Headlines

Debt-crippled Greece has named some 4,000 alleged tax dodgers, including a former media magnate and a prominent entertainer, with the worst offender owing the state nearly euro1 billion ($1.3 billion), the Associated Press reported. But much of that money might never be reclaimed, as some of the top offenders are in prison or their companies are bankrupt.

The complex issue of how to deal with unsustainable mortgages in out-of-court debt settlements may be concluded in three months’ time – but the operation of the new system could prove as difficult as its construction, the Irish Times reported in an analysis. Under the proposed changes, the Government aims to introduce non-judicial debt settlements, allowing people an alternative to the costly and protracted court system of resolving debts. But the changes are fraught with difficulties.

Retailer Hart Stores Inc. said Quebec Superior Court has authorized a filing under the Companies’ Creditors Arrangement Act (CCAA) calling for payments totalling $6 million over three years to monitor RSM Richter Inc., The Montreal Gazette reported. The money would be for distribution to creditors, who can accept their pro-rata share or a lump sum equal to the lesser of the value of their claims or $1,000. A meeting of creditors to vote on the proposal is expected in February. If creditors approve, it will then go to Quebec Superior Court for ratification.

Euro zone finance ministers will decide on Monday what terms of a Greek debt restructuring they are ready to accept as part of a second bailout package for Athens after negotiators for private creditors said they could not improve their offer, Reuters reported. Resolving the issue of a Greek debt swap is key to putting Athens' debt on a sustainable path and avoiding a chaotic default that could threaten the whole currency bloc.

There are two basic models for a successful financial center. One is to be the onshore center for a large domestic market, as New York is for the U.S. The alternative is to be an offshore haven, touting for business around the world by offering favors such as regulatory arbitrage, tax advantages or, in Switzerland's case, secrecy, The Wall Street Journal Agenda blog reported. Over the years, London's model has evolved. In the 19th century, it was the onshore center for the British Empire.

The International Monetary Fund has earmarked 91 per cent of its definitive commitments to programmes in Europe. There is now a proposal on the table that suggests this is not enough and should be significantly increased, the Financial Times reported in a commentary. Would an increase in IMF funds to bail out the eurozone be justified? In particular, should non-eurozone countries participate in raising this new capital? I think not. The IMF is right, of course, to conclude that the eurozone crisis is the main risk facing the global economy right now.

Ireland will have to deal with mortgage debt as it overhauls bankruptcy laws and introduces a personal insolvency regime, Brian Hayes, a junior government minister, said, Bloomberg Businessweek reported. The government wants to shorten bankruptcy terms and introduce out-of-court debt settlements. Finance Minister Michael Noonan said Thursday the government had agreed with the country’s bailout partners that publication of “the very technically difficult bill” be delayed until the end-April.

Germany's biggest drugstore chain Schlecker said it is filing for insolvency after failing to secure funds to keep it afloat while it restructures its business, Reuters reported. "Necessary restructuring measures cannot be implemented as quickly as they would need to be, especially as planned bridge financing did not come through," the company said in a statement on Friday. It said its operations would continue and its employees would continue to be paid as part of the insolvency process.

Former billionaire Sean Quinn has been declared bankrupt in a Dublin court after his bankruptcy declaration was annulled by a Belfast court, InsolvencyJournal.ie reported. Quinn, who famously claimed to have just £11,000 in the bank, failed to have his bankruptcy declared North of the Border, after the Irish Banking Resolution Corporation successfully argued that his centre of main interest was in Ireland. The bank claimed that a European Directive that applies in insolvency cases stipulates that a person’s centre of main interest has to be ascertainable to third parties, such as creditors.

France and Spain have cleared major funding tests, steadying volatile markets and giving some much-needed cheer to the embattled eurozone, The Guardian reported. Paris and Madrid secured €13bn (£10.8bn) of funding between them in bond auctions at significantly lower interest rates than last year, despite a downgrade by the ratings agency Standard & Poor's last week that sparked fears of a run on the euro and the collapse of several banks. Stock markets rose on the news, with the FTSE 100 finishing the day up 38 points at 5741.15, while the German Dax rose 1%.