/raid1/www/Hosts/bankrupt/TCREUR_Public/010716.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

              Monday, July 16, 2001, Vol. 2, No. 137


                            Headlines

* A U S T R I A *

LIBRO AG: MVL Files for Bankruptcy

* F R A N C E *

BATA: Shoemaker Begins Bankruptcy Proceedings
MOULINEX SA: May Declare Itself Insolvent

* G E R M A N Y *

KABEL: Swedish Unit Files for Bankruptcy
TEAMWORK INFORMATION: In Recovery Talks With Investors

* I T A L Y *

FREEDOMLAND-ITN: Shares Drop 8.8%

* S W E D E N *

ERICSSON: Points Savings in Efficiency Plan
ERICSSON: Seeks Phone-Making Equipment Buyer

* S W I T Z E R L A N D *

SWISSAIR GROUP: Atraxis in Merger Talks With Lufthansa
SWISSAIR GROUP: Cargo Division Will Stay Separate
SWISSAIR GROUP: Disappointed by Belgium's Legal Action
SWISSAIR GROUP: Requires Radical Action to Resolve Issues
SWISSAIR GROUP: Signs MOU With Compass on Exchange of Assets

* U N I T E D   K I N G D O M *

BALTIMORE TECHNOLOGIES: Gets Bid Approach From Chantilley
BARINGS: Starts Trial in October
BRITISH TELECOM: Closes J-Phone Deal With Vodafone
BRITISH TELECOM: Faces Strike Threat Over India Link
CAMMELL LAIRD: Shipbuilder Cuts More Job
INDEPENDENT INSURANCE: Commission Withdraws Consent
INDEPENDENT INSURANCE: FSA Defends Attacks From French Regulator
MARCONI PLC: Faces Class Action Suit
PHOTOBITION PLC: Issues Third Profit Warning
POLAROID CORPORATION: May File for Bankruptcy
POLAROID CORPORATION: Plans to Restructure Debt
REDSTONE TELECOM: Gives Private Investors Role in Rescue Plan


=============
A U S T R I A
=============


LIBRO AG: MVL Files for Bankruptcy
----------------------------------

MedienVertriebsLogistik (MVL), subsidiary of loss-making book,
audio and video retailer Libro, has formally applied for
bankruptcy, the July 11 edition of Namnews said.

MVL, responsible for Libro's logistics in Austria and Germany,
has liabilities of 23 million schilling, compared with assets of
5.5 million schilling.

A majority of the 141 employees affected by the bankruptcy will
be transferred to the parent group.


===========
F R A N C E
===========


BATA: Shoemaker Begins Bankruptcy Proceedings
---------------------------------------------

Bata-Hellocourt, a subsidiary of Canadian shoe giant Bata, has
submitted a request to begin bankruptcy proceedings to a Metz
commercial county court in France, the La Tribune & World
Reporter in its July 11 edition said.

Company directors last week announced that Bata-Hellocourt was
insolvent.


MOULINEX SA: May Declare Itself Insolvent
-----------------------------------------

Household appliance maker Moulinex, according to the Thursday
edition of the Financial Times, is rumored that it would declare
itself insolvent once its remaining factories close on July 21.

The group's own management acknowledged that the state of its
finances is difficult and very worrying. It currently has debts
of 5 billion French francs for a turnover of 17 billion French
francs. Its equity capital has been reduced to 300 million French
francs, despite an 825 million French francs recapitalization
operation last year.

Almost three months ago, Moulinex presented a redundancy plan
that involved 4,000 jobs cuts, including 1,500 in France and
1,700 in Poland, and the closure of three French production
sites.


=============
G E R M A N Y
=============


KABEL: Swedish Unit Files for Bankruptcy
----------------------------------------

Swedish Internet consultancy Kabel New Media Stockholm AB has
filed for bankruptcy, following its parent's decision to cease
payments, the July 10 edition of Svenska Dagbladet said.

All 90 employees in Sweden will lose their jobs. Redundancy
notices had already been issued to 20 employees.

Administrator Kent Hagglund of Hagglund & Ramm-Ericson said that
parent company Kabel New Media was no longer able to finance the
Swedish unit. According to Hagglund, negotiations are ongoing
regarding the sale of parts of the company.


