04-23-2009, 11:50 AM
CREDITOR’S EDGE
(The Nation’s Oldest Daily Business E-Newspaper)
—The Day’s News in Capsule Form—
A Product of Bastien Financial Publications
(For more information contact us at 847-491-1900
or email <!-- e --><a href="mailto:usbj7@yahoo.com">usbj7@yahoo.com</a><!-- e -->)
Wednesday
April 22, 2009
(This daily e-newspaper is a copyrighted publication for the exclusive use
of the recipient only and is not to be forwarded or copied
in whole or in part for use by any other party.)
Educational Tidbits
For Today's Financial Executive
Has TARP Money Boosted Credit?
The Treasury Department’s Troubled Asset Relief Program money may not be doing much to unclog the nation’s credit markets. According to a recent survey of the twenty-one biggest banks in the U.S. that have been recipients of TARP money, credit being offered by those banks in the commercial and consumer lending categories slipped more than 2% in February from the month earlier. While home loans edged up a bit in February as borrowers took advantage of low interest rates, big banks are providing less credit overall for businesses and consumers. Already, Treasury has committed $95 billion of its TARP funds to its strategy to get credit flowing once more for both consumers and businesses.
The Business Professional’s
Q&A Corner
YESTERDAY’S QUESTION: Identify a checklist of important things to consider in being sure your company has a clear credit policy.
ANSWER: To be sure your company has a clear credit policy, there are a number of steps you can take. First, you should have written credit policies and a standard document for credit agreements. Contracts, invoices and followup letters should be clearly defined and policy manuals should outline the guidelines for assessing credit risks. Methods for collections should be clear for the customer and timetables for collection set out. As a backup, you should have a creditors’ rights attorney available and your company should also have an established relationship with a good collection agency. Finally, as a last resort, there should be well defined criteria for making decisions about when to further pursue or write off a delinquent account. Taking steps to be clear will optimize the credit relationship with your customers and improve your chances of being paid in a timely fashion.
QUESTION: Explain the responsibilities of the creditors’ committee in a bankruptcy filing.
ANSWER NEXT ISSUE
Today's Headlines:
Asyst Technologies Inc. to file Chapter 11...
Brown-Forman Co. announces 250 job cuts...
Coca-Cola Co.’s net income slides in the first quarter...
Delta Air Lines Inc. narrows its loss for the first quarter...
Emulex Corp. to get an unsolicited $800 million buyout offer from Broadcom Corp....
Erving Industries Inc. files Chapter 11...
Hexion Specialty Chemicals Inc. warns of reduced profit for the first quarter...
Merck & Co.’s first quarter net income sinks...
New York Times Co. reports a wider first quarter loss on a revenue decline...
Tenet Healthcare Corp. turns around a year-earlier first quarter loss...
TitleMax Holdings LLC files Chapter 11...
Teradyne Inc. to cut 350 jobs...
BANKRUPTCY NEWS
(For more information on these (or any) bankrupt firms
call the 800-number in your U.S. Bankruptcy Court Directory
available through Bastien Financial Publications.)
Asyst Technologies Inc., a Fremont, Ca. maker of semiconductor manufacturing equipment, announced that it will file for Chapter 11 bankruptcy protection, also saying that its Japanese affiliates have already filed similar proceedings under Japanese law. Asyst, which will continue its core operations under Chapter 11, will look for a buyer. In the final quarter of 2008 Asyst lost $7.3 million on revenue of $83 million. As of the end of last year the company had $77 million in cash on its books.
Colby Management Group LLC filed Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of North Carolina. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-031290. For more information contact the court at 919-234-7655.
Dubose Development LLC filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of California. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-30975. For more information contact the court at 888-457-0604.
Erving Industries Inc., a paper-products manufacturer in Erving, Ma., filed Chapter 11 as a result of tough competition, the sagging economy and years of operating losses. The company, whose pension plan is underfunded by $15 million, added that it will continue operating as it reorganizes. Also filing for bankruptcy protection were its Eresco Inc. and Erving Paper Mills Inc. subsidiaries. Erving’s filing, in the U.S. Bankruptcy Court in Massachusetts, was under case number 09-30624. The company listed assets of between $100,000 and $1 million and liabilities of between $1 million and $100 million. Erving has annual sales of about $50 million.
Gulf States Long Term Acure Care of Covington LLC filed Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Louisiana. The firm listed assets of less than $100,000 and liabilities of between $1 million and $100 million. The case number is 09-11116. For more information contact the court at 866-375-7879.
Magna Entertainment Corp. received approval from the U.S. Bankruptcy Court for a modified financing plan of $38.4 million, down from $62.5 million that was originally proposed. A hearing regarding sale procedures in the Ontario-based racetrack owners’s bankruptcy is scheduled for 5/4.
Motor Coach Industries International Inc., a Schaumburg, Il. manufacturer of long-distance buses, emerged from its Chapter 11 reorganization plan with Franklin Mutual Advisers LLC assuming majority ownership through a debt-for-equity swap. Motor Coach filed for bankruptcy protection seven months ago with a prepackaged reorganization plan.
Pacific Microwave filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York. The firm listed assets of less than $100,000 and liabilities of more than $1 billion. The case number is 09-12400. For further information contact the U.S. Bankruptcy Court in Manhattan, N.Y. at 212-668-2870.
Quebecor World filed its joint reorganization plan and disclosure statement with the U.S. Bankruptcy Court, saying it doesn’t anticipate any recovery for various shareholders. A related reorganization plan will be submitted in Canadian courts next month and a hearing on the disclosure statement is scheduled for 5/15.
