Daily Insolvency News Headlines

Fri., May 22, 2015

Fri., May 22, 2015

Late-night negotiations between the Greek, French and German government leaders ended without any sign of a breakthrough that will unlock bailout funds and ensure Greece’s future in the euro region, Bloomberg News reported. With time running out for a deal to free up the remaining 7.2 billion-euro ($8 billion) tranche of aid, talks between Prime Minister Alexis Tsipras, President Francois Hollande and Chancellor Angela Merkel broke up shortly before 1 a.m. on Friday in the Latvian capital Riga with the three agreeing only to stay in close contact. The negotiations took place in a “friendly and constructive atmosphere” and focused on “the successful fulfillment of the current program,” according to a common statement issued by the French and German governments separately. “It was agreed that the talks between the Greek government and the institutions will be continued,” they said. Read more.

Fri., May 22, 2015

A High Court judge has permitted the family of businessman Seán Quinn to proceed with claims in their forthcoming legal action that some €2.34 billion loans by Anglo Irish Bank to various Quinn companies were made for the unlawful purpose of propping up the bank’s share price, the Irish Times reported. However, the Quinns cannot continue to pursue those aspects of their claim alleging the loans are unenforceable, Mr Justice Robert Haughton ruled. He was making final directions concerning management of the hearing, due to open on June 3rd, of the action by Mrs Patricia Quinn and her five adult children aimed at avoiding liability for the €2.34bn loans. The judge was told the family do not intend to appeal his ruling last week preventing them amending their claim to include a claim they were innocent parties to the loan transactions with the effect, they argued, the loans could not be enforced against them. The family’s case, initiated in May 2011, is expected to last more than six months and has been brought against Irish Bank Resolution Corporation and its special liquidator Kieran Wallace. Read more.

Fri., May 22, 2015

Struggling companies will be given a second chance to improve their financial situation under new rules on insolvency approved by MEPs on 20 May. Every year 1.7 million jobs are lost in the EU due to companies going bankrupt. Under the new legislation on cross-border insolvencies, companies in financial difficulties but otherwise sound are given another opportunity to turn the situation around. The plans also include measures to help firms before they go bust. Out of the 200,000 EU businesses facing insolvency every year, 50,000 owe money to someone in another member state, which further complicates legal proceedings. EU rules, which date from 2000, aim to faciliatte these proceedings by clarifying which courts should be handling the cases and helping them to cooperate across borders. One important issue is always to determine what member state should launch the main proceeding, which normally would be where the company has a registered office. The new rules seek to prevent people from exploiting differences between national laws. Read more. (Subscription required.)

Fri., May 22, 2015

Liquidating one of the Irish banks was “not an option” on the night of the bank guarantee in September 29th 2008, the former Central Bank of Ireland governor John Hurley told the Oireachtas Banking Inquiry Thursday. “I would not have advised any government to take that risk,” Mr Hurley said, adding that other options were discussed, including nationalisation. “You were not going to take such a risk with the economy.” In evidence given to the inquiry in January, the current governor Patrick Honohan, said Anglo Irish Bank and Irish Nationwide should have been liquidated by the State. “I don’t agree that liquidation was an option,” was Mr Hurley’s response to this proposition. Read more.

Fri., May 22, 2015

Research by ComRes and R3, the insolvency trade body, has found that the UK’s insolvency profession helped around 6,700 businesses continue trading in some way after entering formal insolvency. This, R3 says, amounts to 41% of formal insolvencies, economia reported. In total, the profession helped 10,400 businesses continue operating, either through formal insolvency or through working with a practitioner to avoid insolvency. These businesses employed approximately 540,000 after they received support. Phillip Sykes, president of R3 said, “As the economy continues to recover from recession, business recovery and renewal will be an important part of the economic landscape.” According to R3, insolvency peaked in 2009 in 2009 with 26,000 business insolvencies and 160,000 personal insolvencies; by 2014, business and personal insolvencies had fallen to 18,000 and 114,000 respectively. However, Sykes said, the next five years will see important changes to the profession. He said, ”Household debts are rising again, while the current climate of creditor forbearance, record low inflation, and record low interest rates may not last. Read more.

Fri., May 22, 2015

The upheaval is deepening around the German maker of a controversial new smart gun, The Washington Post reported. Armatix, based near Munich, is undergoing a “corporate restructuring,” according to a statement Thursday from a company spokesman. Details were not immediately available from German courts, but the spokesman said the move was “not an insolvency proceeding.” Financial records reported to German authorities show Armatix has recorded more than 14 million euros in losses since 2011. The financial issues are mounting amid a key personnel change: Ernst Mauch, the legendary gun engineer who designed the iP1 pistol introduced by Armatix in the United States last year, abruptly left the company several weeks ago. Read more. (Subscription required.)

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