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May 31, 2006
Bayou
Management Hedge Fund Group Files for Bankruptcy
Bayou Management LLC, the
hedge fund group that failed last year after losing hundreds of millions
of investor dollars in a massive fraud, filed for chapter 11 bankruptcy
protection in New York on Tuesday, according to court filings, Reuters
reported yesterday. In conjunction with the bankruptcy filing, Bayou
filed suit against investors including UT Medical Group Inc. and 25
others in a move to recover profits that Bayou paid to those defendants
before it collapsed. The suit applies only to Bayou's
size='3'>U.S.
those in the
size='3'>Cayman Islands
filed by court-appointed Bayou receiver Jeff Marwil
size='3'>, a partner in Jenner & Block's bankruptcy practice, and
Jeffrey Schwartz of Dechert LLP, charges that UT Medical and other
investors received fictitious profits and outsized returns for their
investments in Bayou. The lawsuits seek return of the alleged gains to
the estate of Bayou under fraudulent transfer statutes.
href='http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&s…'>Read
more.
Judge
Grants LG.Philips Permission to Convert to Chapter 7
Judge
face='Times New Roman' size='3'>Brendan L. Shannon
size='3'>of the
size='3'>U.S.
Court in
face='Times New Roman' size='3'>Wilmington
size='3'>,
size='3'>Del.
approved LG.Philips Displays USA's request to
convert to chapter 7 liquidation after a hearing on Thursday,
Portfolio Media
reported yesterday. LG.Philips said in court documents
that despite its efforts, it will be unable to sell its assets and
therefore believes there is no point to remaining in chapter 11. Just
days before the judge’s ruling, LG.Philips’ creditors’
committee won a motion that would not require it to share confidential
corporate information with the creditors it represents. The case
is LG.Philips Displays
USA Inc., case number 06-10245-bls, in the
U.S. Bankruptcy Court for the District of Delaware.
Study
Finds Loss of Health Benefits from Bankrupt Steel Companies Caused
Significant Hardship to Workers
Many respondents to a Kaiser
Family Foundation 2004 survey looking at how the bankruptcies of two
steel companies, the LTV Corporation and Bethlehem Steel, affected
health coverage for the companies’ retirees and dependents
reported that the loss of benefits caused a significant disruption to
their retirement, according to a Kaiser Family Foundation release
yesterday. The bankruptcies left about 200,000 retirees and spouses
without retiree health coverage in 2002 and 2003. Among retirees under
age 65, almost half reported that they or a spouse returned to work or
delayed retirement as a result of the loss of their steelworker retiree
health benefits. About one in four reported that they cashed in “a
lot” of their savings or assets so that they could afford health
care costs or premiums. Those who were uninsured at the time of the
survey were twice as likely to report that they or their spouse went
without or postponed needed care from a doctor due to cost. The report
also provides insight into the impact of a tax credit enacted by
Congress in 2002 to provide temporary assistance to workers and retirees
in “distressed” industries, including the steel industry.
href='http://www.kff.org/insurance/upload/7518.pdf'>Click here for
to read the study.
name='4'>Startup Cable Channel Sues Time Warner, Comcast over
Planned Adelphia Acquisition
The America Channel, which has
yet to go on the air, sued cable giants Time Warner Inc. and Comcast
Corp. on Tuesday in an attempt block their planned acquisition of
bankrupt Adelphia Communications Corp., the Associated Press reported
yesterday. The startup cable television channel claims in its lawsuit
that the deal violates federal antitrust laws and will reduce
competition in the cable TV industry. Comcast and Time Warner, the
nation's two biggest cable TV companies, agreed jointly last year to
acquire Adelphia, the nation's fifth-largest cable operator, for $17.6
billion, and divide up its systems among the two of them. TAC's lawsuit
accuses Comcast and Time Warner of price-fixing and bid-rigging in their
submission of a joint bid instead of competing against each other to
acquire Adelphia's assets.
href='http://www.nytimes.com/aponline/business/AP-Cable-TV-Lawsuit.html?pagew…'>Read
more.
Enron
to Sell $2.9 Billion in Foreign Assets
Enron will sell its
foreign assets for a total of $2.9 billion, a development that the
company has touted as a boon for creditors, Portfolio
Media reported yesterday. The $2.9 billion
total represents a $2.1 billion cash payment, as well as $800 million in
cash dividends Enron received from its foreign subsidiary earlier this
year. Enron's Prisma Energy International Inc. will be purchased by
London-based Ashmore Energy International Limited. The proceeds from the
sale will bolster the distribution of funds to Enron’s creditors
scheduled for November, said Enron spokeswoman Torie Pennington. The
$2.9 billion figure is more than three times the estimated value of
Prisma Energy that was reported in Enron’s disclosure statement,
according to John J. Ray III, Enron’s president and board
chairman. The disparity grows out of the fact that Enron’s
disclosure statement was filed in 2003, said
Pennington.
USG's
Bankruptcy Plan Draws Few Objections
Only a few objections to
USG Corp. (USG)'s chapter 11 plan landed on the court docket on the
final day for creditors to lodge protests over the
w:st='on'>
size='3'>Chicago
maker's plan to exit bankruptcy, MarketWatch.com reported yesterday. The
sole objection of substance came from the Office of the U.S. Trustee,
which stated it does not like a provision in USG's plan that
would immunize former officers and directors from lawsuits. In addition
to the
face='Times New Roman'
size='3'>U.S.
size='3'>rustee's objection, USG must contend with a $153,256 difference
between what it thinks it owes in interest on two small municipal bond
issues and what the trustee for Wells Fargo Bank thinks USG should pay.
