Daily Insolvency News Headlines

Tue., November 25, 2014

Tue., November 25, 2014

Bonuses handed out to senior bosses at Royal Bank of Scotland are facing renewed scrutiny after the chairman of the bailed-out bank apologised for inaccuracies in evidence given to MPs about its restructuring division, The Guardian reported. Sir Philip Hampton admitted evidence given by two of the most senior bankers to the Treasury select committee was incorrect. The division is facing accusations about its treatment of small businesses. The inaccurate evidence was given in June by Derek Sach, who ran the global restructuring group (GRG) – which is now being shut down – and Chris Sullivan, the deputy chief executive. It is now being re-examined, following an exchange of letters between Hampton and Andrew Tyrie, the MP who chairs the committee. It has put a fresh focus on the bonuses handed out by the bank. It has previously been reported that £17m of bonuses were handed out in the GRG division. Disclosures have also been made to the Stock Exchange about share awards issued to Sullivan in his capacity as a senior executive at the bank. In March, prior to the appearance before the committee, Sullivan was awarded shares potentially worth £1.6m under an incentive plan which pays out in three years. He was also handed shares worth £784,900 from schemes relating to previous years. In addition, in August Sullivan – who leaves RBS next year – was handed shares worth £460,000 in “allowances” – payments being used by banks to get round the EU cap on bonuses, which limits bonuses to 100% of salary. Read more.

Tue., November 25, 2014

Bromak, the major shareholder at Corporate Commercial Bank (KTB), is to request an international report on whether the bank's capital is a negative equity, the company's lawyers said on Monday, novinite.com reported. Comments from Menko Menkov and Tervel Georgiev followed a decision of the Sofia City Court to halt the insolvency proceedings started by the Bulgarian National Bank (BNB). The court cited last week's appeal lodged by Bromak, owned by Tsvetan Vasilev, against the proceedings. The KTB case is to continued after the Supreme Court of Administration has had rulings on all appeals submitted so far, a process which could last "a long time," lawyers suggest. Menko Menkov added a team of "20 lawyers" had worked around the clock "for more than two weeks" on the appeal which was submitted last week. In his words, the bank was "in an exceptionally good financial state as of June 20, 2014", when it was placed under special supervision. Menkov described KTB's Supervisory Board as "incompetent" and the decision to scrap the bank's license announced November 6 as "lawless". Read more.

Tue., November 25, 2014

Greek government officials will meet in Paris tomorrow with representatives of the so-called troika of international creditors in a bid to break a deadlock over freeing up the last tranche of the country’s bailout, Bloomberg News reported. Bonds gained today after the Greek Finance Ministry said in a statement that Greece and its creditors will discuss how to move forward with the current review and the framework for a post-bailout agreement. Two troika officials, who asked not to be identified because the talks are private, said one option might be extending the euro area-backed program beyond this year, a proposal that Greece has so far refused. The European Commission said it’s premature to talk about next steps until the current review is resolved. The Paris meeting will focus on the current review and no discussion on extending the program is scheduled, according to spokeswoman Mina Andreeva. “Both parties continue to work closely together with the aim of concluding the review and discussing how subsequently Greece can continue to strengthen its fiscal position and economic growth,” Andreeva said in an e-mail. Without action, Greece’s rescue program backed by 145 billion euros ($180 billion) of cheap loans from the euro-area crisis fund is set to expire at the end of this year. Read more.

Tue., November 25, 2014

Members of the family of bankrupt businessman Sean Quinn want court orders permitting them cross-examine Irish Bank Resolution Corporation special liquidator Kieran Wallace regarding claims they may be hiding up to €500 million in undisclosed assets from the bank, the Irish Times reported. The Quinns say those claims, made on foot of information from unidentified informants, are “scurrilous lies”. Despite orders obtained by IBRC from the London and US courts for disclosure of documents, nothing has been obtained to support the allegations, they also say. The family has also objected that the allegations were outlined by IBRC to the Commercial Court last May via an affidavit from Mr Wallace without the family being given any notice of them. Read more.

Tue., November 25, 2014

Lawyers representing the provincial government took centre stage at U.S. Steel Canada’s restructuring hearing on Thursday, as the court worked toward figuring out who should gets paid first if the company is sold or goes bankrupt. The province won the right to file future claims against U.S. Steel Canada during its restructuring, while also successfully arguing the court will be allowed to examine the American parent's claim when it comes time to decide who what piece of the proceeds or assets. U.S. Steel Canada has been in bankruptcy protection under the Companies’ Creditors Arrangement Act (CCAA) since Sept. 16. Superior Court Justice Herman Wilton-Siegel, who is presiding over the CCAA proceedings in Toronto, has already approved a $185 million debtor-in-possession loan from the company’s American parent, U.S. Steel Corp., that has allowed the company to continue operating its Hamilton and Nanticoke, Ont. plants until the end of 2015. The judge’s next move will be to pass a motion outlining the claims procedure order, which feature several revisions put forward by lawyers representing the province. Read more.

Tue., November 25, 2014

South America’s most economically troubled country, facing fears of a debt default amid tumbling oil prices and a cash crunch, has been thrown a lifeline by its largest lender, China, The Wall Street Journal reported. The Asian giant loosened repayment terms on the nearly $50 billion in loans it has granted Venezuela since 2007, according to Venezuela’s Official Gazette. And President Nicolás Maduro said in a speech last week that his finance minister, Rodolfo Marco, would soon travel to China to try to secure new loans. Mr. Maduro’s popularity has plummeted to 30%, polls show, as Venezuela’s currency collapses and the government struggles with the world’s highest inflation rate and widespread scarcity of basic goods. The country’s woes threaten the future of what Mr. Maduro’s predecessor, the late President Hugo Chávez, called 21st Century Socialism. Analysts say Beijing’s flexibility may buy Mr. Maduro more time. Last week the president used a $4 billion Chinese credit, traditionally earmarked by the Chinese government for infrastructure projects and held in off-budget funds, to increase reserves to $23.2 billion. China also recently lent $1.3 billion to help Argentina buoy falling reserves, giving President Cristina Kirchner , a close ally of Mr. Maduro, a cushion to help alleviate that country’s cash crunch. Read more. (Subscription required.)

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