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November 2, 2005
Pensions
name='1'>Automakers
Watch Pension Legislation
Congress is moving
toward
legislation that could put more financial pressure on automakers and
their pension
funds, WJRT-TV reported yesterday. The Detroit News reports the
pension overhaul
legislation would force companies to fully fund their pension systems.
The bill
could have dire consequences for companies with poor debt ratings,
such as GM
and Ford. Congressional leaders say that the bill under consideration
is designed
to discourage companies from relying on the government-backed Pension
Benefit
Guaranty Corporation.
id='2'>Pension
Debate Continues; Aguirre Presses Consultants
In the latest
showdown between
San Diego’s Michael Aguirre and just about everyone else, the
city attorney
argued with consultants, drew outbursts from two council members and
left City
Manager Lamont Ewell smiling wryly as he denied another allegation
leveled against
him. The consultants from the risk management firm Kroll Inc.,
appeared before
the City Council yesterday to report on another delay in their
internal investigation
of the city’s finances. Council members failed to come to an
immediate agreement
to allow Kroll to submit more detailed invoices without compromising
its investigation,
now nearly nine months long. The firm will return later this month to
present
another update.
href='http://www.signonsandiego.com/news/metro/pension/20051102-9999-1m2pensi…'>Read
the full story.
id='3'>Agawam
Credit Counseling Firm to Pay Penalty
An Agawam, Mass.,
credit
counseling company and its two former owners will pay $4.2 million in
penalties
and restitution to resolve allegations that it misled thousands of
Massachusetts
consumers, Attorney General Thomas Reilly announced yesterday. Reilly
said that
the agreement ends his lawsuit, filed last year in Suffolk Superior
Court, which
alleged that former owners John and Richard Puccio violated charities
laws by
using Cambridge Credit Counseling to funnel $60 million to for-profit
companies
that they also owned, according to Associated Press reports. Under the
agreement,
the Puccio brothers will pay $2 million in penalties and restitution,
and are
barred from working with Cambridge Credit. The company will pay $2.2
million
in penalties and restitution. Cambridge Credit also has agreed to be
run by
a majority of board members who must be approved by Reilly’s
office.
href='http://www.boston.com/news/local/massachusetts/articles/2005/11/01/agaw…'>Read
more.
id='4'>Refco
in Legal Tussle with Rogers Funds
Refco Inc. has
denied that
it misdirected and wrongfully seized assets at the center of a lawsuit
by two
funds backed by famed investor Jim Rogers, Reuters reported yesterday.
The two
funds, backed by the best-selling investment author and co-founder of
the Quantum
Fund, sued Refco Inc. last week demanding the immediate return of $362
million
in assets that they said were fraudulently seized. The complaint filed
by the
Rogers Raw Materials Fund LP and the Rogers International Raw
Materials Fund
LP last week said Refco deceitfully diverted $340 million in
government securities
to an unregulated entity, Refco Capital Markets.
href='http://money.cnn.com/2005/11/01/markets/refco_rogers.reut/index.htm'>Read
the full story.
Airlines
id='5'>NWA
and Delta’s Chapter 11 Filings Impacting Albany Int’l
Airport
There are fewer
seats these
days on Northwest and Delta airlines flights out of Albany
International Airport,
the first sign of the impact the two carriers’ chapter 11
filings are having
in the Capital Region, the Albany Times Union reported
yesterday. Northwest
this month discontinued one of its two daily flights to Minneapolis,
while Delta
has actually increased flights but is using planes on some flights
that are
less than half the size of aircraft used previously. As recently as
August,
Northwest had three daily flights to Minneapolis.
href='http://www.airportbusiness.com/article/article.jsp?id=4068&siteSection=3'>
Read more.
id='6'>Delta
Asks Court to Void Pilots Contract
Delta Air Lines
asked a bankruptcy
court judge to allow it to void a contract with its unionized pilots
after talks
with the group failed to secure $325 million in annual concessions the
company
says it needs, the Wall Street Journal reported today. The
Atlanta-based
carrier said it filed a §1113 motion with the U.S. Bankruptcy
Court in
New York, which has been overseeing Delta’s reorganization. In a
memo to pilots,
represented by the Air Line Pilots Association (ALPA), Delta said that
the filing
of a §1113 motion does not preclude continuing negotiations and
that it
still hopes to reach an agreement.
href='http://money.cnn.com/2005/11/02/news/fortune500/delta.reut/index.htm'>Read
more.
id='7'>Court
Rejects Challenge By UAL Flight Attendants To Pension-Plan
Termination
A federal appellate
court
yesterday rejected an appeal from United Airlines flight attendants
who challenged
a ruling that allowed the company to terminate its pension plan, the
Associated
Press reported today. A three-judge panel of the Seventh U.S. Circuit
Court
of Appeals said that it found "no reason" to reverse a
bankruptcy
judge’s approval for United parent UAL Corp. to transfer its
plans to the Pension
Benefit Guaranty Corp (PBGC). The Association of Flight Attendants
argued that
the termination violated its labor contract. United’s five other
unions also
saw their plans turned over to the PBGC as of result of that May
ruling in bankruptcy
court. The transfer of pension obligations to the government is
estimated to
save the airline about $645 million annually.
href='http://online.wsj.com/article/SB113093110053586216-search.html?KEYWORDS…'>Read
the full story.