RAD Realty Corp. filed Chapter 11 in the U.S. Bankruptcy Court in Maryland. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-16800. For more information contact the court at 800-829-0145.
Red Top Rentals Inc. filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Indiana. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-05229. For more information contact the court at 800-335-8003.
Redwood Reliance Sales Co. filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of California. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-11070. For more information contact the court at 888-457-0604.
TitleMax Holdings LLC, a privately-held title lending company with more than 500 locations, filed Chapter 11. The Savannah, Ga.-headquartered firm filed in the U.S. Bankruptcy Court for the Southern District of Georgia listing assets and liabilities of between $100 million and $500 million each. The case number is 09-40805. Also filing for bankruptcy protection were fifteen TitleMax affiliates.
TOUSA Inc., the bankrupt homebuilder, filed its amended Chapter 11 reorganization plan and disclosure statement with the U.S. Bankruptcy Court. The plan calls for monetizing its assets over the next two to three years.
Tribune Co. has a suitor for its Chicago Cubs baseball team, with local investment banker Tom Ricketts looking around to find investors to help finance a proposed $900 million acquisition of the Cubbies. Mr. Ricketts wants to attract about ten investors to pump in about $25 million apiece in exchange for an ownership interest in the team.
Viking Industries LLC filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Alabama. The firm listed assets of between $100,000 and $1 million and liabilities of between $1 million and $100 million. The case number is 09-11778. For more information contact the court at 251-441-5638.
DISTRESSED / RAPIDLY-EXPANDING COMPANIES
&
OTHER COMPANY NEWS
Acorn Capital Management in Pennsylvania and its principal, Donald Young, were charged by the Securities and Exchange Commission with running a Ponzi scheme and misappropriating $23 million in clients’ assets.
Allegiant Travel Co., the Las Vegas, Nv. parent company of Allegiant Air, reported its first quarter profit nearly tripled–to $28.2 million, on a 7% revenue increase–to $142 million. The company benefitted from lower fuel prices.
Allina Hospitals and Clinics, a Minneapolis, Mn.-based operator of forty-five clinics, is merging its clinic in Litchfield, Mn. with another one owned by Affiliated Community Medical Centers for an undisclosed amount.
American International Group Inc., the Manhattan, N.Y. insurer, is having to pay a price for its notorious bonuses, saying that it closed a deal for $30 billion in federal funding, although the government will subtract from that amount the $165 million that AIG shelled out in executive bonuses.
Amylin Pharmaceuticals Inc., San Diego, Ca., said that investor Carl Icahn, who’s in a proxy battle with the company, suggested that Amylin put itself up for sale, although Amylin said that’s not going to happen at the present time.
Aurora Catholic Federal Credit Union in Denver, Co. merged with Security Service Federal Credit Union for an undisclosed amount.
Baldor Electric Co., an Arkansas-based manufacturer of electric motors and other products, is shutting down a plant in Fort Mill, N.C. and shifting production to a larger facility in Kings Mountain, N.C. The move affects 140 workers who are being offered jobs at the Kings Mountain location.
Bank of America Corp. reported strong first quarter results, or did it? Despite logging $2.4 billion in net income for this year’s first quarter, the banking giant’s shares plunged in Wall Street trading as the company also said it set aside more than $13 billion to cover potential future credit losses, up nearly 60% from the reserves it announced in the fourth quarter. Further, CEO Kenneth Lewis warned that credit is still in the dumps and could even further deteriorate before the situation stabilizes. Bank of America’s nonperforming assets rose almost another percent from the year-ago quarter–to 6.25%, and the North Carolina bank lost almost $1.7 billion on its credit-card operations and chalked up a $500 million insurance loss. And while the profit for the quarter was up almost threefold from a year ago, it stemmed mostly from the trading business at its Merrill Lynch & Co. unit.
Blackrock Inc., the big Manhattan, N.Y. money manager, reported its first quarter profit tanked 56%–to $110 million, about in line with analysts’ estimates. Revenue sank 24%–to $987 million, while its assets under management declined 6%. The firm was hurt by wide-ranging investment losses.
Boston Scientific Corp., the Natick, Ma. maker of medical devices, reported a first quarter net loss of $13 million, down from a $322 million profit in the year-earlier period. Revenue slipped 2%–to just over $2 billion. The recent results included $240 million in after-tax charges related to patent-related payment costs. As a result of those costs, and another $1.1 billion the firm has set aside for other patent-infringement payments, Boston Scientific also lowered its projection for 2009 earnings.
Brown-Forman Co., the Louisville, Ky. wine and spirits company, announced that it will lay off 250 workers as it cuts costs. Another sixty workers have accepted early retirement. Brown-Forman, with 4,100 employees around the world, hopes that its streamlining will save it between $15 million and $25 million in fiscal 2010.
Chrysler LLC is under pressure from the Treasury Department in four-way meetings that also include Fiat SpA and the Michigan carmaker’s union workers. Some Obama administration officials have apparently decided that Chrysler apparently isn’t worth the trouble of any more government assistance and that it may be headed for liquidation. Chrysler now faces a deadline at the end of the month to reach union and lender agreements on cutting costs. One possibility is for the government to force Chrysler into a Chapter 11 or even a Chapter 7 proceeding if restructuring details aren’t reached in the next ten days. Chrysler, already the beneficiary of $4 billion in government loans, is hoping to get another $500 million in working capital this month.
