April 13, 2011 nº 1.029 - Vol. 9
"Life consists not in holding good cards, but in playing those you hold well."
Josh Billings
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The problem with multiple Chapter 11 plans
Until October 2005, dueling Chapter 11 plans were a theoretical possibility, but a rare occurrence in reality. The Federal Bankruptcy Code contemplated that a debtor might lose its exclusive right to propose a plan, but bankruptcy courts routinely extended exclusivity and the debtor typically proposed the only plan in the case. The plan was often the result of negotiation and might look very different from the first plan proposed by the debtor, but there was only one plan.
In the late 1980s and early 1990s, this was the source of some controversy, especially with regard to the failed reorganization of Eastern Airlines. Eastern tried and tried to reorganize, only to ultimately liquidate. Eastern no doubt influenced Congress's decision to place a limit on a debtor's exclusivity rights. As part of the 2005 amendments to the bankruptcy code, debtors have the exclusive right to propose a plan for at most 18 months. After that, any party to the case can propose a plan.
We are now living with the consequences of that decision in both the Lehman Brothers and Tribune Company bankruptcies, among other large Chapter 11 cases in which multiple plans emerged, and it has become clear that the implications of the change were not thought all the way through. For example, the bankruptcy code does not explain if competing plans are to be considered simultaneously or serially. Simultaneously might make sense, so the creditors could consider all their options at once, but this would also increase the risk of confusion, especially if there are a large number of retail or trade creditors. A small creditor hit with three disclosure statements at once seems apt to throw them all in the trash can.
The bankruptcy code also does not provide for any clear guidance about the disclosure requirements for plan proponents. Outside of bankruptcy, parties soliciting votes as part of an effort to take control of a corporate board are subject to federal proxy rules that mandate disclosure of their motives and interests in the target company. Such disclosure is not clearly required by the bankruptcy code, but it probably should be. Creditors should know that they are voting on a plan that helps the plan proponent recover more on its claim in the Chapter 11 case. The bankruptcy courts can try to work out some of these problems using their existing powers. But without clear powers granted under the bankruptcy code, there is always a risk that some sensible solution order by a bankruptcy court will fail to hold up on appeal. And there is that lingering question about whether all these competing plans are the most efficient way to run corporate reorganization system. Every plan proposed no doubt results in a corresponding increase in debtor and committee legal expenses. Maybe we need to reconsider the basic premise of this change to the Federal Bankruptcy Code.
US must tackle government deficit, says IMF report
There is an urgent need for the US to tackle the deficit in the government's finances, according to the IMF - International Monetary Fund. The organization has warned that the size of the deficit risks creating instability in the financial markets. However, the global economic recovery is gaining strength, the IMF said. In developed economies the private sector is increasingly replacing government spending in driving that recovery, it added. This reduces the risks of a renewed recession as governments continue to curb their spending. However the report warned that developed economies still needed to watch levels of government debt.
Arbitration Express
Citi ordered by panel to pay investors $54.1m
An arbitration panel ordered Citigroup Inc to pay a group of investors $54.1m for losses from a municipal securities fund that cratered between 2007 and 2008, the biggest award yet in a long and continuing series of legal claims against the bank.
2010: a record year for domain name dispute arbitrations
Arbitration cases involving allegations of cybersquatting, or improper use of trademarks in Internet domain-name registrations, hit record levels last year at the two organizations that handle most of the disputes.
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China, Brazil sign deals at summit
China and Brazil, two of the world's fastest growing economies, announced a handful of commercial agreements on Tuesday—including an order worth up to $1.5bn for Brazilian aircraft from Chinese companies—at a time when Brazil has become increasingly frustrated with Chinese trade practices. Economic ties between the countries have become strained in recent months amid complaints by Brazil that China has flooded its markets with cheap goods and has restricted access to its own markets for Brazilian goods other than commodities. This follows rapid expansion in trade between the countries, with total trade tripling in the last five years to $62.6bn, according to Chinese figures.
Milk poisoning in northwest China 'deliberate'
Three children who died after drinking tainted milk appear to have been the victims of deliberate poisoning. Investigators said the industrial salt nitrite had been added to fresh milk at two dairies in the north-western Gansu province in order to harm people. They had detained suspects in the city of Pingliang.
