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October 10, 2006
Airlines
name='1'>Comair to Cut Flight Attendant Wages
After failed negotiations with
the union, Delta subsidiary Comair said that it will unilaterally cut
wages and change work rules for its 970 flight attendants on Nov. 15,
the Associated Press reported today. The flight attendants have
threatened to go on strike if the regional-jet airline imposed
concessions, and the company said Monday that it will seek an order to
prevent the union from engaging in any type of work action, such as a
strike or a work slowdown. The flight attendants' union, the
International Brotherhood of Teamsters, wouldn't comment on whether the
flight attendants would go on strike Nov. 15 if concessions are imposed.
Comair's action comes more than two months after a federal bankruptcy
judge gave Comair permission to throw out its contract with the flight
attendants. Comair was seeking concessions of $7.9 million a year as
part of a package of cuts from its flight attendants, pilots and
mechanics.
href='http://www.nytimes.com/aponline/business/AP-Comair-Flight-Attendants.html'>Read
more.
name='2'>Lenders Blast Delta’s Proposed Dispute Resolution
Plan
A $4 billion battle may
be brewing between bankrupt Delta airlines and the companies that
financed its aircraft, after several of the lenders objected to a Delta
proposal for resolving disputes over their leverage-lease claims,
Portfolio Media
reported yesterday.
size='3'>Delta received outside financing for 270 of its planes through
leverage-lease agreements. Seeking to avoid a dispute that may delay its
mid-2007 chapter 11 emergence, Delta has proposed a resolution that the
airline has called “fair and reasonable.” The company urged
a bankruptcy court to approve its repayment plan in order to avoid
delaying the bankruptcy case. However, financiers like the Walt Disney
Co. have objected to the proposal, calling it an attempt “to
invent entirely new, untested, unwieldy and unfair
processes.”
name='3'>FleetBoston Settles Litigation with Enron
Enron Corp said that it
reached an agreement with FleetBoston Financial Corp. and Fleet National
Bank to settle litigation linked to the former energy trader's dramatic
collapse five years ago, Reuters reported on Friday. Fleet Financial
will pay Enron $10.4 million to settle its part of the so-called
``Megaclaims litigation'' and $9.35 million to settle a lawsuit
concerning the company's commercial paper, Enron said in a statement.
The settlement raises to about $875 million Enron's proceeds from the
Megaclaims settlements with its former banks in connection with the
collapse of the company, once the seventh largest in the
country.
href='http://www.nytimes.com/reuters/business/business-energy-enron.html?pagewanted=print'>Read
more.
Kara
Homes in Bankruptcy after Mortgage Payment Offer
Kara Homes Inc., a luxury
builder in New Jersey that sells homes triple the average U.S. house
size, filed for bankruptcy after discounts of as much as $246,000 and a
year of mortgage payments failed to lure buyers, Bloomberg News reported
yesterday. The closely held East Brunswick, N.J.-based company sought
chapter 11 protection in U.S. Bankruptcy Court Oct. 5, saying it owes
$296.84 million to lumber, concrete, electrical, plumbing and woodwork
companies while holding $350.18 million in assets, primarily unsold
houses and land.
w:st='on'>
size='3'>U.S.
size='3'>housing demand is flagging after five record years, swelling
the inventory of unsold homes. Almost half the people who sign contracts
with builders are canceling before the house is finished, forcing
companies to sacrifice profit margins by offering freebies to attract
new buyers, according to James Hughes of
w:st='on'>
size='3'>Rutgers
face='Times New Roman'
size='3'>University
size='3'>.
href='http://www.bloomberg.com/apps/news?pid=20601087&sid=azbpl3UtOiEw&refer=home'>Read
more.
name='5'>Shareholders Want a Say in Allied's Chapter
11
An ad hoc committee of
shareholders for Allied Holdings Inc. has once again filed a motion for
official representation in the case, arguing that the bankrupt auto
hauler’s situation has improved since a big-name investor jumped
into the chapter 11 case,
size='3'>Portfolio Media reported yesterday.
