Czech Republic

The Czech Republic's lottery company, Sazka, has been forced into the Czech equivalent of Chapter 11 by its main creditors after shareholders refused to agree to restructuring and a management change, Dow Jones Daily Bankruptcy Review reported. Sazka has been on life support since the beginning of the year when it failed to meet terms on its Eurobonds issue amid accusations that its chairman deliberately acted against the company's interests.

The principal creditors voted on Friday to send Czech national lottery and betting firm Sazka into bankruptcy following clashes with the company's management that scuppered an agreement on a reorganisation, a spokeswoman for the Prague Municipal Court said, Reuters reported. Sazka fell into deep debt after building a 17,000-seat arena for the 2004 ice hockey world championship. Registered claims against the company are about 10 billion crowns ($579 million). Bankruptcy means the firm will be taken over by a receiver and its assets sold.

The Prague Municipal Court declared Czech developer ECM insolvent on Tuesday and the stock exchange halted trading in the firm's shares, Reuters reported. The developer, which builds mainly in the Czech capital, filed for insolvency on May 17 and proposed reorganisation. The court said it would decide on the reorganisation plan within three months, the filing said. The company accumulated debt as an economic downturn pounded the construction and development sector which only began to recover this year in the Czech Republic.

Czech developer ECM Real Estate Investments filed for insolvency on Tuesday and proposed reorganisation, Reuters reported. The firm, building mainly in the Czech capital Prague, has suffered heavy losses in the global economic crisis over the past two years. ECM said the proposal was in line with the results so far of talks with unsecured creditors. "This step should allow for a faster implementation of some intended transactions and better coordination of negotiations with creditors," the company said.

The bankruptcy receiver of Czech lottery firm Sazka said on Thursday he had accepted debt claims from creditors worth 14.7 billion czech crowns ($859 million), including bonds and a number of bank loans, Reuters reported. Sazka, the largest Czech lottery firm, became insolvent in March after failing to pay back debt it racked up mostly when building a sports arena in Prague in 2004. The recognised claims include Sazka's bonds worth 200 million euros.

The Czech Constitutional Court's ruling to strike down legislation that would reduce state support for consumer savings in home-building bank accounts amounts to judicial activism and the court's venture into politics, Czech President Vaclav Klaus said, The Wall Street Journal reported. "Today's decision by the Constitutional Court clearly demonstrates that the court is operating outside the constitution and has entered the sphere of politics," Mr. Klaus told local media late Wednesday.

Two of the biggest bondholders of insolvent Czech betting company Sazka have asked for an early repayment of its bonds due in 2021 worth a nominal 203 million euros ($292 million), their representatives said on Friday, Reuters reported. Sazka, the biggest lottery operator in the Czech market, was declared insolvent last month and a court appointed a preliminary creditors' committee.

A district court placed Czech lottery company Sazka into insolvency and called a meeting of its main creditors for May 26, the court said on Tuesday, Reuters reported. The move was expected after the debt-laden company's chief executive Ales Husak filed for insolvency late on Friday, the latest step in a months-long battle for control of the national lottery operator. Sazka, owned by Czech sports unions, had 10.5 billion crowns ($604.1 million) in debt as of September 2010.

Czech lottery firm Sazka will likely file for reorganisation following pressure for insolvency proceedings by creditors, Chief Executive Ales Husak said on Wednesday, Reuters reported. He said he would file the proposal if a court decides on Friday against a plan to provide loans from financial partners. He said he did not expect bankruptcy. The company had delayed a payment on its 2021 amortising bond in January and lost its rating from Standard and Poor's. It made the payment later. Several creditors have filed for the firm's insolvency.

Ratings agency Standard & Poors has withdrawn its "D" long-term corporate credit rating on Czech gaming company Sazka after the indebted company's assets were placed under preliminary insolvency administration, Reuters reported. S&P said it also withdrew its "D" rating on Sazka's 215 million euros ($303.7 million) secured notes due in 2021. The indebted national lottery operator is facing insolvency claims by two major creditors who, along with another group of investors, are battling to take control over the firm.