Breakingviews

Why investors were taken in by Gowex

July 11, 2014

The scandal-hit Spanish wifi provider raised many red flags. Why were they all ignored? Because more people benefit when companies flourish, and Spain needs success stories. Gotham City, Gowex’s nemesis, did everyone a service, but its work shouldn’t have been necessary.

Gowex collapse leaves egg on many faces

July 7, 2014

The Spanish wifi provider has said its CEO admitted falsifying the accounts, days after short-seller Gotham City attacked the company. Gowex’s status as a poster child for Spanish entrepreneurialism means the fallout will go beyond increased risk aversion to junior listed stocks.

Rob Cox: Can we Grand Bargain before going bust?

May 29, 2014

Kumbaya has broken out in Detroit: Michigan’s legislature, the UAW and even JPMorgan are chipping in to help the city emerge from bankruptcy protection. While good news, it’s also a sad comment on America’s broken political system that it takes so much failure to come together.

Loss of bankruptcy card would weaken cities’ hands

August 2, 2011

Taking away the bankruptcy card would weaken the hand of U.S. cities and counties.

MF Global’s failure vindicates Volcker Rule

October 31, 2011

Adding the complex proposal to sweeping financial regulation looked like overkill to some at the time. But the bankruptcy of the brokerage run by Jon Corzine suggests otherwise. MF Global reinforces the idea that prop trading belongs where its damage to the system can be limited.

MF Global could finally help SarbOx prove itself

November 15, 2011

The Enron-inspired Sarbanes-Oxley Act helped clean up U.S. companies’ books, albeit at a cost. But approaching 10 years on, enforcers have filed few cases, despite glaring failures in the crisis. Jon Corzine’s fallen firm may at last offer a chance to test the reform’s teeth.

Double-dipping Twinkies tarnish bankruptcy process

January 11, 2012

Chapter 11 is supposed to give crippled companies a fresh start. Yet, Hostess, the maker of iconic American junk food, has gone bust just three years after emerging from bankruptcy court. Such recidivism should make investors more skeptical about the court’s cleansing power.

Apax finds French twist on bankruptcy tourism

March 6, 2012

Buyout house Apax may use French law to weaken creditors’ hands in a debt restructuring. It is risky, and may draw accusations of opportunism. But this novel twist on the way continental companies relocate to the UK to use its bankruptcy law may appeal to other buyout firms.

Lehman is back! Is the financial crisis over?

March 6, 2012

If only. Sure, the worst may be history as the ghost of the Wall Street firm finally emerges from bankruptcy. But uncertainty still obscures new rules and how another Lehman meltdown will be avoided. Worse, governments look far more enmeshed in financial markets than before.

Hedge funds show banks how to recoup loans to Gulf

March 20, 2012

Bahraini investment house Arcapita has been forced to file for U.S. bankruptcy protection after pressure from non-bank creditors – a first in the region. That won’t end “extend and pretend” debt deals, but it may deliver one of the Gulf’s first effective restructurings.