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January 4, 2006
id='1'>Greenspan Keeps Investors Guessing on Next Rate Moves
Alan Greenspan is giving investors a new puzzle in his final month
on the job: whether the Fed is almost done with interest rate increases
or has several more to go, Bloomberg News reported today. Minutes of the
Fed's Dec. 13 meeting, released yesterday, said the number of additional
rate increases 'probably would not be large.' To Bill Gross, manager of
the world's biggest bond mutual fund, that means 'just one' more
increase. To Joseph LaVorgna, chief U.S. fixed-income economist at
Deutsche Bank Securities Inc. in New York, that means three more by
June. Greenspan, who retires Jan. 31, took interest rates off autopilot
last month, suggesting the Fed may be close to stopping after 13
straight increases. The minutes reinforced that view, while
acknowledging inflation remains a concern. The result: language that
suits both sides of the debate.
href='http://www.bloomberg.com/apps/news?pid=10000103&sid=aRLtpA.L8PRI&refer=us'>Read
more.
id='2'>Chapter 7 Filing Boom Turns to Bust
The Oct. 17 change
in bankruptcy law generated a short-term boom for personal-bankruptcy
attorneys, spurring 600,000 Americans to file chapter 7 petitions in the
two weeks before the tough new law took effect. But business has been a
bust ever since, lawyers say, according to a Dow Jones Newswire report
yesterday. By the week of Dec. 12, the volume of weekly chapter 7
filings - which averaged 30,000 a month before the law took effect - had
dwindled to 1,951, according to Lundquist Consulting, a California
research firm that tracks the data. Some lawyers, convinced the golden
days are over, have begun to look for other work. 'This law actually
punishes lawyers,' said Prof. Nathalie Martin, ABI's
fall 2005 resident scholar. A dropoff in the number of filings after
Oct. 17 was widely expected. But lawyers say the magnitude of the
decline took them by surprise. Many fret that when the dip ends,
bankruptcy may not be a lucrative area of practice anymore.
href='http://online.wsj.com/article/SB113634114721937172-email.html'>Read
more.
id='3'>Armstrong World Plan Rejected on Appeal
A federal appeals
court has upheld the rejection of Armstrong World Industries Inc.'s
bankruptcy reorganization plan, prolonging the flooring, ceiling and
cabinet maker's five-year stay under court protection, Reuters reported
yesterday. Armstrong Holdings Inc. said that the U.S. Court of Appeals
for the Third Circuit upheld U.S. District Judge Eduardo Robreno's
February 2005 denial of the plan. Armstrong World had appealed Robreno's
determination that a distribution of new warrants to shareholders, over
the objection of unsecured creditors, was not 'fair and equitable.'
Armstrong World filed for protection from creditors in December 2000
after being crushed by claims related to floor tiles containing
asbestos. Lancaster, Pa.-based Armstrong Holdings said it
cannot estimate when Armstrong World will emerge from Chapter 11 or what
payouts its major creditors and stockholders might receive. The company
has 41 plants, 14,900 employees and more than $3 billion of annual
sales.
id='4'>Mirant Emerges from Chapter 11
Energy supplier
Mirant Corp. said yesterday that it has emerged from chapter 11
bankruptcy after filing for protection nearly 30 months ago, the
Associated Press reported yesterday. The Atlanta-based company said that
it has secured $2.35 billion in exit financing. Its reorganization plan
calls for converting more than $6 billion of debt and liabilities into
equity in the new company, and it will nearly halve its overall debt.
Mirant will issue 300 million shares of common stock to its creditors
and existing equity-holders. The company has applied for re-listing with
the New York Stock Exchange and expects to begin trading on Jan. 11
under the ticker symbol MIR. Subsidiaries of Mirant owning generating
facilities and other assets in New York state will remain in chapter 11
proceedings pending the resolution of certain issues with local
authorities. The company also said yesterday that it has installed a new
nine-member board of directors.
Airlines
id='5'>Northwest Seeks Extension
The nation's
fourth-largest carrier says it hopes to have a plan to emerge from
bankruptcy by the end of the year, the Associated Press reported
yesterday. The airline faces a January 12th deadline for filing a plan.
