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                           E U R O P E

           Thursday, June 10, 2010, Vol. 11, No. 113

                            Headlines



F R A N C E

PEUGEOT CITROEN: Arranges New EUR1.8 Billion Refinancing Loan
VALEO SA: Expects to Achieve EUR4.7 Bil. Sales in 1H 2010


G E R M A N Y

ARCANDOR AG: Berggruen Inks Deal to Acquire Karstadt Unit
EDSCHA NORTH AMERICA: Seeks Exclusivity Until August 6
LEHMAN BROTHERS BANKHAUS: Holds 4.9% of Electronic Sensor Shares


I R E L A N D

ANGLO IRISH: Collapse Would Have Led Other Banks' Cash-Strapped
BELGARD MOTORS: Former HQ Building, Service Center Up for Sale
BLACK SHORE: Anglo Opposes Survival Schemes for Two Companies


R U S S I A

MOBILE TELESYSTEMS: Posts US$381-Mil. Net Income in Q1 2010
PROGNOZ SILVER: Begins Bankruptcy Procedures, High River Discloses


U N I T E D   K I N G D O M

BARCLAYS BANK: Moody's Upgrades Subordinated Debt Ratings From Ba3
BP PLC: Oil Spill Prompts Calls for Bankruptcy, Receivership
BRITISH AIRWAYS: Cabin Crew Divided Over Further Strikes
CRYSTAL PALACE: Completes Sale of Selhurst Park to Consortium
DUNFERMLINE: Parent Group Closes Offices; 325 Jobs Affected

HAVELOCK EUROPA: To Move to Aim Under Cost-Cutting Plan
HIGHLAND QUALITY: 77 Jobs Axed; Administrators Seek Buyers
NORTHERN ROCK: To Cut 650 Jobs by the End of Year
PORTSMOUTH FOOTBALL: HMRC Set to Reject Repayment Offer
ROYAL BANK: Gauges Investor Support on Issuance of Covered Bonds

ROYAL BANK: Draws Up Shortlists of Bidders for Two Businesses

* UK: Clubs Must File Accounts on Time or Face Transfer Embargo
* UK: Pub and Bar Industry Insolvencies Continue to Soar
* UK: FSA Stress-Testing Firms' Exposure to European Markets


X X X X X X X X

* EUROPE: Rescue Fund Created to Halt Greek Debt Crisis Spread
* EUROPE: Aviation Industry Still in the Red, IATA Says
* Countries Must Coordinate to Solve "Too Big to Fail" Concept

* Upcoming Meetings, Conferences and Seminars




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F R A N C E
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PEUGEOT CITROEN: Arranges New EUR1.8 Billion Refinancing Loan
-------------------------------------------------------------
Zaida Espana at Reuters reports that PSA Peugeot Citroen has
launched syndication of a EUR1.8 billion (US$2.4 billion)
refinancing loan.

According to Reuters, proceeds from the new three-year loan will
refinance an existing EUR2.4 billion revolving credit facility
signed in 2005 that matures next March.

The new EUR1.8 billion loan has been arranged by BNP Paribas,
Credit Agricole CIB, HSBC, Natixis, Royal Bank of Scotland and
Societe Generale CIB as mandated lead arrangers and bookrunners;
with Santander, Citigroup and Commerzbank as mandated lead
arrangers, Reuters discloses.

PSA Peugeot Citroen S.A. -- http://www.psa-peugeot-citroen.com/
-- is a France-based manufacturer of passenger cars and light
commercial vehicles.  It produces vehicles under the Peugeot and
Citroen brands.  In addition to its automobile division, the
Company includes Banque PSA Finance, which supports the sale of
Peugeot and Citroen vehicles by financing new vehicle and
replacement parts inventory for dealers and offering financing and
related services to car buyers; Faurecia, an automotive equipment
manufacturer focused on four component families: seats, vehicle
interior, front end and exhaust systems; Gefco, which offers
logistics services covering the entire supply chain, including
overland, sea and air transport, industrial logistics, container
management, vehicle preparation and distribution, and customs and
value added tax (VAT) representation, and Peugeot Motocycles,
which manufactures scooters and motorcycles.  In 2008, PSA Peugeot
Citroen S.A. sold more than 3.2 million vehicles in 150 countries
worldwide.

                           *     *     *

PSA Peugeot Citroen is rated BB+ by Standard & Poor's.


VALEO SA: Expects to Achieve EUR4.7 Bil. Sales in 1H 2010
---------------------------------------------------------
Valeo's Combined Annual Shareholders' Meeting was held June 3
under the chairmanship of Pascal Colombani, Chairman of Valeo.

                     2009 Results and Outlook

The shareholders approved the 2009 accounts, which were published
on February 24, 2010.

"Valeo has set as its objective for the first half 2010 to achieve
sales of 4.7 billion, a 35% increase versus the first half 2009,
and an operating margin level of close to 6% of sales, the highest
half-yearly level for the past 8 years," said Jacques
Aschenbroich, Valeo's Chief Executive Officer.  "I am therefore
very confident that we will achieve the objective for the full
year 2010 that we communicated on February 24, which will be fine-
tuned during the presentation of the first half results on July
27, 2010."

By focusing the Group's R&D and investment efforts on technologies
enabling a reduction in vehicle CO2 emissions and on emerging
markets, Valeo intends to return to organic growth and aims to
achieve sales of EUR10 billion in 2013.  In addition, by lowering
investments in mature countries and cutting Group overheads, Valeo
aims to achieve a return on capital employed, before restructuring
and goodwill, of 30% during the same period. Strengthened by this
return to profitable growth, and as part of the industrial
strategy unanimously approved by the Board and presented to
investors, with the support of appropriate advisors Valeo intends
to actively work to ensure the highest possible value for the
Group in a fast evolving sector.

             Renewal and Appointment of Board Members

The terms of Board Members Daniel Camus and Jerome Contamine were
renewed and the cooptation of Michel de Fabiani as a Board Member
was ratified.  Noelle Lenoir was appointed as a new Board Member.
Mrs. Lenoir is a lawyer, Member of the Conseil d'Etat, former
Member of the Conseil Constitutionnel and former Deputy Minister
in charge of European Affairs.

                        Other Resolutions

All other resolutions were also adopted, in particular those
involving the approval of agreements benefiting the Chief
Executive Officer and the granting of Valeo shares to employees
and corporate officers.

                            About Valeo

Paris, France-based Valeo SA (EPA:FR) -- http://www.valeo.com/--
is an industrial company focused on the design, production and
sale of components, systems and modules for cars and trucks on the
original equipment market and also the aftermarket via its
subsidiary, Valeo Service.  The Company has 10 products families:
lighting systems, wiper systems, interior controls, electrical
systems, security systems, engine management systems, compressors,
climate control, engine cooling and transmissions.  As of December
2008, the Company is present in 27 countries with 121 production
sites, 61 Research and Development centers and 10 distribution
platforms.  On May 31, 2008, Valeo SA sold its heavy duty engine
cooling division to EQT.  The Company also entered the Russian
market in 2008 with the creation of a joint venture with Russian
automotive systems supplier, Itelma.

                           *     *     *

Valeo has a credit rating of Ba2, two levels below investment-
grade, from Moody's Investors Service, Bloomberg discloses.


