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October 11, 2006
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id='1'>Iowa
size='3'> Diocese Files for Bankruptcy
The
w:st='on'>
size='3'>Davenport
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size='3'>Iowa
Catholic Church filed for chapter 11 bankruptcy Tuesday,
size='3'>the
face='Times New Roman' size='3'>Des Moines
Register reported today. The
decision by church officials in
face='Times New Roman' size='3'>Davenport
size='3'>to put the financial fate of the southeast
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size='3'>Iowa
the hands of a federal bankruptcy judge comes a month after the
Davenport Diocese was ordered to pay $1.5 million to an abuse victim.
The Davenport Diocese is the fourth diocese to file for bankruptcy since
the Catholic Church's sex-abuse scandal exploded into the spotlight
several years ago. Dioceses in
face='Times New Roman' size='3'>Portland
size='3'>,
size='3'>Ore.
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size='3'>Spokane
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size='3'>Wash.
w:st='on'>
size='3'>Tucson
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size='3'>Ariz.
bankruptcy court in 2004. The bankruptcy filing will put the assets of
the Davenport Diocese into play to satisfy all claims and judgments,
said ABI executive director
size='3'>Samuel Gerdano.
href='http://desmoinesregister.com/apps/pbcs.dll/article?AID=/20061011/NEWS/610110370/1045/LIFE05'>Read
more.
ARMs
Likely to Lead to
Bankruptcy Spike, Experts Warn
Despite the sharp decline
in bankruptcy filings witnessed since the implementation of the new
bankruptcy law, many experts say it may be only a matter of time before
filing rates increase due to massive adjustable-rate-mortgage
(ARM) debt many took on during the housing boom, the
Orlando Sentinel
reported today. Homeowners, especially those who have
interest-only or so-called 'teaser-rate' mortgages, could see their
monthly payments more than double. 'Some just won't be able to make the
new monthly payments,' said
size='3'>Jules Cohen, a bankruptcy lawyer and
partner in Akerman Senterfitt, an
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size='3'>Orlando
'They'll get two or three months behind, and then you'll see a lot of
them file chapter 13 bankruptcy in hopes they can set up a debt-payment
plan and prevent foreclosure.' Interest rates will rise on about $300
billion in adjustable-rate mortgages this year alone, according to First
American Real Estate Solutions, a research group. That figure is
projected to skyrocket to more than $1 trillion in each of the next two
years.
href='http://www.orlandosentinel.com/orl-mbankruptcy1106oct11,0,1069152.story?coll=orl-home-headlines'>Read
more.
size='3'>Autos
id='3'>Trustee Blasts Dana Bid
to Protect Incentive Plans
Three weeks after Dana
Corp. asked a bankruptcy court to reconsider a ruling that denied
proposed incentive packages for the company’s executives, the U.S.
Trustee overseeing the case is lashing out at the auto parts
maker’s motion, arguing that the move is “procedurally and
substantively defective,”
size='3'>Portfolio Media reported
yesterday. Last month, Dana asked
Judge Burton R.
Lifland of the U.S. Bankruptcy Court for the
Southern District of New York to reconsider the plan, which would cost
the company almost $10 million in bonuses designed to retain key
executives through the restructuring process. But in an objection filed
Friday, Diana G.
Adams, the U.S. Trustee overseeing the
bankruptcy, said Dana’s motion should be denied because it seeks
advisory opinions from the court rather than reconsideration, she
argued. Adams accused Dana of unfairly seeking guidance as to how to
frame a proposal that the court will approve after Judge Lifland denied
the plan at a hearing last month, ruling that it violated §503 of
the Bankruptcy Code.
id='4'>GM,
size='3'>Delphi
that May Avert Strike
Delphi Corp., the
bankrupt auto-parts company, is near an agreement with General Motors
Corp. and other creditors to avoid a strike that would cripple
production at the world's largest automaker, Bloomberg News reported
today. The accord calls for GM to subsidize Delphi workers' pay and to
prolong contracts for parts purchases, locking in future revenue for
Troy, Mich.-based
help from GM,
size='3'>Delphi
biggest creditor, may allow the parts producer to scale back wage-cut
demands and ward off a United Auto Workers strike. GM Chief Executive
Officer Rick Wagoner said last week that resolving the
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size='3'>Delphi matter without a long
walkout was one of the biggest challenges facing the automaker.