Ciena Corp.’s shares sank almost 9% in recent trading after the Linthicum, Md. network infrastructure manufacturer said that it would write off the last $456 million of goodwill that remains on its balance sheet.
Coca-Cola Co., Atlanta, Ga., reported its first quarter net income sank 10%–to about $1.3 billion, although not including restructuring charges and other items earnings reached $1.5 billion. Sales for the quarter slipped 3%–to $7.2 billion, shy of Wall Street estimates. The beverage company also reiterated that it hopes to achieve $500 million in annual savings by 2011.
DataSource Inc., a print-supply chain-management company in Kansas City, Mo., expanded by acquiring FRI Resources, a printing distributor in St. Louis, for an undisclosed amount.
Delta Air Lines Inc., Atlanta, Ga., narrowed its loss in the first quarter to $794 million, a big improvement over its $6.4 billion loss in the year-earlier period. The results included $684 million in fuel-hedge losses as prices for jet fuel declined. Revenue surged 40%–to $6.7 billion, thanks to its merger with Northwest Airlines last fall. Hoping to generate $100 million in fees, the carrier immediately put in place a $50 fee for most passengers who check a second piece of luggage. Delta ended the quarter with $5 billion in unrestricted liquidity.
Eli Lilly and Co., the Indianapolis, In. maker of pharmaceuticals, reported its first quarter net income increased 23%–to $1.3 billion, ahead of Wall Street expectations. Revenue was up 5%–to more than $5 billion, and gross margins surged.
Emulex Corp., a Costa Mesa, Ca. maker of computer-data-center technology, is apparently getting an unsolicited $800 million cash buyout offer from Broadcom Corp., the Irvine, Ca. manufacturer of communications semiconductors. Several months ago Emulex adopted a poison-pill defense trying to block any hostile takeover maneuvers.
Fair Isaac Corp., a Minneapolis, Mn. credit-scoring company, had its stock downgraded by an analyst who expressed concern about the firm’s second quarter results.
Florida Capital Bank NA, Jacksonville, Fl., now has no more than 120 days to propose and implement plans for reducing its credit risk and boosting its liquidity, as regulators are demanding that the bank strengthen its books. Last year the company lost $16.2 million, following a $6.5 million loss in 2007.
Galaxy Associates, a specialty chemical company in Ohio, expanded by acquiring Challenge Inc., an Indianapolis, In. maker of metal-related chemicals, for an undisclosed amount.
General Motors Corp.’s shares lost another 11% after the Detroit, Mi. carmaker, struggling to stay out of bankruptcy, announced that 1,600 more job cuts are imminent.
GlaxoSmithKline PLC gets a significantly stronger dermatology business with its recently announced deal to acquire Stiefel Laboratories Inc., a closely-held Coral Gables, Fl. dermatology products maker, for $2.9 billion. Stiefel, which makes various acne and scalp treatments, will add about $900 million in annual sales to Glaxo, which itself has a $550 million dermatology business. The big British drug firm is eager enough for Stiefel that it will assume $400 million of Stiefel’s debt and make $300 million in additional cash payments, pending future performance.
Greensboro College in North Carolina will reduce salaries of both faculty and other staffers by 20% and will cut an unspecified number of part-time jobs to deal with budget pressures.
GridNetworks Inc., a Seattle, Wa. company that provides high-definition full-screen video over the Internet, has merged with Global Media Services in Manhattan, N.Y. for an undisclosed amount.
Halliburton Co. announced 2,000 job cuts (12% of it North American payroll), as it contends with reduced production. The big Houston, Tx.-based oilfield-services provider also reported its first quarter earnings sank 35%–to $380 million, on a 3% slide in revenue–to $3.9 billion. The company blamed weak gas-drilling activity in North America.
Harris Corp., a Melbourne, Fl.-based communications and information-technology company, wants to add fifteen positions at its geospatial services production site in St. Louis, Mo.
Hasbro Inc., the Pawtucket, R.I. toymaker, reported its first quarter profit sank 47%–to $19.7 million, on a 12% revenue decline–to $621 million.
Hexion Specialty Chemicals Inc., a Columbus, Oh. maker of adhesives and other products, announced that operating income for its first quarter will be no more than $15 million and perhaps as low as $5 million, compared to an $83 million profit in the year-ago first quarter. As it released preliminary results, Hexion said that its revenue for the period fell 45%–to $900 million. Hexion’s CEO, Craig Morrison, added that the company expects to be in compliance with its debt terms. The firm will expand a program to cut costs by $100 million, partly by cutting 15% of its worldwide workforce of 6,500 employees.
Hyundai, the South Korean-based automaker, is recalling more than 530,000 vehicles that were manufactured at its operations in Alabama due to a malfunctioning stop lamp switch.
InsWeb Corp., a Sacramento, Ca. online insurance marketplace, reported a first quarter loss of $500,000, down from a $670,000 profit in the year-earlier period. Revenue fell 27%–to $9.5 million. By the end of March InsWeb’s cash and equivalents had sunk to $4.1 million, down from $9.2 million at the end of 2008.
International Business Machines Corp.’s quarterly profit slipped 1%–to $2.3 billion, on an 11% sales decline–to $21.7 billion, with results hurt partly by the effects of the strong greenback overseas. More troubling in the longer term for the Armonk, N.Y. company is Sun Microsystems Inc.’s acceptance of a $7.4 billion buyout bid from rival Oracle Corp. in a deal that will enhance Oracle’s future in the market for corporate software. Earlier IBM made an offer to acquire Sun, but Sun opted in the end for the Oracle offer, which, according to some, was a surprise for IBM.
