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May 15, 2007
name='1'>Consumer Bankruptcy Filings Fall 15 Percent in
April
w:st='on'>
size='3'>U.S.
size='3'>consumer bankruptcy filings fell 15 percent nationwide in April
from the previous month, according to the American Bankruptcy
Institute (ABI). Relying on data from the National Bankruptcy Research
Center (NBKRC), overall consumer filings totaled 62,489 in April, a
figure that was up 33.6 percent from April 2006. Chapter 13 filings
constituted 37 percent of all consumer cases in April, down slightly
from earlier this year. “Though bankruptcy filings are elevated
from a year ago, overall levels are still at about one-third the rate
experienced before Congress changed the laws,” said ABI Executive
Director Samuel J.
Gerdano.
href='http://www.abiworld.org/AM/Template.cfm?Section=Monthly_Bankruptcy_Statistics&Template=/MembersOnly.cfm&NavMenuID=3716&ContentID=46994&DirectListComboInd=D'>Click
here to view the April filing statistics.
face='Times New Roman' size='3'>
name='2'>St.
size='3'> Vincent Trustee Finds Disclosure Statement
Lacking
U.S. Trustee
Diana G. Adams
size='3'>has urged a bankruptcy court to deny approval of St. Vincent
Catholic Medical Center's disclosure statement, arguing in court
documents Friday that the bankrupt health care system’s statement
is “deficient,'
size='3'>Bankruptcy Law360 reported yesterday.
Adams pointed out that two exhibits to the disclosure statement were
completely missing, preventing creditors from being able to make an
informed decision about whether to accept or reject
w:st='on'>St.
Vincent
plan. Both
Exhibit 3, containing St. Vincent’s liquidation analysis, and
Exhibit 4, containing the “Debtors' Projected Financial
Information,” are missing from the disclosure statement,
size='3'>Adams
Adams said that
size='3'>St. Vincent’s
disclosure statement also fails to include adequate disclosure with
respect to the debtors’ financial condition in
face='Times New Roman' size='3'>chapter 11.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=24706'>Read
more. (Registration required.)
Autos
name='3'>Dana, Creditors Say Goodyear's Claim Too
Late
Bankrupt auto parts maker
Dana Corp. and its unsecured creditors’ committee have filed
objections to claims filed by Goodyear Tire and Rubber Company in March,
nearly six months after the deadline to file claims had passed,
Bankruptcy Law360
reported yesterday. Dana listed Goodyear as having six
general unsecured claims totaling $3.1 million in its schedules of
assets and liabilities and statement of financial affairs filed last
June. The court later set Sept. 21, 2006, as the deadline for proofs of
claims to be filed against Dana. However, Goodyear, which supplied
automotive hoses to some of the Dana companies, filed administrative
expense claims against the company for $1.4 million at the end of March,
more than six months after the bar date. Goodyear said that it had not
received notice of the bar date from Dana, and thus should be allowed an
order saying its claims were filed on time.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=24659'>Read
more. (Registration required.)
face='Times New Roman' size='3'>
name='4'>Delphi
size='3'> and IRS Reach Agreement on Pension
Taxes
Delphi Corp. reached an
agreement with the U.S. Internal Revenue Service that will help the
auto-parts supplier avoid as much as $1.4 billion in excise taxes and
transfer some of its pension liabilities to its former parent, General
Motors Corp., the Wall
Street Journal reported today. Delphi’s
agreement with the IRS will extend a June 15 deadline the company has to
honor minimum funding requirements under its pension plans, according to
papers filed Friday in a U.S. Bankruptcy Court in
w:st='on'>
York. The waivers allow
the company to skip required payments to the plans that are due June 15
and move the payment date to its emergence from bankruptcy
protection.
size='3'>Delphi
aren't in place, the IRS will declare a $1.25 billion shortfall for the
plans for the year ended Sept. 30, 2006.
In related news,
size='3'>Delphi
court to approve a settlement with Electronic Data Systems Corp., the
creditor that helped unravel an alleged accounting fraud at the
beleaguered auto parts company,
size='3'>Bankruptcy Law360 reported yesterday.