id='8'>O’Sullivan
CEO Takes Leave
On Oct. 14,
O’Sullivan
and certain of its subsidiaries filed for chapter 11 bankruptcy
protection,
the Manufacturing News reported yesterday. The company’s
board of directors
has named Executive Vice President CFO Rick Walters to serve as
interim CEO
until such time as Parker is able to return to work. Walters joined
O’Sullivan
as CFO in June 2004 from Newell Rubbermaid, where he had served as
group vice
president and CFO of the company’s Sharpie/Calphalon Group since
2001. O’Sullivan
has been in business since 1954. The company designs, manufactures and
distributes
ready-to-assemble furniture and related products. The company employs
approximately
1,300 people, primarily at its production facilities in Lamar, Mo.,
and South
Boston, Va. The company has its headquarters in Roswell, Ga.
id='9'>Forgiven
Loans Looked at in DCHC Bankruptcy
A bankruptcy judge
in the
District is questioning millions of dollars in forgiven corporate
loans to pay
for "highly personal interests" by the parent company of
Greater Southeast
Community Hospital before its financial collapse, the Washington
Times
reported today. Judge S. Martin Teel Jr., in a 65-page ruling issued
Monday,
cited loans from Doctors Community Healthcare Corp. (DCHC) to finance
personal
expenses, including a house, a car, a divorce settlement and a
donation to the
University of the District of Columbia.The ruling comes nearly a year
after
a liquidating trust representing DCHC creditors first filed a lawsuit
in U.S.
Bankruptcy Court against executives at the Arizona-based health care
company.
href='http://washingtontimes.com/metro/20051101-104932-3819r.htm'>Read
more.
id='10'>Sidewalk
Six Member Files for Bankruptcy
A convicted former
East Chicago
parks superintendent filed for bankruptcy late last week, putting on
hold his
court-ordered requirement to pay back the $25 million he helped
swindle from
the federal government, the Northwest Indiana Times reported
today. Jose
Valdez Jr. and his wife, Rosario, filed for bankruptcy in the U.S.
District
Court for the Northern District of Indiana on Oct. 26. Valdez is
scheduled to
report to the Federal Correctional Institution at Oxford, Wis., on
Nov. 15 to
begin serving a 33-month sentence for his role in the Sidewalk Six
scandal.
The officials told residents their sidewalks would be repaired —
with public
funds — if they promised to vote for Mayor Robert Pastrick, them
and their
political allies. All the defendants have been sentenced, but
Kollintzas fled
the country prior to his sentencing hearing. He remains a fugitive. As
part
of their sentences, all six are ordered to collectively repay more
than $25
million.
href='http://www.thetimesonline.com/articles/2005/11/02/news/lake_county/a448…'>Read
more.
id='11'>Bankruptcy
Judge OKs $48m for Foss Payroll
A U.S. Bankruptcy
judge in
New Hampshire yesterday authorized the use of cash assets totaling
roughly $4.8
million to make payroll and keep Foss Manufacturing Company operating
another
three weeks, the New Hampshire Union Leader reported today. The
court
last week removed Foss Manufacturing’s officers and directors
from control
of the Seacoast company with 375 employees. It appointed Patrick J.
O’Malley
of Development Specialists Inc., in Chicago to run Foss Manufacturing
while
it is in bankruptcy. The Hampton manufacturer of non-woven fabrics and
synthetic
fibers sought bankruptcy protection on Sept. 16 after its key lender,
CapitalSource
Finance, accused it of fraud and cut off credit. CapitalSource, the
largest
secured creditor, has a $30 million claim against Foss Manufacturing.
It alleges
in bankruptcy court filings that the company fraudulently overborrowed
millions
to benefit itself and “insiders.”
href='http://www.theunionleader.com/articles_showa.html?article=62592'>Read
more.
id='12'>Entergy
Profit Rises Despite Storm Damage
Utility operator
Entergy
Corp. posted a 24 percent rise in third-quarter earnings yesterday,
despite
extensive damage from hurricanes Katrina and Rita that pushed the
company’s
New Orleans unit into bankruptcy. the Associated Press reported today.
The New
Orleans-based company, which is temporarily headquartered in Clinton,
Miss.,
because of damage from Katrina, said that warmer weather drove higher
electricity
use, while operation and maintenance expenses fell in its regulated
service
areas in Louisiana, Mississippi, Arkansas and Texas. For the quarter
ending
Sept. 30, Entergy earned $350 million, or $1.65 per share, on revenue
of $3.13
billion, compared with year-ago earnings in the third quarter of
$282.2 million,
or $1.22 per share, on revenue of $2.96 billion.
href='http://www.nytimes.com/aponline/business/AP-Earns-Entergy.html'>Read
the full story.
id='13'>Foamex
Program Approval Sought
Foamex
International filed
a motion seeking a U.S. Bankruptcy Court order implementing a key
employee retention
and severance program to "provide employees with an incentive to
remain
with the debtors throughout these chapter 11 cases (and, in some
cases, beyond)
and to offer them a modicum of security in the event their employment
terminates,"
BankruptcyData.com reported today.
id='14'>Metropolitan
Mortgage Disclosure Statement Approved
The U.S. Bankruptcy
Court
approved Metropolitan Mortgage & Securities’ disclosure
statement related
to the company’s third reorganization plan, BankruptcyData.com
reported today.
The documents state that any parties who wish to object to the
confirmation
of the plan must file with the clerk of the court on or before Nov. 28
and ballots
for accepting or rejecting the plan must be returned by Nov. 18. The
documents
set a confirmation hearing date as Dec. 13.
id='15'>Texfi
Final Fee Application Filed
Texfi
Industries’ chapter
11 trustee’s special avoidance claims counsel Silverman
Perlstein & Acampora
filed with the U.S. Bankruptcy Court a third and final application for
allowance
of compensation and reimbursement of expenses, BankruptcyData.com
reported today.
For the period from Oct. 1, 2003 through Oct. 28, 2005, the firm
reported fees
of $123,742.42 and expenses of $6,056.42.