UPDATE 2-Slovenian finance minister sees limited trust in banking system

Fri Sep 20, 2013 9:35am EDT

* Slovenia banks hit by bad loans

* Could be next euro zone state to be bailed out

* Eurogroup chief to visit for talks

* Bad bank expected to issue 4 bln euros of bonds (Updates with governor quotes, details, background)

By Marja Novak

LJUBLJANA (Reuters) - Slovenia's banks are weak and trust in the system is limited, Finance Minister Uros Cufer told parliament on Friday, as expectations grew that the country may need financial help from abroad.

Slovenia's banks are crippled by at least 7.5 billion euros ($10 billion) of bad loans - more than a fifth of national output - with stress tests set to reveal in November how much help the sector will need.

Although it makes up only a tiny proportion of the euro zone's economy, a bailout for Slovenia would fray nerves across the continent with a reminder that the region's debt crisis was not yet conquered.

The head of euro zone's finance ministers, Jeroen Dijsselbloem, will visit the country on Sept. 30 for talks with top policymakers.

Earlier this month the Slovenian central bank began the controlled liquidation of two small private banks in which the state guaranteed all deposits in order to prevent a bank run.

"The decision for such a liquidation was right," said finance minister Cufer.

"Any uncontrolled bankruptcy ... would be playing with matches," he added. "The banking system in Slovenia is relatively weak, trust in it is limited."

Central bank Governor Bostjan Jazbec, who has said policymakers are reviewing the bailout option on a daily basis, told the same parliamentary session that no other banks were thought to be facing similar problems to the two being wound up.

He warned that Slovenia's taxpayers would face a bill of 15 billion euros if all the country's banks collapsed, but added there was no sign that this was about to happen.

The government at present has deposits of 3.6 billion euros in Slovenian banks and expects to spend a significant part of those for the necessary capital injections in local banks following the results of the external stress tests which are due by the end of November.

So far three largest Slovenian banks, all controlled by the state, said they needed capital injections in a joint amount of some 1 billion euros but the stress tests, which are being conducted in 8 banks, are expected to show higher capital needs.

A senior official from the European Bank of Reconstruction and Development encouraged Slovenia this week to seek help.

But Cufer told Reuters on Wednesday that Slovenia was still able to solve its problems by itself, without a bailout.

Slovenia plans to start transferring bad loans to the state-owned 'bad bank' later this year, after the stress tests are completed, with the bad bank issuing 4 billion euros of bonds that will be given to banks in exchange for those loans.

Slovenia was the fastest growing euro zone economy in 2007 until the global financial crisis crushed demand for its exports.

($1 = 0.7384 euros) (Reporting by Marja Novak; Editing by Ruth Pitchford)

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US Airways, American push back on Justice Dept merger lawsuit

WASHINGTON, Sept 20 | Fri Sep 20, 2013 2:32pm EDT

WASHINGTON, Sept 20 (Reuters) - US Airways and American Airlines, whose proposed merger has been stalled by U.S. government opposition, urged a court on Friday to require the Justice Department to turn over documents relating to its approval of four previous airline mergers.

The Justice Department filed a lawsuit on Aug. 13 to stop the planned merger of US Airways and American's parent, AMR Corp, arguing that the deal would lead to higher air fares and other fees. A judge will hear the case without a jury in November and decide whether the deal can go forward.

The airlines have said that the merger is needed to help them compete in a rapidly consolidating industry.

In their motion, US Airways and American asked for analyses, studies, forecasts and other documents relating to the Justice Department's approval of the four mergers completed over the past decade.

Delta Air Lines Inc acquired Northwest Airlines in 2008, United merged with Continental in 2010 and Southwest Airlines Co bought discount rival AirTran in 2011. US Airways bought America West in 2005.

The Justice Department declined to comment immediately on how it planned to handle the airlines' request.

The motion for the material, which could be quite extensive, will likely be granted, said Robert Skitol, an antitrust expert with Drinker Biddle & Reath LLP.

"There's no doubt about it being very burdensome," said Skitol. "This is very resource-intensive."

The airlines and the Justice Department could settle the antitrust lawsuit, which would likely require the companies to sell certain assets. Any divestitures would require approval from the judge overseeing American's emergence from bankruptcy.

