Headlines

Danish domestic airline Cimber Air said Thursday it has taken over key parts of bankrupt budget airline Sterling Airways A/S for an undisclosed amount, the Associated Press reported. The airline said it bought the Icelandic-owned airline's name, operation certificate and Web sites, but had not taken over the aircraft or the staff. Sterling, which is based in Denmark, filed for bankruptcy on Oct. 29.

The banks that have bailed out Babcock & Brown are likely to end up owning a significant chunk of the debt-laden asset-management group as it seeks to convert a short-term rescue package into a more financially secure future, The Sydney Morning Herald reported. B&B will get a $150 million injection of new loans to tide it over until the end of December next year, but has little more than four weeks to come up with a radical overhaul of the group's structure to ensure that it survives on a longer-term basis.

Prime Minister Gordon Brown threw a lifeline to people in jeopardy of defaulting on their mortgages, saying Wednesday that homeowners who lose their jobs or suffer a sharp loss in income will be allowed to defer mortgage interest payments for up to two years, the Washington Post reported. Brown said eight major British lenders, which represent 70 percent of all outstanding mortgages, have agreed to his plan to stave off massive home repossessions as recession takes hold and job losses mount.

British furniture and accessories chain The Pier has gone into administration, it said on Thursday, becoming the latest casualty of the retail downturn, Reuters reported. Accountancy firm Mazars was appointed administrator to the retailer, which was continuing to trade. The Pier, owned by Icelandic group Lagerinn, operates 31 stores and 17 concessions in the UK, employing 400 staff. Many British retailers are struggling with intense competition and a downturn in consumer spending.

The Folio Hotels group has called in administrators following a sharp downturn in business, the BBC reported today. The Swindon-based company has 36 hotels throughout the UK and a turnover of about £70m. Administrators MCR are reviewing the financial position of the company with a view to selling the business as a going concern. The group employs 2,000 people and its establishments include the Redwood Hotel and Country Club in Bristol and The Madison in Swindon. Read more.

Entrepreneur Theo Paphitis said on Thursday he had pulled out of the running to buy Woolworths' sweets-to-DVDs retail business, but talks between the administrators, Deloitte, and other suitors are continuing, the International Herald Tribune reported. “Unfortunately, the constituent parts of Woolworths are more valuable than the whole," Paphitis said. Last week Woolworths Group became Britain's most high-profile victim of the consumer slowdown so far when its retail business and Entertainment UK (EUK) wholesale distribution operation were placed into administration.

Ian Rau, co-founder of failed Geelong financial company Chartwell Enterprises, who fled to Queensland in April as angry creditors closed in, has emerged from hiding to declare himself bankrupt, The Age reported today. Mr Rau, who appeared to accumulate a fortune when running Chartwell, filed for a bankruptcy under a debtor's petition on Wednesday. His trustee in bankruptcy is Jason Bettles of the Surfers Paradise offices of insolvency firm Worrells.

New Zealand’s largest independent music retailer Real Groovy has been saved from receivership by an eleventh hour bailout partnership with Ferrit’s general manager, The National Business Review reported. Its founders have formed a new company, Fonografo, which is buying back the stock and assets of the Auckland store from receivers Corporate Finance. All stores will retain Real Groovy branding, and while operating as three separate companies there will be operational cooperation. Read more.

Reed Smith LLP on Wednesday became the latest firm to announce significant layoffs, saying that it plans to ax 115 support staff in its U.S. offices and up to 11 associates in the U.K, Bankruptcy Law360 reported. In a firmwide memo, Reed Smith said the layoffs were the result of the continuing slowdown of the economy and reduced demand for the firm's services. The layoffs represent less than 4 percent of Reed Smith's total work force. The 115 layoffs were spread across the firm's 15 U.S.

U.K. banks grappling with frozen credit markets and mortgage defaults are facing a new threat to their bottom lines: consumers unable to pay off credit-card bills and personal loans, The Wall Street Journal reported today. Britons, among the world's most indebted consumers, are increasingly struggling to make ends meet. One in six U.K. consumers say they can't handle their debts, according to a recent PricewaterhouseCoopers poll. U.K. banks are trying to limit the damage.