For most of the top airlines, Chapter 11 simply isn’t feasible considering the high cost of bankruptcy and the relatively small savings to be wrung.

“It’s too expensive without the commensurate cost savings to gain,” said Pia Thompson, partner at Reed Smith, the law firm formerly known as Sachnoff & Weaver, which represented creditors during the bankruptcy of United Airlines parent UAL Corp (UAUA.O: Quote, Profile, Research, Stock Buzz).

“There’s almost nowhere left to cut,” Thompson said. “They’ve really done everything they can.”

Since 2002, four of the top seven U.S. airlines have restructured in bankruptcy. Two others — AMR Corp (AMR.N: Quote, Profile, Research, Stock Buzz) and Continental Airlines (CAL.N: Quote, Profile, Research, Stock Buzz) — cut costs outside of Chapter 11.

During these large-scale reorganizations, airlines reined in expenses related to labor, airplane leases and facilities. Those steps, plus a series of fare increases, put the industry back on sure footing after a wave of low-cost competition pummeled large carriers.

But the good times didn’t last. A jump in oil prices sent the price of jet fuel soaring and erased nearly all the gains airlines had made.

By the time crude oil notched a record $147.27 a barrel in July, analysts were predicting a fresh wave of airline bankruptcies. In the first half of 2008, industry analysts combed airline financial statements for signs that insolvency was near. 

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The Evangel Assembly Church of God’s desire for a larger sanctuary and campus triggered the real estate deals.

The church wants to move from its longtime home at the corner of Maple and Ayer roads about 1.5 miles east to the former home base of Eastern Hills Wesleyan Church on Greiner Road, Clarence. Eastern Hills Wesleyan has long since moved to a larger facility, also on Greiner Road in Clarence and has been marketing its former home for several years.

Terms have not been disclosed.

If the Evangel Assembly Church of God moves, McGuire Development Co. has expressed an interest in its 5.5 acre parcel. But McGuire won’t move forward on the deal unless neighbors feel comfortable with its plans for the property.

“Before we bring anything to the Town of Amherst, we want to make sure we meet with the neighbors and they’ve had their input,” said James Dentinger, president.

Dentinger said McGuire Development is willing to consider some options, but given the property’s proximity to Millard Fillmore Suburban Hospital, medical offices are an obvious consideration.

According to a preliminary deal, which was brokered by McGuire’s Vito Picone, the development company will retain its option on the Evangel church property while it works with neighbors.

Once those talks have progressed, the Evangel church will move ahead with its Clarence expansion.

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Polman, who missed out on the top job at the world’s biggest food group Nestle SA (NESN.VX: Quote, Profile, Research, Stock Buzz) last year, becomes the first new head of Anglo-Dutch Unilever Plc/NV (ULVR.L: Quote, Profile, Research, Stock Buzz) (UNc.AS: Quote, Profile, Research, Stock Buzz) not promoted from within the company in its 78-year history.

He will replace Patrick Cescau in early 2008, the company said.

A 52-year-old Dutchman, Polman spent 26 years at U.S. Procter & Gamble (P&G) (PG.N: Quote, Profile, Research, Stock Buzz) before moving to Swiss Nestle in 2006 as chief financial officer, but although seen as favorite for the top job there he was pipped by Nestle’s Americas region head, Paul Bulcke.

Polman was popular with investors after injecting a personal style and greater transparency into Nestle’s dealings with its big shareholders, and is highly regarded by analysts.

“Paul Polman is probably the best candidate in the world to become CEO of Unilever. With hindsight, he was probably the only logical choice,” said independent analyst James Amoroso.

“I think they’ve made an excellent appointment … They’ve really scored a home run here,” said Investec analyst Martin Deboo.

At 0920 GMT, Unilever Plc shares were up 6.1 percent at 15.81 pounds, topping the FTSE Eurofirst index of leading European shares, and London’s FTSE 100 index .FTSE. The Dutch shares rose 6 percent to 19.96 euros. 

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U.S. crude traded down $1.40 to $108.31 a barrel by 10:25 a.m. EDT after settling below its 200-day moving average, a key technical level, for the first time since May 2007 on Tuesday.

London Brent crude fell $1.12 to $107.22 a barrel.

Prices have fallen by $7 from Friday after Hurricane Gustav proved to be less devastating than feared.

Initial checks on U.S. Gulf of Mexico energy installations showed little damage, and the Louisiana Offshore Oil Port (LOOP) — the nation’s only deepwater port — expects to resume operations in the next couple of days.

