CBS Agrees to Buy CNET
CBS Corp. agreed to acquire online news provider CNET Networks Inc. for
about $1.8 billion, the Wall Street Journal reported today.
CNET shareholders would get $11.50 a share, a 45 percent premium to
yesteray's closing price. CBS said that the deal, expected to close in
the third quarter, would make it one of the 10 most popular Internet
companies in the U.S., with a combined 54 million unique users per
month, and about 200 million users worldwide. San Francisco-based CNET
owns such Internet entertainment, news and information sites as CNET,
ZDNet and GameSpot.com. The company has 'a large international
footprint, particularly in China,' CBS noted.
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Senator Urges Regulators to Investigate Countrywide Financial
over Potential Bankruptcy Abuses
Sen. Charles Schumer (D-N.Y.) on Wednesday urged federal regulators to
investigate alleged mistreatment by Countrywide Financial Corp. of
homeowners in bankruptcy, the Associated Press reported yesterday.
Schumer said in a letter to Federal Trade Commission Chairman William
Kovacic that Countrywide has sought to improperly use the bankruptcy
process to foreclose on borrowers' homes. Bankruptcy judges have
criticized the company for arguing in court that borrowers were
delinquent on their payments even when they were not. An investigation
by the FTC 'would help pull the curtain back on a hidden corner of the
existing foreclosure crisis, and could help stem the tide of homeowners
who are now unnecessarily being forced into bankruptcy and foreclosure,'
Schumer's letter said.
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Vallejo School District Feeling Effects of City's
Bankruptcy
Vallejo, Calif.'s decision to declare bankruptcy last week has caused
the Vallejo City Unified School District-a separate governmental
entity-to suffer the loss of financing for portable classrooms, the
delayed delivery of textbooks, the decline in value of general
obligation bonds and a reduction in the number of on-campus city police
officers, the San Francisco Chronicle reported yesterday. At a
press conference last week, the school district hopes to reassure
investors, contractors, bondholders, financial institutions and the
community that the school district is solvent, not bankrupt, and is, by
state law, a separate government agency than the city of Vallejo. School
officials said yesterday that the mistaken impression that the school
district is part of the city government caused publisher McGraw-Hill to
delay delivery of $684,000 in textbooks, an investment group to pull
$400,000 in financing for the purchase of already-ordered portable
classrooms for three school sites, a sharp decline in the
value of $133 million in general obligation bonds issued by the school
district the day after the bankruptcy vote, and a reduction in the
number of city police officers assigned to high school campuses.
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Lawyer Found Guilty in Bankruptcy Fraud Case
A Phoenix attorney has been convicted by a federal jury on 33
counts of false declarations in bankruptcy proceedings, bankruptcy fraud
and money laundering, the Associated Press reported yesterday. During
the weeklong trial, authorities said evidence showed that James Joseph
Everett made numerous false declarations in his chapter 7 bankruptcy
filings in an attempt to conceal about $500,000 in assets and income
from a trustee. Federal prosecutors also charged that Everett used more
than $300,000 in concealed assets to buy a house in Paradise Valley.
Everett, 53, was convicted Tuesday and is scheduled to be sentenced Aug.
25. Prosecutors said that a conviction for false declarations in
bankruptcy proceedings and bankruptcy fraud carries a maximum sentence
of five years in prison and/or a $250,000 fine while a conviction for
money laundering carries a maximum sentence of 20 years in federal
prison and/or a $500,000 fine.
Media Mogul Forced to File Chapter 7
Creditors have forced Visalia, Calif.-based media mogul Harry J. Pappas
into a personal bankruptcy filing-a move that threatens his effort to
save Pappas Telecasting Companies from financial disaster, the
Fresno Bee reported yesterday. Pappas filed Monday in the U.S.
Bankruptcy Court for the District of Delaware. Lenders Fortress Credit
Opportunities, Ableco Finance LLC and Silver Oak Capital LLC, saying
Pappas personally owes them $15 million, are asking in their chapter 7
filing for an interim trustee to protect their interests while the
matter can be sorted out.
