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January 23, 2008
name='1'>Economic Stimulus Legislation Will Start in the House of
Representatives
Congressional leaders
agreed yesterday that the House would take the lead on legislation
intended to stabilize the economy, giving the House Speaker Nancy Pelosi
(D-Calif.) and Minority Leader Representative John A. Boehner (R-Ohio)
primary responsibility for reaching an agreement with the White House,
the New York
Times reported today. Senate leaders said it
made more sense strategically for the House to act first so that
Congress could produce an economic package by mid-February. Though
producing a bill by Feb. 15 would be a virtual sprint for Congress,
senior lawmakers who have been in regular talks with the administration
said Congress had no choice but to move quickly given the market
turmoil. Few details of the stimulus plan have been settled, according
to both lawmakers and senior staff members. Lawmakers say one sticking
point will be a Democratic effort to ensure that Americans who do not
earn enough to pay income taxes will be eligible for any rebate from the
href='http://www.nytimes.com/2008/01/23/business/23cong.html?ref=business&pagewanted=print'>Read
href='http://www.nytimes.com/2008/01/23/business/23cong.html?ref=business&pagewanted=print'>
name='2'>Commentary: Fed Rate Cuts Alone Not Enough to Fix
Economy
Rate cuts by the Federal
Reserve alone are unlikely to provide a powerful enough fix to the
overall
face='Times New Roman'
size='3'>U.S.
size='3'>economy, especially given the severe problems in the housing
market, according to a
size='3'>New York Times editorial today. Rate
cuts cannot forestall foreclosures, turn bad loans into good ones or
undo the worse effects of the housing bust on consumer spending. At
best, rate cuts may buy some time for the economy to stabilize without
being derailed along the way by damaging market panics. The White House
and lawmakers are right that the economy needs a broader stimulus
package. President Bush’s $145 billion proposal is ample, but
too heavily skewed toward tax rebates that would provide no relief for
tens of millions of lower-income Americans.
href='http://www.nytimes.com/2008/01/23/opinion/23wed1.html?ref=opinion&pagewanted=print'>Read
more.
Panel to Hold Hearing on Mortgage Foreclosure Crisis
The House Judiciary
Subcommittee on Commercial and Administrative Law said that it will hold
a hearing titled “Growing Mortgage Foreclosure Crisis: Identifying
Solutions and Dispelling Myths” on Jan. 29. The hearing will take
place at 1 p.m. ET in 2141 Rayburn House Office Building. Witnesses to
be announced.
face='Times New Roman' size='3'>
name='4'>Delphi
size='3'> Told to Reduce Executive
Bonuses
Bankruptcy Judge
Robert Drain
size='3'>said that he would approve Delphi Corp.’s reorganization
plan once it drastically reduces the total payout of cash bonuses to top
executives, the Associated Press reported yesterday. Judge Drain
told
size='3'>Delphi to slash executive
cash bonuses to a total of $16.5 million from a proposed $87.9 million,
which the company had intended to distribute to more than 500 managers
upon emergence.
w:st='on'>
size='3'>Delphi hopes to emerge from
court protection before the end of March but must first secure exit
financing in a tough credit market. An executive said it expected to get
a commitment for $4.5 billion in financing by Jan. 23.
href='http://biz.yahoo.com/ap/080122/delphi_bankruptcy.html?.v=2'>Read
more.
New
Congoleum Plan Would Pass Liability to Trust
The future claimants'
representative in Congoleum Corp.'s chapter 11 proceedings has filed an
amended restructuring plan that would allow the flooring company to
emerge from bankruptcy without liability for existing or future asbestos
claims, Bankruptcy
Law360 reported yesterday. Congoleum's plan
calls for the creation of a trust to shoulder the liability for
Congoleum's current and future asbestos claims. The trust would get 50.1
percent of new stock in the reorganized Congoleum and the proceeds of
various settlements between Congoleum and a number of insurance
carriers. It would be assigned Congoleum's rights under its remaining
policies covering asbestos product liability, according to Congoleum.
