src='/AM/Images/headlines/headline.gif' />
June 16, 2006
id='1'>Bush Tells Lawmakers to Finish Pension Bill
House Majority Leader John Boehner (R-Ohio) said President George W. Bush urged lawmakers on Thursday to end months of sparring and finish work on pension reform legislation, Reuters reported yesterday. But congressional negotiators still haven't settled the key question of defining when a company is at risk of defaulting on its pension obligations, Boehner told reporters. Boehner said lawmakers still had not decided how to determine whether a company is at risk of defaulting on its pension obligations, and therefore must add more funds to its pension plan. The issue has divided lawmakers virtually since the negotiations began in March. Read more.
id='2'>Judge Rules Bankrupt Spokane Diocese Can't Sell Parishes
A federal judge ruled Thursday that individual parishes of the Catholic Diocese of Spokane are not owned by the bishop and thus cannot be sold by him to pay victims of clergy sex abuse, the Associated Press reported yesterday. The ruling by Judge Justin Quackenbush overturned a decision made in August by a bankruptcy judge who had ruled that the bishop held title to all parish assets. It appeared to be a victory for about 80 parishes that had been at risk of losing churches, schools and other property to pay victims' claims. It could be a loss for plaintiffs, who for now would be left with only the much smaller assets of the bishop to divide in any court settlement. Quackenbush sent the case back to bankruptcy court for a determination on the status of individual parishes. Read more.
id='3'>Refco Unit Ordered to Pay $124 Million
A U.S. judge ordered a unit of bankrupt Refco Inc. to honor a British court judgment to pay $124 million to Sberbank, Russia's largest bank, court documents show, according to a Reuters report yesterday. Sberbank had sued Refco Securities LLC in December after accusing the futures broker of essentially taking the bank's collateral from several loan transactions. A British court ruled in favor of the Russian bank, ordering Refco Securities to pay just over $120 million, plus interest and legal fees. In a ruling dated June 2, U.S. District Judge P. Kevin Castel said the British judgment is enforceable in the United States and ordered Refco Securities to pay $123.7 million. Read more.
id='4'>USG Gets Court Approval for Reorganization Plan
USG Corp. won bankruptcy court approval for its reorganization plan, Portfolio Media reported yesterday. USG, which was driven into bankruptcy by asbestos-related personal injury claims almost five years ago, will pay its creditors and put more than $3 billion into a trust for asbestos claimants. The company's stock will retain 100 percent of its value, and existing stockholders will be given the chance to purchase more stock at a strike price of $40 per share. Stockholders are typically the last to be paid in bankruptcy cases and are often saddled with total or near-total losses. Ultimately, no one opposed the chapter 11 plan, said David Heiman, who represented USG in its bankruptcy case.
Autos
id='5'>Delphi Creditors Support Rejection Effort
Delphi Corp.'s creditors on Thursday asked a bankruptcy judge to approve the auto supplier's bid to reject about 5,000 contracts with its biggest customer, General Motors Corp., the Associated Press reported yesterday. Delphi in March asked Bankruptcy Judge Robert Drain in New York to void supply contracts with the automaker. In the filing, Delphi's creditors' committee said that voiding the contracts is essential to the company's 'efforts to obtain, whether voluntarily or involuntarily, GM's contribution to solve the problems that GM created.' The creditors said that Delphi makes clear that it does not intend to stop supplying parts to GM, but at most, to raise the prices. In its own filing Thursday, Troy, Mich.-based Delphi denied it was holding the threat of a shutdown over GM's head and predicted the companies would come to an agreement on new pricing. A hearing on the GM contracts is scheduled for Aug. 15. Read more.
id='6'>UAW Says Applications for Buyouts Soaring at GM
With a week to go before the deadline, it looks like at least 30,000 United Automobile Workers union members at General Motors will opt for incentives to leave or retire Ñ equal to the number of jobs GM plans to cut, the New York Times reported today. The union's president, Ron Gettelfinger, said Thursday that 25,000 GM workers, or roughly 22 percent of its work force represented by the UAW, had signed up thus far. Another 8,500 workers at the parts supplier Delphi, or a little more than a third of its UAW membership, had accepted the plans, said Richard Shoemaker, an outgoing union vice president. Next Friday marks the deadline for workers to decide about the packages, which are available to all 113,000 UAW members at GM and all 23,000 union members at Delphi. Read more.
