href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='/AM/Images/headlines/headline.gif' />
September 3,
2008
August Consumer Bankruptcy Filings Up 29
Percent over Previous Year; Set Post-BAPCPA Record for Single
Month
U.S. consumer bankruptcy filings increased 29.2 percent nationwide in
August from the same period a year ago, according to the American
Bankruptcy Institute (ABI), relying on data from the National Bankruptcy
Research Center (NBKRC). The overall August consumer filing total of
96,413 also set a single-month high since the October 2005 effective
date of the new bankruptcy law. Chapter 13 filings constituted 33.2
percent of all consumer cases in August, a slight increase from
July.
href='http://www.abiworld.org/AM/Template.cfm?Section=Monthly_Bankruptcy_Statistics&Template=/MembersOnly.cfm&NavMenuID=3716&ContentID=46994&DirectListComboInd=D'>Click
here to view the August filing charts.
Judge Finds Grupo Mexico Committed Fraud in
Arasco Case
Judge Andrew S. Hanen of the U.S. District Court for the Southern
District of Texas found that Grupo Mexico committed fraud by
transferring Asarco LLC's 54.2 percent ownership interest in Southern
Peru Copper Corp. to Americas Mining Corp. (AMC), another Grupo
subsidiary, in 2003, Bankruptcy Law360 reported yesterday.
Judge Hanen also found that Grupo Mexico and AMC engaged in conspiracy
to structure the transfer, and that they breached their fiduciary duty
to Asarco and its creditors. The dispute dates back to February 2007,
when Asarco sued AMC. In its complaint, Asarco said that Grupo Mexico's
2003 transfer of Asarco's share in SPCC was fraudulent. It said that the
sale, which undervalued Asarco's stake by almost $500 million, stripped
the company of its most profitable division when it was needed the
most. Read
more. (Subscription required.)
Linens 'N Things Files Reorganization
Plan
Less than four months after seeking chapter 11 protection, home products
retailer Linens 'N Things has filed a reorganization plan that calls for
closing nearly 200 stores and grants its creditors ownership of the
company, Bankruptcy Law360 reported yesterday. Linens Holding
Co., the parent company of Linens 'N Things, laid out its plan to pay
senior lenders in full and give them substantially all of the ownership
of the reorganized company. Unsecured creditors would receive warrants
to purchase common stock in the new company. Pending court approval of
the plan filed on Friday - which the debtors said had the support of
senior lenders, the unsecured creditors' committee and senior
noteholders' committee - the company expects to emerge from bankruptcy
in early 2009.
href='http://bankruptcy.law360.com/articles/67902'>Read more.
(Subscription required.)
Report: Global Mergers &
Acquisitions' Activity Falls 27 Percent
Research firm Dealogic found that global mergers and acquisitions have
fallen 27 percent in the year to date as the credit crunch continues to
limit private-equity firms' presence in the market, the Wall Street
Journal reported today. The value of the M&A market reached $2.5
trillion Sept. 1 compared with $3.46 trillion to the same date in 2007,
according to Dealogic, which tracks the M&A market. Strategic
M&As continue to be healthier than private-equity buyouts, down 16
percent to $2.2 trillion. Sponsor-backed transactions fell 63 percent to
href='http://online.wsj.com/article/SB122043930850494623.html?mod=us_business_whats_news'>Read
more. (Subscription required.)
PBGC Moves to Dismiss Pilots' Benefits
Suit
The Pension Benefit Guaranty Corp. (PBGC) has moved to dismiss portions
of a suit that accuses it of depriving 1,000 retired US Airways Inc.
pilots of payments due under the benefits plan that the PBGC took over
when the airline filed for bankruptcy, Bankruptcy Law360
reported yesterday. In a motion filed Friday in the U.S. District Court
for the District of Columbia, the PBGC asked the court to throw out two
of the pilots' 11 claims. At the same time, the pilots filed a motion
for a preliminary injunction, asking the court to bar the PBGC from
attempting to collect alleged overpayments to the pilots.
href='http://bankruptcy.law360.com/articles/67943'>Read
more. (Subscription required.)
Interstate Bakeries Close to Emerging
from Bankruptcy
Interstate Bakeries Corp. may reach an agreement in the next few days to
emerge from nearly four years of chapter 11 protection as a stand-alone
company, the Kansas City Business Journal reported yesterday.
The Kansas City-based baker said yesterday in a filing with the
Securities and Exchange Commission that it is in the final stages of
negotiating a reorganization plan and financing, though many
constituencies must agree for negotiations to succeed and IBC to avoid
liquidation. A reorganization plan remains the sticking point in
negotiations, the filing said, but the IBC board hopes that the parties
will reach an agreement in the next few days so IBC can file as a going
concern its annual financial report for the year ended May 31. The
company expects to file the report Sept. 15.
href='http://www.bizjournals.com/kansascity/stories/2008/09/01/daily7.html?t=printable'>Read
more.
Mercury Mortgage Company Files for
Bankruptcy
Closely held Mercury Cos., the Denver-based operator of mortgage
companies that once had almost 250 offices in six states, sought
bankruptcy court protection from creditors, blaming its collapse on the
U.S. housing market, Bloomberg News reported on Saturday. Mercury
estimated it has assets and debt of as much as $100 million each in its
chapter 11 petition filed in the U.S. Bankruptcy Court in Denver. The
company had offices in Colorado, Arizona, California, Texas, Oregon and
Utah, according to its Web site. Mercury said it ceased operations in
some states in July. In June, three units sought permission to liquidate
in a bankruptcy court in California, according to court papers.
href='http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aGr.zQK6.voc'>Read
more.
Some Fed Officials Sought Tougher
Inflation Posture
At least three regional Federal Reserve officials appear to have
supported higher interest rates ahead of last month's policy meeting,
when the central bank left rates unchanged, the Wall Street
Journal reported today. Minutes of the Fed's meetings to set the
discount rate for direct loans to commercial banks showed that more
policy makers than before favored tightening rates due to inflation
concerns. Three of the 12 regional banks -- Chicago, Dallas and Kansas
City -- called for a quarter-point increase in the discount rate. Those
banks agreed that the economy was soft and financial markets hadn't
stabilized fully yet. They also noted that 'the upside risks to
inflation were of greater concern than the downside risks to growth,'
the minutes said.
href='http://online.wsj.com/article/SB122037860242991461.html?mod=us_business_whats_news'>Read
more. (Subscription required.)
International
Alitalia's Unions Demand Talks on
Rescue Plan
Bankrupt Alitalia's nine major unions on yesterday said that they were
willing to negotiate on the latest plan to salvage the airline, but
needed to be convinced of the plan's merits before discussing job
losses, Reuters reported. Winning union backing is crucial for the
rescue plan led by a group of Italian investors who plan to buy the best
parts of the struggling airline, which filed for bankruptcy on Friday.
The investor group, led by Piaggio CEO Roberto Colaninno, formally
submitted a bid for certain Alitalia assets on Monday. Italy's
government has warned the unions -- who scuttled a sale to Air
France-KLM earlier this year -- that they have no choice but to get on
board with the rescue plan, with liquidation of the airline the only
other option.
href='http://www.iii.co.uk/news/?type=afxnews&articleid=6875669&action=article'>Read
more.