Bosnian airline grounded over debt, faces bankruptcy-minister
Tuesday, 05 March 2013 00:00
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* Wants to settle debt by selling two aircraft
By Daria Sito-Sucic
SARAJEVO, March 5 (Reuters) - Bosnia's BH Airlines has been grounded and faces possible bankruptcy over an outstanding bank debt, a senior government official said on Tuesday.
The Sarajevo-based carrier is solely owned by Bosnia's autonomous Muslim-Croat Federation, after Turkish Airlines pulled out of a joint venture in June last year and handed its 49-percent stake over to the government.
Enver Bijedic, the Federation's minister for transport and communications, told Reuters that flights had been halted due to claims of some 7 million Bosnian marka ($4.6 million) by the Bosnian arm of Austria's Hypo Alpe Adria Bank.
Last month the bank froze the airline's accounts over an unpaid 5.5 million marka leasing loan for two ATR 72 aircraft and a 1.5 million marka rehabilitation loan. Bijedic said BH Airlines had deposited collateral of roughly the same amount with the bank.
The bank confirmed in a statement that it had frozen the accounts of BH Airlines because of significant outstanding debt and delays in the payment of the leasing loan.
"We did not rush with this decision and the blocking of accounts was the last option," the bank's statement said.
"The bankruptcy of BH Airlines is not in our interest," the bank said, adding it expected the airline's management to consider all options to relieve its financial problems and ensure operations would continue.
Hypo Alpe Adria is in the process of rolling back an ambitious expansion into southeastern Europe in an attempt to shrink itself back to health.
Under a 2005 contract with Hypo Alpe Adria's leasing arm, BH Airlines bought two 66-seat ATR 72 aircraft worth a total of $18.4 million. ATR is a joint venture of European aerospace group EADS and Italy's Finmeccanica.
"The company has paid back $15 million under the leasing loan, while these two planes are today worth $9 million," Bijedic said, blaming the debt on the airline's previous management.
He said the airline had offered the bank a new deal to pay off the debt from the sale of the two aircraft, topped up with a further $550,000 from the government.
"We have proposed to level the balance with the bank," Bijedic said. "If they decline, BH Airlines will go bankrupt, which means that everybody will face a loss," he said, adding that the Bosnian arm of the bank had sent the offer to its Austrian headquarters.
"We have already conducted early negotiations with Airbus to buy one 160-seat Airbus 319 aircraft under a favourable agreement, so we would then be able to resume flights," he said.
Goran Jovanovic, president of BH Airlines' supervisory board, said he was hopeful the matter could be resolved and flights resumed.
BH Airlines receives an annual government subsidy of 2.7 million marka, as well as proceeds from departure taxes at Sarajevo airport. (Reporting by Daria Sito-Sucic; Editing by Helen Massy-Beresford)
* Airline grounded over bank debt |
Girls Gone Wild Files for Bankruptcy
Monday, 04 March 2013 00:00
U.S. govt objects to sale of Hostess assets to FBC Georgia
Monday, 04 March 2013 00:00
SAN BERNARDINO: New city manager declared personal bankruptcy
Thursday, 21 February 2013 00:00
SAN BERNARDINO: New city manager declared personal bankruptcy
The man hired to lead San Bernardino out of bankruptcy went through a personal bankruptcy recently in which he and his wife lost their home.
According to U.S. Bankruptcy Court records, Allen J. Parker, 71, of Beaumont, and his wife, Sara, declared personal bankruptcy two years ago.
The couple owed creditors $621,218, had a home worth $147,500 and other assets worth $23,140 when they declared bankruptcy on Feb. 18, 2011, according to the court records, which are public.
Reached by phone on Friday, Feb. 22, Parker said he told the San Bernardino City Council about his bankruptcy during the interview before the council confirmed his appointment as city manager on Feb. 15.
When asked whether his bankruptcy reflects on his ability to handle the city’s fiscal problems, Parker said, "Apples and oranges."
Asked whether the council had had any questions about his bankruptcy, Parker said: "I told them that I had gone through bankruptcy and as part of that, I gave back the house – it wasn’t foreclosed on – and that’s all I told them."