Kadant AES, a manufacturer of cleaning products for the paper industry, put its plant in Queensbury, N.Y. on the sales block as the company moves to streamline operations and move its manufacturing to another site in Massachusetts.
Legg Mason Inc., the Baltimore, Md. money manager, continued paring its payroll, saying it laid off forty more workers as it hopes to shave $120 million from its budget this year. Last month Legg Mason reduced its payroll by twenty positions and back in December the firm cut 200 positions.
Lennar Corp.’s shares slumped 19% in recent trading after the Miami, Fl. homebuilder announced a plan to sell up to $275 million in stock in a move that would dilute shareholders’ interest. The company also revealed that it’s the target of a class-action lawsuit by disgruntled homeowners regarding drywall problems.
Logos Technologies Inc., an Arlington, Va. provider of services for the intelligence, law-enforcement and other markets, is expanding by opening a new office in Loudoun County, Va.
Lumension Inc., Scottsdale, Az., will boost its risk-management and compliance-software business by acquiring Securityworks, a Dallas, Tx. governance, risk and compliance software company, for an undisclosed amount.
McClatchy Co., the newspaper company, was warned that its shares could be delisted from trading on the New York Stock Exchange for failing to maintain minimum listing requirements. The company has five weeks to submit a plan to regain compliance.
McKenna Long & Aldridge LLP, a law firm in Washington, D.C., will cut new associates’ salaries by $20,000 as it deals with the economic downturn.
Merck & Co., the Whitehouse Station, N.J. drug company, reported its first quarter net income tumbled 57%–to $1.4 billion, short of expectations, partly because of weak sales of some of its top drugs and declining income from partnerships. The results included restructuring charges and expenses related to its planned acquisition of Schering-Plough Corp., the big Kenilworth, N.J. drug company, for more than $41 billion. Also, the year-earlier quarter was inflated by a $2.2 billion pretax gain. Revenue in the recent quarter fell 8%–to $5.4 billion.
Microsoft Corp., which announced in January that it would pare its payroll by 5,000 positions over the next year and a half, could engage in even more workforce reductions, according to one industry analyst.
Mutual of Omaha Insurance Co., American Heritage Life Insurance Co. and Wakely and Associates Inc. agreed to pay $15 million to settle allegations that they provided inaccurate actuarial work on certain insurance policies in Missouri.
New York Times Co., Manhattan, N.Y., reported a first quarter loss of $74.5 million, way up from a $335,000 loss in the year-earlier quarter. Revenue sank almost 19%–to $609 million, including a 28% drop in ad revenue at its publishing businesses. The newspaper company has been looking for ways to reduce costs and raise cash, including raising $225 million through a sale-leaseback of its headquarters and a $250 million loan from Mexican billionaire Carlos Slim.
Park National Corp., a Newark, Oh. bank, reported higher-than-anticipated earnings for its first quarter of $21.4 million, although that’s down slightly from $23 million in the year-earlier period which was boosted by a special gain. Net interest income was up 11%–to $68.2 million, although its loan-loss provisions jumped by 66% and noninterest income fell 9%.
Quicksilver Resources Inc.’s shares tumbled more than 20% after the Fort Worth, Tx.
oil and gas company’s investment rating was lowered by RBC Capital, which expressed worry about Quicksilver’s pinched liquidity and covenant risks, among other matters. Quicksilver itself insisted that it’s in compliance with all of its debt obligations.
Revlon Inc., the troubled Manhattan, N.Y. cosmetics firm, received an offer to be bought out by MacAndrews & Forbes Holdings Inc., investor Ronald Perelman’s investment vehicle. Mr. Perelman has offered converting all the Revlon stock that MacAndrews doesn’t currently own into $75 million in preferred shares and forgiving $75 million out of a $107 million loan that MacAndrews earlier made to Revlon’s consumer-products business.
S&T Bancorp Inc.’s shares lost nearly a quarter of their value in recent trading after the Indiana, Pa. company said that it lost $3.1 million in its first quarter as a result of a more than $21 million provisions for loan losses. In the year-earlier period S&T recorded net income of $14.9 million.
San Francisco Chronicle’s delivery drivers’ union members approved a deal with the newspaper that will result in the loss of 100 jobs as the company, a unit of Heart Corp., seeks to reduce costs.
Stream International, a business processing outsourcing provider, will close a call center in Richardson, Tx. and cut sixty jobs.
Tenet Healthcare Corp., a Dallas, Tx. hospital operator, swung to the black in the first quarter, saying that it anticipates net income for common shareholders of $178 million for the period, a turnaround from a $31 million loss in the year-earlier period. The company also boosted its projections for the full year.
Teradyne Inc., North Reading, Ma., announced that it will reduce its payroll by 350 workers in the current quarter, among other cost-cutting moves, amid sinking demand for its semiconductor manufacturing equipment. The job cuts, on top of a 14% workforce cut that the company announced three months ago, will result in a $12 million cash charge during the second quarter. Teradyne lost $55 million in its fourth quarter.
Trojan Hardware in Troy, N.Y. is shutting down operations after nearly a century of doing business.
UBS AG is selling its Banco Pactual investment unit in Brazil to BTG Investments, which earlier owned that unit, for $2.5 billion in cash and liability assumption as the big Swiss bank continues efforts to bolster its balance sheet. UBS, which wants to reduce next year’s spending by up to $3.4 billion, is taking a loss on the sale although the deal
will also strengthen its Tier 1 capital-strength ratio.