EDS, a member of the unsecured creditors’ committee, provides
information technology outsourcing services to
w:st='on'>
size='3'>Delphi
that Delphi is responsible for approximately $11,173, 088.21 in unpaid
invoices for
size='3'>U.S. operations,
$518,330.54 in unpaid invoices with respect to EDS'
w:st='on'>
size='3'>Mexico
size='3'>operations, and $4,999,999.93 due under Vega notes receivables,
the motion states. Under the settlement, EDS will be granted a general
unsecured non-priority claim against DAS LLC in the amount of
$11,678,813.95 and
size='3'>Delphi in the amount of
$4,999,999.93, court papers state.
size='3'>A hearing has been scheduled for May 31, with objections due on
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=24670'>Read
more. (Registration required.)
name='5'>Commentary: In Chrysler Deal, a Test for the
UAW
The $7.4 billion deal
that Cerberus Capital Management struck to take control of Chrysler will
create a lot of questions, including whether equity investors can
fix Chrysler for good, and whether they can avoid a confrontation with
the United Automobile Workers union, the
size='3'>New York Times reported today. By
unwinding a nine-year-old merger between Chrysler and Daimler-Benz
of
face='Times New Roman'
size='3'>Germany
Cerberus is also taking on Chrysler’s $18 billion obligation for
health care and pensions for employees and retirees. Any efforts to
sharply reduce those perks — which Chrysler can afford but says
represent a cost burden of $1,500 a vehicle — will probably put it
at odds with the UAW. The issue will take on added importance in two
months, when the union and
w:st='on'>
size='3'>Detroit
open talks on a new national contract. The union’s position on
Chrysler may influence talks with General Motors and the Ford Motor
Company, with the outcome representing the latest chapter in the
wholesale restructuring of the American auto industry.
href='http://www.nytimes.com/2007/05/15/business/15Auto.html?_r=1&oref=slogin&pagewanted=print'>Read
more.
Rejects Congoleum’s $25 Million Pact with Insurers
Bankruptcy Judge
Kathryn Ferguson
rejected a tentative agreement between Congoleum and the
Travelers Cos. Inc., siding with the representative for future asbestos
claimants instead,
size='3'>Bankruptcy Law360 reported
yesterday. Judge Ferguson argued that she
could not properly evaluate the settlement given that the company still
does not have a reorganization plan in place, although it has been in
bankruptcy for nearly three years.
size='3'>Several of Congoleum’s insurers, including Continental
Casualty Co., Continental Insurance Co., First State Insurance Co. and
Twin City Fire Insurance Co., had filed a motion for summary judgment
denying the confirmation of Congoleum’s reorganization
plan—the company’s tenth version—on Aug. 15. Judge
Ferguson ruled that a bondholder-supported plan does not satisfy the
funding requirements under federal bankruptcy law and said the current
classification scheme in the plan does not provide substantially similar
treatment for similarly situated creditors.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=24720'>Read
more. (Registration required.)
Airlines
name='7'>Northwest Examiner Wants Report Kept
Confidential
An examiner appointed by the
bankruptcy court to investigate allegations that
face='Times New Roman'>Northwest Airlines Corp. is
considering a merger behind shareholders’ backs has asked that his
report be kept confidential at the behest of the airline,
Bankruptcy Law360
reported yesterday. The court-appointed examiner,
Richard Nevins
size='3'>, has moved for authorization from U.S. Bankruptcy Judge
Allan Gropper
size='3'>to file the report under seal, saying the airline fears the
leaking of 'highly sensitive' information. The motion requests that the
written report be provided only to a select group of stakeholders,
including the counsel for the unsecured creditors’ committee and
the ad hoc equity committee.
size='3'>On March 30, the court ordered U.S. Trustee
face='Times New

















Roman'
size='3'>Diana Adams, who is overseeing
Northwest’s chapter 11 case, to assign an independent examiner to
conduct a probe to determine whether the bankrupt carrier had
underestimated the value of its assets and the extent of any merger
discussions.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=24710'>Read
more. (Registration required.)
name='8'>Survey: Airlines Need Better Customer
Ties
A survey to be released today
by the University of Michigan revealed that UAL Corp.'s United Airlines
and Delta Air Lines Inc., both of which restructured under chapter 11 in
recent years, ranked last and next-to-last, respectively, among airlines
in customer satisfaction, the Associated Press reported today. Marks
were only slightly better for AMR Corp.'s American Airlines, which
teetered on the verge of bankruptcy before winning employee concessions
in 2003, and Northwest Airlines Corp., which is currently in bankruptcy.
About 20,000 people were asked during the first quarter of this year to
rate their level of satisfaction as customers of companies in a variety
of industries, including the airlines. An American Customer Satisfaction
Index, on a scale of 1 to 100, was created based on the responses to
questions about overall satisfaction, intention to be a repeat customer
and perception of quality, value and expectations. The index for the
airline industry as a whole fell to 63 from 65 last year. Southwest had
the highest index with 76, up from 74 last year. United's was the lowest
at 56. Bringing up the rear was Delta at 59 and American at 60. Eagan,
Minn.-based Northwest was only slightly better at 61.
href='http://www.nytimes.com/aponline/business/AP-Airlines-Customer-Satisfaction.html?pagewanted=print'>Read
more.