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G E R M A N Y
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ARCANDOR AG: Berggruen Inks Deal to Acquire Karstadt Unit
---------------------------------------------------------
Holger Elfes at Bloomberg News reports that Berggruen Holdings
Ltd. signed a contract to acquire Karstadt AG, Arcandor AG's
department-store operator.

Bloomberg relates law firm Freshfields Bruckhaus Deringer,
which acted as Berggruen's legal adviser on the deal, said in an
e-mailed statement Tuesday that the contract has been signed
"under certain conditions," which should be met soon.  The law
firm did not specify the conditions, Bloomberg notes.

According to Bloomberg, Wolfgang Weber-Thedy, spokesman for the
investment firm, said Berggruen hasn't yet reached an agreement on
lowering the stores' rents.

                        Rent Negotiations

Matthias Inverardi at Reuters reports that Highstreet warned
Karstadt buyer Nicolas Berggruen the insolvent German retailer
could still be liquidated if he did not accept its deal on rents.

According to Reuters, rent negotiations are planned for this week
and Highstreet said it had an offer to cut rents.

"Highstreet is ready to reduce rents by another EUR230 million
(US$309 million) in the next five years in addition to the
contribution of EUR160 million over three years pledged in the
restructuring plan," Reuters quoted a spokesman for the Highstreet
consortium as saying on Tuesday.

Should this offer -- available to all potential Karstadt buyers --
not be taken up, "the probability of a Karstadt liquidation rises
significantly," the spokesman said, according to Reuters.  "An
agreement with Highstreet is a core component of rescuing
Karstadt."

In an e-mail to Berggruen dated Monday and seen by Reuters,
lexander Dibelius, who heads Goldman's German operations,
suggested lowering the minimum fixed rent to EUR210 million from
EUR250 million for the rest of this year after the closing of the
deal.  Reuters notes the e-mail said the rent would go up to
EUR211 million for 2011 and 2012, and would then return to EUR250
million by 2018.

As reported by the Troubled Company Reporter-Europe on June 9,
2010, Bloomberg News said Berggruen won the bidding for Karstadt
over private equity company Triton and the Highstreet partnership,
which owns most of Karstadt's real estate.  Bloomberg disclosed
insolvency administrator Klaus Hubert Goerg said in an e-mailed
statement Monday that Berggruen's offer was chosen by a
"significant majority" of the committee's members.  No financial
details were disclosed, Bloomberg said.  Bloomberg noted that
while the other bidders wanted Karstadt's 25,000 workers to agree
on wage cuts or more flexible working hours, Berggruen had pledged
he wouldn't ask the employees to contribute beyond salary
reductions they have already accepted and which are worth about
EUR150 million (US$179 million) over three years.

                        About Arcandor AG

Germany-based Arcandor AG (FRA:ARO) -- http://www.arcandor.com/--
formerly KarstadtQuelle AG, is a tourism and retail group.  Its
three core business areas are tourism, mail order services and
department store retail.  The Company's business areas are covered
by its three operating segments: Thomas Cook, Primondo and
Karstadt.  Thomas Cook Group plc is a tour operator with
operations in Europe and North America, set up as a result of a
merger between MyTravel and Thomas Cook AG.  It also operates the
e-commerce platform, Thomas Cook, supporting travel services.
Primondo has a portfolio of European universal and specialty mail
order companies, including the core brand Quelle.  Karstadt
operates a range of department stores, such as cosmopolitan
stores, including KaDeWe (Kaufhaus des Westens), Karstadt
Oberpollinger and Alsterhaus; Karstadt brand department stores;
Karstadt sports department stores, offering sports goods in a
variety of retail outlets, and a portal, karstadt.de that offers
online shopping, among others.

As reported by the Troubled Company Reporter-Europe, a local court
in Essen formally opened insolvency proceedings for Arcandor on
September 1, 2009.  The proceedings started for the Arcandor
holding company and for 14 units, including the Karstadt
department-store chain and Primondo mail-order division.

Arcandor filed for bankruptcy protection after the German
government turned down its request for loan guarantees.  On
June 8, 2009, the government rejected two applications for help by
the company, which employs 43,000 people.  The retailer sought
loan guarantees of EUR650 million (US$904 million) from Germany's
Economy Fund program.  It also sought a further EUR437 million
from a state-owned bank.


EDSCHA NORTH AMERICA: Seeks Exclusivity Until August 6
------------------------------------------------------
Bill Rochelle at Bloomberg News reports that Edscha North America
Inc. is asking for a 60-day extension of the exclusive right to
propose a Chapter 11 plan.  The Court will consider the request
for an August 6 extension at a hearing on June 17.  Edscha ceased
operating in June 2009 and filed under Chapter 11 in October.  The
Company said it won't be feasible to propose a plan until a sale
of assets in Mexico concludes.  The sale was approved by the judge
in April.

Germany-based Edscha AG manufactures door hinges, convertible
roofs and driver controls for major carmakers.  It was previously
owned by buyout firm Carlyle Group.

Edscha AG, the German auto parts company and parent of Edscha
North America, filed for insolvency for its European operations on
Feb. 2, 2009.  At the time, it cited "massive declining trends" in
the auto industry and difficulty in obtaining financing.

The debts incurred by the company's leveraged buyout through
Carlyle in late 2002 "was not responsible" for the insolvency
filing, but the massive slump in car sales.  The insolvency of
Edscha followed a 50% drop in some of the company's businesses
during the fourth quarter of 2008.

Edscha North America Inc., has filed for Chapter 11 reorganization
(Bankr. N.D. Ill. Case No. 09-39055), eight months after its
German parent filed for insolvency.  The Company listed assets of
US$6.44 million and liabilities of US$672.4 million in its
voluntary Chapter 11 petition.


LEHMAN BROTHERS BANKHAUS: Holds 4.9% of Electronic Sensor Shares
----------------------------------------------------------------
Lehman Brothers Bankhaus AG (i. Ins.) disclosed that as of May 13,
2010, it may be deemed to beneficially own 7,965,000 shares or
roughly 4.9% of the common stock of Electronic Sensor Technology,
Inc.

                  About Lehman Brothers Bankhaus

Lehman Brothers Bankhaus AG filed for Chapter 15 bankruptcy
protection in New York on April 29, 2009 (Bankr. S.D.N.Y. Case No.
09-12704).  The petition for Chapter 15 bankruptcy listed more
than US$1 billion each in debts and assets.  The report discloses
as of April 1, 457 creditors had filed claims against the German
unit, of which 22 were based in the U.S.

The German affiliate, established in 1987, has branch offices in
South Korea, London and Milan, the report states.  The offices in
London and Milan are being wound down as part of the German court
proceedings and the Korean office is subject to a moratorium on
business activities by local banking authorities.

In the Chapter 15 petition, Dr. Michael C. Frege served as
insolvency administrator and foreign representative.  Judge James
M. Peck presides over the case.  David Farrington Yates, Esq., at
Sonnenschein, Nath & Rosenthal LLP in New York, serves as Chapter
15 Petitioner's Counsel.


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I R E L A N D
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ANGLO IRISH: Collapse Would Have Led Other Banks' Cash-Strapped
---------------------------------------------------------------
Stephen Collins at The Irish Times, citing Ireland's Central Bank
governor Patrick Honohan, reports that the main Irish banks would,
in all likelihood, have run out of cash within days if Anglo Irish
Bank had been allowed to collapse in a disorderly manner in the
autumn of 2008.

