Ukio Banko Investicine Grupe, or UBIG, the Lithuanian investment company that controls Scottish soccer club Heart of Midlothian, is insolvent, said the Baltic nation’s Department of Enterprise Bankruptcy Management today on its website, Bloomberg reported. The department, part of the Economy Ministry, said that Kaunas-based UBIG, at its own request, had been placed on a list of companies unable or unwilling to meet their obligations. UBIG is a sister company of Ukio Bankas AB, a lender that Lithuania’s central bank closed in February for risky lending to related parties.

The euro-zone debt crisis has mutated into Europe's longest slump of the postwar era, with no recovery in sight for a broad swath of the continent, The Wall Street Journal reported. Continuing government austerity, banks that can't or won't lend and heavy household debts are weighing on many countries. Weak business surveys are challenging official predictions, including from the European Central Bank, that growth will return this year.

Europe moved closer to favouring big uninsured depositors over bondholders when imposing losses on a failing bank’s creditors, despite UK-led warnings that the special treatment would have a “perverse effect” on bank funding, the Financial Times reported. In a pivotal intervention during an EU finance ministers’ meeting, Wolfgang Schäuble, Germany’s finance minister, gave conditional backing for a “depositor preference” compromise, so uninsured deposits are only hit as a last resort.

Austria’s central bank said Hypo Alpe-Adria-Bank International AG will likely avoid a 16 billion-euro ($21 billion) insolvency as policy makers negotiate with the European Commission over the nationalized lender, Bloomberg Businessweek reported. “The government is on a very good path with the Commission, therefore I don’t think that there is an immediate threat,” Andreas Ittner, a director at the nation’s central bank, told journalists in Vienna Tuesday.

The bailouts of the weakest banks in Slovenia should begin next month, the country's finance minister told CNBC on Tuesday, but he insisted that he is not concerned with the time-frame of the process. Uros Cufer said the first assets would be transferred to the nation's so-called bad bank by the end of June, with the exercise due to be completed by the third quarter. Slovenia plans to move 3.3 billion euros of bad loans from its three largest banks, NLB, Nova KBM and Abanka Vipa, to the bad bank in return for state guaranteed bonds worth 1.1 billion euros.

Commerzbank, Germany's second-biggest lender, said it is considering launching a platform to operate ships in a bid to recover higher values from the vessels that it seizes after shipowners fail to service their loans, Reuters reported. The goal of such a project would be to run the ships together with partners for a limited time, Commerzbank said in the prospectus of its capital increase published on Tuesday. The shipping industry is facing difficult times because of the economic downturn and a glut of new ships, which were ordered during the boom years before 2008.

A bankruptcy court on Monday approved Central European Distribution Corp's bankruptcy exit plan, putting Russian billionaire Roustam Tariko on the verge of adding one of the world's largest vodka producers to his stable of companies, Thomson Reuters News & Insight reported. Under the plan, green lighted in U.S. Bankruptcy Court in Wilmington, Tariko will receive all of the Polish company's newly issued stock in return for $277 million he is providing for the benefit of its creditors.

Ireland’s new insolvency service will pursue and prosecute borrowers fraudulently seeking debt forgiveness, said Lorcan O’Connor, head of the new agency, Bloomberg reported. Borrowers who lie about their finances face fines of as much as 100,000 euros ($130,000) or as long as five years in prison, according to laws which created the Insolvency Service of Ireland, known as the ISI, last month.

Five years after rescuing one of the world's biggest banks, the British government still hasn't figured out what to do with it—a sign of the country's struggle to put its banking woes behind it, The Wall Street Journal reported. Royal Bank of Scotland Group PLC received a bailout of £45 billion, or about $70 billion, in 2008. Today, it remains 81%-owned by U.K. taxpayers, and a return to private hands is unlikely soon, according to government officials. Under pressure from the Bank of England, officials at the U.K.

Euro-zone policy makers have been in rare harmony over the significance of their plan to build a much lauded banking union in their effort to strengthen Europe’s financial system and prevent future bank troubles from burdening government finances and taxpayers, The Wall Street Journal MoneyBeat blog reported. Most of them also appear united in their support of accelerating plans to bring banks under common supervision and for regulations for winding down failed banks.