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January 31, 2008
name='1'>Judicial Pay Raise Bill Expected to Receive Senate
Committee Vote Today
The Senate Judiciary
Committee is expected to vote today on a proposed pay raise for federal
judges. A New York
Times editorial today endorsed passage of the
bill and added that the new pay package should include an overdue
tightening of the gift rules to bar corporate-sponsored junkets. The
House Judiciary Committee in December approved a bill that would raise
the pay of federal trial judges to $218,000 a year with comparable
raises for other judges. From 1969 to 2006, according to figures
compiled by the Administrative Office of the U.S. Courts, federal
judicial pay declined by almost a quarter when adjusted for inflation.
The national average for all wages rose by about 18 percent. Supreme
Court Chief Justice John Roberts notes that the prolonged lack of a pay
raise “has left federal trial judges earning about the same as
(and in some cases less than) first-year lawyers at firms in major
cities, where many of the judges are located.”
href='http://www.nytimes.com/2008/01/31/opinion/31thu4.html?ref=opinion&pagewanted=print'>Click
here to read the editorial.
name='2'>Senate Panel Passes Alternative Economic Stimulus
Package
With bipartisan support,
the Senate Finance Committee yesterday approved a $157 billion economic
stimulus plan that rivals the measure fashioned by President Bush and
House leaders, setting up a Senate showdown today that could determine
who will receive rebates from the federal government and how quickly the
checks will arrive, the
size='3'>Washington Post reported today. The
Senate Finance Committee bill would send checks to virtually every
American. Individuals would receive $500 -- for couples, it would be
$1,000 -- plus $300 per child. Workers who can show $3,000 in earned
income last year -- or seniors who had $3,000 in Social Security
benefits -- would also qualify, even if they earned too little to pay
income taxes. Committee Chairman Max Baucus (D-Mont.) added income caps
on eligibility that he had initially rejected, but they are considerably
more generous than the ones imposed by the House. Rather than capping
eligibility for the full check at $75,000 for individuals and $150,000
for couples, the new bill phases out eligibility at $150,000 for
individuals and $300,000 for couples. The Bush administration and House
leaders had hoped the Senate would simply accept the stimulus plan
approved by the House on Tuesday, ensuring final passage this week and
the mailing of the first checks by May. Senate Minority Leader Mitch
McConnell (R-Ky.) will try today to block the Senate from adopting the
Finance Committee plan and force the passage of the House bill
instead.
href='http://www.washingtonpost.com/wp-dyn/content/article/2008/01/30/AR2008013003651_pf.html'>Read
more.
Fed
Lowers Interest Rate to 3 Percent
The Federal Reserve cut
short-term interest rates on Wednesday for the second time in eight days
by lowering its benchmark federal funds rate by half a percentage point
to 3 percent, the New
York Times reported today.
size='3'>The Fed’s move yesterday came after an even bigger
surprise rate cut of three-quarters of a percentage point on Jan. 22 at
a rare unscheduled meeting. Inflation,
meanwhile, is running higher than Fed officials would like as a Commerce
Department report released yesterday on
w:st='on'>
size='3'>U.S.
size='3'>economic growth in the fourth quarter estimated that consumer
prices, excluding energy and food, climbed at an annual pace of 2.7
percent.
href='http://www.nytimes.com/2008/01/31/business/31econ.html?_r=1&oref=slogin&ref=business&pagewanted=print'>Read
more.
name='4'>California Governor Watching Pacific Lumber Case
California Gov. Arnold
Schwarzenegger is weighing in on Pacific Lumber's bankruptcy, calling it
'an issue of paramount importance' and saying that any plan to
reorganize the company must ensure sustainable timber production, the
Associated Press reported yesterday. 'These lands and assets represent a
unique public trust for the people of
face='Times New Roman' size='3'>California
size='3'>,' Schwarzenegger wrote in a letter filed Tuesday with the U.S.
Bankruptcy Court in
w:st='on'>Corpus
face='Times New Roman' size='3'>Chris
size='3'>ti
w:st='on'>
size='3'>Texas
governor's letter comes as several parties in the case are expected to
unveil competing proposals to take Pacific Lumber out of
bankruptcy.
size='3'>Schwarzenegger didn't support any specific plan, but he said
any proposal should preserve Pacific Lumber's more than 200,000 acres of
timberlands by maintaining harvest levels that ensure 'sustainable,
high-quality timber production over the long term.'
href='http://biz.yahoo.com/ap/080130/pacific_lumber_bankruptcy.html?.v=1'>Read
more.
name='5'>Solutia to Pay EPA $3 Million to Settle Superfund
Issues
Solutia Inc. will pay the
U.S. Environmental Protection Agency $3.6 million as an allowed
unsecured claim in its chapter 11 case in order to resolve the EPA's
$9.8 million claim and to settle the EPA's related lawsuit, which was
filed before Solutia entered bankruptcy,
size='3'>Bankruptcy Law360 reported today.
