February 10, 2000
Borrower Delinquency Rates Improve in Fourth Quarter
Borrower delinquency rates generally continued to decline in
the fourth quarter of 1999, according to a report issued by Trans Union
LLC. The report is based on consumer credit information gathered from
TrenData™, Trans Union's database of aggregated time series credit
bureau information. The percentage of mortgage holders that are 30 days
or more delinquent was virtually the same in the fourth quarter last
year as in the fourth quarter in 1998. The percentage of installment
credit borrowers that were 30 or more days delinquent dropped by 44
basis points in the quarter, compared to a year earlier, while the
revolving borrower delinquency rate dropped by 48 basis points. Trans
Union Vice President of Analytical Services Chet Wiermanski said he is
not concerned that consumers are taking on an unusually large amount of
debt relative to today's economic conditions or that consumers'
indebtedness poses any special threat to the economy. He said, 'We
recently analyzed the Federal Reserve's data on total household debt and
found that, after adjusting for inflation, total household debt is at
rates very close to historical averages for this stage of the business
cycle.' He added that the good times would not last forever and that
delinquency rates and bankruptcy filings would increase when the economy
slumps. The Credit Research Center at Georgetown University is using
TrenData™ to analyze modern consumer credit behavior, and
Wiermanksi said he hopes that this research will better help the company
understand the possible impact of the next recession on consumers'
credit behavior. Additional information is online at
href='http://www.trendatau.com/'>http://www.trendatau.com.
wp='BR1'>
American Pad & Paper Receives Final Approval on DIP
Facility
American Pad & Paper Co., Dallas, announced that it has
received final bankruptcy court approval on $65 million of
debtor-in-possession (DIP) financing and that the Williamhouse division
sale process is progressing as expected, according to a newswire report.
CEO James W. Swent III said that the DIP financing will enable the
company to move ahead with its chapter 11 case to focus on maximizing
the value of the business for all stakeholders. The sale of Williamhouse
is expected to close by the middle of the year, and the company is
moving ahead with plans to possibly sell other assets and restructure
the debt. American Pad & Paper, which invented the legal pad in
1888, field for chapter 11 protection earlier this year.
Alaska Senator Criticizes FTC on BP Amoco-Arco Deal
Sen. Ted Stevens (R-Alaska) yesterday criticized federal
regulators' handling of a proposed merger between oil companies BP Amoco
and Atlantic Richfield Co. (Arco), stating that a delay on this deal
could bankrupt the state of Alaska, Reuters reported. 'My state faces
bankruptcy if you refuse this for three or four years,' Sen. Stevens
told five members of the Federal Trade Commission (FTC) who appeared
before a Senate subcommittee yesterday. The FTC has sued to block the
merger, saying that the deal would further strengthen BP Amoco's
dominant position as the main seller of Alaska North Slope crude oil to
the West Coast. Sen. Stevens said that he thought the FTC was holding
the deal to more rigorous standards than other mergers and that it
seemed determined to fight in court rather than negotiate a solution.
FTC Chairman Robert Pitofsky said that the FTC has not changed its
criteria for this merger.
Tultex to Liquidate Assets and Go Out of Business
Martinsville, Va.-based Tultex Corp. has announced plans to
liquidate its assets and go out of business, rather than reorganize and
pay off its debts, the Associated Press reported. The active wear
manufacturer filed for bankruptcy protection in December and announced
that it would restructure and hire other companies to make its products
so that it could concentrate its business as a small clothing marketer.
Some 3,300 employees were laid off, and most of the remaining 650
employees will likely be laid off soon, even though it may take month or
years to complete the sale of assets. Assets include a 1.1 million
square-foot factory in Martinsville, a modern warehouse in Henry County
and two out-of-state distribution companies. Bankruptcy Judge William
Anderson said that he doubted Tultex could raise enough money to pay all
11,000 of its creditors, including at least 2,400 past and present
employees who would hope to collect Christmas bonus checks. Tultex began
in 1937 as Sale Knitting Co. and was the fifth largest active wear
manufacturer in the country until recently. In January, Tultex ceased
all manufacturing.
Restaurant Teams Acquires Tanner's Restaurant Assets
Restaurant Teams International Inc. announced that it has
acquired substantially all of the operating assets of the chapter 11
subsidiaries of Tanner's Restaurant Group Inc., according to a newswire
report. The transaction was approved by the bankruptcy court in Atlanta
on Tuesday.