Companies had closed 13 refineries and shut in all of the 1.3 million barrels per day (bpd) of oil production in the Gulf and 95.4 percent of the region’s natural gas output.

Now the storm has passed, analysts said slowing oil demand in the United States and other consumer nations would continue to depress oil prices, which have dropped from a record of $147.27 on July 11.

DEMAND DESTRUCTION 

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Gustav, a Category 3 hurricane before it hit Louisiana mid-morning, was downgraded to a Category 2 storm prior to making landfall.

With the New York Mercantile Exchange closed for Labor Day, U.S. crude traded on global electronic markets down $4.60 at $110.86 a barrel.

"There was an expectation of a certain strength, but the storm hasn’t been that strong," said Bob Tippee, editor of Oil & Gas Journal, an industry publication. "The sense now is that the storm isn’t the monster that people thought it would be."

Still, traders won’t get a sense Monday of the full impact of the storm, which may not be known for several days.

Gustav threatens oil imports and production facilities. The 5.6 million barrels of imported oil that enter the Gulf every day have been suspended, according to the U.S. Department of Energy. Those imports account for 56% of all oil imports, the agency said.

And the Gulf is the site of about 25% of U.S. oil production, or 1.3 million barrels a day. Offshore platforms and pipelines buried in the sea bed are vulnerable to extreme storms such as hurricanes.

The Energy Department said there are 22 natural gas plants along the Gulf of Mexico processing 13.2 billion cubic feet per day. Many of the plants have shut down due to Gustav.

As of Sunday evening, 96% of oil production in the Gulf has been halted, according to the Energy Department.

"As soon as a storm passes through, people have to go back to the facilities and check them for damage," said Tippee. "But unless there’s much damage, production can start up again pretty quickly, and imports could come back almost immediately."

Since 2005, the industry began making improvements to the Gulf infrastructure. The Interior Department in April 2008 imposed more stringent design and assessment criteria for both new and existing structures located within particular Gulf of Mexico areas.

And pipelines, which carry most of the oil and gas from the production platforms to the shore, now are equipped with redundant electric generation stations to ensure the power to the pumps will not be interrupted.

"The industry learned a lot from 2005," said Tippee. "There is a sense that the damage will be much less this time."

Prices rose as high as $118.60 on Sunday in anticipation of a strong blow to the oil industry. However, the market’s early reaction was much less frantic than it was in August 2005, when the impact of Hurricane Katrina sent oil prices up about $3, spiking just below $70 to a then-record $69.81 a barrel. With oil trading at nearly twice that amount today, a similar market reaction would have sent oil up about $5 to $121 a barrel.

"It seems like the market is weathering the storm, so the market’s focus will shift back to soft demand and a stronger dollar," said Phil Flynn, senior market analyst with Alaron Trading. "Though Gustav will still do some damage, there’s a real possibility that oil has more room to fall."

Though traders sense that the damage to offshore oil production facilities may be less than originally forecast, it remains to be seen whether onshore coastal oil refineries will suffer.

There are 150 refineries in the United States, about a third of which are located in the Gulf Coast region. About 15% of total U.S. refining capacity has been shut down, including 9 closed refineries and several more with reduced output, according to Esa Ramasamy, director of market reporting for energy analysis group Platts.

"Refineries can take just a few days or as many as 10 days to restart," said Tippee. "If the refineries aren’t damaged, the storm won’t have as major an impact."

In a precautionary measure, the Energy Department said Thursday it was prepared to release supplies from the government’s 700 million barrel Strategic Petroleum Reserve to cushion the blow. After Katrina and Rita, the government opened up the SPR for just the fourth time in history, shipping off just 11 million barrels to refiners.

But in a preliminary report Sunday, the department said existing supplies of oil may be enough to avoid major problems in the market.

"[A]bsent significant physical damage to the region’s energy systems, the record level of supply existent in the SPR today, coupled with the inventories held both offshore and onshore by the petroleum sector, should ensure these disruptions are localized and temporary," the department wrote. 

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Though the full impact of the hurricane on the facilities won’t be known until later this week, the Associated Press reports that the price of oil fell more than $8 a barrel in electronic trading on the New York Mercantile Exchange, suggesting traders were confident that the energy complex suffered only a small blow.

Houston-based ConocoPhillips (NYSE: COP) said in a statement that remote monitoring of its Magnolia production platform about 165 miles off the Louisiana coast indicated it had not sustained significant damage.

