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June 11, 2007
Autos
name='1'>Tower Auto Chapter 11 Plan Vote Approved
Tower Automotive Inc. won
approval from the bankruptcy court to send its chapter 11 reorganization
plan, which is built around the company's sale to Cerberus Capital
Management, for a creditor vote, the Associated Press reported on
Friday. Judge Allan L.
Gropper of the U.S. Bankruptcy Court in
size='3'>Manhattan
July 11 hearing to consider approval of the plan, which would move Tower
toward an exit from bankruptcy under the ownership of Cerberus. Tower's
creditors, including unsecured creditors slated to recover virtually
nothing under the plan, have until July 6 to vote on the reorganization
plan. The plan will be funded by New York-based Cerberus' $1 billion
purchase of Tower's assets. The deal, however, is subject to higher
offers at a June 25 chapter 11 auction. Tower plans to use the sale
proceeds to pay off its secured debt, including a $154.2 million owed to
second-lien lenders, according to court papers.
href='http://www.forbes.com/feeds/ap/2007/06/06/ap3795021.html'>Read
more.
Clears Icahn's Bid for Auto Parts Supplier Lear
EU regulators today cleared a
group affiliated with billionaire investor Carl Icahn to take over auto
parts supplier Lear Corp. for $2.8 billion, the Associated Press
reported. The European Commission approved the deal automatically after
identifying no antitrust problems and receiving no complaints from
rivals within a deadline of 25 working days. Under terms of the takeover
on Feb. 9, Icahn's American Real Estate Partners LP is paying $36 a
share and assuming about $2.5 billion (1.92 billion euros) in debt.
Icahn already was Lear's largest shareholder, owning nearly 16 percent
of the company.
href='http://www.woodtv.com/global/story.asp?s=6638962'>Read
more.
All
American Semiconductor Wins Right to Reject Severance
Contracts
All American
Semiconductor Inc. has won bankruptcy court approval to reject some
agreements it entered into with former employees after arguing that the
contracts were detrimental to the company and its estates,
Bankruptcy Law360
reported on Friday. In its May 25 motion to reject the
agreements, All American urged the court to approve its bid to toss the
deals because the company was in dire financial straits. All American
said it had experienced a significant reduction of its workforce since
February. As officers and employees left, All American entered into
“a number of employee severance, separation and deferred
compensation agreements,” which it now finds are hampering its
reorganization plans, the motion said.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=26398'>Read
more. (Registration required.)
name='4'>Bankrupt Lender Sees Dueling Class Certification
Bids
A group of class
claimants and plaintiffs have filed competing bids seeking class
certification from a bankruptcy court arguing that bankrupt subprime
lender People's Choice Home Loan Inc. violated
w:st='on'>
size='3'>California
laws, Bankruptcy
Law360 reported on Friday. The groups claim
that People's Choice violated
w:st='on'>
size='3'>California
when it laid workers off without adequate warning in March and denied
final payment of wages and reimbursement of expenses owed at the time of
the layoff. A hearing has been scheduled for June 26 on the
matter.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=26378'>Read
more. (Registration required.)
name='5'>Commentary: Investors Looking to Legal Arbitrage for
Returns
At a time when a
historically low default rate is making distressed investments ever more
scarce, some investors are increasingly inclined to dabble in pending
litigation against companies in distress or default, a tactic known as
legal arbitrage, the
size='3'>Wall Street Journal reported today.
While such investors are accustomed to navigating their way through
complex restructurings and bankruptcy court proceedings, these
distressed-debt specialists are looking for new ways to squeeze as much
as they can out of a market parched by a default rate for U.S.
speculative-grade debt that was just 1.5 percent in May, according to
Moody's Investors Service. One outgrowth has been a burgeoning market
for company debt that carries with it rights to potential litigation
claims in restructurings, experts say.
href='http://online.wsj.com/article/SB118152537996030770-search.html?KEYWORDS=bankruptcy&COLLECTION=wsjie/6month'>Read
more. (Registration required.)
name='6'>Greystone to Lead Bids for Joan Fabrics
A bankruptcy judge said
Joan Fabrics Corp. could sell its business to buyout firm Greystone
Private Equity LLC, subject to higher bids at a court-ordered auction,
the Associated Press reported on Friday.
size='3'>Judge
size='3'>Christopher S. Sontchi of the U.S.
