The Education Resources Institute Inc. (TERI), the bankrupt student loan guarantor, will now be collecting payments on student loans for Sovereign Bank NA and PNC Bank NA, according to yesterday’s TheDeal.com. Judge Henry J. Boroff of the U.S. Bankruptcy Court for the District of Massachusetts in Boston signed orders on Dec. 16 allowing one of 2008’s largest debtors to enter into collection services agreements with the two banks, court papers said. In exchange for managing the bank’s collection of student loans, TERI will receive a percentage of the money it recovers from the defaulted student loans, court documents said, but the exact fees TERI would receive weren’t disclosed. Through the agreement, TERI will have the authority to collect, settle, enforce through litigation, enter into forbearance agreements and create payment plans for the defaulted loans. TERI said that it wanted to get involved in the loan collections in order to provide an ongoing source of revenue to fund its operations.

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Bankruptcy Judge Kevin Gross on Tuesday approved a request made by Whitehall Jewelers Inc. to terminate its private-label credit card program administered by GE Money Bank, Bankruptcy Law360 reported yesterday. Whitehall had asked the court in late November to terminate its private-label credit card agreement with GE Money Bank. Before the company filed for bankruptcy protection in June, Whitehall offered its customers Whitehall credit cards through GE Money Bank. However after the filing, GE Money Bank claimed that the agreement it had made with Whitehall to provide the credit cards included provisions giving the company the right to terminate the program. Whitehall was initially unwilling, and attempted to negotiate with GE Money Bank with an eye toward continuing the credit card program on a post-petition basis.

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Global economic forecasting firm CSM Worldwide said that General Motors and Ford have viable reorganization plans in place, provided Congress authorizes billions of dollars in loans to help them survive the severe economic downturn, but that Chrysler’s demise is all but inevitable, the New York Times reported today. Chrysler, which this month warned that it could soon run out of money without a $7 billion loan, “doesn’t really have the scale, at least in most vehicle lines, that is really required to survive in this market,” CSM said. The company, which cut a quarter of its white-collar work force last month through a buyout and an early retirement program, no longer has the resources to be competitive, he said. CSM predicted a controlled wind-down in Chrysler’s operations over the next several years.

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Two experts said that the attorneys’ fees in a potential General Motors bankruptcy could reach as high as $800 million, Bankruptcy Law360 reported on Friday. “For professionals, this is a bankruptcy the size of Enron,” said Lynn M. LoPucki, a professor at UCLA and Harvard Law School. Enron generated more than $1 billion in fees when those approved by the bankruptcy court and others assessed before and after the filing were included, according to LoPucki. Lehman Brothers Holdings Inc. could generate up to $1.4 billion in fees, LoPucki’s earlier research showed. LoPucki’s research partner, John W. Doherty of UCLA, said that with only 60 percent of total fees being awarded by a judge, professional fees for a GM bankruptcy could reach as high $1.3 billion on GM’s annual 10-K reports to the Securities and Exchange Commission.

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Sen. Carl Levin (D-Mich.) said yesterday that a compromise pact to provide at least $15 billion in loans to General Motors Corp. and Chrysler LLC could be unveiled within the next 24 hours, the Detroit Free Press reported yesterday. Levin said on FoxNews yesterday that he expected the bill to be introduced in the next couple of days. The Senate is set to come back in session Monday, with the House planning to return Tuesday. Any bill will likely need 60 votes to pass in the Senate, something Levin couldn’t guarantee. However, Senate Banking Chairman Chris Dodd (D-Conn.) said yesterday that he believed there would be enough votes to pass the measure, even though congressional leaders are displeased over the situation._“None of us like this at all, and there [are] a lot of reasons to be furious,” Dodd said, noting that more than 2 million auto-related jobs in the United States are at risk if the automakers fail. Dodd also noted that General Motors Chairman Rick Wagoner might be required to step down.

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Two more landlords have filed an objection to Circuit City Stores Inc.’s debtor-in-possession financing plan, seeking to halt the company’s ability to cancel any nonresidential leases that were part of the DIP financing, Bankruptcy Law360 reported yesterday. Monday’s filing, by Eatontown Commons Shopping Center of New Jersey and South Barrington Shopping Center of Illinois, follows a slew of filings by landlords seeking to stop the approval of Circuit City’s $1.1 billion DIP financing plan. Bankruptcy Judge Kevin R. Huennekens gave preliminary approval for the DIP financing on Nov. 10. The Eatontown and South Barrington shopping centers are objecting to provisions in the credit agreement that provide for an extension of time to assume or reject nonresidential leases, according to the motion. A final hearing on the DIP financing plan is scheduled for Friday.

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Bankrupt electronics chain Tweeter yesterday converted its case to a chapter 7 liquidation, abruptly shuttered its stores, and fired more than 600 employees at 70 stores across the country, the Boston Globe reported today. The owners of the chain, Schultze Asset Management, shut down Tweeter and filed for chapter 7 after they paid off millions of dollars to Wells Fargo, the company’s largest secured creditor. Tweeter employees are still owed at least one week’s pay, vacation time and hundreds of thousands of dollars in bonuses that were promised as part of the liquidation sale. Customers are unable to pick up merchandise they had already purchased and the liquidators handling the closing also have not been paid. Meanwhile, there is roughly $14 million worth of goods left in the locked stores. In its chapter 7 filing, Tweeter requested $900,000 to be put in a fund for unpaid wages, commissions and payroll taxes for employees.

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