Daily Insolvency News Headlines

Tue., August 19, 2014

Tue., August 19, 2014

Government investigators in China have found the Mercedes-Benz unit of Daimler, the German automaker, in violation of antitrust price rules, the Chinese state news media reported on Monday. The announcement was the latest in a spate of inquiries over pricing and sales policies that have raised pressure on foreign corporations across China, the International New York Times reported. The price bureau of Jiangsu Province, adjacent to Shanghai, concluded that prices for parts and maintenance for Mercedes vehicles had been set at exorbitant levels that violated China’s antimonopoly law, the China News Service, a state-run agency, reported, citing an official from the bureau. The Jiangsu officials did not announce a fine against Mercedes or the distributors, and the decision does not apply nationwide. But the announcement added to a recent pattern in which carmakers come under antitrust investigation by local regulators, who publicize price-fixing accusations, followed in some cases by the companies cutting prices nationwide. Last week, investigators in Hubei Province in central China announced fines against BMW dealers for illegal pricing, and Daimler’s officers in Shanghai were searched by officials this month. Read more. (Subscription required.)

Tue., August 19, 2014

Romanian businessman Nelu Iordache accuses Casa de Insolventa Transilvania (CITR), the former judicial administrator of construction company Romstrade, that it looted his company, causing losses by ending contracts, maintaining others and signing new ones, but also by selling assets of Blue Air airline, Romania-Insider.com reported. Iordache, the owner of both companies, who is serving jail time for misuse of EU funds, made a series of accusations in a report addressed to creditors, reports local Adevarul. One of the accusations refers to the termination of leasing contracts for equipment, which led to the termination of some of the company’s road and infrastructure contracts. “The presented statements are unfounded. All the measures CTIR undertakes in the insolvency procedures it manages are taken with the agreement of creditors and under the court’s control of legality, according to the Insolvency Law. CITR is no longer the judicial administrator of Romstrade, since March 2014. Thus, we can’t comment on its activity,” said CITR officials. Read more.

Tue., August 19, 2014

Hungary's gross public debt jumped to a four-year high of 85.1% of gross domestic product at the end of June, central bank data published Monday showed, The Wall Street Journal reported. Gross public debt calculated under the European Union's Maastricht criteria was 81.7% of GDP a year earlier and 85.6% of GDP in June 2010 when the current government first gained power and the forint, the Hungarian currency, weakened significantly against core currencies amid Europe's continuing economic crisis. Hungary's public debt has been the highest in Central and Eastern Europe for several years, in terms of GDP and reducing it is one of the government's top economic priorities. The economy ministry said public debt fluctuates during the year and was expected to fall again toward the end of the year. "The state debt management agency AKK pre-financed maturing securities earlier this year, which has raised the level of state debt," Deputy State Secretary Peter Banai said on public radio MR1 Kossuth. Hungary paid back €1 billion ($1.34 billion) of debt in July, which will impact debt statistics at the end of September, Mr. Banai said. A further €2 billion of debt would be repaid by the end of the year. Read more.

Tue., August 19, 2014

China said it will curb executive pay and perks at major state-controlled companies as part of an austerity program intended to curb government largess, The Wall Street Journal reported. The official Xinhua News Agency said Monday that President Xi Jinping called for the government to more tightly regulate executive salaries at state-owned enterprises and to make adjustment for "unreasonably high" compensation. He also called on SOEs to rein in other compensation such as spending on cars and accommodations, Xinhua said. The report didn't provide further details on how the effort would be carried out. It said Mr. Xi was addressing a committee of officials focused on economic reform. Beijing has been cracking down on state extravagance as part of an anticorruption campaign carried out under Mr. Xi. Communist Party leaders have acknowledged that perceptions of corruption threaten their grip on power. The austerity program has targeted everything from official cars to lavish banquets to delicacies such as shark fins and bird nests. Read more. (Subscription required.)

Tue., August 19, 2014

In 2012, after years of discussion, Germany introduced new insolvency reforms. Bringing in more control for both debtors and creditors during insolvency proceedings, the reforms helped to improve the legal framework of corporate restructuring in Germany, Economia reported. Two years on, the dust has settled and there are two crucial areas where the benefits have become obvious: Creditors now have the ability to be heard by the courts and can even nominate the insolvency administrator, and debtors are also seeking help more quickly, before serious financial problems arise. Before the reforms it was the sole responsibility of the courts to select and appoint the insolvency administrator. The courts favoured a purely independent system, and would almost automatically reject an insolvency practitioner that had been recommended by the stakeholder. Creditors are now able to be involved in choosing and recommending an administrator for insolvency proceedings by serving as member of a preliminary creditors committee. Once accepted, the creditors at the preliminary committee are able to put forward a practitioner whose expertise can be beneficial for insolvency proceedings, and the courts must listen to these recommendations. Banks, normally the largest creditors and typically asked to sit on the creditors' committee, reacted slowly to the changes to start with, but have since worked to adapt to the new mechanism that allows the nomination of an insolvency administrator. Read more.

Tue., August 19, 2014

London home sellers cut asking prices by the most in more than six years this month, adding to signs that the property market in the UK capital is coming off the boil, the Irish Times reported. London values fell 5.9 per cent from the previous month to an average £552,783 (€688,269), the biggest drop since December 2007, property website Rightmove said today. Nationally, prices declined 2.9 per cent, a record for an August. While property demand usually weakens during the summer, Rightmove said the slump this year was steeper than it expected. Tougher new mortgage rules introduced by Bank of England Governor Mark Carney, as well as anticipation of higher interest rates, are putting pressure on the market after a surge in values raised concerns that a bubble may develop. “Buyers and sellers are becoming increasingly aware about personal finances, given that the cost of mortgages are going up and regulators are trying to bring availability down,” said Miles Shipside, a director at Rightmove. “This limits what buyers are willing or able to pay, and helps moderate sellers’ price expectations.” Read more. (Subscription required.)

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