The ad hoc group said that investment firm Yucaipa Cos., which infused
Allied with cash over the summer, was a 'dominant, aggressive and vocal
creditor,' and that Allied’s recent operating results prove the
company isn't “hopelessly insolvent.” A hearing on the
request is scheduled for Nov. 8. In February, a similar motion by the ad
hoc committee was denied by Judge W. Homer Drake, Jr. in the U.S.
Bankruptcy Court in the Northern District of Georgia.
Records Closing, Selling Inventory
After a lengthy auction
stretching over two days, a federal bankruptcy judge on Friday approved
the sale of California-based Tower Records to Great American Group, the
Associated Press reported yesterday. Great American won with a bid of
$134.3 million, beating Trans World Entertainment, which had hoped to
continue operating at least some Tower stores.
face='Times New Roman' size='3'>Peter Gurfein
size='3'>, an attorney representing Tower Records said Great American
plans to begin the liquidation process and going-out-of-business sales
on Saturday, which eventually will result in the elimination of the jobs
of some 3,000 Tower employees.
href='http://www.king5.com/topstories/stories/NW_100906BUBtowerrecordssalesJM.1fcb2fc4.html'>Read
more.
w:st='on'>
name='7'>Utah
size='3'> Bankruptcy Filings Down 76 Percent from
2005
A total of 499 Utahns
filed for bankruptcy in September, down from 2,208 filings in the same
month of 2005, according to figures released Friday by the U.S.
Bankruptcy Court for the District of Utah, the
face='Times New Roman' size='3'>Salt Lake Desert News
size='3'>reported on Saturday. Filings for the first nine months of 2006
in
size='3'>Utah decreased by
76 percent compared to the same period in 2005, the court
reported.
name='8'>Court Loss Could
w:st='on'>
size='3'>Prompt
face='Times New Roman' size='3'>Catholic
size='3'>School
File for Bankruptcy
Leaders of
size='3'>Regina
face='Times New Roman' size='3'>Catholic
size='3'>
Iowa City, Iowa, are preparing to file for chapter 11 if
they lose a lawsuit alleging a former principal molested a student in
the mid-1960s, the
size='3'>Des Moines
size='3'>(
face='Times New Roman' size='3'>Iowa
size='3'>) Register reported today. The filing
would allow the school, which has about 1,000 students in preschool
through 12th grade, to protect its assets from being seized as part of
three pending lawsuits regarding Lawrence Soens, who was principal
at
size='3'>Regina from
1958-67.
face='Times New Roman' size='3'>Regina
has been named in three lawsuit involving 15 plaintiffs.
The first suit is scheduled for a jury trial on Oct. 23 in Scott County
District Court.
href='http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=/20061009/NEWS/61009021'>Read
more.
name='9'>Armstrong Emerges From Chapter 11
Armstrong World Industries Inc.
(AWI) announced that it has emerged from chapter 11 bankruptcy,
according to a company press release on Friday. The company’s
reorganization plan includes a comprehensive settlement resolving AWI's
asbestos liability by establishing and funding a trust to compensate all
current and future asbestos personal injury claimants. 'In addition to
resolving AWI's asbestos liability, we used the time in chapter 11 to
restructure our flooring business to make it more competitive,' said
Michael D. Lockhart, AWI's Chairman and Chief Executive Officer.
href='http://www.buildingonline.com/news/viewnews.pl?id=5496&subcategory=70'>Read
more.
name='10'>California Health Care District’s Bankruptcy May
Extend to 2007
Based on the first
proceeding of the chapter 9 of the West Contra Costa Healthcare District
in California it appears that the case will last well into 2007,
the Contra Costa
Times reported on Friday. The hospital
district filed a petition on Oct. 1 to shield itself from creditors as
it listed $50 million to $100 million in liabilities and the same range
of assets.The district has lost somewhere from $1 million to $2 million
a month since it bought the Doctors Medical Center in 2004. The hospital
district does not expect to file a reorganization plan until well into
next year as it is expected to take until March 2007 for all the
creditors in the case to file proofs of their claims.
