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October 6, 2006
id='1'>Report: New Bankruptcy Law Not as Bad as Predicted
Though consumer
advocates and bankruptcy attorneys predicted the new bankruptcy law
would make filing more onerous, force people to repay more of their
debts even if they couldn't afford to and discourage consumers from
pursuing bankruptcy altogether, preliminary reports indicate that
debtors, not credit card companies, are benefiting most from the the new
law, CNNMoney.com reported yesterday. In years past, typically more than
two-thirds of all personal bankruptcy filings were chapter 7s. This
year, chapter 7 filings still make up the majority, but they fell to 59
percent of all filings in the first half of this year from 76 percent in
the same period a year earlier, according to the American Bankruptcy
Institute. John Penn, ABI's immediate past president and an
attorney with Haynes and Boone in Texas, predicts eventually there will
be an even split between chapter 7 and 13 filings.
href='http://money.cnn.com/2006/10/04/pf/bankruptcy_yearlater/?postversion=20…'>Read
more.
Airlines
id='2'>Delta, Retirees Reach Benefit Deal
Delta Air Lines
Inc., which is operating under bankruptcy protection, reached an
agreement Thursday with thousands of retirees on changes to medical
benefits that will save the nation's No. 3 carrier about $50 million
annually, the Associated Press reported today. The deal, which would
need to be approved by a bankruptcy court judge, covers a portion of
roughly 42,000 pilot and non-pilot retirees, their spouses and
survivors, Delta spokeswoman Betsy Talton said. A hearing on the
agreement is scheduled for Oct. 19.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/10/06/AR20061…'>Read
more.
id='3'>Mair Tries to Stifle Criticism of Mesaba Payments
Under fire from
Mesaba Airline's unsecured creditors, parent company Mair Holdings, Inc.
has requested that the bankruptcy court issue a declaratory judgment
ruling that any payments made to Mai were appropriate and proper,
Portfolio Media reported yesterday. Mair entered a bid for a
declaratory judgment on Thursday in the U.S. Bankruptcy Court in
Minnesota, trying to settle rumors of impropriety regarding various
transactions between the two companies. The complaint maintains that
every payment and dividend Mair received from Mesaba was an appropriate
business transaction, and that Mesaba was solvent at the time. An
estimated 75 percent of the dividends in question were paid in 2002,
according to Mair.
id='4'>Union Stamping Agrees to Bankruptcy
Union Stamping &
Assembly Inc., which had been fighting an attempt by several creditors
to force it into bankruptcy, recently acquiesced, saying in a court
document that filing for bankruptcy would be in the best interests of
the company and its creditors, the Associated Press reported yesterday.
Bankruptcy Judge Ronald G. Pearson approved converting the case
to a voluntary bankruptcy in an order issued Wednesday. The Cleveland,
Ohio-based company owed more than $23.9 million to potentially 1,000 or
more creditors as of Aug. 31, according to court documents. Union
Stamping listed $19.1 million in assets as of the same date.
href='http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=AP&D…'>Read
more.
id='5'>Amkor Threatens Bankruptcy Filing in Bondholder Dispute
Amkor Technology
Inc. recently said that if bondholders proceed in trying to accelerate
Amkor's debt, the company will file for chapter 11 bankruptcy
protection, the Wall Street Journal reported today. In a
situation that reflects a larger trend of hedge funds using aggressive
tactics with companies, bondholders have told the Chandler, Ariz.,
company, which tests and packages computer chips, that they will seek to
enforce rights to make the company pay off its debt immediately if it
doesn't file its quarterly financials with the Securities and Exchange
Commission by Monday. Amkor's founder and chief executive James Kim,
along with his family, controls 46 percent of its shares. By putting the
company into chapter 11, Kim would put at risk that Amkor stake,
currently valued at $460 million.
href='http://online.wsj.com/article/SB116010250989684594-search.html?KEYWORDS…'>Read
more. (Registration required.)
id='6'>Judge Halts Defendants' Bid to Avoid $116 Million Medical
Malpractice Verdict
Bankruptcy Judge
Paul Glenn set aside the chapter 7 petitions of two Tampa,
Fla.-area medical practices so that a circuit court jury could finish
its work in awarding punitive damages in a medical malpractice case
against the two practices, the Daily Business Review reported
today. Allan Navarro was paralyzed after physician's assistant Mark
Herranz, who attorneys said failed his state licensing test four times,
and Dr. Michael Austin failed to realize he was experiencing a stroke
when they treated him at Tampa's University Community
Hospital-Carrollwood in 2000. Navarro was diagnosed with sinusitis and
sent home. They were hit with a $116.7 million malpractice verdict in
favor of a Navarro, now a quadriplegic, who blamed them for his
condition. Carrollwood Emergency Physicians and Franklin Favata & Hulls,
Herranz's and Austin's employers, were also named defendants. Late
Monday night, Carrollwood Emergency Physicians and its affiliated group,
Franklin Favata & Hulls, filed for chapter 7 in the U.S. Bankruptcy
Court for the Middle District of Florida, interrupting the punitive
damages portion of the case. The jury deliberations were temporarily
halted while attorneys for Navarro argued that the bankruptcy cases
should be put on hold.
href='http://www.law.com/jsp/law/LawArticleFriendly.jsp?id=1160039129442'>Read
more.
id='7'>Ford Interest in Alliance Apparently May Be Waning
While Carlos Ghosn,
head of Nissan and Renault, made it clear he wants a North American
partner, the Ford Motor Company is reportedly no longer eager to bring
him aboard, the New York Times reported today. Ford's chairman,
William Clay Ford Jr., tried to hire Ghosn as chief executive last year
and called him during the summer to get next in line if things did not
work out with GM. Since then, Ford has named a new chief executive,
Alan R. Mulally, and the company is said to have lost interest in
pursuing an alliance.
href='http://www.nytimes.com/2006/10/06/business/06auto.html?ref=business'>Read
more.
id='8'>Claims Traders Set Up Committee in Interstate Case
Claims traders
against Interstate Bakeries Corp. have agreed to form an ad hoc
committee to assert their interests in the bakery's chapter 11
proceedings, Portfolio Media reported yesterday. The unofficial
committee is made up of investors who have purchased more than $50
million in trade creditors' claims against the company, according to
attorney Evan D. Flaschen of Bingham McCutchen, which represents the
committee. The case is Interstate Bakeries Corp., case number
04-45814, in the U.S. Bankruptcy Court for the Western District of
Missouri.
id='9'>Judge Approves Adelphia, Verizon Settlement
A federal
bankruptcy judge has signed off on a settlement agreement under which
Verizon Media Ventures Inc. will drop its objection to Adelphia
Communications Corp.'s chapter 11 plan in exchange for being allowed two
unsecured claims totaling more than $87 million against the bankrupt
cable provider and a California subsidiary, Portfolio Media
reported yesterday. However, the agreement, approved by Bankruptcy Judge
Robert E. Gerber in an order issued Thursday, noted that
Verizon's right to vote against any amended plan will be preserved if
that plan gives the unsecured claims against Adelphia California
Cablevision LLC any shortcomings. Pursuant to the settlement agreement,
Verizon will be allowed one unsecured $39 million claim against Adelphia
and another unsecured claim of just over $48 million, plus interest,
against Adelphia California Cablevision LLC. The settlement agreement
calls for Adelphia to set aside funds to cover the Verizon claims.