Storm damage keeps Manhattan bankruptcy court shuttered

Mon Nov 5, 2012 2:52pm EST

* Building on Manhattan's southern tip still lacks heat, phones

* Court hearings are postponed or moved

* Courthouse basement flooded in storm - GSA

By Nick Brown

NEW YORK, Nov 5 (Reuters) - The U.S. Bankruptcy Court in lower Manhattan, which sits in a historic former U.S. custom h o use, will be closed indefinitely in the wake of flooding and electrical outages from Hurricane Sandy, the court said on Monday.

Much of downtown Manhattan has returned to a semblance of normalcy after flooding and power failures following the storm, but there is no timetable for re-opening the bankruptcy court, said Stephanie Cirkovich, a public information officer for Manhattan's federal court system.

The courthouse basement flooded last week, according to a facilities update on the website of the U.S. General Services Administration, which owns the building. It also said there was no heat, phone or Internet connectivity in the building.

Water and sewage had been fully drained from the building as of mid-afternoon on Monday, Cirkovich said.

The bankruptcy court at One Bowling Green is housed in the Alexander Hamilton Custom House, an ornate Beaux-Arts-style building designed by architect Cass Gilbert at the beginning of the 1900s. As a custom house, it was the revenue collection point for the lower Manhattan port. The building stood vacant for much of the 1970s before undergoing major renovations. The bankruptcy court moved into the structure in 1987.

The National Museum of the American Indian, which shares the building with the bankruptcy court, had power on Monday, but no steam, heat, or telephone service, museum spokeswoman Eileen Maxwell said.

By court order, judges are allowed to move hearings to the White Plains and Poughkeepsie branches of the bankruptcy court while the Manhattan courthouse is down. Parties that cannot get to those locations can participate in hearings by telephone.

Some bankruptcy hearings were postponed. Others were being moved to federal district court in Manhattan, which re-opened on Monday, Cirkovich said.

• Link this
• Share this
• Digg this
• Email
• Reprints

16.47 | 0 komentar | Read More

American Suzuki Motor to file for Chapter 11

Mon Nov 5, 2012 6:33pm EST

Nov 5 (Reuters) - American Suzuki Motor Corp, the sole distributor of Suzuki Motor Corp vehicles in continental United States, said it will file for Chapter 11 bankruptcy protection.

The company will wind down and discontinue new automobile sales in continental United States, it said.

American Suzuki sold 2,023 vehicles in the United States last month. (Reporting by Sharanya Hrishikesh in Bangalore)

16.47 | 0 komentar | Read More

UPDATE 2-Suzuki to end car sales in U.S., focus on motorcycles

Mon Nov 5, 2012 9:51pm EST

* American Suzuki Motor to file for Chapter 11 protection

* Strong yen, small-car lineup hurt U.S. sales

* Focus in U.S. will be on motorcycles, ATVs, boats

TOKYO, Nov 6 (Reuters) - Japan's Suzuki Motor Corp will pull the plug on its unprofitable automobile sales business in the United States after nearly three decades, hurt by a strong yen and a limited choice of vehicles that failed to excite consumers.

Suzuki said on Tuesday it would use a Chapter 11 bankruptcy filing by its U.S. subsidiary in federal court in California to shut down the auto business and to focus instead on sales of motorcycles, All-Terrain Vehicles (ATV) and boats.

The departure of Suzuki ends a 27-year effort to gain traction in the world's second-largest auto market and should most benefit Kia Motor and Nissan Motor, the two brands that car shoppers most compared to Suzuki, according to car shopping website Edmunds.com.

The bankruptcy could allow Japan's No.4 automaker to step away from its contractual responsibilities to the more than 200 dealers who maintain franchises, much as General Motors and Chrysler were able to drop dealerships in their 2009 bankruptcies.

Suzuki models did not catch on in the United States, and the company suffered from a lack of investment in new vehicles. It also struggled from the strong yen that makes it more expensive to export products from Japan.

It sold 21,188 vehicles in the United States through October this year, a 5 percent drop from the previous year at a time when the overall market was up by 14 percent. That made the brand the second worst-selling mainstream brand, behind the Smart micro-car.

Suzuki, which had marketed the Kizashi sedan and the Grand Vitara SUV in the United States, said it would continue to honor warranties during the bankruptcy and did not see the need for outside financing during the restructuring.

