Daily Insolvency News Headlines

Fri., February 27, 2015

Fri., February 27, 2015

For years, Greece has been trying to attack corruption and tax evasion, from the smallest taverna owner to the nation’s most powerful oligarchs. Now, Prime Minister Alexis Tsipras is vowing to take far more action than previous administrations in cracking down, the International New York Times reported. He says his government, led by his leftist party, Syriza, will succeed because having never held power, it is not beholden to the entrenched interests that have long fought to maintain the status quo. But even Mr. Nikoloudis acknowledges that fixing Greece’s finances will not be easy. Which throws into question how readily, or at least how quickly, the government can fulfill its promise to its European creditors. This week, in exchange for keeping Greece’s €240 billion financial lifeline in place for at least four more months, Athens outlined a two-pronged approach to battling corruption. The first involves going after wealthy tax evaders. Read more. (Subscription required.)

Fri., February 27, 2015

A Spanish court has rejected a government proposal to rescue two of nine bankrupt motorways, increasing the likelihood the toll roads will go into liquidation and the state will have to assume their debt of more than 4 billion euros ($4.5 billion), Reuters reported. A Madrid commercial court said on Feb. 24 the terms of the rescue package were not legal and the Ocana-La Roda and R4 roads would now enter liquidation, court documents showed. The government will appeal the decision, a government spokeswoman said. Ferrovial, a major shareholder in both roads, declined to comment. "If the roads start entering into liquidation one by one, it makes a rescue package more unlikely as there will be less roads to group together," said one source close to the negotiations. The road operators went bust after failing to attract enough traffic during Europe's economic crisis. Use of the roads, which mostly run around Madrid, has dropped further still because many have toll-free highways running alongside them. Under a Spanish law drawn up over 40 years ago, the state is liable for the cost of the land and construction of private motorways if they go bust. Spain has proposed a 2.3 billion-euro rescue package that would keep the highway debt from going onto its deficit. Read more.

Fri., February 27, 2015

Two brothers have lost their bid to restrain receivers selling their assets after Allied Irish Banks obtained a €17.6 million judgment against them, the Irish Times reported. Mr Justice Brian McGovern rejected arguments by Paul and Gerard Dormer the €17.6 million judgment granted against them in March 2014 should be vacated due to AIB’s alleged failure to properly complete a January 2014 settlement agreement under which they had agreed to judgment provided specific conditions were met by AIB. On foot of his decision, he lifted interim injuctions restraining receivers appointed by AIB over various assets of the brothers dealing with those assets and taking steps to sell them. In their proceedings against AIB and receivers Luke Charleton and Marcus Purcell, of Ernst & Young, the brothers, with addresses at Fortrose Park, Templeogue, and Rathdown Park, Terenure, both Dublin, alleged the January 2014 agreement required three named AIB representatives to make a “recommendation” to its area credit committee concerning credit facilities for them. Read more.

Fri., February 27, 2015

It may go down as one of the least effective bail-outs the world has ever seen. Not Greece’s, but Ukraine’s, The Economist reported. Just two weeks ago Christine Lagarde, the head of the International Monetary Fund (IMF), promised Ukraine $40 billion over four years—an impressive-sounding sum for a country whose GDP may soon shrink to $70 billion. Since then, however, Ukraine’s economic crisis has got much worse. The currency has hit new lows: a dollar now buys around 30 hryvnia (see chart). This week the central bank instituted new currency controls in a fruitless attempt to slow its plunge. Government bonds are trading at 40 cents on the dollar. The main problem, of course, is the war in the east of the country, which, in addition to claiming many lives, is draining state coffers, putting investors to flight and bringing life in and around the war zone to a standstill. But the bail-out itself is another source of uncertainty. No one is sure where the money will come from. The IMF pledged $17.5 billion. A few billion dollars may come from other donors, including the European Union and America. Even if all goes to plan—and it probably will not—the pot is a long way short of $40 billion. Read more. (Subscription required.)

Fri., February 27, 2015

The four of five bills comprising the insolvency framework will not be tabled to the House Plenary today, as the Budgetary and Interior Committees could not conclude the discussion of the four bills, Chairman of the Budgetary Affairs Committee Nicolas Papadopoulos has said, the Famagusta Gazette reported. The insolvency framework is a crucial set of bills as the majority of the parliamentary parties has made clear it would not vote the foreclosure bills in the absence of the insolvency framework, believed to put a safety net to low-income borrowers that face problems servicing their loans. Parliamentary parties are planning to further postpone the implementation of the foreclosure bill, a prerequisite for the continuation of Cyprus` €10 billion financial assistance programme. Read more.

Fri., February 27, 2015

Businessman Sean Quinn’s family have appealed to a High Court judge not to grant the DPP a second deferral of the hearing of their action. They allege they are not liable for about €2.34 billion loans advanced by the former Anglo Irish Bank to Quinn companies, the Irish Times reported. The DPP says there is a “clear threat” to the fairness of criminal proceedings against former Anglo chairman Sean Fitzpatrick, due to open before a jury on April 13th, from the Quinns’ civil action, due to open at the Commercial Court on April 14th. Mr Fitzpatrick has been served with a subpoena notice, indicating the family intend to call him as a witness. Opposing the DPP’s bid to defer the Quinns’ case, Martin Hayden SC said the Quinns initiated their case in 2011 and they are entitled to “some finality” and have the same right as any citizen to have their case heard. A number of German bankers are among the witnesses to be called and considerable work has gone into structuring the case, he added. The case is against State-owned IBRC (Anglo’s successor in title) and its special liquidator Kieran Wallace and is expected to last at least six months. Read more.

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