/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/091216.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 Wednesday, December 16, 2009, Vol. 10, No. 248 Headlines A U S T R I A HYPO ALPE: BayernLB CEO Steps Down Following Write-Off B E L A R U S BELPROMSTROIBANK JSC: Fitch Affirms Individual Rating at 'D/E' D E N M A R K MONDO A/S: Ciklum Aps Buys Firm's Main Activities G E R M A N Y OPERA GERMANY: Fitch Junks Ratings on Two Classes of Notes PREPS SERIES: Fitch Cuts Ratings on Five Classes of Notes to 'CC' I C E L A N D LANDSBANKI ISLANDS: Iceland Must Complete Refinancing, IMF Says I R E L A N D BUDGET TRAVEL: High Court Issues Winding-Up Order CAPITAL BARS: AIB Appoints Receiver to Four Businesses DUNCANNON CRE: Repurchase Won't Affect Fitch's Ratings on Notes EP MOONEY: High Court Issues Winding-Up Order FLEMING GROUP: ACC Appeals High Court Decision on Rescue Plan I T A L Y GIANNI VERSACE: Seeks to Return to Profitability in 2011 K A Z A K H S T A N BANK POSITIV: Creditors Must File Claims by December 30 ENERGO-AA-07: Creditors Must File Claims by December 30 ENERGO-UG-1: Creditors Must File Claims by December 30 RTN PLUS: Creditors Must File Claims by December 30 SHYMKENT TORG: Creditors Must File Claims by December 30 TRANSPORT CJSC: Creditors Must File Claims by December 30 URAL RECH: Creditors Must File Claims by December 30 VNUTRIDOMOVYE ELECTRICHESKIYE: Claims Filing Deadline is Dec. 30 N E T H E R L A N D S MOSCOW STARS: Fitch Affirms Rating on Class B Notes at 'BB-' R U S S I A BANK OF MOSCOW: Fitch Affirms Individual Rating at 'D' BELPROMSTROIBANK JSC: Moody's Reviews 'B1' Long-Term Ratings * KALUGA REGION: Fitch Affirms 'BB-' Long-Term Foreign Rating S P A I N * SPAIN: S&P Takes Rating Actions on Eight ABS & RMBS Transactions S W E D E N GENERAL MOTORS: Spyker Is Only Remaining Bidder for Saab GENERAL MOTORS: Whitacre Reveals CEO Search Underway S W I T Z E R L A N D E. KUENZLER: Claims Filing Deadline is December 21 KINDERBOUTIQUE PINOCCHIO: Claims Filing Deadline is December 28 MICONOS BETEILIGUNGEN: Claims Filing Deadline is December 28 MIG-SHOP: Claims Filing Deadline is December 29 MOUNTAIN DV: Claims Filing Deadline is December 18 N.OSWALD AG: Claims Filing Deadline is December 18 OCTAGON WORLDWIDE: Claims Filing Deadline is December 23 PINEDE AG: Claims Filing Deadline is December 31 SOORTREFF GMBH: Claims Filing Deadline is December 18 UDG UMWELT: Claims Filing Deadline is December 23 U N I T E D K I N G D O M A&H GADD: In Administration; 57 Jobs Affected AERO INVENTORY: Creditors File Bankruptcy Petition in U.S. ASCALADE COMMUNICATIONS: Returns Capital to Shareholders BRITISH AIRWAYS: To Seek Injunction to Halt Cabin Crew Strike CATTLES PLC: Court Defines Guarantee in Creditor Dispute DRYDEN X: Moody's Junks Ratings on Three Classes of Notes EMI GROUP: Terra Firma Seeks Outside Investors Amid Default Fears FLYGLOBESPAN: Not on Brink of Collapse, Funding Talks Continue GORDON RAMSAY: Has New Projects After Near Brush with Bankruptcy LEHMAN BROTHERS: UK High Court Rules on Handling of Client Money LEHMAN BROTHERS: FINRA Compensates Investor for Notes LEHMAN BROTHERS: LBSF Ch. 11 Case Recognized as Main Proceeding NATIONAL EXPRESS: Cosmen Family Takes Up GBP360 Mln Rights Issue SLP HOLDINGS: Receives Inquiries From Potential Buyers TAURUS CMBS: S&P Downgrades Rating on Class D Notes to 'B-' YESTERYEAR PUB: Placed Into Administrative Receivership * UK: Treasury to Unveil Plans to Boost Protection of Bank Clients * UK: Entertainment & Media Insolvencies Reach Record Levels X X X X X X X X * IATA Sees US$5.6 Billion Airline Industry Loss in 2010 * Hogan & Hartson and Lovells to Merge Effective May 2010 ********* ============= A U S T R I A ============= HYPO ALPE: BayernLB CEO Steps Down Following Write-Off ------------------------------------------------------ Oliver Suess and Zoe Schneeweiss at Bloomberg News report that Bayerische Landesbank Chief Executive Officer Michael Kemmer resigned after the the bank had to write off its investment in Hypo Alpe-Adria Bank International AG. According to Bloomberg, Bavarian Premier Horst Seehofer said at a briefing in Munich Monday Mr. Kemmer will step down immediately. Bavaria owns about 94% of the BayernLB. Mr. Seehofer, as cited by Bloomberg, said he will be temporarily replaced by Chief Financial Officer Stefan Ermisch while BayernLB and its owners search for a new permanent CEO. Bloomberg relates Austria said earlier Monday it would nationalize Hypo Alpe- Adria and inject as much as EUR450 million (US$659 million) into the company. BayernLB, Germany's second-biggest state-owned lender, agreed to sell its 67% stake for EUR1 and to inject EUR825 million into the business, following negotiations that lasted the whole night, Bloomberg says. Under the agreement with the Austrian government, BayernLB is injecting the money by waiving receivables. It will also maintain a credit line of about EUR3 billion to the Austrian bank, Bloomberg notes. Mr. Seehofer said earlier Monday, BayernLB had a total loss of EUR3.75 billion on Hypo Alpe-Adria, Bloomberg disloses. Hypo Alpe-Adria International AG is a subsidiary of BayernLB. It is active in banking and leasing with a balance sheet of EUR43 billion. In banking, HGAA serves both corporate and retail customers and offers services ranging from traditional lending through savings and deposits to complex investment products and asset management services. * * * As reported by the Troubled Company Reporter-Europe on June 11, 2009, Moody's Investors Service downgraded the bank financial strength rating of Hypo Alpe-Adria-Bank International AG to E+ from D-. Moody's said the downgrade of the BFSR reflects Moody's expectation that Hypo Alpe-Adria will not be able to operate profitably until 2011. The historically low profitability of the bank does not provide a sufficient buffer to absorb the effects of the continuing downturn in the global economy and the persistent economic turmoil in international capital markets that is likely to have a worsening negative impact on the economies of Hypo Alpe Adria's core markets in South-Eastern Europe. Hence, Moody's expects pressure on earnings, asset quality and capital ratios to increase further and the likelihood that the bank would need outside support to rise. ============= B E L A R U S ============= BELPROMSTROIBANK JSC: Fitch Affirms Individual Rating at 'D/E' -------------------------------------------------------------- Fitch Ratings has placed Belarus-based BPS-Bank's Long-term Issuer Default Rating of 'B-' and Support Rating of '5' on Rating Watch Positive. The rating action follows Sberbank - Savings Bank of the Russian Federation's ('BBB'/Negative), Russia's largest state- owned bank, planned acquisition of 93.3% of BPS. The RWP reflects the potential upgrade of BPS's Long-term IDR to 'B' and Support Rating to '4' following the completion of the acquisition, in light of the greater potential for the new shareholder, relative to the Belarusian authorities, to provide support in case of need. At the same time, the ratings would still be constrained by Belarusian transfer and convertibility risks, which may limit the extent to which Belarusian banks can receive and utilize external support to meet obligations to creditors. Fitch expects to resolve RWP as soon as the acquisition is completed, which may be as soon as by the end of this year, according to the parties. BPS is the fourth-largest bank in Belarus with assets of US$1.7 billion at end-Q309. BPS is currently 93.3%-owned by the State Property Committee of the Republic of Belarus, with another 2.6% held by state-owned enterprises and the remaining equity broadly dispersed among individuals and private companies. Sberbank is planning to grow BPS's market share in corporate lending to 12% by 2014 from 7.5% currently. To that end it intends to increase BPS's equity to US$300 million-350 million (currently US$225 million) and provide BPS with additional non-equity financing of up to US$2 billion by 2014. Sberbank is the largest bank in central and eastern Europe, and accounts for about 30% of the assets of Russia's banking system. The main shareholder of Sberbank is the Central Bank of Russia (57.6% of equity). Sberbank has the most extensive branch network in Russia, including 18 territorial banks and more than 20,000 outlets, and also operates subsidiaries in Kazakhstan and Ukraine. The full list of rating actions is: -- Long-term IDR of 'B-' placed on RWP -- Short-term IDR: affirmed at 'B' -- Support rating of '5' placed on RWP -- Individual rating: affirmed at 'D/E' -- Support Rating Floor: affirmed at 'B-' In Fitch's rating criteria, a bank's standalone risk is reflected in Fitch's Individual ratings and the prospect of external support is reflected in Fitch's Support ratings. Collectively these ratings drive Fitch's Long- and Short-term IDRs. ============= D E N M A R K ============= MONDO A/S: Ciklum Aps Buys Firm's Main Activities ------------------------------------------------- Ciklum ApS has signed an agreement with the liquidator of Mondo A/ S to take over the main part of Mondo's remaining business activities. This purchase concerns Mondo's outsourcing business which includes 150 employees in Denmark, Ukraine and Pakistan, and some Danish and a few foreign customers. The transfer began on December 7 and most of the projects are already fully functional. The customers are no longer affected by the disruption which the bankruptcy has caused over the last week. Ciklum is already a well-known professional outsourcing services provider with 700 employees primarily in Ukraine so it sees the acquisition of 150 new employees and the continuation of the work to be easily consummated before Christmas. Ciklum's organic growth just in November was 26 people, giving confidence for Torben Majgaard, Ciklum CEO to expect 1000 employees headcount already in Q2 2010. Ciklum is working almost exclusively with long term contracts, where customers have their own development teams. "We ensure a high degree of networking among our customers so that they learn from each other. With the new customers of Mondo this networking will be even better for both the existing and newly arrived customers," says Mr. Majgaard. "In our industry it is important to be focused, have a good control over the costs and skills. We see the acquisition of Mondo's activities to strengthen us so that we in 2010 can provide an even better service to all our customers," concludes Torben Majgaard. About Ciklum Ciklum -- http://www.ciklum.net-- is a Danish IT outsourcing company specializing in nearshore software development in Ukraine by establishing and servicing clients' dedicated development teams. The environment of services and knowledge sharing within the company helps clients to market quickly and with less risk and minimal investment. Established in 2002, Ciklum employs more than 700 specialists with more than 90 global client teams. Ciklum has six offices in the four largest cities in Ukraine, as well as offices in Denmark, Sweden, United Kingdom, Switzerland, Germany and the Netherlands. Ciklum is a winner of the Red Herring 100 Europe 2009. ============= G E R M A N Y ============= OPERA GERMANY: Fitch Junks Ratings on Two Classes of Notes ---------------------------------------------------------- Fitch Ratings has downgraded all five note classes of Opera Germany (No. 2) p.l.c.'s CMBS notes and maintains the Rating Watch Negative on all of them: The rating actions are: -- EUR374.5m class A (XS0278492706): downgraded to 'A' from 'AAA'; remains on RWN -- EUR46.8m class B (XS0278493001): downgraded to 'BBB' from 'AA'; remains on RWN -- EUR65.6m class C (XS0278493266): downgraded to 'B' from 'A'; remains on RWN -- EUR63.7m class D (XS0278493340): downgraded to 'CCC' from 'BBB'; remains on RWN -- EUR9.4m class E (XS0278493423): downgraded to 'CCC' from 'BBB-'; remains on RWN The downgrades are driven by the significant deterioration in the creditworthiness of the single loan securitized in the transaction. This is evidenced by the decline in the income generated by the collateral which in turn has resulted in a requirement to make cumulative drawings of EUR3.18 million under the interest shortfall guarantee at the last two interest payment dates in order continue making debt service payments in full. In addition, the fall in reported market values has triggered a breach of the loan-to-value ratio covenant. Fitch understands that the servicer, Eurohypo AG, has been working on a restructuring of the loan since January 2009. The continuation of the RWN reflects the risk of a further deterioration in the transaction if an agreement is not reached on the restructuring. The EUR560 million interest-only loan, of which only the A-note is securitized, is secured on four shopping centres located in Germany and is scheduled to mature in October 2011. The deterioration in income can be primarily attributed to the Koe-Galerie property which represents 39.5% of aggregate market value. The property has experienced an almost 23.4% decrease in gross passing rent, to EUR11.8 million at the October 2009 IPD from EUR14.8 million at closing, and an increase in the vacancy rate to 38% compared with 12% at closing. In particular, the largest tenant, McKinsey & Company (15% of passing rent) vacated the property in September 2009. Fitch notes that the reported interest coverage ratios of 1.65x and 1.23x for the securitized and whole loans, respectively, reflect projected income figures and the interest shortfall guarantee, and do not therefore reflect the weak cash flow. A March 2009 re-valuation of the four