/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/081212.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, December 12, 2008, Vol. 9, No. 247 Headlines A U S T R I A AGRAR ENERGIE: Claims Registration Period Ends December 31 ALOIS NUNNER: Claims Registration Period Ends December 31 ISMET ALIBABIC: Claims Registration Period Ends December 31 EHMANN BAU: Claims Registration Period Ends January 5 ERGEE TEXTILGRUPPE: Claims Registration Period Ends January 5 F R A N C E DELPHI CORP: Wants Sole Right to File Plan Extended to Jan. 31 LEHMAN BROTHERS: Inks Settlement with French Units THOMSON SA: Weaker Sales Cued Rating Cut to 'B', S&P Says G E R M A N Y CREATIVE-LINE BODENBELAGS: Claims Registration Ends January 14 ELECTRO METALL: Claims Registration Period Ends January 10 HIVOLIN GMBH: Claims Registration Period Ends January 9 LEHMAN BROTHERS: Deutsche Bank Sues to Recover US$72.5MM MEGAPOLYMERS SUED: Claims Registration Period Ends January 5 TRIGA IT-SYSTEME: Claims Registration Period Ends January 2 I C E L A N D AVIANCE: 150 Workers Accept Survival Plan I C E L A N D STRAUMUR-BURDARAS INVESTMENT: Fitch Retains Neg. Watch on Ratings I R E L A N D TABERNA EUROPE: S&P Junks Ratings on Class D & E Notes K A Z A K H S T A N AIS-STROY LLP: Proof of Claim Deadline Slated for Jan. 23 ARTI-OIL LLP: Creditors Must File Claims by January 23 KAZAKH MYS: Claims Filing Period Ends January 23 MARKETING CENTRE: Creditors' Claims Due on January 23 MEGA INVEST: Claims Registration Ends January 27 STROY MARKET-NOVOSEL: Claims Deadline Slated for January 23 TECHNOSEVICE 2000 K: Creditors Must File Claims by Jan. 23 TENIR INVEST: Claims Filing Period Ends January 27 TORT AUL: Creditors' Claims Due on January 23 WEST INVEST: Claims Registration Ends January 23 K Y R G Y Z S T A N EXPRESS SPETS: Creditors Must File Claims by January 23 TALLHA & MOBEEN: Creditors Must File Claims by January 23 L A T V I A PAREX BANKA: Stable After Gov't Intervention, New Chair Says N E T H E R L A N D S BETULA FUNDING: Fitch Reiterates Negative Watch R U S S I A BALT-GAZ-STROY LLC: Court Names Temporary Insolvency Manager EKSPO-STROY-TEKS LLC: Creditors Must File Claims by January 5 EVRAZIA-TSENTR CJSC: Creditors Must File Claims by February 5 NORD-INVEST LLC: Court Names Temporary Insolvency Manager POLYMER LLC: Creditors Must File Claims by February 5 STROY-SERVIS-PLUS LLC: Court Names Insolvency Manager UIS-STROY LLC: Creditors Must File Claims by February 5 YUG-STROY LLC: Stavropolskiy Bankruptcy Hearing Set February 26 YUNIT-BANK CJSC: Creditors Must File Claims by February 5 ZLYNSKIY CANNERY: Creditors Must File Claims by January 5 * MOSCOW OBLAST: S&P Puts 'B-' Rating on Planned Sr. Unsec. Bond S P A I N BANCO BILBAO: Fitch Takes Rating Actions on Six Spanish CDOs FONDO DE TITULIZACION: S&P Downgrades Ratings on UCI Classes PYME VALENCIA: Fitch Downgrades Ratings on Two Classes to Low-B RURALPYME 2: Moody's Downgrades Class C Rating to 'BB' S W E D E N * SWEDEN: Gov't Plans to Offer Loans to Car Sector S W I T Z E R L A N D BIELAVIA LLC: Creditors' Proofs of Claim Due by December 21 FARLEX LLC: Proofs of Claim Filing Deadline is December 21 GENERAL MOTORS: EU Unit in Talks w/ Unions On Cost Savings Plan KRATO JSC: December 24 Set as Deadline to File Claims LEHMAN BROTHERS FINANCE: Creditors Must File Claims by Dec. 23 LEHMAN BROTHERS INT'L.: Deadline to File Claims Set Dec. 23 OMIGO JSC: Creditors Have Until December 23 to File Claims U K R A I N E AGRO-PROGRESS LLC: Creditors Must File Claims by Dec. 26, 2008 AGRO-SPUTNIK LLC: Creditors Must File Claims by December 26 DNIEPROBALT LLC: Creditors Must File Claims by December 26 DONSNAB LLC: Creditors Must File Claims by December 26 KADIS LLC: Creditors Must File Claims by December 26 KRASNAYA UKRAINA: Creditors Must File Claims by December 26 RADOSIN LLC: Creditors Must File Claims by December 26 STAKHANOVSKOYE LLC: Creditors Must File Claims by Dec. 26, 2008 ZIRCONIUM REFRACTORY: Creditors Must File Claims by December 26 ZOLOTIYE PESKI-2 : Creditors Must File Claims by December 26 U N I T E D K I N G D O M BRITISH AIRWAYS: Qantas Board Gives Go Signal on Merger Talks BUCKS AUTO: Appoints Joint Liquidators from Smith & Williamson EMI GROUP: Says it Will Not Default on Citigroup Loans HBOS PLC: Tribunal Rejects Legal Challenge Against Lloyds Merger JJB SPORTS: Total Group Sales Down 7.5% from July 28 to December 7 KAUPTHING SINGER: IoM Gov't Backs Bondholder Compensation Package LANDSBANKI GUERNSEY: Savers to Meet UK Politicians Next Week MONITOR OIL: Court Converts Case to Chapter 7 Liquidation NEW STAR: Chairman to Step Down After Refinancing Deal w/ Banks PULLAN CONSTRUCTION: Taps Joint Administrators from PwC RADNEY HOLDINGS: Names Joint Liquidators from Tenon Recovery REGAL ELECTRICAL: Taps Joint Liquidators from Tenon Recovery SOUTH COAST: Appoints Joint Liquidators from Tenon Recovery STEELART LTD: Names Joint Liquidators from Tenon Recovery SUNKING FLOWERS: Taps Joint Liquidators from KPMG YORK HOUSE: Appoints Joint Administrators from Ernst & Young * UK: SocGen Says Covenant Breach Looms as Property Prices Fall * UK: Charities with Frozen Accounts in Icelandic Banks Seek Help X X X X X X X X * Fitch Gives Negative Outlook for European Pharmaceutical Sector * House Passes US$14 Billion Financial Aid for Detroit's Big 3 * BOOK REVIEW: Voluntary Assignments for the Benefit of Creditors ********* ============= A U S T R I A ============= AGRAR ENERGIE: Claims Registration Period Ends December 31 ---------------------------------------------------------- Creditors owed money by LLC Agrar Energie (FN 280341t) have until Dec. 31, 2008, to file written proofs of claim to the court- appointed estate administrator: Dr. Andreas Rabl Ringstrasse 14 4600 Wels Austria Tel: 07242/41824 Fax: 07242/41824-80 E-mail: office@rakanzlei.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 10:20 a.m. on Jan. 15, 2009, for the examination of claims at: Land Court of Wels Hall 101 Wels Austria Headquartered in Weisskirchen an der Traun, Austria, the Debtor declared bankruptcy on Nov. 10, 2008, (Bankr. Case No. 20 S 141/08y). ALOIS NUNNER: Claims Registration Period Ends December 31 --------------------------------------------------------- Creditors owed money by LLC Alois Nunner (FN 66281y) have until Dec. 31, 2008, to file written proofs of claim to the court- appointed estate administrator: Dr. Wolfgang Reinisch Hauptplatz 28 8430 Leibnitz Austria Tel: 03452/83 29 6 Fax: 03452/83 29 6 - 20 E-mail: leibnitz@reinisch-wisiak.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 10:10 a.m. on Jan. 7, 2009, for the examination of claims at: Graz Land Court Room 222 Graz Austria Headquartered in Kittenberg, Austria, the Debtor declared bankruptcy on Nov. 11, 2008, (Bankr. Case No. 26 S 134/08p). ISMET ALIBABIC: Claims Registration Period Ends December 31 ----------------------------------------------------------- Creditors owed money by KG Ismet Alibabic have until Dec. 31, 2008, to file written proofs of claim to the court-appointed estate administrator: Clemens Krabatsch Hafergasse 7 4600 Wels Austria Tel: 07242/35264 Fax: 07242/35264-14 E-mail: kanzlei.krabatsch@inode.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 10:40 a.m. on Jan. 15, 2009, for the examination of claims at: Land Court of Wels Hall 101 Wels Austria Headquartered in Wels, Austria, the Debtor declared bankruptcy on Nov. 11, 2008, (Bankr. Case No. 20 S 142/08w). EHMANN BAU: Claims Registration Period Ends January 5 ----------------------------------------------------- Creditors owed money by LLC Ehmann Bau (FN 293779d) have until Jan. 5, 2009, to file written proofs of claim to the court- appointed estate administrator: Dr. Otto Werschitz CGO Masseverwalt Neutorgasse 47/I 8010 Graz Austria Tel: 0316/820620 Fax: 0316/820620-4 E-mail: office@cgo-masseverwaltung.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:15 a.m. on Jan. 20, 2009, for the examination of claims at: Graz Land Court Hall K Room 205 Austria Headquartered in Wundschuh, Austria, the Debtor declared bankruptcy on Oct. 28, 2008, (Bankr. Case No. 40 S 56/08w). ERGEE TEXTILGRUPPE: Claims Registration Period Ends January 5 ------------------------------------------------------------- Creditors owed money by LLC Ergee Textilgruppe (FN 32238i) have until Jan. 5, 2009, to file written proofs of claim to the court- appointed estate administrator: Dr. Alois Autherith Utzstrasse 13 3500 Krems Austria Tel: 02732/83485 Fax: 02732/83485-10 E-mail: office@autham.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 8:30 a.m. on Jan. 21, 2009, for the examination of claims at: Trade court of Krems Hall A 2nd Floor Austria Headquartered in CT, Austria, the Debtor declared bankruptcy on Schrems, (Bankr. Case No. 9 S 60/08h). =========== F R A N C E =========== DELPHI CORP: Wants Sole Right to File Plan Extended to Jan. 31 -------------------------------------------------------------- Delphi Corp. has asked the U.S. Bankruptcy Court for the Southern District of New York to preclude its creditors' committee from filing a competing plan before Jan. 31, Bill Rochelle of Bloomberg News reports. The Delphi's reorganization plan that was confirmed by the Bankruptcy Court in January 2008 prevents anyone other then the committee from proposing a plan. Mr. Rochelle also notes that the new motion, to be heard Dec. 17, is silent about whether Delphi can emerge from Chapter 11 before the fate of former parent General Motors Corp. is sorted out. The hearing to consider preliminary approval of the Delphi Corp.' and its affiliates' proposed modifications to their confirmed First Amended Joint Plan of Reorganization is also scheduled for hearing on Dec. 17, 2008, after the schedule was adjourned three times. Delphi presented to the Bankruptcy Court changes to an already confirmed Plan after Appaloosa Management, L.P., and other investors backed out from their commitment to provide US$2.550 billion in exit financing. The new plan does not require financing from plan investors, but requires more funding from primary customer General Motors Corp., which is facing its own liquidity crisis, and US$3.75 billion from an exit debt financing and a rights offering. The Preliminary Plan Modification Hearing was originally scheduled for October 23, 2008, and contemplated Delphi's emergence from bankruptcy by Dec. 31, 2008. The modified plan does not require, in addition to US$4,700,000,000 of debt exit financing, Appaloosa's US$2,550,000,000 cash-for-equity investment, which was the highlight of the Court-confirmed, but unconsummated, Jan. 25, 2008 PoR. The modified plan requires debt exit financing of US$2.75 billion plus a US$1,000,000,000 raised through a rights offering. Delphi, however, has signed deals with General Motors Corp. and its DIP Lenders, led by JPMorgan Chase Bank, N.A., in order to have access to borrowed cash until mid-2009. Delphi, however, has said that "in the face of the current unprecedented turbulence in the credit markets and uncertainty in the automobile industry," it does not anticipate emerging from chapter 11 prior to December 31, 2008, when its financing deals mature. "Despite the efforts of the federal government to provide stability to the capital markets and banks, the markets have remained extremely volatile and liquidity in the capital markets has been nearly frozen, resulting in an unprecedented challenge for the Debtors to successfully attract emergence capital funding for their Modified Plan, particularly in light of the current conditions in the global automotive industry," John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, said, in a court filing. Under the modifications to the confirmed plan, unsecured creditors could recover 38.8% compared with 100% under the confirmed pLan. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. (Delphi Bankruptcy News, Issue No. 151; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Inks Settlement with French Units -------------------------------------------------- Lehman Brothers Holdings, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement agreement with three French affiliates that operate Lehman's investment business in France. The three affiliates are: (i) Banque Lehman Brothers S.A., (ii) Lehman Brothers Conseil S.A., and (iii) Lehman Brothers Services S.N.C. LBHI also seeks authority to vote, in its capacity as a shareholder of BLB, for the sale of BLB's business to Banque Nomura France and the voluntary dissolution of BLB, both of which are predicated, inter alia, upon the implementation of the Settlement Agreement. The Settlement Agreement, which provides for a settlement of intercompany claims between LBHI and the Lehman French Companies, is a condition precedent for the BNF Transaction. The BNF Transaction is expected to decrease BLB's liabilities significantly, because, among other things, BLB will no longer be liable for certain debts that BNF is assuming. Richard P. Krasnow, Weil, Gotshal & Manges LLP, in New York, asserts LBHI will benefit from this reduction in BLB's liabilities, given LBHI's potential exposure under a support letter, dated June 15, 1994, wherein LBHI committed to the Banque de France, the French central bank, and the Commission Bancaire, the French banking agency, among other things, to provide BLB with financial support when so requested by the Banque de France. Mr. Krasnow adds that in addition to enabling the BNF Transaction to occur, the Settlement Agreement, among other things, provides for a release of all claims BLB could raise against LBHI under the Support Letter and provides that BLB will waive its intercompany claim against LBHI except to the extent that BLB does not have sufficient assets to pay its creditors. Moreover, the combination of the BNF Transaction and the Settlement Agreement will facilitate BLB's ability to wind down its affairs through a solvent liquidation, which entails a cooperative and orderly process for negotiating with creditors and minimizing liabilities, rather than through an insolvent liquidation, which is likely to result if the Settlement Agreement is not approved. Claims Settled LBHI, on the one hand, and the Lehman French Companies, on the other hand, have asserted numerous claims against each other as of September 12, 2008. LBHI has asserted these claims against the Lehman French Companies: -- A claim of EUR8,056,444 by LBHI against LBS resulting from LBHI's funding of LBS through the prepetition cash management system. -- A claim of EUR41,529,491 by LBHI against BLB resulting from LBHI's funding of BLB through the prepetition cash management system. -- A claim of EUR8,087,665 by LBHI against BLB resulting from an intercompany agreement concerning the Lehman employee incentive plan. -- A claim of EUR27,135,925 by LBHI against BLB resulting from a subordinated loan agreement between the parties. BLB has asserted a claim of EUR178,021,639 against LBHI relating to the Debtors' prepetition cash management system. The parties dispute the validity or the amount of the claims they asserted against each other. The Settlement Agreement provides that: 1. LBHI waives the LBHI Claims in their entirety. 2. BLB waives the BLB Claim other than EUR93,212,114, which is the net amount resulting from a netting of the LBHI Claims against the BLB Claims. LBHI retains the right to object to the Remaining BLB Claim, and BLB retains the burden of proving that the Remaining BLB Claim is an allowed claim. 