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June 20, 2007
id='1'>Bankruptcy Clerks Fear Staff Cuts
Bankruptcy court clerks
around the
w:st='on'>United
States
the federal judiciary will cut their staffs in response to the drop in
bankruptcy filings, a move they say would be rash because fewer filings
haven't meant less work for courts, the Associated Press reported
yesterday. Bankruptcy filings hit an all-time low in 2006, a drop
spurred by the new filing requirements of BAPCPA. Filings plummeted in
the final months of 2005 and into 2006, but have rebounded in recent
months. Clerks say justifying staff cuts based on the number of filings
would be a mistake because the requirements under the new law have
increased their work on each case. Courts are juggling more paperwork
per case - from motions to judges' orders - than ever before. 'It's a
pretty phenomenal change in workload,' said Barry
Lander, clerk for the U.S. Bankruptcy Court
in
'You expected fewer hearings and hearing orders because you had fewer
cases. That's not turning out to be the case.' According to the
Administrative Office of the U.S. Courts, which collected statistics
from 10 bankruptcy courts, overall filings were down 52 percent in the
three-month period ended Dec. 31, 2006, compared with the same period in
2004. However motions filed per case were up 59 percent, orders filed
per case jumped 35 percent and notices per case sent out by the
judiciary's
face='Times New Roman'
size='3'>Bankruptcy
w:st='on'>
size='3'>Noticing
face='Times New Roman'
size='3'>Center
by 41 percent.
href='http://biz.yahoo.com/ap/070619/bankruptcy_clerks.html?.v=1'>Read
more.
id='2'>Senate Education Chair Looks to
w:st='on'>
size='3'>Boost
face='Times New Roman'
size='3'>College
size='3'>Loans, Cut Lender Subsidies
The higher education
reauthorization bill that the Senate Health, Education, Labor and
Pensions Committee will take up today will greatly expand federal loan
programs at a hefty cost to college lenders,
size='3'>CongressDaily reported yesterday.
'The bipartisan bill released today signals to students that their
futures are our top priority,' Health, Education, Labor and Pensions
Chairman Edward Kennedy (D-Mass.) said. The five-year Higher Education
Act reauthorization bill would cut $18.3 billion in lender subsidies to
fund a $17.3 billion increase in need-based aid, including a hike in the
Pell Grant maximum from $4,700 to $5,100 in 2008, and then to $5,400 by
2011. Under Kennedy's plan, the insurance rate paid out to lenders in
the Federal Family Education Loan program would be cut by 1 percent. The
bill would allow guaranty agencies to collect just 16 percent –
down from 23 percent – of the profit made on defaulted loan
payments, and cut the special allowance payments given to lenders on new
loans. Kennedy's bill also calls for the creation of a pilot program
that would require lenders to compete in an auction process to provide
federal parent loans. By forcing companies to compete for business, the
federal government would avoid having to woo lenders with subsidies to
offer loans to students.
id='3'>Creditors Protest Legal Fees for Ownit
Mortgage
Ownit Mortgage Solutions
Inc.'s unsecured creditors are protesting $70,000 in fees that the
bankrupt subprime lender plans to pay Pachulski Stang Ziehl Young Jones
& Weintraub LLP for its help in putting together a compensation
package for the company's CEO,
size='3'>Bankruptcy Law360 reported yesterday.
According to the creditors, those fees were incurred during weeks of
negotiation and squabbling over a package for William Dallas, the
company's CEO, that they had opposed all along. During those
negotiations, a compensation advisor was hired as well. Debtor counsel
Jonathan Kim of Pachulski, however, stressed the extensive negotiation
that had taken place between between the debtor and unsecured creditors
and called the differences between their plans relatively minor. He also
said the proposed compensation was significantly less than
size='3'>Dallas
before the company filed for chapter 11 in late 2006 and said Ownit had
called it fair and reasonable.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=27308'>Read
more. (Registration required.)
face='Times New Roman' size='3'>St.
Vincent
size='3'> Wants Solicitation Rights Extended
St. Vincent Catholic
Medical Centers is seeking an extension of its exclusive rights to
solicit support for its reorganization plan, citing a three-day gap
between the scheduled expiration of the debtors' right to lobby for plan
support and the court-imposed deadline for voting on the plan,
Bankruptcy Law360
reported yesterday. In its motion filed yesterday, which
is supported by the unsecured creditors’ committee and tort
claimants’ committee,
face='Times New Roman' size='3'>St. Vincent
size='3'>asked Bankruptcy Judge
size='3'>Adlai S. Hardin Jr. to extend its
exclusive solicitation rights through Aug. 15. The motion does not seek
an extension of the debtors' exclusive right to file a plan. St.
Vincent's exclusive right to seek acceptance of the restructuring plan
related to the disclosure statement the court approved on June 5 is
slated to expire on July 15, the motion notes, and adds that the court
established July 18 as the deadline for voting on the debtors' plan. The
motion also notes that a confirmation hearing on
w:st='on'>St.
Vincent
for July 27.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=27304'>Read
more. (Registration required.)
id='5'>Calpine Prepares to Emerge from Bankruptcy
Power generator Calpine
is set to outline its plans for emerging from bankruptcy today, and
energy industry experts say the timing couldn't be better, the
San Jose Mercury
News reported today. After selling off power
plants, renegotiating contracts and cutting its staff by 30 percent
since it filed for bankruptcy, Calpine is expected to file a plan that
will have it emerge from bankruptcy protection by the end of this year
or early next year.
size='3'>Since the
Jose
December 2005,
face='Times New Roman'
size='3'>California
other states have passed a slew of clean-energy goals to reduce
greenhouse-gas emissions and combat global warming. In California,
legislators have banned any long-term energy contracts with plants using
high-carbon-emitting sources such as coal, and the state has said a
certain percentage of power provided by utilities must be from renewable
sources like geothermal. Calpine provides 10 percent of the energy
in
size='3'>Texas
w:st='on'>
size='3'>California
amount of power to the southeastern
w:st='on'>
size='3'>United States
size='3'>.
href='http://www.mercurynews.com/ci_6183748?source=rss'>Read
more.
