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December 28, 2006
Airlines
Northwest Pilots Sell Part of Bankruptcy Claim for $150 Million
Northwest Airlines Corp. said its pilots sold $150 million worth of their $888 million bankruptcy claim on the airline, the Associated Press reported today. Northwest Chief Executive Doug Steenland said Sunday that the proceeds of the sale would go into either the retirement accounts or directly to members of the Air Line Pilots Association. The airline, Michigan's biggest passenger air carrier, supported the sale. The pilots had taken two double-digit pay cuts to help Northwest reduce labor costs, and said they wanted to recoup some benefits. The airline's ground workers have a claim of about $181 million, and unions representing dispatchers, meteorologists and simulator technicians have claims of about $4 million.
name='2'>Delta Sets Hearing for Disclosure Statement
Lawyers for Delta Air Lines Inc., the nation's third-largest carrier, said Wednesday that they have scheduled a Feb. 7 hearing in bankruptcy court to consider approval of the disclosure statement to the carrier's reorganization plan, the Associated Press reported today. The disclosure statement includes details on Atlanta-based Delta's operations, and if approved, Delta is seeking to set Feb. 1 as the date for creditors to vote on its reorganization plan. Delta faces a hostile $8.5 billion bid by US Airways Group Inc. to buy Delta in a deal that would create the nation's largest carrier. Delta's reorganization plan calls for Delta to emerge from chapter 11 by the middle of next year as a stand-alone carrier. Read more.
name='3'>Comair, Union Still at Odds
Comair and union officials wrapped up negotiations yesterday without a deal to avoid a potential strike and help lift the airline out of bankruptcy, The (Cincinnati) Enquirer reported today. Both sides are due in bankruptcy court this afternoon to argue whether the judge should forbid a potential strike if Comair imposes $15.8 million in court-authorized pay cuts on Saturday. While further talks are scheduled today and Friday, union officials say court proceedings will cut into the time for bargaining. The 1,600-member union represented by the Air Line Pilots Association has authorized a strike if Comair imposes new terms. The average pilot faces an 11 percent pay cut if terms are imposed, according to Comair. If Judge Adlai Hardin does not intervene, a potential strike could happen as early as Saturday. The airline says it needs to impose terms before Monday, because pilot costs will rise another $8 million annually as a 'snapback' clause kicks in. Read more.
name='4'>Ex-Enron Lenders, Pension Funds Agree to Settlement
Citigroup Inc., JPMorgan Chase & Co. and other defendants agreed to pay Ohio's state pension funds $4.5 million to settle any liability related to the fraud that destroyed Enron Corp., Bloomberg News reported today. The funds asked a judge to dismiss their claims against the banks, which are former Enron lenders, as part of a Dec. 15 agreement, according to court papers yesterday. The Ohio pension funds pursued their claims separately from a class of Enron investors who have recovered more than $7 billion in their case against former Enron banks, law firms and officers. Citigroup, the biggest U.S. bank, and JPMorgan previously settled claims made by investors in the class action. The settling banks, which also included Toronto-based Canadian Imperial Bank of Commerce, said in the Dec. 15 agreement that they did not accept any wrongdoing regarding the Enron fraud and that they settled to avoid protracted litigation. Read more.
Autos
name='5'>March 12 Trial Date Set for Dana Benefit, Labor Plans
The judge overseeing Dana Corp.'s bankruptcy case set a March 12 trial date to consider the Toledo, Ohio, auto-parts supplier's plans to end retiree health benefits and to alter labor contracts, according to the Toledo Blade today. The decision of Judge Burton Lifland of U.S. Bankruptcy Court in New York City follows a Dec. 19 hearing in which labor unions and retirees said the company was trying to pressure them to make concessions by setting an aggressive schedule to evaluate proposals. The firm has until Jan. 29 to tell labor unions and a retirees committee the names of witnesses expected to testify on Dana's behalf. The retirees and unions have until Feb. 9 to name their list of witnesses. The company initially wanted hearings to start in January. Dana, which has embarked on a massive restructuring program that includes closing plants, filed bankruptcy in New York last March.
Collins & Aikman to Close Georgia Plant, Revises Bankruptcy Exit Plan
Collins & Aikman is expected to close its Americus, Ga., plant within the next few weeks, a move that will cost 330 employees their jobs, Automotive World magazine reported today. The facility manufactures plastic bumpers and other automotive plastic accessories, and says it will cease operations unless another company takes over. Collins & Aikman filed for chapter 11 protection in 2005, and in November 2006 the company announced its plans to sell its operations. The company has 45 plants in North America. In related news, Collins & Aikman has filed a revised plan to exit bankruptcy court protection, reflecting its decision to shut down rather than stay in business. According to the revised plan filed on Friday in the U.S. Bankruptcy Court in Detroit, secured creditors and those holding administrative and priority claims will receive all the money they are owed, while shareholders will receive nothing.
