Headlines

European leaders in Brussels on Friday are expected to confirm the broad outline of a strategy for solving the debt crisis, in a move that is seen as a decisive moment for the euro zone, The Wall Street Journal reported. For more than a year, since Greece's budget meltdown sparked a crisis of confidence in the euro zone's financial stability, Europe has struggled to react to events driven by panicky financial markets. After weeks of lead-up, much rides on the credibility of the new strategy.

Canada's largest book distributor, H.B. Fenn and Company Ltd., announced Thursday that it plans to file a proposal under the Bankruptcy and Insolvency Act, CTV.ca reported on a Canadian Press story. In a brief statement, the company said it has "encountered significant financial challenges due to the loss of distribution lines, shrinking margins and the significant shift to e-books, all of which have significantly reduced the company's revenues." " D.J. Miller, of the Toronto-based restructuring and litigation firm Thornton Grout Finnigan, said the move does not necessarily mean H.B.

Splitting up state-backed German lender WestLB would be the most sensible scenario for the ailing bank, the head of Germany's biggest regional savings banks association said Tuesday, as pressure mounts on WestLB and its shareholders to drastically reduce the bank's size and find new owners by the end of 2011, Dow Jones Daily Bankruptcy Review reported.

The gloom that descended on European consumers in 2008 shows no signs of lifting, with rising prices and the threat of low or falling real wages adding to concerns about jobs and the prospect, if not yet the fact, of higher taxes, The Wall Street Journal reported. Much of this is not surprising. Economists may not know a great deal about how the world works, but one thing they are pretty sure about is that the fallout from a financial crisis is longer and more painful than that of most other triggers of recession.

Ireland's parliament was dissolved Tuesday for a long-awaited Feb. 25 election as Prime Minister Brian Cowen exited the political stage defending his management of the nation's plunge toward bankruptcy, the Associated Press reported. Cowen declared a formal end to his government two months after he was forced to negotiate a euro67.5 billion ($92 billion) loan package from the European Union and International Monetary Fund, a measure he had insisted Ireland did not need. Cowen told a silent, somber parliament that his 2 1/2 years as prime minister "have been a time of great trial and test.

Heading into a European Union summit meeting on Friday, Chancellor Angela Merkel is lobbying hard for strengthened continental unity, reaching out to the other member states, the European Commission and skeptics at home to cement the rescue of the euro by agreeing on a new conformity on everything from pensions to corporate tax rates, the International Herald Tribune reported. It is an unusual move for the German leader, who since taking office in 2005 has made few memorable speeches on Europe.

Banco Financiero y de Ahorros SA, Spain's third-largest bank by assets, will set aside €9.2 billion ($12.52 billion) to cover loan losses and write down the value of its real-estate holdings, illustrating the ongoing fallout from the country's property bust, The Wall Street Journal reported.

The Sunday Tribune newspaper has been placed into receivership after its main financial backer, Independent News & Media (IN&M), withdrew its support from the company yesterday, the Irish Times reported. The move puts the jobs of 43 staff at the newspaper in doubt although IN&M has agreed to pay staff for four more weeks to give the receiver – Jim Luby of McStay Luby – an opportunity to secure an investor for the title. It was not clear yesterday if Mr Luby would have sufficient financial resources to publish the newspaper this Sunday.

Alexander Knaster's Pamplona Capital Management seems set to retain a stake in oil drilling contractor KCA Deutag, after agreeing jointly with holders of the mezzanine debt to write one of the largest equity checks ever offered for a debt restructuring-led takeover in Europe, said sources close to the matter, Dow Jones Daily Bankruptcy Review reported. Around 50% of KCA Deutag's senior lenders have accepted the proposal from private equity firm Pamplona and holders of its mezzanine debt, a form of quasi-equity, to inject $550 million of new money into the company.

Cash-strapped Egoli Tossell Film, the German producer of Golden Globe winner "Carlos," has embarked on financial restructuring to bring in a new shareholder and secure its future, Variety reported. It is in negotiations with an unnamed Frankfurt-based investor, which will take a significant equity stake in the company. As part of this reorganization, ETF filed last week for the German equivalent of Chapter 11. It expects to emerge within three to four months with its new shareholder and a clean balance sheet.