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January 31, 2007
Approves GB Holdings’ Chapter 11 Plan
U.S. Bankruptcy Court
Judge Judith
Wizumur approved the chapter 11 plan of GB
Holdings Inc,, shielding billionaire and majority shareholder Carl Icahn
from any further litigation over his handling of the Sands Hotel and
Casino, Bankruptcy
Law360 reported yesterday. Judge Wizumur
confirmed the company’s reorganization plan, giving bondholders
led by Harbinger Capital Management $53 million and major shareholder
Robino Stortini Holdings Inc. $3.9 million. GB Holdings filed for
bankruptcy in September 2005 after Icahn, who owns a 77.5 percent stake
in GB Holding’s equity, transferred the Sands Casino to another of
his companies, Atlantic Coast Entertainment Holdings. GB Holdings owned
an estimated 2.9 million shares in the company, with the stock serving
as its primary asset.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=17579'>Read
more. (Registration required.)
Airlines
name='2'>US
face='Times New Roman' size='3'> Airways CEO Won’t Pursue
Delta if It Emerges from Bankruptcy
US Airways CEO Doug Parker said
that he would not pursue a hostile bid for Delta Air Lines if it emerges
from bankruptcy, the Associated Press reported yesterday. Delta was
making progress on remaining independent. The carrier said Tuesday it
has obtained a commitment for $2.5 billion in exit financing as part of
its plan to emerge from bankruptcy by the middle of this year as a
stand-alone company. Parker said he would hold creditors to
tomorrow’s deadline to begin moving forward on its $9.9 billion
bid for the carrier. To keep the offer alive, Parker said Delta's
creditors have until the end of the day Thursday to request a delay in a
Feb. 7 bankruptcy hearing on Delta management's bankruptcy plan. The
creditors also must call on both companies to begin the federal
regulatory process and a due diligence process that would open Delta's
books for US Airways.
href='http://www.chron.com/disp/story.mpl/business/4513127.html'>Read
more.
name='3'>Goldman Sachs to Pay $125 Million for Mesaba’s
Northwest Claim
Mesaba Aviation Inc. has
agreed to sell its $145 million claim against Northwest Airlines for
nearly $125 million to Goldman Sachs Credit Partners LP,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported yesterday. Mesaba said that claims against Northwest
are trading at approximately 95 percent of the face value of the claim,
and that given uncertainty in Northwest’s operations and
reorganization plan, it believes that the market for claims of Northwest
may fluctuate. Northwest has already reached a deal with the embattled
carrier’s parent company MAIR Holdings Inc. over the Mesaba deal,
to which Northwest would pay Mesaba's estate $145 million in addition to
$10 million in operating cash.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=17578'>Read
more. (Registration required.)
name='4'>Solutia Seeks Another Exclusivity Extension
Bankrupt chemical
products maker Solutia Inc. requested its third exclusivity extension as
it continues to look to emerge from chapter 11,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported yesterday. If U.S. Bankruptcy Judge
face='Times New Roman' size='3'>Prudence Carter Beatty
size='3'>grants Solutia’s request, its exclusive right to file its
reorganization plan would be extended through April 30, and its
exclusive rights to lobby for creditor support for its plan would be
extended until June 29. The deadlines after which Solutia’s
exclusive rights will expire currently stand at Feb. 13 for filing a
plan and April 16 for seeking creditor support.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=17507'>Read
more. (Registration required.)
name='5'>Granite Broadcasting’s Creditors Balk at Joining
Committee
size='3'>Lisa Lambert, the U.S. Trustee
overseeing Granite Broadcasting Corp.’s bankruptcy proceedings,
said that she could not appoint a creditors’ committee due to lack
of interest, Bankruptcy Law360 reported yesterday. Lambert told
the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Manhattan
contacted the 20 largest unsecured creditors listed in the
debtor’s petition and that “an insufficient number of
eligible creditors indicated a willingness to serve on such a
committee.” Granite Broadcasting, a
w:st='on'>
York media company,
originally filed for chapter 11 on Dec. 11, listing $443.6 million in
assets and $641.1 million in debts. Granite listed between 100 and 200
creditors, with the list topped by a $30 million claim from D.B. Zwirn
Specialist Opportunities Fund LP. Twentieth Century Fox is claiming
$15.1 million, while various units of Warner Brothers are claiming more
than $7.1 million.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=17482'>Read
more. (Registration required.)
name='6'>Former Assemblyman Calls California Pension Situation a
‘Time Bomb’
Although out of office for two
months due to term limits, former Assemblyman Keith Richman is still
sounding the alarm about the 'ticking time bomb' effect of public
employee pensions, calling it the greatest fiscal issue facing the
state, the Los Angeles Times reported today. Richman said that
unless changes are made, the pension debt will overwhelm the state's
ability to fund higher education, build roads and develop technology.