TEAMWORK INFORMATION: In Recovery Talks With Investors
------------------------------------------------------

Information management solutions company Teamwork Information
Management AG, according to the Financial Times on Thursday, is
in talks with two potential investors.

One of the companies was an industrial partner from the software
industry, while the other was a German group of financial
investors.

If a contract is signed on August, Teamwork will carry out an
insolvency plan with the new capital, which will lead to its debt
being paid off.

The company owes 20 million deutsche marks, but creditors will
waive 70% of the amount.


=========
I T A L Y
=========


FREEDOMLAND-ITN: Shares Drop 8.8%
---------------------------------

Last week, shares in Internet-TV company Freedomland were down
8.82% on the Italian stock market.

Financial Times & II Sole 24 Ore reported on Thursday that more
than 100,000 shares changed hands. The 65% of shares seized by
the finance police from Freedomland founder Virgilio Degiovanni
were placed under the legal supervision of company law expert
Edoardo Ricci.

Italian banks Comit, Banca Popolare di Milano and Banca Popolare
di Intra are said to have advanced funds to Degiovanni, who
offered the shares as a surety.


===========
S W E D E N
===========

ERICSSON: Points Savings in Efficiency Plan
-------------------------------------------

Telecom equipment maker Ericsson said the biggest savings in its
20 billion crown annual efficiency plan will come from
administration of R&D in mobile systems, Reuters on July 10
reported.

Launched in March, the savings scheme was as an addition to an
earlier launched 18 billion crown cost-cutting program to help
Ericsson return to the black.

The Mobile Systems would further contribute 14 billion crowns of
savings to the annual 20 billion target, with the Information
Technology unit accounting for 2.3 billion, the Multi-Service
Networks unit saving 1.9 billion crowns and corporate management
adding 700 million. Other savings of 1.1 billion will complete
the scheme.

The company's research and development (R&D) and product units
would contribute savings of 7.1 billion crowns mainly in
administrative costs. Savings on divisional and corporate
functions would produce 6.2 billion crowns annually, Information
Technology 2.3 billion and market regions 4.4 billion.

Management of market regions and divisions will report progress
and results on a monthly basis to ensure that the savings are
implemented.


ERICSSON: Seeks Phone-Making Equipment Buyer
--------------------------------------------

Ericsson is looking for a buyer for mobile-phone making equipment
worth at least $900 million following the full outsourcing of
handset production to Flextronics, Reuters' July 10 edition said.

The Swedish telecom equipment maker Ericsson outsourced since
April all mobile phone production to Singapore-based Flextronics
in an effort to cut costs and return the loss-making consumer
products division to profit.

Under the deal, electronics manufacturer Flextronics will take
over Ericsson handset facilities in Brazil, Britain, Malaysia,
Sweden and parts of the Lynchburg plant in the U.S.


=====================
S W I T Z E R L A N D
=====================


SWISSAIR GROUP: Atraxis in Merger Talks With Lufthansa
------------------------------------------------------

Swissair Group on Thursday said its subsidiary Atraxis Group, a
leading international provider of comprehensive IT solutions for
the aviation industry, is in advanced merger talks with Lufthansa
Systems Group, a premier information technology service provider.

The talks have the full support of both the Swissair Group and
Lufthansa boards.

The proposed merger would strengthen their product and service
range further and enable the new company to provide an even more
comprehensive offering to its worldwide client base.


SWISSAIR GROUP: Cargo Division Will Stay Separate
-------------------------------------------------

Swissair Group air freight division Swisscargo, according to the
July 10 edition of Reuters, will remain a separate entity within
the new structure of the aviation company.

"There are no plans to change the status of Swisscargo as a
separate entity within the framework of the Swissair Group,"
Swisscargo chief executive Klaus Knappik said.

Knappik added Swisscargo, too, would have to find cost savings as
part of Swissair's commitments to slash costs by at least 500
million Swiss francs in the second half of this year.