3. The French Administrator will use his best efforts to settle all of BLB's liabilities with assets other than the Remaining BLB Claim. The Settlement Agreement is null and avoid, if, among other things, (i) LBHI and the chairman in office of BLB do not vote in favor of the Solvent Liquidation at the general meeting of shareholders of BLB on or prior to June 30, 2009, and (ii) the shareholders of LBS and LBC do not vote in favor of the voluntary dissolution of LBS and LBC on or prior to June 30, 2009 About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only US$2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). THOMSON SA: Weaker Sales Cued Rating Cut to 'B', S&P Says --------------------------------------------------------- Standard & Poor's Ratings Services published a report, "Why S&P has Downgraded Thomson S.A. To 'B'," which addresses some of the most frequently asked questions S&P received since it lowered the ratings on Dec. 2 on the France-based technology group. The downgrade to 'B' from 'B+' and placement of the rating on CreditWatch with negative implications last week was the latest in a series of downgrades of the company by S&P this year and followed the group's release of its sales for the third quarter of 2008. Thomson's credit quality has seriously eroded during 2008 as a result of several cumulative factors, and the Dec. 2 action reflects S&P's greater emphasis on aspects of the company's financial flexibility and liquidity. "Our concerns hinged on weaker-than-expected sales in the third quarter amid a further general deterioration in the economic and operating environment," said S&P's credit analyst Leandro De Torres Zabala. "The CreditWatch placement reflects our lack of visibility about Thomson's headroom under its financial covenants and overall financial flexibility at year-end 2008 and the first half of 2009," added Mr. De Torres Zabala. ============= G E R M A N Y ============= CREATIVE-LINE BODENBELAGS: Claims Registration Ends January 14 -------------------------------------------------------------- Creditors of Creative-Line Bodenbelags GmbH have until Jan. 14, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 8:15 a.m. on Feb. 4, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court Nordhorn Hall 42 Seilerbahn 15 48529 Nordhorn Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Marc Daniel Schulz C/o Pluta Rechtsanwalts GmbH Ludgeristrasse 54 48143 Muenster Germany Tel: 0251/16283-0 Fax: 0251/16283-11 E-mail: muenster@pluta.net The District Court opened bankruptcy proceedings against the company on Dec. 2, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Creative-Line Bodenbelags GmbH Attn: Walter Kukowski, Manager Hengeloer Strasse 8 48455 Bad Bentheim Germany ELECTRO METALL: Claims Registration Period Ends January 10 ---------------------------------------------------------- Creditors of Electro Metall GmbH have until Jan. 10, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 9:30 a.m. on Feb. 10, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Wuppertal Meeting Room A234 Second Floor Isle 2 42103 Wuppertal Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Dr. Marc d Avoine Doeppersberg 19 42103 Wuppertal Germany Tel: 0202-245070 Fax: 0202-2450777 The District Court opened bankruptcy proceedings against the company on Dec. 1, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Electro Metall GmbH Industriestr. 29 40822 Mettmann Germany Attn: Uwe Berger, Manager Kammgarnweg 5 42477 Radevormwald Germany HIVOLIN GMBH: Claims Registration Period Ends January 9 ------------------------------------------------------- Creditors of Hivolin GmbH have until Jan. 9, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 10:50 a.m. on Feb. 16, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Duisburg Hall C407 Kardinal-Galen-Strasse 124-132 47058 Duisburg Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Thomas Lauterfeld Friedrich-Ebert-Str. 34 45468 Muelheim an der Ruhr Germany The District Court opened bankruptcy proceedings against the company on Dec. 1, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Hivolin GmbH Attn: Dr. Joachim Marx, Manager Schwerinstr. 34-38 45476 Muelheim Germany LEHMAN BROTHERS: Deutsche Bank Sues to Recover US$72.5MM -------------------------------------------------------- In a complaint filed before the U.S. Bankruptcy Court for the Southern District of New York, Deutsche Bank said that the money had been mistakenly transferred to Lehman Brothers Holdings' account held at Bank of America. The money was supposed to be transferred to a certain fund as required under its master agreement with Deutsche Bank. The name of the fund was not mentioned in the complaint. Attorney for Deutsche Bank, Joshua Dorchak, Esq., at Bingham McCutchen, in New York, said that Lehman Brothers Holdings refused to return the sum on grounds that one of its units is allegedly owed by the German bank about US$290 million. "[Deutsche Bank] is aware of no contractual or other relationship with [Lehman Brothers Holdings] that could give rise to a debt in any amount owing from [Deutsche Bank] to [Lehman Brothers Holdings]," he said. Mr. Dorchak said that Deutsche Bank paid US$72.5 million to the fund, which agreed not to file any claims against the bank on account of the incorrect transfer. Deutsche Bank asks the Court to correct a simple but substantial mistake, Mr. Dorchak wrote. Deutsche Bank, according Mr. Dorchak, meant to transfer the US$72.5 million to another party but sent it instead to Lehman Brothers Holdings Inc., "due to both a clerical error at DB and a miscommunication between DB and its counterparty." About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the United States District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act in the case captioned Securities Investor Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV- 8119 (GEL). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI Barclays Bank Plc has agreed, subject to U.S. Court and relevant regulatory approvals, to acquire Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, on Sept. 22 reached an agreement to purchased Lehman Brothers Holdings, Inc.'s operations in Europe and the Middle East less than 24 hours after it reached a deal to buy Lehman's operations in the Asia Pacific for US$225 million. Nomura paid only $2 dollars for Lehman's investment banking and equities businesses in Europe, but agreed to retain most of Lehman's employees. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. The two units of Lehman Brothers Holdings, Inc., which has filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion -- US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. (Lehman Brothers Bankruptcy News; Bankruptcy Creditors' Service, Inc., <http://bankrupt.com/newsstand/>or 215/945-7000). MEGAPOLYMERS SUED: Claims Registration Period Ends January 5 ------------------------------------------------------------ Creditors of megaPolymers Sued GmbH have until Jan. 5, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 9:30 a.m. on Feb. 17, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Karlsruhe Hall IV First Floor Schlossplatz 23 76131 Karlsruhe Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Steffen Rauschenbusch O3 11 + 12 68161 Mannheim Germany The District Court opened bankruptcy proceedings against the company on Dec. 1, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: MegaPolymers Sued GmbH Attn: Frank Volg, Manager Goethestr. 15a 76275 Ettlingen Germany TRIGA IT-SYSTEME: Claims Registration Period Ends January 2 ----------------------------------------------------------- Creditors of Triga IT-Systeme + Grafik GmbH have until Jan. 2, 2009, to register their claims with court-appointed insolvency manager. Creditors and other interested parties are encouraged to attend the meeting at 11:05 a.m. on Feb. 2, 2009, at which time the insolvency manager will present his first report. The meeting of creditors will be held at: The District Court of Pinneberg Hall 5 Station Route 17 25421 Pinneberg Germany Claims set out in the insolvency manager's report will be verified by the court during this meeting. Creditors may also constitute a creditors' committee or opt to appoint a new insolvency manager. The insolvency manager can be reached at: Gregor Schoene Haferweg 22 22769 Hamburg Germany The District Court opened bankruptcy proceedings against the company on Nov. 30, 2008. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Triga IT-Systeme + Grafik GmbH Attn: Sabine Hofmann, Manager Siethwender Chaussee 4 25335 Raa-Besenbek Germany ============= I C E L A N D ============= AVIANCE: 150 Workers Accept Survival Plan ----------------------------------------- RTE Business reports that 150 workers at Aviance airport ground handling company at Dublin airport voted to accept a survival plan aimed at saving their jobs. Aviance, the report recounts, announced earlier this week that it was closing its Dublin operation in March and making all staff redundant. According to the Irish Times, a recent review of the company's operations revealed that its current cost base could not be sustained under the Dublin business model. The company, the Irish Times adds, partly blamed the planned closure on the economic climate. The survival plan, which was devised to reduce the cost base without extensive job losses, was accepted by 67% of workers. It involves a 15% pay cut, and significant roster changes, RTE Business discloses. However, staff will retain certain entitlements, including sick pay and leave days, RTE Business notes. The trade union Siptu negotiated the plan with the management on Thursday, the Irish Times relates. ============= I C E L A N D ============= STRAUMUR-BURDARAS INVESTMENT: Fitch Retains Neg. Watch on Ratings ----------------------------------------------------------------- Fitch Ratings says it is maintaining the Rating Watch Negative on Iceland-based Straumur-Burdaras Investment Bank's Long-term Issuer Default rating of 'B', Short-term IDR of 'B' and Individual Rating of 'D/E'. A full rating breakdown is provided at the end of this commentary. The decision to maintain the RWN, which was placed on Straumur's ratings on November 5, 2008, reflects continued pressure on Straumur's immediate liquidity, despite the repayment by the bank of its EUR200 million syndicated loan that matured on December 9, 2008. Initially, the RWN reflected the refinancing risk inherent in the repayment of the syndicated loan, which represented a significant cash consideration. Management's actions enabled the bank to close short-term bank refinancing of EUR133 million last week. While the new funding has helped to ease the immediate pressure on Straumur's liquidity, future refinancing and liquidity needs remain reliant on improved global financial markets and market sentiment. Until this happens, liquidity is contingent on Straumur's planned asset sales and Fitch believes the bank has a limited margin of safety over the next few months. Given the bank's risk profile and the impact of the market environment on its funding and liquidity, management in recent weeks has concentrated on securing immediate liquidity needs. Straumur faces larger debt maturities in 2010 and 2011, but a number of smaller tranches are maturing in 2009. Fitch has been informed by management that Straumur is on track to dispose of certain assets, although the agency believes this may be challenged by current difficult conditions in the financial markets. In Fitch's opinion, should asset sales not be realized in sufficient time to meet any liquidity shortfall, default is probable - in the absence of external support - and the agency would expect to downgrade the Long-term IDR to 'CC' and the individual rating to 'E'. For the first 10 months of 2008, Straumur reported a net loss of EUR275 million on the back of substantial asset write-downs and impairments. The significant deterioration in asset quality resulted from the global financial slowdown and the difficulties faced by Icelandic companies, including the related impact of the simultaneous failure of the three large Icelandic commercial banks. Further balance sheet reductions, mainly through asset sales to support the bank's liquidity and reduce concentration risk and equity exposures, should help to restore the soundness of Straumur's balance sheet. In addition, the bank has made continued progress in developing customer-driven income streams. Integrating and leveraging the various platforms that have been established or acquired recently will be key to enable the bank to achieve sustainable profitability. The building up of the bank's franchise in the current difficult environment will represent a major challenge although some opportunities may continue to arise from the changes in the market place. Straumur's ratings are: -- Long-term IDR 'B'; RWN maintained -- Short-term IDR 'B'; RWN maintained -- Support rating: affirmed at '5' -- Support Rating Floor: affirmed at 'No Floor' -- Individual rating 'D/E'; RWN maintained -- Senior debt 'B'; RWN maintained; Recovery Rating of 'RR4' affirmed -- Subordinated debt 'CCC+'; RWN maintained; Recovery Rating of 'RR6' affirmed ============= I R E L A N D ============= TABERNA EUROPE: S&P Junks Ratings on Class D & E Notes ------------------------------------------------------ Standard & Poor's Ratings Services removed from CreditWatch negative and lowered its credit ratings on the class A-2, B, C-1, C-2, D and E notes issued by Taberna Europe CDO II PLC. The class A-1 notes in this transaction have been removed from CreditWatch negative and affirmed. The rating actions follow two asset defaults and S&P's downgrades of assets in the underlying portfolio. S&P has also incorporated into its rating analyses, the revised assumptions related to collateralized debt obligations of hybrid securities. As a result of these revised assumptions, coupled with S&P's opinion of the deteriorating credit quality of the underlying portfolio, S&P believes that there will be an increase in the scenario default rates for the transaction. In addition, in S&P's cash flow analysis of the transaction, changes in credit enhancement levels have resulted in a decrease in break-even default rates for the tranches in the CDO. In S&P's opinion, the increase in SDRs and decrease in BDRs are not commensurate with S&P's previous ratings. Taberna Europe CDO II is a managed CDO characterized by a diverse pool of assets. S&P understand that approximately 12% of the portfolio currently consists of hybrid securities. The remainder of the portfolio is invested in corporate loans and bonds, with limited exposure to CMBS and financial institutions. On July 18, S&P placed all rated notes in this transaction on creditwatch negative in anticipation of the impact of expected changes made to the assumptions used for rating CDOs backed by hybrid securities. Ratings List Taberna Europe CDO II PLC EUR900 Million Floating-Rate Notes Ratings Removed from Creditwatch Negative And Lowered Class To From ----- -- ---- A-2 A AAA/Watch Neg B BBB- AA/Watch Neg C-1 B+ A/Watch Neg C-2 B- A-/Watch Neg D CCC- BBB/Watch Neg E CCC- BB/Watch Neg Ratings Removed from Creditwatch Negative and Affirmed Class To From ----- -- ---- A-1 AAA AAA/Watch Neg =================== K A Z A K H S T A N =================== AIS-STROY LLP: Proof of Claim Deadline Slated for Jan. 23 --------------------------------------------------------- LLP Construction Company Ais-Stroy has opted for liquidation. Creditors have until Jan. 23, 2009, to submit written proofs of claims to: LLP Construction Company Ais-Stroy Ugolnaya Str. 30 Astana Kazakhstan ARTI-OIL LLP: Creditors Must File Claims by January 23 ------------------------------------------------------ The Specialized Inter-Regional Economic Court of Aktube has declared LLP Arti-Oil insolvent. Creditors have until Jan. 23, 2009, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Aktube Altynsarin Str. 31 Aktobe Aktube Kazakhstan Tel: 8 (3132) 21-30-32 KAZAKH MYS: Claims Filing Period Ends January 23 ------------------------------------------------ Representation of LLP Corporation Kazakh Mys has opted for liquidation. Creditors have until Jan. 23, 2009, to submit written proofs of claims to: LLP Corporation Kazakh Mys Alihanov Str. 4 Karaganda Kazakhstan MARKETING CENTRE: Creditors' Claims Due on January 23 ----------------------------------------------------- LLP Marketing Centre has opted for liquidation. Creditors have until Jan. 23, 2009, to submit written proofs of claims to: LLP Marketing Centre Abai ave. 97 Semey East Kazakhstan Kazakhstan MEGA INVEST: Claims Registration Ends January 27 ------------------------------------------------ LLP Almaty Mega Invest has opted for liquidation. Creditors have until Jan. 27, 2009, to submit written proofs of claims to: LLP Almaty Mega Invest Tulebvaev/Karasai batyr Str. 130/49-27 Almaty Kazakhstan STROY MARKET-NOVOSEL: Claims Deadline Slated for January 23 ----------------------------------------------------------- The Specialized Inter-Regional Economic Court of Aktube has declared LLP Construction Company Stroy Market-Novosel insolvent. Creditors have until Jan. 23, 2009, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Aktube Altynsarin Str. 31 Aktobe Aktube Kazakhstan Tel: 8 (3132) 21-30-32 TECHNOSEVICE 2000 K: Creditors Must File Claims by Jan. 23 ---------------------------------------------------------- LLP Technosevice 2000 K has opted for liquidation. Creditors have until Jan. 23, 2009, to submit written proofs of claims to: LLP Technosevice 2000 K Micro District 18, 14-7 Enbekshynsky Shymkent 160050 South Kazakhstan Kazakhstan TENIR INVEST: Claims Filing Period Ends January 27 -------------------------------------------------- LLP Tenir Invest has opted for liquidation. Creditors have until Jan. 27, 2009, to submit written proofs of claims to: LLP Tenir Invest Isaev Str. 161-23 Almaty Kazakhstan TORT AUL: Creditors' Claims Due on January 23 --------------------------------------------- The Specialized Inter-Regional Economic Court of Karaganda has declared LLP Tort Aul insolvent. Creditors have until Jan. 23, 2008, to submit written proofs of claims to: The Specialized Inter-Regional Economic Court of Karaganda Jambyl Str. 9 Karaganda Kazakhstan WEST INVEST: Claims Registration Ends January 23 ------------------------------------------------ LLP West Invest has opted for liquidation. Creditors have until Jan. 23, 2009, to submit written proofs of claims to: LLP West Invest Timiryazev Str. 16-3 Astana Kazakhstan =================== K Y R G Y Z S T A N =================== EXPRESS SPETS: Creditors Must File Claims by January 23 ------------------------------------------------------- LLC Construction Company Express Spets Stroy has declared insolvency. Creditors have until Jan. 23, 2009, to submit written proofs of claims to: LLC Construction Company Express Spets Stroy Ibraimov Str. 190 Bishkek Kyrgyzstan Tel: (+996 312) 67-18-70 TALLHA & MOBEEN: Creditors Must File Claims by January 23 --------------------------------------------------------- LLC Tallha & Mobeen Motors has declared insolvency. Creditors have until Jan. 23, 2009, to submit written proofs of claims to: LLC Tallha & Mobeen Motors Frunze Str. 89 Novo-Pavlovka Sukuluksky Chui Kyrgyzstan =========== L A T V I A =========== PAREX BANKA: Stable After Gov't Intervention, New Chair Says ------------------------------------------------------------ In a press conference held on Monday December 8, 2008, Nils Melngailis, the recently appointed Chairman of Parex banka emphasized that the Bank was continuing to work normally and that conditions in the banking sector were stabilizing following Government intervention. "Since my appointment on Friday I have been working intensively with the senior management of Parex banka to form a full understanding of the current situation. It is now clear to me that much recent speculation about the Bank has been very much exaggerated. In particular, the outflow of deposits has been overstated and has decreased significantly. Even so, the global environment is obviously very challenging and we are monitoring developments in the market closely. In this respect one of the most important factors for us is the outcome of the State's negotiations with the International Monetary Fund," Mr. Melngailis stated in the press conference. Directly answering questions about the level of deposit withdrawals from the Bank last week, Mr. Melngailis stressed that these amounted to LVL50 million rather than the 200 million that had been widely reported. He further added that the subject of a potential strategic investor is not a current issue: "Currently, the foremost priority is to maintain stability at Parex banka. We will of course consider seriously any interesting proposals that may be made, but our main focus is to deal with the situation created by the global liquidity crunch." In order to clarify the issues related to the possible amount of support required by Parex banka, Mr. Melngailis stated that the Bank was not seeking a specific sum from the Government: "The situation is continuing to develop and we are as usual working very actively with our clients and depositors. Our success in retaining the confidence of our clients naturally reduces the extent, to which we look to the Government for support, but in any case the scope of the Government's intervention is dependent on the State's negotiations with the IMF." Likewise, Mr. Melngailis highlighted that the most important tasks definitely include communication with top personnel of the Bank, employees and clients. "Despite the events of the last three weeks, the management and staff of Parex banka have ensured that the Bank has remained fully functional," Mr. Melngailis said. Other key tasks for the Bank mentioned by Mr. Melngailis include supporting the Government in negotiations with International Monetary Fund and concluding negotiations with Syndicated lenders. Mr. Melngailis is a former Executive Director of Lattelecom, the leading communications company in the Baltics. After leaving the position of Executive Director at Lattelecom in April this year, Mr. Melngailis established the investment firm Riga Capital, where he became President. Under his leadership the Lattelecom Group introduced and implemented an extensive modernization project, transforming the fixed communications operator into a modern electronic communications provider in the fields of telecommunications, Internet and digital TV. He also represents the U.S. investment company Blackstone Group in the Baltic Region. Mr. Melngailis was previously a Partner at the Northern Europe division of IBM Business Consulting Services, as well as a Partner at PriceWaterhouse Coopers in London and the responsible Partner for the Baltics. He was also the manager in charge at Coopers & Lybrand auditors in Latvia. Citing Mr. Melngailis, The Baltic Course reported Monday that the financial investor, that could help Parex banka recover with an investment in share capital or a loan, could be the European Bank for Reconstruction and Development (EBRD). New Management Board The new Management Board of Parex banka took office on December 5, 2008. The following senior managers of Parex banka have been appointed to the Board of the Bank: Guntis Be?avskis, Senior Vice President and Head of Customer Services Division, Valters Abele, Head of Credit Risk Division and Vladimirs Ivanovs, Vice President, Customer Service Department. The Management Board of Parex banka was elected after the acquisition agreement was signed on December 5, 2008. Under the terms of the agreement, 84.83% of Parex banka's shares have been transferred to the state-owned Mortgage and Land Bank of Latvia. The existing minority shareholders of Parex banka will retain the remaining 15.17% of the Bank's capital. The new board has been approved by the local regulator FCMC. Founded in May 1992, JSC Parex Banka -- http://www.parexgroup.com/-- is a commercial bank with assets exceeding 4.46 billion. It offers its clients integrated services in areas such as lending, payment cards, leasing, asset management and securities trading. It has more than 70 branches, customer service centers and settlement group, or nearly all regions of Latvia and the major cities. Currently, bank branches and customer service centers in Latvia employs more than 2,600 people. * * * As reported in the TCR-Europe on Dec. 9, 2008, Moody's Investors Service downgraded the bank financial strength rating of Parex Bank to E from E+. The outlook on this rating is now stable. Moody's also downgraded the bank's local and foreign currency long-term bank deposit and debt ratings to B2 from Ba1, and placed them on review for possible further downgrade. The bank's Not Prime short-term rating was affirmed. The rating actions follow the announcement of deposit withdrawal restrictions put in place earlier this week by the Cabinet of Ministers of the Republic of Latvia and the Financial and Capital Market Commission. As reported in the TCR-Europe on Dec. 5, 2008, Fitch Ratings downgraded Latvia-based Parex Banka's Long-term Issuer Default Rating to 'RD' from 'BB', Short-term IDR to 'RD' from 'B', and Support rating to '5' from '3'. Parex's Support Rating Floor has been changed to 'No Floor' from 'BB' and Individual rating has been affirmed at 'F'. In addition, Fitch has downgraded the senior unsecured ratings to 'CC' from 'BB' and assigned Recovery Rating 'RR4'. Fitch has removed Long-term IDR and senior unsecured ratings from Rating Watch Negative. The rating action follows the decision by the Latvian government and the Financial and Capital Market Commission on Dec. 1, 2008 to set restrictions on the fulfillment of the obligations by Parex. This decision restricts the deposit withdrawals by certain parties. ===================== N E T H E R L A N D S ===================== BETULA FUNDING: Fitch Reiterates Negative Watch ----------------------------------------------- Fitch Ratings issued a press release on December 2 highlighting the uncertainties regarding Betula 1 BV's ability to make interests payment on the class A notes. Fitch has now received confirmation from the trustee, Deutsche Bank, that there are sufficient Euro proceeds in Betula's account to make the interest payment due on December 15. As previously indicated, the transaction remains highly exposed to exchange rate volatility and interest rate risk. The transaction remains on Rating Watch Negative pending clarification of the replacement agent's plan for the transaction. If no replacement swap counterparty is found or a restructuring plan put forth in the coming weeks, the transaction will likely be downgraded to CCC rating category. The transaction was initially placed on RWN on October 10, 2008, following the placement of Landsbanki Islands hf into receivership on October 7 and subsequent downgrade of Landsbanki's Long-term Issuer Default Rating to 'D'. =========== R U S S I A =========== BALT-GAZ-STROY LLC: Court Names Temporary Insolvency Manager ------------------------------------------------------------ The Arbitration Court of Kaliningrad appointed V. Pasko as Temporary Insolvency Manager for Balt-Gaz-Story (Construction). The case is docketed under Case No. A21�5710/2008. He can be reached at: Inzhenernaya Str. 2/19 Kaliningrad Russia EKSPO-STROY-TEKS LLC: Creditors Must File Claims by January 5 ------------------------------------------------------------- Creditors of LLC Ekspo-Stroy-Teks Industrial Construction Company (TIN 7701250499) have until Jan. 5, 2009, to submit proofs of claims to: S. Deyev Insolvency Manager Post User Box 24 115569 Moscow Russia The Arbitration Court of Moscow commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A40-67607/08-95-215B. The Debtor can be reached at: LLC Ekspo-Stroy-Teks Building 2 Novoryazanskaya Str. 26/28 107066 Moscow Russia EVRAZIA-TSENTR CJSC: Creditors Must File Claims by February 5 ------------------------------------------------------------- Creditors of CJSC Evrazia-Tsentr Commercial Bank (Registration A 2839) have until Feb. 5, 2009, to submit proofs of claims to: Investment Insurance Agency Acting as Insolvency Manager Post User Box 48 109052 Moscow Russia Tel: 8�800-200�08-05 The Arbitration Court of Moscow commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A40�68202/08�88-182B. The Debtor can be reached at: CJSC Evrazia-Tsentr Building 2 Solyanka Str. 3 109028 Moscow Russia NORD-INVEST LLC: Court Names Temporary Insolvency Manager --------------------------------------------------------- The Arbitration Court of Smolensk appointed P. Protsenko as Temporary Insolvency Manager for LLC Nord-Invest (Construction). The case is docketed under Case No. A62-623/2008. He can be reached at: Post User Box 30 115372 Moscow Russia The Debtor can be reached at: LLC Nord-Invest Office 202 Isakovskogo Str. 5 Smolensk Russia POLYMER LLC: Creditors Must File Claims by February 5 ----------------------------------------------------- Creditors of LLC Polymer (PSRN 1067150003854) have until Feb. 5, 2009, to submit proofs of claims to: Ye. Shevchuk Insolvency Manager Office 1 Frunze Str. 7 300041 Tula Russia The Arbitration Court of Tula commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A68�2003/08�47/B-08. The Debtor can be reached at: LLC Polymer Building A Tsentralnaya Str. 17 Kvartal 5/15 Dubovka Uzlovaya Tulskaya Russia STROY-SERVIS-PLUS LLC: Court Names Insolvency Manager ----------------------------------------------------- The Arbitration Court of Tatarstan appointed V. Galiyev as Insolvency Manager for LLC Stroy-Servis-Plus (Construction). The case is docketed under Case No. A65�14056/2008-SG4�39. He can be reached at: Post User Box 50 420049 Kazan Tatarstan Russia The Debtor can be reached at: LLC Stroy-Servis-Plus Almetyevsk Russia UIS-STROY LLC: Creditors Must File Claims by February 5 ------------------------------------------------------- Creditors of LLC UIS-STROY (TIN 7726316712, PSRN 1027739720249) (Construction) have until Feb. 5, 2009, to submit proofs of claims to: N. Gorbunov Insolvency Manager Post User Box 101 119313 Moscow Russia The Arbitration Court of Moscow commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A40�38606/08�38-106B. The Debtor can be reached at: LLC UIS-STROY Building 2 Fruktovaya Str. 7 117556 Moscow Russia YUG-STROY LLC: Stavropolskiy Bankruptcy Hearing Set February 26 --------------------------------------------------------------- The Arbitration Court of Stavropolskiy will convene on Feb. 26, 2009, to hear bankruptcy supervision procedure on LLC Yug-Stroy (Construction). The case is docketed under Case No. A63� 16812/08-S5�11. The Temporary Insolvency Manager is: I. Konygin Admiralskogo Str. 51/3 357538 Pyatigorsk Russia The Debtor can be reached at: LLC Yug-Stroy Lenina Str. 189 Zheleznovodsk Stavropolskiy Russia YUNIT-BANK CJSC: Creditors Must File Claims by February 5 --------------------------------------------------------- Creditors of CJSC Yunit-Bank Commercial Bank have until Feb. 5, 2009, to submit proofs of claims to: Investment Insurance Agency Acting as Insolvency Manager Office 6 Floor 4 Uritskogo Str. 19 443030 Samara Russia Tel: 8(846)273-43-52 8-800-200-08-05 The Arbitration Court of Samara commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A55�16133/2008. The Debtor can be reached at: CJSC Yunit-Bank Proezd named after G. Mitireva 11 443079 Samara Russia ZLYNSKIY CANNERY: Creditors Must File Claims by January 5 --------------------------------------------------------- Creditors of PE Zlynskiy Cannery Plant (TIN 3213001942) have until Jan. 5, 2009, to submit proofs of claims to: L. Shvets Insolvency Manager Ostrovskogo Str. 8 Yefremov 301848 Tulskaya Russia The Arbitration Court of Bryanskaya commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A09�7729/2008�32. The Debtor can be reached at: PE Zlynskiy Cannery Plant Sovetskaya Str. 97 Zlynka 243600 Bryanskaya Russia * MOSCOW OBLAST: S&P Puts 'B-' Rating on Planned Sr. Unsec. Bond ---------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B-' long- term debt rating and 'ruBBB-' Russia national scale rating to the proposed RUR33 billion (US$1.2 billion) senior unsecured bond with an amortizing repayment schedule to be issued by the Moscow Oblast (local currency B-/Watch Neg/--; Russia national scale rating ruBBB-/Watch Neg/--). The ratings on the bond are on CreditWatch with negative implications because the ratings on the oblast are on CreditWatch with negative implications. The oblast will use the bond to refinance most of its short-term debt due by year-end 2008, which encompasses RUR14.6 billion in loans from state-owned banks, the put option (RUR5.2 billion) on a bond issued by Moscow Oblast Mortgage Agency, and guarantees of loans raised by the oblast's companies and municipalities of about RUR17.7 billion. The ratings on the bond mirror those on the oblast. The issue, to be placed on Dec. 11, 2008, will have seven, 170-day coupon payments of about 18% per year each, and a 39-month maturity. In November 2009, 15% of the principal will be redeemed, followed by 20% in October 2010, 25% in September 2011, and the remaining 40% to be redeemed in March 2012. S&P lowered the long-term rating on the oblast to 'B-' and placed the rating on CreditWatch with negative implications on Oct. 27, 2008, following uncertainty about the refinancing terms of the oblast's massive short-term direct and guaranteed debt due by the end of 2008. S&P will review the implications of the likely bond placement on the oblast's overall refinancing needs and liquidity position in the coming days. ========= S P A I N ========= BANCO BILBAO: Fitch Takes Rating Actions on Six Spanish CDOs ------------------------------------------------------------ Fitch Ratings has taken various rating actions on six Spanish small- and medium-sized enterprise collateralised debt obligation transactions originated by Banco Bilbao Vizcaya Argentaria (BBVA, rated 'AA-'(AA minus)/'F1+'/Outlook Positive). In total, 10 tranches were downgraded and 14 tranches were affirmed while 14 tranches were assigned Negative rating Outlooks and nine tranches were assigned Stable Outlooks. One tranche had its Negative Outlook maintained. Fitch assigned Negative rating Outlooks between May and September 2008 to 19 tranches issued by Spanish SME CDO transactions due to a combination of declining performance trends and the worsening Spanish macroeconomic environment. In a special report published on May 8, 2008, Fitch discussed why the agency had a negative view for the next one-to-two years and highlighted macroeconomic trends and concerns which, the agency believes, increase the downgrade risk for such notes over the long term. Since then, there has been a notable increase in delinquencies. While significant losses have yet to materialize, Fitch expects further deterioration due to the downturn in the Spanish economy and the significant exposure of the transactions to the real estate and related sectors. While recent declines in interest rates and augmented collection efforts may relieve some degree of stress in the portfolios, Fitch expects performance to weaken further over the near-term due to deteriorating macroeconomic conditions and growing stress in the real estate and construction sectors. Given these expectations, the transactions listed below were reviewed to determine if the levels of credit protection were sufficient to maintain the current ratings. In the analysis undertaken, assumptions on probability of default and loss severity were made with regards to current delinquencies as well as the performing portfolio. With respect to default probability, the base assumption on the current portion of the portfolio was revised upward to reflect the non-investment grade nature of underlying obligors and to consider how the portfolios or loans could perform through-the cycle. This resulted in an increase in the base default probability to approximately 10-15%, which was then adjusted to reflect the remaining weighted average life of the portfolio. The base case PD was further adjusted to account for the existing portfolio delinquency pipeline, with loans in later state delinquency buckets assigned progressively higher default probabilities (up to 100% for loans greater than six months in arrears). On the recovery side, Fitch assumed the 'BB' recovery from the initial rating analysis from each transaction. These updated PD and recovery assumptions were used to determine an updated loss expectation for each portfolio and then compared against existing subordination available for each tranche, with minimum coverage ratios of the updated expected loss driving the actions noted below. Seasoning, excess spread, as well as industry and obligor concentration risk also factored into Fitch's credit view. The rating actions, the transactions' main portfolio parameters and rating action rationales are: BBVA-6 FTPYME, Fondo de Titulizacion de Activos -- Class A1 (ISIN ES0370460000) downgraded to 'AA' from 'AAA'; assigned a Negative Outlook -- Class A2 (G) (ISIN ES0370460018) affirmed at 'AAA'; assigned a Stable Outlook -- Class B (ISIN ES0370460026) downgraded to 'BB' from 'AA-'(AA minus); assigned a Negative Outlook -- Class C (ISIN ES0370460034) downgraded to 'B' from 'BBB+'; Negative Outlook maintained As of October 31, 2008, 90+ day delinquencies stood at 2.1% of the current portfolio, real estate and related sectors exposure at 36.3%, and the largest geographical region is Catalonia at 21.9%. The reserve fund of EUR21.3 million provides 2% of credit enhancement. In comparison, the largest obligor is EUR6 million and the top five obligors total EUR26.9 million. The transaction closed in 2007 and has not benefited from de-leveraging to the same degree as older vintage transactions. The current portfolio is 66.3% of initial portfolio balance. Fitch's analysis of the delinquency pipeline and updated default forecast for the current portion of the portfolio indicate that current levels of credit protection for classes A1, B, and C are no longer adequate to support the ratings. As such, these classes have been downgraded and assigned Negative Outlooks, or had a Negative Outlook maintained, as noted above. The Kingdom of Spain ('AAA'/'F1+'/Outlook Stable) guarantees the class A2 (G) notes. BBVA-5 FTPYME, Fondo de Titulizacion de Activos -- Class A1 (ISIN ES0370459002) downgraded to 'AA' from 'AAA'; assigned a Negative Outlook -- Class A2 (ISIN ES0370459010) downgraded to 'AA' from 'AAA'; assigned a Negative Outlook -- Class A3 (G) (ISIN ES0370459028) affirmed at 'AAA'; assigned a Stable Outlook -- Class B (ISIN ES0370459036) downgraded to 'BBB' from 'AA'; assigned a Negative Outlook -- Class C (ISIN ES0370459044) affirmed at 'AAA'; assigned a Stable Outlook As of October 31, 2008, 90+ day delinquencies stood at 2.9% of the current portfolio, real estate and related sectors exposure at 31.8%, and the largest geographical region is Valencia at 16.9%. The reserve fund of EUR29.5 million provides 2.8% of credit enhancement. In comparison, the largest obligor is EUR6.8 million and the top five obligors total EUR26.3 million. The transaction closed in 2006 and has not benefited from de-leveraging to the same degree as older vintage transactions. The current portfolio is 52.3% of initial portfolio balance. Fitch's analysis of the delinquency pipeline and updated default forecast for the current portion of the portfolio indicate that current levels of credit protection for classes A1, A2, and B are no longer adequate to support the ratings. As such, these classes have been downgraded and assigned Negative Outlooks as noted above. The Kingdom of Spain guarantees the class A3 (G) notes and the European Investment Fund ('AAA'/'F1+'/Outlook Stable) guarantees the class C notes. BBVA-4 PYME, Fondo de Titulizacion de Activos -- Class A2 (ISIN ES0370458012) affirmed at 'AAA'; assigned a Negative Outlook -- Class B (ISIN ES0370458020) downgraded to 'AA' from 'AA+'; assigned a Negative Outlook -- Class C (ISIN ES0370458038) downgraded to 'BB' from 'BBB+'; assigned a Negative Outlook As of October 31, 2008, 90+ day delinquencies stood at 2% of the current portfolio, real estate and related sectors exposure at 31.2%, and the largest geographical region is Catalonia at 22.7%. The transaction as a whole has benefited from de-leveraging that has reached 28.8% of the initial portfolio balance. While the reserve fund balance of EUR15.2 million provides 3.8% of credit enhancement to class C, the largest obligor is EUR3.7 million and the top five obligors total EUR17.3 million. Class C is highly exposed to the obligor concentration risk. Based on Fitch's analysis of the delinquency pipeline and updated default forecast for the current portion of the portfolio, the levels of credit protection for classes B and C are no longer adequate to support the ratings. As such, the ratings have been downgraded and assigned Negative Outlooks. The class A2 was affirmed at 'AAA', but assigned a Negative Outlook due to ongoing performance concerns. BBVA-3 FTPYME, Fondo de Titulizacion de Activos -- Series A1 (ISIN ES0310110004) affirmed at 'AAA'; assigned a Stable Outlook -- Series A2 (G) (ISIN ES0310110012) affirmed at 'AAA'; assigned a Stable Outlook -- Series B (ISIN ES0310110020) affirmed at 'A+'; assigned a Negative Outlook -- Series C (ISIN ES0310110038) downgraded to 'BB' from 'BBB+'; assigned a Negative Outlook As of October 31, 2008, 90+ day delinquencies stood at 1.3% of the current portfolio, real estate and related sectors exposure at 30.9%, and the largest geographical region is Catalonia at 22.4%. The transaction as a whole has benefited from de-leveraging that has reached 26.1% of the initial portfolio balance. While an available subordinated line of credit of EUR10.7 million provides 4% of credit enhancement to Series C, the largest obligor is EUR3.6 million and the top five obligors total EUR14.3 million. The lowest-rated tranche, Series C, is highly exposed to obligor concentration risk, as well as any increase in expected defaults and assumed loss severity, and hence has been downgraded to below investment grade. Series B was assigned a Negative Outlook due to performance concerns. The Kingdom of Spain guarantees the Series A2 (G) notes. BBVA-Hipotecario 3, Fondo de Titualizacion de Activos -- Class A2 (ISIN ES0314227010) affirmed at 'AAA'; assigned a Negative Outlook -- Class B (ISIN ES0314227028) affirmed at 'A'; assigned a Negative Outlook -- Class C (ISIN ES0314227036) downgraded to 'BB' from 'BBB+'; assigned a Negative Outlook As of September 30, 2008, 90+ day delinquencies stood at 1.3% of the current portfolio, and the largest geographical region is Andalucia at 21.8%. The transaction has benefited to some degree from de-leveraging that has reached 45.6% of the initial portfolio balance. The available subordinated line of credit of EUR24.5 million provides 3.6% of credit enhancement to class C. However, the class C is highly exposed to any increase in expected defaults and assumed loss severity, and hence has been downgraded to below investment grade. Classes A2, B and C have also been assigned Negative Outlooks due to future performance concerns given deteriorating macroeconomic conditions. BBVA-2 FTPYME - ICO, Fondo de Titulizacion de Activos -- Series CCA (ISIN ES0338397047) affirmed at 'AAA'; assigned a Stable Outlook -- Series CSA (ISIN ES0338397054) affirmed at 'AAA'; assigned a Stable Outlook -- Series DCA (ISIN ES0338397062) affirmed at 'AAA'; assigned a Stable Outlook -- Series DSA (ISIN ES0338397070) affirmed at 'AAA'; assigned a Stable Outlook -- Series ESA (ISIN ES0338397088) affirmed at 'A-'(A minus); assigned a Negative Outlook As of October 31, 2008, the transaction, which closed in 2000, has de-leveraged to 5.5% of the initial portfolio balance. The 90+ day delinquencies stood at 7.2% of the current portfolio. The available subordinated line of credit facility of EUR7.5 million provides 13.7% credit enhancement to Series ESA. However, in the absence of a clean up call, this series remains exposed to the obligor concentration risk that increases as the transaction de- leverages. The largest obligor is EUR3.1 million and the top five obligors total EUR8.7 million. Hence, Series ESA was assigned a Negative Outlook. The Kingdom of Spain guarantees the Series CCA and DCA notes. FONDO DE TITULIZACION: S&P Downgrades Ratings on UCI Classes ------------------------------------------------------------ Standard & Poor's Ratings Services lowered and removed from CreditWatch negative its credit ratings on the class B and C mortgage-backed floating-rate notes issued by UCI 14, UCI 15, and UCI 17 and the class B, C, D notes issued by UCI 16 due primarily to poor pool performance. At the same time, S&P affirmed the ratings on the class A notes in those transactions, the class D notes issued by UCI 17, and the class E notes issued by UCI 16. S&P has also affirmed the ratings on all classes of notes issued by U.C.I. 4, UCI 7, UCI 8, UCI 9, UCI 10, UCI 11, and UCI 12. The rating actions follow a full credit and cash flow analysis of the most recent transaction information that S&P has received. This analysis showed that the credit enhancement available for UCI 14, UCI 15, UCI 16, and UCI 17's junior classes was not sufficient to maintain the current ratings. This was mainly driven by further deterioration in pool performance. The UCI deals are Spanish residential mortgage-backed securities transactions backed by pools of first-ranking mortgages secured over owner-occupied residential properties in Spain, and pools of unsecured personal or second-lien mortgage loans all associated with the first-ranking mortgages originated by Union de CreditosInmobiliarios, Establecimiento Financiero de Credito S.A. Long-term arrears in the portfolios backing UCI 14, UCI 15, UCI 16, and UCI 17 are rising at a faster rate than earlier cohorts of deals from this originator. Arrears greater than 90 days reached 6.66% in UCI 14, 7.84% in UCI 15, 9.02% in UCI 16, and 7.41% in UCI 17 at the last interest payment date. S&P inputs current delinquency and default information into its credit and cash flow analysis. This demonstrated that the junior notes in these deals could no longer withstand S&P's rating stresses at their previously assigned rating levels. S&P conducted the same credit and cash flow analysis on UCI 4, UCI 7, UCI 8, UCI 9, UCI 10, UCI 11, and UCI 12 and concluded that S&P is able to affirm the ratings on all of these notes. The ratings on these transactions are currently supported by higher credit enhancement levels provided by a cash reserve and subordinated tranches due to transaction amortization, and lower long-term arrears than the later deals. UCI 18 closed relatively recently, in February 2008. At this stage, S&P is closely monitoring the evolution of early-stage distressed loans and will review the transaction in more detail should long-term arrears trends show similar patterns to the preceding deals. Ratings List Ratings Lowered and Removed from Creditwatch Negative Fondo de Titulizacion de Activos UCI 14 EUR1,450 Million Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- B BBB A-/Watch Neg C BB+ BBB/Watch Neg Fondo de Titulizacion de Activos UCI 15 EUR1,451.6 Million Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- B BBB A-/Watch Neg C BB+ BBB/Watch Neg Fondo de Titulizacion de Activos UCI 16 EUR1,819.8 Million Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- B BBB A-/Watch Neg C BB+ BBB/Watch Neg D B BB/Watch Neg Fondo de Titulizacion de Activos UCI 17 EUR1,415.4 Million Mortgage-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- B BBB A/Watch Neg C BB+ BBB/Watch Neg Ratings Affirmed Fondo de Titulizacion Hipotecaria U.C.I. 4 EUR180.3 Million Mortgage-Backed Floating-Rate Notes To From -- ---- A AAA B AA+ Fondo de Titulizacion de Activos UCI 7 EUR455 Million Mortgage-Backed Floating-Rate Notes To From -- ---- A AAA B AA Fondo de Titulizacion de Activos UCI 8 EUR600 Million Mortgage-Backed Floating-Rate Notes To From -- ---- A AAA B AA- Fondo de Titulizacion de Activos UCI 9 EUR1.25 Billion Mortgage-Backed Floating-Rate Notes To From -- ---- A AAA B AA C A Fondo de Titulizacion Hipotecaria UCI 10 EUR700 Million Mortgage-Backed Floating-Rate Notes To From -- ---- A AAA B A Fondo de Titulizacion de Activos UCI 11 EUR850 Million Mortgage-Backed Floating-Rate Notes To From -- ---- A AAA B A C BBB Fondo de Titulizacion Hipotecaria UCI 12 EUR900 Million Mortgage-Backed Floating-Rate Notes To From -- ---- A AAA B A C BBB Fondo de Titulizacion de Activos UCI 14 EUR1,450 Million Mortgage-Backed Floating-Rate Notes To From -- ---- A AAA Fondo de Titulizacion de Activos UCI 15 EUR1,451.6 Million Mortgage-Backed Floating-Rate Notes To From -- ---- A AAA Fondo de Titulizacion de Activos UCI 16 EUR1,819.8 Million Mortgage-Backed Floating-Rate Notes To From -- ---- A1 AAA A2 AAA E CCC- Fondo de Titulizacion de Activos UCI 17 EUR1,415.4 Million Mortgage-Backed Floating-Rate Notes To From -- ---- A1 AAA A2 AAA D CCC- PYME VALENCIA: Fitch Downgrades Ratings on Two Classes to Low-B --------------------------------------------------------------- Fitch Ratings has downgraded the ratings of two classes and affirmed three classes of PYME Valencia 1, FTA, and simultaneously assigned or maintained rating Outlooks,: -- Class A2 (ISIN ES0372241002) affirmed at 'AAA'; assigned a Negative Outlook -- Class B (ISIN ES0372241028) affirmed at 'A'; assigned a Negative Outlook -- Class C (ISIN ES0372241051) downgraded to 'BB' from 'BBB'; assigned a Negative Outlook -- Class D (ISIN ES0372241036) downgraded to 'B' from 'BB'; Negative Outlook maintained -- Class E (ISIN ES0372241044) affirmed at 'CC' The review was prompted by an increase in the amount of delinquent loans in the transaction and concerns about Spain's macroeconomic environment. As of September 30, 2008, 90+ day delinquencies stood at 2.7% of the current portfolio. Further, the portfolio is highly concentrated in real estate and related sectors with the current exposure at 59.7%, and the largest geographical region is Valencia at 60.7%. The transaction