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June 2, 2006
id='1'>Snowbarger Named Acting Chief of PBGC
The U.S. Department of
Labor announced that Vincent Snowbarger will serve as acting chief of
the Pension Benefit Guaranty Corp. (PBGC), the Associated Press reported
yesterday. Snowbarger has served as deputy executive director of the
PBGC since November 2004. He will serve as acting executive director,
replacing Bradley Belt, whose last day on the job was Wednesday.
Snowbarger also is a former
face='Times New Roman' size='3'>U.S.
size='3'>congressman who represented
w:st='on'>
size='3'>Kansas
href='http://www.forbes.com/home/feeds/ap/2006/06/01/ap2788460.html'>Read
more.
id='2'>Creditors Oppose Pliant's Chapter 11 Plan
Pliant Corp. remains on
the cusp of emerging from bankruptcy, but some creditors are arguing
that the packaging maker is not ready to wrap up its bankruptcy just
yet, Portfolio
Media reported yesterday. At the beginning of
the company’s confirmation hearings Wednesday, the group of senior
noteholders claimed that the company is not quite strong enough to exit
chapter 11. Another group said Pliant needed to map out how the
restructuring will take care of problems that led the company to seek
refuge from creditors in January. Pliant maintained that the
reorganization plan it drafted with the assistance of equity-holder JP
Morgan Partners LLC was realistic and fair to all the classes of
creditors. Pliant’s plan would give first- and second-lien
noteholders a full
size='3'>recovery, including reinstating their claims and paying their
attorneys. Pliant would owe approximately $277 million on first-lien
debt and $250 million on second-lien debt, according to the plan. The
case is Pliant
Corp., case number 06-10001, in the U.S.
Bankruptcy Court for the District of Delaware.
SGI
Wins Approval to Limit Equity Trades
Less than a month after
Silicon Graphics Inc. asked a bankruptcy court to limit large trades of
its equity, the high-performance computer maker has won final court
approval to do so in a bid it hopes will help protect certain tax
benefits, Portfolio
Media reported yesterday. Judge
Allan L. Gropper
of the U.S. Bankruptcy Court granted the bid this week,
saying unrestricted trading of Silicon Graphics' stock could 'severely
limit” the company’s ability to use net operating loss
carry-forwards to offset future tax liabilities.
face='Times New Roman' size='3'>Now shareholders owning at least 4.75
percent of the company’s stock must file a notice of intent at
least 15 days prior to the proposed stock transfer, according to court
documents. Silicon Graphics had already previously won approval to limit
trading on an interim basis to protect nearly $1 billion in net
operating loss carry-forwards.
id='4'>Embattled Metabolife Nears Ephedra Settlements
Metabolife International
Inc., the defunct dietary supplement manufacturer, has reached
agreements to settle the first round of hundreds of wrongful injury and
death lawsuits over its ephedra-based products, according to bankruptcy
court documents,
size='3'>Portfolio Media reported yesterday.
If the settlements are approved by the U.S. Bankruptcy Court for the
Southern District of California, insurance companies for Metabolife
would pay about $4.7 million of the claims, according to the documents.
Approval would also likely clear the way for additional settlements
related to it its once best-selling weight control and energy-boosting
pills, which forced the company to seek chapter 11 bankruptcy
protection in July 2005.
Separately, Bankruptcy Judge
size='3'>John J. Hargrove postponed a hearing
until June 15 for the parties to explain why the
w:st='on'>
Diego
w:st='on'>
size='3'>Calif.
company’s case shouldn’t be converted to a chapter 7
liquidation.
id='5'>Commentary: Solutia Bankruptcy Drama Still Playing
Out
The drama continues in
the Solutia chapter 11 case as the company filed for bankruptcy in
December 2003 and is likely to pass the three-year mark before it wraps
up, according to a commentary in today’s
face='Times New Roman' size='3'>St. Louis Post-Dispatch
size='3'>. With the hedge funds fighting hard to protect their profits,
what was expected to be a three-day trial on the bondholder issues will
drag on for at least three weeks, Quinn said. Judge
face='Times New Roman' size='3'>Prudence Carter Beatty
size='3'>has said she may take up to six weeks to rule after the trial
ends. Judge Beatty also must rule on a challenge from a committee
representing Solutia shareholders. Their basic argument is that when
Monsanto spun off its old chemical business in 1997, it set up the new
company to fail.
