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August 14, 2006
New
Law's Impact on Filing Decrease Hard to Determine
National bankruptcy
filings have plunged since the new law took effect, but experts are
saying that it is difficult to tell whether the stricter rules are
playing a role in the huge drop-off or simply because so many debtors
rushed to court last year to beat the change in the law, the
size='3'>Milwaukee
size='3'>(
face='Times New Roman' size='3'>Wis.
size='3'>) Journal Sentinel reported
Saturday. ABI's Immediate Past President
w:st='on'>
size='3'>John Penn
thinks it's probably a combination of both factors, along with a decent
economy in which people have jobs. 'We really are looking for the new
normal,' Penn said Friday.
href='http://www.jsonline.com/story/index.aspx?id=482773&format=print'>Read
more.
name='2'>Commentary: Pension Bill May Raise Disputes in the Near
Future
Pension reform
legislation passed by Congress addresses a number of problems with the
current private pension system, but a number of provisions favor the
particular industry or company that lobbied on the bill, according to
a New York
Times editorial yesterday. For instance, the
bill achieves a major reform goal by setting reasonably strict funding
requirements and higher insurance premiums for traditional corporate
pensions. However, Congress also carved out some big exceptions for
ailing airlines, notably Northwest and Delta, that open the door for
other companies and industries to demand special treatment.
href='http://www.nytimes.com/2006/08/13/opinion/13sun1.html?_r=1&oref=slogin&…'>Read
more.
name='3'>Northwest Attendants to Postpone Strike
Flight attendants at
Northwest Airlines Corp. said they will delay a threatened strike by 10
days because of security concerns stemming from the foiled terrorist
plot in
face='Times New Roman'
size='3'>London
shareholder dropped his suit against executives at the company, the
Associated Press reported on Friday. A judge had not yet ruled on a
request to block a strike from the carrier, which is in bankruptcy
protection. The Association of Flight Attendants said the new deadline
for the strike would be 9:01 p.m. CDT Aug. 25. Separately, a shareholder
who had sued four top officials at Northwest Airlines Corp. after it
filed for bankruptcy protection has dropped the case, the airline said
on Friday. Court, although no reason was given.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/08/11/AR20060…'>Read
more.
Judge
Names Retiree Panel in Dana's Bankruptcy Case
Dana Corp. said Friday
that the judge overseeing its bankruptcy has directed the
size='3'>U.S.
size='3'>trustee in the case to form an official committee of retirees
to represent their interests, MarketWatch.com reported on Friday. The
decision will give the company's retired workers a voice in the
proceedings, as they aren't covered by a collective bargaining
agreement, according to a regulatory filing released by the Securities
and Exchange Commission. Dana, an automobile-parts company that has been
in chapter 11 proceedings since March, hasn't made a decision yet on
whether to cut retirement benefits. However, it indicated that cuts are
a possibility when it asked U.S. Bankruptcy Judge
face='Times New Roman' size='3'>Burton R. Lifland
size='3'>in
face='Times New Roman' size='3'>Manhattan
last month to appoint a committee to represent
retirees.
href='http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid…'>Read
more.
Judge
Approves Mirant-Pepco Settlement
Bankruptcy Judge D.
Michael Lynn has signed off on Mirant Corp.’s $520 million
settlement with Pepco Holdings Inc. to resolve certain contract
disputes, Portfolio
Media reported on Friday. Judge Lynn approved
the deal Wednesday despite opposition from some bondholders who acquired
a majority stake in the Atlanta-based power producer when it emerged
from chapter 11 in January. Mirant said in May that it intended to offer
Washington, D.C.-based Pepco cash and stock to settle various quarrels
and to disentangle the company from expensive power contracts.
Bondholders argued that the settlement was inconsistent with and not
permissible under the reorganization plan. Judge Lynn, however, ruled
that the deal was fair for the company, and the bondholders had brought
no valid arguments against the settlement.
name='6'>Calpine Bids for Right to Settle Certain
Claims
In a move to streamline
the claims approval process in its bankruptcy proceedings, Calpine Corp.
is asking for the authority to settle threatened and actual claims or
lawsuits against the bankrupt energy giant if they are valued at $2
million or less,
size='3'>Portfolio Media reported on Friday.
In court documents filed late last week in the U.S. Bankruptcy Court for
the Southern District of New York, Calpine said various third parties
have asserted or will assert such claims through litigation,
administrative action or arbitration. The move came just one day after
Calpine asked for court approval to allow it to sell a 35 percent stake
in the plant that is expected to bring in $80 million at an auction in a
bid to maintain Pacific Gas & Electric Co.’s involvement in a
power plant project that could be worth up to $841 million. The energy
giant sought permission to sell its stake in the
w:st='on'>
size='3'>Russell
face='Times New Roman'
size='3'>City
size='3'> Project, a 600-megawatt power plant it has been building
in
size='3'>Calif.
auction on September 19.
name='7'>Solutia Looks to Stop Shareholder Suit
Bankrupt chemical
products maker Solutia Inc. asked a judge Wednesday to halt a lawsuit
brought by its equity committee against its former parent companies,
Monsanto Co. and Pharmacia Corp.,
size='3'>Portfolio Media reported on Friday.
According to the motion filed with the U.S. Bankruptcy Court in
size='3'>Manhattan
equity committee’s suit would stymie Solutia’s ability to
seek the approval of its reorganization plan, which depends on a global
settlement Solutia previously negotiated with Monsanto and Pharmacia.
