Luxembourg

Europe’s recession deepened more than estimated in the fourth quarter after companies scaled back production and consumer spending declined. Gross domestic product in the euro region declined 1.6 percent from the previous three months, the most in at least 13 years, the European Union’s statistics office in Luxembourg said today, revising down a March 5 estimate of a 1.5 percent contraction. Investment plunged 4 percent and household spending fell 0.3 percent. From a year earlier, GDP shrank 1.5 percent, the only full-year drop on record.

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.

The European Commission said on Friday that it had launched an in-depth investigation into the restructuring of Belgian-French financial group Dexia, Reuters reported. The Commission said in a statement it intended to make sure the restructuring plan would guarantee the long-term viability of the group, hit hard by the financial crisis. But the executive arm of the 27-nation European Union also authorised guarantees worth $16.9 billion from the Belgian and French governments to aid in the sale of FSA, the bank's U.S. subsidiary.

Swiss bank UBS AG said it has appealed a recent ruling by a Luxembourg court ordering it to reimburse a French fund-management company €30 million ($38.6 million) that had been invested with New York financier Bernard Madoff, The Wall Street Journal reported. UBS is appealing the ruling because it doesn't agree with "the decision's rationale," according to a UBS spokeswoman. The French fund-management firm, Oddo & Cie.--which has already received the €30 million--said it had been notified of the appeal.

Belgium is scrambling to secure the planned sale of troubled banking group Fortis NV to BNP Paribas SA just days ahead of a shareholder vote after the largest shareholder, a Chinese insurer, said Sunday that it will vote to block the deal. The decision by China's Ping An Insurance (Group) Co. is a blow to the Belgian government's plans and the latest sign of growing activism by Chinese investors who took stakes in Western banks last year that have since turned sour, The Wall Street Journal reported.

Bankrupt Lehman Brothers Holdings Inc.’s affiliate Luxembourg Residential Properties Loan Finance filed for bankruptcy court protection in New York, Bloomberg reported. The Chapter 11 petition lists assets and debt of more than $1 billion each. According to court documents, the Luxembourg-based company is affiliated with Lehman Brothers and seeks to be consolidated with Lehman’s bankruptcy case. Luxembourg Trading Finance S.a.r.l. owns 100 percent of the affiliate’s equity, according to court documents. Lehman filed the largest bankruptcy in history on Sept.