Daily Insolvency News Headlines

Mon., August 25, 2014

Mon., August 25, 2014

Two companies linked to the Carl Scarpa chain of 19 women’s shoe shops, which successfully exited examinership in January, retained combined profits of €515,000 in the year to the end of that month, according to their accounts, the Irish Times reported. Cs Calzature and Carl Scarpa (Grafton Street), received debt write-offs totalling more than €2.4 million arising from the examinership, according to notes in the financial statements. A further note attached to the accounts for the Grafton Street company says it was “engaged in litigation with the landlord” of the store. “The High Court found in favour of the company against its landlord for breach of contract. There is currently a claim for damages being assessed by the court,” it said. Cs Calzature, the linchpin entity of the group , received a debt write-off of about €2.25 million, while the Grafton Street entity received a write off of €162,000. The chain, which is controlled by the Moffitt family, entered examinership in October of last year due to its massive boomtime rent bill. A total of 68 jobs were saved, although two stores closed as part of the restructuring. Read more.

Mon., August 25, 2014

Bust developer Sean Dunne is seeking to withdraw his application for bankruptcy protection in the US, Independent.ie reported. The dramatic and unexpected development came as the businessman claimed he no longer had the resources to fight efforts by NAMA to stop him emerging from the process debt free. Last year Dunne filed for bankruptcy in Connecticut, where he has lived since 2010, as creditors owed a total of €695m began to circle. However, Ulster Bank later moved to make Dunne bankrupt in Ireland and an unprecedented dual bankruptcy process has been taking place ever since. But he now wants his US bankruptcy case dismissed, claiming that even if he wins his creditors could seek to "undermine the discharge" because of the Irish case. Dunne's move came after NAMA, which is pursuing loans of €185m, considerably ramped up its investigation of his affairs in recent months. The agency has made a series of damaging allegations about the conduct of the one time 'Baron of Ballsbridge', claiming he has failed to provide it with details of bank accounts, emails, and other key information he is required to disclose. Read more.

Mon., August 25, 2014

European Central Bank President Mario Draghi on Friday signaled a departure from the austerity-focused mind-set that has dominated economic policy-making in the euro zone since the onset of the region's debt crisis nearly five years ago, as officials struggle with stagnant economies, weak prices and high unemployment, The Wall Street Journal reported. Speaking at the Federal Reserve Bank of Kansas City's annual conference Jackson Hole, Wyo., Mr. Draghi said European central bankers and politicians each have a role to play in boosting demand and reducing joblessness. For its part the ECB is willing to take more stimulus measures if needed to keep low rates of inflation from becoming embedded in expectations of future price growth, he said. Although Mr. Draghi's comments didn't constitute an endorsement of rampant deficit spending to boost euro-zone economies, they nevertheless marked a shift away from years of preaching by ECB officials that governments needed to shrink deficits and undertake economic reforms even during times of economic weakness. Critics say that mixing fiscal austerity with labor-market reforms exacerbated Europe's downturn, even though they have long-term payoffs. Read more. (Subscription required.)

Mon., August 25, 2014

Chinese Premier Li Keqiang urged the heavily scrutinised railway sector to seek more private investment and rely less on state support as a key plank of its reform, the government website said on Sunday, the International New York Times reported. Beijing has vowed to deepen reforms of its state-owned enterprises and to open up protected industries such as finance, petroleum, power, telecoms and railways to private investors for the first time. "Railway construction invested solely by the government and promoted by administrative orders will not work any more," Li was quoted as saying. Li said that China Railway Corporation, the national railway operator, should explore ways to attract more non-governmental funds and gather experience which other state-owned enterprises could use. "Reforming investment and financing systems will be the key to reforming the railway sector," he said during an inspection tour of the CRC on Friday. In April, the government said it would create a railway fund worth 200 billion yuan to 300 billion yuan ($32.5 billion to $48.8 billion) each year as part of its policy measures to attract more private investment and support a slowing economy. Read more. (Subscription required.)

Mon., August 25, 2014

The boss of failed airline Air Australia has returned to the travel sector in a senior management role despite being banned by the corporate regulator over conduct that critics claimed wreaked "havoc" in the industry, The Sydney Morning Herald reported. The Australian Securities and Investments Commission last year disqualified Michael James from managing corporations for three years for failing to act with care and diligence in the lead-up to the spectacular collapse of the airline in February, 2012. The company was $97 million in debt when it went into voluntary administration leaving creditors, investors and travellers out of pocket. Approximately $36 million was owed to ticketholders and 4000 passengers were stranded when its flights were suddenly grounded. Mr James has returned to the industry, apparently in a management role in his wife's online discount travel company Bestjet. Mr James had been using the title "commercial manager" before he was disqualified by ASIC in November. Documents seen by Fairfax Media show Mr James has continued in a similar role managing some of the financial affairs of the company, although he has since removed the title from official correspondence between Bestjet and its business partners and clients. Bestjet declined to reveal what Mr James' position is at Bestjet, only confirming he is an employee that is not involved with the day-to-day management of the company. Australian Federation of Travel Agents chief executive Jayson Westbury said Mr James' involvement in the company raised "serious concerns". "The travel industry is still reeling from the significant financial losses to which there are no make-good strategies," Mr Westbury said. href="http://www.smh.com.au/business/boss-of-failed-air-australia-returns-to-travel-industry-20140824-107sla.html”>Read more.

Mon., August 25, 2014

When President Cristina Fernández confidently praised Argentina’s financial system as “one of the most solid in the world” during a speech at the Buenos Aires stock exchange on Wednesday, some of the high-ranking executives present struggled to hide their incredulity, the Financial Times reported. Just the day before, at one point on the verge of tears, Argentina’s mercurial leader had nervously announced a plan to dodge a US court order to pay so-called “holdout” creditors in New York, after the ruling pushed the country into default last month for the second time in 13 years. Economists say Ms Fernández had good reason to be nervous. They warn that the plan to use an Argentine state bank to make debt payments and to invite creditors to swap their foreign law bonds for new ones subject to Argentine law will only prolong Argentina’s isolation from international markets since its last default in 2001, and plunge the economy deeper into recession. Read more. (Subscription required.)

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