A round-up of today's other business news, in brief

Nortel in talks on possible bankruptcy

Nortel Networks, North America's largest maker of phone equipment, is working with Lazard Ltd and law firm ClearyGottlieb Steen Hamilton on options, including a possible bankruptcy filing, according to people familiar with the situation.

Nortel said it engaged advisers to plot strategy, and is striving to improve its financial footing.

Lazard, the investment firm led by Bruce Wasserstein, and James Bromley, a lawyer at Cleary, will help decide whether bankruptcy is the best option, according to the people, who declined to be identified. The company employs 255 people in Galway. - (Bloomberg)

KBC to meet with union

Banking group KBC, which owns KBC Ireland (formerly IIB Bank), said it would meet union representatives to discuss financial and economic conditions, leaving union leaders wondering if job cuts are in store.

"We are going to look in a proactive way at how we can, let's say, safeguard the strong financial position of KBC in view of the worsened economic conditions that we see around us," KBC spokeswoman Viviane Huybrecht said.

She declined to say whether KBC and the union representatives would discuss job cuts. However, union leader Stefaan Decock said he expects talk of job cuts to be on the agenda.

Virgin in talks with Lufthansa

Virgin Atlantic confirmed it is holding talks with Lufthansa "regarding the future" of UK carrier BMI, which the German airline now controls.

Virgin said the discussions "may or may not lead to an agreement" and a further announcement would be made "in due course".

In October, Lufthansa said it had taken a controlling 80 per cent stake in BMI - formerly British Midland Airways - after buying founder Sir Michael Bishop's 50 per cent share.

Lufthansa held a 30 per cent stake in BMI before adding to its shareholding in last October's £318 million deal. The remaining 20 per cent stake in BMI is held by Scandinavian airline SAS. -(PA)

German economy 'to shrink by 2%'

The German economy will shrink 2 per cent next year, the biggest annual contraction since the second World War, the Essen-based RWI economic institute said.

The RWI, which helps prepare twice-yearly economic reports for the government, lowered its outlook yesterday from a prediction of 0.7 per cent economic growth made in September.

Employment and tax revenue in Europe's biggest economy will decline, the institute said. The financial market crisis was having a much stronger effect on the global economy than was conceivable earlier. - (Bloomberg)