The Irish Times reports that, in his report on the banking crisis,
which was considered by the Cabinet Tuesday night, Mr. Honohan
questioned the inclusion of subordinated debt, which accounted for
just over 3% of the total, in the bank guarantee scheme but says
that a guarantee was justified.

The report looks at the issue of how important Anglo Irish was to
the banking sector, The Irish Times notes.

"Anglo was clearly systemically important in the prevailing
conditions at the end of September 2008.  There can be little
doubt that a disorderly failure of Anglo would, in the absence of
any other protective action, have had a devastating effect on the
remainder of the Irish banks.  Given the other banks' reliance
from day-to-day and week-to-week on the willingness of depositors
and other lenders not to withdraw their funds, and the certainty
that those lenders would infer from the failure of Anglo that all
the other Irish banks might be in a comparable situation, in all
likelihood the main banks would have run out of cash within days,"
the Honohan report said, according to The Irish Times.

Anglo Irish Bank Corp PLC -- http://www.angloirishbank.com/--
operates in three core areas: business lending, treasury and
private banking.  The Bank's non-retail business is made up of
more than 11,000 commercial depositors spanning commercial
entities, charities, public sector bodies, pension funds, credit
unions and other non-bank financial institutions.  The Company's
retail deposits comprise demand, notice and fixed term deposit
accounts from personal savers with maturities of up to two years.
Non-retail deposits are sourced from commercial entities,
charities, public sector bodies, pension funds, credit unions and
other non-bank financial institutions.  In addition, at September
30, 2008, its non-retail deposits included deposits from Irish
Life Assurance plc.  The Private Bank offers tailored products and
solutions for high net worth clients and operates the Bank's
lending business in Ireland and the United Kingdom.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on April 7,
2010, Fitch Ratings affirmed Anglo Irish Bank Corporation's lower
Tier 2 subordinated debt downgraded to 'CCC' from 'BBB+'.  Fitch
affirmed the rating on the bank's Upper Tier 2 subordinated notes
at 'CC'.  It also affirmed the rating on the bank's Tier 1 notes
at 'C'.


BELGARD MOTORS: Former HQ Building, Service Center Up for Sale
--------------------------------------------------------------
The Irish Times reports that the former headquarters building of
Belgard Motors and a separate service center at the front of the
Cookstown Industrial Estate on Belgard Road in Tallaght, Dublin
24, were put up for sale on Wednesday on the instructions of the
official liquidator.

The report recalls the business closed November 2009 because of
serious trading difficulties.

The sale was being handled by Brendan Smyth of DTZ Sherry Fon the
instructions of liquidators Kavanagh Farrell, the report
discloses.

According to the report, the two buildings should make a combined
sum of about EUR8 million.

As reported by the Troubled Company Reporter-Europe on Dec. 9,
2009, Irish Independent said the company, which laid off 37 people
earlier in 2009, was insolvent with debts of more than EUR17
million.

Belgard Motors Group was a Tallaght-based motor company.  Its
business includes a Porsche dealership.


BLACK SHORE: Anglo Opposes Survival Schemes for Two Companies
-------------------------------------------------------------
Mary Carolan at The Irish Times reports that Anglo Irish Bank has
opposed survival schemes for Sweeney Oil Retail Ltd. and Sweeney
Oil Service Stations Ltd., two of the companies in Galway
businessman John Sweeney's insolvent Black Shore group.

According to the report, the survival schemes were proposed
Tuesday by James Doherty, for Michael McAteer, the court-appointed
examiner to the companies, and supported by the companies and some
small creditors.  Anglo is the largest creditor, while Bank of
Scotland Ireland, which had earlier opposed the scheme, withdrew
its opposition, the report notes.

Anglo, the report says, is owed EUR3.5 million by one of the
companies, and claims the EUR1.7 million being made available to
it under the survival scheme is less than it would secure if it
appointed a receiver who would sell the companies.

The report recalls Anglo previously installed a receiver over a
number of assets in the Black Shore group after the holding firm
failed in a bid for examinership last February.

Blackshore Holdings comprises Mr. Sweeney's oil, property and
hotel interests.


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R U S S I A
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MOBILE TELESYSTEMS: Posts US$381-Mil. Net Income in Q1 2010
-----------------------------------------------------------
Maria Ermakova at Bloomberg News reports that OAO Mobile
TeleSystems posted net income of US$381 million in the first
quarter of 2010, compared with a net loss of US$53.5 million in
the same period last year, as the country's economy rebounded from
its steepest decline on record.

According to Bloomberg, sales gained 23% to US$2.61 billion.

Bloomberg relates Chief Executive Officer Mikhail Shamolin said
the increase was led by new customers and services, including in
data transmission.  Mr. Shamolin, as cited by Bloomberg, said
MTS's "strong competing position" is allowing the company to "take
advantage of the economic growth."

Headquartered in Moscow, Mobile TeleSystems OJSC --
http://www.mtsgsm.com/-- is a provider of mobile cellular
communications services in Russia, Uzbekistan, Turkmenistan and
Armenia and Ukraine.  During the year ended December 31, 2008, the
Company had a subscriber base of 91.33 million (64.63 million in
Russia, 18.12 million in Ukraine, 5.65 million in Uzbekistan, 0.93
million in Turkmenistan and 2.02 million in Armenia).  In addition
to standard voice services, the Company offers its subscribers
value added services, including voice mail, short message service
(SMS), general packet radio service (GPRS), augmented by enhanced
data rates for GSM evolution (EDGE), high-speed downlink packet
access (HSDPA), and various SMS- and GPRS/EDGE/HSDPA-based
information and entertainment services (including multi media
message service (MMS)).  It also offers its subscribers the
ability to roam automatically throughout Europe and in much of the
rest of the world.

                           *      *      *

As reported by the Troubled Company Reporter-Europe on Dec. 23,
2009, Standard & Poor's Ratings Services said that it had assigned
a recovery rating of '3' on the Russian ruble (RUR) unsecured
bonds (RUR10 billion due 2013, RUR10 billion due 2015, RUR10
billion due 2018, RUR15 billion due 2014, and RUR15 billion due
2016) issued by Russian mobile operator Mobile TeleSystems (OJSC)
(BB/Stable/--).  The recovery rating indicates S&P's expectation
of meaningful (50%-70%) recovery in the event of a payment
default.  The issue-level ratings on these unsecured debt
instruments remains 'BB', in line with the 'BB' corporate credit
rating on MTS.

The issue rating on the US$400 million bonds due 2010 and
US$400 million bonds due 2012 issued by Mobile Telesystems Finance
S.A., guaranteed by MTS is 'BB', in line with the corporate credit
rating on MTS.  The recovery rating on these notes is '3',
indicating S&P's expectation of meaningful (50%-70%) recovery in
the event of a payment default.


PROGNOZ SILVER: Begins Bankruptcy Procedures, High River Discloses
------------------------------------------------------------------
High River Gold Mines Ltd. was informed that the Arbitration Court
of the City of Moscow has approved the application of OJSC
Buryatzoloto for official bankruptcy procedures for Prognoz Silver
LLC, which operates the Prognoz silver project in the Republic of
Sakha (Yakutia), Russia, which the Company has an interest in.
The commencement of the procedures will result in the preservation
of Prognoz Silver LLC's assets, an analysis of its financial
condition, the preparation of the list of creditors and the
holding of the first creditors' meeting.  It is anticipated that
the bankruptcy procedures may last at least seven months and may
permit Buryatzoloto to collect or restructure the indebtedness of
Prognoz.

