Headlines

If one euro-zone country, such as Spain or Portugal, appears poised to default on its debt, the currency union would likely still survive, SmartBrief reported on a story in The Wall Street Journal. While the European Central Bank cannot rescue a member country by directly lending to it, there are other options, such as having the bank buy debt of the struggling nation on the secondary market. Read more. (Subscription required.)

One Scottish firm every two days is going bust, new figures have revealed. Data compiled by accountancy firm PKF has shown that 50 firms fell into receivership or administration in the final three months of 2008, The Scotsman reported. It is triple the 17 in the final quarter of 2007 as the downturn takes its toll. Yet the figures are expected to be much worse in the first quarter of this year as many firms will have been holding on in the final months of the year in the hope that Christmas trading could help pull them through.

Qimonda AG, a unit of chipmaker Infineon Technologies AG, sought protection from creditors after failing to secure sufficient financing following a slide in memory-chip prices this year, Bloomberg reported. The company, which has 12,200 employees, said in December it would get a loan of 325 million euros ($416 million) from the German state of Saxony, Infineon and a unidentified Portuguese bank as part of a rescue package.

As Timothy F. Geithner moved closer yesterday to confirmation as U.S. Treasury secretary, he signaled a more confrontational approach toward China, bluntly stating that the new administration thinks Beijing is "manipulating" its currency and it will act "aggressively" using "all the diplomatic avenues" to change China's currency practices, The Washington Post reported.

Lithuanian carrier flyLAL, which was privatized in 2005 and counts Scandinavian airline SAS among its competitors, said on Friday it had filed for bankruptcy, Reuters reported. The indebted airline grounded its flights last weekend after failing to attract an investor. "Being unable to continue flights and without seeing any real chances to renew operations, we were forced to file for bankruptcy," CEO Vytautas Kaikaris said in a statement.

A corporate restructuring firm has criticised Australian insolvency law, saying it makes it too hard for businesses to get out of financial trouble, ABC News reported. Sydney-based Restructuring Works says its research shows the number of companies placed into some form of insolvency administration by secured creditors in the year to November was 83 percent higher than the average of the previous five years. It says the value of insolvencies reached about $13 billion in the year to September, triple the average of the previous five years.

India’s IT firms have stepped up efforts to collect payments from clients as quickly as possible as fears of default or delay in payment grow in an increasingly deteriorating environment, The Economic Times reported. The collection of receivables for top IT firms such as TCS, Infosys, Wipro and even smaller ones such as Polaris improved by five to six days on an average during the quarter ended December 31, 2008. The data released by the firms during their respective earnings calls shows a decline in the number of DSO (day sales outstanding) days or debtor days.

One of Europe’s most high profile architects, Erick van Egeraat Associates, has called in the receivers after a number of major projects were put on hold due to the credit crunch, BD reported. The sudden cancellation of work caused a cash-flow crisis at the Rotterdam-based firm, which also has offices in London, Budapest, Moscow and Prague. Law firm De Bok Roijers Gasseling was appointed by the Dutch courts after van Egeraat himself declared the practice insolvent. The practice has about 50 projects on its books from Leipzig to Budapest to Prague.

Private investor-owned Crossways Shopping Centre in Paignton, south Devon, has collapsed into receivership, Property Week reported. Paladru Service Corporation, an offshore special purpose vehicle set up by private investors, has been forced into receivership by its lender, believed to be Deutsche Bank. Paladru, which is thought to be based in the British Virgin Islands, worked with David Burke’s Oracle Group, which was development manager for the shopping centre. It is thought Paladru purchased the centre from Kenmore Property Group in 2006.

Chrysler LLC should be required to return billions of dollars in government loans if Italian carmaker Fiat takes a majority stake in the company, a New Jersey senator said Thursday. Sen. Bob Menendez, a Democrat from New Jersey, urged President Barack Obama to prevent the auto industry bailout from being used to help foreign automakers. The Bush administration provided Chrysler with $4 billion in federal loans earlier this month to help the company reorganize and the Auburn Hills, Michigan-based automaker is seeking another $3 billion.