Trading in the shares of a large mortgage company was suspended yesterday, and the nation’s largest insurer of home loans said that its stake in a business that underwrites and invests in mortgage securities may be worthless, the New York Times reported today. The developments are the latest indications that the housing slump will affect a broader segment of the mortgage industry and that the problems will last longer than many officials had suggested earlier this year. Just last week, the nation’s biggest home lender, Countrywide Financial, acknowledged that defaults on second mortgages to prime borrowers were rising quickly. The New York Stock Exchange never opened trading in shares of American Home Mortgage yesterday after the company said late Friday that it would suspend its dividend and was facing “significant margin calls” from its banks. The Mortgage Guaranty Insurance Corp. (M.G.I.C.) also said that it would write down its $516 million investment in Credit-Based Asset Servicing and Securitization, or C-Bass, possibly to zero. The Radian Group, which has a $518 million stake in C-Bass, also said it might have to write off its investment completely. The rest of C-Bass is owned by its management.

In an effort to appease critics of its proposed chapter 11 exit strategy, bankrupt music chain Tower Records has agreed to tweak its liquidation plan to give stakeholders more say in the process, Bankruptcy Law360 reported on Friday. The unsecured creditors’ committee lashed out last week at the music retailer’s plan, saying it barred them from having any input on how the company litigated the asserted $77 million claims by its trade vendor creditors. In a brief filed Wednesday in the U.S. Bankruptcy Court for the District of Delaware, Tower said that the plan had been clarified to require court approval of any settlement of the claims. The plan would also stipulate that written quarterly reports be filed with the court to keep creditors apprised of the status of the case, and would allow for each of the three main stakeholders in the case, including the creditors’ committee, to appoint a “creditor designee” as advocate.

A group claiming to represent more than 1 million Roman Catholics asked a bankruptcy judge yesterday to prevent the San Diego diocese from closing or selling churches, schools and charities to settle sex-abuse cases, the Associated Press reported yesterday. The group, Parishioners for Churches and Schools, wants to join a trial set for this fall in federal bankruptcy court that will determine whether parish properties can be seized or liquidated through the Catholic Diocese of San Diego in any settlement. If the motion for intervention by the parishioners’ group is granted, it would be the first such legal claim by parishioners in a bankruptcy proceeding for a U.S. diocese, according to Thomas Califano, a lawyer for the parishioners’ group. More than 140 plaintiffs who claim they were abused are seeking a settlement of about $200 million from the diocese. Their attorneys have sued the diocese in the bankruptcy court for allegedly shielding land and other holdings worth millions through transfers to parishes and schools.

The federal government on Tuesday defended its bid to stop discovery in a securities suit against bankrupt auto furnishings company Collins & Aikman, saying that the stay was needed for the government to pursue a related criminal proceeding, Bankruptcy Law360 reported yesterday. The company and several of its officers have been targeted by the U.S. Securities and Exchange Commission in a civil action, and by the government in a criminal action. The government argued that allowing civil discovery to continue in the SEC’s lawsuit would prejudice the government in the criminal case. It also said that resolving the criminal case first would “conserve legal and judicial resources.”

In a move that could radically alter the way American companies choose their boards, the Securities and Exchange Commission will vote today on a proposal that could make it possible for the ballots distributed by companies to include competing candidates for director, the New York Times reported today. The commission announced its plan late yesterday, but did not indicate whether that proposal would be approved at the meeting. It also said the commissioners would consider a radically different proposal that would effectively bar shareholders from supporting competing candidates for director unless they were willing to go to the considerable expense of mailing out competing proxies. Under the first proposal, a shareholder or group of shareholders who owned 5 percent of a company’s stock — a high threshold but one that some institutional shareholders could meet — could propose changes to a company’s bylaws concerning shareholder elections.