Buryatzoloto is 85% owned by High River.  High River holds a 50%
indirect interest in Prognoz Silver LLC.  In October 2009,
Buryatzoloto filed a claim to the Arbitration Court of the City of
Moscow against Prognoz Silver LLC to recover an outstanding debt
due under the contract for exploration work on the Prognoz silver
project.  The amount of claim including interest and other
expenses was approximately US$18 million.  The outstanding debt of
Prognoz Silver LLC originated from the inability of the
shareholders other than High River to finance their share of
expenditures at Prognoz Silver LLC.  In December 2009, the court
ruled in favour of Buryatzoloto.  Later, in March 2010, the ruling
was confirmed by the appellate court.  The court awarded
Buryatzoloto the claimed amount; however Buryatzoloto did not
succeed in collecting it.

                       About High River

High River is unhedged gold company with interests in producing
mines and advanced exploration projects in Russia and Burkina
Faso.  Two underground mines, Zun-Holba and Irokinda, are situated
in the Lake Baikal region of Russia. Two open pit gold mines,
Berezitovy in Russia and Taparko-Bouroum in Burkina Faso, are also
in production.  Finally, High River has two advanced exploration
projects with NI 43-101 compliant resource estimates, the Bissa
gold project in Burkina Faso and 50% interest in the Prognoz
silver project in Russia.


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BARCLAYS BANK: Moody's Upgrades Subordinated Debt Ratings From Ba3
------------------------------------------------------------------
Moody's Investors Service has upgraded the long term A2
debt/deposit ratings of Standard Life Bank plc to Aa3, the same
level as Barclays Bank PLC.  In the same rating action, the
subordinated debt ratings of Ba3 were upgraded to Baa1 and the
junior subordinated ratings of B1 were upgraded to Baa2.  All
ratings carry a stable outlook.  The D Bank Financial Strength
Rating of SLB was confirmed and subsequently withdrawn.  The
short-term ratings of Prime-1 were also withdrawn.  This follows
the completion of the transfer of assets and liabilities of SLB to
Barclays on June 1, 2010.

Moody's commented that the upgrade of the debt and deposit ratings
of SLB reflects the alignment of its ratings to those of Barclays,
given that the legal transfer of SLB's assets and liabilities to
Barclays has been completed and Barclays has directly or
indirectly assumed these liabilities.  SLB no longer exists as a
separate regulated legal entity and hence its BFSR, which was on
review for upgrade pending the final status of the bank within
Barclays, was confirmed before being withdrawn.  The P-1 short-
term ratings of SLB were also withdrawn as this issuer no longer
exists.

The last rating action on SLB was on October 26, 2009, when the
long term debt ratings and BFSR of SLB were placed on review for
possible upgrade.

Standard Life Bank had total assets of approximately
GBP9.4 billion at year-end 2009.


BP PLC: Oil Spill Prompts Calls for Bankruptcy, Receivership
------------------------------------------------------------
Tennille Tracy at Dow Jones Newswires reports that energy
specialist Matt Simmons, founder and chairman emeritus of Simmons
& Co., has told Fortune magazine that BP Plc has "about a month
before they declare Chapter 11."

Jeff Plungis and Christopher Condon at Bloomberg's Businessweek,
meanwhile, relate Representative Steve Cohen, a Tennessee
Democrat, said because BP is likely to end up in bankruptcy, the
Obama administration should consider placing the company in
receivership to preserve company assets.  "The president could put
it in receivership to protect the people," Mr. Cohen said.

Businessweek reports that more than 40 U.S. lawmakers on Wednesday
called for BP to suspend its dividend, stop its advertising and
spend the money instead cleaning up its oil spill in the Gulf of
Mexico.  "Not a single cent" should be spent on television ads,
said Representative Lois Capps, a California Democrat, at a news
conference in Washington, according to Businessweek.  "If BP is so
concerned about its public image, it should plug the hole."

The Wall Street Journal's Guy Chazan and Stephen Power report that
the Obama Administration ratcheted up its demands on Wednesday
that BP cover all costs stemming from the Gulf of Mexico oil
spill, including millions of dollars in salaries of oil-industry
workers laid off because of the federal moratorium on deepwater
drilling.

Businessweek says a dividend moratorium would hit BP shareholders
led by BlackRock Inc. and Legal & General Group Plc.  According to
Bloomberg data drawn from regulatory filings, New York-based
BlackRock was the biggest holder of BP shares, with 5.92% as of
December 31, 2009.  Bloomberg says Legal & General Group, the U.K.
insurer and money manager, holds 4% of the shares as of May 4.

Businessweek also notes sovereign wealth funds are among BP's
largest shareholders.  According to Businessweek, Norges Bank
Investment Management, which oversees Norway's state fund, held
1.8% as of May 1.  Kuwait Investment Authority owned 1.8% and the
Republic of China held 1.1%, both as of May 1.

U.S. investors are the biggest holders in BP, Businessweek says,
citing Junction RDS, a London-based shareholder research firm.
They held 9.4% through BP's London-listed shares and an additional
28% via New York-listed American depositary receipts as of May 1.
U.K. investors came next with 31%, Businessweek reports.

The Journal's Messrs. Chazan and Stephen Power relate that the
sudden increase in BP's potential liabilities -- along with
growing evidence that even more oil than expected is gushing from
BP's crippled well -- helped send BP's shares plummeting almost
16% in New York, to US$29.20.  The stock has lost close to half
its value, more than US$82 billion, in the seven weeks since the
spill started.

Meanwhile, Dow Jones' Ms. Tracy says options traders made a
beeline for bearish options in BP, with some willing to make a
cheap bet that the stock could sink below US$7.50 a share.  She
said trading in BP options soared well above normal levels as
shares in the company dropped to their lowest level in years.
With its American depositary shares closing the day at US$29.20,
down 16%, BP has lost more than half of its value since the
Deepwater Horizon rig caught fire on April 20, according to Dow
Jones.

BP has committed to fund the entire US$360 million cost of six
berms in the Louisiana barrier islands project.  On June 7, BP
said it will make an immediate payment of US$60 million to the
State of Louisiana.  The initial US$60 million payment is intended
to permit the State to begin work on the project immediately.  BP
will then make five additional US$60 million payments when the
Coastal Protection and Restoration Authority of Louisiana, which
is chaired by Garret Graves, certifies that the project has
satisfied 20%, 40%, 60%, 80% and then 100% completion milestones.
The entire US$360 million will be funded by the completion of the
project.  BP plans to make payments directly to the State of
Louisiana rather than establishing an escrow fund for this
project.

"We are committed to doing everything we can to protect the
coastline and reduce the impact of the oil and gas spill in the
Gulf of Mexico.  We understand that the United States Coast Guard
and the State of Louisiana want this project to proceed with
urgency, so we want to ensure that funding is immediately
available to begin construction of the berms," said Bob Dudley, BP
Managing Director.

