Headlines

Kuwait's largest investment bank says it is in default on the majority of its debt, the Canadian Press reported. The announcement by Global Investment House on Thursday marks another blow for the firm, which had been meeting with creditors about restructuring almost US$3 billion in loans. Global said as a result of a capital repayment default in December, it was "in default on the majority of its financial indebtedness." In December, two international agencies had downgraded its credit rating on default worries after Global missed the Dec. 15 repayment of a maturing $200 million loan.

The CityCargo project, which envisaged using Amsterdam's tram network to supply shops and businesses, has gone into receivership, although receiver Joris Lensink and Veolia are investigating the possibilities to revive the project. The city council has said it sees potential in the project only as an unsubsidised commercial operation, while the chamber of commerce questioned the extra transhipment and the tariffs, the Railway Gazette reported. Read more.

The Bangko Sentral ng Pilipinas (BSP) has placed two more rural banks under the receivership of the Philippine Deposit Insurance Corp. (PDIC) after declaring a bank holiday, GMANews reported. Rural Bank of Bacolor and the Rural Bank of Sta. Rita declared bank holidays in the past two weeks due to their inability to meet the requirements of excessive withdrawals. BSP deputy governor Nestor A. Espenilla earlier clarified that while both the Bacolor and Sta. Rita banks have related owners, they are not connected with the 14 lenders earlier placed under government receivership.

British music and entertainment retailer Zavvi will immediately close 22 stores and cut 178 jobs, the collapsed company's administrators said Thursday. Administrators at Ernst & Young, appointed to run the company after it filed for bankruptcy protection on Dec. 24, said they hoped to keep the company alive but it was "no longer possible to support continued trading across all of the Zavvi stores,” the Associated Press reported.

China has bought more than $1 trillion in American debt, but as the global downturn has intensified, Beijing is starting to keep more of its money at home, a shift that could pose some challenges to the U.S. government in the near future but eventually may even produce salutary effects on the world economy, the International Herald Tribune reported. The declining Chinese appetite for U.S. debt, apparent in a series of hints from Chinese policy makers over the past two weeks, comes at an inopportune time.

Glitnir Banki HF, the first of three major Icelandic banks to file Chapter 15 petitions following the country's financial crisis, won permission Tuesday to receive bankruptcy protection of its U.S. assets, Bankruptcy Law360 reported. Read more. (Subscription required.)

Litigators from the London office of Weil, Gotshal & Manges have been retained by Kaupthing bank for an expected civil suit against the British government, The AmLaw Daily reported. The Reykjavik-based bank, which was nationalized in October, claims that it collapsed because U.K. authorities forced its British subsidiary into bankruptcy at the height of the banking crisis. Read more.

The head of Indian outsourcing firm Satyam Computer Services resigned on Wednesday, disclosing that profits had been falsely inflated for years and sending its shares tumbling nearly 80 percent, Reuters reported. India's biggest corporate scandal in memory threatens future foreign investment flows into Asia's third-largest economy and casts a cloud over growth in its once-booming outsourcing sector. The news sent Indian equity markets into a tailspin, with Bombay's main benchmark index tumbling 7.3 percent in a firmer session for world markets and the Indian rupee fell.

Lyondell Chemical filed for bankruptcy protection citing waning demand for its products and asked for court approval of an $8 billion loan to help fund operations while it reorganizes, Bloomberg reported. The Chapter 11 filing yesterday was precipitated by a “dramatic softening in demand” as well as “unprecedented volatility in raw materials costs,” parent LyondellBasell Industries AF said in a statement. Lyondell Chemical listed $27.1 billion of assets and $19.3 billion of liabilities in the filing yesterday in U.S. Bankruptcy Court in New York.

According to a recent study conducted by Asian Banker Research, Malaysia is listed fourth in the Asia Pacific region's most creditor-friendly bankruptcy regimes where creditors can expect to recover more than 80 cents in the dollar of assets they are owed, the Malaysian national news agency reported. The findings of the study released today said Singapore and Japan were Asia Pacific region's most creditor-friendly bankruptcy regimes where creditors could expect to recover more than 90 cents in the dollar. Taiwan came third with a similar rate of recovery with Malaysia.