MAXjet Airways Grounds All
Flights, Files for Bankruptcy
MAXjet Airways Inc., a
two-year-old, all-business class airline based in Dulles, Va., serving
trans-Atlantic routes, ceased operations Monday and filed for bankruptcy
court protection in the face of high fuel prices, fierce competition and
a failure to raise new capital,
size='3'>The Wall Street Journal reported
yesterday. The carrier said it was working to reaccommodate customers
whose flights were grounded over the
w:st='on'>
size='3'>Chris
MAXjet, which as recently as October announced that it was planning to
boost the numbers of daily flights on its three routes and had secured
its fifth Boeing Co. 767-200 aircraft, said it was forced to take 'this
drastic measure' because of soaring fuel prices and the deteriorating
credit market, CEO William Stockbridge said.
Chrysler CEO Reassures
Auto-Maker’s Financial Health
Chrysler LLC Chief
Executive Robert Nardelli said the auto maker is meeting or exceeding
its financial targets heading into 2008 and has ample liquidity,
The Wall Street
Journal reported today. “We are fully
funded with working capital to meet our present and future needs and
objectives,” he said in a statement late Friday following a
Wall Street Journal
article reporting that Chrysler was enduring a financial
crunch. At a meeting earlier this month with engineers, Nardelli had
indicated that the company is on track to lose $1.6 billion this year,
and is moving 'aggressively' to sell assets to raise cash.
“Someone asked me, ‘Are we bankrupt?,’” Nardelli
said at the meeting. “Technically, no. Operationally, yes. The
only thing that keeps us from going into bankruptcy is the $10 billion
investors entrusted us with.” In the statement Friday, Nardelli
said that “several recent media reports have painted an inaccurate
picture of Chrysler LLC’s current financial position” and
that Chrysler and its parent, Cerberus Capital Management LP,
“felt it imperative to correct the record.”
href='http://online.wsj.com/article/SB119828205923146051-email.html'>Read
more.
Movie Gallery Files
Reorganization Plan to Exit Bankruptcy
Movie Gallery Inc. has
filed a reorganization plan and hopes to complete the process by
mid-2008, the
size='3'>Birmingham
size='3'>(
face='Times New Roman' size='3'>Ala.
size='3'>) Business Journal reported Monday.
The Dothan, Ala.-based movie rental company has a Jan. 29 hearing with
the U.S. Bankruptcy Court for the Eastern District of Virginia in
Richmond to consider approval of the plan, which would convert the
company’s $325 million 11 percent senior notes and other general
unsecured claims into new equity of the reorganized Movie Gallery,
convert about $72 million of the company’s $175 million second
lien debt into equity and cancel existing shares of the company’s
common stock. Movie Gallery said that it expects to ask the bankruptcy
court to confirm the plan early in the second quarter of 2008 and hopes
to emerge from bankruptcy shortly thereafter. Once the second-largest
movie rental company in the
w:st='on'>
size='3'>U.S.
the company filed for bankruptcy in October after two years of losses
and an accumulation of $1 billion in debt after purchasing Hollywood
Video in 2005.
National Century Lawsuit
Moves Closer to Trial
A lawsuit accusing Credit
Suisse of aiding fraud at bankrupt healthcare finance company National
Century Financial Enterprises moved another step closer to trial after a
U.S. judge said it was too soon to dismiss the suit as requested by the
Swiss investment bank, Reuters reported on Sunday. In the U.S. District
Court for the Southern District of Ohio, Eastern Division, Judge James
Graham said on Dec. 19 it is too soon to dismiss the charges of
debtholders, who have accused Credit Suisse of underwriting securities
issued by National Century, which the bank knew was committing fraud.
Credit Suisse argued it held a large number of National Century notes,
and would therefore be foolish to knowingly help the company commit
fraud. The debtholders, who include MetLife Inc. and the state of
Arizona, said Credit Suisse continued selling National Century notes
after learning of fraud at the company because that was the best way for
the bank to reduce its exposure. National Century filed for bankruptcy
in 2002 after an auditor refused to sign its financial statements and
lenders stopped advancing funds. The Dublin, Ohio-based company was a
multibillion dollar business that bought patients’ bills from
health care providers and packaged them into bonds for
investors.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/12/23/AR2007122301709.html'>Read
more.
