href='mailto:Headlines@abiworld.org?subject=Subscribe me to the ABI
Headlines Direct'>
src='/Images/headlines/headline.gif'>
October 12, 2006
name='1'>Dana’s Bid to Protect Incentive Plans Draws
Retirees’ Ire
Dana Corp.’s
petition for a bankruptcy court to reconsider a ruling that denied
proposed incentive packages for the company’s executives is
continuing to take fire from all sides, with the nonunion
retirees’ committee calling the move “a procedurally
improper request for reconsideration with no basis in fact or
law,” Portfolio
Media reported yesterday. In an objection
filed Tuesday in the U.S. Bankruptcy Court for the Southern District of
New York, the committee said it was previously unable to file an
objection to Dana’s motion because it was only recently appointed.
The committee said that the bankruptcy rules were enacted precisely to
address this inequity, and that Dana’s strategy of turning a blind
eye to those rules is exactly why the court denied the company’s
initial motion.
name='2'>Trustee Criticizes Nellson Debtors
The U.S. Trustee
overseeing Nellson Nutraceutical Inc.’s chapter 11 proceedings has
filed a motion blasting the debtors as “dishonest and
incompetent” and asking the court to appoint a chapter 11
trustee, Portfolio
Media reported yesterday.
size='3'>U.S.
size='3'>Trustee Kelly Beaudin Stapleton filed
the motion Tuesday in federal bankruptcy court in
w:st='on'>
size='3'>Delaware
motion argues that a chapter 11 trustee should be appointed for and
accuses the debtors of threatening members of the unsecured
creditors’ committee. Stapleton said she had been advised that
debtor’s management told the committee members that if they wanted
to continue doing business with the debtors, the committee would have to
adapt its legal position in the case to comport with Nellson’s.
The motion also references allegations that the debtor’s
management misled or hid information from creditors and other parties
involved in Nellson’s ongoing valuation trial.
name='3'>Adelphia Files New Draft of Reorganization
Plan
Bankrupt cable operator
Adelphia Communications Corp. said on Wednesday that it has filed a
further modified draft of its fifth chapter 11 reorganization plan,
seeking to extend the date by which the plan must be consummated to Dec.
22, Reuters reported yesterday. The draft, filed in the U.S. Bankruptcy
Court for the Southern District of New York, was filed alongside a plan
support agreement amending the global settlement reached earlier by
Adelphia and various creditors.
Rail
Franchise May File for Bankruptcy
Sea Containers, the owner
of the British GNER rail franchise, could file for chapter 11 protection
in the
size='3'>United States by
next week as it braces itself for a default on a $115 million bond
payment, the
w:st='on'>
size='3'>London
size='3'>Guardian reported today. The
struggling group must make the payment by Sunday, and there is mounting
speculation within the rail industry that the Bermuda-registered company
will seek shelter from its creditors.
href='http://business.guardian.co.uk/story/0,,1919964,00.html'>Read
more.
name='5'>Senator Battles Insurance Companies over Hurricane Katrina
Claims
One of thousands of
homeowners on the
w:st='on'>
size='3'>Gulf
face='Times New Roman' size='3'>Coast
who have been fighting with their insurers over payments
for damage in Hurricane Katrina, Sen. Trent Lott (R-Miss.) said that he
inserted a provision into legislation, signed by President Bush last
week, directing the Department of Homeland Security to investigate
potential fraud by the insurance industry, the
face='Times New Roman' size='3'>New York Times
size='3'>reported today. Lott said that he was also drafting legislation
to challenge the industry’s exemptions from antitrust laws and had
asked his staff to investigate the industry’s tax rates.
Lott’s claim for the loss of his $400,000 house in
size='3'>Pascagoula
rejected by State Farm. He said that he was not acting solely out of
personal motivation. “I’ve had my own experience, but a lot
of people have had similar experiences,” Lott said.
href='http://www.nytimes.com/2006/10/12/business/12insure.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
name='6'>Commentary: Benefits for State and Local Government
Employees Approaches $2 Trillion Deficit
State and local
governments are amassing huge obligations in the form of unfunded
retirement benefits for their workers, according to a commentary today
in the Wall Street
Journal. Aside from underfunded pension plans,
governments have also run up large obligations from their retiree health
plans. While a new Governmental Accounting Standards Board (GASB) rule
will kick in next year and reveal exactly how large this problem is, it
is estimated that retiree health benefits are a $1.4 trillion fiscal
time bomb. The new GASB regulations will require accrual accounting of
state and local retiree health benefits, thus revealing to taxpayers the
true costs of the large bureaucracies that they fund. A review
of unfunded health costs across 16 states and 11 local governments
that have made actuarial estimates has found an average accrued
liability per covered worker of $135,000. Multiplying that by the number
of covered state and local employees in the country yields a total
unfunded obligation of $1.4 trillion -- twice the reported underfunding
in state and local pension plans at $700 billion.
