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April 11, 2006
name='1'>Acting Trustee Appointed to Northeast Region
Diana Adams has been
appointed Acting U.S. Trustee for
face='Times New Roman' size='3'>New York
size='3'>,
size='3'>Connecticut
size='3'>Vermont
2) for an interim period effective on April 7, the U.S. Trustee Program
announced yesterday. She replaces U.S. Trustee
face='Times New Roman' size='3'>Deirdre A. Martini
size='3'>, who resigned to return to the private sector. Adams
previuosly served as the Assistant U.S. Trustee in the U.S. Trustee
Program's Brooklyn office from 2001 to the present, and as an Assistant
U.S. Trustee in the Program's
w:st='on'>
size='3'>Manhattan
from 1996 to 2001. She has also served as a law clerk for Judge Cecilia
H. Goetz of the Eastern District of New York and worked in private
practice law. Adams received her law degree from New York University
School of Law and her undergraduate degree magna cum laude
from
face='Times New Roman' size='3'>Boston
size='3'>University
size='3'>.
name='2'>Computer Product Manufacturer Files for
Bankruptcy
Verilink Corp., a
computer network equipment manufacturer, said it has laid off 20
percent of its work force and filed for bankruptcy reorganization as it
works to restructure debt, the Associated Press reported yesterday.
Leigh S. Belden, president and CEO, and Timothy Anderson, chief
financial officer, also were let go. Both will be consultants during the
reorganization process. Lee Katz was appointed president and
CEO. Katz has more than 30 years of
experience in corporate restructuring, including a recent stint as
director of reorganization of FirstPlus Financial Group Inc. The company
said the layoffs were effective Friday but did not specify the number of
employees who lost jobs. A telephone message seeking comment was not
returned immediately.
href='http://www.9news.com/acm_news.aspx?OSGNAME=KUSA&IKOBJECTID=8567f6eb-0ab…'>Read
more.
w:st='on'>
name='3'>U.S.
face='Times New Roman' size='3'> Trustee's Office Names Trustee for
Refco Unit
The U.S. Trustee's office
has named Marc Kirschner as trustee to oversee the bankruptcy of a unit
of collapsed commodities and futures broker Refco Inc., Reuters reported
yesterday. As trustee for Refco Capital Markets, the offshore
broker-dealer unit of Refco, Kirschner will have to decide how, if and
when to sell various customer assets in order to return funds to
customers. A group of customers frustrated with the
w:st='on'>
size='3'>U.S.
size='3'>rustee's progress in naming a trustee had moved last week for
the court to allow creditors to vote for one. Refco filed for chapter 11
protection from creditors on Oct. 17, a week after the firm said former
chief executive Phillip Bennett had hidden $430 million of bad
debt. Read
more.
Autos
name='4'>Dana Corp. Reaches Forbearance Agreement
Bankrupt Dana Corp. has
entered into a forbearance agreement with its bondholders in an attempt
to prevent any disputes related to the outstanding debt that came due in
March, Portfolio
Media reported yesterday. The forbearance
agreement will protect the bankrupt automotive parts supplier from
noteholders exercising their rights and remedies under default. Dana has
at least $675 million of outstanding debt in the form of notes,
according to a U.S. Securities and Exchange Commission filing. The notes
came due on March 3, the day Dana filed for chapter 11 in the U.S.
Bankruptcy Court for the Southern District of New York. The forbearance
agreement will end 30 days from April 10, but could terminate earlier if
Dana’s subsidiary, Dana Credit Corp., files for bankruptcy.
Members of an ad hoc committee holding more than 70 percent of the
outstanding principal amount of Dana notes have agreed to work with the
company toward a restructuring of the notes, according to the regulatory
filing.
GM
to Sell Isuzu Stake for $300 Million
General Motors Corp. said
it will sell its 7.9 percent stake in Japanese truck maker Isuzu Motors
Ltd., as the
w:st='on'>
size='3'>U.S.
size='3'>auto maker continues its efforts to raise cash for
restructuring, the Wall
Street Journal reported today. Cash-strapped
GM is selling Isuzu shares to two Japanese trading companies and a bank
for a total of about $300 million. GM, which needs cash to fund an
ongoing revival effort, said last month that it was looking to sell its
Isuzu stake. The move also highlights GM's rapid pullout from Japanese
partnerships it has built since the 1970s. Earlier this month, GM sold
17 percent of Suzuki Motor Corp. for about $2 billion, leaving it with a
3 percent stake. That followed last year's sale of GM's entire 20
percent stake in Fuji Heavy Industries, the maker of Subaru
cars.
href='http://online.wsj.com/article_print/SB114474251725122729.html'>Read
more.
Airlines
name='6'>Showdown Looms at Delta
Delta Air Lines and its pilots
union could soon be flying into uncharted legal territory that could
determine if the pilots go on strike and whether the nation's No. 2 air
carrier stays in business, CNNMoney.com reported yesterday. Both the Air
Line Pilots Association and Delta management say they hope to reach an
agreement on a new labor deal in talks set for this week. Most airline
analysts still think it's unlikely the situation will escalate to the
point of a strike and shut down of the airline, which flies more than
300,000 passengers a day on about 1,700 daily flights. The union is
arguing that if an arbitration panel weighing its contract with Delta
rules against it in the next week, it intends to go on strike, even if
it means the bankrupt airline must halt operations permanently. The only
thing it won't say is when such a strike would start, only that it would
be some time after April 17, or after the upcoming holiday
weekend.
href='http://money.cnn.com/2006/04/10/news/companies/delta/index.htm'>Read
more.