American Suzuki Motor Corp, the sole distributor of Suzuki v ehicles in the continental United States, will file for bankruptcy with $346 million in debt, of which $173 million is owed to Suzuki group companies, the company said.

The Japanese parent company plans to buy the motorcycle, ATV and outboard engine operations out of bankruptcy and shift its auto business to service existing vehicles on the road. The new U.S. operating unit plans to keep the American Suzuki name, it said.

Suzuki's failed tie-up with Volkswagen on vehicle development had raised questions about its commitment to the U.S. market and whether it would be able to invest in a revamped product line-up months before Tuesday's announcement.

Shares of Suzuki sunk in early morning trade but were up 0.38 percent at 1842 yen as of 11:01 a.m. (0201 GMT), slightly outperforming the Nikkei index that was down 0.3 percent.

• Link this
• Share this
• Digg this
• Email
• Reprints

16.47 | 0 komentar | Read More

US bankruptcy regulator updates proposal for lawyer fee overhaul

Fri Nov 2, 2012 7:48pm EDT

* U.S. Trustee offers three-weeks to comment on proposals

* Overhaul aimed at reining in high legal fees in bankruptcy

* Features include budgets, disclosures on billing practices

By Nick Brown

NEW YORK, Nov 2 (Reuters) - Despite their strong opposition, law firms would be still have to disclose extensive details about billing practices under the latest proposals to overhaul how lawyers are compensated when they handle bankruptcies.

The latest draft, issued on Friday, keeps proposals that would force law firms to compare their bankruptcy rates to those used in other legal work and to calculate the added cost of any increase imposed in the middle of a case.

The guidelines are being drawn up by the U.S. Trustee Program, the Justice Department arm that oversees how companies spend money in court-supervised restructurings. They are aimed at reining in legal fees seen as inconsistent with the broader market.

Bankruptcy fees, which in large cases routinely reach hundreds of millions of dollars, have long been under scrutiny by regulators such as the trustee's office. That is because the money is paid out of the bankrupt firm's estate, so the more money paid to lawyers, the less is available for creditors.

In the liquidation of Lehman Brothers Holdings - the largest Chapter 11 case ever - fees paid to lawyers, accountants, financial advisers and other professionals have topped $1.6 billion.

Bankruptcy courts, which must approve all professional fees, are the final arbiters when it comes to compensation for lawyers. But the trustee's office, charged with overseeing compliance with bankruptcy laws, can object and argue that fees are unreasonable.

The trustee's fee overhaul was first proposed last November and Friday's draft followed a feedback period in which law firms and other industry professionals offered criticism.

While the guidelines are far-reaching, a particular point of contention had been disclosures that show legal fees are in line with market rates. Law firms argued the requirements constituted unfair micromanagement.

Unchanged from the earlier draft, firms would have to disclose and calculate the cost of rate increases and offer data comparing them to fees charged in non-bankruptcy legal work.

The new draft is not a carbon-copy of the old, however. Instead of having to disclose their highest, lowest and average rates, law firms would be required only to disclose a blended average of their rates to account for the widespread use of alternative, non-hourly billing measures.

Another controversial aspect of the guidelines was the proposed imposition of non-binding budgets, which firms feared would make details of their billing agreements public.

The trustee's office stands by its budget proposal in the new draft, but makes clear that budget details would be redacted to protect privileged information.

The latest version carries a comment period through Nov. 23, after which the trustee's office will issue final guidelines. Courts will not be required to enforce them, but the trustee's office hopes they will serve as a compass in assessing fees, Cliff White, director of the trustee's office, told Reuters.

"We'll be quite conscientious and vigorous in seeking to uphold these guidelines," White said on Friday. "They are a statement of how we think (bankruptcy) statutes should be complied with."

The latest draft would raise the threshold to apply the guidelines from cases in which debtors had combined assets and liabilities of $50 million, to cases in which debtors had at least $50 million in both assets and liabilities.

The trustee's office is also now calling for large law firms to delegate certain tasks to co-counsel if they can be done more cheaply by a smaller firm, a directive left out of the prior draft.

The change was a response to a handful of comments, including from bankruptcy lawyer Albert Togut, who argued that greater use of co-counsel could be a huge cost-saver in big cases.

"It's not anybody pointing a finger at the big firms saying you did something wrong," Togut told Reuters on Friday. "But as long as you've got a co-counsel in the case, that co-counsel should be utilized."

