Headlines

Bankruptcy petitions in Hong Kong surged 36 percent in July from the same month a year ago, but the jump was lower than an 89 percent year-on-year rise in June as the economy picked up, government data showed on Friday. The territory recorded 1,475 bankruptcy petitions last month, down 9 percent from 1,619 in June and compared to 1,081 in July 2008, Reuters reported. Read more.

The German government has earned about €300 million from its rescue of the country’s banks, according to a finance ministry estimate that could rekindle the debate about Berlin’s strategy in managing the financial crisis, the Financial Times reported. The ministry told the Financial Times that the government and Soffin, the agency that manages Germany’s €500 billion bank rescue fund, had so far earned about €300 million ($430 million, £260 million) in fees for credit guarantees granted to cash-starved banks at the height of the crisis.

The recent storms in the Nigerian banking industry may have revealed deeper insights into the true standing on many more issues than banking in Nigeria, BusinessDay reported in an editorial. The banks in question actually got operationally weak and near collapse because of the non-performing loans granted to mainly players in the various sectors of the economy.

Households wilting under mortgage stress and credit card blowouts are set to receive greater protection from bankruptcy, Australia’s Herald Sun reported. Changes to be unveiled today make it harder for creditors to force battlers into personal insolvency. And extra time will be allowed for debtors to reorganise their affairs instead of plunging headlong into bankruptcy. The changes come as households face added pressure amid prospects of interest rates rising to pre-November 2008 levels. Recent years have witnessed a surge in non-business bankruptcies.

Clients of Lehman Brothers in Europe may have to wait longer to get their assets back after a judge blocked a move to speed the unwinding of the bankruptcy, accountants warned on Friday. PricewaterhouseCoopers (PwC), administrators to Lehman Brothers International (Europe) (LBIE), had asked the High Court to approve a plan to accelerate the return of client's assets, tied up in the bank since its collapse last year, Reuters reported.

The rise of "zombie credits" -- highly leveraged companies left to operate in default by lenders -- is raising concerns among analysts about the risk of another liquidity crisis when those loans come due, The Wall Street Journal reported. In previous downturns, European banks were more likely to enforce lending terms, known as covenants, and forced leveraged-buyout companies to repay debt early, in some cases through a break-up of the business. Lenders wrote off debt in exchange for an equity stake or a fresh investment from a new or existing investor.

Six South Korean banks have signed a preliminary agreement to launch a so-called bad bank on Sept. 30 to take problem loans worth five trillion won ($4 billion) from financial institutions' books, the Korea Federation of Banks said. The bad bank will have capital of 1.5 trillion won and will exist until 2014, the federation said in a statement, The Wall Street Journal reported. Industrial Bank of Korea and the bank units of KB Financial Group, Shinhan Financial Group and Hana Financial Group will each hold a 17.5% stake in the entity.

Bombardier Inc. said on Thursday that it scrapped a large Learjet contract with Jet Republic after the upstart private aviation company declared insolvency, underlining the ongoing turbulence in the business jet market, Reuters reported. The contract for 25 Learjet 60 XR mid-sized jets accounted for $240 million of Bombardier's backlog. If the options for 85 more jets had been exercised, it would have been worth up to $1.5 billion. The jets were due to enter service over the course of the next two years, starting in October 2009.

The Bank of England's financial markets law committee has urged the Insolvency Service to change regulations over administrations in order to avoid uncertainty, including that of Lehman Brothers, The Guardian reported. In a letter to Stephen Leinster, director of policy at the Insolvency Service, the FMLC urged regulators to change the present insolvency law, especially the rules relating to administration liabilities.

Saab has exited the Swedish equivalent of Chapter 11 bankruptcy, filing papers with a district court saying that it would not seek to extend its so-called reconstruction period. But the carmaker’s future is still uncertain as the government has refused the idea of a loan to help wrap up the sale of the company, The New York Times DealBook blog reported. The filing Wednesday, just a day after General Motors formally agreed to sell the troubled carmaker to a much smaller Swedish automaker, Koenigsegg, ending six months of reorganization that could bring a fresh start for Saab.