TCREUR_Public/100521.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

              Friday, May 21, 2010, Vol. 11, No. 099

                            Headlines



G E R M A N Y

COGNIS GMBH: Moody's Changes Outlook to Positive from Stable
COMMERZBANK AG: Shareholders Back Capital Measures
EVONIK DEGUSSA: S&P Affirms 'BB/B' Rating on Short-Term Credit


G R E E C E

* GREECE: Meets Debt Repayment Deadline; Uses EU Rescue Loans


H U N G A R Y

VERTESI: To Initiate Voluntary Liquidation Procedures in June


I R E L A N D

QUINN INSURANCE: CEO Colin Morgan Steps Down


L U X E M B O U R G

CEB CAPITAL: Fitch Puts 'BB-' Long-Term Rating on Senior Eurobond


R U S S I A

LEXEGRANT: S&P Removes 'B' Credit & Financial Strength Rating
MOBILE TELESYSTEMS: Fitch Assigns BB+ Rating on Proposed Eurobond


S P A I N

FONDO DE TITULIZACION: S&P Puts BB Rating on Class E Notes
REAL CLUB: Applies for Voluntary Administration


U N I T E D   K I N G D O M

ADDACABIN: Sold to Wernick Hire for More Than GBP6 Million
BUDDHA BAR: In Administration; 80 Jobs Affected
GENERAL MOTORS: 3,200 Vauxhall Workers May Face Wage Freeze
MATHIESONS BAKERIES: Sold to Consortium; 340 Jobs Secured
NEWCASTLE BUILDING: To Close Four Branches & Cut 126 Jobs

ROYAL BANK: Selling French Factoring Business to GE Capital
TRITON PLC: Fitch Junks Ratings on Four Classes of Notes


X X X X X X X X

* EUROPE: Germany to Push Insolvency Option for Euro Members
* EUROPE: Fitch Says Bank Regulations Concern Investors
* Moody's Changes Global Automotive industry Outlook to Positive

* BOOK REVIEW: The Executive Guide to Corporate Bankruptcy




                         *********


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G E R M A N Y
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COGNIS GMBH: Moody's Changes Outlook to Positive from Stable
------------------------------------------------------------
Moody's Investors Services changed the outlook on all ratings of
Cognis GmbH to Positive from Stable.  All ratings of the group
remain unchanged.

Against a backdrop of volatile trading conditions during the
course of fiscal year 2009 Cognis has proven the defensiveness of
its business profile and its ability to manage its business in a
very difficult environment.  Proactive measures to swiftly reduce
highly priced inventories and to rapidly adjust its cost base have
strongly leveraged the group to the relatively sharp upturn in
volumes over the last three to four quarters to 31st March 2010
leading to a solid recovery in debt and cash flow metrics.

On an LTM Q1 2010 basis Cognis is relatively solidly positioned
within our B3 rating category.  Moody's expects Q2 trading to
remain very solid further supporting a recovery in credit metrics.
Trading conditions and earnings for the second half of the year
should be softening sequentially on higher input costs flowing
through the P&L (3 to 6 months time lag on average), restored
seasonal trading patterns in the chemicals industry with a weaker
fourth quarter and a slowdown on restocking patterns.  Nonetheless
Moody's expects that Cognis will be able to further improve its
debt and cash flow metrics throughout the year strengthening the
case for a rating upgrade within the next twelve to eighteen
months. Positive rating pressure would arise if Cognis was to
reduce Debt / EBITDA sustainably below 6.0x and to generate RCF /
Net debt sustainably above 10%.

Moody's notes that our recovery expectation for the chemicals
industry and hence for Cognis is predicated upon a gradual
recovery in growth across all regions with continued stronger
growth patterns anticipated in emerging economies.  The strong
recovery in emerging market economies have been the main driver of
the recovery in the European Chemicals industry.  The derailing of
emerging economies growth and / or a reversal in the recovery of
developed economies, which are concurrently considered as tail
risks could invalidate our assumption underlying the assignment of
a positive outlook to Cognis.

The liquidity position of Cognis is good.  The liquidity of the
group is mainly supported by a cash position of EUR338 million at
the end of Q1 2010.  Over the next twelve months liquidity
requirements mainly consisting of capex and working capital are
expected to be met from operating cash flows, cash on balance
sheet as well as availabilities under the group's Revolving Credit
Facility (EUR250 million of which EUR201 million was available at
fiscal year-end 2009).  Cognis faces no major short-term
maturities and maintains substantial headroom under its financial
covenants.

The last rating action was on 17th June 2009, when Cognis GmbH was
downgraded from B2 to B3.

Cognis GmbH, headquartered in Monheim, Germany, is a global
specialty chemicals producer with leading market positions in
natural-oil based chemicals.  Cognis reported revenues of EUR2,584
million and a recurring EBITDA of EUR364 million for the fiscal
year ended 31st December 2009.


