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Suntech Power Holdings Co., forced to put its Chinese solar unit into bankruptcy last month, began that slide into insolvency in 2009 when customers linked to the founder could not pay their bills and the company booked the sales as revenue anyway, Bloomberg News reported yesterday. Seven buyers backed by an investment firm funded by Suntech and its founder, Shi Zhengrong, accounted for 29 percent of Suntech’s uncollected bills as 2009 ended, according to correspondence between the solar company and the U.S. Securities and Exchange Commission. Those customers had not yet received enough money to proceed with their projects and Suntech, once the world’s largest solar-panel maker, gave them more time to pay, the letters show. The SEC correspondence provides clues to Suntech’s prospects and a road map to business practices that left the company vulnerable to a 560 million-euro ($720 million) fraud and a $541 million bond default.

Bahrain-based Arcapita Bank, the first Gulf company to file for bankruptcy in the U.S. under chapter 11, said on Saturday that it had submitted a plan to reorganize the company, Reuters reported yesterday. The investment firm filed for bankruptcy in New York in March and was given court approval in November to take out a $125 million loan to provide funding while it restructured its debts. Arcapita's case is being closely watched in the Gulf, where companies have little recourse to dealing with insolvency in an orderly fashion. However, analysts have said few other bankrupt Gulf companies are likely to follow Arcapita in seeking chapter 11 protection because they would need to prove strong business links to the United States.

The stock of Royal Bank of Scotland Group Plc fell 6 percent, the most in four months, as U.S. authorities push for criminal charges in the probe into allegations that Britain’s biggest publicly owned lender tried to rig interest rates, Bloomberg News reported yesterday. The U.S. Justice Department has extended talks to press the Edinburgh-based bank for a guilty plea in any settlement. RBS may pay about 500 million pounds ($786 million) to U.S. and U.K. authorities to settle the claims as soon as next week. The fine would be the second-largest levied by regulators in their investigation into allegations that traders at the world’s biggest lenders manipulated submissions used to set the London interbank offered rate. UBS AG, Switzerland’s biggest lender, paid a $1.5 billion fine in December and its Japanese unit pleaded guilty to one count of wire fraud in the U.S. in its December settlement.

Global central bank chiefs gave lenders four more years to meet international liquidity requirements and watered down the measures in a bid to stave off another credit crunch, Bloomberg News reported today. Banks won the delay to fully meet the so-called liquidity coverage ratio (LCR) following a deal struck by regulatory chiefs meeting yesterday in Basel, Switzerland. They will be able to pick from a longer list of approved assets including equities and securitized mortgage debt as they seek to build up buffers of liquidity for use in a financial crisis. Banks and top officials such as European Central Bank President Mario Draghi pushed for changes to the LCR, arguing that it would choke interbank lending and make it harder for authorities to implement monetary policies. Lenders have warned that the measure might force them to cut back loans to businesses and households.

An American company that lost out in its bid for the assets of failed, federally backed battery maker A123 is appealing a judge's decision last week to sell the company to a Chinese competitor, The Washington Times reported yesterday. The sale of A123 Systems to Chinese-based Wanxiang has prompted critics in Congress to urge the federal government to intervene and block the sale on national security and other grounds. Milwaukee-based Johnson Controls filed its appeal with the U.S. Bankruptcy Court in Delaware early Monday, saying that the company should have been paid a so-called breakup fee and expense reimbursement in the deal selling A123. The company also said that it is ready to make another bid for A123 if the deal with Wanxiang falls apart, which remains a possibility. Sens. Chuck Grassley (R-Iowa) and John Thune (R-S.D.) issued a joint statement last week calling for a "full review" of the bankruptcy transaction by the federal government. "In the end, the taxpayers will be left having to repay interest to China for a business that a Chinese company now owns," the lawmakers said.

