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March 31, 2010
Volcker Optimistic for Financial Revamping
This Year
The White House and one of its top outside economic advisers, Paul A.
Volcker, expressed confidence yesterday that legislation to overhaul the
nation?s financial system would be completed this year, possibly before
the congressional summer recess, the New York Times reported
today. The House passed a sweeping financial reform package in December,
and the Senate Banking Committee did so last week, on a party-line vote.
However, Democrats would have to obtain some Republican support to
overcome the potential threat of a filibuster in the Senate. Volcker,
who has been one of the chief advocates for overhauling financial
regulations, said that the bill approved by the Senate Banking Committee
represented a 'framework for getting agreement this year.'
title='Read more.'
href='http://www.nytimes.com/2010/03/31/business/31regulate.html?ref=business&pagewanted=print'>Read
more.
TLC Vision Eyes April Confirmation
Eyecare company TLC Vision (USA) Corp. will seek confirmation of its
reorganization plan on April 28 after receiving approval of its
disclosure statement from Bankruptcy Judge Kevin Gross, the
Deal Pipeline reported yesterday. The plan establishes both
Charlesbank Capital Partners and H.I.G. Capital LLC as TLC Vision's plan
sponsors. Both Charlesbank and H.I.G. will provide up to $144.9 million
in equity financing, and be eligible for a $5 million breakup fee and up
to $2 million in expense reimbursement if TLC Vision reaches a deal with
a rival plan sponsor. Charlesbank and H.I.G. provided TLC Vision with a
$25 million junior debtor-in-possession loan for which the company won
interim approval on Feb. 12. It received final approval on March 9. That
DIP went, in part, toward paying off a $7.5 million senior DIP loan
obligation from Cantor Fitzgerald Securities and certain first-lien
lenders.
href='http://pipeline.thedeal.com/tdd/ViewArticle.dl?id=10005408575'>Read
more. (Subscription required.)
Finra Orders Refco to Pay Cantor Fitzgerald
More than $11.2 Million
Refco Securities, a now-defunct New York-based brokerage, must pay
$11.2 million plus interest to Cantor Fitzgerald Securities for failing
to fulfill a contract it had with the firm, Dow Jones Daily
Bankruptcy Review reported today. The Financial Industry Regulatory
Authority (Finra) arbitration panel ordered Refco Securities to pay
Cantor Fitzgerald $11.2 million, plus interest, at an annual rate of 9
percent from the date of the award to the date the money is paid,
according to the award dated March 22. Refco Securities' parent, Refco
Inc., filed for chapter 11 protection for several of its companies in
October 2005. Refco Securities was not included in the chapter 11
proceedings, but it began winding down its operations, and in August
2006, a bankruptcy judge approved a settlement in which Refco Securities
would repay $127.5 million that the parent company owed to its creditors
by the end of the year.
SemGroup Creditors Move to Claw Back
Private-Equity Payout
Creditors of SemGroup LP have sued the company's former private-
equity backers in a bid to recoup $56 million worth of dividends the
private-equity firms collected as the energy trading company spiraled
toward collapse, Dow Jones Daily Bankruptcy Review reported
today. Ritchie Capital Management and an energy investing partnership
formed by Carlyle Group and Riverstone Holdings LLC received the money
in February 2008, at a time when SemGroup's sketchy oil price trading
strategy began to catch up with the company, court papers say. The
company filed for chapter 11 protection in July 2008, after shocking
investors and lenders with admissions that it had lost billions of
dollars in wrong-way bets on the movement of oil prices. The premise of
the legal action against the private-equity backers is that SemGroup was
insolvent at the time the partners split $100 million in cash, and so
the money should be returned to be shared among all creditors.
Philadelphia Publisher's Lenders Appeal Bid
Ruling
Lenders to the bankrupt Philadelphia Newspapers LLC have appealed a
court decision preventing them from bidding what they are owed in an
auction of the publisher's business, Reuters reported yesterday. A
three-judge panel of the U.S. Court of Appeals for the Third Circuit
issued the ruling earlier this month. The lenders requested a hearing by
the court's full panel of judges to review the 2-1 ruling, according to
court documents. The ruling was a victory for real estate developer
Bruce Toll, who is leading a group of Philadelphia-area investors who
want to buy the publisher of the Philadelphia Inquirer and
Daily News out of bankruptcy. The ruling prevents secured lenders
from bidding what they are owed, which is known as a credit bid, when
the publisher holds an auction of its business as part of its plan of
reorganization. The company has argued the bids must be in cash to
determine the market price of the business. Read
more.
