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January 5, 2007
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name='1'>Spokane
face='Times New Roman' size='3'> Diocese Agrees to Pay $48 Million
Settlement as Part of Reorganization Plan
The
w:st='on'>
size='3'>Spokane
w:st='on'>
size='3'>Wash.
Catholic Diocese has agreed to pay at least $48 million to victims of
clergy sexual abuse to settle its long-running bankruptcy case, the
Associated Press today. Bankruptcy Judge Gregg W. Zive
of the U.S. Bankruptcy Court for the District of Nevada,
acting as a mediator in the case, announced that the settlement is
represented in the diocese reorganization plan that was filed yesterday.
The plan will go through the normal confirmation process before
Bankruptcy Judge
size='3'>Patricia C. Williams of the U.S.
Bankruptcy Court for the Eastern District of Washington. “The
economic portion of the global settlement totals at least $48 million
and provides a mechanism for the payment of future claims,” Judge
Zive explained. “In addition to the sale of Diocesan assets,
contributions of more than $20 million from six insurance carriers, and
contributions from various Catholic entities in the diocese, the
parishes will be responsible for raising $10 million.
href='http://news.yahoo.com/s/ap/20070105/ap_on_re_us/church_abuse_spokane_9'>Read
more.
name='2'>Solutia Seeks Fifth Amendment of DIP Loan
Chemical products maker
Solutia Inc.’s debtors filed a motion to approve a fifth amendment
to its debtor-in-possession (DIP) loan Wednesday, increasing the
company’s DIP financing by $400 million and extending its loan
another year, Bankruptcy
Law360 reported yesterday. Solutia’s
current DIP loan amounts to $825 million and is set to mature in March
of this year. A hearing on the latest amendment has been scheduled for
Jan. 24. Solutia’s debtors already have plans for the increase in
funds. The company said in December that it had reached an agreement to
purchase Akzo Nobel N.V.’s stake in Flexsys, a rubber chemicals
joint venture between Akzo Nobel and Solutia, as well as Akzo
Nobel’s Crystex business in Japan. According to court documents,
$150 million of the newest DIP loan increase can only be used in a
financial transaction to purchase the 50 percent of Flexsys that Solutia
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=15825'>Read
more. (Registration required.)
name='3'>Entergy and its Creditors to Face Off over Reorganization
Plan
A judge will hear
reorganization plan proposals from Entergy and itsunsecured creditors at
a Jan. 25 hearing,
size='3'>Bankruptcy Law360 reported yesterday.
Under the plan proposed by the unsecured creditors’
committee,Entergy
would borrow $150 million over the next five years in order to pay off
creditors. If that plan is approved, the energy company’s
creditors will receive their money 15 days after the plan goes into
effect, which is expected to occur around June 30. The creditors’
proposal, which would allow Entergy to gradually borrow money rather
than seek financing in one lump sum, directly contradicts
Entergy’s plan that emphasizes that the company must receive a
certain amount of financing by a specific date in order to exit chapter
11.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=15823'>Read
more. (Registration required.)
Airlines
name='4'>Northwest Reaches Deal to Buy Feeder
Airline
Northwest Airlines said that it
had reached an agreement to buy bankrupt regional feeder airline Mesaba,
although it was not clear that Mesaba’s parent company would
accept it, the Associated Press reported yesterday. Both airlines are in
bankruptcy protection. The negotiations between the two airlines
appeared to bypass Mesaba’s sole shareholder, MAIR Holdings. The
deal calls for MAIR to get a $145 million claim in Mesaba’s
bankruptcy, although it is not clear how much that claim would
ultimately be worth. It also includes $10 million in cash for Mesaba to
use as operating money, said Tim J. Robinson, a lawyer for
Mesaba’s creditors.
href='http://www.nytimes.com/2007/01/05/business/05air.html?pagewanted=print'>Read
more.
name='5'>FLYi Seeking Four-Month Exclusivity
Extension
Bankrupt airline FLYi
Inc. has asked a bankruptcy court for an additional four months to win
creditor approval of its liquidation plan, hoping to extend exclusive
control over the bankruptcy proceedings until a March hearing,
Bankruptcy Law360
reported yesterday. The carrier, which had hoped to
liquidate by Dec. 29, will receive an automatic extension until Jan. 23,
at which time a bankruptcy judge will rule on the motion. FLYi has
petitioned for the extension on the grounds that the company needs more
time to win creditor approval of the airline’s plan to pay off its
debts. FLYi submitted its reorganization plan at the end of November,
after smoothing out conflicts with various creditor groups.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=15804'>Read
more. (Registration required.)