COMMERZBANK AG: Shareholders Back Capital Measures
--------------------------------------------------
William Launder of Dow Jones Newswires reports that Germany's
Commerzbank AG late Wednesday said its shareholders had approved a
proposal that allows it to raise additional capital more flexibly
and sets the bank up to begin repaying its bailout from the German
government.

According to Dow Jones, the approval gives Commerzbank
authorization to raise capital of up to a nominal value of
EUR1.535 billion, or around 590 million shares.

Dow Jones says the measures, approved by shareholders at
Commerzbank's annual general meeting, further authorize the bank
to issue conditional capital such as convertible bonds with a
nominal value of up to EUR4 billion.

Dow Jones relates Commerzbank Chief Executive Martin Blessing said
earlier Wednesday that the measures would help the bank repay its
state aid more effectively.  Dow Jones adds that Mr. Blessing
reiterated the bank wants to begin repaying its bailout by 2012 at
the latest.

Conversion rights were also approved to ensure that Germany's
market stabilization fund, or SoFFin, initially maintains its
stake ownership of Commerzbank in the event of a capital increase,
Dow Jones states.

Germany owns a 25%-plus-one-share stake in Commerzbank after
providing it with a EUR18.2 billion bailout to survive the crisis,
Dow Jones discloses.

Headquartered in Frankfurt am Main, Germany, Commerzbank AG --
http://www.commerzbank.com/-- is the parent company of a
financial services group active around the world.  The group's
operating business is organized into six segments providing each
other with mutually beneficial synergies: Private and Business
Customers, Mittelstandsbank, Central and Eastern Europe ,
Corporates & Markets, Commercial Real Estate and Public Finance
and Treasury.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on May 6,
2010, Fitch Ratings affirmed Germany-based Commerzbank AG's Long-
term Issuer Default Rating at 'A+' with a Stable Outlook and
Short-term IDR at 'F1+'.  At the same time, the Individual rating
was upgraded to 'D' from 'D/E'.


EVONIK DEGUSSA: S&P Affirms 'BB/B' Rating on Short-Term Credit
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook to positive
from stable on German chemical company Evonik Degussa GmbH, which
is 100% owned by Evonik Industries AG (Evonik).  At the same time,
S&P affirmed its 'BB/B' long-and short-term corporate credit
ratings on Evonik Degussa and the 'BB' issue rating on the
group's 1.25 billion bond.  The '4' recovery rating on the bond
remains unchanged, indicating our expectation of average (30%-50%)
recovery in the event of a payment default.

"Our outlook revision follows our review of Evonik Degussa's
strategic plan and takes into account our expectations for
stronger credit metrics in 2010 against last year's levels," said
Standard & Poor's credit analyst Karl Nietvelt.  "We anticipate
adjusted funds from operations (FFO) to debt at approximately 20%
this year (versus 15.5% in 2009)."

Underpinning this are the following developments:

    * Strong operating resilience in 2009.  EBITDA from core
      chemical activities was flat at 1.6 billion, helped by sharp
      cost cuts and the favorable supply-demand balance in the
      health & nutrition segment.

    * Record first-quarter 2010 operating profits and margins.
      These point to a strong 2010, although S&P is assuming
      profits will come down again in the second half of the year.

    * The large ?1.2 billion reduction in reported net financial
      debt achieved in 2009, helped by sizable working capital
      inflows.  Fully adjusted net debt was down 0.8 billion year-
      on-year, totaling a still high ?6.6 billion at 2009, of
      which a major part--?4 billion--relates to unfunded pension
      obligations.

    * Increased clarity on the group's strategy and financial
      policy, with an increased focus on core chemical activities.
      Management has not ruled out potential partial disposals of
      energy or real estate activities.  Although not factored in
      at this stage, any future disposal proceeds could improve
      Evonik's currently still high leverage.

The ratings on Evonik Degussa reflect its full ownership by
Evonik, the Germany-based industrial conglomerate operating in
chemicals, energy, and real estate.

S&P said, "We think Evonik's 2010 EBITDA performance will be
strong: Unadjusted EBITDA excluding exceptional items is likely to
exceed 2.3 billion."

"The positive outlook takes into account the potential for near-
term rating upside, if we perceive that credit metrics will
strengthen, either because of sustained strong operating
performance or further debt reductions," said Mr. Nietvelt.

S&P said, "At the 'BB+' level we would see a ratio of fully-
adjusted FFO to debt at 20% or above as commensurate."

"The outlook also factors in management's clarified strategy and
focus, which we think will likely further strengthen Evonik's
balance sheet.  We view the group's noncore energy and real estate
assets as providing further financial flexibility and deleveraging
potential, although we have not factored in any potential disposal
proceeds at this stage," said Mr. Nietvelt.

A return to a stable outlook could follow an unexpected material
drop in chemical profits or an FFO-to-debt ratio closer to 15%.


