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May 24, 2007
Fed Plans to Revise Credit
Card
Rules
Credit card companies
would have to disclose
interest rates and fees in clearer, easier-to-understand language under
new
consumer-protection rules proposed the Federal Reserve Board that could
take effect by the
end of the year, the
size='3'>Washington
Post reported today. The new rules would
require companies to tell
customers 45 days before terms of a credit card contract are changed,
compared with 15 days
now. The rules would also expand the list of changes requiring advance
notice to include
those involving penalty interest rates, which often range above 30
percent. The proposed
rules, which the Fed unveiled yesterday after a 2 1/2 -year study, would
be most significant
change to the nation's truth-in-lending regulations in 26 years.
Companies would also be
required to spell out that low rates on balances transferred from
another credit card apply
only to that balance, not to new purchases.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/05/23/AR2007052301498.html'>
Read more.
In related news, Senate
Banking Chairman
Chris Dodd (D-Conn.) complimented the Federal Reserve for issuing a new
rule Wednesday that
would require banks to simplify their credit card statements, but said
the action would not
be enough to protect customers from questionable lending
practices,
face='Times New Roman' size='3'>CongressDaily
size='3'>reported today. 'It
is vital that consumers have the clearest and most complete information
possible about
credit cards so they can make the most informed decisions about how to
use them,” Dodd
said.
Autos
face='Times New Roman'
size='3'>General
w:st='on'>
face='Times New Roman' size='3'>Motors
face='Times New Roman' size='3'>Narrows
face='Times New Roman' size='3'>Delphi
size='3'>Exposure to $7
Billion
General Motors said today
that it has
narrowed its expected financial exposure related to Delphi Corp.'s
bankruptcy to $7 billion,
from a range of $6 billion to $7.5 billion, the
face='Times New Roman'
size='3'>Wall Street Journal reported. GM also
said it has
received another inquiry from the Securities and Exchange Commission
related to past
accounting, and will provide documents to the agency soon. In a filing
with the SEC, the
auto maker said it has received proposals from Delphi and from the
United Auto Workers union
regarding support to be provided by GM as part of
w:st='on'>
face='Times

&
#13;
New
Roman'
size='3'>Delphi
size='3'>'s restructuring. GM said it believes the proposals 'provide a
basis for continuing
productive negotiations.' The auto maker has
size='3'>struggled to come
to a consensual deal between itself,
face='Times New


&
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&a
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Roman' size='3'>Delphi
size='3'>and the
UAW. The deal is necessary for
face='Times

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Roman'
size='3'>Delphi
size='3'>'s emergence from bankruptcy.
href='http://online.wsj.com/article/SB118000381920413280.html?mod=home_whats_news_us'>Read
more. (Registration required.)
In related news, General Motors
Corp. said that it
has put up a 49 percent stake in its former financial arm as collateral
for a $4.1 billion
revolving line of credit, the Associated Press reported yesterday. It
also announced plans
to replace $1.1 billion in convertible securities with unsecured
convertible notes that
mature June 1, 2009. The new notes have a later maturity date than the
old ones, giving the
href='http://www.nytimes.com/2007/05/24/business/24auto.html'>Read
more.
Judge Approves Collins
& Aikman,
DaimlerChrysler Deal
Judge
face='Times New Roman'
size='3'>Steven W. Rhodes approved an
agreement between bankrupt
auto parts supplier
size='3'>Collins &
Aikman Corp. and automaker DaimlerChrysler Co. that will help Collins
& Aikman
facilitate the sale of its assets,
size='3'>Bankruptcy Law360 reported yesterday.
Though the
agreement was filed under seal, Collins & Aikman said the agreement,
along with the
customer agreement as a whole, would save thousands of jobs and provide
a framework for the
bankruptcy’s resolution. Collins & Aikman added that costly
and time-consuming
litigation would have resulted had a deal not been reached. The case
is
face='Times New Roman'
size='3'>Collins &
Aikman Corp., case number 05-55927, in the
U.S. Bankruptcy Court
for Eastern District of Michigan.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=25386'>Read
more. (Registration required.)
Energy Biogas Receives
Chapter 11
Approval
U.S. Energy Biogas Corp. (USEB)
said that the judge
overseeing company’s bankruptcy agreed on Wednesday to confirm the
company’s
reorganization plan, Bankruptcy Law360 reported yesterday. USEB
said that it is
poised to exit bankruptcy on May 31, adding that the U.S. Energy Systems
Inc. subsidiary
will pay its creditors in full and emerge from chapter 11 after only six
months in
bankruptcy. The company saw liabilities of more than $200 million
knocked down to less than
$110 million in the course of its bankruptcy proceedings. In March, the
Illinois Commerce
Commission (ICC) and USEB struck a deal under which a $5.25
million one-time payment
from USEB was swapped for $63 million in balance-sheet liabilities
stemming from an ICC
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=25325'>Read
more. (Registration required.)
face='Times New


