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May 12, 2008
Autos
name='1'>Delphi Asks Court to Increase Bankruptcy Loan by $254
Million
Delphi Corp., the bankrupt former
parts subsidiary of General Motors Corp., asked the court to approve a
$254 million increase in its loan package after more lenders showed
interest in funding the loan than the company expected, Bloomberg News
reported yesterday. Delphi said that its debtor-in-possession loan was
oversubscribed during a syndication process, giving Delphi the
opportunity to restructure the loan on more favorable terms and increase
the total borrowings. Delphi filed a motion May 9 with the U.S.
Bankruptcy Court in New York seeking approval of the changes. Delphi won
an extension of its bankruptcy loan on April 30 from Bankruptcy Judge
Robert Drain. The Troy, Mich.-based company's loan was
to mature on July 1.
href='http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a79_CpgBKsCc'>Read
more.
Files Amended Reorganization Plan
Bankrupt auto parts maker Dura
Automotive continues to edge closer to emerging from bankruptcy, most
recently filing an amended chapter 11 plan that lowers the value of the
company from $600 million to $495 million, Bankruptcy Law360
reported on Friday. The biggest change made by the new plan is the
satisfaction of the second-lien facility claims in equity rather than in
cash. In addition, the new plan also stipulates that Dura will pay all
debtor-in-possession facility claims in full and in cash. The bulk of
the plan, however, remains the same, with the notable exception of the
total enterprise value.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=55767'>Read
more. (Registration required.)
Fremont
General Says Bankruptcy Filing Is Likely
Fremont General Corp., the former
subprime lending giant that regulators forced out of the mortgage
business last year, said Friday that it probably would seek bankruptcy
protection to hasten its liquidation of assets, the Los Angeles
Times reported on Saturday. Fremont General said that its board
would wait to make the bankruptcy filing until regulators approved the
sale of its retail business to commercial lender CapitalSource Inc. of
Chevy Chase, Md. The retail operation includes 22 Fremont Investment
& Loan offices in California and $5.6 billion in deposits. When the
deal was announced last month, CapitalSource officials said that the
branches would stay open with many of the same employees and no changes
in interest rates or other terms of existing certificates of deposit or
other accounts.
href='http://www.latimes.com/business/la-fi-fremont10-2008may10,0,4686335.story'>Read
more.
IBC
Closes on Revamped DIP Finance Package
Interstate Bakeries Corp. closed on an
amended debtor-in-possession (DIP) financing package that provides the
maker of Wonder Bread and Hostess Twinkies with an additional $50
million and extends the maturity date to Sept. 30, Bankruptcy
Law360 reported on Friday. The amended and restated DIP credit
agreement with certain of the company's existing lenders under its
current DIP credit facility, other new lenders and JPMorgan Chase Bank
NA (as administrative agent and collateral agent for the lenders) was
approved April 29, Interstate said. The bakery revealed that it had
amended the financing commitment with new and existing lenders,
submitting the revamped DIP credit facility to the U.S. Bankruptcy Court
for the Western District of Missouri for approval on April 18.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=55848'>Read
more. (Registration required.)
Spat Spurs Suit Against Home Interiors
Meredith Corp. has filed suit against
Home Interiors & Gifts Inc. in a dispute over about $385,000 worth
of paper that the bankrupt home décor company has argued belongs to
its bankruptcy estate, Bankruptcy Law360 reported on Friday.
The suit seeks a declaratory judgment that the paper belongs to Meredith
and that the company had not violated the automatic stay in Home
Interiors' bankruptcy. It also asks the court to grant Meredith an
allowed claim of $79,370.90, the amount the company says is still
outstanding on its account for Home Interiors.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=55746'>Read
more. (Registration required.)
name='6'>California TV Stations File for
Bankruptcy
Visalia, Calif.-based Pappas
Telecasting Companies announced late Friday it was filing for bankruptcy
protection on behalf of 13 of its television stations, the Visalia
Times Delta reported on Saturday. The company said the filing
decision, which includes Fresno stations KMPH Fox 26 and CW KFRE 59,
will not affect employee compensation or programming. The company
pointed to a slowing U.S. economy and the company's inability to obtain
new financing.
href='http://www.visaliatimesdelta.com/apps/pbcs.dll/article?AID=/20080510/NEWS01/80510001'>Read
more.
