Headlines

Bankruptcy petitions in Hong Kong rose to a more than five-year high in February as the recession in the city deepened, government data showed Friday. The government said 1,500 bankruptcy petitions from individuals and non-limited firms were filed during the month, up from 1,266 in January, Dow Jones Newswires reported. February's figure was the highest since October 2003, when 1,648 bankruptcy petitions were filed as Hong Kong was recovering from the Severe Acute Respiratory Syndrome crisis. The data come amid signs of further deterioration in local economic conditions.

Debt-laden retailer Comercial Mexicana said Thursday it has presented a new debt restructuring proposal to its derivatives counterparties, Dow Jones reported. The company didn't provide further details on the proposal, which is follow-up to a counterproposal it received last week in response to an original plan submitted in December. Comercial Mexicana defaulted on debt last October after running up massive losses on currency options and is seeking to restructure all of its debt. It had estimated its derivatives losses at $1.1 billion, but faced claims of twice as much.

Austria's banks exert an outsize influence beyond the country's borders. In the 1990s, after the fall of communism, banks based in Vienna expanded eastward and came to dominate finance in Eastern Europe. Today, however, Hungary, Romania and Ukraine--where Austrian banks nearly cornered the market--have sought emergency aid from the International Monetary Fund. Foreign investors are fleeing Eastern Europe, worried that the problems could spread. Credit-rating agencies have warned that Austrian banks are highly exposed if Eastern European borrowers trigger a wave of defaults.

UBS AG, the Swiss bank’s Luxembourg units and Ernst & Young LLP were sued over their alleged “serious faults” in the supervision of a fund that invested about 95 percent of its assets with confessed fraudster Bernard Madoff, Bloomberg reported. About 70 investors whose money was put into Access International Advisors LLC’s LuxAlpha Sicav-American Selection sued UBS, which was the fund’s custodian bank and Ernst & Young, its auditor, in a Luxembourg court, seeking compensation for their losses, Pierre Reuter, one of the lawyers, said today.

Six aviation companies, including General Electric Co's aviation subsidiary, have appealed to a Hubei court to declare a Chinese airline carrier bankrupt, Shanghai Daily reported. East Star Airlines, based in the capital Wuhan City of Hubei Province, owes 500 million yuan ($73.1 million) to other companies, including the six complainants, the West China City Daily reported today. East Star was told to suspend its services last Sunday because of unpaid loans.

Several big U.S. banks are balking at a proposed debt restructuring at AbitibiBowater Inc., a move that could force the forest products giant to file for court protection from its creditors, the Globe and Mail reported. The U.S. banks, including Bank of America, Citicorp and Wachovia Corp., hold a relatively small amount of Montreal-based Abitibi's massive $6-billion debt. But they hold Abitibi's fate in their hands, given their position as secured lenders.

Russia’s government may buy a stake in billionaire Vladimir Yevtushenkov’s Indian mobile-phone unit to help his holding company AFK Sistema pay off debt. “It’s only at the discussion stage and a lot will depend on the Indian side, which is also a shareholder in this company,” First Deputy Prime Minister Igor Shuvalov said in an interview in his office in Moscow yesterday. Sistema Shyam TeleServices Ltd. has licenses to operate in all of India’s 22 regulatory regions, which have a combined population of more than 1 billion.

Europe risks being the last region to pull itself out of recession unless it can present a united front on the economic crisis and bulk up stimulus plans, according to the head of Italy’s business lobby group. Emma Marcegaglia, president of Confindustria, told the Financial Times in a video interview that the Group of 20 summit in London next month was doomed to failure if Europe did not take a co-ordinated approach to ending the crisis and forget about side issues such as hedge fund regulation, the Financial Times reported.

The Australian government said it plans to crack down on excessive executive-pay packages and curb so-called golden handshake termination payments, prompting an angry response from business groups, The Wall Street Journal reported. Treasurer Wayne Swan said the center-left Labor government will amend the Corporations Act to require shareholder approval for any termination payments that exceed average annual base salary, which excludes additional compensation such as shares or stock options.

Policy makers in the U.K. and Germany set out plans to place a much heavier regulatory burden on banks and other financial institutions in a sign of how rules throughout Europe are likely to change in the wake of the financial crisis, The Wall Street Journal reported. In the U.K., Lord Adair Turner, chairman of the country's financial watchdog, laid out recommendations for what he called a "profound" overhaul of banking supervision that, if adopted, will mark the end of more than a decade of light regulation in one of the world's financial centers.