/raid1/www/Hosts/bankrupt/TCREUR_Public/020827.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

                 Tuesday, August 27, 2002, Vol. 3, No. 169


                              Headlines

* F I N L A N D *

SONERA CORPORATION: Latvian Unit Will Apply for UMTS License  

* F R A N C E *

AIR LIB: Expects No State Aid, Seeks Investors on Restructuring
VIVENDI UNIVERSAL: Faces Credit Facility Dilemma on EUR 2BB Loan
VIVENDI UNIVERSAL: Canal Plus Attracts Potential Buyers
VIVENDI UNIVERSAL: Vivendi Entertainment Execs Favor Demerger

* G E R M A N Y *

DZ BANK: Reports Decrease in Operating Profits in First Half
KIRCHMEDIA: Files Injunction That Bank Will Not Call in Lien
PHOTO PORST: Photo Finishing Group May Close 100 Outlets

* I T A L Y *

FIAT SPA: Refuses to Comment on Data Room Opening for Fidis Sale

* P O L A N D *

BANK PEKAO: Fitch Downgrades Bank's Individual Rating
BRE BANK: Fitch Downgrades Individual Rating to D
ELEKTRIM SA: E.ON Eyes Elektrim's Energy Assets

* S W E D E N *

LM ERICSSON: Moves Deadline to Swap ADS Rights for B Share Rights
LM ERICSSON: Wins GSM Deal With Turkish Aycell

* U N I T E D   K I N G D O M *

AEX DRAX: Fitch Downgrades Senior Notes to CCC
CELLSTAR: Shutdown at U.K. Distribution Threatens Jobs
CLAIMS DIRECT: Administrators Sell Assets to Mystery Bidder
EQUITABLE LIFE: E&Y in Motion to Quash GBP2.6BB Claim
MOTHERCARE: Green Is Lead Candidate for Baby Supply Retail Chain
WESSEX WATER: Police Releases CEO Skellett on Bail


=============
F I N L A N D
=============


SONERA CORPORATION: Latvian Unit Will Apply for UMTS License  
------------------------------------------------------------
Sonera's Latvian mobile communications associated company
Latvijas Mobilais Telefons SIA (or Latvian Mobile Telephone,
Sonera's ownership 24.5%) files an application for an UMTS
license in Latvia.

The Latvian government will grant a total of three licenses, and
they will cost 5.8 million Latvian lats (about EUR 10 million)
each. Any license received would be paid by Latvijas Mobilais
Telefons (LMT). According to the license terms, the operators
that have received a UMTS license must build a UMTS network
covering 30% of the country's population by the end of 2005. In
practice, this means Riga, the capital of the country.

Latvijas Mobilais Telefons is one of Latvia's two mobile phone
operators. It is the market leader with a market share of nearly
60%. At the end of 2001, the company had 348,000 customers. In
2001, the company's revenues amounted to EUR 188 million.

Sonera is a leading provider of mobile and advanced
telecommunications services. Sonera is growing as an operator and
as a provider of transaction and content services in Finland and
in selected international markets.

The company also offers advanced data solutions to businesses,
and fixed network voice services in Finland and neighboring
markets. In 2001, Sonera's revenues totaled EUR 2.2 billion, and
profit before extraordinary items and taxes was EUR 0.45 billion.
Sonera employs about 7,400 people. www.sonera.com

Latvijas Mobilias Telefons has published the following press
release:


    LMT EXPRESS WILLINGNESS TO PURCHASE UMTS LICENCE

On August 23 the Latvian Mobile Telephone SIA submitted to the
Ministry of Transport of the Republic of Latvia documents
required for acquisition of UMTS mobile telecommunications
license.

LMT President Juris Binde: "With this step LMT confirms once more
its leading status in the market and introduction of new
technologies. LMT was the first in Latvia, which introduced WAP
technology, and as the only operator offers the modern HSCSD and
GPRS data transmission services, so the next logical step is
offering of the third generation mobile communications services.

