/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/101105.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, November 5, 2010, Vol. 11, No. 219 Headlines A U S T R I A A-TEC INDUSTRIES: AE&E Lenders Seek Stake as Bridge Loan Security E S T O N I A CELANDER EHITUS: Creditor Banks Plan to Appeal Restructuring G E R M A N Y HELLA KGAA: Moody's Affirms Corporate Family Rating at 'Ba1' I R E L A N D EBS BUILDING: IL&P Offers Government 10% Stake for Merger Approval * IRELAND: NAMA May Liquidate Development Firms as Arrears Rise K A Z A K H S T A N BTA BANK: KazMunaiGaz Withdrew Deposit on Limited Access Concerns LIFE INSURANCE: Fitch Withdraws 'BB' Insurer Strength Rating N E T H E R L A N D S PHI DATA: Zetes Industries Buys Assets Out of Bankruptcy S W E D E N BORAAS WAEFVERI: Files for Bankruptcy; Likely to Be Broken Up U K R A I N E MRIYA AGRO: S&P Assigns 'B-' Long-Term Corporate Credit Rating RISE GROUP: Fitch Assigns 'B-' Long-Term Issuer Default Rating SYNTEZ BANK: National Bank Initiates Liquidation Procedure U N I T E D K I N G D O M AER ARANN: High Court Accepts Rescue Plan BELFAST CLINIC: Owes Almost GBP10 Million BINGHAM DAVIS: Curtins Buys Assets & IP Out of Liquidation CRUSADERS: Goes Into Administration EDINBURGH UNIVERSITY SETTLEMENT: Goes Into Administration EMI GROUP: Jury Set to Decide on Terra Firma Case v. Citi Today ENGLISH & AMERICAN: Scheme Creditors' Claims Due by April 11 EXCALIBUR FUNDING: S&P Lowers Rating on Class A Notes to 'B- (sf)' LEHMAN BROTHERS: LBIE's Report on 2 Years of Administration LEHMAN BROTHERS: Asks Court to Allow Lloyd's to Pay US$10MM MUMFORDS: Assets Sold Following Administration S&V NAYLOR: Goes Into Liquidation SKY DEVELOPMENTS: Collapse to Cost Creditor Banks GBP1.2 Million STOKES LTD: Martingate Centre Reopens * SCOTLAND: Distressed Property Sales Up 126% in H1 of 2010 X X X X X X X X * BOOK REVIEW: Harvest Moon - Portrait of a Nursing Home ********* ============= A U S T R I A ============= A-TEC INDUSTRIES: AE&E Lenders Seek Stake as Bridge Loan Security ----------------------------------------------------------------- Lenders to A-Tec Industries AG's power plant AE&E unit asked for a stake as collateral in exchange for a bridge loan intended to keep the unit operating, Boris Groendahl at Bloomberg News reports, citing a member of A-Tec's creditor committee. "The banks would like to have 40% of AE&E as a security for the loan," Wolfgang Hrobar of creditor protection association Alpenlaendischer Kreditorenverband said on the phone from Vienna, according to Bloomberg. Mr. Hrobar, as cited by Bloomberg, said A-Tec Chief Executive Mirko Kovats and the committee agreed to this plan "in principle," and a deal could be finalized by Nov. 4. Bloomberg relates two groups of creditors are in talks about restructuring A-Tec's debt since the group filed for insolvency on Oct. 20. One includes holders of A-Tec's three outstanding bonds, worth EUR302 million, and other creditors such as suppliers and the tax authorities, Bloomberg discloses. The other consists of banks that had given A-Tec's non-insolvent AE&E unit a EUR798 million credit line, Bloomberg notes. Bloomberg relates rescuing AE&E is crucial for A-Tec and its creditors. The unit, which builds power plants for clients such as utilities or steel makers, is A-Tec's biggest unit with 60% of the group's revenue and 83 percent of pretax profit in 2009, Bloomberg states. Failure to keep it afloat would diminish the funds for creditors, Bloomberg notes. "If AE&E goes down the drain, there will be nothing left to distribute for A-Tec's creditors," Mr. Hrobar said on Oct. 28, according to Bloomberg. Bloomberg relates A-Tec failed to repay a bond on Tuesday because its refinancing efforts failed when AE&E lost access to the EUR798 million credit line. Lenders Separately, Zoe Schneeweiss at Bloomberg News, citing Wirtschaftsblatt, reports A-Tec's AE&E unit has 16 "syndicated guarantee lenders." According to Bloomberg, the Vienna-based paper said the group consists of Banco Bilbao Vizcaya Argentaria S.A.'s Belgian branch; BNP Paribas Fortis SA; Commerzbank AG; Erste Group Bank AG; Europe Arab Bank plc; GE Artesia Bank; KBC Bank N.V.; Raiffeisen Bank International AG; Raiffeisenlandesban Oberoesterreich AG; Royal Bank of Scotland; Societe Generale; UBS AG; WestLB AG; Westpac Banking Corp.; Westpac Europe Ltd.; and Zurich Versicherung. Bloomberg relates the paper said AE&E also has 23 "bilateral lenders," eight banks which are "hedge providers" and four credit insurers. The bilateral lenders are Deutsche Bank AG; Credit Suisse; Winterthur; Raiffeisen Landesbank Steiermark; Euler-Hermes; Volksbank CZ; Privredna + Splitska; Barclays; Credit du Nord; CIC- Lyonnaise de Banque; St. Galler Kantonalbank; Commerzbank (Dresdner Bank); CEGI (Natixis); KBC Bank N.V.'s Spanish unit; SCICC; Coface; Bank of Nanjing Huaihal; China Industrial and Commercial Bank, Nanhu Branch; Natixis; CIC; DnB NOR ASA; Investkredit Bank AG; and Axis Bank (former HDFC), the paper, as cited by Bloomberg, said. The credit insurers are Euler-Hermes; Coface; Atradius and Prisma, Bloomberg says, citing the paper. As reported by the Troubled Company Reporter-Europe on Nov. 4, 2010, Bloomberg News, citing Wirtschaftsblatt, said that creditors of A-Tec's AE&E unit offered a EUR97 million (US$136 million) bridge financing facility until Jan. 31. Bloomberg disclosed the newspaper said A-Tec's creditor committee had asked for EUR140 million. On Oct. 22, 2010, the Troubled Company Reporter-Europe, citing Bloomberg News, reported that A-Tec sought court clearance to reorganize debt after losing access to its line of credit because of an Australian power-station project's financial difficulties. Bloomberg disclosed A-Tec said in a statement on Oct. 20 that the company filed for self-administered reorganization proceedings at the Vienna Commercial Court and appointed trustees for bondholders. The company has a EUR798 million (US$1.11 billion) revolving credit facility and EUR302 million of outstanding bonds, according to Bloomberg data. A-Tec Industries AG is an engineering company based in Vienna, Austria. ============= E S T O N I A ============= CELANDER EHITUS: Creditor Banks Plan to Appeal Restructuring ------------------------------------------------------------ Ott Ummelas at Bloomberg News, citing Aeripaeev, reports that the Estonian units of Swedbank AB and SEB AB plan to appeal a court ruling that allowed the restructuring of OU Celander Ehitus. The banks are the company's biggest creditors. Bloomberg relates Lars Nilsson, the head of Swedbank's Baltic Financial Restructuring and Recovery division, told the newspaper in an interview that restructuring of Celander Ehitus should have been started "much earlier" to be successful. Bloomberg notes Silver Vohu, SEB's spokesman in Estonia, as cited by the newspaper, said restructuring is "impossible considering the company's present state of business." According to Bloomberg, the newspaper said Celander's debts amount to EEK247 million (US$22 million), with assets at EEK108 million. Harju County Court last week approved a restructuring plan of Celander, citing an expert opinion that the company may cover liabilities from future profits, the newspaper said, according to Bloomberg. OU Celander Ehitus -- http://www.celander.ee/-- is a building company. The company has been active in Estonia ever since 1997 and has mainly dealt with the restoration and redesign of buildings of high cultural and historical value. It also carries out general contracting activities of medium-sized building projects and provides services of project management and consultations with regard to the financing of construction sites. ============= G E R M A N Y ============= HELLA KGAA: Moody's Affirms Corporate Family Rating at 'Ba1' ------------------------------------------------------------ Moody's Investors Service affirmed the debt ratings of Hella KGaA Hueck&CO., Corporate Family and Probability of Default Rating at Ba1, and revised the rating outlook to positive. The change in Hella's rating outlook to positive acknowledges the significant recovery in Hella's operating performance during fiscal year 2009/2010 compared to the previous year supported by increasing automotive productions volumes as well as the group's reshaped cost structure. This lead to credit metrics beyond the expectation for the Ba1 rating category, evidenced by EBIT margin of 5%, Debt/EBITDA of 2.7x and RCF/Net Debt of 60.7%. While Hella remains exposed to the cyclicality of automotive production, the positive outlook reflects Moody's increased confidence that Hella should be able to sustain reasonable credit metrics throughout the cycle. The agency derives this comfort from the group's improved cost structure and management's commitment to increase operating efficiency which should mitigate concerns in case the car industry would weaken again. In addition, the positive outlook incorporates Moody's view, that the group will preserve a balanced capital structure and the adequacy of its liquidity profile going forward. Moody's would consider to upgrade Hella's ratings within the next 12 months should the company demonstrate the ability to sustain positive free cash flow generation and profitability improvement evidenced by sustainability of Debt/EBITDA markedly below 3x as well as EBIT/interest above 3x.. Hella's Ba1 rating continues to benefit from the group's leading market positions in lighting technology, in the European independent aftermarket as well as in original equipment electronics. The company's sizeable aftermarket segment (approx. 