Daily Insolvency News Headlines

Thu., September 18, 2014

Thu., September 18, 2014

Taxpayers may end up footing the bill for third-party claims related to the collapse of Setanta Insurance, the Irish Times reported. The Maltese-registered insurer went into liquidation in April leaving 75,000 motor policyholders in Ireland with no cover. It had been selling mainly commercial motor insurance through brokers and was known as a low-cost operator. Initially Minister for Finance Michael Noonan signalled the industry-funded Motor Insurance Bureau of Ireland (MIBI) would cover all outstanding third-party claims emanating from the collapse. However, on foot of legal advice, the department has informed the Oireachtas Finance Committee that the MIBI would not now be playing a role in compensating claimants due awards under Setanta policies. “In all likelihood these claims must now be sent to the Insurance Compensation Fund(ICF), funded by the insurance levy, which itself must queue up and stake its claim under the liquidation process,” Sinn Féin finance spokesman Pearse Doherty said. Read more.

Thu., September 18, 2014

Government is one step closer to enacting the Bankruptcy and Insolvency Act of 2007, Finance Minister Larry Howai has said. At present, he said, the state was moving apace to create the Office of the Insolvency Regulator which soon after would be filled and the agency would commence operations, the Trinidad and Tobago Guardian reported. Speaking at Monday’s launch of NCB Global Finance Ltd, a subsidiary of NCB Group, on Ariapita Avenue, Woodbrook, the minister said, “The Act was passed in 2007. It’s another piece of legislation that improves our ease of doing business. However, the Act had languished for some time and had not been proclaimed. Earlier this year, we took steps to ensure that the appropriate regulations were put in place to ensure that we could actually effect the legislation. And, we have put the systems in place for the Insolvency Regulator’s position to be filled and for that office to become operational.” Read more.

Thu., September 18, 2014

Banks, insurers and other finan­cial services firms operating across Europe face extra hundreds of mil­lions of pounds of extra tax costs, following a European Court of Justice (ECJ) ruling yesterday, City A.M. reported. The ruling means services supplied between a group’s headquarters and its branches may now be subject to VAT. Until now, services such as IT and call centre operations provided to a bank from foreign office were not charged the 20 per cent tax, as they were deemed to be within the same “VAT group”. Yesterday’s ruling concerned the Swedish insurer Skandia, which the ECJ said was now liable to pay VAT on cross-border services. Stephen Morse, tax partner at PwC, said: “The case significantly expands the VAT net for financial services firms. Banks and insurers are likely to be affected most… Any internal costs between a firm’s branches will now face VAT, rather than just the external costs. Many financial services firms will see their VAT bills soar. Read more.

Thu., September 18, 2014

Mauricio Cárdenas, Colombia’s finance minister, describes his government’s economic agenda with a nod to French economist Thomas Piketty, who argues for taxes on the rich to reduce the concentration of wealth in the hands of a few. “It is very important to collect revenues from the wealthiest Colombians to be able to invest in security and defence on the one hand, and in social sectors on the other hand,” he told the Financial Times in New York, between meetings with investors. Colombia is one of the world’s most unequal societies. Last week, the government of Juan Manuel Santos, who began his second term as president in August, announced the extension of a wealth tax introduced in 2002 to pay for the mounting costs of the country’s 50-year drug-fuelled guerrilla war. “In that sense, we are actually ahead of the curve of what Piketty proposes,” says Mr Cárdenas. Critics claim the tax cuts too deeply into Colombia’s emerging middle class, hurt investments and were hoping it would be abandoned in the event of a peace deal to end the conflict. Mr Cárdenas counters that the impost will fall only on “individuals who are relatively wealthy by Colombian standards” – those with a net worth of more than $500,000. Read more. (Subscription required.)

Thu., September 18, 2014

The Bucharest court has recently approved the insolvency request for Romanian construction company Tehnologica Radion, whose owner, Theodor Berna, is currently under preventive arrest for tax evasion and money laundry, Romania-Insider.com reported. The company had a turnover of EUR 80.7 million in 2013, and a net profit of EUR 876,000. However, it amassed some EUR 86 million in debts, while its due receivables were of EUR 57 million. Prosecutors recently froze Tehnologica Radion’s accounts and goods, as the company is also part of the trial which involves its owner. Berna is believed to have caused EUR 100 million in prejudices. Tehnologica Radion has some 2,000 employees. Read more.

Thu., September 18, 2014

An insolvency company has revealed details of its clients who have gone bankrupt under rules introduced a year ago, RTÉ News reported. The figures show that banks which lent mortgages to these clients have had to write off 68% of the outstanding debt. In all of the cases the borrowers will lose or have already lost their homes. Some of the borrowers had applied for personal insolvency but were turned down by the banks. The figures have been compiled by the Insolvency Resolution Service, which acts as a personal insolvency practitioner to individuals who are in arrears. The figures are based on 25 individuals who were adjudicated bankrupt by the High Court this year. All but one of the cases involved ordinary consumer debt. Four of the borrowers had also bought buy-to-let properties. The figures show that borrowers were from twelve different counties. It shows unsecured lenders such as credit card companies have lost all of the money they lent in the 25 cases. The average total borrowings were €368,000. The data represents the first analysis of the outcome of bankruptcy cases since the Government overhauled the legislation regarding personal debt in Ireland. Read more.

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