is also exposed to obligor concentration with the largest obligor accounting for 2% of the portfolio and the top five obligors totaling EUR50.9 million or 9.2%. The transaction closed in 2007 and has not benefited from de-leveraging to the same degree as older vintage transactions. The current portfolio is 64.9% of the initial portfolio balance, which has led to a small increase in credit enhancement on the notes. The reserve fund of EUR15.3 million provides 2.7% of credit enhancement. While current levels of credit protection for classes A2 and B remain sufficient to maintain the current rating, the transaction is exposed to the delinquency pipeline, and these notes have thus been assigned Negative Outlooks. Fitch's analysis of the delinquency pipeline and updated default forecast for the current portion of the portfolio indicates that the credit protection for classes C and D has declined markedly which is why the notes have been downgraded to below investment grade with Negative Outlooks as noted above. Fitch assigned Negative rating Outlooks between May and September 2008 to 19 tranches issued by Spanish small- and medium-sized enterprise collateralized debt obligation transactions due to a combination of declining performance trends and the worsening Spanish macroeconomic environment. In a special report published on May 8, 2008, Fitch discussed why the agency had a negative view for the next one-to-two years and highlighted macroeconomic trends and concerns which, the agency believes, increase the downgrade risk for such notes over the long term. Since then, there has been a notable increase in delinquencies. While significant losses have yet to materialize, Fitch expects further deterioration due to the downturn in the Spanish economy and the significant exposure of the transaction to the real estate and related sectors. While recent declines in interest rates and augmented collection efforts may relieve some degree of stress in the portfolio, Fitch expects performance to weaken further over the near-term due to deteriorating macroeconomic conditions and growing stress in the real estate and construction sectors. Given these expectations, the transaction was reviewed to determine if the levels of credit protection were sufficient to maintain the current ratings. In the analysis undertaken, assumptions on probability of default and loss severity were made with regards to current delinquencies as well as the performing portfolio. With respect to default probability, the base assumption on the current portion of the portfolio was revised upward to reflect the non-investment grade nature of underlying obligors and to consider how the portfolio or loans could perform through-the cycle. This resulted in an increase in the base default probability to approximately 10-15%, which was then adjusted to reflect the remaining weighted average life of the portfolio. The base case PD was further adjusted to account for the existing portfolio delinquency pipeline, with loans in later state delinquency buckets assigned progressively higher default probabilities (up to 100% for loans greater than six months in arrears). On the recovery side, Fitch assumed the 'BB' recovery from the initial rating analysis. These updated PD and recovery assumptions were used to determine an updated loss expectation and then compared against existing subordination available for each tranche, with minimum coverage ratios of the updated expected loss driving the actions noted above. Seasoning, excess spread, as well as industry and obligor concentration risk also factored into Fitch's credit view. This transaction is a cash flow securitization of secured and unsecured loans granted by Banco de Valencia ('A-'((A minus))/'F2'/Outlook Stable) to SMEs in Spain. PYME Valencia 1, FTA, a limited liability SPV incorporated under Spanish law, will be legally represented and managed by Europea de Titulizacion, SGFT, SA, whose activities are limited to the management of securitization funds. RURALPYME 2: Moody's Downgrades Class C Rating to 'BB' ------------------------------------------------------ Fitch Ratings has downgraded the rating of one class and affirmed four classes of Ruralpyme 2 FTPYME, Fondo de Titulizacion de Activos. The agency has simultaneously assigned rating Outlooks: -- Class A1 (ISIN ES0374352005) affirmed at 'AAA'; assigned a Negative Outlook -- Class A2 (G) (ISIN ES0374352013) affirmed at 'AAA'; assigned a Stable Outlook -- Class B (ISIN ES0374352021) affirmed at 'A'; assigned a Negative Outlook -- Class C (ISIN ES0374352039) downgraded to 'BB' from 'BBB-' (BBB minus); Negative Outlook maintained -- Class D (ISIN ES0374352047) affirmed at 'CC' The Kingdom of Spain ('AAA'/'F1+'/Outlook Stable) guarantees the class A2 (G) notes. The review was prompted by an increase in the amount of delinquent loans in the transaction and concerns about Spain's macroeconomic environment. As of October 31, 2008, 90+ day delinquencies stood at 2.3% of the current portfolio. Further, the portfolio is concentrated in real estate and related sectors with the current exposure at 22.2%, and the largest geographical region is Aragon at 28.9%. The transaction is also exposed to obligor concentration with the largest obligor accounting for 1.5% of the portfolio and the top five obligors totaling EUR22.8 million or 6%. The transaction closed in 2006 and has not benefited from de- leveraging to the same degree as older vintage transactions. The current portfolio is 63.5% of initial portfolio balance, which has led to a small increase in credit enhancement on the notes. The reserve fund of EUR24 million provides 6.3% of credit enhancement. While current levels of credit protection for classes A1 and B remain sufficient to maintain their current ratings, the transaction is exposed to the delinquency pipeline, and these notes have thus been assigned Negative Outlooks. Fitch's analysis of the delinquency pipeline and updated default forecast for the current portion of the portfolio indicate that the credit protection for class C has declined markedly which is why the tranche has been downgraded to below investment grade and assigned a Negative Outlook as noted above. Fitch assigned Negative rating Outlooks between May and September 2008 to 19 tranches issued by Spanish small- and medium-sized enterprise collateralized debt obligation transactions due to a combination of declining performance trends and the worsening Spanish macroeconomic environment. In a special report published on May 8, 2008, Fitch discussed why the agency had a negative view for the next one-to-two years and highlighted macroeconomic trends and concerns which, the agency believes, increase the downgrade risk for such notes over the long term. Since then, there has been a notable increase in delinquencies. While significant losses have yet to materialize, Fitch expects further deterioration due to the downturn in the Spanish economy and the significant exposure of the transaction to the real estate and related sectors. While recent declines in interest rates and augmented collection efforts may relieve some degree of stress in the portfolio, Fitch expects performance to weaken further over the near-term due to deteriorating macroeconomic conditions and growing stress in the real estate and construction sectors. Given these expectations, the transaction was reviewed to determine if the levels of credit protection were sufficient to maintain the current ratings. In the analysis undertaken, assumptions on probability of default and loss severity were made with regards to current delinquencies as well as the performing portfolio. With respect to default probability, the base assumption on the current portion of the portfolio was revised upward to reflect the non-investment grade nature of underlying obligors and to consider how the portfolio or loans could perform through-the cycle. This resulted in an increase in the base default probability to approximately 10-15%, which was then adjusted to reflect the remaining weighted average life of the portfolio. The base case PD was further adjusted to account for the existing portfolio delinquency pipeline, with loans in later state delinquency buckets assigned progressively higher default probabilities (up to 100% for loans greater than six months in arrears). On the recovery side, Fitch assumed the 'BB' recovery from the initial rating analysis. These updated PD and recovery assumptions were used to determine an updated loss expectation and then compared against existing subordination available for each tranche, with minimum coverage ratios of the updated expected loss driving the actions noted above. Seasoning, excess spread, as well as industry and obligor concentration risk also factored into Fitch's credit view. The transaction represents a cash-flow securitization of a static portfolio of loans to Spanish SMEs granted by 14 rural credit cooperatives. Ruralpyme 2 is a special purpose vehicle incorporated under the laws of Spain with limited liability. Its sole purpose is to acquire the portfolio of loans as collateral for the issuance of fixed-income securities. The assets of Ruralpyme 2 were acquired on its behalf by Europea de Titulizacion SGFT, S.A., a special purpose management company with limited liability and incorporated under the laws of Spain. =========== S W E D E N =========== * SWEDEN: Gov't Plans to Offer Loans to Car Sector -------------------------------------------------- The Swedish government planned to offer loans and loan guarantees worth several billion Swedish crowns to the country's car sector, Adam Cox and Victoria Klesty of Reuters report citing Swedish daily Dagens Industri. Reuters relates that an unidentified source cited by Dagens Industri said "It is not a question of subsidies or of the government going in as an owner, but of loans and loan guarantees on good terms." However, a government spokesman declined to comment on the report, Reuters notes. According to Reuters, Ford and General Motors are important to the wider Swedish economy not only because of the thousands of workers they employ directly, but also because of the many companies that supply the firms. ===================== S W I T Z E R L A N D ===================== BIELAVIA LLC: Creditors' Proofs of Claim Due by December 21 ----------------------------------------------------------- Creditors owed money by LLC Bielavia are requested to file their proofs of claim by Dec. 21, 2008, to: Stefanie T.S. Falciani Liquidator Bruggstrasse 106 2503 Biel/Bienne Switzerland The company is currently undergoing liquidation in Biel/Bienne. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Sept. 16, 2008. FARLEX LLC: Proofs of Claim Filing Deadline is December 21 ---------------------------------------------------------- Creditors owed money by LLC Farlex are requested to file their proofs of claim by Dec. 21, 2008, to: Terrassenweg 1a 6301 Zug Switzerland The company is currently undergoing liquidation in Zug. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Nov. 6, 2008. GENERAL MOTORS: EU Unit in Talks w/ Unions On Cost Savings Plan --------------------------------------------------------------- Jamie Dunkley at the Daily Telegraph reports that General Motors is in talks with union leaders in Europe over a EUR750 million (GBP652 million) cost saving plan. According to the report, the company said discussions were "ongoing" at its Russelsheim office in Germany. A spokesman for GM Europe however said details of the plan would not be revealed until next year, the report notes. Measures under consideration are thought to include changes to shift patterns, shorter working weeks, pay cuts and redundancies, the report relates. GM Europe, which reported revenue of US$37.4 billion in 2007, currently employs about 55,000 people, with 5000 working in the UK by Vauxhall at its Merseyside and Luton plants, the report discloses. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. As reported in the Troubled Company Reporter on Nov. 10, 2008, General Motors Corporation's balance sheet at Sept. 30, 2008, showed total assets of US$110.425 billion, total liabilities of US$170.3 billion, resulting in a stockholders' deficit of US$59.9 billion. * * * As reported in the Troubled Company Reporter on Nov. 11, 2008, Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on General Motors Corp. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Oct. 9, 2008. S&P said that the outlook is negative. Fitch Ratings, as reported in the Troubled Company Reporter on Nov. 11, 2008, placed the Issuer Default Rating of General Motors on Rating Watch Negative as a result of the company's rapidly diminishing liquidity position. Given the current liquidity level of US$16.2 billion and the pace of negative cash flows, Fitch expects that GM will require direct federal assistance over the next quarter and the forbearance of trade creditors in order to avoid default. With virtually no further access to external capital and little potential for material asset sales, cash holdings are expected to shortly reach minimum required operating levels. Fitch placed these on Rating Watch Negative: -- Senior secured at 'B/RR1'; -- Senior unsecured at 'CCC-/RR5'. As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corp. and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. economy. KRATO JSC: December 24 Set as Deadline to File Claims ----------------------------------------------------- Creditors owed money by JSC Krato are requested to file their proofs of claim by Dec. 24, 2008, to: Dr. Ferdinand Meyer Liquidator Forchstrasse 452 Mail Box: 1432 8032 Zurich Switzerland The company is currently undergoing liquidation in Zollikon. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Nov. 3, 2008. LEHMAN BROTHERS FINANCE: Creditors Must File Claims by Dec. 23 -------------------------------------------------------------- Creditors owed money by JSC Lehman Brothers Finance are requested to file their proofs of claim by Dec. 23, 2008, to: Talstrasse 82 8001 Zurich Switzerland The company is currently undergoing liquidation in Zurich. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Oct. 29, 2008. LEHMAN BROTHERS INT'L.: Deadline to File Claims Set Dec. 23 ----------------------------------------------------------- Creditors owed money by JSC Lehman Brothers International Europe are requested to file their proofs of claim by Dec. 23, 2008, to: Talstrasse 82 8001 Zurich Switzerland The company is currently undergoing liquidation in Zurich. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Oct. 29, 2008. OMIGO JSC: Creditors Have Until December 23 to File Claims ---------------------------------------------------------- Creditors owed money by JSC Omigo are requested to file their proofs of claim by Dec. 23, 2008, to: LLC IBS Baarerstrasse 94 6300 Zug Switzerland The company is currently undergoing liquidation in Zug. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on Oct. 23, 2008. ============= U K R A I N E ============= AGRO-PROGRESS LLC: Creditors Must File Claims by Dec. 26, 2008 --------------------------------------------------------------- Creditors of LLC Agro-Progress (code EDRPOU 30843865) have until Dec. 26, 2008, to submit proofs of claim to: Mrs. Tatiana Viknianskaya Temporary Insolvency Manager V. Aleksandri Str. 151/d Chernovcy 58000, Ukraine Tel: 8(050)5228757 The Arbitration Court of Chernovcy commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 10, 2008. The case is docketed as 10/206/B. The Economic Court of Chernovcy O. Kobylianska Str. 14 58000 Chernovcy Ukraine The Debtor can be reached at: LLC Agro-Progress Terebleche Glybotsky Chernovcy Ukraine AGRO-SPUTNIK LLC: Creditors Must File Claims by December 26 ----------------------------------------------------------- Creditors of LLC Agro-Sputnik (code EDRPOU 35176410) have until Dec. 26, 2008, to submit proofs of claim to: The Economic Court of Nikolaev Admiralskaya Str. 22a 54009 Nikolaev Ukraine The Arbitration Court of Nikolaev commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 21, 2008. The case is docketed as 5/497/08. The Debtor can be reached at: LLC Agro-Sputnik Sadovaya Str. 1-a Nikolaev Ukraine DNIEPROBALT LLC: Creditors Must File Claims by December 26 ---------------------------------------------------------- Creditors of LLC Dnieprobalt (code EDRPOU 25478292) have until Dec. 26, 2008, to submit proofs of claim to: Mr. Ivan Pogorely Liquidator/Insolvency Manager P.O.B. 2112 69091 Zaporozhje Ukraine Tel: 8(061)270-43-44 8(061)233-05-89 8(050)454-22-03 The Arbitration Court of Chernovcy commenced bankruptcy proceedings against the company after finding it insolvent on Nov. 11, 2008. The case is docketed as 12/275/08. The Economic Court of Chernovcy O. Kobylianska Str. 14 58000 Chernovcy Ukraine DONSNAB LLC: Creditors Must File Claims by December 26 ------------------------------------------------------ Creditors of LLC Donsnab (code EDRPOU 32227514) have until Dec. 26, 2008, to submit proofs of claim to: Mr. Aleksey Liaskovets Temporary Insolvency Manager P.O.B. 3398 69006 Zaporozhje Ukraine The Arbitration Court of Zaporozhje commenced bankruptcy proceedings against the company after finding it insolvent on Nov. 3, 2008. The case is docketed as 16/321/08. The Economic Court of Zaporozhje Shaumiana Str. 4 69001 Zaporozhje Ukraine The Debtor can be reached at: LLC Donsnab Chekistov Str. 39/48 69054 Zaporozhje Ukraine KADIS LLC: Creditors Must File Claims by December 26 ---------------------------------------------------- Creditors of LLC Firm Kadis (code EDRPOU 23619802) have until Dec. 26, 2008, to submit proofs of claim to: Mr. Alexander Kodrian Temporary Insolvency Manager Apt. 128 Chkalov Str. 108 Nikolaev Ukraine The Arbitration Court of Nikolaev commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 28, 2008. The case is docketed as 5/498/08. The Economic Court of Nikolaev Admiralskaya Str. 22a 54009 Nikolaev Ukraine The Debtor can be reached at: LLC Firm Kadis Heroes of Stalingrad Avenue, 1-B Nikolaev Ukraine KRASNAYA UKRAINA: Creditors Must File Claims by December 26 ----------------------------------------------------------- Creditors of Agricultural LLC Krasnaya Ukraina (code EDRPOU 30813249) have until Dec. 26, 2008, to submit proofs of claim to: Mr. Oleg Shypitko Liquidator/Insolvency Manager Apt. 131 Parkovaya Str. 85 Kramatorsk 84300 Donetsk Ukraine The Arbitration Court of Donetsk commenced bankruptcy proceedings against the company after finding it insolvent on Aug. 19, 2008. The case is docketed as 45/120B. The Economic Court of Donetsk Artema Str. 157 83048 Donetsk Ukraine The Debtor can be reached at: Agricultural LLC Krasnaya Ukraina Lenin Str. 19 Vasilyevka Starobelsky Donetsk 87252 Ukraine RADOSIN LLC: Creditors Must File Claims by December 26 ------------------------------------------------------ Creditors of LLC CJSC Production-Trading Firm Radosin (code EDRPOU 30491162) have until Dec. 26, 2008, to submit proofs of claim to: Mr. Y. Ignatchenko Liquidator Prague Str. 5 Kiev Ukraine Tel: 8(050)216-47-61 8(044)494-46-61 The Arbitration Court of Kiev commenced bankruptcy proceedings against the company after finding it insolvent on Aug. 20, 2008. The case is docketed as 49/217-B. The Economic Court of Kiev B. Hmelnitskij Boulevard 44-B 01030 Kiev Ukraine The Debtor can be reached at: LLC CJSC Production-Trading Firm Radosin Bratislavskaya Str. 8 Kiev Ukraine STAKHANOVSKOYE LLC: Creditors Must File Claims by Dec. 26, 2008 --------------------------------------------------------------- Creditors of LLC Stakhanovskoye (code EDRPOU 31083527) have until Dec. 26, 2008, to submit proofs of claim to: Mrs. Nathalie Prudka Liquidator/Insolvency Manager 40 Years of Soviet Ukraine Str. 82a 69035 Zaporozhje Ukraine The Arbitration Court of Zaporozhje commenced bankruptcy proceedings against the company after finding it insolvent on Nov. 10, 2008. The case is docketed as 19/155/08. The Economic Court of Zaporozhje Shaumiana Str. 4 69001 Zaporozhje Ukraine The Debtor can be reached at: LLC Stakhanovskoye Valery Lobanovsky Str. 6-A 69006 Zaporozhje Ukraine ZIRCONIUM REFRACTORY: Creditors Must File Claims by December 26 --------------------------------------------------------------- Creditors of LLC Zirconium Refractory Materials Plant (code EDRPOU 31240890) have until Dec. 26, 2008, to submit proofs of claim to: Mr. Alexander Vozdvizhensky Liquidator a/b 1799 49027 Dnipropetrovsk Ukraine Tel: (056)744-21-37 (056)770-22-92 The Arbitration Court of Dnipropetrovsk commenced bankruptcy proceedings against the company after finding it insolvent on Nov. 13, 2008. The case is docketed as B 15/29/5-07. The Economic Court of Dnipropetrovsk Kujbishev Str. 1a 49600 Dnipropetrovsk Ukraine The Debtor can be reached at: LLC Zirconium Refractory Materials Plant Stepovaya Str. 1B Volnogorsk 51700 Dnipropetrovsk Ukraine ZOLOTIYE PESKI-2 : Creditors Must File Claims by December 26 ------------------------------------------------------------ Creditors of LLC Zolotiye Peski-2 (code EDRPOU 32785795) have until Dec. 26, 2008, to submit proofs of claim to: Mrs. Nathalie Gapina Temporary Insolvency Manager Apt. 4 Gogol Str. 11 73000 Herson Ukraine The Arbitration Court of Herson commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 29, 2008. The case is docketed as 5/238-B-08. The Economic Court of Herson Gorkiy Str. 18 73000 Herson Ukraine The Debtor can be reached at: LLC Zolotiye Peski-2 Lenin Str. 202-a Genichesk 75500 Herson Ukraine =========================== U N I T E D K I N G D O M =========================== BRITISH AIRWAYS: Qantas Board Gives Go Signal on Merger Talks ------------------------------------------------------------- The Australian reports that Qantas Airways Ltd.'s board has given airline executives a green light to continue talks on the AU$8 billion merger with British Airways Plc. As published in the Troubled Company Reporter-Europe on Dec. 9, 2008, Bloomberg News reported Qantas Chief Executive Officer Alan Joyce said "significant matters" need to be resolved before a merger with British Airways can be achieved. These include "an appropriate merger ratio," issues connected with British Airways' pension fund and the global economic outlook, Mr. Joyce said, as cited by Bloomberg News. According to Bloomberg News, analysts at Citigroup Inc. said in a Nov. 21 report concern about pension fund liabilities has delayed progress on British Airways' proposed tie-up with Spain's Iberia Lineas Aereas de Espana SA. As reported in the Troubled Company Reporter-Europe on Nov. 19, 2008, Iberia planned of an all-share merger with British Airways and has told investors it may take a bigger share of the combined group. However, Iberia chairman Fernando Conte noted there are still some difficulties with the deal including British Airways's pension deficit. Bloomberg News disclosed British Airways, which will complete a tri-annual actuarial review of its pension program in 2009, said Sept. 18 that the annual funding deficit widened to GBP1.5 billion (US$2.2 billion) as of March 31, the end of its last fiscal year. A TCR-Europe report on Dec. 4, 2008, said British Airways confirmed it is exploring a potential merger with Qantas Airways via a dual-listed company structure. British Airways' discussions with Iberia meanwhile are also continuing. British Airways however said there is no guarantee that any transaction will be forthcoming and a further announcement will be made in due course, if appropriate. About British Airways Headquartered in Harmondsworth, England, British Airways Plc -- http://www.ba.com/-- operates of international and domestic scheduled and charter air services for the carriage of passengers, freight and mail, and provides of ancillary services. The British Airways group consists of British Airways plc and a number of subsidiary companies including in particular British Airways Holidays Ltd. and British Airways Travel Shops Ltd. BA has offices in India and Guatemala. * * * As reported in the TCR-Europe on Nov. 18, 2008, Moody's Investors Service placed all ratings of British Airways plc (Baa3 Corporate Family Rating - CFR); Ba1 senior unsecured and the Ba2 rating of the perpetual guaranteed preferred securities on review for possible downgrade. BUCKS AUTO: Appoints Joint Liquidators from Smith & Williamson -------------------------------------------------------------- Stephen John Tancock and Stephen John Adshead of Smith & Williamson Ltd. were appointed joint liquidators of Bucks Auto Components Ltd. on Nov. 26, 2008. The company can be reached through Smith & Williamson Ltd. at: First Floor 89 King Street Maidstone Kent ME14 1BG England EMI GROUP: Says it Will Not Default on Citigroup Loans ------------------------------------------------------ Nick Clark at The Independent reports that EMI Group plc dismissed speculation that it could default on its GBP2.7 billion loans with Citigroup early next year. It is believed that the group needed more cash to avoid breaching covenants in three months, the report relates. According to the report, private equity firm Terra Firma, which bought the group for GBP2.4 billion in 2007, has a covenant check scheduled for March. However, sources on both sides maintained the group will not default on the loans, the report discloses. Citing a source close to Terra Firma, the report states internal forecasts predict the group will generate enough cash to avoid going cap in hand to its owners. "EMI had a solid first half, and if performance continues in the same way then there is no reason why it should run into problems. The covenant light facility has seven years to go, and March is nothing more than a covenant test," the source was quoted by the report as saying. In September Terra Firma, the report recounts, had to inject between GBP65 million and GBP75 million into the group to avoid a potential default. However, the report notes banking sources remain confident over the group's ability to pay, adding that at the time of the investment three months ago it had raised "a fair amount of equity in excess of what it needed at the time". About EMI Group plc Headquartered in London, United Kingdom, EMI Group PLC -- http://www.emigroup.com/-- is the world's largest independent music company, operating directly in 50 countries, with licensees in a further 20 and employs around 5,500 people. The group has operations in Brazil and China among others. In August 2007 EMI was acquired by private equity firm Terra Firma. At March 31, 2007, EMI Group's consolidated balance sheet revealed GBP1.5 billion in total assets, GBP2.65 billion in total liabilities resulting to GBP1.15 billion in shareholders' deficit. HBOS PLC: Tribunal Rejects Legal Challenge Against Lloyds Merger ---------------------------------------------------------------- The Competition Appeal Tribunal on Wednesday rejected a legal challenge to Lloyds TSB Group plc's proposed takeover of HBOS plc brought by a group of customers, shareholders and businessmen called the Merger Action Group, BBC News reports. According to the report, the tribunal in London was asked to decide whether the government had been right to bypass competition concerns in allowing HBOS to be rescued. The two-day tribunal hearing in London was held under Scottish law, the report notes. HBOS shareholders will vote on the takeover deal today, the report discloses. MAG Reacts on Court's Decision In a press statement on Wednesday, the Merger Action Group said it was disappointed to lose its legal challenge against the Government's decision to ignore competition law to push through the Lloyds TSB's proposed takeover of HBOS. But the group was heartened that the tribunal found they were right and proper people to bring the action which had been raised under public interest concerns. During the two-day hearing, the tribunal heard that MAG had won the backing of some 630 members of the public, while First Minister Alex Salmond and Mr Peter Vicary-Smith, chief executive of Which? -� Europe's largest independent consumer body with more than 700,000 members -- were among others who had written to the tribunal in support of the appeal. Although the hearing was held in London, it was conducted under Scots Law because the applicants were mainly Scotland-based and the impact of the merger if it goes ahead will be felt more keenly north of the Border than elsewhere. Mr Ian Forrester QC, for MAG, told the tribunal that the association was "a group of responsible individuals pursuing a real and legitimate interest". He said they shared the concerns of the Office of Fair Trading [OFT] which, in a report before Lord Mandelson's made his decision, warned that the merger could lead to a significant lessening of competition. The OFT said the takeover should be referred to the Competition Commission for further investigation. However, Lord Mandelson disregarded this advice after both Gordon Brown and Alistair Darling had earlier spoken publicly in favor of the merger. Mr. Forrester said the proposed merger should have been open to public scrutiny, but that "the Government had a clear policy" that the deal should go ahead. MAG to Conclude Legal Challenge In a press statement on Thursday MAG said it felt it had done all it practically could to highlight the widespread public concern over the Government's decision to waive competition law to push through the takeover of HBOS by Lloyds TSB. Accordingly, MAG has decided to conclude its legal challenge and will not be appealing to the Court of Session following the Competition Appeal Tribunal's ruling. The group of businessmen, supported by more than 750 bank shareholders, customers and other concerned members of the public, said it had no wish to interfere with today's meeting in Birmingham when HBOS shareholders will be asked to vote on the takeover, and had taken great care to facilitate a truncated tribunal timetable in order to meet this deadline. MAG spokesman Malcolm Fraser, an Edinburgh architect, said: "We are glad we took the stand we did, and that we were able to highlight issues in advance of any vote. It is now up to shareholders to decide what is in the best interests of themselves, the banks and their staff and customers. "We are satisfied that our legal challenge against Lord Mandelson's extraordinary decision to approve this takeover without referring it to the Competition Commission was right, proper and responsible. "And we take great heart from the fact that in its judgment, the Competition Appeal Tribunal corroborated this view even though, on very strict and narrow legal grounds, it ruled against us. "We have also been very encouraged by the huge groundswell of public and political support for our cause, which in itself is very rewarding given that our only motive in bringing forward this appeal was to protect and stand up for the public interest. "We have had no issue with either of the banks involved � this was purely and simply done in the public interest and to address the concerns and fears of many people in Scotland that it was a decision made for political expediency. "Many people will no doubt find it hard to believe that the prior public statements made by the Chancellor and the Prime Minister placed no burden on Lord Mandelson's decision, but nonetheless we respect the ruling of Sir Gerald Barling QC and his two fellow panel members, who diligently adjudicated on the evidence provided to them. "In deciding not to exercise our right to appeal to the Court of Session, we also have to take into account that we are a relatively small group with limited resources. Nevertheless, we have no regrets or doubts that we were promoting a just cause, and do not apologize for doing what we believed to be right.' The group is now exploring its options on whether to continue in a modified form or to disband. "We have yet to decide whether there may be a future role for MAG," said Mr Fraser. "We are aware that there are a number of people and organizations who are urging us to continue. We shall make an announcement on that in early course." The question of legal costs in connection with the two-day hearing at CAT has yet to be resolved between lawyers acting for MAG and those representing Lord Mandelson. MAG said that they appreciated indications from the two banks involved, as interveners, that they would not pursue the group for costs, but MAG is awaiting a decision from Department of Business, Enterprise and Regulatory Reform [BERR]. Mr. Fraser said: "The Tribunal is not in the business of dissuading challenges by relatively small applicants, and in the past has even awarded costs to losing parties acting in the public interest, as were we. "Nonetheless, we feel it is right to pay our own costs in regard to our action, and hope that the UK Government will do likewise. We did not want to use our costs