Law firms will have some time to familiarize themselves with the new proposal. According to Friday's draft, the final guidelines, once issued, will become effective on July 1.

• Link this
• Share this
• Digg this
• Email
• Reprints

16.47 | 0 komentar | Read More

Troubled Saudi al-Mojil Group extends losses

RIYADH | Sat Nov 3, 2012 10:43am EDT

RIYADH Nov 3 (Reuters) - Saudi construction company Mohammed al-Mojil Group, due to hold an emergency meeting on Monday to discuss breaking up, on Saturday reported a third quarter loss of 33.8 million riyals ($9 million) as project revenue faltered.

The contractor said in September its liabilities exceeded its assets and shareholders were left with a deficit of 279.8 million riyals after it ran into problems on some large contracts.

Accumulated losses in September also exceeded 75 percent of MMG's capital, forcing it to call an emergency meeting to discuss whether the company should be dissolved. Trading in MMG stock was suspended earlier this year.

However, the company said in a statement posted on the website of the Saudi bourse, that its third quarter loss had narrowed from the previous quarter as it reduced spending in a restructuring plan.

The company's construction of the Manifa natural gas development for Saudi Arabian Oil Co (Aramco) generated a loss of 355.2 million riyals in the first nine months of 2012.

MMG added, in a statement posted on the website of the Saudi bourse, that its cost of borrowing had also risen by 10.9 million riyals. (Reporting by Angus McDowall; editing by Patrick Graham)

16.47 | 0 komentar | Read More

American Airlines pilots union close to finalizing labor deal

Sun Nov 4, 2012 7:03pm EST

Nov 4 (Reuters) - A negotiating committee representing American Airlines pilots union said on Sunday it is close to finalizing contract language for a labor deal with airlines management.

It expects to present a final product to the union board later this week.

The board would then review the contract, and if approved, would send it to union members for a ratification vote.

Remaining points of the contract which have not yet been agreed upon include language around pay, furlough protection and outsourcing work to pilots who are not represented by the American Airlines union, the group said.

American and its pilots have been trying to negotiate a labor contract since 2006. The airline filed for bankruptcy last year to reduce costs and is evaluating a merger with US Airways Group which the pilots union is in favor of.

16.47 | 0 komentar | Read More

UPDATE 4-Warren Buffett buys toy and party-supplies company

Fri Nov 2, 2012 5:56pm EDT

* Sale is for $500 million, person close to the deal says

* KKR, others had picked it up in 2010 restructuring

By Olivia Oran and Greg Roumeliotis

Nov 2 (Reuters) - Warren Buffett's Berkshire Hathaway Inc said it would buy Oriental Trading Co, a toy and party supplies company that is partially owned by private equity firm KKR & Co LP, for an undisclosed sum.

The deal ends a period of instability for the Omaha, Nebraska-based maker of merchandise ranging from pink flamingos and wedding favors to Halloween decorations and beading supplies, in which it underwent bankruptcy and was passed around by private equity firms.

Berkshire will pay around $500 million for the company after an earlier auction did not yield satisfactory bids, according to two people close to the deal.

In mid-October, Oriental Trading Chief Financial Officer and Chief Operating Officer Steve Mendlik e-mailed Berkshire Hathaway Chief Financial Officer Marc Hamburg, who Mendlik had met previously, CEO Sam Taylor told Reuters in an interview.

Two hours later, Mendlik got a phone call from Buffett. The two spoke for around 10 minutes before Buffett said he was interested in taking a look at the company and wanted to see its financials.

Just a few days later, Taylor and other members of Oriental Trading management met with Buffett for about two hours.

The company then offered itself for sale at a price Buffett accepted.

"He was very warm and down to earth," Taylor said. "It was a surreal experience. I was sitting on the couch pinching myself saying 'I can't believe I'm talking to Warren Buffett.'"

Oriental Trading's strong cash flow, customer loyalty and high core profit margins made the business attractive to Buffett, Taylor said.

Not to mention the fact that Buffett, who hails from Omaha, is a fan of his hometown, Taylor said.

Oriental Trading, which filed for Chapter 11 bankruptcy protection in August 2010, is owned by more than a dozen financial institutions, including KKR.

