Headlines

Early signs are that investors in New Zealand’s Hanover Finance will vote in favour of a rescue package rather than see the company go into receivership, 3news reported today. With $550 million in frozen investments at stake, Hanover wants shareholders to hang on and accept its rescue plan rather than vote for receivership. Under the plan it is hoped to repay investors in five years, although a smaller group of unsecured investors will only received 50c for each dollar. The co-owners say they are fronting up by putting in $96 million in cash and property.

Bankers to Sydney-based Babcock & Brown have given the infrastructure funds company just days to reach a new agreement over restructuring its debt or risk being placed into receivership, The Age reported today. Babcock shares and its subordinated notes, already under a trading halt, were suspended yesterday as it attempted to secure the release of up to $150 million in deposits from the HypoVereinsbank, which is an unsecured lender to Babcock.

Kinnitty Castle, the upmarket hotel in County Offaly, has been seized by its bankers after amassing debts of almost €7 million, The Sunday Business Post reported yesterday. KBC Ireland, formerly known as IIB, took control of the hotel last week in an effort to secure funds that it had advanced to Con Ryan, the owner of the hotel. Ryan was loaned the money in a personal capacity, rather than through a limited company, and the bank has appointed a receiver over ‘‘certain assets’’ belonging to Ryan, including Kinnitty Castle.

Struggling British retailer Woolworths is locked in talk over a rescue deal as company restructuring specialist Hilco sweetened its bid by offering to take on more debt, the Sunday Times reported. Hilco is seeking to buy Woolworth's 840 high street shops for a nominal sum of one pound, but is now offering to take on a greater share of the retailer's 385 million pound ($571 million) debt as talks continued over the weekend, the paper added.

Australian parliament opposition leader Malcolm Turnbull is pushing for tax reform and a review of bankruptcy laws for big companies to protect jobs amid the global financial crisis, condemning the government's own response as making the situation worse, The Australian reported today. Turnbull accused the prime minister of a "financial blunder of epic proportions" over the unlimited bank guarantee and warned he would not offer him a "leave pass" to drive the federal budget into deficit.

C& Heavy Industries, a flagship unit of the cash-strapped C& Group, is expected to ask Woori Bank and other creditors to place it under a workout program this week in a bid to stay afloat amid the deepening credit squeeze and a global economic downturn, The Korea Times reported today. If creditors accept its request, the shipbuilder will undergo drastic restructuring in return for the extension of loan maturities and an injection of fresh capital.

The cost of protecting corporate bonds from default fell around the world after Citigroup Inc. got $306 billion of troubled mortgages and toxic assets guaranteed by the U.S. government, Bloomberg reported today. Credit-default swaps on the Markit iTraxx Crossover index of 50 companies with mostly high-risk, high-yield credit ratings dropped 21 basis points to 892, according to JPMorgan Chase & Co. prices at 11:03 a.m. in London. Contracts on Citigroup fell 9 basis points to 482, CMA Datavision prices show.

UK-based DLA Piper is set to boost its insolvency practice by retraining 20 lawyers from other departments to meet soaring demand for restructuring advice, The Lawyer reported today. The move will expand the UK practice by around 20 per cent, with two partners set to make the transition. Litigation and regulatory partner Simon Boon will join the group alongside corporate partner Jonathan Richards. Boon will focus on asset-based lending, while Richards will target distressed private equity funds. The UK restructuring team currently numbers around 100 lawyers, of whom 22 are partners.

Prime Minister Gordon Brown will try to kickstart the stalling British economy on Monday by spending billions of borrowed pounds on tax cuts in a bid to stop a recession turning into a slump. Reuters reported today. The package, expected to total up to 20 billion pounds ($30 billion), or more than one percent of gross domestic product, will include extra public spending but will also include a warning taxes will rise later to pay for the boost.

Thompson Reuters PLC has asked a bankruptcy court to require Lehman Brothers Holdings Inc. to disclose and compensate Reuters for any of the information company's services and intellectual property that might be included in a transition services agreement between Lehman and its European branches, Bankruptcy Law360 reported today. The limited objection takes issue with Lehman's Nov. 13 motion seeking approval of a transition services agreement that would re-establish a cross-Atlantic trade of information among Lehman, Lehman Europe and Neuberger Berman Holdings LLC.