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March 26, 2007
name='1'>Magnolia Energy Emerges
from Chapter 11
Mississippi-based power
wholesaler Magnolia
Energy LP emerged from bankruptcy on Friday after refinancing nearly
$427 million in
debt, Bankruptcy Law360
size='3'>reported on Friday. Magnolia operates a 900 megawatt, natural
gas-fired power plant
in
size='3'>Ashland,
w:st='on'>
face='Times New Roman' size='3'>Miss.,
that began
generating and selling wholesale electric power in August 2003 and now
generates most of the
energy in the
face='Times New
Roman' size='3'>Tennessee
w:st='on'>Valley
size='3'>region.
Magnolia filed for chapter 11 protection in September 2006, citing an
imbalance in supply
and demand for power in the region that sank revenues and kept the
company from paying its
debt obligations. At the beginning of February, it asked for permission
to enter into a
refinancing deal to dismiss its chapter 11 case.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=21219'>Read
more.
(Registration required.)
name='2'>Bankruptcy Court Approves
3dfx Deal
A federal judge approved
an investment pact
that shareholders of computer graphics-card maker 3dfx Interactive Inc.
hope will end the
company's long-running bankruptcy case, the Associated Press reported on
Friday. JudgeRoger
L. Efremsky of the U.S. Bankruptcy Court in
w:st='on'>
Jose,
face='Times New
Roman' size='3'>Calif.,
signed off Thursday on
a deal the committee representing 3dfx shareholders reached with hedge
fund Harbinger
Capital Partners, which has agreed to pay about $51.5 million for the
company's preferred
stock.The proceeds
from the sale to
Harbinger would be used to pay off the company's creditors, an action
the shareholder
committee hopes will trigger a big stock payout from the company that
bought 3dfx's assets
more than six years ago. The deal, however, is far from done as it
hinges on the outcome of
the shareholder panel's court battle with Nvidia Corp.
href='http://biz.yahoo.com/ap/070323/3dfx_bankruptcy.html?.v=1'>Read
more.
Unions to Negotiate
Dana Corp. and
representatives for its
unionized workers are preparing to negotiate this week over the
company’s requrest
significant wage, benefit and other concessions from its factory workers
in order to emerge
from chapter 11, the
size='3'>(
w:st='on'>
size='3'>Ohio)
Blade
size='3'>reported yesterday. Dana was suffering from cash-flow problems
when it filed for
chapter 11 protection from creditors on March 3, 2006. The Fortune 500
company lost $1.6
billion in 2005 and $739 million last year as sales declined slightly to
$8.5 billion. As
part of an overall plan to save at least $405 million a year to
successfully emerge from
bankruptcy by year's end, Dana estimates it can save $60 million to $90
million a year by
reducing labor and benefits costs. Judge Burton Lifland
size='3'>said
that he will decide on issues involving the unions by the end of
April. He likely
wants the unions and Dana to negotiate a solution rather than him
intervening, said James J.
White, a bankruptcy expert at the
face='Times New
Roman' size='3'>University
size='3'>of
w:st='on'>
size='3'>Michigan
size='3'>in
face='Times New Roman'
size='3'>Ann Arbor. Dana
will have to prove it
cannot afford to continue paying higher wages, retiree health care and
other bills, and
neither side will want all of those details revealed, said
John Penn of Haynes and Boone
LLP in Fort Worth,
href='http://toledoblade.com/apps/pbcs.dll/article?AID=/20070325/BUSINESS03/703240341'>Read
more.
name='4'>PBGC Concerned
about Northwest Pension Liabilities
The Pension Benefit
Guaranty Corp. (PBGC)
said that Northwest airlines hasn't been clear about the implications of
its pension
liabilities in its chapter 11 disclosure statement that it intends to
send to creditors, the
Associated Press reported on Friday. Judge Allan
Gropper
size='3'>of the U.S. Bankruptcy Court in
w:st='on'>
w:st='on'>
size='3'>Manhattan
is scheduled to consider the adequacy of that statement
at a court hearing
today. In court papers filed Friday, the PBGC said the disclosure is
'critically important'
to Northwest's unsecured creditors because they would end up owning more
than 90 percent of
the new stock Northwest aims to issue upon its chapter 11 exit. The
Eagan, Minn.-based
airline's reorganization plan calls for creditors to swap their debt for
the new
stock.
href='http://www.chron.com/disp/story.mpl/ap/fn/4657011.html'>Read
more.
Turnaround from Chapter 11
Houseware company Home Products
International Inc.
emerged from bankruptcy onWednesday
after having declared
over $116 million in publicly held debt only four months ago,
Bankruptcy
Law360
reported on Friday. Under the terms of the
company’s second amended
chapter 11 reorganization plan, senior subordinated notes will be
converted into
approximately 95 percent of the company’s post-bankruptcy equity.
The company’s
existing common stock has been extinguished, but certain common
stockholders will receive
the remaining 5 percent of Home Products’ post-bankruptcy equity.
Also extinguished is
Home Products’ previous board of directors, which has been
succeeded by a new one
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=21147'>Read
more.