properties was published in November 2009, showing a market value decline of 19%. Fitch estimates that the value is likely to have deteriorated by a further 6%. The re-valuation increased the reported LTV of the whole loan to 110.1% (from 89.3%), triggering a breach of the whole loan default LTV covenant of 92.5%. The securitized LTV increased to 92.6% from 75.1%. The outcome of ongoing discussions regarding the restructuring of the whole loan remains unclear. A special notice published on 10 December 2009 confirmed that the principal terms have been agreed. However, the sponsors (Merrill Lynch and ECE Projektmanagement) have not yet signed the restructuring agreement. Fitch understands from the servicer that the restructuring agreement will allow the borrowers to carry out urgently needed capital expenditure and tenant improvements, especially at Ko-Galerie where it is required to avoid further income deterioration. Fitch notes that the injection of additional funds for capital expenditure as per the business plan associated with the restructuring proposal is likely to be beneficial to the transaction. However, at this stage the agency did not reflect this in its analysis as uncertainty remains regarding the exact restructuring details and the success of the business plan in the medium term. Should the sponsors not sign the restructuring agreement by 15 December 2009, the servicer is expected to enforce the loan and the borrower is likely to file for insolvency. The continued RWN on the notes reflects the risk that a failure to agree the restructuring agreement could result in a forced sale of the properties at significantly lower values than those currently reported and, ultimately, material losses for the transaction. Fitch will resolve the RWN once further information is received regarding either the restructuring agreement, if it is signed, or the servicer's strategy following the enforcement of the loan. Fitch employed its criteria for European CMBS surveillance to analyze the quality of the underlying commercial loans. PREPS SERIES: Fitch Cuts Ratings on Five Classes of Notes to 'CC' ----------------------------------------------------------------- Fitch Ratings has downgraded six classes of notes from the PREPS series of transactions (PREPS 2004-2, PREPS 2005-1, PREPS 2005-2, PREPS 2006-1, and PREPS 2007-1). Fitch has simultaneously affirmed the ratings of 11 classes from the series, and revised the Outlooks to Negative from Stable on 12 tranches. A full rating breakdown is provided at the end of this comment. The rating actions are driven by the transactions' negative performance which Fitch has observed since the last review in March 2009. Further defaults have occurred across the PREPS series, except for PREPS 2004-2. The largest amount of defaults during this period, EUR31.5 million, occurred in PREPS 2007-1 and led to an increase in the balance of its principal deficiency ledger to EUR31.6 million. Given that the PDL currently exceeds the total outstanding notional of the unrated junior notes (as per the December 2009 investor report) and, in Fitch's view, it is unlikely to be reduced significantly by the maturity of the transaction, the default of PREPS 2007-1 class B1 notes is probable. As a result of this analysis, Fitch has downgraded the PREPS 2007-1 class B1 notes to 'CC' from 'B-' and the PREPS 2007-1 class A1 notes to 'B' from 'BB-' as their remaining subordination is limited. Since the agency's last review in March 2009, further defaults have occurred in PREPS 2005-1, PREPS 2005-2 and PREPS 2006-1 totalling EUR10 million, EUR18 million and EUR13 million, respectively. As the current PDL amounting to EUR10 million is significantly lower than the total unrated junior notes in PREPS 2005-1, Fitch has affirmed the current ratings of the PREPS 2005-1 notes. However, in PREPS 2005-2 and PREPS 2006-1 the respective balances of the PDLs have risen close to the amounts of the outstanding junior notes. The PDL balance of PREPS 2005-2 is currently just above, and the PDL balance of PREPS 2006-1 is slightly below the respective outstanding junior notes. In Fitch's view the PDL in both transactions is unlikely to be significantly reduced by the maturity of these transactions, making the default of PREPS 2005-2 classes B1 and B2 and PREPS 2006-1 classes B1 and B2 notes probable. Therefore the agency has downgraded these four classes of notes to 'CC' from 'CCC'. Fitch has revised the rating outlooks to Negative from Stable on all tranches rated above 'CCC' due to concerns over the refinancing risk. The majority of the borrowers will have to obtain lump-sum funding in order to repay the securitized loan instruments at their maturity dates. As the creditworthiness of the debtors has on average deteriorated since the closing of the transactions and the availability of capital market based financing products for these types of companies has decreased, Fitch believes that the refinancing possibilities with respect to the securitized loan instruments have worsened. As part of transaction monitoring, Fitch will review any available information on the refinancing plans of the borrowers. Among all Fitch rated PREPS transactions, PREPS 2004-2 has the closest scheduled maturity of December 2011. The PREPS series are cash securitizations of subordinated loans to medium-sized enterprises located in up to eight jurisdictions, including Germany, Austria, Switzerland, Italy, Belgium, Luxembourg, the Netherlands and the United Kingdom. The rating actions are: PREPS 2004-2 limited partnership (PREPS 2004-2): -- EUR324,361,915 class A1 notes (ISIN: XS0205676272): affirmed at 'BBB'; Outlook revised to Negative from Stable; 'LS-2' -- EUR61,901,129 class A2 notes (ISIN: XS0205676942): affirmed at 'BBB'; Outlook revised to Negative from Stable, 'LS-3' -- EUR46,000,000 class B1 notes (ISIN: XS0205677320): affirmed at 'B'; Outlook revised to Negative from Stable, 'LS-4' -- EUR40,000,000 class B2 notes (ISIN: XS0205677676): affirmed at 'B'; Outlook revised to Negative from Stable, 'LS-4' PREPS 2005-1 limited partnership (PREPS 2005-1): -- EUR150,094,041 class A1 notes (ISIN: XS0225228765): affirmed at 'BB+'; Outlook revised to Negative from Stable, 'LS-3' -- EUR51,460,814 class A2 notes (ISIN: XS0225229144): affirmed at 'BB+'; Outlook revised to Negative from Stable, 'LS-3' -- EUR47,000,000 class B notes (ISIN: XS0225229813): affirmed at 'B-'; Outlook revised to Negative from Stable, 'LS-3' PREPS 2005-2 plc (PREPS 2005-2): -- EUR189,159,871 class A1 notes (ISIN: XS0236849005): affirmed at 'BB'; Outlook revised to Negative from Stable, 'LS-2' -- EUR46,200,337 class A2 notes (ISIN: XS0236849427): affirmed at 'BB'; Outlook revised to Negative from Stable, 'LS-3' -- EUR41,500,000 class B1 notes (ISIN: XS0236849930): downgraded to 'CC' from 'CCC' -- EUR12,500,000 class B2 notes (ISIN: XS0236850862): downgraded to 'CC' from 'CCC' PREPS 2006-1 plc (PREPS 2006-1): -- EUR218,308,018 class A1 notes (ISIN: XS0261122732): affirmed at 'BB-'; Outlook revised to Negative from Stable, 'LS-2' -- EUR825,188 class A2 notes (ISIN: XS0261125081): affirmed at 'BB-'; Outlook revised to Negative from Stable, 'LS-5' -- EUR40,000,000 class B1 notes (ISIN: XS0261125677): downgraded to 'CC' from 'CCC' -- EUR9,000,000 class B2 notes (ISIN: XS0261127376): downgraded to 'CC' from 'CCC' PREPS 2007-1 plc (PREPS 2007-1): -- EUR167,862,162 class A1 notes (ISIN: XS0289620709): downgraded to 'B' from 'BB-'; Outlook revised to Negative from Stable, 'LS-2' -- EUR35,000,000 class B1 notes (ISIN: XS0289620881): downgraded to 'CC' from 'B-' ============= I C E L A N D ============= LANDSBANKI ISLANDS: Iceland Must Complete Refinancing, IMF Says --------------------------------------------------------------- Omar R. Valdimarsson at Bloomberg News reports that the International Monetary Fund said Iceland must complete the refinancing of Landsbanki Islands hf and the country's network of savings banks before the IMF will hand over the next installment of the island's loan. According to Bloomberg, Iceland is relying on a US$4.6 billion IMF loan to rebuild the economy, which suffered the worst decline in the western world after its banks were unable to finance debt that swelled to 10 times the size of the economy. "We and the government want to see" New Landsbanki hf and the saving banks recapitalized, Bloomberg quoted Mark Flanagan, the IMF mission chief to Iceland, as saying in an interview in Reykjavik Monday. "Once we have the balance sheet of Landsbanki, we have room to start moving forward more systematically." Creditors of Landsbanki are seeking to recoup as much as US$28 billion in loans since it collapsed in the largest bankruptcy in Iceland's history, Bloomberg discloses. Bloomberg relates the committee overseeing the resolution of creditors' claims has said as much as 89% of priority claims will be covered by liquidating the bank's asset. Total claims against the estate amount to ISK6.5 trillion (US$51.7 billion), while approved priority claims amount to ISK1.3 trillion, Bloomberg says. About Landsbanki Islands Landsbanki Islands hf, also commonly known as Landsbankinn in Iceland, is an Icelandic bank. On October 7, 2008, the Icelandic Financial Supervisory Authority took control of Landsbanki and two other major banks. Landsbanki filed for Chapter 15 protection on Dec. 9, 2008 (Bankr. S.D. N.Y. Case No.: 08-14921). Gary S. Lee, Esq., at Morrison & Foerster LLP, represents the Debtor. When it filed for protection from its creditors, it listed assets and debts of more than US$1 billion each. ============= I R E L A N D ============= BUDGET TRAVEL: High Court Issues Winding-Up Order ------------------------------------------------- The Sunday Business Post Online reports that the High Court on Monday made a winding-up order for Budget Travel. The report relates Ms. Justice Mary Laffoy said she was satisfied to confirm Simon Coyle as liquidator to the company. According to the report, the judge said she was happy to issue the order because the company was insolvent and unable to pay its debts. The report recalls Budget Travel sought to go into liquidation following demands for repayment of inter-company loans of some EUR3.8 million which it could not repay. Budget Travel is Ireland's largest tour operator. The company employed more than 170 people in its 17 shops. CAPITAL BARS: AIB Appoints Receiver to Four Businesses ------------------------------------------------------ Ciaran Hancock and Mary Caroloan at The Irish Times report that AIB has appointed a receiver to four businesses within the Capital Bars group of pubs in Dublin after failing to agree a deal with publicans Liam and Des O'Dwyer relating to a EUR25.7 million debt. The report relates Pearse Farrell of accountants FGS was appointed Friday as receiver to the well-known Dublin pubs Cafe en Seine, Howl at the Moon, Zanzibar and the George Friday. According to the report, Mr. Justice Brian McGovern Friday afternoon granted an application by examiner Kieran Wallace of KPMG to be discharged, after which the judge was told by counsel for AIB that the bank would be appointing a receiver. According to the report, it is understood that the O'Dwyer brothers had offered AIB, which holds a charge over the leases on the pubs, about EUR7 million as part of a refinancing aimed at rescuing the businesses. The report says the brothers had hoped to secure funding for the refinancing of the pubs from Anglo Irish Bank, which is owed EUR120 million by the O'Dwyers relating to the freeholds on the properties. But this was not possible in the context of the challenges being faced by state-owned Anglo, the report states. AIB is believed to have stood firm on seeking the full EUR25.7 million it is owed, the report notes. Headquartered in Dublin, Ireland, Capital Bars plc -- http://www.capitalbars.com/-- runs multi-themed bars (several of them 'superpubs' -- gigantic blends of restaurants, dancehalls, and pubs), including Cafe en Seine and The George. Capital Bars also has two contemporary-style hotels (Grafton Capital Hotel and Trinity Capital Hotel) in Ireland's capital. The joint directors (and brothers) Desmond and Liam O'Dwyer control the company. After acquiring Capital Bars in 2001, the O'Dwyers took the company private the following year. DUNCANNON CRE: Repurchase Won't Affect Fitch's Ratings on Notes --------------------------------------------------------------- Fitch Ratings says that the recently proposed repurchase of Duncannon CRE CDO I PLC's class A notes will not in itself impact the rating of the notes. The notes are rated: -- EUR6,250,000 class X: 'B'; Outlook Negative; -- EUR284,260,029 class A: 'B-'; Outlook Negative; -- EUR98,246,898 class RCF: 'B-'; Outlook Negative; -- EUR40m class B: 'CCC'; Recovery Rating 'RR5'; -- EUR60m class C: 'CC'; Recovery Rating 'RR6'; -- EUR60,992,207 class D: 'C'; Recovery Rating 'RR6'; -- EUR41,044,042 class E: 'C'; Recovery Rating 'RR6'. As per Condition 7 (h) of the Duncannon CRE CDO I PLC Prospectus, the issuer may at any time, at the direction of the portfolio manager, purchase senior or mezzanine notes in the open market or in privately negotiated transactions, at a price not exceeding 100 per cent. Under this proposed buyback, the repurchase of EUR10 million of the class A notes is to be undertaken at a price in the low seventies. The EUR10 million class A notes will subsequently be cancelled, thereby increasing available credit enhancement to all rated notes. This proposed buyback follows an earlier buyback of EUR9.5 million of class A notes in September 2009. The repurchase will be funded using cash available in the