30% of revenues) supported revenue and profitability stability during the downturn as it is subject to less cyclicality and higher margins. Hella's rating benefits further from the group's track record in adjusting its cost structure and improving profitability at all divisions. In addition, Moody's notes positively the group's recent efforts to diversify both its customer base and its geographical spread by focusing on growth in emerging markets. Nonetheless, with about 70% of revenues coming from Europe, where the recovery in automotive production has lagged other regions in 2010, continued margin improvements could be challenging. The rating remains constrained by the company's continuous need to adjust its cost base in order to counterbalance price reductions demanded by OE customers; its exposure to the volatility of raw material prices; as well as material R&D needs in order to maintain technological leadership. Downgrades: Issuer: Hella KGaA Hueck&Co -- Senior Unsecured Regular Bond/Debenture, Downgraded to LGD4, 51% from LGD3, 47% Outlook Actions: Issuer: Hella KGaA Hueck&Co -- Outlook, Changed To Positive From Stable The last rating action on Hella was on November 13, 2009 when a Ba1 rating with a stable outlook was assigned to Hella's EUR300 million senior unsecured note. Headquartered in Lippstadt, Germany, Hella KGaA Hueck & Co. is one of the leading automotive suppliers in automotive lighting and electronics components, and holds a strong position in the aftermarket (approx. 30% of revenues). The Group is family owned and revenues in fiscal 2009/10 were EUR3.5 billion (fiscal year ends on May 31). The company employs approximately 23,000 people at more than 70 manufacturing facilities, production subsidiaries and joint ventures worldwide. ============= I R E L A N D ============= EBS BUILDING: IL&P Offers Government 10% Stake for Merger Approval ------------------------------------------------------------------ Simon Carswell at The Irish Times reports that Irish Life & Permanent has offered to give the government a potential 10% stake in the company in return for accepting an offer to merge its banking division Permanent TSB with state-owned EBS Building Society. According to The Irish Times, the company, one of two final bidders in the EBS sale process, is offering the government warrants on a 10% stake in Irish Life & Permanent Group Holdings. The Irish Times says this would give the state a share in the upside value of the parent group if it were to off-load Permanent TSB banking division into a merged bank with EBS. The other final bidder in the EBS sale process, a private-equity consortium of international investors led by Cardinal Capital Group, has proposed taking full control of the building society in return for injecting the additional EUR500 million of capital required by the lender, The Irish Times discloses. Under Irish Life & Permanent's proposal, the government would have to inject the additional capital at EBS and the state would end up with a stake of more than 40% in the merged bank, The Irish Times notes. Last month, the Department of Finance narrowed the race for EBS to Cardinal and Irish Life & Permanent, The Irish Times recounts. The building society was taken into state control by the government following the commitment of EUR350 million in capital to the lender earlier this year, The Irish Times recalls. Discussions have commenced with the two bidders with a view to preparing final, third-stage bids over the coming weeks, The Irish Times notes. EBS requires the additional EUR500 million to meet the Financial Regulator's target of EUR875 million, The Irish Times states. This is to cover losses incurred on the transfer of EUR1 billion of loans to developers to the National Asset Management Agency (Nama) at discounts of up to 60%, according to The Irish Times. EBS Building Society is Ireland's largest building society. Servicing more than 400,000 members, it distributes its products through a branch and franchised agency network as well as handling direct business both over the telephone and via the Internet. EBS Building Society provides mortgage lending, savings, investments, and insurance products in Ireland. * * * As reported by the Troubled Company Reporter-Europe on June 7, 2010, Moody's Investors Service downgraded the non-cumulative Tier 1 instruments of EBS Building Society to Ca from Caa1 (issued through EBS Capital No1 S.A.), and the dated subordinated debt one notch to Baa1 from A3. These rating actions follow the issuance of a "Special Investment Share" to the Irish government that is similar in scope to a nationalization, and the forthcoming issuance of a Promissory Note to the government that would provide capital to the society. The other ratings of the society including the D BFSR, the A2 long-term bank deposit and senior debt rating and the Aa1-rated government guaranteed debt were all unaffected. * IRELAND: NAMA May Liquidate Development Firms as Arrears Rise --------------------------------------------------------------- Emmet Oliver at Irish Independent reports that the National Asset Management Agency is moving towards major action against developers as the amount of loans now in arrears tops EUR11.7 billion with no sign of improvement in most of the assets. These loans were bought by NAMA for EUR4.9 billion, Irish Independent notes. According to Irish Independent, about EUR5.1 billion of NAMA loans are now in arrears for 120 days or more, bringing the agency to a crossroads where it must decide to either liquidate certain development companies or refinance them. Irish Independent says NAMA's quarterly report to the end of June shows that most of the impaired loans have overdue interest for several months, with hundreds of loans now in the 90-day and 120- day arrears profile. The report disclosed that NAMA, as of June 2010, had not taken any action against developers, although there has been some action subsequent to the report, Irish Independent notes. Irish Independent says the agency is obliged to provide details each quarter on the number of foreclosure actions it has taken. Meanwhile, a report by the Comptroller & Auditor General on NAMA said the agency will need additional insolvency experts, Irish Independent relates. =================== K A Z A K H S T A N =================== BTA BANK: KazMunaiGaz Withdrew Deposit on Limited Access Concerns ----------------------------------------------------------------- Nariman Gizitdinov at Bloomberg News reports that KazMunaiGaz National Co., a Kazakh state-owned oil and gas producer, withdrew US$1 billion from BTA Bank in September on concerns that access to its deposit was "limited," and used the money to redeem bonds and make loans. Although KazMunaiGaz bank deposits "were not at any time legally frozen, the company's management believed that the access to the deposits was limited in practice," KazMunaiGaz said Wednesday in a prospectus for a US$7.5 billion bond program published on the Kazakhstan Stock exchange Web site, according to Bloomberg. Bloomberg relates KazMunaiGaz reduced its deposits as of Sept. 30 to US$7.2 billion, including US$2.6 billion with