T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, November 21, 2007, Vol. 8, Issue 231 Headlines A R G E N T I N A ALITALIA SPA: Implements Organizational Changes ASOCIACION MUTUAL: Proofs of Claim Verification Ends on Feb. 5 DANA CORP: Gets Court Approval to Settle 7,500 Asbestos Claims NOSSE BOX: Trustee Verifies Proofs of Claim Until Feb. 1, 2008 ORGANIZACION MEDICA: Claims Verification Deadline Is Feb. 29 QUINTO SA: Proofs of Claim Verification Deadline Is Feb. 6 REPES SA: Proofs of Claim Verification Deadline Is March 19 SALUD OCUPACIONAL: Proofs of Claim Verification Ends on Dec. 27 B A H A M A S HARRAH'S ENTERTAINMENT: Illinois Gaming Board Okays Acquisition B E R M U D A BT LOOKSMART: Proofs of Claim Filing Ends on Nov. 30 CHEVRONTEXACO NORTH: Proofs of Claim Filing Deadline Is Nov. 30 CM CONTINENT: Proofs of Claim Filing Deadline Is Nov. 30 KENT EQUITY: Proofs of Claim Filing Deadline Is Nov. 29 KENT MASTER: Proofs of Claim Filing Ends on Nov. 29 MAN MAC: Proofs of Claim Filing Is Until Nov. 30 NORDIC TRADING: Proofs of Claim Filing Ends on Nov. 28 QCH ACQUISITION: Proofs of Claim Filing Deadline Is Nov. 30 B R A Z I L BANCO BMG: Denies Initial Public Offering & Sale Talks BANCO INDUSTRIAL: Will Lease Operations in 2008 BANCO NACIONAL: Grants BRL1-Billion Financing to Furnas DELPHI CORP: Reaches Agreement with Investors on Plan Amendments FORD MOTOR: Names Tata, Mahindra & One Equity as Final Bidders JAPAN AIRLINES: To Increase Int'l Fuel Surcharge for 1st Quarter KRATON POLYMERS: Moody's Affirms B1 Corporate Family Rating SANYO ELECTRIC: To Invest JPY210 Bil. in Two Profitable Units SANYO ELECTRIC: Lead in Microwave Cues BAIC to Order Recall SUN MICROSYSTEMS: Partners with Zeus Tech to Offer Traffic Mgmt. TOWER AUTOMOTIVE: Reaches Settlement Resolving Michigan's Claim * BRAZIL: Petrobras Inks Pact with Marubeni for NatGas Supply * BRAZIL: Says It Won't Limit Sale of Blocks Near Tupi C A Y M A N I S L A N D S ARSENAL INVESTMENTS: Proofs of Claim Filing Ends on Nov. 30 BEAR STEARNS: Foreign Reps. File Opening Appellant Brief BEAR STEARNS: Massachusetts Files Admin. Complaint Against BSAM BROOKINVEST HOLDINGS: Proofs of Claim Filing Deadline Is Nov. 30 CABLE & WIRELESS: Unveils Management Changes at Int'l Business CABLE & WIRELESS: Earns GBP134 Mln in Six Months Ended Sept. 30 GROPO LTD: Proofs of Claim Filing Is Until Nov. 30 HIGHLAND SPECIAL: Proofs of Claim Filing Is Until Nov. 30 ICP ADVISER: Proofs of Claim Filing Deadline Is Nov. 30 PARMALAT SPA: Could Get EUR3.1 Billion from Claims Settlement PARMALAT SPA: Italian Prosecutors Pursue BofA Link Evidence SOUTH AFRICA: Proofs of Claim Filing Deadline Is Nov. 30 THAILAND INT'L: Sets Final Shareholders Meeting for Nov. 30 C H I L E BELL MICRO: Has Until Jan. 31 to Comply with Nasdaq Requirement GERDAU SA: Acquires Quanex for US$1.67 Billion GERDAU SA: Makes Offer for Employee's Stake in Units SCIENTIFIC GAMES: Completes Buy of 50% Stake in Guard Libang C O L O M B I A DOLE FOOD: Has to Pay US$2.5 Million in Punitive Damages C O S T A R I C A ARMSTRONG HOLDINGS: Commences Asset Distribution on December 12 D O M I N I C A N R E P U B L I C PRC LLC: Moody's Lowers Corp. Family Rating to Caa1 from B3 E L S A L V A D O R AES CORP: Moody's LGD Point Estimate Revision Won't Affect Rtgs. G U A T E M A L A MILLICOM INT'L: CEO Marc Beuls Selling 100,000 Ordinary Shares G U Y A N A FLOWSERVE CORP: Selling Rail Business-Related Assets to Vossloh M E X I C O ACXIOM CORP: Acquires MKTG; Expands SMB Marketing Capabilities ADVANCED MICRO: Secures US$622-Mln Investment from Mubadala Unit COTT CORP: Moody's Downgrades Corp. Family Rating to B1 from Ba3 DUERR AG: Earns EUR5.7 Million for Nine Months Ended Sept. 30 DURA AUTOMOTIVE: U.S. Trustee Objects to Chapter 11 Plan DURA AUTOMOTIVE: Noteholders Support U.S. Trustee's Objections DURA AUTOMOTIVE: Second Lien Group Objects to Chapter 11 Plan GRUPO TMM: Javier Segovia to Quit as President Effective Dec. 1 MOVIE GALLERY: Won't be Able to File Plan Before November 27 MOVIE GALLERY: Delays Form 10-Q Filing for Qtr. Ended Sept. 30 MOVIE GALLERY: Gets Final Okay on US$150-Mln Goldman Sachs Loan REMY WORLDWIDE: Bankruptcy Court Approves CVC Settlement Pact REMY WORLDWIDE: Can Assume Caterpillar Inventory Agreement SR TELECOM: Files for Creditor Protection under CCAA N I C A R A G U A XEROX CORP: Declares US$0.0425 Per Share Quarterly Dividend XEROX CORP: Solid Position Prompts Moody's to Lift Ratings P E R U COMVERSE TECH: Consolidates Management Structure with Affiliate PERRY ELLIS: Earns US$8.5 Million in Third Quarter Ended Oct. 31 * PERU: Strong Loan Growth Cues Moody's To Put Stable Outlook P U E R T O R I C O ADVANCED MEDICAL: Names Richard Meier as President MYLAN INC: Closes Sale of 55,640,000 Preferred & Common Shares T R I N I D A D & T O B A G O MIRANT CORP: To Return US$4.6 Bln in Excess Cash to Stockholders V E N E Z U E L A CHRYSLER LLC: Officially Seals New Labor Agreement with UAW PETROLEOS DE VENEZUELA: Gov't To Spend US$10B To Raise Output * IDB & EC Inks Deal to Improve Economic Devt. in Latin America - - - - - ================= A R G E N T I N A ================= ALITALIA SPA: Implements Organizational Changes ----------------------------------------------- Alitalia S.p.A. has approved these organizational changes: -- the Business & Corporate Coordination department, headed by Giancarlo Schisano, is eliminated; -- a new Passenger & Cargo Division, headed by Mr. Schisano, has been set up reporting directly to the President, dealing with Purchasing & Supply Management, Marketing & Business Strategies, Sales & Distribution, Production, and Cargo, which report directly to the new division. -- the Administration, Finance & Control department, headed by Vittorio Mazza, will now report directly to the President again; -- Giancarlo Zeni, who previously headed Marketing & Business Strategies, is leaving the Company; and -- Andrea Stolfa, who previously headed Planning & Development as part of the Production Division, becomes head of Marketing & Business Strategies. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes. The Italian government owns 49.9% of Alitalia. The company has operations in Argentina. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia posted EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked annual net losses of EUR520 million in 2003, EUR813 million in 2004, EUR168 million in 2005, and EUR625.6 million in 2006. Italian Transport Minister Alessandro Bianchi has warned that Alitalia may file for bankruptcy if the current attempt to sell the government's 49.9% stake fails. ASOCIACION MUTUAL: Proofs of Claim Verification Ends on Feb. 5 -------------------------------------------------------------- Roberto Vogliotti, the court-appointed trustee for Asociacion Mutual Interservicios' bankruptcy proceeding, verifies creditors' proofs of claim until Feb. 5, 2008. Mr. Vogliotti will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 20 in Buenos Aires, with the assistance of Clerk No. 41, will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Asociacion Mutual and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of Asociacion Mutual's accounting and banking records will be submitted in court. La Nacion didn't state the reports submission deadlines. Mr. Vogliotti is also in charge of administering Asociacion Mutual's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Asociacion Mutual Interservicios Bynon 6980 Buenos Aires, Argentina The trustee can be reached at: Roberto Vogliotti Cordoba 1309 Buenos Aires, Argentina DANA CORP: Gets Court Approval to Settle 7,500 Asbestos Claims -------------------------------------------------------------- Dana Corp. and its debtor-affiliates obtained the U.S. Bankruptcy Court for the Southern District of New York's permission to enter into settlement agreements with Asbestos personal injury claimants. The settlements, which would cost the Debtors US$2,000,000 and partially reimbursed by insurers, would result to the dismissal of 7,500 Asbestos claims filed by tort attorneys Robert Peirce & Associates; The Lanier Law Firm; Goldenberg, Miller, Heller & Anotognoli; and Bevan & Associates. According to toledoblade.com, Judge Burton Lifland said the decision "resolves a very large number of claims" and opens the door for other claimants to seek similar settlements. The Debtors are facing 150,000 asbestos-related personal injury claims as of June 30, 2007. The Debtors have been named defendants in a number of lawsuits related to the Debtors' sale of certain automotive gaskets containing asbestos in an encapsulated form and the alleged exposure of people to asbestos as a consequence of contact with these gaskets. The settlement agreements, among other things, require the Asbestos Personal Injury Claimants to provide medical documentation of their illnesses, and evidence of their exposure to asbestos-containing products manufactures, sold, or distributed by Dana, according to Corinne Ball, Esq., at Jones Day, in New York, on behalf of the Debtors. She added that the claimants must also submit release to qualify for payment of their asbestos personal injury claims. The Court overruled an objection filed by an ad hoc committee of asbestos personal injury claimants. The group, represented by Douglas T. Tabachnik, Esq., at the Law Offices of Douglas T. Tabachnik, in Freehold, New Jersey, and Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, in Dallas, Texas, complained that the Settlement Agreements provide potentially different, more favorable treatment for the asbestos personal injury claims that are being settled pre-confirmation than the treatment afforded other asbestos personal injury claims, although those claims are classified in the same class under Dana's plan of reorganization. The ad hoc committee also asked the Debtors to shed