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April 21, 2008
name='1'>Senate Panel to Examine Role of Credit Rating Agencies in
Current Economic Turmoil
The Senate Banking
Committee will hold a hearing tomorrow titled, 'Turmoil in U.S. Credit
Markets: The Role of the Credit Rating Agencies.' Securities and
Exchange Commissioner Chair
face='Times New Roman' size='3'>Chris
size='3'>topher Cox is currently scheduled to testify. The hearing will
take place in room 538 of the
w:st='on'>
size='3'>Dirksen
face='Times New Roman' size='3'>Senate
size='3'>Office
face='Times New Roman'
size='3'>Building
size='3'>.
href='http://banking.senate.gov/public/index.cfm?Fuseaction=Hearings.Detail&HearingID=709b68d2-6e2b-4048-bf86-19fdc01ecec3'>Click
here for further details on the hearing.
name='2'>Commentary: Bankruptcy Courts Shed Light on Escalating Fees
to Troubled Borrowers
A number of bankruptcy
court judges are drawing back the curtain on the mortgage servicing
business, exposing the escalating fees that big banks and financial
companies levy on troubled borrowers, according to a commentary
yesterday in the New
York Times.
size='3'>The cases come out of bankruptcy courts in
w:st='on'>
size='3'>Delaware
w:st='on'>
size='3'>Louisiana
size='3'>New York
each one shows how improper, undisclosed or questionable fees unfairly
penalize borrowers already struggling with mortgage debt or bankruptcy.
Foreclosure filings rose 57 percent in March over the same period in
2007, according to RealtyTrac, the real estate and foreclosure Web site.
It also said that banks repossessed more than 50,000 homes last month,
more than twice the amount of one year earlier.
href='http://www.nytimes.com/2008/04/20/business/20gret.html?sq=bankruptcy&st=nyt&scp=4&pagewanted=print'>Read
more.
size='3'>California City Moves Closer to
Bankruptcy Filing
The city of
size='3'>Vallejo
w:st='on'>
size='3'>Calif.
closer to bankruptcy on Tuesday as its city staff members have been
unable to come up with a long-term financial plan to avert financial
ruin, the San Francisco
Chronicle reported yesterday.
size='3'>Vallejo
slammed by the crumbling housing market and its escalating public safety
salaries. The city is asking for steep concessions from the police and
fire unions, whose members are among the highest paid in the Bay Area
and whose salaries comprise about 74 percent of the city's budget. In
March, faced with a $9 million deficit and no reserves, the city slashed
funding to senior centers, the arts, museums, libraries and public
works, and laid off 16 city workers. Police and firefighters took a 6.5
percent pay cut, and the city closed two fire stations. The cuts are
intended to keep
face='Times New Roman' size='3'>Vallejo
afloat through June 30. But the city needs to come up
with a long-term solution to its financial woes by tomorrow for it to
have the minimum amount of time to declare bankruptcy if necessary.
The city heads into the 2008-09 fiscal year with a projected deficit of
$13 million.
href='http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/04/20/BADG108NOD.DTL&type=printable'>Read
more.
w:st='on'>
name='4'>U.S.
face='Times New Roman' size='3'> Energy Systems Seeks Two-Month
Exclusivity Extension
Bankrupt U.S. Energy
Systems Inc. has told a court that it needs an extra 60 days to
negotiate with creditors and other stakeholders before filing a
reorganization plan and exiting chapter 11,
size='3'>Bankruptcy Law360 reported on Friday.
The company, which currently has until May 8 to file its chapter 11
reorganization plan, has asked for the deadline to be pushed back to
July 8. Counsel for the company told the court the debtors' staff had
been busy trying to stabilize the business and restructure hundreds of
millions of dollars in debt, and more time was required to draft a
plan.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=53545'>Read
more. (Registration required.)
Bank
Close to Receiving $6 Billion Infusion amid Mortgage Woes
After weeks of searching
for a way to ease the financial distress caused by the mortgage crisis,
National City Corp. was closing in on a capital infusion of more than $6
billion from a private-equity firm and a number of large shareholders,
the Wall Street
Journal reported today. The Cleveland-based
regional bank was hammering out final terms of the transaction with a
group of investors led by Corsair Capital LLC, a
w:st='on'>
York private-equity group.
As envisioned, the plan will be the third huge cash infusion for a major
U.S. bank this month, bringing the total to about $22 billion. Like
Washington Mutual Inc. and Wachovia Corp.,
w:st='on'>
size='3'>National City
offering its financial rescuers shares at prices substantially below the
prevailing market price, while diluting the holdings of existing
shareholders.
href='http://online.wsj.com/article_print/SB120873510977529849.html'>Read
more. (Registration required.)
name='6'>President Selects New HUD Chief
President Bush on Friday
chose SBA Administrator Steve Preston to lead the government's housing
agency at a time of crisis in the industry, praising him as a skilled
manager, the Associated Press reported. If confirmed by the
Senate,
size='3'>Preston
and Urban Development (HUD) Secretary Alphonso Jackson, who announced
his resignation last month amid a criminal investigation and allegations
of political favoritism.
size='3'>Preston has a background of
25 years in financial and operational leadership positions. Before
joining SBA, he was executive vice president of The ServiceMaster
size='3'>Co.
chief financial officer. Before that, he was a senior vice president and
treasurer of First Data Corp. and an investment banker at Lehman
Brothers.
href='http://www.washingtonpost.com/wp-dyn/content/article/2008/04/18/AR2008041800982_pf.html'>Read
more.
International
name='7'>Judge Denies Parmalat’s Damage
Claims
An Italian judge ruled
Friday that once-bankrupt dairy giant Parmalat SpA cannot seek damages
in the criminal trial of five banks that allegedly rigged the market in
the company's collapse,
size='3'>Bankruptcy Law360 reported on Friday.
Bank of America Corp., Citigroup Inc., UBS, Deutsche Bank and Morgan
Stanley are scheduled to go on trial in July for their alleged role in
the company's collapse, though all of the banks have denied any
wrongdoing. Parties can request civil damages during criminal
proceedings under Italian law. Since the discovery of alleged accounting
misdeeds at the company,
size='3'>Parmalat executives have been pointing the finger at auditors
and underwriters, claiming the banks played a role in the
company’s bankruptcy.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=53611'>Read
more. (Registration required.)
name='8'>Bank of
w:st='on'>
size='3'>England
size='3'>'s Swap Plan Aims to Jump-Start
Lending
The Bank of England
launched a plan today to allow banks to temporarily swap £50
billion ($100 billion) of mortgage-backed and other securities for
United Kingdom Treasury bills in a bid to ease the current credit
crunch, the Wall Street
Journal reported.
w:st='on'>
size='3'>England
central bank said that financial markets aren't working normally and
that failure to intervene in this way would risk a wider impact on
the
face='Times New Roman'
size='3'>U.K.
size='3'>economy. Banks will be able to enter into new asset swaps at
any time from today for the next six months, the Bank of England said.
That period would be extended if the bank thought it appropriate. The
central bank said that the swaps will last for one year but be renewable
for up to three years and that the risk of losses on the securities will
remain with the banks. It said the swaps will be available only for
assets in existence at the end of 2007.
href='http://online.wsj.com/article_print/SB120876259143130753.html'>Read
more. (Registration required.)
href='http://online.wsj.com/article_print/SB120876259143130753.html'>