North America

Mexican bank Banorte said it has only limited exposure to the financial woes of Mexicana de Aviacion, the Mexican airline that filed for credit protection in Mexico and the United States this week, Reuters reported. The bank said in a statement on Wednesday that it was not a direct creditor of the struggling airline but was owed money by Mexicana's holding company. The bank said the group's credit commitments to Banorte totaled 1.576 billion pesos ($125 million) and would expire in 2014.

Debt-ridden Mexicana de Aviacion, which filed for creditor protection in Mexico and the United States this week, suspended ticket sales on Wednesday as its operating troubles deepened. Company spokesman Adolfo Crespo told Radio Formula that the airline will continue operating flights that have been already sold. A spokesman for the pilots' union told Reuters that they were expected to meet with Mexico's labor minister on Thursday in a bid to strike a deal with the company's management. The flight attendants union was not immediately available for comment.

Dubai International Capital, the private equity arm of the Gulf Arab emirate, said it will focus on bringing German aluminium maker Almatis out of bankruptcy after a long-running battle with a dissident lender ended, Reuters Africa reported. Oaktree Capital Management LP withdrew its opposition to DIC's plan to retain control of the bankrupt firm after a settlement offer was leaked. Oaktree and Dubai have been battling over the best way to refinance Almatis, which filed for bankruptcy in the United States with more than $1 billion in debt, for the past year.

The empire of Alberta's premier chocolate maker is melting after 27 years of providing high-end treats, The Calgary Herald reported. Debt problems brought on by slumping sales and an ill-timed real estate buy forced Chocolaterie Bernard Callebaut into receivership Tuesday, leaving roughly 210 employees at 30 stores and the Calgary factory and headquarters under the control of a court-appointed financial services firm. Vic Kroeger, senior vice-president with Deloitte & Touche in Calgary, said raising new capital is probably the company's "only hope" of survival.

The main unit of Mexicana on Tuesday warned it could face liquidation unless Mexico's largest airline was allowed to keep operating aircraft in the wake of its bankruptcy filing, Dow Jones reported. Compania Mexicana de Aviacion filed for bankruptcy protection in the U.S. and Mexico on Monday after failing to reach a new deal with its unions to cut costs after a period of rapid expansion. The airline continued to operate most flights Tuesday, but said in court filings that aircraft leasing companies and owners were taking steps to repossess planes.

Grupo Mexicana de Aviacion, Mexico’s biggest airline by passengers, is in talks with international investors as it considers whether its largest unit should file for bankruptcy, Chief Executive Officer Manuel Borja Chico said. Compania Mexicana de Aviacion, which is separate from the company’s low-cost Click and Link units, seeks a new labor agreement with unions to cut costs, Borja told reporters today in Mexico City. The company must improve operations before it can attract new investment, he said.

Oaktree Capital Management LP is willing to give up its fight for control of Almatis BV, a bankrupt aluminum maker, for full payment of its loans and an end to threatened legal action, according to a "confidential" court filing on Monday, Reuters reported. In a letter dated July 27 to an Almatis lawyer, Oaktree's lawyer outlined six conditions for ending Oaktree's battle with Dubai International Capital LLC over the European aluminum company.

A U.K. Court of Appeal ruled in favor of hedge funds that maintained their client money, held in the main European arm of Lehman Brothers Holdings Inc., wasn't properly protected when the investment bank collapsed, The Wall Street Journal reported. The development is the latest aspect of the complex effort to return cash and other assets to Lehman's clients after the bank failed in September 2008. Lehman's bankruptcy, with more than $600 billion in total assets, ranks as the largest U.S. corporate failure.

Canadian authorities canceled two Mexico City-bound flights from airline Mexicana de Aviacion on Thursday amid mounting concerns over the financial health of the company, Reuters reported. The flights, set to depart from Montreal and Calgary, were canceled due to a request to Canadian authorities from an unnamed creditor seeking clarification on Mexicana's debt situation, the airline said in a release.

A Kazakhstan bank's bid to use the U.S. bankruptcy court to halt an overseas legal proceeding could drag the court into disputes in which the U.S. itself has little at stake, Dow Jones Daily Bankruptcy Review reported. Kazakhstan's JSC BTA Bank says the U.S. bankruptcy court's decision to grant it Chapter 15 protection in the U.S. after it underwent restructuring in its home country last year extended a key benefit of U.S. bankruptcy law: the automatic stay that halts legal action against a debtor company.