Ford
Motor Seeks Buyer for Extended-Warranty Unit
Ford Motor Co. has put
its extended-warranty service contract business up for sale as the auto
maker continues to look for ways to shore up its operations, the
Wall Street Journal
reported today. The potential sale of the Automobile
Protection Corp., a Ford subsidiary, is part of the company's review of
strategic options as it restructures in an effort to become smaller and
leaner. Ford bought APCO in 1999, which mainly sells auto dealers
warranty service contracts that continue beyond the manufacturer's
warranties. Ford said that Atlanta-based APCO has grown in sales and
revenue since it was acquired.
href='http://online.wsj.com/article/SB116057871951589380.html?mod=us_business_whats_news'>Read
more. (Registration required.)
name='8'>Commentary: Extend 'Payday Loan' Protections to All
Borrowers
A recent measure passed
by Congress specifically to assist military personnel with regard to
payday loan protections should serve as a template for all consumers,
according to a commentary today in the
size='3'>Washington Post. The 2007 defense
authorization bill includes a provision capping annual interest rates on
consumer credit loans, including 'payday loans,' to service members and
their dependents at 36 percent. On an annualized basis, the fee charged
on these loans can top out at 400 to 1,000 percent, according to Travis
Plunkett, legislative director for the Consumer Federation of
America.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/10/11/AR2006101101453_pf.html'>Read
more.
name='9'>Ex-Cop Accused of Bankruptcy Fraud
FBI agents arrested a
retired
face='Times New Roman' size='3'>Denver
police narcotics detective Wednesday on a federal
bankruptcy fraud indictment, the
size='3'>Denver Post reported today. The
six-count indictment accuses Joseph Rael of forging his police officer
wife's signature to apply for bankruptcy court protection on March 31 in
an effort to reorganize finances and pay off gambling debts. The couple
faced a foreclosure on their home in
w:st='on'>
size='3'>Littleton
w:st='on'>
size='3'>Colo.
failed to disclose gambling debts from 2004, according to the criminal
indictment by U.S. Attorney Troy Eid.
href='http://www.denverpost.com/ci_4478355?source=rss'>Read
more.
Credit Managers Daily
Business News Report
The following articles
are taken from the Daily Summary of Troubled & Fast Growing U.S.
Companies published by Bastien Financial Publications.
For more of the latest business news visit
color='#800080'
size='3'>http://dailybusiness.creditmanagers.biz
face='Times New Roman' size='3'>.
ABI Members receive a 50
percent discount when subscribing to the complete Daily
Summary.
size='3'>American Medical Response
Inc., Greenwood Village, Co., agreed to pay $9
million to settle charges by the Department of Justice that it provided
discount transportation in exchange for referrals. American Medical did
not admit to any wrongdoing in the matter.
size='3'>Asyst Technologies Inc
size='3'>., a Fremont, Ca. maker of semiconductor equipment, said that
costs related to restatements for correcting past irregularities in its
stock-options accounting will be about $19 million. The restatements
will increase net losses for 2002, 2003, 2005 and 2006 while its net
loss for 2004 will be reduced.
size='3'>Audiovox Corp
size='3'>., a Hauppauge, N.Y. seller of consumer electronics, reported a
second quarter net loss of nearly $2 million, including an operating
loss of $1.6 million. Revenue declined
21%--to $97.4 million.
size='3'>CMGI Inc.,
a
Ma. provider of supply-chain management services, reported a fourth
quarter net loss of more than $2.5 million, including operating income
of nearly $4.9 million. Revenue rose 6%--to $262 million. For the year,
its net income sank 44%--to $14.9 million, including operating income of
$28.7 million. Fiscal revenue rose 9%--to
$1.1 billion. The quarter and year included charges of $636,000 and $9.5
million respectively.
size='3'>Pizza Inn Inc
size='3'>., a Colony, Tx. operator of quick-service pizza restaurants,
reported a fiscal net loss of $6 million, including an extra charge of
$1.3 million. Sales fell 8%--to $50.6
million.
size='3'>Zila Inc.,
a
Az. developer of cancer-detection technologies, reported a fourth
quarter net loss of $9 million, including an operating loss of $8
million. Revenue declined 62%--to $4.2 million. For the year, it lost
$29.3 million, including an operating loss of $27.7 million. Revenue
declined 35%--to $28.2 million.