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With no one in charge, frustration rises in Suez
Residents of Suez, Egypt, are disillusioned with a revolution they complain has turned their city on its head. With no government in place, volunteers have tried to step in — they sweep the streets and run neighborhood patrols. But some say the revolution was a failure.
Gbagbo moved out of Abidjan
Former Ivory Coast president Laurent Gbagbo has been moved out of Abidjan a day after his arrest. He was detained after a week-long siege by forces loyal to his rival, the UN-recognised president Alassane Ouattara. Army chiefs who had remained loyal to Mr Gbagbo have been pledging their loyalty to Mr Ouattara at a ceremony, but there are reports that some soldiers and militiamen have refused to surrender. Ouattara announced that a truth and reconciliation commission would be set up to "shed light on all the massacres, crimes, and all cases of human rights violation".
Japan PM seeks to calm food fears
Japanese PM Naoto Kan says food from the region near the stricken Fukushima plant is safe to eat despite radiation fears. But Japanese authorities have raised the severity rating of their nuclear crisis to the highest level, seven. The decision reflects the total release of radiation at the damaged Fukushima Daiichi power plant, which is ongoing, rather than a sudden deterioration. Level seven previously only applied to the 1986 Chernobyl disaster, where 10 times as much radiation was emitted.
Accusations of corruption rampant in Afghanistan
Convictions are rare in Kabul, facts are elusive, and many say arrests are not possible. Several figures seen as key to fighting corruption have themselves faced charges in recent months, leaving the Afghan public to wonder whether the accused have been caught red-handed, or perhaps were getting a bit too close to catching someone who really is guilty.
Budget would cut $18m from D.C. Courts
District of Columbia's local courts would see an $18m reduction in annual funding under the latest version of the proposed federal budget, but the deal brokered late Friday represents an $8m increase in funding for the city's court system from a previous version of the budget proposed in February.
EU demands Tunisia do more to stop illegal migration
The European Commission's president has said Tunisia must do more to prevent migrants entering Europe illegally, and readmit its citizens who have done so. Most EU governments argue that the North Africans are mostly economic migrants, and not asylum seekers or refugees in need of protection.
Doctors 'often defy' their own treatment advice
Many doctors recommend treatments to their patients that they would not use themselves, a US study suggests. Doctors were far more likely to opt for a therapy carrying a higher chance of death but better odds of side-effect free survival, for example. But for their patients, doctors tended to pick a treatment that erred on the side of survival, regardless of the quality of life.
Court freezes immigration law
The US Court of Appeals for the Ninth Circuit on Monday upheld a lower court decision to enjoin several provisions of Arizona's controversial immigration law. In July, the US District Court for the District of Arizona granted a preliminary injunction to the DOJ - Department of Justice blocking implementation of the law. Affirming the decision below, the Ninth Circuit held that "the district court did not abuse its discretion in finding that the United States demonstrated that it faced irreparable harm and that granting the preliminary injunction properly balanced the equities and was in the public interest." In addressing the equities and public interest, the Ninth Circuit indicated that the constitutional infringement of the Supremacy Clause alleged by the DOJ could itself constitute irreparable harm to the federal government absent injunctive relief
UN unmonitored Bradley Manning visits 'blocked'
A UN investigator on torture says US officials have blocked his requests for unmonitored visits to alleged Wikileaks whistleblower Bradley Manning. He said Mannung was "disappointed and frustrated by the prevarication" he met from US officials. Pte Manning, accused of leaking secret military and diplomatic cables, has been detained at a US marine base since May 2010.
Tepco may face $23.6bn in claims
Tepco - Tokyo Electric Power Company may face as much as 2 trillion yen ($23.6bn) in compensation claims, according to JP Morgan. The company has been grappling to contain the radiation leak crisis at its Fukushima Daiichi nuclear plant. Under Japanese law, operators of a nuclear facility can be waived of any liability if the accident is deemed to have been triggered by a natural disaster of an exceptional character. Whether the current crisis fits that classification will determine the course for Tepco, analysts say.