(Registration required.)
w:st='on'>
face='Times New Roman' size='3'>
name='6'>Malden
face='Times


New
Roman' size='3'> Mills
Creditors Push for
GE Settlement
Unsecured creditors of
Malden Mills
Industries Inc. want a bankruptcy court to sign off on a deal with the
fleece
manufacturer’s creditor General Electric Capital Corp. following
months of
negotiations, Bankruptcy
Law360
reported yesterday. Under the terms of the deal, GE
Capital has agreed to
contribute $500,000 to Malden Mills “to be used for any
purposes permitted under
the Bankruptcy Code, including the making of distributions on account of
allowed unsecured
claims,” according to the filing. In exchange, the filing stated
that GE Capital will
receive a complete release of all claims.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=21156'>Read
more.
(Registration required.)
name='7'>Foreclosure Wave Bears
Down on Immigrants
Homeownership rates among
immigrants surged
in the first half of the decade, but it is becoming apparent that many
people managed to buy
homes in an inflated real estate market by turning to unusual new
mortgages only now
receiving scrutiny from regulators and legislators, the
face='Times New
Roman' size='3'>Washington Post reported
today. Nearly 375,000
high interest-rate loans were made nationally to Hispanics in 2005, and
nearly 73,000 of
them are likely to go into foreclosure, said Aracely Panameno, director
of Latino affairs
for the Center for Responsible Lending. About 1.1 million homes in
the
w:st='on'>
size='3'>United
States are
expected to go into
foreclosure in the next six years, and many native-born Americans are
likely to be stuck
with burdensome loans. Unfamiliar with the U.S. mortgage market, unable
to speak or read
English well and vulnerable to the enticements of industry professionals
who told them
property values always rise, many immigrants are struggling to deal with
high mortgage
payments as their homes sag in value, making it harder to escape the
loans by
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/03/25/AR2007032501323.html'>
Read more.
name='8'>Citigroup Likely to
Propose Job Cuts
Citigroup Inc. executives
are putting the
finishing touches on a restructuring plan that is likely to involve
around 15,000 job cuts
and a charge against earnings of more than $1 billion, the
Wall Street Journal reported
today. The review is
being spearheaded by Citigroup COO Robert Druskin, who is due to report
his recommendations
internally by the end of the week. The company expects to unveil the
plan by the time it
reports its first-quarter results on April 16, the day before
Citigroup's annual meeting.
While the plan isn't final, Druskin is contemplating a roughly 5 percent
reduction in
Citigroup's worldwide work force of 327,000.
href='http://online.wsj.com/article/SB117486786290248497.html?mod=hpp_us_pageone'>Read
more. (Registration required.)
name='9'>General Electric to Buy
Sanyo Credit for $1.1 Billion
General Electric Co.'s
commercial finance
division agreed to buy Sanyo Electric Credit Co. for about 135 billion
yen ($1.14 billion)
to increase office-equipment leasing and lending to small companies
in
w:st='on'>
size='3'>Japan,
Bloomberg News
reported on Friday. GE, based in
face='Times New Roman'
size='3'>Fairfield,
w:st='on'>
face='Times New Roman' size='3'>Conn.,
will pay 3,250 yen
($27.58) a share, 62 percent more than the closing price in
w:st='on'>
size='3'>Tokyo, Sanyo
Credit said in a
statement today. The purchase should be completed in the second quarter,
GE said. General
Electric is shifting into more company lending in
w:st='on'>
size='3'>Japan
size='3'>after the government
tightened consumer credit rules and limited the interest that can be
charged.
size='3'>Japan's
economy grew at the
fastest pace in three years in the fourth quarter as surging exports
prompted spending on
href='http://www.bloomberg.com/apps/news?pid=20601080&sid=a3pPaB6X9q.o&refer=asia'>R
ead more.
International
name='10'>Judge Lets Europeans
in on Vivendi Suit
A federal judge in
w:st='on'>New
York
size='3'>has ruled that French, English and Dutch citizens who bought
Vivendi shares before
the French media-to-telecom group neared bankruptcy in 2002 are allowed
to join a
size='3'>U.S.
size='3'>class action against
the company that was initiated by Vivendi shareholders, the Associated
Press reported
yesterday. Defendants in the case are the company, Messier and former
Vivendi Universal CFO
Guillaume Hannezo. The class action was initiated by two French
individual shareholders
accusing Vivendi and its top executives of using false information to
hide the company's
href='http://biz.yahoo.com/ap/070325/vivendi_lawsuit.html?.v=1'>Read
more.
name='11'>BP Offers to Bid
Against Rosneft for Yukos Assets
BP offered Friday to bid
against the Russian
state oil giant Rosneft in a bankruptcy auction for assets of the Yukos
oil company,
signaling the British oil company's deepening involvement in the
turbulent Russian energy
sector, the International Herald
Tribune
size='3'>reported on Friday. BP already owns roughly $1 billion in stock
in Rosneft, a
company that BP says it considers a strategic partner in
w:st='on'>
size='3'>Russia.
BP’s CEO John
Browne was in Moscow on Friday to meet his counterpart from Rosneft and
the Russian
president, Vladimir Putin, along with the designated successor to
Browne, Tony Hayward. With
the offer, BP is wading into an auction process in a country with a
history of troubled
asset sales at such venues, beginning with the 1990s privatization
auctions that are now
widely understood to have been rigged.
href='http://www.iht.com/articles/2007/03/23/business/bp.php'>Read
more.
href='http://www.iht.com/articles/2007/03/23/business/bp.php'>