The amended plan calls for Class A and Class B common shares to be
canceled when the plan takes effect, meaning that shareholders,
including current controlling shareholder American Biltrite, would
receive nothing. A hearing on the disclosure statement is slated for
Feb. 14.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=44826'>Read
more. (Registration required.)
Approves Musicland Liquidation Plan
Bankruptcy Judge
Stuart M. Bernstein
on Thursday approved the liquidation plan of bankrupt
music retailer Musicland Holdings Inc., allowing it to exit chapter 11
protection after a sale of its assets,
size='3'>Bankruptcy Law360 reported yesterday.
Wachovia Bank objected to the confirmation because of a long-standing
dispute over the bank's attempt to get more than $25 million in claims
to pay for a lawsuit brought against the bank by several entertainment
giants. Eight secured trade creditors, which include Buena Vista
Home Entertainment
Inc. and Paramount Pictures Corp., claimed Wachovia participated in
“subterfuge” to disguise a last-minute $25 million loan as
part of a revolving credit facility secured by a senior claim on all of
Musicland’s assets at the creditors' expense. The district court
suit was withdrawn, but the vendors subsequently brought an adversary
complaint in the bankruptcy case. A bankruptcy judge dismissed the
adversary case in August, but the vendors filed a notice of appeal at
the end of that month.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=44744'>Read
more. (Registration required.)
name='7'>Medical Technology Company Files for
Bankruptcy
Diomed Holdings Inc. said
Tuesday that rival Total Vein Solutions filed for chapter 11 protection
just before a hearing in a long-running patent dispute between the two
firms, Bankruptcy
Law360 reported yesterday. Diomed has charged
Total Vein Solutions with infringing on its patent related to an
endovascular laser treatment for varicose veins. A judge had been
expected to rule Jan. 17 on Diomed's request for an injunction against
TVS that aims to block the TVS' ability to sell certain products. Diomed
first launched the patent suit in 2004 in the U.S. District Court for
the District of Massachusetts.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=44744'>Read
more. (Registration required.)
name='8'>Bank of
w:st='on'>
size='3'>America
size='3'>Reports Mortgage-Related Losses
Bank of America became
the latest financial institution to offer results that showed the depth
of the problems in the credit and mortgage markets as it said that net
income in the fourth quarter tumbled 95 percent, to $268 million from
$5.26 billion a year earlier, the New York Times reported
today. Like other banks, a huge write-down for bad bets in
mortgage-related securities cut deep into earnings. Bank of America,
based in
face='Times New Roman' size='3'>Charlotte
size='3'>,
size='3'>N.C.
$5.28 billion in collateralized debt obligations (CDOs), in the quarter.
The bank still holds about $8 billion in CDOs. Bank of America’s
results also reflected another troublesome front: problems with consumer
credit. The bank doubled its provisions for loan losses to $3.31 billion
from $1.57 billion a year earlier. The percentage of net charge-offs, or
loans that the bank does not expect to collect, rose to 0.91 percent
from 0.80 percent in the third quarter of 2007.
href='http://www.nytimes.com/2008/01/23/business/23bank.html?ref=business&pagewanted=print'>Read
more.
International
name='9'>Norwegian Airline Declares Bankruptcy
The small Norwegian
airline Coast Air declared bankruptcy and immediately canceled all
flights yesterday, saying it had been stunned by unexpected and
unsustainable fourth-quarter losses, the Associated Press reported.
Coast Air was
w:st='on'>
size='3'>Norway
fourth-largest airline, after SAS Norway, Norwegian Air Shuttle and
Wideroe. It had eight routes in
w:st='on'>
size='3'>Norway
international connections, to
face='Times New Roman' size='3'>Copenhagen
size='3'>,
size='3'>Denmark, and
size='3'>Gdansk,
size='3'>Poland
Trygve Seglem, a major Coast Air shareholder, said that the cost of
operating the aircraft had increased dramatically, and that the airline
had failed to reach a revised agreement with pilots that would have cut
costs and increased crew flexibility.
href='http://www.chron.com/disp/story.mpl/ap/fn/5477498.html'>Read
more.
href='http://www.chron.com/disp/story.mpl/ap/fn/5477498.html'>