Without an extension, bankruptcy law allows Northwest's creditors to
come up with their own blueprint. Northwest says that its creditors
support a six-month extension with the understanding that it will
probably need another one. Trial is set for later this month on
Northwest's requests to reject union contracts and impose its own terms
on its pilots, flight attendants and ground workers.
id='6'>United's Path Clearer after Creditors' OK
United Airlines'
parent company has entered the homestretch of its more than three-year
stay in bankruptcy, well-positioned to emerge from chapter 11 next month
now that it has won creditors' support for its reorganization plan, the
Associated Press reported yesterday. UAL Corp. still has some disputes
to resolve before seeking a judge's final go-ahead at a Jan. 18-20
confirmation hearing, including one over its controversial proposal to
give 400 top managers 11 percent of the new stock in the reorganized
company. But industry experts said yesterday that no significant threats
to a February exit appear to remain following its announcement late last
week that a wide majority of creditors had voted for the reorganization
plan.
href='http://www.suntimes.com/output/business/united03.html'>Read
more.
Enron
id='7'>Commentary: Enron Rears Its Head Again
The collapse of
Enron seems so long ago, the New York Times mused last week.
Much has happened in the ensuing four years, so it is easy to forget the
first in a string of corporate scandals that shook our collective trust
in business leaders. For an indicted executive, conditions would seem
perfect for keeping a low profile ahead of trial. So it was a surprise
to see Kenneth Lay, the company's former chairman, claim in a recent
speech that prosecutors disregarded the truth. Lay told a Houston
audience that Enron was 'a strong, profitable, growing company even into
the fourth quarter of 2001.' That was the same quarter in which Enron
declared bankruptcy. Judging from his speech, Ken Lay and Enron were the
victims of a couple of bad apples inside the company and after-the-fact
political scape-goating.
href='http://www.theday.com/eng/web/news/re.aspx?re=40bbdf63-4d79-42a0-b2a4-fc2f758b1b82'>Read
more.
id='8'>Did Skilling Mislead the SEC?
Federal prosecutors
intend to argue that former Enron CEO Jeff Skilling attempted to deceive
the Securities and Exchange Commission (SEC) about his reason for
selling 500,000 shares of Enron stock in a deposition he gave soon after
the company's bankruptcy, according to a published report, CNN reported
today. The Wall Street Journal reports that in a government
filing yesterday, prosecutors argued they should be able to use
Skilling's deposition that he gave to the SEC on Dec. 6, 2001, in the
upcoming trial of Skilling and former Enron Chairman and CEO Kenneth
Lay, due to start in Houston on Jan. 30. The Journal reported
Wednesday that Skilling's lawyers have tried to exclude that deposition,
arguing that SEC officials didn't properly warn Skilling about his
criminal exposure before he talked in what he believed was a purely
civil investigation. The newspaper reports that the government response
filed Tuesday disputed the argument that a criminal probe couldn't use
information gleaned from a civil investigation.
href='http://money.cnn.com/2006/01/04/news/companies/skilling/index.htm'>Read
more.
id='9'>Execs See More Auto Industry Woes
A survey of top
auto executives around the globe released today found that three out of
four are expecting another major bankruptcy in the sector this year, and
just more than half expect one of the major automakers will disappear
through consolidation by 2008, CNN reported today. The survey of 140
senior executives at vehicle manufacturers and automotive suppliers by
KPMG LLP, the U.S. accounting and advisory firm, found that 76 percent
answered 'Yes' when asked 'Do you think any major (automakers) or
suppliers will file for bankruptcy in the next year?' It was the first
time the bankruptcy question had been asked in the KPMG's annual survey.
href='http://money.cnn.com/2006/01/04/news/companies/auto_outlook/index.htm'>Read
more.
id='10'>FiberMark Out of Bankruptcy
FiberMark Inc.
announced yesterday that it emerged from chapter 11 bankruptcy as a
private company owned by Connecticut-based Silver Point Capital, the
Brattleboro Reformer reported today. FiberMark spokeswoman
Janice Warren said that there are no changes planned for the company's
headquarters and manufacturing facility in Brattleboro, Vt., where they
employ about 200 people. FiberMark completed a reorganization mandated
by the U.S. Bankruptcy Court, District of Vermont, last month.
href='http://www.reformer.com/Stories/0,1413,102~8862~3190060,00.html'>Read
more.