name='7'>Northwest Flight Attendants Request Union
Change
A month after reaching a
tentative agreement with bankrupt Northwest Airlines, an overwhelming
majority of flight attendants are now seeking to replace the union that
negotiated the deal with a different labor organization,
face='Times New Roman' size='3'>Portfolio Media
size='3'>reported yesterday. A majority of flight attendants have asked
the national Mediation Board to call the election, hoping to replace the
Professional Flight Attendants Association with the Association of
Flight Attendants. The PFAA negotiated a plan in March that included
$195 million in labor cost savings toward Northwest’s target to
lower its annual labor expenses by $1.4 billion. The flight attendants,
which represent 9,700 employees, are expected to vote on the agreement
soon. This contract was the first negotiated by the independent PFAA,
which replaced the Teamsters at Northwest in 2003. But now the PFAA's
leadership is being questioned by the flight attendants. The group has
argued that the AFA, which represents flight attendants at 20 airlines,
should lead the charge instead, since it has the best financial
resources and experience.
name='8'>Creditors Fight Allied’s Bid for Exclusivity
Extension
Unsecured creditors of
bankrupt car transporter Allied Holdings Inc. are fighting the
company’s bid to extend its exclusive control over its chapter 11
proceedings for an additional five months, Portfolio Media reported
yesterday. Allied is currently facing an April 28 deadline, but has
asked the court to extend its exclusive right to file a plan to Sept.
28, citing the need to reach a labor deal with the Teamsters union. The
creditors’ committee wants the court to limit the extension to
June 28 to allow the group to file sooner any competing reorganization
proposals for the company, which filed for chapter 11 protection in July
2005. The creditors noted in their motion, filed in the U.S. Bankruptcy
Court for the Northern District of Georgia, that while successive
extensions are not uncommon in large chapter 11 cases, an extension
would be “ill-advised” in Allied’s case given the
“extremely precarious” financial situation of the company.
The creditors also argued that since Allied has made substantial
progress in developing a reorganization plan and presented a formal
proposal to the Teamsters, there is no need for the company to retain
exclusivity for another 180 days. Allied’s request for extension
is scheduled to be addressed at a hearing today.
Court
OKs USG Disclosure Statement
USG Corp., the world's
largest manufacturer of wallboard, said a
w:st='on'>
size='3'>Pennsylvania
size='3'>bankruptcy court judge approved its disclosure statement,
allowing it to start approaching asbestos personal injury claimants for
votes on its reorganization plan, the Associated Press reported
yesterday. USG filed the disclosure statement and reorganization plan in
connection with its plans to exit chapter 11 this year. The company
previously announced an agreement to settle asbestos personal injury
claims in its chapter 11 case. The terms of the settlement are
included in the disclosure statement and reorganization plan; voting on
the plan will take place until June 2. Objections to the plan must be
filed by May 26. Confirmation hearings are scheduled for June 15 and 16
in
size='3'>Pittsburgh
size='3'>.
href='http://biz.yahoo.com/ap/060410/usg_court.html?.v=1'>Read
more.
name='10'>Skilling Implies Fraud Was Hardly Necessary
Jeffrey K. Skilling, the
former Enron chief executive, took the stand in his own defense and
declared that he was 'absolutely innocent' of charges that he conspired
to defraud Enron, the
size='3'>New York Times reported today.
Skilling had no answer for one of the allegations against him: that he
sold Enron stock in September 2001 based on insider information that the
company was troubled. Skilling's stockbroker testified earlier in the
trial about a taped phone call in which Skilling called in early
September intending to sell 200,000 shares of Enron stock, but increased
the order to 500,000 shares on Sept. 17, 2001.
size='3'>The issue is potentially problematic for him because he told
the Securities and Exchange Commission in December 2001 that the only
reason he sold Enron stock was because of the plummeting stock market
after the Sept. 11 attacks. Prosecutors are sure to question Skilling
about testimony on Monday where he described Enron's international
assets as 'outstanding.' During his time at Enron, Skilling was a
frequent critic of the company's international strategy and said
internally that its international assets had lost significant value,
government witnesses have testified.
href='http://www.nytimes.com/2006/04/11/business/11enron.html?_r=1&oref=slogi…'>Read
more.
International
name='11'>Workers of Bankrupt Brazilian Airline Demand Government
Rescue
Workers from Brazilian
airline Viac¸ao Aérea RioGrandense SA, which is operating
under bankruptcy, plan a march in the capital today to demand that the
Brazilian government rescue the carrier, which has run out of money to
pay suppliers, Bloomberg News reported yesterday. About 300 workers,
including crew members and mechanics, will rent a plane today morning
from
size='3'>Rio de Janeiro
airport and fly to
face='Times New Roman' size='3'>Brasilia
to meet lawmakers and march to the presidential palace to
demand a meeting with President Luiz Inácio Lula da Silva. Finance
Minister Guido Mantega told reporters on Friday the government has no
plans to bail out the carrier, while creditors, including state-owned
companies, rejected a request by Varig to stop paying bills for 90
days, Valor
Económico reported Monday. Varig Chief
Executive Marcelo Bottini last week told reporters the carrier is
running out of cash, and that it needs a government loan to keep
flying while it negotiates with creditors to reorganize about 7 billion
reais (U.S. $3.26 billion) of debt. The employee-controlled airline is
suffering because the government can't afford to divert money from other
priorities and management is struggling to cut staff to reduce costs,
said Arnim Lore, Varig's former chief executive, in a telephone
interview from
face='Times New Roman' size='3'>Sao
Paulo
href='http://www.thestate.com/mld/miamiherald/business/special_packages/busin…'>Read
more.
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