light with respect to the settlements reached by some of its members with the Dana, which settlements remain unfunded and unpaid. Dana's third amended Joint Plan of Reorganization and the Court- approved Disclosure Statement provide that Class 3 - Asbestos Personal Injury Claims will be reinstated on the Plan's effective date. About Dana Corporation Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Aug. 31, 2007, the Debtors listed USUS$6,878,000,000 in total assets and US$7,551,000,000 in total debts resulting in a total shareholders' deficit of US$673,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. The Court has set Dec. 10, 2007, to consider confirmation of the Plan. (Dana Corporation Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) NOSSE BOX: Trustee Verifies Proofs of Claim Until Feb. 1, 2008 -------------------------------------------------------------- Fernando Luis Greco, the court-appointed trustee for Nosse Box S.R.L.'s reorganization proceeding, verifies creditors' proofs of claim until Feb. 1, 2008. Mr. Greco will present the validated claims in court as individual reports on March 14, 2008. The National Commercial Court of First Instance in Buenos Aires will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Nosse Box and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of Nosse Box's accounting and banking records will be submitted in court on May 2, 2008. Creditors will vote to ratify the completed settlement plan during the assembly on Nov. 25, 2008. The debtor can be reached at: Nosse Box S.R.L. Almirante Segui 1251 Buenos Aires, Argentina The trustee can be reached at: Fernando Luis Greco Arenales 2365 Buenos Aires, Argentina ORGANIZACION MEDICA: Claims Verification Deadline Is Feb. 29 ------------------------------------------------------------ Norberto Volpe, the court-appointed trustee for Organizacion Medica Sanahed SA's bankruptcy proceeding, verifies creditors' proofs of claim until Feb. 29, 2008. Mr. Volpe will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 22 in Buenos Aires, with the assistance of Clerk No. 44, will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Organizacion Medica and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of Organizacion Medica's accounting and banking records will be submitted in court. La Nacion didn't state the reports submission deadlines. Mr. Volpe is also in charge of administering Organizacion Medica's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Organizacion Medica Sanahed SA Pueyrredon 210 Buenos Aires, Argentina The trustee can be reached at: Norberto Volpe Maipu 859 Buenos Aires, Argentina QUINTO SA: Proofs of Claim Verification Deadline Is Feb. 6 ---------------------------------------------------------- Jose Larrory, the court-appointed trustee for Quinto SA's bankruptcy proceeding, verifies creditors' proofs of claim until Feb. 6, 2008. Mr. Larrory will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 25 in Buenos Aires, with the assistance of Clerk No. 49, will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Quinto and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of Quinto's accounting and banking records will be submitted in court. La Nacion didn't state the reports submission deadlines. Mr. Larrory is also in charge of administering Quinto's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Quinto SA Belgrano 225 Buenos Aires, Argentina The trustee can be reached at: Jose Larrory Rodriguez Pena 231 Buenos Aires, Argentina REPES SA: Proofs of Claim Verification Deadline Is March 19 ----------------------------------------------------------- Jose Luis Cicocciopo, the court-appointed trustee for Repes S.A.'s bankruptcy proceeding, verifies creditors' proofs of claim until March 19, 2008. Mr. Cicocciopo will present the validated claims in court as individual reports on May 7, 2008. The National Commercial Court of First Instance in Buenos Aires will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Repes and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of Repes' accounting and banking records will be submitted in court on June 18, 2008. Mr. Cicocciopo is also in charge of administering Repes' assets under court supervision and will take part in their disposal to the extent established by law. The trustee can be reached at: Jose Luis Cicocciopo Vidal 3375 Buenos Aires, Argentina SALUD OCUPACIONAL: Proofs of Claim Verification Ends on Dec. 27 --------------------------------------------------------------- Oscar Luis Olguin, the court-appointed trustee for Salud Ocupacional Sur S.R.L.'s reorganization proceeding, verifies creditors' proofs of claim until Dec. 27, 2007. Mr. Olguin will present the validated claims in court as individual reports on March 12, 2008. The National Commercial Court of First Instance in Quilmes, Buenos Aires, will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Salud Ocupacional and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of Salud Ocupacional's accounting and banking records will be submitted in court on April 24, 2008. The debtor can be reached at: Salud Ocupacional Sur S.R.L. Avenida San Martin 596, Bernal, Partido de Quilmes Buenos Aires, Argentina The trustee can be reached at: Oscar Luis Olguin Moreno 525, Quilmes Buenos Aires, Argentina ============= B A H A M A S ============= HARRAH'S ENTERTAINMENT: Illinois Gaming Board Okays Acquisition --------------------------------------------------------------- Harrah's Entertainment Inc. has received approval from the Illinois Gaming Board for the proposed acquisition of Harrah's by affiliates of Apollo Management, L.P. and TPG Capital. The transaction remains subject to approval by other jurisdictions in which Harrah's subsidiaries operate and other conditions to closing set forth in the agreement and plan of merger entered into on Dec. 19, 2006. Headquartered in Las Vegas, Nevada, Harrah's Entertainment Inc. (NYSE: HET) -- http://www.harrahs.com/-- has grown through development of new properties, expansions and acquisitions, and now owns or manages casino resorts on four continents and hosts over 100 million visitors per year. The company's properties operate under the Harrah's, Caesars and Horseshoe brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker. Harrah's also owns the London Clubs International family of casinos. In January, it signed a joint venture agreement with Baha Mar Resorts Ltd. to operate a resort in Bahamas. * * * Harrah's Entertainment Inc. continues to carry Standard & Poor's "BB" long term foreign and local issuer credit ratings, which were placed in December 2006. ============= B E R M U D A ============= BT LOOKSMART: Proofs of Claim Filing Ends on Nov. 30 ---------------------------------------------------- BT Looksmart, Ltd.'s creditors are given until Nov. 30, 2007, to prove their claims to Robin J. Mayor, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. BT Looksmart's shareholder agreed on Nov. 14, 2007, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Robin J. Mayor Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, HM DX, Bermuda CHEVRONTEXACO NORTH: Proofs of Claim Filing Deadline Is Nov. 30 --------------------------------------------------------------- Chevrontexaco North Buzachi Ltd.'s creditors are given until Nov. 30, 2007, to prove their claims to Gary R. Pitman, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Chevrontexaco North's shareholder agreed on Nov. 15, 2007, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Gary R. Pitman Chevron House 11 Church Street, Hamilton HM DX, Bermuda CM CONTINENT: Proofs of Claim Filing Deadline Is Nov. 30 -------------------------------------------------------- CM Continent's creditors are given until Nov. 30, 2007, to prove their claims to Robin J. Mayor, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. CM Continent's shareholder agreed on Nov. 15, 2007, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Robin J. Mayor Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, HM DX, Bermuda KENT EQUITY: Proofs of Claim Filing Deadline Is Nov. 29 ------------------------------------------------------- Kent Equity International Ltd.'s creditors are given until Nov. 29, 2007, to prove their claims to Nicholas Hoskins, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Kent Equity's shareholder agreed on Nov. 6, 2007, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Nicholas Hoskins Wakefield Quin Chancery Hall, 52 Reid Street Hamilton, Bermuda KENT MASTER: Proofs of Claim Filing Ends on Nov. 29 --------------------------------------------------- Kent Master Fund Ltd.'s creditors are given until Nov. 29, 2007, to prove their claims to Nicholas Hoskins, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Kent Master's shareholder agreed on Nov. 6, 2007, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Nicholas Hoskins Wakefield Quin Chancery Hall, 52 Reid Street Hamilton, Bermuda MAN MAC: Proofs of Claim Filing Is Until Nov. 30 ------------------------------------------------ Man Mac Castor 2A Limited's creditors are given until Nov. 30, 2007, to prove their claims to Beverly Mathias, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Man Mac's shareholder agreed on Nov. 14, 2007, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Beverly Mathias c/o Argonaut Limited Argonaut House, 5 Park Road Hamilton HM O9, Bermuda NORDIC TRADING: Proofs of Claim Filing Ends on Nov. 28 ------------------------------------------------------ Nordic Trading Ltd.'s creditors are given until Nov. 28, 2007, to prove their claims to Marco Montarsolo, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Nordic Trading's shareholder agreed on Nov. 6, 2007, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Marco Montarsolo Sofia House 1st Floor, 48 Church Street Hamilton Bermuda QCH ACQUISITION: Proofs