When pressed for the reason he and his wife became insolvent, Parker declined to discuss it.
"I really don’t have anything to add," he said.
Mayor Patrick Morris, who selected Parker to succeed Interim City Manager Andrea Travis-Miller after she announced last month she was leaving the city, was out of town and couldn’t be reached for comment.
His spokesman, Jim Morris, said the mayor and council members were aware of the bankruptcy before hiring Parker.
They "discussed its issues and evaluated it in light of being able to make use of (Parker’s) expertise," Morris said.
Jim Morris was not privy to the discussion.
City Attorney Jim Penman said his office did an extensive background check on Parker, including interviewing some of his creditors, and knew about the bankruptcy.
"The council spent a lot of time, as did the mayor, discussing that issue with him, and the mayor was comfortable enough with his answers to appoint him, and the council was comfortable enough to confirm him," Penman said.
"I would not want people to think this is something we were not aware of," he said.
"Bankruptcy is something we don’t take lightly, because we’re in it, and a lot of time was spent" investigating Parker’s situation, he said.
The background check included talking to people in several of the cities Parker has managed and the city’s investigators were told that Parker saved several cities from bankruptcy, Penman said.
"We were able to get confirmation of that, and not from people he recommended we talked to, (but from) people we went to ourselves," Penman said. "And that was what was impressive."
The council was also impressed that Parker brought up the issue of his bankruptcy in the interview process, Penman said.
As a condition of discharging their debts through bankruptcy, Parker and his wife were required to attend a course in personal financial management, bankruptcy court records show.
According to the bankruptcy trustee’s report, the couple’s debts were to be "discharged without payment" and their assets, valued at $170,640, abandoned.
The bankruptcy case was closed on June 30, 2011.
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Casey Anthony speaks at bankruptcy hearing
Tuesday, 05 March 2013 00:00
Casey Anthony speaks at bankruptcy hearing
TAMPA, Fla. (AP) — Appearing in public for the first time since she was acquitted of murder, Casey Anthony revealed that she doesn't have a job or a car, lives with friends and relies on unsolicited gift cards and cash to get by.
"I guess you could say I'm living free off the kindness" of others, Anthony said at a bankruptcy hearing in Tampa.
Anthony, 26, was acquitted of murder in July 2011 in the death of her daughter, Caylee. She was released from jail several days later and disappeared from the spotlight. At the time, she had been vilified online and elsewhere, and her attorneys said threats had been made against her.
On Monday, dressed in a white short-sleeve top, a black skirt and black heels, she emerged from a sport utility vehicle and several dozen photographers and reporters swarmed her. When she left the courthouse, about 10 U.S. Homeland Security officers stood on the steps with guns.
During the 50-minute long hearing, she consulted with her team of attorneys frequently. When she spoke, it was in a calm, matter-of-fact voice, and she mostly answered "yes sir" or "no sir" to the trustee's questions.
Anthony said all of the "unsolicited" money, gift cards and donations were sent to her attorneys, who then pass them along to her. She added that her criminal attorney, Jose Baez, has given her about $3,400 in cash "to help with my living expenses."
She refused to disclose who pays for her cell phone, with one of her attorneys saying that it was due to "safety and security concerns."
Anthony filed for bankruptcy in January, claiming about $1,000 in assets and $792,000 in liabilities.
Only one creditor showed up at the hearing: R. Scott Shuker, who is a lawyer for Zenaida Fernandez-Gonzalez.
Fernandez-Gonzalez said her reputation was damaged by Anthony telling detectives that a baby sitter by the same name kidnapped Caylee. The detectives were investigating the 2008 disappearance of Caylee, who was found dead several months later.
Anthony's attorney said details offered by Anthony did not match Fernandez-Gonzalez and clearly showed Anthony wasn't talking about her.
Shuker grilled Anthony repeatedly on whether she has been approached to tell her story for a movie, book or TV deal. Anthony insisted that she has not spoken to any agent or media organization.
Shuker said afterward that he questioned whether she was telling the truth.
