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October 27, 2009
Dodd Seeks to Freeze Credit
Card Rates
Senate Banking Committee Chairman Christopher Dodd
(D-Conn.) moved yesterday to impose an immediate freeze on credit card
interest rates, as congressional Democrats continued pushing to rein in
financial-sector practices, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. Dodd introduced legislation that would freeze
rates on existing card balances until February, when tough new rules for
the industry are slated to go into effect. Dodd said that he was making
the move because companies are using the delayed implementation of the
new standards, passed by Congress in May, to push through aggressive
rate and fee increases.
size='3'>Dodd's measure is part of a broader effort by congressional
Democrats to crack down on what they see as gaming of the new rules by
card issuers. Reps. Barney Frank (D-Mass.) and Carolyn Maloney (D-N.Y.)
have introduced House legislation that would move up the effective date
of the new restrictions to December from February. The legislation
bumping up the effective date of the restrictions passed the House
Financial Services Committee last week.
href='http://dodd.senate.gov/?q=node/5289/print'>Click here to
read Dodd’s statement on the credit card freeze
legislation.
House Panel Tackles How to
Handle “Too Big to Fail” Companies
House lawmakers this week are set to tackle some of
the thorniest issues in the effort to overhaul financial rules,
including how to take over large companies whose failure could threaten
the economy and what role the Federal Reserve should have in policing
markets' health, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. House Financial Services Committee Chairman
Barney Frank (D-Mass.) could release early this week draft legislation
-- comprising several complementary bills -- with potentially broad
implications over financial regulations, congressional aides said. The
legislation could direct the government to wipe out shareholders of any
institution taken over by the government, and give it the option of
lending to a failing institution. It could also place new limits on
capital and debt at large financial institutions. The House panel is
expected to vote on the draft legislation next week, following a
committee hearing Thursday. The Senate hasn't yet put together a bill on
financial regulation, but one is expected in the next few weeks.
href='http://online.wsj.com/article/SB125659342902908937.html'>Read
more. (Subscription required.)
href='http://www.house.gov/apps/list/hearing/financialsvcs_dem/hr_102209.shtml'>Click
here for more information on the House Financial Services Committee
hearing on Thursday.
Nelson Says Senate to
Extend, Reduce Homebuyer Credit
Senator Bill Nelson (D-Fla.) said that Senate leaders
are negotiating to extend and gradually reduce an $8,000 tax credit for
first-time homebuyers through 2010, Bloomberg News reported yesterday.
Senate Majority Leader Harry Reid (D-Nev.) and Senate Finance Committee
Chairman Max Baucus (D-Mont.) may seek to add the homebuyers extension
to legislation extending unemployment benefits that may be debated as
early as this week.Lawmakers are under pressure from real estate agents,
mortgage brokers and homebuilders to extend the $8,000 credit before it
expires Nov. 30.Baucus and Reid made a proposal last week to Senate
Republicans that would extend the homebuyer credit through 2010,
Lachapelle said. First-time homebuyers who close before April 1 would
get the full $8,000, and the credit’s value would be reduced by
$2,000 in each successive quarter until expiring at the end of the
year.
href='http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aGuiU0lB58kg'>Read
more.
Coyotes’ Owner Agrees
to Sell Team to NHL
Phoenix Coyotes owner Jerry Moyes has agreed to sell
the bankrupt franchise to the NHL, the Associated Press reported today.
The agreement, which still must be approved by Judge
face='Times New Roman'>Redfield
T. Baum, was announced in court yesterday
after attorneys met for more than an hour during a recess in a status
hearing on the case. Former coach Wayne Gretzky, who has a $22.5 million
claim in the case, has not agreed to the deal. Moyes' attorney said that
the decision to make a deal came largely because the expenses of running
the team in bankruptcy were being paid from the league's $140-million
offer. Judge Baum set a Friday morning
deadline for objections from other creditors, and said that he would
hear objections on Nov. 2.
href='http://www.washingtonpost.com/wp-dyn/content/article/2009/10/27/AR2009102700267_pf.html'>Read
more.
Judge Allows Deutsche Bank
to Open Taylor Bean’s Books
Bankruptcy Judge
face='Times New Roman' size='3'>Jerry Funk on
Friday approved Deutsche Bank AG’s request to begin probing the
paper trail behind the bankruptcy of Taylor Bean & Whitaker Mortgage
Corp. in response to Deutsche Bank’s fears that it may lose more
money to the fallen mortgage lender than first thought,
face='Times

























New
















Roman'
size='3'>Bankruptcy Law360 reported yesterday.