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G R E E C E
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* GREECE: Meets Debt Repayment Deadline; Uses EU Rescue Loans
-------------------------------------------------------------
Nicholas Paphitis at The Associated Press reports that Greece
managed to pay off its creditors Wednesday by using billions of
euros from the EU-led rescue package aimed at containing the debt
crisis.

According to the report, finance ministry sources said the
government redeemed EUR8.5 billion (US$10.43 billion) in expiring
10-year state bonds, which it was unable to raise without outside
assistance as wary investors have sent Greek borrowing costs sky-
high.

The report recalls the country on Tuesday received EUR14.5 billion
(US$18 billion) from 10 of the other 15 European Union countries
that use the euro.  The loans are part of a EUR110 billion (US$136
billion) joint EU and International Monetary Fund rescue package,
the report notes.

The report relates Greek Prime Minister George Papandreou said the
bailout had earned the heavily indebted country time to sort
itself out fiscally.


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H U N G A R Y
=============


VERTESI: To Initiate Voluntary Liquidation Procedures in June
-------------------------------------------------------------
MTI-Econews reports that at Vertesi power plant's extraordinary
general meeting on Tuesday, shareholders decided to begin
preparations for launching voluntary liquidation procedures.

According to MTI, MVM, Vertesi's principal shareholder, said the
Hungarian power plant will formally initiate voluntary liquidation
procedures at the company's next EGM in June.

MTI says Vertesi can carry on with coal-mining until the end of
this year, and electricity generation could continue for three
years, within the legal time frame of the liquidation process.

MTI notes MVM said the shareholders had appointed Jozsef Magyari
to replace Pal Szabo as the company's CEO.

According to Platts, due in part to a steep fall in electricity
prices, Vertesi posted losses of HUF3.4 billion last year.  The
company has received an estimated HUF120 billion in subsidies over
the past decade, in the form of coal subsidies or capital
injections from MVM, Platts discloses.

Vertesi, commissioned in 1961, is one of Hungary's few remaining
coal-fired plants, and operates the country's only deep-mined
coalmine.  In addition to electricity generation, the plant also
has 84 MW heating capacity, providing heat to Oroszlany, a former
heavy-industry city of 21,000 people, according to Platts.


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I R E L A N D
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QUINN INSURANCE: CEO Colin Morgan Steps Down
--------------------------------------------
BBC News reports that Colin Morgan, CEO of Quinn Insurance, has
decided to step down from the company.

"I feel it is an opportune time for me to pursue other
opportunities in my career," BBC quoted Mr. Morgan, who has been
at the firm for seven years, as saying.  "I have enjoyed the
successes and challenges at Quinn Insurance and firmly believe
that this business will recover from its current difficulties and,
in some form or other, go on to achieve long term success given
the strength of the business model and the quality of the people."

BBC relates earlier this week the Irish financial regulator said
the prices Quinn Insurance charged were too low for the firm to
meet potential claims.

On May 18, 2010, the Troubled Company Reporter-Europe, citing
Tribune Business, reported that the joint administrators to Quinn
Insurance have submitted a new business plan to the financial
regulator that would allow the company to reopen its commercial
insurance lines in the UK.

As reported by the Troubled Company Reporter-Europe on April 19,
2010, The Financial Times said Quinn Insurance was put into
administration on April 15 after Sean Quinn abandoned attempts to
keep control of the family-owned company.

Quinn Insurance is owned by Sean Quinn, Ireland's richest man, and
his family.  The company has just more than 20% of the motor and
health insurance market in Ireland.  It has more than one million
customers in the country.  Employing almost 2,800 people in
Britain and Ireland, it was founded in 1996 and entered the UK
market in 2004, according to The Times.


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L U X E M B O U R G
===================


CEB CAPITAL: Fitch Puts 'BB-' Long-Term Rating on Senior Eurobond
-----------------------------------------------------------------
Fitch Ratings has assigned CEB Capital S.A.'s US$300 million 7.75%
issue of limited recourse loan participation notes a final Long-
term 'BB-' rating.  The notes are due on May 20, 2013, but the
note-holders have a put option exercisable on May 20, 2012.  The
proceeds are to be used solely for financing a loan to Russia's
Credit Europe Bank Ltd.  (CEBR), rated Long-term foreign and local
currency Issuer Default (IDR) 'BB-', Short-term foreign currency
IDR 'B', Support '3', Individual 'D', and National Long-term
'A+(rus)'.  The Outlooks for CEBR's Long-term IDRs and National
Long-term rating are Stable.


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


LEXEGRANT: S&P Removes 'B' Credit & Financial Strength Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services removed its 'B' long-term
counterparty credit and insurer financial strength ratings and the
'ruA-' Russia national scale rating on LEXGARANT from CreditWatch,
where they had been placed with negative implications on Aug. 11,
2009.  At the same time, the ratings were affirmed.  The outlook
is stable.