The shareholders and management of the company consider the
offered license provisions as sufficiently reasonable for
successful further development. Telecommunications and
information technologies are in constant progress, and the third
generation mobile communications technologies will definitely
develop as well.

The time set forth in the license for introduction of third
generation mobile services in Latvia is sufficiently long, so the
LMT will have an opportunity to base on experience of the other
operators and offer to its customers services already tested in
the other countries, as well as modern phones for wide usage of
new technological possibilities. With submission of application
the company has made the first step in order to provide the LMT
customers with all the large selection of services of the next
generation."


   Contact Information:

   Juris Binde
   President and CEO
   Latvijas Mobilais Telefons SIA
   Telephone: + 371 924 8100

   Martti Nareneva
   Director, Baltic areas
   GSM +358 400 427105
   E-mail: martti.nareva@sonera.com


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


AIR LIB: Expects No State Aid, Seeks Investors on Restructuring
---------------------------------------------------------------
Beleaguered Swiss airline Air Lib must find investors who could
give financial assistance for a needed restructuring because it
could not depend on the French government for assistance, said
Jean-Claude Jouffroy, a spokesman for Secretary of Transportation
Dominique Bussereau, a report from AFX News says.

The spokesman added that Air Lib restructuring will need a large
amount of money and would require its chairman Jean-Charles
Corbet to seek more investors, the news agency reports.

The company's recent financial audit revealed that Air Lib would
be able to survive through this summer, but will have to face a
big treasury problem in December, AFX reports.

Meanwhile, the Troubled Company Reporter reported that Air Lib
recently unveiled plans to take out its daily flights from Roissy
airport to the Anitlles and Reunion due to losses.

Air Lib will keep only seven daily flights in the winter season
from Orly to Pointe-a-Pitre, Fort-de-France and Reunion, the TCR
said.

The TCR reported that the move generated concerns over Air Lib's
code-sharing agreement with French airline Air France. It is said
that the national airline could take this opportunity to do away
with the agreement altogether.

Air Lib's withdrawal of the service is seen to also directly
threaten many jobs. The company however says it will launch
services to new destinations but this plan has not been revealed
in detail, the TCR said.


VIVENDI UNIVERSAL: Faces Credit Facility Dilemma on EUR 2BB Loan
----------------------------------------------------------------
Bankers who are engaged in debt-laden French media empire Vivendi
Universal's refinancing foresees that agreeing to a new debt
facility worth EUR2 billion could compel the company to
renegotiate terms for much of its existing borrowing, a report
from the Financial Times says.

Vivendi is currently in negotiations with seven banks over the
new credit facility. But a source familiar with the process said
the completion of the deal, which is expected by mid-September,
depends on the collateral assets pledged against the loan, the
paper adds.

The company is requesting new credit terms to plug an estimated
funding gap of EUR1.4 billion this year. It admitted earlier this
month that its "core net debt" had reached EUR19 billion, or
EUR35 billion including borrowings at Vivendi Environnement, its
40% owned utility affiliate, the daily reports.

The daily adds that Vivendi Universal could be compelled to
renegotiate terms for an additional EUR10 billion of existing
bank loans despite a guarantee that banks would approve the
credit facility. These loans have negative pledge covenants
against them.

The arrangements mean that the terms for new loans - guaranteed
by collateral - would have to be applied also to the existing
portfolio of "collateralized" borrowings.

The French media company is eager to reach an agreement over the
new facility prior to its September 25 board meeting when its new
chairman Jean-Ren, Fourtou would request approval for a
restructuring plan, the daily reports.

The seven banks involved in the refinancing talks are understood
to comprise four French lenders - BNP, Soci,t, G,nerale, Credit
Lyonnais and Credit Agricole - along with Credit Suisse First
Boston, Citibank and Deutsche Bank.

