Headlines

Insolvency experts are welcoming a Court of Appeal decision they say gives comfort to firms trading with a company in receivership, Stuff.co.nz reported. The wisdom of continuing to do business with a troubled entity was called into question by a dispute between the receivers of pet food manufacturer Lovitt's and packaging company Huhtamaki New Zealand. Huhtamaki claims it is $280,000 out of pocket after receivers Deloitte ordered ongoing supplies but then said there were no available funds to pay for them.

Standard & Poor's fired a second warning shot at the euro zone in 24 hours, threatening on Tuesday to cut the credit rating of its financial rescue fund as European leaders raced to find a political solution to their sovereign debt crisis, Reuters reported. German Chancellor Angela Merkel and French President Nicolas Sarkozy want to change EU rules to impose mandatory penalties on euro zone states that exceed deficit targets, aiming to restore market trust and prevent the crisis spiralling out of control. Visiting U.S.

General Motors Co said on Tuesday it would not support a proposed ownership structure for Saab that included a Chinese bank, moving the Swedish auto company closer to liquidation, Reuters reported. "We have reviewed Saab's proposed changes regarding the sale of the company," GM spokesman James Cain said in a statement. "Nothing in the proposal changes GM's position. We are unable to support the transaction." GM has said it would be difficult to support a sale of Saab that hurts GM's competitive position in China and other key markets.

Spain's incoming prime minister, intent on curing the country's ailing banking sector, is considering cleanup plans that could dwarf the cost of previous efforts, including the creation of a state-funded "bad bank" to acquire toxic assets or a move to force banks to dramatically boost loan-loss reserves, people close to the situation say, The Wall Street Journal reported.

The U.K. government, struggling with a disappointing economic strategy, deserves some sympathy. It also needs to show some patience, Bloomberg reported in a commentary. In its first budget last year, Prime Minister David Cameron’s coalition announced higher taxes and lower public spending, aiming to contain borrowing, shore up market confidence and spur growth. The policy was hailed by many at the time as bold and decisive. Now, with the economy at risk of falling back into recession, Cameron and his team are under fire.

Taxes on savings, fuel, rental income and tobacco are set to increase as the Government seeks to raise an extra €1 billion in tax revenue next year, the Irish Times reported. In his Budget speech, Minister for Finance Michael Noonan said there would be no increases to income or corporation taxes as the Government was attempting to generate conditions that would protect and create employment. He said the Coalition had decided to raise revenue through a raft of indirect taxes in order to make sure incomes were protected and that the wealthy paid their share.

If Commerzbank CEO Martin Blessing could make one wish, he would presumably ask for a few billion euros, or that someone would take the bank's ailing subsidiary Eurohypo off his hands, or that the entire sovereign debt crisis would simply disappear, Spiegel Online reported. But banks, along with their managers and owners, are not allowed to pin their hopes on miracles. They need money, as quickly as possible.

Seeking to restore confidence in the euro, the leaders of France and Germany jointly called on Monday for changes to the European Union treaty so that countries using the euro would face automatic penalties if budget deficits ran too high, the Los Angeles Times reported. But not everyone on Wall Street was reassured that Europe would get control of its 2-year-old debt crisis. Stock prices rose and borrowing costs for European governments dropped sharply in response to the changes proposed by French President Nikolas Sarkozy and German Chancellor Angela Merkel.

BTA Bank may ask the Kazakh government to back its second debt restructuring or provide additional state funds to help avert bankruptcy, according to two people with direct knowledge of the matter, Bloomberg reported. BTA may seek a capital injection of more than $4 billion, said the people, who declined to be identified because the information isn’t public. Lazard Freres & Co., which acted as an adviser to BTA during its debt reorganization in 2009, assessed the cost of another restructuring last month, the people said.

One of the world’s largest operators of oil product tankers gained more time to devise a restructuring plan on Monday when creditors allowed Denmark’s Torm to waive many of its loan terms and stop making loan repayments until at least January 15, the Financial Times reported. A group of three of the company’s lending banks – Danske Bank, Danish Ship Finance and Nordea – also announced that they had formed a committee to negotiate a solution to the problems of the company, which said on November 17 it needed $300m in new capital.