principal collection account. As of December 2009, approximately EUR7.1 million is available in the principal collection account. Generally, proceeds in the principal collection account can be used by the portfolio manager to invest in new portfolio assets, limited by the eligibility criteria, or may be distributed to noteholders, if no investment opportunity exists. Due to the funding of the proposed repurchase of the class A notes, the amount of principal proceeds available for immediate distribution to the remaining noteholders will be lower. At the same time, noteholders will benefit from an increase in credit enhancement due to the relative increase of assets compared to liabilities in the structure. Currently the senior, second senior and mezzanine par value tests are breaching their limits. Note all par value ratios will improve as a result of the repurchase. Consequently, the amount of interest required to be diverted on future payment dates to the senior notes to cure the par value tests will be reduced. EP MOONEY: High Court Issues Winding-Up Order --------------------------------------------- The Sunday Business Post Online reports that the High Court on Monday made a winding-up order for EP Mooney Ltd. The report relates Ms. Justice Mary Laffoy confirmed accountant Paul McCann provisional liquidator to the company, which has debts of EUR22 million. According to the report, the judge said she was happy to issue the order because the company was insolvent and unable to pay its debts. The report says the company's difficulties were caused by the current economic climate; government changes to vehicle registration tax which had impacted on spending on used cars; and reduced financing being made available to dealers and customers. Other adverse factors included customers buying cars in Northern Ireland due to falling sterling and restrictions on vehicle stocking finance resulting in increased VAT payments, the report notes. EP Mooney Ltd. is one of Ireland's largest car dealerships. The company operated five garages in Dublin and employed 95 people. It was founded in Dublin almost 40 years ago. FLEMING GROUP: ACC Appeals High Court Decision on Rescue Plan ------------------------------------------------------------- Ian Kehoe at The Sunday Business Post Online reports that ACC Bank could be forced to write off more than EUR20 million it is owed by the Fleming construction group if a rescue plan for the firm is given the go-ahead. According to the report, the Fleming group owes EUR21.5 million to ACC, but the bank contends that it would be left with assets worth just EUR1 million if the rescue plan is approved. ACC is appealing to the Supreme Court a decision by the High Court to approve the scheme of arrangement for the group, which has total debts of EUR1 billion, the report relates. ACC argues that the scheme, prepared by a court-appointed examiner, is prejudicial to its interests and is an abuse of the examinership process, the report says. Under the rescue plan devised by accountant George Maloney, a new company called Donban would invest around EUR4 million in the Fleming group and take control of two contracting and operational subsidiaries, the report discloses. The development business would then come under the control of the group's various banks, the report notes. Three companies in the Fleming Group remain under court protection pending the outcome of the appeal, the report states. ========= I T A L Y ========= GIANNI VERSACE: Seeks to Return to Profitability in 2011 -------------------------------------------------------- Jerrold Colten at Bloomberg News reports that Gianni Versace SpA said in a statement Monday that it is targeting a return to profit in 2011 and that it named Francesco Buccola as its new chief financial officer. As reported by the Troubled Company Reporter-Europe on Oct. 30, 2009, Versace said it would cut 26% of its workforce as it seeks to return to profitability. Bloomberg disclosed the company said it would eliminate about 350 positions worldwide from a total of 1,360. Gianni Versace S.p.A. -- http://www.versace.com/-- is an Italian-based international fashion house. The company produces accessories, fragrances, makeup and home furnishings as well as clothes. =================== K A Z A K H S T A N =================== BANK POSITIV: Creditors Must File Claims by December 30 ------------------------------------------------------- JSC Bank Positiv Kazakhstan is currently undergoing liquidation. Creditors have until December 30, 2009, to submit proofs of claim to: Abdirov Ave. 25 Karaganda Kazakhstan ENERGO-AA-07: Creditors Must File Claims by December 30 ------------------------------------------------------- Creditors of LLP Energo-AA-07 have until December 30, 2009, to submit proofs of claim to: Ilyaev Str. 24 Shymkent South Kazakhstan Kazakhstan The Specialized Inter-Regional Economic Court of South Kazakhstan commenced bankruptcy proceedings against the company on September 28, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of South Kazakhstan Tynybaev Str. 42 Shymkent South Kazakhstan Kazakhstan ENERGO-UG-1: Creditors Must File Claims by December 30 ------------------------------------------------------ Creditors of LLP Energo-Ug-1 have until December 30, 2009, to submit proofs of claim to: Ilyaev Str. 24 Shymkent South Kazakhstan Kazakhstan The Specialized Inter-Regional Economic Court of South Kazakhstan commenced bankruptcy proceedings against the company on September 28, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of South Kazakhstan Tynybaev Str. 42 Shymkent South Kazakhstan Kazakhstan RTN PLUS: Creditors Must File Claims by December 30 --------------------------------------------------- Creditors of JSC RTN Plus have until December 30, 2009, to submit proofs of claim to: Jambyl Str. 9 Karaganda Kazakhstan The Specialized Inter-Regional Economic Court of Karaganda commenced bankruptcy proceedings against the company on September 25, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Karaganda Alalykin Str. 9 Karaganda Kazakhstan SHYMKENT TORG: Creditors Must File Claims by December 30 -------------------------------------------------------- Creditors of LLP Shymkent Torg Stroy Service have until December 30, 2009, to submit proofs of claim to: The Specialized Inter-Regional Economic Court of South Kazakhstan Tynybaev Str. 42 Shymkent South Kazakhstan Kazakhstan The court commenced bankruptcy proceedings against the company on September 23, 2009. TRANSPORT CJSC: Creditors Must File Claims by December 30 --------------------------------------------------------- CJSC Transport is currently undergoing liquidation. Creditors have until December 30, 2009, to submit proofs of claim to: Ryskulov Str. 68 Almaty Kazakhstan URAL RECH: Creditors Must File Claims by December 30 ---------------------------------------------------- Creditors of OJSC Ural Rech Flot have until December 30, 2009, to submit proofs of claim to: Sarayshyk Str. 19-92 Uralsk West Kazakhstan Kazakhstan The Specialized Inter-Regional Economic Court of West Kazakhstan commenced bankruptcy proceedings against the company on September 25, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of West Kazakhstan Seifullin Str. 37 Uralsk West Kazakhstan Kazakhstan VNUTRIDOMOVYE ELECTRICHESKIYE: Claims Filing Deadline is Dec. 30 ---------------------------------------------------------------- Creditors of LLP Vnutridomovye Electricheskiye Seti have until December 30, 2009, to submit proofs of claim to: Tkachev Str. 17-185 Pavlodar Kazakhstan The Specialized Inter-Regional Economic Court of Pavlodar commenced bankruptcy proceedings against the company on October 5, 2009, after finding it insolvent. The Court is located at: The Specialized Inter-Regional Economic Court of Pavlodar Djambulskaya Str. 6 Pavlodar Kazakhstan ===================== N E T H E R L A N D S ===================== MOSCOW STARS: Fitch Affirms Rating on Class B Notes at 'BB-' ------------------------------------------------------------ Fitch Ratings has affirmed and downgraded Moscow Stars B.V.'s class A and B notes, respectively, and removed both notes from Rating Watch Negative. At the same time, Fitch has assigned Negative Outlooks to both note classes. The rating actions are: -- Class A (ISIN XS0307297225): affirmed at 'BB+'; removed from RWN; assigned Negative Outlook; assigned 'LS-1' -- Class B (ISIN XS0307297811): downgraded to 'BB-' from 'BB'; removed from RWN; assigned Negative Outlook; assigned 'LS-2' Moscow Stars B.V. is a securitization of mortgage loans originated by CB Moskommertsbank (rated 'CCC'/Negative Outlook). The rating action reflects the rapid deterioration in the transaction's performance in the past few months. The downgrade of the class B notes was additionally triggered by a lack of sufficient credit protection for this class of notes in comparison to Fitch's current assumptions for 'BB' rating level. At the same time, the successful transition of the collection account from the current servicer MKB to the back-up servicer ZAO Raiffeisenbank (rated 'BBB+'/Negative Outlook) has prompted the agency to remove the notes from RWN. The cumulative default rate had risen to almost 5.9% by the end of October 2009 from 1.61% in January 2009. Accounting for cures, the cumulative default rate had reached 4.8% at the end of October 2009. The rapid increase in defaults has led the class C Principal Deficiency Ledger to be debited in full. At the same time, Fitch identified discrepancies between the contractual agreements and the actual bookings made by the cash manager in the past. As such, the PDL is of limited use to measure the performance of the transaction. Nevertheless, the current performance of the transaction is worse than Fitch's base case expectations at closing. Fitch has revised its base case assumptions and conducted an updated portfolio analysis based on the most recent pool provided by MKB. The results of the analysis show expected losses of 20.1% ('BB+' scenario) and 15.6% ('BB' scenario) for class A and B respectively, while the current class A and B credit enhancement is 23.6% and 9.0% respectively. The lack of sufficient credit protection for the class B notes triggered the downgrade of the class B notes to 'BB-' from 'BB'. A further deterioration of the transaction's performance could also lead to a further erosion of class B credit enhancement below current levels. This will add further downward pressure on the rating. As such, the Negative Outlook is driven by concerns over the asset performance. In line with Fitch's criteria, the rating and Outlook of the senior notes are additionally linked to the originator's rating and Outlook. Currently the transaction originator, MKB, has a Negative Outlook. As a result, Fitch has assigned the class A notes a Negative Outlook as further downgrades of the originator would trigger further downgrades of class A notes' rating. The agency will continue to monitor the transaction and take appropriate rating actions. Fitch's employed its criteria for emerging market RMBS transactions to analyze the quality of the portfolio and the expected performance of the transaction in general. =========== R U S S I A =========== BANK OF MOSCOW: Fitch Affirms Individual Rating at 'D' ------------------------------------------------------ Fitch Ratings has affirmed the ratings of Bank of Moscow, including the Long-term Issuer Default Rating at 'BBB-' with a Negative Outlook. The ratings reflect Fitch's view of the high probability of support from the City of Moscow if necessary given BOM's ties to the city, the city's majority ownership, albeit partly indirect, in BOM, and its strong ability to provide support, as indicated by its IDR of 'BBB'/Negative. The bank's Long-Term IDR is dependant on the city's ownership, its financial position and its propensity to support the bank. Any major changes in the relationship between the city and the bank, for example, as a result of the potential change in the city's mayor at end-2011, could also impact the ratings. BOM's Individual Rating of 'D' is under downward pressure mainly from asset quality deterioration. Reported non-performing loans (over 90 days overdue) were at 3% of the loan book at end-Q309, while rolled-over loans represented a further 4%, which is below the peer average. Asset quality numbers are supported by the relatively good quality of many of the largest borrowers (most of the 20 largest borrowers are large industrial companies, with some being state-owned or state-related), but also by bullet repayments of principal in some of the loans. The bullet repayments in particular apply to four groups of borrowers (among the 20 largest), which represent riskier construction exposure totalling RUB38 billion or 8% of total loans (overall reported construction exposure was about 15% of total loans at end-Q309). These loans are reasonably well collateralized, while several projects have some backing from the City of Moscow, including them being subject to the city's property buyout programs, Fitch was informed. Although interest is currently being paid on all of the aforementioned construction loans, some of them (maturing in 2010) will likely be rolled-over. The quality of the retail portfolio (16% of total loans) has deteriorated to what Fitch estimates to be near the break-even level. The liquidity position is reasonable (cash and liquid securities amounted to US$3.5 billion at the end of October 2009). Although funding from the Central Bank of Russia and the City of Moscow is quite high (25% of liabilities), significant unutilized capacity exists. In this context, refinancing