M.
Fabrikant Creditors Seek to Examine Lenders
Creditors for a diamond
and jewelry wholesaler that sought chapter 11 protection are requesting
to examine the company’s lenders and chief operating officer
regarding possible improprieties,
size='3'>Bankruptcy Law360 reported yesterday.
The unsecured creditors’ committee of M. Fabrikant & Sons,
Inc. filed a motion in bankruptcy court Wednesday and Thursday under
Bankruptcy Rule 2004, allowing the bankruptcy court to order the company
to hand over financial documents as well as to appear for oral
examination. When the jeweler filed for bankruptcy, it did not include
financial documentation. A court hearing regarding the motion is
scheduled for Jan. 17.
href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=15848'>Read
more. (Registration required.)
GM
Says Rival Delphi Reorganization Bid Could Delay Deal
General Motors CEO Rick
Wagoner said that a deal between General Motors Corp. and Delphi Corp.
could be delayed by a rival reorganization offer for the bankrupt
supplier, Reuters reported today. GM, which spun off Delphi in 1999, has
been in negotiations with
and its major union to allow the supplier to emerge from
bankruptcy with lower costs. The bankruptcy court later this month will
hear arguments against
w:st='on'>Delphi
bankruptcy-emergence deal with a group of investors led by Appaloosa
Management LP and Cerberus Capital Management. Dallas-based
$4.7 billion reorganization plan in December for Delphi, setting the
stage for a fight for control of the auto parts supplier between its two
largest investors as
emerges from bankruptcy. Wagoner said a Delphi board
decision to consider the
would slow down the process. GM has said it expected its total exposure
to
size='3'>Delphi
billion to $7.5 billion.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/01/05/AR2007010500444_pf.html'>Read
more.
In related news, General
Motors Corp. said it sold more cars outside the
w:st='on'>
size='3'>U.S.
size='3'>than at home for the second year in a row and hopes to ride a
wave of growth in overseas markets, the Wall Street
Journal reported today. However, the
auto giant is expected to report today that global
sales fell slightly last year, with most of the 80,000-vehicle sales
decline coming from its core
w:st='on'>
size='3'>U.S.
size='3'>market, and that 55 percent of its 9.1 million-plus sales
occurred abroad. GM's growing reliance on overseas markets comes as it
implements aggressive cost cuts that are designed to increase the
profitability of its global product portfolio. GM Chief Executive Rick
Wagoner said the company will shave fixed costs to represent at most 25
percent of revenue in 2010, down from 34 percent in 2005, but added, 'I
think we can go beyond that.' GM plans to cut $9 billion in structural
costs starting in 2007.
href='http://online.wsj.com/article/SB116796255063267773.html?mod=home_whats_news_us'>Read
more. (Registration required.)
Rejects OCA Reorganization Plan
Judge
face='Times New Roman' size='3'>Jerry Brown
size='3'>has refused to confirm a reorganization plan filed by OCA Inc.
that would enable it to emerge from bankruptcy,
size='3'>the
face='Times New Roman' size='3'>New
Orleans
size='3'>Times-Picayune reported today. In his
38-page opinion, Judge Brown took issue with a provision in the plan
that would have allowed a senior lender to share the money it recovered
from the bankrupt dental practice management company with some of OCA's
large stockholders. Under the plan, Silver Point would have recovered
all of the money it loaned OCA and would have used some of it to help
compensate large stockholders by making financial gifts to them over
time. OCA filed for chapter 11 bankruptcy
protection in March after it failed to file earnings reports and other
financial statements with regulators in a timely manner. The company
also faced litigation from a number of doctors. Beginning in 2004, its
doctor base was reduced as doctors stopped paying the company and began
suing for breach of contract.
href='http://www.nola.com/business/t-p/index.ssf?/base/money-1/1167979064225830.xml&coll=1'>Read
more.
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