. Coupled with the new law requiring greater
accountability
for lawyers who assist debtors, many lawyers have chosen to
concentrate their
practice in areas other than bankruptcy law.
href='http://www.prleap.com/pr/21439/'>Read
more.
id='10'>Delphi
Eyes Asia for Growth
Bankrupt auto parts
maker
Delphi Corp. said yesterday that the Asia-Pacific region, particularly
business
with Japanese auto makers, was key to its future growth, playing down
concerns
about the impact of its chapter 11 filing in the United States,
Reuters reported
today. The region accounted for $1.1 billion of Delphi’s sales
out of a total
$28.6 billion last year. Chief Executive Robert "Steve"
Miller and
other top executives are slated to meet employees and customers who
are worried
about Delphi’s future after it filed the biggest bankruptcy in
U.S. automotive
history in October. Miller stressed that Delphi’s chapter 11
filing in no way
affected its international operations, which he said would continue to
expand
as the company prepares to raise spending on engineering to $2 billion
in 2006.
href='http://today.reuters.com/business/newsArticle.aspx?type=ousiv&storyID=2…'>Read
more.
id='11'>Enron’s
Ken Lay to Use Speech to Present His Defense
Former Enron Corp. Chairman Kenneth Lay, facing trial on fraud
charges related
to the $60 billion collapse of the company, will make his case
publicly in
a speech to business executives in Houston today, Bloomberg News
reported.
Defendants in criminal trials are usually advised by their lawyers
not to
make public statements about charges to avoid having their remarks
used against
them. Lay, who has a Web site with data posted on his case, held a
press conference
last year to defend himself, a tactic lawyers called risky at the
time. Lay
will address the Houston Forum, a business roundtable. He’ll
take questions
from members of the group attending the luncheon speech, a
spokesperson for
the forum said. The media will not be able to query him. The Houston
Forum
didn’t disclose the subject of Lay’s speech.
href='http://www.bloomberg.com/apps/news?pid=10000103&sid=avfGYq2CZ1lc&refer=…'>Read
more.
Meanwhile, about
href='http://www.nytimes.com/aponline/business/AP-Enron-Bonuses.html?ex=11351…'>40
former Enron traders have been ordered by a Texas bankruptcy judge
to return $20 million of bonuses they received just before the company
went
bankrupt, the Associated Press reported today. The money will go
to employees
fired around the same time. On Monday it was made public that U.S.
Bankruptcy
Judge Robert McGuire, a Dallas-based judge sitting in Houston for this
case,
ordered Friday that the bonuses in question were fraudulent and
improperly preferential.
Enron paid out $105 million in bonuses to favored trading personnel
just before
it declared chapter 11 bankruptcy in December 2001.
id='12'>Calpine
Taps Turnaround Veteran to Assume Role of CEO
Calpine Corp. named
former
HealthSouth Corp. chairman Bob May as CEO, two weeks after the board
unexpectedly
ousted the power-generation company’s two top officers, the
Wall Street
Journal reported today. Mr. May takes command of a company on the
edge
of bankruptcy, weighed down by almost $18 billion in debt and
disappointing
cash flow and beset by restive bondholders who repeatedly have gone to
court
to prevent the San Jose, Calif., company from disposing of assets that
back
Calpine debt securities. In an interview yesterday, Mr. May said that
his immediate
goal is to immerse himself in Calpine’s finances. He said he has
made no judgment
about whether the company will have to seek bankruptcy
protection.
href='http://online.wsj.com/article/SB113441964738120406-email.html'>Read
more.
id='13'>Ford,
UAW Set Tentative Deal on Health-Care Concessions
The United Auto
Workers and
Ford Motor Co. have come to terms on a health care agreement that will
enable
the auto maker to make much-needed cost cuts, according to a Dow Jones
newswire
report yesterday. The union didn’t specify what concessions
would be made, but
said that UAW Ford workers will continue to receive some of the best
health
care benefits of any industrial employees in the country. The union
said officials
representing Ford workers are scheduled to meet this week in Detroit
to discuss
the tentative agreement.
href='http://online.wsj.com/article/SB113425962886819446-email.html'>Read
more.
International
id='14'>Bankruptcy
OK’d in Fake Japanese Data Scam
The Tokyo District
Court
yesterday accepted a bankruptcy petition filed by a building design
office involved
in the designing of several hotels whose quake-proof specifications
were falsified
by a disgraced architect, the Japan Times reported today.
According
to a lawyer for Heisei Sekkei design office, it has applied for court
protection
from 55 creditors with an estimated 637 million yen in debts.
Tokyo-based Heisei
Sekkei is affiliated with Kimura Construction Co., a construction firm
based
in Yatsushiro, Kumamoto Prefecture, which built many properties whose
quake-proof
data were fabricated by the architect, Hidetsugu Aneha. Kimura
Construction
went bankrupt shortly after the building-code scandal was unearthed in
mid-November.
href='http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nn20051213a9.htm'>Read
more.
id='15'>Bird
Flu Places Vietnamese Farmers at Risk of Bankruptcy
Vietnam is losing
1,140 billion
VND ($71.25 million U.S.) a month in sales of chickens and eggs,
according to
the chairman of the Vietnam Poultry Association, VNANet.vn reported
yesterday.
Speaking at a meeting last week in Ha Noi held by the association,
Chairman
Tran Cong Xuan said that the bird flu scare had caused poultry sales
to plummet.
About 40 million chickens and 300 million eggs are going unsold each
month.
Strict government regulations resulting in the massive culling of
chickens have
placed 8 million farmers at risk of bankruptcy. To support farmers,
the government
is giving them 10,000 VND for each quarantined chicken they slaughter
for sale.
href='http://www.vnanet.vn/newsa.asp?LANGUAGE_ID=2&CATEGORY_ID=29&NEWS_ID=178…'>Read
more.