December 282007

 

size='3'>Bankruptcy Case Filed against Main Ritchie Fund

An investor group has filed a
petition in court to declare bankrupt the flagship fund of hedge fund
firm Ritchie Capital Management in Boston, Reuters reported yesterday.
An involuntary chapter 11 case was filed against the Ritchie
Multi-Strategy Global fund on Wednesday in the U.S. Bankruptcy Court for

the Northern District of Illinois. The petitionersÑBenchmark Plus
Partners LLC, Benchmark Plus Institutional Partners LLC and Sterling Low

Volatility FundÑare owed about $45 million by the fund.

href='http://www.washingtonpost.com/wp-dyn/content/article/2007/12/27/AR2007122701799.html'>Read

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name='2'>Furniture Retailer Files for Bankruptcy

Columbia, Md.-based furniture
company Scan International Inc. has filed for chapter 11 bankruptcy
protection, citing declining revenue and an inability to borrow money,
the Baltimore Business Journal reported yesterday. The
company sells contemporary furniture in five retail locations in the
Washington, D.C. and Baltimore areas. Revenue at the company dropped
from $25 million to $17 million from 2005 to 2007, according to court
papers filed Wednesday in U.S. Bankruptcy Court in Baltimore. Scan
officials attribute the decrease partly to 'the decline in the housing
market and the loss of business as a result of other furniture retailers

ceasing operation and liquidating inventories at deep discounts.' The
revenue drop made it difficult for Scan to borrow money from its bank,
Wells Fargo, and made it challenging for Scan executives to purchase
inventory for retail sales, the filing shows. Scan listed about $100
million each in assets and liabilities.

name='3'>Deloitte to Settle Delphi Investor Suit for
$38M

Deloitte & Touche LLP in
New York has agreed to pay $38.25 million to settle an investor lawsuit
over alleged accounting improprieties at bankrupt auto parts maker
Delphi Corp., plaintiffs' lawyers said, Reuters reported yesterday. The
case in the U.S. District Court in Detroit stems from an accounting
scandal at Delphi that led to the company restating financial results
going back several years in June 2005, the law firms said. Deloitte was
Delphi's outside auditor.

href='http://www.washingtonpost.com/wp-dyn/content/article/2007/12/27/AR2007122702087.html'>Read

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name='4'>Analysis: Bankruptcies Likely to Rise Again in
2008

Market analysts warn that more
U.S. businesses are likely to hang 'going bankrupt' signs on their doors

next year as the twinned blows of slower economic growth and pricey
commodities force the weakest companies to seek refuge from creditors,
according to a Dow Jones report today. In a twist from this year's
trends, the pain is likely to spread from mortgage lenders, homebuilders

and consumer-oriented firms - all areas that contributed to a 40 percent

jump in bankruptcy filings in 2007 and are expected to play a role in
2008's misery. Next year, industries at risk for the biggest increases
in chapter 11 filings include electronics makers, energy miners like
coal companies and agriculture firms, according to Global Insight.
Makers of durable goods like machinery are also more at risk and will
likely contribute to a 13 percent rise in bankruptcies in 2008, says the

private research firm, which bases its estimates on issuers' credit
quality and operating conditions.

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name='5'>NYRA's Bankruptcy Court Hearing Postponed

A key hearing has been
postponed in the bankruptcy case of the New York Racing Association Inc.

(NYRA), a delay that could give state leaders more time to resolve
disputes over the state's horse racing franchise, The (Albany, N.Y.)
Business Review reported yesterday. The case is being tried in
the U.S. Bankruptcy Court for the Southern District of New York. On
Thursday, Bankruptcy Judge James Peck was scheduled to review
NYRA's proposed reorganization plan, which was approved by almost all of

its creditors. NYRA officials expect the hearing to be reset for
sometime next month, giving Gov. Eliot Spitzer and legislative leaders
more time to flesh out a deal to give NYRA the racing franchise. The
judge's ultimate approval of the plan would put NYRA on the verge of
becoming solvent and emerging from chapter 11 protection, which it filed

for in November 2006. That plan, though, hinges on whether NYRA retains
the state's horse racing franchise, and under what conditions.

href='http://www.bizjournals.com/albany/stories/2007/12/24/daily11.html'>Read

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ACA
Capital Holdings Inc. Allows Regulator to Take Control