&
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size='3'>U.S.
size='3'> Trustee Objects to
w:st='on'>
face='Times New Roman' size='3'>Kara
face='Times New Roman'
size='3'>Homes
size='3'>’ Chapter 11 Plan
The Justice Department
has joined a slew of
creditors criticizing Kara Homes Inc.'s chapter 11 plan-disclosure
statement, labeling the
proposal 'inadequate,' the Associated Press reported yesterday. U.S.
Trustee
face='Times New Roman' size='3'>Kelly Beaudin Stapleton
size='3'>filed an
objection to the New Jersey builder's disclosure statement Wednesday
with the U.S.
Bankruptcy Court in Trenton, N.J. Stapleton noted that a disclosure
statement must contain
adequate information that would enable creditors to determine whether
they can support the
plan.
size='3'>Stapleton also said that one
of the provisions appears to release from liability all attorneys who
have been retained
by
face='Times New


&
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&a
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Roman' size='3'>Kara
w:st='on'>
size='3'>Homes
for work they performed in the case. 'It is inappropriate
for an attorney to
seek or accept any type of waiver or exculpation which would relieve
that attorney of the
duty to exercise reasonable care in rendering services to that client or
limit the liability
for failure to do so,' Stapleton said. The court will hold a hearing on
the company’s
disclosure statement's on June 13.
href='http://www.chron.com/disp/story.mpl/ap/fn/4830128.html'>Read
more.
Tower Records Files Modified
Liquidation
Plan
Tower Records filed a
modified version of
both the plan and its disclosure statement on Tuesday,
face='Times New


&
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Roman' size='3'>Bankruptcy
Law360
size='3'>reported yesterday. Tower, which has no intention of
reorganizing, is currently in
the last stages of liquidating its assets, but is still facing a number
of critical issues,
including a lawsuit filed recently by a vendor group. The company filed
the first draft of
its liquidation plan on March 26, but creditors and other interested
parties immediately
objected. The unsecured creditors’ committee contended that
because the bankruptcy
case is being administered mainly for their benefit, they should have
more control over the
case once a plan is confirmed, according to court papers. Meanwhile, the
vendor group said
Tower’s plan could not be confirmed because its feasibility rested
on the resolution
of its ongoing lawsuit, the outcome of which would determine whether or
not Tower had the
means to pay other claims. The vendor group, which comprises six
companies including Sony
BMG Music Distribution, Universal Music Group Distribution Corp., Warner
Home Video Inc. and
Twentieth Century Fox Home Entertainment LLC, sued the bankrupt retailer
for the proceeds of
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=25358'>Read
more. (Registration required.)
SEC Revises Its Standards
for Corporate
Audits
The Securities and
Exchange Commission
approved new guidelines yesterday that try to balance the need for
tighter financial
controls with the cost of companies complying with them, the
New York Times
size='3'>reported
today. The new standards call for public companies to focus on the areas
most prone to
potential fraud, streamlining an auditing process that many have called
excessive and
burdensome. While big public companies had previously adhered to more
rigorous standards,
the unanimous vote by the commission’s five members paves the way
for this more
relaxed set of guidelines to be imposed on the smaller companies whose
market value is less
than $75 million. Small companies will have to adhere to the new
guidelines starting on Dec.
15 for the 2007 calendar year. The commission had previously delayed the
effective date amid
complaints that complying with the rules would be too costly for small
companies.
href='http://www.nytimes.com/2007/05/24/business/24regs.html?_r=1&oref=slogin&ref=bu
siness&pagewanted=print'>Read more.
International
w:st='on'>
size='3'>Singapore
face='Times




