Headlines

Nortel Networks Corp. has moved to shut off health care to retirees and payments to disabled employees in the U.S. as it prepares to distribute $2.8 billion in cash and deal with patents that could be worth another $1 billion, Dow Jones Daily Bankruptcy Review reported. Papers filed recently in a U.S. Bankruptcy Court say the former telecommunications equipment giant wants to end health care and life insurance benefits on Aug. 31 for more than 4,000 retired people or their dependents, and cut off long-term disability payments to another 280 people.

Bank levies and a global transaction tax: those two items will be at the top of German Chancellor Angela Merkel's wish list when she travels to Toronto this weekend for the G-20 summit, Spiegel Online reported. With the economy on the slow road to health, so goes her logic, it is time to introduce far-reaching reforms of the global financial system. Opposition to her reform proposals is widespread and, more ominously, frustration is building with Germany's new focus on budget consolidation and debt reduction.

Barclays Plc's President Robert Diamond said on Monday that the British bank's comments to the media about its deal to acquire parts of Lehman Brothers may not have been official disclosure to the U.S. bankruptcy court, which approved the takeover, Reuters reported. At issue is whether the British bank received an unfair $11 billion windfall when it acquired parts of Lehman Brothers after the investment bank's collapse in Sept., 2008. Diamond said that Barclays had tried to craft a deal to take over Lehman's core U.S. brokerage business in a way that Barclays would see a gain.

French bank Credit Agricole SA's Emporiki Bank of Greece SA unit said Tuesday that it now expects to return to profit in 2012—instead of its previously forecast 2011—because of rising loan losses, The Wall Street Journal reported. The bank said that the amount it needs to set aside to cover loan losses had increased by €450 million ($553 million) through 2013 compared with expectations last year when it first outlined its restructuring plan. It said most of the additional risk costs will be concentrated in 2010 and 2011.

Societe Generale SA, France’s second-largest bank by market value, could have been forced into bankruptcy by Jerome Kerviel’s unauthorized positions had they not been unwound immediately, a trader told a Paris court today, Bloomberg reported. The bank lost 4.9 billion euros ($6 billion) in the process of liquidating Kerviel’s accounts over three days in January 2008 as markets worldwide fell. The timing was “bad luck,” said Maxime Kahn, who liquidated the positions. “It was impossible to wait,” said Kahn, now head of European trading at Paris-based Societe Generale.

Chancellor of the Exchequer George Osborne readied a sweeping emergency budget on Tuesday that is likely to combine severe spending cuts and tax increases in Britain’s deepest fiscal retrenchment since the early years of Margaret Thatcher’s rule, The New York Times reported. Mr. Osborne’s address was anxiously awaited by a nation that, in the wake of the debt crises in other European countries such as Greece, Ireland and Spain, has been steeling itself for cuts in public services but has by no means accepted that it must make sacrifices.

Fairfax Financial Holdings Ltd., a key contributor to AbitibiBowater Inc.'s proposed $500 million bankruptcy-exit financing package, refused to move forward with the deal after a bankruptcy judge said the company couldn't grant the investor immunity from a possible legal challenge, Dow Jones Daily Bankruptcy Review reported. Fairfax and two other AbitibiBowater bondholders that were to backstop a debt offering walked away from the deal this weekend, causing the newsprint maker to scramble for other options, said company attorney Kelley A.

Greece won’t restructure its debt, and December tranches of international loans are secure provided the nation keeps implementing its stability plan, Finance Minister George Papaconstantinou told the Proto Thema newspaper, Bloomberg reported. Greece “battled to avoid and avoided” restructuring its debt with the help of the 110 billion-euro ($136.3 billion) European Union and International Monetary Fund loan package, the newspaper cited Papaconstantinou as saying in an interview published today.

More companies associated with Christchurch property developer Dave Henderson were placed into receivership Friday, TVNZ reported. The companies were Livingspace Properties Ltd, Castle Street Ventures Ltd, Tay Ventures Ltd, RFD Investments Ltd and 92 Lichfield Ltd. The receivers are Tim Downes, Simon Thorn and Dave Ruscoe of Grant Thornton New Zealand. Livingspace Properties operates apartments in Dunedin, Invercargill and Christchurch. The receivers intend to continue to operate the Livingspace businesses and honour bookings.

Spanish banking giant Santander today confirmed its bid for more than 300 branches that are being sold off by part-nationalised Royal Bank of Scotland in Britain, Finfacts reported. The owner of Abbey, Alliance & Leicester and Bradford & Bingley is the sole bidder for the 318 branches which NatWest owner RBS is disposing on the instructions of the European Commission. The business being sold has about three million customers - - - two-thirds of which are small businesses - - and consists of RBS branches in England and Wales as well as its NatWest uniits in Scotland.