/raid1/www/Hosts/bankrupt/TCREUR_Public/010921.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

           Friday, September 21, 2001, Vol. 2, No. 185


                            Headlines

* B E L G I U M *

LERNOUT & HAUSPIE: Court to Rule on Bankruptcy Protection Today
LERNOUT & HAUSPIE: Creditors Okay Restructuring Plan
SABENA SA: U.S. Pilots to Audit Sabena Restructuring Plan

* F R A N C E *

AIR LIBERTE: To Improve Aircraft's Safety
MOULINEX SA: Receives Separate Takeover for Moulinex and Brandt
PLEIN CIEL: Court to Examine Takeover Plans

* G E R M A N Y *

BETRIEBSMANAGEMENT GMBH: Lifeboat Company to Be Formed
BREMER VULKAN: Former Bosses Face Fraud Retrial
DAIMLERCHRYSLER: Moody's Places Outlook to Negative Review
DAIMLERCHRYSLER: S&P Puts Outlook on Credit Watch
REFUGIUM AG: Creditors Files DM400MM Claim
TEAMWORK INFORMATION: Acts Against Delisting

* N O R W A Y *

BRAATHENS ASA: Faces Liquidation Threat
ENITEL ASA: In Talks With Minister of Trade and Communications
ENITEL ASA: Tele2 Takes Over Enitel Customers

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

SULZER MEDICA: Posts CHF608.1MM First-Half Loss

* U N I T E D   K I N G D O M *

GLOBAL TELESYSTEMS: Banks Extend Waiver
INVENSYS PLC: Shares Plunge 26% on Debt Worry
J2C PLC: Chief Will Receive 3.6MM-Pound Payout
MARKS & SPENCER: French Court Dismisses Case
MARKS & SPENCER: Gal Lafayette Set to Claim M&S French Stores
MARKS & SPENCER: Japanese Firm Will Not Consider French Stores


=============
B E L G I U M
=============


LERNOUT & HAUSPIE: Court to Rule on Bankruptcy Protection Today
---------------------------------------------------------------

A Belgian commercial court will decide today whether to grant
troubled speech technology group Lernout & Hauspie Speech
Products NV bankruptcy protection, Dow Jones Newswires reported
on Wednesday.

Lernout's current temporary protection from creditors expires at
the end of September.

Lernout plans to file for bankruptcy if it fails to obtain a
binding offer for its speech and language technology division, or
SLT, by November 1.


LERNOUT & HAUSPIE: Creditors Okay Restructuring Plan
----------------------------------------------------

Lernout & Hauspie has managed to get an approval of its
restructuring plan from the majority of its creditors, the
Developer reported on Tuesday.

The Belgian speech technology group won 90% of the 150 votes cast
by creditors, but the company must still get the support from a
local commercial court to implement the plan that includes laying
off 30% of staff members and shutting down half of its plants.

The beleaguered company, which has filed for bankruptcy
protection in January, has faced an investigation for reporting
irregularities, the expulsion of the company's founders, and a
delisting from the Nasdaq exchange after losing $10 billion in
market capitalization.


SABENA SA: U.S. Pilots to Audit Sabena Restructuring Plan
---------------------------------------------------------

The US pilots association US Alpha has agreed to carry out an
audit on the restructuring plan of Belgian air operator Sabena,
the Le Soir/FT Information reported on Wednesday.

Unions and pilots from Sabena met with the US consultant to fix
the details of the investigation.

The report added that unions want the management of Sabena, which
has been negotiating to eliminate 1,421 jobs as well as some
routes and non-airline businesses, to finance a part of the
audit.


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


AIR LIBERTE: To Improve Aircraft's Safety
-----------------------------------------

The US aviation control body, FAA, has demanded French airline
company AOM-Air Liberte to modify the wiring in its McDonnell
Douglas passenger aircraft, the Monday edition of Les Echos/FT
Information said.

The fragile financial health of the French airline company could
be hit badly by the directive order. Some sources suggest that
the cost of the re-wiring operation on all Air Liberte's 29
airplanes could be as high as 305 million euros.

A French commercial court in August has selected former Air
France pilot Jean-Charles Corbet, through a company called Holco,
to take over bankrupt AOM-Air Liberte.


MOULINEX SA: Receives Separate Takeover for Moulinex and Brandt
---------------------------------------------------------------

The judicial administrators of bankrupt domestic appliance
company Moulinex SA have received offers of a separate takeover
for Moulinex and Brandt because they never truly merged, Le
Monde/FT Information reported on Wednesday.

Reports say Moulinex controls 100% of Brandt.

One possibility is that Italian group Elettro Finanziaria, the
former owner of Brandt, may take it back again.

Several companies have offered, including investment funds and
French domestic appliances company Seb.


PLEIN CIEL: Court to Examine Takeover Plans
-------------------------------------------

The Essonne commercial court in France will examine the two
takeover plans for French group Plein Ciel Diffusion, which is in
voluntary liquidation since the end of June, the Les Echos/FT
Information reported on Wednesday.

The court have asked take-over candidates Spicers France and
Sacfom to improve their offers that only include 90 of the 217
employees.

