href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='http://www.abiworld.org/AM/Images/headlines/headline.gif'>
March 30, 2007
w:st='on'>
name='1'>San Diego
face='Times New Roman' size='3'> Diocese Offers $95 Million
Settlement
The Roman Catholic Diocese of
San Diego is offering $95 million to settle more than 140 claims of
sexual abuse by priests, the Associated Press reported today. The
diocese would offer 143 individuals anywhere from $10,000 to $800,000,
depending on the degree of abuse and other factors, according to
documents filed Wednesday in the church's bankruptcy proceedings. Under
the proposed bankruptcy reorganization plan, a $3 million fund would
also be created to settle any additional abuse claims that have not yet
been formally made. The plan has to go through steps including the
approval of a creditors' panel containing some of the claimants and a
hearing before a bankruptcy judge. Attorneys representing the plaintiffs
said they thought the offer was too low, estimating a fair settlement to
be around $200 million based on payouts made in other dioceses,
including the $100 million by the Diocese of Orange County, Calif., to
87 accusers in 2005.
href='http://www.nytimes.com/aponline/us/AP-Church-Abuse-Bankruptcy.html?pagewanted=print'>Read
more.
name='2'>Tougher GSE Oversight Legislation Passes House
Panel
The House Financial
Services Committee approved legislation to create stronger oversight at
government-sponsored enterprises such as Fannie Mae and Freddie Mac and
take money from their portfolios to create an estimated $600 million
affordable housing fund,
size='3'>CongressDaily reported yesterday. The
panel voted 45-19 for the bill with 13 Republicans in support. H.R.
1427, sponsored by Financial Services Chairman Barney Frank (D-Mass.),
is a response to accounting scandals in recent years at both Fannie and
Freddie, which own or guarantee repayment of 40 percent of the country's
residential mortgages. The bill would give a new regulator the ability
to restrict their combined $1.5 trillion portfolios based on safety and
soundness, a provision that Frank negotiated with the Treasury
Department. Frank also included a provision that would siphon off 1.2
basis points of the GSEs' combined $1.5 trillion portfolio to create an
affordable housing fund that would be administered by the new regulator
and later distributed to states. The money in the first year would go
to
face='Times New Roman' size='3'>Gulf
size='3'>Coast
size='3'>communities affected by Hurricane Katrina.
href='http://www.house.gov/apps/list/press/financialsvcs_dem/press032907.shtml'>Click
here to read the House Financial Services Committee’s news
release and summary of the H.R. 1427.
name='3'>Auditors Doubt Dura Automotive's Future
Auditors for Dura
Automotive Systems have raised doubt that the troubled car parts
supplier can remain solvent,
size='3'>Bankruptcy Law360 reported yesterday.
In a filing with the U.S. Securities and Exchange Commission Wednesday,
the company said its annual financial report would not only be late, but
would include a paragraph by accounting firm Deloitte & Touche LLP
that 'substantial doubt' existed as to Dura’s future. The
Michigan-based manufacturer said its annual report could not be filed
until two weeks after the March 31 due date “without unreasonable
effort and expense,” and would not include any adjustments as a
result of the uncertainty created by D&T’s statement. The
company said it expected to report a substantial net loss for the year
ending Dec. 31, 2006, compared to its 2005 net income of $1.8 billion,
resulting from a general decline in the auto industry.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=21602'>Read
more. (Registration required.)
name='4'>Justice Dept. Objects to Allied Holdings’ Disclosure
Statement
The Justice Department and
Allied Holdings Inc.'s shareholders are urging the bankruptcy court not
to approve the auto hauler's disclosure statement, the Associated Press
reported yesterday. U.S. Trustee William Neary, a Justice Department
employee, and the ad hoc shareholders’ committee filed separate
objections to Allied's disclosure statement on Wednesday with the U.S.
Bankruptcy Court in Atlanta. Neary said that some of the provisions in
the disclosure statement regarding the discharge of debts and release of
claims aren't permitted by the Bankruptcy Code and shouldn't be
authorized by the court, and said that he wanted clarification
regarding what it means when the company states there are about $200
million of claims that are subject to compromise.
href='http://www.chron.com/disp/story.mpl/ap/fn/4672496.html'>Read
more.
Refuses to Toss Foamex Employment Suit
Though a bankruptcy court
judge on Wednesday agreed to eliminate some of the claims in a lawsuit
filed against Foamex International alleging defamation and breach of
contract, he denied the company’s request to dismiss the entire
complaint, Bankruptcy
Law360 reported yesterday. Judge
size='3'>Kevin Goss of the U.S. Bankruptcy
Court for the District of Delaware agreed to toss the defamation claims
filed against Foamex and two of its current top executives by former
chief executive Thomas E. Chorman. However, Judge Goss also denied the
company’s motion to completely dismiss the suit, ruling that
Chorman’s claims relating to his contract could proceed. In
addition to the defamation allegations, Chorman had accused current CEO
Raymond E. Mabus and current President Gregory Christian of breaching a
covenant of good faith and fair dealing by forcing him into
retirement.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=21607'>Read
more. (Registration required.)
