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April 2, 2007
PBGC
Takes Over Collins & Aikman Pension Plan
The pension plan for Collins
& Aikman Corp., the bankrupt auto parts-maker once headed by David
Stockman, is being taken over by the Pension Benefit Guaranty Corp.,
Bloomberg News reported on Saturday. The company's pension plan, which
covers about 21,000 employees and retirees, is underfunded by $181
million, the PBGC said Friday. The agency said it's stepping in because
Collins & Aikman has missed $7.6 million in required contributions
and the pension plan was to be abandoned when the company sold all its
assets.
href='http://www.chicagotribune.com/business/chi-0703300359mar31,0,2486636.story?coll=chi-business-hed'>Read
more.
In related news, Collins
& Aikman Corp. employees ended their occupation of a
size='3'>Toronto
after receiving a commitment from the bankrupt auto-parts company to pay
part of more than C$6 million ($5.2 million) in severance money,
Bloomberg News reported yesterday. The workers, members of the Canadian
Auto Workers union, agreed to leave after more than 40 hours, They were
assured that severance payments of C$1.4 million ($1.2 million) would be
made to 80 people fired in December, the union said. About 170 workers
fired last week at the factory also are due severance. Collins &
Aikman has agreed to pay those workers, and DaimlerChrysler AG said it
will step in with $1.6 million if the company doesn't pay, according to
the union. The
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size='3'>Toronto plant, due
to close in July, ships most of its parts to Chrysler plants.
href='http://www.bloomberg.com/apps/news?pid=20601082&sid=as33kLcuuwKo'>Read
more.
Airlines
name='2'>Northwest Creditors Approve Payout Plan for Top
Managers
Northwest Airlines Corp.,
which hopes to emerge from bankruptcy court protection in June, said its
creditors approved a plan in which the carrier's top 400 managers would
receive 4.9 percent of the equity of the reorganized company in
restricted stock and stock options that vest over four years, the
Wall Street Journal
reported on Saturday. That payout would contrast with the
8 percent of equity that the top 400 managers of United Airlines parent
UAL Corp. were granted when that carrier emerged from chapter 11 early
last year. Northwest, the nation's fifth-largest airline, said that the
apportionment of the package remains under consideration. The restricted
stock portion, 60 percent of the package, is valued at $232 million,
assuming the airline's overall valuation is
$7.8 billion.
href='http://online.wsj.com/article/SB117526567253554618-search.html?KEYWORDS=bankruptcy&;COLLECTION=wsjie/6month'>Read
more. (Registration required.)
name='3'>Delta Air Picks New Directors
Delta Air Lines Inc. picked a
new 11-member board for when it emerges from bankruptcy protection, the
Associated Press reported today. Delta Chief Executive Officer Gerald
Grinstein is among the board members who will serve as directors after
the air carrier emerges from bankruptcy proceedings April 30. Grinstein
said he plans to step down as CEO once the new board picks a successor.
The nonexecutive chairman of the new board will be Daniel A. Carp,
former CEO of Kodak. Delta has a confirmation hearing on its
reorganization plan set for April 25.
face='Times New Roman' size='3'>
name='4'>Delphi
size='3'> Posts $132 Million Net Loss for
February
Bankrupt
size='3'>U.S.
size='3'>auto parts maker Delphi Corp. posted a $132 million net loss
for February, the company said in a limited operating report filed with
the U.S. Bankruptcy Court, Reuters reported on Friday.
w:st='on'>
size='3'>Delphi, which filed for
bankruptcy in October 2005, remains in talks with its unions and former
parent General Motors Corp. on agreements necessary to complete a
proposed $3.4 billion private equity investment to exit court
protection. Troy, Mich.-based
face='Times New Roman' size='3'>Delphi
size='3'>also reported $19 million in professional fees directly related
to the bankruptcy for February.
name='5'>Commentary: Subprime Pullback May Constrict Consumer
Spending
With subprime mortgage
lenders pulling back, some working-class Americans are already finding
it harder to buy a new home or refinance the one they already own, which
experts worry will take its toll on consumer spending, according to a
commentary in today’s
size='3'>Wall Street Journal. With the housing
market currently in a slump and defaults mounting in the market for
subprime home loans, some economists believe more lenders will tighten
credit standards in the months ahead as concerns grow about Americans'
heavy debt load and their ability to manage it. Reduced access to credit
is one reason some economists are forecasting tougher times for
retailers that cater to working-class Americans. Archstone Consulting,
which follows the retail industry, is predicting that next
year, retailers that cater to the bottom 40 percent of income
earners, merchants such as Kmart, Wal-Mart and most convenience stores
will see same-store sales growth between 0 to -2 percent at locations
that get a lot of traffic from lower-income shoppers.
href='http://online.wsj.com/article/SB117547660975556417.html?mod=googlenews_wsj'>Read
more. (Registration required.)
name='6'>Vendors File Suit against Tower Records
A number of secured vendors,
including Sony BMG, Twentieth Century Fox Home
size='3'>Entertainment and Warner Home Video, have filed a lawsuit
against bankrupt Tower Records to stop the company from putting money
they are allegedly owed toward administrative and other expenses,
size='3'>Bankruptcy Law360 reported on Friday.