(The Nation’s Oldest Daily Business E-Newspaper)
—The Day’s News in Capsule Form—
A Product of Bastien Financial Publications
(For more information contact us at 847-491-1900
or email <!-- e --><a href="mailto:usbj7@yahoo.com">usbj7@yahoo.com</a><!-- e -->)
Wednesday
April 22, 2009
(This daily e-newspaper is a copyrighted publication for the exclusive use
of the recipient only and is not to be forwarded or copied
in whole or in part for use by any other party.)
Educational Tidbits
For Today's Financial Executive
Has TARP Money Boosted Credit?
The Treasury Department’s Troubled Asset Relief Program money may not be doing much to unclog the nation’s credit markets. According to a recent survey of the twenty-one biggest banks in the U.S. that have been recipients of TARP money, credit being offered by those banks in the commercial and consumer lending categories slipped more than 2% in February from the month earlier. While home loans edged up a bit in February as borrowers took advantage of low interest rates, big banks are providing less credit overall for businesses and consumers. Already, Treasury has committed $95 billion of its TARP funds to its strategy to get credit flowing once more for both consumers and businesses.
The Business Professional’s
Q&A Corner
YESTERDAY’S QUESTION: Identify a checklist of important things to consider in being sure your company has a clear credit policy.
ANSWER: To be sure your company has a clear credit policy, there are a number of steps you can take. First, you should have written credit policies and a standard document for credit agreements. Contracts, invoices and followup letters should be clearly defined and policy manuals should outline the guidelines for assessing credit risks. Methods for collections should be clear for the customer and timetables for collection set out. As a backup, you should have a creditors’ rights attorney available and your company should also have an established relationship with a good collection agency. Finally, as a last resort, there should be well defined criteria for making decisions about when to further pursue or write off a delinquent account. Taking steps to be clear will optimize the credit relationship with your customers and improve your chances of being paid in a timely fashion.
QUESTION: Explain the responsibilities of the creditors’ committee in a bankruptcy filing.
ANSWER NEXT ISSUE
Today's Headlines:
Asyst Technologies Inc. to file Chapter 11...
Brown-Forman Co. announces 250 job cuts...
Coca-Cola Co.’s net income slides in the first quarter...
Delta Air Lines Inc. narrows its loss for the first quarter...
Emulex Corp. to get an unsolicited $800 million buyout offer from Broadcom Corp....
Erving Industries Inc. files Chapter 11...
Hexion Specialty Chemicals Inc. warns of reduced profit for the first quarter...
Merck & Co.’s first quarter net income sinks...
New York Times Co. reports a wider first quarter loss on a revenue decline...
Tenet Healthcare Corp. turns around a year-earlier first quarter loss...
TitleMax Holdings LLC files Chapter 11...
Teradyne Inc. to cut 350 jobs...
BANKRUPTCY NEWS
(For more information on these (or any) bankrupt firms
call the 800-number in your U.S. Bankruptcy Court Directory
available through Bastien Financial Publications.)
Asyst Technologies Inc., a Fremont, Ca. maker of semiconductor manufacturing equipment, announced that it will file for Chapter 11 bankruptcy protection, also saying that its Japanese affiliates have already filed similar proceedings under Japanese law. Asyst, which will continue its core operations under Chapter 11, will look for a buyer. In the final quarter of 2008 Asyst lost $7.3 million on revenue of $83 million. As of the end of last year the company had $77 million in cash on its books.
Colby Management Group LLC filed Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of North Carolina. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-031290. For more information contact the court at 919-234-7655.
Dubose Development LLC filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of California. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-30975. For more information contact the court at 888-457-0604.
Erving Industries Inc., a paper-products manufacturer in Erving, Ma., filed Chapter 11 as a result of tough competition, the sagging economy and years of operating losses. The company, whose pension plan is underfunded by $15 million, added that it will continue operating as it reorganizes. Also filing for bankruptcy protection were its Eresco Inc. and Erving Paper Mills Inc. subsidiaries. Erving’s filing, in the U.S. Bankruptcy Court in Massachusetts, was under case number 09-30624. The company listed assets of between $100,000 and $1 million and liabilities of between $1 million and $100 million. Erving has annual sales of about $50 million.
Gulf States Long Term Acure Care of Covington LLC filed Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Louisiana. The firm listed assets of less than $100,000 and liabilities of between $1 million and $100 million. The case number is 09-11116. For more information contact the court at 866-375-7879.
Magna Entertainment Corp. received approval from the U.S. Bankruptcy Court for a modified financing plan of $38.4 million, down from $62.5 million that was originally proposed. A hearing regarding sale procedures in the Ontario-based racetrack owners’s bankruptcy is scheduled for 5/4.
Motor Coach Industries International Inc., a Schaumburg, Il. manufacturer of long-distance buses, emerged from its Chapter 11 reorganization plan with Franklin Mutual Advisers LLC assuming majority ownership through a debt-for-equity swap. Motor Coach filed for bankruptcy protection seven months ago with a prepackaged reorganization plan.
Pacific Microwave filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York. The firm listed assets of less than $100,000 and liabilities of more than $1 billion. The case number is 09-12400. For further information contact the U.S. Bankruptcy Court in Manhattan, N.Y. at 212-668-2870.
Quebecor World filed its joint reorganization plan and disclosure statement with the U.S. Bankruptcy Court, saying it doesn’t anticipate any recovery for various shareholders. A related reorganization plan will be submitted in Canadian courts next month and a hearing on the disclosure statement is scheduled for 5/15.