ACA Capital Holdings Inc.
decided to allow the Maryland insurance regulators to manage one of its
divisions after the bond insurer was downgraded last week, according to
an AHN report yesterday. The move would potentially save ACA
Financial Guaranty Corp. from becoming insolvent as it additionally
asked for a 30-day waiver before it has to post collateral on credit
derivatives it guaranteed. Last week, Standard & Poor's, a financial

firm rating agency, cut the financial guarantor subsidiary's rating to
junk status.ACA Capital Holdings Inc. reported in a Securities and
Exchange Commission filing late Wednesday that the deal would provide
the Maryland Insurance Administration complete control of its unit, but
many analysts doubt if it would actually benefit the company on the
longer run. The deal between ACA and the new regulator will be effective

by Jan. 18.

name='7'>  AMS Health Sciences Seeks Bankruptcy
Protection

AMS Health Sciences, Inc. today

announced it has sought chapter 11 protection in the U.S. Bankruptcy
Court for the Western District of Oklahoma due to the verdict and
subsequent judgment rendered against the company in its November 2007
jury trial relating to the its 2005 acquisition of Heartland Cup, Inc.,
according to a Business Wire report yesterday. In September 2005, AMS
Manufacturing, Inc., a wholly-owned subsidiary of the company, acquired
approximately 83 percent of the capital stock of Heartland Cup, Inc., a
manufacturer of styrofoam cups located in Allen, Okla. The acquisition
was effected through the purchase of such shares from Truett McCarty,
Heartland's controlling stockholder, who received shares of the
company's common stock in consideration for the stock purchase. On Feb.
6, 2006, the company and AMS Manufacturing filed a lawsuit against
McCarty in the District Court of Oklahoma County, alleging that McCarty
defrauded them in the sale of his stock in Heartland by failing to
disclose the true amount of Heartland's accounts payable as well as a
long-term liability of Heartland.

href='http://www.foxbusiness.com/markets/industries/retail/article/ams-health-sciences-seeks-bankruptcy-protection_419668_7.html'>Read

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name='8'>  Commentary: Fears for Business-Class Airlines Grow
Following MAXjet's Bankruptcy

When MAXjet filed for
bankruptcy this week, few were surprised. Indeed, as soon as the
business class-only airline took to the skies two years ago, analysts
began predicting the demise of it or of one of its direct competitors,
SilverJet or the more high-end Eos Airlines. Now that MAXjet's fleet of
five 767s has been grounded, the question has turned to whether it will
be just the first of other crash landings of these upstarts which, with
a fraction of the funding or the fleets of the big boys, have decided to

take them on in the cutthroat competition for business and first-class
trans-Atlantic passengers, according to a commentary in today's The
(U.K.) Independent. The passenger segment they are targeting is

where heavyweights British Airways and Virgin Atlantic make most of
their profits and is the subject of fierce competition. The environment
is set to become even more difficult when the 'open skies' agreement
that opens the route to other carriers comes into effect next spring.
Add that to the rising cost of jet fuel Ð it increased 50 per cent
over the past year Ð and worries about a drop in spending by
corporate customers amid the deepening credit crunch, and there is a
nagging sense that MAXjet won't be the last to hit turbulence.

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name='9'>  Panitz Signature Homes Files for Chapter 7
Bankruptcy

After closing its doors in
April and failing to sell its remaining inventory, Ponte Vedra Beach,
Fla.-based Panitz Signature Homes has filed for chapter 7 bankruptcy
protection in the Jacksonville division of the Bankruptcy Court for the
Middle District of Florida, BUILDER Online News
Service reported yesterday. The luxury builder listed $18.4
million in assets, $16.5 million in debts and Branch Banking & Trust

Co., which is owed $3.8 million, as the major debtor. Citing the current

downturn in the housing market, the luxury builder is calling it quits
after operating in Northeast Florida for 27 years. At a May 19 auction,
the builder was unable to sell any of its 11 homes, 25 home sites, or 32

townhome sites. The company, started in 1980, became a division of
Beazer Homes in 1993.

name='10'>  Southern Star Mortgage to Dissolve

Southern Star Mortgage Corp. is

looking to dissolve in the wake of the country's mortgage lending crisis

and a general slowdown in the real estate market,
TheDeal.com reported yesterday. East Meadow, N.Y.-based
Southern Star said in papers filed in the U.S. Bankruptcy Court for the
Eastern District of New York in Brooklyn that it is hoping to complete
an orderly wind-down of its business while under protection from
creditors. Southern Star's operations were primarily carried out in New
York, New Jersey, Florida, California, Connecticut, Texas, Pennsylvania,