The airlines themselves have defended the deal by arguing in court filings that it would create $500 million in savings to consumers annually by building a stronger competitor to Delta and United.

In its complaint, the Justice Department focused on Ronald Reagan National Airport, just outside Washington, D.C., where the two companies control a combined 69 percent of takeoff and landing slots. It also listed more than 1,000 routes between two cities where the two airlines dominate the market.

The case at the U.S. District Court for the District of Columbia is No. 1:13-cv-12346.

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UPDATE 1-US Airways, American push back on Justice Dept merger lawsuit

Fri Sep 20, 2013 5:47pm EDT

WASHINGTON, Sept 20 (Reuters) - US Airways and American Airlines, whose proposed merger has been stalled by U.S. government opposition, urged a court on Friday to require the Justice Department to turn over documents relating to its approval of four previous airline mergers.

The Justice Department filed a lawsuit on Aug. 13 to stop the planned merger of US Airways and American's parent, AMR Corp, arguing that the deal would lead to higher air fares and other fees. A judge will hear the case without a jury in November and decide whether the deal can go forward.

The airlines have said that the merger is needed to help them compete in a rapidly consolidating industry.

In their motion, US Airways and American asked for analyses, studies, forecasts and other documents relating to the Justice Department's approval of the four mergers completed over the past decade.

Delta Air Lines Inc acquired Northwest Airlines in 2008, United merged with Continental in 2010 and Southwest Airlines Co bought discount rival AirTran in 2011. US Airways bought America West in 2005.

Justice Department spokeswoman Gina Talamona said that the agency would reply formally to the motion next week.

The motion for the material, which could be quite extensive, will likely be granted, said Robert Skitol, an antitrust expert with Drinker Biddle & Reath LLP.

"There's no doubt about it being very burdensome," said Skitol. "This is very resource-intensive."

Previously, the government had said the request was too broad, and that data on previous mergers not relevant to this case.

The airlines and the Justice Department could settle the antitrust lawsuit, which would likely require the companies to sell certain assets. Any divestitures would require approval from the judge overseeing American's emergence from bankruptcy.

The airlines have defended the deal in court filings, saying it would create $500 million in savings to consumers annually by building a stronger competitor to Delta and United.

In its complaint, the Justice Department focused on Ronald Reagan National Airport, just outside Washington, D.C., where the two companies control a combined 69 percent of takeoff and landing slots. It also listed more than 1,000 routes between two cities where the two airlines dominate the market.

The case at the U.S. District Court for the District of Columbia is No. 1:13-cv-12346.

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UPDATE 2-Slovenian finance minister sees limited trust in banking system

Fri Sep 20, 2013 9:35am EDT

* Slovenia banks hit by bad loans

* Could be next euro zone state to be bailed out

* Eurogroup chief to visit for talks

* Bad bank expected to issue 4 bln euros of bonds (Updates with governor quotes, details, background)

By Marja Novak

LJUBLJANA (Reuters) - Slovenia's banks are weak and trust in the system is limited, Finance Minister Uros Cufer told parliament on Friday, as expectations grew that the country may need financial help from abroad.

Slovenia's banks are crippled by at least 7.5 billion euros ($10 billion) of bad loans - more than a fifth of national output - with stress tests set to reveal in November how much help the sector will need.

Although it makes up only a tiny proportion of the euro zone's economy, a bailout for Slovenia would fray nerves across the continent with a reminder that the region's debt crisis was not yet conquered.

The head of euro zone's finance ministers, Jeroen Dijsselbloem, will visit the country on Sept. 30 for talks with top policymakers.

Earlier this month the Slovenian central bank began the controlled liquidation of two small private banks in which the state guaranteed all deposits in order to prevent a bank run.

"The decision for such a liquidation was right," said finance minister Cufer.

"Any uncontrolled bankruptcy ... would be playing with matches," he added. "The banking system in Slovenia is relatively weak, trust in it is limited."

Central bank Governor Bostjan Jazbec, who has said policymakers are reviewing the bailout option on a daily basis, told the same parliamentary session that no other banks were thought to be facing similar problems to the two being wound up.

He warned that Slovenia's taxpayers would face a bill of 15 billion euros if all the country's banks collapsed, but added there was no sign that this was about to happen.

The government at present has deposits of 3.6 billion euros in Slovenian banks and expects to spend a significant part of those for the necessary capital injections in local banks following the results of the external stress tests which are due by the end of November.