as a bargaining position regarding our appeal, which is why we have notified all parties that we are waiving our right of appeal with immediate effect." MAG's legal action has been funded largely through public donations to a fighting fund which was set up at the start of the campaign. Takeover Deal As reported in the TCR-Europe on Nov. 24, 2008, Lloyds TSB shareholders overwhelmingly supported the proposed takeover of HBOS. Lloyds TSB shareholders voted 95.98% in favor of the takeover, which if pushed through will create a banking giant with 145,000 staff and 3,000 branches. The shareholders also approved plans to raise GBP5.5 billion by issuing new shares and special preference shares. On Nov. 19, 2008, the TCR-Europe reported that HBOS urged its shareholders to vote in favor of its merger with Lloyds TSB. HBOS warned the bank could face nationalization if shareholders turn down a proposed takeover by Lloyds TSB as it would need significantly more capital, making the loss of private sector status more likely. HBOS shareholders are scheduled to vote on the GBP12 billion (US$18 billion) takeover by Lloyds TSB on December 12. About HBOS Plc HBOS Plc (LON: HBOS) -- http://www.hbosplc.com/-- is a United- Kingdom based company. It is the holding company of the HBOS Group. It operates through five divisions: retail, corporate, insurance & investment, international and treasury & asset management. The company's retail range of products includes personal and business banking products and services to 23 million customers. JJB SPORTS: Total Group Sales Down 7.5% from July 28 to December 7 ------------------------------------------------------------------ JJB Sports plc published its Interim Management Statement relating to the period from July 28, 2008 to December 7, 2008. Trading Update During this period, total Group sales (excluding the Original Shoe Company and Qube), on a like-for-like basis, (on operating units that have been trading for over 52 weeks) were 7.5% lower than the same period last year. This consisted of a 6.7% increase in revenue for health clubs and a 8.9% decrease in retail sales. The core retail gross margin achieved during the same period was 210 basis points higher than last year. The stock holding in the retail business is 28% lower than last year. Given the difficult trading conditions, the Company said it started its sale early, two weeks ago, and so far it is pleased with the increased sales achieved, albeit at reduced gross margin. Achievement of market expectations of profit before tax and exceptional items will depend on continuing the good sales performance in the traditional January sales' period. As announced on December 1, 2008 the Company exchanged contracts for the assignment of the leases of four retail stores for a consideration of GBP3.4 million and as announced on October 20, 2008 placed 11,944,360 new JJB ordinary shares with proceeds totaling approximately GBP3.4 million. Update of Potential Disposals Further to the announcement on December 4, 2008, discussions continue in relation to JJB's Fitness Clubs and JJB's non-core assets and businesses. A number of inquiries have been received regarding the Fitness Clubs business in recent weeks and the Board has requested that Lazard engage with potentially interested parties. The preliminary approach for the LifeStyle division referred to in its announcement of October 15, did not result in a transaction. The LifeStyle division continues to trade at a loss and the Board continues to consider its options in respect of the future of this business. Update on the Company's Banking Arrangement The Company's lenders Barclays, HBOS and Kaupthing have agreed that the Kaupthing GBP20 million bridging facility need not be repaid in full on the due date of December 14, 2008, but the Company said it was still to repay GBP20 million pro rata across the three banks yesterday, December 10, 2008. The banks are continuing constructive discussions with the Company and are reviewing the Company's plans and forecasts with a view to agreeing a basis for providing continuing support. Roger Lane-Smith, Non-executive Chairman of JJB, said: "During the period we have made good progress on a number of fronts in the face of the difficult trading conditions that have afflicted the entire high street. The economic outlook is challenging but I am confident that the work we are doing will put JJB in the best possible shape to trade through it." About JJB Sports Headquartered in Wigan, England, JJB Sports plc -- http://www.jjbcorporate.co.uk/-- is engaged in the retailing of sportswear and sporting equipment. The company also operates a chain of fitness clubs, which has a smaller number of indoor soccer centers attached to them. It also operates a television broadcasting and marketing business, which specializes in the marketing of golf products and fitness equipment through Sky Television. On Oct. 2, 2008, TCR-Europe reported that Deloitte & Touche LLP raised going concern issues about JJB Sport plc's interim report and condensed financial statements for the 26 weeks to July 27, 2008. Deloitte pointed to material uncertainties that may cast significant doubt on the group's ability to continue as a going concern. These material uncertainties comprise: * ongoing availability of the original facilities given the actual and projected covenant breaches; * the ability to repay the bridging facility from asset sales or seasonal cash flows; * achieving the sale of non-core businesses and/or assets within the timescales and at the values projected; and * the achievability of forecasts and key assumptions within the forecasts. Deloitte warned there is a risk that the material uncertainties as to the group's ability to continue as a going concern may not be resolved satisfactorily. KAUPTHING SINGER: IoM Gov't Backs Bondholder Compensation Package ----------------------------------------------------------------- Hannah Stodell at Money Marketing reports that the Isle of Man government backed a compensation package to bondholders with cash deposits in Kaupthing Singer & Friedlander Isle of Man. According to the report, over GBP800 million of savings were tied up with KSF IoM, nearly GBP400 million of which was in cash deposits within offshore bonds. The compensation package, the report discloses, will consist of a levy from the government and local banks under the DCS and monies raised by the provisional liquidator from the sale of KSF assets. The maximum government contribution to the scheme will be GBP150 million, while the banks will have a maximum total contribution cap of GBP200 million, the report states. The report adds the government is also understood to be looking to provide emergency payouts of around GBP1,000 to help small depositors who are in desperate straits, although these discussions are thought to be at an early stage. AILO meanwhile is continuing to work closely with the Manx Insurance Association and the IoM government to get the best possible outcome for policyholders whose advisers recommended investment in KSF. AILO, as cited by the report, said all depositors, including life insurance company policyholders can expect to do "significantly better" from the resulting rescue package. The provisional liquidator is currently working to quantify claims on KSF IoM assets and is due to hold an update hearing on Jan. 15, the report notes. As reported in the TCR-Europe on Dec. 3, 2008 Mike Simpson, provisional liquidator of Kaupthing Singer & Friedlander Isle of Man said that at a hearing at the Isle of Man High Court on Nov. 27, 2008, before Deputy Deemster Corlett, the joint petition of the bank and the Financial Supervision Commission was adjourned until 10:00 a.m., January 29, 2009 at the request of the Isle of Man Treasury. LANDSBANKI GUERNSEY: Savers to Meet UK Politicians Next Week ------------------------------------------------------------ The Landsbanki Guernsey Depositors Action Group will meet with Chief Minister Lyndon Trott and Treasury and Resources Minister Charles Parkinson next week in a bid to recover savers' money in full, channelonline.tv reports. The action group claimed the government of Guernsey is doing nothing to support the depositors, the report recounts. Guernsey, the report notes, has unveiled a Depositors Compensation Scheme, but it's not retrospective and not one penny of it will go to Landsbanki savers. Neil Dickens from The Landsbanki Guernsey Depositors Action Group, as cited by the report, said they are also gathering information on the events that led up to the bank going into administration, not least the role that the GFSC took in this. He warned the group will push hard until they see a resolution where depositors can receive 100 per cent of their money back, the report relates. As reported in the TCR-Europe on Oct. 21, 2008, the administrators of Landsbanki Guernsey announced a proposal to make a part-payment to depositors equivalent to 30 pence in the GBP1. About Landsbanki Guernsey Ltd. Landsbanki Guernsey Ltd. -- http://www.landsbanki.co.gg/-- is engaged in retail banking. It is a subsidiary of Iceland-based financial institution Landsbanki Islands hf. Lansbanki Guernsey was placed into administration on Oct. 7, 2008. The administration, which follows the deepening problems of the Icelandic economy and, in particular, of the Icelandic banking system, is on a temporary basis until Jan. 6, 2009 or earlier order of the Royal Court. The affairs, business and property of the bank are being managed by the joint administrators, Rick Garrard and Lee Manning of Deloitte, the business advisory firm. MONITOR OIL: Court Converts Case to Chapter 7 Liquidation --------------------------------------------------------- Tiffany Kary of Bloomberg News reports that the Hon. Martin Glenn of the United States Bankruptcy Court for the Southern District converted the Chapter 11 case of Monitor Oil Plc to Chapter 7 liquidation proceeding at behest of the ad hoc committee of bondholders. According to Judge Glenn, other than hearings, the ruling was based on a December 8 letter from the Debtor's attorneys withdrawing the company's objection to a liquidation instead of a Chapter 11 restructuring Ms. Kary says. In the letter, the company dropped it objection given the failure of bondholders to reach an agreement with second-lien lenders, she notes. Ms Kary says Judge Glenn ordered the Debtor to file its schedule of unpaid debts incurred after it filed for bankruptcy within 15 days and a final report 30 days days from Dec. 9, 2008. Bloomberg said that the bondholders say the case can no longer survive as a Chapter 11 reorganization or any business with reasonable prospect of rehabilitation. The case, according to them, has languished, incurring administrative expenses with no immediate prospect of payment at risk to the estate-compensated professionals involved and the expense of the Debtor's unsecured creditors, according to the Troubled Company Reporter on Nov. 12, 2008. About Monitor Oil Headquartered in the Cayman Islands, Monitor Oil, Plc -- http://www.monitoroil.com/-- an oil and gas service company that provides oil and gas production solutions, offshore services and engineering services. The Monitor Group has operations in London, England; Aberdeen, Scotland; Stavanger, Norway; Caldicot, Wales; Shanghai, China and New York, United States. The company and two of its affiliates, Monitor Single Lift 1, Ltd., and Monitor US FinCo, Inc., filed for Chapter 11 Protection on Nov. 21, 2007 (Bankr. S.D.N.Y. Case No. 07-13709). Eric Lopez Schnabel, Esq., at Dorsey & Whitney, L.L.P., represents the Debtor. The U.S. Trustee for Region 2 appointed five creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' cases. Ira L. Herman, Esq., at Thompson & Knight, LLP, represents the Committee. As of Dec. 31, 2007, the company disclosed total assets of US$98,340,000 and total debts of US$56,125,000. NEW STAR: Chairman to Step Down After Refinancing Deal w/ Banks --------------------------------------------------------------- John Duffield, the chairman and the founder of New Asset Management, will step down from the fund management company after reaching a rescue refinancing deal with its five lending banks, The Daily Telegraph reports. Mr. Duffield, the report recounts, was last week forced to agree to a GBP240 million debt-for-equity swap to prevent the company from collapse. The banks which negotiated the debt-for-equity swap include HBOS, HSBC, Lloyds TSB and Royal Bank of Scotland, and National Australia Bank. Under the deal, they will take a 75% stake in exchange for GBP240 million of the company's GBP260 million debt, the report discloses. New Star shareholders will meet in January to vote on the proposed debt-for-equity swap, the report notes. The banks, the report says, are trying to secure a quick sale of the company, which is now capitalized at just GBP5 million. They are thought to be talking to rival asset managers Aberdeen, Neptune, Gartmore and Jupiter, the report reveals. According to the report, any sale will see shareholders receive a pittance with the banks taking the lions share of the sale price in return for their debt. UBS, New Star's adviser, has received several calls from interested buyers, the report relates. On Dec. 4, 2008, the TCR-Europe reported that according to the Daily Telegraph, the Financial Services Authority rejected the request of New Star to suspend trading in its shares. The company, the report disclosed, asked for its ordinary shares to be temporarily suspended, while it held negotiations with its bank syndicate. In November, the company suspended the trading of its GBP470 million international property fund after a rush of redemptions caused liquidity problems. The company, the report revealed, has more than GBP230 million worth of debt on its balance sheet after a special dividend paid to shareholders in 2007. Its assets under management dropped from GBP19.8 billion at the end of June, to around GBP13 billion amid falling markets and a wave of redemptions by nervous investors. The fund manager, the report added, re-negotiated its banking covenants last month. It also confirmed Stephen Whittaker, its chief investment officer, after the underperformance of its UK Growth fund. In a TCR-Europe report on Nov. 4, 2008, the Scotsman said that an analyst warned that when the FTSE 100 is between about 4,000 and 4,400, the company could breach its banking covenants. The analyst added "a key driver of value in the fund management sector is funds under management. If equities drop it impacts revenues." Meanwhile, another analyst cautioned that if New Star did breach its covenants it would have to pay 1.5% more interest on its loans "substantially raising costs, such that it could become loss- making," the report stated. New Star Asset Management -- http://www.newstaram.com/-- is a UK fund manager, offering a wide range of investment products for retail and institutional investors PULLAN CONSTRUCTION: Taps Joint Administrators from PwC ------------------------------------------------------- Nicholas Edward Reed and Ian David Green of PricewaterhouseCoopers LLP were appointed joint administrators of Pullan Construction Ltd. on Nov. 28, 2008. The company can be reached at: Pullan Construction Ltd. Manor Works Beeston Leeds LS11 8QT England RADNEY HOLDINGS: Names Joint Liquidators from Tenon Recovery ------------------------------------------------------------ Duncan R. Beat of Tenon Recovery was appointed liquidator of Radney Holdings Ltd. on Nov. 26, 2008, for the creditors' voluntary winding-up procedure. The company can be reached through Tenon Recovery at: 75 Springfield Road Chelmsford Essex CM2 6JB England REGAL ELECTRICAL: Taps Joint Liquidators from Tenon Recovery ------------------------------------------------------------ Ian William Kings and Steven Philip Ross of Tenon Recovery were appointed joint liquidators of Regal Electrical & Mechanical Services Ltd. on Nov. 26, 2008, for the creditors' voluntary winding-up proceeding. The company can be reached through Tenon Recovery at: Tenon House Ferryboat Lane Sunderland SR5 3JN England SOUTH COAST: Appoints Joint Liquidators from Tenon Recovery ----------------------------------------------------------- Duncan R. Beat of Tenon Recovery was appointed liquidator of South Coast Plant Ltd. on Nov. 26, 2008, for the creditors' voluntary winding-up procedure. The company