RAD Realty Corp. filed Chapter 11 in the U.S. Bankruptcy Court in Maryland. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-16800. For more information contact the court at 800-829-0145.
Red Top Rentals Inc. filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Indiana. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-05229. For more information contact the court at 800-335-8003.
Redwood Reliance Sales Co. filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of California. The firm listed assets and liabilities of between $1 million and $100 million each. The case number is 09-11070. For more information contact the court at 888-457-0604.
TitleMax Holdings LLC, a privately-held title lending company with more than 500 locations, filed Chapter 11. The Savannah, Ga.-headquartered firm filed in the U.S. Bankruptcy Court for the Southern District of Georgia listing assets and liabilities of between $100 million and $500 million each. The case number is 09-40805. Also filing for bankruptcy protection were fifteen TitleMax affiliates.
TOUSA Inc., the bankrupt homebuilder, filed its amended Chapter 11 reorganization plan and disclosure statement with the U.S. Bankruptcy Court. The plan calls for monetizing its assets over the next two to three years.
Tribune Co. has a suitor for its Chicago Cubs baseball team, with local investment banker Tom Ricketts looking around to find investors to help finance a proposed $900 million acquisition of the Cubbies. Mr. Ricketts wants to attract about ten investors to pump in about $25 million apiece in exchange for an ownership interest in the team.
Viking Industries LLC filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Alabama. The firm listed assets of between $100,000 and $1 million and liabilities of between $1 million and $100 million. The case number is 09-11778. For more information contact the court at 251-441-5638.
DISTRESSED / RAPIDLY-EXPANDING COMPANIES
&
OTHER COMPANY NEWS
Acorn Capital Management in Pennsylvania and its principal, Donald Young, were charged by the Securities and Exchange Commission with running a Ponzi scheme and misappropriating $23 million in clients’ assets.
Allegiant Travel Co., the Las Vegas, Nv. parent company of Allegiant Air, reported its first quarter profit nearly tripled–to $28.2 million, on a 7% revenue increase–to $142 million. The company benefitted from lower fuel prices.
Allina Hospitals and Clinics, a Minneapolis, Mn.-based operator of forty-five clinics, is merging its clinic in Litchfield, Mn. with another one owned by Affiliated Community Medical Centers for an undisclosed amount.
American International Group Inc., the Manhattan, N.Y. insurer, is having to pay a price for its notorious bonuses, saying that it closed a deal for $30 billion in federal funding, although the government will subtract from that amount the $165 million that AIG shelled out in executive bonuses.
Amylin Pharmaceuticals Inc., San Diego, Ca., said that investor Carl Icahn, who’s in a proxy battle with the company, suggested that Amylin put itself up for sale, although Amylin said that’s not going to happen at the present time.
Aurora Catholic Federal Credit Union in Denver, Co. merged with Security Service Federal Credit Union for an undisclosed amount.
Baldor Electric Co., an Arkansas-based manufacturer of electric motors and other products, is shutting down a plant in Fort Mill, N.C. and shifting production to a larger facility in Kings Mountain, N.C. The move affects 140 workers who are being offered jobs at the Kings Mountain location.
Bank of America Corp. reported strong first quarter results, or did it? Despite logging $2.4 billion in net income for this year’s first quarter, the banking giant’s shares plunged in Wall Street trading as the company also said it set aside more than $13 billion to cover potential future credit losses, up nearly 60% from the reserves it announced in the fourth quarter. Further, CEO Kenneth Lewis warned that credit is still in the dumps and could even further deteriorate before the situation stabilizes. Bank of America’s nonperforming assets rose almost another percent from the year-ago quarter–to 6.25%, and the North Carolina bank lost almost $1.7 billion on its credit-card operations and chalked up a $500 million insurance loss. And while the profit for the quarter was up almost threefold from a year ago, it stemmed mostly from the trading business at its Merrill Lynch & Co. unit.
Blackrock Inc., the big Manhattan, N.Y. money manager, reported its first quarter profit tanked 56%–to $110 million, about in line with analysts’ estimates. Revenue sank 24%–to $987 million, while its assets under management declined 6%. The firm was hurt by wide-ranging investment losses.
Boston Scientific Corp., the Natick, Ma. maker of medical devices, reported a first quarter net loss of $13 million, down from a $322 million profit in the year-earlier period. Revenue slipped 2%–to just over $2 billion. The recent results included $240 million in after-tax charges related to patent-related payment costs. As a result of those costs, and another $1.1 billion the firm has set aside for other patent-infringement payments, Boston Scientific also lowered its projection for 2009 earnings.
Brown-Forman Co., the Louisville, Ky. wine and spirits company, announced that it will lay off 250 workers as it cuts costs. Another sixty workers have accepted early retirement. Brown-Forman, with 4,100 employees around the world, hopes that its streamlining will save it between $15 million and $25 million in fiscal 2010.
Chrysler LLC is under pressure from the Treasury Department in four-way meetings that also include Fiat SpA and the Michigan carmaker’s union workers. Some Obama administration officials have apparently decided that Chrysler apparently isn’t worth the trouble of any more government assistance and that it may be headed for liquidation. Chrysler now faces a deadline at the end of the month to reach union and lender agreements on cutting costs. One possibility is for the government to force Chrysler into a Chapter 11 or even a Chapter 7 proceeding if restructuring details aren’t reached in the next ten days. Chrysler, already the beneficiary of $4 billion in government loans, is hoping to get another $500 million in working capital this month.