Chinese automotive equipment giant Wanxiang has already given up a lot in its $256.6 million winning bid to take over bankrupt U.S. battery maker A123, SeekingAlpha.com reported Sunday. Not only has it said goodbye to A123's U.S. government work, it has lost the remaining $120 million or so of a $249 million Department of Energy grant that's helped build A123's lithium-ion factories in Michigan— plants that Wanxiang says it will keep open. But political opponents of A123's sale to a Chinese company are saying that may not be enough. Even A123's commercial technology is inextricably linked back to its federally funded work with partners like DOE and the Department of Defense, they say. That could allow Wanxiang to develop military applications based on A123's U.S.-funded technology, it is claimed—and that's enough reason to block the sale. These are some of the issues facing the Committee on Foreign Investment in the U.S. The committee chaired by Treasury Secretary Tim Geithner is in charge of deciding just what parts of a proposed sale of A123's assets and intellectual property might constitute a national security risk. This week, the group began a 45-day review of the sale, with a deadline of Jan. 15, 2013, to make a decision.

Wanxiang Group, a large Chinese auto parts maker, won a high-stakes auction on Sunday for assets of A123 Systems, the bankrupt American battery maker that was a centerpiece of the Obama administration's loan program for electric vehicles, the New York Times reported Sunday. A123, which filed for bankruptcy in October after chronic losses and a damaging battery recall, said Wanxiang agreed to pay $256 million for its automotive and commercial operations, including its three factories in the United States. But the sale excludes A123's business with the U.S. government and its military contracts. That portion of the company will be sold to a small energy company based in Illinois, Navitas Systems, for $2.2 million, in order to quell concerns about transferring sensitive military technology to the Chinese. The deal, which requires approval of a U.S. bankruptcy judge, would expand Wanxiang's share of the global market for lithium-ion batteries used in new electric cars like the Fisker Karma. In addition to the approval of the bankruptcy judge, the deal requires the approval of the Committee on Foreign Investment in the United States, a broad-based group led by the Treasury Department that reviews foreign takeovers of American companies. A123, which is based in Waltham, Mass., was once one of the most promising recipients of federal loans under the Obama administration's $2 billion program to stimulate the electric-car industry in the United States. But consumers have been slow to buy electric vehicles in large numbers, crippling any chance for A123 to make a profit. It also stumbled when its first big shipment of batteries to Fisker proved defective and needed to be recalled.

A draft of changes to United Arab Emirates bankruptcy law aimed at simplifying the process and letting failing companies restructure is taking longer than expected and may not be ready until the end of 2013, Reuters reported today. The draft, which has been in the works since 2009, should enable both listed and family-owned companies that get into trouble to restructure and be rescued rather than being forced to go through lengthy bankruptcy or liquidation proceedings. The OPEC member's government hopes the new rules will reassure foreign investors and help bring in more cash from overseas. Dubai's debt crisis in 2009-2010 shone a spotlight on company restructurings but existing federal bankruptcy laws - seen as opaque and complex - remain untested in UAE courts as distressed firms prefer to settle creditor claims privately. The new law, which will allow a bankrupt company to restructure its debts and assets and have a fresh start, is roughly based on French bankruptcy legislation.

Vitro SAB, the Mexican glassmaker that has been fighting hedge fund Elliott Management Corp. and other creditors over its restructuring, lost an appeals court bid to enforce its bankruptcy plan in the U.S., Bloomberg News reported yesterday. The U.S. Court of Appeals in New Orleans ruled against Vitro today and upheld a bankruptcy court ruling that denied enforcement of the reorganization, a result that Vitro had warned would create "chaos" for the company. "Vitro cannot propose a plan that fails to substantially comply with our order of distribution and then defend such a plan by arguing that it would suffer were it not enforced," the court said. Vitro was appealing a decision by Bankruptcy Judge Harlin DeWayne Hale in June that handed a victory to holders of Vitro’s $1.2 billion in defaulted bonds. Hale refused to grant enforcement of Vitro's Mexican bankruptcy plan, saying that it was contrary to U.S. policy.

The Organization for Economic Cooperation and Development (OECD) warned yesterday that the world economy is at risk of a fresh contraction if euro-zone and U.S. policy makers fail to restore confidence by resolving their fiscal problems, the Wall Street Journal reported today. In its twice-yearly report on global economic prospects, the Paris-based think tank delivered its most urgent call to action since late 2008, when the global economy was confronting a deepening financial crisis. It urged central banks in the euro zone, Japan, China and India to provide further stimulus to their economies, and said that governments should slow budget cuts, which it said were damping growth to a greater degree than it had expected.