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Airlines
Delta Pilots Change Pact in Advance of
Merger
Pilots at Delta Air Lines have voted overwhelmingly in favor of changes
to their contract that will give them pay raises, an equity stake and
other benefits, but also will give management more leeway as part of a
proposed combination with a rival carrier, Northwest Airlines, the
Associated Press reported today. Voting, which started May 1, ended
Wednesday. A letter from the chairman of the union's executive
committee, Lee Moak, to fellow pilots said that 78 percent of pilots who
voted approved of the changes. The contract covers more than 7,000
pilots at Delta. Northwest's 5,000 pilots are not part of the agreement.
Out of 6,073 eligible Delta pilots, 4,590 voted. Of those, 3,580 voted
in favor of ratifying the agreement, Mr. Moak said. Delta agreed to
extend its existing collective bargaining agreement with its pilots
through the end of 2012. The revised contract provides the Delta pilots
a 3.5 percent equity stake in the new company.
href='http://www.nytimes.com/2008/05/15/business/15delta.html?scp=2&sq=delta&st=nyt'>Read
more.
Mesa Air to Shut Air Midwest
Mesa Air said that it will shut down subsidiary carrier Air Midwest,
cutting off service to 16 small cities in 10 states because of soaring
fuel prices, the Associated Press reported yesterday. Phoenix-based Mesa
Air Group Inc. said that the cuts will begin next week and be completed
by June 30. The cities belong to the federal government's Essential Air
Service program, which subsidizes flights on routes that would otherwise
be unprofitable. 'Unfortunately under the current economic conditions
there was no foreseeable way to achieve sustained profitability,' said
Jonathan Ornstein, CEO of Mesa Air Group. Earlier this year, Air Midwest
asked the U.S. Department of Transportation to let it out of 13
subsidized contracts.
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IdleAire files Chapter 11 Bankruptcy
IdleAire Technologies Corp. has filed for bankruptcy in the U.S.
Bankruptcy Court for the District of Delaware, Land Line Magazine
reported yesterday. The company has amassed a total net loss of more
than $246 million since it went into operation, according to its 2007
annual report to stockholders. In that annual report, company officials
weren't optimistic about its future either-so much so that expansion
plans are now on hold. IdleAire is a provider of truck stop
electrification and related services. Corporate headquarters and a
research and development center are located in Knoxville, Tenn.
href='http://www.landlinemag.com/todays_news/Daily/2008/May08/051208/051408-06.htm'>Read
more.
Penn. Restaurant Files for Chapter 11
Salone Holdings LLC has filed for chapter 11 bankruptcy protection on
$3.6 million in debts on the Quaker Steak & Lube restaurant
franchise, the Altoona Mirror reported today. The filing for
Quaker Steak & Lube will not affect any of Salone's other business
interests, said the company's Managing Member Larry Salone. Salone
Holdings owes $1.8 million to S&T Bank of Indiana; $1.4 million to
Sovereign Bank of Wyomissing; a business loan of $304,000 to Graystone
Bank of Harrisburg and a trade debt of $6,000 to the SS Kemp Co. of
Cleveland, according to the bankruptcy filing.
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more.
New Orleans Arm of Restaurant Chain Files for Chapter
11
Pat O'Brien's has filed for chapter 11 bankruptcy, Black
Enterprise Magazine reported today. The move allows the New
Orleans-based restaurant and bar to reorganize while it remains open.
The petition lists estimated liabilities in a category of between $1
million and $10 million, and assets of up to $50,000. The facility,
which opened at 310 Beale in 2002, defaulted on payment of a
construction deed of trust issued in December 2001. Other store
locations include Cancun, Mexico; Orlando, Fla.; and San Antonio. A
franchise in Destin, Fla., is set to open this summer.
href='http://www.blackenterprise.com/yb/ybopen.asp?section=ybsb&story_id=117360764&ID=blackenterprise'>Read
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Fedders Procedures Approved
The U.S. Bankruptcy Court approved Fedders' motion for sale procedures
and purchaser protections and scheduled a hearing to approve the sale of
certain assets, BankrupcyData.com reported today. The order further
approves the assumption and assignment of certain executory contracts
and unexpired leases and grants related relief.