"From the smell test, it didn't smell right," he said. "Any time you see an attorney in what's supposed to be a no asset case being that active, more to the point, you had five attorneys there, allegedly none of them being paid, that's odd."
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ResCap Wins More Time to File Exclusive Plan
Tuesday, 05 March 2013 00:00
Residential Capital LLC won more time to file an exclusive plan to reorganize while the bankrupt mortgage company remains in mediation with creditors, who say talks have stalled.
U.S. Bankruptcy Judge Martin Glenn in Manhattan today extended the company’s exclusive right to file a reorganization plan to April 30. The order came after ResCap settled a dispute with noteholders by dropping a provision that would have given a committee of unsecured creditors a “veto role” over any plan the company may file by that date.
Glenn approved ResCap’s request to hire a new chief restructuring officer, Lewis Kruger, and said he deserves time to try to put together a plan. The company requested 60 days during which no creditor is allowed to propose one.
“It may be at the end of 60 days, all bets are off,” Glenn said. ResCap “would have a hard time convincing me to extend exclusivity again.”
Glenn extended until May 31 negotiations with creditors and ResCap’s parent, Ally Financial Inc. The talks are designed partly to decide how much Ally must to pay to avoid a lawsuit over what it did before ResCap filed bankruptcy.
While it retains the exclusive right to reorganize itself, ResCap doesn’t expect to file a restructuring plan that the creditor committee opposes, company attorney Lorenzo Marinuzzi said in court today.
Ally Settlement
Ally, based in Detroit, had proposed paying creditors $750 million to settle all claims. The creditor committee opposed that settlement, saying it was too low.
ResCap’s board supported the settlement until last month, when the company agreed to hire Kruger and promised not to file a reorganization plan in the next few months without support from the creditor committee.
ResCap filed for bankruptcy last year, partly to help it resolve lawsuits brought by investors that purchased mortgage bonds backed by $226 billion worth of home loans. The lawsuits claimed the bonds lost value because many of the loans were bad.
The case is In re Residential Capital LLC, 12-bk-12020, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Steven Church in Wilmington, Delaware, at
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Moody's sees bankruptcy risk in Detroit fiscal emergency
Tuesday, 05 March 2013 00:00
Moody's sees bankruptcy risk in Detroit fiscal emergency
(Reuters) - The city of Detroit would have a potential path to bankruptcy court under a state-appointed emergency financial manager, posing risks to the city's bondholders, Moody's Investors Service said on Monday.
The credit ratings agency, which rates the city of Detroit Caa1 with a negative outlook, said the appointment of a manager under a current Michigan law or a new law that takes effect later this month "would be one procedural step closer to a bankruptcy filing" that could lead to delayed or reduced payments to bondholders.
The manager could ultimately recommend a Chapter 9 municipal bankruptcy would be the best remedy for Detroit. A bankruptcy filing by Detroit, which could be blocked by Michigan officials, would be the largest ever in the United States.
Michigan Governor Rick Snyder on Friday officially declared a financial emergency for his state's biggest city and said he has identified a top candidate for the manager job. Detroit officials have until March 11 to request a hearing to challenge the determination of an emergency.
Moody's also pointed out that the appointment of a manager would be an additional termination trigger for interest rate swap agreements associated with pension debt the city sold in 2006.
The swaps, which could cost Detroit as much as $440 million or about 22 percent of its operating budget, were previously subject to termination in March 2012, when Moody's dropped the city's rating to B2.
"The additional event could result in a termination and unbudgeted liquidity demand on the city," Moody's said in a report. "To date, counterparties have not requested a termination payment and the city continues to make its swap payments, which are supported by an intercept of the city's share of casino revenue distributions from the state."
The rating agency said an emergency manager appointment could be positive for the cash-strapped city by alleviating political and operational challenges that have stood in the way of efforts to solve big financial problems.
"The (emergency manager's) ability to amend the current year budget, which is now projected to end with a $113 million operating deficit, could be a first step toward imposing fiscal stability and improving the city's illiquid cash position," Moody's said.
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