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October 28, 2005
name='1'>Bankruptcy
Law’s ‘Special Circumstances’ Loophole
The new federal
bankruptcy
law has been widely billed as reducing judicial discretion and making
it far
harder for Americans to promptly discharge debt, the Daily Business
Review
said today. But a loophole in BAPCPA could soften some of the
controversial
law’s bite—depending on how judges interpret it. The wild
card in the
new law is that under §707(B)(i), chapter 7 filers can sidestep
the new
means test if they can show that "special circumstances"
have shrunk
their income or increased their debts. Victims of the recent Gulf
Coast hurricanes
recently were deemed to have special circumstances. But no one is sure
how "special
circumstances" will be defined and interpreted for other debtors
forced
into court by events beyond their control.
href='http://www.law.com/jsp/article.jsp?id=1130332860921'>Read
the full article.
id='2'>Delphi
Receives Final Approval of $4.5B in DIP Financing
Delphi Corp.
announced yesterday
that it has received final approval of a $2 billion senior secured DIP
financing
facility being provided by JPMorgan Chase and Citigroup Global Markets
Inc.
and final approval of an adequate protection package for the
company’s $2.5
billion pre-petition secured revolver and term loan facilities,
PRNewswire reported
yesterday. The final financing package includes provisions that the
court determined
also adequately protect customers and suppliers with allowable set-off
and recoupment
claims and permits them to continue ordinary course business
relationships with
Delphi.
href='http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/…'>Read
more.
id='3'>Equitas
Settles GM Asbestos Claim
Equitas, the unlisted company set up to handle potentially
crippling asbestos-related
claims against the Lloyd’s of London insurance market, said
today that it
href='http://www.forbes.com/home/feeds/afx/2005/10/27/afx2302712.html%20'>has
settled all claims from General Motors (GM), AFX News Limited
reported.
An Equitas spokeswoman did not disclose how much the company has
agreed to
pay GM. An Equitas spokeswoman declined to give further details,
citing confidentiality
agreements. GM’s claims against Equitas relate to asbestos and
environmental
liabilities originally covered by LLoyd’s insurers, some of
them dating back
to the mid-1950s. GM stressed that the Equitas settlement has no
impact on
its legal action against UK general insurer Royal & Sun Alliance
Insurance
Group PLC, aimed at forcing it to cover separate asbestos-related
liabilities.
GM continues to pursue coverage for asbestos and other third-party
liabilities
from its primary insurer, Royal Indemnity Insurance and its parent
companies,
Royal & Sun Alliance Insurance Group PLC and Royal & Sun
Alliance
Insurance PLC, GM spokeswoman Geri Lama said in a statement.
Equitas’ biggest
settlement deals include a $575 million agreement with U.S. oil
company Halliburton
in January 2004.
Meanwhile,
href='that%20it%27s%20going%20to%20file%20for%20chapter%2011%20bankruptcy%20protection.%0Dhttp://www.foxnews.com/story/0,2933,173667,00.html%0D'>stocks
fell yesterday on concerns over GM’s financial health,
though earnings
growth from oil giants Exxon Mobil Corp. and Royal Dutch Shell may
limit the
decline, Fox News reported. GM said late Wednesday that it received
subpoenas
from the Securities Exchange Commission as part of an agency
investigation
of the carmaker’s pension obligations and business dealings
with bankrupt
Delphi Corp. The announcement added to existing jitters in the
market about
the state of GM’s health, and prompted the automaker to deny
talk that it’s
going to file for chapter 11.
id='4'>Judge
Orders Non-union Retiree Panel for Delta
A federal court
agreed to
name an official committee to represent non-union retirees in Delta
Air Lines
Inc.’s chapter 11 case to help protect their health benefits,
the Associated
Press reported yesterday. However, the court declined to immediately
name a
panel to represent retired pilots. U.S. Bankruptcy Judge Prudence
Carter
Beatty said that there should be an official committee in the
Atlanta-based
airline’s bankruptcy to try to negotiate the best means for
Delta to save money
on health benefits for non-union retirees while protecting the sickest
and most
financially strapped. Beatty said that the retiree committee will
consist of
seven members of a group called the Delta Air Lines Retirement
Committee. She
said pilot retirees were of a different economic situation than the
other 28,000
retirees that DALRC says it represents.
href='http://www.tallahassee.com/mld/tallahassee/news/local/13014181.htm'>Read
more.
