Headlines

Worried by a sharp slowdown in the economy and a strong yen, Japan's government is considering another round of stimulus to stoke growth as measures enacted during the recent financial crisis begin to expire, The Wall Street Journal reported. But policy makers face a daunting challenge balancing any new spending with their pledges to curb the country's debt, which is already approaching twice the size of Japan's gross domestic product.

The German government has dropped plans to introduce a privilege for state creditors in insolvency cases, the justice ministry said Monday, Dow Jones Daily Bankruptcy Review reported. The government had planned to reintroduce such a privilege for fiscal authorities as part of its EUR80 billion austerity drive, but the justice ministry had concerns and called for an alternative model and convinced the finance ministry in talks last week. "On Friday, we agreed that tax authorities' privilege will be replaced by a different compensation," the spokesman said.

The taxpayer will be called on to foot the bill for any shortfall after Allied Nationwide Finance was put into receivership late Friday afternoon, The National Business Review reported. The company – a subsidiary of NZX-listed Allied Farmers, which took over the assets and loans of Eric Watson and Mark Hotchin’s Hanover finance companies, was operating under the Crown retail deposit guarantee scheme. The company has about $137 million worth of debentures on issue. Kerryn Downey and Andrew Grenfell of McGrath Nicol were appointed receivers.

Hong Kong bankruptcy petitions in July fell 1.07 percent to 833 from June and were down 43.5 percent from a year earlier, government data showed on Friday, Reuters reported. The number of bankruptcy petitions totalled 5,664 for the first seven months of 2010, down 46.8 percent from a year earlier. Bankruptcy orders stood at 5,629 for January-July, down 46.6 percent from a year earlier. Last week, the government raised its full-year economic growth forecast for 2010 to 5-6 percent from the previous forecast of 4-5 percent.

Reports have emerged that troubled house builder McInerney Holdings is preparing an application for court protection which would force its lenders to write down its debts. If the petition goes ahead, it could represent a challenge to Nama legislation, InsolvencyJournal.ie reported. Laden down with borrowings of €236 million, McInerney Holdings, one of the country's oldest house builders, is one of the many Irish firms attempting to restructure its debts in a last-gasp effort for survival.

Lehman Brothers Holdings Inc.'s multibillion-dollar lawsuit against Barclays PLC gets underway again this week when Barclays will call its first witnesses in the trial Monday, Dow Jones Daily Bankruptcy Review reported. Lehman sued Barclays in New York bankruptcy court over the British bank's purchase of Lehman's brokerage in September 2008, shortly after Lehman collapsed. Lehman is trying to recover more than $11 billion that it says Barclays unfairly pocketed in the deal by failing to disclose discounts it was receiving on the assets it was buying.

Nakheel, a troubled Dubai-based developer, has paid Dh2.5bn ($681m) to trade creditors as it pushes towards agreement on Dh4bn in unpaid bills to contactors as part of the broader restructuring at Dubai World, its parent, the Financial Times reported. Ali Lootah, Nakheel’s chairman, told a local newspaper on Sunday that the developer had agreed claims with 80 per cent of its trade creditors as it pushes towards the 95 per cent threshold needed to finalise a restructuring agreement.

Nuevo Grupo Aeronautico SA, the holding company for airline Compania Mexicana de Aviacion, was purchased yesterday by a group of Mexican investors and the country’s pilots’ union, according to a member of the investment group and a union leader, Bloomberg reported. Tenedora K, which was formed in order to purchase Mexicana, bought 95 percent of the airline’s shares, union secretary general Fernando Perfecto said yesterday. The pilots’ union owns 5 percent of the company, said Perfecto, who was involved in the negotiations.

A group of European Union members in central and eastern Europe, plus Sweden, asked the bloc to take into account the cost of pension system overhaul when assessing debt levels, Dow Jones’ New Europe blog reported in a commentary. The move would reduce sovereign debt as measured by the EU, but only on paper. The countries are in fact asking for debt to be swept under the carpet.

Allied Nationwide Finance says it missed paying maturing debentures yesterday and needs more time to remedy breaches of its trust deed, The National Business Review reported. The finance company said it expected to make good its investor payments today but needed an extension to a 14-day deadline set by Guardian Trust (NZGT) to comply with financial ratios. The deadline expired last night. Until yesterday, Allied Nationwide had continued to meet its obligations, including repayment of maturing debentures, the company said.