“As weather conditions permit, we’ll conduct a fly-over of the platform and south Louisiana assets to further assess their conditions,” the company says.

The oil giant’s two refineries in Louisiana — one in Belle Chasse and one in Lake Charles — both remained shut down Tuesday morning.

Houston-based Anadarko Petroleum Corp. (NYSE: APC), the largest independent deep-water producer in the Gulf of Mexico, says remote monitoring also indicated its offshore assets remained in placed as Gustav passed through the region Sept. 1.

Transocean Inc., the world’s largest offshore drilling contractor, said Sept. 1 that its three moored, semisubmersible rigs in the Gulf appeared to remain anchored in position during the storm.

Houston-based Transocean (NYSE: RIG) says eight other rigs that used thrusters to move out of the storm’s path also were safe and were moving back to their drilling locations.

Swift Energy Co. (NYSE: SFY), a Houston-based oil and gas company, said Tuesday it was in the process of assessing the damage to its coastal Louisiana properties, which will remain shut down until a safe return can be determined.

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The Institute for Supply Management's factory index was unchanged at 50.0, according to the median estimate in a Bloomberg survey before today's report from the Tempe, Arizona- based group. The ISM gauge has hovered near 50, the dividing line between expansion and contraction, for the past year.

Manufacturers are paring output and investments as tumbling home prices and high gasoline and other commodity costs squeeze demand. Surging exports are keeping factories from stumbling as the broader economy slows.

“Exports continue to save the day as strong demand from abroad is putting a floor under manufacturing,'' said Ryan Sweet, a senior economist at Moody's Economy.com in West Chester, Pennsylvania. “Final demand will remain weak as the fiscal stimulus boost fades and tight credit conditions hurt investment.''

Economists' forecasts ranged from 48.5 to 52. The ISM will release the report at 10 a.m. New York time.

A separate report from the Commerce Department at the same time may show construction spending fell 0.4 percent in July for a second month, according to economists surveyed by Bloomberg.

The economy will grow at an average 0.7 percent pace in the second half of the year, economists surveyed by Bloomberg News forecast in the first week of August. Last week, the government reported the economy grew at a better-than-forecast 3.3 percent annual rate in the second quarter, following 0.9 percent in the first three months of the year.

Shrinking Trade Deficit

The smallest trade deficit in eight years was the biggest contributor to growth last quarter. The smaller gap added 3.1 percentage points to growth, the most since 1980. That is likely to diminish as overseas economies slow and the dollar strengthens.

Manufacturers have also turned cautious as consumer spending weakens as the effects of tax rebate checks fade and Americans continue to cope with tumbling house prices and gasoline that topped $4 a gallon two months ago.

The auto industry is at the forefront of the manufacturing slump. Sales of cars and light trucks in July slid to a 12.5 million annual rate, the lowest level since 1993, according to industry figures.

General Motors Corp. Chief Executive Officer Rick Wagoner said Aug. 16 he's not yet seeing signs of a recovery in the U.S. economy or in vehicle sales.

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Nearly all of the oil and gas production in the Gulf of Mexico and more than a quarter of U.S. refining capacity was shut or slowed down as a precaution by the time Gustav made landfall near New Orleans on Monday morning.

But energy experts were hopeful the storm would cause less damage to infrastructure than Hurricanes Katrina and Rita, which three years ago destroyed more than 100 offshore oil platforms and closed several large refineries for months.

“The storm has been downgraded and it looks like the main portion of the refinery district is going to escape a significant hit,” said Jim Ritterbusch of Ritterbusch and Associates in Galena, Illinois.

U.S. crude oil fell nearly 4 percent while natural gas futures were down more than 5 percent.

Gustav weakened into a Category 2 hurricane on the five-step Saffir-Simpson scale, with winds of 110 mph before hitting the coast near Port Fourchon, a key logistical port that supports 75 percent of Gulf of Mexico oil and gas drilling operations.

U.S. forecasters warned that Gustav will bring an “extremely dangerous storm surge” of up to 14 feet that could test levies in low-lying areas. But a surge of that size would be only half of that caused by Katrina, which flooded New Orleans in 2005.

Energy companies are unlikely to have much information about the condition of offshore platforms until surveillance flights can be launched once Gustav has passed. 

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If Florida regulators approve the company's 2009 fuel-cost projections, clean-air expenses, nuclear pre-construction costs and other factors, the average residential monthly bill would increase by 31 percent, to $144.86, from $110.59 starting in January.