So far three largest Slovenian banks, all controlled by the state, said they needed capital injections in a joint amount of some 1 billion euros but the stress tests, which are being conducted in 8 banks, are expected to show higher capital needs.

A senior official from the European Bank of Reconstruction and Development encouraged Slovenia this week to seek help.

But Cufer told Reuters on Wednesday that Slovenia was still able to solve its problems by itself, without a bailout.

Slovenia plans to start transferring bad loans to the state-owned 'bad bank' later this year, after the stress tests are completed, with the bad bank issuing 4 billion euros of bonds that will be given to banks in exchange for those loans.

Slovenia was the fastest growing euro zone economy in 2007 until the global financial crisis crushed demand for its exports.

($1 = 0.7384 euros) (Reporting by Marja Novak; Editing by Ruth Pitchford)

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US Airways, American push back on Justice Dept merger lawsuit

WASHINGTON, Sept 20 | Fri Sep 20, 2013 2:32pm EDT

WASHINGTON, Sept 20 (Reuters) - US Airways and American Airlines, whose proposed merger has been stalled by U.S. government opposition, urged a court on Friday to require the Justice Department to turn over documents relating to its approval of four previous airline mergers.

The Justice Department filed a lawsuit on Aug. 13 to stop the planned merger of US Airways and American's parent, AMR Corp, arguing that the deal would lead to higher air fares and other fees. A judge will hear the case without a jury in November and decide whether the deal can go forward.

The airlines have said that the merger is needed to help them compete in a rapidly consolidating industry.

In their motion, US Airways and American asked for analyses, studies, forecasts and other documents relating to the Justice Department's approval of the four mergers completed over the past decade.

Delta Air Lines Inc acquired Northwest Airlines in 2008, United merged with Continental in 2010 and Southwest Airlines Co bought discount rival AirTran in 2011. US Airways bought America West in 2005.

The Justice Department declined to comment immediately on how it planned to handle the airlines' request.

The motion for the material, which could be quite extensive, will likely be granted, said Robert Skitol, an antitrust expert with Drinker Biddle & Reath LLP.

"There's no doubt about it being very burdensome," said Skitol. "This is very resource-intensive."

The airlines and the Justice Department could settle the antitrust lawsuit, which would likely require the companies to sell certain assets. Any divestitures would require approval from the judge overseeing American's emergence from bankruptcy.

The airlines themselves have defended the deal by arguing in court filings that it would create $500 million in savings to consumers annually by building a stronger competitor to Delta and United.

In its complaint, the Justice Department focused on Ronald Reagan National Airport, just outside Washington, D.C., where the two companies control a combined 69 percent of takeoff and landing slots. It also listed more than 1,000 routes between two cities where the two airlines dominate the market.

The case at the U.S. District Court for the District of Columbia is No. 1:13-cv-12346.

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UPDATE 1-US Airways, American push back on Justice Dept merger lawsuit

Fri Sep 20, 2013 5:47pm EDT

WASHINGTON, Sept 20 (Reuters) - US Airways and American Airlines, whose proposed merger has been stalled by U.S. government opposition, urged a court on Friday to require the Justice Department to turn over documents relating to its approval of four previous airline mergers.

The Justice Department filed a lawsuit on Aug. 13 to stop the planned merger of US Airways and American's parent, AMR Corp, arguing that the deal would lead to higher air fares and other fees. A judge will hear the case without a jury in November and decide whether the deal can go forward.

The airlines have said that the merger is needed to help them compete in a rapidly consolidating industry.

In their motion, US Airways and American asked for analyses, studies, forecasts and other documents relating to the Justice Department's approval of the four mergers completed over the past decade.

Delta Air Lines Inc acquired Northwest Airlines in 2008, United merged with Continental in 2010 and Southwest Airlines Co bought discount rival AirTran in 2011. US Airways bought America West in 2005.

Justice Department spokeswoman Gina Talamona said that the agency would reply formally to the motion next week.

The motion for the material, which could be quite extensive, will likely be granted, said Robert Skitol, an antitrust expert with Drinker Biddle & Reath LLP.

"There's no doubt about it being very burdensome," said Skitol. "This is very resource-intensive."

Previously, the government had said the request was too broad, and that data on previous mergers not relevant to this case.

The airlines and the Justice Department could settle the antitrust lawsuit, which would likely require the companies to sell certain assets. Any divestitures would require approval from the judge overseeing American's emergence from bankruptcy.

The airlines have defended the deal in court filings, saying it would create $500 million in savings to consumers annually by building a stronger competitor to Delta and United.

In its complaint, the Justice Department focused on Ronald Reagan National Airport, just outside Washington, D.C., where the two companies control a combined 69 percent of takeoff and landing slots. It also listed more than 1,000 routes between two cities where the two airlines dominate the market.

The case at the U.S. District Court for the District of Columbia is No. 1:13-cv-12346.

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UPDATE 2-Fitch expects Detroit to miss a bond payment due Oct. 1

Wed Sep 18, 2013 6:31pm EDT

Sept 18 (Reuters) - Fitch Ratings said on Wednesday it expects Detroit to miss payments due on the city's general obligation bonds on Oct. 1, an event that would prompt the credit agency to downgrade to D its ratings on Detroit's unlimited tax general obligation and limited tax obligation debt.

"Fitch believes GO debt will not be paid as due on Oct. 1," the ratings agency said in a statement. "If the Oct. 1st debt service payment is missed, Fitch will downgrade both the ULTGOs and LTGOs to 'D.'"

Bill Nowling, a spokesman for Detroit's emergency manager, Kevyn Orr, declined to comment on whether the city will miss the Oct. 1 payment other than to say, "Nothing has changed" since the city's mid-June report.

Orr said in June that most of the general obligation bonds are considered unsecured debt and would not be paid.

As for the city's general obligation debt rating possibly falling to D, Nowling said, "We don't comment on things before they happen."

Fitch, which said Detroit's landmark bankruptcy, if it goes ahead, might be rewriting basic expectations of creditors during a debt workout, cut its ratings in June on the city's certificates of participation to D after a missed debt service payment.

A decision by Detroit's emergency manager to treat unlimited tax general obligation (ULTGO)and limited tax obligation debt (LTGO) bonds and post-employment benefit payments as a single class of creditor was an unwelcome surprise, Fitch said.

"If the Detroit case signals a shift towards lumping these obligations together and not levying taxes to support the apparently affordable ULTGO debt already approved by taxpayers, the outcome will lead Fitch to reconsider the impact on ratings," Fitch managing director Amy Laskey said.

Fitch also said Michigan Act 436's strong oversight for struggling local governments in the state was being offset by the weak support for Detroit bondholders.

"The city's bankruptcy filing demonstrates that state intervention mechanisms do not preclude credit deterioration or default," Fitch said.

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UPDATE 2-American Airlines, US Airways unions rally for merger

Wed Sep 18, 2013 6:37pm EDT

By Diane Bartz

WASHINGTON, Sept 18 (Reuters) - Union members who work for American Airlines and US Airways Group rallied on Capitol Hill on Wednesday, urging the U.S. Justice Department to drop its opposition to a planned merger between the two airlines.

The rally by pilots, flight attendants, baggage handlers and others also attracted a handful of the 300 lawmakers that the union representatives are meeting this week in hopes of building support for the deal.

Representatives of the Association of Professional Flight Attendants, the Allied Pilots Association and US Airline Pilots Association and the Transport Workers Union also met on Wednesday with William Baer, the head of the Justice Department's Antitrust Division, to express displeasure over the lawsuit, a union source said.

The Justice Department filed a lawsuit on Aug. 13 to stop the planned merger between US Airways and American's parent, AMR Corp. The government argues it would violate antitrust laws because it would lead to higher airfares and other fees.

A judge will hear the case without a jury in November and decide whether the deal can go forward.

Representative Ed Pastor, a Democrat from Arizona, where US Airways is headquartered, said he was surprised that the Justice Department wanted to stop the deal after allowing other large airline mergers in recent years.

Delta Air Lines Inc acquired Northwest Airlines in 2008, United merged with Continental in 2010 and Southwest Airlines Co bought discount rival AirTran in 2011.

Without the planned deal between American and US Airways, "competition will be stifled and the stability that we want in the airline industry will be taken away," Pastor said.

Pilots attending the rally made similar points, with one saying that the Justice Department allowed other airline mergers "without a whimper."

"All of a sudden they're trying to stop this," said Jim Sgueglia, 55, who said he has been flying for US Airways for 26 years.