Surety Bank's Parent
Corporation Declares Bankruptcy
The parent corporation of
Surety Bank of
size='3'>Fort Worth
w:st='on'>
size='3'>Texas
bankruptcy protection, although it cites several million dollars more in
assets than liabilities, the (
w:st='on'>
size='3'>Fort Worth
Star-Telegram reported yesterday. Jerome
“Jerry” Weiner, chairman and chief executive of Surety
Capital Corp. since Oct. 1, described the chapter 11 move as a means to
overcome possible shareholder opposition to a desired sale of the
holding company. 'We are in a unique situation,' Weiner said. 'Nobody is
forcing us into bankruptcy. We are taking such action to address certain
regulatory issues and realize the maximum value of our asset. The
bankruptcy filing will allow us to conduct the sale in a transparent,
court-approved manner.' An unidentified Texas bank has offered to
acquire the bank for $3 million more than its $5.5 million to $6 million
book value, Weiner said. The bankruptcy filing disclosed assets of $9
million and liabilities of $6.6 million.
href='http://www.star-telegram.com/business/story/377287.html'>Read
more.
Analysis: Unpaid Credit
Cards Bedevil Americans
Americans are falling behind on
their credit card payments at an alarming rate, sending delinquencies
and defaults surging by double-digit percentages in the last year and
prompting warnings of worse to come, the Associated Press reported on
Sunday. An Associated Press analysis of financial data from the
country's largest card issuers also found that the greatest rise was
among accounts more than 90 days in arrears. Experts say these signs of
the deterioration of finances of many households are partly a byproduct
of the subprime mortgage crisis and could spell more trouble ahead for
an already sputtering economy. The value of credit card accounts at
least 30 days late jumped 26 percent to $17.3 billion in October from a
year earlier at 17 large credit card trusts examined by the AP. That
represented more than 4 percent of the total outstanding principal
balances owed to the trusts on credit cards that were issued by banks
such as Bank of America and Capital One and for retailers like Home
Depot and Wal-Mart. At the same time, defaults rose 18 percent to almost
$961 million in October, and serious delinquencies also are up sharply:
Some of the nation's biggest lenders, including Advanta, GE Money Bank
and HSBC, reported increases of 50 percent or more in the value of
accounts that were at least 90 days delinquent when compared with the
same period a year ago.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/12/23/AR2007122300923.html?sub=AR'>Read
more.
Rebates for Customers of
InPhonic Once Again in Peril
InPhonic, a reseller of
wireless services based in
w:st='on'>
size='3'>Washington
w:st='on'>
size='3'>D.C.
leaving some of its customers out in the cold for a second time,
the Washington
Post reported today. The company's sale to
a
size='3'>private-equity firm and its bankruptcy filing mean that it is
less likely to repay hundreds of customers under a settlement with the
D.C. attorney general’s office over allegations of deceptive
rebate practices. The sale and bankruptcy filing also call into question
the fate of a class-action lawsuit against the company over the same
rebate practices. The lawsuit is pending in U.S. District Court in
the
Columbia
company has decided to use the bankruptcy laws to avoid paying back the
consumers it scammed,” said Harvey Rosenfield, a lawyer with the
Foundation for Taxpayer and Consumer Rights in
w:st='on'>
Angeles and who is involved
in the class-action lawsuit. The company's troubles began last year,
when at least four class-action lawsuits were filed in three states
against the company over its rebate practices.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/12/25/AR2007122501073.html'>Read
more.
Diocese Makes Cuts, Asks for
Donations to Pay for Sexual Abuse Settlement
A $198 million settlement
in 2007 ended years of litigation against the Catholic Diocese of San
Diego, but the church continues to feel the effects of the sexual abuse
scandal and is asking for financial help, according to the
size='3'>North
w:st='on'>
size='3'>County
w:st='on'>
size='3'>Calif.
Times yesterday. The settlement's financial
costs have begun to affect church projects, among them a plan to build a
new Catholic high school in northern
w:st='on'>
size='3'>San Diego
face='Times New Roman'
size='3'>County; the
land is slated to be sold, with the proceeds going to help pay the
settlement, a diocese official said. The diocese filed for bankruptcy on
Feb. 27, 2007, the eve of the first sexual abuse trial in
size='3'>San Diego
diocese and 144 abuse victims reached a settlement agreement in
September, and the bankruptcy case was dismissed.
href='http://www.nctimes.com/articles/2007/12/26/news/top_stories/1_03_4012_25_07.txt'>Read
more.
SiriCOMM Files for
Bankruptcy
SiriCOMM has filed for
chapter 11 bankruptcy, and a board member says the company’s
future is in question, the
face='Times New Roman' size='3'>Joplin
size='3'>(
face='Times New Roman' size='3'>Mo.
size='3'>) Globe reported Monday. According to
documents filed in U.S. District Court for the Western District of
Missouri, SiriCOMM’s board members signed the paperwork agreeing
to file for bankruptcy on Dec. 10, and they had 30 days to act on it.
