April 29, 2010

Republicans Allow Debate on Financial Overhaul

Senate Republicans agreed yesterday to let Democrats open debate on legislation that would impose the most far-reaching overhaul of the nation?s financial regulatory system since the aftermath of the Depression, the New York Times reported today. Republicans said that they had won the elimination of a proposed $50 billion fund that would be paid for by big financial companies and would be used to help pay for putting failed banks out of business. The Obama administration also had opposed the fund, out of concern that it would complicate efforts to deal with more costly bank failures. And the Democrats had already indicated a willingness to remove the fund from the bill. Floor debate is expected to begin today and last at least two weeks, and lawmakers in both parties are likely to bring forward a long list of amendments. Read more.

Six Flags Looks to Exit Bankruptcy

Bankruptcy Judge Christopher Sontchi yesterday confirmed the Six Flags Inc.'s fourth amended reorganization plan and the company could exit bankruptcy as soon as Friday, the Deal Pipeline reported today. Six Flags, its noteholders and noteholders of unit Six Flags Operations Inc. reached a settlement on their disputes just minutes before the confirmation hearing began yesterday, according to Steven B. Levine of Brown Rudnick LLP, counsel to the unsecured creditors'committee. Levine said that the settlement resulted in the Six Flags' noteholders supporting the debtor's reorganization plan and withdrawing their objections. Through the settlement, the SFO noteholders now will receive $470 million in cash for their claims, which includes the principal debt owed plus pre- and postpetition interest. The group had been set to be paid in full in cash with prepetition interest, plus payment of postpetition interest if ordered by the court. Read more.(Subscription required.)

House Judiciary Committee to Hold Hearing on Credit Card Merchant Fees

The House Judiciary Committee today will hold a hearing on H.R. 2695, the 'Credit Card Fair Fee Act of 2009.' Click here to read the prepared witness testimony.

Secured Lenders Win Philly Newspapers Auction

A group of lenders submitted the winning bid in the bankruptcy auction for Philadelphia Newspapers LLC, Reuters reported yesterday. The secured lenders submitted a $135 million bid for the company, which owns the Philadelphia Inquirer and Philadelphia Daily News. The group includes investment fund Angelo, Gordon & Co and a unit of Credit Suisse. The lenders outbid a group of local investors led by Bruce Toll, the vice chairman of Toll Brothers Inc. Read more.

Cooper-Standard Seeks to Tap $150 Million Bankruptcy-Exit Loan

Cooper-Standard Holdings Inc. is seeking to tap a $150 million loan, which along with $450 million in new notes that the auto-parts maker intends to issue, would finance its exit from chapter 11 protection, Dow Jones Daily Bankruptcy Review reported today. Bank of America Corp., Deutsche Bank AG, UBS AG and Barclays PLC have agreed to extend the financing that would be secured by a lien on all the company's assets. The company has agreed to pay an interest rate equal to the London interbank offered rate plus 3.5 percent, or some similar formula. Cooper-Standard is set to seek court permission to enter into the loan at a May 5 hearing.

Republican Senator Criticizes GM loan repayment

General Motors' repayment of a $6.7 billion government loan was criticized yesterday by a top Republican lawmaker, who said the automaker simply shuffled federal bailout funds to pay back taxpayers, the Associated Press reported yesterday. Sen. Charles Grassley (R-Iowa) scolded General Motors for failing to acknowledge in advertising publicizing the loan repayment that the government still owns nearly 61 percent of the Detroit automaker. He questioned whether taxpayers ever would be fully compensated. The Treasury Department, in a letter to Grassley, defended the GM loan repayment and called it 'good news for the company, our investment and the American people.' Read more.

Capmark Blasts Merrill Lynch in Fight over Soured Swap

Capmark Financial Group Inc. says that Merrill Lynch Capital Services Inc. is trying to 'manipulate' bankruptcy law by claiming the commercial lender's guarantee of a residential loan deal is actually a swap agreement, Dow Jones Daily Bankruptcy Review reported today. Merrill Lynch argues Capmark's bankruptcy filing in October was a default under a swap agreement, which entitles it to more than $30 million in cash posted by Capmark as collateral under the terminated agreements. Capmark, however, said in a court filing on Tuesday that its agreement with Merrill is simply an ordinary guarantee to reimburse the Merrill unit, a derivatives dealer now owned by Bank of America Corp., if it had to make payments to investors in a structured real estate finance deal. Lawyers for Capmark claim Merrill Lynch describes their deal as a swap agreement in order to take advantage of bankruptcy law's safe-harbor provision governing derivatives in order to jump ahead of other creditors under the law's priority scheme governing repayment.

Judge Confirms Window Maker Atrium's Bankruptcy-Exit Plan

Bankruptcy Judge Brendan Shannon yesterday confirmed Atrium Corp.'s bankruptcy-exit plan, which hinges on a $169.2 million equity investment from the two funds, plus $260 million in new loans. In exchange, Golden Gate and Kenner will share 92.5 percent of the company's new common stock, Dow Jones Daily Bankruptcy Review reported today. Atrium also has another proposal waiting in the wings in case the deal with Golden Gate and Kenner falls apart. The so-called standalone alternative contemplates handing holders of senior secured claims a new $200 million secured term loan plus 96 percent of the common stock in the new Atrium, subject to some dilution for a management incentive plan. Senior subordinated noteholders would share in 4 percent of the new common stock.

Judge Approves Sale of Taylor Bean MBS to Angelo Gordon

A hedge fund run by Angelo Gordon & Co. was the winning bidder for a portfolio of Taylor Bean & Whitaker Mortgage Corp.'s mortgage-backed securities once valued at more than $30 million, Dow Jones Daily Bankruptcy Review reported today. The hedge fund bid $9.675 million for the assets, topping rival offers from a Long Island, N.Y., Catholic diocese's pension plan and a hedge fun run by Centerbridge Partners, according to court papers. Bankruptcy Judge Jerry A. Funk signed off on the sale of the assets to AG Mortgage Value Partners Master Fund, a Cayman Islands-registered hedge fund, at a hearing on Tuesday.

International

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