BP already has provided US$170 million to Louisiana, Alabama,
Mississippi, and Florida to help with those state's response costs
and to help promote their tourism industries.  The company also
has paid approximately US$51 million in compensation to people and
companies affected by the spill.

BP Plc -- http://www.bp.com/-- is one of the world's largest
energy companies, providing its customers with fuel for
transportation, energy for heat and light, retail services and
petrochemicals products for everyday items.

Bloomberg's Businessweek notes BP represents 5.6% of the FTSE 100
Index, the second biggest weighting of the top U.K.-listed
companies behind London-based bank HSBC Holdings Plc.  BP also
represents the biggest portion of the FTSE 350 Oil & Gas Producers
Index at 31%, and the MSCI EAFE/Energy Index at 16%.


BRITISH AIRWAYS: Cabin Crew Divided Over Further Strikes
--------------------------------------------------------
Gill Plimmer in London and Pilita Clark at The Financial Times
report that British Airways cabin crew are increasingly divided
over whether to press ahead with further strikes this summer.

The Unite union, representing 11,000 cabin crew, needs to decide
whether to ballot for further action if the dispute is not
resolved soon, the FT notes.

The FT says Unite, which has pledged not to take further action
during the World Cup, is determined to press ahead with a vote for
further action, potentially on the alleged bullying and harassment
of staff who participated in the walkout.  But given the airline's
record on using the courts to block strike action, the union is
taking legal guidance on the grounds for the dispute, the FT
discloses.

The FT relates Acas, the conciliation service, has said it expects
a date to be set shortly for peace talks to resume.  But with
Willie Walsh, chief executive, pledging to "hold out for as long
as it takes", the airline appears intent on permanently altering
the balance of power with the union, the FT states.

According to the FT, Mr. Walsh insists a settlement does not hinge
on the restoration of travel concessions but on the need for cabin
crew to accept much-needed cultural changes to the company's
working practices.  In particular, he wants the freedom to
introduce future cost savings without the constant threat of
strikes, the FT says.

BBC News reports British Airways cabin crew met MPs on Tuesday --
the penultimate day of the last of a series of five-day walkouts.
BBC relates they have told MPs how the airline is currently
gripped by a "climate of fear".

                      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 March 19,
2010, Moody's Investors Service lowered to B1 from Ba3 the
Corporate Family and Probability of Default Ratings of British
Airways plc; and the senior unsecured and subordinate ratings to
B2 and B3, respectively.  Moody's said the outlook is stable.
This concludes the review that was initiated on November 10, 2009.
The rating action reflects Moody's view that credit metrics will
not be commensurate with the previous rating category in the
medium term.  Moody's expect furthermore that metrics will be
burdened in the foreseeable future by the company's significant
pension deficit, which was at GBP2.6 billion for the APS and NAPS
schemes combined as of September 2009 (under IAS).  Moody's
nevertheless understand that under the current agreement with the
trade unions, the cash contributions to these deficits will be
frozen at GBP330 million per year for three years, subject to
approval by the Pensions Regulator and the trustees


CRYSTAL PALACE: Completes Sale of Selhurst Park to Consortium
-------------------------------------------------------------
The joint administrators for Selhurst Park, home of Crystal Palace
FC, confirmed that, following the "in-principle" agreement on
June 1 to sell the ground to CPFC 2010 (the Consortium) at an
agreed and undisclosed price, the deal has been effectively
concluded with the formal exchange of contracts.

The completion of the purchase by CPFC 2010 remains dependent on
the CVA being secured by Crystal Palace FC's administrators, The
P&A Partnership, and approval from the Football League.

Barry Gilbertson, partner at PricewaterhouseCoopers LLP, said:
"This transaction has been one of the more complex to resolve.  We
would like to reassure everyone, and the Club's loyal fans in
particular, that all parties have worked diligently and with a
spirit of determination to find the right solution to the very
many issues that arose.  This has ultimately involved many hours
of hard work, before, during and after lengthy meetings and
conference calls late into several nights, in the best interests
of making the deal work.

"We believe that the Consortium's vision for the Club, which they
are purchasing in a parallel transaction, using Selhurst Park as
their ground, matches that of the community, the football club and
its supporters.

"Enabling the paperwork to be prepared, negotiated and agreed, in
what has been a short space of time, is testament to the ongoing
support we have received from Lloyds Banking Group and other key
stakeholders with their respective advisers.  We would like to
take this opportunity to thank them all for the contribution they
have made in securing this successful outcome.

"Importantly, we wish the Club well in the days, weeks and months
ahead as they work their way out of administration, continue their
discussions with the Football League, and prepare for the start of
a much happier season in the Championship."

As reported by the Troubled Company Reporter-Europe on Jan. 28,
2010, The Times said Crystal Palace went into administration after
running into financial problems.  The Times disclosed the club has
debts estimated at GBP30 million.

London-based Crystal Palace Football Club --
http://www.cpfc.premiumtv.co.uk/-- plays in the English League.
The team, also known as the "Eagles" represents a borough of
London called Croydon.  It was founded in 1905 by workers at the
Crystal Palace, a wrought iron and glass building originally
erected in the Hyde Park area of London to house the Great
Exhibition of 1851 (the first in a series of World's Fair
exhibitions).  The Crystal Palace Football Club moved to its
current stadium Selhurt Park in 1924.  Chairman Simon Jordan took
over the club in 2000, ending Crystal Palace's stint with
bankruptcy.


DUNFERMLINE: Parent Group Closes Offices; 325 Jobs Affected
-----------------------------------------------------------
Terry Murden at The Scotsman reports that Dumferline Building
Society's head office is to become the administrative hub for
parent group Nationwide's regional businesses in a shake-up that
will result in more jobs in the Fife town.

According to the report, Nationwide, which acquired a large part
of the Dunfermline following its collapse in March 2009, will
close the head offices of Cheshire and Derbyshire building
societies and move their operations to Scotland.

The report says it will create 150 jobs at Caledonia House in
Dunfermline, but 75 will go as Dunfermline will no longer offer
its own mortgages.  The site will become a call center and
administrative hub for the three brands, which will focus on
savings and investments, the report states.

The report relates administrative offices in Macclesfield,
Cheshire and Duffield, Derbyshire will close over the next two
years along with 17 branches in the Cheshire and Derbyshire
networks, because of low customer use and the proximity of other
Nationwide branches.

The Cheshire Estate Agency will also close as it is not core to
the Nationwide model, the report says.  The overall impact of the
group changes is a loss of 325 jobs, the report notes.

                         Restructuring

As reported by the Troubled Company Reporter-Europe on Jan. 26,
2010, the European Commission approved under EU state aid rules
the aid given by the UK authorities to facilitate restructuring of
the Dunfermline Building Society of the United Kingdom.

The restructuring consisted of the immediate split-up of
Dunfermline, after which the part containing the good assets and
liabilities was sold in an auction to a competitor with a
financial contribution by the UK State of over GBP1.5 billion.
The part containing the impaired assets was put into
administration.  The Commission found that the orderly break-up of
Dunfermline resulted in the return to viability of the good part
that was sold.  The Commission furthermore concluded that there
was sufficient burden-sharing as subordinated debt-holders
contributed to the restructuring as much as possible and that the
liquidation of a substantial part of Dunfermline limited the
distortion of competition caused by the aid.  The Commission
therefore concluded that the direct restructuring is compatible
with the EU rules on state aid to remedy a serious disturbance in
a Member State's economy (Article 87(3)(b) of the EC Treaty).

