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In a related story, Bloomberg reported that Germany has allocated enough funds to deal with toxic assets, Finance Minister Peer Steinbrueck said, seeking to tackle the $1 trillion banking crisis without forcing taxpayers to spend more on bailouts in an election year. The government’s Soffin bank-rescue fund has €260 billion ($356 billion) left, with a maximum of €190 billion in toxic assets still on banks’ books, he said. Chancellor Business owners have complained that Steinbrueck stalled as he sought to limit the burden to taxpayers before Sept. 27 national elections.
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Firms interested in bidding for Swedish car maker Saab Automobile have all agreed to a restructuring plan that would come with the purchase, the company said. The plan calls for centering Saab's operations in Trolhattan in southwestern Sweden, the Swedish news agency TT reported Tuesday. Out of 27 firms originally looking at the company, Saab has selected two or three as the final bidders, but would not release those names. Analysts speculate Chinese automakers and Swedish automaker Koenigsegg joined together with Norwegian funding sources are in the running.
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Bankruptcies in Canada soared by over 50 per cent in March from a year ago as the rising unemployment rate left more consumers unable to pay their bills, the Toronto Star reported. At the same time, business bankruptcies declined during the month, according to figures released yesterday by the Office of the Superintendent of Bankruptcy Canada. There were 10,578 personal bankruptcies across the country in March, up 17.3 per cent from the month before, and up a staggering 57 per cent from March 2008. The biggest year-over-year increases came from the western provinces.
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A High Court judge has allowed financial services provider Asteron Life Ltd to serve a bankruptcy notice on a man in South Africa by email, provided it receives a “read reply,” The National Business Review reported. Asteron, formerly Royal and SunAlliance, had already received judgement against Pieter Anton Franck. Court permission is required to serve bankruptcy papers on a debtor overseas. As Asteron had been frustrated in obtaining an address for service, it asked for permission to serve the overseas notice by email.
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Japan Airlines Corp. slid into deep losses in the fiscal year ended in March and warned it will stay in the red this year, even as it scrambles to cut costs. JAL Senior Vice President Yoshimasa Kanayama said Tuesday the carrier aims to reduce its work force by 1,200 workers in the current fiscal year. The Japanese carrier had a staff of 47,526 at the end of March. JAL, Japan's largest airline by revenue, reported a loss of 63.2 billion yen ($648.7 million) for the year, compared with a profit of 16.9 billion yen the previous year.
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Employees of Adam Opel AG would own as much as 10 per cent of the company under a plan for the auto maker put forward by Magna International Inc. and its Russian partners--a proposal that could give the Canadian auto parts giant an advantage in its battle to win the bidding, The Globe and Mail reported. The Magna bid to invest in Opel, the key European manufacturing operations of General Motors Corp., is up against Italian auto maker Fiat SpA and offers from other investors.
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Bank of America Corp., seeking to bolster its financial standing in the face of new government requirements, raised $7.3 billion from Asian investors Tuesday through the sale of a roughly 5.7% stake in China Construction Bank Corp., according to people familiar with the matter, The Wall Street Journal reported. For the U.S. lender, the move marks a significant step to raising $34 billion in capital needed to meet the requirements of a new U.S. government stress test for lenders.
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CanWest Global Communications Corp, which has been getting continuous extensions in talks with lenders, is reviewing as many as four restructuring proposals from outside investors to help it avoid filing for protection from creditors, The Globe and Mail said. The company will look at some of the proposals this week, the paper said, citing sources close to CanWest. Potential firms interested in participating in a recapitalization of Canada's largest media company could include Fairfax Financial Holdings Ltd, Onex Corp and Brookfield Asset Management Inc, according to the paper.
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The U.K. Treasury will call for faster payments to creditors and greater clarity on trades in the event an investment bank collapses, an effort to overhaul insolvency law after the demise of Lehman Brothers Holdings Inc., Bloomberg reported. Investors will have more protection and information to determine the legal position of outstanding trades once liquidators have been called in. The proposals to reshape insolvency rules were published in London yesterday, forming the basis for a formal consultation later this summer. The U.K.
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Wingecarribee Shire Council has won the right to proceed with attempts to uncover Lehman Brothers' insurance policies, as it fights to recoup millions of dollars lost in financial products it bought that were smashed in value by the US subprime crisis, The Australian reported. If it is able to get access to the insurance policies, the council could pave the way for other creditors seeking to recover money from collapsed companies.
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