Daily Insolvency News Headlines

Thu., April 17, 2014

Thu., April 17, 2014

Britain's Co-operative Group will report a loss of more than 2 billion pounds on Thursday, laying bare the full damage done by disastrous acquisitions, a drugs scandal and an exodus of executives that have put its future as a mutual into doubt, Reuters reported. Losses at the group, whose activities range from supermarkets to funeral services, are expected to be up to 2.5 billion pounds for 2013, according to a source close to the matter. The crisis at the 170-year-old Co-op, which claimed its ethical credentials set it apart from commercial rivals, started at its bank with an ill-fated takeover of Britannia building society, which saddled it with a portfolio of souring property loans. The bank, facing a 1.5 billion pound capital shortfall, was restructured last December, with bondholders including U.S. hedge funds taking control and the group's stake falling to 30 percent. Co-op Group still owes Co-op Bank 263 million pounds from its initial 1.5 billion pound recapitalisation and is considering whether to inject more cash as part of a further 400 million pound fundraising by the bank to cover the cost of past misconduct such as overcharging for mortgages. Read more.

Thu., April 17, 2014

Spanish media conglomerate Vertice 360 has declared insolvency and filed for a suspension of payments, which paves the way for a court-appointed administrator to prioritize debt and mediate payments with creditors, The Hollywood Reporter reported. The move comes after the Vertice failed to reach an agreement on its own with its creditors. The film and television group has been seeking to increase capital through various methods since December 2013, after posting a financial debt of $19.9 million (€14.4 million), with $93.7 million (€67.8 million) in losses. In addition to the Spanish treasury, which agreed to delay payment for $17.1 million (€12.4 million), creditors include Banco Espiritu Santo, Santander Bank, Deloitte, KPMG and others. The group had been in talks with U.S. fund Red Apple, but negotiations reportedly failed due to the reluctance of Vertice’s main shareholder Ezentis, which holds 27.8 percent of the company. Ezentis, a company responsible for the “last mile” of telecommunication companies access to the end consumer. Vertice sold off its audiovisual services subsidiary VSA las summer, but at the end of the first quarter of this year, the group announced it was negotiating the debt of 10 of its subsidiaries, including its film and TV holdings. Read more.

Thu., April 17, 2014

German luxury fashion company Strenesse, once known for dressing the German national soccer team at official events, has filed for insolvency, it said on Wednesday, Reuters reported. The family-owned company, which has been struggling with its finances but seemed back on a firmer footing in February when creditors agreed a new 12 million-euro ($16.6 million) bond, said it would seek to restructure itself under insolvency proceedings. "We want to return Strenesse to profitability as soon as possible," lawyer Michael Pluta, who will act as chief restructuring officer, said. Strenesse, which is mainly active in German-speaking countries, Italy, the United States, Japan and eastern Europe, mainly designs women's clothing. It employs around 360 people and has seen sales drop to around 50 million euros from over 100 million at their peak. Read more.

Thu., April 17, 2014

Romania's Chamber of Deputies, or the lower house of the parliament, on Tuesday passed an insolvency bill to ensure honest business environment, New Europe Online reported. The bill proposes "an insolvency code that puts together all the regulations governing the pre-insolvency and insolvency mechanisms targeting the economic operators and it does so in a correlated and adjusted manner," explained Justice Minister Robert Cazanciuc. Prime Minister Victor Ponta welcomed the adoption of the bill, pointing out that it is a "highly important step." "Parliament passed a law that is truly important for the entire honest and correct business environment," the prime minister told the media, adding that the law must support in difficult times small or large companies that need a period to restructure, pay off their debts, and be able to start afresh. Romania recorded the second highest rate of insolvencies related to the number of firms active during 2013 in the countries of Central and Eastern Europe, namely 6.44 percent, according to the Insolvency Report 2013, conducted recently by Coface, a trade risk expert and a worldwide leader in credit insurance. Read more.

Thu., April 17, 2014

MtGox, once the biggest bitcoin exchange in the world, is likely to be liquidated after a Japanese court denied it bankruptcy protection on Wednesday, The Guardian reported. The company's assets will be sold off and used to pay its creditors, including those with accounts on the site. But any creditor will now recoup less than their initial stake, although it remains to be seen how much the infrastructure of the firm, as well as intellectual property including the MtGox brand, is worth. Tokyo-based Gox made headlines around the world in February when it closed its doors without warning, holding millions of dollars worth of bitcoin as well as deposits in multiple conventional currencies. It revealed that it was missing almost 850,000 bitcoin, worth around £400m, and applied for a civil rehabilitation order, the local equivalent of bankruptcy. Since then, the firm has "discovered" 200,000 bitcoin which were sitting in an account it hadn't used for years. Read more.

Thu., April 17, 2014

The adviser of troubled Italian energy group Sorgenia will meet creditor banks on Thursday with a final deal over debt restructuring in sight, a source close to the matter said, Reuters reported. "The deal is within reach, there will be a meeting tomorrow," the source said on Wednesday. Sorgenia, controlled by holding company CIR has run up 1.9 billion euros of debt - 600 million euros of which must be cleared to keep it afloat in the short term. Sorgenia owes money to about 20 Italian and foreign banks. Its main creditor is bailed-out Italian lender Banca Monte dei Paschi di Siena. Read more.

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