Plein Ciel Diffusion has been in difficulty since capital risk
company Apax Partners entered its capital in October 1999 only to
throw in the towel 18 months later.


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


BETRIEBSMANAGEMENT GMBH: Lifeboat Company to Be Formed
------------------------------------------------------

A lifeboat company will be formed for insolvent
Betriebsmanagement GmbH (BMG), the operating company of insolvent
retirement home group Refugium Holding AG, the Tuesday edition of
Frankfurter Allgemeine Zeitung said.

It is not known yet how many of the 50 Refugium establishments
will be transferred to the new company.

Earlier, the creditors of Refugium have approved a proposal by
the insolvency administrator to dissolve its operations with
immediate effect.


BREMER VULKAN: Former Bosses Face Fraud Retrial
-----------------------------------------------

Germany's federal prosecution court Bundesgerichtshof in
Karlsruhe has
ordered a retrial at the Bremen court for four former managers of
bankrupt shipyard group Bremer Vulkan, the Tuesday edition of
LLoyds List & World Reporter said.

The four are charged with embezzling Dm854 million of government
funds for the modernization of the Vulkan group's eastern German
shipyards. The managers did not use the money for personal
purposes, but redirected it into the group's cash management to
shore up finances. When it went bankrupt in May 1996, the money
was gone.

German privatization authority Bundesanstalt fur
vereinigungsbedingte Sonderaufgaben is demanding compensation
payments of Dm9.7 million each from former Vulkan chief executive
Friedrich Hennemann and his ex-board colleagues Rudiger Zinken,
Gunter Smidt and Hans Schnuttgen.


DAIMLERCHRYSLER: Moody's Places Outlook to Negative Review
----------------------------------------------------------

Moody's Investors Service on Wednesday has confirmed the current
ratings of Stuttgart-based DaimlerChrysler AG and its guaranteed
subsidiaries, but changed the outlook to Negative from Stable.

The change in outlook reflects the credit rating agency's
concerns that the terrorist attacks in America have the potential
to erode overall automotive demand, to lessen the degree of
progress the company will have in implementing the restructuring
of Chrysler, and to diminish the attractiveness of higher-priced
luxury vehicles in the U.S.


DAIMLERCHRYSLER: S&P Puts Outlook on Credit Watch
-------------------------------------------------

US debt rating agency Standard & Poor's has put the outlook of
German-based vehicle maker DaimlerChrysler on "credit watch,"
with a view to a debt ratings downgrade, the Financial Times
reported on Wednesday.

S&P said that last week's terrorist attacks in the United States
is expected to weaken the demand for new cars and trucks for at
least the next two quarters.


REFUGIUM AG: Creditors Files DM400MM Claim
------------------------------------------

Refugium Holding AG's creditors have filed claims of over DM400
million, including claims for compensation and rent, the
Frankfurter Allgemeine Zeitung/FT Information reported on
Wednesday.

The insolvent Koenigswinter-based retirement home company will be
liquidated and a creditor committee will be formed to determine
the next course of action.

Pako Immobilien AG, which owns 27 of the 57 homes run by
Refugium, has announced that it is not willing to support efforts
to keep the company together and in operation.


TEAMWORK INFORMATION: Acts Against Delisting
--------------------------------------------

Teamwork Information Management AG, the insolvent Paderborn-based
information management solutions provider, has launched an action
against the country's stock exchange, in an attempt to prevent
its delisting from the Neuer Markt in November, Borsen-Zeitung/FT
Information reported on Wednesday.

Teamwork is hopeful it will fight off its insolvency. It is
currently in advanced negotiations with two investors, where
letters of intent have already been signed.


===========
N O R W A Y
===========


BRAATHENS ASA: Faces Liquidation Threat
---------------------------------------

The terrorist attack in the US on September 11 is expected to
accelerate Braathens' liquidation, the Dagens Naeringsliv/FT
Information reported on Tuesday.

According to the Norwegian airline's PR manager Anne Grete
Ellingsen, the number of passengers has fallen after last week's
incident and said that the market has weakened.

While Scandinavian Air System has agreed to take over Braathens
ASA for 1.1 billion kroner in May, analyst Hans Erik Jacobsen at
Norwegian brokerage First Securities do not believe that
international investors or airlines are willing to acquire
Braathens to focus on the Norwegian market.


ENITEL ASA: In Talks With Minister of Trade and Communications
--------------------------------------------------------------

Norwegian telecommunications company Enitel, according to the
Monday edition of Dagens Naeringsliv/FT Information, is in
meetings with Norwegian minister of trade and communications
Terje Moe Gustavsen about the financial crisis in the company.

Enitel is trying to ensure that customers in the Norwegian
emergency services do not lose telephony connections if Enitel
goes into liquidation.

Swedish telecommunications company Telia and Danish competitor
Tele Danmark were rumored to be interested in acquiring Enitel.


ENITEL ASA: Tele2 Takes Over Enitel Customers
---------------------------------------------

Norwegian telecommunications operator Enitel ASA, which filed for
protection from creditors last month, said on Tuesday that
Swedish operator Tele2 AB would take over all its telephone and
Internet customers at an undisclosed amount.

