Hanesbrands Inc., the Winston-Salem, N.C. maker of underwear and other apparel, announced that it will shutter nine of its sewing and assembly facilities and reduce its payroll by 5,300 workers (11% of its workforce). Most of the layoffs will be at the firm’s operations in the Dominican Republic and Mexico as it moves to lower-cost facilities, though some 350 administrative and management positions will be phased out, mostly in the U.S.  The moves will result in $42 million in restructuring charges. Hanesbrands, which was spun off last year by Sara Lee Corp., announced in May that it would close three sewing and assembly operations and cut 1,400 jobs.

The U.S. Bankruptcy Court in Manhattan yesterday denied Granite Broadcasting Corp.’s bid to pay a $460,000 bonus to CEO W. Don Cornwell, the Associated Press reported yesterday. The 2006 bonus, considered prebankruptcy debt, was held up by creditor and shareholder protests. Cornwell, who was criticized by a court-appointed examiner for bargaining on his own behalf while Granite struggled, received millions in benefits under the chapter 11 plan confirmed in May by Judge Allan Gropper. The company emerged from chapter 11 protection earlier this month under the control of buyout firm Silver Point Capital. Under the reorganization plan, a $3.3 million loan Granite made its CEO was forgiven, his $2.5 million tax liability on that loan forgiveness was covered and Cornwell kept his job.
See Also:  Bankruptcy Lawyers New York

Federal-Mogul Corp. CEO Jose Maria Alapont said yesterday that auto suppliers are headed for a “challenging and painful” time as wage rates in Europe, Japan and North America must fall to be competitive, Automotive News reported today. “We cannot sustain a system of high-cost labor and excess capacity,” Alapont said. Federal-Mogul filed for court protection because it faced an overwhelming number of claims of illness from asbestos contamination. The claims came from T&N, a company Federal-Mogul bought in 1998. Alapont said Federal-Mogul spent $150 million in bankruptcy fees last year and $500 million in the first four years.
See Also:  Chapter 7 Bankruptcy

Bank of America Corp. said Monday it lost about $450 million from the bankruptcy of Parmalat SpA after relying on “fraudulent” statements made by the Italian dairy company that collapsed under euro14 billion ($18 billion) of debts in 2003, the Associated Press reported yesterday. The U.S.-based bank is charged with failing to have procedures in place that would have prevented its employees from allegedly misrepresenting the state of Parmalat’s financial affairs, as alleged in a market-rigging case against former executives in Milan. Bank of America represented Parmalat in nearly all of the U.S. private placements, according to the indictment. Technical consultants from the bank were in court on Monday testifying about the relationship between the bank and Parmalat in the market-rigging case. Bank of America has maintained that it was unaware of Parmalat’s financial condition and that the bank itself was a victim of the behavior of Parmalat and its management.

Lawyers for the family of Ron Goldman and a bankruptcy trustee said that celebrity gossip Internet site TMZ.com should be held in contempt for posting a manuscript of O.J. Simpson’s book “If I Did It,” the Associated Press reported today. The Web site and its lawyer said that the company did nothing wrong and that the manuscript was posted only briefly, though excerpts remained on the site yesterday afternoon. U.S. Bankruptcy Judge Jay Cristol said that he would schedule a hearing later on whether to hold TMZ in contempt and suggested that the company—a joint venture between America Online Inc. and a Time Warner Co. subsidiary—could eventually be held financially liable for any violation. Simpson said yesterday that he had nothing to do with Miami-based TMZ’s posting of the manuscript.

Arizona bankruptcy filings increased for the first five months of 2007 as 3,723 cases were filed, compared to the 2,328 over the same time period in 2006, the EastValley (Ariz.) Tribune reported today. That represents a 60 percent increase. “Any filing lag that was caused by that initial rush is over, so I think probably people are now making an honest assessment,” Terrence Miller, clerk of the U.S. Bankruptcy Court of Arizona. Before the regulations, annual filings have averaged 30,000 to 35,000 statewide, Last year, less than 6,500 were filed.

Platinum and gold records, autographed posters and even a key to the city all were sold at an auction as creditors liquidated the assets of boy-band impresario Lou Pearlman, the Associated Press reported yesterday. Hundreds of bidders packed a downtown building Tuesday for the chapter 11 bankruptcy sale. Pearlman allegedly defrauded about 1,000 investors of more than $315 million by selling a bogus savings account plan, then using their money to cover his losses in other businesses. Banks are seeking more than $120 million, according to court documents. He also is being investigated by the FBI, IRS and state authorities. Pearlman’s assets included memorabilia from the Backstreet Boys and ‘N Sync, the two boy bands he created in the ’90s that made him famous, and several of his lesser-known acts.

Granite Broadcasting Corp. emerged from bankruptcy protection after fighting off a shareholder group’s last-minute bid to delay the exit pending an appeal of the TV station operator’s reorganization plan, the Associated Press reported yesterday. New York-based Granite, whose chapter 11 plan was confirmed by the court last month over the shareholder group’s rival proposal, exited bankruptcy on Monday under the control of buyout firm Silver Point Capital after cutting its debt by more than $300 million. Granite’s chapter 11 exit comes after a lengthy plan-confirmation battle, which pitted the company’s Silver Point-backed reorganization plan against a proposal put forward by shareholders led by hedge fund Harbinger Capital Partners. Judge Allan L. Gropper approved the Granite plan on May 18 over the preferred-shareholders’ plan. Although both proposals called for full repayment for Granite’s creditors, Judge Gropper ruled that the Harbinger-backed plan would have burdened the reorganized company with too much debt.

Ritchie Capital Management Ltd. is preparing to seek bankruptcy protection for life-insurance holdings in its flagship hedge fund, a month after blaming its co-investor for more than $700 million in losses, Bloomberg News reported yesterday. Ritchie sued Coventry First LLC on May 2, saying that it concealed a government investigation into fraud against policyholders. The Lisle, Ill.-based hedge-fund manager has been selling assets to pay off clients following two years of subpar returns. It agreed in April to sell a “significant portion” of its multi-strategy fund’s holdings to New York-based Reservoir Capital Group in a transaction valued at $1 billion. It’s been in talks to sell additional assets to potential buyers including Coller Capital Ltd., a London-based private-equity firm. Ritchie tried last year to restructure and pay clients back over two and a half years. It scrapped that plan in December. It had about $2.8 billion under management at the time, including borrowed money.

See Also:  Chapter 7 Bankruptcy

A group of institutional investors has published a “best practices” for pension fund oversight to address what they see as haphazard standards in the industry, the Wall Street Journal reported today. Pension funds have been “neglected in terms of governance,” says Peter Clapman, chairman of the committee that drafted the recommendations, and former head of corporate governance for TIAA-CREF, a big retirement-plan provider for teachers and others. The recommendations are going to be released today by a committee of the Stanford Institutional Investors’ Forum, an informal group of about 25 institutional investors. The suggestions are aimed at lightly regulated, nonprofit investors such as pension funds, endowments and charitable foundations. Most are simple ground rules such as disclosing governance guidelines and outlining the duties of trustees. Patrick McGurn, who advises institutional investors as vice president of Institutional Shareholder Services, says he often sees tension between fund staffers and trustees because of confusion about their responsibilities. McGurn says he supports recommendations to clarify the lines of authority, and for trustee education.