can be reached through Tenon Recovery at: 75 Springfield Road Chelmsford Essex CM2 6JB England STEELART LTD: Names Joint Liquidators from Tenon Recovery --------------------------------------------------------- S. J. Parker and J. K. Rolls of Tenon Recovery were appointed joint liquidators of Steelart (U.K.) Ltd. on Nov. 24, 2008, for the creditors' voluntary winding-up proceeding. The company can be reached through Tenon Recovery at: Sherlock House 73 Baker Street London W1U 6RD England SUNKING FLOWERS: Taps Joint Liquidators from KPMG ------------------------------------------------- Richard James Philpott and Mark Jeremy Orton of KPMG LLP were appointed joint liquidators of Sunking Flowers Ltd. on Nov. 21, 2008, for the creditors' voluntary winding-up proceeding. The company can be reached through KPMG LLP at: Peat House 1 Waterloo Way Leicester LE1 6LP England YORK HOUSE: Appoints Joint Administrators from Ernst & Young ------------------------------------------------------------ Robert Hunter Kelly and Charles Graham John King of Ernst & Young LLP, were appointed joint administrators of York House Construction Ltd. on Nov. 26, 2008. The company can be reached at: York House Construction Ltd. Gatherley Road Brompton on Swale Richmond North Yorkshire DL10 7JH England * UK: SocGen Says Covenant Breach Looms as Property Prices Fall --------------------------------------------------------------- Ben Harrington of the Daily Telegraph reported Monday that Societe Generale said several of Britain's largest property companies may have to carry out rights issues next year to avoid covenant breaches as commercial property prices are expected to drop by 45%. Citing Marc Mossi of SocGen, the report disclosed three of the majors may need a total GBP700 million of new capital to fulfill their debt covenants or, more probably, to create some breathing space for their day-to-day business. SocGen downgraded Hammerson and Liberty from hold to sell and gave them price targets of 410p and 420p respectively, the report noted. * UK: Charities with Frozen Accounts in Icelandic Banks Seek Help ------------------------------------------------------------- John Plummer at Third Sector Online Sector reports that the Treasury has turned down a proposal put forward by shadow Treasury minister Mark Hoban to set up a temporary funding facility for charities with money frozen in failed Icelandic banks. The temporary funding facility, according to Mr. Hoban, would help to keep charities operating until the administrator decided how money from the failed banks would be distributed, the report discloses. However, Treasury minister Angela Eagle, the report notes, rejected the idea as she does not believe that it "would be an effective use of public funding, simply because there is no additional source for such a grant fund to be drawn from". Maria Miller, the shadow minister for children, suggested finding additional short-term funding to tackle the "significant and overwhelming financial crisis" the hospice Naomi House faced, but Ms. Eagle said there were many creditors and many larger charities with problems, the report recounts. CharityFinance reported last week thirty charities that have funds deposited in the collapsed Iceland-owned bank Kaupthing Singer & Friedlander (KSF) demanded that the government underwrite the GBP47 million they collectively had invested in the bank. The charities, which have formed an action group named Save Our Savings, led by Cats Protection and Naomi House Children's Hospice, secured representation on the KSF creditors committee to fight for the return of their money, CharityFinance revealed. At a creditors meeting on December 1 in London, the coalition attracted enough votes to bag one of the five seats on the creditors committee, the report recalled. =============== X X X X X X X X =============== * Fitch Gives Negative Outlook for European Pharmaceutical Sector ----------------------------------------------------------------- Fitch Ratings says that, whilst underlying credit fundamentals remain strong, the outlook for the European pharmaceutical industry is negative due to a number of key industry challenges facing the sector. These include the upcoming patent expiry cliff during 2010-2013, where the agency notes that, in particular, GlaxoSmithKline and Sanofi-Aventis are proportionally over exposed with their product lines compared to their European rated peers; government cost containment measures on healthcare spending that are likely to be increased due to the current economic crisis; the continued longer approval times for new drugs due to greater skepticism on drug safety standards; and finally continued competitive pressures from generic drug makers. To counter these challenges, Fitch believes that European pharmaceutical companies might be tempted to respond with debt financed acquisitions during 2009, which would create downward pressure on ratings. "In the short-term, European pharmaceutical companies' cost cutting measures should compensate for the margin pressure resulting from these industry challenges whilst, in the medium-to long-term, Fitch notes that lower operating profitability and cash flow generation is likely to be seen for all market players," says Britta Holt, Director in Fitch Ratings. European pharmaceutical players are likely to continue with cost cutting measures, while governmental cost containment policies are expected to lead to more risk-sharing deals for European pharmaceutical companies in order to insure reimbursement of their products. Additionally, tough generic competition is expected to lead to a continued high number of authorized generic drugs coming on to the market. Fitch believes that acquisitions are likely to be pursued in order to prepare for the upcoming patent cliff (by acquiring pipeline) or in order to increase diversification into other, less high risk but less profitable, healthcare areas, as seen by Novartis (Alcon). In order to ensure solid sales growth, European pharmaceutical companies are also likely to increase their presence in the higher growth, but lower profitability developing markets. Overall, the rated European pharmaceutical companies are expected to continue to benefit from their well diversified product portfolios, good geographical diversification with a relatively low percentage of US sales at risk through patent expiries by 2013, relatively full product pipelines and high profitability. Although tough industry challenges will have to be faced over the next years, the European pharmaceutical industry is expected to continue to remain one of Fitch's highest rated industries in Europe, due to superior cash flow generation, high cash balances, strong liquidity and solid growth prospects, driven by high unmet medical needs, favorable demographics, technology advances and the existence of chronic diseases. Among European drug makers rated publicly by Fitch, only GlaxoSmithKline PLC (AA- (AA minus) /F1) has a Negative Outlook, reflecting the group's large share buyback program, and ongoing acquisition appetite. Roche's Holding Ltd's ('AA' /F1+) ratings were placed on Rating Watch Negative in July, following the group's announcement of its US$44 billion bid for US pharmaceutical company Genentech. AstraZeneca Plc's, Sanofi- Aventis SA's (AA- (AA minus)/F1+) and Bayer's ('A-' (A minus)/F2) Stable Outlooks reflect the relative headroom in their current ratings. With the exception for a potential acquisition of a non-Nestle minority stake in Alcon, Novartis's (AA/F1+) ratings fully reflect the Alcon acquisition, although Fitch notes the company now does not have headroom for any further material acquisitions. * House Passes US$14 Billion Financial Aid for Detroit's Big 3 -------------------------------------------------------------- Greg Hitt at The Wall Street Journal reports that The House of Representatives has passed the bill on the government financial assistance being requested by General Motors Corp., Ford Motor Co., and Chrysler LLC. According to WSJ, the Democrats and the Bush administration hoped for a Senate vote as early as Dec. 11 and enactment by week's end. Republicans in the Senate objected the bill, which could affect the bailout, says the report. The report quoted Sen. Richard Shelby as saying, "I'm going to oppose the package because I think this is just the down payment on billions and billions to come. These are failed or failing companies." Sen. John Cornyn, according to the report, said that he and other Republicans have concerns on whether the proposed "car czar," who would supervise the bailout program, would be able to force concessions needed to return the industry to financial stability. Some Republicans said that they might support the bailout especially if the car czar is given stronger authority to dictate terms of a restructuring. The Auto Federal Financial Assistance Bill The bill states that the U.S. president will designate one or more officers from the Executive Branch with appropriate expertise in areas like economic stabilization, financial aid to commerce and industry, financial restructuring, energy efficiency, and environmental protection, to facilitate the restructuring necessary to achieve the long-term financial viability of the automakers. The president will also appoint may appoint additional persons with expertise. The president's designee will determine by Jan. 1, 2009, appropriate measures for assessing the progress of each eligible automobile manufacturer toward transforming the plan submitted by the automakers to the Congress on Dec. 2, 2008, into a restructuring plan to be submitted by March 31, 2009, aimed at achieving and sustaining long-term viability, international competitiveness, and energy efficiency of the automakers. Up to $14 billion in loans will be provided. Loans shall mature in seven years, or the President's designee may determine a longer period. The loans will have (a) 5% interest during the five-year period beginning on the date on which the designee disburses the loan; and (b) 9% interest after the end of the five-year period. Payments will be made semi-annually. The loans shall be prepayable without penalty at any time. Borrowers must then allow the designee access to their books, papers, records, or other data; and those of their subsidiaries, affiliates, or entity holding an ownership interest of 50% or more. They must provide information requested by the designee and promptly inform the designee of any asset sale, investment, contract, commitment, or other transaction proposed to be entered into that has a value in excess of US$100 million, and any other material change in the financial condition of the automakers. If the borrowers fail to make adequate progress towards meeting the restructuring progress assessment measures established by the designee, or if after March 31, 2009, the borrowers fail to submit an acceptable restructuring plan or fail to comply with any conditions or requirement applicable under the Act or applicable fuel efficiency and emissions requirements, or the borrowers fail to make adequate progress in the implementation of their restructuring plan, repayment of any loan may be accelerated to an earlier date, and any other financial assistance may be cancelled by the designee; The designee may not provide any loan unless he or she receives from the borrowers: -- securities which are traded on a national securities exchange, a warrant giving the right to the designee to receive nonvoting common stock or preferred stock or a voting stock in the company; and -- a warrant for common or preferred stock or an instrument that is the economic equivalent of such a warrant in the holding company of the eligible borrower, or any company that controls a majority stake in the borrower. The designee shall require the borrowers to meet appropriate standards for executive compensation and corporate governance, which include, among other things: -- limits on compensation that exclude incentives for senior executive officers of the borrower -- provision for the recovery of any bonus or incentive compensation paid to a senior executive officer based on statements of earnings, gains, or other criteria that are later found to be materially inaccurate; -- prohibition to make any golden parachute payment to a senior executive officer A copy of the bill is available for free at: http://ResearchArchives.com/t/s?3607 * BOOK REVIEW: Voluntary Assignments for the Benefit of Creditors ----------------------------------------------------------------- Publisher: Beard Books Softcover: 788 pages for both volumes Price: US$34.95 each volume; US$49.95 set Review by Henry Berry http://www.amazon.com/exec/obidos/ASIN/189312228X/internetbankrupt http://www.amazon.com/exec/obidos/ASIN/1893122298/internetbankrupt Voluntary Assignments for the Benefit of Creditors is a 1999 update of the classic nineteenth-century work on the important financial and business instrument known as "voluntary assignments." The author of the original edition was Alexander M. Burrill, a noted legal scholar who also wrote a law dictionary and several other texts. Voluntary Assignments for the Benefit of Creditors is now in its sixth edition, with Avery-Webb authoring the update. As defined by the authors, voluntary assignments for the benefit of creditors are "transfers, without compulsion of law, by debtors, of some or all of their property to an assignee or assignees, in trust to apply the same, or the proceeds thereof, to the payment of some or all of their debts, and to return the surplus, if any, to the owner." Voluntary assignments offer businesspersons from small business owners to corporate executives great flexibility in raising capital. Considering the many ways that businesses can enter into voluntary assignments, the different ways of valuing properties "assigned," and the changing value of these properties over time, the law governing voluntary assignment is complex. The authors tackle the subject of voluntary assignments in all its breadth and depth. During the 1800s, when Burrill's work first came out, there were innumerable cases dealing with voluntary assignments. The case law of the 1800s remains authoritative, informative, and instructive today. To render it comprehensible, the authors break down the subject matter into its many facets, thereby allowing lawyers and others to quickly reference areas of interest. These cases are listed alphabetically, and comprise more than fifty pages in a front section titled "Table of Cases." Cases are also referred to in the text proper and in copious footnotes. The format of the text, including the footnotes, is the standard followed by many legal texts and handbooks, notably the multi-volume American Jurisprudence. The sections are numbered consecutively in forty- five chapters. There are 458 sections in all. The sections are relatively short, even though the subject of voluntary assignments is complex and there is bountiful case law. Readers can peruse general topics such as execution of the assignment, construction of assignments, sale of the assigned property, and the rights, duties, and powers of the assignee. More specific, detailed topics can be accessed using the index. There are two appendices. The first contains synopses of the statutes of every state and territory on voluntary assignments. The second appendix contains nearly thirty standard forms that can be used for various aspects of assignments. Although voluminous and rigorous in its commentary and legal citations, the two-volume Voluntary Assignments for the Benefit of Creditors is neither dense nor ungainly. Like a good lawyer breaking down a case so it can be comprehended by a jury of average persons, so does Burrill and Avery-Webb deal with the topic of voluntary assignments. Born in 1868 in Tennessee, James Avery-Webb (d. 1953) had a career as a prominent attorney in New York City. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* 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., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Pius Xerxes V. Tovilla, Valerie C. Udtuhan, Marites O. Claro, Rousel Elaine C. Tumanda, Joy A. Agravante, Marie Therese V. Profetana and Peter A. Chapman, Editors. Copyright 2008. 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 US$625 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 US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *