North America

Sunrise Records, a Canadian chain of record stores, agreed to buy most of HMV Group Plc in an auction overseen by the embattled music retailer’s administrators, fending off a rival bid by retail magnate Mike Ashley, Bloomberg News reported. Douglas Putnam, who runs Sunrise and bought HMV’s Canadian unit in 2017, will gain control of 100 stores across the U.K., KPMG LLP said Tuesday. The remaining 27 shops will be shut down, putting 455 employees out of work.

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Canada’s Supreme Court ruled on Thursday that bankrupt oil companies must clean up inactive wells, overturning lower court decisions that prioritized paying creditors and potentially raising the risks of investment in the industry, Reuters reported. The 5-2 ruling means that the Alberta Energy Regulator, which had appealed the earlier court decisions, can order the cleanup of inactive wells even when their owners have filed for bankruptcy protection. “Bankruptcy is not a license to ignore rules,” the court said in a written decision.

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Petroleos Mexicanos bonds cratered after Fitch Ratings downgraded the state-owned company to just a notch above junk, spurring a slide in sovereign debt and the peso, Bloomberg News reported. The yield on Pemex bonds due in 2027 rose 28 basis points to 7.251 percent at 1:02 p.m. in New York, after jumping as much as 40 basis points earlier in the day. Its five-year credit default swaps climbed 24 basis points to 319. Fitch cut the embattled oil producer’s long-term issuer default rating two notches to BBB- from BBB+ and maintained its negative outlook.

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Consumer insolvencies are rising at the sharpest rate since mid-2016, according to a report by CIBC Capital Markets breaking down delinquencies across various types of credit, Yahoo! Finance reported. Benjamin Tal, the bank’s deputy chief economist, found the portion of Canadians who find themselves unable to meet their financial obligations is climbing 4.5 per cent on a year-over-year basis.

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An increasing number of Canadians can’t meet their financial obligations, another sign rising borrowing costs are taking a toll on household balance sheets, Bloomberg News reported. The number of consumers seeking debt relief jumped 5.1 percent to 11,320 in November from a year earlier, the Ottawa-based Office of the Superintendent of Bankruptcy reported on Jan. 4. October and November combined saw 22,961 consumer insolvency filings, the most for those two months since at least 2011.

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The latest figures from the Office of the Superintendent of Bankruptcy Canada show the number of Canadian businesses and consumers financially going under jumped significantly in November compared to a year ago, Globalnews.ca reported. Alberta had some of the highest number of consumer insolvencies. Donna Carson, a financial insolvency trustee with MNP Ltd. Calgary, said she wasn’t surprised. “We’ve been seeing spikes in insolvencies in Alberta for the last two-and-a-half years or so,” Carson said on Friday.

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U.S. cannabis retailer Green Growth Brands Ltd. is planning to launch a hostile takeover bid for Aphria Inc. that values the Canadian marijuana producer at almost C$2.8 billion ($2.1 billion), Bloomberg News reported. Columbus, Ohio-based Green Growth plans to offer C$11 per share in an all-stock bid for Aphria, according to a statement Thursday. That’s a 46 percent premium over Aphria’s closing price on Monday.

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Tougher rules for new borrowers, rising mortgage rates and new taxes for home buyers have been put in place by Canadian regulators in recent years to tame some of the most overheated housing markets in the developed world. But they have also shut prospective homeowners out of the market, the Wall Street Journal reported. That has slowed sales in cities like Toronto and Vancouver in recent months, prompting some to call for Canada to loosen the restrictions lest they brake the economy too much.

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While 2018 was the year trade wars broke out, 2019 will be the year the global economy feels the pain, Bloomberg News reported. Bloomberg’s Global Trade Tracker is softening amid a fading rush to front-load export orders ahead of threatened tariffs. And volumes are tipped to slow further even as the U.S. and China seek to resolve their trade spat, with companies warning of ongoing disruption. Already there are casualties. GoPro Inc.
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People who make a living guiding others through bankruptcy in Canada say they’ve never been busier, Bloomberg News reported. Record debt burdens, rising borrowing costs and, in some cases, bigger payday loans are driving many Canadians to seek relief, according to several licensed insolvency trustees who spoke to Bloomberg. They say November was their busiest on record, and December -- typically a slow time of year in the insolvency trade -- hasn’t let up.

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