"Over the past two years the company has transitioned to steady growth, both top and bottom line, and there is no question the company has a bright future as part of the Berkshire Hathaway enterprise," Jeremiah Lane, a director in KKR's special situations team, said in a statement.

In 2006, Carlyle Group LP purchased most of Oriental Trading for more than $1 billion from private equity firm Brentwood Associates. Saddled with debt, the company filed for bankruptcy in August 2010, allowing creditors to take over.

Although the company's earnings before interest, tax depreciation and amortization (EBITDA) only fell by a third from peak to trough because of higher bulk mail costs and the recession, that was enough to cripple it due to its high debt load, one of the people said.

Carlyle had leveraged the company at 7.5 times its EBITDA, resulting in it breaching debt covenants and eventually going through a debt restructuring. KKR, which bought a third of the company's $400 million bank debt and got 55 cents on the dollar during the restructuring, stands to make two times its money due to Buffett's acquisition, the person added.

A year and a half after Oriental Trading emerged from bankruptcy, investors were looking for an exit. Reuters reported in August that Oriental Trading was up for sale in a deal that could fetch about $500 million.

"For us and our employees this is huge," Taylor said. "It's a permanent home for Oriental Trading so we can get off the private equity treadmill and not have to deal with uncertainty about who is going to be the owner."

The deal is expected to close by the end of November. Oriental Trading was advised by Lazard Middle Market..

Founded in 1932, Oriental Trading sells more than 40,000 products, ranging from Halloween decorations to teaching supplies and novelty toys.

Oriental Trading is one of several recent deals for party and crafts-supply companies.

Party City Holdings Inc was purchased by private equity firm Thomas H. Lee Partners in June for $2.69 billion.

Crafts retailer Michaels Stores Inc filed for a $500 million initial public offering in March, although those plans are currently on hold, according to sources familiar with the matter.

• Link this
• Share this
• Digg this
• Email
• Reprints

16.47 | 0 komentar | Read More

US bankruptcy regulator updates proposal for lawyer fee overhaul

Fri Nov 2, 2012 7:48pm EDT

* U.S. Trustee offers three-weeks to comment on proposals

* Overhaul aimed at reining in high legal fees in bankruptcy

* Features include budgets, disclosures on billing practices

By Nick Brown

NEW YORK, Nov 2 (Reuters) - Despite their strong opposition, law firms would be still have to disclose extensive details about billing practices under the latest proposals to overhaul how lawyers are compensated when they handle bankruptcies.

The latest draft, issued on Friday, keeps proposals that would force law firms to compare their bankruptcy rates to those used in other legal work and to calculate the added cost of any increase imposed in the middle of a case.

The guidelines are being drawn up by the U.S. Trustee Program, the Justice Department arm that oversees how companies spend money in court-supervised restructurings. They are aimed at reining in legal fees seen as inconsistent with the broader market.

Bankruptcy fees, which in large cases routinely reach hundreds of millions of dollars, have long been under scrutiny by regulators such as the trustee's office. That is because the money is paid out of the bankrupt firm's estate, so the more money paid to lawyers, the less is available for creditors.

In the liquidation of Lehman Brothers Holdings - the largest Chapter 11 case ever - fees paid to lawyers, accountants, financial advisers and other professionals have topped $1.6 billion.

Bankruptcy courts, which must approve all professional fees, are the final arbiters when it comes to compensation for lawyers. But the trustee's office, charged with overseeing compliance with bankruptcy laws, can object and argue that fees are unreasonable.

The trustee's fee overhaul was first proposed last November and Friday's draft followed a feedback period in which law firms and other industry professionals offered criticism.

While the guidelines are far-reaching, a particular point of contention had been disclosures that show legal fees are in line with market rates. Law firms argued the requirements constituted unfair micromanagement.

Unchanged from the earlier draft, firms would have to disclose and calculate the cost of rate increases and offer data comparing them to fees charged in non-bankruptcy legal work.

The new draft is not a carbon-copy of the old, however. Instead of having to disclose their highest, lowest and average rates, law firms would be required only to disclose a blended average of their rates to account for the widespread use of alternative, non-hourly billing measures.

Another controversial aspect of the guidelines was the proposed imposition of non-binding budgets, which firms feared would make details of their billing agreements public.

The trustee's office stands by its budget proposal in the new draft, but makes clear that budget details would be redacted to protect privileged information.