of Claim Filing Deadline Is Nov. 30 ----------------------------------------------------------- QCH Acquisition Ltd.'s creditors are given until Nov. 30, 2007, to prove their claims to Robin J. Mayor, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. QCH Acquisition's shareholder agreed on Nov. 14, 2007, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Robin J. Mayor Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, HM DX, Bermuda =========== B R A Z I L =========== BANCO BMG: Denies Initial Public Offering & Sale Talks ------------------------------------------------------ Banco BMG Chief Executive Officer Ricardo Guimaraes has denied to Brazilian financial daily Valor Economico that the bank is planning an initial public offering. Mr. Guimaraes told Valor Economico that Banco BMG is not for sale. The bank had enough capital to finance growth without an initial public offering. "I don't think the time's right and I'd prefer to go to the market when it's stronger," Mr. Guimaraes commented to Business News Americas. Mr. Guimaraes dismissed speculation that Itau was ready to purchase the Banco BMG, BNamericas notes. According to Valor Economico, Itau had agreed to acquire 50% of Banco BMG for BRL2 billion. The paper said that Itau also agreed to pay another BRL1 billion tied to five-year profit and loan growth targets and an option to buy the remaining 50%. Itau denied the report. BNamericas relates that Banco BMG and Itau entered into a funding accord. Under the agreement, Banco BMG cedes BRL150 million per month in payroll loans to Itau for three years and grants Itau the right of first refusal should Banco BMG decide to sell. The pact expires on Dec. 8, 2007. "There are no ongoing negotiations and there never were. We've been contacted, but we have no interest in selling the bank," Mr. Guimaraes commented to BNamericas. About Itau Banco Itau Holding Financeira S.A. is a private bank in Brazil. The Company has four principal operations: banking (including retail banking through its wholly owned subsidiary, Banco Itau S.A., corporate banking through its wholly owned subsidiary, Banco Itau BBA S.A. and consumer credit to non-account hold customers through Itaucred, credit cards, asset management and insurance, private retirement plans and capitalization plans, a type of savings plan. Itau Holding provides a variety of credit and non-credit products and services directed towards individuals, small and middle-market companies and large corporations. The company provides these services on an integrated basis through Itau and Itau BBA. In March 2007, the company and Itausa-Investimentos Itau S.A. announced the acquisition of BankBoston in Uruguay. About Banco BMG Banco BMG is the banking arm of Grupo BMG, which also has real estate, food manufacturing and agro industry holdings. The bank is a niche player focused on loans to civil servants, with repayments taken monthly from payrolls. BMG operates mainly through in-house representatives in state companies. It also offers leasing and asset management services. * * * As reported in the Troubled Company Reporter-Latin America on Sept. 5, 2006, Moody's Investors Service upgraded Banco BMG SA's long-term foreign currency deposits to Ba3, from B1. Moody's said the rating outlook is stable. * * * As reported in the Troubled Company Reporter-Latin America on June 26, 2007, Standard & Poor's Ratings Services raised its long-term counterparty credit rating on Banco BMG S.A. to 'BB-' from 'B+'. The rating was removed from CreditWatch Positive where it was placed June 11, 2007. S&P said the outlook is stable. BANCO INDUSTRIAL: Will Lease Operations in 2008 ----------------------------------------------- Banco Industrial e Comercial S.A.'s investor relations officer, Milto Bardini, said in a conference call that the bank will start leasing operations in 2008. The leasing of operations is part of Banco Industrial's move to boost lending 50% next year from this year, Business News Americas relates, citing Mr. Bardini. Mr. Bardini told BNamericas that Banco Industrial will offer machine and equipment-leasing services to businesses. BNamericas notes that Banco Industrial lends mostly to middle- market firms with yearly revenues of up to BRL300 million. Its commercial loans accounted for 90.4% of all its lending at the end of the third quarter 2007. Banco Industrial increased its loan book by 69.5% to BRL6.46 billion in September 2007, from the same period last year. Its working capital loans rose 122%, while its trade finance grew 41.0%. Mr. Bardini told BNamericas that Banco Industrial received about BRL400 million in fresh capital in May 2007. It raised about BRL822 million from its initial public offering in October 2007, with BRL493 million of the amount added to its capital base. By year-end, Banco Industrial will have three times as much capital as at the end of 2006 to finance its expansion plans, BNamericas says, citing Mr. Bardini. Banco Industrial will also make two or three bond issues for US$200 million apiece in 2008. The first issuance will be in March, Brazilian financial daily DCI states. * * * As reported in the Troubled Company Reporter-Latin America on March 1, 2007, Standard & Poor's Ratings Services assigned its 'B+' counter party credit rating to Banco Industrial e Comercial SA. S&P said the outlook is stable. BANCO NACIONAL: Grants BRL1-Billion Financing to Furnas ------------------------------------------------------- Banco Nacional de Desenvolvimento Economico e Social has approved a financing to the energy sector, within the scope of Programa de Aceleracao do Crescimento [Growth Acceleration Program] of the federal government. This is a Furnas Centrais Eletricas SA project, of Eletrobras Group, for the construction of Simplicio Hydroelectric Power Plant, with a BRL1.034 billion financing, equivalent to 62% of the BRL1.6 billion global investment. BNDES already counts 9 hydroelectric power plan construction projects approved within the scope of PAC, with total financings of BRL4.2 billion. These projects account for 2,177 MW generation capacity. Located in river Paraiba do Sul, on the border of the municipalities of Sapucaia and Tres Rios and Chiador, the power plant shall have a 333,7 MW installed capacity. The project also contemplates the implementation of a power transmission system, with 120 km of extension. UHE Simplicio will be second largest hydroelectric plant in the State of Rio de Janeiro, only behind Nilo Pecanha Power Plant, in the municipality of Pirai, constructed in 1950. During the implementation phase, the project should generate around 2.2 thousand direct and 6.6 thousand indirect jobs, with socio-economic benefits for the region. The project socio- environmental investments, in the amount of BRL264 million, account for 16% of the total to be invested in the project. UHE Simplicio will be extremely important for the increase of power offer as of 2010, representing a 28% increment in the hydric energy offering capacity in the State of Rio de Janeiro, which currently relies on 10 hydroelectric power plants, with 1,220 MW generation capacity. In addition, the project will contribute for the development of the national industry of power generation and civil construction equipment. UHE Simplicio shall be integrated to the National Interconnected System. Around 97% of the energy produced shall be commercialized by means of Regulated Environment Energy Commercialization Contracts, to be signed with a pool formed by 31 distributors. The project, with original civil work design, contemplates the construction of a dam in Paraiba do Sul, near the locality of Anta, where a small Hydroelectric Plant, shall be implemented with minimum installed power capacity of 28 MW. Its waters will be detoured by a system of tunnels and channels, with around 10 km of extension that will lead them to the UHE engine room. The implementation of the new power plant reservoirs contemplates the flooding of 1,536 ha, or 1,180 ha, when discounting the river natural runway. This means a quite efficient ratio between the flooded area and the generation installed capacity. The hydroelectric utilization already has an Installation License in force. The execution of civil works is in charge of a consortium formed by the construction firms Norberto Odebrecht and Andrade Gutierrez. However, the operation and maintenance of UHE Simpl�cio and PCH Anta shall be executed by Furnas. Socio-Environmental Actions The project for implementation and operation of UHE Simpl�cio foresees the implementation of 28 socio-environmental programs in the region of influence of the power plant. Among these programs, the company can name: -- the program for ground water and quality of underground water monitoring; -- climatological program; -- degraded areas recuperation program; -- aquatic ecosystems monitoring program, encompassing sub- programs of fish transposition, recomposition of vegetation and forest inventory; -- environmental education program; land indemnity program, support to rural producers; -- health and educational programs; and -- environmental plan for preservation and usage of the reservoir surroundings. Furnas Furnas Centrais Eletricas is the largest company of the Eletrobras Group and has been operating for 50 years in the generation, transmission and distribution of energy in Brazil. With a 9,919 MW installed capacity, around 13% of the total energy generation in the Country, Furnas relies on a generating park comprising ten hydroelectric and two thermoelectric power plants. With respect to the transmission system, Furnas has 19,277 km of lines, which is equivalent to approximately 11% of the whole network installed in the Country. About Banco Nacional Banco Nacional de Desenvolvimento Economico e Social is Brazil's national development bank. It provides