href='http://www.stltoday.com/stltoday/emaf.nsf/Popup?ReadForm&db=stltoday%5C…'>Read
more.
id='6'>Ex-Enron Law Firm to Pay $30 Million
Enron's former law firm,
Vinson & Elkins, has agreed to pay the company $30 million to settle
claims of contributing to its collapse in 2001 by signing off on
questionable deals, the Associated Press reported yesterday. The firm,
which once earned up to $40 million a year from Enron, admitted no
liability in the settlement. The settlement is subject to approval by
Judge Arthur J.
Gonzalez of Federal Bankruptcy Court in
size='3'>Manhattan
overseeing Enron's reorganization.
href='http://www.nytimes.com/2006/06/02/business/businessspecial3/02enron.htm…'>Read
more.
Ohio
Health Care Company Calls for Union Concessions to Avoid
Bankruptcy
Forum Health says it will
file for bankruptcy protection 'sooner rather than later' without
concessions from its unions, the
face='Times New Roman' size='3'>Youngstown
size='3'>(
face='Times New Roman' size='3'>Ohio
size='3'>) Vindicator reported
today. Dr. Keith Ghezzi, interim president
and chief executive of the troubled medical provider, said that lenders
will force it into bankruptcy 'sooner rather than later if they don't
see real progress toward the goal of making Forum market competitive.' A
union official said, however, that no concessions will be made until
Forum lets the union know how many workers Forum expects to have, what
services it plans on providing and what its current financial
projections are. Dr. Ghezzi said Forum's bondholders, who are owed $180
million, want to see Forum go further in reconfiguring its operations
and be more aggressive in cutting costs.
href='http://community.vindy.com/content_printstory.php?link=http%3A%2F%2Fwww…'>Read
more.
RNI
Wind Down Corp. Announces Key Terms of Bankruptcy Plan
RNI Wind Down Corp., formerly
Riverstone Networks, today announced that it had reached agreement with
its creditors’ and equity-holders’ committees concerning the
key terms of its liquidation plan, according to a company press release
yesterday. The parties plan to file the proposed consensual plan of
liquidation and accompanying proposed disclosure statement in mid-June.
RNI, currently operating as a debtor-in-possession, currently intends to
pay all allowed claims of creditors in full plus interest and expects to
have sufficient cash remaining to pay a substantial distribution to
stockholders after funding certain required reserves. The
company’s plan is scheduled to be reviewed by the bankruptcy court
in mid-September, and distributions to creditors and stockholders are
expected to be made by the end of September.
href='http://www5.sys-con.com/read/230207.htm'>Read more.
Autos
id='9'>Dana's $126 Million Loss Driven Largely by Reorganization
Efforts
Dana Corp., based
in
size='3'>Ohio
million last quarter after the bankrupt auto supplier spent $55 million
on its chapter 11 reorganization process, the
face='Times New Roman' size='3'>Toledo Blade
size='3'>reported yesterday. Operations that Dana wants to sell this
year, which includes factories in Upper Sandusky, Wharton and
size='3'>Archbold
w:st='on'>
size='3'>Ohio
million in the first quarter. The company also asked the U.S. Bankruptcy
Court in New York to approve the dissolution of a Mexican joint venture
with DESC SA de CV that will cost the Dorr Street firm $19.5 million.
