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 Thursday, February 14, 2008, Vol. 9, No. 32 Headlines A R G E N T I N A ALITALIA SPA: Opposition Party to Respect Possible Stake Sale ARMELINO ROSA: Seeks Bankruptcy Approval from Buenos Aires Court H Y H: Proofs of Claim Verification is Until April 18 LAS PORTENAS: Proofs of Claim Verification Deadline is March 31 PIED SA: Court Concludes Reorganization SUCESION DE ABRAHAM: Trustee Verifies Claims Until April 3 B A H A M A S PETROLEOS DE VENEZUELA: Selling Borco to First Reserve TYCO INT'L: To Sell Infrastructure Services Biz to AECOM Tech B E R M U D A FOSTER WHEELER: Finnish Unit Bags PJSC Contract in Russia INTELSAT LTD: Appoints Messrs. Spengler & Guillemin as EVP & SVP INTERNATIONAL FILM: Final Shareholders Meeting is on March 12 INTERNATIONAL FILM: Proofs of Claim Filing Ends on February 20 REFCO INC: Court Moves Claim Objection Deadline to April 30 REFCO INC: Sale of 35% Equity Stake in FXCM Consummated REFCO INC: SPhinX Liquidators Want Protective Order Eased SOLAR ENTERPRISES: Sets Final Shareholders Meeting for March 10 B O L I V I A COEUR D'ALENE: Resumes Pre-Commissioning at San Bartolome Mine * BOLIVIA: Inks Loan Pact With World Bank to Finance 5 Projects B R A Z I L BLOUNT INT'L: Sept. 30 Balance Sheet Upside-Down by US$78.1 Mil. FIAT SPA: Sees no Slowdown in Global Demand FORD MOTOR: Plans to Offer Buyout Packages to 9,000 Workers FORD MOTOR: Tells Plastech Court Carmakers Can Recover Tooling GENERAL MOTORS: Inviting Ex-Guide Workers to Apply at Plants GENERAL MOTORS: Posts Net Loss of US$38.7 Billion in 2007 GENERAL MOTORS: Reaches Agreement with UAW on Attrition Program GENERAL MOTORS: Tells Plastech Ct. Carmakers Can Recover Tooling GERDAU AMERISTEEL: Joint Venture Pacific Coast to Buy Century SCO GROUP: Reduces Workforce by 30 Positions to Reduce Expenses SUN MICROSYSTEMS: Signs Stock Purchase Deal with innotek SUN MICROSYSTEMS: To Launch Sun Vietnam With Frontline Tech * BRAZIL: PeMex Could Own Up to 15% Stake in Petrobras Project * BRAZIL: Inflation Risk Premium to Decline, Central Bank Says C A Y M A N I S L A N D S ABLAMID INVESTMENT: Proofs of Claim Filing Deadline is Feb. 25 ASIAN INFRASTRUCTURE: Proofs of Claim Filing Ends on Feb. 25 PARMALAT SPA: Kenyan Crisis Spurs Firm to Defer Spin Knit Buy TRADED POLICIES: Sets Final Shareholders Meeting for February 26 TVG ASIAN: Proofs of Claim Filing Deadline is February 25 C H I L E ELECTRONIC DATA: Bob Hershey to Lead SAP Consulting Practice EMPRESA ELECTRICA: Reports US$60.9 Million Net Profit in 2007 SOL MELIA: S&P Withdraws BB Credit Rating at Company's Request C O L O M B I A CUMMINS INC: Board Declares 12.5 Cents Per Share Dividend GERDAU SA: Unit Selling 9.98% Stake in Acerias Paz for US$66.2MM C O S T A R I C A ALCATEL-LUCENT SA: Forms Joint Venture With NEC Corp. SPECTRUM BRANDS: Dec. 30 Balance Sheet Upside-Down by US$141.2MM * COSTA RICA: State Refiner Junks Plant Revamp Bidding Process * COSTA RICA: State Refiner Seeking LPG System Project Funding D O M I N I C A N R E P U B L I C GENERAL CABLE: Earns US$208.6 Million in Full Year 2007 E C U A D O R PETROECUADOR: Ortiz Wants Borders To be Redrawn for Oil Blocks E L S A L V A D O R * EL SALVADOR: 5 Groups Buy El Chaparral Project Bidding Rules G U A T E M A L A ALLIANCE ONE: S&P Ratings Unmoved by Delay in Financial Filing H O N D U R A S * HONDURAS: Will Likely Purchase Oil Byproducts from Venezuela M E X I C O BERRY PLASTICS: Moody's Holds B3 Rating on Captive Buyout Loan CHRYSLER LLC: Tooling Request Being Evaluated by the Court ENESCO GROUP: Plan Confirmation Hearing Deferred to February 13 GERDAU SA: To Purchase 49% of Corsa Controladora GRUPO MEXICO: Restarts Ore Processing at Cananea Mine IXE BANCO: S&P Holds BB/B Counterparty Rating; Outlook Stable N I C A R A G U A PERRY ELLIS: Reports Preliminary FY 2008 & Fourth Qtr. Results P A N A M A CHIQUITA BRANDS: Completes US$200MM Offering of 4.25% Sr. Notes P A R A G U A Y MILLICOM INTERNATIONAL: Earns US$697.1 Million in Full Year 2007 P E R U LEVI STRAUSS: Nov. 25 Balance Sheet Upside-Down by US$398 Mil. P U E R T O R I C O ADVANCED CARDIOLOGY: Files Amended Disclosure Statement AEROMED SERVICES: Hires Alexis Fuentes-Fernandez as Counsel BADRAN STORES: Court OKs Mender as Accountant & Consultant FIRST BANCORP: Raymond James Upgrades Firm to Strong Buy V E N E Z U E L A CITGO PETROLEUM: May Face US$169,000 Fine from US Gov't PETROLEOS DE VENEZUELA: Exxon's Suit Seen as U.S. Political Move PETROLEOS DE VENEZUELA: Petrocedeno To Shut Down Crude Upgrader PETROLEOS DE VENEZUELA: Fitch Says Freeze Has Little Effect * VENEZUELA: Oil Output Down by 1/3 on Mr. Chavez's Policie - - - - - ================= A R G E N T I N A ================= ALITALIA SPA: Opposition Party to Respect Possible Stake Sale ------------------------------------------------------------- The Forza Italia opposition party will respect the possible sale of the Italian government's 49.9% stake in Alitalia S.p.A. to Air France-KLM S.A. if it wins the snap election in April 2008, published reports say. "If there were to be a contract already signed, it would be respected," Renato Brunetta, deputy coordinator of Silvio Berlusconi's Forta Italia, was quoted by Bloomberg News as saying. Mr. Brunetta, however, said Forza Italia would like the outgoing government, headed by Prime Minister Romano Prodi, to avoid an agreement and leave the decision to the next government, Reuters reports. President Giorgio Napolitano dissolved the Italian parliament on Feb. 6, 2008, and set a snap election for April 13 and 14, 2008. Mr. Prodi's administration remains as caretaker government until a new prime minister is elected into office. As reported in the TCR-Europe on Feb. 11, 2008, Mr. Prodi vowed to "do everything possible" to complete the stake sale. "We will certainly do our best to make sure that this operation, which no-one has had the courage to face despite being widely recognized as necessary and unavoidable, makes it to the end," Mr. Prodi was quoted by Agenzia Giornalistica as saying. "We have taken on this task and we will try to go all the way." Alitalia and Air France-KLM SA have until mid-March to complete exclusive talks and present a final binding offer to the Italian government, which thereafter will decide whether to sell its stake to the French carrier. As previously reported in the TCR-Europe, Alitalia and Italy commenced exclusive sale talks with Air France-KLM. In its non-binding offer, Air France plans to: -- acquire 100% of the shares of Alitalia through an exchange offer; -- acquire 100% of Alitalia convertible bonds; and -- immediately inject at least EUR750 million into Alitalia through a capital increase, that will be open to all shareholders and be fully underwritten by Air France. 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. ARMELINO ROSA: Seeks Bankruptcy Approval from Buenos Aires Court ---------------------------------------------------------------- The National Commercial Court of First Instance No. 10 in Buenos Aires is studying the merits of Dawn Foods International SRL's request to enter bankruptcy protection. Armelino Rosa filed a "Quiebra Decretada" petition, after failing to pay its debts. The petition, once approved by the court, will transfer control of the company's assets to a court-appointed trustee who will supervise the liquidation proceedings. Clerk No. 19 assists the court in this case. The debtor can be reached at: Armelino Rosa - Varela - Barralia SRL Quirno 7 Buenos Aires, Argentina H Y H: Proofs of Claim Verification is Until April 18 ----------------------------------------------------- Carlos Grela, the court-appointed trustee for H y H Producciones SRL's bankruptcy proceeding, verifies creditors' proofs of claim until April 18, 2008. Mr. Grela will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 11 in Buenos Aires, with the assistance of Clerk No. 21, will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that 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 H y H 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 H y H's accounting and banking records will be submitted in court. La Nacion didn't state the reports submission deadlines. Mr. Grela is also in charge of administering H y H's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: H y H Producciones SRL Alsina 1123 Buenos Aires, Argentina The trustee can be reached at: Carlos Grela Nunez 2395 Buenos Aires, Argentina LAS PORTENAS: Proofs of Claim Verification Deadline is March 31 --------------------------------------------------------------- Leticia Andrea Matej, the court-appointed trustee for Las Portenas S.A.'s bankruptcy proceeding, verifies creditors' proofs of claim until March 31, 2008. Ms. Matej will present the validated claims in court as individual reports on May 27, 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 determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Las Portenas 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 Las Portenas' accounting and banking records will be submitted in court on July 14, 2008. Ms. Matej is also in charge of administering Las Portenas' assets under court supervision and will take part in their disposal to the extent established by law. The trustee can be reached at: Leticia Andrea Matej Tucuman 1567 Buenos Aires, Argentina PIED SA: Court Concludes Reorganization --------------------------------------- Pied S.A. concluded its reorganization process, according to data released by Infobae on its Web site. The closure came after the National Commercial Court of First Instance in San Jorge, Santa Fe, homologated the debt plan signed between the company and its creditors. SUCESION DE ABRAHAM: Trustee Verifies Claims Until April 3 ---------------------------------------------------------- Gerardo Serghezzo, the court-appointed trustee for Sucesion de Abraham Dayan's bankruptcy proceeding, verifies creditors' proofs of claim until April 3, 2008. Mr. Serghezzo will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 3 in Buenos Aires, with the assistance of Clerk No. 5, will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that 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 Sucesion de Abraham 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 Sucesion de Abraham's accounting and banking records will be submitted in court. La Nacion didn't state the submission deadlines for the reports. Creditors will vote to ratify the completed