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December 27, 2006
Refco Exits Bankruptcy Protection
Refco Inc., the onetime futures and commodities broker, said yesterday that it had emerged from bankruptcy protection, Reuters reported today. Refco and 23 of its affiliates filed for court protection on Oct. 17, 2005, a week after revealing that the former chief executive, Phillip R. Bennett, had hidden $430 million of debt, and two months after raising $583 million in an initial public offering. Mr. Bennett has pleaded not guilty to fraud charges and is scheduled to stand trial in March. The expected payouts represent a small fraction of the $16.8 billion that creditors claimed they were owed. Judge Robert D. Drain of Federal Bankruptcy Court in Manhattan approved RefcoÕs reorganization plan on Dec. 15. Read more.
name='2'>Delphi Seeks to Extend Time for Plan Approval
Auto-parts maker Delphi Corp., in bankruptcy since last year, asked a judge to extend for nine months its exclusive right to ask creditors for approval of its reorganization plan, Bloomberg News reported yesterday. Under an extension granted in June by the U.S. Bankruptcy Court in New York, Delphi has the sole right to file plans through Feb. 1 and to solicit approvals through April 2. The company asked Judge Robert D. Drain on Friday to extend the proposal period to July 31 and the solicitation period to Sept. 30. On Thursday, Delphi's second-largest shareholder, Highland Capital Management LP, proposed investing $4.7 billion in the company. The offer came three days after a $3.43 billion offer by five New York financial firms led by Cerberus Capital Management LP and top shareholder Appaloosa Management LP. A court hearing to review the offers is set for Jan. 11. The case is In re Delphi Corp., 05-44481, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
name='3'>SeraCare Wins Approval to Send Bankruptcy Plan to Creditors
California medical supply manufacturer SeraCare Life Sciences has won court approval to send its shareholder-backed bankruptcy plan to creditors for a vote, the Associated Press reported yesterday. The U.S. Bankruptcy Court in San Diego has signed off on the biotechnology company's disclosure statement, which states that SeraCare will pay all of its debt, including settlements with the government and with shareholders stemming from securities-fraud claims.
name='4'>Judge OKs Performance Transportation's Bankruptcy Plan
A bankruptcy judge approved a chapter 11 plan submitted by Performance Transportation Services that gives control of the automobile hauler to a buyout company, according to the Associated Press yesterday. The Wayne, Mich., company's reorganization plan calls for second-lien lenders, who are owed $35 million, to get the bulk of the reorganized company's stock. The buyout company, Yucaipa, holds most of the second-lien debt. First-lien lenders, owed $78 million plus an additional $43 million on an outstanding letter of credit, are to be paid in full under the company's newly approved plan.
name='5'>Hearing Set for Today for Oklahoma Medical Center's Purchase Plan
A hearing is set for 9:30 a.m. today in the U.S. Bankruptcy Court in Oklahoma City on a motion that could expedite the sale of the bankrupt Moore Medical Center, The Norman (Okla.) Transcript reported today. Attorneys for the hospital filed a motion to set a bid deadline for 2 p.m. Jan. 5, 2007. Should that motion be approved, the court would auction off the facility's assets at 10 a.m. on Jan 10. Acadiana Healthcare of Oklahoma Inc. - a holding company formed by Oklahoma City medical consultant Robert R. Hicks and a private group of 'in-state and out-of-state' investors - made a stalking-horse bid for a total of $55 million for the facility, but HCI Secured Medical Receivables Special Purpose Corp. filed an objection to Acadiana's bid Tuesday. Read more.
Bankruptcy Court Issues Ruling on Pittsburgh Corning Reorganization Plan
The U.S. Bankruptcy Court for the Western District of Pennsylvania denied confirmation of the most recent amended reorganization plan for Pittsburgh Corning Corporation yesterday, according to a Business Wire report today. Although denying confirmation, the decision favorably viewed many features of the plan. Pittsburgh-based chemical and class manufacturer PPG, which has owned 50 percent of Pittsburgh Corning since 1937, said it is reviewing the bankruptcy court's decision to determine its next steps.
name='7'>Northwest Pilots Sell Portion of Their Claim
The pilots union at Northwest Airlines Inc. has sold a part of its bankruptcy claim in the company's chapter 11 case, resulting in about $150 million that the union can distribute to its members, the Detroit Free Press reported today. In a message to workers Sunday, Northwest CEO Doug Steenland said the Air Line Pilots Association found a buyer to purchase 20 percent of the union's $888 million claim. Northwest and the pilots had negotiated the claim earlier this year as part of the union's contract. The ground workers union, in its contract, negotiated a $181 million claim and also seeks to sell part of it. Read more.