Microsoft takes to the streetside
The tech giant launches rival to StreetView and reveals it will map wi-fi data. Microsoft has been keen to avoid the privacy concerns that dogged Google's service but said that it does plan to gather wi-fi data. It said it had consulted with data protection authorities and privacy bodies such as Privacy International throughout the development of Streetside.
EU adopts tougher fishing rules to protect stocks
The EU has agreed on common inspection rules to prevent overfishing and make it possible to trace fish "from net to plate". The rules include a new point system to punish crews who fish illegally. If they accumulate too many points they will lose their licence. EU nations police their own fisheries, but they have agreed on common inspection and reporting methods.
Gene patents
Gene patents were in the spotlight recently, as the Federal Circuit heard oral arguments on whether an isolated gene is patentable, and organic farmers sued Monsanto, claiming its transgenic seed patents are invalid.
Shake-Up at Renault over 'chain of failures'
Carlos Ghosn, Renault's chief, escaped with his job Monday, but a debacle over false charges of industrial spying cost the carmaker's chief operating officer and six others their posts. COO Patrick Pelata has resigned, but will remain within the group, following an industrial espionage scandal. Three executives from the group's security service will leave the French car-maker, which is 15% state-owned. Meanwhile, compensation will be paid to another three executives who were wrongly fired over the affair. It comes after investigations into the theft of the electric car technology, which was first detected last August. Another trio of top executives will be relieved of their duties while their fate is decided, Renault added.
Facebook claimant says he has Zuckerberg's e-mails to prove 50% ownership
Facebook Inc. won a court decision enforcing the settlement of a lawsuit claiming company founder Mark Zuckerberg stole the idea for the world's largest social-networking site from former Harvard University classmates, twins Cameron and Tyler Winklevoss. Separately, e-mails allegedly written by Zuckerberg are cited in a new court filing by Paul Ceglia as proof of his claim that he's entitled to 50 percent of the company under a 2003 contract. E-mails allegedly written by Facebook Inc. co-founder Mark Zuckerberg are cited in a new court filing by Paul Ceglia as proof of his claim that he's entitled to 50 percent of the company under a 2003 contract. The revised complaint, filed yesterday in federal court in Buffalo, NY, includes new allegations supporting Ceglia's claim to own part of Palo Alto, California-based Facebook, the world's biggest social-networking site, including that Zuckerberg sent numerous e-mails discussing the terms of the contract and the early development of "The Face Book" with Ceglia.
Syria forces preventing access to medical care for protesters
HRW - Human Rights Watch reported Tuesday that Syrian security forces have stopped medical personnel, sometimes violently, from attending to injured protesters. A spokesperson for the group called the practice "both inhumane and illegal." According to the report, at least 28 protesters died Friday in protests spread across three cities. Witnesses said security forces opened fire when civilians tried to remove the injured from the scenes and that in Daraa an ambulance was blocked from reaching wounded protesters. Witnesses also reported that security forces controlled hospitals in Daraa and Harasta and would not admit injured protesters.
Berlusconi calls tax fraud hearing 'waste of time'
Italian PM Silvio Berlusconi attended a hearing in Milan on Monday to defend himself against charges of tax fraud. After just two-and-a-half hours, Berlusconi left the trial saying the prosecution had no case against him and that the hearing was a waste of time. Berlusconi's media empire, Mediaset is accused of purchasing television rights for US movies through offshore companies and falsely declaring the costs on its taxes. Mediaset chairman Fedele Confalonieri and producer Frank Agrama are among the 10 others charged in the case. During Monday's hearing, witnesses provided testimony on the purchase of television rights for Italian television. The trial was set to continue into the afternoon without Berlusconi. Last month, Berlusconi attended a hearing to defend himself against separate charges of fraud and embezzlement. In that case, Berlusconi is accused of inflating the price paid to buy television rights for his company Mediaset to fund political activities. Prior to that hearing, Berlusconi had not attended a case hearing for more than seven years.