financing for projects within Brazil and plays a major role in the privatization programs undertaken by the federal government. * * * Banco Nacional currently carries a Ba2 foreign long-term bank deposit rating from Moody's, and a BB+ long-term foreign issuer credit rating from Standards and Poor's. The ratings were assigned in August and May 2007, respectively. DELPHI CORP: Reaches Agreement with Investors on Plan Amendments ---------------------------------------------------------------- Delphi Corp. has reached agreement with General Motors Corp. and its Plan Investors on amendments to its Joint Plan of Reorganization, Global Settlement Agreement, and Master Restructuring Agreement between Delphi and GM, and the New Equity Purchase and Commitment Agreement with Delphi's Plan Investors led by an affiliate of Appaloosa Management L.P. Delphi filed these proposed amendments in the U.S. Bankruptcy Court for the Southern District of New York as revisions to the appendices to the company's Disclosure Statement. Conforming potential amendments to Delphi's Disclosure Statement will be filed no later than Nov. 16, 2007. These filings are being made in accordance with a scheduling order entered by the Bankruptcy Court last week, which provides for the resumption on Nov. 29, 2007, of the Disclosure Statement hearing commenced in Oct. 2007. Pursuant to the Bankruptcy Court's order, the filings may be further amended by the company on Nov. 28 and remain subject to approval of the Bankruptcy Court. Appaloosa and all of the other Plan Investors have delivered a fully executed bid letter to the company in connection with the revised Investment Agreement amendment. The effectiveness of the amendment is subject to various conditions including Appaloosa being reasonably satisfied with any changes to the Disclosure Statement when the proposed amendments are filed later this week. "T[he] filings, which have been agreed upon by GM and all of our Plan Investors, are the cornerstones of a plan of reorganization that we believe can be achieved during this challenging capital markets environment," said John Sheehan, Delphi vice president and chief restructuring officer. "We have agreed to very focused potential amendments to our reorganization plan which continues to provide for full recoveries for unsecured creditors at plan value as well as fair consideration for Delphi's equity holders." As with Delphi's Oct. 29 filing, these potential amendments reflect current market conditions, commensurate changes to the Company's emergence capital structure and form of plan currency contemplated for stakeholder distributions, an effective reduction of less than 5% in plan value to reflect macroeconomic and industry conditions and uncertainties and reductions in stakeholder distributions to some junior creditors and interest holders. Further, the potential amendments reflect changes required by Delphi's Plan Investors to obtain their endorsement of the Plan, the company's settlements with GM and its U.S. labor unions, the company's emergence business plan and related agreements. The potential amendments include the following changes to the Plan Investors' direct investment and certain stakeholder recoveries: Revised Potential Party Original Plan Amendment (11/14/07) ----- ------------- -------------------- Net Funded US$7.1 Billion US$5.2 Billion Debt Plan Equity Total enterprise Total enterprise Value value of US$13.9B, value of US$13.4B, which after deducting which after deducting net debt and warrant net debt and warrant value results in value results in distributable value distributable value of US$6.6 billion (or of US$8.1 billion (or approximately US$45.00 approximately US$61.72 per share based on per share based on approx. 147.6 million approx. 131.3 million shares) shares) Plan Direct Investment Direct Investment Investors * Purchase US$400MM * Purchase US$400MM of preferred stock of preferred stock convertible at an convertible at an assumed enterprise assumed enterprise value of US$11.75B value of US$10.25B (or 30.1% discount (or 37.8% discount from Plan Equity from Plan Equity Value) Value * Purchase US$400MM * Purchase US$400MM of preferred stock of preferred stock convertible at an convertible at an assumed enterprise assumed enterprise value of US$12.80B value of US$10.75B (or 14.3% discount (or 31.6% discount from Plan Equity from Plan Equity Value) Value) * Purchase US$175MM * Purchase US$175MM of New Common Stock of New Common Stock at an assumed plan at an assumed plan value of US$12.8B value of US$10.25B (or 14.3% discount (or 37.8% discount from Plan Equity from Plan Equity Value) Value) GM Recovery of US$2.7B Recovery of US$2.7B * US$2.7B in Cash * US$750MM in Cash * US$750MM in second lien note * US$1.1B in junior convertible preferred stock (US$1.2B in liquidation value) Unsecured Par + accrued recovery Par + accrued recovery Creditors at Plan value of at Plan value of US$13.9B US$13.4B * 80% in New Common * 75.5% in New Common Stock valued stock valued at at Plan Equity Value Plan Equity Value * 20% in Cash * 24.5% through pro rata participation in the Discount Rights an assume enterprise value of US$10.25B (or 37.8% discount from Plan Equity Value) TOPrS Par + accrued recovery Par only recovery at at Plan value of Plan value of US$13.4B US$13.9B * 100% in New Common * 75.5% in New Common Stock valued at Stock valued at US$45 per share Plan Equity Value * 24.5% through pro rata participation in the Discount Rights an assume enterprise value of US$10.25B (or 37.8% discount from Plan Equity Value) Existing Par Value Rights Par Value Rights Common Stockholders * Right to acquire * Right to acquire approx. 12,711,111 approx. 20,770,345 shares of New Common shares of New Common Stock at a purchase Stock at a purchase price of US$45.00 price struck at per share Planned Equity Value Warrants Warrants * Warrants to acquire * Warrants to acquire an additional 5% 6,908,758 shares of of New Common Stock New Common Stock at US$45.00 per share (which comprises 5% of exercisable for five the fully diluted New years after emergence Common Stock) exercisable for 5 years after emergence struck at 32.4% premium of Plan Equity Value * Warrants to acquire US$1.0 billion of New Common Stock exercisable for six months after emergence struck at 8.2% premium to Plan Equity Value Direct Distribution No provision for Direct Distribution * 1,476,000 shares of New Common Stock Participation in No Provision for Discount Participation in Rights Offering Discount Rights Offering * Right to purchase 40,845,016 shares of New Common Stock at a purchase price of US$38.56 per share A full-text copy of blacklined portions of Delphi's Disclosure Statement, reflecting the Nov. 14 Proposed Amendments, is available for free at: http://bankrupt.com/misc/Delphi_DSAmendments_11-14-07.pdf Although the potential amendments are supported by GM and the Plan Investors, Delphi has been advised by both of its Statutory Committees that they will no longer support the Company's Plan if amended as proposed. The Creditors' Committee opposes changes to the Plan made since the potential amendments filed on Oct. 29, particularly the proposed increase in consideration to the Plan Investors (as a result of the larger discounts to Equity Plan Value agreed to by the company in exchange for the Plan Investors' proposed investment), the form of distributions to GM and proposed addition of out-of-the-money warrants to common stockholders. The Equity Committee opposes changes from the original Plan filed on Sept. 6, which would reduce recoveries to common stockholders as contemplated in the potential amendments. Absent a consensual resolution of these concerns, both of the Delphi's Statutory Committees are expected to supplement the objections filed by each committee on Nov. 2 and seek other relief from the Bankruptcy Court. Delphi will continue to work toward a consensus among its principal stakeholders, including the Creditors' Committee and the Equity Committee, recognizing that such an outcome is not assured. In the event these amendments do not become effective, the original underlying agreements as approved by the Bankruptcy Court on Aug. 2 remain in effect. The company continues to pursue emergence from Chapter 11 during the first quarter of 2008. About Delphi Corp. Headquartered in Troy, Michigan, Delphi Corporation (OTC: 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, represents the Official Committee of Unsecured Creditors. As of Mar. 31, 2007, the Debtors' balance sheet showed US$11,446,000,000 in total assets and US$23,851,000,000 in total debts. The Debtors' exclusive plan-filing period expires on Dec. 31, 2007. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan of Reorganization and a Disclosure Statement explaining that Plan. The hearing to consider the adequacy of the Disclosure Statement started on Oct. 3, 2007, and will be continued on Nov. 29, upon which time the Debtors are expected to have filed a revised Reorganization Plan and related documents. (Delphi Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) FORD MOTOR: Names Tata, Mahindra & One Equity as Final Bidders -------------------------------------------------------------- Ford Motor Company has narrowed the final bidders for its Jaguar and Land Rover brands to three -- Indian carmaker Tata Motors, rival Mahindra & Mahindra in collaboration with buyout firm Apollo, and One Equity Partners, a buyout firm funded by U.S. investment bank JP Morgan, Mathieu Robbins writes for Reuters, quoting people familiar with the matter. Tata, Mahindra & Mahindra and One Equity are each set to move on to the third round of negotiations with Ford in line with their efforts to acquire the two British marques, the report says. The three bidders are now expected to begin talks with trade unions and the U.K. government about saving jobs following speculations that some of the bidders intend to shift production from the U.K. Buyout firms TPG, Terra Firma and Ripplewood were expected to submit second-round bids but Ford decided to drop them from the third-round shortlist, Reuters reveals. Former Rover Head Eyes Jaguar Wolfgang Reitzle, the former head of Rover, has partnered with former Ford Motor Co. CEO Jacques Nassar in a bid to buy Ford's Jaguar and Land Rover brands, Ben Harrington writes for the Daily Telegraph. According to the report, Mr. Reitzle has started working with One Equity Partners in the final stages of the auction process for the car brands. If One Equity's bid for Jaguar and Land Rover will be successful, Mr. Reitzle would take up a non- executive role at the company, the Telegraph relates. Unnamed industry sources told the Telegraph that Mr. Reitzle could provide the right management and advice to Jaguar and Land Rover. Analysts estimated that the two brands could cost as much as GBP1 billion between them. Mr. Reitzle previously worked for Ford Motor's Premier Automotive Group -- which includes Aston Martin, Jaguar, Lincoln, Volvo and Land Rover -- as chairman and CEO before he left for Linde AG in May 2002. Ford began exploring the sale of the European brands in June as part of a strategic global review, which also included the sale of Aston Martin to a Kuwait-backed consortium in a GBP480 million-deal completed in March, Reuters relates. As reported on Sept. 18, 2007, the sale of the two luxury brands is expected to add about US$1.5 billion to US$2 billion to Ford's financial coffers. Ford is scrambling to beef up its finances in order to fund a potential Voluntary Employment Benefits Association, as well as its ongoing restructuring plans. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the Company maintains a presence in Sweden, and the United Kingdom. The Company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 19, 2007, Moody's Investors Service has affirmed the long- term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. JAPAN AIRLINES: To Increase Int'l Fuel Surcharge for 1st Quarter ---------------------------------------------------------------- Japan Airlines International Co., Ltd., has requested the Japanese Ministry of Land, Infrastructure and Transport's approval to revise the fuel surcharge placed on all international passenger tickets issued for the three-month period starting Jan. 1, 2008. JAL has decided to increase the fuel surcharge for tickets issued between January 1 and March 31, 2008, as the price of Singapore kerosene-type jet fuel averaged US$90.65 per barrel over the three-month period from August to October 2007. Based on ticket sales in Japan, the new surcharges per person per sector flown range from JPY2,400 on a Japan-Korea ticket (up from JPY2,000) to JPY21,000 on a Japan-Brazil ticket (up from 17,000). The surcharge on a Japan-Europe ticket or a Japan- North America ticket will be JPY17,000, up from JPY13,000. JAL originally introduced the fuel surcharge on international tickets in February 2005 in response to unprecedented rises in the cost of fuel. The surcharge will be progressively reduced as the price of fuel decreases, and will be canceled completely when the price of Singapore kerosene stays below the benchmark of US$45.00. The fuel surcharge charged for tickets issued from April to June 2008 will be reviewed based on the average price of fuel for November 2007 through to January 2008. The company will continue conducting a wide range of countermeasures to limit the full impact of the price increase including fuel hedging, fuel consumption reductions, and the introduction of more fuel-efficient small and medium-sized aircraft to its fleet. Despite these measures, the company is still reluctantly obliged to ask its international passengers to bear part of the burden caused by the unprecedented increase in the price of fuel over the past few years. About Japan Airlines Tokyo-based Japan Airlines International Company, Limited -- http://www.jal.com/en/--was created as a result of the merger of Japan Airlines and Japan Air Systems to boost domestic coverage. Japan Airlines flies to the United States, Brazil and France. * * * As reported on Feb. 9, 2007, that Standard & Poor's Ratings Services affirmed its 'B+' long-term corporate credit and issue ratings on Japan Airlines Corp. (B+/Negative/--) following the company's announcement of its new medium-term management plan. The outlook on the long- term corporate credit rating is negative. KRATON POLYMERS: Moody's Affirms B1 Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service has affirmed Kraton Polymers LLC's B1 corporate family rating but revised the company's outlook to negative as Moody's expects continued margin weakness, due to delays in passing on the full extent of raw material cost increases to Kraton customers, which will diminish free cash flow from operations over the next 12 to 18 months. Kraton's margins have been adversely impacted by an upturn in raw material costs such that gross margins for the third quarter have dropped to 16% from 22% year-over-year despite a measure of success in achieving some price increases. Year to date, Kraton's cost of goods sold, as measured on a US dollar per metric ton basis, have increased 11% and only 43% of these higher costs have been passed on to customers. Margin declines have also served to offset the benefits of successful programs to cut fixed costs. New cost cutting efforts are just being completed and their benefits to cash flows have not been realized. In early 2007, Moody's indicated the ratings or outlook could be lowered if Kraton significantly under performed our forecast such that debt to EBITDA exceeded 5.5 times or retained cash flow to total debt declined below 7% over the next 18 months. Due to margin pressures, for the LTM period ending Sept. 30, 2007, adjusted debt to EBITDA was 7.3 times (adjusted for pensions and capitalized leases) and retained cash flow to total adjusted debt declined below 5% -- metrics that drive the change in the outlook to negative. Moody's will monitor Kraton's performance, cost saving initiatives, and ability to increase product prices over the next few quarters as it seeks to reverse this margin pressure, but its ratings could be downgraded in the absence of sustainable improvement. Moody's also views Kraton's liquidity profile as facing pressure due to potential breaches of financial covenants. The company made a US$40 million pre-payment on its term loan in the third quarter from available cash. The 5.45 debt to adjusted EBITDA covenant in Kraton's credit facility would have been breached in the third quarter of 2007 if the company had not made at least a US$16 million pre-payment on its term loan. The credit facilities' leverage and interest coverage covenants tighten in 2008, raising the possibility that Kraton may fail to meet covenant tests by the end of the second quarter of 2008 if margin pressure accelerates. At Sept. 30, 2007, Kraton had no borrowings under the revolving portion of its US$75.5 million credit facility and more than US$30 million in cash on the balance sheet. Issuer: KRATON Polymers LLC -- Moody's Actions: Outlook Changed To Negative From Stable Based in Houston, Texas, Kraton Polymers LLC -- http://www.kraton.com/-- produces styrenic block copolymers. SBCs are highly-engineered thermoplastic elastomers, which enhance the performance of numerous products by delivering a variety of attributes, including greater flexibility, resilience, strength, durability and processability. Kraton polymers are used in a wide range of applications including adhesives, coatings, consumer and personal care products, sealants, lubricants, medical, packaging, automotive, paving, roofing, and footwear products. Kraton has the leading position in nearly all of its core markets and is the only producer of SBCs with global manufacturing capability. Its production facilities are located in the United States, Germany, France, The Netherlands, Brazil, and Japan. * * * As reported in the Troubled Company Reporter-Latin America on June 8, 2007, Standard & Poor's Ratings Services lowered its ratings on Kraton Polymers LLC, including the corporate credit and senior secured debt ratings to 'B' from 'B+'. S&P said the outlook is negative. SANYO ELECTRIC: To Invest JPY210 Bil. in Two Profitable Units ------------------------------------------------------------- Sanyo Electric Co., Ltd., will invest JPY210 billion in its rechargeable battery and photovoltaic power generation businesses over the three years from fiscal 2008, reports The Yomiuri Shimbun. In a company business strategy master plan obtained by The Yomiuri Shimbun, Sanyo, which is undergoing some reconstruction, aims to improve its business structure by focusing on these profitable sectors. The report states that the consumer electronics manufacturer's global market for photovoltaic power generation is expected to double in the 2006 to 2010 period. In line with this, Osaka-based Sanyo, which initially planned to increase its production capacity to 600 megawatts per year, will now double its planned capacity to hit 1,200 megawatts per year over the three years from fiscal 2008 to 2010 by investing JPY110 billion, relates The Yomiuri Shimbun. For its rechargeable battery unit, Sanyo, according to the report, plans to invest JPY100 billion, mainly to improve its production capacity for lithium ion rechargeable batteries that are used for personal computers, cell phones and hybrid electric vehicles. The article notes that the company has earmarked a total of JPY37 billion in the two business fields in fiscal 2007. The master plan, which sets out the firm's planned direction for the three years from fiscal 2008, will be officially announced