The two companies announced in November they agreed to dissolve the
joint venture, with Dana assuming full ownership of axle and driveshaft
operations and DESC getting transmission and replacement gasket
operations. A hearing on the joint-venture dissolution is scheduled for
June 20.
href='http://toledoblade.com/apps/pbcs.dll/article?Date=20060601&Category=BUS…'>Read
more.
id='10'>GM Invests in Plant, Says
face='Times New Roman' size='3'>Delphi
size='3'>Issues Remain
General Motors Corp. said
it would invest $332 million at its powertrain plant in
size='3'>Warren
w:st='on'>
size='3'>Mich.
continuing discussions with the former subsidiary Delphi Corp. and the
United Auto Workers (UAW) to reduce labor costs, Reuters reported
yesterday. Speaking to reporters at the plant, Chief Executive Rick
Wagoner said major issues remained to be settled in the talks. The
investment at the
face='Times New Roman' size='3'>Warren
plant supports GM's plans to build 3 million of the new
six-speed transmissions annually by 2010, the company said. Wagoner said
GM's new six-speed transmissions would offer a 4 percent gain in fuel
economy over the automaker's current generation of four-speed
automatics, an improvement targeted at consumer anxiety over rising gas
prices.
href='http://www.washingtonpost.com/wp-dyn/content/article/2006/06/01/AR20060…'>Read
more.
id='11'>Asian Cars Won 40 Percent of Market Last
Month
Sales figures reported
Thursday showed that
w:st='on'>
size='3'>Toyota
other Asian manufacturers claimed a record 40 percent of the American
market in May, the New
York Times reported today. For Detroit
companies, which have continued to aggressively market their costly new
sport utility vehicles and pickup trucks despite the high gas prices,
market share last month dropped to 52.9 percent — their
second-lowest in history.
size='3'>It was their smallest level since last October, when sales
plummeted after the companies stopped offering employee-discount
promotions for all consumers. In all, industry sales for May dropped 4.6
percent compared with 2005, according to Ward's InfoBank. Car sales rose
nearly 2 percent, but sales of SUV's, pickups and minivans fell 10.2
percent.
href='http://www.nytimes.com/2006/06/02/business/02auto.html?pagewanted=print'>Read
more.
id='12'>Some Passenger Pilots Taking Pay Cuts to Fly
Cargo
The turbulence that has
led to $38 billion in combined losses since the start of 2001 for the
six largest passenger airlines in the
w:st='on'>
size='3'>United States
size='3'>is causing their pilots to flood major cargo airlines with job
applications, the Wall
Street Journal reported today. This trend is
taking place even as contract negotiations are heating up between pilots
and cargo airline management. FedEx Corp. had 14,000 applicants for the
420 pilot slots it filled last year, while UPS picked the 233 new pilots
it hired from 10,000 applications, including 8,000 from passenger
pilots. FedEx and UPS did 28 percent of all pilot hiring at major
size='3'>U.S.
year, up from 8 percent in 2004, according to Air Inc., a
pilot-placement firm in
w:st='on'>
size='3'>Atlanta
cargo carriers also are expanding, including Kalitta Air of
size='3'>Ypsilanti
w:st='on'>
size='3'>Mich.
flies 14 planes, up from three in 2000.
href='http://online.wsj.com/article/SB114920080367969133.html?mod=hps_us_edit…'>Read
more. (Registration required.)
International
id='13'>Canadian Bankruptcy Trustee Confirms Shipyard
w:st='on'>Sale
w:st='on'>
size='3'>Norway
size='3'>Firm
The bankruptcy trustee
managing Davie Industries’ bankruptcy announced Thursday that its
shipyards have been sold to
w:st='on'>
size='3'>Norway
Teco Management, the Canadian Press reported yesterday. Thibalult, Van
Houtte and Associates said the transaction will be completed the end of
June 'even though certain conditions are still the object of
negotiations.' Recent media reports said the sale is contingent on the
renewal of the workers' contracts and resolving the pension plan issue.
The Norwegian buyers don't want to assume pension obligations totaling
about $15 million. The shipyard near
w:st='on'>
size='3'>Quebec City
size='3'>employed more than 3,000 in the early 1990s. Its future has
been uncertain since
w:st='on'>
size='3'>Dominion
face='Times New Roman'
size='3'>Bridge
into bankruptcy in 2001. The shipyard built oil tankers, cargo ships,
trawlers, ferries, warships and oil drilling stations.
href='http://finance.canada.com/bin/story?StoryId=Crh5MqeabyNvZAw5LC3mTnJy2od…'>Read
more.
href='http://finance.canada.com/bin/story?StoryId=Crh5MqeabyNvZAw5LC3mTnJy2od…'>