Dunfermline Building Society -- http://www.dunfermline-bs.co.uk/
-- offers a range of financial products and services including
mortgages, savings accounts, business and personal loans, credit
cards, personal insurance, financial planning, investment
products, and share brokering.  Founded in 1869, the mutually-
owned Dunfermline is one of the oldest and largest building
societies in Scotland.  It operates through more than 30 branches
and 40 agencies.  The building society has engineered two social
housing deals with the Royal Bank of Scotland and Lloyds TSB worth
a combined 40 million.


HAVELOCK EUROPA: To Move to Aim Under Cost-Cutting Plan
-------------------------------------------------------
Perry Gourley at The Scotsman reports that Havelock Europa
announced plans to cut costs by moving from the main market to
Aim, the junior exchange.

According to the report, the firm said the move would also give it
greater flexibility to react quickly to acquisitions and other
corporate transactions if "opportunities arise".

The report says approval for the proposal will be sought at a
shareholder meeting on July 1 and the move to Aim is expected by
the end of that month.

The report recounts Havelock Europa's market value has shrunk
dramatically over the past five years.  The report recalls in
2006, its shares were trading at 158p compared with Wednesday's
close of just 10.5p, valuing the company at just over GBP4
million.  In the past year, the company has lost 80% of its value,
the report notes.

The report relates Havelock -- whose exceptional costs have soared
on the back of problems with merging its retail interior and
education supply operations -- issued three profit warnings in the
six months leading up to the departure of its chief executive Hew
Balfour.

Havelock Europa is a Fife-based shopfitter.


HIGHLAND QUALITY: 77 Jobs Axed; Administrators Seek Buyers
----------------------------------------------------------
The Inverness Courier reports that a total of 77 employees have
been made redundant at Highland Quality Construction, which went
into administration last week.

According to the report, only three employees remain at the firm
and are assisting the administrators KPMG.

The administrators are now inviting offers for the business as a
going concern, the report discloses.

"Unfortunately Highland Quality Construction experienced
significant trading losses and cashflow pressures and was owed
significant amounts by contractors," the report quoted Blair
Nimmo, head of restructuring for KPMG in Scotland, as saying.

Highland Quality Construction is an Inverness-based civil
engineering and construction firm.  It had an annual turnover of
GBP20 million, according to The Inverness Courier.


NORTHERN ROCK: To Cut 650 Jobs by the End of Year
-------------------------------------------------
Katherine Griffiths at Times Online reports that Northern Rock
will cut up to 650 jobs by the end of the year as part its drive
to shrink costs before a sale back to the private sector.

According to the report, the latest cuts, which will be
accompanied by the close of the final salary pension scheme to
future contributions, were described by the union Unite as
"devastating".

The report says Northern Rock's "good" bank, which is responsible
for new lending, and its asset management company, which is
running off its back book, will each be hit.  Northern Rock's
centers in Newcastle and Sunderland will bear the brunt of the
latest measures, with posts going from across the business, the
report notes.

The report relates Unite criticized the move, saying that the bank
had cut 20% of its workforce overall.

The bank will enter a 90-day consultation with the union and
employees, the report discloses.

                        About Northern Rock

Headquartered in Newcastle upon Tyne, England, Northern Rock plc
-- http://www.northernrock.co.uk/-- deals with mortgages, savings
accounts, loans and insurance.  The company also promotes secured
loans to its existing mortgage customers.  The company had more
than US$200 billion in assets at the end of June 2007.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on Dec. 11,
2009, Standard & Poor's Ratings Services raised the rating on
Northern Rock's dated subordinated lower Tier 2 debt to 'BB' from
'CCC'.  The ratings on its perpetual subordinated debt and
preference shares were unaffected.  S&P said the outlook is
stable.


PORTSMOUTH FOOTBALL: HMRC Set to Reject Repayment Offer
-------------------------------------------------------
UKPA reports that the HM Revenue and Customs is set to reject
Portsmouth Football Club's repayment offer to creditors.

According to the report, a vote on the 20p in the pound offer will
be taken at a creditors meeting on June 17 and HMRC -- who claim
they are owed GBP35 million -- will seek a better offer.

The report says the opposition from HMRC would seriously threaten
Portsmouth's chances of securing a company voluntary arrangement
(CVA) which would enable them to come out of administration and
avoid any further points deductions next season.

The club needs 75% of creditors to vote in favor of the 20p deal
and Portsmouth's administrator Andrew Andronikou claims that HMRC
only hold 21% of the vote, the report notes.  Mr. Andronikou
believes the HMRC should only be claiming GBP21 million and that
the other GBP14 million relates to image rights and is
challengeable, and that on that basis they would not be able to
block the CVA deal, the report states.

As reported by the Troubled Company Reporter-Europe, Bloomberg
News said Portsmouth on Feb. 26 became the first team in England's
Premier League to go into administration after U.K. authorities
tried to force its closure over unpaid tax of GBP12.1 million.

Portsmouth Football Club Ltd. -- http://www.portsmouthfc.co.uk/--
operates Portsmouth FC, a professional soccer team that plays in
the English Premier League.  Established in 1898, the club boasts
two FA Cups, its last in 2008, and two first division
championships.  Portsmouth FC's home ground is at Fratton Park;
the football team is known to supporters as Pompey.  Dubai
businessman Sulaiman Al-Fahim purchased the club from Alexandre
Gaydamak in 2009.  A French businessman of Russian decent,
Gaydamak had controlled Portsmouth Football Club since 2006.


ROYAL BANK: Gauges Investor Support on Issuance of Covered Bonds
----------------------------------------------------------------
Jennifer Hughes at The Financial Times reports that Royal Bank of
Scotland has sounded out investors about issuing covered bonds in
a move that could see the troubled British bank diversify its
funding sources.

The FT recalls the bank won approval from the UK's Financial
Services Authority last year for the bonds, a safer form of
securitization where the loans backing the bonds remain on the
balance sheet but are ring-fenced so that the bonds pay out even
if the bank were to fail.

Last month RBS hosted investor roadshows to gauge likely interest
in the bonds, the FT recounts.

RBS has no definite issue plans at the moment, the FT notes.

                            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.


ROYAL BANK: Draws Up Shortlists of Bidders for Two Businesses
-------------------------------------------------------------
Javier Blas, Martin Arnold, Sharlene Goff, Helen Thomas and
Gregory Meyer at The Financial Times report that Royal Bank of
Scotland has drawn up shortlists for two businesses which are
expected to fetch about GBP4 billion for the government-backed
bank.

According to the FT, people familiar with the process said Morgan
Stanley and Jefferies are among the final bidders for RBS Sempra
Commodities' North America business, which focuses on gas and
power trading and could reach a value of US$2 billion (GBP1.4
billion).

RBS has also narrowed the field of bidders for its GBP2.5 billion
payment processing arm to two US private equity consortiums, which
are vying to seal the UK's biggest buy-out deal for almost three
years, the FT discloses.

The sales were triggered by a European Commission ruling ordering
RBS to sell assets in return for receiving a bail-out, the FT
notes.

The FT relates people familiar with the process said the
commodities business -- a joint venture between RBS and Sempra
Energy, the US utility group -- could be sold in pieces, and the
negotiations with some bidders could fail.

