Daily Insolvency News Headlines

Tue., June 30, 2015

Tue., June 30, 2015

Uncertain what might happen next, with banks and financial markets closed, across Athens people wasted little time Monday, rushing to the nearest A.T.M. to withdraw their new daily maximum of 60 euros, determined to raise every last cent while they could, the International New York Times reported. Yet, even as Greeks faced a new level of chaos and hardship this week, they were being confronted with another unsolvable riddle: a vote on their future that was even more uncertain than the current chaos. “Simply put, we’re confused,” Eleni Gardikioti, 31, an insurance worker, said. “We don’t understand what games they are playing, whether to stay or go and whether there is a permanent goal in all that.” There were good arguments on each side, she said, as she fished out a coin to give to a beggar. In a referendum on Sunday, Greeks will be asked to decide whether to accept a take-it-or-leave-it bailout offer by the country’s creditors, and remain mired in austerity in the eurozone, or reject the deal but suffer the consequences of leaving the euro. The question is not as simple as it might sound. For one, the bailout offer has already been withdrawn by the eurozone’s finance ministers, so it is not clear the parties could reach a deal now even if Greece voted in favor. Prime Minister Alexis Tsipras clouded the matter further on Monday by saying a vote against the deal would not necessarily mean abandoning the euro, but rather would give him leverage to negotiate a better agreement with Greece’s creditors — other European Union nations, the International Monetary Fund and the European Central Bank. Read more. (Subscription required.)

Tue., June 30, 2015

China’s state auditor has uncovered falsified revenues and profits in the accounts of some of the country’s biggest state-owned companies, as Beijing broadens its assault on official corruption, the Financial Times reported. The National Audit Office said on Sunday that 14 state-owned groups, including well-known names such as State Grid, China Ocean Shipping Co (Cosco) and China Southern Power Grid, falsified nearly Rmb30bn ($4.8bn) in revenue and nearly Rmb20bn in profits in 2013. The revelations came in the auditor’s annual work report summarising the results of its reviews of government spending, as well as state-owned enterprises. It follows audits last year that exposed problems at China Investment Corporation, the sovereign wealth fund, Bank of China, the fourth-largest lender, and Agricultural Development Bank, a policy lender. The audit office’s more aggressive stance towards state champions is part of a huge clampdown on corruption and misuse of public funds in areas ranging from mah-jong to top company executives, more than 100 of which have been detained on suspicion of corruption since the start of last year, according to official statistics. Read more. (Subscription required.)

Tue., June 30, 2015

Frankfurt prosecutors are examining the role played by individuals connected with Deutsche Bank’s involvement in the Libor rate-rigging scandal – potentially opening up a new front in the affair that has rocked Germany’s biggest bank. The investigation is the first step in a procedure that could lead to criminal charges, the Irish Times reported. The prosecutors’ investigation stems from a report by the German financial watchdog BaFin, details of which were revealed by the Financial Times on Friday. BaFin’s report painted a damning picture of the failings that lay behind Deutsche’s involvement in the rate-rigging affair. Nadja Niesen, senior prosecutor, said: “I can confirm that a corresponding preliminary investigation is pending here. Those suspected are all represented by lawyers and are also aware of the process. How things proceed depends on the evaluation of the BaFin report, which has only recently been received.” Read more.

Tue., June 30, 2015

At a ceremony imbued with quiet triumph at the Great Hall of the People, China’s president, Xi Jinping, hosted 56 member countries on Monday for the founding of a Chinese-led infrastructure bank for Asia, including major American allies from Asia and Europe that Washington had counseled not to join the bank, the International New York Times reported. Conspicuously absent from the gathering were the United States and Japan, the leaders of the World Bank and the Asian Development Bank, the institutions that were created after World War II to build a Western-designed global financial architecture. Washington fears those institutions will be undermined by the new body. Australia, one of the allies that the Obama administration had vigorously lobbied to stay away from the bank — called the Asian Infrastructure Investment Bank, or A.I.I.B. — was the first country to sign the articles of agreement. The new bank is the first large international body established by China that, like the World Bank and the Asian Development Bank, meets the standards of the Vienna Convention on the Law of Treaties, legal experts said, and as such could be seen as an effort by China to shoulder more responsibility in underdeveloped parts of Asia, even as some neighbors fear its growing military and territorial claims. Read more. (Subscription required.)

Tue., June 30, 2015

A judge has approved the distribution of funds in Mobilicity’s restructuring proceedings after the small wireless carrier struck a $465-million deal to sell itself to Rogers Communications Inc., The Globe and Mail reported. The court’s order Monday was necessary for the companies to proceed on closing the deal, which they announced last week and which already has approval from the federal government and faces no opposition from the Competition Bureau. A group of Mobilicity’s creditors – including its bondholders as well as suppliers including customer-support provider Amdocs, network manager Ericsson Canada Inc. and landlords for its cellular sites – consented to a “vesting” order the company put forth to Ontario Superior Court of Justice judge Frank Newbould. The order, which the judge signed Monday afternoon, will allow Rogers to assume Mobilicity’s assets free and clear of any claims against them apart from the small carrier’s trade liabilities, which Rogers has agreed to assume. The purchase price of the deal is $440-million and Rogers has agreed to assume $25-million in net negative working capital, according to a spokesman for Mobilicity. Read more.

Tue., June 30, 2015

The receivers for Doug Somers-Edgar's Orange Finance have concluded their work with a shortfall of about $10 million in principal and interest owed to debenture holders of the failed company, Scoop.co.nz reported. Orange froze repayments to some 2,500 investors owed $25.6 million in late 2008 before convincing debenture holders to agree to a moratorium on redemptions and interest payments until the end of July 2011. That deadline was later pushed out another year with trustee Covenant Trustee's approval. Covenant appointed Brendon Gibson and Grant Graham of KordaMentha as receivers after Orange managed to repay 72 cents in the dollar during its 3 1/2-year moratorium on interest payments. By the end of the receivership, the repayment has climbed to 84 cents in the dollar. Orange had been incorporated in 2003 and funded property development and investment loans from funds raised from the public via the issue of debentures. Orange had no employees or infrastructure and was operated by Matrix Funding Group, which changed its name to Waiwera Canyon in June 2014 and is still owned by Somers-Edgar and his wife Anne. Read more.

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