AbitibiBowater Inc., the world’s biggest newsprint maker by capacity, won court approval to borrow as much as $1.35 billion to help fund its exit from bankruptcy, Bloomberg reported. U.S. Bankruptcy Judge Kevin J. Carey gave the company permission to obtain the funds after no objection to the financing proposals was filed, according to court documents filed yesterday in Wilmington, Delaware. Units of JPMorgan Chase & Co., Barclays Plc and Citigroup Inc. will be the agents for a $600 million asset-based loan and each will contribute $100 million, court papers show.

Canada agreed Tuesday to pay newsprint maker AbitibiBowater more than $100 million to settle the company's claim over what it said was an illegal seizure of its assets, the Associated Press reported. The forestry giant had sought $500 million under the provisions of the North American Free Trade Agreement after Canada's Atlantic-coast province of Newfoundland expropriated some of its assets.

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.

A bankruptcy judge issued a preliminary injunction shielding Compania Mexicana de Aviacion from creditors seeking to seize its U.S. assets, Dow Jones Daily Bankruptcy Review reported. Judge Martin Glenn of the U.S. Bankruptcy Court in Manhattan ruled in the Chapter 15 bankruptcy case of airline Mexicana's main unit for international flights. The case is a companion of the unit's main bankruptcy proceeding in Mexico.

Compania Mexicana de Aviacion, Mexico’s biggest airline by passengers, agreed to return at least eight leased airplanes and a U.S. judge put off ruling on a bid to shield the company from creditors, Bloomberg reported. Mexicana agreed to return three planes to Wells Fargo & Co. One was returned in July, Arthur Rosenberg, a lawyer for Wells Fargo Bank Northwest NA, said today in an interview. U.S. Bankruptcy Judge Martin Glenn in Manhattan today postponed ruling on Mexicana’s request for a preliminary injunction barring legal actions by creditors.

General Motors Co. agreed to pay employees of its European division up to €1.1 billion, or about $1.4 billion, if it fails to honor commitments to invest billions into new cars and trucks in the region through 2014, according to a regulatory filing Monday, The Wall Street Journal reported. GM said in the filing it expects to have a final deal with European labor unions in place by Sept. 30. The auto maker and unions reached tentative agreements earlier this year.

Telecom equipment maker Nortel Networks Corp., which is in the midst of selling off divisions as it works through Canadian bankruptcy, said its loss expanded in the second quarter as revenue fell 86 percent, Bloomberg Businessweek reported. The net loss in the three months to June 30 came to $1.5 billion, or $3.02 per share, compared with a loss of $274 million, or 55 cents per share, a year ago. The loss included reorganization costs of $1.4 billion. Revenue came in at $145 million, compared to $1.01 billion a year ago.

AbitibiBowater Inc. is seeking to quickly strike a deal in connection with a proposed bankruptcy-exit financing package of up to $750 million, Dow Jones Daily Bankruptcy Review reported. The pulp-and-paper company is asking the U.S. Bankruptcy Court in Wilmington, Del., to schedule an Aug. 25 hearing at which it would consider allowing AbitibiBowater to enter into agreements with Barclays Capital Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., which have agreed to manage a $750 million notes offering.

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.

A U.S. federal magistrate has shielded Nortel Networks Corp. from action by U.K. pension regulators who fear the troubled company will walk away from obligations to 40,000 retirees, leaving a $3.4 billion funding shortfall, Dow Jones Daily Bankruptcy Review reported. Recommendations issued Thursday by U.S. Magistrate Judge Mary Pat Thynge relieve the company of worry that the U.K.'s Pension Regulator will intrude as Nortel negotiates a bankruptcy exit plan, at least until a federal district judge reviews and acts on Thynge's recommendations.