Spain high court indicts judge Garzon for jailhouse wiretap order
The Spanish Supreme Court on Monday issued an indictment against National Court judge Baltasar Garzon for his order to place illegal wiretaps in jailhouses for the purpose of recording conversations between inmates and their lawyers. Garzon's order was a part of his investigation into a network of businesses alleged to have given money and other gifts to members of Spain's Popular Party, in exchange for contracts in regions under the party's governance. This investigation, now known as "el caso GUrtel", was commenced by Garzon in 2009, with the wiretap order issued in February of that year. He based his order to wiretap the jailhouse on his belief that it would yield incriminating evidence as the lawyers may be acting as liaisons with others suspected of involvement in this network. However, the court found that Garzon extended the amount of time the jailhouse was wiretapped even after he discovered that the majority of the initial conversations overheard dealt mostly with defense strategies.
Ikea faces plenty of worker complaints in U.S.
Ikea, the home-furnishing giant long thought of as an exemplary employer, is facing a laundry list of complaints from its US employees. Three years after it opened a factory in Virginia, the company has now been slapped with multiple racial discrimination complaints, high turnover from disgruntled employees and an attempt to unionize by its workers.
Atrocities, call for Qaddafi exit
Al Arabiya, Online news, Dubai, United Arab Emirates
Hosni Mubarak 'hospitalised'
Al Jazeera, Doha, Qatar
Libya's Mussa Kussa 'leaving UK for Qatar talks'
Asharq Al-Awsat, Pan-Arab daily, London, England
Syrian forces firing at small village
Egyptian Gazette, English-language, Cairo, Egypt
Clinton: U.S. plans new push on Israeli-Palestinian peace
Haaretz, Liberal daily, Tel Aviv, Israel
MIDEAST: War clouds back over Gaza
IPS Middle East, International cooperative of journalists, Rome, Italy
Ban on fuel supply to Western Airlines
Iran Daily, English-language, reformist, Tehran, Iran
UNRWA hopes for big crowds at 1st-ever Gaza Marathon
JPost, Conservative, Jerusalem, Israel
TEPCO to soon give outlook for controlling nuclear crisis
Times of Oman, English-language daily, Muscat, Oman
Japan disaster now on Chernobyl level
CNN International, London, England
Families bury school gunman victims
Daily Express, Conservative tabloid, London, England
Israel: Macintyre wins media peace award
Independent The, London, England
Iraqi governor says 'terror groups' behind attacks on U.S. forces
Radio Free Europe, Prague, Czech Republic
Interest rates 'on hold until August'
Telegraph The, Conservative daily, London, England
Leading actor who won gagging order could be unmasked at High Court today
Telegraph The, Celebrity news, London, England
Hardship blunts Iranian interest in Arab protests
Daily Jang, Left-wing daily, Karachi, Pakistan
India-Pakistan unlikely to break impasse soon: US
Dawn, English-language daily, Karachi, Pakistan
West Asia imparts political colour to BRICS summit
Hindu The, Left-leaning daily, Chennai, India
India, China work on resuming defence exchanges
India Express, News portal, Mumbai, India
Hardship blunts Iranian interest in Arab protests
News The, Left-wing, Karachi, Pakistan
5 Taliban detained in Helmand
Pajhwok Afghan News, (Independent news agency), Kabul, Afghanistan
IAEA says Japan nuclear crisis 'totally different' from Chernobyl accident
People's Daily Online, English-language, Beijing, China
Hopes raised for recovery of AF447 black boxes
Straits Times, Pro-government, Singapore
Post-ban, France slaps first fine on veil
Times of India, Conservative, New Delhi, India
Seven of Puerto Rican kingpins's alleged hired killers to stand trial
Dominican Today, Independent daily, Santo Domingo, Dominican Republic
Gas tax rollback - Government cuts petrol prices, PNP calls off protest
Jamaica Gleaner, Independent daily, Kingston, Jamaica
Bolivia to give nature same rights as humans
Newser, News web site, Chicago, U.S
Syrian forces arrest 200 in rebellious town - lawyer
Reuters, World News, New York, U.S
Mills pledges more facilities to improve education
GhanaWeb, Online news portal, Amsterdam, Netherlands
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