Seth Bloom, an antitrust expert formerly with the department and now in private practice, said the rally would likely have no effect on its views.

The merger is a critical piece in American's future plans. The company declared bankruptcy in 2011 and a judge approved its plan to emerge from bankruptcy that was centered on the deal with US Airways.

The airlines and the Justice Department could settle the antitrust lawsuit, which would likely require the companies to sell assets. Any such divestitures would require the bankruptcy judge's approval.

AMR shareholders, who stand to receive a 3.5 percent stake in the merged entity, would likely be wiped out under any plan other than a merger, experts say. Most of AMR's key creditors, including the unionized workers, support the tie-up.

The airlines themselves have defended the deal by arguing in court filings that it would create $500 million in savings to consumers annually by building a stronger competitor to Delta and United.

In its complaint, the Justice Department focused on Ronald Reagan National Airport, just outside Washington, D.C., where the two companies control a combined 69 percent of takeoff and landing slots. It also listed more than 1,000 routes between two cities where the two airlines dominate the market.

The case at the U.S. District Court for the District of Columbia is No. 1:13-cv-12346.

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U.S. care homes firm Chatsworth files for bankruptcy

Sept 19 | Thu Sep 19, 2013 2:41am EDT

Sept 19 (Reuters) - U.S. firm Chatsworth PGA Properties LLC, which provides assisted living services for the elderly, has filed for Chapter 11 bankruptcy protection in a court filing on Thursday.

Chatsworth, which also offers nursing and dementia care, listed estimated liabilities of between $100-$500 million and assets of up to $10 million, according to the court document.

Chatsworth commenced Chapter 11 proceedings along with three of its affiliated entities.

The case is in re Chatsworth PGA Properties LLC, Case No. 13-12457, U.S. Bankruptcy Court, District of Delaware.

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Ecotality, an electric car charger maker, files for bankruptcy

By Jonathan Stempel

Sept 17 | Tue Sep 17, 2013 7:18pm EDT

Sept 17 (Reuters) - Ecotality Inc, a maker of charging stations for electric cars that won a $99.8 million grant from the U.S. Department of Energy four years ago, has filed for bankruptcy protection and said it plans to auction its assets next month.

The San Francisco-based company is among a growing number of U.S. alternative-energy companies that have struggled or succumbed amid consumer resistance to the high cost and restricted driving range associated with electric vehicles.

Ecotality and five affiliates filed for Chapter 11 protection on Monday night with the U.S. bankruptcy court in Phoenix.

The company said eight parties have expressed interest in bidding on its assets and that it wants to hold an auction on Oct. 9, with a closing to occur within two days.

Citing "significant liquidity constraints and the difficulty of obtaining long-term financing," Ecotality said an auction is necessary to maximize value for creditors and avoid a "fire-sale liquidation."

Ecotality makes systems for electric vehicles under the Blink and Minit Charger brands. It had warned on Aug. 12 that a bankruptcy filing was possible, amid disappointing sales and a suspension of payments from the federal government.

Among other U.S. alternative energy companies, green car startup Coda Holdings Inc filed for bankruptcy protection in May after selling just 100 all-electric sedans.

Meanwhile, the Energy Department on Tuesday said it will in October sell a non-performing loan made to another green car startup, Fisker Automotive.

Ecotality's $99.8 million grant was awarded in August 2009 to help develop the EV Project, a network of charging stations for vehicles such as the Chevrolet Volt and Nissan Leaf in major U.S. metropolitan areas.

The company said Nissan North America Inc agreed to provide up to $1.25 million of financing to keep it operating during the bankruptcy. Court approval is required for that loan.

According to a court filing, the Energy Department is owed $6.5 million as the largest unsecured creditor of Ecotality affiliate Electric Transportation Engineering Corp.

A hearing on Ecotality's "first-day motions," including that it be allowed to pay employees and vendors, is scheduled for Thursday morning.

Shares of Ecotality closed on Tuesday down 7.2 cents, or 31.1 percent, at 15.9 cents on the Nasdaq. They closed at $1.46 on Aug. 9, the last trading day before Ecotality warned of a possible Chapter 11 filing.

The case is In re: Ecotality Inc, U.S. Bankruptcy Court, District of Arizona, No. 13-16127.

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