id='11'>Boston Supermarket Chain Files for Bankruptcy Protection
Americas' Food
Basket, a Boston grocery chain that shuttered its three stores last
month, filed for chapter 7 bankruptcy, the Boston Globe
reported today. The shops, located in Dorchester and Hyde Park, Mass.,
closed because of slow sales and mounting debt. The company's founder,
Andre Medina, could not be reached for comment. Andre Porter, Boston's
deputy director of the office of business development, said at a meeting
last night that the grocery chain, which specialized in ethnic foods,
owed more than $3 million, including about $750,000 to the city.
id='12'>Packaging Firm Seeks Bankruptcy Protection
Schaumburg,
Ill.-based packaging company Pliant Corp. filed for chapter 11
bankruptcy protection yesterday and said that it would restructure its
debt in a prearranged deal with stockholders and bondholders, the
Chicago Tribune reported today. The privately held company,
which employs 3,000 people globally, said no job cuts or plant closings
are planned and that it would continue normal operations during
bankruptcy proceedings, which it expects to last four to six months. The
chapter 11 filing in Wilmington, Del., covers its U.S. and Canadian
operations.
href='http://www.chicagotribune.com/business/chi-0601040204jan04,1,3479977.story?coll=chi-business-hed'>Read
more.
id='13'>GM Shares Tumble
Shares of General
Motors Corp. fell nearly 5 percent yesterday after Bank of America
Securities cut its target price for the automaker's stock, Reuters
reported yesterday. The brokerage firm lowered the target price to $13
from $16, citing lower savings from GM's recent health-care agreement
with the United Auto Workers union. That would represent a fall of an
additional 33 percent this year for GM's stock, which was one of the
worst performers in the Standard & Poor's 500 index in 2005,
dropping almost 52 percent.
href='http://money.cnn.com/2006/01/03/news/companies/gm.reut/index.htm'>Read
more.
id='14'>Refco Judge Extends Freeze on RCM Unit's Assets
The judge
overseeing Refco Inc.'s bankruptcy proceedings has through Jan. 31
blocked clients of the company's unregulated broker-dealer unit from
pursuing some actions to recover their property, Reuters reported
yesterday. In a seven-page order dated Tuesday, Judge Robert
Drain of the U.S. Bankruptcy Court in Manhattan delayed at least 19
lawsuits and other actions brought by account holders at the unit, Refco
Capital Markets Ltd. These actions raised the issue of whether property
held by Refco Capital Markets belonged to its bankruptcy estate or to
clients. A prior freeze had expired on Dec. 8. Refco Inc., a futures and
commodities broker, filed for bankruptcy protection Oct. 17, and has
said it owed $16.8 billion to creditors.
href='http://www.nytimes.com/reuters/business/business-financial-refco.html'>Read
more.
International
id='15'>Plumber's Bankruptcy Release Blocked
Documents were
filed in the U.S. Bankruptcy Court by George Miller, American Business
Financial's trustee, seeking to employ Ciardi & Ciardi as special
counsel for the prosecution of litigation related to short selling of
the company's stock pre-petition, BankruptcyData.com reported today. The
documents state that compensation for the services performed by Ciardi &
Ciardi shall be 40 percent of the proceeds of the prosecution,
settlement or other resolution of the Short Seller Litigation. In
addition, Ciardi will be reimbursed for all costs associated with this
engagement.
id='16'>Fashion Firm Kookai Declares Bankruptcy
Fashion chain
Kookai became the latest casualty in England yesterday after it formally
declared bankruptcy and appointed accountancy firm Deloitte as
administrators to seek a buyer, the New Zealand Herald reported
yesterday. The future of the once high-flying fashion chain hung in the
balance after debt-laden Forminster, the U.K. franchise holder for the
brand, failed to renegotiate contract terms with Kookai's Paris-based
parent company just before Christmas. Kookai trades from 25 British
stores and 30 concessions and employs 600 people in the United Kingdom.
It operates under the Kookai SA brand in France. Shares in Forminster,
listed on the London Stock Exchange's AIM market, were suspended at 3.75
pence in December, after tumbling more than 20 per cent because of
doubts about its future. At the end of November the group warned that
its trading position from January 1 was 'highly uncertain.'
href='http://www.nzherald.co.nz/section/6/story.cfm?c_id=6&objectid=10362403'>Read
more.