September 272006

 

Feds
Ease Enrollment Rules
for Pension Plans

The Labor Department unveiled a

proposal yesterday to make it easier for companies to enroll workers in
pension plans such as 401(k)s, a move supporters hope will increase
participation, the Associated Press reported today. The Labor Department

was required to take the action under a revamp of pension policies
approved by Congress and signed into law by President Bush in August.
The rules would relieve companies from liability for any investment
losses to a worker who was automatically enrolled in a qualified default

investment alternative as outlined under the proposal. The department
said that one-third of eligible workers don't participate in 401(k)s and

other defined contribution plans. 

href='http://www.nj.com/business/ledger/index.ssf?/base/business-4/1159336508130800.xml&coll=1'>Read

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id='2'>Health Care Costs Rise Twice
as Much as Inflation

A survey jointly
sponsored by the Kaiser Family Foundation and the Health Research and
Educational Trust reported yesterday that the cost of employee health
care coverage rose 7.7 percent this year, more than double the overall
inflation rate and well ahead of the increase in the incomes of workers,

the New York
Times reported today. While the 7.7 percent
increase was the lowest since 1999, the average cost to employees
continued an upward trend, reaching $2,973 annually for family coverage
out of a total cost of $11,481. Since 2000, the cost of family coverage
has risen 87 percent while consumer prices are up 18 percent and the pay

of workers has increased 20 percent, the survey noted. 

href='http://www.nytimes.com/2006/09/27/business/27insure.html?ref=business&pagewanted=print'>Read

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id='3'>Court Approves
Owens
size='3'>Corning's
Bankruptcy Plan

Owens Corning announced
yesterday that the U.S. Bankruptcy Court for the District of
Delaware approved its reorganization plan, paving the way for the
fiberglass insulation maker to emerge from bankruptcy after six years by

the end of October, Reuters reported yesterday. The plan approved by the

court calls for a total distribution valued at $8.627 billion. That
distribution consists of an enterprise value of $5.858 billion and
assumed excess cash of $1.432 billion. Also included in the distribution

is $1.491 billion in Fibreboard and asbestos trust assets. In May, the
company agreed to pay more than $5.1 billion to people sickened by
asbestos made by the company. 

href='http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-09-26T210121Z_01_N26377343_RTRIDST_0_MANUFACTURING-OWENSCORNING-UPDATE-1.XML&rpc=66&type=qcna'>Read

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Autos

id='4'>1,400 More Workers
at
size='3'>Delphi Take
Buyouts

More than 70 percent of
Delphi Corp.'s hourly work force will leave by the end of the year as
the nation's largest auto parts supplier works to emerge from bankruptcy

by transforming into a smaller company, the Associated Press reported
today. Delphi said Tuesday that another 1,400 workers represented by the

United Auto Workers union have decided to accept buyout offers worth up
to $140,000 each. That brings to 20,100 the number of
w:st='on'>
size='3'>Delphi production workers who

have decided to leave by Jan. 1, either through buyout offers or early
retirement packages. Delphi
had 27,500 unionized workers as of June 30, and 12,400
UAW members previously accepted early retirement offers. Another 6,300
members of the International Union of Electronic Workers-Communications
Workers of America also will take buyouts or early retirements,

size='3'>Delphi said. 

href='http://www.washingtonpost.com/wp-dyn/content/article/2006/09/26/AR2006092600923.html'>Read

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GM
to Seek Billions from
Renault, Nissan in Alliance Talks,

General Motors Corp. is
prepared to seek a multibillion-dollar payment from Renault and Nissan
to compensate for the greater value the Detroit auto maker believes it
would bring to any partnership, the Wall Street
Journal reported today. GM's request for a
payment shows that the two camps are still far apart not only in
evaluating the benefits of a deal but even in agreeing on what
constitutes an alliance. Carlos Ghosn, chief executive of both Nissan
and Renault, is to meet today in
w:st='on'>
size='3'>Paris with GM
chief Rick Wagoner. Ghosn has envisioned broad cooperation along the
lines of the existing tie-up between Nissan and Renault, which doesn't
involve any such payments. 

href='http://online.wsj.com/article/SB115927472085074207.html?mod=hps_us_pageone'>Read

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id='6'>Auto Parts Supplier to
Miss Forecasts

Auto parts supplier Visteon
Corp. said Tuesday that it would not meet its financial targets for the
rest of the year because of production cuts by automakers and other
factors, the Associated Press reported today. Visteon, the former parts
unit of Ford Motor Co., said it expected second-half sales to be about
10 percent lower than its first-half sales of $5.7 billion. The company
did not say whether it still expected to earn a profit for the year. In
August, Visteon predicted a 2006 profit of $170 million to $200 million
with product sales of around $11 billion. 
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id='7'>Galvex Tries Again to Have
Its Chapter 11 Dismissed

Less than a month after
its bankruptcy case was converted to a chapter 7 liquidation, Galvex
Holdings Ltd. has asked a
w:st='on'>
size='3'>Manhattan court to

officially dismiss its chapter 11 proceedings,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. The steel maker filed papers in the U.S.
Bankruptcy Court for the Southern District of New York on Monday,
seeking to toss out the case since “no purpose is served by
continuing this chapter 11.” In the motion, Galvex argued that its

sole remaining asset is its claim against the Galvex debtors, which will

require extensive litigation outside the bankruptcy court’s
jurisdiction. Since Galvex has no chance of filing and confirming
a reorganization plan, according to court papers, the chapter 11
case should be thrown out, the company said. A hearing on the matter has

been scheduled for Oct. 24, with objections due a week
before.