It is expected that if lenders would agree the facility, they
would be awarded a large part of the advisory work on Vivendi
Universal's EUR10 billion disposal plan. Citibank's investment
banking arm, CSFB and Salomon Brothers, have already received the
responsibility to process the sale of Houghton Mifflin, Vivendi's
US publishing units, the paper says.  

Houghton Mifflin has already attracted several offers, which
Vivendi puts up for more than USD2.2 billion, the amount it paid
for it last year, the Financial Times says.


VIVENDI UNIVERSAL: Canal Plus Attracts Potential Buyers
-------------------------------------------------------
Several investors are said to be interested in French media
company Vivendi Universal's broadcasting activities, including
its pay-TV arm Canal Plus, which it has put up for sale in hopes
to raise Eur4 billion to increase its cash reserves, a report
from Le Monde and Financial Times says.

Vivendi also expects to generate a further EUR2 billion by the
flotation of 51% of the capital of the new Canal Plus France, the
report adds.

The report also says that Telepiu, Canal Plus' Italian pay-TV
unit has attracted a EUR1.5 billion offer from US-Australian
media group News Corporation. The bid was made in June and has
been lowered to EUR1.1 billion. Simultaneously, Canal Plus's
cable network, NC Numericable has attracted Liberty Media and US
media giant AOL Time Warner as possible buyers, the report says.


VIVENDI UNIVERSAL: Vivendi Entertainment Execs Favor Demerger
-------------------------------------------------------------
Vivendi Universal Entertainment's senior executives confirm they
support the demerger of the company from its French parent
company, Vivendi Universal, a report from the Financial Times
says.

Vivendi Entertainment is composed of the Hollywood studio
Universal Pictures, major cable channels and a number of theme
parks.

Financial Times cited one U.S. executive who said that he backs
the spin-off plan, saying that he believes "these companies were
always meant to be independent stand-alone entertainment
businesses. At the moment, there are a lot of assets that don't
fit together, hoping for synergies from the Internet that just
don't exist."

Vivendi Universal Entertainment was created in 2000 to merge
Universal Studios Group, which consists of Universal Pictures and
various theme parks, with cable channel assets acquired from
Barry Diller's USA Interactive for USD10.8 billion last December.

Presently, Vivendi Universal is planning to demerge the 86% owned
unit as part for the second stage of its EUR10 billion disposal
project. The second stage is believed to start after the
company's liquidity crisis would be solved, the daily reports.

Vivendi Universal Entertainment's chairman and chief executive
Mr. Diller, who owns a 1.5% stake in the company and USA
Interactive, which has 5.4% shareholding. He is seen to play a
major role in any demerged entity. Analysts currently values
Vivendi Universal Entertainment at an estimated EUR10-15 billion,
the paper says.    

Jean-Rene Fourtou, Vivendi Universal's new chief executive is
trying to convince Vivendi Universal's banks to give a new EUR12
billion rescue loan facility that is important for the group to
avoid a debt default. Vivendi Universal shares plunged 80% since
the beginning of the year, the daily reports.

Moreover, Vivendi Universal executives consider the possibility
whether Universal Music Group should be part of the demerged
entity. On the other hand, VUE executives say they doubt if
Universal Pictures would be profitable enough to be demerged from
VUE. They would prefer it to still be part of the theme parks and
cable channels that make up the rest of the division, the daily
adds.

VUE reported 21% revenue growth in the first half. Operating
income grew by 36%, primarily because of strength at Universal
Pictures, offset in part by lower cable advertising revenue and
spending at theme parks.


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


DZ BANK: Reports Decrease in Operating Profits in First Half
------------------------------------------------------------
First-half operating earnings before risk provisions of German
cooperative banking group DZ Bank show a 14.4% decrese on the
year-ago level at 356 million euros, the Handelsblatt reports.

Operating earnings after risk provisioning slipped 5.5%, the
paper adds. Commission earnings fell 5.2% to 440 million euros,
the paper says.

