BANKRUPTCY

Wednesday, April 16, 2008

BANKRUPTCY

Filings Rose 38 Percent Last Year

Bankruptcy filings jumped 38 percent last year as many consumers struggled with higher mortgage payments and other debt loads, a nonprofit group said.

There were 850,912 bankruptcy filings in 2007, up from 617,660 the previous year, the American Bankruptcy Institute said, citing data from the Administrative Office of the U.S. Courts.

Consumer bankruptcy filings rose 37.6 percent, to 822,590 from 597,965. Business bankruptcies, meanwhile, increased 44 percent, to 28,322, from a record low of 19,695 in 2006, the ABI said.

The largest increases in filings came from California and Nevada, the ABI said, where the real estate bust has hit particularly hard. The increase follows a significant drop in bankruptcy filings in 2006, after a new law made it more difficult for consumers to seek bankruptcy protection from creditors.

Delphi Exit Is Months Away

Delphi, the former General Motors parts subsidiary, is months rather than weeks from exiting bankruptcy, the company's chairman said.

Delphi must wait until capital markets stabilize before it can leave court protection, said Chairman Steve Miller, left. The supplier is in a holding pattern after an investor group withdrew from a planned $2.55 billion investment April 4. The bankruptcy exit is stalled primarily because the company, based in Troy, Mich., promised to restore a shortfall in its pension obligations, Miller said.

Miller said that the company's operations are "fixed" and that Delphi has won $20 billion to $30 billion in new business each year it has been in bankruptcy. The company filed for court protection in October 2005.

TELECOM

Comcast Wants 'Bill of Rights'

Comcast, under federal investigation for interfering with the traffic of its Internet subscribers, said it wants to develop a "bill of rights and responsibilities" for file-sharing.

The announcement expands on Comcast's new policy toward file-sharing: It said last month that rather than singling out such traffic and blocking some of it, the company would move toward a system that treats all types the same.

The document would codify "best practices" for Internet providers to deal with file-sharing traffic, which can place substantial loads on the networks of cable companies. It would also clarify what controls consumers should have over peer-to-peer file-sharing applications on their computers.

RETAIL

Linens 'n Things in Talks on Debt

Linens 'n Things, the home-furnishings retailer taken private by Apollo Management, is in talks with bondholders to restructure debt as the slumping U.S. economy makes it harder for vendors to borrow.

The retailer, which lost money the past two years, may be trying to line up agreements with creditors to avoid filing for bankruptcy, said Carla Casella, a fixed-income analyst at J.P. Morgan Securities.

Linens 'n Things said in a statement that it postponed the payment of $16.1 million in interest due to noteholders. Lenders including General Electric, which arranged a line of credit for Linens 'n Things, support the restructuring efforts, the company said.

CONTRACTING

Northrop to Record Charge

Northrop Grumman said it will take a first-quarter charge of as much as $360 million because of a delay in building a $1.9 billion amphibious assault ship. Northrop shares fell $5.27, to $71.57.

The company said the USS Makin Island will be delivered in the second quarter of 2009 instead of the end of this year.

Northrop blamed Hurricane Katrina, which damaged its Pascagoula, Miss., shipyard and displaced experienced workers.

EARNINGS

Johnson & Johnson reported a 40 percent jump in first-quarter profit, mainly due to the weak dollar boosting foreign revenue and a charge that depressed results a year ago. The maker of health products reported that it earned $3.6 billion, up from $2.57 billion in the comparable period a year earlier. The year-ago quarter included a charge of $807 million. Revenue rose 8 percent, to $16.19 billion.

Intel, the world's biggest chipmaker, said its first-quarter earnings fell 12 percent because of costs related to the spinoff of a business. Profit declined to $1.44 billion from $1.64 billion. Sales rose 9.3 percent, to $9.67 billion. The company, based in Santa Clara, Calif., spent $300 million during the period to shed a money-losing unit that makes flash memory for cellphones.

Charles Schwab's first-quarter profit rose 12 percent as it added 246,000 brokerage accounts, its most in nearly seven years. The company reported earnings of $305 million, up from $273 million. Revenue climbed 13 percent, to $1.31 billion.

U.S. Bancorp said first-quarter earnings fell 3.5 percent, to $1.09 billion. Revenue was $3.87 billion, up 14 percent. The bank blamed the mortgage crunch for its lower profit but said its credit problems are manageable.

Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.