Chrysler Says It Expects to Break Even This
Year
Chrysler, which began its path into bankruptcy a year ago, expects to
break even this year, according to CEO Sergio Marchionne, the New
York Times reported today. Marchionne said that the automaker had
slightly more than $5 billion in cash on hand, about half the amount
Chrysler had in 2007 after Cerberus Capital Management acquired it from
Daimler of Germany. A subsequent slump in car sales led to a financial
crisis that prompted Chrysler, and General Motors, to seek federal
bailouts. Chrysler entered bankruptcy on May 1, 2009,and emerged about
six weeks later, with federal assistance. Fiat, which Marchionne also
runs, took management control of the company, which received about $15
billion collectively from the Bush and Obama administrations.
id='jkpc' title='Read more'
href='http://www.nytimes.com/2010/03/31/business/31auto.html?ref=business&pag…'>Read
more.
Xerium Files for Pre-packaged
Bankruptcy
Industrial textiles manufacturer Xerium Technologies Inc. yesterday
filed a pre-packaged chapter 11 in bankruptcy court looking to cut
its debt by about $150 million, Reuters reported yesterday. The global
economic crisis prompted a dramatic slowdown in print advertising as
well as in packaging materials. Xerium said that it had taken a variety
of cost-cutting initiatives designed to improve its competitive
position, including shutting down 12 manufacturing facilities between
2002 and 2008. Xerium, which is the direct or indirect parent of 45
subsidiaries worldwide, said it expects the court process to be
completed in 30-60 days. The company also said it had secured a
commitment from its lenders for an $80 million term and revolving credit
facility and had filed motions seeking the court's approval for the
financing. The case is In re Xerium Technologies Inc., U.S.
Bankruptcy Court, District of Delaware (Delaware), No: 10-11031.
id='gtkc' title='Read more.'
href='http://www.reuters.com/article/idUSSGE62T0G020100330'>Read
more.
Lender Wants Sex.com Bankruptcy Case Thrown
Out
A lender that claims it is owed millions by the Sex.com domain
name operator is asking a U.S. bankruptcy court to dismiss an
involuntary bankruptcy case against the company so that it can
resume a foreclosure auction, Reuters reported yesterday. The New Jersey
lender, DOM Partners LLC, which said that it loaned more than $4 million
to Escom LLC to fund the Website's operations, said in court papers on
Friday that Escom should not be in bankruptcy. DOM said it would be best
able to recover the debt by holding a new auction for what may be the
world's most valuable domain name. The case is In re Escom LLC,
U.S. Bankruptcy Court, Central District of California, No. 10-13001.
id='i0qo' title='Read more.'
href='http://www.reuters.com/article/idUSN3014848420100331'>Read
more.
Credit Suisse Fights Lending
Lawsuit
Defense attorneys want a federal judge to throw out a $24 billion
predatory lending lawsuit filed against Credit Suisse Group by investors
in broke resorts in the West and the Bahamas, the Associated Press
reported yesterday. The investors contend that Credit Suisse set up a
branch in the Cayman Islands to skirt U.S. rules and appraised the
resorts at inflated prices as part of a scheme to later foreclose on the
properties. The original lawsuit was filed in January by investors in
Idaho's Tamarack Resort, the Yellowstone Club in Montana, Nevada's Lake
Las Vegas resort and the Ginn Sur Mer Resort in the Bahamas. In the
complaint, investors detailed what they called a loan-to-own scheme,
contending that Credit Suisse planned to make money on both ends of the
resort lending deals - first by collecting millions of dollars in loan
fees and later by foreclosing and flipping the resorts.
title='Read more.'
href='http://www.washingtonpost.com/wp-dyn/content/article/2010/03/30/AR2010033002917_pf.html'>Read
more.
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