settlement plan during the assembly on Dec. 11, 2008. Mr. Serghezzo is also in charge of administering Sucesion de Abraham's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Sucesion de Abraham Dayan Salguero 540 Buenos Aires, Argentina The trustee can be reached at: Gerardo Serghezzo Paraguay 1224 Buenos Aires, Argentina ============= B A H A M A S ============= PETROLEOS DE VENEZUELA: Selling Borco to First Reserve ------------------------------------------------------ Venezuelan state-run oil firm Petroleos de Venezuela SA will sell its Bahamian oil storage business Borco to energy-focused private equity firm First Reserve in an alleged US$900-million deal, The Financial Times Limited reports. As reported in the Troubled Company Reporter-Latin America on Aug. 17, 2007, Venezuelan energy and oil minister and Petroleos de Venezuela's chief executive officer Rafael Ramirez denied plans to sell Borco. Petroleos de Venezuela directors led by the firm's refining vice president, Alejandro Grando, met twice in Houston in 2006 to discuss the sale of Borco. Petroleos de Venezuela had considered the sale of Borco because it didn't need a large storage complex in the Caribbean. The FT notes that Borco was valued at US$400 million in June 2007, based mainly on its storage capacity of 20 million barrels. The availability of 300 acres of adjacent land for expansion as well as the possibility of restarting some deactivated parts of the facility gave Borco more value than some initially thought, The FT says, citing First Reserve. First Reserve told The FT it was positive that Petroleos de Venezuel'as dispute with ExxonMobil wouldn't affect the Borco transaction, which has already closed. As reported in the Troubled Company Reporter-Latin America on Feb. 11, 2008, Petroleos de Venezuela is barred from taking or disposing of up to US$12 billion in petroleum assets worldwide after courts in Britain and the U.S. ordered freezing of those assets. Exxon Mobil had sought the ruling amid reports that Petroleos de Venezuela could be looking to sell assets to counter financial crisis. According to U.K. court filing, ExxonMobil is concerned that Petroleos de Venezuela will transfer assets to other countries including China to put them out of reach of an international arbitration commission. Last year, Venezuelan President Hugo Chavez nationalized oil projects in the country and Exxon Mobil has been seeking to recover the value of its investments in those fields. The FT relates that First Reserve examined Borco for over a year. First Reserve managing director Tom Sikorski commented to The FT, "The fact is that oil majors are spending much of their available capital exploring for new oil, leaving them little left to invest in storage - that's where we can come in." Royal Dutch Shell already entered into an accord with First Reserve to be its first tenant at Borco, The FT states. About First Reserve First Reserve Corporation fuels the companies that help fuel the world. The private equity firm invests in middle-market energy companies, and currently manages about US$12.5 billion. Its typical investment ranges from US$100 million to US$500 million in enterprises involved in energy manufacturing and services, energy infrastructure, and energy reserves. The company's current portfolio includes stakes in some 20 firms, including Brand Energy & Infrastructure Services and Dresser. First Reserve's investor base is primarily comprised of corporations, endowments, foundations, and public retirement funds. About Petroleos de Venezuela SA Petroleos de Venezuela SA -- http://www.pdv.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. PDVSA is one of the top exporters of oil to the US with proven reserves of 77.2 billion barrels of oil -- the most outside the Middle East -- and about 150 trillion cu. ft. of natural gas. PDVSA's exploration and production take place in Venezuela, but the company also has refining and marketing operations in the Caribbean, Europe, and the US. PDVSA estimates it will achieve a 5 million 847 thousand barrel per day production capacity by the year 2012. * * * In March 2007, Standard & Poor's Ratings Services assigned its 'BB-' senior unsecured long-term credit rating to Petroleos de Venezuela S.A.'s US$2 billion notes due 2017, US$2 billion notes due 2027, and US$1 billion notes due 2037. TYCO INT'L: To Sell Infrastructure Services Biz to AECOM Tech ------------------------------------------------------------- Tyco International Ltd. has entered into a definitive agreement to sell substantially all of its Infrastructure Services business to AECOM Technology Corporation for approximately US$510 million. Infrastructure Services, which operates under the name Earth Tech Inc., provides consulting engineering, construction management and operating services for the water, wastewater, environmental, transportation and facilities markets. The business had revenue of US$1.3 billion in 2007 and employs 7,000 people around the world. "The sale of Infrastructure Services is an important step in the ongoing refinement of our portfolio and is consistent with our strategy to divest certain non-core businesses," said Tyco Chairperson and Chief Executive Officer, Ed Breen. During 2007, Tyco agreed to sell a Brazilian subsidiary of Infrastructure Services for approximately US$295 million, a transaction expected to close in the current fiscal quarter. Completion of the AECOM transaction is subject to customary closing conditions, regulatory approvals and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. AECOM Technology, based in Los Angeles, California is a US$4.2 billion global engineering services company providing professional technical and management support services to customers in the transportation, facilities, environmental and energy markets. About Tyco Based in Pembroke, Bermuda, Tyco International Ltd. (NYSE: TYC) -- http://www.tyco.com/-- provides security, fire protection and detection, valves and controls, and other industrial products and services to customers in four business segments: Electronics, Fire & Security, Healthcare, and Engineered Products & Services. With 2007 revenue of US$18 billion, Tyco employs approximately 118,000 people worldwide. In Latin America, Tyco has presence in Argentina, Brazil, Bermuda, Chile, Costa Rica, Ecuador, Honduras, and the Bahamas. Effective June 29, 2007, Tyco International Ltd. completed the spin-offs of Covidien and Tyco Electronics, formerly its Healthcare and Electronics businesses, respectively, into separate, publicly traded companies in the form of a distribution to Tyco shareholders. * * * As reported in the Troubled Company Reporter on Dec. 21, 2007, in its annual report for the year ended Sept. 28, 2007, Tyco said that on Nov. 8, 2007, The Bank of New York delivered to the company a notice of events of default. The notice claims that the actions taken by the company in connection with its separation into three public entities constitute events of default under the indentures. ============= B E R M U D A ============= FOSTER WHEELER: Finnish Unit Bags PJSC Contract in Russia --------------------------------------------------------- Foster Wheeler Ltd.'s Finnish subsidiary Foster Wheeler Energia Oy, part of its Global Power Group, has been awarded a contract by PJSC EnergoMashinostroitelny Alliance for a 330 MWe (gross megawatt electric) advanced circulating fluidized-bed (CFB) steam generator to be located in Novocherkassk, Russia. The Novocherkasskaya GRES facility is owned by The Sixth Wholesale Power Market Generating Company (WGC-6). Foster Wheeler has received a full notice to proceed on this contract. The terms of the award were not disclosed, and the contract will be included in the company's bookings for the first quarter of 2008. Although Foster Wheeler CFB technology has been installed in more than 300 locations worldwide, this is the first CFB to be built in Russia and the second CFB ordered in the world which utilizes advanced supercritical once-through (OTU) steam technology. The first such CFB is located in Poland, where Foster Wheeler is currently building a 460 MWe OTU-CFB that is planned to come on-line in the first quarter of 2009. OTU-CFB technology improves overall power plant efficiency, resulting in producing about 5-10% more electricity from the same amount of fuel consumed as compared to a conventional subcritical steam power plant. Further, this fuel savings translates into approximately the same amount of reduction for the plant's air and ash emissions helping to reduce the plant's environmental impact. Foster Wheeler will supply the steam generator, auxiliary equipment and advisory services for erection and commissioning of the boiler island. The boiler will be designed to burn both anthracite and bituminous coal along with a potential of 30% anthracite slurry. "This is a wonderful opportunity to further demonstrate the capabilities of our supercritical CFBs in utility scale operations," said Tomas Harju-Jeanty, president and chief executive officer of Foster Wheeler Energia Oy. "This advanced- CFB technology will increase opportunities for industrialized nations to use their domestic coal reserves for large scale utility plants while minimizing any environmental impact. In addition, we are honored to be the company selected to bring the first CFB to Russia." About Foster Wheeler Ltd. Foster Wheeler Ltd. (Nasdaq: FWLT) -- http://www.fwc.com/-- offers a broad range of engineering, procurement, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas-to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 5, 2008, Standard & Poor's Ratings Services revised its outlook on Foster Wheeler Ltd. to positive from stable. At the same time, S&P affirmed its 'BB' corporate credit rating on the company. The company reported total debt of approximately US$150 million at Sept. 30, 2007. In December 2006, Standard & Poor's Ratings Services revised its outlook on Foster Wheeler Ltd. to positive from stable. Standard & Poor's also affirmed its 'B+' corporate credit rating and other ratings on the company. The company had about US$217 million of total debt at Sept. 29, 2006. INTELSAT LTD: Appoints Messrs. Spengler & Guillemin as EVP & SVP ---------------------------------------------------------------- Intelsat Ltd. announced a number of executive appointments, effective immediately. Intelsat Chief Executive Officer Dave McGlade has appointed Stephen Spengler to the position of