Delphi to Auction Assets and News on Other Financially Challenged U.S. Companies for March 25

The items below are taken from the Credit Manager’s Weekly Summary of Financially Challenged Companies. A full issue contains information on more than 200 companies. Please visit the insideARM bookstore for information on subscribing to the Summary.

Delphi Corp., the bankrupt Troy, Mich., auto-parts firm, won approval from the U.S. Bankruptcy Court to auction off its assets in Kettering, Ohio. An auction is set for 4/14 and Tenneco Inc.’s $18.8 million bid for the assets is currently the top offer.

Discovery Holding Company, the Englewood, Colo., firm which has a 65% interest in cable broadcaster, Discovery Communications, reported a fourth quarter net loss of $170 million, on a 10% revenue decline–to $178.2 million.  The loss compares with income of $5.2 million for the same period one year earlier. For the year, the company reported a net loss of $68.4 million on a 3% revenue increase–to $707 million.  The loss, which compares with a $46 million loss for fiscal 2006, includes charges of $165 million related to its restructuring efforts as well as the sale of certain assets and impairments.

Eureka Casino in Black Hawk County, will cease operating by the end of the month after failing to get a renewal of its license.  

EStyle Inc., a baby and maternity apparel retailer, filed for bankruptcy protection in the U.S. Bankruptcy Court in Los Angeles, saying that it wants to shutter six of its nearly two dozen stores.

J.P. Morgan Chase & Co., Manhattan, N.Y., agreed to a deal whereby it will raise its offer price to acquire Bear Stearns Cos. from $2 a share to $10 a share, hoping to win over shareholders that balked at the original bid. The revised deal calls for an acquisition price of more than $1 billion, and J.P. Morgan will also assume the first $1 billion in losses on Bear Stearns’s assets, after which a $30 billion guaranty from the federal government takes effect. Separately, it expected that after the deal goes through perhaps 14,000 Bear Stearns employees will lose their jobs.

Mannatech Inc., a Coppell, Texas, maker of nutritional supplements, agreed to pay more than $11 million to settle class-action litigation that charged it with non properly supervising sales staff and allowing false claims to be made about how effective its products are.

Palm Inc., the Sunnyvale, Calif., maker of handheld devices, was warned that its credit rating could be lowered deeper into junk territory by Standard & Poor’s, because of worse-than-expected results.  Palm recently reported a loss for its most recent quarter on dropping revenue.

Sentinel Management Group Inc.’s bankruptcy trustee sued the money manager’s auditor for allegedly ignoring legal violations by Sentinel executives which, the trustee says, led to millions of dollars of losses and the demise of the firm last summer. The lawsuit seeks $550 million.

Starbucks Corp., Seattle, was ordered to pay $105 million in penalties because supervisors at its California stores allegedly took some of the tips that customers left for baristas who work at the stores. The coffee shop operator said it will appeal the ruling.

Winland Electronics Inc., Mankato, Minn., reported its fourth quarter net income sank 86%–to $7,000. Revenue fell 18%–to $7.5 million. For the year, it lost $260,000 on an 8% revenue decline–to $34.7 million.

WorldSpace Inc., a Silver Spring, Md. provider of satellite-based digital radio. reported a fourth quarter net loss of $46 million. Revenue declined 24%–to $3.8 million for the year, it lost almost $170 million on a 12% revenue decline–to $13.8 million. The quarter included a debt-extinguishment expense of $1.4 million and the year included an $11.5 million write-off.

Young Broadcasting Inc. of New York reported a fourth quarter net loss of $4.3 million on a 12% revenue decline–to $44 million.  The loss compares with income of $723,000 for the same period one year earlier.  For the year, the company reported a net loss of $72.7 million, up from a loss of $56.6 million in fiscal 2006.  Revenue declined 6%–to $155.6 million.  The company owns and operates ten television stations nationwide.