The company said the increase of about $34 includes about $21 for projected fuel costs in 2009, about $11 for new nuclear-plant construction, and about $1 for environmental projects, including the installation of the latest clean-air technology at the company's coal-fired power plants.

The proposal comes as Progress Energy (NYSE: PGN), which is based in Raleigh, also seeks a rate hike in North Carolina. The company asked N.C. regulators in June for a 16 percent increase in rates that would cover just the cost of fuel. It has yet to ask to raise rates to deal with new nuclear construction efforts, though the company has filed with federal regulators to build two new reactors at the Shearon Harris site in southwestern Wake County.

North Carolina officials are expected to rule on Progress’ request by year’s end.

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The alliance of mortgage servicers, counselors, and investors assembled to combat foreclosures fixed more than 192,000 problem loans during July, a one-month record that represents a 6% increase over June.

Despite this progress, foreclosures continue to climb; 91,752 families lost their homes in July. That represents an increase of 14% from June and more than double the number of July 2007, when only 42,043 homes went to foreclosure.

"The treadmill is still going a little faster than [Hope Now] can keep up with," said Nicholas Retsinas, Director of Harvard University’s Joint Center for Housing Studies. "Foreclosures have outpaced the efforts to combat them."

So, Hope Now is stepping up its efforts to reach out to troubled borrowers to let them know help is available, according to Faith Schwartz, the alliance’s executive director. The group has promoted its program through advertising, public announcements, as well as letters to at-risk borrowers and large foreclosure prevention events that it’s holding around the country.

But even now, after months of publicity, many borrowers still fail to respond to Hope Now’s offers to help.

Of the nearly 1.6 million letters that have gone out since November 1, 2007 to borrowers 60 days past due, more than 80% of borrowers still had not called their lenders a month after receiving the letters, according to Schwartz.

"Outreach is crucial," she said. "Borrowers have to talk to their lenders. That’s the most important message we communicate."

Still, that low response rate is better than the industry norm. Most loan servicers find only about 2% to 3% of delinquent borrowers contact them after receiving a notice, according to John Courson, chief operating officer for the Mortgage Bankers Association.

Hope Now has recently started partnering with community groups to put on large events that allow the thousands of troubled borrowers who attend to meet with foreclosure prevention counselors. It has hosted 20 of these events since March, with a total of 11,500 homeowners in attendance.

Last week Hope Now held several of these events in Florida even as Tropical Storm Fay buffeted the state; a total of 3,300 borrowers turned out for help.

"We are committed to helping as many borrowers as possible and we’re not going to let anything, including a tropical storm, get in the way," she said.

Twenty different mortgage lenders and servicers participated in the Florida events including many of the industry’s biggest players, like Bank of America (BAC, Fortune 500), JP Morgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500) and Washington Mutual (WM, Fortune 500).

"I think their outreach efforts are great," said Jared Bernstein, senior economist with the Economic Policy Institute, "and they’re smart to go to ground zero [for foreclosures] to hold these events. But there’s only so much they can do. They cannot change people’s circumstances in enough cases to stave off the correction that has to occur."

And a change in lender attitudes has probably paved the way for more workouts, according to Harvard’s Retsinas.

"The participating lenders have come to grips with the idea that the market is not going to get better soon, so they are cooperating more with borrowers. Hope Now numbers reflect that," he said.

Of the 192,034 total workouts completed by Hope Now in July, nearly 112,000, or 58%, were repayment plans, while the remaining 80,000 or 42% of the workouts involved permanently modifying the terms of a loan to make it more affordable. Last year at this time, less than 24% of workouts were modifications. Of the nearly 92,000 subprime loans that were fixed, 52% of them were modifications.

Repayment plans simply give borrowers more time to pay lenders what they owe, either by extending the term of the loan or by raising monthly payments. They work best for borrowers who were thrown off the track by one-time events, such as an illness or temporary job loss.

But by and large they’re considered to be fairly ineffective at preventing foreclosures in the long run, since borrowers often cannot afford the original terms of their loans.

Modifying a mortgage by lowering the interest rate, the principal, or both, is the most effective means of keeping owners in their homes.

Even modifications won’t work for everyone, according to Bernstein.

"Home prices are still falling," he said. "There are probably 10 million folks underwater, owing more on their mortgages than their homes are worth and that’s going to climb. Not everybody under water is going to foreclose. If you’re close to solvency, these efforts can help pull you back from the brink. But if you’re well underwater, you’re probably going to drown." 

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