Some estimates show the state has promised its government workers at
least $100 billion more in cash payments and healthcare benefits than
its pension funds are projected to be able to cover. Billions more are
owed to local government employees statewide, Richman said.
href='http://www.latimes.com/news/printedition/california/la-me-pension31jan31,1,3684175.story?coll=la-headlines-pe-california&ctrack=1&cset=true'>Read
more.
International
name='7'>Greek Nuns Hide after Running Up Debts
A group of Greek nuns
abandoned their convent and went into hiding after running up debts of
more than 600,000 euros ($777,000) from a knitting business that went
bust, Reuters reported yesterday. The 55 sisters of the Saints Kirikos
and Ioulitis monastery in the town of
face='Times New Roman' size='3'>Sidirokastro
size='3'>near the border with
w:st='on'>
size='3'>Bulgaria
size='3'>, had purchased machinery worth 250,000 euros with bank loans a
number of years ago, police officials said. Despite supplying several
shops with knitted goods, they were running deeper and deeper into debt
and risking bankruptcy. The nuns are believed to have taken refuge at
another monastery in central
face='Times New Roman' size='3'>Greece
size='3'>and the Greek press has reported that the
w:st='on'>
size='3'>Church
size='3'>Greece
offered to help them pay their debts and come out of
hiding.
name='8'>TROUBLED COMPANIES IN THE NEWS
1000’s of companies lose
money or experience some form of difficulty each
quarter.
The business news
articles below are taken from the
size='3'>Daily Summary of Troubled & Fast Growing U.S. Companies and
Other Business News published by Bastien
Financial Publications.
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size='3'>Genesis Microchip Inc., an
Alviso,
face='Times New Roman' size='3'>Calif.
designer of integrated circuits, reported a third quarter
net loss of $130 million, including a $101 million charge from the
impairment of goodwill and assets. Revenue sank 31%--to $51.1
million.
size='3'>Harvey Electronics Inc., a
size='3'>Lyndhurst
w:st='on'>
size='3'>N.J.
audio and video products, reported a fiscal net loss of $3.2 million on
an 11% revenue decline--to $36 million.
size='3'>Motorola Inc. of
w:st='on'>
size='3'>Schaumburg
w:st='on'>
size='3'>Il
about shutting down a software-development plant in
w:st='on'>
size='3'>Cork
size='3'>Ireland
size='3'>as part of its earlier announced plan to trim its worldwide
payroll by 3,500 jobs.
size='3'>NetManage Inc., a
w:st='on'>
size='3'>Cupertino
w:st='on'>
size='3'>Calif.
software firm, reported a fourth quarter net loss of $920,000. Revenue
declined 19%--to nearly $8.7 million. For the year, it lost $2.5 million
on an 18% revenue decline--to $35.6 million. The quarter and year
included restructuring charges of $84,000 and $181,000
respectively.
size='3'>Sara Lee Corp. will shutter two
plants and trim another 1,700 jobs from its payroll (3% of its
workforce). Production from the two
w:st='on'>
size='3'>Mississippi
size='3'>facilities, which make bacon, pork and spices, will be
transferred to suppliers. The closings will result in extra charges of
$34 million. Sara Lee will also incur another $118 million in
charges related to writing down the value of its Brazilian and Austrian
coffee operations and for writing down the value of trademarks owned by
the Brazilian unit.
size='3'>Stanley Furniture Co. Inc.,
size='3'>Stanleytown
w:st='on'>
size='3'>Va., reported its
fourth quarter net income fell 24%--to $4.5 million. Sales fell 13%--to
$70.6 million. For the year, net income fell 28%--to $16.8 million, on
an 8% sales decline--to $308 million.