The bidding is expected to produce a deal by next month, the FT
states.

                            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.


* UK: Clubs Must File Accounts on Time or Face Transfer Embargo
---------------------------------------------------------------
UKPA reports that new rules voted at an annual general meeting in
Malta on Tuesday will see Football League clubs being hit with a
transfer embargo if they do not file their financial accounts in
time.

The report relates a proposal by Leyton Orient to impose a
relegation of two divisions for any club going into administration
was rejected.

According to the report, League chiefs will review the punishments
for administration to see if they need toughening up.

The clubs have also closed a loophole so that clubs that go into
administration are hit with sporting sanctions even when the club
is part of a group company, the report notes.


* UK: Pub and Bar Industry Insolvencies Continue to Soar
--------------------------------------------------------
The number of bar and pub companies going bust has continued to
soar in the last year, defying the trend of falling corporate
insolvencies across the rest of the economy says Top 22
accountancy firm Wilkins Kennedy.

A total 23 pub, bar and nightclub companies have become insolvent
in the first three months of 2010 alone, a jump of 109% on the 11
that went bust in the first 3 months of 2009.

In total 87 pub, bar and nightclub companies have gone bust in the
last year (to March 31 2010), compared with 79 in the previous 12
months.

In comparison, the total number of corporate insolvencies in the
last year fell 36% to 5,911 from 9,233 in the previous year.

Wilkins Kennedy said that the sector clearly has not recovered
from either from the impact of the recession or from the
legislative and tax burden dropped on them from the last
Government.  The accountancy firm said that the new Government
must avoid weakening the sector further in the emergency Budget,
on June 22.

Anthony Cork, director of Wilkins Kennedy, commented, "What the
pub and bar industry needs to see in the June 22 budget is an end
to duty increases.  The Government needs to be understanding of
the sector and not tax it out of existence."

"Such is the weak pricing power of much of the bar industry that
bar operators have to either swallow tax increases themselves or
lose custom to the supermarkets."

Wilkins Kennedy said that the Governments proposals to review the
current Licensing Act that could restrict opening hours for some
establishments is a real risk.

Mr. Cork said, "For many establishments, working on wafer thin
margins and high fixed costs, any restriction in trading hours
could tip them into loss."

Wilkins Kennedy said one ray of light from the new Government is
the new Social Responsibility Bill announced in the Queens Speech
which may see the banning of the sale of alcohol below cost price
and, therefore, lessen the competitive pressure from supermarkets.

Mr. Cork explained, "Bars continue to suffer an intense
competitive threat from the buying might of the Big 4
supermarkets, undercutting local establishments and encouraging
people to drink at home cheaply and 'pre-loading' before coming
out."

"The choice available in supermarkets is so extensive that pubs
can only compete on that aspect without reshuffling their
contracts with suppliers and that can be difficult."

Mr. Cork said that spending in bars that fell steeply because of
the recession started its slide with the introduction of the
smoking ban.  He suggested that because it was regulatory and
legal changes that pushed the sector over the edge politicians
have an obligation not to heap further pain on pubs and bars.

Mr. Cork added, "Pubs and bar owners have been entrepreneurial and
have followed the standard advice to try and transition into a
more food led offering. But, this is not easy and can involve
reskilling as well as alterations to the premises which are
capital intensive.  That solution to the woes of the sector seemed
to assumed that the eating-out market could grow unchecked."


* UK: FSA Stress-Testing Firms' Exposure to European Markets
------------------------------------------------------------
Jonathan Russell at The Daily Telegraph reports that the Financial
Services Authority is working with UK companies to stress test
their exposure to European markets as fears over the future of the
euro mount.

According to the report, the regulator is understood to be mapping
where risks come from, focusing on currencies, countries and
commodities.

The report relates the increased focus on foreign risk comes as
leading economists predict the euro will have broken up within the
next five years.

The report notes that although sources denied the FSA had drawn up
a "risk map" of Europe identifying problem areas such as Greece
and Hungary, the FSA's supervisory teams have been analysing
companies' exposure to countries in and around the eurozone.


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


* EUROPE: Rescue Fund Created to Halt Greek Debt Crisis Spread
--------------------------------------------------------------
Jonathan Stearns and Meera Louis at Bloomberg News report that
European finance minister put the finishing touches on a rescue
fund being backed by EUR440 billion (US$524 billion) in national
guarantees, seeking to halt the spread of Greece's debt crisis.

According to Bloomberg, the European Financial Stability Facility
would sell bonds backed by the guarantees and use the money it
raises to make loans to euro-area nations in need, the finance
ministers agreed yesterday in Luxembourg.  The new entity would
sell debt only after an aid request is made by a country,
Bloomberg discloses.

Bloomberg says the ministers aim for ratings companies to assign a
AAA rating to the facility, whose bonds would be eligible for
European Central Bank refinancing operations.  The fund will be
based in Luxembourg, Bloomberg states.

The fund, being created for three years, is the main part of a
EUR750-billion aid package that European Union finance ministers
hammered out a month ago to combat a sovereign debt crisis,
Bloomberg notes.


* EUROPE: Aviation Industry Still in the Red, IATA Says
-------------------------------------------------------
The International Air Transport Association expects airlines to
post a global profit of US$2.5 billion in 2010.  This is a major
improvement compared with IATA's previous forecast released in
March of a US$2.8 billion loss.

Industry revenues are forecast to be US$545 billion in 2010. This
is up from the US$483 billion in 2009, but still below the US$564
billion achieved in 2008.  "The global economy is recovering from
the depths of the financial crisis much more quickly than could
have been anticipated.  Airlines are benefiting from a strong
traffic rebound that is pushing the industry into the black. We
thought that it would take at least three years to recover the
US$81 billion (14.3%) drop in revenues in 2009.  But the US$62
billion top line improvement this year puts us about 75% on the
way to pre-crisis levels," said Giovanni Bisignani, IATA's
Director General and CEO.

"The US$2.5 billion profit comes with some important health
warnings.  First, this represents a net margin of just 0.5%, which
is a long way from sustainable profitability.  Second, a major
part of the global industry is still posting big losses.  A
stagnating economy, strikes, natural disasters, and a currency
crisis have left European carriers struggling with an anticipated
US$2.8 billion loss," said Mr. Bisignani.

Highlights of the revised forecast include:

Traffic: Passenger traffic is forecast to grow by 7.1% in 2010
while cargo traffic will expand by 18.5%.  This is significantly
better than the previous forecast growth of 5.6% and 12.0%
respectively.  Over the first quarter, the industry was growing at
an annualized rate of 9% for passenger and 26% for cargo.  Much of
the cargo growth is associated with inventory re-stocking.  As
this cycle completes with normal inventory to sales ratios, we are
expecting moderate growth driven by consumer spending.

Yields: Yields are now forecast to grow by 4.5% for both the cargo
and passenger business.  This is a significant improvement from
the previously forecast yield growth of 2.0% in passenger markets
and 3.1% for cargo.  The 4.5% rate is just ahead of consumer price
inflation.  This is contributing strongly to the 13% rise in
revenues forecast for 2010.  Despite the increase, revenues remain
4% below their 2008 peak.

