/raid1/www/Hosts/bankrupt/TCREUR_Public/010621.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

             Thursday, June 21, 2001, Vol. 2, No. 121


                            Headlines

* A U S T R I A *

LIBRO AG: Debts Mount Up to Sch3.8BB
LIBRO AG: Styria May Bid for Libro

* B E L G I U M *

LERNOUT & HAUSPIE: Dictaphone Conducts Voice Technology Seminars

* F R A N C E *

AIR LIBERTE: Court Gives French Airlines Reprieves
AIR LIBERTE: To Get Judicial Protection
AIR LIBERTE: Unions in Talks With Transport Ministry

* G E R M A N Y *

BANKGESELLSCHAFT BERLIN: Funding Will Not Prevent Bank's Safety
DAIMLERCHRYSLER: Seeks Buyer for Debis Unit
EM.TV: Sells Junior Web Stake to Victory Media

* I R E L A N D *

IRISH ISPAT: Closes After Mounting Losses
W & R MORROGH: Levy to Cover Morrogh Losses

* N E T H E R L A N D S *

KPN NV: Falls Over Debt Concern

* S W I T Z E R L A N D *

ISMM GROUP: Germany's Kabel Hit by ISMM Bankruptcy
SWISSAIR GROUP: Moody's Downgrades Long-Term Rating to Ba3
SWISSAIR GROUP: To Restructure Plane Leasing Unit

* U N I T E D   K I N G D O M *

DERBY CYCLE: S&P Withdraws All Ratings
INDEPENDENT INSURANCE: Directors Uninformed of Contracts
INDEPENDENT INSURANCE: S&P Revises Ratings to 'R'
INDEPENDENT INSURANCE: SFO to Probe Independent's Downfall
RAILTRACK GROUP: Responds to Cullen Report


=============
A U S T R I A
=============


LIBRO AG: Debts Mount Up to Sch3.8BB
------------------------------------

The total liabilities of Austrian retailer Libro stand at Sch3.8
billion, according to Der Standard & World Reporter's June 18
edition.

Consultancy Roland Berger predicted that the insolvency
distribution rate might be just 5%. Berger added Libro would show
losses of Sch450 million in 2001, and that the retailer would
have assets of Sch200 million and liabilities of Sch4.2 billion
if it filed for insolvency.


LIBRO AG: Styria May Bid for Libro
----------------------------------

Media company Styria Medien AG has confirmed it might make an
offer for retailer Libro, Der Standard & World Reporter in its
June 16 edition said.

Yline's Werner Bohm and Austrian industrialist Ernst Hofmann have
also made a new bid.

However, investment banks believe Switzerland's Eurobooks and
Germany's Douglas have no chance of acquiring Libro, as an all-
Austrian solution seems to be the most preferred concept.

Libro must find a rescuer by the end of the month or the company,
which owes banks Sch2.3 billion, will file for insolvency.


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


AIR LIBERTE: Court Gives French Airlines Reprieves
--------------------------------------------------

A French court gave French airlines AOM and Air Liberte three
months to resolve mounting financial problems, according to the
Tuesday edition of the Associated Press.

The ruling comes after the two carriers filed for bankruptcy and
appealed to the court for more time to seek potential buyers.

U.K.-based budget airline easyJet PLC has already expressed an
interest in acquiring some of the assets of the airlines.


AIR LIBERTE: To Get Judicial Protection
---------------------------------------

A Creteil commercial court has ordered that AOM-Air Liberte and
five of the company's units will receive judicial protection from creditors
for three months.

Lawyer Pierre Bouaziz, who appeared for the works council of AOM-
Air Liberte, said he was happy with the ruling, which will give the company
time to implement a plan for continued trading.


AIR LIBERTE: Unions in Talks With Transport Ministry
----------------------------------------------------

Unions of AOM-Air Liberte met Tuesday with representatives
from the Ministry of Transport to discuss the impact of the
company's bankruptcy on its staff, according to AFX News.

Union delegate Geoffroy Lamade said discussions focused on
finding jobs for employees who may be forced to leave the
company.


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


BANKGESELLSCHAFT BERLIN: Funding Will Not Ensure Bank's Safety
---------------------------------------------------------------

Bankgesellschaft Berlin AG has been told that the DM4 billion
capital injection will not ensure its safety, Die Welt & World
Reporter in its June 18 edition said.

