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January 2, 2007
Autos
Meridian Emerges from Bankruptcy
Auto parts supplier Meridian Automotive Systems Inc. on Friday said it has emerged from chapter 11 protection and entered into a $167 million exit financing facility with Deutsche Bank, the Detroit News reported on Saturday. Under Meridian's plan, secured creditors owed $294.6 million will get a stake in the company worth about 80 cents on the dollar. Another set of secured creditors owed $179.8 million will get a piece of Meridian worth 7 cents on the dollar. Unsecured creditors owed $96 million will get as much as 2 cents on the dollar and creditors holding $172.9 million in low-priority debt will get nothing. Read more.
name='2'>Delphi Posts $226 Million Net Loss for November
Bankrupt auto parts maker Delphi Corp. posted a $226 million net loss for November in a limited monthly report for the U.S. Bankruptcy Court in New York, Reuters reported on Friday. Delphi, which filed for bankruptcy in October 2005, reported a cumulative $4.66 billion net loss for the first 11 months of 2006 in the limited report. Net sales in November were almost $1.33 billion and about $16.1 billion for the first 11 months of 2006.
name='3'>Vermont Bankruptcies Drop Nearly 76 Percent from Previous Year
The U.S. Bankruptcy Court in Rutland, Vt., reported that there were 620 bankruptcies filed in Vermont, representing a drop of 76 percent from 2005 when 2,616 bankruptcies were filed, the Rutland Herald reported yesterday. Of the 620 cases filed, 448 were chapter 7, one chapter 11 case, two chapter 12 bankruptcies and 169 chapter 13 cases. Read more.
name='4'>Hawaiian Bankruptcies at a 16-Year Low
Hawaiian bankruptcies plunged in 2006 to a 16-year low, following a surge in 2005 when Hawaii residents rushed ahead of the new bankruptcy law, the Honolulu Star Bulletin reported on Saturday. Hawaiian residents filed only 953 overall bankruptcy cases in 2006, representing a 78.7 percent decrease from 4,481 filings in 2005. The 2006 figure represents the lowest number of filings since 1990, when 754 chapter 7 and 13 cases were filed, according to state and federal records. Chapter 7 filings totaled 793, down 80.8 percent from 4,125 in 2005. Chapter 13 filings decreased 56.1 percent to 150 from 342. Chapter 11 filings also decreased 38.5 percent to 8 from 13. Read more.
name='5'>Ownit Mortgage Solutions Seeks Bankruptcy Protection
Ownit Mortgage Solutions Inc. of Agoura Hills, Calif., has filed for bankruptcy protection, saying it owes more than $165 million to Merrill Lynch & Co. and other financial firms that bought Ownit loans now in default, the Los Angeles Times reported on Saturday. The petition, filed late Thursday in federal bankruptcy court in Van Nuys, Calif., was made in response to lawsuits filed by two creditors, said William Dallas, Ownit's chief executive and sole director.?In its filing, Ownit listed its assets as between $1 million and $10 million and said it owed $170 million to its 20 biggest creditors. Read more.
Advanced Marketing Services Files for Bankruptcy
San Diego-based Advanced Marketing Services filed for chapter 11 bankruptcy yesterday, the San Diego Union Tribune reported on Saturday. The company, which distributes best-selling books to warehouse stores and provides customized merchandising services, said it filed for bankruptcy protection after its lenders declined to extend its current loan facility beyond Dec. 28. AMS auditors have not completed the audit of AMS's financial statements for fiscal 2004, 2003 or 2002, nor has AMS filed any annual or quarterly reports for fiscal 2004, 2005, 2006 or 2007. In conjunction with the Delaware bankruptcy court filing, AMS said it received a $75 million loan from Wells Fargo Foothill to fund ongoing operations during the chapter 11 proceeding. Read more.