"The removal from CreditWatch and affirmation reflect the
improvement of LEXGARANT's liquidity because of the resolution in
May 2010 of a legal dispute over a cash deposit of US$5 million,"
said Standard & Poor's credit analyst Victor Nikolskiy.  "The full
cash amount was restored to the company's accounts."

The ratings continue to reflect LEXGARANT's small size and limited
franchise, small capital base, and low-quality investments.  They
also reflect persistently high industry risk in the aviation
insurance business.

These negative factors are counterbalanced by the company's
relative resilience to country risk, in our view, owing to the
geographic diversity of its portfolio.  Still-high industry risk
is somewhat mitigated by continued diversification into new lines
of business.  In addition, LEXGARANT continues to exploit what S&P
considers to be its currently good reinsurance protection.

"The stable outlook reflects our expectation that LEXGARANT will
continue to maintain its position in its niche market and its
current capitalization, supported by good reinsurance protection,"
said Mr. Nikolskiy.

S&P said, "We would consider revising the outlook to positive if
LEXGARANT develops stronger competitive advantages, either through
organic growth or possible acquisitions; improves capitalization,
including the impact of revaluation of fixed assets to fair value;
and improves the quality and diversification of its investment
portfolio."

Conversely, any significant and sustained deterioration in
earnings, capitalization, or investment-portfolio quality could
lead to negative rating actions.


MOBILE TELESYSTEMS: Fitch Assigns BB+ Rating on Proposed Eurobond
-----------------------------------------------------------------
Fitch Ratings has assigned OJSC Mobile TeleSystems's (MTS)
proposed loan participation notes, totaling up to US$1.2 billion
and with a headline maturity of up to 15 years, an expected senior
unsecured foreign currency rating of 'BB+'.  (MTS is rated Long-
term Issuer Default Rating (IDR) 'BB+' with a Stable Outlook,
Short-term IDR 'B' and National Long-term rating 'AA(rus)' with a
Stable Outlook.)

The loan participation notes (notes) will be issued by MTS
International Funding Limited, an SPV domiciled in Ireland.  The
SPV will be restricted in its ability to do business other than
issue notes and provide loans to MTS.  The notes will be secured
by a loan to MTS which will rank equally with other senior
unsecured obligations of MTS.  The loan will contain a number of
restrictive covenants including, inter alia, negative pledge,
change of control clause, cross-default to other debt with a total
limit of US$15 million, limitation on assets sales, but no
financial covenants.

The final rating is contingent on the receipt of final documents
conforming to information already received.

MTS's ratings reflect sound competitive strengths and strong
market positions in all the countries where it operates.  Fitch
expects MTS to maintain healthy EBITDA margins and that its
revenue will demonstrate strong resilience in the challenging
macroeconomic environment.  The company's exposure to parent JSFC
Sistema's ('BB-'/Stable) group-wide risks, which are associated
with the lower credit quality of Sistema's other subsidiaries, and
the possible influence of Sistema on MTS's capital structure are
viewed by Fitch as a significant credit constraint.


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S P A I N
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FONDO DE TITULIZACION: S&P Puts BB Rating on Class E Notes
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary credit
ratings to Fondo de Titulizacion de Activos Santander Hipotecario
6's 1,050 million mortgage-backed floating-rate notes.  In
addition, Santander Hipotecario 6 will issue an overissuance of
210 million floating-rate class F notes.

This will be the Santander group's 27th securitization over its
residential mortgage portfolio.

Santander Hipotecario 6 will purchase mortgage transmission
certificates from the participation issuer, Banco Santander S.A.
(Santander; AA/Negative/A-1+) and will issue six classes of
floating-rate notes.

Santander originated the pool of first-ranking mortgages secured
over residential properties in Spain that back the notes.  The
class F notes will fund the reserve fund and will be repaid with
excess spread.  The swap agreement will provide credit enhancement
to the transaction by providing additional excess spread and
adjusted notional.

The transaction will use the proceeds from the principal and
interest on the loans to pay interest and principal on the notes.
However, to protect the most senior notes, the priority of
payments will feature a trigger based on the amount of loans that
are more than 18 months past due.  Under certain stress
scenarios, this will protect the most senior tranches.

The transaction will also feature an artificial write-off
mechanism, whereby the outstanding balance of loans more than 18
months past due will be added to the amortization amount of the
notes, and therefore the notes will pay at a
faster pace.  The notes will pay sequentially.

Rating List

Fondo de Titulizacion de Activos Santander Hipotecario 6
1,050 Million Mortgage-Backed Floating-Rate Notes And An
Overissuance Of 210 Million Floating-Rate Notes

Class          Prelim.         Prelim.
                rating          amount
                                (mil.)
-----          -------         ------
A              AAA              871.5
B              AA                63.0
C              A                 52.5
D              BBB               42.0
E              BB                21.0
F(1)           CCC-             210.0

(1)The class F note proceeds will fully fund the reserve fund at
closing.


