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.

Despite hundreds of millions of dollars in orders and enough public support and goodwill to sink a ship, Canada's oldest and most prestigious shipyard, Davie Yard, is once again floundering. And it risks going under for good if a major financial or strategic investor isn't found by Sept. 15, The Montreal Gazette reported. "We're looking for a third party to invest or to buy assets," said Pierre Laporte, a chartered accountant and bankruptcy trustee with Samson Belair Deloitte Touche, who has been in charge of the file since Feb.

Peru's Ministry for Mining and Energy said Tuesday it will begin the process of winding down Doe Run Peru's management of the country's only polymetallic smelter. Doe Run, a unit of U.S.-based Renco Group Inc., could also face insolvency and environmental proceedings against it by Peru's regulatory bodies, Osinergmin and OEFA, Dow Jones Daily Bankruptcy Review reported. Osinergmin supervises energy and mining investments, while OEFA is charged with the evaluation of environmental affairs.

Canada's BCE Inc. has agreed to pay $40 million cash and drop $500 million worth of claims to settle litigation over the collapse of Teleglobe Communications Corp., a failed subsidiary, Dow Jones Daily Bankruptcy Review reported. Documents filed with the U.S. Bankruptcy Court in Wilmington, Del., set out terms of the pact, which caps five years of litigation in courts in the U.S. and Canada. The deal means cash for bondholders of Teleglobe and a smaller pile of debt in the bankruptcy case, a product of the telecommunications industry meltdown of 2000 and 2001.

Bankrupt Canadian newsprint producer AbitibiBowater Inc said it repaid $166 million of its debtor-in-possession loan following an improvement in market conditions and operational performance, Reuters reported. In regulatory filings with the U.S. Securities and Exchange Commission, the company said it now had $40 million outstanding under the loan. AbitibiBowater also extended the DIP loan to Dec. 31, 2010, and modified certain covenants. It now has the ability to retain the proceeds from asset sales without triggering a mandatory prepayment. The amendment fee amounted to about $1 million.

AbitibiBowater Inc. is seeking to keep control of its restructuring for an extra three months so it can stay on track to emerge from bankruptcy early this fall, Dow Jones Daily Bankruptcy Review reported. The giant pulp-and-paper manufacturer is urging the U.S. Bankruptcy Court in Wilmington, Del., to extend the time in which it alone has the right to file a Chapter 11 plan of reorganization, which AbitibiBowater has already filed but is continuing to negotiate the terms of with its creditors. If the court doesn't agree to extend its exclusive plan-filing rights through Oct.