Judge Funk stopped short of granting the full motion, which asked for
permission under Bankruptcy Rule 2004 for Deutsche Bank to probe records
held by the Federal Deposit Insurance Corp. and the Federal Home Loan
Mortgage Corp., among others.Consideration of that aspect of the motion
was adjourned to Nov. 5 barring a further request from Deutsche Bank,
according to Judge Funk.
href='http://bankruptcy.law360.com/print_article/130367'>Read
more. (Subscription required.)
SemGroup Bankruptcy
Reorganization Plan Approved
Bankruptcy Judge
face='Times New Roman' size='3'>Brendan Linehan Shannon
size='3'>yesterday approved SemGroup LP’s reorganization plan,
which will make the bankrupt oil trader a public company owned mainly by
its lenders when it leaves court protection next month, Bloomberg News
reported today. The chapter 11 plan is worth about $2.45 billion to
creditors and would leave the Tulsa, Okla.-based company majority-owned
by its lenders, who are owed about $2.5 billion. Lenders will receive
both cash and stock, while noteholders owed $610 million will receive
stock and warrants to purchase more shares. The bankruptcy case
is In re SemCrude LP, 08-11525,
U.S. Bankruptcy Court, District of Delaware (Wilmington).
href='http://www.bloomberg.com/apps/news?pid=20601103&sid=arn5X5M6Y2wE'>Read
more.
Autos
Product Liability
Claimants' Appeal to GM Sale Draws Criticism
Motors Liquidation Co. (MLC) — the remnant of
former General Motors Corp. in bankruptcy — has urged a federal
judge to reject an appeal from product liability claimants who say a
bankruptcy court should not have allowed General Motors LLC, or
“New GM,” to buy the bankrupt automaker's assets free and
clear of their tort claims,
face='Times New Roman' size='3'>Bankruptcy Law360
size='3'>reported yesterday. Motors Liquidation Co. and New GM filed an
answering brief Friday in the U.S. District Court for the Southern
District of New York, asking the court to affirm the bankruptcy court's
sale order and deny the appeal by Callan Campbell and the other
claimants. Campbell's arguments opposing the free and clear sale were
the same arguments that were rejected by the bankruptcy judge that
approved Chrysler's asset sale — a transaction that was upheld by
the U.S. Court of Appeals for the Second Circuit, MLC argued.
href='http://bankruptcy.law360.com/print_article/130272'>Read
more. (Subscription required.)
Analysis: Delphi’s
Union Received Special Lifeline
Delphi workers that belonged to unions have received a
lifeline by having their pension benefits restored in an unprecedented
deal related to the government-supervised bankruptcy of General Motors,
the onetime parent of Delphi, the New York Times reported
today. However, nearly 21,000 other non-union salaried workers and
retirees at Delphi are furious that their roughly 46,000 union
co-workers at Delphi have had their benefits restored while they have
not. Though the Pension Benefit Guaranty Corp. caps the amount of
benefits it will pay, GM
size='3'>has arranged for a side deal by agreeing to pay special
supplements, called top-ups, so that Delphi’s union retirees get
everything they were promised. The automaker is drawing the money from
its own pension fund.
href='http://www.nytimes.com/2009/10/27/business/27delphi.html?_r=1&ref=business&pagewanted=print'>Read
more.
U.S. Newspaper Circulation
Falls 10 Percent
The two-decade erosion in newspaper circulation has
continued as figures released yesterday showed that weekday sales
of newspapers were down more than 10 percent since last year, depressed
by rising Internet readership, price increases, the recession and papers
intentionally shedding unprofitable circulation, the
face='Times New Roman'>New York
Times reported today. In the six months ended
Sept. 30, sales fell by 10.6 percent on weekdays and 7.5 percent on
Sundays, from the period a year earlier, for several hundred papers
reporting to the Audit Bureau of Circulations. Through the 1990s and
into this decade, newspaper circulation was sliding, but by less than 1
percent a year. Then the rate of decline topped 2 percent in 2005, 3
percent in 2007 and 4 percent in 2008. A driving factor has been the
collapse in advertising, with revenue down 16.6 percent last year and
about 28 percent so far this year, according to the Newspaper
Association of America.
href='http://www.nytimes.com/2009/10/27/business/media/27audit.html?ref=business&pagewanted=print'>Read
more.
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