Under that agreement, the three companies divvied up the costs of
environmental cleanups and litigation, among other expenses. Solutia
added that the shareholders would need a leave of court to prosecute the
case, and that they would also need proof that Solutia unjustifiably
failed to sue its parent companies. The case is
face='Times New Roman' size='3'>In re Solutia Inc
size='3'>., case no. 03-17949, in the U.S. Bankruptcy Court for the
Southern District of New York.
name='8'>Pfizer Unit to Modify Rejected Bankruptcy
Plan
A bankruptcy judge has
rejected the chapter 11 plan of Pfizer Inc.'s Quigley Co. unit, handing
the company a setback in its effort to resolve asbestos liabilities,
MarketWatch.com reported on Friday. Pfizer said in a Securities and
Exchange Commission filing that it is considering options, including
adjusting its reorganization plan and sending the proposal out for vote
again. The possibility of a bankruptcy
'cram-down' on asbestos claimants who voted against Quigley's plan
hasn't been ruled out, said Quigley attorney Michael Cook. Quigley is a
Pfizer-owned shell company that has been working for years to resolve
hundreds of thousands of personal-injury claims stemming from
asbestos-containing products that Pfizer used to make. Bankruptcy
Judge Stuart
Bernstein told Quigley and its asbestos
creditors on Wednesday to schedule a future meeting with him to decide
on the next steps.
href='http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid…'>Read
more.
name='9'>Musicland Pays $26 Million to Secured
Debtholders
A federal bankruptcy
judge has approved Musicland’s motion to repay $26 million to the
holders of secured trade debt,
size='3'>Portfolio Media reported on Friday.
On Thursday, U.S. Bankruptcy Judge Stuart Bernstein
approved the motion, a key part of the music retailing
company’s controversial liquidation strategy. The money
constitutes a partial repayment of the principal of the secured trade
debt, according to court documents. In May, Musicland filed the plan in
the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Manhattan
revealing that unsecured creditors and shareholders would not be
reimbursed for any of their claims. Musicland also set
shareholders’ company stock to be canceled. The case is
Musicland Holdings
Corp., case number 06-10064, in the U.S.
Bankruptcy Court for the Southern District of New
York.
name='10'>Bankruptcy Forces
w:st='on'>
size='3'>Arizona
Kreme Stores to Close
All eight Krispy Kreme
stores in
face='Times New Roman' size='3'>Arizona
closed Friday after the company that owns the franchise
in the state went out of business and filed for chapter 7 bankruptcy on
Wednesday, the Arizona
Republic reported Friday. Krispy Kreme
spokesman James Golden said the
face='Times New Roman' size='3'>Arizona
size='3'>stores and two in
w:st='on'>New
Mexico
their doors as the company worked with their franchisee, Omaha,
Neb.-based Rigel Corp., to sort through financial problems.
href='http://www.azcentral.com/php-bin/clicktrack/print.php?referer=http://ww…'>Read
more.
New
Jersey Uniform Company Files for Chapter 11
Best Manufacturing Group,
a Jersey City, N.J.-based uniform company, announced last week that it
filed for chapter 11 bankruptcy, MultichannelMerchant.com reported on
Friday. Best Manufacturing has operations in
w:st='on'>
size='3'>Massachusetts
size='3'>Georgia
size='3'>Mississippi
size='3'>Illinois
w:st='on'>
size='3'>Texas
w:st='on'>
size='3'>Nevada
recent organizational improvements, Best Manufacturing came under heavy
demands from its lenders, forcing liquidity pressures that led to the
filing, according to spokesman Ari Korman. The company estimates it
will take six months to a year to reorganize, Korman says.
href='http://multichannelmerchant.com/news/bestmanufacturing-chapter11-081120…'>Read
more.
name='12'>Commentary: Forgiven Debts Can Lead to a Large Tax
Bill
Consumers working with
creditors to forgive portions of their debt should be aware that they
face taxes on any debt that is canceled, according to a
face='Times New Roman' size='3'>Washington Post
size='3'>commentary yesterday. 'I have had to deal with unhappy
taxpayers who are upset to find they have a tax liability they did not
expect,' said Larry Cohen, a senior tax adviser at an H&R Block
office in
face='Times New Roman' size='3'>Wheaton
size='3'>,
size='3'>Md.
debt is forgiven as a result of a car repossession or renegotiated
credit card or mortgage debt (often the result of a foreclosure),
consumers should receive IRS Form 1099-C 'Cancellation of Debt' or
1099-A 'Acquisition or Abandonment of Secured Property.' Only certain
institutions are required to send borrowers a 1099 if debt is forgiven.
They include federal government agencies, certain agencies connected to
the federal government, financial institutions, finance companies and
credit unions.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/08/12/AR20060…'>Read
more.
International
name='13'>Japanese Corporate Bankruptcy Cases Rise in
July
The number of Japanese
corporate bankruptcies rose 2.63 percent in July from the same month a
year earlier, a research firm said on Monday, although failed companies'
total debt load fell, Reuters reported today. Tokyo Shoko Research said
1,051 firms went bankrupt in July, the second-lowest total for the month
in the last 10 years, after a decade-long low recorded last year.
Bankruptcy debt dropped 35.28 percent from a year earlier to 309.97
billion yen ($2.66 billion), the lowest amount for July since 1991, the
data showed.
href='http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&stor…'>Read
more.
href='http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&stor…'>