Kazkommertsbank, US$2.4 billion with Halyk and nothing at BTA. The National Wellbeing Fund Samruk-Kazyna took control of BTA, the nation's largest lender at the time, and bought stakes in Kazkommertsbank and Halyk Savings Bank in early 2009 after credit markets froze and Kazakhstan's property bubble burst, Bloomberg recounts. "The restructured banks are in the early stages of their post- restructuring operations, however, and there can be no assurance that the restructuring efforts in respect of the Kazakhstan financial sector will ultimately be wholly successful and that the banks with which the company has deposits, and possibly others, will, accordingly, not become bankrupt," Bloomberg quoted KazMunaiGaz as saying. Bloomberg notes Milena Ivanova-Venturini, head of research for Central Asia at the Almaty unit of Moscow-based Renaissance Capital, said KazMunaiGaz's withdrawals from BTA have been offset by an inflow of corporate deposits from other companies. About BTA Bank BTA Bank AO (BTA Bank JSC), formerly Bank TuranAlem AO -- http://bta.kz/-- is a Kazakhstan-based financial institution, which is involved in the provision of banking and financial products for private and corporate clients. The BTA Group is one of the leading banking groups in the Commonwealth of Independent States and has affiliated banks in Russia, Ukraine, Belarus, Georgia, Armenia, Kyrgyzstan and Turkey. In addition, the Bank maintains representative offices in Russia, Ukraine, China, the United Arab Emirates and the United Kingdom. The Bank has no branch or agency in the United States, and its primary assets in the United States consist of balances in accounts with correspondent banks in New York City. As of November 30, 2009, the Bank employed 5,043 people inside and 4 people outside Kazakhstan. It has no employees in the United States. Most of the Bank's assets, and nearly all its tangible assets, are located in Kazakhstan. JSC BTA Bank, also known as BTA Bank of Kazakhstan, commenced insolvency proceedings in the Specialized Financial Court of Almaty City, Republic of Kazakhstan. Anvar Galimullaevich Saidenov, the Chairman of the Management Board of BTA Bank, then filed a Chapter 15 petition (Bankr. S.D.N.Y. Case No. 10-10638) on Feb. 4, 2010, estimating more than US$1 billion in assets and debts. On March 9, 2010, the Troubled Company Reporter-Europe reported that JSC BTA Bank was granted relief in the U.S. under Chapter 15 when the bankruptcy judge in New York recognized the Kazakh proceeding as the "foreign main proceeding." Consequently, creditor actions in the U.S. were permanently halted, forcing creditors to prosecute their claims and receive distributions in Kazakhstan. In the U.S., the Foreign Representative is represented by Evan C. Hollander, Esq., Douglas P. Baumstein, Esq., and Richard A. Graham, Esq. -- rgraham@whitecase.com -- at White & Case LLP in New York City. Bloomberg News reports that the Specialized Financial Court of Almaty approved BTA Bank's debt restructuring on Aug. 31, 2010, trimming its obligations from US$16.7 billion to US$4.2 billion, and extending its longest maturity dates to 20 year from eight. Creditors who hold 92 percent of BTA's debt approved the restructuring plan in May. BTA reportedly distributed US$945 million in cash to creditors and new debt securities including US$5.2 billion of recovery units (representing an 18.5% equity stake) and US$2.3 billion of senior notes on Sept. 1, 2010. BTA forecasts profit of slightly more than US$100 million in 2011, Chief Executive Officer Anvar Saidenov told reporters in Almaty. LIFE INSURANCE: Fitch Withdraws 'BB' Insurer Strength Rating ------------------------------------------------------------ Fitch Ratings has withdrawn Kazakhstan-based Life Insurance Company State Annuity Company JSC's 'BB' Insurer Financial Strength rating with Stable Outlook and National IFS 'A(kaz)' rating with Stable Outlook. The agency will no longer provide ratings or analytical coverage of State Annuity Company. The ratings were withdrawn due to insufficient information being provided. ===================== N E T H E R L A N D S ===================== PHI DATA: Zetes Industries Buys Assets Out of Bankruptcy -------------------------------------------------------- John Martens at Bloomberg News reports that Zetes Industries SA said on its Web site that it bought the assets of PHI Data BV out of bankruptcy and took over part of its staff. According to Bloomberg, the statement said the transaction won't have a "significant" impact on Zetes' balance sheet and will expand its business in the Netherlands. PHI Data BV is a Dutch maker of automatic identification and data capture solutions. =========== S W E D E N =========== BORAAS WAEFVERI: Files for Bankruptcy; Likely to Be Broken Up ------------------------------------------------------------- Janina Pfalzer at Bloomberg News reports that Boraas Waefveri AB said it filed for bankruptcy as the rising cost of cotton and a lack of sales contracts at the Krenholm Valduse division in Estonia prevented the Swedish company from returning to profit. Bloomberg relates Chairman Stig-Arne Blom said Wednesday in a phone interview the company, which made the filing at Gothenburg district court, is likely to be broken up under an administrator. Bloomberg notes Boraas Waefveri said the board of Boraas Waefveri decided to apply for bankruptcy for the parent company and its Estonian unit. Boraas Waefveri said Wednesday in a statement Krenholm's order books for the current quarter and first three months of 2011 weren't enough to sustain operations, and the rising cost of cotton was leading to continued losses. "Massive attempts to save Krenholm have been made through cost cuts in the form of staff reductions and payment plans with some of the bigger creditors," the company said, according to Bloomberg. "Despite all these actions, we haven't been able to save Krenholm." Boraas Waefveri was halted from trading on the Stockholm exchange on Wednesday, Bloomberg discloses. The shares have fallen 67% this year, valuing the company at SEK15.4 million (US$2.3 million), according to Bloomberg. Boraas Waefveri AB is a Swedish textile maker. ============= U K R A I N E ============= MRIYA AGRO: S&P Assigns 'B-' Long-Term Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it had assigned its 'B-' long-term corporate credit rating to large Ukrainian farming company Mriya Agro Holding PLC. The rating was placed on CreditWatch with positive implications. S&P also assigned its 'B' long-term debt rating to Mriya's proposed US$300 million senior unsecured bond issue with an expected tenor of five years. S&P has assigned a recovery rating of '4' to the bond, indicating S&P's expectation of "average" (30%-50%) recovery for bondholders in the event of a payment default. S&P understand that the bond is not underwritten by the arrangers. The ratings on the pending bond issue are subject to the successful issuance of this instrument and S&P's review of final documentation. Any change in the amount, terms, or conditions of the bond issue would have to be reviewed by Standard & Poor's and could affect the current ratings on the bond. "The 'B-' long-term rating is based on S&P's assessment of Mriya's business risk profile as "weak" and its financial risk profile as "highly leveraged"," said Standard & Poor's credit analyst Anton Geyze. Mriya's credit quality is constrained by the company's aggressive expansion strategy and liquidity risks stemming from the substantial investment program, which requires external financing. The inadequate availability of medium-term financing in Ukraine, exposure to the volatile agribusiness industry, and geographic earnings and revenue concentration on Ukraine also limit Mriya's credit quality. Mriya's credit quality is supported by the company's modest debt burden and its position as a large player in the Ukrainian farming industry with a track record of profitable growth. Mriya boasts high margins of more than 50% benefiting from high-quality farmland and equipment, low labor and lease costs, and advanced crop cultivation and harvesting processes. The company's profitability exceeded 50% in 2007-2009. Mriya cultivates sugar beets, wheat, rapeseed, potatoes, and corn in four regions of western Ukraine, including the Ternopil Oblast, where the company has its headquarters. Its land under cultivation exceeded 218,000 hectares in 2010. Mriya leases the land it grows agricultural produce on, because Ukrainian regulations prevent wholesale ownership of agricultural land. The moratorium on land sales expires in 2012, but is subject to extension. Mriya is a family-owned company listed on the Frankfurt stock exchange. The Huta family, which dominates Mriya's board of directors, controls 80% of the shares in the company. Mriya is involved in related-party transactions with sugar factories also owned by the Huta family, to which it sells its sugar beet harvest. "The CreditWatch placement indicates that S&P will likely raise the long-term rating to 'B' if the bond issuance is completed under the preliminary terms and conditions that S&P has reviewed," said Mr. Geyze. In S&P's view, the pending refinancing, if successful, will likely improve Mriya's debt maturity profile and support its liquidity position. S&P expects to resolve the CreditWatch placement upon completion of the pending bond issue or, if the issue is delayed, within the next three months. S&P believes that Mriya's stated plans to use bond proceeds for its investment program are credible, based on its track record of profitable growth and improving corporate governance. The company has recently introduced new independent directors into the board. Further rating upside potential would hinge on the company's continuing its financial policy of maintaining a modest debt burden and managing liquidity prudently. RISE GROUP: Fitch Assigns 'B-' Long-Term Issuer Default Rating -------------------------------------------------------------- Fitch Ratings has assigned Rise Group N.V. Long-term foreign and local currency Issuer Default Ratings of 'B-' respectively and a National Long-term rating of 'BBB' (ukr). The ratings are all on Rating Watch Negative, reflecting an immediate need to procure longer-dated debt which a successful issue of the proposed bond is expected to address. Fitch has also assigned Rise's planned notes an expected unsecured rating of 'B-', also on RWN and a recovery rating of 'RR4'. The final rating on the notes is contingent upon the receipt of final documents conforming to information already received by Fitch. Failure to raise unsecured bond proceeds of at least US$150 million to reduce existing secured debt accordingly would lead to amounts of prior-ranking debt remaining in place which could adversely affect the unsecured rating. The ratings reflect Rise's above-average business risks, due to the strong cyclicality and seasonality of agricultural commodities, its reliance on Ukraine, its relative small size and execution risk stemming from the management's business plan based on an improvement in production yield and increased demand. These factors are, however, mitigated by the long-term growth prospects for the agricultural sector in Ukraine, Rise's comparatively high output yields relative to Ukrainian agricultural peers and its nationwide coverage with its distribution arm. Rise's liquidity was severely constrained as of June 2010 as refinancing of existing debt and funding of Q4 working capital relies on uncommitted overdraft facilities. However, the company expects to obtain working capital and pre-export finance facilities for a total amount of US$35 million to improve its liquidity situation. Fitch also notes that the company is in restructuring negotiations with its lending banks following certain violations of some of its loan financial covenants. Fitch understands that the proceeds of the planned notes will be used to refinance the majority of existing secured debt and help term-out substantial short-term maturities. Given over half of Rise's outstanding debt is due or will mature by FYE 2011, liquidity risk is high and the ratings could be downgraded if the company is not able to obtain longer dated funding from international capital markets or alternative debt providers to refinance its debt. Conversely, a successful procurement of funding including the planned unsecured bond issuance would lead to the ratings being affirmed at the existing level. The planned notes are unsecured, unsubordinated obligations of Rise and benefit from guarantees (which are suretyships under Ukrainian law) from three of its subsidiaries, namely PJSC Rise, PJSC Rise Maksymko and Achrani Limited (Cyprus). These account for at least 90% of the aggregate combined EBITDA, net assets and net income of the group respectively. The terms of the notes contain limitations for the issuer and its restricted subsidiaries on incurring additional indebtedness based on a net debt/EBITDA ratio of less than 3.5x. The draft bond indenture also includes restrictions on dividends and asset disposals. Note holders also benefit from a put option at 101 (1% over par) upon a change of control event. Management's commitment to deleverage and not exceed an unadjusted net debt/EBITDA ratio of 2.5x, together with uncommitted (as customary for the Ukraine) US$10 million and US$25 milion pre- export facilities, should provide further support to the group's liquidity intra-year and to the ratings. The company's lease adjusted leverage at FYE09 was at 3.9x based on EBITDAR excluding gains from changes in fair value. Rise is a privately owned leading agricultural producer and distributor in Ukraine, focused on the distribution of seeds and corn, crop protection facilities and fertilizers, agricultural machinery and spare parts, as well as the growing and trading of various grain crops and the production and trading of sugar. As of end-June 2010, Rise had approximately 168,000 hectares of land under management. In 2009, Rise generated operating revenues and EBITDA (excluding gains arising from changes in fair value on agricultural produce and biological assets net of cost of sales) of equivalent US$320.6 million and US$82.3 million respectively (25.7% EBITDA margin). SYNTEZ BANK: National Bank Initiates Liquidation Procedure ---------------------------------------------------------- Ukrainian News Agency reports that the National Bank said it has decided to close Syntez Bank. Ukrainian News relates the regulator recalled the license of the bank and initiated the procedure of its liquidation from Nov. 3. According to Ukrainian News, on Nov. 3, authorities of provisional administrator of the bank Yevhen Chechil were terminated. Besides the board, supervisory board and general assembly of the stockholders of the financial institution were also disbanded, Ukrainian News notes. Ukrainian News says the bankruptcy commissioner of Syntez is Oleksandra Boldyreva. Ukrainian News earlier reported that Syntez ended April-June with losses of UAH 62.118 million. Kyiv-based Syntez is one of Ukraine's small-sized banks. Oleksandr Loifenfeld owns 74.92% of the shares in the Syntez Bank PJSC, while limited liability company Premium Plus holds 24.96%. =========================== U N I T E D K I N G D O M =========================== AER ARANN: High Court Accepts Rescue Plan ----------------------------------------- The Irish Examiner reports that the High Court has approved a rescue plan for Aer Arann, allowing the airline to come out of examinership. The Irish Examiner relates Justice Mary Finlay Geoghegan said November 3 she was satisfied to approve the scheme of arrangement prepared by the airline's examiner, Michael McAteer of Grant Thornton, once certain modifications are made to the scheme. The scheme had been approved by the majority of the airline's creditors, the Irish Examiner notes. According to the Irish Examiner, the court also heard the Revenue Commissioner was prepared to drop its initial objections to the scheme being approved. Under the modified proposals, the Irish Examiner notes, Revenue will receive 22% of what it is owed within 29 days, with the remaining 78% to be paid within 18 months. The Irish Examiner reports that the judge said she was satisfied the modified scheme allowed the court form the view that the airline had a reasonable prospect of survival as a going concern. Those modifications include clarifying which classes of the airline's creditors come within the scheme and which do not, the Irish Examiner adds. According to the Irish Examiner, the judge also heard an additional EUR2.2 million outside the scheme of arrangement is to be invested. That new investment is to be provided by businessman Timothy Kilroe Jnr. and was dependent on the