REAL CLUB: Applies for Voluntary Administration
-----------------------------------------------
The Associated Press reports that Spanish football club Real Club
Deportivo Mallorca, S.A.D. said it is bankrupt and has applied to
go into voluntary administration.

According to the report, Mateo Alemany, Mallorca's majority
shareholder, said using the bankruptcy law "is a solution, not a
problem" for a club that has debts of a reported EUR60 million
(C$78 million) and was "in danger of disappearing."

The report notes Mr. Alemany said there are several interested
buyers but he has "little hope that a sale can be done."

Real Club Deportivo Mallorca, S.A.D. is a Spanish football team
from Palma (Majorca).  Founded on March 5, 1916, it currently
plays in the Spanish first division.


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


ADDACABIN: Sold to Wernick Hire for More Than GBP6 Million
----------------------------------------------------------
The Scotsman reports that Blair Nimmo and Gary Fraser of KPMG
Restructuring, joint administrators of Addacabin, have sold the
business and its assets to Wernick Hire for more than GBP6
million.

According to The Scotsman, all 16 employees have been transferred
to the new owner.

The Scotsman recalls KPMG was appointed as administrator of the
company on February 17.

Based in Glenrothes, Addacabin hires out cabins to construction
companies and local authorities, according to The Scotsman.


BUDDHA BAR: In Administration; 80 Jobs Affected
-----------------------------------------------
Event Magazine reports that Buddha Bar has gone into
administration, resulting in the loss of 80 jobs.

Event Magazine relates Baker Tilly was appointed administrator of
the company, which lost nearly GBP1.4 million in 2008.

Buddha Bar was owned by property and leisure tycoon Simon Halabi
and was run under the umbrella of Paris based restaurant and bar
collective George V Eatertainment, according to Event Magazine.


GENERAL MOTORS: 3,200 Vauxhall Workers May Face Wage Freeze
-----------------------------------------------------------
Robert Lea at The Times reports that more than 3,200 Vauxhall
workers are bracing themselves for a two-year wage freeze.

According to the report, Vauxhall's parent company, the
Opel/Vauxhall European division of General Motors, said that it
was close to a deal with unions, which have been told that the
company needs to find EUR265 million (GBP225 million) a year in
savings from its workers, mainly in Germany, Spain and Britain.

The report says it is believed that British union representatives
are close to agreeing a deal that will keep wages at the same
level for the next two years.  Other workers in the Opel group are
expected to have to accept pay cuts, the report states.

The report relates a statement Wednesday night from Opel's
headquarters in Ruesselsheim, Germany, said that the company had
laid down a framework agreement with its European Employee Forum,
which includes staff representatives from all its plants.

"The parties made good progress and during the next days,
management and employee representatives will work towards a final
agreement," the report quoted Opel as saying.  "At this point,
details of the proposed agreement cannot be disclosed."

                        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 December 31, 2009, GM had total assets of US$136.295 billion
against total liabilities of US$107.340 billion.  At December 31,
2009, total equity was US$21.249 million.

                 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)


MATHIESONS BAKERIES: Sold to Consortium; 340 Jobs Secured
---------------------------------------------------------
Rachael Singh at Accountancy Age reports that Deloitte
administrators have sold Mathiesons Bakeries as a going concern
for an undisclosed sum, securing approximately 340 jobs at the
Scottish bakery.

According to Accountancy Age, John Reid and Brian Milne, joint
administrators of Mathiesons Bakeries, were able to seal the deal
with a consortium of bakery companies, now called Mathiesons
Foods.

The consortium comprises of James Allan Bakers owned by Mark
Bradford and Murdoch Allan Bakers run by Paul Allan, Accountancy
Age says, citing Insider Magazine.

"The deal represents the best outcome for the creditors of the
company and preserves the employment of around 340 employees,"
Accountancy Age quoted Mr. Reid as saying.

As reported by the Troubled Company Reporter-Europe, The Scotsman
said Mathiesons Bakeries went into administration on March 2.  The
Scotsman disclosed that in a statement, Deloitte said that
Mathiesons, which has previously had revenues of GBP9 million a
year, had been "unable to support an over-burdened cost base".

Based in Stirlingshire, Mathiesons Bakeries made a range of
products from cakes and pastries to savories.  It was established
in Falkirk in 1872, according to The Scotsman.


NEWCASTLE BUILDING: To Close Four Branches & Cut 126 Jobs
---------------------------------------------------------
BBC News reports that Newcastle Building Society is to close four
branches and cut 126 jobs.  According to the report, management
said the cuts were due to a "challenging climate" in the finance
sector.

Branches to close include West Road in Newcastle, Crook in County
Durham, Yarm in Stockton-on-Tees and York, the report discloses.

The pension scheme for active members will also close, the report
says.  Union, Unite, said it would meet with the building society,
the report notes.