Executive Vice President, Sales & Marketing, and Thierry Guillemin to the position of Senior Vice President & Chief Technical Officer, both new roles. These roles replace the Chief Operating Officer position vacated by James Frownfelter, who submitted his resignation from Intelsat on Feb. 8 2008. Mr. Spengler most recently served as Intelsat's Senior Vice President, Europe, Middle East, Africa & Asia Pacific Sales, and has over 25 years experience in the telecommunications industry. Since joining Intelsat in 2003, Mr. Spengler has served in a number of sales leadership positions, and led Intelsat's Global Marketing and Sales organizations immediately prior to Intelsat's acquisition of PanAmSat in 2006. As Executive Vice President, Sales & Marketing, Mr. Spengler will have responsibility for Intelsat's global marketing and sales efforts, which include providing services to media and network services customers in approximately 200 countries and territories. Mr. Guillemin most recently served as Intelsat's Vice President of Satellite Operations & Engineering, where he was responsible for the service availability of Intelsat's in-orbit fleet of 54 satellites. Mr. Guillemin has over 25 years experience in the satellite industry, in disciplines including spacecraft development, launch and operations. As Senior Vice President & Chief Technical Officer, Mr. Guillemin will be responsible for customer operations, space systems management and planning, and satellite operations. In announcing the appointments, Mr. McGlade said, "Over the past several years, Intelsat has built a highly skilled management team, one that understands the needs of our global customer base and that is fully capable of profitably growing the business. I am proud of the bench strength we enjoy throughout the organization, and today's appointments reflect Intelsat's leadership in this respect. We thank Jim Frownfelter for his years of service to PanAmSat, and for his contributions to our successful merger integration progress." About Intelsat Headquartered in Bermuda, Intelsat, is the largest fixed satellite service operator in the world and is owned by Apollo Management, Apax Partners, Madison Dearborn, and Permira. * * * As reported in the Troubled Company Reporter-Latin America on Jan. 31, 2008, Moody's Investors Service downgraded Intelsat Ltd.'s corporate family rating by two notches to Caa1. INTERNATIONAL FILM: Final Shareholders Meeting is on March 12 ------------------------------------------------------------- International Film Guarantors Reinsurance, Ltd., will hold its final shareholders meeting on March 12, 2008, at 9:30 a.m., at Messrs. Conyers Dill & Pearman, Clarendon House, Church Street, Hamilton, Bermuda. These matters will be taken up during the meeting: -- receiving an account showing the manner in which the winding-up of the company has been conducted and its property disposed of and hearing any explanation that may be given by the liquidator; -- determination by resolution the manner in which the books, accounts and documents of the company and of the liquidator shall be disposed; and -- passing of a resolution dissolving the company. INTERNATIONAL FILM: Proofs of Claim Filing Ends on February 20 -------------------------------------------------------------- Film Guarantors Reinsurance, Ltd.'s creditors are given until Feb. 20, 2008, 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. Film Guarantors' shareholder decided on Jan. 29, 2008, 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 REFCO INC: Court Moves Claim Objection Deadline to April 30 ----------------------------------------------------------- RJM, LLC, the plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner, the plan administrator to Refco Capital Markets, Ltd., obtained an April 30, 2008 extension of their deadline to object to requests for payment of administrative expense claims and prepetition claims. Steven Wilamowsky, Esq., at Bingham McCutchen, LLP, in New York, relates that, since Refco's bankruptcy filing in October 2005, 14,400 filed claims and 8,300 unfiled claims have been addressed by the U.S. Bankruptcy Court for the Southern District of New York. The Plan Administrators currently have 200 claims subject to objections, and 100 claims for additional claims resolution. Mr. Wilamowsky says roughly 225 claims were asserted as administrative claims against either RCM or the Reorganized Debtors. The Plan Administrators have fully administered and resolved 215 of the 225 claims. According to Mr. Wilamowsky, the extension is appropriate to complete the claims reconciliation process and will ensure that all non-meritorious claims are properly challenged. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. Refco has operations in Bermuda. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets Ltd. and Refco F/X Associates LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Refco Commodity's exclusive period to file a chapter 11 plan expired on Feb. 13, 2007. (Refco Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Sale of 35% Equity Stake in FXCM Consummated ------------------------------------------------------- RJM LLC, the plan administrator to reorganized Refco Inc. and its affiliates, and Marc S. Kirschner, the plan administrator to Refco Capital Markets, Ltd., notified the U.S. Bankruptcy Court for the Southern District of New York that the sale of Refco Group Ltd.'s 35% equity interest in Forex Capital Markets, LLC, has been consummated. The names of the purchasers had been withheld for confidentiality purposes, according to Steven Wilamowsky, Esq., at Bingham McCutchen LLP, in New York. As reported in the Troubled Company Reporter on Nov. 29, 2007, the Plan Administrators asked the Court to approve their settlement agreement with Forex Capital Markets, LLC, Forex Trading LLC, FXCM Canada Ltd., FXCM LLC, David Sakhai, William Ahdout, Kenneth Grossman, Michael Romersa, and Edward Yusupov. Reorganized Refco Group Ltd. holds a 35% equity interest in Forex Capital Markets, LLC. Pursuant to Refco's confirmed Chapter 11 Plan, RJM has authority to exercise Refco's rights in respect of RGL's 35% interest in FXCM, including all rights related to its liquidation or disposition. The sale of RGL's interest is subject to the requirement that certain claims against the Refco parties and RCM be resolved. The Settlement Agreement provides that: a. The Plan Administrators will seek Court approval allowing the claims filed by the FXCM Parties: 1. Claim No. 9140, to be allowed as a Class 6 FXA Convenience Class Claim for US$3,290.87 under the Plan; 2. Claim No. 9870, to be allowed as a Class 5(a) FXA General Unsecured Claim for US$8,281,529.63; 3. Claim No. 9871, to be allowed as a Contributing Debtor Class 5(a) General Unsecured Claim for US$8,281,529.63. b. The Plan Administrators ask Court to expunge FXCM Parties' 31 other claims -- Claim Nos. 6629, 6630, 6631, 6632, 6633, 6634, 6635, 6636, 6637, 7564, 7566, 7568, 7569, 7570, 7571, 7572, 14268, 14269, 14270, 14271, 14272, 14273, 14274, 14275, 14276, 14427, 14428, 14429, 14430, 14431, 14432. Jeffrey M. Olinsky, Esq., at Bingham McCutchen LLP, in New York, told the Court the Plan Administrators have carefully reviewed the claims filed by the FXCM Parties, as well as the books and records of the Reorganized Debtors and RCM as they relate to the claims. The Plan Administrators believe that Claim Nos. 9140, 9870 and 9871 are properly allowable at the amounts set, and the rest of the FXCM Parties' claims should be expunged. Mr. Olinsky said the FXCM Parties agree that the 31 other claims should be expunged. "Expunging these other claims will eliminate 31 claims against the Reorganized Debtors' and RCM's estates that seek damages based on alleged fraudulent conduct of the Debtors," he said. Mr. Olinsky noted the Agreement would result in proceeds from the sale of RGL's 35% equity interest in FXCM becoming available for distribution to creditors of the Contributing Debtors. The Court approved the Settlement Agreement in December. A full-text copy of the FXCM Settlement Agreement is available for free at http://bankrupt.com/misc/FXCMsettlementAgreement.pdf About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. Refco has operations in Bermuda. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets Ltd. and Refco F/X Associates LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Refco Commodity's exclusive period to file a chapter 11 plan expired on Feb. 13, 2007. (Refco Bankruptcy News, Issue No. 76 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). REFCO INC: SPhinX Liquidators Want Protective Order Eased --------------------------------------------------------- Kenneth M. Krys and Christopher Stride, in their capacity as the Joint Official Liquidators of SPhinX, Ltd., SPhinX Macro Fund, SPhinX Managed Futures Fund SPC, et al., ask the U.S. Bankruptcy Court for the Southern District of New York to modify a protective order dated April 26, 2006, and amended on March 19, 2007, governing the use of certain confidential material. SPhinX seeks to allow Marc S. Kirschner, as Plan Administrator for Refco Capital Markets, Ltd., and at the same time, as Refco Litigation Trustee, to produce certain documents. On behalf of the SPhinX Liquidators, David J. Molton, Esq., at Brown Rudnick Berlack Israels LLP, in New York, relates that the Protective Order was issued with respect to the documents gathered at the Refco examiner's investigation of the Debtors' Chapter 11 cases. The Protective Order allows disclosure of confidential documents if the producing party consents, or if the Court issues an order. According to Mr. Molton, certain parties transferred hundreds of millions of dollars in SPhinX assets from Refco, LLC, to RCM, where it comingled with the assets RCM and its other customers. A discovery is being held at the Grand Court of the Cayman Islands investigating the facts, circumstances, and events that led to the collapse of SPhinX, Mr. Molton says. Under a Court- approved settlement agreement between the parties, Mr. Kirschner will "not oppose any attempt by the Joint Official Liquidators to obtain relief from any confidentiality restrictions." Mr. Molton maintains that the information sought by SPhinX is critical to the Cayman Court investigation of the assets, liabilities and financial affairs of the SPhinX Funds. Ernst & Young, et al., Object Seven objecting parties separately ask U.S. Bankruptcy Judge