DZ Bank saw its performance split into two areas that Chief
Executive Ulrich Brixner sees as key, risk-related costs and
administration costs.

On the positive side, the bank continued to reduce its
administration costs, which came in at 1.314 billion euros, down
2.7% on the year.

At parent-group level, the administration costs were down by as
much as 9%. Here Brixner's strict cost management is clearly
beginning to pay off. One area that Brixner has attacked is
staffing costs. Around 20% of the bank's jobs are to be cut.

DZ Bank was formed in September from the merger of DG Bank and GZ
Bank, the German paper says. A spokesman explained that a final
examination of the respective credit engagements of the two
institutions had yet to be completed, the news outfit adds.

According to the Troubled Company Reporter - Europe's July 23
issue, DZ Bank received a "D+" in April from credit rating agency
Moody's, following its disclosure on plans to carry out initial
public offerings of shares in its insurance and funds
subsidiaries, R+V Versicherung
and Union Fonds Holding.

The bank holds 76.8% in Union Fonds Holding and 78.1% in R+V
Versicherung.  It also holds shares in mortgage bank DG Hyp
(100%), building society Schw"bisch Hall (87,9%), leasing company
VR-Leasing (83,5%) and bws Bank (83,2%), the paper said.

DZ Bank was formed towards the end of last year from the merger
of two of Germany's biggest cooperative banks: Deutsche
Genossenschaftsbank, or DG Bank, and Genossenschafts Zentralbank,
or GZ-Bank.

In April, Moody's said the impending KirchGruppe bankruptcy had
undermined the bank's financial strength rating and as a result
deserved a downgrade from "C-" to "D+".

According to Moody's, the deterioration in the bank's financial
fundamentals is reflected by the fact that it could only
partially cover the significant increase in loan loss provisions
with its modest profits and therefore had to release hidden
reserves, which were already strained after higher loan loss
provisions in 2000.

Headquartered in Frankfurt, DZ Bank is the sixth largest banking
group in Germany and had pro-forma assets of around EUR360
billion as of June 2001.


KIRCHMEDIA: Files Injunction That Bank Will Not Call in Lien
------------------------------------------------------------
German media mogul Leo Kirch applies at a court in Munich for an
injunction against Deutsche Bank's taking over his 40% stake in
newspaper group Axel Springer Verlag, insider sources at Kirch
report to Handelsblatt.

The move will secure Kirch more time to negotiate with WAZ
Mediengruppe on the reported Springer sale.

The German paper says that Kirch's application was filed on the
basis that Deutsche blocked an earlier deal. The Kirch group
intends to prevent Deutsche from exercising its lien over the
Springer stake, the paper adds.

The holding was used to collateralize a EUR 400 million loan to
Kirch, on which Kirch defaulted. Deutsche and Kirch had
previously agreed a deadline of August 30 for any sale.

Following Kirch's injunction application, the Kirchgruppe founder
has until September 10, when the court is due to rule on this
filing.

The Germany newspaper says that WAZ came forward on Friday to
express interest in Kirch's stake in Springer.


PHOTO PORST: Photo Finishing Group May Close 100 Outlets
--------------------------------------------------------
Photo Porst, the insolvent German photographic services company,
has announced that it is to close a number of outlets, following
the collapse of plans for its takeover by Kodak and Ringfoto,
Germany news group Frankfurter Allgemeine Zeitung (FAX) reports.

Last week, Kodak and Ringfoto acquired the brand rights for Photo
Porst, however, a buyer needs to be found for its headquarters
and around 200 of its branches.

FAZ adds that it is thought that the outlets will be offered to
their managers, as part of a plan to run them as a franchise
operation.
The German paper adds that Ringfoto has disclosed earlier that it
will offer to managers franchise contracts at reasonable prices.

So far, with 200 managers in Photo Porst, only 70 managers are
reported to have interest. This could mean that the number of
outlets which remain open will be far less than 100, the paper
says.