The latest version carries a comment period through Nov. 23, after which the trustee's office will issue final guidelines. Courts will not be required to enforce them, but the trustee's office hopes they will serve as a compass in assessing fees, Cliff White, director of the trustee's office, told Reuters.

"We'll be quite conscientious and vigorous in seeking to uphold these guidelines," White said on Friday. "They are a statement of how we think (bankruptcy) statutes should be complied with."

The latest draft would raise the threshold to apply the guidelines from cases in which debtors had combined assets and liabilities of $50 million, to cases in which debtors had at least $50 million in both assets and liabilities.

The trustee's office is also now calling for large law firms to delegate certain tasks to co-counsel if they can be done more cheaply by a smaller firm, a directive left out of the prior draft.

The change was a response to a handful of comments, including from bankruptcy lawyer Albert Togut, who argued that greater use of co-counsel could be a huge cost-saver in big cases.

"It's not anybody pointing a finger at the big firms saying you did something wrong," Togut told Reuters on Friday. "But as long as you've got a co-counsel in the case, that co-counsel should be utilized."

Law firms will have some time to familiarize themselves with the new proposal. According to Friday's draft, the final guidelines, once issued, will become effective on July 1.

• Link this
• Share this
• Digg this
• Email
• Reprints

16.47 | 0 komentar | Read More

Troubled Saudi al-Mojil Group extends losses

RIYADH | Sat Nov 3, 2012 10:43am EDT

RIYADH Nov 3 (Reuters) - Saudi construction company Mohammed al-Mojil Group, due to hold an emergency meeting on Monday to discuss breaking up, on Saturday reported a third quarter loss of 33.8 million riyals ($9 million) as project revenue faltered.

The contractor said in September its liabilities exceeded its assets and shareholders were left with a deficit of 279.8 million riyals after it ran into problems on some large contracts.

Accumulated losses in September also exceeded 75 percent of MMG's capital, forcing it to call an emergency meeting to discuss whether the company should be dissolved. Trading in MMG stock was suspended earlier this year.

However, the company said in a statement posted on the website of the Saudi bourse, that its third quarter loss had narrowed from the previous quarter as it reduced spending in a restructuring plan.

The company's construction of the Manifa natural gas development for Saudi Arabian Oil Co (Aramco) generated a loss of 355.2 million riyals in the first nine months of 2012.

MMG added, in a statement posted on the website of the Saudi bourse, that its cost of borrowing had also risen by 10.9 million riyals. (Reporting by Angus McDowall; editing by Patrick Graham)

16.47 | 0 komentar | Read More

Denmark's Sydbank agrees to buy Tonder Bank

COPENHAGEN | Fri Nov 2, 2012 2:44pm EDT

COPENHAGEN Nov 2 (Reuters) - Sydbank, Denmark's third-biggest bank, has agreed to acquire Tonder Bank, a small lender in the south of the country, the latest deal in a banking industry under pressure from tough new regulations.

Sydbank said on Friday it would take over Tonder Bank's 18,000 customers and a balance sheet worth 2.3 billion Danish crowns ($396 million). All depositors will be covered by the transfer to Sydbank.

Danish banks have been stung by bad loans in the aftermath of a burst property bubble, a struggling agriculture sector and following tighter writedown rules imposed by the country's regulator in April.

Tonder Bank said in a statement the new writedown rules and a deadline to meet new solvency requirements by this Sunday had left it no alternative other than filing for bankruptcy on Monday.

"It has not been possible to provide the necessary capital within the prescribed period and therefore the bank must give up its independence," the bank said in a statement.

Its board members have tendered their resignation.

Denmark has the most fragmented banking industry in the Nordic region with more than 100 banks and many in the industry are predicting a wave of consolidation.

In September, two of the country's smaller listed banks, Salling Bank and Vinderup Bank, said they would merge.

Spar Nord Bank announced a week later it would acquire rival Sparbank.

Sydbank, which said the acquisition would help strengthen its position in southern Jutland, and Denmark's second-biggest lender Jyske Bank have both said they would be interested in buying rivals.

Some speculate that Sweden's capital-rich banks could also muscle into a wave of mergers in the country.

($1 = 5.8072 Danish crowns) (Reporting by Mia Shanley; Editing by David Holmes)

• Link this
• Share this
• Digg this
• Email
• Reprints

16.47 | 0 komentar | Read More