The American Bankers Association reported yesterday that late payments on U.S. home equity lines of credit rose to a 5-1/2 year high in the second quarter of 2007, but delinquencies on many other types of consumer loans fell, Reuters reported yesterday. In its quarterly report on consumer borrowing, the bankers group said delinquencies in repaying home equity lines of credit rose to 0.77 percent in the April-June period.  That compared to a rate of 0.60 percent in the first quarter and represented the highest rate since the fourth quarter of 2001, when the rate was 0.81 percent. When it came to paying credit card bills in the second quarter, consumers improved, according to the report. The delinquency rate on credit card bills fell to 4.39 percent from 4.41 percent in the first quarter, ABA said.

The U.S. Department of Justice has urged a federal bankruptcy court to sign off on a $3 million settlement deal it made with bankrupt Marcal Paper Mills Inc. over pollution claims involving New Jersey’s Lower Passaic River, Bankruptcy Law360 reported yesterday. Representatives of the Environmental and Natural Resources Division of the Justice Department argued in a court filing Thursday that the bankruptcy court should approve the settlement over the Lower Passaic River Study Area Cooperating Parties Group’s objections. A hearing on the settlement agreement is scheduled for Thursday.

U.S. Trustee Diana G. Adams objected to fee applications totaling nearly $2.7 million in the chapter 11 proceedings of The New York Racing Association Inc., Bankruptcy Law360 reported yesterday. The applications Adams reviewed come from seven parties who want $2,690,228.75 in fees and $96,745.77 to cover expenses, and cover a time period stretching from Feb. 1 through the end of July. Adams also asked the court to hold back 20 percent of the requested fees pending the resolution of NYRA’s bankruptcy. The trustee’s objection notes that a restructuring plan and disclosure statement have not yet been filed in the NYRA case as the debtors have until Nov. 15 to file.

Bankruptcy Judge Burton R. Lifland scheduled a hearing for Jan. 14 to determine how much Dana Corp. owes for the environmental cleanup of six sites, though the government hopes a district court will ultimately decide the final tally, Bankruptcy Law360 reported yesterday. Dana had requested a December hearing, while federal attorneys sought one for March, over more than $300 million in government claims — the largest disputed claims left in Dana’s case. Judge Lifland has yet to rule on a government motion to stay the estimation procedures because federal attorneys want to move the determination of the claims to a district court. A hearing in the bankruptcy court on the motion is scheduled for Oct. 3.

The United Automobile Workers union has chosen General Motors as its lead company in negotiations on contracts that are set to expire at midnight on Friday, the New York Times reported today. The choice may signal the union’s willingness to negotiate on a health care trust, the major demand by GM, the Ford Motor Company and Chrysler. The union would administer the trust, which would be financed by contributions of cash, stock and possibly real estate from the car companies, allowing them to take the obligation off their books. GM has pushed the most heavily for such a trust because it faces a health care liability of about $55 billion for its workers, retirees and their families.
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Bankruptcy lawyers for Northwest Airlines Corp. were denied $4.2 million in end-of-case bonuses, with a judge saying their average rates of about $500 an hour had already provided adequate compensation, the Wall Street Journal reported today. U.S. Bankruptcy Judge Allan Gropper in Manhattan rejected a $3.5 million bonus for the air carrier’s lead law firm, Cadwalader Wickersham & Taft, which ushered the Eagan, Minn., airline out of bankruptcy in May. A law firm representing creditors, Otterbourg Steindler Houston & Rosen PC, was denied a $700,000 bonus.

About $120 billion of commercial paper outside the U.S. is due for renewal in the next week, including $56.5 billion of asset-backed paper, which has met the stiffest resistance from investors, the Wall Street Journal reported today. Issuers need to find buyers in order to roll over these short-term funding mechanisms or pay off the loans. So banks and other issuers are using short-term moves to raise cash to keep them going. In Australia, the central bank has broadened the definition of assets it would accept as collateral for short-term funding it supplies to domestic banks. In the United States, money-market funds haven’t suffered big redemptions and thus still have money to put to work. Investors in these funds also are willing to hold commercial paper for slightly longer time frames, suggesting that some stability may be returning, though the funds may find their investors want a limited diet of short-term paper.

The Roman Catholic Diocese of San Diego said Friday it has agreed to pay $198.1 million to settle 144 claims of sexual abuse by clergy, the second-largest payment by a diocese, the Associated Press reported on Saturday. The agreement caps more than four years of negotiations in state and federal courts. Earlier this year, the diocese filed for bankruptcy protection just hours before trial was scheduled to begin on 42 lawsuits alleging sexual abuse. The San Diego diocese initially offered about $95 million to settle the claims. The victims were seeking about $200 million. The Diocese of San Diego, with nearly 1 million Catholics and holdings throughout San Diego County, is by far the largest and wealthiest of the five U.S. dioceses to have filed for chapter 11 protection under the shadow of civil claims over sexual abuse. Dioceses in Spokane, Wash., Portland, Ore., and Tucson, Ariz. , have already emerged from chapter 11 protection. The Davenport, Iowa, diocese, which faces claims from more than 150 people, is still in proceedings.

After four years of lawsuits, delays and bankruptcy proceedings, an agreement may be drawing near between the Roman Catholic Diocese of San Diego and about 150 childhood sexual abuse victims, the San Diego Union Tribune reported today. “I believe that they are very close,” said Bob Baker, a prominent Catholic who recently helped form Parishioners for the Churches and Schools to represent church members in the diocese’s bankruptcy case. The bankruptcy court has postponed until next week a crucial hearing – further signaling that there may be progress toward a deal. Bankruptcy Judge Louise DeCarl Adler was scheduled tomorrow to consider whether to dismiss the bankruptcy case, citing a court-ordered audit that she said found several irregularities in the handling of church finances. Yesterday, she postponed the hearing on that and other items until Tuesday. Details of the new offer were not available yesterday.
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Bankruptcy Judge M. Bruce McCullough revoked the sale of the Le-Nature’s bottling plant to a supermarket chain yesterday, saying the chain intimidated a competing entity into dropping out of the bidding, the Associated Press reported yesterday. Judge McCullough ruled that Giant Eagle acted in bad faith in its bid to buy the closed Latrobe plant for $20 million. He awarded the sale to competitor Cadbury Schweppes Beverage Group, the beverage arm of U.K.-based Cadbury Schweppes PLC, for $19 million. Cadbury Schweppes, however, told the judge yesterday that it now does not want to buy the plant and will sell it if forced to go through with the purchase. Giant Eagle said it will appeal McCullough’s ruling, which came after court-appointed bankruptcy trustee R. Todd Neilson requested that the supermarket chain’s purchase be revoked.

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