HSBC rebel investor says US unit may need Chapter 11

Knight Vinke Asset Management (KVAM) has urged HSBC to sell or "ring-fence" its HSBC Finance (HFC) unit, which is largely made up of the Household business it bought for $14.8 billion in 2003... "We believe that HFC has an unsustainable business model and is structurally unable to support its $150 billion of debt," KVAM said in its letter, saying the business creates risk for the whole group. "In effect it adds very high credit risk to very high business risk."

And why HFC/Household is in trouble (from Wikipedia):

HSBC acquired Household International on March 28, 2003. The acquisition was controversial: Household International had, in October 2002, settled for $486 million charges of predatory lending by attorneys general in 46 U.S. states. Household International CEO William Aldinger became the highest-paid director in the United Kingdom, before announcing his departure in February 2005. After its integration with the HSBC Group Household International was merged with a subsidiary company and renamed HSBC Finance Corporation.