src='/AM/Images/headlines/headline.gif' />
January 5, 2006
name='1'>From Bankruptcy To Lottery Riches
The man who claimed the largest lottery prize ever won in Iowa said
Tuesday that he plans to keep working, but said he’ll throw away
his alarm clock, the Associated Press reported yesterday. Hugh Hawkins,
44, of Des Moines, Iowa, stepped forward to accept a lump sum of $54.7
million, half the $113.2 million Dec. 14 Powerball jackpot.
Hawkins said it had been something of a "roller coaster year"
for his family. "Back in May 2005, we ran out of money and I needed
to file for bankruptcy protection from four credit card companies,"
Hawkins said. "And now, today, we have a big pile of money."
Hawkins said his first task would be to work out a repayment plan.
href='http://www.cbsnews.com/stories/2006/01/04/earlyshow/printable1176424.shtml'>Read
more.
id='2'>Enron’s Lay, Skilling Ask Judge to Move
Trial
Former Enron Corp. chiefs Kenneth Lay and Jeffrey Skilling on
yesterday asked a federal judge to move their upcoming trial out of
Houston because nearly all potential jurors are heavily biased against
them, Reuters reported today. About 244 of 280 potential jurors
indicated in questionnaires they held strongly negative views against
Lay, Enron’s former chairman, and Skilling, the former chief
executive. Lawyers for the two men, whose criminal trial is scheduled to
begin on Jan. 30, also argued that media attention surrounding the last
week’s guilty plea in the case of former Enron Chief Accountant
Richard Causey further tainted the jury pool.
href='http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-01-04T233723Z_01_KWA484972_RTRIDST_0_BUSINESSPRO-ENRON-VENUE-DC.XML'>Read
more.
id='3'>Court Cancels Calpine Contracts Hearing
A hearing scheduled for today on whether Calpine Corp. could get out
of allegedly unprofitable power contracts has been canceled after a
district court took over the dispute, Reuters reported today. Earlier on
Wednesday, U.S. District Judge Richard Casey ruled that the question of
whether Calpine could cancel the contracts more properly belonged in his
federal courtroom in lower Manhattan than in Bankruptcy Court.
Bankruptcy Judge Burton Lifland had been expected to
rule on the contracts on Thursday.
id='4'>Delphi Backs European Satellite Radio Company
Bankrupt auto parts maker Delphi Corp. said yesterday that it was
investing in Madrid-based Ondas Media, a company attempting to develop
satellite radio service for Europe by the end of the decade, Reuters
reported yesterday. Delphi did not disclose the amount, but described it
as a ”significant cash strategic investment.” Ondas is
planning to launch a pan-European subscription radio service at the end
of 2009, but it still needs to raise more money to secure licenses
throughout the continent and to launch the requisite satellites. In
addition to the large investment needed for such a venture, the service
envisioned by Ondas would require providing stations in multiple
languages, negotiating with a number of local regulators and contending
with public broadcasters.
href='http://www.nytimes.com/reuters/business/business-media-delphi-ondas.html'>Read
more.
Auto Industry
China
General Motors Corp. may have unseated Volkswagen A.G. foreign seller
in China in 2005, outpacing its European rival as well as overall sales
growth in the world’s third-largest vehicle market, Reuters
reported today. The U.S. automaker posted a 35 percent rise in China
sales to 665,390 vehicles in 2005, exceeding the combined 564,300 units
sold by Volkswagen’s two Chinese joint ventures. Analysts said a
more diversified slate of vehicles had helped GM, which has been gaining
on Volkswagen in China for years, and the improved sales growth provides
much-needed momentum for the U.S. automaker, which has been losing
market share in its home market.
href='http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-01-05T091831Z_01_FLE531912_RTRIDST_0_BUSINESSPRO-AUTOS-CHINA-GM-DC.XML'>Read
more.
id='6'>U.S. Automakers See Sales Drop in 2005
The auto industry finished 2005 in a familiar pattern, with U.S.
market share continuing to slip from U.S. automakers to their Asian
competitors. Japanese automakers reported the year’s biggest sales
gains, the Associated Press reported today. Combined U.S. market share
for General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s
Chrysler Group fell to an unprecedented low of 56.9 percent, down from
61.7 percent three years ago, according to Autodata Corp. At the same
time, Toyota Motor Corp., Honda Motor Co., Nissan Motor Co. and other
Asian brands saw their U.S. market share climb to 36.5 percent from 34.6
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/01/04/AR2006010401027.html'>Read
more.