The German bank said international markets are waiting for a
clear sign from major investors as to whether they would be
taking part in the capital increase.


DAIMLERCHRYSLER: Seeks Buyer for Debis Unit
-------------------------------------------

DaimlerChrysler is seeking a buyer for its stake in its airline
leasing business, Debis Air-Finance, the Tuesday edition of the
Financial Times said.

The German-US vehicle maker has retained investment bank Goldman
Sachs to find a buyer for Daimler's minority shareholding.

The stake sale would not only suit DaimlerChrysler's move
to focus on its core automotive operations and withdraw from
peripheral activities, it would also enable Debis to concentrate
on global automotive financing and services.

Both Daimler and Goldman declined to comment.


EM.TV: Sells Junior Web Stake to Victory Media
----------------------------------------------

EM.TV & Merchandising AG is selling its 74.9% stake in Internet
company, Junior Web GMbH, to Victory Media Gruppe for an
undisclosed sum, the June 19 edition of AFX News said.

The move marks a further step in EM.TV's aim to withdraw from
unprofitable business activities.  Under the agreement, all the license
rights from Junior Web will revert back to EM.TV.


=============
I R E L A N D
=============


IRISH ISPAT: Closes After Mounting Losses
-----------------------------------------

Steel producer Irish Ispat Limited has closed after several years
of losses and months of evaluating ways to make the plant
more competitive, Asia Pulse in its Tuesday edition said. A
meeting of creditors has been called to appoint a liquidator.

Since parent company Ispat International of India acquired the
Irish plant from the Irish Government in 1996, it has injected 24
million Irish pound to fund operating losses and capital
investments.

More recently, the management of Irish Ispat strived to implement
certain cost reduction and production increase proposals, but
these did not have sufficient support from trade union officials.


W & R MORROGH: Levy to Cover Morrogh Losses
-------------------------------------------

The Investor Compensation Company Limited is expected to sanction
a levy on financial institutions, stockbrokers and investment
intermediaries to cover investor losses at W & R Morrogh.

Annual subscriptions, which range from 1,400 to 40,000 pounds,
are due in August and the ICCL will possibly seek the additional
funding then.

Bernard Sheridan of the ICCL said it was still too early to estimate
how much money would be paid to the nearly 2,000 Morrogh clients
who were affected by its collapse.


=====================
N E T H E R L A N D S
=====================


KPN NV: Falls Over Debt Concern
-------------------------------

Shares of KPN NV fell 9% on concern the company isn't doing
enough to cut its 23.2-billion-euro debt, Bloomberg's Tuesday
edition said.

KPN's debt, which quadrupled last year as it spent more than $90
billion on licenses for faster wireless services, is more than
three times its current market value of 7.4 billion euros.

KPN said it is studying all options to lower debt, including a
share sale. In March, the company announced that it would sell at
least 20 assets to raise about 5 billion euros this year.


=====================
S W I T Z E R L A N D
=====================


ISMM GROUP: Germany's Kabel Hit by ISMM Bankruptcy
--------------------------------------------------

Shares in Kabel New Media dropped about 40% on Tuesday after the
German multimedia agency announced a full-year net loss of E115
to 130 million, and said it had been hit by the insolvency
hearings of sports marketing group ISMM, according to the
Financial Times' Tuesday report.

The hearings at ISMM led to funding cutbacks at one of Kabel's
main customers, ISMM subsidiary ISL Worldwide.

As a result, Kabel said it missed its fourth-quarter target and
took a charge of E100 million to write down the value of
acquisitions in the fiscal year through March.


SWISSAIR GROUP: Moody's Downgrades Long-Term Rating to Ba3
----------------------------------------------------------

Credit rating agency Moody's Investors Service on Tuesday
downgraded the long-term issuer rating of aviation group Swissair
Group to Ba3 from Baa3 and the short-term rating to Not-Prime
from Prime-3.

The rating action reflected the potential for significantly
higher exit costs at the French partners Air Littoral, AOM, Air
Liberte and in Belgium's Sabena.

The rating downgrade was also based on increased pressure on
Swissair's core operations due to high fuel costs and the impact
of an economic downturn on the airlines and the airline related
businesses such as catering.

Although Swissair's status is factored into the ratings, Moody's
noted that so far there has been no indication of tangible
support by the Swiss government.