scheme getting approval from the court, the Irish Examiner notes. The survival plan has secured the support of nine out of the 12 classes of creditors, including AIB, the Irish Examiner relates. As reported by the Troubled Company Reporter-Europe on Oct. 21, 2010, The Irish Times said Aer Arann, which was placed into examinership in August, are set to receive EUR2.2 million from the airline's new investors in settlement for their debts. This is part of the scheme of arrangement that has been put together by Aer Arann's examiner, according to The Irish Times. The Irish Times noted some creditors -- notably the Dublin Airport Authority -- are set to receive all of the money they are owed under the terms of the scheme, but others will get back just 2%. In all, there are 18 classes of creditor at the airline who are owed some EUR29.5 million between them, The Irish Times disclosed. Mr. McAteer has agreed an investment deal of EUR3.5 million with a group comprising UK transport company Stobart and Galway businessman Padraig O'Ceidigh, who owns the airline, The Irish Times said. The investors will purchase Aer Arann for EUR1, The Irish Times disclosed. Aer Arann operates 13 aircraft. It employs 320 people at its bases in Dublin and Galway, as well as in Shannon, Cork, Waterford and the Isle of Man. BELFAST CLINIC: Owes Almost GBP10 Million ----------------------------------------- The Belfast Clinic that went into administration in August had debts of almost GBP10 million, it has emerged, BBC News reports. According to the report, its biggest debt is to its sole secured creditor Barclays Bank which is owed GBP8.6 million. BBC relates that the taxpayer and a number of doctors are owed several hundred thousand pounds in total. The Belfast Trust has said it is due about GBP84,500, and it is taking steps to recover the money, the report notes. However, BBC relates, Barclays, as a secured creditor, will have its debt paid off in full before any unsecured creditors get any money back. As well as the Belfast Trust, the unsecured creditors include Land and Property Services, HM Revenue and Customs and the Southern Health Trust, the report adds. When it went into administration in August, 26 out of 31 employees were made redundant, BBC discloses. BBC adds that a buyer is now being sought for the building to go some way towards paying the company's debts. The Belfast Clinic is a private medical clinic on the Lisburn Road. BINGHAM DAVIS: Curtins Buys Assets & IP Out of Liquidation ---------------------------------------------------------- Curtins Group, the national consulting engineering business, has bought some of the assets and intellectual property of Liverpool- based Bingham Davis Limited, which went into liquidation in early October. The purchase will see former director Tim Bingham join the Curtins Group, which has 11 offices nationwide and is itself headquartered in Liverpool. Rob Melling, chief executive of Curtins, says the move will ensure continuity of service for a number of key clients. "Tim has an outstanding reputation in the private developer market and will strengthen that part of our business. It's good that a Liverpool business has been able to provide the solution to this issue," said Mr. Melling. "We've held our own during the recession," said Mr. Melling, "and this acquisition is part of our strategy of reducing exposure to public sector markets. We've got a healthy mix of projects going forward in what remains a challenging market." Gary Lee, partner at Begbies Traynor and Liquidator of Bingham Davis said: "In what is a very challenging market this is a positive outcome for the clients of Bingham Davis and the company's creditors. When liquidation is the only alternative, a deal that preserves expertise and intellectual property must be considered a success." CRUSADERS: Goes Into Administration ----------------------------------- The Crusaders has gone into administration on November 3, 2010, after former owner Leighton Samuel served a writ on the Welsh club for GBP360,000, The Sun reports. According to the report, the news came hours after the Rugby League Players' Association threatened legal action over missed pension payments. The Sun relates that the Super Leaguers will lose a minimum of nine points before the new season starts in February. An unnamed spokesman said: "We have been constantly firefighting the debts and just couldn't go on once this writ came in," The Sun notes. Last week, The Sun revealed how Crusaders had slashed their coaching wage bill and that only Iestyn Harris remained on the payroll. The Crusaders (formerly the Canterbury Crusaders) are a New Zealand professional Rugby union team based in Christchurch that competes in the Super 14. They are the most successful team in Super Rugby history with seven titles (1998, 1999, 2000, 2002, 2005, 2006 and 2008). EDINBURGH UNIVERSITY SETTLEMENT: Goes Into Administration --------------------------------------------------------- Key Edinburgh fringe venue, the Roxy Art House, has closed and two further venues have been put up for sale after its owner Edinburgh University Settlement went into administration, The Stage News reports. According to the report, Edinburgh University Settlement first put the Roxy up for sale in October, together with the Forest Cafe on Bristo Place and the GRV on Guthrie Street, with a combined price tag of almost GBP3 million. The report notes that The Forest Cafe and the Roxy were both described as a "development opportunity" in the particulars, leading to concerns that they might be converted into accommodation. However, the report says, a sequestration order on the EUS was granted by Edinburgh Sheriff Court on October 27, forcing the charity into administration, with PricewaterhouseCoopers appointed as liquidators. The EUS-run Roxy was then closed and its staff made redundant, the report notes. Edinburgh University Settlement is a 105-year-old charity. EMI GROUP: Jury Set to Decide on Terra Firma Case v. Citi Today --------------------------------------------------------------- Andrew Edgecliffe-Johnson at The Financial Times reports that a New York jury has begun its deliberations on whether a Citigroup banker lied to Guy Hands over his takeover of EMI Group or whether the private equity investor made up the charge to recoup the money he lost on the deal. According to the FT, the jury must reach a unanimous verdict this afternoon, with the burden on Mr. Hands' Terra Firma group to prove that David Wormsley, once his closest adviser, misled him about a competing offer and that he would not have bid without this alleged advice. The FT relates Judge Jed Rakoff sent the eight-person jury off after the two sides' lawyers presented impassioned final arguments in a case that could decide the fate of EMI and the reputations of Mr. Hands and Mr. Wormsley. The FT notes Ted Wells, Citigroup's lead counsel, said Mr. Hands had "made up" his case to shift responsibility for a bad deal, and had "[thrown] David Wormsley over the side" because he had 60 to 70% of his own wealth tied up in EMI. Terra Firma argued for damages of GBP1.32 billion, while Citigroup argued that damages should be nothing, or no more than US$46.5 million, the FT discloses. As reported by the Troubled Company Reporter-Europe on Oct. 21, 2010, The FT said Mr. Hands told a New York court on Oct. 19 that it would not have bid for EMI Group in a 2007 auction had it not been for the alleged advice of a Citigroup banker. The FT disclosed Mr. Hands, taking the stand on the second day of his fraud lawsuit against the bank that financed the GBP4.2 billion (US$6.6 billion) deal, alleged that David Wormsley, Mr. Hands' closest adviser at Citigroup, encouraged Terra Firma to enter the race for the music company even though the private equity group preferred to avoid auctions. Mr. Hands, as cited by the FT, said suing his closest external adviser had been "a very, very last resort", arrived at reluctantly only after negotiations with Citigroup on restructuring EMI failed. He reiterated his allegation that Mr. Wormsley told him over the weekend before the Monday morning bid deadline that Terra Firma should offer 265p per EMI share because Cerberus, a rival private equity firm, planned a 262p offer, the FT disclosed. Citigroup, the FT said, vehemently disputes the claim, arguing that Mr. Hands decided to sue only after losing most