Pacific
Lumber Settlement Questioned by Bondholders
Bondholders in Pacific Lumber Co.'s
bankruptcy case said that they want to investigate possible fraud in a
settlement that calls for the company to abandon its reorganization plan
and support a rival proposal, the Wall Street Journal reported
today. Bank of New York Mellon Corp., which represents the bondholders,
said that it wants to probe several aspects of the agreement. The bank
wants to look into whether the deal, a key development in the
15-month-old chapter 11 proceeding, is 'the product of fraud or
collusion and was forced on' Pacific Lumber, according to documents
filed last Thursday with the U.S. Bankruptcy Court in Corpus Christi,
Texas. Bankruptcy Court Judge Richard Schmidt will
consider approving the agreement at a hearing Thursday.
href='http://online.wsj.com/article_print/SB121056111546084353.html'>Read
more. (Registration required.)
Growing
Deficits Threaten Public Pensions
The funds that pay pension and health
benefits to police officers, teachers and millions of other public
employees across the country are facing a shortfall that could soon run
into trillions of dollars, the Washington Post reported
yesterday. State governments alone have reported they are already
confronting a deficit of at least $750 billion to cover the cost of the
retirement benefits they have promised. However, that figure likely
underestimates the actual shortfall because of the range of methods they
use to make their calculations, including practices that have been
barred in the private sector for decades. By their own assessment, state
and local governments acknowledge that their funds for retiree benefits
are increasingly falling behind, with the number that are severely
underfunded soaring to 40 percent in 2006, a five-fold increase from
2000, according to the U.S. Government Accountability Office.
href='http://www.washingtonpost.com/wp-dyn/content/article/2008/05/10/AR2008051002883_pf.html'>Read
more.
Banking
Group's Efforts Surge Prior to GSE Bill Markup
The trade group representing the
Federal Home Loan Bank System is making a last-minute bid for a panel to
oversee its 12 regional banks as well as mortgage giants Fannie Mae and
Freddie Mac, as opposed to the creation of a single regulator,
CongressDaily reported on Friday. The Council of Federal Home
Loan Banks faces an uphill bid in its lobbying campaign as the Senate
Banking Committee attempts to mark up legislation this week that would
revamp oversight at government-sponsored enterprises Fannie and Freddie
as well as the Federal Home Loan Bank System. The Bush administration
has led the push to consolidate supervision of the three into a single
regulator and has support on both sides of the aisle. The system is
regulated by a five-member board. However, a House-passed bill would
create a single regulator for all three, requiring them to adhere to the
same mission oversight.
MBIA
Swings to a Loss on Derivatives Hit
MBIA Inc. booked its third consecutive
quarterly loss, as the country's largest bond insurer was hurt by a
$3.58 billion loss on contracts the company has written to insure
complicated securities often backed by mortgages against default, Dow
Jones Newswires reported today. The quarter also showed the damage done
to MBIA's business by concerns about its exposure to troubled
securities, as net premiums written fell 41 percent. MBIA posted a net
loss of $2.41 billion compared with net income of $198.6 million a year
earlier. The company reported negative revenue of $2.96 billion due to
the loss on insured derivatives, compared with a profit of $729.9
million. MBIA's paper losses on insured derivatives would have been $7.1
billion, except for an offsetting $3.6 billion gain on the declining
value of its own credit guarantees.
href='http://online.wsj.com/article/SB121058992836184835.html?mod=us_business_whats_news'>Read
more. (Registration required.)
size='3'>International
name='11'>Japan April Corporate Bankruptcy Cases Increase 24
Percent
Private credit research agency Teikoku
Databank Ltd. said that Japanese corporate bankruptcies rose 24 percent
on the year in April to 1,013 cases, Dow Jones Newswires reported today.
The result marked the fourth straight month of on-year rises in
insolvencies. The number of insolvent firms with debts of more than Y1
billion stood at 84 in April, the highest figure in three years. Teikoku
said that the construction industry continues to struggle due to rising
raw material prices and declines in public works projects. In April, 274
construction firms went out of business, up 41 percent from a year
ago.
href='http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=3343e969-c10a-45c5-9b39-9e81cdd296f3'>Read
more.