Europe

The possible insolvency of German department-store operator Arcandor AG could have an impact on a property-investment consortium led by the Whitehall Funds, which owns a 51% stake in a portfolio that includes 85 of the retailer's Karstadt stores as well as other properties, The Wall Street Journal reported. Some of the buildings are among Germany's top retail locations, such as the KaDeWe store in Berlin or the Oberpollinger store in Munich.

Bankruptcy for Opel, the European unit of General Motors, remains a distinct possibility despite three offers for the unit, the German economy minister, Karl-Theodor zu Guttenberg, said in an interview published on Sunday, The New York Times reported. Though Chancellor Angela Merkel’s government is to meet on Monday to consider the bids, there is no guarantee that any will be accepted, Mr. Guttenberg was quoted as saying by Bild am Sonntag. Speaking to journalists in Berlin on Sunday, Mr.

Loss-making Dutch hotel operator Golden Tulip will file for bankruptcy for 13 hotels in the Netherlands that it directly owns and operates, Reuters reported. The decision will not affect franchised or affiliated hotels, of which there are 720 in more than 50 countries, and the affected hotels will continue to operate during the proceedings, the company said. The group owns 60 hotels directly. The unlisted hotel chain had warned earlier this year that declining occupancy rates and the cost of investing in new hotels had led to losses.

Britain yesterday became the first big economy to be warned in the financial crisis that it might lose its top-notch credit rating, in a move that raised fears of possible downgrades for other large industrialised nations, the Financial Times reported. S&P based its warning on a forecast that net government debt risked approaching 100 per cent of national income and staying at that level. "A government debt burden of that level, if sustained, would in Standard & Poor's view be incompatible with a AAA rating," the agency said.

Standard and Poor's grim warning on the British economy is as much an indictment of the political landscape in London as the perilous state of the public finances, according to newspapers, Agence France-Presse reported. An editorial in the Financial Times described the verdict as "dramatic", but said the signs had all been there for some time. The business daily said the biggest risk hanging over recession-hit Britain was political, warning there was a "credibility hiatus" caused by the anticipation of an election, which must be held by June 2010.

Fiat SpA is convinced it has more than a 50 percent chance of succeeding in its bid for Opel because it does not think the other contenders have the expertise to revive the car maker, Reuters reported on an Italian newspaper story. But General Motors Corp, which is selling Opel, has Fiat at the bottom of a list of three contenders, German magazine Der Spiegel said in its online edition, citing what it described as an internal GM ranking list of the bids.

At least three bids were submitted to the German government Wednesday from suitors interested in acquiring or taking a stake in the ailing Adam Opel GmbH, a GM Europe spokesman said. Chris Preuss, a spokesman for the Zurich-based automaker which owns Opel, told The Associated Press that the bids had been received but did not identify who had filed them. So far, Italian automaker Fiat SpA has not been shy about courting Opel. Fiat wants to wrap GM Europe, including Opel, into a global car-making powerhouse along with Chrysler LLC.

Cevdet Caner, the man at the center of Germany’s biggest real estate insolvency in 15 years, is fighting eviction from his 20 million pound ($31 million) London townhouse, complete with basement swimming pool, Bloomberg reported. His group of investment companies called Level One owes €1.5 billion ($2 billion) to creditors led by Credit Suisse Group AG, according to estimates by the German administrator. The two main holding companies defaulted and were placed under court administration in August, U.K.

Norway's non-oil economy sank into recession, reflecting sharply lower manufacturing output, Statistics Norway said Tuesday. Gross domestic product fell 1% in the first quarter compared with a downwardly revised contraction of 0.8% in the fourth quarter of 2008. Total GDP, which includes oil and gas and ocean shipping, contracted 0.4% in the first quarter, swinging from growth of 0.8% in the fourth quarter of 2008.

Germany’s voluntary “bad bank” scheme adopted by the cabinet last week is a substantially watered-down version of the original draft, amended because of a parliamentary revolt, the Financial Times has learnt. Berlin was forced to shelve the earlier draft, which would have saddled taxpayers with hundreds of billions of euros in risks associated with toxic assets held by the nation’s banks, because coalition legislators threatened to vote it down.