Headlines

Western consumers are buying fewer luxury goods, and demand for cashmere has plunged, The New York Times reported. The painful effects of this are being felt all the way to these nearly empty plateaus of Inner Mongolia, by goatherds and factory workers and owners — showing how ripples from markets in the United States, Europe and Japan can reverberate to some of the most remote corners of the world. The problem is not just the collapse of the cashmere market, but also a government ban on Kashmir goats across much of Inner Mongolia for environmental reasons.

The World Bank said the global recession this year will be deeper than it predicted in March and warned that a flight of capital from developing nations will swell the ranks of the poor and the unemployed, Bloomberg reported. The world economy will contract 2.9 percent, compared with a previous forecast of a 1.7 percent decline, the Washington- based lender said in a report today. Growth will be 2 percent next year, down from a 2.3 percent prediction, the bank said.

Beleaguered oil and gas producer Canadian Superior Energy Inc. said Friday it will buy partner and sidecar company Challenger Energy Corp. in a paper deal valued at $77.8 million, including debt, the Calgary Herald reported. The acquisition would consolidate Canadian Superior's stake in a contentious gas field offshore Trinidad and Tobago in which Challenger holds a 25 per cent interest.

Bankruptcy petitions in Hong Kong in May jumped 54 percent from a year earlier, totalling 1,417, as the territory continued to struggle with economic recession, but they fell on a monthly basis for a second straight month, government data showed on Friday, Reuters reported. Bankruptcies in April totalled 1,490, up 56 percent from a year earlier. The number of bankruptcies in May was the lowest since January and marked only the third time since August that bankruptcy petitions, which give an indication of future bankruptcies, had fallen from the previous month.

Fraser Papers Inc. and its subsidiaries have initiated a court-supervised restructuring under Canada’s Companies' Creditors Arrangement Act and will seek similar relief pursuant to Chapter 15 of the U.S. Bankruptcy Code, Dow Jones Newswires reported. Fraser Papers, Toronto, said PricewaterhouseCoopers Inc. was appointed by the Ontario Superior Court of Justice as Monitor to assist the company through its restructuring process.

Arcandor AG’s insolvency administrator said the German retailer’s Quelle mail-order unit had its financing cut off last week, forcing him to seek alternative funding to print next season’s catalogs, Bloomberg reported. Klaus Hubert Goerg, who was appointed by a court last week, said the Quelle situation is “extremely complex,” as Valovis Bank AG cut off Quelle’s factoring, a process where companies sell outstanding invoices to a bank to secure needed funds.

The receivers of ABC Learning have sold the failed childcare operator's UK operations, Busy Bees, for an undisclosed sum, The Australian reported. McGrathNicol today said Busy Bees Group, the largest children's nursery group in the UK, was sold to Singapore's Knowledge Universe Education. The receiver said the sale of ABC's New Zealand assets was progressing well; the sale timetable had been extended following strong interest from a number of bidders.

Quebecor World Inc.'s putting off of a creditors' vote on its restructuring plan to Monday from Thursday was done merely to finalize some of the terms and conditions and is not a sign the deal is in trouble, says the company's chief restructuring officer. “We've got some momentum in terms of trying to resolve some of the outstanding items,” Randy Benson said in an interview, The Globe and Mail reported. The vote had been scheduled for Thursday for both U.S. and Canadian creditors and could have gone ahead even as talks on some of the outstanding details continued, he said.

Bulgaria should not allow large-scale unemployment and the bankruptcy of important economic sectors, minister of labor and social policy Emiliya Maslarova said yesterday at a conference devoted to employment in times of economic crisis. Mrs. Maslarova pointed out that in a situation of financial destabilization, the usual practice is to cut salaries in order to maintain a maximum number of job positions, the Standart reported. Dimitar Brankov, deputy chief of the Bulgarian Chamber of Commerce and Industry, supported minister Maslarova.

Nortel Networks Corp. sought financial aid from the Canadian government to avoid filing for bankruptcy protection but was refused, Nortel President and Chief Executive Mike Zafirovski told a parliamentary committee Thursday. The telecommunications-equipment company filed for protection under the Companies Creditors Arrangement Act in Canada in January, Dow Jones reported. Testifying before the House of Commons Finance Committee, Zafirovski said he had private discussions with Finance Minister Jim Flaherty and Industry Minister Tony Clement.