href='http://www.bloomberg.com/apps/news?pid=20601103&sid=avyL04MDPLdk'>Read
more.
id='5'>Meridian Pushes Back
Disclosure Statement Hearing
Meridian Automotive
Systems Inc. has delayed a bankruptcy court hearing after its unsecured
creditors took issue with its most recent disclosure statement,
Portfolio Media
reported yesterday. The hearing was to have taken place
Tuesday, but the auto parts maker worked to push it off once the
official committee of unsecured creditors filed an objection on Oct. 3.
No make-up date has been announced.
face='Times New Roman' size='3'>Meridian
size='3'>has said it wants a consensual reorganization, but the
creditors’ committee alleged that
w:st='on'>
size='3'>Meridian
new reorganization plan would leave them with little hope of recovery,
and that senior debtholders would gain at their expense.
size='3'>Meridian
previous amended plan had the support of the official committee of
unsecured creditors, and was approaching confirmation earlier this year.
The company had to scrap the previous plan, however, following a sharp
decline in production at
w:st='on'>
size='3'>U.S.
size='3'>vehicle manufacturers.
id='6'>Bankrupt Texas Copper Plant
Illegally Burned Hazardous Waste, According to EPA
Bankrupt copper giant
Asarco, and its
size='3'>Corpus Christi
size='3'>subsidiary, Encycle, are facing billions of dollars in
pollution claims across the nation and accused of pretending for years
to recycle metals while illegally burning hazardous waste in a
size='3'>El Paso
according to a newly released Environmental Protection Agency (EPA)
document, the New York
Times reported today. Although the company has
filed for chapter 11 protection, it is also awaiting action from
the
size='3'>Texas
application to renew smelting in
w:st='on'>El
Paso
mountain of litigation and enforcement actions. As recently as August,
the Justice Department filed a claim under the bankruptcy proceedings to
assure Asarco’s compliance with terms of the agreed-upon cleanup
at Encycle. At the same time, Texas State Senator Eliot Shapleigh
said that an estimate of legal claims filed against
Asarco amounted to more than $21 billion.
href='http://www.nytimes.com/2006/10/11/us/11toxic.html?pagewanted=print'>Read
more.
id='7'>Creditors Approve Winn-Dixie
Reorganization
Winn-Dixie Stores Inc.
has taken a big step toward coming out of bankruptcy, saying that enough
of its creditors have voted to approve the supermarket chain's
reorganization plan, the Associated Press reported yesterday. The next
step for the company is a hearing Friday in which U.S. Bankruptcy
Judge Jerry
Funk will be asked to approve the plan. The
Jacksonville, Fla.-based company hopes to emerge from bankruptcy by
mid-November with a new board of directors. The reorganization plan
establishes 21 classes of claimants and gets rid of current Winn-Dixie
stock. Creditors will receive from 53 to 100 cents on the dollar,
depending on their class. The approval rates of the plan in each class
ranged from 76 percent to 100 percent, above the amount necessary. The
company plans to issue 50 million shares of stock to cover an estimated
$985 million in unsecured claims, according to the plan.
href='http://www.nytimes.com/aponline/business/AP-Winn-Dixie-Bankruptcy.html?pagewanted=print'>Read
more.
