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October 3, 2006
id='1'>Dana Corp. Unlikely to File Exit Plan by
Deadline
While
w:st='on'>Toledo
face='Times New Roman' size='3'>Ohio
size='3'>’s Dana Corp. is scheduled to file its plan to emerge
from bankruptcy protection in three months, the company and experts
agree that uncertainty in the
w:st='on'>
size='3'>U.S.
size='3'>auto industry, including cost-cutting pressures from the Big
Three, will make it difficult for the company to finish formulating a
plan in that time, the
size='3'>Toledo Blade reported today. A Dana
spokesman conceded yesterday that the company is likely to ask for
additional time to file its reorganization plan despite having made
steady progress during the bankruptcy's initial stage. Dana is more than
a third of the way through the 18 months that Chairman and Chief
Executive Mike Burns initially told creditors and others he hoped it
would take the company to emerge from bankruptcy. 'I can't say that 18
months is not possible, but it is an aggressive time frame,' said
attorney Reggie
Jackson, president elect of the American
Bankruptcy Institute and an attorney with Vorys, Sater, Seymour and
Pease LLC. 'There's a lot going on, and there's a lot yet that has to be
finished,' added attorney
size='3'>Jean Robertson of McDonald Hopkins in
Cleveland.
href='http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20061003/BUSINESS…'>Read
more.
w:st='on'>
id='2'>Meridian
face='Times New Roman' size='3'> Seeks Sixth
Extension
Meridian Automotive
Systems is asking the court overseeing its chapter 11 proceedings to
extend the bankrupt auto parts maker's exclusive periods for filing a
reorganization plan and soliciting plan approval, the sixth such request
that Meridian has made since it declared bankruptcy in April
2005, Portfolio
Media reported yesterday. In their September
motion,
face='Times New Roman' size='3'>Meridian
asked the court for an extension of about three months
for exclusive filing and approval periods.
w:st='on'>
size='3'>Meridian
exclusivity period for filing a chapter 11 plan, which expired on Sept.
30, to stretch for 92 extra days up to Dec. 31, 2006.
w:st='on'>
size='3'>Meridian
asked the court to extend the exclusive solicitation period for 90 days
to March 1, 2007.
w:st='on'>
id='3'>U.S.
face='Times New Roman' size='3'> Auto Makers Trail Japanese Rivals
in Profits
A study released Monday by the
Harbour-Felax Group said that domestic auto makers make an average of
$2,400 less per vehicle than their Japanese rivals because of high labor
benefit costs, less-efficient purchasing and manufacturing procedures,
and a weak yen, the Associated Press reported yesterday. The domestic
auto makers must quickly reduce their labor and manufacturing costs or
they may not be in business over the long term, said company President
Laurie Harbour-Felax. 'If they don't do this, they have their own
problems to deal with in terms of long-term viability,' she said. On
average, domestic auto makers take in $21,597, 11 percent less than the
average revenue of Japanese auto makers, which collect $24,289 per
vehicle, the report said. The authors attributed that disparity to steep
discounts that domestic manufacturers use to fuel sales, as well as
discounts for rental and other fleet sales, which average 25 percent of
total domestic sales.
href='http://online.wsj.com/article/SB115980786590380099.html?mod=us_business…'>Read
more.
Airlines
id='4'>Pushed to Liquidation, Mesaba Asks to Cut
Wages
Saying it will soon run
out of cash, bankrupt Mesaba Airlines Inc. is again asking a court to
allow it to void its collective bargaining agreements and cut wages for
about 1,500 unionized workers by more than 19 percent,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. In a court filing Friday, the
Minnesota-based regional carrier said it is losing $1 million a week and
will be forced to liquidate if it doesn’t reach labor agreements
by Oct. 15. The airline cannot access its debtor-in-possession financing
until it has agreements in place. The airline says that the unions never
submitted what could be “characterized as a good-faith
counterproposal.” Even after a court ruled in May that Mesaba
needs 19.4 percent in labor savings over six years, the unions never
came close to offering that amount and never offered more than three
year concessionary agreements, according to the
filing.
