Free Republic

Senate conservatives last week waged a hard-fought and principled battle to protect both U.S. taxpayers and the integrity of the free market against the Washington establishment that favored a government bailout of General Motors and Chrysler. By late Thursday it appeared they had won. But within hours of the end of negotiations in the Senate, the White House undercut conservatives by announcing it would consider using taxpayer money from the Troubled Assets Relief Program (TARP) to bailout the Detroit automakers. Sadly, this wasn’t the first time the White House felt entitled to use TARP funds in a manner inconsistent with...

Some brave Senators are trying to save America from a $14 Billion mistake with a threatened filibuster against the Auto Bailout. At the same time, According to the Wall Street Journal General Motors may be finally realizing that the jig is up: General Motors Corp. has hired lawyers and bankers to consider whether to file for bankruptcy protection, said several people familiar with the matter. While still fighting to forestall the move, GM management recently tapped bankruptcy veteran Harvey Miller of New York law firm, Weil Gotshal & Manges LP, to handle what would be one of the largest and...

No Auto Bailout? Investors May Just Say 'No Problem' BAILOUT, AUTOMAKERS, BIG THREE, FORD, GENERAL MOTORS, GM, CHRYSLER, CARS, ECONOMY, STOCK MARKET NEWS CNBC.com | 19 Nov 2008 | 01:28 PM ET If Congress turns its back on the Big Three auto makers—as many expect—investors probably won't drive the stock market off a cliff. Instead, some market experts see at most a brief selloff once news hits that Ford , General Motors and Chrysler won't be getting a bailout. Market reaction otherwise could be muted, despite the big scare headlines such a development would generate—and worries among average investors (see...

We examine a sample of 459 firms filing for Chapter 11 during the period 1991 to 1998 and find that our sample firms experience significant improvements in their operating performance during Chapter 11. Our evidence is consistent with the hypothesis that Chapter 11, if anything, provides net benefits to bankrupt firms. In the cross section, firms with higher debt ratios experience greater improvements in operating performance, and the complexity of the renegotiation process negatively affects the improvement. We find no relationship between Chapter 11 outcome and changes in risk-adjusted firm value in Chapter 11.

Circuit City’s bankruptcy filing is causing concern among U.S. shopping center and mall property owners as they face the prospect of every Circuit City store turning into vacant space, Reuters reports (via Retailer Daily). The No. 2 consumer electronic retailer will continue to operate through the rest of the year, thanks to $1.1 billion of debtor-in-possession financing from existing lenders, led by Bank of America. However, that financing must be brought down to $900 million by Dec. 29, and Circuit City will be forced to use holidays sales proceeds to repay other outstanding loans. The liquidity will get them through...

In the face of the economic downturn, retail chains over the past 12 months have been closing stores to cut costs. Here is rundown of what major retailers who operate stores in the Tucson market have done: • Ann Taylor — Is closing 117 of its 959 women’s clothing stores. By year’s end the company will have closed 25 Ann Taylor and 39 Loft stores with the remainder to be closed in 2009. The company has an Ann Taylor store in La Encantada and Loft stores in Tucson Mall and Park Place Mall, none of which are among the announced...

BREAKING NEWS Lehman Brothers Holdings Inc says filing for Chapter 11 bankruptcy; says no subsidiaries will be included in filing 12:34am EDT

LOS ANGELES — Veg-O-Matic king Ron Popeil used to love to say, "But wait, there's more!" But only barely, it turns out, at least in regard to the company he founded. Ronco Corp., based in Simi Valley has filed for Chapter 11 bankruptcy protection, declaring it has $32.7 million in debts and $13.9 million in assets. Popeil, 72, an irrepressible pitchman who used infomercials to sell products such as the Pocket Fisherman, Showtime Rotisserie and GLH spray-on hair, is the largest creditor. Two years ago, he sold Ronco, the company he founded in 1958. The price was about $55 million...

RUSH: Here is Mack in Orlando, Florida. Welcome, sir, to the program. CALLER: Rush, what an honor to talk to you. It's been 16 years that I've been listening, and first time I've ever called in. RUSH: Thank you. I'm glad you got through. CALLER: Yes. What I wanted to talk about today was something very interesting that went across the Internet this morning. I see that Air America filed for Chapter 11. No Kidding? Its Really Dead, Jim! RUSH: Is that right? CALLER: I thought it's an interesting contrast between a media program that has been propped up by...

ANCHORAGE, Alaska (AP) -- A spokesman for Era Aviation Inc. said the regional airline expects no disruption to passengers as it reorganizes in Chapter 11 bankruptcy. The company filed for bankruptcy reorganization this week after a dispute with its lender. The Anchorage-based carrier serves Southcentral and Western Alaska. It will continue flying while it reorganizes, said company president Paul Landis on Thursday. "We're flying the same schedule with the same equipment and fare structure," Landis said. Advertisement The bankruptcy filing became necessary when Capital Source Financing of Chevy Chase, Md., began restricting the airline's access to cash, Landis said. The...