Affirms Ruling Against Northwest Flight
Attendants Strike
A federal appeals court
affirmed a lower court ruling yesterday when it ruled that flight
attendants at Northwest Airlines are not allowed to strike, Reuters
reported today. The ruling, from the Federal Court of Appeals for the
Second Circuit, protects Northwest from a potentially devastating strike
threatened by the workers after Northwest voided their labor contract
last year with court permission. The appeals court agreed with Judge
Victor Marrero of
w:st='on'>Federal District
Court
size='3'>New York
said last year that Northwest’s flight attendants, represented by
the Association of Flight Attendants, did not have the right to strike
under the circumstances. The union may appeal to the U.S. Supreme Court,
but did not say whether it would do so.
In related news, a second
group of investors has decided to back down and disclose their holdings
in Northwest Airlines Corp.,
size='3'>Bankruptcy Law360 reported yesterday.
The new filers included Avenue Capital, Black River Asset Management,
CarVal Investors LLC, Davidson Kempner Capital Management LLC, DE Shaw
Laminar, Durham Asset Management LLC, Fortress Investment Group LLC, GK
Capital LLC, GSO Capital Partners and Stanfield Capital Partners LLC.
News of the additional revelations comes only days after the
equity-securityholders’ committee filed a notice of appeal,
choosing to take their complaint to the U.S. District Court for the
District of Manhattan. The funds, led by Owl Creek Asset Management, are
hoping that the higher court will overturn the disclosure order handed
down by Judge
size='3'>Allan Gropper earlier this
month.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=21596'>Read
more. (Registration required.)
Additionally, Northwest
said that it is the latest company to be investigated by the probe into
price-fixing in the air cargo industry,
size='3'>Bankruptcy Law360 reported
yesterday. Officials from the U.S. Federal
Bureau of Investigation, the European Union competition directorate
and
size='3'>South Korea
competition regulator are examining a number of carriers in the
United States, Europe and
size='3'>Asia
asked for information from El Al Israel, British Airways, Air
France-KLM, Scandinavian Airlines System, Japan Airlines, American
Airlines and United Airlines, in some cases issuing subpoenas.
Scandinavian Airlines said officials are inspecting whether airlines
fixed prices on surcharges, including fuel fees, post-September 11
security measures and war-risk insurance, in addition to their basic
cargo rates.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=21588'>Read
more. (Registration required.)
DVI
Exec Sentenced for Financing Fraud
A former executive of a
bankrupt medical equipment financing company was sentenced to two and a
half years in prison after pleading guilty to a securities violation in
a $51 million fraud scheme against Fleet Bank,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported yesterday. Steven Garfinkel, the former chief
financial officer of DVI Inc., admitted to double-listing about $51
million in DVI’s assets to Fleet so that the bank would continue
lending money to his distressed company between 1999 and 2003.
Garfinkel’s sentence is scheduled to begin April 30. He was also
ordered to pay $200 a month when he leaves prison to pay up to $51
million in restitution. Garfinkel pled guilty in December 2006 to mail
fraud and a securities violation for falsely certifying a quarterly
report with the U.S. Securities and Exchange Commission.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=21592'>Read
more. (Registration required.)
name='8'>Analysts Say Vonage May Go Bankrupt
A Citigroup analyst said that
Vonage Holdings Corp. may go bankrupt by 2009 and investors should sell
shares of the Internet-phone company, Bloomberg News reported yesterday.
Citigroup analyst Michael Rollins reduced his rating from 'hold' in a
note to investors Monday and said ongoing patent litigation increases
risk to the company's profitability. The move follows a similar
downgrade by IPO comanager Bear Stearns Cos., which warned investors
Monday not to be tempted by a recent drop in the stock price. A judge
blocked Vonage from using technology that allows Internet calls to reach
traditional phone lines last week after a separate court decision found
that the company infringed patents held by Verizon Communications
Inc.
href='http://www.boston.com/business/globe/articles/2007/03/28/analyst_vonage_may_go_bankrupt?mode=PF'>Read
more.
name='9'>Pension Fund Files Suit Against Amaranth
The San Diego County
Employees Retirement Association said late Thursday that it had sued
Amaranth Advisors over its collapse last fall from bad natural-gas
trades, the
size='3'>Wall Street Journal reported today.
The long-anticipated lawsuit against the
w:st='on'>
size='3'>Greenwich
w:st='on'>
size='3'>Conn.
is the first litigation lobbed against Amaranth in the wake of its more
than $6 billion in losses triggered by risky bets at the hands of a
32-year-old energy trader, Brian Hunter. Other investors have held off
on litigation because the funds for Amaranth to defend the case would
have to come out of the limited assets still remaining that Amaranth
hasn't already distributed to investors. Amaranth chief executive
Nicholas Maounis said in a letter that the
w:st='on'>
Diego
the losses 'resulted from securities fraud and other improper conduct,
rather than legitimate but ill-fated investment decisions.'
href='http://online.wsj.com/article/SB117522916654754319.html?mod=home_whats_news_us'>Read
more.
href='http://online.wsj.com/article/SB117522916654754319.html?mod=home_whats_news_us'>&#
160;