Under Solutia's court-approved reorganization plan, unsecured creditors
will receive 83 cents for every dollar in claims, which would equal a
payout to EPA of approximately $3 million. The EPA's claim concerns the
Great Lakes Container Corp. site in
w:st='on'>
Louis
w:st='on'>
size='3'>Mo.
Solutia's predecessor, Monsanto Co., allegedly released hazardous
substances. A hearing on the settlement is scheduled for Feb. 7.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=45616'>Read
more. (Registration required.)
Approves Interstate Bakeries’ Disclosure Statement
Despite a last-minute
objection from the company's unsecured creditors, a court approved the
disclosure statement filed by Interstate Bakeries Corp., giving the
Twinkie maker the green light to solicit support from creditors,
Bankruptcy Law360
reported yesterday. Though the court has given its
blessing to IBC's disclosure statement, the success of the company's
reorganization plan still depends on the company's ability to work out
an agreement with the International Brotherhood of Teamsters, with which
it has been locked in a dispute. IBC said that it would mail the plan to
creditors by Feb. 4 and that it had set a March 3 deadline for creditor
ballots. The court has scheduled a confirmation hearing for March
12.
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=45586'>Read
more. (Registration required.)
Funds Oppose TOUSA Refinancing
A group of hedge funds is
fighting to unravel TOUSA Inc.’s July 2007 refinancing, saying
that it would allow the homebuilder to pay unsecured creditors of its
subsidiaries in full, the Associated Press reported yesterday. The
investor group, which holds nearly a quarter of Tousa's $1 billion in
unsecured notes, contends that the company 'forced' its
subsidiaries to guarantee first- and second-lien loans to refinance the
$675 million in debt it racked up by buying the homebuilding assets of
Transeastern Properties Inc. The 'disastrous' refinancing, the investors
said, unnecessarily saddled the subsidiaries with $500 million in new
debt.
href='http://biz.yahoo.com/ap/080130/tousa_inc_bankruptcy.html?.v=1'>Read
more.
name='8'>People's Choice Requests More Time to File
Plan
People's Choice Home Loan Inc.
says it needs another two months to finalize its liquidation strategy
with the official committee of its unsecured creditors and is asking a
bankruptcy court to block the filing of any rogue plan, the Associated
Press reported today. In a filing Tuesday with the U.S. Bankruptcy Court
in Santa Ana, Calif., the liquidating subprime mortgage lender said that
it is 'working closely' with the committee to prepare a joint chapter 11
liquidation plan, and asked the court to give it through March 31 to
file the plan without the threat of a competing plan. In addition to
seeking more time to file a plan, the company is asking the court to
extend through May 31 its sole right to solicit creditor support for a
plan.
href='http://biz.yahoo.com/ap/080130/people_s_choice_bankruptcy.html?.v=1'>Read
more.
Credit
Derivatives Write-Downs Hit MBIA
Bond insurer MBIA Inc.
reported its second consecutive quarterly net loss as write-downs in its
credit derivatives portfolio rose to $3.5 billion, the
face='Times New Roman' size='3'>Wall Street Journal
size='3'>reported today. MBIA's fourth quarter derivatives write-down is
more than 10 times as large as the $352.4 million write-down it reported
in the third quarter, an indication of the rapidly worsening U.S.
housing market and its effect on securities backed by loans made to
credit-challenged customers. The company also announced that it closed
on its $500 million stock sale to private equity investor Warburg
Pincus, part of a deal announced earlier this month that will have
Warburg invest up to $1 billion in the troubled bond insurer. As part of
the deal, two Warburg managing directors took seats on MBIA's board of
directors, replacing two current directors.
href='http://online.wsj.com/article/SB120175741480431553.html?mod=hpp_us_whats_news'>Read
more. (Registration required.)
name='10'>Car-Industry Woes Push Key Supplier to Financial
Brink
The recent woes of
the
face='Times New Roman'
size='3'>U.S.
size='3'>automotive industry have pushed Plastech Engineered Products
Inc., which makes door panels, floor consoles and engine covers, to the
financial brink, the
size='3'>Wall Street Journal reported today.
The Dearborn, Mich.-based company, which last year posted sales of $1.4
billion, has hired advisers to work on a restructuring or potential
bankruptcy filing. The Big Three auto makers and Johnson Controls Inc.
are now contemplating a $200 million bailout package for the
8,000-employee company. A bankruptcy filing by Plastech, a critical part
of
size='3'>Detroit's supply
chain, could disrupt the production of many key vehicles, including the
F-150 pickup truck, the Ford Edge crossover or General Motors Corp.'s
popular large crossovers, the Buick Enclave and GMC Acadia. Ford
represents about 26 percent of Plastech's sales.
href='http://online.wsj.com/article_print/SB120174577743230823.html'>Read
more. (Registration required.)
href='http://online.wsj.com/article_print/SB120174577743230823.html'>