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August 26, 2009
size='3'>Chrysler Sues Daimler over Key 2010
Vehicle Parts
Chrysler Group LLC has sued
Daimler AG, saying the German automaker failed to uphold contracts for
the delivery of crucial vehicle parts for its 2010 vehicles, the
Associated Press reported today. The Auburn Hills, Mich.-based company
says the parts are critical for the production of several key 2010
model-year vehicles. Chrysler argues that it may have to shut down
production of the vehicles without them. Chrysler filed the lawsuit in
bankruptcy court in New York and is seeking unspecified damages from
Daimler, which owned Chrysler until 2007.
href='http://www.washingtonpost.com/wp-dyn/content/article/2009/08/26/AR2009082601073_pf.html'>Read
more.
Chapter 11
Colonial BancGroup Inc., the Montgomery, Ala.-based
bank holding company under a criminal probe, filed for chapter 11 after
being taken over by North Carolina lender BB&T Corp., Bloomberg News
reported yesterday. Colonial listed assets of $45 million and debts of
$380 million yesterday in its bankruptcy filing. Colonial’s
mortgage unit provided “warehouse” credit lines that
mortgage companies used to make loans to homebuyers. The U.S. Justice
Department is investigating accounting irregularities and the mortgage
warehouse unit, Colonial said in an Aug. 7 regulatory filing. The
company said it is cooperating with the probe.Colonial had $20 billion
of deposits and assets of $25.5 billion as of June 30 and reported $1.7
billion in losses over the past five quarters, mostly from defaults on
loans to Florida builders and developers.
href='http://www.bloomberg.com/apps/news?pid=20601087&sid=adb5gqffAiKg'>Read
more.
Bankrupt Pennsylvania
Township Reaches Settlement with Developer
Westfall Township, Pa., reached a $6 million
settlement Tuesday — about 6 times its annual budget — in a
lawsuit filed by a New Jersey real estate developer who had claimed
harassment and threats after trying to build up property in the
locality, the Associated Press reported yesterday. The agreement signals
the end of an acrimonious dispute that began in the late 1980s, moved
into court in the mid-'90s and by last year had left Westfall on the
hook for $20.8 million. Westfall filed for chapter 9 protection this
spring. Under terms of the settlement, taxpayers in the township of
about 2,500 people will be assessed a special tax to pay Katz four
payments of $75,000 per year for the next 20 years. The settlement calls
href='http://www.latimes.com/news/nationworld/nation/wire/sns-ap-us-town-on-the-brink,0,142991,print.story'>Read
more.
Environmental Cleanup Ruling
The U.S. Court of Appeals for the Seventh Circuit
yesterday upheld an order requiring Apex Oil Inc. to remediate soil and
groundwater contamination from a former refinery in Hartford, Ill., at a
cost that could top $150 million,
face='Times
New
Roman' size='3'>Bankruptcy Law360 reported
yesterday. The ruling affirmed a 2008 injunction requiring the cleanup,
rejecting Apex's argument that the government's claim to the injunction
had been discharged in bankruptcy court. Apex, which no longer does
refining, has no in-house ability to conduct the cleanup, and has
estimated that it would cost $150 million to hire an outside party to do
the work. It argued that the expense constituted a “right [of the
plaintiff] to payment” that was discharged in the company's
bankruptcy in the 1980s. However, the Seventh Circuit said that the
government was not seeking a money payment, and the injunction it
obtained under the Resource Conservation and Recovery Act did not
entitle it to payment.
href='http://bankruptcy.law360.com/articles/118406'>Read
more. (Subscription required.)
Court Rules Fed Must
Disclose Firms that Accept Aid
U.S. District Judge Loretta Preska ruled Monday that
the Federal Reserve must disclose the names of financial companies that
have taken hundreds of billions of dollars in emergency aid during the
financial crisis, a major setback to the central bank's long-standing
policy of making such loans on a confidential basis, the
face='Times New Roman'>
size='3'>Washington Post reported today. Judge
Preska wrote that the Fed had no legitimate reason to deny a request for
the information made by Bloomberg News, rejecting the argument that such
publicity would deter firms from seeking necessary aid in the future.
The ruling comes amid broad pressure for the Fed to provide more
information about its activities, provoked in large part by the agency's
leading role in responding to the financial crisis. The Fed has provided
more than $1 trillion in aid through roughly a dozen emergency
programs.
href='http://www.washingtonpost.com/wp-dyn/content/article/2009/08/25/AR2009082503080_pf.html'>Read
more.