of his investment in the deal. Banking Covenants As reported by the Troubled Company Reporter-Europe on Aug. 19, 2010, the FT said that an assessment by Maltby Capital, EMI's private equity owner, shows that EMI will fall short of its banking covenants until 2015 and will need a far larger injection of fresh equity next year than the GBP87.5 million (US$136 million) it received in 2010. The FT disclosed that while Maltby outlines strong operational improvements in the business in its annual report, the gains remain insufficient to satisfy tightening banking covenants, raising the pressure for a renegotiation with Citigroup to avoid breaching the terms of the GBP3.04 billion debt due between 2014 and 2017. The FT noted that although it has a provisional commitment from Terra Firma funds to provide the GBP26.9 million it expects to need for the periods ending June 30, September 30 and December 31 this year, it expects "a further significant shortfall" when the covenant is tested at the end of March 2011. The FT said EMI could require "substantially in excess" of the GBP87.5 million in equity cures injected in 2010. Further smaller sums may also be required for the remaining three covenant tests in 2011, the FT stated. EMI Group Ltd. -- http://www.emigroup.com/-- is the fourth largest record company in terms of market share (behind Universal Music Group, Sony Music Entertainment, and Warner Music Group). It houses recorded music segment EMI Music and EMI Music Publishing. EMI Music distributes CDs, videos, and other formats primarily through imprints and divisions such as Capitol Records and Virgin, and sports a roster of artists such as The Beastie Boys, Norah Jones, and Lenny Kravitz. EMI Music Publishing, the world's largest music publisher, handles the rights to more than a million songs. EMI Music operates through regional divisions (EMI Music North America, International, and UK & Ireland). Private equity firm Terra Firma owns EMI. ENGLISH & AMERICAN: Scheme Creditors' Claims Due by April 11 ------------------------------------------------------------ In accordance with Schemes of Arrangement proposed under part 26 of the English Companies Act 2006 for English & American Insurance Company Limited, The Insurance Corporation of Singapore (U.K.) Limited, Baloise Insurance Ltd, City International Insurance Company Limited, Dowa Insurance Company (Europe) Ltd, East West Insurance Company Limited, Fuji International Insurance Company Limited, Hiscox Insurance Company Limited, The Home Insurance Company (In Liquidation), KX Reinsurance Company Limited, Metropolitan Reinsurance Company (U.K.) Limited, Moorgate Insurance Company Limited, Nippon Insurance Company of Europe Limited, Polygon Insurance Company Limited, Swiss Re International SE, UK Branch, and Tower Insurance Limited, sanctioned by the High Court of Justice of England and Wales on Oct. 6, 2010, and delivered to Registrar of Companies in England and Wales on Oct. 12, 2010, Scheme Creditors must submit their Claim Forms by 5:00 p.m., prevailing U.K. time, on April 11, 2011, to: EAUA Pools PRO Insurance Solutions Limited Bruton Court, Bruton Way Gloucester, GL1 1DA UNITED KINGDOM Telephone: +44 (0)1452 330 514 Fax: +44 (0)1452 523 437 E-mail: pro_eauapools@pro-ltd.co.uk KPMG LLP Restructuring, the Scheme Manager and Foreign Representative for English & American Insurance Company Limited, commenced a section 304 proceeding (Bankr. S.D.N.Y. Case No. 93-42685) in 1993. PRO Insurance Solutions Limited -- in its role as the foreign representative Baloise Insurance Ltd, City International Insurance Company Limited, Dowa Insurance Company (Europe) Ltd, East West Insurance Company Limited, Fuji International Insurance Company Limited, Hiscox Insurance Company Limited, KX Reinsurance Company Limited, Metropolitan Reinsurance Company (U.K.) Limited, Moorgate Insurance Company Limited, Nippon Insurance Company of Europe Limited, Polygon Insurance Company Limited, Swiss Re International SE, UK Branch, and Tower Insurance Limited -- commenced chapter 15 proceedings (Bankr. S.D.N.Y. Case No. 10-15358) on Oct. 14, 2010. PRO Insurance is represented in the U.S. by Ken Coleman, Esq., Stephen Doody, Esq., and Jonathan Cho, Esq., at Allen & Overy LLP. EXCALIBUR FUNDING: S&P Lowers Rating on Class A Notes to 'B- (sf)' ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered to 'B- (sf)' from 'BB+ (sf)' its credit rating on Excalibur Funding No. 1 PLC's ?2.89 billion floating-rate class A notes. At the same time, S&P removed the rating from CreditWatch negative. S&P has taken this action because its expectation of interest shortfalls occurring on the class A notes has increased, S&P's expectation of full principal recovery of the class A notes has decreased, and S&P is of the view that there continues to be lack of clarity around the replacement of the swap counterparty and advance provider. Considering the above, S&P's view of the transaction's creditworthiness is now commensurate with a 'B- (sf)' rating. In 2008, S&P lowered its rating on the class A notes to 'BB+ (sf)' and placed it on CreditWatch negative following its review of the implications of Lehman's insolvency for the rating, and S&P's opinion that the default on the swap or other arrangements could cause interest payment shortfalls on the class A notes. Lehman entities are involved in the transaction in a number of capacities, including as liquidity provider, administrator of collateral and hedge arrangements, and undrawn commitment funder. Since then, there has been a lack of information available to us to indicate what actions are being taken to manage the issues raised by Lehman's insolvency. The transaction is a commercial real estate collateralized debt obligation comprising real estate assets including senior/whole loans, commercial mortgage-backed securities notes, mezzanine loans, development/land loans, B-notes, and corporate bank loans/structured debt. S&P note that as a result of the portfolio failing to meet coverage tests, interest due on the unrated class B notes is instead being applied to pay principal on the class A notes. Nonetheless, as a result of unpaid interest, portfolio income continues to be insufficient to fully cover interest due on the class B notes. As of the July interest payment date, ?25.5 million of deferred interest remains outstanding on these notes. The cash flow pressure caused by deteriorating performance of the assets, together with the lack of an advance provider and swap counterparty, increases the likelihood of an interest shortfall occurring on the class A notes, in S&P's opinion. Under moderately stressed interest rate scenarios, S&P's analysis indicates that the current cash flow generated by the assets would not be sufficient to fully cover interest payable on the class A notes. Similarly, continued asset deterioration could, in S&P's view, also lead to an interest shortfall on the class A notes. Furthermore, S&P's review of the remaining positions in the portfolio leads us to believe that the likelihood of the class A notes repaying in full has decreased. Considering four assets have already been sold at a loss, nine are being positioned for sale in the coming months, and 12 are not paying interest in full, S&P believes that the level of losses is likely to increase. So long as the transaction lacks an advance provider and swap counterparty, in the event of an increase in interest rates and/or an increase in the level of unpaid interest, S&P expects that interest shortfalls will occur on the class A notes. Replacement of Lehman as a counterparty, in particular as advance provider, could lead us to review the transaction in consideration of a potential upgrade. Absent an improvement in the performance of the assets, however, an upgrade would be unlikely. S&P intend to continue to evaluate information available to us and monitor performance of the assets securing the transaction. LEHMAN BROTHERS: LBIE's Report on 2 Years of Administration ----------------------------------------------------------- The Joint Administrators of Lehman Brothers International (Europe) -- In Administration have updated the creditor community with details of their progress over the two-year period of the Administration. Tony Lomas, Joint Administrator of LBIE and Partner at PwC said: "We have achieved exceptional progress in the administration, dealing with