needs from Q409 through to 2010 are moderate, at US$1.8 billion. However, this excludes a short-term deposit of US$1.8 billion from a single counterparty, which is expected to be extended; this depositor has placed money with the bank since 2006. Capitalization has been supported by RUB20 billion of new equity in Q309 and strong pre-impairment profit. BOM is planning another RUB20 billion share issue in H110, which would raise loan loss absorption capacity to a significant 19% from the currently moderate 14%. The city's ownership (both direct and indirect) in BOM should not change materially as a result of the planned share issue, as both the city and Capital Insurance Group (see below), are expected to participate in it, Fitch was informed. BOM is one of Russia's five largest banks. It is controlled by the city, which owns 48.11% directly and controls a further 15.28% through Capital Insurance Group. The latter is 25% owned by BOM, while the city has a 25%+1 share. The rating actions are: Bank of Moscow -- Long-term IDR: affirmed at 'BBB-'; Outlook Negative -- Senior unsecured debt: affirmed at 'BBB-' -- Subordinated debt: affirmed at 'BB+' -- Short-term IDR: affirmed at 'F3' -- Individual Rating: affirmed at 'D' -- Support Rating: affirmed at '2' -- National Long-term Rating: affirmed at 'AA+(rus) '; Outlook Stable In Fitch's rating criteria, a bank's standalone risk is reflected in Fitch's Individual ratings and the prospect of external support is reflected in Fitch's Support ratings. Collectively these ratings drive Fitch's Long- and Short-term IDRs. BELPROMSTROIBANK JSC: Moody's Reviews 'B1' Long-Term Ratings ------------------------------------------------------------ Moody's Investors Service placed the B1 long-term local currency deposit rating of Belpromstroibank (BPS-Bank) on review for possible upgrade. The bank's B2 long-term foreign currency deposit rating, Not Prime short-term local and foreign currency deposit ratings and E+ bank financial strength rating were affirmed with stable outlook. This rating action follows official announcements that Russian bank Sberbank will acquire a 93.27% stake in BPS-Bank for US$280.8 million. The transaction is expected to close by the end of 2009. Moody's review for possible upgrade of BPS-Bank's local currency deposit rating reflects its view of the prospective level of parental support for the bank from Sberbank. The probability of such support will be driven by Sberbank's strategic commitment to BPS-Bank and to the Belarusian market. Moreover, according to the press release issued by the banks on 11 December 2009, Sberbank will additionally inject up to US$300-350 million in BPS-Bank's capital in 2010-2014 and assist in attracting for up to US$2 billion in funding to the bank during this period. "The review of the bank's rating will be concluded once the legal acquisition of BPS-Bank's shares by Sberbank is completed," added Maxim Bogdashkin, a Moscow-based Moody's Analyst and the lead analyst for BPS-Bank. The bank's foreign currency deposit rating of B2 is unaffected by this rating action since it is constrained by the foreign currency deposit ceiling for Belarus of B2. With regard to the bank's BFSR, Moody's explained that it does not expect the acquisition to have any immediate effect on BPS-Bank's intrinsic financial strength. The rating agency therefore affirmed BPS-Bank's BFSR at E+ with stable outlook. At the same time, the rating agency expects the acquisition to be rating-neutral for Sberbank, due to the relatively small size of BPS-Bank. Moody's previous rating action on BPS-Bank's ratings was on 14 July 2009, when it downgraded its global local currency deposit rating to B1 from Ba1 as Belarus' ability to provide support to its banking system was reassessed. Headquartered in Minsk, Belarus, BPS-Bank reported unaudited total consolidated assets and net profit in accordance with IFRS of US$1.69 billion and US$28.0 million respectively as of Q3 2009. * KALUGA REGION: Fitch Affirms 'BB-' Long-Term Foreign Rating ------------------------------------------------------------- Fitch Ratings has affirmed Kaluga Region's Long-term foreign and local currency ratings at 'BB-' respectively, while affirming the Russian region's Short-term foreign currency rating at 'B'. The agency has also affirmed its National Long-term rating at 'A+ (rus)'. All the Long-term rating Outlooks are Stable. The ratings reflect the region's satisfactory budgetary performance and rapid economic growth in 2006-2008. However, the ratings also factor in the region's economy being still weaker than the national average and increased total risk in 2008-2009. The Stable Outlook reflects Fitch's expectation that the region will be able to control its operating expenditure and curb further total debt growth in 2010 while economic recovery should allow the region to restore sound operating performance. The overall scale of Kaluga's economy is modest relative to other Russian regions. Per capita gross regional product was 87% of the median for Russian regions in 2007. The low dependence of the regional economy on natural resource extraction or export-oriented sectors helps provide resilience to global negative trends. Kaluga actively develops local special economic zones on its territory, including four large industrial zones for the purpose of investment attraction. The region finances the infrastructure development of these zones via a public entity Development Corporation of Kaluga Region. The region guarantees two long-term loans that DCKR has raised from Vnesheconom Bank ('BBB'/Negative/'F3'). The loans, which total RUB4.8 billion, will begin amortizing in 2011and mature in 2019. During 2004-2008 the region's total risk (debt and guarantees) gradually increased to reach RUB9 billion by November 2009, or 41% of expected full-year current revenue. The region's direct debt is composed of bonds with smooth and relatively long maturity profiles and bank loans. Additionally, a significant part of the region's risk (62%) is represented by the liabilities of DCKR. By end-2009 the region's total risk will account for approximately 50% of current revenue, up from 26% in 2007. Although this is mitigated by the debt's smooth and long-term profile, Fitch notes that a further increase of total risk could lead to increased pressure on budget expenditure. Prudent budget management has allowed the region to improve its operating performance despite high capital expenditure; the operating margin increased to 14.4% in 2008 from 8.1% in 2006. Fitch hence expects limited deterioration in budgetary performance in 2009 despite the national economic downturn. The operating margin is expected to fall to around 10%-12% in 2009 before recovering to 2008's level in 2010 while deficit before debt is forecast to reach RUB3 billion or 12.7% of total revenue. Kaluga Region is located in central Russia, bordering the Moscow Region to the south-west. It accounted for 0.4% of the country's GDP in 2007 and 0.7% of its population. ========= S P A I N ========= * SPAIN: S&P Takes Rating Actions on Eight ABS & RMBS Transactions ------------------------------------------------------------------ Standard & Poor's Ratings Services took multiple rating actions on eight Spanish ABS and RMBS transactions. On July 15, S&P placed on CreditWatch negative its ratings on all the notes in the relevant transactions listed below, following its preliminary review of the effect of short-term arrears levels on the swap payments in each transaction. The rating actions are mainly driven by the assessment of the impact of soft arrears on the swap notional. These transactions feature total return swaps where the issuer pays the swap counterparty all the interest received on the underlying loans. In return, each issuer receives an amount equal to the weighted-average coupon on the notes, plus a defined margin, calculated on a notional equal to the daily weighted- average of performing assets during the collection period. As a consequence, S&P see that the higher the level of loans in arrears for some days during the quarter that start performing again before the quarter ends, the higher the possible mismatch between the payment made to and the payment received from the swap counterparty. In the current economic environment, S&P expects a higher level of short-term arrears between 1 and 90 days. Consequently, S&P reviewed its original assumptions on the expected level of soft arrears, and the subsequent impact on the swap mechanism. S&P lowered the ratings on the class B and C notes in Pymes Banesto 2 based on a combination of this swap effect and its assessment of a general weakening in the underlying collateral for that transaction. S&P lowered GC Pastor Hipotecario 5's class D notes to 'D' due to the missed interest payment on the last payment date for that class. At closing, class D was issued to fund the cash reserve. The issuer uses excess spread to pay interest and principal for that class. S&P conducted a credit and cash flow analysis for all the reported transactions. This showed that the credit enhancement available for some of the tranches is, in S&P's view, insufficient to maintain the current ratings. Ratings List Ratings Affirmed and Removed From Creditwatch Negative Empresas Banesto 1, Fondo de Titulizacion de Activos EUR2 Billion Floating-Rate Notes Rating ------ Class To From ----- -- ---- A2 AAA AAA/Watch Neg B A A/Watch Neg C BBB- BBB-/Watch Neg Fondo de Titulizacion de Activos, PYMES Banesto 2 EUR1 Billion Floating-Rate Notes Rating ------ Class To From ----- -- ---- A1 AAA AAA/Watch Neg A2 AAA AAA/Watch Neg Empresas Banesto 2, Fondo de Titulizacion de Activos EUR2 Billion Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AAA AAA/Watch Neg B A A/Watch Neg C BBB BBB/Watch Neg Empresas Banesto 3, Fondo de Titulizacion de Activos EUR2.3 Billion Asset-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AAA AAA/Watch Neg B A A/Watch Neg C BBB BBB/Watch Neg GC FTPYME PASTOR 4, Fondo de Titulizacion de Activos EUR630 Million Asset-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A2 AAA AAA/Watch Neg A3(G) AAA AAA/Watch Neg D BB BB/Watch Neg E B B/Watch Neg TDA, Empresas Pastor 5, Fondo de Titulizacion de Activos EUR550 Million Asset-Backed Floating-Rate and EUR18.7 Million Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AA AA/Watch Neg B BBB BBB/Watch Neg C B B/Watch Neg GC Pastor Hipotecario 5, Fondo de Titulizacion de Activos EUR710.5 Million Floating-Rate Mortgage-Backed Notes Rating ------ Class To From ----- -- ---- A1 AAA AAA/Watch Neg TDA Pastor Consumo 1, FTA EUR300 Million Asset-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- A AA AA/Watch Neg B A A/Watch Neg C B B/Watch Neg Ratings Lowered and Removed From Creditwatch Negative Empresas Banesto 1, Fondo de Titulizacion de Activos EUR2 Billion Floating-Rate Notes Rating ------ Class To From ----- -- ---- D B BB-/Watch Neg Fondo de Titulizacion de Activos PYMES Banesto 2 EUR1 Billion Floating-Rate Notes Rating ------ Class To From ----- -- ---- B BBB A/Watch Neg C B BB/Watch Neg GC FTPYME PASTOR 4 Fondo de Titulizacion de Activos EUR630 Million Asset-Backed Floating-Rate Notes Rating ------ Class To From ----- -- ---- B A AA-/Watch Neg C BBB- BBB/Watch Neg GC Pastor Hipotecario 5, Fondo de Titulizacion de Activos EUR710.5 Million Floating-Rate Mortgage-Backed Notes Rating ------ Class To From ----- -- ---- A2 AA+ AAA/Watch Neg B A- A/Watch Neg C BB BBB-/Watch Neg Rating Lowered GC Pastor Hipotecario 5, Fondo de Titulizacion de Activos EUR710.5 Million Floating-Rate Mortgage-Backed Notes Rating ------ Class To From ----- -- ---- D D CCC- Rating Unaffected TDA, Empresas Pastor 5, Fondo de Titulizacion de Activos EUR550 Million Asset-Backed Floating-Rate And EUR18.7 Million Floating-Rate Notes Rating ------ Class To From ----- -- ---- D D D =========== S W E D E N =========== GENERAL MOTORS: Spyker Is Only Remaining Bidder for Saab -------------------------------------------------------- Dow Jones Newswires' Sharon Terlep reports General Motors Co. on Tuesday disclosed Dutch sports-car manufacturer Spyker Car NV was the only remaining bidder for the remaining assets of GM's Saab unit. According to Ms. Terlep, the announcement came as the Swedish government said it had been given the go-ahead to analyze an approach from a lead bidder -- confirmed to be Spyker -- as it considers a request to act as guarantor to EUR400 million (US$586 million) in European Investment Bank loans to Saab. In November Swedish sports car maker Koenigsegg Group AB backed out from a deal to buy Saab saying it was taking too long to secure financing. Earlier this week, Beijing Automotive Industry Holdings Co. completed the acquisition of intellectual property rights for some Saab 9-3 models, the current 9-5 models, and powertrain technology and tooling. Beijing Automotive plans to use the equipment to build its own models. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Whitacre Reveals CEO Search Underway ---------------------------------------------------- Sharon Terlep at Dow Jones Newswires' reports General Motors Co. Chairman Edward E. Whitacre Jr. revealed to reporters on Tuesday GM's CEO search has been under way for about a week and so far there are no candidates. He said he is open to candidates of all backgrounds, whether a GM insider or a seasoned executive with no automotive experience. According to the report, Mr. Whitacre said he doesn't intend to remain chief executive over the long term but that he has no timetable for finding a new leader. The report relates Mr. Whitacre said the search is complicated by executive-pay limits imposed by the U.S. government on companies that received large federal bailouts. According to the report, Mr. Whitacre also said GM remains on track begin repaying US$8 billion in U.S. and Canadian loans this month and hopes to complete the repayments sooner than GM's June target. Mr. Whitacre declined to predict when the company would become profitable and wouldn't discuss sales or financial targets or when the company may go public, the report says. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ===================== S W I T Z E R L A N D ===================== E. KUENZLER: Claims Filing Deadline is December 21 -------------------------------------------------- Creditors of E. Kuenzler Immobilien AG are requested to file their proofs of claim by December 21, 2009, to: Stefan Kuenzler Liquidator Schoenhaldenstrasse 37 8708 Maennedorf Switzerland The company is currently undergoing liquidation in Herisau. The decision about liquidation was accepted at an extraordinary general meeting held on October 26, 2009. KINDERBOUTIQUE PINOCCHIO: Claims Filing Deadline is December 28 --------------------------------------------------------------- Creditors of Kinderboutique Pinocchio GmbH are requested to file their proofs of claim by December 28, 2009, to: Stefan Supersaxo Haus Feegletscher 3906 Saas-Fee Switzerland The company is currently undergoing liquidation in Saas-Fee. The decision about liquidation was accepted at a general meeting held on May 29, 2009. MICONOS BETEILIGUNGEN: Claims Filing Deadline is December 28 ------------------------------------------------------------ Creditors of Miconos Beteiligungen AG are requested to file their proofs of claim by December 28, 2009, to: Bernardo Lardi Liquidator Reichsgasse 65 Mail box: 474 7002 Chur Switzerland The company is currently undergoing liquidation in Chur. The decision about liquidation was accepted at a general meeting held on October 28, 2009. MIG-SHOP: Claims Filing Deadline is December 29 ----------------------------------------------- Creditors of MIG-Shop GmbH are requested to file their proofs of claim by December 29, 2009, to: Sitz der Gesellschaft Leonhardsgraben 8 4051 Basel Switzerland The company is currently undergoing liquidation in Basel. The decision about liquidation was accepted at an extraordinary shareholders' meeting held on October 14, 2009. MOUNTAIN DV: Claims Filing Deadline is December 18 -------------------------------------------------- Creditors of Mountain DV Solutions GmbH are requested to file their proofs of claim by December 18, 2009, to: Markus Gwerder Liquidator Kanzleiweg 6 8636 Wald Switzerland The company is currently undergoing liquidation in Wald ZH. The decision about liquidation was accepted at a shareholders' meeting held on September 15, 2009. N.OSWALD AG: Claims Filing Deadline is December 18 -------------------------------------------------- Creditors of N. Oswald AG are requested to file their proofs of claim by December 18, 2009, to: Timag Treuhand GmbH Meierhoefliring 3 6017 Ruswil Switzerland The company is currently undergoing liquidation in Oberwil-Lieli AG. The decision about liquidation was accepted at an extraordinary general meeting held on October 12, 2009. OCTAGON WORLDWIDE: Claims Filing Deadline is December 23 -------------------------------------------------------- Creditors of Octagon Worldwide Limited are requested to file their proofs of claim by December 23, 2009, to: Beat Ritschard Liquidator Suedstrasse 12 8800 Thalwil Switzerland The company is currently undergoing liquidation in Zurich. The decision about liquidation was accepted at a general meeting held on December 18, 2008. PINEDE AG: Claims Filing Deadline is December 31 ------------------------------------------------ Creditors of Pinede AG are requested to file their proofs of claim by December 31, 2009, to: Alexander A.J. Schellings Liquidator Boertjistrasse 10 7260 Davos Dorf Switzerland The company is currently undergoing liquidation in Davos. The decision about liquidation was accepted at a general meeting held on November 3, 2009. SOORTREFF GMBH: Claims Filing Deadline is December 18 ----------------------------------------------------- Creditors of Soortreff GmbH are requested to file their proofs of claim by December 18, 2009, to: Haeseli Treuhand AG Wilenstrasse 50 9500 Wil Switzerland The company is currently undergoing liquidation in Buetschwil SG. The decision about liquidation was accepted at a shareholders' meeting held on October 2, 2009. UDG UMWELT: Claims Filing Deadline is December 23 ------------------------------------------------- Creditors of UDG Umwelt Beratung GmbH are requested to file their proofs of claim by December 23, 2009, to: Ernst Habluetzel & Co. Unterneuhaus 269 8217 Wilchingen Switzerland The company is currently undergoing liquidation in Wilchingen. The decision about liquidation was accepted at a shareholders' meeting held on September 30, 2009. =========================== U N I T E D K I N G D O M =========================== A&H GADD: In Administration; 57 Jobs Affected --------------------------------------------- BBC News reports that A&H Gadd has gone into administration, resulting in the loss of 57 jobs. According to the report, the company said it had to close shop after its bank pulled the plug. The report relates Andrew Gadd, the company's chairman, said building contracts already begun by the firm would be completed, although there could be delays. Somerset-based A&H Gadd is one of the West Country's largest independently-owned building contractors. AERO INVENTORY: Creditors File Bankruptcy Petition in U.S. ---------------------------------------------------------- Law360 reports that three aircraft parts companies have filed an involuntary Chapter 11 petition for U.K.-based aircraft maintenance and inventory management company Aero Inventory (UK) Ltd., claiming the company is too heavily invested in the U.S. to proceed under the bankruptcy laws reserved for foreign companies. Aero Inventory (UK) Limited -- http://www.aeroinventory.com/-- is a service provider to companies in the aerospace industry, providing a comprehensive procurement and inventory management service. Aero Inventory's ultimate goal is to become the world's leading aircraft consumable parts service provider. Aero Inventory is listed on the Alternative Investment Market of the London Stock Exchange with operations in the United Kingdom, Australia, Canada, China, Bahrain, Hong Kong, Indonesia, Japan, Switzerland and the United States of America. ASCALADE COMMUNICATIONS: Returns Capital to Shareholders -------------------------------------------------------- Ascalade Communications Inc. disclosed return of capital in the amount of C$0.159 per common share will be payable on December 22, 2009 to all shareholders of record as of December 8, 2009. All assets of the Company have been realized upon and these proceeds are being disbursed to the shareholders as a return of capital. The Company is subject to proceedings under the Companies' Creditors Arrangement Act. To facilitate the realization of the Company's assets and the winding-up of the Company and its business, on March 3, 2008 Deloitte & Touche Inc. was appointed Monitor of the Company pursuant to the Company's CCAA filing. In June 2008 the Company's Plan of Compromise or Arrangement was presented to the Company's creditors, who voted in favour of accepting the Plan. As a result of the creditors' acceptance of the Plan, a court order was obtained on June 26, 2008 whereby the Supreme Court of British Columbia sanctioned the approval of the Plan. Pursuant to the Plan, on December 3, 2009 payment of 100% of all proven creditor's claims had been made by the monitor. The Monitor proposes obtaining an Order of the B.C. Supreme Court on or about December 22, 2009 authorizing it to distribute the remaining cash resulting from the sale of the assets of the Company, to the Shareholders, passing its accounts and obtaining its discharge. On December 8, 2009 the Monitor obtained a court order permitting the Monitor to serve all interested parties with notice of the proposed distribution and finalization of these proceedings by serving all parties who had filed appearances in the CCAA Proceedings or by filing this press release and posting all supporting materials in respect of the proposed distribution and finalization on the Monitor's website: http://www.deloitte.com/ca/ascalade. About Ascalade Communications Inc. Based in Richmond, British Columbia, Ascalade Communications Inc. (TSE:ACG) -- http://www.ascalade.com/-- is an innovative product company that designs, develops and manufactures digital wireless and communication products. The company deliver products by offering its partners and customers complete vertical integration, from product design and development to final production. The company's products include digital cordless phones, Voice over Internet Protocol phones, digital wireless baby monitors and digital wireless conference phones. Ascalade products have been distributed in more than 35 countries and under 80 regional brands. Ascalade also has facilities in Qingyuan, China, Hong Kong and a sales office in Hertfordshire, United Kingdom. As reported by the Troubled Company Reporter on March 4, 2008, Ascalade announced its decision to seek protection from creditors under the Companies' Creditors Arrangement Act with the British Columbia Supreme Court. On April 29, 2008, Jervis Rodrigues, senior vice-president of Deloitte & Touche Inc., filed separate petitions for protection under Chapter 15 of the U.S. Bankruptcy Code on behalf of Ascalade Communications Inc. and its debtor-affiliate (Bankr. N.D. Ill. Case Nos. 08-10612 and 08-10616). Jeffrey G. Close, Esq., at Chapman and Cutler LLP represents the Petitioner in the Chapter 15 case. Ascalade's financial condition as of September 2007 showed total assets of US$99,630,000 and total debts of US$40,410,000. BRITISH AIRWAYS: To Seek Injunction to Halt Cabin Crew Strike ------------------------------------------------------------- Dow Jones Newswires' Kaveri Niththyananthan reports British Airways PLC said it will launch a legal action to prevent a 12-day cabin-crew strike over the Christmas period. According to the report, BA said it has written to Unite, the union representing BA's 13,500 cabin-crew members, highlighting irregularities in the union's strike ballot that render it invalid. The report says BA said it asked Unite to call off the action, but because the union failed to do so. A hearing on the injunction is due to take place in the High Court Wednesday afternoon, British Airways said. According to Dow Jones, BA said it believes Unite included in the ballot workers who are no longer employed by the airline, which would be a breach of the Trade Union Labor Relations Act. "The two sides are at odds over the airline's plans to streamline the company. British Airways on Nov. 16 cut the number of cabin-crew members on long-haul flights from London's Heathrow airport to 14 from 15 after failing to reach a compromise with unions after nine months of negotiations," Mr. Niththyananthan reports. According to Dow Jones, UBS estimates that a 12-day strike could cost BA GBP40 million to GBP50 million (US$65.2 million to US$81.5 million) in lost profit and between GBP250 million and GBP275 million in lost revenue. Both sides will meet in court Feb. 1 to decide whether changes made by BA are contractual or not, the report says. Rival Virgin Atlantic said it will take advantage of BA's cabin-crew strike and catering for a further 1,600 seats for those still wanting to travel to New York, Washington and Boston, the report adds. About British Airways Headquartered in Harmondsworth, England, British Airways Plc, along with its subsidiaries, (LON:BAY) -- http://www.ba.com/-- is engaged in the operation of international and domestic scheduled air services for the carriage of passengers, freight and mail and the provision of ancillary services. The Company's principal place of business is Heathrow. It also operates a worldwide air cargo business, in conjunction with its scheduled passenger services. The Company operates international scheduled airline route networks together with its codeshare and franchise partners, and flies to more than 300 destinations worldwide. During the fiscal year ended March 31, 2009 (fiscal 2009), the Company carried more than 33 million passengers. It carried 777,000 tons of cargo to destinations in Europe, the Americas and throughout the world. In July 2008, the Company's subsidiary, BA European Limited (trading as OpenSkies), acquired the French airline, L'Avion. * * * As reported in the Troubled Company Reporter-Europe on Nov. 12, 2009, Moody's placed the Ba3 Corporate Family and Probability of Default Ratings of British Airways plc and the senior unsecured and subordinate ratings of B1 and B2 under review for possible downgrade. CATTLES PLC: Court Defines Guarantee in Creditor Dispute -------------------------------------------------------- James Lumley at Bloomberg News reports that Cattles Plc said a London judge interpreted terms of a bank guarantee after the company and its creditors asked the court for guidance. Bloomberg relates Cattles said in a statement that the High Court ruled Monday that the company can't make claims against "relevant trading company subsidiaries for money lent until the claims of the relevant bank creditors against those subsidiaries and the company have been satisfied in full." Cattles, Bloomberg discloses, has been in talks with banks led by Royal Bank of Scotland Group Plc over how to pay GBP635 