The Newcastle Building Society -- http://www.newcastle.co.uk/--
provides mortgage, investment, insurance, and other finance
management services throughout the UK.  Expanding beyond
traditional building society walls, the company launched two
subsidiaries in recent years: Newcastle Financial Services, which
provides life, investment, and pension products, and Newcastle
Strategic Solutions, which offers consulting services in such
areas as call centers, commercial lending, mortgage brokering,
online banking, processing, and product development. The society
traces its roots back to 1861.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on April 26,
2010, Fitch Ratings upgraded UK-based Newcastle Building Society's
dated subordinated (lower tier 2; LT2) notes, maturing in 2019, to
'BB' from 'B-' and removed them from Rating Watch Negative.


ROYAL BANK: Selling French Factoring Business to GE Capital
-----------------------------------------------------------
The Scotsman reports that Royal Bank of Scotland has agreed to
sell its French factoring business to US-based finance firm GE
Capital.

The sale price of the French business was undisclosed but thought
to be between GBP50 million and GBP100 million, the report notes.

The French factor division, which RBS described as "non-core", had
gross assets of about GBP606 million as of December 31, the report
discloses.

                            About RBS

The Royal Bank of Scotland Group plc (NYSE:RBS) --
http://www.rbs.com/-- is a holding company of The Royal Bank of
Scotland plc (Royal Bank) and National Westminster Bank Plc
(NatWest), which are United Kingdom-based clearing banks.  The
company's activities are organized in six business divisions:
Corporate Markets (comprising Global Banking and Markets and
United Kingdom Corporate Banking), Retail Markets (comprising
Retail and Wealth Management), Ulster Bank, Citizens, RBS
Insurance and Manufacturing.  On October 17, 2007, RFS Holdings
B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V.,
Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and
controlled by RBS, completed the acquisition of ABN AMRO Holding
N.V. (ABN AMRO).  In July 2008, the company disposed of its entire
interest in Global Voice Group Ltd.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on March 29,
2010, Standard & Poor's Ratings Services said that it lowered its
ratings on "may pay" Tier 1 securities issued or guaranteed by The
Royal Bank of Scotland Group PLC (A/Stable/A-1) to 'C' from 'CC'.
At the same time, the rating on the RBSG-related security issued
by Argon Capital PLC was similarly lowered to 'C' from 'CC'.  The
counterparty credit ratings and stand-alone credit profiles of
RBSG and subsidiaries, and the ratings on other debt securities
issued by these entities, are unaffected.


TRITON PLC: Fitch Junks Ratings on Four Classes of Notes
--------------------------------------------------------
Fitch Ratings has downgraded all floating rate notes in Triton
(European Loan Conduit No. 26) plc as shown in the table below.
Recovery ratings (RR) have been assigned to the 'CCC' and 'CC'-
rated tranches.  The Outlooks on Classes A, B, C and D remain
Negative to reflect the uncertainty regarding the outcomes of the
upcoming loan maturities in 2011.  At the same time, the class X
certificates have been affirmed at 'AAA' with a Stable Outlook.

-- GBP335.5m Class A1 (XS0294625008) downgraded to 'A' from 'AA';
    Outlook Negative;

-- Class X affirmed at 'AAA'; Outlook Stable;

-- GBP99.4m Class A2 (XS0294602486) downgraded to 'A' from 'AA';
    Outlook Negative;

-- USD87.3m Class B (XS0294620207) downgraded to 'BBB' from 'A';
    Outlook Negative;

-- GBP39.2m Class C (XS0294603294) downgrade to 'B' from 'BBB+';
    Outlook Negative;

-- GBP9.9m Class D (XS0294603708) downgraded to 'B' from 'BBB':
    Outlook Negative;

-- GBP20.0m Class E (XS0294604185) downgraded to 'CCC' from
    'BBB-'; RR4;

-- GBP10.4m Class F (XS0294604771) downgraded to 'CC' from 'BB+';
    RR6;

-- GBP20.8m Class G (XS0294607287) downgraded to 'CC' from 'BB';
    RR6; and

-- GBP18.3m Class H (XS0294608335) downgraded to 'CC' from 'B';
    RR6.

The rating actions reflect Fitch's estimate of declines in the
transaction's collateral value: the weighted-average (WA) Fitch
loan-to-value ratio (LTV) stands at 105% compared to a WA reported
LTV of 83% in April 2010.  While the Devonshire Square, Sanctuary
and Nextra loans are all secured by prime or strong secondary
quality London office assets, the agency believes these assets
have suffered an overall decline in market value since the last
review in January 2009 despite the stabilization of prime yields
in recent months.  The collateral for the fourth loan, the Access
loan, is secured by secondary-quality self storage units and is
therefore exposed to continued decline in the value of such
assets.

The high WA Fitch LTV is of particular concern given that the
Devonshire Square and Sanctuary loans, which together account for
two thirds of the current loan balance, are both scheduled to
mature in 2011.  The continued scarcity of new bank lending for
high LTV loans implies that, absent material improvements in
collateral value, significant equity injections will be necessary
in order to ensure an orderly repayment of the loans at their
respective maturity dates.  This situation is exacerbated by the
presence of subordinated B-notes on three of the four loans, which
further increases the WA Fitch LTV to 123%.