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


FIAT SPA: Refuses to Comment on Data Room Opening for Fidis Sale
----------------------------------------------------------------
Italian car manufacturer Fiat SpA's spokesperson refused to
comment on a report that the group will open a data room
providing information to bidders for a 51% stake in its Fidis
finance unit, a report from AFX News says.

The spokesperson said under the company's debt restructuring
plan, Unicredito Italiano SpA, IntesaBci SpA, Sanpaolo IMI, and
Capitalia SpA are committed to buying the 51% stake, the news
outfit adds.

Previously, General Motors Corp spokesman recently confirmed
reports that it will not exercise its option to acquire the Fidis
stake from Fiat, AFX says.

The Fiat spokesman acquiesced that launching a data room would
assist the banks in setting the price and modalities for the
purchase, which are not detailed in the earlier debt accord, the
news agency reports.

Citing a source close to the banks, AFX further reports that the
four banks will finalize the purchase next week. Moreover, a
broker said he sees a EUR800 million to EUR1 billion price for
the 51% stake.


===========
P O L A N D
===========


BANK PEKAO: Fitch Downgrades Bank's Individual Rating
-----------------------------------------------------
Fitch Ratings, the international rating agency, downgrades the
Individual rating of Poland's Bank Pekao SA (Pekao) from 'C' to
'C/D'.

According to Fitch, the Long-term, Short-term and Support ratings
have been affirmed at 'BBB+', 'F2' and '2' respectively. The
Outlook for the Long-term ratings remains Stable.

The present negative macroeconomic environment in Poland has
materially affected Pekao's loan portfolio quality. The bank
reported a net loss for 2Q2002, caused by high loan loss
provisions, the rating agency adds.

The Bank experienced significant deterioration in asset quality,
with a strong increase in irregular loans, especially in the
'lost' category. Furthermore, the reserve coverage of lost loans
fell to 65% at end-June 2002, a substantially lower level than in
2000, Fitch reports.

Overall classified loans reserve coverage remains at 50%. Given
the present negative macroeconomic environment in Poland, asset
quality is not expected to improve and further loan loss
provisioning is likely. In addition, the operating environment
will continue to restrain revenue growth, therefore increasing
the impact of provisioning costs, Fitch says.

Fitch recognizes Pekao's efforts in controlling its cost base,
introducing a new IT system and increasing efficiency. The bank's
strong market share in retail and small- and medium-sized
companies' lending should ensure some stability in its earning
streams, while diversified and stable funding protects interest
margins.

Fierce competition from other universal banks, however, might
cause a loss of market share in the same and medium-sized
corporate industry.

Lastly, Fitch says thatPekao's Long- and Short-term ratings
(capped at the sovereign ceiling for Poland) continue to benefit
from the backing of its strategic shareholder, Italy's UniCredito
Italiano (rated AA-, AA minus).


BRE BANK: Fitch Downgrades Individual Rating to D
-------------------------------------------------
Fitch Ratings, the international rating agency, downgrades the
individual rating of Poland's BRE Bank (BRE) from 'C/D' to 'D'.

The Long-term, Short-term and Support ratings have been affirmed
at 'BBB+', 'F2' and '3' respectively. The Outlook for the Long-
term rating remains Stable, the rating agency reports.

BRE's profitability suffered during 1H2002 because of a slowdown
in the Polish capital markets, the failure of BRE in a number of
equity deals, stagnating revenues and a surge in costs.

According to Fitch, despite the successful development of its
retail arm in terms of gaining new clients, BRE's interest margin
remains lower than that of its peers. Other operating income has
also come under pressure because of depleted investor confidence
in Poland's capital markets.

BRE's investment banking arm has been an important, although
somewhat volatile, contributor to profit in the past few years,
but has performed poorly in recent months, and further write-
downs on some of its equity stakes remain possible, the rating
agency adds.

The bank's asset quality is better than the national average,
however, its reserve coverage is weak and new loan loss
provisions in 2002 may be necessary given the poor economic
environment, Fitch says.

The development of retail banking and the increased scope of
consolidation of subsidiaries in 2002 raised the group's costs
without any notable contribution to earnings.

Fitch adds that the bank is planning a strict staff
rationalization, but the benefits of this move are only likely to
come through in 2003. Similarly, the present equity portfolio is
not likely to generate substantial income before 2003.

On the other hand, BRE maintains a unique position in Polish
investment banking and has sophisticated risk management systems
and treasury products. Its lean structure should help it adapt to
deteriorated market conditions and allow it to find sustainable
sources of income in the coming future.

BRE's Long- and Short-term ratings (capped at the sovereign
ceiling for Poland) continue to benefit from the backing of the
bank's strategic shareholder, Germany's Commerzbank AG (rated
'A').


ELEKTRIM SA: E.ON Eyes Elektrim's Energy Assets
-----------------------------------------------
Elektrim is considering the sale of its energy assets in PAK to a
prospective investor reported to be E.ON, a report from Warsaw
Business Journal says.

The company is currently seeking ways to generate cash to pay its
creditors.

The paper says that E.ON is believed to be one interested
investor in Elektrim's energy assets. E.ON is said to be also
planning to acquire the G-8 group that is currently being
privatized.

According to WBJ, Elektrim President Maciej Radziwi said: "I
think that the investor who enters G-8 will be interested in
investing in the PAK power stations."

The company owns almost 40% of PAK. The sale of the stake is
excluded 2005 according to the privatization deal signed between
Elektrim and Treasury Ministry several years ago.

Elektrim hopes that the ministry will be lenient this time. El
Dystrybucja, and German energy concern E.ON are among the
companies who have expressed interest in purchasing the G-8.
Earlier, El Dystrybucja lost its exclusivity negotiating rights
because it was unable to submit appropriate financial guarantees
to complete the transaction, the WBJ reports.


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


LM ERICSSON: Moves Deadline to Swap ADS Rights for B Share Rights
-----------------------------------------------------------------
In connection with Ericsson's rights offering, Citibank, N.A., as
ADS rights agent, has agreed to provide holders of ADS rights
with additional time to exchange their rights for B share rights.
Citibank has agreed to extend the deadline to exchange ADS rights
for B share rights until 5:00 p.m. (New York City time) on August
27, 2002.

Ericsson is shaping the future of Mobile and Broadband Internet
communications through its continuous technology leadership.

Providing innovative solutions in more than 140 countries,
Ericsson is helping to create the most powerful communication
companies in the world.


Contact Information:

Gary Pinkham
Vice President, Investor Relations
Telephone: +46 8 719 0858, +46 730 371 371
Email: investorrelations@ericsson.com

Maria Bernstrom, Director, Investor Relations
Telephone: +46 8 719 5340, +46 70 533 4750
E-mail: maria.bernstrom@lme.ericsson.se


LM ERICSSON: Wins GSM Deal With Turkish Aycell
----------------------------------------------
Ericsson (http://www.ericsson.com)and Aycell have signs an  
agreement for expansion of the Turkish operator's GSM mobile
network in seven major cities. The agreement covers a three-year
period and is valued at Euro55 million.

"This new agreement with Ericsson supports our strategy of
continuously and rapidly expanding our coverage area and to
providing better and more widespread services to our subscribers.
We have chosen Ericsson because of our previous successful
collaboration. The agreement ensures we will continue to benefit
from Ericsson's expertise and support," said Tahsin Yilmaz, Vice
President of Aycell.

Aycell is a wholly owned subsidiary of Turkish Telekom.
Established in October 2001, Aycell is the fourth GSM 1800
operator to enter the highly competitive Turkish mobile market.