on Nov. 27, adds The Yomiuri Shimbun. About Sanyo Electric Headquartered in Osaka, Japan, Sanyo Electric Co., Ltd. -- http://www.sanyo.com/-- is one of the world's leading manufacturers of consumer electronics products. The company has global operations in Brazil, Germany, India, Ireland, Spain, the United States and the United Kingdom, among others. * * * In March 2, 2007, Fitch Ratings placed SANYO Electric Co. Ltd.'s BB+ long-term foreign and local currency issuer default and senior unsecured ratings on rating watch negative. SANYO ELECTRIC: Lead in Microwave Cues BAIC to Order Recall ----------------------------------------------------------- Sanyo Electric Co., Ltd., was ordered by the Beijing Administration for Industry and Commerce to stop selling microwave ovens in Beijing that are made by a local joint venture due to excessive amounts of lead found in them, Jiji Press reports. The report states that the Beijing authority has also ordered Osaka-based Sanyo to recall all EM-2010EB1 microwave ovens already sold. Officials said that an inspection in March by the BAIC found that the amount of lead in parts of the ovens were 30 times the permitted level, relates Jiji Press. Sanyo, according to the report, claims that the joint venture in Anhui Province manufactures 80,000 microwave oven units annually, mainly for the Chinese market. About Sanyo Electric Headquartered in Osaka, Japan, Sanyo Electric Co., Ltd. -- http://www.sanyo.com/-- is one of the world's leading manufacturers of consumer electronics products. The company has global operations in Brazil, Germany, India, Ireland, Spain, the United States and the United Kingdom, among others. * * * In March 2, 2007, Fitch Ratings placed SANYO Electric Co. Ltd.'s BB+ long-term foreign and local currency issuer default and senior unsecured ratings on rating watch negative. SUN MICROSYSTEMS: Partners with Zeus Tech to Offer Traffic Mgmt. ---------------------------------------------------------------- Sun Microsystems and Zeus Technology have entered into a partnership to deliver Zeus' best-of-breed Application Delivery Controller deployed on Sun's latest CoolThreads and x64 systems hardware running the Solaris 10 operating system. Sun's global distribution network will carry the new end-to-end application traffic management system, a powerful new combination of Sun hardware and ZXTM (Zeus Extensible Traffic Manager). The new offering represents an entirely new level of scalability and performance for traffic management systems, with the combined Sun hardware and ZXTM software solution able to outperform most dedicated hardware appliances, while at the same time offering an unparalleled ability to manage application traffic -- even XML -- using traffic scripting. Large enterprises, service providers, and online media companies will use the solution to deliver high-performance, reliable applications that meet service level agreements while minimizing operational costs. Zeus Technology's ZXTM application traffic management software directs incoming requests to the fastest server available and directs traffic away from slower or inactive servers, while dramatically increasing the number of users a server can support. Using software to load balance traffic across multiple servers makes it easy for enterprises to scale their applications. Thanks to ZXTM's built-in redundancy features, users can access applications even in the event of a failure. Applications that are not designed for clustering can be scaled with session persistence, improving availability and response times, and application servers can be isolated from external networks, protecting the systems from external security threats, even including denial of service attacks and application-level hacking. "This partnership is an excellent opportunity to bring the benefits of ZXTM to a broader market. Sun leads the industry in both price and performance, and running our award winning software on these platforms provides a robust, flexible application traffic management solution that can evolve to meet growing business needs", said Paul Brennan, Chairman, Zeus Technology. The combination of ZXTM running on Sun platforms provides a best-of-breed application delivery controller, enabling service providers to offer reliable, high-performance network and Web services. Optimized for speed on Sun systems, the ZXTM software enables businesses to select from a wide variety of Sun systems running the Solaris(TM) 10 operating system. Sun's scalable server platforms, including Sun Fire(TM) servers with CoolThreads(TM) technology, can dramatically increase throughput and provide eco-friendly energy savings by reducing energy consumption and datacenter footprints without sacrificing high performance. "Sun and Zeus bring to market an unparalleled offering for organizations that need to manage high volumes of traffic and mission-critical Web services. Customers can select from a wide variety of Sun systems running the Solaris(TM) 10 operating System to benefit from this best-of-breed Application Delivery Controller" said Antony Watkins, Communications and Media Practice, Sun Microsystems Sun servers continue to set new standards for performance, reliability, and energy efficiency and lead the industry in terms of price and performance. As a result, running the ZXTM software on Sun platforms provides the foundation of a robust, flexible application traffic management solution that can grow and adapt to evolving business requirements. Application Delivery Controllers According to Gartner, "ADCs reside in the data center, typically in front of frontline Web servers. They are deployed asymmetrically - only at the data center end - and are designed to improve the availability, performance and security of Web- or Internet Protocol (IP)-based applications. ADCs enhance the performance of Web-based and related applications for end users by providing a suite of services at the network and application layers." About Zeus Technology With over ten years' industry experience, Zeus Technology provides application traffic management software, dramatically improving network and web-enabled applications making them run faster, more reliably, more securely and making them easier to manage. The Zeus solutions enable organizations to intelligently manage their applications, streamline operations and provide a seamless end-user experience. As the only pure software traffic management solution, the Zeus products are flexible whatever your deployment environment; a purpose-built Zeus appliance, standard servers, blades, or even virtualized environments. Zeus holds strategic partnerships with world-class companies such as AMD, Dell, Egenera, HP, IBM, Intel, Sun Microsystems, Qualcomm and VMware. Zeus powers over 1 million sites across the world and provides web infrastructure solutions to over 800 customers including, BT, China Telecom, Hotel.de, NASA, PLAY.COM, Federal Railroads Administration, ifs School of Finance, STA Travel, Strategic Command and Virgin Holidays. About Sun Microsystems Headquartered in Santa Clara, California, Sun Microsystems Inc. (NASDAQ: SUNW) -- http://www.sun.com/-- provides network computing infrastructure solutions that include computer systems, data management, support services and client solutions and educational services. It sells networking solutions, including products and services, in most major markets worldwide through a combination of direct and indirect channels. Sun Microsystems conducts business in 100 countries around the globe, including Brazil, Argentina, India, Hungary, United Kingdom, among others. * * * Sun Microsystems Inc. carries Moody's "Ba1" probability of default and long-term corporate family ratings with a stable outlook. The ratings were placed on Sept. 22, 2006, and Sept. 22, 2005, respectively. Sun Microsystems also carries Standard & Poor's "BB+" long-term foreign and local issuer credit ratings, which were placed on March 5, 2004, with a stable outlook. TOWER AUTOMOTIVE: Reaches Settlement Resolving Michigan's Claim --------------------------------------------------------------- The Tower Automotive Post-Consummation Trust, the trust that has represented Tower Automotive, Inc., and its affiliates following their emergence from bankruptcy protection and the effective date of their reorganization plan, has reached a settlement with respect to business and use taxes due to the State of Michigan. The State of Michigan submitted proofs of claim against TAI's affiliates. On July 17, 2005, the State of Michigan Department of Treasury filed Claim No. 6394 against Tower Automotive Michigan, LLC, for US$1,994, which was subsequently amended and superseded by Claim No. 6419 for US$313,821 and Claim No. 6504 for US$301,877. On July 28, 2007, Michigan filed Claim No. 6420 against Tower Automotive Plymouth, Inc., for US$10,772,667 and Claim No. 6395 for US$500,456. The Claims were subsequently amended and superseded by Claim No. 6499 for US$10,302,488, Claim No. 6517 for US$11,690,291, Claim No. 6686 for US$11,689,834 and Claim No. 6724 for US$4,643,767. Michigan also filed Claim No. 6421 against Tower Automotive Products, Co., for US$10,272,211, which was subsequently amended and superseded by Claim No. 6498 for US$10,302,032. The Debtors filed their 22nd Omnibus Claims Objection seeking to expunge Michigan's claims as amended or duplicative. As a result of arm's-length negotiations and an exchange of information, the Post-Consummation Trust and Michigan has agreed that: -- Claim No. 6504 will be reduced and fixed for US$46,799 and will be entitled to treatment as a priority tax claim against the TAM estate; -- Claim No. 6724 will be reduced and fixed for US$19,096 and will be entitled to treatment as a priority tax claim against the TAP estate; -- Claim No. 6498 will be reduced and fixed for