CHICAGO - Nearly three-quarters of Americans wouldn't buy a car from a bankrupt company, according to a recent survey. a nationwide survey by the Cincinnati-based research firm Directions Research Inc. published Friday, only 26 percent of respondents said they would purchase or lease a new car from a manufacturer that had declared bankruptcy. General Motors Corp. lost nearly $5 billion in its North American automotive business in the first nine months of 2005, and speculation has mounted among investors that the auto maker may eventually be forced to file for Chapter 11 protection. GM recently announced it would close 12...

DETROIT (AP) -- Delphi Corp., the largest U.S. auto supplier, filed for bankruptcy Saturday, sending shock waves through the nation's auto industry, which already is weakened by high labor costs and falling market share. The company's bankruptcy is one of the largest in the country's history. Delphi filed to reorganize its U.S. operations in federal bankruptcy court in New York, where hearings are scheduled to begin next week. Delphi's non-U.S. operations were not included in the filing. Delphi Chairman and CEO Robert S. Miller said the company hopes to emerge from Chapter 11 in early to mid-2007. "We will...

...The immediate causes of the Northwest and Delta filings are failed labor negotiations and bad luck. Northwest is struggling with striking mechanics who refused to join other unions in negotiating $1.4 billion in annual savings to prevent bankruptcy. Delta has its own high-cost union contracts and has long been bleeding cash. Hurricane Katrina and sky-high fuel costs were the tipping point. But the root of the problem for these "legacy" carriers is the burden of pension costs. And one tantalizing option is to use bankruptcy to pass them off to the taxpayer via the federal Pension Benefit Guaranty Corp. (PBGC)....

Northwest Airlines, its financial condition worsening, filed for bankruptcy-court protection Thursday in U.S. Bankruptcy Court in New York, a first in the history of the 79-year-old company and a fate it narrowly averted in the early 1990s. The filing, which was preceded by defaults on some payments due in the past few days, is expected to help the nation's fourth-largest airline by traffic reduce its towering labor costs and restructure its aircraft lease payments and other expenses. Delta Air Lines, the No. 3 carrier, also sought protection from its creditors Thursday. (See related story.) The two join UAL Corp.'s United...

Term sheet paves way for company's emergence from bankruptcy ATLANTA, Sept. 7 /PRNewswire-FirstCall/ -- Mirant Corporation (Pink Sheets: MIRKQ - News) announced today that it has reached an agreement with a number of the key constituencies in its Chapter 11 case regarding the terms upon which it will emerge from bankruptcy protection.The deal sets forth the modifications that Mirant will make to its currently pending Plan of Reorganization (POR) filed in March of this year, and the terms on which the constituencies will support and recommend the amended POR's confirmation. Parties to the accord include the company, all three of...

It was a problem that Lloyd Levine wrestled with for over six years: how to rid the state of a great environmental blight--over 9 million scrap tires filling up California landfills, serving as mosquito incubators, and occasionally igniting into great fires and belching plumes of oily toxic smoke. As a graduate student at California State University, Sacramento, Levine wrote his master’s thesis on the problem. As a member of the California Assembly representing Van Nuys, he had a chance to do something about it. His bill, AB 338, was simple, even elegant: use all of those tires to pave California...

The following statement should be attributed to R-CALF USA President and Founder Leo McDonnell: “It is unfortunate that a frank discussion of the failures of the North American Free Trade Agreement (NAFTA) will not be part of the summit tomorrow between the leaders of Canada, Mexico and the United States. “For example, the Chapter 11 provisions of NAFTA – which grant foreign corporations and producers greater rights than U.S. citizens at special international tribunals – must be rewritten, both in NAFTA and in future trade agreements such as the Central American Free Trade Agreement (CAFTA). “Right now, the Canadian Cattlemen...

But grocery chain says stores will remain open, financing is lined up and employees will get paid. NEW YORK (Reuters) - Winn-Dixie Stores Inc. has filed for bankruptcy protection, due to stiff competition and the need to restructure to stem widening losses.

In the airline industry's dark months after the September 2001 attacks, the federal government, banks, aircraft lenders and others came forward to help, giving the wounded companies plenty of leeway in the face of extraordinary circumstances. But three years later, the benevolence is gone. In a form of tough love that is quickly spreading, these same backers are putting the clamps on the still-troubled airlines, particularly those operating under bankruptcy protection. The backers are giving chief executives at United Airlines, US Airways and ATA Airlines their marching orders: enforce strict timetables, conserve cash, reduce spending and eliminate jobs - or...

When Donald Trump writes his next book, he'll have plenty of expertise in how to write Chapter 11. Trump Hotels & Casino Resorts, the company that controls the real estate mogul's casinos, said yesterday that it plans to seek Chapter 11 bankruptcy protection. The move all but wipes out existing shareholders who already endured a 99 percent drop in the stock's value. Trump Stays Meanwhile, Trump keeps his job as CEO at the ailing company, which has paid him US$1.5 million in salary for at least the past three years. And the company, which has lost money for the 10...