United Kingdom

A Barclays PLC accounting executive said Thursday that the $45.5 billion price placed on Lehman Brothers Holdings Inc. collateral was a fair-market number reached after valuing Lehman assets, not an agreed upon discount price to sweeten the deal for Barclays, Dow Jones Daily Bankruptcy Review reported. Gary Romain, head of technical accounting for Barclays, testified Thursday in the U.S. Bankruptcy Court in Manhattan in Lehman's lawsuit accusing Barclays of arranging a "secret" $5 billion discount when it purchased Lehman's broker-dealer unit in September 2008.

A major property mogul is contesting a principal lender’s decision to write down his property portfolio by £30 million to £35 million, Bridging & Commercial reported. RT Properties was taken into receivership by the Royal Bank of Scotland on Tuesday, after the bank took over all but two of property baron Roy Thomas’ assets. The company ran into trouble after it was charged a fixed rate loan breakage of £14.8 million by RBS. Mr Thomas owned Swansea Airport and Swansea’s Dragon Hotel and Marks and Spencer store.

Net mortgage lending by U.K. banks grew at a similar pace in July from a month earlier, while nonfinancial firms paid down debt at the fastest pace since March, data from the British Bankers Association showed Tuesday, The Wall Street Journal reported. The increased rate of debt repayment by nonfinancial companies was due to still sluggish demand for finance, the BBA said. However, it comes at a time when smaller and medium-sized firms are stepping up their criticism of bank-lending practices. U.K.

Lehman Brothers Holdings Inc.'s multibillion-dollar lawsuit against Barclays PLC gets underway again this week when Barclays will call its first witnesses in the trial Monday, Dow Jones Daily Bankruptcy Review reported. Lehman sued Barclays in New York bankruptcy court over the British bank's purchase of Lehman's brokerage in September 2008, shortly after Lehman collapsed. Lehman is trying to recover more than $11 billion that it says Barclays unfairly pocketed in the deal by failing to disclose discounts it was receiving on the assets it was buying.

More U.K. budget travel companies are facing insolvency after a combination of the economic downturn, volcanic ash, bad weather and strikes resulted in a sharp fall in holiday bookings this year, Dow Jones reported. Kiss Flights, which sold holidays to Greece, Egypt, Turkey and the Canary Islands, went into administration Tuesday, the seventeenth U.K. travel company protected by a customer protection scheme to go out of business this year, according to the Civil Aviation Authority. Another 33 companies under the same scheme failed last year.

As Britain continues to haul itself out of recession, the number of companies entering liquidation in the UK dropped by almost 20 per cent in the first half of 2010, InsolvencyJournal.ie reported. Figures released by the UK's Insolvency Service last week revealed that a total of 8,140 companies collapsed in England and Wales between January and June of this year, compared to 10,005 in the same period last year – a drop of 19%. Of these figures, 2,467 were compulsory liquidations while 5,673 were creditors' voluntary liquidations.

U.K. banks and other creditors are speeding up commercial-property sales of distressed assets partly because they are concerned the recent increase in prices may be leveling off, The Wall Street Journal reported. But buyers shouldn't expect cheap property to flood the market and reduce prices. While banks will accelerate property sales, they will continue to sell assets in an orderly manner to protect prices in a recovering market, observers said. The assets coming on the market include distressed real estate taken over as well as troubled loans whose borrowers have defaulted.

Like a shipwrecked sailor on a starvation diet, the new British coalition government is preparing to shrink down to its bare bones as it cuts expenditures by $130 billion over the next five years and drastically scales back its responsibilities, The New York Times reported. The result, said the Institute for Fiscal Studies, a research group, will be “the longest, deepest sustained period of cuts to public services spending” since World War II. Until recently, the cuts were just election talking points, early warnings of a new age of austerity. But now the pain has begun.

The Duchess of York is doing "everything she can" to avoid bankruptcy as she struggles to manage debts running into millions of pounds, The Guardian reported. Sarah Ferguson has paid off all her personal debts, her spokesman said, and her business debts – some of which are disputed – were "being managed", although voluntary bankruptcy was still an option. Ferguson's money woes became public after a newspaper claimed her personal and business debts had risen to almost £5m, prompting fears in the royal family that bankruptcy was now her best option.

Bankruptcy decisions made by US courts could be enforceable in England and Wales after an important court ruling that lawyers say could have implications for former UK clients of collapsed bank Lehman Brothers and those of the fraudster Bernard Madoff, the Financial Times reported. The Court of Appeal recently ruled in the case of a trust created by Eurofinance SA that English courts could recognise overseas insolvency proceedings made by US courts. Previously US bankruptcy judgments were not enforceable in the UK unless a separate UK action had been started on the same grounds.