"The agreement confirms the very good cooperation between our
companies, which began when Aycell was first established. The new
agreement is also an affirmation of Ericsson's leading technology
and services in Turkey's highly competitive mobile market," said
Cem Agaoglu, Vice President and Account Executive for Turk
Telecom and Aycell account at Ericsson in Turkey.


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


AEX DRAX: Fitch Downgrades Senior Notes to CCC
----------------------------------------------
Fitch Ratings, the international rating agency, has upgraded
Senior Notes issued by AES Drax Energy Ltd to 'CCC' from 'C'.

Ratings of the Senior Secured Bond issued by AES Drax Holdings
Limited and the Senior Secured Bank loan rating for Inpower
Limited are left unchanged at 'BB', Fitch adds.

All of these ratings remain on Negative Watch, where they were
placed in November 2001.

The ratings group adds that all these debt issues relate to the
3.96 GW coal-fired power station located near Selby in the UK and
operated by AES Drax, which produces around 8% of the annual
power produced in England and Wales.

AES Corporation, rated 'BB-', Rating Watch Negative, has stated
its intention to inject sufficient cash into DrxEn to complement
the existing GBP 7 million balance of the Debt Service Reserve
Account for DrxEn Notes and fully pay the GBP 15 million interest
due on August 30.

After that date, the DSRA will be fully depleted. Further
payments on the Notes will depend on either more favourable cash
flow projections, allowing the release of the substantial amount
of cash trapped at DrxHold, or further support from AES, of which
there can be no assurance, Fitch adds.

In view of the fact, that this cash injection should allow the
next coupon to be met, the ratings for DrxEn's Senior Notes are
upgraded from 'C', signaling imminent default, to 'CCC', which
indicates that capacity for meeting financial commitments is
solely reliant upon sustained, favorable business or economic
developments.

According to Fitch's press release of August 20, 2002, Fitch will
maintain on Negative Watch the company's reatings pending a
detailed review with the company of its latest projections,
including assumptions for cost savings and sensitivity to power
prices.

Fitch will also monitor for any sign of potential renegotiation
of the Power Hedge Agreement guaranteed by TXU Europe, rated
'BBB-'/'F3'.


CELLSTAR: Shutdown at U.K. Distribution Threatens Jobs
-------------------------------------------------------
More Employees at US company Cellstar were made redundant after
last month's layoffs as the company winds down its UK operations,
Mobile News reports.

Following the group's US' decision to shut its distribution
business in the UK unless a buyer could be found.

Cellstar's UK managing director David Aitken confirmed that
there had been no formal offers made for the company as yet, the
news outfit says.

The news comes as Vodafone appointed Fone Logistics to take over
Cellstar's UK Distribution Agreement. The agreement took effect
from the beginning of this month, the report adds.

Fone Logistics will takeover Cellstar's Vodafone dealer base,
which joins its expanding dealer network.

CellStar's US parent company decided to shut its UK, Argentina
and Peru distribution businesses in June due to heavy losses.
CellStar will now focus on Asia, Mexico and the US.


CLAIMS DIRECT: Administrators Sell Assets to Mystery Bidder
-----------------------------------------------------------
Deloitte & Touche says that it sold the Claims Direct brand and
call centers for an undisclosed sum, the Financial Times say.

The Joint Administrative Receivers of the claims business Jamie
Smith, Bob Maxwell and Nick Dargan of Deloitte & Touche, offered
the sale of the business and assets of Claims Direct and its
subsidiary units after the company ran out of cash, the July 22
issue of the Troubled Company Reporter Europe reports.

The receivers refused to disclose the identity of the bidder,
however, a newspaper reports to the Financial Times that Mick
Shepherd, a computer entrepreneur based in Blackpool, Lancashire
is the buyer.

According to the FT, Deloitte received six bids for the personal
injury claims business, including one submitted by Ronnie
Henderson, the former chief executive of Claims Direct.

The receivers hopes to sell other assets of Claims Direct
including the claims-processing technology and debtor book, the
paper adds.