id='7'>GM Chief Executive Wagoner Calls Bankruptcy a 'Bad Strategy'
General Motors Corp. Chief Executive Officer Rick Wagoner said he has no intention of filing for bankruptcy and that doing so would be a 'bad strategy,' Bloomberg News reported today. Wagoner said the automaker was on solid financial ground after posting $10.6 billion in losses last year. Detroit-based GM reported a first-quarter profit, and Wagoner plans to trim $7 billion in annualized spending by the end of 2006. 'General Motors in bankruptcy would be a company that would sell a lot fewer units,' Wagoner said, and told employees in November that GM had no plans to file for bankruptcy. Other executives, including vice chairman Bob Lutz, have made similar comments since then. Read more.
id='8'>Ford, in a Blow to UAW, Casts an Eye to Mexico
Underscoring the weakening influence of the United Auto Workers union over the U.S. auto industry, Ford Motor Co. is considering building a new plant in Mexico at a time when it is shutting down factories in the United States, the Wall Street Journal reported today. The Oakland Press, a Detroit-area newspaper, reported this week details from a document outlining a plan suggesting that Ford and its suppliers could invest as much as $9.2 billion in Mexico and create as many as 150,000 jobs there. Ford officials have acknowledged that the document appears to be real, but have declined further comment. Among its details are deadlines for key tasks and the Ford executives responsible for them. People familiar with the matter said the auto maker is nearing a decision on building a Mexican plant to produce a new subcompact car that wouldn't be economically feasible in a UAW-staffed U.S. plant. Read more. (Registration required.)
id='9'>Heating Oil Firm Gets $125 Million in Exit Financing
With $125 million in exit financing under its belt, Heating Oil Partners LP is preparing to emerge from chapter 11 in July, less than a year after high oil prices drove the company to insolvency, Portfolio Media reported yesterday. As part of the arrangement, J.P. Morgan Chase Bank NA will serve as administrative agent, according to court documents. The package could increase to $150 million through a five-year revolving credit facility. Bankruptcy Judge Alan H.W. Shiff approved its reorganization plan on Wednesday. Darien, Conn.-based Heating Oil Partners and two of its affiliates filed for bankruptcy protection in September 2005, claiming $127 million and $155 million in debts, in the U.S. Bankruptcy Court for the District of Connecticut.
id='10'>California Settles with Bankrupt Diet-Pill Maker for $1 Million
California and 10 local prosecutors have reached a $1 million settlement with bankrupt diet-pill maker Nutraquest Inc., which was accused of using deceptive techniques to sell weight-loss products that contained ephedra, the Associated Press reported today. Nutraquest Inc. was accused in a lawsuit filed by the California prosecutors of making numerous deceptive advertising claims about its best-selling diet pill, Xenadrine RFA-1. Nutraquest filed for bankruptcy protection in 2003 after a flood of lawsuits claiming the ephedra in Xenadrine caused medical problems, including at least one death. As part of the settlement announced Thursday, Nutraquest president Robert Chinery is required to pay $600,000 in civil penalties and $400,000 in costs.
Some people who bought the diet pills also will be eligible for restitution as part of the bankruptcy proceedings. Read more.
id='11'>Winn-Dixie Plans to Emerge from Bankruptcy
Winn-Dixie Stores Inc. will file its reorganization plan later this month and plans to emerge from bankruptcy protection by late October after the supermarket chain agreed with creditors on how they will be paid, a company attorney said, the Associated Press reported yesterday. Winn-Dixie attorney Stephen Busey told U.S. District Bankruptcy Judge Jerry Funk that a committee of creditors had reached a compromise on payments, and the Jacksonville, Fla.-based company agreed. The agreement will be placed in its reorganization plan, allowing the company to file it by a June 29 deadline, Busey said. He said that Winn-Dixie will file a disclosure statement at that time along with a schedule of payments, based on the class of creditor and that a hearing will be scheduled Aug. 4 to work out the details for all the parties involved to vote on the plan. Read more.
id='12'>Tire Retreading Company Freezes Pension Plans
Tire retreading company Bandag Inc. said it was closing its pension plans to new hires in the United States and Canada and freezing its existing pension plans for U.S. workers and some Canadian employees to better control retirement expenses, Reuters reported yesterday. The company also said it may terminate its pension plans within 18 months, and it is offering an early retirement program for some employees. The company said it expects to record a net curtailment pretax gain of $1.9 million, or 6 cents a share, for the quarter ending June 30. Read more.