name='7'>More South Dakota Homeowners Losing their Property
While South Dakota's foreclosure rate is low compared with most other states, the National Delinquency Survey from the Mortgage Bankers Association showed that the number of delinquent mortgage loans and foreclosures in the state have increased since last year, the Sioux Falls Argus Leader reported Saturday. South Dakota had a total of 197 residential properties in foreclosure proceedings in 2005, according to RealtyTrac Inc., which tracks foreclosure data nationwide. By the third quarter of 2006, the state already had 227 properties in some stage of foreclosure. The total number of loans in South Dakota with installments past due increased from 2.23 percent in the third quarter of 2005 to 2.62 percent in the third quarter of this year, according to the MBA survey. Read more.
name='8'>States Swift to Warn Mortgage Lenders
Nineteen states and the District of Columbia have moved quickly to warn state-regulated lenders about the hazards to consumers from nontraditional mortgages, the Washington Post reported today. Tens of thousands of state-licensed lenders and mortgage brokers are affected by the advisories, also known as a 'guidance.' Such loans include interest-only mortgages and other arrangements where the borrower cuts monthly costs by paying back less than full interest and principal. The states are following closely behind federal banking regulators, who issued a sternly worded advisory in late September to the lenders they supervise, telling them they should not make these loans to borrowers who may be unable to repay them. Read more.
name='9'>Survey: Economy Poised for Rebound in 2007
The U.S. economy is poised to shake off the housing slump and regain momentum by the end of this year, according to a Wall Street Journal survey today. The panel of 60 economists who participated in the Journal's latest semiannual economic forecasting survey offered an optimistic outlook for 2007: The service sector should remain stable as the recent weakness in housing and manufacturing abates and the Federal Reserve begins to reduce interest rates. Even with the prediction, economists haven't stopped worrying about what could happen if the current slowdowns in housing and manufacturing spread further -- a pattern that has characterized previous recessions. Read more. (Registration required.)
TROUBLED COMPANIES IN THE NEWS
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Analytical Surveys, a Houston, Tx. provider of data services for the geographic market, reported a fiscal net loss of $330,000, including a $61,000 gain from debt extinguishment. Revenue declined 29%--to $4.3 million.
BCSB Bankcorp, the parent company of Baltimore County Savings Bank in Maryland, will suspend its dividend program as part of an effort to bolster its finances. Over the summer, the company said it would incur a $7 million after-tax loss stemming from an alleged check-kiting scam.
Discovery Education, a unit of Discovery Communications of Silver Spring, Md., will lay off eighty-four workers as part of a restructuring aimed at streamlining its operations.
Greenhill & Co. Inc., a Manhattan, N.Y. investment bank, reported its third quarter net income fell 20%--to $14.2 million. Revenue declined 13%--to $57.6 million.
Medimmune Inc., the big Gaithersburg, Md. biotech company, should put itself up for sale, according to one of its large shareholders. Matrix Asset Advisors argued that a sale of the company would be in the best interests of Medimmune's investors. In its third quarter the company lost $56 million.
Quaker Fabric Corp., a Fall River, Ma. maker of upholstery fabrics, reported a third quarter net loss of $8.4 million. The results included extra charges of $4.5 million. Revenue declined 35%--to $30.3 million.
Weyerhaeuser Co., the Federal Way, Wa. forest-products concern, is facing increased pressure to reorganize itself as a real estate investment trust, following a suggestion by a big shareholder, Franklin Mutual Advisers LLC, that Weyerhaeuser consider taking the REIT route in order to make its timberlands operations more tax-efficient. A number of other timber companies have gone the REIT route, including Plum Creek Timber Co., Longview Fibre and Potlatch Corp., but for Weyerhaeuser to go REIT would result in a $4 billion tax penalty because of its structure, which still includes some century-old landholdings, not to mention the cost for the conversion itself. Weyerhaeuser has already been trying to boost efficiency by consolidating, closing mills and selling off certain operations, but the firm recently said it has no intentions of converting into an REIT.
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