Under the deal, Enitel will retain its 350 largest business
customers. None of Enitel's employees will be transferred to
Tele2.

After Enitel AS declared bankruptcy early this week, the
management has been working intensely to sell parts of the
company. They are still working on possible solutions for the
remaining parts of Enitel's activities.


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


SULZER MEDICA: Posts CHF608.1MM First-Half Loss
-----------------------------------------------

Swiss medical technology company Sulzer Medica AG reported a
first-half loss of CHF608.1 million, compared with a net profit
of CHF99.9 million last year, the Wednesday edition of Dow Jones
Newswires said.

The loss was tied to around 1,600 lawsuits in the U.S. after
selling faulty artificial hip and shinbone products

A Sulzer Medica spokesman said the company's bottom line would
suffer in the next three to five years because about half of the
expected profits will likely be used for settlement payments. The
company has offered a lump sum of $783 million to settle the
lawsuits.


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


GLOBAL TELESYSTEMS: Banks Extend Waiver
---------------------------------------

Global TeleSystems Europe Holdings B.V. creditors Deutsche Bank,
Dresdner Bank and Bank of America have agreed to further extend
the waiver of any defaults under their facility caused by GTS's
election to not make interest payments on GTS Europe's publicly-
traded debt while the company works toward a debt restructuring
plan with bondholders, the Tuesday edition of M2 Presswire said.

The creditor banks have earlier agreed to extend until September
17 the waiver. The waiver has again been extended through
September 24, 2001.

GTS and the banks continue their discussions, aimed at replacing
the current financing agreement with a longer-term financing
facility.


INVENSYS PLC: Shares Plunge 26% on Debt Worry
---------------------------------------------

Shares of Invensys has tumbled 26% to a 10-year low on fears over
its debt position following last week's terrorist attacks in the
US, the Financial Times reported on Wednesday.

Analysts said the worsening economic downturn would make it
harder for the group to carry out restructuring aimed at cutting
the 3.2-billion-pound net debt.

The engineering company lost chief executive Allen Yurko in July
after its third profit warning in 10 months. The group aims to
cut 6,000 jobs this year as part of a bid to cut net debt.


J2C PLC: Chief Will Receive 3.6MM-Pound Payout
-----------------------------------------------

Company directors at Internet company J2C will receive multi-
million pound payouts from their original investment after
shutting down the dot.com firm, the Independent News reported
yesterday.

Once J2C's plan to return 32.97 million pounds will be approved
by investors, which include Prudential and 3i, it will produce a
3.6-million-pound payout for chief executive Karl Watkin, who has
invested 30,000 pounds in the business.

Graeme Lowdon, who stepped down from the role of operations
director in February, is set to receive a similar figure while
Sir Michael Bett, the former chairman of BT Cellnet, is in line
for a 380,000-pound payout.

Alan Donnelly, the former leader of Labour's MEPs, will gain
460,000 pounds for a 1,250-pound investment, while serial
entrepreneur Luke Johnson will get some 760,000 pounds for the
2,000 pounds he invested.

J2C put itself up for sale in February and decided to wind up its
affairs after getting no serious offers by June.


MARKS & SPENCER: French Court Dismisses Case
--------------------------------------------

A French court has dismissed the case brought by French unions
CFDT, CFTX and CGC-FE against UK retailer Marks and Spencer and
confirmed the validity of the agreement under which the European
works council was set up, the Financial Times reported on
Wednesday.

The court also ordered the CFDT to pay the legal costs of the
case and a fine of Ffr10,000 to M&S.

M&S caused controversy in France in March when it first announced
its plans to close 18 stores with the loss of more than 1,600
jobs, as part of its wider withdrawal from continental Europe.
The announcement led to one court ruling that the group had
broken labor law in its move.


MARKS & SPENCER: Gal Lafayette Set to Claim M&S French Stores
-------------------------------------------------------------

French retailer Galeries Lafayette is set to claim the 18 Marks &
Spencer PLC stores up for sale in France, beating off rival
suitors U.S. group Wal-Mart Stores and Japanese clothing company
Fast Retailing, Dow Jones Newswires reported on Wednesday.

A Galeries Lafayette spokeswoman would not comment on the sale
process.

M&S said the selloff plan is part of a global retrenchment that
will see the struggling retailer end continental European and
U.S. operations by the end of the year.

M&S has declined to put a price tag on the French stores.


MARKS & SPENCER: Japanese Firm Will Not Consider French Stores
--------------------------------------------------------------

Casual-clothing store operator Fast Retailing, according to the
Wednesday edition of Dow Jones Newswires, has no plan to buy 18
French stores of U.K. retailer Marks & Spencer PLC's.

The Japanese firm was thought to be a candidate to buy the French
stores, which M&S said it would sell as part of its global
restructuring plan.

M&S is nearing its self-imposed September-end deadline for
finding a buyer for the stores. So far, French retailer Galeries
Lafayette is considered the most likely candidate.

                                 ***********

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

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same firm for the term of the initial subscription or balance
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Christopher Beard at 301/951-6400.


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