Load Factors: New capacity will be added to the global system as a
result of the 1,340 aircraft that are scheduled to join the fleet
in 2010.  Of these, approximately 500 are replacement aircraft
while the rest will be new capacity.  Latent capacity is also
present as a result of reduced long-haul fleet utilization which
remains several percentage points below pre-crisis levels.  Over
the year, we expect an average demand improvement of 10.2%
(passenger and cargo) to be met with a 5.4% increase in capacity.
This will support load factors which remained near record levels
for most of the first quarter.

Ash: Air space closures following the eruption of an Icelandic
volcano dented the recovery in April as a result of over 100,000
flight cancellations associated with European markets over six
days.  While uncertainty remains with the potential for future
eruptions, it appears that this was a short-lived shock.  Early
May figures show a rebound in traffic for European carriers.

Premium Travel: Despite earlier fears that the financial crisis
would result in a structural change to the premium market, it now
appears to be recovering cyclically in many regions-alongside
improvements in global trade.  Premium travel was rebounding at an
annualized growth rate of 20% over the first quarter and economy
travel is now back to pre-recession levels.  In the absence of a
strong improvement in consumer confidence that would be needed to
drive leisure traffic growth, it would appear that business travel
also supported some of the recovery in the economy cabin.

Fuel: Fuel costs continue in line with the previous forecast
expectations.  IATA maintained its expectation for an average
annual oil price of US$79/barrel (Brent) in 2010.

                       Regional Differences

Regional differences in airline performance sharpened with this
forecast.  "The recovery from this crisis is asymmetrical.
Worsening conditions in Europe are in sharp contrast to
improvements in all other regions," said Mr. Bisignani.
Highlights include:

Asia-Pacific: Asia-Pacific carriers continue to benefit from
strong regional growth.  Against a global GDP growth expectation
of 2.9%, the Asian economy (excluding Japan) is expected to grow
by 7% this year.  China will outpace that with an expected 9.9%
GDP expansion.  As a result, the region's carriers are expected to
deliver the largest profit at US$2.2 billion.  This is more than
double the previously forecast US$900 million in March and a major
reversal from the US$2.7 billion loss in 2009.

North America: North American carriers are expected to return a
profit of US$1.9 billion.  This is a major reversal from the
previously forecast US$1.8 billion loss, and the US$2.7 billion
that the region's carriers lost in 2009.  The US economy is
growing with a 3.3% GDP expansion.  Carriers are improving
efficiencies as a result of demand growth, capacity cuts and
domestic mergers.

Latin America: Latin American carriers will show a profit of
US$900 million, up slightly from the US$800 million previously
forecast.  Having posted a US$500 million profit in 2009, Latin
America will be the only region to post two consecutive years of
profit.  The region's commodities are closely linked with Asian
growth and supported by a 3.9% GDP expansion this year.

Middle East: Middle Eastern carriers are expected to post a profit
of US$100 million-their first since 2005.  This is significantly
better than the previously forecast US$400 million loss and the
US$600 million that the region's carriers lost in 2009.  GDP
growth of 4.3% is outstripping the global average and Gulf
carriers continue to gain market share through their hubs for
Europe to Asia-Pacific traffic even as capacity is being added at
a more cautious rate.

Africa: African carriers are expected to post a US$100 million
profit, their first since 2002.  This reverses the US$100 million
loss previously forecast in March and the US$100 million that the
region lost in 2009.

Europe: Europe will be the only region in the red with a US$2.8
billion loss.  This is a downgrading from the US$2.2 billion loss
previously forecast in March, although it is an improvement on the
US$4.3 billion that the region lost in 2009.  GDP growth of 0.9%
is not enough to support a recovery and the currency crisis clouds
the future with uncertainty.  Moreover, 70% of the US$1.8 billion
loss in revenue as a result of the volcanic ash crisis was borne
by European carriers.  A series of labor strikes and strike
threats have also impacted the region's performance.

"Seeing black on the bottom line is a great achievement.  The
resilience of the industry has been strengthened by a decade of
cost cutting, restructuring and re-engineering processes.  IATA's
programs have contributed to this with US$47 billion in cost
savings since 2004 with efficiencies in safety auditing, fuel
management, infrastructure costs, and Simplifying the Business,"
said Mr. Bisignani.

"But even with all of our hard work, the result is just a 0.5%
margin that does not even cover our cost of capital.  The industry
is fragile.  The challenge to build a healthy industry requires
even greater alignment of governments, labor, and industry
partners.  They must all understand that this industry needs to
continue to reduce costs, gain efficiencies and be able to re-
structure itself if it is to be sustainably profitable.  We must
all be prepared for a greater change," said Mr. Bisignani.


* Countries Must Coordinate to Solve "Too Big to Fail" Concept
--------------------------------------------------------------
Rachelle Younglai at Reuters reports that Germany's financial
regulator said on Monday that countries must coordinate efforts to
thwart a market perception that some large financial services
firms are considered too large to fail.

"We need a clearly defined liquidation process," Jochen Sanio,
president of Federal Financial Supervisory Authority (BaFin), told
a conference in Montreal, according to Reuters.


* Upcoming Meetings, Conferences and Seminars
---------------------------------------------

June 17-20, 2010
AMERICAN BANKRUPTCY INSTITUTE
    Central States Bankruptcy Workshop
       Grand Traverse Resort and Spa, Traverse City, Michigan
          Contact: 1-703-739-0800; http://www.abiworld.org/

July 7-10, 2010
AMERICAN BANKRUPTCY INSTITUTE
    Northeast Bankruptcy Conference
       Ocean Edge Resort, Brewster, Massachusetts
          Contact: 1-703-739-0800; http://www.abiworld.org/

July 14-17, 2010
AMERICAN BANKRUPTCY INSTITUTE
    Southeast Bankruptcy Conference
       The Ritz-Carlton Amelia Island, Amelia, Fla.
          Contact: http://www.abiworld.org/

Aug. 5-7, 2010
AMERICAN BANKRUPTCY INSTITUTE
    Mid-Atlantic Bankruptcy Workshop
       Hyatt Regency Chesapeake Bay, Cambridge, Maryland
          Contact: 1-703-739-0800; http://www.abiworld.org/

Oct. 6-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
    TMA Annual Convention
       JW Marriott Grande Lakes, Orlando, Florida
          Contact: http://www.turnaround.org/

Dec. 2-4, 2010
AMERICAN BANKRUPTCY INSTITUTE
    22nd Annual Winter Leadership Conference
       Camelback Inn, Scottsdale, Arizona
          Contact: 1-703-739-0800; http://www.abiworld.org/

Mar. 31-Apr. 3, 2011
AMERICAN BANKRUPTCY INSTITUTE
    Annual Spring Meeting
       Gaylord National Resort & Convention Center, Maryland
          Contact: 1-703-739-0800; http://www.abiworld.org/

June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
    Central States Bankruptcy Workshop
       Grand Traverse Resort and Spa
          Traverse City, Michigan
             Contact: http://www.abiworld.org/

October 25-27, 2011
TURNAROUND MANAGEMENT ASSOCIATION
    Hilton San Diego Bayfront, San Diego, CA
       Contact: http://www.turnaround.org/

Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
    23rd Annual Winter Leadership Conference
       La Quinta Resort & Spa, La Quinta, California
          Contact: 1-703-739-0800; http://www.abiworld.org/


                            *********

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 * * *