href='http://www.mercurynews.com/mld/mercurynews/news/breaking_news/15697725.htm'>Read
more.
name='11'>Justice O'Connor to Sit In on
size='3'>
Court
Former Supreme Court
Justice Sandra Day O'Connor will join a federal appeals court panel
in
size='3'>Manhattan to hear
arguments on five cases, the Associated Press reported yesterday.
Justice O'Connor, appointed to the Supreme Court by President Reagan,
will sit Wednesday on the Second U.S. Circuit Court of Appeals,
according to Circuit Executive Karen Milton.
w:st='on'>
size='3'>Milton
Justice O'Connor will sit on a three-judge panel beside senior Judge
John M. Walker Jr. and chief judge Dennis Jacobs as they consider five
cases, including one criminal, one bankruptcy and three civil in
nature.
href='http://online.wsj.com/article/SB116036401621786564-search.html?KEYWORDS=bankruptcy&COLLECTION=wsjie/6month'>Read
more.
name='12'>Private-Equity Firms Face Anticompetitive
Probe
The Department of Justice
has begun an inquiry into potentially anticompetitive behavior among
some of the world's leading private-equity funds, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. In recent weeks, Justice Department officials
have sent out a series of letters to a number of the industry's most
well-known players including Kohlberg Kravis Roberts & Co. and
Silver Lake Partners, but likely not limited to those firms. These
informal requests have asked for a range of information and documents
related to deals and business practices, according to three people
briefed on their contents, and ask about company auctions staged since
2003. It is unclear exactly who may be the subject of any inquiry, or
whether any Justice Department action will develop from the information
requests.
href='http://online.wsj.com/article/SB116045130991787820.html?mod=us_business_whats_news'>Read
more. (Registration required.)
name='13'>Kerkorian Proxy Quits GM Board
Jerome B. York,
billionaire Kirk Kerkorian's agent on the General Motors Corp. board,
resigned on Friday, saying he had 'grave concerns' about the automaker's
competitiveness and the willingness of directors to challenge GM's chief
executive, G. Richard Wagoner Jr., the
size='3'>Washington Post reported on Saturday.
Some analysts suggested that
w:st='on'>
size='3'>York
was a signal that Kerkorian might be preparing for a larger battle
against the company.
w:st='on'>
size='3'>York
followed the GM board's decision on Wednesday to reject a proposed
alliance with Nissan Motor Co. and Renault SA. GM added
size='3'>York
last year under pressure from Kerkorian, who has a 9.9 percent stake in
the company. York, a former chief financial officer of Chrysler Corp.
and International Business Machines Corp., has long been Kerkorian's
chief business strategist.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/10/06/AR2006100600654_pf.html'>Read
more.
name='14'>ComEd Warns of Bankruptcy if Rate Freeze Legislation
Passes in
w:st='on'>Illinois
The chairman of ComEd
contended that the utility giant would go bankrupt if an electricity
rate freeze approved in an Illinois House committee on Monday eventually
becomes law, the Chicago
Tribune reported today. Chief
Executive Officer Frank Clark maintained the freeze
proposal is 'very, very serious' and that consumers could not count on
reliable service if lawmakers approved the bill to keep a rate freeze in
place for three years. However, Illinois House Speaker Michael Madigan
(D-Chicago) said he took ComEd's comments with a 'grain of salt' and
urged Gov. Rod Blagojevich to call for a special session of the General
Assembly as soon as possible. Faced with electricity rate increases of
25 percent or more throughout the state next year, the Illinois House
Utility Oversight Committee voted 9-4 to approve the three-year freeze.
The legislation could be heard during the veto session in
November.
href='http://www.chicagotribune.com/business/chi-0610100136oct10,0,4719452.story?track=rss'>Read
more.
International
name='15'>British Pension Protection Fund Embraces Swaps,
Stocks
Britain’s Pension
Protection Fund (PPF) said on Monday that it will shift some assets to
equities and make use of derivatives such as interest rate swaps, a move
mirroring broader trends in the financial industry, Reuters reported
yesterday. The PPF, set up by the government last year to protect
pension scheme members if a firm goes bust, said it will cease to hold
its entire assets in government bonds. Instead, it will hold 20 percent
of its portfolio in equities, both domestic and foreign, with 7.5
percent in property, 2.5 percent in currencies, 20 percent in cash and
50 in global bonds. Global bonds and equities will be hedged back into
sterling. The investment switch is intended to start by the end of this
year, a PPF spokesman said.
href='http://today.reuters.co.uk/news/articlebusiness.aspx?type=businessNews&storyID=2006-10-09T125155Z_01_L09897553_RTRUKOC_0_UK-FINANCIAL-BRITAIN-PENSION.xml'>Read
more.
Credit Managers Daily Business News
Report
The following articles are
taken from the Daily Summary of Troubled & Fast Growing U.S.
Companies published by Bastien Financial Publications. For more of
the latest business news visit
href='http://dailybusiness.creditmanagers.biz/'>
size='3'>http://dailybusiness.creditmanagers.biz
face='Times New Roman' size='3'>.
ABI Members receive a 50 percent discount when subscribing to the
complete Daily Summary.
Banta Corp., a Menasha,
Wis., provider of printing and supply-chain management services, will
shutter a printing plant in Eden Prairie, Mn. and other facilities in
Connecticut and Utah as part of a consolidation aimed at slashing annual
costs by $35 million. Back in September, Banta announced plans to
shutter five plants and cut 500 jobs. The firm is currently an
acquisition target of Cenveo Inc. of Stamford, Ct.
Bombardier Inc.'s deal to
provide three dozen regional jets for Northwest Airlines in Minnesota
was good news, but it may not be enough as the big Montreal, Quebec
manufacturer of planes and trains still has to come up with more big
orders or possibly be forced to cut production and cut its
payroll.
Children's Internet Inc.,
Pleasanton, Ca., announced that its auditor, Marc Lumer & Co., quit,
after Children's Internet was sued by the Securities and Exchange
Commission for alleged stock fraud.
GlobeTel Communications
Corp., a Fort Lauderdale, Fl.-based telecommunications
company, is being delisted from the American Stock Exchange and will
begin trading on the Pink Sheets beginning Oct. 11.
AMEX claimed GlobeTel allegedly provided materially false and
misleading information to AMEX. GlobeTel said it has authorized an
internal investigation into the issue.
Polymer Group Inc., a
Charlotte, N.C. maker of disposable fabrics for the medical and
industrial markets, asked its CEO, James Schaeffer, to resign, following
an internal audit that revealed certain transactions with a supplier
weren't fully reported to Polymer's chief financial officer.
Reynolds and Reynolds Co., a
maker of computer systems for car dealers, is closing its training
facility in Sparks, Md., affecting nearly eighty employees. Some
sixty jobs will be transferred to its Dayton, Oh.-based headquarters.
Back in July, the company said it wanted to cut 450 jobs as part of a
plan to reduce costs by $50 million by 2009.
Shoe Pavilion Inc., a Sherman
Oaks, Ca. retailer of men's and women's shoes, warned that it will lose
between $100,000 and $300,000 in the third quarter, in contrast to
earnings of $293,000 in the year-earlier period.
Wilsons The Leather Experts
Inc., a Brooklyn Park, Mn. retailer of men's and women's
leather outerwear and accessories, reported that its same-store sales
tumbled 15.5% in September, compared to a 6.6% decline in the
year-earlier month. The company says that it's currently trying to
revamp its stores and product line.