Oilsands Quest Inc., which explores for oil in sand deposits in western Canada, is seeking protection from its U.S. creditors and shareholders, Dow Jones Daily Bankruptcy Review reported. Oilsands, which once did business as CanWest Petroleum Corp., sought the protection of a Canadian court last November. The Calgary, Alberta, company is now asking the U.S. Bankruptcy Court in Manhattan to recognize the Canadian proceeding and extend its protection to the company in the U.S., where it faces three shareholder lawsuits.

Mexican glass maker Vitro SAB said Tuesday that a court in Mexico has approved its debt restructuring, but that it expects certain of its bondholders who have fought the deal to continue efforts against the plan, Dow Jones reported. In a press release, Vitro said a judge in Monterrey approved the proposed restructuring put forward by the conciliator in the case. The restructuring of $1.5 billion in third-party debt has caused controversy among bondholders, as it involves Vitro voting on an additional $1.9 billion in intercompany debt to secure the majority needed for approval.

Canadian foamer Domfoam International Inc. has filed for bankruptcy protection in the US after flagging sales and a million-dollar fine over price-fixing led the company into insolvency, PlasticsNews.com reported. Domfoam filed for Chapter 15 protection in the U.S. Bankruptcy Court in Toledo, where it faced more than a dozen lawsuits over the inflated prices it charged for its foam that goes into carpet underlay, furniture and bedding, according to a report from Dow Jones.

The International Monetary Fund warned on Tuesday that global growth prospects had dimmed as the sovereign debt crisis in the euro zone entered a “perilous new phase,” the International Herald Tribune reported. Releasing quarterly updates of three reports on the outlooks for the economy, debt and global financial stability, the fund cut its estimates of global growth this year to 3.25 percent, from the 4 percent it forecast in September, on “sharply escalated” risks emanating from Europe.

Retailer Hart Stores Inc. said Quebec Superior Court has authorized a filing under the Companies’ Creditors Arrangement Act (CCAA) calling for payments totalling $6 million over three years to monitor RSM Richter Inc., The Montreal Gazette reported. The money would be for distribution to creditors, who can accept their pro-rata share or a lump sum equal to the lesser of the value of their claims or $1,000. A meeting of creditors to vote on the proposal is expected in February. If creditors approve, it will then go to Quebec Superior Court for ratification.

The International Monetary Fund has asked its member countries for an extra $500bn in firepower to combat the world’s spreading fiscal emergencies, which it estimates will generate demand for bail-out loans totalling $1tn over the next two years, the Financial Times reported. The estimate was presented by Christine Lagarde, IMF managing director, to the fund’s executive board this week, according to people familiar with the discussions, and would most likely be financed by voluntary ad hoc loans rather than mandatory contributions. The IMF currently has $387bn in available resources.

Struggling Catalyst Paper Corp. has received the go-ahead from a court in British Columbia to begin a planned restructuring, while at the same time filing for protection from creditors in the United States, The Globe and Mail reported. The Richmond, B.C.,-based company said Wednesday a B.C. court had issued an initial order under the Canada Business Corporations Act to begin the restructuring process. The plan would see bondholders take control of the firm. It would also reduce its overall debt by $315.4-million and cut annual cash interest payments by $25.5-million.

Moody's Investors Service downgraded Catalyst Paper Corp. on Tuesday after the company signed a deal to significantly cut its debt under a recapitalization plan that will see its bondholders take control of the firm, CanadianBusiness.com reported on a Canadian Press story. The agency downgraded Catalyst to Ca from Caa3 and its senior secured notes to Caa3 to Caa2. The company's senior unsecured notes were downgraded to C from Ca. Under the Moody's rating system, anything less than BBB is considered too risky for conservative fund managers such as pension plans.

Sino-Forest Corp., the Chinese timber company fending off allegations of fraud, said it reached a waiver agreement with bondholders, reducing the risk of bankruptcy, Bloomberg reported. Holders of a majority in principal of its senior notes due 2014 and 2017 agreed to waive the default arising from the company’s failure to release its third-quarter financial results on time, Hong Kong- and Mississauga, Ontario-based Sino-Forest said today in a statement.

The number of failed companies is expected to rise by 3 percent globally this year, led by Europe, under the weight of an economic slowdown and tighter monetary and budgetary policy, credit insurance company Euler Hermes said in a report, Reuters reported. Failures will likely increase by 12 percent in the euro zone, including a 19 percent rise among Mediterranean countries that have been "very weakened by the crisis", Euler Hermes Chief Economist Ludovic Subran said. Euler Hermes economists expect global gross domestic product growth to slow to 2.7 percent this year from 3 percent in 2011.