name='8'>Collins & Aikman Files New Plan to Exit Bankruptcy
Auto-parts maker Collins & Aikman Corp. filed a revised plan to exit bankruptcy court protection, reflecting its decision to shut down rather than stay in business, Bloomberg News reported today. Secured creditors and those holding administrative and priority claims will get back all the money they are owed, while shareholders will get nothing, according to the plan, filed Friday in the U.S. Bankruptcy Court in Detroit. The Southfield, Mich.-based company, in bankruptcy since May 2005, announced last month it would sell its operations, although it had originally planned to reorganize. Collins & Aikman operates 45 North American plants and employs 12,000 workers. Read more.
name='9'>Weil Gotshal Moves to End Legal Malpractice Suit
Weil, Gotshal & Manges has moved for summary judgment in a legal malpractice suit brought against it in Texas by a former bankruptcy client, the New York Law Journal reported today. The National Benevolent Association of the Christian Church (Disciples of Christ), one of the largest nonprofits ever to file for bankruptcy, sued Weil Gotshal in September 2005, claiming the New York law firm pushed it into a 'disastrous' chapter 11 filing rather than exploring a negotiated settlement with creditors. The St. Louis, Mo.-based group, which runs shelters for the elderly and teens, once had 2,500 employees in 20 states and annual revenues and contributions of $145 million. Following the 2004 bankruptcy, the group shrank to 365 employees in five facilities, though it retained a $70 million endowment. But in its summary judgment motion filed last week, Weil Gotshal said there was no evidence that the group's creditors had ever offered it any out-of-court restructuring, much less a 'better deal' than the group got through its bankruptcy filing. The firm's motion will be heard Jan. 27 in the U.S. Bankruptcy Court for the Western District of Texas. Read more.
Judge Denies Back Wages for Kara Homes Employees
A bankruptcy court judge on Tuesday turned down a request, at least for now, to pay back wages to 44 employees of struggling builder Kara Homes Inc., the Asbury Park (N.J.) Press reported today. The employees were not paid for 16 days of work before the East Brunswick, N.J., company filed for bankruptcy on Oct. 5. The company wants to pay them the back wages, totaling about $234,000, to keep them on staff. But U.S. Bankruptcy Court Judge Michael B. Kaplan said he would like to see the company's reorganization further along before granting back wages to the employees. However, Kaplan said he would allow First Constitution Bank to loan Kara about $75,000 to winterize two partially completed homes. Read more.
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Belo Corp., the Texas-based publisher, said that it will take fourth quarter charges of $4 million related to discontinuing its pension plan.
DaimlerChrysler AG's Chrysler Group unit's restructuring plan, to be presented next month, will call for plant closings and job cuts, but the reorganization will not be as severe as one undertaken five years ago when it cut 40,000 jobs from its payroll.
El Paso Corp., Houston, Tx., sold the assets of its ANR Pipeline Co. unit in Michigan and its 50% stake in Great Lakes Gas Transmission to TransCanada Corp. of Calgary, Alberta and TC PipeLines LP for nearly $3.4 billion. The transaction, which also calls for the Canadian firms to assume $744 million in debt, is part of El Paso's strategy of paring its debtload. TC PipeLines is an indirect subsidiary of TransCanada.
Goodyear Tire & Rubber Co., Akron, Oh., reached a tentative agreement with the United Steelworkers union, which represents 12,600 workers, on a new labor contract. That ends an eleven-week strike over healthcare benefits and other matters. Also, Goodyear will drop its plans to shutter a facility in Tyler, Tx. in return for an offer of a retirement buyout.
Openwave Systems Inc., a Redwood City, Ca. developer of wireless technology, reported a first quarter net loss of $24.5 million. The results included charges of $12.6 million related to restructuring and the sale of assets. Revenue declined 12%--to $91.5 million.
Synergx Systems Inc., a Syosset, N.Y. diversified technology and systems-integration firm, reported a fourth quarter net loss of $320,000, including an operating loss of $280,000. Revenue declined 13%--to $4.5 million. For the year, it lost $740,000, including an operating loss of $610,000. Revenue declined 10%--to $15.8 million.
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