million of debt. Bloomberg says the company's banks and bondholders are arguing over the meaning of a pledge given to RBS by a Cattles unit that said that no other creditor will "in competition with or in priority to the bank, make any claim." Bloomberg recalls RBS lawyer William Trower told the court at a hearing in October that the clause meant that RBS should have priority if Cattles goes into administration. RBS was given permission to appeal the ruling, Bloomberg notes citing Cattles' Monday statement. Bloomberg recounts Cattles said earlier this year it has been selling assets, winding down units and no longer lending after recording an extra GBP700 million (US$1.14 billion) of writedowns following accounting irregularities related to bad debts this year. Cattles plc -- http://www.cattles.co.uk/-- is a financial services company specializing in providing consumer credit to non- standard customers in United Kingdom. The Company also provides debt recovery services to external clients and its consumer credit business, and working capital finance for small- and medium-sized businesses. It also has a car retail operation, which is an introducer of hire purchase customers to its consumer credit business. Its business divisions include Welcome Financial Services, The Lewis Group and Cattles Invoice Finance. Welcome Financial Services consists of three businesses: Welcome Finance, Shopacheck and Welcome Car Finance. Shopacheck provides short- term home collected loans to some 260,000 customers through 52 branches. The Lewis Group provides debt recovery and investigation services, serving both external clients and Welcome Financial Services. In September 2007, it announced the acquisition of a debt portfolio of United Kingdom credit card, loan and overdraft receivables. DRYDEN X: Moody's Junks Ratings on Three Classes of Notes --------------------------------------------------------- Moody's Investors Service took these rating actions on notes issued by Dryden X -- Euro CLO 2005 plc. Given that this is a relatively well-performing CLO, the Class A-1, A-1D and A-2 notes remain Aaa. -- EUR19,200,000 Class B-1 Senior Floating Rate Notes due 2022, Downgraded to A3; previously on Mar 4, 2009 Aa2 Placed Under Review for Possible Downgrade -- GBP 3,262,000 Class B-2 Senior Floating Rate Notes due 2022, Downgraded to A3; previously on Mar 4, 2009 Aa2 Placed Under Review for Possible Downgrade -- EUR22,400,000 Class C-1 Mezzanine Deferrable Interest Floating Rate Notes due 2022, Downgraded to Ba1; previously on Mar 19, 2009 Downgraded to Baa3 and Remained On Review for Possible Downgrade -- GBP 3,806,000 Class C-2 Mezzanine Deferrable Interest Floating Rate Notes due 2022, Downgraded to Ba1; previously on Mar 19, 2009 Downgraded to Baa3 and Remained On Review for Possible Downgrade -- EUR14,400,000 Class D-1 Mezzanine Deferrable Interest Floating Rate Notes due 2022, Downgraded to B2; previously on Mar 19, 2009 Downgraded to Ba3 and Remained On Review for Possible Downgrade -- GBP 2,447,000 Class D-2 Mezzanine Deferrable Interest Floating Rate Notes due 2022, Downgraded to B2; previously on Mar 19, 2009 Downgraded to Ba3 and Remained On Review for Possible Downgrade -- EUR12,000,000 Class E-1 Mezzanine Deferrable Interest Floating Rate Notes due 2022, Downgraded to Caa2; previously on Mar 19, 2009 Downgraded to B3 and Remained On Review for Possible Downgrade -- EUR4,000,000 Class E-1B Mezzanine Deferrable Interest Fixed Rate Notes due 2022, Downgraded to Caa2; previously on Mar 19, 2009 Downgraded to B3 and Remained On Review for Possible Downgrade -- EUR4,000,000 Class Q Combination Notes due 2022, Downgraded to Ba1; previously on Mar 4, 2009 Baa1 Placed Under Review for Possible Downgrade -- EUR8,000,000 Class S Combination Notes due 2022-2, Downgraded to Caa1; previously on Mar 4, 2009 Ba3 Placed Under Review for Possible Downgrade This transaction is a managed cash collateralized loan obligation with exposure to predominantly European senior secured loans, as well as some mezzanine loan exposure representing 7.7% of the collateral assets. The rating actions reflect Moody's revised assumptions with respect to default probability and the calculation of the diversity score as described in the press release dated February 4, 2009, titled "Moody's updates key assumptions for rating CLOs." These revised assumptions have been applied to all corporate credits in the underlying portfolio, the revised assumptions for the treatment of ratings on "Review for Possible Downgrade", "Review for Possible Upgrade", or with a "Negative Outlook" being applied to those corporate credits that are publicly rated. Moody's also notes that a material proportion of the collateral pool consists of debt obligations whose credit quality has been assessed through Moody's credit estimates. As credit estimates do not carry credit indicators such as ratings reviews and outlooks, a stress of a quarter notch-equivalent assumed downgrade was applied to each of these estimates. According to Moody's, the rating actions taken on the notes are also a result of slight credit deterioration of the underlying portfolio. This is observed through an increase in the proportion of securities from issuers rated Caa1 and below (currently 5.3% of the portfolio), an increase in the amount of defaulted securities (currently 3.5% of the portfolio) and a decline in the average credit rating as measured through the portfolio weighted average rating factor 'WARF' (currently 2,684 compared to 2,325 in January 2009). All coverage tests are passing despite some deterioration since January 2009. These measures were taken from the recent trustee report dated 13 November 2009. Moody's also performed a number of sensitivity analyses, including consideration of a further decline in portfolio WARF. Due to the impact of all the aforementioned stresses, key model inputs used by Moody's in its analysis, such as par, weighted average rating factor, and weighted average recovery rate, may be different from trustee's reported numbers. In addition to the quantitative factors that are explicitly modelled, qualitative factors are part of the rating committee considerations. These qualitative factors include the structural protections in each transaction, the recent deal performance in the current market environment, the legal environment, specific documentation features, the collateral manager's track record, and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, may influence the final rating decision. EMI GROUP: Terra Firma Seeks Outside Investors Amid Default Fears ----------------------------------------------------------------- Richard Wachman at The Observer reports that private equity group Terra Firma is looking to bring in outside investors to help prop up EMI, which is struggling with GBP2.6 billion of debt. According to the report, city pension funds, insurance companies and foreign banks have been approached amid fears within Terra Firma that EMI could default on interest repayments to Citigroup, which bankrolled the GBP4 billion buyout of the music group on the eve of the credit crunch in 2007. The report says Terra Firma would retain majority control in the event of any restructuring, and Guy Hands would remain chairman at the company. EMI is profitable at the operating level but has been hit hard by borrowing costs that have forced Terra Firma to twice inject equity into the operation in the past 18 months, the report discloses. So far, Mr. Hands has written down the value of his investment in EMI -- which now stands at GBP2.3 billion including equity injections -- by 90%, the report relates. EMI can meet its debt-servicing liabilities, but there are worries that if its recorded music division loses momentum, it could struggle to fulfill its obligations, the report notes. In the event that EMI defaulted on its debt, Citigroup could be forced to take over the business, the report states. EMI -- http://www.emigroup.com/-- is the fourth largest record company in terms of market share (behind Universal Music Group, Sony Music Entertainment, and Warner Music Group). It houses recorded music segment EMI Music and EMI Music Publishing. EMI Music distributes CDs, videos, and other formats primarily through imprints and divisions such as Capitol Records and Virgin, and sports a roster of artists such as The Beastie Boys, Norah Jones, and Lenny Kravitz. EMI Music Publishing, the world's largest music publisher, handles the rights to more than a million songs. EMI Music operates through regional divisions (EMI Music North America, International, and UK & Ireland). Private equity firm Terra Firma owns EMI. FLYGLOBESPAN: Not on Brink of Collapse, Funding Talks Continue -------------------------------------------------------------- BBC News reports that Flyglobespan has denied it is on the brink of collapse. BBC relates the company issued a statement on Monday evening, saying talks about a major funding package from Halcyon Investments Ltd. were continuing. According to BBC, Flyglobespan said the investment package was subject to regulatory approval but was about to be finalized. The group, as cited by BBC, said the deal would allow it to expand its airline and associated products and services. Independent on Sunday reported Scotland's biggest airline, Globespan, faces the prospect of going into administration unless it receives payment of an outstanding debt by Dec. 14. The money is owed by Halcyon Investments linked to funds owed to the airline by E-Clear, a credit card processing firm, Independent on Sunday discloses. Flyglobespan is Scotland's largest airline. Set up in 2002, Flyglobespan operates from five UK airports, including Glasgow, Edinburgh and Aberdeen. The company flies to various European holiday destinations such as Spain, Portugal and Turkey as well as further afield to Egypt and Florida. GORDON RAMSAY: Has New Projects After Near Brush with Bankruptcy ---------------------------------------------------------------- An article by Jacqueline Palank posted at The Wall Street Journal's Bankruptcy Beat relates Gordon Ramsay -- owner of London-based Gordon Ramsay Holdings Ltd. -- is bouncing back from a rough year that almost saw his company declare bankruptcy. Ms. Palank recalls nearly one year ago KPMG recommended that London-based Gordon Ramsay Holdings file for bankruptcy, fire hundreds of employees and close all but its most-profitable restaurants. The recommendation came after Gordon Ramsay Holdings breached the terms of a GBP10.5 million (US$17.1 million) loan and overdraft facility from Royal Bank of Scotland Group. Ms. Palank relates amid the company's distress, Mr. Ramsay had to ship off to the U.S. to shoot his reality show "Hell's Kitchen." "His days on camera would be followed by nights on the phone, discussing plans to save his company. In the chef's mind, bankruptcy wasn't on the table," Ms. Palank says. Ms. Palank relates Mr. Ramsay teamed up with his father-in-law and business partner to invest GBP9 million into the Company this year. They extended tax payments, cut staff at London headquarters and handed ownership of five restaurants to private- equity firm Blackstone Group LP, which pays Mr. Ramsay to oversee them. Amid other cost cutting efforts, Mr. Ramsay's company believes it's put its troubles behind it and is ready to start two new projects next year, Ms. Palank continues. LEHMAN BROTHERS: UK High Court Rules on Handling of Client Money ---------------------------------------------------------------- The Wall Street Journal's Cassell Bryan-Low reports a U.K. High Court judge on Tuesday ruled how client money held in the main European arm of Lehman Brothers Holdings Inc. should be handled. According to the report, Lehman's European arm had ring fenced a pool of as much as US$2.1 billion of money for some clients, thus providing protection. "But, for various reasons, the bank failed to ring fence potentially billions of dollars of additional money for other clients who also believed their money was segregated. Those clients have argued that they should be treated equally," Mr. Bryan-Low says. The Journal recalls PricewaterhouseCoopers, administrators of Lehman's U.K. Estate, had asked the court to seek direction on how to handle the matter. On Tuesday, the Court said those clients whose money wasn't segregated won't get the same protection as those clients whose money had been ring fenced. According to the Journal, Andrew Clark, Esq., a PwC partner working on the Lehman insolvency in London, said the ruling "reaffirmed what we believed was the right answer." Mr. Bryan-Low says, the decision "is a blow to those funds and other clients who believed they were protected. It comes against a backdrop of the debate over the attractiveness of London as a financial center from the perspective of regulation, tax and other matters." Mr. Bryan-Low reports Robert Turner, Esq., a London-based partner at law firm Simmons & Simmons representing the affected group, said that the purpose of regulation is to protect client money in the event of insolvency but had in this instance failed to. "If a firm slips up in respect of your money, this judgment says that regulatory protection slips through the same cracks at the same time. The regime won't help you," Mr. Turner said, according to the report. The High Court gave permission for an appeal by various respondents, the report notes. Mr. Bryan-Low says Lehman's U.K. estate held about US$35 billion in assets, of which about US$13.3 billion had been returned to hedge funds and other clients by PwC as of late last month. Lehman Brothers Holdings' bankruptcy estate in the U.K. recently launched a proposal, or "claim resolution agreement," to hedge-fund creditors aimed at unfreezing about US$11 billion in assets, the report adds. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: FINRA Compensates Investor for Notes ----------------------------------------------------- A retail investor received payment of US$200,000 after the Financial Industry Regulation Authority decided that her broker inappropriately sold her risky Lehman Brothers notes, according to a December 4 report by morningstar.com The case, one of the first involving the Lehman notes to be heard by a Finra arbitration panel, was brought for arbitration a year ago against UBS Financial Services, a unit of UBS. It sought US$300,000 in damages because the broker recommended structured products. Jacob Zamansky, Esq., at Zamansky & Associates, in New York, who represented the investor in the arbitration case said the notes were "speculative derivative securities" and were "unsuitable" for unsophisticated investors, according to the report. UBS expressed disappointment over the decision, saying that "any client losses were the direct result of the unexpected and unprecedented failure of Lehman Brothers," which the company said affected all Lehman bondholders, morningstar.com reported. As in most arbitration awards, the three-person FINRA arbitration panel did not give reasons for its findings, the report said. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LBSF Ch. 11 Case Recognized as Main Proceeding --------------------------------------------------------------- The High Court of Justice of England and Wales issued an order recognizing the Chapter 11 case of Lehman Brothers Special Financing Inc. as a foreign main proceeding. The order came after LBSF applied for recognition of its bankruptcy case to the High Court on November 24, 2009. LBSF made the move to protect its properties in the U.K. from a group of noteholders. The noteholders including Perpetual Trustee Company Ltd. and Belmont Park Investments Pty Ltd. reportedly filed claims against BNY Corporate Trustee Services Ltd. to foreclose the collateral held in trust by BNY, which secures LBSF's interest in a credit default swap with an Irish corporation. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) NATIONAL EXPRESS: Cosmen Family Takes Up GBP360 Mln Rights Issue ---------------------------------------------------------------- Gill Plimmer at The Financial Times reports that the Cosmen family, the rebel shareholder of National Express Group plc, has taken up the GBP360 million rights issue it campaigned against. According to the FT, the decision by the Spanish consortium, which owns 20% of the group, will shore-up the fundraising exercise, due to be completed next Tuesday. The rights issue has been fully underwritten and supported by institutional shareholders including M&G, the second-largest investor with a 12.5% stake in the company, the FT discloses. Its completion comes at the same time as National Express strives to appoint a new chief executive, the FT notes. National Express has been searching for a new chief executive since Richard Bowker resigned in the wake of its decision, the FT relates. National Express is struggling with GBP1 billion debt, and its relationship with the government has been soured by the decision in July to hand back the lossmaking East Coast rail franchise, the FT says. As reported by the Troubled Company Reporter-Europe on Dec. 1, 2009, the FT said the Cosmens, who have supported two takeover attempts, argued that the rights issue is too large and that the group lacks a proper strategy. But John Devaney, National Express's chairman, said that the GBP360 million would enable the company to repay a portion of its GBP1.1 billion debt, as well as meeting loan conditions at the end of the year, the FT disclosed. The Troubled Company Reporter-Europe, citing the FT, reported on Nov. 26, 2009, that the Cosmen family increased its stake in National Express from 18.5% to 19.72% in an attempt to block the company's rescue rights issue. National Express Group PLC -- http://www.nationalexpressgroup.com/ -- is the holding company of the National Express Group of companies. Its subsidiary companies provide mass passenger transport services in the United Kingdom and overseas. The Company's segments comprise: UK Bus; UK Coach; UK Trains; North American Bus; European Coach and Bus, and Central functions. Its subsidiaries include Tayside Public Transport Co. Limited, Durham School Services LP, Stock Transportation Limited, Dabliu Consulting SLU, Tury Express SA, General Tecnica Industrial SLU and Continental Auto SLU. In June 2009, the Company announced the completion of the sale of Travel London, its London bus business, to NedRailways Limited, a subsidiary of NS Dutch Railways. SLP HOLDINGS: Receives Inquiries From Potential Buyers ------------------------------------------------------ Stephen Oldfield, Chris Pillar and Mark Shires were appointed joint administrators of SLP Holdings Ltd. and its subsidiaries on November 27, 2009. Following satisfactory progress in the first two weeks of administration, with several customers committing to continue their projects with SLP, the administrators are now focusing their efforts on finding a buyer for the business. Stephen Oldfield, joint administrator and Advisory partner at PricewaterhouseCoopers LLP in East Anglia, said:"Following an advertisement for the business I have received a pleasing number of inquiries from interested parties. The inquiries have come from every continent and include a significant amount of trade interest, some financial buyers and some Plc and intermediary interest." A number of meetings are scheduled for next week and some progress expected before Christmas. However, recognizing the festive period, meaningful talks are unlikely to take place until January. Recent customer commitments have stabilized trading at SLP and consequently the Administrators do not necessarily need to achieve a sale in coming weeks. Mr. Oldfield continued:"The interest that we have received in SLP over recent days has ranged from focus on the oil and gas activities of the group, its renewables business and the two combined. There has also been interest in the assets of the group but our focus remains on finding a buyer for the SLP business as a going-concern. The levels of customer commitments achieved so far give us the time to fully explore the interest registered." SLP is a supplier of engineering and construction projects to the offshore oil and gas industry and the renewables and wind energy markets. It employs 876 at its sites in Lowestoft, Tyneside, Blackpool and New Malden. About PricewaterhouseCoopers PricewaterhouseCoopers -- http://www.pwc.com/-- provides industry-focused assurance, tax and advisory services to build public trust and enhance value for our clients and their stakeholders. More than 163,000 people in 151 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) or, as the context requires, the PricewaterhouseCoopers global network or other member firms in the network, each of which is a separate and independent legal entity. TAURUS CMBS: S&P Downgrades Rating on Class D Notes to 'B-' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered and removed from CreditWatch negative its credit ratings on Taurus CMBS (U.K.) 2006-2 PLC's commercial mortgage-backed securities. At closing, Taurus CMBS (U.K.) 2006-2 acquired eight loans secured on 157 properties in the U.K. Since closing, two of the loans have fully repaid and the outstanding note balance is GBP352.78 million. The Times Square loan accounts for 10.5% of the total balance. The loan is currently in special servicing following a breach of the interest-coverage ratio covenant and a breach of other undertakings relating to non-payment of certain property related costs, S&P understands. In April 2009, the reported market value was GBP25 million, equating to a loan-to-value ratio of 149%. The reported ICR is 1.01x. S&P believes that the rental income may decrease during the loan term as a consequence of increased vacancy levels due to the property's tenant and lease profile. In S&P's view, further deterioration in rent could further depress the property's market value. The loan matures in December 2012. The St Katherine's Dock loan accounts for 24.9% of the total balance. The loan is secured on a complex of predominantly office properties situated adjacent to Tower Bridge, London. Since closing, reported occupancy has increased to 97% from 89%. The securitized loan ICR is 1.60x, including interest paid on pari- passu-ranking debt. The loan matures in July 2010. The largest loan is the Mapeley loan, which accounts for 47.6% of the total balance. It is secured on a portfolio of properties majority-let to HM Revenue and Customs. In July 2009, the reported market value was GBP503.02 million, equating to an LTV ratio of 39.2%, taking into account a senior-ranking charge over the properties. The loan matures in April 2021. Three of the loans (Iron Mountain, A&A Prescott, and Dundee) are each secured on single properties let entirely to one tenant, although the property securing the A&A Prescott loan is approximately 80% sublet to two entities. In its analysis, S&P has considered the impact of these properties becoming vacant. S&P has lowered its ratings to reflect its adjusted view of the creditworthiness of the loans remaining in the collateral pool. S&P's rating actions reflect its opinion of the increased risk of principal losses under the Times Square loan, and the general market value declines that S&P believes are likely to have affected the properties securing the other loans in the pool. S&P has also considered the potential effect of the low LTV ratio of the Mapeley loan, which accounts for almost half of the total balance. Ratings List Taurus CMBS (U.K.) 2006-2 PLC GBP447.15 Million Commercial Mortgage-Backed Floating-Rate Notes Ratings Lowered and Removed From Creditwatch Negative Ratings ------- Class To From ----- -- ---- A AA AAA/Watch Neg X AA AAA/Watch Neg B A AA/Watch Neg C B BBB/Watch Neg D B- BB/Watch Neg YESTERYEAR PUB: Placed Into Administrative Receivership ------------------------------------------------------- Crain's Manchester Business reports that Yesteryear Pub Company has been placed into administrative receivership for the second time in three years. The report relates a statement from administrators Begbies Traynor confirmed that Steve Williams and David Acland had been appointed as administrative receivers to the business on December 2. Mr. Williams also acted as administrative receiver on the 2006 insolvency, the report notes. Yesteryear Pub Company is a Wigan-based operator of a chain of pubs and bars. The business, which was owned by Tony Callaghan, operated a number of bars in secondary towns such as Harry's Bar in Wigan, as well as the Number Fifteen and Moloneys chains. * UK: Treasury to Unveil Plans to Boost Protection of Bank Clients ------------------------------------------------------------------ Brooke Masters and Anousha Sakoui at The Financial Times report that plans to increase protection for clients and counterparties of failing investment banks will be unveiled by the Treasury today in an effort to prevent a repeat of the legal wrangling around the collapsed Lehman Brothers. According to the FT, the move is aimed at ensuring an orderly wind-down of investment banks, particularly cross-border institutions sometimes deemed too big to fail. The FT relates in one of the proposals to be announced by Lord Myners, City minister, banks would be required to keep up-to-date, centralized information about their counterparties. Employment contracts would have to be written in such a way that key staff would be retained for a period in an insolvency, the FT says. The package will also include detailed proposals to make it easier to segregate and transfer client assets in case of failures, the FT notes. This would make the UK the first jurisdiction to set out clearly how client money should be protected in an insolvency, the FT states. * UK: Entertainment & Media Insolvencies Reach Record Levels ------------------------------------------------------------ Micropayments may offer a rescue package for publishing but it's not as easy as it looks. Despite a recent recovery in advertising, the overall number of entertainment & media (E&M) insolvencies has now reached record levels from the early days of the credit crunch. Autumn 2009 marked a milestone of 1,000 insolvencies in the UK entertainment and media sector since June 2007, according to PricewaterhouseCoopers LLP (PwC) business recovery analysis. But publishing failures alone jumped nearly 25% this year (January to October inclusively) on 2008 despite a recovery for other sectors such as advertising. In fact publishing failures account for a third of all E&M insolvencies. The highest proportion of publishing insolvencies was in books, software, and journals & periodicals. This market is being hurt by several concurrent developments. The migration of readers from print to digital media has adversely affected print advertising. Even when the economy was expanding, print advertising in consumer magazines averaged low-single-digit increases. Other publishing areas struggling are the business to business market, as reflected in the journal & periodicals insolvencies (20 percent of all publishing insolvencies). David Lancefield, media partner, PricewaterhouseCoopers LLP, said: "The sheer number of administrations in the entertainment and media sector, particularly publishing, demonstrates