Airlines
Flyi’s Skeen May
Have Averted Pay Loss
Kerry B. Skeen, chairman and chief executive of Independence Air, may
have avoided the loss of more than $3 million in deferred compensation
by renegotiating his contract in March, months before the budget carrier
entered bankruptcy protection, according to specialists in bankruptcy
law and executive compensation and a review of company documents, the
Washington Post reported today. Skeen, 53, had built up $3.4
million in deferred compensation as head of Independence Air parent Flyi
Inc. and its predecessor, but before the March contract revision, he had
only an unsecured claim to that money, according to a document the
company filed with the Securities and Exchange Commission. That could
have made it difficult for him to salvage the money from the
company’s bankruptcy as Flyi’s creditors battle over its
assets, specialists said.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/01/04/AR2006010401881.html'>Read
more.
ATA December Traffic Results
Announced
In a release issued by ATA Holdings, the company announced that
December 2005 scheduled service traffic decreased 52.6 percent from 2004
to 432.2 million RPMs (revenue passenger miles), BankruptcyData.com
reported today. Capacity decreased 56.2 percent compared to 2004 to
570.6 million ASMs (available seat miles). ATA’s December 2005
scheduled service passenger load factor increased 5.9 points to 75.8
percent. There were 319,860 passengers enplaned in December 2005, a
decrease of 56.7 percent. As of Dec. 31, 2005, ATA had a fleet of 15
Boeing 737-800s, six Boeing 757-200s, six Boeing 757-300s and five
Lockheed L-1011s.
Northwest Flight Attendants Threaten
Strike
Northwest Airlines flight attendants union said in a bankruptcy
filing late Wednesday that it may strike if a bankruptcy judge allows
the carrier to reject its contract, the Associated Press reported today.
Northwest is negotiating with pilots, flight attendants and ground
workers ahead of a Jan. 17 hearing in which the nation’s
fourth-largest airline will ask to reject their contracts. Northwest has
said it wants to use more foreign-based flight attendants on
international flights and use flight attendants at a new subsidiary on
smaller domestic flights. The Professional Flight Attendants
Association, which has 9,600 members at Eagan-based Northwest, said such
a move could reduce their number by half.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/01/05/AR2006010500037.html'>Read
more.
In related news, facing mounting pilot opposition to its plan to
create a
separate subsidiary that would operate large regional jets, Northwest
said
the new company would allow it to expand service to its midsized
markets,
participate in a fast-growing sector of the industry and offer
employment to
as many as 800 furloughed Northwest pilots by 2010, according to the
Wall
Street Journal today. The carrier, which plans to defend the move
in
communications with employees today, hopes to counter some of the
negative
speculation that the venture has provoked among its employees.
Northwest is
also seeking less-costly contracts with its three big unions or it
will ask
the bankruptcy court overseeing its case to set them aside and impose
its
own terms. The carrier could be seriously hurt if its cost-cutting
efforts
provoke a strike, especially from its pilots union.
href='http://online.wsj.com/article/SB113643107043738346-email.html'>Read
more.
Delta Air’s Fight with Creditors Over
Leased Jets Heads to Court
A group of plane
owners trying to retrieve three leased Boeing 767s claims
that Delta Air Lines is making the collection of the planes too
difficult,
the Wall Street Journal reported today. The aircraft owners,
mostly
investment banks such as Morgan Stanley and Natexis Banques Populaires
SA of
France, claimed in a court filing last week that Delta violated
bankruptcy
rules by disassembling the aircraft and storing the frames and engines
in
separate locations. The fight is headed for a hearing today in New York
before U.S. Bankruptcy Court Judge Prudence Carter
Beatty,
who could order Delta to reassemble the aircraft so the owners can
repossess
them. The dispute underscores what has become an increasingly common
battle
over leases in the airline industry as carriers seek to restructure
through
bankruptcy.
href='http://online.wsj.com/article/SB113642163895438078-email.html'>Read
more.