Robert D. Drain to refrain from amending the protective order governing the use of certain confidential materials. The parties are: -- Ernst & Young LLP; -- Credit Suisse Securities (USA) LLC, formerly known as Credit Suisse First Boston LLC), Banc of America Securities LLC, Deutsche Bank Securities Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc., Sandler O'Neill & Partners, L.P. and HSBC Securities (USA) Inc.; -- Thomas H. Lee Partners, L.P.; -- Grant Thornton LLP; -- PricewaterhouseCoopers; -- Arthur Andersen LLP; and -- Bank fur Arbeit und Wirtschaft und Osterreichische Postparkasse Aktiengesellschaf. According to the Objecting Parties, the SPhinX Liquidators are seeking to obtain pre-litigation discovery that Bankruptcy Judge James M. Peck has already denied other Sphinx Funds representatives in In re PlusFunds Group, Inc. The Objecting Parties assert that the SPhinX Liquidators are pursuing effectively the same request, for the same stated reasons, and through the same counsel, which the Sphinx Trust asserted and lost in the PlusFunds bankruptcy case. Ernst & Young tells Judge Drain that it has no direct connection to SPhinX or their estates, except for the tax work Ernst & Young performed for certain Debtors in the tax year 2002. Ernst & Young adds that the SPhinX Liquidators did not explain how its preparation of the Debtors' tax returns could have affected SPhinX Funds. The SPhinX Liquidators seek pre-litigation access to confidential documents in which they are fundamentally disinterested, Ernst & Young contends. He also notes that that the extensive existing record of Refco Inc. examiner's investigation are publicly available, enabling the SPhinX Liquidators to evaluate their potential claims. Furthermore, the Underwriters, Credit Suisse et al., argue that the Motion exceeds the scope of Rule 2004 of the Federal Rules of Bankruptcy Procedure and Section 1521 of the Bankruptcy Code. Rule 2004 limits any examination only to the acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor's estate, or to the debtor's right to a discharge. Section 1521(a)(4) provides for discovery concerning the debtor's assets, affairs, rights, obligations or liabilities. The Underwriters, together with TH Lee, Grant Thornton, Arthur Andersen, and PwC, argue that the Foreign Representatives seek information that has nothing to do with the Sphinx Funds' assets, affairs, rights, obligations or liabilities. They further stated that Judge Peck had found, in the PlusFunds proceeding, that the Sphinx Trustee did not need any further document production to determine any causes of action against third parties, and that any additional document discovery should occur pursuant to the Federal Rules. Grant Thornton also states that it opposes the Motion, but if the Court permits Marc S. Kirschner, as Refco Capital Markets, Ltd. Plan Administrator and Refco Litigation Trustee, to produce any documents, the SPhinX Liquidators should be subject to the same confidentiality restrictions as applied to Mr. Kirschner and the Refco Examiner. Meanwhile, Arthur Andersen LLP tells Judge Drain that its work for Refco predates SPhinX Funds' existence. BAWAG argues that it is inappropriate to lift the protections afforded to the producing parties to SPhinX Funds, a non-estate, non-fiduciary party, simply because it alleges possible claims against parties in Refco's bankruptcy case. Additionally, BAWAG maintains that the relief requested has no direct connection to the proceedings in the Grand Court of the Cayman Islands. SPhinX Liquidators Talk Back The SPhinX Liquidators tell Judge Drain that the information they seek regarding SphinX's funds at RCM, and the redemptions of investments in SPhinX Funds through Refco's related entities during 2005 and 2006, is "absolutely critical" to the investigation of the SPhinX Funds assets, liabilities and financial affairs, and the determination of the rights and remedies that they may pursue on behalf of the SPhinX Funds. The SPhinX Liquidators state that the Objections contain two common threads: -- the discovery exceeds the proper scope of discovery under Rule 2004 and Section 1521; and -- the discovery was previously determined to be improper by Judge Peck in PlusFunds' bankruptcy case. With regard to scope, the SPhinX Liquidators insist that they are acting in accordance with a Settlement Agreement with Mr. Kirschner, allowing them to seek the proposed discovery. Moreover, the SPhinX Liquidators assert that the proposed discovery is closely related to SPhinX Funds' affairs, as impacted by the unlawful transfer of SPhinX assets to non- segregated accounts with RCM. The SPhinX Liquidators maintain that close relationship between SPhinX Funds claims, the Objecting Parties, and other Refco- related entities, demonstrates that Judge Peck's holding in the PlusFunds case are inapplicable to the SphinX Funds case, since the PlusFunds claims are distinct from the SphinX Funds claims. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. Refco has operations in Bermuda. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets Ltd. and Refco F/X Associates LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Refco Commodity's exclusive period to file a chapter 11 plan expired on Feb. 13, 2007. (Refco Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). SOLAR ENTERPRISES: Sets Final Shareholders Meeting for March 10 --------------------------------------------------------------- Solar Enterprises Limited will hold its final shareholders meeting on March 10, 2008, at 9:30 a.m., at Messrs. Conyers Dill & Pearman, Clarendon House, Church Street, Hamilton, Bermuda. These matters will be taken up during the meeting: -- receiving an account showing the manner in which the winding-up of the company has been conducted and its property disposed of and hearing any explanation that may be given by the liquidator; -- determination by resolution the manner in which the books, accounts and documents of the company and of the liquidator shall be disposed; and -- passing of a resolution dissolving the company. ============= B O L I V I A ============= COEUR D'ALENE: Resumes Pre-Commissioning at San Bartolome Mine -------------------------------------------------------------- Coeur d'Alene Mines Corporation has begun pre-commissioning activities at its San Bartolome silver mine, which is expected to produce over ten million ounces of silver during its first twelve months of full-scale operations. All major plant equipment at San Bartolome is now in place. The Company expects the processing facilities to be connected to the national electrical grid during the second half of February, at which point full commissioning of the crushers and mills will commence. Processing of ore is expected to begin during the second half of March. Production and plant utilization will then steadily increase with full plant capacity anticipated to be reached in August. "In reaching the finish line at the San Bartolome silver mine, we are very pleased to report the success in completing this world-class project while maintaining the highest standards of safety, quality of construction, and adherence to cost and scheduling," said Dennis E. Wheeler, Chairman, President and Chief Executive Officer. "Over 1,600 workers, almost all of them Bolivians, have done an excellent job in constructing what will be the world's largest pure silver mine, surpassing over 3.7 million man hours without a lost time accident, a truly remarkable achievement given the size and scope of this state- of-the-art facility. Coeur is proud of the strong community, government and economic relationships we have developed with the people and organizations of Potosi and Bolivia, and the Company is excited about placing the mine into production and generating value for all stakeholders." Overview of Key Mine Metrics: -- Expected silver production during remainder of 2008 of over six million ounces -- Operating cash costs once plant reaches full-scale operations in August through the end of the year are expected to be US$4.10 per ounce of silver (excluding royalties and production taxes of US$2.03 per ounce) -- Over ten million ounces of silver production during the first twelve months of full-scale operations -- 153.0 million ounces of silver mineral reserves and 34.2 million ounces of additional indicated mineral resource -- Estimated mine life of 14 years About Coeur d'Alene Coeur d'Alene Mines Corp. (NYSE:CDE) (TSX:CDM) -- http://www.coeur.com/-- is the world's largest primary silver producer, as well as a significant, low-cost producer of gold. The company has mining interests in Nevada, Idaho, Alaska, Argentina, Chile, Bolivia and Australia. * * * Coeur d'Alene Mines Corp.'s US$180 Million notes due Jan. 15, 2024, carry Standard & Poor's B- rating. * BOLIVIA: Inks Loan Pact With World Bank to Finance 5 Projects --------------------------------------------------------------- The Government of Bolivia and the World Bank have signed a US$77.5 million loan agreement to finance five projects in the areas of education, agricultural development, rural investment, sustainable development, and natural disaster prevention that will create opportunities for and improve the quality of life of the poorest sectors of the population. The loan agreement was signed at World Bank headquarters by Bolivia's Ambassador to the US, Mario Gustavo Guzman, and by Carlos Felipe Jaramillo, World Bank Director for Bolivia, Ecuador, Peru, and Venezuela, in a ceremony attended by Felix Alberto Camaraza, World Bank Executive Director for Bolivia. "The Government of Bolivia is committed to the poorest sectors of its population and the World Bank's support is based on a dialogue grounded in the country's development priorities as defined in the National Development Plan of President Evo Morales' administration," said Bolivian Ambassador Mario Gustavo Guzman. The agreement includes: -- US$20 million for the Second Participatory Rural Investment Project; -- US$20 million for the Lake Titicaca Local Sustainable Development Project; -- US$15 million for the Land for Agricultural Development Project; -- US$10 million for the Municipality of La Paz Secondary Education Transformation Project; and -- US$12.5 million for the Prevention and Management of Natural Disasters Project. "Bolivia has improved the quality of life of its population as well as access to basic services and social indicators. However, the country still faces poverty