some GBP29bn of securities and cash, having now returned almost GBP12bn of this to clients. Whilst there are still numerous major challenges to address, our actions to date have generated significant realizations for creditors which will be paid to them in due course." The Joint Administrators' report details the considerable progress made to date in resolving complex issues through the development of ground breaking and pragmatic solutions. Tony Lomas continued: "Following the successful launch of our innovative Claims Resolution Agreeement, which has seen almost GBP2bn of Trust assets returned since March, we have focused on developing a new approach for the accelerated agreement of unsecured claims. For those creditors who want to take advantage of it, this will give them finality and certainty regarding their claims in a much shorter timescale than could otherwise be acheived." The Joint Administrators are currently unable to advise LBIE's creditors on the timing or amount of an interim dividend. Commenting on this fact, Tony Lomas added: "Despite our best intentions and the significant progress made on very many fronts, the Court of Appeal judgment in July relating to Client Money has unfortunately impacted badly on our ability to commence distributions in the short term, both to Client Money claimants and to unsecured creditors. Despite these challenges, we are determined to return Trust Property and agree creditors' claims at the earliest possible opportunity such that once the legal landscape is clearer, distributions can commence." Key achievements to date: * GBP11.9bn of cash has been recovered to 14 September 2010, of which GBP1.8bn was realized within the last six months. * A framework has been developed for the expedited resolution of claims for financial trading counterparties. The mechanism will provide eligible creditors with an option to achieve finality and certainty regarding its financial claim against LBIE. * Considerable progress has been achieved on the many affiliate company issues in the period, and Court directions are currently being sought to determine ownership of substantial assets claimed by different Lehman affiliates. * LBIE has returned almost GBP2bn of assets to clients since the March 2010, bar date under the Claims Resolution Agreement. * The pre-Administration Client Money judgment was handed down by the Court of Appeal in August 2010. The judgment as it stands has a material impact for both Client Money claimants and unsecured creditors of LBIE, resulting in significant delay to distributions and substantial additional costs. The Administrators now need to embark on a complex tracing exercise to identify additional Client Money claimants and cash or assets which might possibly be subject to a trust claim. Given the overwhelming adverse impact on the LBIE House estate, the Administrators have sought permission to appeal to the Supreme Court. * A sustained headcount of over 480 Lehman staff and contractors continue to support the Administration, in addition to PwC staff and the Administrators' legal advisers. The contribution and collaboration between the teams is key to the outstanding achievements made to date. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was 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. Lehman Brothers filed for Chapter 11 bankruptcy September 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. 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 September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. 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 (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of 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, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. 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. 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 September 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 September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Asks Court to Allow Lloyd's to Pay US$10MM ----------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's authority for Lloyd's London and London Market Company to pay US$10 million in connection with a settlement deal involving their former officers. Lloyd's is one of the firms tapped by Lehman Brothers Holdings Inc. to provide insurance coverage to former and incumbent directors and officers who are facing various lawsuits, some of which stemmed from the company's bankruptcy filing in 2008. It provides coverage of $10 million in excess of US$45 million. LBHI earlier entered into an agreement with Booth Foundation Inc. to settle the lawsuits it filed against former Lehman officers including Richard Fuld Jr. and Martin Shafiroff. The lawsuits allege unsuitability and failure to supervise claims, which stemmed from alleged activities of certain Lehman brokers in connection with the sale to Booth Foundation of LBHI-issued notes. The lawsuits are pending in the U.S. Court of Appeals for the Second Circuit. According to LBHI's lawyer, Richard Krasnow, Esq., at Weil Gotshal & Manges LLP, in New York, the settlement deal will not take effect unless the U.S. Bankruptcy Court for the Southern District of New York permits Lloyd's to pay US$10 million to Booth Foundation as condition for the dismissal of the lawsuits. Mr. Krasnow says that if Lloyd's is barred from paying out the $10 million, Mr. Fuld could file a claim against LBHI for that amount. "Consequently, payment of the settlement amount under the Lloyd's policy will reduce or eliminate the claims that Fuld could assert against the Debtors," Mr. Krasnow says in court papers. The settlement payment would equal about 5% of Lehman's total insurance coverage for directors and officers from 2007 to 2008, according to an October 28, 2010 report by Bloomberg News. The Court will hold a hearing on November 17, 2010, to consider approval of the request. Deadline for filing objections is November 10, 2010. MUMFORDS: Assets Sold Following Administration ---------------------------------------------- Car dealership Mumfords of Plymouth, which trades as Western Garage Plymouth Ltd, has been sold to city rival Vospers for an undisclosed sum after going into administration, The Herald reports. The report relates that Mumfords' business, including its Plympton showroom, other assets and staff were transferred when a deal was completed on November 2, 2010. According to the report, Vospers, which is now planning to create a massive motor park around its Marsh Mills base, said the "vast majority" of the 60 Mumfords employees would be retained but there would be a "restructuring". The report notes that administrators BDO were appointed who then sold "the business and majority of the assets" to Vospers Motor House Ltd. A BDO spokesman, the report discloses, said cash that from the sale would not go to the Mumford family -- but to pay creditors. The report relates Simon Girling, BDO business restructuring partner, said: "Mumfords was exposed to difficulties in the motor retail sector." Mumfords Director William Mumford said staff and customers should see a "seamless transfer", the report says. The sale took place after Vospers secured the Renault franchise for Plymouth and Torbay, he added. Mumfords sold new and used cars, operating a Renault franchise since 1983 and a Nissan franchise since 2001. S&V NAYLOR: Goes Into Liquidation --------------------------------- Chris Tindall at ROADTRANSPORT.com reports that S&V Naylor Transport has gone into liquidation. Insolvency practitioner Laurence Burt at recovery expert Ganley Burt in Northwich was appointed as liquidator on October 14, 2010. ROADTRANSPORT.com, citing the company's estimated Statement of Affairs, discloses that non-preferential creditors are unlikely to see any return. S&V Naylor Transport is a Wolverhampton-based haulier. The company ran seven vehicles and seven trailers out of two operating centres. SKY DEVELOPMENTS: Collapse to Cost Creditor Banks GBP1.2 Million ---------------------------------------------------------------- BBC News reports that the collapse of Sky Developments is set to cost Bank of Ireland and Ulster Bank a total of almost GBP1.2 million. BBC says the company, which was put into administration in September, owes Bank of Ireland just over GBP2.2 million. According to BBC, the administrator estimates that about GBP1.3 million of that