The lawsuit, filed Wednesday in the U.S. Bankruptcy Court for the
District of Delaware, says that Tower owes the secured trade vendors
about $77.6 million, approximately $71.4 million of which is held by the
informal committee that filed the suit. The suit was filed two days
after Tower filed its liquidation plan with the court. The motion says
that unsecured creditors could recover only about 2.5 cents on each
dollar that they are owed. Tower said the vendors are unsecured because
they filed a limited objection to its bankruptcy filing -- a contention
the group disagrees with in the suit.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=21700'>Read
more. (Registration required.)
name='7'>Calpine Closes $5 Billion in DIP Funds
Calpine Corp. reported that it
received $5 billion of debtor-in-possession (DIP) funding to refinance
much of its debt at lower interest rates, which will save the
independent power producer about $100 million a year, according to the
Associated Press on Friday. The new credit will replace Calpine's
existing $2 billion of DIP funding and repay roughly $2.5 billion of
secured debt at Calpine Generating Company LLC, one of the company's
largest operating subsidiaries. The remaining funds will be used for
working capital and other general corporate purposes, including
repayment of debt, said Calpine, which filed for chapter 11 in December
of 2005. In addition, the San Jose-based company has the option to
borrow up to $2 billion more to refinance other existing project debt,
which would lower annual interest costs further.
href='http://www.chron.com/disp/story.mpl/ap/fn/4675167.html'>Read
more.
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name='8'>Malden
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size='3'> Mills Chapter 7 Conversion Gets
Boost
In an emergency motion to
convert filed March 28, Trustee Richard T. King argued that textiles
manufacturer Malden Mills Industries Inc. would be suitable for
conversion to chapter 7 after being sold to private-equity firm
Chrysalis Capital Partners and renamed OM Industries Inc.,
size='3'>Bankruptcy Law360 reported on
Friday. The unsecured creditors’
committee has been opposed to the conversion since it was first proposed
by the debtor on March 7. The committee argues that the conversion
isn’t needed because they’re already lined up for some
financial recovery through a deal with General Electric Capital Corp. as
long as the company reigns in costs. The case is
face='Times New Roman' size='3'>Malden Mills Industries
Inc., case number 07-40124, in the U.S.
Bankruptcy Court for the District of Massachusetts.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=21691'>Read
more. (Registration required.)
name='9'>JPMorgan Chase Wins Dismissal of Enron-Related Investors
Suit
A federal judge has
rebuffed investors in JPMorgan Chase who alleged they bought shares in
the company out of regard for its 'integrity and financial discipline'
during the time it was aiding and abetting the massive Enron fraud, the
New York Law Journal reported today.
size='3'>U.S. District Court Judge Sidney H. Stein said that the facts
as alleged in the second amended complaint failed to show 'in a
particularized fashion' that JPMorgan intended to deceive its own
shareholders or in fact did deceive them in a material way.
JPMorgan agreed in June 2005 to pay $2.2 billion to
resolve a class action lawsuit by former Enron investors over the energy
trader's 2001 collapse. It also agreed to pay $350 million in the
so-called 'MegaClaims' litigation to help Enron pay debts as it
liquidates. The suit
by JPMorgan investors was filed in 2002.
href='http://www.law.com/jsp/article.jsp?id=1175245441448&pos=ataglance'>Read
more.
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name='10'>Chicago
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size='3'> Cosmetics Mogul Files for Chapter
11
size='3'>Chicago cosmetics mogul
Marilyn Miglin has filed for chapter 11 protection after a
size='3'>Nevada business
venture she invested in went south, the Associated Press reported on
Saturday. Marilyn Miglin said that the bankruptcy filing won't affect
her cosmetics and real estate businesses. Miglin invested $2.5 million
in a company in 2000 that marketed a special needle to remove spider
veins. The business foundered, and few of the needles were ever sold.
Two of the company's other investors later sued Miglin in
size='3'>Nevada
were awarded $16.8 million by a
w:st='on'>Las
Vegas
size='3'>jury.
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name='11'>Ohio
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size='3'> Heating Oil Firm Files for
Bankruptcy
An
w:st='on'>
size='3'>Akron
w:st='on'>
size='3'>Ohio
that ran afoul of the Ohio Environmental Protection Agency and faces a
civil lawsuit for mistakenly dumping heating oil into a homeowner's
basement has filed for bankruptcy protection, the
face='Times New Roman' size='3'>Akron Beacon Journal
size='3'>reported yesterday. Joseph Monesky, the owner of Gas & Oil
Inc., filed for chapter 7 protection in U.S. Bankruptcy Court on
Thursday, listing assets of $86,292 and liabilities of $1.6 million. Gas
& Oil has operated several gas stations in the
w:st='on'>
size='3'>Akron
Earlier this year, the Ohio EPA fined the company $10,000 for numerous
air-pollution violations at the stations. The company also faces two
civil lawsuits in the Summit County Court of Common Pleas over heating
oil delivery mistakes.
href='http://www.montereyherald.com/mld/ohio/news/17005339.htm?source=rss&channel=ohio_news'>Read
more.
Diego Pension Fund Files Suit over Investment Losses
w:st='on'>San
Diego
size='3'>County's
pension fund has sued Amaranth Advisors over losses from the investment
firm's collapse last year after a series of disastrous natural-gas
trades, the Associated Press reported on Saturday. The
w:st='on'>
size='3'>San Diego County
Retirement Assn. said Amaranth's failure stemmed from 'excessive and
unbridled speculation' that was contrary to promises that its
investments would be diversified and risk-controlled. The lawsuit, filed
Thursday in U.S. District Court in
w:st='on'>
York, seeks unspecified
damages for fraud, negligence and breach of contract. The retirement
fund invested $175 million in Amaranth, which shocked investors in
September, when it disclosed that it had lost $6 billion in just a few
days.