Bankruptcy Court in
w:st='on'>
size='3'>Wilmington
w:st='on'>
size='3'>Del.
approved the bid rules for the auction of the company, which makes
fabric for upholstered furniture. Greystone Private Equity has agreed to
acquire the Tyngsborough,
w:st='on'>
size='3'>Mass.
assets for $11.1 million. That bid can be raised to $13.5 million if
Greystone opts to purchase some company-owned real estate in
size='3'>North Carolina
The auction rules call for rival bids to start at about $11.5 million --
enough to cover Greystone's bid, a $276,000 breakup fee plus
$100,000.
href='http://biz.yahoo.com/ap/070608/joan_fabrics_bankruptcy.html?.v=1'>Read
more.
name='7'>Commentary: New Labor Strikes Deals with Private
Equity
As burgeoning private
equity funds bought U.S. companies last year worth more than half a
trillion dollars -- a tenfold increase in only three years -- unions are
shoring up their bargaining power to try to negotiate worker-friendly
financial deals with this new breed of buyers, the
face='Times New Roman' size='3'>Washington Post
size='3'>reported yesterday. The strongest unions have traded
concessions for a share of eventual profits and for limits on how much
money investors can take out of a business. Others have formed alliances
with investors who honored labor commitments, becoming finders for
potentially lucrative deals elsewhere. The Steelworkers are labor's most
seasoned financial dealmakers, going back to the 1980s and 1990s, when
the industry shed more than 400,000
w:st='on'>
size='3'>U.S.
size='3'>jobs. Now private equity funds are swinging multibillion-dollar
deals in coal, textiles, food processing, hotels, real estate -- every
sector of the economy. Pooling money from the super-rich and financial
institutions, the funds buy companies on the cheap and mortgage them
heavily, aiming to restructure and sell them in three to five years at
profits that far exceed those in the stock market. Because wages and
benefits are the biggest costs in most companies, the strategy puts
maximum pressure on workers.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/06/09/AR2007060901413_pf.html'>Read
more.
name='8'>Private Loans Deepen a Crisis in Student
Debt
Though the Department of
Education proposed regulations this month to crack down on payments by
lenders to universities and their officials, they do nothing to address
unregulated private loans, the
size='3'>New York Times reported yesterday. As
college tuition has soared past the stagnant limits on federal aid,
private loans have become the fastest-growing sector of the student
finance market, more than tripling over five years to $17.3 billion in
the 2005-06 school year, according to the College Board. Unlike federal
loans, whose interest rates are capped by law — now at 6.8 percent
— these loans carry variable rates that can reach 20 percent, like
credit cards. New York Attorney General Andrew Cuomo and Congress are
now investigating how lenders set those rates. While federal loans come
with safeguards against students’ overextending themselves,
private loans have no such limits. Students are piling up debts as high
as $100,000.
href='http://www.nytimes.com/2007/06/10/us/10loans.html?pagewanted=print'>Read
more.
name='9'>TROUBLED COMPANIES IN THE NEWS
1000’s of companies lose
money or experience some form of difficulty each
quarter.
The business news
articles below are taken from the
size='3'>Daily Summary of Troubled & Fast Growing U.S. Companies and
Other Business News published by Bastien
Financial Publications.
To begin receiving the COMPLETE
Daily e-Summary, that emails you information on over 70 such companies
each morning, email
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size='3'>your name, company name, address, phone and fax.
We’ll set you up within 24 hours.
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size='3'>Ahold NV, the giant Dutch retailer,
reported its first quarter net declined slightly–to $320
million. The firm, which has been adversely affected by the
restructuring of its
w:st='on'>
size='3'>U.S.
size='3'>operations, from which it generates most of its revenue, has
also been hurt by the weak dollar. Ahold has been under pressure
from a number of sides as it seeks to sell its U.S. Foodservice catering
supply operations while also planning to exit a Portuguese joint venture
and sell certain other operations.
size='3'>Aldila Inc., a
w:st='on'>
size='3'>Poway
graphite golf club shafts, reported its first quarter net declined
38%–to $2.7 million on a slight revenue decline to $21
million.
size='3'>Amerco Co., whose principal operation
is the truck rental firm U-Haul which is also a leading operator of
self-storage facilities, reported a fourth quarter net loss of $15.7
million on a slight revenue decline–to $445 million. For the
year the company’s net declined 25%–to nearly $91 million on
a 30% revenue decline–to $1.5 billion. The fiscal earnings
decline included nearly $7 million in expenses for the extinguishment of
debt.
size='3'>Kellwood Company, a
w:st='on'>
size='3'>Chesterfield
size='3'>Mo.
maker, reported its first quarter net declined 20%–to $7.3
million. Sales slipped 2%–to $484 million.
size='3'>Lakeland Industries Inc., the
size='3'>Ronkonkoma
w:st='on'>
size='3'>N.Y.
protective clothing, reported its first quarter net declined
64%–to $532,000. Sales fell 6%–to $25.6
million.
size='3'>National Semiconductor Corp.,
a
size='3'>Santa Clara, Ca.
firm which provides analog and digital chips for communication,
networking, automotive and aerospace applications, reported its fourth
quarter net income declined 24%–to $90 million. Revenue
declined 20%–to $456 million. For the year the company
reported its net declined 16%–to $375 million on a revenue decline
of 11%–to $1.9 billion.
Virco Mfg. Corp., a
w:st='on'>Torrance
educational and commercial furniture, reported a first quarter net loss
of $2.9 million, an improvement over the $3.3 million loss reported for
the same period one year earlier. Sales declined 10%–to $31
million.
href='http://www.nytimes.com/2007/06/10/us/10loans.html?pagewanted=print'>
href='http://business.guardian.co.uk/story/0,,2098101,00.html'>