Headlines

Russia’s economy shrank 10.1 per cent in the first half of this year, the economy minister said on Wednesday, its worst decline since the early 1990s. The credit crunch, falling commodity prices and a gradual rouble devaluation have shattered 10 years of rapid growth but there are signs that the pace of economic decline is slowing, the Financial Times reported.

Linklaters has moved to substantially bolster its German restructuring practice after recruiting Clifford Chance's (CC's) best-known local insolvency lawyer, Kolja von Bismarck, LegalWeek reported. The appointment of the highly-regarded restructuring expert will be seen as a key strategic move for Linklaters which, unlike CC and Freshfields Bruckhaus Deringer, has yet to establish a high profile restructuring practice in Europe's largest economy.

A unit of National Australia Bank Ltd. said Thursday it could face a tax bill of up to NZ$654 million plus possible penalties after the nation's High Court ruled against it in relation to a long-running tax dispute. Bank of New Zealand said it is likely to appeal the decision, which relates to amended tax assessments for six structured finance transactions with offshore parties between 1998 and 2005. The amount of tax in dispute totaled NZ$416 million. The bank could also be liable for interest of NZ$238 million as of June 30.

Administrators representing Lehman Brothers Holdings Inc.'s main European unit have set forth a plan to return about $13 billion in client funds that have been in legal limbo since the investment bank collapsed last September, The Wall Street Journal reported. Under the U.K. court filing made Wednesday, roughly 1,000 clients still owed money by Lehman's European arm have until the end of 2009 to submit their claims. The plan, which requires court approval, targets the first quarter of 2010 for those assets to be returned.

China's Ministry of Commerce on Wednesday played down reports that it is at odds with the economic planning agency over a controversial deal for a little-known Chinese company to buy GM's Hummer unit, Reuters reported. A politically connected source told Reuters that the NDRC seemed to oppose the deal, due partly to environmental concerns about the fuel-hungry Hummer car and the vague plans that suitor Sichuan Tengzhong Heavy Industrial Machinery has for the brand.

Korean banks will execute restructuring on a total of 113 small- and medium-sized firms, The Korea Times reported. The Financial Supervisory Service announced Wednesday that banks selected 77 to go through a workout program, while the other 36 will be driven out of the market. The creditor banks completed the first round of review on credit risks on 861 mid-tier companies with bank loans between five and 50 billion won. Among them, 13.1 percent, or 113, are set to go through restructuring.

After quitting his job as a senior engineer at Chrysler to join China's fledgling domestic auto industry, Frank Zhao had a stark premonition. “I saw the end of Detroit," says 45-year-old Mr. Zhao, who now supervises 1,200 engineers building a new generation of vehicles for Geely Holding Group Co., one of China's top-selling brands. Geely, with a group of financial backers, is now considered a front-runner in the bidding for Ford Motor Co.'s Volvo unit, The Wall Street Journal reported. A decision could come in the next several weeks, according to people familiar with the situation.

Parents dismayed by the closure of Queensland's only hospice for terminally ill children say they have been left in limbo, The Australian reported. Zoe's Place, one of only three children's hospices in Australia, went into liquidation after a creditors' meeting yesterday. It was closed indefinitely on Monday. SV Partners, which is heading the liquidation, says all children receiving support from Zoe's Place have been placed with alternative service providers. But some parents dispute this.

A summit of the Non-Aligned Movement opened at Egyptian Red Sea resort town Sharm El-Sheik Wednesday with a call from Cuban President Raul Castro for a new international financial system to shield developing nations from the global recession, The Associated Press reported. The new system, he said, must give developing countries "preferential treatment." He did not elaborate. U.N.

The holding company of Northland avocado oil producer Olivado is in receivership after failing to secure new funding arrangements following a management bust up. Auckland firm PKF Corporate Recovery & Insolvency has been appointed as receiver for Olivado Holdings Ltd, which operates Olivado New Zealand Ltd, Olivado Kenya (EPZ) Ltd and Olivado USA Inc. Those firms will continue trading and are not in receivership, a spokeswoman for Olivado said.