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Articles of Interest

Bankruptcy Lawyers See Land Of Opportunity In Detroit Crisis

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By The Huffington Post News Editors

By Nick Brown
July 21 (Reuters) – With more than $18 billion at stake in Detroit’s restructuring, big law firms and other advisers are clamoring to represent the city’s many creditors – including some advisers not exactly known for municipal work.
The city, which filed the largest-ever U.S. municipal bankruptcy on Thursday, tapped high-priced lawyers from Jones Day, financial advisers from Ernst & Young and restructuring consultants from Conway MacKenzie, court papers show.
For creditors and related parties, there is clearly a lot at stake. That means bondholders, insurers, retirees and others are sure to be accompanied in court by platoons of lawyers.
Detroit owes more than $8 billion in bond debt, and the insurers likely on the hook for those costs have already retained big-name law firms to take their cases.
Federal Guaranty Insurance Co tapped Weil Gotshal & Manges, according to a source close to the matter, who declined to be named because the information was not public as of Saturday. An attorney for Weil declined to comment.
David Dubrow, a lawyer at Arent Fox, confirmed on Saturday that he has been tapped by Ambac Financial Group.
And, according to the court’s electronic docket, Syncora hired Kirkland & Ellis, known for its corporate bankruptcy work, while Assured Guaranty retained Winston & Strawn, and National Public Finance Guarantee Corp hired Sidley Austin.
Bond insurers will play a key role in Detroit’s case. While a portion of the city’s $1.13 billion in general obligation bonds are secured by city assets, about $651 million of it is secured only by the ability to raise taxes. The city’s emergency manager, Kevyn Orr, has said he will treat that portion of the debt as an unsecured claim.
That classification, which has been largely untested in federal courts, is likely to be hotly contested and possibly litigated by bondholders or their insurers.
Detroit also owes $5.7 billion in unfunded healthcare and other benefits to retirees, and has …read more

Source: FULL ARTICLE at Huffington Post

Business, Finance, Occupation & Industry

Detroit Emergency Financial Manager Kevyn Orr Had Tax Liens on His Home

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By The Associated Press

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Kevyn Orr anwsers a question during a news conference in Detroit, Thursday, March 14, 2013.
(Paul Sancya/AP)

DETROIT (AP) – The auto-industry turnaround expert picked to steer Detroit back from the brink of financial ruin had tax liens on his Maryland home, records show.

Kevyn Orr, Detroit’s new emergency financial manager, had two outstanding liens on his $1 million home in Chevy Chase, Md., for $16,000 in unemployment taxes in 2010 and 2011, The Detroit News reported Saturday. The Maryland state records also show that two other liens of more than $16,000 in unemployment and income taxes were satisfied in 2010 and 2011.

Orr, a partner in the Cleveland-based law firm of Jones Day who represented Chrysler during its successful restructuring, was appointed Detroit’s financial manager by Michigan Gov. Rick Snyder on Thursday.

Orr said Friday he didn’t know anything about the liens when shown the records by the News. On Saturday, the Washington, D.C., bankruptcy attorney said he now is paid up on state liens.

“It’s on me – it’s something that fell through the cracks,” Orr told the Detroit Free Press.

Orr, 54, apologized for the oversight, saying he always tries to be attentive to such matters and wasn’t aware of the liens until he was notified about them on Friday.

“It’s remarkably embarrassing,” Orr said. “I called and paid it up Friday. I wanted to make sure I addressed it as soon as I could.”

Sara Wurfel, a spokeswoman for Snyder, said the governor’s office wasn’t aware of the liens until the News asked about them.

“It did not come up in any of the vetting,” she said.

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Critics of the emergency manager said the liens are troubling, because one of Orr’s jobs will be to improve Detroit’s tax-collecting operations.

Detroit is saddled with a $327 million budget deficit and more than $14 billion in long-term debt. City records estimate that Detroit collected $32 million less in income taxes than it was owed in 2011.