Ciena Corp.’s shares sank almost 9% in recent trading after the Linthicum, Md. network infrastructure manufacturer said that it would write off the last $456 million of goodwill that remains on its balance sheet.
Coca-Cola Co., Atlanta, Ga., reported its first quarter net income sank 10%–to about $1.3 billion, although not including restructuring charges and other items earnings reached $1.5 billion. Sales for the quarter slipped 3%–to $7.2 billion, shy of Wall Street estimates. The beverage company also reiterated that it hopes to achieve $500 million in annual savings by 2011.
DataSource Inc., a print-supply chain-management company in Kansas City, Mo., expanded by acquiring FRI Resources, a printing distributor in St. Louis, for an undisclosed amount.
Delta Air Lines Inc., Atlanta, Ga., narrowed its loss in the first quarter to $794 million, a big improvement over its $6.4 billion loss in the year-earlier period. The results included $684 million in fuel-hedge losses as prices for jet fuel declined. Revenue surged 40%–to $6.7 billion, thanks to its merger with Northwest Airlines last fall. Hoping to generate $100 million in fees, the carrier immediately put in place a $50 fee for most passengers who check a second piece of luggage. Delta ended the quarter with $5 billion in unrestricted liquidity.
Eli Lilly and Co., the Indianapolis, In. maker of pharmaceuticals, reported its first quarter net income increased 23%–to $1.3 billion, ahead of Wall Street expectations. Revenue was up 5%–to more than $5 billion, and gross margins surged.
Emulex Corp., a Costa Mesa, Ca. maker of computer-data-center technology, is apparently getting an unsolicited $800 million cash buyout offer from Broadcom Corp., the Irvine, Ca. manufacturer of communications semiconductors. Several months ago Emulex adopted a poison-pill defense trying to block any hostile takeover maneuvers.
Fair Isaac Corp., a Minneapolis, Mn. credit-scoring company, had its stock downgraded by an analyst who expressed concern about the firm’s second quarter results.
Florida Capital Bank NA, Jacksonville, Fl., now has no more than 120 days to propose and implement plans for reducing its credit risk and boosting its liquidity, as regulators are demanding that the bank strengthen its books. Last year the company lost $16.2 million, following a $6.5 million loss in 2007.
Galaxy Associates, a specialty chemical company in Ohio, expanded by acquiring Challenge Inc., an Indianapolis, In. maker of metal-related chemicals, for an undisclosed amount.
General Motors Corp.’s shares lost another 11% after the Detroit, Mi. carmaker, struggling to stay out of bankruptcy, announced that 1,600 more job cuts are imminent.
GlaxoSmithKline PLC gets a significantly stronger dermatology business with its recently announced deal to acquire Stiefel Laboratories Inc., a closely-held Coral Gables, Fl. dermatology products maker, for $2.9 billion. Stiefel, which makes various acne and scalp treatments, will add about $900 million in annual sales to Glaxo, which itself has a $550 million dermatology business. The big British drug firm is eager enough for Stiefel that it will assume $400 million of Stiefel’s debt and make $300 million in additional cash payments, pending future performance.
Greensboro College in North Carolina will reduce salaries of both faculty and other staffers by 20% and will cut an unspecified number of part-time jobs to deal with budget pressures.
GridNetworks Inc., a Seattle, Wa. company that provides high-definition full-screen video over the Internet, has merged with Global Media Services in Manhattan, N.Y. for an undisclosed amount.
Halliburton Co. announced 2,000 job cuts (12% of it North American payroll), as it contends with reduced production. The big Houston, Tx.-based oilfield-services provider also reported its first quarter earnings sank 35%–to $380 million, on a 3% slide in revenue–to $3.9 billion. The company blamed weak gas-drilling activity in North America.
Harris Corp., a Melbourne, Fl.-based communications and information-technology company, wants to add fifteen positions at its geospatial services production site in St. Louis, Mo.
Hasbro Inc., the Pawtucket, R.I. toymaker, reported its first quarter profit sank 47%–to $19.7 million, on a 12% revenue decline–to $621 million.
Hexion Specialty Chemicals Inc., a Columbus, Oh. maker of adhesives and other products, announced that operating income for its first quarter will be no more than $15 million and perhaps as low as $5 million, compared to an $83 million profit in the year-ago first quarter. As it released preliminary results, Hexion said that its revenue for the period fell 45%–to $900 million. Hexion’s CEO, Craig Morrison, added that the company expects to be in compliance with its debt terms. The firm will expand a program to cut costs by $100 million, partly by cutting 15% of its worldwide workforce of 6,500 employees.
Hyundai, the South Korean-based automaker, is recalling more than 530,000 vehicles that were manufactured at its operations in Alabama due to a malfunctioning stop lamp switch.
InsWeb Corp., a Sacramento, Ca. online insurance marketplace, reported a first quarter loss of $500,000, down from a $670,000 profit in the year-earlier period. Revenue fell 27%–to $9.5 million. By the end of March InsWeb’s cash and equivalents had sunk to $4.1 million, down from $9.2 million at the end of 2008.
International Business Machines Corp.’s quarterly profit slipped 1%–to $2.3 billion, on an 11% sales decline–to $21.7 billion, with results hurt partly by the effects of the strong greenback overseas. More troubling in the longer term for the Armonk, N.Y. company is Sun Microsystems Inc.’s acceptance of a $7.4 billion buyout bid from rival Oracle Corp. in a deal that will enhance Oracle’s future in the market for corporate software. Earlier IBM made an offer to acquire Sun, but Sun opted in the end for the Oracle offer, which, according to some, was a surprise for IBM.
