Headlines

The United Arab Emirates (UAE) government is set to announce a new bankruptcy law "within months" aimed at providing legal protection for companies in financial strife, local newspaper Gulf News reported Wednesday. "The government is working on issuing a comprehensive bankruptcy/insolvency law that will protect businesses under financial stress and help them move forward," the report quoted Hamad Bu Amim, director general of the Dubai Chamber of Commerce and Industry, as saying. "There are certain provisions for insolvencies in our Companies Laws.

Abu Dhabi's decision to offer Dubai financial succour has bought time for the debt-laden emirate to restructure its troubled Dubai World conglomerate, but the former boom town still faces a severe test, the Financial Times reported in an analysis. Dubai World holds most of the emirate's credit pile, and despite the $10 billion (€6.8 billion, £6.1 billion) support extended yesterday by Abu Dhabi, the United Arab Emirates capital, the conglomerate must still restructure its debts.

Royal Bank of Scotland Group PLC's ABN Amro operations in China said it has uncovered potential irregularities within its small and medium-size enterprise banking business in response to a Wall Street Journal inquiry. The scale and nature of the potential problems at ABN Amro China still remain unclear. ABN Amro has one of the biggest foreign banking franchises in China, operating 18 retail banking outlets in the country. The ABN Amro China spokeswoman declined to give further details about the potential irregularities, citing the bank's ongoing investigation.

Canada's Fraser Papers Inc on Tuesday sought court approval to sell assets of its specialty papers business to Brookfield Asset Management Inc. for $185 million, court papers showed. Brookfield will be the stalking horse bidder and set the floor at a bankruptcy auction, which will be open to higher and better offers for the assets, Reuters reported. In a separate filing with the U.S. bankruptcy court in Delaware, J. Peter Gordon, chief executive of Fraser Papers, said proceeds from the sale would be used to pay off certain debt.

The euro tumbled as debt woes spread around the euro zone from Greece, where pledges of austerity and fiscal rigor failed to stem growing fears that the Continent's economic recovery could be derailed, The Wall Street Journal reported. The euro fell as low as $1.4505 on Tuesday, its lowest level since early October. New worries about Austrian banking also roiled markets, with rumors of trouble at an Austrian lender with shaky investments in Eastern Europe following Monday's surprise nationalization of another Austrian bank at the behest of the European Central Bank.

Austria's justice ministry says an investigation has been launched to clarify the circumstances surrounding the near demise of troubled financial institution Hypo Alpe Adria, The Associated Press reported. Austria on Monday nationalized Hypo Alpe Adria, a unit of German public-sector bank BayernLB, to prevent it from sliding into a bankruptcy fueled in part by bad loans - most of them in Eastern Europe. The ministry says prosecutors in the southern city of Klagenfurt are probing whether those responsible for the bank committed breach of trust and fraud.

The U.K. Treasury published proposals Wednesday designed to improve the handling of investment-bank failures in the U.K including introducing a new insolvency regime, forcing key bank staff to remain with a bank during its wind-down and better protecting client money, The Wall Street Journal reported. The proposals, outlined in a consultation paper, are designed to deal with the problems raised by the collapse of Lehman Brothers in the U.S. in mid-September last year as part of a bid to make the U.K. a more attractive place for investors to do business.

The International Banking Corp., a Bahrain-based provider of commercial loans, filed a Chapter 15 bankruptcy petition, seeking protection from U.S. creditors, The China Post reported. TIBC had assets of US$4 billion and liabilities of US$2.6 billion as of July 31, according to documents filed in Manhattan court Monday. TIBC is under administration proceedings in Bahrain, with Trowers & Hamlins Services Ltd. acting as administrator, and Zolfo Cooper hired for restructuring work.

“Look around the room, there’s not a single teenager. Most of the people here are senior people. This proposal is a disaster.” These words from an investor in Mark Hotchin and Eric Watson’s finance companies neatly sum up the anguish many of the 16,000 investors are feeling as they await results of today’s crucial vote on a deal with Allied Farmers, The National Business Review reported. Approve the deal and they receive shares of uncertain value in a struggling rural services and finance company.

Beleaguered fashion company Mariella Burani Fashion Group SpA has failed to reach agreement with its banks over a €488.9 million debt restructure, forcing the family-controlled company Wednesday to seek approval from shareholders for a capital hike. Chief Executive Gabriele Fontanesi told Dow Jones Newswires the meeting, scheduled for later Wednesday is "very important" as the future of the company hinges on whether it now gets the go-ahead for the issue of €83.5 million in new shares, plus the use of €18 million in reserves.