SiriCOMM officials are reportedly looking at all possible options for
keeping the company open. Read more.
href='http://www.joplinglobe.com/local/local_story_358195443.html'>
face='Times New Roman' color='#0000ff'
size='3'>http://www.joplinglobe.com/local/local_story_358195443.html
Rosetta Comments on Calpine
Bankruptcy
Oil-and-gas company
Rosetta Resources Inc. responded on Friday to Calpine's reorganization
plan, which was confirmed by the Bankruptcy Court in
w:st='on'>
York on Dec. 19, according
to a PrimeNewswire report. Although Rosetta generally supported
Calpine's reorganization plan, it objected to the release of Calpine's
claims against, among others, members of Calpine's current and previous
boards of directors on the ground that the proposed releases could not
be justified in light of Calpine’s allegations regarding these
persons' conduct and role in its lawsuit against Rosetta. Randy
Limbacher, President and CEO of Rosetta stated, 'We will continue to
fully protect the interests of Rosetta and its shareholders by
vigorously defending against what Rosetta truly believes are frivolous
claims by Calpine arising out of a transaction that Calpine's board with
the help of its professional advisers, structured, priced and otherwise
thoroughly vetted and reviewed.'
w:st='on'>New
Jersey
face='Times New Roman'
size='3'>Hospital
face='Times New Roman' size='3'>to Auction off
Assets
Attorneys for
size='3'>Pascack
face='Times New Roman' size='3'>Valley
size='3'>Hospital
size='3'>Westwood
w:st='on'>
size='3'>N.J.
beds, buildings, equipment and other property in bankruptcy court on
Feb. 4 in
face='Times New Roman'
size='3'>Newark
to The Record
(NorthJersey.com) yesterday. The 48-year-old,
280-bed community hospital was $100 million in debt when it closed Nov.
21 and put 1,000 employees out of work. Hospital bondholders and a
committee of unsecured creditors will review all the bids, and hospital
attorneys will invite qualified bidders to participate in the auction.
Qualified bidders have until Jan. 28 to submit their bids on the
hospital. Officials from Westwood and neighboring municipalities, whose
residents depended on
w:st='on'>
size='3'>Pascack
face='Times New Roman'
size='3'>Valley
medical care, are concerned that some bidders might put the property to
other use, as residents in that area now have to travel up to 30 minutes
to reach the nearest hospitals.
Creditors Approve NYRA's
Reorganization Plan
The New York Racing
Association (NYRA) said over the weekend that its creditors approved a
plan for emerging from bankruptcy, putting the nonprofit agency one step
closer to becoming solvent, The
(
size='3'>N.Y.
Review reported Monday. According to NYRA
officials, about 97 percent of NYRA's private creditors approved the
plan, submitted to the U.S. Bankruptcy Court for the Southern District
of New York. The plan was OK'd ahead of a Dec. 27 hearing in which a
federal judge is expected to review NYRA's reorganization plan and could
possibly remove NYRA from chapter 11 bankruptcy protection. That plan is
founded on the September agreement between Gov. Eliot Spitzer and NYRA
officials that enables the racing association to retain control
of
size='3'>'s horse racing franchise for 30 years. The plan waives NYRA's
debt to the state, which totals at least $100 million, and the state
would give NYRA $75 million to help pay off creditors. Senate
Republicans have resisted Spitzer's plan, offering their own proposal
that includes more oversight of NYRA and plans to install more video
lottery terminals. NYRA's current franchise expires Dec.
31.
Pacific Lumber Exclusivity
Terminated
The U.S. Bankruptcy Court
issued an order terminating the exclusive period during which Pacific
Lumber Company can file a reorganization plan and solicit acceptances
thereof, BankruptcyData.com reported today. Company bondholders had
sought the termination order. Competing plans must be filed with the
court by Jan. 31, 2008. At the hearing, U.S. Bankruptcy Court Judge
Richard S. Schmidt proclaimed, “one way or another, this case is
going to be resolved around the first of April.”
face='Times New Roman'>
size='3'>
International
Intesa Sanpaolo to Pay
$600 Million in Parmalat Case
Intesa Sanpaolo SpA and two of
the Italian bank's former units agreed to pay a total of €420
million, or about $600 million, to settle lawsuits brought by Parmalat
SpA, in the biggest settlement yet over the Italian dairy company's
bankruptcy four years ago, The Wall Street Journal reported Monday.
Parmalat collapsed in 2003 under about €14 billion of debt
following an accounting scandal. After a relisting in 2005, the new
Parmalat, headed by Chief Executive Enrico Bondi, is working to recoup
billions of euros from banks. The settlement, announced Saturday, brings
Parmalat's recoveries to about €1.2 billion. Intesa Sanpaolo is
the first big Italian lender to settle all claims. In addition to Intesa
Sanpaolo, the settlement includes Cariparma and Biverbanca, which used
to be part of the Intesa Group.