Headlines

Shinsung Engineering & Construction, a mid-sized building company, Wednesday filed for a court receivership to allow it to reschedule its debts, the Korea Times reported today. It was the first case for the construction industry that has been troubled by diminishing orders and a backlog of unsold housing amid liquidity problems stemming from the global financial crisis. Shinsung's request came after it failed to repay its debts worth 173.9 billion won ($128.5 million) to its 159 subcontractors, according to the Financial Services Commission (FSC).

As part of its response to the financial crisis, the European Commission has proposed new credit rating agency regulations that seek to eliminate conflicts of interest and ensure high-quality credit ratings, Bankruptcy Law360 reported today. The proposal would allow the EU to supervise credit rating agencies by creating a registration procedure for credit rating agencies whose ratings are used by banks, investment firms, insurance companies, pension funds and other institutions.

Germany's economy is in a recession after output fell more sharply than expected in the third quarter amid a downturn in exports, the Wall Street Journal reported today. Gross domestic product in Europe's biggest economy fell by 0.5% in the third quarter, following a 0.4% contraction in the previous quarter. Two successive quarters of contraction are a common definition of a recession. The third quarter fall in growth was much worse than market expectations of around 0.1%.

The Dubai International Financial Centre (DIFC) today released its proposed updates on the DIFC Companies Law and the DIFC Insolvency Law for public consultation, AME Info reported today. Following the consultation process, the Companies Law and the Insolvency Law will be presented to the Ruler of Dubai for enactment in accordance with Dubai Law No. 9. The Companies Law and the Insolvency Law, posted on the DIFC website, will be open for public comment until 13 December 2008. Read more.

RBC Capital Markets filed a bankruptcy petition seeking to force energy trader 1.618 Group LLC to liquidate, claiming the company owes it $33.2 million, Bloomberg reported today. The petition for Chapter 7 bankruptcy filed today in Manhattan bankruptcy court lists RBC Capital, an investment-banking unit of Toronto-based Royal Bank of Canada, as the sole petitioner. Read more.

According to Abu Dhabi Commercial Bank CEO Eirvin Knox, Abu Dhabi won't allow Dubai's state-owned companies to default on debt payments as the global banking crisis limits their access to funds, Bloomberg reported yesterday. Dubai may need help from Abu Dhabi and the United Arab Emirates government to finance a surge in borrowing that paid for the world's tallest tower, palm tree-shaped man-made islands and stakes in banks worldwide, Moody's Investors Service said in a report last month.

European companies, already in the middle of an economic downturn, face another uphill struggle as they seek to refinance $242.6 billion of maturing debt over the coming year, the Wall Street Journal reported today. With credit still scarce and expensive, Europe's large corporate-debt pile poses an unwelcome challenge to companies, which are having to pay dearly to roll over existing debt and insure against default risk, credit-ratings firm Standard & Poor's said in a report published Tuesday.

The World Bank announced plans Tuesday to step up assistance to developing countries and companies based there, essentially doubling its aid to respond to the global financial crisis, the Wall Street Journal reported yesterday. The bank plans new commitments of up to $100 billion by the International Bank for Reconstruction and Development, its primary lending institution to middle-income countries. It also is looking to generate financing of around $35 billion over the next three years for development through its private-sector arm, the International Finance Corp.

Storm Cat Energy Corporation announced that all of its wholly-owned U.S. subsidiaries filed for a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code, the International Business Times reported today. Storm Cat Energy Corporation was not included in the U.S. bankruptcy filing, nor did it file an application for creditor protection under the Companies' Creditors Arrangement Act in Canada. Storm Cat is in negotiations with its existing lenders to secure sufficient debtor-in-possession (DIP) financing.

Investors in stricken finance company Dorchester Pacific will have to wait a little longer for details of management's restructuring plan, which the company yesterday said would see them get all their money back over a three-year period, the New Zealand Herald reported today. A day after St Laurence Finance and Investments, with whom Dorchester's fate is entwined, announced details of its own imminent restructuring proposal, Dorchester's management said their plan was "now well advanced".