January 172008

 

name='1'>Public Company Bankruptcies Up Slightly in

2007

The number of publicly-traded
companies filing for bankruptcy in 2007

totaled 78, a slight increase from 66 filings in 2006, according to a
BankruptcyData.com release yesterday.

However, the 2007 public company filing total is the fifth lowest
filing number since 1980 and well below

the high of 263 public company bankruptcies recorded in 2001. The total
pre-petition assets of publicly-traded

companies in bankruptcy increased in 2007 to $70,525,653,392 in
comparison to $22,257,549,333 in 2006. Although

significant in comparison to 2006, the five largest filings were all in
the mortgage and banking

industry. 
href='http://biz.yahoo.com/bw/080116/20080116006169.html?.v=1'>Read the
release.

Housing
Downturn

name='2'>Congress Weighs Stimulus Proposal Targeting

Housing

Democratic congressional
leaders are weighing the need for a

rescue package for the nation's battered housing industry, exploring the

possibility of allowing state housing

authorities greater ability to go into distressed areas to finance the
purchase of foreclosed homes and creating

a temporary government agency that would provide insurance to stabilize
the rattled mortgage-backed securities

market,
size='3'>Congress Daily

size='3'>reported today. The thinking among lawmakers such as House
Financial Services Chairman Barney Frank

(D-Mass.) and Joint Economic Committee Chairman Charles Schumer (D-N.Y.)

is that since the downturn has been

driven by a collapse in the home mortgage market, efforts tailored to
bring stability to the industry could

be effective in helping the economy recover. Frank said that he is
exploring whether state housing

authorities could receive additional funding to go into areas that have
significant foreclosure rates, such as

the

size='3'>Cleveland area,
and buy properties in foreclosure to help

stabilize the market, providing an at-risk family a home as well as
preventing a further decrease in prices in a

metropolitan area. Schumer also mentioned that he is looking at the
possibility of creating a temporary

government agency similar to the Resolution Trust Corporation, which was

created in the late 1980s to help

liquidate property as a result of the savings-and-loan bust. Such an
agency could provide significant liquidity

to the distressed mortgage-backed securities market, either by
purchasing such devalued assets or insuring

them.

name='3'>Fed Chairman Supporting Economic Stimulus

Measures

Federal Reserve Chairman
Ben S. Bernanke has told lawmakers that

he can support tax cuts or spending measures to stimulate the economy,
even if they increase the budget deficit,

provided the measures are quick and temporary, the
face='Times New Roman' size='3'>New York

Times reported today. Faced with growing
evidence that the economy is slipping into a

recession, Congressional Democrats and President Bush are trying to come

up with a package that would put more

money in Americans’ hands within the next few months. Many
lawmakers will not support action without the

chairman’s blessing, and the double dose of stimulus that the Fed
and Congress are considering must be

carefully calibrated.
size='3'>Democratic lawmakers who have spoken

with Bernanke said that he would not endorse any specific plan but
supported the general idea of propping up

consumer spending and investment with temporary tax or spending
measures. 

href='http://www.nytimes.com/2008/01/17/business/17fiscal.html?_r=1&hp=&oref=slogin&pagewanted=print'

>Read more.

name='4'>Countrywide Adjusts Terms on Some

Loans

Countrywide Financial
Corp. said that it modified terms on loans

and took other steps to allow 81,266 struggling mortgage borrowers to
remain in their homes last year, the

Wall Street Journal
reported today. The

Calabasas,
face='Times New Roman'

size='3'>Calif., lender is

under pressure from politicians and

regulators to prevent foreclosures where possible. Countrywide also said

that it also agreed to 'short sales' in

7,880 cases last year, where the borrower sells the home for less than
the loan balance and the lender agrees not

to demand the remaining amount due. In October, Countrywide reached an
agreement with Neighborhood Assistance

Corp. of America (NACA) to restructure loans for people at risk of
losing their homes. 

href='http://online.wsj.com/article/SB120053645112796439.html?mod=us_business_whats_news'>Read

more.

(Registration required.)

name='5'>Merrill Lynch Swings to Loss on $11.5

Billion in Write-Downs

Merrill Lynch & Co.
swung to a fourth-quarter net loss, as the

company recorded $11.5 billion more in mortgage-related write-downs in
addition to a $3.1 billion write-down on

hedges with financial guarantors, the Wall Street

Journal reported today. The company recorded
$7.9 billion in mortgage-related

write-downs in the third quarter. Exposure to
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;#10;Roman' size='3'>U.S.
size='3'>collateralized debt obligations

was $4.8 billion as of Dec. 31, compared with $15.8 billion three months

earlier. For the same periods, exposure

to subprime-residential mortgages fell to $2.71 billion from $5.66
billion. Merrill has addressed its

balance-sheet woes by selling a commercial-finance unit and garnering a
combined $12.8 billion in capital

infusions from a number of investors, including sovereign wealth funds
of

w:st='on'>

size='3'>Singapore,

face='Times New 


Roman'
size='3'>Korea

and
w:st='on'>
size='3'>Kuwait

size='3'>. 

