Daily Insolvency News Headlines

Thu., April 9, 2015

Thu., April 9, 2015

Policy makers in Italy, Portugal and Spain say their economies and financial systems are strong enough to survive a Greek departure from the eurozone, but they acknowledge that Grexit might set a precedent replete with risks for Europe’s 60-year-old integration project. Government officials and independent analysts in Lisbon, Madrid and Rome say a chaotic Greek abandonment of the euro, bringing widespread economic distress and social upheaval in its wake, would serve as a cautionary shock and probably weaken anti-euro political forces in countries exposed to possible contagion from Greece. According to José Ignacio Torreblanca, head of the Madrid office of the European Council on Foreign Relations think-tank, a Grexit would not be good for Podemos, Spain’s new radical leftist party, which has high hopes of success in national parliamentary elections due at the end of this year. Read more. (Subscription required.)

Thu., April 9, 2015

Nervous investors drove safe-haven German Bund yields close to record lows on Wednesday, amid concern over Greece’s ability to resolve its debt crisis, a day before it must repay a loan to the International Monetary Fund, the Irish Times reported. Although cash-strapped Greece successfully sold €1.138 billionof six-month Treasury bills on Wednesday, doubts remain over its ability to find enough funds to repay all its debts in the coming weeks. Athens must roll over another €1 billion on April 15th. The T-bills, which saw strong demand from investors, were sold at a yield of 2.97 per cent, unchanged from a previous sale in March and the highest rate in 11 months. Greece is now paying to borrow for six months almost twice what Portugal pays to borrow for 10 years. Shut out of debt markets and with aid from official creditors frozen, Greece has scrambled to cope with its redemption payments. It must repay the IMF €450 million on Thursday. Read more.

Thu., April 9, 2015

The Bank of Japan stuck with its monetary stimulus program on Wednesday, brushing off a lack of inflation two years after it vowed to pull the economy out of more than a decade of falling prices, the International New York Times reported. As its initial deadline for stoking inflation passed, the central bank maintained that consumer prices were temporarily depressed by cheaper oil, and would gradually rise as consumers and businesses spent more and the economy recovered further. The Bank of Japan has been buying bonds and other assets furiously since April 2013 to increase base money — or cash and deposits at the central bank — by 80 trillion yen, or $667 billion, a year, expanding its balance sheet by an amount equal to the size of Australia’s economy. But it appears no closer to hitting its target of 2 percent inflation in about two years, part of its promise to pull the Japanese economy out of decades of deflation and spiritless performance. Read more. (Subscription required.)

Thu., April 9, 2015

Ireland could offer itself as a home to some of Britain’s wealthiest residents if a Labour government was elected in the UK and followed through on threats to abolish a rule which allows some people to mitigate their UK tax liability, the Irish Times reported. Labour leader Ed Miliband has declared that, if elected in the forthcoming election, he would end the regime which allows those who are resident, but not domiciled in the UK, to avoid paying tax on their worldwide income. Ireland operates the same non-domicile regime, a legacy of British rule, according to Tim O’Rahilly, a partner with PricewaterhouseCoopers. But unlike in the UK, there has been no political pressure here to abolish it. Read more. (Subscription required.)

Thu., April 9, 2015

Italy’s financial police have released sobering statistics about fraud and corruption in Italy’s public sector: Of the €4.6 billion ($5 billion) worth of public contracts checked last year, they found €1.5 billion in fraud and €2.6 billion wasted, The Wall Street Journal reported on an Associated Press story. The financial police released their annual report for 2014 on Wednesday, saying they had made police reports against 3,700 people for crimes against public administration. The mafia has been known for its infiltration of public contracts in Italy, helping contribute to the country’s dismal ranking on Transparency International’s corruption perception list — alongside Swaziland, Senegal, Greece, Bulgaria and Romania. Recently, major anticorruption investigations have targeted contracts for Milan’s Expo world’s fair, Venice’s Moses underwater barrier project and the reconstruction of L’Aquila after the 2009 earthquake. Read more. (Subscription required.)

Thu., April 9, 2015

Rizzo Bottiglieri de Carlini Armatori SpA, a marine freight transportation services provider, moved to shield its U.S. assets by filing a bankruptcy petition in Texas after seeking protection from creditors in Italy, Bloomberg News reported. The company filed under Chapter 15 of the U.S. Bankruptcy Code, which would prevent creditors from taking action against the company’s U.S.-based assets while it reorganizes under Italian law. The company listed assets and debt of more than $500 million each in court documents filed Wednesday in U.S. Bankruptcy Court in Houston. The Italian proceeding is before the Court of Torre Annunziata. The company is asking a U.S. judge to recognize the Italian action as the primary proceeding. Read more.

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