Judge Seeks Answers on
SEC-Bank of America Deal
U.S. Judge Jed S. Rakoff said yesterday that he was
not satisfied by the Securities and Exchange Commission's explanation
for why it agreed to accept a $33 million payment from Bank of America
to settle allegations that the bank misled investors, the
face='Times New Roman'>
size='3'>Washington Post reported today. The
SEC and Bank of America are urging Judge Rakoff to sign off on the
settlement. Earlier this month, the SEC charged that Bank of America hid
from shareholders plans to pay billions of dollars in bonuses to
employees of Merrill Lynch, the troubled Wall Street firm it bought
during the financial crisis. However, Judge Rakoff has refused to
endorse the settlement and has demanded to know why the SEC filed a case
against the company and not the executives who made the decisions about
disclosures of bonuses. He also wants to know how the SEC settled on the
href='http://www.washingtonpost.com/wp-dyn/content/article/2009/08/25/AR2009082502862_pf.html'>Read
more.
Circuit City Hits Sirius
with $7 Million Adversary Suit
Bankrupt Circuit City Stores Inc. has slapped creditor
Sirius XM Radio Inc. with a breach-of-contract adversary suit claiming
the satellite broadcast company owes more than $7 million for services
performed on satellite radios,
face='Times
New
Roman' size='3'>Bankruptcy Law360 reported
yesterday. In a complaint filed Monday in the U.S. Bankruptcy Court for
the Eastern District of Virginia, Circuit City says it marketed, sold,
installed and activated satellite radios as part of a contract with
Sirius XM.The electronics retail giant said that it performed the
services before and throughout its bankruptcy proceedings, which began
on Nov. 10, 2008, and ultimately led to the company announcing plans to
liquidate in January.Circuit City is alleging breach of contract and
unjust enrichment, and is seeking $7.1 million in damages to cover the
full cost of the services, as well as interest, expenses and attorneys'
fees, the complaint says.
href='http://bankruptcy.law360.com/articles/118340'>Read
more. (Subscription required.)
NHL Files Bid to Purchase
Phoenix Coyotes
A group headed by Jerry Reinsdorf has pulled out as a
potential buyer of the Phoenix Coyotes just as the NHL and a partnership
of Canadian and American investors filed separate bids in U.S.
Bankruptcy Court to purchase the team and keep it in Arizona, the
Associated Press reported yesterday. The NHL announced its bid filing a
few hours before word came that the investors' group, known as Ice Edge
Holdings, had met Tuesday's court-imposed deadline. Ice Edge chairman
Keith McCullough said that the plan was to 'revitalize NHL hockey in
Arizona and the southwestern United States.' Reinsdorf's group said it
was unable to meet the deadline for submitting a firm offer. The flurry
of activity Tuesday leaves the NHL and Ice Edge as bidders that would
keep the team in Arizona. Neither organization revealed the size of its
bid. Earlier, Ice Edge said it was prepared to offer about $150 million.
Canadian billionaire Jim Balsillie filed an amended purchase agreement
on Monday offering $212.5 million, contingent on immediately moving the
franchise to Hamilton, Ontario.
href='http://www.washingtonpost.com/wp-dyn/content/article/2009/08/25/AR2009082502744_pf.html'>Read
more.
Spansion Seeks Approval for
$35 Million Sale of Subsidiary
Spansion Inc. has asked a bankruptcy court to approve
a $35 million sale of its Singapore subsidiary to Powertech Technology
Inc.,
size='3'>Bankruptcy Law360 reported yesterday.
Spansion Holdings (Singapore) Pte. Ltd. is owned by debtor Spansion LLC,
and in turn owns Spansion (China) Ltd., which operates a manufacturing
facility in Suzhou, China, according to the motion made by the company
on Friday. Spansion, which designs and sells flash memory solutions for
equipment manufacturers in the mobile phone, consumer electronics and
automotive electronics markets, tried to sell its Singapore subsidiary's
shares to a willing purchaser prior to filing for chapter 11
protection.
href='http://bankruptcy.law360.com/articles/118317'>Read
more. (Subscription required.)
Dayton Superior’s
Disclosure Statement Approved
Dayton Superior Corp., which makes products used in
concrete construction, said that Bankruptcy Judge
face='Times New Roman'>Brendan
L. Shannon on Monday approved the company's
disclosure statement, the Associated Press reported yesterday. Dayton
Superior said it plans to mail creditors the disclosure statement,
reorganization plan and ballots to vote on the plan during the first
week of September, with a deadline of Oct. 1. A confirmation hearing on
the reorganization plan has been scheduled for Oct. 14.
href='http://www.washingtonpost.com/wp-dyn/content/article/2009/08/25/AR2009082501890_pf.html'>Read
more.
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