Headlines

Germany's upper house of parliament Friday approved the country's bank restructuring law, which includes a bank levy to generate funds for troubled banks, Dow Jones reported. The upper house voted against the recommendations of its finance and economic committees, which were in favor of having the conciliation committee of both houses of parliament deal with the law, as the proposed levy would also affect savings and cooperative banks. The legislation sets up a restructuring procedure for banks, allowing for early intervention to tackle problems before insolvency.

A Mexican court has approved the $1.54 billion pre-packaged debt restructuring of retailer Comercial Mexicana, which had the approval of 98% of creditors, the company said Wednesday, Dow Jones reported. Comercial Mexicana said in a press release that the ruling brings an end to its filing under the local equivalent of Chapter 11, and that it will proceed to carry out the agreements reached with creditors.

Government-guaranteed finance company Equitable Mortgages called in receivers Friday, The New Zealand Herald reported. The Auckland-based financial institution has around 6000 depositors and approximately $178 million in Crown-guaranteed deposits. Eligible depositors with Equitable Mortgages can claim repayment from the Crown, Treasury's deputy secretary of financial operations Phil Combes said yesterday.

The Supreme Court of Canada said Thursday it will hear Newfoundland and Labrador's appeal of a lower-court mill clean-up ruling, The Montreal Gazette reported. Newfoundland and Labrador had asked the Supreme Court to rule on certain issues relating to the creditor protection process, especially whether AbitibiBowater's statutory duty to remove environmental contamination is invalidated by the Companies' Creditors Arrangement Act. AbitibiBowater gained court protection from creditors in Canada and the U.S. 20 months ago and plans to exit next month after the Canadian and U.S.

European leaders sparred over whether to commit more funds to rescue struggling euro-zone countries, as financial-market pressure on the region's weakest economies intensified, The Wall Street Journal reported. The European Union's executive arm, the Brussels-based EU Commission, floated a proposal on Wednesday to double the size of Europe's €440 billion ($588 billion) bailout fund for euro-zone governments, but the idea was dismissed by Germany, according to people familiar with the situation.

A committee of Canada's Senate on Thursday killed a proposed law aimed at preventing long-term disabled workers from being treated as unsecured creditors in bankruptcy proceedings, Dow Jones reported. Bill S-216, as it is known, which moves the disabled up the queue to preferred creditor status, is meant to help disabled Nortel Networks Corp. employees who will lose their benefits at year's end because of a court-approved former employees' settlement earlier this year.

Grain company Keith Seeds has sold its assets to NZ company PGG Wrightson and entered voluntary administration, AdelaideNow reported on a story in The Advertiser. The company has an estimated $7 million in debt. PGG told the New Zealand stock exchange yesterday it completed the purchase of the assets of Keith Seeds on Monday, for an undisclosed sum. The company will use Keith Seeds as a base to expand its existing South Australian operations. But the transaction could leave an estimated 200 suppliers out of pocket by $7 million, with no assets against which to claim.

Irish Nationwide has succeeded in its legal bid to dismiss a lawsuit by two subordinated bondholders in the High Court in London as a judge said he could not stop the Government’s plan to share the €5.4 billion cost of the building society, The Irish Times reported. The bondholders, Satinland Finance and Trimast Holding, had sought to force a unit of French bank BNP Paribas, the trustee of the bonds, to file a winding up petition against Irish Nationwide to force their repayment in full. The investment funds did not have a valid legal claim, Judge George Mann said in his ruling.

As fears about Ireland’s political stability rattled Europe on Tuesday, the party of Prime Minister Brian Cowen brushed aside calls for his immediate ouster on Tuesday and urged the government to approve wrenching budget- and deficit-reduction plans in order to secure a $100 billion bailout from the European Union and the International Monetary Fund, the International Herald Tribune reported.

Spanish officials are mounting an aggressive campaign to dismiss fears that Europe's fiscal woes—which have already leapt from Greece to Ireland and may soon spread to Portugal—will reach their shores, The Wall Street Journal reported. This week, Spanish officials hastened to throw up a firewall around their country with a volley of positive comments about the progress of Spain's fiscal reforms and the soundness of its banking sector. The message they are emphasizing: Spain is not Ireland, which is on track for an estimated €80 billion ($109 billion) international bailout.