will be paid back from the completion and sale of developments at Glenville Mews in Whiteabbey and Willis Green in Finaghy, along with the house in Holywood. Ulster Bank is owed just over GBP1 million, which is secured against a development of eight apartments on the Beersbridge Road in Belfast, BBC discloses. The administrator estimates that GBP760,000 will be raised from the sale of those properties, BBC states. Total claims from unsecured creditors, including a Ballymoney architect, are likely to amount to GBP685,000, none of which are likely to be paid, BBC notes. As reported by the Troubled Company Reporter-Europe on Sept. 15, 2010, BBC News said that financial consultants BDO were appointed as administrators of Sky Developments. BBC disclosed the construction and development sector in Northern Ireland was badly affected by the economic downturn. Sky Developments is a County Down building firm which specializes in energy efficient homes. STOKES LTD: Martingate Centre Reopens ------------------------------------- Mike Wilkinson at Wiltshire Times reports that Stokes Ltd's Martingate Centre was given approval to reopen after the managers running the store decided to take over the shop themselves. According to the report, managers Bob and Jan Stevens heard the news that their branch of Stokes Ltd, in the Martingate Centre, was to close after the company went into administration. Wiltshire Times notes that the store previously employed eight people and now has five. The opening hours are to remain the same but the couple is switching to more local suppliers, the report relates. Headquartered in Bristol, Stokes Ltd has branches across the south west and was one of the largest independent greengrocers in the county. * SCOTLAND: Distressed Property Sales Up 126% in H1 of 2010 ----------------------------------------------------------- Commercial property agents Christie + Co has reported a large increase in distressed asset sales in Scotland as insolvency cases attracted a large number of buyers, Colin Calder at Business7 reports. Business7 relates Christie + Co said that there had been a 126% rise in sales of distressed assets in the half year to September. According to Business7, the number of pubs for sale led the way, showing a 189% increase in business sales during period compared to the previous year, with the care sector seeing a 125% rise. Business7 says the hotel market has increasingly come under the spotlight of banks and insolvency practitioners, which is reflected in an 88% increase in the number of distressed hotel businesses sold. The number of distressed restaurant sales also increased, up 67%, while the number of deals in the retail sector stayed flat, Business7 discloses. =============== X X X X X X X X =============== * BOOK REVIEW: Harvest Moon - Portrait of a Nursing Home -------------------------------------------------------- Author: Sallie Tisdale Publisher: BeardBooks Softcover: 218 pages List Price: US$34.95 Review by Henry Berry Sallie Tisdale uses her vantage point as a registered nurse to present an intriguing look at the structure, operations, staff, and patients of a typical nursing home named Harvest Moon. The privacy of the people she encounters at work has been protected with pseudonyms, but her descriptions of physical facilities, the behavior of individual patients, the commitment of nurses, and other varied issues and relationships encountered in nursing homes will be recognized as true by anyone familiar with this area of healthcare. Harvest Moon is, in the main, a humanistic portrait of a nursing home. Ms. Tisdale takes no political position, nor does she offer solutions to the problems of nursing homes and the larger social problem of providing quality healthcare for the elderly. In keeping with the book's humanistic tone, the author is also not critical of any of the many individuals who appear in her fictionalized, but true-to-life, nursing home. Harvest Moon, like the large majority of nursing homes that have a limited number of patients, staff, and administrators and a singular focus on care for the elderly, adopts a kind of tribal village approach (rather than a corporate approach) to providing healthcare for the aged. Without going into the causes of problems in the nursing home industry, Ms. Tisdale does nonetheless note that the shift "undeniably and inexorably toward profit" in this field has created a situation where the "demands of profit-oriented budgets are made worse by the shortage of help." Staffing issues have long been a problem in an industry where the annual turnover rate is sixty percent. Although the "boom" of the nursing home industry has run its course since the book was first published in 1987, conditions in nursing homes are still more or less the same, and the same problems remain. The author's observations that the cost of nursing-home care sometimes causes "impoverishment" for individuals and their families is familiar. With scenes, dialog, recurring characters, and a loose story line, the book reads like a novel. Ms. Tisdale's remark, "It is a beautiful and perfectly clear day, a day of short sleeves and no clouds," draws a sharp contrast with the atmosphere of the nursing home with its fluorescent lights that illuminate the same no matter what kind of day it is. A relative of one of the patients comes in with "a shiny pink raincoat." Her hair "falls lankly below her stooped shoulders" as she "steps up to the counter like a Fate." In another place, "smells of kitchen steam and urine, mop buckets and laundry, and disinfectant . . . mingle together in the halls." These and other vivid descriptions draw the reader into the experience of having entered a nursing home. Unlike most other books that look into the healthcare industry, Harvest Moon does not delve into issues of organizational structure, present cost analyses, opine about government intervention, or offer a laundry list of solutions. Yet all of this can be plainly inferred by any reader with knowledge of the recognized problems of modern-day healthcare and the debates on dealing with those problems. In places, Ms. Tisdale cites numbers and other facts of the nursing-home field -- for example, ". . . there are almost 24,000 nursing homes in the United States . . . . Nursing homes house two million people at a cost of over $30 billion dollars annually -- about eight percent of all the dollars spent nationally on health care." In other places, she uses settings, situations, and individuals to bring in background material on the nursing home industry. Such techniques do not take away from the author's aim of conveying just what things are like in a nursing home -- rather they supplement her objective. For example, her vivid description, "[t]he third hall, C Wing, is a sickly orange, and has room for forty patients requiring professional nursing, or 'skilled care'", is followed in the same paragraph with an explanation of what "skilled care" means and how it differs from the care provided in hospitals. She continues on to further explain how the skilled care of modern healthcare for "patients who would have never left the hospital" in previous decades but now must do so because of the crushing costs of hospital stays is part of the reason for the growth of nursing homes and the problems they try to deal with. But, as always, Ms. Tisdale returns to the illustrative examples of Harvest Moon. For example, a paragraph begins, "The patients on C Wing are notable most of all for variety in condition and disease," followed by the naming of these. There is no better book than Harvest Moon for getting a true picture of a nursing home. It is an exemplary humanitarian tale, while also relating the fundamentals of the business and healthcare issues that have to be taken into account for problems with nursing homes to be alleviated and perhaps someday remedied. A registered nurse, Sallie Tisdale is the well-known author of six books and many articles and also a contributing editor of the magazine Tricycle. Her work and interests in the healthcare field have been recognized with awards and fellowships, including an NEA Fellowship. ********* 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. Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Frauline S. Abangan and Peter A. Chapman, Editors. Copyright 2010. 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 * * *