Headlines

The former directors of the failed Five Star group appeared in court this morning on charges laid by the Serious Fraud Office, The National Business Review reported. Marcus Macdonald, Anthony Bowden, Nicholas Kirk and alleged “shadow director” Neill Williams will next appear at the Auckland District Court on October 28 for a post-committal hearing. The SFO has laid more than 100 charges under the Crimes Act against them over related party lending that took place between 2003 and 2007 involving loans worth $50 million, much of which is said to be irrecoverable.

Failed Latvian lender Parex won European Union regulatory approval on Wednesday for its plan to split up its sound assets into a new bank as part of a restructuring to ensure its viability, Reuters reported. Parex's state bailout in November 2008 was one of the reasons why Latvia had to take an International Monetary Fund and European Union 7.5 billion euro ($9.75 billion) rescue package last year. Latvia handed over a restructuring plan for Parex, the country's second-largest bank prior to the credit crisis, to the European Commission in March.

Greece’s finance minister has strongly rejected the idea that Athens will be forced to restructure its debts, saying that a default would break the eurozone. On a two-day visit to London, Paris and Frankfurt to convince investors that Athens has turned a corner in its year-long economic crisis, George Papaconstantinou told the Financial Times that a Greek default would spark selling in other so-called peripheral bond markets of Portugal and Ireland. “Restructuring is not going to happen.

Some 1.5 million unfinished, unsold or unwanted residential units stand scattered across Spain, products of a still-deflating housing bubble that threatens to undermine the country’s broader economy for years to come, The Wall Street Journal reported.

Canadian newsprint maker AbitibiBowater Inc. said Tuesday that a majority of its unsecured creditors have approved its plan for reorganization under Canadian bankruptcy law, Bloomberg BusinessWeek reported. The Montreal-based company filed for bankruptcy protection more than a year ago and has been soliciting votes from creditors. The company's plan will require creditor approval and confirmation by the U.S. and Canadian Courts. AbitibiBowater said it has received the votes it needs, except with respect to Bowater Canada Finance Corp., a special-purpose subsidiary with no operating assets.

Mark Korda of KordaMentha said his main concern in MFS's financial problems was to ensure the sale of the Stella tourism group went through, The Australian reported. He said yesterday that if MFS went into voluntary administration before selling Stella then the value of Stella would be zero. Corporate recovery adviser KordaMentha was appointed by the MFS board in January 2008 to deal with MFS's solvency issues. The firm had consistently maintained that MFS was solvent because it had sufficient assets to pay off its liabilities.

Riviera Marine (Int.) Pty Ltd., part of a group of Australian companies that manufacture and sell luxury boats, is seeking bankruptcy protection in the U.S., Trade Only Today reported. Riviera CEO John Anderson said in a statement that the filing is not a new proceeding, but "merely a request that the U.S. courts recognize the [Deed of Company Arrangement] process, which was officially completed by Riviera in June 2010 and that allows us to complete our restructure of both our Australian and U.S. operations." The U.S. filing follows a voluntary administration in Australia.

The Quinn Group has heavily criticised the Financial Regulator’s decision yesterday not to allow Quinn Insurance Limited (QIL), which is in administration, to write new commercial business in the UK, The Irish Times reported. Quinn Group said commercial UK business was QIL’s most “profitable” line in 2009 and 2010 and the decision “should be reconsidered” by the regulator. Quinn Group remains Quinn Insurance Ltd’s ultimate shareholder, even though the regulator appointed joint administrators on March 30th.

The High Court has confirmed the appointment of an examiner to housebuilding firm McInerney Homes and a number of related companies, The Irish Times reported. Mr Justice Frank Clarke ruled that examiner William O’Riordan of PricewaterhouseCoopers must address a number of issues of concern to the court by early October or the process, opposed by a syndicate of three banks which are owed €113 million by McInerney, could be terminated.

The run on deposits at the troubled Kabul Bank slowed Tuesday after a long religious holiday, but Afghan financial officials and businessmen said they foresaw further problems in stabilizing the bank, the nation’s largest, The New York Times reported. They raised the possibility of prosecutions of bank officials who were in charge until two weeks ago, when they were ousted because of fears that the bank’s losses far exceeded its deposits.