Lawyers handling a $9 billion class-action lawsuit against Sino-Forest Corp. will ask an Ontario judge on Friday to terminate bankruptcy proceedings involving the troubled timber company, the Toronto Star reported. When Sino-Forest, which is based in Mississauga but operates in China, sought protection from creditors under the Companies’ Creditors Arrangement Act last month, any pending legal actions were essentially put on hold.

A growing shortage of safe assets poses a new threat to global financial stability, the International Monetary Fund warned on Wednesday. Sovereign debt crises are reducing the number of governments that investors trust to issue “risk-free” bonds just as new financial regulations are increasing demand for safe securities from banks, the Financial Times reported. The report shows how reforms in the wake of the 2007-09 crisis may create new pinch points in the global financial system that could cause trouble in the future.

The global banks group that recently negotiated Greece's historic debt restructuring Monday outlined principles it believes should inform possible future privately-held government debt write-downs, Dow Jones reported. "The experience with the protracted negotiations and the scope of the Greek debt exchange have given rise to a number of issues that could usefully be discussed in the period ahead," the Institute of International Finance said in a policy letter written ahead of International Monetary Fund ministerial meetings.

Sino-Forest, the Chinese forestry company whose stock collapsed after a short-seller's fraud accusations, said on Monday that Canada's top securities regulator found that its conduct ran afoul of sections of securities law pertaining to fraud, Reuters reported. The Ontario Securities Commission made its findings known to Sino-Forest by serving the Toronto-listed company and some of its current and former executives with enforcement notices, the company said in a statement on Monday.

A group of Catalyst Paper Corp.'s first-lien noteholders will serve as stalking-horse bidder with a $275 million bid for the British Columbia specialty paper and newsprint producer if the company's reorganization efforts fail, The Deal reported. According to an April 1 monitor's report, CP Acquisition LLC, an entity controlled by the company's first-lien noteholders, is the debtor's stalking-horse bidder. Invesco Canada Ltd. owns the majority of the secured notes.

Ernst & Young LLP has resigned as Sino-Forest's auditor, days after a Canadian court granted creditor protection to the embattled Chinese forestry company and months after fraud allegations triggered a stampede out of its stock, Reuters reported. Sino-Forest's Toronto-listed shares tanked last June after a short-seller accused it of exaggerating the size of its forestry assets. The company says the allegations have paralyzed its business.

The Quebec government is threatening legal action against Air Canada over its alleged failure to comply with a federal law that requires the continued operation of maintenance services in Montreal, CanadianBusiness.com reported on a Canadian Press story. Justice Minister Jean-Marc Fournier told a news conference in Quebec City that the carrier had previously given assurances that its heavy maintenance operations would be continue to be performed in Montreal — effectively by Aveos Fleet Performance, the sucessor to a former subsidiary sold off by the airline.

Richard Chandler, the New Zealand billionaire and biggest shareholder of Sino-Forest, has hired a team to plan a rescue restructuring of the Chinese timber group after it filed for bankruptcy protection last week, the Financial Times reported. Richard Chandler Corporation, his investment vehicle, said on Monday that it had assembled a group including David Walker, an expert in the Asian forestry sector, to lead its proposal for the restructuring of Sino-Forest. “Sino-Forest faces a range of complex problems,” Mr Walker said.

Sino-Forest Corp. filed for bankruptcy protection as part of a plan that may see the Chinese timber grower company sold to bondholders, nine months after it was accused of fraud by short seller Carson Block, Bloomberg reported. The company obtained an initial order for creditor protection in the Ontario Superior Court under the Companies’ Creditors Arrangement Act, Sino-Forest said yesterday in a statement.

Toshiba Corp has decided to join the bidding race to sponsor Elpida Memory Inc's turnaround from bankruptcy, setting stage for a battle with U.S.-based Micron Technology, the Nikkei business daily said, Reuters reported. Toshiba, which believes adding Elpida's cell-phone-use DRAMs to its offerings is crucial for its survival in the chip industry, might seek financial assistance from the government-backed Enterprise Turnaround Initiative Corp of Japan, the newspaper said. Elpida Memory will soon stop accepting applications for the first round of bidding, Nikkei said.