US$32,645 and will be entitled to treatment as a priority tax claim against the TAPC estate; -- The Fixed Claims supersede the claims that the Debtors scheduled in favor of Michigan will be deemed immediately expunged without further Court order; and -- the Debtors' 22nd Omnibus Objection will be deemed settled. The Court-confirmed First Amended Joint Plan of Reorganization of TAI and its affiliates provides that priority tax claims will paid in full and unimpaired under the Plan. About Tower Automotive Headquartered in Grand Rapids, Michigan, Tower Automotive Inc. -- http://www.towerautomotive.com/-- (OTC Bulletin Board: TWRAQ) is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The company has operations in Korea, Spain and Brazil. The company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed US$787,948,000 in total assets and US$1,306,949,000 in total debts. On May 1, 2007, the Debtors filed their Chapter 11 Plan of reorganization and Disclosure Statement explaining that plan. On June 4, 2007, the Debtors submitted an Amended Plan and Disclosure Statement. The Court approved the adequacy if the Amended Disclosure Statement on June 5, 2007. On July 11, 2007, the Court confirmed the Debtors' Amended Chapter 11 Plan and the Debtors emerged from Chapter 11 on July 31, 2007. (Tower AutomotiveBankruptcy News, Issue No. 72; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) * BRAZIL: Petrobras Inks Pact with Marubeni for NatGas Supply ------------------------------------------------------------- A spokesperson of Brazilian state-run oil firm Petroleo Brasileiro SA aka Petrobras told Business News Americas that the company has signed a preliminary contract with Japan's Marubeni for the supply of liquefied natural gas. The spokesperson commented to BNamericas, "This is the fifth LNG [liquefied natural gas] supply agreement Petrobras has signed with another company." "Liquefied natural gas volumes and prices will depend on each shipment," BNamericas notes, citing the spokesperson. Petrobras will launch operations in its two floating liquefied natural gas regasification units in Rio de Janeiro and Ceara in May 2008. The first liquefied natural gas supply vessel will arrive in Brazil in April 2008, will the second will be in the country in April 2009, BNamericas states. * * * As reported in the Troubled Company Reporter-Latin America on May 14, 2007, Fitch Ratings upgraded Brazil's long-term foreign and local currency sovereign Issuer Default Ratings to 'BB+' from 'BB' and the Country Ceiling to 'BBB-' from 'BB+'. In addition, Fitch affirmed Brazil's Short-term IDR at 'B'. Fitch said the rating outlook is stable. * BRAZIL: Says It Won't Limit Sale of Blocks Near Tupi ------------------------------------------------------ The Brazilian government won't restrict the sale of exploration blocks near its Tupi offshore field, Bloomberg News reports. Nelson Hubner, Brazil's energy minister, said in reports that the 41 blocks near Tupi field will be studied for a year before they will be put on the auction block. * * * As reported in the Troubled Company Reporter-Latin America on May 14, 2007, Fitch Ratings upgraded Brazil's long-term foreign and local currency sovereign Issuer Default Ratings to 'BB+' from 'BB' and the Country Ceiling to 'BBB-' from 'BB+'. In addition, Fitch affirmed Brazil's Short-term IDR at 'B'. Fitch said the rating outlook is stable. As reported on Nov 16, 2007, Moody's America Latina Ltda. has downgraded the ratings of the senior certificates of Brazilian Securities Series 2002-2 (aka Series 9 or BBRAZ S005) to B2 from B1 (Global Scale, Local Currency), and to Ba1.br from Baa1.br (Brazilian National Scale). The ratings of these securities will remain on review for possible further downgrade. =========================== C A Y M A N I S L A N D S =========================== ARSENAL INVESTMENTS: Proofs of Claim Filing Ends on Nov. 30 ----------------------------------------------------------- Arsenal Investments GP Ltd.'s creditors are given until Nov. 30, 2007, to prove their claims to CDL Company Ltd., the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Arsenal Investments' shareholder agreed on Oct. 8, 2007, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: CDL Company Ltd. P.O. Box 31106 SMB, Grand Cayman Cayman Islands BEAR STEARNS: Foreign Reps. File Opening Appellant Brief -------------------------------------------------------- Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., and Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund, Ltd., filed on July 30, 2007, provisional winding-up proceedings in the Grand Court of Cayman Islands under the provisions of the Companies Law (2007 Revision) of the Cayman Islands. On the same day, the Funds filed petitions in the U.S. Bankruptcy Court for the Southern District of New York seeking recognition of the Cayman Islands liquidation as a foreign main proceedings under Chapter 15 of the U.S. Bankruptcy Code. On July 31, 2007, the Cayman Islands Court appointed Simon Lovell Clayton Whicker and Kristen Beighton, from KPMG, as the Bear Stearns Funds' joint provisional liquidators and foreign representatives. The Cayman Court converted the provisional liquidation to official liquidation in September. In August 2007, Judge Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York denied the Foreign Representatives' Chapter 15 request finding that each of the Funds' real seat and their "center of main interest" is the United States, where they conduct the administration of their interest on a regular basis, and the Southern District of New York, where their principal interests, assets and management are located. The Foreign Representatives appealed from Judge Lifland's Decision and asked the U.S. District Court in the Southern District of New York to determine whether Judge Lifland erred in finding that (i) the Funds' COMI are not located in the Cayman Islands, hence their liquidation proceedings there are not entitled to recognition as foreign main proceedings, and (ii) the Funds do not have an "establishment" in the Cayman Islands, and that, therefore, the foreign proceedings are not entitled to recognition as foreign non-main proceedings. Conflict with Chapter 15 Tenets On the Foreign Representatives' behalf, Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, argues that Judge Lifland's Decision conflicts with the basic tenets of Chapter 15, which is to foster comity and cooperation between American and foreign courts. Mr. Hodara notes that Chapter 15 scholars, including Chapter 15 co-author Prof. Jay Westbrook in his work Locating the Eye of the Financial Storm, uniformly stress that Chapter 15's purpose of maximizing cooperation with foreign courts. Judge Lifland, also co-author of Chapter 15, in his work, Chapter 15 of the United States Bankruptcy Code: An Annotated Section-by-Section Analysis, has recognized the central role played by comity in Chapter 15. Since Chapter 15 was enacted in 2005, U.S. Courts have granted comity and recognition to Cayman Islands proceedings including: -- In re SPhinX, Ltd., 351 B.R. 103, 112 (Bankr. S.D.N.Y. 2006) granting non-main recognition; -- In re Amerindo Internet Growth Fund Limited, Chapter 15 Case No. 07-10327 (RDD)(Bankr. S.D.N.Y. March 7, 2007) granting foreign main recognition; and -- In re Bancredit Cayman Limited (In Liquidation), Chapter 15 Case No. 06-11026 (SMB) (Bankr. S.D.N.Y. June 15, 2006) granting foreign main recognition. Mr. Hodara asserts that Chapter 15 was designed to streamline the process of granting recognition to foreign insolvency proceedings making it "as simple, fast and inexpensive as possible," by reducing it to "a simple documentary process, unless challenged." The United Nations Commission for International Trade Law reflects the same idea, Mr. Hodara contends, noting that that UNCITRAL lists, as one of its key objectives, provisions of a system designed "to provide expedited and direct access for foreign representatives to the courts of the enacting State" and to avoid the need to rely on cumbersome and time-consuming letters rogatory or other forms of diplomatic or consular communications that might otherwise have to be used." To obtain approval of a Chapter 15 request, foreign representatives must demonstrate that the foreign proceeding is either a "main" or nonmain" proceeding. A foreign main proceeding, under Section 1502(4) of the Bankruptcy Code, is one that is brought in the courts of the country where the debtor has the COMI is located, while a foreign nonmain proceeding, under Section 1502(2), is one that is brought in a country outside the place of a COMI where the debtor has an "establishment," defined in Section 1502(5), as "any place of operations where the debtor carries out a nontransitory economic activity." The Bankruptcy Code, however, does not defined "nontransitory economic activity." Chapter 15 includes a statutory presumption that, in the absence of evidence to the contrary, a foreign debtor's COMI is the place where its registered offices are located, Mr. Hodara tells the U.S. District Court. This statutory presumption, he continues, may be challenged only on the basis of evidence that the COMI is in another country, or on the basis of the very narrow public policy exception in Section 1506, which permits courts to refuse to take actions manifestly contrary to the public policy of the United States. Mr. Hodara further contends that one of the key reasons for streamlining the recognition process is predictability. A predictable recognition process is essential to the insolvent entity's creditors, he adds. In considering whether to recognize foreign insolvency proceedings under Chapter 15, Mr. Hodara notes that courts and commentators, including the High Court of Ireland in In re Eurofood IFSC Ltd., Case C-341/04 (Grand Chamber), 