id='5'>Supreme Court Denies Northwest Appeal
The Supreme Court Monday
refused to consider a significant antitrust case involving Northwest
Airlines and a low-cost competitor that could have set some rules for
competition between large airlines and smaller, no-frills rivals, the
Associated Press reported yesterday. The case,
face='Times New Roman' size='3'>Northwest Airlines Corp. v. Spirit
Airlines Inc., stems from a six-year-old
Spirit Airlines suit in which Spirit charged that Northwest engaged in
predatory pricing to force Spirit to drop two flights from
size='3'>Detroit
size='3'>Boston
size='3'>Philadelphia
case raises key antitrust issues, such as the type of evidence needed to
prove that a company engaged in below-cost pricing to drive a competitor
out of business. A district court sided with Northwest, but the Sixth
Circuit Court of Appeals overturned the ruling and found for Spirit
Airlines. However, the Supreme Court Monday refused to hear the case due
to procedural issues related to the timing of an appeal filed by
Northwest. The airline filed a petition July 17, but the petition was
removed from the court's docket because it was filed five days
late.
href='http://www.nytimes.com/aponline/business/AP-AP-SCOTUS-Northwest.html?pa…'>Read
more.
id='6'>Comair Says Pilots May Derail Delta Bid
Comair said a lack of
concessions from its pilots union may derail a bid by the regional
carrier to win a contract for jet service from its parent, Delta Air
Lines Inc., the Associated Press reported yesterday. The bid will
reflect the restructuring Comair has completed in nonunion areas and the
savings it is forecasting for concessions from the unions for the flight
attendants and mechanics, Comair spokeswoman Tressie Long said Monday.
However, the company said it was so far apart on a new deal with the
pilots union that it would not include those concessions and that this
would likely cost the airline any chance of winning the bid. Like
Atlanta-based Delta, Comair, which has 6,500 employees and operates 882
flights daily to 103 cities, is reorganizing under chapter 11 bankruptcy
protection, which it entered last year. The regional carrier said last
week it would likely not be able to submit a winning bid for operating
up to 143 of Delta's regional jets without concessions from all three
unions.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/10/02/AR20061…'>Read
more.
id='7'>Solutia Pleads for More Time to File Chapter 11
Plan
Solutia Inc. has asked a
federal bankruptcy judge to again extend the exclusivity period to file
a reorganization plan by six months to April 10, 2007,
Portfolio Media
reported yesterday. Solutia, a maker of glass, nylon and
other specialty products, also asked the judge on Thursday to move the
deadline for lobbying for creditor acceptance of the plan to June 11,
2007. Solutia has won eight extensions on
the exclusive period, which has now lasted three years since the
petition for bankruptcy was filed. The disclosure statement hearing is
currently scheduled for Nov. 16.
id='8'>Equity Committee Objects to BAWAG Settlement
Allocation
The ad hoc
equity-holders’ committee in the Refco Inc. bankruptcy has filed
an objection to the allocation of the funds gained from a settlement
between the bankrupt futures brokerage and Austrian bank Bawag
P.S.K., Portfolio
Media reported yesterday. The group has argued
that the allocation plan unfairly gives a bulk of the funds to Refco
subsidiary Refco Group LLC and Refco Capital Markets Ltd. without
asserting the claims of the parent company. According to the settlement,
agreed to in June, Bawag will pay out $108 million to Refco’s
investors. However, if Bawag sells for more than €1.8 billion at a
future auction, it will pay an additional 5 percent of the sale price
above €1.8 billion, with a maximum payout of $32 million. The
Austrian bank also said it would cooperate in the lead plaintiffs’
case against other defendants by making certain employees available for
interviews and depositions.