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Video Distributor Files Chapter 7 Bankruptcy
Pro-Active Entertainment Group filed for chapter 7 bankruptcy protection
in U.S. Bankruptcy Court for the Central District of California on May
7, VideoBusiness.com reported yesterday. Pro-Active represented dozens
of mainly small video labels, acting as a consolidator to key retailers
and distributors. A resolution in the filing, signed by president
Leonard Levy and other officers, stated reasons as video distribution
“has ceased to be a profitable business due to the proliferation
of films on the Internet;” “from early 2006 until mid-2007,
the directors of the corporation have been unable to show a
profit;” and “the decision was made to cease business
operations in November 2007.” The company listed zero assets and
$460,231.68 in liabilities, primarily in the form of film distribution
fees due the labels. The fees were listed as unsecured claims.
Sharper Image Stalking-Horse Bidder Approved
A joint venture led by Hilco Consumer Capital and GB Brands, in
partnership with Windsong Brands and Crystal Capital, announced that it
was approved by the bankruptcy court as the stalking horse bidder for
certain assets of Sharper Image, BankruptcyData.com reported today. HCC
and GBB also announced that they have developed a global licensing
strategy for wholesale, retail, direct-to-retail, e-commerce and catalog
businesses that for the company's product line. The court scheduled a
May 28, 2008 auction for the assets with a sale hearing to follow on May
29, 2008.
Pope & Talbot Procedures Approved
A bankruptcy court approved Pope & Talbot's chapter 7 trustee's
motion for an order establishing bidding procedures in connection with
the sale of certain assets of the debtors relating to their business at
the Halsey Pulp Mill, authorizing and scheduling an auction in
connection with the sale, approving cure cost procedures relating to the
assumption and assignment of certain executory contracts and unexpired
leases in connection with the sale, approving form and manner of notices
and scheduling a hearing for final approval of the sale,
BankruptcyData.com reported today. The court scheduled a June 3 auction
with a June 9 sale hearing.
International
Bank of England Almost Done Cutting Interest
Rates
Bank of England Governor Mervyn King signaled that the central
bank is about done cutting interest rates, Bloomberg News reported
yesterday. King said yesterday that he expects inflation to breach
the government's 3 percent limit for “several quarters,'' and the
central bank's forecasts show that further rate cuts may make matters
worse. Reducing the Bank of England's benchmark rate to 4.5 percent from
the current 5 percent would risk unacceptably high inflation, the
central bank's forecasts show. The Bank of England has cut its benchmark
rate three times since December, by a quarter point each time.
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Parmalat Trading Declines Most Since 2005
Parmalat SpA, Italy's biggest dairy company, fell the most in
more than two years in Milan trading after posting an 18 percent drop in
first-quarter profit and saying it was unable to recover costs from
price increases, Bloomberg News reported today. Parmalat slid as much as
32 cents, or 15 percent, to 1.86 euros in Milan, the steepest intra-day
drop since Oct. 7, 2005. The company, which alleges that former bankers
contributed to its 2003 bankruptcy, earned about a third less from legal
settlements in the quarter than it did a year earlier. Parmalat also
said efforts to raise prices lagged behind unexpected increases in raw
milk. Net income fell to 90.2 million euros ($140 million) from 110.3
million euros a year earlier, the Collecchio, Italy-based company said
after markets closed yesterday. That missed the 103.9 million-euro
median estimate in a survey of three analysts. Parmalat was down 23
cents, or 11 percent, at 1.95 euros as of 1:17 p.m. in Milan, extending
this year's drop to 27 percent and cutting the company's market value to
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