“It’s quite interesting that (Orr) feels he could manage the city of Detroit, and he’s having trouble managing his own affairs,” said the Rev. Charles Williams II, president of the National Action Network of Michigan and an opponent of Orr’s appointment.

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Source: FULL ARTICLE at DailyFinance

Automobiles

Report: Detroit's new emergency city manager worked on Chrysler bankruptcy [w/video]

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By Zach Bowman

Detroit Emergency City Manager Orr at his appointment press conference with Governor Snyder in the background

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Kevyn Orr, the new emergency city manager of Detroit, has a history with one of Michigan’s most famous residents: Chrysler. Governor Rick Snyder (at right) appointed Orr to the position yesterday with the belief that Detroit needs outside assistance to right the city’s mounting financial woes. Orr (at left), a partner with the Jones Day law firm, will begin work on March 25 and receive $275,000 a year for his work. While state officials believe the new city manager will be able to complete his duties in 18 months, the contract is technically open-ended.

The 54-year-old attorney helped steer Chrysler through its 2009 bankruptcy, earning $700 per hour for his efforts. He was also instrumental in convincing the courts to allow Chrysler to shutter 789 dealerships in a single month. Orr says he’s aware that his efforts won’t have made him any friends in Southern Michigan.

“I’m prepared to be the most hated man for a period of time,” Orr is quoted as saying in The Detroit Free Press, “but some of that vitriol will abate.”

Moving forward, Orr will have widespread power to put Detroit on whatever course he sees fit, including everything from eliminating the city’s mayor and council’s pay and fringe benefits to stripping them of fiduciary powers. You can watch Snyder introduce Orr in the video below.

Continue reading Detroit’s new emergency city manager worked on Chrysler bankruptcy [w/video]

Detroit’s new emergency city manager worked on Chrysler bankruptcy [w/video] originally appeared on Autoblog on Fri, 15 Mar 2013 11:31:00 EST. Please see our terms for use of feeds.

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Source: FULL ARTICLE at Autoblog

Business, Finance, Occupation & Industry

Ferro Confirms Prior Receipt and Rejection of Unsolicited Proposal from A. Schulman

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By Business Wirevia The Motley Fool

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Ferro Confirms Prior Receipt and Rejection of Unsolicited Proposal from A. Schulman

Advises Shareholders to Take No Action at This Time

CLEVELAND–(BUSINESS WIRE)– Ferro Corporation (NYSE: FOE, the “Company”) today confirmed that its Board of Directors had previously received and rejected an unsolicited proposal from A. Schulman, Inc. (NAS: SHLM) to acquire all of the outstanding shares of Ferro common stock for $6.50 per share in cash and stock.

Ferro’s Board of Directors, in consultation with financial and legal advisors, unanimously determined that the A. Schulman proposal is not in the best interests of Ferro shareholders and that continued execution of the Company’s value creation strategy will deliver greater value to Ferro shareholders.

Ferro advises shareholders to take no action at this time.

Goldman, Sachs & Co. is serving as Ferro’s financial advisor, and Jones Day is serving as its legal advisor.

About Ferro Corporation

Ferro Corporation (http://www.ferro.com) is a leading global supplier of technology-based performance materials for manufacturers. Ferro materials enhance the performance of products in a variety of end markets, including building and construction, automotive, appliances, electronics, household furnishings, pharmaceuticals, and industrial products. Headquartered in Mayfield Heights, Ohio, the Company has approximately 4,860 employees globally and reported 2011 sales of $2.2 billion.

Cautionary Note on Forward-Looking Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of Federal securities laws. These statements are subject to a variety of uncertainties, unknown risks and other factors concerning the Company’s operations and business environment. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements and that could adversely affect the Company’s future financial performance include the following:

  • demand in the industries into which Ferro sells its products may be unpredictable, cyclical or heavily influenced by consumer spending;
  • Ferro’s ability to successfully implement its value creation strategy;
  • Ferro’s ability to successfully implement and/or administer its cost-saving initiatives, including its restructuring programs and produce the desired results, including …read more
    Source: FULL ARTICLE at DailyFinance