Miami Dolphins Player Seeks Dismissal of Bankruptcy Case
Miami Dolphins wide receiver Tony Martin, who filed chapter 7
last year, asked Bankruptcy Judge Robert A. Mark last
week to dismiss his case, according to the Miami Daily Business
Review. His attorney, Robert Schatzman of Adorno
& Zeder, said that his life has changed significantly since he filed
chapter 7 and that he is prepared to pay his debts on his own, outside
of the court process. When Martin filed, he had been released from the
Atlanta Falcons and was facing money laundering charges. He has since
signed a lucrative contract with the Dolphins and was acquitted of the
federal charges. Martin's creditors, however, argue that this does not
warrant a dismissal and that once he's out of the court's purview, their
is no guarantee that he will pay his debts. At a hearing last week,
Judge Martin indicated he may dismiss, but not if enough creditors
object. Another hearing is scheduled for next week.
Proposed Maryland Legislation May Protect Home Buyers
The proposed Maryland Homebuilders Act, introduced by Sen. John
C. Astle (D-Anne Arundel) would create a licensing system for builders
under the state attorney general's consumer protection office, according
to The Washington Post. In areas of booming residential
building, such as Southern Maryland, buyers occasionally have problems
with builders who walk off an incomplete project, refuse to fix debts or
declare bankruptcy and open up under another business name. The
Associated Press reported that the legislation will have the support of
the state's home-building industry.
T&W Financial Announces Loss of Servicing
Tacoma, Wash.-based T&W Financial Corp. announced yesterday
that its operating subsidiary, T&W Financial Services Co. L.L.C.,
was terminated effective Feb. 8 as service on substantially all of its
remaining portfolio of leases, according to a newswire report. As
previously announced, the company expects to file for bankruptcy
protection soon.
TransAmerican Energy Announces Distribution Date
TransAmerican Energy Corp. announced that a distribution record
date of Feb. 15 has been established in connection with distributions
pursuant to TransTexas Gas Corp.'s reorganization plan. The plan was
confirmed by the bankruptcy court on Monday in the Southern District of
Texas, and the hearing on confirmation of the plans of liquidation of
the two companies is continuing.
Trumbull Services to Expand Bankruptcy-Related Trust &
Trustee Services
Trumbull Services' offerings of bankruptcy-related trustee and
trust services are set to expand this year, according to a newswire
report. Trumbull's parent company, the Hartford Financial Services
Group, based in Hartford, Conn., received approval from the Office of
Thrift Supervision to open a federal savings bank offering trust
services to individual and institutional customers. The thrift, to be
named the Hartford Bank, will provide a variety of trust services, and
the company said it is another step in Trumbull and the Hartford's
strategy to make available a wider range of services in the bankruptcy
and mass tort arenas. Trumbull currently offers bankruptcy services such
as claim administration, institutional liability funding, risk transfers
and crisis communication.
Romanian Court Declares Bank Bankrupt
The Bucharest Court declared the Bankcoop Romanian bank
insolvent this week; the bank owes hundreds of thousands of creditors
nearly $15 million, The Washington Post reported. The court
made the declaration after a tense meeting between creditors and bank
officials. A Bankcoop spokesperson said that the court 'rule that
bankruptcy proceedings should begin,' but she did not say whether the
bank would contest the decision. The bank can contest the decision
before the Supreme Court within 15 days. Bankcoop is the latest in a
series of bank failures in Romania. Last year the Romanian Foreign Trade
Bank and several small banks all failed.
Breed Tech Board Delays Meeting to Consider Sale Offers
Breed Technologies Inc. (BDTTE) on Tuesday postponed for seven to 10
days a board meeting to consider bids to purchase substantially all of
the Lakeland, Fla., automotive parts suppliers' assets. Charles J.
Speranzella, Jr., Breed's chief operating officer, wouldn't give details
on the nature or quality of bids for the company. Speranzella told the
Daily Bankruptcy Review that Breed had a lot of analysis to do and it
intends to get a unified recommendation from its investment bankers,
accountants and restructuring consultants from Development Specialists
Inc.
Courtesy of
href='http://www.fedfil.com/bankruptcy/developments.htm'>The
Daily Bankruptcy Review Copyright ©
February 10, 2000.
Thanks for visiting Today's Bankruptcy
Headlines. New articles are posted here each business
day.