id='9'>Bankrupt
w:st='on'>
size='3'>Spokane
Sell Bishop's Office
Hoping to emerge from
bankruptcy protection by the end of this year, the Roman Catholic
Diocese of Spokane is selling its bishop's office building to raise
money to pay victims of clergy sex abuse, the Associated Press reported
yesterday. A telephone auction is scheduled for Wednesday after three
parties met the minimum offer of $1.7 million for the
28,968-square-foot
w:st='on'>
size='3'>Pastoral
face='Times New Roman'
size='3'>Center
size='3'>downtown, Keen Realty Vice President Michael Mattlat said
Monday from his office in Great Neck, N.Y. Proceeds from the sale will
go to a fund to pay claims of people sexually abused by priests or other
clergy. About 150 people have filed such claims against the diocese.
The
face='Times New Roman' size='3'>Pastoral
size='3'>Center
known as the Chancery, is among $11 million in assets the diocese
claimed when it filed for chapter 11 protection in December 2004, citing
more than $81 million in claims, mostly by abuse victims.
href='http://www.theolympian.com/apps/pbcs.dll/article?AID=/20061003/NEWS06/6…'>Read
more.
w:st='on'>
id='10'>U.S.
size='3'> Will Pay
w:st='on'>New
York
Stabilize the State’s Hospital Industry
State and federal
officials said yesterday that the Bush administration has agreed to
pay
York
five years to help stabilize the state’s financially troubled
hospital industry, the
size='3'>New York Times reported today. In
return, the state will move forward with shrinking that industry,
cutting Medicaid costs, and sharply increasing the sums it recovers from
Medicaid fraud. Along with a $1 billion commitment the state has made of
its own money, the long-sought agreement, to be announced today by state
and federal officials, is considered a crucial piece of Gov. George E.
Pataki’s push to reshape the health care business in
size='3'>New York
size='3'>. The state intends to close
under-used hospitals and improve the economic health of those that
remain, and to steer people to cheaper health care alternatives than the
ones they use now, like outpatient clinics rather than emergency rooms,
and in-home care rather than nursing homes.
href='http://www.nytimes.com/2006/10/03/nyregion/03hosp.html?pagewanted=print'>Read
more.
id='11'>California's Doctors Medical Center Files
face='Times New Roman' size='3'>for Chapter 9
Financially ailing
size='3'>Doctors
face='Times New Roman' size='3'>Medical
size='3'>Center
the public district that runs it have filed for chapter 9 bankruptcy as
they try to line up new revenue sources to save the 247-bed facility,
the San Francisco
Business Times reported today.
The San Pablo, Calif.-based West Contra Costa Healthcare
District filed for bankruptcy protection late Sunday in the U.S.
Bankruptcy Court in
w:st='on'>
size='3'>Oakland
$50 million to $100 million in debts and the same range of assets,
according to published accounts. Those assets include the hospital
building and the land beneath it, valued at roughly $40 million in a
recent appraisal, said Andrea Porter, a bankruptcy attorney at
size='3'>San Francisco
Friedman Dumas and Springwater law firm who is representing the
health-care district and medical center.
href='http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2006/10/02/dai…'>Read
more.
International
id='12'>Cryopak Industries Plans to File for
Bankruptcy
Cryopak Industries Inc. said
Monday it has secured creditors and found a receiver interested in
acting for the company, the Canadian Press reported yesterday. The
Vancouver-based maker of hot and cold packs for industrial and consumer
uses said it plans to file for bankruptcy with creditor Deloitte &
Touche LLP appointed as receiver. Meanwhile, TCP Reliable Inc. has
offered to take over the business and acquire all company assets for
$4.5-million. Cryopak said TCP plans to complete the process as soon as
possible. In August, Cryopak said it would be unable to pay $80,000 in
accumulated monthly interest due July 31 on $1.6-million of secured
convertible debentures, and $122,500 in principal and interest due on
unsecured notes.
href='http://www.theglobeandmail.com/servlet/story/RTGAM.20061002.wcryopak100…'>Read
more.
href='http://www.theglobeandmail.com/servlet/story/RTGAM.20061002.wcryopak100…'>