href='http://online.wsj.com/article/SB120056782485697411.html?mod=hps_us_whats_news'>Read

more. (Registration required.)

name='6'>Creditors Approve Plan for

w:st='on'>Delphi

Delphi Corp.'s
reorganization plan has won the approval of

creditors, arming the company with key support as it heads to court
today to seek a judge's final approval for

its plan, the Detroit
Free Press

size='3'>reported today. Meanwhile, in a bankruptcy court filing, the
company said it expects to have a

$6.1-billion exit loan, crucial to its bankruptcy emergence, in place by

early next month.

w:st='on'>

size='3'>Delphi said yesterday that 81

percent of 4,000 eligible creditors who

voted on the plan approved it. The plan pays most unsecured creditors in

full through new stock and rights to buy

stock at a discount and also gives existing stockholders newly issued
shares in the reorganized company.

size='3'>Delphi

size='3'>has said it wants exit chapter 11 by the end of March. 

href='http://www.freep.com/apps/pbcs.dll/article?AID=/20080117/BUSINESS01/801170348/1014/BUSINESS01'>Read

more.

name='7'>Federal-Mogul Names Icahn as

Chairman

The Federal-Mogul Corporation,
the auto parts supplier that emerged from

chapter 11 last month, named the billionaire investor and shareholder
Carl C. Icahn as nonexecutive chairman,

Reuters reported yesterday. Icahn holds a 75 percent stake in
Federal-Mogul, which sought chapter 11 bankruptcy

protection in October 2001 in the face of large asbestos claims. He
accumulated a large position in unsecured

Federal-Mogul bonds before its bankruptcy and they were swapped for
equity as part of its reorganization

plan.

name='8'>Asarco Seeks Ninth Exclusivity

Extension

Mining company Asarco LLC

is asking a judge for another

exclusivity extension to file its chapter 11 plan, saying it needs more
time to negotiate with creditors over

outstanding liabilities,
size='3'>Bankruptcy Law360

size='3'>reported yesterday. In a motion filed Tuesday in the U.S.
Bankruptcy Court for the Southern District of

Texas, the company requested a new deadline of April 11 to file its plan

and until June 13 to win creditor

approval. The company said in the motion that it had made significant
progress in negotiations with its two

largest creditor groups- those who have environmental and asbestos
claims. But it has yet to reach a

definitive agreement, and another mediation session is scheduled for
Jan. 24. 

href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=44328'>Read

more. (Registration

required.)

name='9'>Interstate Bakeries Goes Forward with Filing

Disclosure Statement

Interstate Bakeries Corp.

has not received any qualifying

alternative proposals to fund its reorganization under chapter 11 since
it lost its exclusivity last week, and

will not hold an auction of its assets later this month as it had
planned,

size='3'>Bankruptcy Law360 reported yesterday.

The maker of Hostess Twinkies and Wonder

Bread also said that it has not heard from investment firm Yucaipa Co.
and the International Brotherhood of

Teamsters, which submitted a reorganization plan in December. IBC's sole

right to file a chapter 11 plan and

retain authority over its case came to an end on Jan. 7. In the absence
of competing proposals, however, IBC will

go ahead and submit its own disclosure statement to creditors for
approval. A hearing on its disclosure statement

is scheduled for Jan. 29. 

href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=44386'>Read

more. (Registration required.)

International

name='10'>Basis Capital Funds Denied Bid for

Chapter 15 Bankruptcy

Bankruptcy Judge

size='3'>Robert Gerber yesterday denied a bid
by Australian hedge fund manager Basis

Capital Funds Management Ltd. to place one of its collapsed hedge funds
into chapter 15, the Associated Press

reported yesterday. The Basis Capital Yield Alpha Fund (Master), based
in the Cayman Islands, sought chapter

15 protection in the U.S. Bankruptcy Court in
w:st='on'>

size='3'>Manhattan in August after it
suffered big losses due to fallout from

the
face='Times New Roman'

size='3'>U.S.
size='3'>subprime-mortgage crisis. Judge Gerber said

in his ruling that the liquidators failed to address whether the
Cayman Islands was

the proper jurisdiction for the fund's

liquidation. More than $50 million of the fund's assets were located in
the United States, according to court

documents. 

href='http://biz.yahoo.com/ap/080116/basis_capital_funds_bankruptcy.html?.v=1'>Read

more.

href='http://biz.yahoo.com/ap/080116/basis_capital_funds_bankruptcy.html?.v=1'>