Kadant AES, a manufacturer of cleaning products for the paper industry, put its plant in Queensbury, N.Y. on the sales block as the company moves to streamline operations and move its manufacturing to another site in Massachusetts.
Legg Mason Inc., the Baltimore, Md. money manager, continued paring its payroll, saying it laid off forty more workers as it hopes to shave $120 million from its budget this year. Last month Legg Mason reduced its payroll by twenty positions and back in December the firm cut 200 positions.
Lennar Corp.’s shares slumped 19% in recent trading after the Miami, Fl. homebuilder announced a plan to sell up to $275 million in stock in a move that would dilute shareholders’ interest. The company also revealed that it’s the target of a class-action lawsuit by disgruntled homeowners regarding drywall problems.
Logos Technologies Inc., an Arlington, Va. provider of services for the intelligence, law-enforcement and other markets, is expanding by opening a new office in Loudoun County, Va.
Lumension Inc., Scottsdale, Az., will boost its risk-management and compliance-software business by acquiring Securityworks, a Dallas, Tx. governance, risk and compliance software company, for an undisclosed amount.
McClatchy Co., the newspaper company, was warned that its shares could be delisted from trading on the New York Stock Exchange for failing to maintain minimum listing requirements. The company has five weeks to submit a plan to regain compliance.
McKenna Long & Aldridge LLP, a law firm in Washington, D.C., will cut new associates’ salaries by $20,000 as it deals with the economic downturn.
Merck & Co., the Whitehouse Station, N.J. drug company, reported its first quarter net income tumbled 57%–to $1.4 billion, short of expectations, partly because of weak sales of some of its top drugs and declining income from partnerships. The results included restructuring charges and expenses related to its planned acquisition of Schering-Plough Corp., the big Kenilworth, N.J. drug company, for more than $41 billion. Also, the year-earlier quarter was inflated by a $2.2 billion pretax gain. Revenue in the recent quarter fell 8%–to $5.4 billion.
Microsoft Corp., which announced in January that it would pare its payroll by 5,000 positions over the next year and a half, could engage in even more workforce reductions, according to one industry analyst.
Mutual of Omaha Insurance Co., American Heritage Life Insurance Co. and Wakely and Associates Inc. agreed to pay $15 million to settle allegations that they provided inaccurate actuarial work on certain insurance policies in Missouri.
New York Times Co., Manhattan, N.Y., reported a first quarter loss of $74.5 million, way up from a $335,000 loss in the year-earlier quarter. Revenue sank almost 19%–to $609 million, including a 28% drop in ad revenue at its publishing businesses. The newspaper company has been looking for ways to reduce costs and raise cash, including raising $225 million through a sale-leaseback of its headquarters and a $250 million loan from Mexican billionaire Carlos Slim.
Park National Corp., a Newark, Oh. bank, reported higher-than-anticipated earnings for its first quarter of $21.4 million, although that’s down slightly from $23 million in the year-earlier period which was boosted by a special gain. Net interest income was up 11%–to $68.2 million, although its loan-loss provisions jumped by 66% and noninterest income fell 9%.
Quicksilver Resources Inc.’s shares tumbled more than 20% after the Fort Worth, Tx.
oil and gas company’s investment rating was lowered by RBC Capital, which expressed worry about Quicksilver’s pinched liquidity and covenant risks, among other matters. Quicksilver itself insisted that it’s in compliance with all of its debt obligations.
Revlon Inc., the troubled Manhattan, N.Y. cosmetics firm, received an offer to be bought out by MacAndrews & Forbes Holdings Inc., investor Ronald Perelman’s investment vehicle. Mr. Perelman has offered converting all the Revlon stock that MacAndrews doesn’t currently own into $75 million in preferred shares and forgiving $75 million out of a $107 million loan that MacAndrews earlier made to Revlon’s consumer-products business.
S&T Bancorp Inc.’s shares lost nearly a quarter of their value in recent trading after the Indiana, Pa. company said that it lost $3.1 million in its first quarter as a result of a more than $21 million provisions for loan losses. In the year-earlier period S&T recorded net income of $14.9 million.
San Francisco Chronicle’s delivery drivers’ union members approved a deal with the newspaper that will result in the loss of 100 jobs as the company, a unit of Heart Corp., seeks to reduce costs.
Stream International, a business processing outsourcing provider, will close a call center in Richardson, Tx. and cut sixty jobs.
Tenet Healthcare Corp., a Dallas, Tx. hospital operator, swung to the black in the first quarter, saying that it anticipates net income for common shareholders of $178 million for the period, a turnaround from a $31 million loss in the year-earlier period. The company also boosted its projections for the full year.
Teradyne Inc., North Reading, Ma., announced that it will reduce its payroll by 350 workers in the current quarter, among other cost-cutting moves, amid sinking demand for its semiconductor manufacturing equipment. The job cuts, on top of a 14% workforce cut that the company announced three months ago, will result in a $12 million cash charge during the second quarter. Teradyne lost $55 million in its fourth quarter.
Trojan Hardware in Troy, N.Y. is shutting down operations after nearly a century of doing business.
UBS AG is selling its Banco Pactual investment unit in Brazil to BTG Investments, which earlier owned that unit, for $2.5 billion in cash and liability assumption as the big Swiss bank continues efforts to bolster its balance sheet. UBS, which wants to reduce next year’s spending by up to $3.4 billion, is taking a loss on the sale although the deal
will also strengthen its Tier 1 capital-strength ratio.