Headlines

Nortel Networks Corp. shouldn't be allowed to ignore parts of its contract with the Canadian Auto Workers union, as it did when severance and other payments to former employees were cut off the day it got creditor protection, a CAW lawyer asserted Tuesday. While Nortel noted that severance and other post-employment payments have been frequently suspended by companies when they're under the Companies' Creditors Arrangement Act, the CAW called on an Ontario judge to order Nortel to make the payments, The Canadian Press reported.

U.S. and European banks need to raise $875 billion in equity by next year to return to levels similar to the years before the current crisis--and twice that amount to match the levels of the mid-1990s, the International Monetary Fund said. The steep funding requirements reflect a financial crisis that continues to deepen, the IMF said. The banking sector's woes have spread from the housing sector to commercial real-estate loans and emerging-market debt, The Wall Street Journal reported.

Investors who filed to push Bernard Madoff into personal bankruptcy are now seeking to have the bankruptcy case of his business’s U.K. unit, Madoff Securities International Ltd., transferred from Florida to New York, Bloomberg reported. Madoff International filed for Chapter 15 bankruptcy protection in West Palm Beach, Florida, on April 14 and sued Bernard’s brother, Peter Madoff, to recover a $200,000 Aston Martin car, according to court documents. Madoff International listed assets of as much as $500 million and debt of more than $1 billion in its bankruptcy petition.

The Reserve Bank of Australia said the nation has joined its global peers in recession, but the long-term prospects for growth remain sound, Dow Jones Newswires reported. The statement by RBA Governor Glenn Stevens that Australia's economy is shrinking matches a similar message from Prime Minister Kevin Rudd and Treasurer Wayne Swan, both of whom this week signaled Australia is headed for its first recession since the early 1990s.

The number of people claiming jobless benefits in the U.K. rose less than expected in March, but still hit its highest level in nearly 12 years, official data showed Wednesday. The data are likely to add pressure on the government to intensify efforts to tackle the deepening recession in its spring budget, to be released later Wednesday, The Wall Street Journal reported. The Office for National Statistics reported that the jobless claimant count rose 73,700 in March, compared with February's revised 136,600 increase.

The savings of about 5000 customers of New Zealand hamper company Mrs Christmas are in limbo after the business went into liquidation this morning, The National Business Review reported. In a shock move, Mrs Christmas withdrew its opposition to an application for liquidation filed by courier company Post Haste. This cleared the way for Associate Judge David Robinson to place the company in the hands of liquidators Damien Grant and Steven Khov of Waterstone Insolvency. “The evidence establishes that the defendant is indeed insolvent,” he said this morning.

A federal bankruptcy judge presiding over the restructuring of AbitibiBowater Inc., North America's largest newsprint producer, has approved $206 million in debtor-in-possession financing from investment firm Fairfax Financial Holdings Ltd. and hedge fund Avenue Investments LP, Bankruptcy Law360 reported. Judge Kevin J. Carey in the U.S. Bankruptcy Court for the District of Delaware issued an interim order on Friday granting the newsprint company's 13 first-day motions, including the request for the DIP agreement.

General Motors Corp.’s Adam Opel GmbH division will be able to survive even if the U.S. parent is forced to file for bankruptcy protection, according to a member of the German carmaker’s supervisory board. “The impression I have today is that a solution for GM, with or without bankruptcy, will no longer cause an uncontrolled implosion,” Armin Schild, an executive at Germany’s IG Metall union and a member of Opel’s supervisory board, said in an e-mailed statement to Bloomberg News in response to questions. GM, surviving on U.S.

Ottawa and Ontario, taking an increasingly active role in the negotiations between Chrysler LLC and the Canadian Auto Workers union, have ordered the two sides back to the table to get a quick agreement to slash hourly labour costs, The Globe and Mail reported. “We got a call from both the federal and provincial governments … and [they] said ‘You guys have got to get back to the table,'” CAW president Ken Lewenza said before negotiations resumed Monday afternoon. The U.S.

Faced with plunging orders, merchants across recession-wracked Spain are starting to do something that many of them have never done: cut retail prices. Prices dipped everywhere, from restaurants and fashion retailers to pharmacies and supermarkets in March, The New York Times reported. The nation’s jobless rate, already a painful 15.5 percent, could soon reach 20 percent, a troubling number for a major industrialized country.