USG's confirmation hearings are slated to begin June 15.
href='http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid…'>Read
more.
name='7'>Booz Allen Hamilton to Help Struggling
size='3'>
Judge
face='Times New Roman' size='3'>Robert Drain
size='3'>said Tuesday that Booz Allen Hamilton Inc. would continue to
help
size='3'>Delphi
$450 million a year,
size='3'>Portfolio Media reported yesterday.
Changes will include a workforce reduction and some production
elimination.
size='3'>Delphi
chapter 11 proceedings by the first half of 2007. Booz Allen Hamilton is
in the second phase of guiding
face='Times New Roman' size='3'>Delphi
size='3'>’s restructuring. This “design” portion will
include creating a finance, human resource and sales back-office shared
service organization, as well as streamlining
w:st='on'>
size='3'>Delphi
core.
size='3'>Delphi
Hamilton $13 million and expenses for its work. This second phase should
be completed in September. Implementation of the plan will extend at
least into the first quarter of 2007.
name='8'>SeraCare Equity-Holders Denied Official
Committee
The judge in charge of
SeraCare Life Sciences Inc.’s chapter 11 proceedings turned down a
request to appoint an official equity-holder’s committee, calling
into question claims about SeraCare’s solvency as well as the
thoroughness of the preparation of the ad hoc committee’s counsel
in filing the motion,
size='3'>Portfolio Media reported yesterday.
U.S. Bankruptcy Judge
size='3'>Louise DeCarl Adler suggested in the
Minute Order that the attorneys who filed the motion seeking an official
committee for equity-holders hadn’t followed the court’s
advice and read the transcript of a “contested cash collateral
hearing” in which the debtor’s declarations were
discredited. The motion in favor of an official equity-holder’s
committee relied upon these declarations, according to the Minute Order.
Even if the disputed claims of solvency were accepted as fact, that
would weigh in favor of arguments against an official equity-holders
committee because the equity would “ride through” the
bankruptcy process, the Minute Order says.
GM's
Wagoner Picks Clarke to Run North American Unit
General Motors Corp.
appointed Troy Clarke, head of the automaker's profitable Asia-Pacific
operations, to run its money-losing North American unit, Bloomberg News
reported yesterday. Chief Executive Officer Rick Wagoner will give up
day-to-day control of
America
automaker. Nick Reilly, president of GM Daewoo Auto & Technology
Co., will replace Clarke, 51. GM vice chairman John Devine, 62, will
retire June 1, the company said in a statement today. The shift,
effective July 1, puts a deputy in charge of
w:st='on'>North
America
months. Clarke, who joined GM in 1973, previously ran the automaker's
Mexican operations and was responsible for GM's manufacturing and labor
relations before his
size='3'>posting. He oversaw the carmaker's 2003 negotiations with the
United Automobile Workers. That contract expires next year, and a key
part of his job will be negotiating the new agreement.
href='http://www.bloomberg.com/apps/news?pid=10000087&sid=a12IKa05iVvA#'>Read
more.
face='Times New Roman' size='3'>
name='10'>Connecticut
size='3'> Porch & Patio Holds Liquidation
w:st='on'>
size='3'>Sale
After filing for chapter
11 bankruptcy reorganization in early May, Connecticut Porch & Patio
launched a furniture liquidation sale at one of its remaining two stores
in
size='3'>Orange
w:st='on'>
size='3'>Wethersfield
size='3'>Conn.
CasualLiving.com reported yesterday. Among
its 20 largest unsecured creditors were outdoor furniture manufacturers
Winston Furniture, nearly $107,000; Tropitone, about $95,500; Outdoor
Lifestyle, nearly $52,000; Woodard, more than $46,500; Brown Jordan
Companies, nearly $45,000; Cebu Imports, nearly $41,000; Panacea
Products, nearly $33,000; and Whitecraft, nearly $25,000.
href='http://www.casualliving.com/article/CA6339298.html'>Read
more.
name='11'>Indiana Coal Company Files for Chapter 11
Bronco
w:st='on'>
size='3'>Hazleton
of Arizona-based Bronco Energy Fund, filed for bankruptcy in the U.S.
Southern District of Indiana federal court May 22, the
size='3'>Princeton (
w:st='on'>
size='3'>Ind.
Clarion reported today. The petition is on
behalf of Hazleton Wash Plant, White River Coal Inc., Bronco Holdings I,
Inc. and Hazleton Mining LLC, according to court documents. Bronco Coal
purchased the Hazleton Coal Mine land, equipment, permits and mineral
rights for $35 million in December 2005. The bankruptcy filing estimates
the number of creditors between 200 and 999, with debts estimated at $41
million and assets of $25 million.
href='http://www.tristate-media.com/articles/2006/05/31/pdclarion/news/news3…'>Read
more.
International
name='12'>Eurotunnel Could Seek Bankruptcy if Restructuring Plan
Rejected
Anglo-French Channel tunnel
operator Eurotunnel said on Wednesday it could file for bankruptcy if
bondholders reject its debt restructuring plan, Reuters reported today.
'This plan is our final chance,' Chairman Jacques Gounon said at a news
conference. Gounon, who had already said Eurotunnel could file for
bankruptcy if shareholders rejected the plan, added it could do the same
if bondholders also decided not to accept the restructuring.