Income trends on the overall transaction remain stable to
positive.  Over the past year the net operating income (NOI) has
increased marginally by 2% and the WA vacancy rate has improved to
13% from 15%.  Consequently, the WA interest coverage ratio (ICR)
has improved to 1.96x from 1.60x, partly due to significant
improvements in the ICR on the floating-rate Nextra loan.  The WA
lease term remains strong at 15.2 years.


===============
X X X X X X X X
===============


* EUROPE: Germany to Push Insolvency Option for Euro Members
------------------------------------------------------------
Germany is proposing the option of "orderly state insolvency" for
euro-area countries as governments seek to learn lessons from
Europe's debt crisis, Tony Czuczka and Brian Parkin at Bloomberg
News report, citing a Finance Ministry document.

Bloomberg says the proposal is part of a German position paper for
a European Union meeting today, May 21, in Brussels to discuss
ways to tighten rules for the euro and avoid a repeat of the
fiscal crisis touched off by Greece's budget deficit.

"A procedure for an orderly state insolvency must be a
major element of a permanent crisis management framework for the
euro zone," the document said, according to Bloomberg. "This
creates incentives for solid fiscal policy by countries and
incentives for responsible issuing of credit by financial-market
participants."


* EUROPE: Fitch Says Bank Regulations Concern Investors
-------------------------------------------------------
Fitch Ratings said that its quarterly fixed income investor survey
shows European investors believe regulatory reform poses the
greatest risk to bank credit quality over the next 12 months.
"Regulation remains a concern to investors, with 83% believing
proposed changes represent critical or important risks to the
credit quality of the bank sector," said Monica Insoll, Managing
Director in Fitch's Credit Market Research group.  New rules for
banks rank just ahead of macro economic risk, which is seen as a
threat by 81% of respondents.  Investor sensitivity to both
regulation and the economic outlook increased marginally from the
already elevated levels reported in the Q110 survey.

"Lack of consensus on the appropriate regulatory responses to the
financial crisis is in part due to lack of agreement about the
fundamental causes of the crisis," said Gerry Rawcliffe, Group
Credit Officer for Financial Institutions at Fitch Ratings.  "The
lack of clarity regarding the response is creating a high degree
of uncertainty, which is never positive for financial markets."

Most progress has been made in micro-prudential regulation,
primarily stricter capital requirements for market risk and
securitization; heightened risk management requirements; new
liquidity standards; the introduction of a leverage ratio and a
stricter definition of regulatory capital.  One reason for the
progress on this front is that the Basel Committee exists as a
long-standing international structure within which measures of
this type are handled.  Details and timing remain to be fixed,
although the current aim is for new standards to be phased in by
end-2012, provided that economic recovery is assured.

Regulatory progress on more macro-level issues is likely to be
slower.  The ramifications are greater, especially in those areas
that deal both with the structure of individual firms and of the
banking industry as a whole as well as some key markets in
derivative products.  A notable development will be in the
evolution of resolution regimes, which were largely found wanting
in the face of the crisis, especially in their ability to deal
with large complex financial institutions.  These are among the
most internationally-oriented enterprises in existence, but
addressing the problem that Bank of England governor Mervyn King
defined as "global in life, national in death," will be a major
task.

Changes to resolution regimes may provide that certain bank
creditors have to share the costs of bank failure.  In the current
crisis the costs were largely covered by taxpayers.  Such changes
could have potentially serious implications for bank investors
across the capital and funding structure.


* Moody's Changes Global Automotive industry Outlook to Positive
----------------------------------------------------------------
Moody's Investors Service changed the outlook for the global
automotive industry to positive from stable.  This outlook
expresses Moody's expectations for the fundamental credit
conditions in the industry over the next 12-18 months.

The change in the industry-wide outlook was prompted by Moody's
view that trends in volumes, demand and prices in the auto
industry have recovered faster than the rating agency had
anticipated earlier in the year.  "Indeed, volumes in China and
Brazil in particular have improved, and western Europe is holding
up better than expected so far," said Falk Frey, senior vice
president in Moody's Corporate Finance Group.  "Moreover, the US
is on track toward recovery and Japan continues to benefit from
incentives," Mr. Frey added.

As regards unit sales of global light vehicles, Moody's has raised
its base case forecast for 2010 largely based on continued strong
demand in China.  Specifically, the rating agency expects global
unit sales volumes of 67.6 million -- or a 5.5% increase over 2009
unit sales -- compared with its previous forecast of 65.3 million
units, or a 2% increase.

Although Moody's view of light vehicle unit sales in Western
Europe has improved, the rating agency still expect them to
decline vs. 2009, mainly due to the end of government scrapping
schemes.  Moody's also expects European volumes to decline by 12%
in 2010, compared with its earlier forecast of a 15% drop.

