src='/AM/Images/headlines/headline.gif' />
October 18, 2005
name='1'>Ga.
Bankruptcy Court Invalidates "Debt Relief Agency"
Provision in BAPCPA
In the first
judicial shot
across the bow of the new bankruptcy law, effective yesterday, Chief
Bankruptcy
Judge Lamar Davis (S.D. Ga.) entered an order yesterday morning that
attorneys
licensed in the Georgia court are not covered by the new attorney
regulations
found in §§526, 527 and 528.
href='/pdfs/lwdOrder.pdf'>Get
the full opinion here.
id='2'>Conflicts
of Interest Ends Congoleum’s Pre-packaged Bankruptcy Plan
In a setback for
Congoleum
Corp., a federal appeals court has reversed a bankruptcy judge’s
approval of
the company’s "pre-packaged" bankruptcy plan after
finding that one
of the firms it hired suffered from conflicts of interest because it
also represented
plaintiffs with asbestos claims against Congoleum, the Legal
Intelligencer
reported today. In its 30-page opinion in In re Congoleum
Corp., a unanimous
three-judge panel concluded that Congoleum should not have hired
Gilbert Heintz
& Randolph (GHR) of Washington, D.C., as "special
counsel" to
advise it on negotiating with asbestos claimants. The court concluded
that GHR
suffered from an incurable conflict of interest because it had acted
as counsel
for Congoleum in negotiating settlement arrangements with asbestos
claimants
represented by lawyers from another firm—Weitz &
Luxenberg—who
were co-counsel with GHR in insurance matters for the same claimants.
The ruling
is a victory for a group of insurance companies that would have been
required
under the bankruptcy plan to finance a $500 million trust that would
allow Congoleum
to put its asbestos liability behind it.
href='http://www.law.com/jsp/article.jsp?id=1129552519464'>Read
the full story.
id='3'>Delphi
Execs Take Pay Cut
Delphi
Corp.’s Chairman and
CEO Steve Miller pledged to cut his $1.5 million annual salary to $1
until the
supplier emerges from chapter 11 bankruptcy, the Detroit Free
Press reported
yesterday. The self-imposed reduction, which would take effect Jan. 1,
also
calls for Miller to forego bonuses, severance and pension plan payouts
going
forward. However, Miller will keep the $3 million signing bonus he
received
when he became CEO on July 1. Delphi executives who were with the
company at
the time Miller became CEO voluntarily took 10 percent pay cuts.
Delphi President
Rodney O’Neal agreed to take a 20 percent reduction in his
salary, also effective
Jan. 1. Last week, a Delphi official told the Free Press that
the company’s
top five executives, excluding Miller, were paid between $800,000 and
$1 million
a year in 2004.
href='http://www.freep.com/news/latestnews/pm6728_20051017.htm'>Read
the full story.
id='4'>San Diego’s
Aguirre Has A Lot At Stake in Mayor Race
City Attorney
Michael Aguirre
has jumped into the San Diego mayor’s race, backing Donna
Frye’s fiscal-recovery
plan and criticizing her rival, Jerry Sanders, with a fervor that
underscores
how much he has at stake in the Nov. 8 special election, the San
Diego Union-Tribune
reported Sunday. If Frye wins, Aguirre will have something he has not
had during
his tumultuous first year as city attorney—a close ally in the
mayor’s
office, one whose vision for San Diego’s fiscal recovery borrows
heavily from
his own. But if Sanders wins, Aguirre will face a mayor whose public
and private
remarks show that his definition of the city attorney’s job is
narrower than
Aguirre’s.
href='http://www.signonsandiego.com/news/metro/20051016-9999-1n16aguirre.html'>Read
the full story.
id='5'>Bankruptcies
Will Hit Citigroup
A surge in
bankruptcies ahead
of yesterday’s new bankruptcy law could cut Citigroup’s
fourth quarter net income
by more than $310 million, the company’s financial chief Sallie
Krawcheck said,
according to CNN reports. Speaking at the company’s third
quarter earnings call
with analysts, Krawcheck said that Citigroup, which recorded a $124
million
after-tax third quarter loss as a result of the consumer rush to file
bankruptcy,
expects the fourth quarter impact to be more than 2 1/2 times the
third quarter
loss.
href='http://money.cnn.com/2005/10/17/news/fortune500/citigroup_earnings/inde…'>Read
more.