id='8'>Sphinx Funds Object to Refco
Plan, Cite $263 Million Deal
Liquidators for bankrupt
Sphinx Managed Futures Fund SPC have objected to Refco Inc.’s
amended chapter 11 plan, arguing that under the plan, Sphinx’
recent $263 million settlement with the bankrupt broker could be paid to
creditors before it receives final court approval,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. The Cayman Islands-based Sphinx fund, along
with 21 of its bankrupt affiliates, filed a motion objecting to the
Refco plan on Oct. 9, arguing that the plan fails to provide adequate
information about the legal status of the settlement. According to
Sphinx, the statement fails to point out that the $263 million payment
it made to an offshore unit of Refco should be off limits to Refco
creditors until its gets final approval from the court. The motion was
filed by liquidators handling Sphinx’ chapter 15 bankruptcy, who
are looking into the validity of the $263 million deal. Until the court
says the settlement is final and nonreviewable, the liquidators want
Refco’s reorganization plan to steer clear of the
sum.
id='9'>Claimant Urges Judge to
Reject Musicland Statement
Months after Musicland
presented a controversial liquidation plan, the lead plaintiff in a
class action against the entertainment giant has objected to the
bankrupt company’s disclosure statement, a key component of its
planned emergence from chapter 11, Portfolio Media reported
yesterday. On Friday, claimant Maureen MacLennan protested the proposed
statement in the U.S. Bankruptcy Court for the Southern District of New
York on the grounds that the document failed to mention the earlier
class action settlement. The objection came one day past the
court-appointed deadline, with the class maintaining that it had
routinely not been informed about important dates in the chapter 11
proceedings. The plaintiff has asked for the debtor to amend the
statement before the judge approves the action, according to court
documents. A hearing on the matter is scheduled for tomorrow.
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
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face='Times New Roman'>.
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Summary.
size='3'>Champps Entertainment
Inc., a
size='3'>Littleton
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size='3'>Colo.
operator and franchiser, will be limited to opening no more than eight
restaurants a year, according to terms of its credit agreement. This
shouldn't hamper the company, however, since its growth has been slower
than that of other eatery chains. In fact, last year, Champps opened
only four restaurants and during fiscal 2006 it opened one and closed
three of its underperforming locations. On the other hand, the credit
agreement raises the credit commitment from $5 million to $7 million. In
fiscal 2006, Champps, with fifty company restaurants and thirteen
franchises, reported a net loss of $1.6 million, compared to a $200,000
loss a year ago. Revenue was down 1.7 percent--to $210
million.
size='3'>Merge Technologies
Inc.,
size='3'>West Allis
w:st='on'>
size='3'>Wis.
an extension of the deadline for filing its second quarter financial
report.
size='3'>P.H. Glatfelter Co.
size='3'>, a York,
Pa.-based maker of specialty papers, is auctioning off surplus
paper-making equipment at its vacant mill in
w:st='on'>
size='3'>Neenah
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size='3'>Wis.
auction is scheduled for 11/8. The company shuttered the unprofitable
mill earlier this year and laid off 200 workers after attempting to
improve operations there over the past few years.
size='3'>SatCon Technology
Corp., a
size='3'>Boston
w:st='on'>
size='3'>Mass.
power electronics and control systems, asked for a hearing with Nasdaq
to argue that its stock listing should be continued. Last month, Nasdaq
informed SatCon that it fell out of compliance with listing
requirements.
size='3'>Simplicity Manufacturing
Inc. will
cut twenty-five jobs from its staff as part of a plan to move its
service parts warehouse operations from Port Washington to
size='3'>Menomonee Falls
size='3'>Wis.
size='3'>
size='3'>West Contra Costa Healthcare
District
size='3'>in
face='Times New Roman'
size='3'>California
recently filed chapter 9, looks like it could be headed for a long
reorganization, if it is to succeed at all. The company, which
opted for bankruptcy in an attempt to protect itself from creditors,
expects that it will take until next March for all creditors to file
their claims. In its filing, in the U.S. Bankruptcy Court in
size='3'>Oakland
listed assets and liabilities of between $50 million and $100 million
each. However, observers in the hospital industry believe
there isn't much chance that West Contra Costa Healthcare, which
operates
size='3'>Doctors
face='Times New Roman' size='3'>Medical
size='3'>Center
size='3'>San Pablo
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size='3'>Calif.
survive, unless there's a bailout from either the county or the
state.