Diocese
id='5'>Ruling
Rejects Vatican’s Request
A federal bankruptcy
judge
in Portland ruled Wednesday that the Holy See has no standing to seek
to limit
the questions of a Vatican-based archbishop, the Oregonian
reported yesterday.
However, Judge Elizabeth Perris said that she would consider
the request
as having been made by Archbishop William Levada, the highest-ranking
American
in Rome. Perris is presiding over the Portland Archdiocese bankruptcy
proceedings.
The Roman Catholic church for Western Oregon sought bankruptcy
protection in
2004 in the face of hundreds of millions of dollars in sex abuse
lawsuits.
id='6'>Woman
Reaches Deal with Diocese
A woman who claimed
that
she was sexually abused by a priest in the 1970s has reached a $17,500
settlement
with the St. Cloud, Minn., Diocese, acknowledging her case would have
likely
been thrown out since the alleged abuse happened long ago, the
Associated Press
reported yesterday. Susan Fuchs-Hoeschen, a former parishioner at St.
Louis
Church in Paynesville, claimed that former priest Donald Rieder
sexually abused
her in 1973. She and her attorney told the St. Cloud Times that
they
knew the lawsuit was filed after the statute of limitations had
expired. Lawsuits
that miss such deadlines are normally dismissed. The St. Cloud Diocese
issued
a statement Thursday saying it agreed to settle the case to help her
heal. Rieder
pleaded guilty in 2003 to three counts of second-degree criminal
sexual conduct
and admitted abusing a young girl in the early 1990s while he was
pastor at
St. John Cantius Church.
href='http://www.startribune.com/stories/462/5692864.html'>Read
the full story.
id='7'>Decker
College Employees File Petition against School
Three employees of
Decker
College Inc.’s Louisville, Ky., operations have filed an
involuntary bankruptcy
petition against the school and its holding company, Compass
Educational Holdings,
seeking to push the entities into bankruptcy, Business First
reported
yesterday. Decker College, a Louisville-based for-profit technical
school, closed
its doors and took down its online courses last week amid an
investigation conducted
by the U.S. Department of Education, the U.S. Office of Inspector
General and
the Federal Bureau of Investigation.
href='http://louisville.bizjournals.com/louisville/stories/2005/10/24/daily33…'>Read
the full story.
id='8'>FiberMark
Receives Approval of Revised Disclosure Statment
FiberMark, Inc.
announced
Wednesday that the U.S. Bankruptcy Court for the District of Vermont
has authorized
the company to begin the voting process on its revised plan of
reorganization
based on a newly approved disclosure statement, PRNewswire reported.
The revised
plan incorporates a settlement reached among the company’s three
largest bondholders
and the company. If approved, the plan will result in increased
distributions
to the company’s other bondholders and unsecured creditors and
resolution of
issues identified by a court-appointed examiner.
href='http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/…'>Read
more.
id='9'>Ames
Extension Approved
The U.S. Bankruptcy
Court
approved Ames Department Stores’ motion for an extension
pursuant to §1121(d)
of the Bankruptcy Code of the time during which the company may
solicit acceptances
of its reorganization plan, dated Dec. 6, 2004, until April 28, 2006,
BankruptcyData.com
reported yesterday.
id='10'>Delaware
Supreme Court Considers Asbestos Exposure Liability
The Delaware Supreme
Court
heard arguments Wednesday in an asbestos liability case that could
have a significant
impact on the future course of asbestos litigation in the state, the
Associated
Press reported yesterday. The issue before the court is whether a land
owner
who hires an independent contractor—but does not directly
control the
work of that contractor—should be held potentially liable for
alleged
injuries stemming from the contractor’s work. The case involves
claims by construction
workers who blame their health problems to exposure to asbestos at a
variety
of industrial sites in Delaware from the 1950s to the 1970s.
href='http://www.wboc.com/Global/story.asp?S=4038028&nav=MXEF'>Read
the full article.