id='6'>Yonkers
Project Sparks Builder’s Chapter 11 Filing
A Bronx builder
with several
completed and pending redevelopment projects in Yonkers to his credit
maintains
that his work will not be affected by his pursuit of chapter 11
bankruptcy for
the corporation that completed his largest and best-known project, the
Westchester
County Business Journal reported yesterday. Gary Flocco blames a
money dispute
with an investor partner for placing his St. Casimir Development Corp.
under
protection from creditors pending a reorganization of debts. The
corporation
was Flocco’s entity for St. Casimir’s Senior Residence, a
107-unit apartment
building in Yonkers, N.Y. Flocco is accusing two entities of trying to
remove
him from the partnership, and of not paying him $1.68 million. That
money is
part of the $9.65 million St. Casimir is obligated to repay holders of
Government
National Mortgage Association, or "Ginnie Mae" mortgage
bonds issued
by the Yonkers Industrial Development Agency.
href='http://www.westchestercbj.com/current_issue/101705wrop01.html'>Read
more.
id='7'>Chapter
11 for Refco
Commodities broker
Refco Inc.
filed for chapter 11 bankruptcy protection and said that it had
reached a preliminary
deal to sell its core futures brokerage business to a group of private
investors
for $768 million, the Associated Press reported today. The consortium
of would-be
buyers is led by private buyout firm J.C. Flowers & Co. LLC, which
specializes
in taking distressed financial companies and either turning them
around or selling
the pieces to other companies. As part of the agreement, Refco said it
will
have the option to retain up to 20 percent of the equity value of the
entities
being sold. The situation at Refco, which just went public in an
August stock
offering, has deteriorated quickly following the disclosure last week
that CEO
Phillip Bennett hid a $430 million debt from the company’s
books. He was placed
on leave after repaying the company $430 million plus interest.
id='8'>Boxing
Champ Files Chapter 11 in Maryland
Two-time former
heavyweight
boxing champion Riddick Bowe has filed for chapter 11 bankruptcy
protection,
the Associated Press reported yesterday. Bowe’s Baltimore
attorney, Paul
Nussbaum, says the filing will allow Bowe to restructure his debts
while
he focuses on his boxing career. After more than seven years away from
boxing,
Bowe began a comeback last year. Bowe is also a three-time New York
Golden Gloves
Champion and 1988 Olympic Silver Medal winner.
id='9'>Signature
Sales & Service Files For Chapter 11
Signature Sales
& Service
LLC, doing business as Atlas Distributing International in Wood Dale,
Ill.,
recently filed for chapter 11 bankruptcy protection, MarketWatch
reported yesterday.
A meeting of creditors has been scheduled for Nov. 3 at the court in
Chicago.
Frank Gumma, president of the company, said that service has not been
interrupted
and that suppliers have been notified.
id='10'>Chapter
11 Chain Files for Bankruptcy
Atlanta-based
Chapter 11 Bookstores
has filed for chapter 11 bankruptcy protection, the Atlanta
Journal-Constitution
reported today. A retailing chain whose slogan once touted
"prices
so low, you’d think we were going bankrupt" will shutter
seven stores by
the end of the month as part of a reorganization plan. Chapter 11
Bookstores
was founded in Atlanta in 1990 and thrived for the subsequent decade
by offering
primarily budget-priced books. By 2001, the chain was said to be
suffering from
flat sales. No other details on the bankruptcy or the company’s
reorganization
plan were available.
id='11'>Boyds
Collection Files Chapter 11
The Boyds
Collection Ltd. filed
for chapter 11, BankruptcyData.com reported today. The Maryland-based
teddy
bear company said that it is taking this action in an effort to
restore its
financial stability and ensure its long-term success without any
disruption
to the day-to-day operation of its business. Boyds has received a
commitment
from D.E. Shaw Laminar Lending Inc. for up to $8 million in DIP
financing which,
upon bankruptcy court approval, will provide funding for the
company’s ongoing
operations.
id='12'>Judge:
Pilots Must File Lawsuit if They Want to Challenge Delta Pension
Decision
A bankruptcy judge
ruled
yesterday that if Delta Air Lines pilots want to challenge the
company’s decision
not to make certain pension payments, they need to file a lawsuit.
Judge Prudence
Carter Beatty did not rule on the merits of a motion that the
pilots filed
seeking reinstatement of the payments. Instead, the judge indicated
that they
need to follow procedure and recommended that Delta meet with its
pilots to
try to come to a resolution outside the court.
href='http://www.usatoday.com/travel/news/2005-10-18-delta-bankruptcy_x.htm%2…'>Read
more.