the double whammy of a cyclical downturn and a structural transition to online. "As a result survivors are searching for a new, sustainable business model. Media companies are experimenting with new charging models for online content, particularly the use of new subscription models and micropayments." The industry is grappling with how much the consumer is willing to pay for content online and how to package content across multiple devices. Coming out of the recession consumer convenience and value for money need to be at the heart of any content strategy. David Lancefield, media partner, PricewaterhouseCoopers LLP, explained:"Who commits first is an important element of the micropayment game. To be the only provider charging could lose an audience but it is equally as damaging to be left on the shelf." Peter Simon, director in PricewaterhouseCoopers LLP financial services practice, said: "Media companies should learn lessons from others industries more experienced in the payments sector -- in many cases, launching new payment systems is not the same as making money. "In practice, it brings a whole deal of complexity that many media companies will not have had to deal with before. The solution must be simple and consumer friendly, therefore limiting risk, however a simple click here to pay with a credit card will not likely offer the customer an engaging experience." The IT infrastructure supporting these sites also needs to be rigorous reviewed. Any server or site engineering problems could seriously damage a brand and with so much choice consumer churn will be very high. Once the provider understands the relevant behaviour for their target consumer segment there are some basic choices to make, from subscriptions, to pre-pay, to providing loyalty points and rewards. Peter Simon, director in PricewaterhouseCoopers LLP financial services practice, concluded: "Dynamic pricing may be vital to making microcharging work, but it is also clear that any payment solution can create very complex ecosystems (with several partner, joint venture and supplier relationships.) "Even seemingly simple decisions such as fixed or variable fee setting, geographic scope, mobile solutions or customer loyalty offers can create significant cash flow issues. The upside of getting this strategy right can be the creation of a product with significant commercial, customer, brand and intellectual property value for the business." "While a micropayments solution could create significant value to media companies, they should not underestimate the complexity of implementing a paid-content system." Immediate issues are: -- Tax -- E-money licenses -- Payments services directive -- Anti-money laundering -- Know-you-customer obligations * Information security and fraud Volume of E&M insolvencies per quarter 07 Q3 - 80 07 Q4 - 99 08 Q1 - 107 08 Q2 - 96 08 Q3 - 115 08 Q4 - 125 09 Q1 - 160 09 Q2 - 136 09 Q3 - 107 total - 1025 Volume of publishing insolvencies per quarter 07 Q3 - 17 07 Q4 - 35 08 Q1 - 36 08 Q2 - 30 08 Q3 - 34 08 Q4 - 29 09 Q1 - 43 09 Q2 - 35 09 Q3 - 47 total - 306 About PricewaterhouseCoopers PricewaterhouseCoopers -- http://www.pwc.com/-- provides industry-focused assurance, tax and advisory services to build public trust and enhance value for our clients and their stakeholders. More than 163,000 people in 151 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) or, as the context requires, the PricewaterhouseCoopers global network or other member firms in the network, each of which is a separate and independent legal entity. =============== X X X X X X X X =============== * IATA Sees US$5.6 Billion Airline Industry Loss in 2010 -------------------------------------------------------- The International Air Transport Association in Geneva revised its financial outlook for 2010 to an expected US$5.6 billion global net loss, larger than the previously forecast loss of US$3.8 billion. For 2009, IATA maintained its forecast of a US$11 billion net loss. "The world's airlines will lose US$11.0 billion in 2009. We are ending an Annus Horribilis that brings to a close the 10 challenging years of an aviation Decennis Horribilis. Between 2000 and 2009, airlines lost US$49.1 billion, which is an average of US$5.0 billion per year," said Giovanni Bisignani, IATA�s Director General and CEO. "The worst is likely behind us. For 2010, some key statistics are moving in the right direction. Demand will likely continue to improve and airlines are expected to drive down non-fuel unit costs by 1.3%. But fuel costs are rising and yields are a continuing disaster. Airlines will remain firmly in the red in 2010 with US$5.6 billion in losses," said Mr. Bisignani. The forecast highlights include: (A) Revenues: Industry revenues are expected to rise by US$22 billion (4.9%) to US$478 billion in 2010, compared to 2009. However, revenues remain US$57 billion (-11%) below the peak of US$535 billion in 2008 and US$30 billion below 2007 when passenger traffic was at similar levels to what is expected in 2010. (B) Passenger Demand: Following a decline of 4.1% in 2009, passenger traffic is expected to grow by 4.5% in 2010 (stronger than the previously forecast 3.2% in September). A total of 2.28 billion people are expected to fly in 2010, bringing total passenger numbers back in line with the peak recorded in 2007. (C) Cargo Demand: Cargo demand is expected to grow by 7% to 37.7 million tonnes in 2010 (stronger than the previously forecast 5% in September), following a 13% decline in 2009. Total freight volumes will remain 10% below the 41.8 million tonne peak recorded in 2007. Cargo demand is rising faster than world trade as depleted inventories are rebuilt. Once the inventory cycle completes, growth is expected to fall back in line with world trade. (D) Yields: In 2009, passenger and cargo yields plummeted by 12% and 15% respectively. Cargo yields are expected to improve by 0.9% in 2010. But passenger yields are not expected to improve from their extraordinary low level. This is being driven by two factors: excess capacity in the market and reduced corporate travel budgets. Capacity adjustments in 2009 were made at the expense of lower aircraft utilization (down 6%). An additional 1300 aircraft due for delivery in 2010 will contribute to 2.8% global capacity growth, putting continuing pressure on yields. On top of this, corporate travel buyers have adjusted their budgets to reflect lower premium fare levels. (E) Fuel: An average oil price of US$75.0 per barrel (Brent) is expected in 2010, up considerably from the US$61.8 average expected for 2009. As a percentage of operating costs, fuel will be 26% in 2010. This is considerably lower than the 32% of operating costs that fuel comprised in 2008, but twice the 13% of operating costs that fuel represented in 2001-2002. (F) Cash: Over 2009, the industry raised at least US$38 billion in cash (US$25 billion from capital markets and US$13 billion from aircraft sale and leasebacks). The ratio of cash to revenues improved for European and North American airlines, but was flat for Asia- Pacific carriers. This will provide a cash cushion for the approaching first quarter's seasonally weak traffic lows. "The number of travelers will be back to the peak levels of 2007, but with US$30 billion less in revenues. The US$38 billion cash cushion built up throughout this year will help airlines survive through the low season, but there is no recovery in sight for 2010. Tough times continue," said Mr. Bisignani. Regional Breakdown for 2010 While all regions except Africa will see an improvement in 2010 compared to 2009, performance will vary greatly as follows: (A) North American carriers will see losses reduced from US$2.9 billion in 2009 to US$2.0 billion in 2010. The relative improvement is largely the result of pricing power and cost reductions gained through capacity adjustments. (B) European carriers will generate the largest losses of any region at US$2.5 billion. This is an improvement over the US$3.5 billion loss that the region's carriers are expected to post in 2009. Slow economic recovery in the region combined with limited ability to adjust capacity due to airport slot regulations is hindering the region�s airlines. (C) Asia-Pacific carriers will post losses of US$700 million. Compared to losses of US$3.4 billion in 2009, this region is showing the most dramatic improvement. This is driven by a recovery in some of the region�s economies. For example, China�s GDP is forecast to grow by 9.0% in 2010. (D) Latin American carriers will be the only profitable regional grouping in both 2009 and 2010. The profit in each year is expected to be US$100 million. This is largely due to the benefit of relatively strong economies in South America and the efficiencies gained through regional airline structures. (E) Middle East carriers will see losses shrink from a US$1.2 billion loss in 2009 to a US$300 million deficit in 2010. A strong long-haul connection business over Middle East hubs will provide some insulation against the impacts of Dubai's financial difficulties. (F) African carriers will deliver a loss of US$100 million in 2010�consistent with the US$100 million loss of 2009. Relatively strong economies and increasingly liberal markets are being offset by competitiveness challenges. A Structural Adjustment "The industry is structurally out of balance. The precipitous fall in yields will likely never be fully recovered. It is difficult to see how this can be balanced on the cost-side of the equation. After almost a decade of cost cutting, non-fuel unit cost reductions will be incremental at best. And the risk of rising fuel costs will be constant. There will be some individual airline success stories. But without relaying the foundations of the industry to facilitate structural change, covering the cost of capital for this hyper-fragmented industry will remain a dream at best," said Mr. Bisignani. In November, seven countries (Chile, Malaysia, Panama, Singapore, Switzerland, the UAE and the US) signed a multilateral Statement of Policy Principles that was also endorsed by the European Commission. These principles represent a commitment by the signatories to modernize the industry and make cross border consolidation possible. They are premised on a level playing field which is a responsibility of governments. "Consolidation is the great hope for the industry. The round of consolidation experienced since this horrible decade began is a step in the right direction. But it has been confined within political borders as a result of ownership restrictions in the archaic bilateral system. The industry cannot afford the mounting losses of the status quo. The next decade must facilitate consolidation," said Mr. Bisignani. International Air Transport Association represents some 230 airlines comprising 93% of scheduled international air traffic. * Hogan & Hartson and Lovells to Merge Effective May 2010 --------------------------------------------------------- Hogan & Hartson LLP and Lovells announced on Tuesday their respective partnerships have approved the merger of their firms. The combined firms will be known as Hogan Lovells, effective May 1, 2010. Hogan Lovells will have total revenues of approximately US$1.8 billion and 2,500 lawyers in more than 40 offices throughout the United States, Europe, Asia, the Middle East, and Latin America. The proposed combination, which is the first transatlantic "merger of equals" in the legal sector, is seen by both firms as a progressive response to the increasing need by large multinational clients for high-quality legal advice on complex, cross-border transactions, disputes, and commercial matters. The proposed combination also reflects the increased emphasis on regulation in the global market place and the complex legal issues involved, in the U.S. and European Union markets particularly, but also in other markets such as China. The new Hogan Lovells will be jointly led by current Hogan & Hartson Chairman, Warren Gorrell, and Lovells Managing Partner, David Harris, as Co-CEOs. Hogan Lovells will be an international legal practice represented in all the major legal markets of the world and is expected to comprise Hogan Lovells U.S. LLP, Hogan Lovells International LLP, a Swiss Verein, and their affiliated businesses. "Hogan Lovells will have a global presence with high-quality practices and geographic depth unmatched in the market, including in the world�s major business and financial centers. At the same time, each firm will preserve its shared cultural and core values � collegiality, teamwork, and worldwide leadership in community service," said Warren Gorrell. According to David Harris, "Hogan Lovells presents a compelling proposition to our clients and to the market more generally. The new firm will have unrivalled global capability and distinctive strengths in dispute resolution, regulatory, antitrust, corporate, finance, intellectual property, and real estate. It will also provide clients with access to considerable industry knowledge and resource in key sectors, including energy, financial services, telecommunications, media and technology, life sciences and pharmaceutical, consumer goods, real estate, natural resources, and infrastructure." The combination is subject to the firms obtaining the necessary regulatory clearances. On the Net: http://www.lovells.com/ http://www.hhlaw.com/ ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Valerie C. Udtuhan, Marites O. Claro, Rousel Elaine C. Tumanda, Joy A. Agravante and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$625 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *