Headlines

Nortel Networks Corp CEO Mike Zafirovski was forced on Thursday to defend his company's decision to pay executives millions in retention bonuses even as the insolvent telecom equipment maker decided to stop paying severance to many laid-off workers, Reuters reported. Nortel has decided -- with court approval -- to pay out about $45 million in bonuses for close to 1,000 employees, despite its filing for bankruptcy protection in January. It had previously argued that the bonuses were needed if the company's restructuring was going to be successful. Nortel has a total of about 30,000 employees.

Air Canada has bought itself some breathing room after hammering out tentative agreements on pension funding with its employees, but observers say it still may not be enough to keep the country's largest airline out of bankruptcy protection, the Toronto Star reported. The airline reached tentative deals with its five biggest unions this week that include a moratorium on pension payments for 21 months, with four of the five unions also agreeing to wage freezes over the same period. As well, the agreements call for Air Canada to raise $600 million in financing.

Private bank Sal. Oppenheim is considering a sale of its stake in bankrupt German retailer Arcandor, a source close to the bank said on Wednesday. The bank and its holding company will decide in about three months' time whether to keep its stake and inject more money or to exit the position, depending on the outcome of the assessment by the insolvency administrator, the source said. German newspapers on Wednesday also said the bank was considering a sale. The bank declined to comment. Oppenheim Holding and its bank Sal. Oppenheim together own 28.6 percent of Arcandor.

Petcetera, the leading pet supplies superstore in Canada, has gone out of business, CTV reported. The British Columbia-based company filed for bankruptcy on Tuesday after an unsuccessful restructuring bid. Petcetera was founded in 1997 in Richmond, B.C. In March, the company revealed that it would seek protection from creditors under the Bankruptcy and Insolvency Act.

A senior Swedish government official said on Tuesday it remained unclear whether Sweden would need to make guarantees for European Investment Bank financing in support of a deal to sell General Motors unit Saab. GM Europe said earlier on Tuesday a preliminary agreement had been reached to sell Saab to sports car maker Koenigsegg. "We do not yet know if Koenigsegg group will need loan guarantees or not," Joran Hagglund, state secretary for Sweden's industry ministry, told Reuters. GM Europe did not disclose terms but said the sale involved expected financing that would be guaranteed by Sweden.

Porsche Automobil Holding SE said Wednesday that the company's owner family backs its talks with Qatar over taking a stake in the Stuttgart-based company, dismissing a German media report published earlier Wednesday, Dow Jones reported. "The family unanimously supports the talks with an investor," Porsche said in a statement, adding that there was no family meeting at which Ferdinand Piech allegedly hindered a decision for Qatar to take a stake. Financial Times Deutschland reported earlier Wednesday that the planned deal with Qatar was at risk after Piech intervened at a family meeting.

Bankrupt German retailer Arcandor has filed for insolvency of further 15 business units affecting another 6,700 staff, it said on Wednesday. Its roughly 53 percent stake in Europe's second-largest travel company Thomas Cook, its home shopping channel HSE 24 and the specialty mail order companies of its Primondo subsidiary are not affected by the filing, it said. Read more.

The Commonwealth Bank has been forced into a embarrassing backflip over its involvement in the $3 billion collapse of Queensland financial planning firm Storm Financial earlier this year, The Australian reported. After initially defending its role as a margin lender to thousands of Storm clients, CBA chief executive Ralph Norris said today the bank was “not proud of our involvement in some of these issues”. The bank, which provided margin loans to about 2500 Storm clients, admitted it made mistakes in the way it lent money.

The Canadian Press reports that Canwest Global Communications newspapers' unions were asked discuss concessions as the company faces restructuring to cope with debt of C$3.9 billion. In a copy of a provided to the Canadian Press by the company, Canwest Newspaper Operations President and CEO Dennis Skulsky suggested a 5% wage cut for all Canwest newspaper employees would result in $C20 million in savings a year and could help the company avoid bankruptcy.

Swedish car maker Koenigsegg Group AB has reached an agreement to acquire General Motors Corp.'s Saab Automobile AB unit for an undisclosed sum, the companies said Tuesday. Saab was granted creditor protection in Sweden Feb. 20 and GM, also in bankruptcy protection, said it wanted to offload the unit by the year's end. The sale, expected to close by the end of the third quarter of this year, includes an expected $600 million funding commitment from the European Investment Bank guaranteed by the Swedish government, the companies said in a statement.