A group of creditors owed more than $111.7 million is trying to force TPG Troy LLC, which is owned by liquidating telecommunications company Hellas Telecommunications II SCA, into chapter 7 bankruptcy, Dow Jones DBR Small Cap reported today. SPQR Capital (Cayman) Ltd., Lansdowne Capital SA and Crest One SpA, which are owed $76.6 million, $26.1 million and $9.1 million, respectively, asked a bankruptcy court last week to put Delaware-based TPG Troy into chapter 7
American Airlines' pilot union warned that an American Airlines merger with US Airways Group Inc. may not occur during the AMR Corp. unit's bankruptcy unless pilot groups from the carriers agree on interim contract terms, Bloomberg News reported today. If an accord is not reached “in the very near future, in all likelihood there will be no merger before American Airlines exits restructuring,” said Keith Wilson, president of the Allied Pilots Association. The pilot groups, joined by executives from both carriers, began negotiating the accord earlier this month. American, which filed for bankruptcy on Nov. 29, 2011, has said it prefers to assess mergers after it leaves court protection. US Airways has been pushing for a tie-up since January.
Moody's Investors Service said that the number of U.S. companies with a speculative-grade rating of B3 or lower has hit a new low for the year as credit-market access improves, Dow Jones Newswires reported yesterday. The credit rater said that it has 152 companies on its B3 negative and lower corporate ratings list, down 15 percent from 179 at the beginning of 2012. The decline supports Moody's expectation that the U.S. speculative-grade default rate will drop to 2.5 percent by mid-2013 from the current rate of 3.1 percent. Moody's said that high-yield debt issuance has been extremely strong in 2012 as investors chase higher returns in a low-interest rate environment.
Bankruptcy Judge Thomas Bennett blocked a legal bid to force Alabama's Jefferson County to keep running a hospital that serves the poor, which the county says it can no longer afford to operate, Reuters reported yesterday. Birmingham, the state's largest city and located in Jefferson County, had asked Judge Bennett to exempt it from a ban on lawsuits against the County so that it could press a claim in state court that the county's underused Cooper Green Mercy Hospital must maintain in-patient and emergency services. Birmingham and county residents do not want to lose the hospital's services. But Judge Bennett said in a 37-page opinion that Birmingham was unlikely to win its case in state court and that he saw no reason to lift automatic stays against lawsuits that Jefferson County has had in place since its landmark, $4.23 billion bankruptcy petition filed on Nov. 9, 2011.
Detroit Mayor Dave Bing yesterday outlined a 10-point program to raise revenue and cut expenses totaling $50 million in the city's latest effort to heal its finances, Reuters reported. The "revenue enhancement initiative" includes more effective collection of property and income taxes. Also, the city will be more aggressive in collecting on a variety of programs, including delinquent licensing fees and parking tickets, as well as fighting workers compensation fraud. The city also wants to sell a $4 million building on the downtown riverfront to the United Auto Workers union, but the price has yet to be negotiated. "This is just the beginning," said Bing, indicating that there will be more rounds of cost-saving initiatives.
AMR Corp.'s American Airlines won court approval for a new contract with its pilots union, a deal that cuts labor costs and boosts the airline's effort to exit bankruptcy protection, Bloomberg News reported yesterday. The agreement, approved at a hearing yesterday by Bankruptcy Judge Sean Lane, comes after American secured new contracts with unions representing flight attendants and mechanics as part of its restructuring. Judge Lane said that the agreement with the Allied Pilots Association is a significant step to resolving the bankruptcy case that began more than a year ago and helps achieve “long-term viability” for the airline.
Centennial Beverage Group has filed for chapter 11 protection saying that it owes more than $10 million to lenders, the Fort Worth (Texas) Star-Telegram reported today. Debtor attorney Robert D. Albergotti of Haynes and Boone said that Centennial would restructure without the need of traditional debtor-in-possession borrowing, saying that the company had sufficient cash flow to see it through the closing of some stores and operating the remaining retail outlets. The number and location of stores to be closed have not yet been decided, Albergotti said. Centennial expanded in 2011 by acquiring the Majestic stores out of bankruptcy.
American Airlines passenger service agents, the only major employee group at the carrier not unionized, began voting yesterday on whether to be represented by the Communications Workers of America union, Reuters reported yesterday. About 9,700 airport agents and reservations representatives are eligible to cast ballots in a vote being conducted by the National Mediation Board (NMB), said Chuck Porcari, a CWA spokesman. Voting ends Jan. 15. The U.S. Supreme Court cleared the way for the vote last week when it denied American's request for a stay of an earlier ruling that upheld the election.
U.S. Senator-elect Elizabeth Warren is poised to join the Senate Banking Committee after she is sworn into office in January, Bloomberg News reported. Two Democratic aides briefed on the matter said Senate leaders intend to assign Warren to the Banking Committee, although a final decision on committee assignments will not be made until the new session of Congress convenes. Warren had been floated as a likely candidate for the committee seat, which would give her a role in writing banking legislation including revisions to the Dodd-Frank Act. Senator Joe Manchin (D-W.V.) is also expected to receive a seat on the Banking Committee, according to one of the Democratic aides. Manchin acknowledged he was pushing to get a seat on the committee.
Members of ABI's Chapter 11 Reform Commission said yesterday pointed to labor and benefits being key issues likely to surface during a host of public hearings beginning early next year, Reuters reported. "We'll be hearing from both labor and management about the way the bankruptcy code treats collective bargaining agreements, pension issues and the like," said Commission Co-Chair Robert Keach Bernstein Shur Sawyer & Nelson on an ABI media teleconference. In the handful of hearings so far, the commission has heard largely from lenders, many of whom have expressed concern that the commission would look to limit the use of secured credit. Commission members have said they are not looking to curb the use of secured credit so much as improve its transparency. The commission will also consider changes to rules that exempt derivatives contracts from certain bankruptcy rules and the effects on bankrupt retailers of a 2005 law that changed rules on treatment of leases in bankruptcy. About six or seven hearings will be held throughout the country next year. Read more: http://www.reuters.com/article/2012/12/03/bankruptcy-commission-idUSL1E…