2006, agree that a Bankruptcy Court should heed the goals of respecting international comity and meeting the reasonable expectations of creditors. Erroneous Interpretation of COMI Presumption Mr. Hodara tells the District Court that it is undisputed that the Foreign Debtors submitted all of the requisite documents to satisfy the threshold requirements for Chapter 15 recognition and that their place of registration is in the Cayman Islands. Thus, Mr. Hodara asserts that the Cayman Islands are the presumptive site of the Foreign Debtors' COMI. No interested party has challenged recognition and there is nothing to suggest that the Chapter 15 Petitions were filed for anything but the proper purposes, he adds. The analysis of the COMI of a hedge fund cannot be considered as if the hedge fund were a company that manufactures products or provides services, he explains. Typically, a hedge fund will have no office or employees, because, unlike a typical business, there are no "cooperations" in the traditional sense. Instead, hedge funds, by the actions of their boards of directors, enter into various service contracts with investment managers, administrators, attorneys, and auditors. Therefore, he contends, in the hedge fund context, the pivotal analysis must focus on the expectations of creditors and investors that the law of the country where the fund is incorporated will control both prior to, and after commencement of, any insolvency proceedings. Mr. Hodara also contends that initiation of the liquidation proceedings in the Cayman Islands is consistent with the expectations of the interested parties, which consist of four investors and less than 20 creditors, many of which were represented by Cayman Islands counsel before the commencement of the Cayman Islands proceedings. The Bankruptcy Court ignored relevant evidence that buttresses the presumption that the Foreign Debtors' COMI is in the Cayman Islands, Mr. Hodara alleges. The Bankruptcy Court, he points out, focused on facts set forth in pleadings filed at the very outset of the Foreign Debtors' Chapter 15 cases before the Foreign Representatives had had a chance to investigate. Evidence presented prior to and during the Chapter 15 Request hearings showed that Bear Stearns Asset Management, Inc., the Funds' investment manager, managed investments located in numerous jurisdictions, including the Cayman Islands and Europe, he notes. This is in contrary to the Bankruptcy Court's finding that the assets managed by BSAM is located in the Southern District of New York. Mr. Hodara also alleges that Bankruptcy Court discounted a number of relevant facts that contradicted its view of the Cayman Islands office as a "letterbox." While the Bankruptcy Court acknowledged that two of High-Grade Fund' three investors are registered Cayman Islands companies, it dismissed this fact on the grounds that the investors were exempted foreign entities. The Bankruptcy Court gave no consideration to the fact that on the appointment of the Foreign Representatives as joint provisional liquidators, the powers of the boards of directors ceased and the absolute control of the Foreign Debtors was transferred to Cayman Islands-based official liquidators, Mr. Hodara says. Moreover, Mr. Hodara alleges that the Bankruptcy Court completely ignored other facts adduced at the August 27 hearing on the Foreign Debtors' Chapter 15 Petition request, namely that: (a) the Foreign Debtors' prepetition attorneys are in the Cayman Islands; (b) the Foreign Debtors' prepetition auditors, Deloitte & Touche, performed auditing work in the Cayman Islands; (c) most, if not all, of the Foreign Debtors' remaining liquid assets are in bank accounts in the Cayman Islands; (d) the Foreign Representatives and the Foreign Debtors are governed by the laws and regulations of the Cayman Islands, where the only foreign proceedings, other than the Chapter 15 cases, are pending; (e) the Foreign Debtors are subject to Cayman Islands tax law and are not subject to U.S. income tax; and (f) the Foreign Debtors' investments included collateralized debt obligations constituted under Cayman Islands law. Furthermore, Mr. Hodara alleges that the Bankruptcy Court erred in failing to recognize the Foreign Proceedings as foreign nonmain proceedings because the Foreign Debtors have "establishments" in the Cayman Islands. Mr. Hodara says the Foreign Representatives' evidentiary showing of the business conducted in the Cayman Islands amply supports recognition of the Cayman Islands proceedings at least as foreign non-main proceedings based on a "place of operations where the debtor carries out a non-transitory economic activity." Accordingly, the Foreign Representatives asks the District Court to reverse Judge Lifland's denial of their Chapter 15 request, and recognize the Foreign Proceedings as foreign main proceedings or, in the alternative, foreign non-main proceedings. About Bear Stearns Funds Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. are open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law (2007 Revision) of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On Aug. 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. Fred S. Hodara, Esq., Lisa G. Beckerman, Esq., and David F. Staber, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the liquidators in the United States. The Funds' assets and debts are estimated to be more than US$100,000,000 each. (Bear Stearns Funds Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) BEAR STEARNS: Massachusetts Files Admin. Complaint Against BSAM --------------------------------------------------------------- The Enforcement Section of the Massachusetts Securities Division in the office of Secretary of State William F. Galvin filed an administrative complaint against Bear Stearns Asset Management, Inc., for violating the Massachusetts Uniform Securities Act and relevant regulations. Since Sept. 1, 2003, until 2007, BSAM is the investment manager of Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., and Bear Stearns High-Grade Structure Credit Strategies Enhanced Fund, Ltd., which filed for liquidation proceedings in the Grand Court of Cayman Islands in July 2007 as a result of the collapse of the U.S. sub-prime mortgage market. BSAM solicited investors for the Cayman Funds. The Complaint asserts that BSAM was trading securities, including mortgage-backed securities and collateralized debt obligations, from its own account with hedge funds it advised without properly notifying the client funds' independent directors, as required by federal and state securities laws as well as its own prospectus disclosures and representations. Under the Complaint, the transactions that required prior approval from the Cayman Funds' independent directors, 78.95% did not receive approval in 2006, 58.66% in 2005, 29.73% in 2004, and 18% in 2003. Through the Complaint, the Enforcement Section wants to censure BSAM and to take further action as may be deemed just and appropriate by the hearing officer for the protection of investors. It also requires BSAM to (i) permanently cease and desist from violating the Act and Regulations and (ii) pay an administrative fine in an amount as may be determined. Michael Regan, Esq., staff attorney of the Enforcement Section, in Boston, Massachusetts, notes that the Investment Act of 1940 bars an investment adviser from engaging in principal transactions with an advisory client "without disclosing to such client in writing before the completion of such transaction the capacity in which he is acting and obtaining the consent of the client to such transaction." The disclosure and consent procedure was known as a Principal Trade Letter at BSAM, Mr. Regan said. The PTL was designed as a tool to minimize and control conflicts of interest between BSAM, Bear, Stearns & Co., Inc., the Cayman Funds, and other investment vehicles managed by BSAM. The Complaint also asserted that BSAM failed to carry out its obligations with regard to principal transactions from 2004 to 2007. Mr. Regan pointed out that BSAM staff "with responsibility for PTLs were uncertain as to when and why PTLs were necessary." BSAM neither trained nor oversaw the people who were supposed to obtain approvals on principal trades from the Cayman Funds' directors. Because the consent of the independent directors was not obtained for many principal transactions, as required by federal law and the BSAM offering documents, BSAM has violated the Massachusetts Uniform Securities Act, Mr. Regan alleged. "Investors are entitled to know when their investment adviser has some stake in the other side of the deal, as Congress realized back in 1940. Investors must also be able to rely on truthful information and representations provided in an Offering Memorandum. Bear Stearns Asset Management did not do what the law and its own disclosures assured investors that it would do," Secretary Galvin said in a press release. "The cavalier attitude that this company had about its various conflicts of interest is intolerable. This is a case that demonstrates why existing rules regulating principal transactions are so important for investors," Mr. Galvin continued. "This begins to explain how the sub-prime genie got out of the bottle," Mr. Galvin told the Associated Press. William O'Connor, Esq., at Crowell & Moring, in New York, related to AP that the Complaint "is an indication that there are a lot more problems that are going to come out" involving alleged conflicts of interest in mortgage-related investments. "It's not just about writing off losses. You're going to see more and more claims like this come forward," Mr. O'Connor continued. To recall, the Securities Division of Mr. Galvin's office had conducted a probe on whether the Funds' informed its independent directors before engaging in trading transactions.