Claims Direct was founded in 2000 by its Tony Sullman, a taxi
driver, and Colin Poole, a lawyer, the Troubled Company Reporter
said.

The FT said Claims Direct's flotation netted GBP50 million for
the two founders, and at one point, the company was valued at
GBP724 million.

Customers began deserting the company in 2001 after many found
their compensation awards disappeared due to Claims Direct's fees
which ranged from GBP1,300 to GBP1,500, the FT adds.


EQUITABLE LIFE: E&Y in Motion to Quash GBP2.6BB Claim
-----------------------------------------------------
Accountancy firm Ernst & Young motions the High Court to quash
the GBP2.6 billion damages claimed by its former client,
beleaguered life insurance group Equitable Life, Telegraph says.

The new board of Equitable Life is suing Ernst & Young for
professional negligence over the auditing of its accounts prior
to 1999. An E&Y representative says: "Ernst & Young does not
believe there is a valid case against it."

However, Equitable says it intended to pursue with the "very
important claim against its former auditors on behalf of
policyholders".

The insurance group insists that Ernst & Young, responsible for
auditing its accounts between 1990 and 2001, should have realized
at that time that the Equitable's guaranteed annuity rate
contracts were too expensive to pay out, the paper adds.

Equitable alleges that the business could have been sold for
GBP2.9 billion four years ago if the former auditor had assessed
the true extent of its guaranteed annuity rate (GAR) liabilities,
the news outfit says.


MOTHERCARE: Green Is Lead Candidate for Baby Supply Retail Chain
----------------------------------------------------------------
Retail entrepreneur Terry Green, who resigned as head of BHS last
month, has emerged as the leading candidate to be Mothercare's
next chief executive, the Financial Times say.

Mothercare chairman Ian Peacock has been in detailed talks to
appoint Green, a report on the Sunday Times confirm.

The move suggests that the maternity and baby goods retail chain
is close to concluding appoint its new senior management team
after nearly six weeks.

At present, the group's finance director, Mark McMenemy, is
serving as interim chief executive, July 17's issue of the
Troubled Company Reportrer said.

Chris Martin and Alan Smith quit as chief executive and chairman,
respectively, in mid-July after the group issued its third
profits warning in a year, FT adds.

Ian Peacock, the non-executive chairman of MFI Furniture,
replaced Smith and began the process of recruiting a chief
executive.

However, the management departures and Mothercare's persistent
profitability problems sparked a round of speculation that the
baby supply retail chain was a likely takeover target, the paper
reports.

According to the FT, if Green takes the post as CEO, other likely
appointments may include Phil Cox, former finance director at
Asda, as commercial director and Dominic Scott-Flanagan as the
head of international operations.

Mothercare  has a workforce of 5,198. The company reported a net
loss of GBP0.1 million for the first quarter of 2002. Its assets
total GBP196.2 million for the same period with GBP70.8 million
in total liabilities, The Troubled Company Reporter - Europe
further reported on its July 17 issue.

Mothercare has nearly 170 stores throughout Europe, Asia and the
Middle East, FT says.


WESSEX WATER: Police Releases CEO Skellett on Bail
--------------------------------------------------
Wessex Water confirms that Colin Skellett, its chairman and chief
executive, was released on police bail Friday.

Colin Skellett has said that no payment, nor promise of payment,
was made to him during the negotiations of the sale. Neither he
nor any other Wessex Water directors were involved in the
decision to sell to YTL.

He has indicated that confusion has arisen over a subsequent
agreement with YTL, which explains the financial transaction for
retaining his services over the next five years. Colin has
provided the police with a copy of the agreement.

Wessex Water is pleased that matters seem to be resolving
themselves and hopes Colin will be back in the office shortly.

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

        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,
Larri-Nil Veloso, Maria Lourdes Reyes and Jean Claire Dy,
Editors.

Copyright 2002.  All rights reserved.  ISSN 1529-2754.

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