id='11'>New
Jersey Plaintiff’s Asbestos Case Booted
Scolding a New Jersey
plaintiff
for not seeking justice in her own state court, Madison County, N.J.,
Circuit
Judge Daniel Stack followed through on his promise to dimiss asbestos
cases
not directly connected to Madison County, the St. Claire Record
reported
yesterday. Irmagard Berndt of New Brunswick, N.J, claimed her husband,
Fritz
Berndt, died shortly after being diagnosed with mesothelioma in
November of
2003. Last October, in his first forum ruling as chief of the
nation’s largest
asbestos case docket, Stack stated that the "astronomical
burden"
of looming trials demanded he dismiss cases with no direct connection
to the
venue. Stack pondered how Madison County would hold up if every
asbestos lawsuit
filed in its courts did go to trial, suggesting that the "cash
cow"
asbestos docket would quickly overwhelm local taxpayer resources to
the expense
of plaintiffs.
href='http://www.stclairrecord.com/news/newsview.asp?c=169023'>Read
more.
id='12'>WorldCom
Defendants in $651M Deal
A group of investment
banks
and other defendants agreed on Thursday to pay a combined $651 million
to a
coalition of institutional investors that lost money in
WorldCom’s collapse,
Reuters reported yesterday. The lawsuits brought by the funds, which
decided
to forego a broader class-action settlement involving other WorldCom
investors,
were among the last pieces of the web of litigation stemming from the
$11 billion
accounting fraud at WorldCom that led to the telecommunication
company’s bankruptcy
three years ago. More than 65 institutional investors are part of the
new pact,
including the largest U.S. pension fund, the California Public
Employees’ Retirement
System. The California State Teachers’ Retirement System and
pension funds in
Illinois, Washington state and Tennessee are among the other large
investors
set to get payments. The settlement will be paid primarily by
WorldCom’s former
investment banks, including Citigroup and JP Morgan Chase & Co ,
that underwrote
WorldCom Inc. securities, according to a law firm for the funds,
Lerach Coughlin
Stoia Geller Rudman & Robbins of San Diego. The lawsuit was aimed
at compensating
the investors for losses on purchases of WorldCom stocks and bonds
spanning
from 1998 to 2001.
href='http://www.nytimes.com/reuters/business/business-financial-worldcom.htm…'>Read
more.
id='13'>Bankrupt
Winn-Dixie Reports $691M Loss
Jacksonville,
Fla.-based
supermarket chain Winn-Dixie Stores Inc., struggling to emerge from
bankruptcy
by closing unprofitable stores and warehouses, reported a net loss of
$691 million
in fiscal year 2005, compared with a $51 million loss in 2004, the
Associated
Press reported today. The filing lists a gain of $148.29 million from
reorganization.
The largest component of that increase was $185.6 million in non-cash
income
from the rejection of store leases. Winn-Dixie announced plans earlier
this
year to close 326 stores and three distribution centers. Upon
completion of
its restructuring plan, it said it will operate 575 stores in Florida,
Alabama,
Louisiana, Georgia and Mississippi, plus 12 stores in the Bahamas.
id='14'>Judge
Lets Northwest Surrender More Planes
Northwest Airlines
Corp.,
the nation’s fourth-largest airline, can abandon leases on
another 100 planes,
a bankruptcy judge said Thursday, the Associated Press reported
yesterday. This
could allow the carrier to cut flights. So far, the judge has given
Northwest
the approval to reject the leases of more than 200 planes, although
the carrier
has said it does not plan to abandon all of them. The aircraft are
leased to
Northwest by Wells Fargo & Co., the U.S. Bank National Association
and Finova
Capital Corp., among others.
id='15'>Asarco
President and CEO Resigns
The president and
chief executive
of bankrupt copper mining company Asarco LLC, Tuscon, Ariz., has
resigned, the
Associated Press reported today. Daniel Tellechea informed the company
Wednesday
night that he was stepping down, Asarco said in a statement Thursday.
Asarco
filed for bankruptcy reorganization protection in August after some
1,500 union
workers went on strike in July at its five facilities in Arizona and
refinery
in Amarillo, Texas. Asarco’s board expects to name a replacement
shortly, the
company said. In its statement, the company said its operations would
continue
"in parallel" with its efforts to reorganize under chapter
11. The
company also said it expects to close debtor-in-possession financing
this week.
Besides the strike, the company is facing about 95,000
asbestos-related personal
injury claims. Asarco is a subsidiary of Mexico City-based Grupo
Mexico SA.