SWISSAIR GROUP: Company Profile
-------------------------------

Name:        SWISSAIR GROUP
             P.O. Box
             CH-8058 Zurich Airport,
             Switzerland

Phone        +41 1 8121212

Website:     www.sairgroup.com

SIC:                4512
Employees:          71,905 (2000)
Operating Revenue:  16.229 billion CHF (December 31, 2000)
Net Loss:           1,069,257,000 CHF (For the year 2000)
Total Assets:       9,059,386,000 CHF (December 31, 2000)
Total Liabilities:  8,155,445,000 CHF (December 31, 2000)

Type of Business:  Air transportation.

Note: Formerly known as the SAirGroup, the name was changed to
Swissair Group at the Shareholders' meeting on April 25, 2001.

Trigger Event: Shares dropped with the resignation of former
SwissAir CEO Katz last year. Group continued to operate in a
difficult business environment with mounting losses at its
Belgian and French operations. Early this year, chief executive
Philippe Bruggisser resigned after the board of directors halts
his plans to build an independent airline group.

CEO: Dr. Mario A. Corti
Senior Executive Officer: Wolfgang Werle
Senior Corporate Officer, CFO: Jacqualyn A. Fouse
Senior Corporate Officer, CPO: Matthias Molloeney

Auditor: KPMG

Securities:  Total Shares Outstanding: 12,613,867 (2000)

Last published in TCR-EUR on July 12, 2001


SWISSAIR GROUP: Disappointed by Belgium's Legal Action
------------------------------------------------------

Swissair Group was astonished and disappointed at the legal case
brought by the Belgian government against the Swiss airline, the
Financial Times reported on Thursday.

Swissair spokesperson Hans Klaus believes that the case has no
legal basis as the group has always respected its contracts.

Contrary to declarations by Sabena board chairman Fred Chaffart,
the Belgian company has not joined in the legal action on the
Belgian government's side, as it cannot take a shareholder to
court for not respecting its engagements.


SWISSAIR GROUP: Requires Radical Action to Resolve Issues
---------------------------------------------------------

Swissair Group on Thursday said it requires radical action to
resolve their outstanding airline participation issues.

Although the Swiss aviation group has taken the first steps in
their overall restructuring plan during the last three months,
they still need to do much to put them on secure footing.

Swissair added it has to change fundamentally a number of the
group's operating and management practices to improve efficiency
and profitability.

The effects of the new strategy should reduce the net debt over
the next two years and enhance cash generation during the same
period.


SWISSAIR GROUP: Signs MOU With Compass on Exchange of Assets
------------------------------------------------------------

Swissair Group on Thursday said it has signed a non-binding
memorandum of understanding with Compass Group on an exchange of
assets enabling the Swiss aviation group to acquire Compass' in-
flight catering business Eurest In-flight, and dispose its
Restorama, Rail Gourmet and Gourmet Nova divisions.

According to Swissair Group chairman and chief executive Mario
Corti, the planned transaction is a further step to strengthen
the airline's core businesses. The transaction enhances Gate
Gourmet's market penetration in Europe, while Eurest In-flight's
future growth will benefit from the extensive Gate Gourmet
network.  

Eurest In-flight, operating in Spain and Greece, is complimentary
to the business of Swissair's airline catering company Gate
Gourmet.

Restorama provides foodservice for clients in Switzerland,
Germany, Austria and Hong Kong.

Rail Gourmet is a leading provider of quality on-board
foodservice to customers traveling by rail in Europe. It has
operations in Spain, Switzerland, UK, Belgium and Scandinavia.

Gourmet Nova is an airport restaurant and rail station
foodservice company with activities in the UK and Finland.


===========================
U N I T E D   K I N G D O M
===========================


BALTIMORE TECHNOLOGIES: Gets Bid Approach From Chantilley
---------------------------------------------------------

Chantilley Corp Ltd has approached Baltimore Technologies PLC on
a possible combination of the two companies that may result in an
offer for the issued share capital of Baltimore, AFX News
reported on Thursday.

Baltimore's board, however, sees that the letter from Chantilley
requesting a meeting to discuss the bid proposal does not
constitute an offer for the company.

It responded to Chantilley, a British company specializing in
Public Key Encryption technology, that it is not prepared to hold
a meeting until a firm proposal has been made.

This approach comes after Baltimore chief executive Fran Rooney
resigned.


