Headlines

Nortel Networks Corp. has claimed another victim: Employees on long-term disability are just learning that their benefits, which they thought were insured, may be cut off if the company does not emerge intact from Companies' Creditors Arrangement Act protection, the Financial Post reported. Nortel's imploding benefits package has put the spotlight on the problem of "administrative services only" arrangements, known in the insurance industry as ASOs.

Kazakhstan's fourth-largest bank Alliance said on Wednesday it had reached an agreement with creditors on restructuring its $4 billion debt, putting an end to months of uncertainty over its future, Reuters reported. Alliance halted debt repayments in April and has said it would have to write down $2-3 billion due to bad loans and previously undisclosed asset pledges. It has also said a failure to restructure debt would lead to its bankruptcy.

Chancellor of the Exchequer Alistair Darling pledged steps to strengthen regulation of Britain’s financial system, creating rules to make sure banks are better run, markets have greater oversight and consumers are better informed, Bloomberg reported. “Our central objective must be to ensure that -- as we come through the downturn -- we reform and strengthen our financial system and rebuild it for the future,” Darling told lawmakers in the House of Commons today. Read more.

The battle for bankrupt copper miner Asarco LLC continued this week, as the debtor urged creditors to approve a newly filed reorganization plan that reflects a revised offer from India-based Sterlite Industries Ltd., Bankruptcy Law360 reported. The sixth amended Chapter 11 plan filed Monday includes a deal to sell Asarco's assets to Sterlite, a subsidiary of London-based Vedanta Resources PLC, for $1.1 billion in cash and a $770 million promissory note.

Rio Tinto Group iron ore executive Stern Hu was detained in China on suspicion of espionage and stealing state secrets, Australian Foreign Affairs Minister Stephen Smith said. Hu, an Australian and head of London-based Rio’s iron ore operations in China, was detained on July 5, Smith said in Perth today. The executive hasn’t been charged and there wasn’t any indication allegations were business-related, he said, declining to comment on how relations with China would be affected. Three other Rio workers, all Chinese nationals, are also being held.

The world’s most affluent nations will take decades to work off the biggest buildup in debt since World War II, Bloomberg reported. The political costs may be permanent, laid bare at this week’s Group of Eight summit of leading industrial powers. Bank bailouts and recession-fighting measures will explode the debt of the advanced economies to at least 114 percent of gross domestic product in 2014, more than triple the 35 percent of the main emerging economies including China, the International Monetary Fund forecasts.

General Motors Corp. considers Beijing Automotive Industry Holding Co. "a formidable bidder" for its Adam Opel GmbH unit, whose offer could threaten an earlier bid by Magna International Inc., The Wall Street Journal reported. GM, which in recent weeks has described Magna as the front-runner to take over the European business, is increasingly attracted to the offer from Beijing Auto, which the Chinese state-owned car maker submitted last week, said a person close to GM.

Paris has set aside €100 million in stimulus funds earmarked for what the French like to call their cultural patrimony, The New York Times reported. It is a French twist on how to overcome the global downturn, spending borrowed money avidly to beautify the nation even as it also races ahead of the United States in more classic Keynesian ways: fixing potholes, upgrading railroads and pursuing other “shovel ready” projects.

Daewoo Logistics, a mid-sized South Korean shipping and logistics company, has filed for court receivership after struggling to pay back maturing debts, the Financial Times reported. The filing came after its rescue talks with Posco, the steelmaker, fell through. Daewoo was also hit hard by the failure of its deal to lease a huge tract of farmland in Madagascar, which fell through because of a military coup in the African nation.

U.S. private equity firm MatlinPatterson Global Advisors confirmed on Monday that it plans to put forward a comprehensive proposal to reorganize the businesses of bankrupt Canadian telecom equipment maker Nortel Networks, Reuters reported. MatlinPatterson, a major bondholder and Nortel creditor, said it does not believe that the proposed sale of Nortel's key wireless technology unit to Nokia Siemens Networks maximizes value for Nortel stakeholders.