id='11'>Refco Creditors Seek to Block Naming of Trustee
Refco Inc. creditors opposed the appointment of a chapter 11
bankruptcy trustee, saying that the futures and commodities
broker’s new CEO can oversee the company’s affairs fairly
and for less money, Reuters reported yesterday. In a Tuesday filing with
the U.S. Bankruptcy Court in Manhattan, Refco’s official committee
of unsecured creditors said Harrison Goldin, named Refco’s CEO
last month, is “uniquely qualified” to maximize the value of
company assets for the benefit of creditors and customers. Goldin is
senior managing director of Goldin Associates LLC, which provides
financial advisory and risk management consulting services.
href='http://www.nytimes.com/reuters/business/business-financial-refco.html?oref=login'>Read
more.
id='12'>Solutia Named in Suit
A suit was filed by more than 500 General Electric Co. employees,
BankruptcyData.com reported today. The suit names Solutia, Monsanto Co.
and Pharmacia and claims that employees were exposed to toxic chemicals
manufactured for decades by Monsanto. The product liability suit seeks
$1 billion in punitive and $1 billion in actual damages. Monsanto
spun-off its chemicals business as Solutia in 1997, and Solutia filed
for bankruptcy protection in 2003.
id='13'>Westpoint Final Fee Applications Approved
A bankruptcy court approved the following final fee applications in
the Westpoint Stevens case, according to BankruptcyData.com: Weil
Gotshal & Manges LLP, fees awarded: $4,203,796, expense awarded:
$80,432.; Ernst & Young LLP, fees awarded: $1,033,664, expense
awarded: $3,000; Giuliani Capital Advisors LLC f/k/a Ernst & Young
Corporate Finance LLC, fees awarded: $458,321, expense awarded: $0.00;
Stein Riso Mantel, LLP, fees awarded: $245,417, expense awarded: $545.
Stroock & Stroock & Lavan LLP, fees awarded: $336,865, expense
awarded: $1,576; American Appraisal Associates, Inc., fees awarded:
$161,914, expense awarded: $0; Lehman Brothers, Inc., fees awarded:
$350,504, expense awarded: $132; Yantek Consulting Group, fees awarded:
$463,886, expense awarded: $31,675 and Rothschild Inc., fees awarded:
$3,675,806, expense awarded: $28,456.
id='14'>Court Grants Interim OK on Pliant Ch 11 Bankruptcy Loan
U.S. Bankruptcy Judge
Mary F. Walrath Wednesday granted
interim authority to Pliant Corp. to borrow $37 million to fund
operations
as it begins its financial restructuring. The Schaumburg, Ill.-based
packaging maker filed for chapter 11 protection Tuesday under pressure
from
suppliers but with agreements in place with key financial creditors. If
approved in final form, Pliant’s debtor-in-possession loan from
General
Electric Capital Corp. will provide $68.8 million in new funding for the
company, Larry Nyhan, Pliant bankruptcy attorney, said Wednesday. Judge
Walrath signed off on the interim deal at a hearing in Wilmington, Del.,
Wednesday and set a Feb. 2 hearing to consider final approval. In
addition
to the finance package, Walrath signed off Wednesday on an order that
allows
Pliant to pay $18.2 million on recent bills from trade creditors.
href='http://news.morningstar.com/news/DJ/M01/D04/200601041408DOWJONESDJONLINE0007
06.html'>Read more.
id='15'>Bankruptcy Looms for San Diego
Faced with $1.4
billion pension shortfall and exploding health-care costs
for its retired workers, San Diego may well become the next Orange
County,
the California city’s neighbor that became the largest municipal
bankruptcy case in U.S. history when it filed under chapter 9 in 1994,
according to a Dow Jones Newswire report today. San Diego’s
troubles aren’t
unique. Other cash-strapped cities, such as Detroit and Pittsburgh, are
faced with similar problems: underfunded pension and health-care
liabilities
they can’t afford. "This is an avalanche that’s going
to hit," said Peter
Gilhuly, a bankruptcy attorney in Los Angeles. "The idea
of
multiple chapter 9 bankruptcies isn’t out of the question. The
number of
municipalities that have a problem that they can’t solve
themselves is high.
A lot of those municipalities will have to file."
href='http://www.azstarnet.com/dailystar/business/109923.php'>Read
more.