and inequality challenges, and we are proud to be the Government's partner and to work together to solve them," said Carlos Felipe Jaramillo. The Second Participatory Rural Investment Project covers 182 municipalities, 71 of which will receive support for improving rural transport links, while the remaining 111 will receive more integral support covering all aspects of productivity. These 111 municipalities were chosen because of their high poverty levels, job creation potential, and high share of indigenous population. An estimated 14 percent of the Bolivian population lives in this area, including more than 4,000 rural communities belonging to the Aymara, Quechua, Guarani, Chiquitano, and Mojeno people. The Project is expected to serve at least 230,000 people and 38,600 households. The Lake Titicaca Local Sustainable Development Project will be used to promote tourism, protect the area's archeological and cultural heritage, provide basic services to the local population, and strengthen local government management capacity. The proposed measures aim to mitigate the severe water pollution that results from debris and waste being thrown into the lake by the surrounding communities. The Land for Agricultural Development Project will establish a decentralized land distribution system that allows organized landless or poor farmers to acquire agricultural lands and implement investment subprojects that will help them to improve their income and living standards. The project will benefit around 2,200 poor rural families, which represents roughly 20 percent of the total number of families nationwide that have requested land allocations from the Government. It targets a mostly indigenous group of extremely poor people in the eastern lowlands, one of Bolivia's most productive regions. The Municipality of La Paz Secondary Education Transformation Project will support the La Paz Municipal Government's education strategy by increasing access to secondary education for adolescents and young people and improving their permanence in the education system. The loan will also help to improve the quality and relevance of primary and secondary education and to strengthen the decentralized education management capacity of the Municipality. The Prevention and Management of Natural Disasters Project will be used to considerably improve the government's capacity to respond to natural disasters, and will include components such as damage prevention and mitigation, infrastructure reconstruction, and rehabilitation of the extensive affected areas. Among other activities, the project will finance smaller schemes such as school repair, housing, health clinics, bridges, roads, and irrigation systems, as well as building dykes on riverbanks and constructing filtering tunnels and all the works necessary to protect inhabitants of the five most vulnerable areas. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 26, 2007, Standard & Poor's Ratings Services assigned B- long-term sovereign local and foreign currency ratings and C short-term sovereign local and foreign currency ratings on Bolivia. =========== B R A Z I L =========== BLOUNT INT'L: Sept. 30 Balance Sheet Upside-Down by US$78.1 Mil. ---------------------------------------------------------------- Blount International Inc.'s consolidated balance sheet at Sept. 30, 2007, showed US$472.4 million in total assets and US$550.5 million in total liabilities, and US$78.1 million in total stockholders' deficit. The company reported net income of US$9.4 million for the third quarter ended Sept. 30, 2007, compared with net income of US$15.1 million in the same period of 2006. Sales for the company for the third quarter increased to US$166.9 million or 1.7% from last year's third quarter. Sales for the company's Outdoor Products segment increased by 9.5% from last year's third quarter to more than offset a 14.7% decline in the Industrial and Power Equipment Segment. Operating income was US$22.6 million in this year's third quarter compared to US$18.7 million last year. Last year's third quarter operating income included non-recurring charges of US$4.8 million related to the redesign of the company's retirement plans and the closure of a manufacturing facility. Income from continuing operations in this year's third quarter was US$9.4 million, compared to US$10.1 million in the comparable period last year. This year's income from continuing operations includes income tax expense of US$5.7 million compared to an income tax benefit of US$640,000 last year, when the company recognized the impact of certain tax planning strategies. Commenting on the company's results, James S. Osterman, chairman and chief executive officer, stated: "Third quarter sales for our Outdoor Products segment increased solidly from last year as we experienced strong growth in key international markets. This top line growth resulted in a slight improvement to segment contribution despite continued margin pressure caused by a further strengthening of the Canadian and Brazilian currencies. We ended the third quarter with a good order backlog in the Outdoor Products segment and expect to continue to experience year over year sales growth through the fourth quarter." Total Debt Total debt at Sept. 30, 2007, was US$355.0 million compared to US$350.9 million at Dec. 31, 2006. As of Sept. 30, 2007, outstanding debt consisted of a revolving credit facility balance of US$32.3 million, a term loan of US$147.8 million and senior subordinated notes of US$175.0 million. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?27f2 About Blount International Blount International Inc. (NYSE: BLT) -- -- is a diversified international company operating in two principal business segments: Outdoor Products and Industrial and Power Equipment. The company's Outdoor Products segment provides chain, bars and sprockets to the chainsaw industry, accessories to the lawn care industry and concrete cutting saws. Blount manufactures its products in the United States, Canada, China, and Brazil, and sells them in more than 100 countries. FIAT SPA: Sees no Slowdown in Global Demand ------------------------------------------- Fiat S.p.A. expects no decrease in global demand despite the current financial market upheaval, Reuters reports citing company CEO Sergio Marchionne. "Most companies that are in this sector have not yet shown the slightest slowdown in industrial development," Mr. Marchionne was quoted by Reuters as saying. "We do not see any negative impact on market demand." Mr. Marchionne added that the company is experiencing weak local demand, which the CEO is "understandable" due to the tax incentives problem. About Fiat S.p.A. Headquartered in Turin, Italy, Fiat S.p.A. -- http://www.fiatgroup.com/-- is one of the largest industrial groups in Italy and the fourth largest European-based automobile manufacturer, with revenues of EUR33.4 billion in the first nine months of 2005. Fiat's creditors include Banca Intesa, Banca Monte dei Paschi di Siena, Banca Nazionale del Lavoro, Capitalia, Sanpaolo IMI, and UniCredito Italiano. Fiat operates in Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, China, Czech Republic, Denmark, France, Germany, Greece, Hungary, India, Ireland, Italy, Japan, Lituania, Netherlands, Poland, Portugal, Romania, Russia, Singapore, Spain, among others. * * * As reported on Nov. 6, 2007, Moody's Investors Service changed the outlook on Fiat S.p.A. and subsidiaries' Ba3 Corporate Family Rating to positive from stable and affirmed its Ba3 long- term senior unsecured ratings as well as the short-term non- Prime rating. On Oct. 4, 2007, Fitch Ratings affirmed Fiat S.p.A.'s Issuer Default and senior unsecured ratings at BB- and Short-term rating at B. The company carries Standard & Poor's Ratings Services' BB long- term corporate credit rating. The compay also carries B short- term rating. S&P said the outlook is stable. FORD MOTOR: Plans to Offer Buyout Packages to 9,000 Workers ----------------------------------------------------------- Ford Motor Co. intends to offer another round of buyout packages to 14% of its entire plant workforce in North America to restore profitability, Bloomberg News reports citing a source familiar with the matter. Roughly 9,000 workers will be displaced in addition to 33,000 employees who availed the compensation packages in 2006 and 2007. Last month, United Auto Workers union representatives and the automaker agreed to compensation offers higher than those offered in 2006, including an education package, health benefits and a lump sum payment, according to Bryce G. Hoffman of the Detroit News. Pursuant to the agreement, an additional US$35,000 will be given to qualified retirees as they leave, the payout totaling US$70,000. As reported in the Troubled Company Reporter on Feb. 5, 2008, total Ford sales in January, including Jaguar, Land Rover, and Volvo, were 159,914, down 4%. "It's not going to get any easier -- at least for awhile," Jim Farley, Ford's group vice president, Marketing and Communications, said. "Recent monetary actions and the proposed stimulus package may help the economy later this year, but we're not pinning our hopes on that. Our plan is based on restructuring our business to be profitable at lower demand and changed mix while also accelerating the development of new products people want to buy." Based 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 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. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the UAW. FORD MOTOR: Tells Plastech Court Carmakers Can Recover Tooling -------------------------------------------------------------- Rival carmakers General Motors Corp. and Ford Motor Co. appeared before the U.S. Bankruptcy Court for the Eastern District of Michigan Wednesday to support Chrysler LLC'S request to recover its tooling equipment from Plastech Engineered Products Inc. and its debtor-affiliates' plants, The Associated Press says. AP's Dee-Ann Durbin reports that spokesperson for GM and Ford as well as for auto supplier Johnson Controls Inc. told the Court they believe they have the right to reclaim their own equipment under their contracts with Plastech. "GM is not taking a position regarding whether the court should grant Chrysler the relief it is seeking," GM spokesman Frank Sopata said, according to AP. "But GM does strongly support Chrysler's position regarding the tooling since we have entered into the same agreement as Chrysler and the other major customers of Plastech to reclaim our tooling should it be necessary." Ford and GM haven't experienced any disruption in their supply from Plastech or reported any quality problems, AP says. "We've continued to work with them all along," Ford spokesman Todd Nissen told the Court, AP relates. AP notes that GM Chief Financial Officer Fritz Henderson said Tuesday that GM hasn't made any decisions about whether to keep doing business with Plastech but is trying to help the supplier. "We're working constructively with them to help them with their current financial difficulties," he said. Chrysler-Plastech Dispute Honorable Phillip J. Shefferly began yesterday a two-day trial to consider the merits of Chrysler's request. The Court was also set to consider Chrysler's motion for a temporary restraining order that would allow Chrysler or its agents to enter Plastech's plants and obtain possession of the equipment. Chrysler and Plastech have temporarily resolved their dispute by entry of an interim agreement which provides that: i) Plastech will continue delivering component parts to Chrysler until Feb. 15, 2008; and ii) Plastech will allow Chrysler supervised access to Plastech facilities for purposes of inventory and inspection. Revenues Could Plummet Absent Tooling Equipment The Debtors, however, oppose Chrysler's request for lifting of the automatic stay under Section 362(d)(1) that would allow it to take possession of the Tooling. Chrysler wants possession of the Tooling so that it could transfer manufacturing of component parts to other parties. Plastech notes that Chrysler accounts for about $200,000,000 of its annual revenues. Thus, if Chrysler's proposal is granted, the Debtors would immediately lose approximately 15% of their annual revenues. This would occur when the Debtors' business is most vulnerable, the first two weeks of their Chapter 11 cases, avers Peter Smidt, executive vice president for Finance and chief financial officer of the Debtors. Deborah L. Fish, Esq., at Allard & Fish, P.C., in Detroit, Michigan, says that Chrysler is stayed by the Bankruptcy Code from taking possession of the Tooling. Ms. Fish contends that pursuant to Section 362(a)(3) of the Bankruptcy Code: -- Chysler is prohibited from taking unpaid tooling, which pursuant to their Financial Accommodation Agreements, are property of the estate. Section 362(a)(3) prohibits taking any action against estate property. The Debtors are also under no obligation to sell the unpaid tooling to Chrysler under the FFAs. -- Chrysler is prohibited from taking possession of any Tooling it owns but in the possession, custody and control of the Debtors. Regardless of who legally owns the Tooling, any Tooling in the possession of the Debtors may only be removed upon a modification of the automatic stay. Sufficient cause does not exist to modify the automatic stay under Section 362(d), Ms. Fish asserts. She argues that: -- The Debtors' and creditors' interests in prohibiting Chrysler from seizing any owned tooling substantially outweigh any harm that Chrysler might suffer if the stay is not lifted. Plastech will lose business if equipment are removed from their plants. On the other hand, Chrysler will suffer, "at most, financial damages, which damages were self-inflicted and not legally cognizable." -- Chrysler is not likely to prevail on the merits of its underlying claims. Ms. Fish notes that to grant a temporary restraining order or modify the automatic stay, the Court must also conclude that Chrysler has a substantial likelihood of prevailing on its underlying claims, all of which are premised on two contentions: i. that Chrysler properly terminated the Supply Agreements on February 1, 2008; and ii. that Chrysler owns the Tooling. The Debtors say that they will demonstrate at the hearing that Chrysler is not likely to prevail on either contention. Ms. Fish argues that: (a) Chrysler's notices were ineffective. Notices or letters sent by Chrysler on Jan. 15 and 16, and Feb. 1, which purportedly terminated the supply agreements, were not sent to the proper notice parties, which include the Debtors' other customers. In addition, the notices were "simply impermissibly vague" and, thus, did not trigger Plastech's 10-day obligation to cure defaults under the agreements. (b) Plastech timely cured certain of the alleged defaults and Chrysler is estopped from asserting others. Within two weeks following the January Notices, Plastech had cured or was on the verge of curing the alleged defaults regarding its financial condition and accommodation requests. (c) Chrysler is not likely to prevail on the merits of its contention that it could terminate the supply agreements for breach. Among other things: -- Plastech is not in breach of any quality obligation, -- Plastech is not in breach of any obligation to pay tooling suppliers and provide verification, -- Plastech has not breached any quality issues requiring third-party inspection, -- Plastech's request to advance payables did not constitute a breach, and -- Plastech's planned closures of certain facilities did not constitute any breach. Ms. Fish adds that Chrysler is not likely to show that the tooling is owned by Chrysler and held by the Debtors under Article 7 Of The Michigan Uniform Commercial Code. She avers that Chrysler did not and, indeed, cannot establish that a bailment relationship exists between itself and the Debtors. Previously, the Debtors refuted Chrysler's assertions that it will suffer significant harm absent a lifting of the stay. "Any harm to Chrysler was self-inflicted," the Debtors' proposed counsel, Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, asserted. "Any harm to Chrysler is not irreparable," he added. Plastech also asserted that even if the stay is lifted, it could take weeks, even months, for the equipment to be removed from the Debtors' facilities and be set up in another facility. Granting Chrysler's request, Mr. Galardi argued, would reward Chrysler for acting precipitously at a time when the Debtors efforts need to be, and indeed were, focused elsewhere in an effort to maximize the value of their estates for the benefit of all creditors. Other Objections Tri-Way Mfg., Inc., doing business as Tri-Way Mold & Engineering, which holds a lien on the molds Chrysler seeks to recover, wants Chrysler's lift stay request denied, absent the satisfaction of Tri-Way's statutory liens. In addition, H.S. Die & Engineering, Inc. and H.S. Die Rantoul Mold Services, LLC, which manufacture and supply Plastech with tools, dies and molds, including the Molds Chrysler seeks to recover, also objected to Chrysler's request. H.S. Die asserted that granting the lift stay request would entitle Chrysler to take possession or exercise any rights as to the Tools, which is subject to certain liens held by H.S. Die. H.S. Die is the Debtors' largest general unsecured creditor with a $6,360,328 claim according to papers filed at the time of their bankruptcy filing. About Chrysler LLC Based in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC and removed it from CreditWatch with positive implications, where it was placed Sept. 26, 2007. S&P said the outlook is negative. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 2 and 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets (DTAs) in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. About Ford Motor 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 on Nov. 19, 2007, Moody's Investors Service 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. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the UAW. GENERAL MOTORS: Inviting Ex-Guide Workers to Apply at Plants ------------------------------------------------------------ The Associated Press reports that 400 employees from the shuttered Guide Corp. plant in Anderson, Indiana, were told by letter that they were qualified to apply at a General Motors Corp. assembly plant in Fairfax, Kansas by Friday, Jan. 15, 2008. The GM plant has 300 vacancies. Headquartered in Southfield, Michigan, Guide Corporation is a North American supplier of exterior automotive lighting systems, including both forward and signal lighting. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of US$39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets (DTAs) in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GENERAL MOTORS: Posts Net Loss of US$38.7 Billion in 2007 --------------------------------------------------------- General Motors Corp. reported a 2007 calendar-year adjusted net loss, excluding special items, of US$23.0 million. This compares to adjusted net income of US$2.2 billion in 2006, as significantly improved automotive performance was offset by large losses at GMAC. Including special items, the company reported a loss of US$38.7 billion for the year, compared to a reported loss of US$2.0 billion in 2006. The loss is almost entirely attributable to the non-cash US$38.3 billion special charge in the third quarter related to the valuation allowance against deferred tax assets. The loss is believed to be the largest annual loss ever by an auto maker, The Wall Street Journal's John D. Stoll says. In the fourth quarter 2007, GM posted adjusted net income of US$46.0 million, compared to adjusted net income of US$180.0 million in the year-ago period. Including special items, the company reported a net loss of US$722.0 million in the fourth quarter 2007, compared to net income of US$950.0 million in the year-ago period. GM's core automotive business generated record revenue of US$178.0 billion in 2007, a US$7.0 billion improvement over 2006, aided by explosive growth in emerging markets and favorable foreign exchange against a weaker U.S. dollar. In total, GM generated US$181.0 billion in revenue in 2007, compared with US$206.0 billion in 2006. The decrease versus last year is due to the non-consolidation of GMAC revenue, following GM's sale of 51.0% of GMAC in November of 2006. "2007 was another year of important progress for GM, as we implemented further significant structural cost reductions in North America, grew aggressively in emerging markets, negotiated an historic labor contract with our UAW partners in the U.S., advanced development of a broad range of advanced propulsion technologies and most importantly, introduced a series of breakthrough cars and trucks around the world," GM chairman and chief executive officer Rick Wagoner said. "We're pleased with the positive improvement