Newmont Mining Corp. and bankrupt Asarco LLC have struck a settlement with the U.S. Department of Justice worth close to $40 million, which will go toward paying for the cleanup of a large mining site that has been polluted with over 2,000 waste piles, Bankruptcy Law360 reported yesterday. According to the pact, aimed at funding the cleanup of the California Gulch Superfund in Leadville, Colo., Asarco will pay about $6 million to the DOJ for the continued cleanup of the site, as well as close to $5 million to refund the U.S. Environmental Protection Agency for past cleanup costs, according to the Colorado Department of Public Health & Environment. In addition, Asarco will pay Newmont about $10 million. Newmont will use the money to clean up the Black Cloud Mine, which is next to the superfund but not part of it, and continue running a water treatment plant, which cleans the water that is considered to have been a major source of pollution. For its part, Newmont will pay roughly $10.5 million for natural resources restoration and $9.5 million for cleaning the superfund site.

Another Dana Corp. creditor, Brandes Investment Partners LP, has joined the fight against a deal between the bankrupt auto parts maker and its largest unions, the United Steel Workers and the United Auto Workers, Bankruptcy Law360 reported on Friday. Brandes argued that the motion in support of the deals doesn’t provide relevant information about anticipated distributions for equity securityholders. Appaloosa, a New Jersey-based hedge fund, previously filed an objection to the agreement on July 9. The court has yet to rule, but in the meantime Appaloosa sent a letter to Dana’s board of directors, calling the negotiations between the USW and the UAW unions “fundamentally flawed and, if continued, will yield far less than the maximum recoveries available to stakeholders.”

Verizon Wireless has asked for bankruptcy court permission to disconnect Amp’d Mobile LLC from its wireless network, just over a month after its attempts to remove Amp’d from its network pushed the start-up cellular carrier into chapter 11, Bankruptcydata.com reported yesterday. In a motion filed with the U.S. Bankruptcy Court for the District of Delaware on Tuesday, Verizon Wireless said that Amp’d Mobile has been racking up $370,000 in network usage charges per day but cannot pay its post-petition bills because it has failed to receive a DIP loan. The bankrupt carrier has been operating post-petition with the use of cash collateral, provided by its lender Kings Road Investments Ltd. Verizon Wireless, a joint venture between Verizon Communications Inc. and Vodafone Group PLC, has asked the bankruptcy court to allow it to immediately disconnect Amp’d Mobile’s service and terminate the pre-petition wholesale agreement between the two companies. Verizon Wireless has also asked the court to either offer assurances that it would be paid in full for the services rendered or reject the wholesale agreement entirely. A hearing on the matter has been scheduled for July 23.

Auto-parts maker Delphi Corp. said it reached a $2.55 billion investment agreement with a group led by hedge fund Appaloosa Management LP, a move that replaces a previous $3.4 billion plan and keeps Delphi on track to exit from bankruptcy proceedings by the end of the year, the Wall Street Journal reported today. The previous investment plan was scrapped because private-equity firm Cerberus Capital Management LP, which made a successful bid for DaimlerChrysler AG’s Chrysler Group, pulled out of the investor group. Compared with the previous agreement, the new plan involves a shift in the cash and equity mix paid to unsecured creditors and will see a smaller rights offering for current shareholders. The Troy, Mich.-based supplier said that the new deal has the support of its statutory committees and Detroit auto maker General Motors Corp., which is Delphi’s largest customer and former parent.

New Century Financial Corp. said that it needs a 120-day extension of their exclusive rights to put together a reorganization plan, Bankruptcy Law360 reported yesterday. New Century wants Bankruptcy Judge Kevin J. Carey to extend its exclusive rights to file a reorganization plan through Nov. 28, and extend its exclusive rights to solicit support for its plan through Jan. 8, 2008. The extension motion points out that, prior to filing for bankruptcy, New Century had more than 6,000 employees at about 300 nationwide locations, and since the bankruptcy petition was filed on April 2, the debtors have made significant progress, such as negotiating and securing court approval for asset sales.