Headlines

Ecuador says it will formally default on a second set of bonds later this week, the International Herald Tribune reported. Finance Minister Maria Elsa Viteri says the government will default Sunday on $2.7 billion in bonds due in 2030 because it refuses to pay $135 million in interest by the end of a monthlong grace period. Viteri said in a communique Thursday that Ecuador plans to make an official proposal to debt holders this month for an "integral solution" to the defaulted bonds, which account for 32 percent of its foreign debt.

Best Theratronics Ltd. is getting a discount on a line of prostate cancer treatment products it's buying from California-based North American Scientific Inc., but the news may be one reason the latter is filing for bankruptcy protection, the Ottawa Business Journal reported. The Ottawa-based arm of the TeamBest family of medical product and service providers said it has signed a new asset purchase agreement that will see Best Theratronics paying half the sale price that was originally agreed upon when the deal was first announced in February.

Nortel Networks Corp., the Canadian phone-equipment maker that filed for bankruptcy protection in January, is in talks to sell assets to rivals, people close to the situation said. Siemens Enterprise Communications Ltd. is examining an offer for Nortel’s unit that builds communication networks for companies, said one of the people, who declined to be identified as the talks aren’t public. Nokia Siemens Networks is looking at a unit that makes wireless voice gear, another person said.

Nortel Networks Corp. is in talks to sell its two main businesses to rivals, a sign the firm could break itself apart rather than emerge from bankruptcy as planned, The Wall Street Journal reported. Much remains in flux at the Toronto maker of telecommunications equipment, which filed for protection from creditors in January. Nortel has been able to attract interest in the sale of its core wireless-equipment business and a separate unit that builds telecom systems for offices, according to people familiar with the matter. These businesses posted $6.7 billion in sales last year.

Russian Prime Minister Vladimir Putin on Thursday said Ukraine was on the verge of bankruptcy but promised Moscow would not push its ex-Soviet neighbour over the edge with high gas bills, local news agencies reported. The global crisis has battered Ukraine's economy, with industrial output down more than 30 percent year-on-year, GDP seen shrinking six percent in 2009 and its currency losing 50 percent of its value against the dollar at one point last year.

The prospect of a prolonged shutdown at Terrace Bay Pulp is looming large as the operation struggles to restructure its finances and cope with $80 million in debt, The Chronicle Journal reported. The company, a division of Buchanan Forest Products, filed Wednesday for protection from its creditors under the federal Companies‘ Creditors Arrangement Act. The 30-day protection period could be extended by an Ontario Superior Court judge.

Australia's unemployment rate hit a four-year high of 5.2 percent in February as the "global economic cyclone" tore into the job market, Prime Minister Kevin Rudd said Thursday. Rudd said the figures showed the government was right to press ahead with a 42 billion Australian dollar (US$27.3 billion) stimulus package to help cushion an economy that analysts say may have already tipped into recession, Agence France-Presse reported.

The current global financial crisis and high-profile insolvencies of well-known companies have refocused attention on the suitability of insolvency regimes, Legal Week reported in an analysis of how different European jurisdictions are handling the crisis. Although the current events have prompted calls for reform, many countries have only recently introduced changes to their insolvency regimes.

Britain's Financial Services Authority warned bankers should be "very frightened" of the watchdog, promising intrusive oversight, but warned against forming a monolithic EU supervisory body. The FSA would judge firms on the outcomes of their actions not on simple box-ticking, its Chief Executive Hector Sants said in a speech to members of Britain's financial community at Thomson Reuters offices in Canary Wharf, London. "There is a view that people are not frightened of the FSA. I can assure you that this is a view I am determined to correct.

Responding to the report that DLA Piper's United Kingdom offices have recently shed 7 to 8 percent of their partnership, a prominent New York legal consultant said that cutting deadweight at the highest levels could help firms stay afloat amid the recession, Bankruptcy Law360 reported. On Wednesday, a leaked memo revealed that up to 8 percent of DLA Piper's partners have recently left its U.K. office, Legal Week reported. The memo said that since June the London office has hired only 37 employees but lost 145, according to the report.