trend in our automotive results, especially given the challenging conditions in important markets like the U.S. and Germany, but we have more work to do to achieve acceptable profitability and positive cash flow," Wagoner added. The fourth quarter results reflect a US$1.6 billion tax benefit in continuing operations related to SFAS No. 109 guidelines for intra-period tax allocations between continuing operations, other comprehensive income and discontinued operations. Special charges recorded in the fourth quarter totaled US$768.0 million, including an US$805.0 million adjustment principally related to a favorable tax item related to the gain on the sale of Allison Transmission, which was offset by US$622.0 million in charges associated with GM's support of Delphi's restructuring efforts, US$552.0 million for pension benefits provided to Delphi employees and retirees and US$290.0 million in other restructuring-related charges. GM reported revenue of US$47.1 billion in the fourth quarter versus US$50.8 billion in the year ago period, with the decline more than accounted for by the exclusion of GMAC revenue starting Dec. 1, 2006. Revenue from automotive operations totaled US$46.7 billion in the quarter, a US$3.0 billion increase over the prior year and a new quarterly revenue record, reflecting strong growth in Latin America, Asia Pacific and Eastern Europe. GM Automotive Operations GM's global automotive operations posted adjusted earnings before tax of US$553.0 million in 2007, compared to an adjusted loss before tax of US$339.0 million in 2006. In the fourth quarter 2007, GM's automotive operations had an adjusted loss before tax of US$803.0 million, compared to adjusted earnings before tax of US$8.0 million in the year-ago quarter. GM's worldwide vehicle sales increased 3.0%, or 277,000 units, to 9.4 million vehicles in 2007, marking the second best year in units sold in the company's 100-year history. For the third consecutive year, a majority of the company's sales -- almost 60.0% -- were outside of the U.S. Record sales performance was achieved in key growth markets throughout Eastern Europe, Latin America and the Asia Pacific. GM North America posted an adjusted loss before tax of US$1.5 billion for 2007, compared to a loss before tax of US$1.6 billion in the year-ago period, excluding special items. GM North America had an adjusted loss before tax of US$1.1 billion in the fourth quarter, compared to an adjusted loss before tax of US$129.0 million in the fourth quarter 2006. Losses for the year in GM North America were largely attributable to a softer U.S. market, and the strategic actions to reduce dealer inventory by approximately 150,000 units and lower sales of daily rental vehicles by about 110,000 vehicles in the U.S. High commodity prices, unfavorable foreign exchange and lower unit sales exerted pressure on profitability, but were more than offset by better product mix, stronger pricing, and significantly reduced manufacturing and legacy costs. GM North America also incurred higher engineering costs to support continuing product and technology development activities. "Our North America turnaround remains on track despite the weak U.S. economy and continued high commodity prices," Wagoner said. "The actions we've taken to further reduce structural costs and strengthen our product lineup with great new vehicles like the award-winning Chevrolet Malibu and Cadillac CTS are fundamentally improving our ability to compete in the U.S. and around the world. We're building a solid foundation for continued growth and improved operating results," Wagoner added. GM reached its structural cost reduction target of US$9.0 billion in North America in 2007 versus 2005, a key part of reducing global automotive structural cost as a percent of revenue from 34.0% in 2005 to 29.7% in 2007. GM expects to derive additional structural cost savings of US$4.0 billion to US$5.0 billion by 2010 in the U.S. as it fully implements the 2007 GM-UAW contract, including the independent healthcare trust. These savings will help GM reach its goal to reduce structural cost as a percent of revenue to 25.0% of revenue by 2010, and further to 23.0% of revenue by 2012. GM Europe posted its second consecutive year of adjusted profitability in 2007 with earnings before tax of US$55.0 million, down from earnings before tax of US$357.0 million in 2006, excluding special items. For the fourth quarter GM Europe posted an adjusted loss before tax of US$215.0 million versus an adjusted loss before tax of US$12.0 million in the year ago period. The decline in calendar year and fourth quarter earnings were attributable primarily to a markedly softer German market as well as unfavorable foreign exchange rates. Other key areas of GM Europe's business performed relatively well, including strong sales outside Germany, increases in net pricing, and improvements in structural and material cost performance. GM Europe sales were up 8.9% in 2007 to a record 2.2 million units, led by Chevrolet, up 34.0%, Opel/Vauxhall, up 4.3% nd Cadillac up 31.0%. Strong demand for GM vehicles in the United Kingdom, Ukraine, Italy, Greece and Russia -- where sales doubled to 260,000 units -- made the company the fastest growing major automobile manufacturer in Europe in 2007. Financial results generated from the rapidly growing sales of GM Daewoo- built Chevrolet vehicles in Europe are consolidated in Korea and reflected in GM Asia Pacific results. With a 19.0% increase in sales to a record 1.2 million units in 2007, GM Latin America, Africa, Middle East (GMLAAM) achieved a record US$1.3 billion in adjusted earnings before tax for the year, up 140.0% over 2006 adjusted earnings of US$561.0 million. GMLAAM also set a sales record in the fourth quarter with 341,000 units, up 18.0% year over year, generating US$424.0 million in adjusted earnings before tax, up from US$76.0 million in the fourth quarter of 2006. Robust sales in the GMLAAM region resulted in record revenue of US$18.9 billion for the calendar year and US$6.0 billion in the fourth quarter. The year-over-year gain in GMLAAM pre-tax earnings was largely driven by strong volume growth, which outpaced industry growth, as well as favorable price and mix. Robust sales contributed to record GM sales in Argentina, Brazil, Chile, Colombia, Egypt and Venezuela in 2007. Continued strong sales of the Chevrolet Corsa, Aveo and Celta throughout the region were complemented by the successful launch of several new entries, including the Chevrolet Captiva in Latin America and Chevrolet Suburban and Cadillac Escalade in the Middle East. Chevrolet sales in the region were up 23.0% for the calendar year, and accounted for 90.0% of units sold in GMLAAM in 2007. GMAP posted adjusted earnings before tax of US$744.0 million in 2007 compared to US$403 million for 2006. GMAP adjusted earnings before tax for the fourth quarter were US$72.0 million, compared to US$105.0 million in fourth quarter of 2006. The calendar year earnings gain was driven by favorable volume and mix, increased equity income from GM's China joint ventures and improved operating performance at Holden. The results were partially offset by increased structural cost increases associated with continued investment in high growth markets and lower Suzuki equity income resulting from the sale of a majority of GM's equity in 2006. GMAP had continued strong performance in China, where domestic sales grew 18.5% in 2007 and GM, with its local partners, became the first global automotive manufacturer to sell more than 1 million vehicles. In addition, GM sales in India rose 74.0%, and export sales of the GM Daewoo products built in Korea increased by 30.0% to 870,000 vehicles. GMAC Posts US$2.3BB Net Loss in 2007 On a standalone basis, GMAC Financial Services reported a net loss of US$2.3 billion in 2007, compared with net income of US$2.1 billion in 2006. Profitable results in the global automotive and insurance businesses were more than offset by the significant loss at Residential Capital LLC. In the fourth quarter, GMAC reported a net loss of US$724.0 million, compared to net income of US$1.0 billion in the fourth quarter of 2006. The effect on ResCap of the continued disruption in the mortgage, housing and capital markets was the primary driver of adverse performance. GM reported a US$1.1 billion net loss attributable to GMAC, as a result of its 49.0% equity interest and preferred dividends received for the full year 2007, and a US$394.0 million reported net loss for the fourth quarter. While market conditions remain uncertain, GMAC has taken aggressive actions in 2007 across all its businesses in an effort to mitigate future risk, rationalize the cost structure and position the company for growth. As a result, GMAC currently expects to be profitable in 2008. GMAC's liquidity position is at relatively high historical levels and GM believes that GMAC remains adequately capitalized. Cash and Liquidity Cash, marketable securities and readily available assets of the Voluntary Employees Beneficiary Association trust totaled US$27.3 billion as of Dec. 31, 2007, up from US$26.4 billion as of Dec. 31, 2006. GM ended the 2007 calendar year with negative adjusted automotive operating cash flow of US$2.4 billion, a significant US$2.0 billion improvement compared to 2006. It marks the second consecutive year-over-year improvement in operating cash flow for all four of GM's operating regions. Consistent with past years, GM withdrew US$2.7 billion from the VEBA in December, leaving a balance of US$16.3 billion at 2007 year-end, of which the UAW related portion is estimated at US$14.5 billion. In negotiations with the UAW and UAW retiree class counsel on a Settlement Agreement involving the healthcare MOU that will shortly be filed with the court, the parties have agreed in principle that of the US$18.5 billion that was agreed to be set aside upfront for future retiree healthcare claims, the difference of approximately US$4.0 billion will be funded with a short term note maturing January 2010 with interest at 9.0%. This will enhance interim liquidity for GM and provide the UAW and plan participants a 9.0% return. The parties have also agreed in principle, as part of the overall Settlement Agreement, to execute a series of derivatives that would effectively reduce the conversion price of the convertible note from US$40 to US$36, and would entitle GM to recover the additional economic value provided if