SWISSAIR GROUP: To Restructure Plane Leasing Unit
-------------------------------------------------

Swissair Group said in its press release on Tuesday it would
restructure its aircraft leasing unit, Flightlease, to concentrate
on the management of airplanes needed for the Group's operations.

The decision to focus on core operations will enable Swissair Group
to generate more cash and to improve its balance sheet. It also means
the end to a three-year-old joint venture with one of the world's largest
aircraft leasing companies, US-based GATX.

Swissair also said that GATX Flightlease Management would be
restructured to release assets from the portfolio.


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


DERBY CYCLE: S&P Withdraws All Ratings
--------------------------------------

On Tuesday, Standard & Poor's withdrew its 'D' corporate credit
and senior secured debt ratings on bicycle manufacturer Derby
Cycle Corp., as well as its 'D' senior unsecured debt rating on
guaranteed subsidiary Lyon Investments B.V.

All ratings on Derby and Lyon were revised to 'D' on May 15 after
Derby's announcement that it would not be making the scheduled
interest payment on both the $100-million 10% senior notes issue
due 2008 and the DM110-million 9.375% senior notes issue due on
2008.


INDEPENDENT INSURANCE: Directors Uninformed of Contracts
--------------------------------------------------------

Independent Insurance's finance director, Dennis Lomas, and deputy
managing director Philip Condon said they knew nothing about the
reinsurance contracts that played an important part in the collapse
of the insurance company, the Financial Times reported Tuesday.

The two executive directors said they have not been told about
the reinsurance contracts.

Independent's plan to launch a 180-million-dollar rescue rights
issue failed this month after four new reinsurance contracts were
discovered. There were concerns that the terms of these contracts
were highly unfavorable, putting Independent at financial risk.

Among those affected by the problems at Independent are some
tenants of Newcastle city council, where Independent has provided
cover for the City's Tenants House Contents Insurance scheme.


INDEPENDENT INSURANCE: S&P Revises Ratings to 'R'
-------------------------------------------------

Standard & Poor's on Tuesday revised its counterparty credit and
insurer financial strength ratings on insurer Independent
Insurance Co. Ltd. to 'R' from double-'B'. The 'R' rating is
applied to insurers that have experienced a regulatory or similar
action relating to their solvency.

The rating action follows the company's placement into
provisional liquidation at the request of its directors.

The rating also updates Standard & Poor's June 14 press release
when Independent's ratings were lowered to 'BB' and CreditWatch
implications on the company were revised to negative for failure
to complete the capital raising exercise being pursued by its
parent company Independent Insurance Group, and the subsequent
temporary suspension of the business.


INDEPENDENT INSURANCE: SFO to Probe Independent's Downfall
----------------------------------------------------------

City watchdog Financial Services Authority has asked the Serious
Fraud Office to examine events leading up to the collapse of
Independent Insurance Company, the Financial Times in its June 17
edition said.

Independent's external actuaries Watson Wyatt discovered last
month the insurer is facing unquantifiable losses from claims
that had never been entered into its systems.

The professional services firm PwC confirmed on Monday it had
been appointed by the directors of Independent Insurance to
oversee the liquidation process.

The role of SFO is to investigate frauds generally involving more
than 1 million pounds.


RAILTRACK GROUP: Responds to Cullen Report
------------------------------------------

Railtrack on Tuesday described the publication of Lord Cullen's
report into the tragedy at Ladbroke Grove as a further step
towards delivering a safer railway.

"Ladbroke Grove left an indelible mark on the industry and led us
all to take a hard look at rail safety," Railtrack Director of
Safety & Environment Chris Leah said.

Lord Cullen's report, according to Leah, marks an important step
for the whole industry since the findings were already published
and what's needed is to analyze them and look for the best way to
implement any changes necessary to deliver an even safer railway.


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

      S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter -- Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Trenton, NJ
USA, and Beard Group, Inc., Washington, DC USA. Kimberly MacAdam,
Salve M. Mordeno and Ma. Cristina D. Pernites, Editors.

Copyright 2001.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is $575 per half-year, delivered
via e-mail.  Additional e-mail subscriptions for members of the
same firm for the term of the initial subscription or balance
thereof are $25 each.  For subscription information, contact
Christopher Beard at 301/951-6400.


                  * * * End of Transmission * * *