name='9'>Bad
w:st='on'>
size='3'>U.S.
size='3'>Loans Plague HSBC
HSBC Holdings PLC has
taken steps to clean up its troubled
w:st='on'>
size='3'>U.S.
size='3'>mortgage loans, but the British bank still faces challenges,
including mortgage-delinquency ratios that continue to rise, the
Wall Street Journal
reported today. In the first quarter, the delinquency
ratio for its
w:st='on'>
size='3'>U.S.
size='3'>mortgage-services business rose to 5.26 percent from 4.76
percent in the fourth quarter, according to a filing made yesterday with
the U.S. Securities and Exchange Commission. That rate is nearly double
HSBC's rate in the first quarter of 2006. The bank cited a declining
balance of customer borrowings as one reason for the higher delinquency
ratio. Its mortgage-services customer loans and advances stood at $46.6
billion in the first quarter, compared with $49.5 billion in the fourth
quarter. The filing also showed a large book of adjustable-rate
mortgages, whose interest rates will climb this year and add to pressure
on borrowers to meet payments.
href='http://online.wsj.com/article/SB117919761037102965.html?mod=us_business_whats_news'>Read
more. (Registration required.)
w:st='on'>
name='10'>Houston
face='Times






New



Roman'
size='3'> Faces Challenge over Pension Fund
Short of layoffs, the
city won't meet its full obligation to the municipal pension fund in the
next fiscal year, Mayor Bill White says, citing rising public safety and
health care costs that are expected to strain resources, the
Houston Chronicle
reported yesterday. In the next budget, expected to be
unveiled Wednesday, White's administration will propose paying only
two-thirds of the statutorily required pension contribution — an
arrangement that still would need approval from the pension fund board.
The employee retirement plan continues to be a challenge for White, who
inherited a $1.9 billion unfunded liability in the pension fund when he
took office in 2004. White hopes to reduce the liability further by
proposing a hybrid approach that would allow employees to opt out of
contributing a portion of their pay in exchange for a reduced retirement
benefit. The city has prepared for some of these looming payments, White
said, building up tens of millions in an undesignated fund in recent
years. However, that is not enough to meet the additional $39 million
for the increased pension obligation.
href='http://www.chron.com/disp/story.mpl/front/4800636.html'>Read
more.
name='11'>TROUBLED COMPANIES IN THE NEWS
1000’s of companies lose
money or experience some form of difficulty each
quarter.
The business news
articles below are taken from the
size='3'>Daily Summary of Troubled & Fast Growing U.S. Companies and
Other Business News published by Bastien
Financial Publications.
To begin receiving the COMPLETE
Daily e-Summary, that emails you information on over 70 such companies
each morning, email
face='Times New Roman' color='#0000ff'
size='3'>steve@creditnews.com
size='3'>your name, company name, address, phone and fax.
We’ll set you up within 24 hours.
Receive an ABI
member’s discount of 50% off the $500 annual subscription
fee. Indicate “ABI CODE 27” in
your email.
size='3'>Advanced Environmental Recycling Technologies
Inc., a
w:st='on'>
size='3'>Springdale
firm that recycles plastics into building materials, reported a first
quarter net loss of $1.2 million. Revenue declined 19%–to $22.4
million.
size='3'>Advanced Micro Devices Inc., a
size='3'>Sunnyvale
maker of semiconductor chips, announced that it will reduce its payroll
by 430 workers (2.6% of its workforce), as it moves to reduce
costs. AMD, which is in a bruising price battle with rival Intel
Corp., recently reported a first quarter loss of more than $600 million,
compared to a $185 million profit in the year-earlier first
quarter.
size='3'>Alcatel-Lucent, the French-American
manufacturer of telecommunications gear, reported a first quarter loss
of $10.8 million. The company said that earnings were hurt by expenses
and accounting changes related to the merger last year of France’s
Alcatel and Lucent Technologies of New Jersey. The firm earlier said
that the merger will result in the loss of some 12,500 jobs and more
than $2 billion in restructuring costs. Sales in the quarter fell
12%–to $5.2 billion, as a result of dropping sales of older
wireless network equipment and traditional telephone
gear.
size='3'>Avatar Holdings Inc., a
size='3'>Coral Gables
developer of residential communities, reported its first quarter net
income declined 55%–to $11.1 million. Revenue declined
40%–to $92.4 million.
size='3'>Congoleum Corp., a
w:st='on'>
size='3'>Mercerville
flooring products, reported a first quarter net loss of $350,000.
Revenue declined 14%–to $49.3 million.
Jaco Electronics Inc.,
w:st='on'>
w:st='on'>N.Y.
loss of $750,000. Revenue declined 18%–to $49.9 million.