Some
Lenders Dislike Plan to Save Bear Stearns Fund
An effort to save a
troubled hedge fund at Bear Stearns hit a major hurdle yesterday when
Merrill Lynch signaled that it would move forward with plans to auction
$850 million in subprime securities that had been held as collateral,
the New York
Times reported yesterday. While negotiations
are continuing and the auction could be averted, the move signaled that
some lenders in the High Grade Structured Credit Strategies Enhanced
Leverage fund are not happy with some terms of the Bear Stearns bailout
plan. Executives at the bank have been scrambling to shore up the fund
since three lenders — Merrill, Citigroup and JPMorgan Chase
— asked the bank to put up more capital. The executives had
offered to inject $1.5 billion in new loans into the fund, and a
consortium of other banks, including Citigroup and Barclays, would
infuse $500 million in new capital. In return, the Wall Street banks and
brokerage firms that had provided nearly $6 billion to the hedge fund
would have had their own exposure reduced but would have had to agree
not to demand more cash or collateral from the fund for a year. Started
just last year, the Bear Stearns hedge fund was hit by a combination of
bad bets on bonds backed by subprime mortgages as well as high levels of
leverage. Investors originally put $600 million into the fund and
another $6 billion was borrowed from the Wall Street banks.
href='http://www.nytimes.com/2007/06/20/business/20mortgage.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
id='7'>Nissan Board to Forego Bonus Pay
Nissan CEO Carlos Ghosn
told shareholders that the Japanese automaker's board members will
forego their bonus pay to take responsibility for poor performance, the
Associated Press reported today. In the fiscal year ended March,
Tokyo-based Nissan Motor Co. marked its first profit drop in seven
years - the first time earnings have slid under the turnaround
efforts led by Ghosn. Ghosn said that Nissan had no interest in buying
the Jaguar and Land Rover luxury European brands that Ford Motor Co. has
expressed interest in selling. Nissan had marked a dramatic turnaround
from near bankruptcy under the Brazilian-born Ghosn, who was sent in
1999 by Renault, which owns 44 percent of Nissan. However, its sales
have been sliding, and it has slipped into third place in
size='3'>Japan
size='3'>Toyota
Honda.
href='http://www.nytimes.com/aponline/business/AP-Japan-Nissan.html?pagewanted=print'>Read
more.
id='8'>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
size='3'>Daily Summary of Troubled & Fast Growing U.S. Companies and
Other Business News 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
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size='3'>Ashworth Inc., a
w:st='on'>
size='3'>Carlsbad
maker of golf apparel, reported a second quarter net loss of $2.5
million. Revenue declined 9%–to $59.9 million.
size='3'>Cadbury Schweppes PLC announced a
sharp downsizing, saying it will shutter about 15% of its more than
eighty factories around the world and slash 7,500 jobs, or about 15% of
its payroll. The reorganization has the twofold purpose of helping
Cadbury to focus on its top thirteen candy divisions while at the same
time protecting it from unwanted takeover attempts. In conjunction with
focusing on its candy businesses, the firm recently announced it wants
to sell its soft-drinks unit in the
w:st='on'>
size='3'>U.S.
which has attracted several suitors including private-equity firms and
Toronto, Ontario-based beverage company Cott Corp. There had been
speculation that Cadbury, which could get upwards of $16 billion for
its
size='3'>U.S.
business, might make a bid to buy a big
w:st='on'>
size='3'>U.S.
size='3'>candy company such as Hershey Co., but Cadbury now says it will
concentrate on making smaller acquisitions. As part of that strategy,
the company announced that it will begin a tender offer to acquire a
majority interest in Sansei Foods Co., a Japanese maker of candies, in a
deal that could be valued at as much as $111 million. Cadbury said that
it wants to buy at least two-thirds of the shares outstanding of Sansei,
which has reportedly agreed to the tender offer.
size='3'>Chrysler Group may be getting some
help from the United Auto Workers union, whose president recently
commented that the union must come up with concessions to assist
the
face='Times New Roman'
size='3'>U.S.
size='3'>unit of DaimlerChrysler AG similar to earlier concessions that
were granted to rivals Ford Motor Co. and General Motors Corp. two years
ago. Official negotiations are set to start in July.
Healthcare and other concessions are considered essential for Chrysler,
which lost $618 million last year and almost $2 billion, before interest
and taxes, in this year’s first quarter.
size='3'>Good Times Restaurants Inc., Golden,
Co., reported a second quarter net loss of $150,000. Sales were up
19%–to $5.6 million.
size='3'>Nabi Biopharmaceuticals Inc.,
size='3'>Boca Raton
said that it trimmed its payroll by about 5% and may put itself or parts
of its business up for sale. At the same time, Nabi said that it
set up a new business, Nabi Biologics, to advance its pipeline of
protein and immunological products. The company retained Banc of America
Securities LLC to help it consider strategic
alternatives.
size='3'>U.S. Energy Systems Inc.’s
stock price tumbled 25% after the
w:st='on'>New
York firm announced that
an auditor expressed worries about the company’s ability to
continue as a going concern. U.S. Energy gathers gas from landfills for
generating electricity.
size='3'>Visteon Corp., the Van Buren
Township, Mi. auto-parts supplier, said that it will shutter a plant
in
size='3'>Bedford
year as part of its efforts to reduce losses. The closure of the
plant, which makes fuel systems, would affect about 685
workers.