Massachusetts, Maryland, Illinois and North Carolina, and the company
originated and sold residential mortgages, as well as sold the servicing

rights of its mortgages to institutional end-loan investors. The company

filed for Chapter 11 on Dec. 21.

name='11'>  Interstate Bakeries Bid Detail Request Shot
Down

A federal bankruptcy judge has
denied a request from Interstate Bakeries Corp. to force a key bidder
and its union partner to provide additional details on an offer to buy
the company, the Associated Press reported yesterday. U.S. Bankruptcy
Judge Jerry Venters said in a ruling issued late last week that while he

acknowledged the company's frustration over the bid by Los Angeles-based

investment firm Yucaipa Cos. and the International Brotherhood of
Teamsters, it was too soon in the bidding process to impose new
deadlines on one bidder. Bidders are required to file their proposals by

Jan. 15, with an auction to be held Jan. 22 if there are multiple plans.

Judge Venters will make the final decision during a Jan. 29 hearing.
Interstate Bakeries, the Kansas City-based maker of Hostess Twinkies and

Wonder Bread, is seeking an exit after more than three years under
chapter 11 bankruptcy protection. It has developed a reorganization plan

based on $400 million in financing it would receive through specialty
lender Silver Point Finance LLC, but the plan is contingent on the
company reaching concessions from the Teamsters union, which represents
about 9,500 of the company's 25,000 employees.
href='http://www.chron.com/disp/story.mpl/ap/fn/5406904.html'>Read
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name='12'>  City of Charleston Looks to Seize Land Tied Up in
Bankruptcy Court

Charleston, S.C.'s request for
16.5 acres tied up in bankruptcy court would benefit both coastal
residents and the creditors of W.R. Grace & Co., a city attorney
said Thursday, the Associated Press reported yesterday. The city filed
papers in bankruptcy court last week attempting to acquire the property
from Grace, where a shuttered fertilizer and pesticide plant operated
for decades. The once-contaminated facility has since been cleaned. The
city has long planned to build new public works, maintenance and
fire-training facilities on the site to replace outdated facilities
nearby. That land would become part of a planned retail and residential
development meant to revitalize the upper peninsula. The Maryland-based
Grace & Co. filed for chapter 11 protection in 2001, following
asbestos-related lawsuits. A court hearing on the request is set for
next month.

International

name='13'>  Critics Take Aim at Canada's New Bankruptcy
Law

Canada's updated federal
bankruptcy law, hastily passed by the Senate in mid-December without
comprehensive hearings, has raised the ire of some lawyers in the field
who say it has serious flaws, ReportonBusiness.com
(Toronto) reported today. The new law has been lauded by the
conservative government mainly for provisions that ensure workers who
are caught in the crossfire of a bankruptcy can collect their final
paycheques. But other parts of the complex law have drawn criticism from

those who will have to put it into practice once it comes into force.
While there are clearly some major advances in the new law, 'on balance
I'm not happy with it,' said Robert Klotz, a bankruptcy lawyer in
Toronto. Klotz has been on a legislative reform task force for three
years, has helped draft reports on the reforms and has advised the
government on the amendments package. But still, he said, 'I have a
negative attitude towards it.'

href='http://www.theglobeandmail.com/servlet/story/LAC.20071228.RBANKRUPT28/TPStory/Business'>Read

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name='14'>  Credit Crunch Could Push Up U.K.
Bankruptcies

Accountancy firm KPMG has
forecast that 130,000 people in the United Kingdom will next year either

be declared bankrupt or take out an individual voluntary arrangement
(IVA)Ña less stringent form of bankruptcy, The (U.K.)
Telegraph reported today. That would be a 19 percent increase
on this year's estimated 109,615 insolvencies. The increase comes
despite previous official figures showing that conditions were improving

for thousands of people in financial difficulty. The data had shown a
steady decrease in people falling into bankruptcy and taking out IVAs
since the start of this year. However, the faltering state of the
economy, combined with Christmas spending, is likely to push people back

towards the edge, according to Mark Sands, director of personal
insolvency at KPMG.

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