In terms of Original Equipment Manufacturers, Moody's believes
that greater demand, together with the effect of re-stocking, will
lead to better capacity utilization rates and thus improved
profitability.  Moody's views the situation as further developed
in the US, where restructuring has led to meaningful cuts in
capacity, compared with Europe, where structural capacity changes
have yet to occur.  Moreover, the rating agency says that rising
prices of raw materials, especially steel, could become a concern
for OEMs towards the end of 2010.  "Overall, the industry will
still be operating at below break-even operating profit levels in
2010," predicted Mr. Frey.

According to Moody's, the price/mix effect is becoming more
favorable for auto manufacturers.  The government-sponsored
incentives that propped up sales of smaller cars have largely been
phased out. Consumers are again purchasing larger vehicles, or
adding expensive options to smaller, more fuel-efficient cars.

"Overall, in view of the volatile nature of the industry's demand
cycles, the recovery in the global auto sector appears to be
stronger than that of the broader economy in many regions," said
Mr. Frey.  However, in Europe, Moody's will monitor the impact of
the sovereign debt crisis in terms of the availability of funding
for the financing arms of the car companies as well as further
economic recovery .


* BOOK REVIEW: The Executive Guide to Corporate Bankruptcy
----------------------------------------------------------
Authors: Thomas J. Salerno; Craig D. Hansen; Jordan A. Kroop
Publisher: Beard Books
Hardcover: 728 pages
List Price: US$174.95

The newly revised edition of The Executive Guide To Corporate
Bankruptcy is perfectly timed.  As the global economy continues to
deteriorate, more and more companies are sinking into insolvency
with executives at their helm who need a crash course in
bankruptcy realities.  This excellent book will quickly get both
the seasoned executive and the uninitiated lawyer up to speed on
the bankruptcy process.

Salerno, Kroop and Hansen understand that the reorganization
process can be intimidating, puzzling, and generally unpleasant.
They penetrate the opaque gloom that some lawyers tend to
perpetuate.  Each chapter of this book addresses a different
aspect of the reorganization process, beginning with an overview
of the origins and purpose of US bankruptcy laws and ending with a
debunking of common myths about reorganization.  In between, they
discuss each chapter of the bankruptcy code; discussing the gamut
from liquidations through Chapter 11 sales and full-blown
reorganizations.  The authors' ability to distill the bankruptcy
code's complex language into comprehensible and manageable blocks
of information makes the book extremely readable.

The Executive Guide is full of pragmatic advice.  After laying out
the essential elements and key players in the restructuring
process, the authors get down to the nitty gritty of navigating a
distressed company through reorganization.  They realistically
assess the challenges that an executive should expect to face in
Chapter 11.  They discuss how to assuage and balance the concerns
of employees and key vendors, address the inevitable creditor
dissatisfaction with executive compensation, deal with members of
their professional team and work effectively as an executive whose
actions will be constantly scrutinized and second-guessed.  The
authors also provide the cautionary note that "executives
preparing to embark on a reorganization are usually too
preoccupied with business emergencies to think about the personal
toll that the process will exact."

One common flaw in books that try to be accessible while dealing
with technical topics is that they fall short in providing the
reader with a substantive understanding of the subject matter.
The Executive Guide to Corporate Bankruptcy avoids this pitfall.
The book's fourth and fifth chapters provide in-depth analysis of
the strategic decisions and steps that should be taken during the
restructuring process.  The authors explain the importance that
venue can have a case, the intricacies of first day motions and
how to prepare for confirmation.  There is a detailed discussion
of the sale of assets during the course of a Chapter 11
restructuring and the importance of making sure that major
constituencies are a part of the decision-making process.  They
also walk the reader through the specifics of a plan of a
reorganization, explaining the dynamics of the negotiation
process, especially how to understand and appreciate the needs of
your constituents and how to get a plan confirmed.

The icing on the cake for this book is the excellent appendix.
The final section of the book includes a user-friendly glossary of
commonly used bankruptcy terms and a reorganization timeline.  It
also includes sample documents such as debtor-in-possession (DIP)
financing agreements, operating reports, first day motions and
orders, management severance agreements, and more.  The summary of
management incentive stock plans implemented in recent
restructuring transactions is particularly informative.

This is a terrific book.  While geared to the non-lawyer
executive, it will also be a useful resource for any lawyer who
wants to gain practical familiarity with the bankruptcy process.
This should be a best seller in today's environment, though it may
need to be delivered to most executives in a brown paper wrapper.


                            *********

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.  Joy A. Agravante, Valerie U. Pascual, Marites O.
Claro, Rousel Elaine T. Fernandez, Frauline S. Abangan and Peter
A. Chapman, Editors.

Copyright 2010.  All rights reserved.  ISSN 1529-2754.

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

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

The TCR Europe subscription rate is US$625 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each.  For subscription information,
contact Christopher Beard at 240/629-3300.


                 * * * End of Transmission * * *