Headlines

Falling demand for cashmere among recession-hit shoppers in the West is cutting into earnings among nomadic herders in Mongolia, whose goats produce the soft fiber used in high-end sweaters, scarves and coats. The result: herder loan defaults, The Wall Street Journal reported. Mongolians are calling the current situation a financial zud, invoking a local term for unusually harsh winters that devastate herds. The credit crisis on the steppe has root causes similar to those of the subprime mess in the U.S.
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A Tel Aviv court has appointed a receiver for the Israeli rough diamond trader Stelman, the Israel Diamond Exchange reported. Stelman’s bank debts are reportedly over $20 million. Stelman is a family-owned company with headquarters in Antwerp. According to reports, it is currently striving to reach debt settlements. Stelman was a major Diamond Trading Company (DTC) sightholder and a leading rough diamond trader. According to reports, aside from a debt of $5 million to Erez Daliyot, no Israeli diamond companies are owed money by Stelman.
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Ecuadorean President Rafael Correa may unveil an offer today to holders of $3.2 billion in defaulted bonds, a restructuring he says could include a discount of about 70 cents on the dollar. Falling income from oil has made it unlikely the proposal will include the outright buyback offer that Correa previously mentioned as a possibility, said Ramiro Crespo, head of Analytica Securities in Quito. Instead, he may offer to swap the defaulted debt for new bonds that carry a lower interest rate and longer maturity, he added.
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Canadian casino and hospitality firm Evergreen Gaming Corp said the company and its units have obtained court protection from creditors until May 15, after a lender demanded immediate payment of $30.1 million, Reuters reported. The company said the protection under the Companies' Creditors Arrangement Act (CCAA) will stay creditors and others from enforcing any rights against it and will also allow it to restructure its business. Deloitte & Touche Inc was appointed monitor under the order, Evergreen Gaming said in a statement.
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The bank has installed a receiver over Thedforde Trading in an effort to secure about €20 million it lent to the firm, The Sunday Business Post reported. Thedforde Trading is controlled by Simon Kelly, the son of Dublin property developer Paddy Kelly. Thedforde Trading has been trying to redevelop the premises into shops and a hotel, and had lodged a number of planning applications. It recently received planning permission for a part of the proposed development. Thedforde is the latest in a series of companies controlled by the Kelly family to be seized by banks.
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Ottawa is refusing to rescue AbitibiBowater Inc. with loan guarantees--putting thousands of jobs in communities across Canada at risk after the forest products giant filed for bankruptcy protection, the Globe and Mail reported. AbitibiBowater, one of the country's oldest companies and the world's biggest producer of newsprint, filed for Chapter 11 protection in the United States Thursday, citing a debt burden of more than $6 billion (U.S.), and plans to file for similar protection in Montreal today, under the Companies' Creditors Arrangement Act.
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Bankruptcy petitions in Hong Kong rose to a more than five-year high in March as the recession in the city deepened, government data showed Friday. The government said individuals and non-limited companies filed 1,872 bankruptcy petitions during the month, up from 1,500 in February, Dow Jones Newswires reported. March's figure was the highest since July 2003, when 1,899 bankruptcy petitions were filed as Hong Kong was recovering from the Severe Acute Respiratory Syndrome crisis. The data come amid signs of a further deterioration in local economic conditions.
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A potentially nasty jurisdictional battle could be brewing between the U.S. and Antiguan receivers who both claim control of assets held by Stanford International Bank in the Caribbean, the Houston Chronicle reported. On Wednesday a judge of the High Court of Antigua and Barbuda, where the bank alleged to be at the center of a multibillion-dollar fraud is located, placed it in liquidation, the equivalent of bankruptcy. The judge named as liquidators the pair of British receivers who were appointed by Antiguan regulators on Feb.
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The key players who will determine whether Chrysler LLC has a future in Canada are digging in their heels, increasing the danger that a rescue effort could collapse, the Globe and Mail reported. The campaign to convince the Canadian Auto Workers to offer more concessions to Chrysler Canada Inc. is growing increasingly public, with would-be Chrysler saviour Fiat SpA jumping into the fray this week, followed by Industry Minister Tony Clement, and yesterday, Chrysler Canada president Reid Bigland.
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The pace of European company defaults relative to the U.S. has picked up considerably and there are indications things will get worse, The Wall Street Journal reported. On Tuesday, S&P revised its forecast for European corporate defaults, saying nearly 15% of high-risk companies it reviews could default this year, compared with its previous forecast of as much as 11%. Another 15% could default in 2010, S&P said. The firm's forecast for defaults among U.S. junk-rated companies for the next 12 months starting April is about 14%. Across Europe, the trauma is starting to mount.
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