BARINGS: Starts Trial in October
--------------------------------

The multimillion-pound High Court action between Ernst & Young
against the former auditors for Barings bank expects the trial to
start on October 2, the July 11 edition of the Independent
newspaper said.

The trial was delayed in June after the bank's liquidator, E&Y,
reached a non-binding settlement with Barings' former auditors
PricewaterhouseCoopers.

The parties expect to agree to a final settlement by July 23.


BRITISH TELECOM: Closes J-Phone Deal With Vodafone
--------------------------------------------------

British Telecom on Thursday said it had closed the sale of its
interests in Japan's J-Phone regional operating companies to
Vodafone.

The 1.054-billion-euro deal follows the exercise of the option
that BT held over a 4.9% direct stake in each of the three J-
Phone regional operating companies.

This completes the sale of BT's interests in Japan Telecom and
the J-Phone group.

The proceeds are being used to reduce BT's debt.


BRITISH TELECOM: Faces Strike Threat Over India Link
----------------------------------------------------

British Telecom, the July 12 edition of The Guardian said, is
facing strike action threats unless it drops a pilot scheme to
outsource back-office functions to a joint venture partner in
India.

The Communication Workers Union, representing 75,000 BT
employees, believes the company's Project Reach experiment
represent a threat to thousands of British jobs.

The telecom giant said that outsourcing non-selling activities
would allow the group to concentrate on delivering a world-class
customer experience. Sales people would be able to concentrate on
the customer experience and selling solutions.

BT was disappointed by the union's reaction and plans to meet
with CWU representatives this week. It did not intend to drop its
outsourcing plans.


CAMMELL LAIRD: Shipbuilder Cuts More Job
----------------------------------------

Receiver PricewaterhouseCoopers announced a further 187 job
losses at the troubled shipbuilder Cammell Laird, according to
The Scotsman newspaper in its July 12 report.

The latest redundancies include 95 at Tyneside and 47 at
Birkenhead, with work at both yards due to run out at the end of
the month.

Ian Stokoe of PcW said there still remains a number of interested
parties and they were hopeful of finding buyers for the firm's
yards soon.


INDEPENDENT INSURANCE: Commission Withdraws Consent
---------------------------------------------------

The French insurance control commission has withdrawn its consent
from Independent Insurance French subsidiary, Independent
Insurance France, according to the Financial Times' report on
Thursday.

The withdrawal of consent means that those with insurance will no
longer be covered and must find insurance elsewhere.

The punishment forbids insurance companies from carrying out any
activities and forces them to declare voluntary liquidation, the
FT added.


INDEPENDENT INSURANCE: FSA Defends Attacks From French Regulator
----------------------------------------------------------------

The Financial Services Authority has reacted at criticism by
French insurance regulator La Commission de Controle des
Assurances over its handling of collapsed insurer Independent
Insurance, according to the Thursday edition of Press
Association.

The UK watchdog denies claims that it failed to act on a tip-off
by French authorities and that they were not informed on what it
already knew about Independent.


MARCONI PLC: Faces Class Action Suit
------------------------------------

The law firm of Berger & Montague, P.C. has filed a class action
suit on behalf of an investor against Marconi and two of its
principal officers in the United States District Court for the
Western District of Pennsylvania on behalf of all persons or
entities who purchased Marconi American Deposit Receipts from
April 11 through July 4, 2001.

The complaint charges defendants for falsely reassuring investors
during the class period that its revenues would rise this year,
claiming that its geographic and business mix left it relatively
immune from the economic downturn, and that is saw no need to
change its guidance.

The disclosure of Marconi's true financial condition was
devastating to shareholders. Marconi ADR's, which hit a class
period high of $12.50 on May and had closed at $7.03 on July 3,
dropped by over 50% when trading resumed. It closed on July 5 at
only $3.35 per share.

The complaint alleges that as a result of defendants' conduct,
plaintiff and other members of the class suffered damages.

The lawsuit seeks to recover losses suffered by individual and
institutional investors who purchased the Company's ADR's during
the class period at artificially inflated prices.

Those who purchased Marconi ADR's from April 11 through July 4
may contact Sherrie Savett, Esquire Stuart Guber, Esq. Kimberly
Walker, Investor Relations Manager Berger & Montague, P.C. 1622
Locust Street Philadelphia, PA 19103 at telephone numbers
888/891-2289 or 215/875-3000, through fax 215/875-5715 or visit
the website at http://www.investorprotect.come-mail:  
InvestorProtect@bm.net.