New
Roman'
size='3'> Bankruptcies Fall in
April
The number of new
bankruptcies in
size='3'>Singapore
size='3'>fell for the third
month in a row, falling 4 percent in April from a year ago, Reuters
reported today. April's
bankruptcy orders -- including those filed by companies and individuals
-- fell to 216 from
225 a year ago, according to the Singaporean Ministry of Law. The total
number of
undischarged bankrupts as of April 30 was 25,074, the ministry
said.
w:st='on'>
size='3'>Singapore
size='3'>'s trade-driven
economy grew at a faster-than-expected annualized rate of 7.6 percent in
the first quarter,
thanks to booming construction and a strong services sector, prompting
the government to
raise its 2007 gross domestic product growth forecast to 5-7 percent
from 4.5-6.5
percent.
w:st='on'>
face='Times New Roman' size='3'>New
Jersey
face='Times New


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&
;#10;n' size='3'>Supreme Court Rejects Citigroup Appeal in Parmalat
Case
Parmalat SpA on Wednesday
said
Jersey's highest court
rejected Citigroup
Inc.'s attempt to dismiss its $10 billion lawsuit accusing the largest
U.S. bank of helping
former management commit fraud, Reuters reported yesterday. Parmalat, an
Italian company,
said that the state supreme court rejected Citigroup's appeal of a
January ruling by Bergen
County Superior Court Judge Jonathan Harris. The judge had turned aside
Citigroup's argument
that Parmalat brought the case in the wrong court. Parmalat Chief
Executive Enrico Bondi has
accused some 50 defendants, including Citigroup, of helping prior
management hide debt and
inflate results, leading in 2003 to
face='Times New Roman'
size='3'>Europe's largest
bankruptcy.
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 Daily Summary
of Troubled &
Fast Growing U.S. Companies and Other Business News
size='3'>published by
Bastien Financial Publications.
To begin receiving the COMPLETE
Daily e-Summary,
that emails you information on over 70 such companies each morning,
email
href='mailto:steve@creditnews.com'>
color='#0000ff'
size='3'>steve@creditnews.comyour name, company name,
address, phone and
fax. We’ll set you up within 24
hours.
The
face='Times New Roman' size='3'>ABI
size='3'>member discount
rate is only $99 for an annual subscription.
size='3'>Indicate
“
size='3'>ABI CODE 27” in
your
email.
size='3'>Bookham
Inc., the San Jose, Ca. firm which integrates
light processing
functions through silicon chips for communications products such as
receivers and
transponders and which has used acquisitions to expand its operations,
reported a third
quarter net loss of $24.3 million on a 16% revenue decline–to $45
million. The
loss, which includes a $4.3 million restructuring charge, compares with
a loss of $48
million for the same period one year earlier.
size='3'>CompUSA, the Dallas, Tx. computer
products retailer which
recently closed 126 of its more than 225 outlets, is getting back to
basics. The
company will no longer cater to the average consumer but instead focus
on small and
medium-sized businesses and tech experts.
size='3'>Computer Sciences
Corp., El Segundo, Ca. global information
technology firm, which
has more than 75,000 employees worldwide and which recently named a new
president, has
reported it will delay its fourth quarter and year end results for
fiscal 2007, citing it
needs additional time to finalize the accounting for income taxes
related to transactions in
prior periods. CSC expects earnings, excluding restructuring
charges, to be no greater
than $1.61 a share.
size='3'>Converge
Inc., an
w:st='on'>
face='Times New Roman' size='3'>East Hanover
size='3'>,
size='3'>N.J. firm which
provides hardware and
software to electric utility companies and suppliers, reported a first
quarter net loss of
$4.5 million, up from a loss of $2.7 million for the same period in
fiscal 2006.
Revenue declined 2%–to $5.7 million in the first
quarter.
size='3'>DayStar
Technologies Inc., the Halfmoon, N.Y. solar
cell manufacturer
which reported a net loss of $18 million for its most recent period and
which less than two
weeks ago announced it was laying off twenty employees in the
w:st='on'>
size='3'>Albany,
w:st='on'>
face='Times New Roman' size='3'>N.Y.
area, has
received a $4 million bridge financing commitment. The company
intends on moving its
headquarters back to
w:st='on'>Santa
Clara,
Ca.
3D Systems Corp., the
w:st='on'>Rock
Hill,
of printers, stereo
lithography machines as well as laser devices, has received a notice
from NASDAQ that it
could be delisted. The company reported a fourth quarter net loss of
nearly $6
million. This compares with a gain of nearly $6 million for the
same period one year
earlier. The delisting notice related to 3D’s delay in
filing its quarterly
report for its period ended 3/31.