name='7'>New York Car Antenna Manufacturer to Close
Ward Products Corp., a maker of car antennas in Amsterdam, N.Y., will close its doors today, putting 42 people out of work, The (Albany) Business Review reported yesterday. The plant, owned by Ward Products LLC, of North Brunswick, N.J., has been phasing down production since last year. The parent company filed for chapter 11 protection in August, blaming downward pricing pressures and increases in raw materials. The Amsterdam plant supplied antennas for DaimlerChryser and Ford Motor Co., as well as automotive supply stores. Read more.
name='8'>Convicted Killer Michael Peterson Bankruptcy Claim No Longer Contested
A bankruptcy claim by convicted wife-killer Michael Peterson no longer is being contested, and an opposing lawyer said yesterday he hopes to quiz the Durham, N.C., novelist soon about the 2001 death of his spouse, then-Nortel Networks executive Kathleen Peterson, The (N.C.) Herald Sun reported today. Lawyer Jay Trehy, representing Caitlin Atwater, the dead woman's daughter by an earlier marriage, had previously sought to get the bankruptcy petition thrown out, describing the claim as a frivolous attempt to stall civil wrongful-death proceedings brought by Atwater against her stepfather. Until a federal judge recently lifted it, an automatic stay was put on the civil case by Peterson's bankruptcy filing. Peterson was convicted of first-degree murder in October 2003 and sentenced to life in prison without parole. Read more.
International
name='9'>Russians Open New Probe of Yukos Oil Baron
Imprisoned Russian oil tycoon Mikhail Khodorkovsky is a suspect in a new money-laundering investigation, raising the possibility that the Kremlin foe, already serving an eight-year sentence for tax evasion and fraud, could spend many more years in prison, his attorney said Wednesday, The Washington Post reported today. Khodorkovsky, his imprisoned partner Platon Lebedev, also a suspect, and their attorneys were summoned to a detention facility in the remote Siberian city of Chita to undergo questioning yesterday. Russian press reports said the case relates to the alleged sale of oil at below-market prices between subsidiaries of Yukos between 2000 and 2003. Prosecutors allege that billions of dollars in undeclared profits were shifted to offshore accounts before being redistributed to other parties. http://www.washingtonpost.com/wp-dyn/content/article/2006/12/27/AR20061….
Japanese Coal Mine Files for Bankruptcy
Tokyo's Mitsui Coal, a leading mine company that helped underpin Japan's post-war economic growth but has since been haunted by huge debts, has filed for bankruptcy protection, the parent company said Thursday, the Times of Oman reported today. Mitsui Mining Co.'s subsidiary Mitsui Coal Mining has incurred debts of some 100 billion yen ($842 million), a company spokesman said, in part due to lawsuits by miners with black-lung disease and their family members. Board members agreed on the liquidation of Mitsui Coal Mining and filed for bankruptcy protection last week with the Tokyo District Court, the spokesman for the parent company said. Mitsui Coal Mining operated what was once the largest coal mine in Japan, Mitsui-Miike Mine on the southwestern island of Kyushu, which fueled the economy after the ashes of World War II. But the Japanese mining industry diminished quickly due to cheaper coals from overseas, leading Mitsui-Miike Mine to close in 1997 and the coal miner labor union to dissolve in 2005.
TROUBLED COMPANIES IN THE NEWS
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Bioanalytical Systems Inc., a West Lafayette, In. drug developer, reported a fourth quarter net loss of $676,000 on a 13% revenue decline--to $10.7 million. This compares with a profit of $142,000 in the year-earlier quarter. For the year the firm lost $2.6 million on revenue of $43 million. In order to accommodate recent losses, the firm has had to trim its payroll by 12%.
Coach Industries Inc., a Cooper City, Fl. maker and seller of limousines, is trying to weather some tough times, following last summer's indictment of its former chairman and CEO on extortion and money-laundering charges. While Coach itself hasn't been charged with any wrongdoing, it's been reported that several Coach lenders have canceled or declined to renew credit lines. The company is also reportedly behind on some bill payments. On another front, Coach is in a spat with American Dealerships Corp., with each company suing the other over a joint marketing venture.
GTSI Corp., a Chantilly, Va. reseller of computers and related products, reported a third quarter net loss of $3.4 million. Revenue fell 16%--to $$242 million.
Iridex Corp., a Mountain View, Ca. maker of semiconductor-based laser systems, reported a third quarter net loss of $1.1 million. Revenue edged up less than 2%--to $9.2 million.
Pediatrix Medical Group, Sunrise, Fl., announced that its audit committee uncovered certain 'deficiencies' in its stock-options practices that resulted in misdated options grants to executives. Pediatrix may have to recognize up to $28 million in stock-based compensation expenses for the period 1995 through 2006.
TOUSA Homes LP, Hollywood, Fl., was sued by Deutsche Bank, which is seeking the repayment of unspecified debt obligations.
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