PHOTOBITION PLC: Issues Third Profit Warning
--------------------------------------------

Graphics group Photobition was again forced to issue its third
profits warning for this year due to an expected pre-tax loss for
the full year, the Thursday edition of the Financial Times said.

The group, which has debts of around 110 million pounds, also
implied that it had again violated its banking covenants.

Photobition said it still has the backing of its bankers and that
a management buyout is being arranged for the company.

However, analysts have doubts whether venture capitalists would
support the buyout led by chief executive Eddie Marchbanks and
finance director Steven Smith.


POLAROID CORPORATION: May File for Bankruptcy
---------------------------------------------

Polaroid, the company that invented instant photography, is
considering filing for bankruptcy due to massive debts,
Annanova's July 11 edition said.

Polaroid has suffered mounting losses as it struggles to
transform itself into a digital imaging company. Many investors
are also demanding action to boost its share price.

The company is exploring a variety of alternatives, but declined
to say what they are.

In June, Polaroid announced it was cutting 2,000 jobs on top of
the 950 posts laid off in February. The company also sold its
Massachusetts headquarters in the United States last year to
reduce its debts.

Polaroid's regional headquarters in Europe is based in UK. It has
other sites in France, Germany and the Netherlands.


POLAROID CORPORATION: Plans to Restructure Debt
-----------------------------------------------

Polaroid Corporation, the worldwide leader in instant imaging, on
July 11 said it has reached an agreement with its U.S. bank
lenders that it expects will maintain the company's near-term
liquidity and operational stability as it continues to implement
a series of initiatives aimed at strengthening its financial
performance.

Polaroid has retained Dresdner Kleinwort Wasserstein and Merrill
Lynch & Co. to assist the company in an exploration of strategic
alternatives, which could include an asset sale, a merger, sale
of the company, and/or a strategic partnership.

The instant imaging group added it would not make certain
upcoming interest payments on its bonds and intends to begin
negotiations shortly with its bondholders regarding a potential
restructuring of the company's debt with the objective of
developing a capital structure that will better support its long-
term business objectives.

Following negotiations with its bank lenders, Polaroid has
obtained a waiver from its U.S. lenders of certain of its bank
loan covenants through October 12, 2001, as well as a waiver of a
$19 million principal repayment that had been scheduled for
September 2001. These waivers will become effective upon receipt
of a similar waiver from Polaroid's U.K. lenders, which the
company expects to receive shortly. In addition, the company
intends to pursue negotiations with its bank group concerning a
rescheduling of its bank credit facilities.

The company intends to initiate discussions with its bondholders
promptly to pursue a consensual restructuring of its unsecured
debt. Dresdner Kleinwort Wasserstein and Zolfo Cooper LLC have
been retained to assist the company in the negotiations. These
will be detailed on Wednesday when the company reports on its
second quarter financial results.


REDSTONE TELECOM: Gives Private Investors Role in Rescue Plan
-------------------------------------------------------------

Redstone Telecom has surrendered to pressure from private
investors by adapting its restructuring proposals to provide a
larger role for small shareholders.

The company, according to the July 12 edition of The Guardian,
added a rights issue to the placing and open offer it announced
last month. It planned to issue 2.2 billion shares at 1p each to
institutions and 4 million penny shares to all other investors.

The Redstone Action Group threatened to vote against the rescue
plan at an EGM later this month and send the company into
bankruptcy with the loss of 450 jobs.

However, Redstone said all shareholders would be given the
opportunity to buy up to 4 million extra penny shares, provided
the initial open offer is oversubscribed.

                             *************

      S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter -- Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Trenton, NJ
USA, and Beard Group, Inc., Washington, DC USA. Kimberly MacAdam,
Salve M. Mordeno and Ma. Cristina D. Pernites, Editors.

Copyright 2001.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is $575 per half-year, delivered
via e-mail.  Additional e-mail subscriptions for members of the
same firm for the term of the initial subscription or balance
thereof are $25 each.  For subscription information, contact
Christopher Beard at 301/951-6400.


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