the GM stock price appreciates to between US$63.48 and US$70.53 per share. Future Outlook Despite the uncertainty in the U.S. market, the company disclosed that it expects improved pre-tax automotive earnings in 2008 versus 2007, largely driven by continued strong performance in emerging markets. GM expects improvements in automotive revenue, favorable pricing, favorable material cost performance and continued reductions in structural cost as a percentage of revenue in the 2008 calendar year. Operating cash flow is expected to be relatively flat in 2008 versus 2007, despite planned increases in capital spending to about US$8.0 billion, up from US$7.5 billion in 2007. GM remains confident in the 2010-2011 opportunities to further improve earnings and cash flow. Most notable is the potential to realize the full impact of the GM-UAW labor agreement which is expected to provide significantly greater flexibility and yield additional savings of US$4.0 billion to US$5.0 billion. In addition, GM estimates that if the U.S. market volume returns to trend levels in 2009 and beyond, which would be an increase of 1 million units, the change would generate additional pre-tax income to GM in the range of approximately US$1.0 billion to US$1.5 billion annually. GM also expects to reduce a substantial portion of the cost premiums it has historically paid to Delphi for systems and components over the next three to five years. The savings will be offset by various labor and transitional subsidies of US$300-400 million per year under Delphi's plan of reorganization, however GM expects to achieve annual net savings over the mid-term of approximately US$500.0 million. In addition, significant additional opportunities to further improve GM earnings and cash flow by 2010-2011 include improved pricing driven by a host of new products, continued strong growth in revenue and profitability in emerging markets, and improved performance at GMAC. Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed US$148.9 billion in total assets, US$184.4 billion in total liabilities, and US$1.6 billion in commitments and contingencies Minority interests, resulting in a US$37.1 billion total stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with US$59.2 billion in total assets available to pay US$70.8 billion in total current liabilities. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of US$39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets (DTAs) in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GENERAL MOTORS: Reaches Agreement with UAW on Attrition Program --------------------------------------------------------------- General Motors Corporation disclosed in a regulatory filing with the Securities and Exchange Commission dated Feb. 12, 2008, that the company and the United Auto Workers union have reached an agreement on a comprehensive special attrition program that will be offered to all of GM's 74,000 UAW-represented employees. The special attrition program offers employees a choice of several pension and buyout incentives. GM is offering retirement pension incentives of US$45,000 for production employees or US$62,500 for skilled trades. Eligible employees can select from a variety of ways to receive their incentive: -- One time, lump-sum cash payment -- Direct rollover into their GM 401(k) or into an Individual Retirement Account (IRA) -- Monthly annuity -- Combination of partial lump-sum payment and direct rollover into their GM 401(k) or an IRA The other retirement and buyout options available are similar to those offered to employees in 2006. These options include: -- Mutually Satisfactory Retirement (MSR) for employees who are at least 50 years old with 10 or more years of service. This option provides a pension payment with full benefits. -- Pre-Retirement Program in which employees with 26, 27, 28 or 29 years of service can grow into a full "30 and out" retirement. Until they reach 30 years of credited service, participating employees would receive fixed monthly payment with full benefits. -- Cash Buyout for employees who agree to voluntarily quit and sever all ties with GM. A US$140,000 buyout incentive is offered to employees with 10 or more years of credited service or seniority, while a US$70,000 buyout incentive is offered to employees with less than 10 years of credited service or seniority. In December 2007, GM and the UAW reached an agreement on what the company was calling the first phase of a comprehensive special attrition program. Details of this program were rolled out to employees at select locations last month. Those employees are now eligible for the enhanced provisions of this new agreement. "We've worked with our UAW partners to ensure our employees have a variety of options to consider," said Rick Wagoner, GM chairman and chief executive officer. "The special attrition program is an important tool that will help us transform the workforce." About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of US$39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets (DTAs) in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GENERAL MOTORS: Tells Plastech Ct. Carmakers Can Recover Tooling ---------------------------------------------------------------- Rival carmakers General Motors Corp. and Ford Motor Co. appeared before the U.S. Bankruptcy Court for the Eastern District of Michigan Wednesday to support Chrysler LLC'S request to recover its tooling equipment from Plastech Engineered Products Inc. and its debtor-affiliates' plants, The Associated Press says. AP's Dee-Ann Durbin reports that spokesperson for GM and Ford as well as for auto supplier Johnson Controls Inc. told the Court they believe they have the right to reclaim their own equipment under their contracts with Plastech. "GM is not taking a position regarding whether the court should grant Chrysler the relief it is seeking," GM spokesman Frank Sopata said, according to AP. "But GM does strongly support Chrysler's position regarding the tooling since we have entered into the same agreement as Chrysler and the other major customers of Plastech to reclaim our tooling should it be necessary." Ford and GM haven't experienced any disruption in their supply from Plastech or reported any quality problems, AP says. "We've continued to work with them all along," Ford spokesman Todd Nissen told the Court, AP relates. AP notes that GM Chief Financial Officer Fritz Henderson said Tuesday that GM hasn't made any decisions about whether to keep doing business with Plastech but is trying to help the supplier. "We're working constructively with them to help them with their current financial difficulties," he said. Chrysler-Plastech Dispute Honorable Phillip J. Shefferly began yesterday a two-day trial to consider the merits of Chrysler's request. The Court was also set to consider Chrysler's motion for a temporary restraining order that would allow Chrysler or its agents to enter Plastech's plants and obtain possession of the equipment. Chrysler and Plastech have temporarily resolved their dispute by entry of an interim agreement which provides that: i) Plastech will continue delivering component parts to Chrysler until Feb. 15, 2008; and ii) Plastech will allow Chrysler supervised access to Plastech facilities for purposes of inventory and inspection. Revenues Could Plummet Absent Tooling Equipment The Debtors, however, oppose Chrysler's request for lifting of the automatic stay under Section 362(d)(1) that would allow it to take possession of the Tooling. Chrysler wants possession of the Tooling so that it could transfer manufacturing of component parts to other parties. Plastech notes that Chrysler accounts for about $200,000,000 of its annual revenues. Thus, if Chrysler's proposal is granted, the Debtors would immediately lose approximately 15% of their annual revenues. This would occur when the Debtors' business is most vulnerable, the first two weeks of their Chapter 11 cases, avers Peter Smidt, executive vice president for Finance and chief financial officer of the Debtors. Deborah L. Fish, Esq., at Allard & Fish, P.C., in Detroit, Michigan, says that Chrysler is stayed by the Bankruptcy Code from taking possession of the Tooling. Ms. Fish contends that pursuant to Section 362(a)(3) of the Bankruptcy Code: -- Chysler is prohibited from taking unpaid tooling, which pursuant to their Financial Accommodation Agreements, are property of the estate. Section 362(a)(3) prohibits taking any action against estate property. The Debtors are also under no obligation to sell the unpaid tooling to Chrysler under the FFAs. -- Chrysler is prohibited from taking possession of any Tooling it owns but in the possession, custody and control of the Debtors. Regardless of who legally owns the Tooling, any Tooling in the possession of the Debtors may only be removed upon a modification of the automatic stay. Sufficient cause does not exist to modify the automatic stay under Section 362(d), Ms. Fish asserts. She argues that: -- The Debtors' and creditors' interests in prohibiting Chrysler from seizing any owned tooling substantially outweigh any harm that Chrysler might suffer if the stay is not lifted. Plastech will lose business if equipment are removed from their plants. On the other hand, Chrysler will suffer, "at most, financial damages, which damages were self-inflicted and not legally cognizable." -- Chrysler is not likely to prevail on the merits of its underlying claims. Ms. Fish notes that to grant a temporary restraining order or modify the automatic stay, the Court must also conclude that Chrysler has a substantial likelihood of prevailing on its underlying claims, all of which are premised on two contentions: i. that Chrysler properly terminated the Supply Agreements on February 1, 2008; and ii. that Chrysler owns the Tooling. The Debtors say that they will demonstrate at the hearing that Chrysler is not likely to prevail on either contention. Ms. Fish argues that: (a) Chrysler's notices were ineffective. Notices or letters sent by Chrysler on Jan. 15 and 16, and Feb. 1, which purportedly terminated the supply agreements, were not sent to the proper notice parties, which include the Debtors' other customers. In addition, the notices were "simply impermissibly vague" and, thus, did not trigger Plastech's 10-day obligation to cure defaults under the agreements. (b) Plastech timely cured certain of the alleged defaults and Chrysler is estopped from asserting others. Within two &