w:st='on'>
size='3'>
id='8'>London Fog Seeks Extension

to File Chapter 11 Plan

London Fog Group Inc.
asked the U.S. Bankruptcy Court in
w:st='on'>
size='3'>Nevada to give
the company an extra three months to submit its chapter 11
reorganization plan,
size='3'>Portfolio Media reported yesterday.
The Seattle-based company, which sold the London Fog brand name last
month, asked that a hearing on the matter be held prior to Oct. 18.
London Fog has argued that it needs more time to decide whether the
company should sell its last remaining business,
w:st='on'>
size='3'>Homestead, a line
of bedding and other linens, or include it as a main portion of its
chapter 11 plan.

id='9'>Motorola May Find Itself on
the Hook for Debt from Failed Iridium Venture

The creditors of bankrupt

Iridium LLC, a satellite phone company, are seeking the return of $3.7
billion plus interest that Motorola received from them for building the
start-up's satellite network, the

size='3'>Wall Street Journal reported today.
The global satellite phone operator, nurtured and spun off by the
Schaumburg,
face='Times New Roman' size='3'>Ill.

size='3'>, telecom equipment maker, filed for bankruptcy just nine
months after it began offering service in 1999. It had signed
up less than 10 percent of the 213,000 customers that its loan

covenants required. Its $5 billion in assets were liquidated and sold
for $25 million. On Oct. 23, a federal bankruptcy court in Manhattan is
scheduled to open a trial to determine when Motorola realized that
Iridium was destined to fail and what role it might have played in
extending Iridium's downfall. 

href='http://online.wsj.com/article/SB115932513681775192-search.html?KEYWORDS=bankruptcy&COLLECTION=wsjie/6month'>Read

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id='10'>Coudert Brothers Names
Unsecured Creditors

The dissolved
international law firm Coudert Brothers LLP owes millions around the
world to its unsecured creditors, according to the latest filing in the
firm’s chapter 11 bankruptcy case, Portfolio Media
reported yesterday. Coudert’s largest unsecured
debts include two disputed claims from landlords that amount to over $4
million, $1.5 million owed to the law firm’s employees pension
benefit program and various other claims of taxes and money owed to
companies and law firms, according to court filings. Coudert filed for
chapter 11 bankruptcy protection on Friday after losing two lawsuits,
including a $2.5 million malpractice suit filed by a former client, only

one year after the law firm announced its plans to dissolve. The
disputed claims come from Lyman Gardens Apartments LLC in

size='3'>Irvine,
w:st='on'>
size='3'>Calif., which
Coudert owes $2.56 million, and San Francisco Cannery LLC, which the
firm owes $1.87 million, according to court filings.

id='11'>BearingPoint in Default on
$200 Million of Bonds

A
w:st='on'>New
York court last week found that
McLean,
face='Times New Roman' size='3'>Va.
size='3'>, consulting firm BearingPoint Inc. had defaulted on $200
million of its bonds, the
size='3'>Washington Post reported today. The
company, which employs 17,000 people worldwide, has struggled through a
series of accounting problems during the past two years and has not been

able to file up-to-date financial reports. Bondholders sued the company
last fall, arguing that filing timely financial reports was part of the
bond agreement. In a filing with the Securities and Exchange Commission,

company officials said that the ruling by the New York State Supreme
Court could raise questions about the company's ability to continue
operating, consuming cash if bondholders must be repaid early and
perhaps prompting the cancellation of contracts. 

href='http://www.washingtonpost.com/wp-dyn/content/article/2006/09/26/AR2006092601540.html'>Read

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id='12'>Enron’s Former CFO
Sentenced to 6 Years

Andrew S. Fastow, the
former chief financial officer of Enron, was sentenced Tuesday to six
years in prison for his role in Enron’s collapse in 2001,
the New York
Times reported today. 
size='3'>Despite admitting to numerous crimes, Fastow was given a prison

sentence four years less than the 10-year plea deal he struck with the
government in January 2004. Legal analysts and Enron prosecutors
credited his reduced sentence to his cooperation in the trial against
the former chief executives Kenneth L. Lay and Jeffrey K. Skilling, as
well as his continuing assistance in civil suits against banks brought
by shareholders who contended that the banks participated in
fraudulent deals to conceal Enron’s huge debt. Fastow also
benefited from a ruling last year by the U.S. Supreme Court that made
federal sentencing guidelines advisory rather than binding, paving the
way for Judge Kenneth M. Hoyt of the Federal District Court to reduce
the sentence. 

href='http://www.nytimes.com/2006/09/27/business/27enron.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read

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International

w:st='on'>
id='13'>South
Korea
face='Times New Roman' size='3'>'s Daewoo Files for Chapter
15

Already under bankruptcy
protection in South Korea, Daewoo Corp., the former parent of the South
Korean construction and trading conglomerate, sought refuge Monday under

chapter 15 in the
w:st='on'>United
States,
Portfolio Media
reported yesterday. Hyung-Ha Lee, the court-appointed
trustee in Daewoo’s foreign bankruptcy, submitted the filing in
the U.S. District Court for the Southern District of New York to stave
off
face='Times New Roman'
size='3'>U.S.
size='3'>creditors from closing in on the company’s assets while
its Korean bankruptcy is pending. The company listed about $103 million
in assets and $23 billion in debts by the end of 2005. Judge
Robert Gerber
size='3'>, who has been assigned to Daewoo’s case, has not yet set

a hearing date for the company’s bid to approve its bankruptcy
filing. The case is
size='3'>Daewoo Corp., case number
06-12242-reg, in the U.S. District Court for the Southern District of
New York.