/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/100910.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, September 10, 2010, Vol. 11, No. 179 Headlines A U S T R I A GLOUCESTER ENGINEERING: Swiss Winding to Raise Offer for Assets B E L G I U M TELENET NV: Fitch Affirms Long-Term IDR at 'BB' C Z E C H R E P U B L I C ODEVNI PODNIK: Posts CZK92.1 Million Loss in May-July 2010 MORITZ ZDEKAUER: 13.5% Bearer Shares Up for Sale on Sept. 17 G E R M A N Y PROCREDIT HOLDING: Fitch Affirms Tier 1 TruPS at Long-Term 'BB-' H U N G A R Y MKB BANK: Fitch Maintains Watch Negative on Support Rating I R E L A N D AER ARANN: 14 Groups Eye Investment; Sept. 20 Bid Deadline Set ANGLO IRISH: To Be Split Into Two, Finance Ministry Says ANGLO IRISH: Makes Further EUR700MM Provision for Quinn Losses BANK OF IRELAND: May Opt Out of State Guarantee for EUR50BB Debt BLACKROCK CABS: Liquidator Appointed; Creditors May Get Nothing MCINERNEY HOMES: Banks Appoint Receiver to McInerney Services * IRELAND: Extends Guarantee for Short-Term Bank Liabilities U N I T E D K I N G D O M CONNAUGHT PLC: Retail Investors May Get Nothing Following Demise DECO SERIES 2005: Fitch Affirms EUR5.7MM Class H Notes at 'CCCsf' ILKESTON TOWN: High Court Orders Liquidation Over Unpaid Tax Debt JKRS: In Administration; RSM Tenon Recovery Seeks Buyer KICKWORLDWIDE: Bought Out of Administration by Founders LOCAL BILLING: Wound Up Following Insolvency Service Probe SHEFFIELD WEDNESDAY: Seeks Investors for Long-Term Survival * Fitch Takes Various Rating Actions on Lehman Currency Swap Deals X X X X X X X X * BOOK REVIEW: Competition in the Health Care Sector ********* ============= A U S T R I A ============= GLOUCESTER ENGINEERING: Swiss Winding to Raise Offer for Assets --------------------------------------------------------------- European Plastics News reports that Swiss Winding Invention, which had previously offered EUR530,000 (US$673,700) for the business assets of Gloucester Engineering Europe, said it is prepared to double that figure and hopes to block court approval of the settlement proposal put forward by the Austrian company's U.S. parent. As reported by the Troubled Company Reporter-Europe on Sept. 8, 2010, European Plastics News said creditors of Gloucester Engineering Europe voted in the Austrian bankruptcy court on Sept. 1 to accept a settlement proposal put forward by US parent Gloucester Engineering Co that will pay out 30% of money owed to them. Citing Raoul Wagner, the Austrian bankruptcy trustee handling Gloucester Engineering Europe, European Plastic News disclosed the parent company will make a total contribution of around EUR403,000 under the proposed settlement. European Plastic News noted the deal, which will become final if no creditor files an appeal before Sept. 14, will see Type 1 creditors -- those owed money prior to the company filing for bankruptcy on February 18 of this year -- receive 30% of the EUR935,000 owed to them (around EUR280,000). Type 2 creditors -- those holding debts emerging after the bankruptcy date -- will receive 100% (around EUR68,000 in total), according to European Plastic News. European Plastics News relates Swiss Winding Invention Chairman Carlos Martinez, who founded the high performance film winding machinery manufacturer Wintech Winding Technology in the 1990s, said Sept. 7 that he had raised his bid for the business assets to EUR1 million (US$1.27 million), and that he was working with a Gloucester Engineering Europe creditor to file an appeal against the settlement proposal before the Sept. 14 deadline. Gloucester Engineering Co. Chairman John Sharood pointed out the company would not give up on its claim to the intellectual property, European Plastics News note. One of the key factors in the creditors' acceptance of the settlement proposal was that it avoided potential legal argument over ownership of Gloucester Engineering Europe's intellectual property and customer lists -- its major assets, European Plastics News states. According to European Plastics News, while Rapperswill, Switzerland-based Swiss Winding Invention's earlier offer presented a higher return to creditors -- EUR530,000 against Gloucester Engineering Co.'s EUR360,000 (US$457,600) -- the trustee could not release the funds until any legal challenge had been resolved. Raoul Wagner, the Austrian bankruptcy trustee handling Gloucester Engineering Europe, told European Plastics News that a raised offer on the part of Swiss Winding Investment would be more attractive to creditors, but they would still have to weigh up whether some money now against the possibility of more money later. Gloucester Engineering Europe GmbH is the Vienna-based subsidiary of Gloucester Engineering Co. Inc., a blown and cast film machinery maker in Gloucester, Massachusetts. GEC manufactures its equipment from its headquarters in Gloucester, MA, USA and through its joint-venture company in Damman, India, Kabra Gloucester Engineering. Gloucester Engineering's Chapter 7 case -- filed on March 23, 2010 -- was converted to Chapter 11 bankruptcy protection on June 25, 2010 (Bankr. D. Mass. Case No. 10-12967). ============= B E L G I U M ============= TELENET NV: Fitch Affirms Long-Term IDR at 'BB' ----------------------------------------------- Fitch Ratings has affirmed Telenet N.V.'s (Telenet; formerly Telenet Bidco N.V.) ratings at Long-term Issuer Default 'BB' with Stable Outlook and at Short-term IDR 'B'. Fitch has also affirmed Telenet's senior secured bank facility at 'BB+.' The affirmation reflects Telenet's diversified subscription-based revenues, its consistently strong operating performance, business position and financial profile. The ratings are constrained by the company's somewhat limited scale but, more importantly, a financial policy that is influenced by majority shareholder, Liberty Group International (LGI), which is likely to keep leverage at speculative-grade levels. In Fitch's view, Telenet is one of the most effectively managed cable operators in Europe. Despite its relatively small scale the consistency with which management delivers performance targets, generates free cash flow (FCF) and deleverages the balance sheet, underlines Fitch's view that were the company (and controlling shareholder, LGI) to choose a more conservative capital structure, it could ultimately be upgraded to low investment-grade territory. While cash flow generation is expected to underpin Telenet's ability to deleverage on a consistent basis, dividend policy is, in Fitch's view, likely to result in leverage spikes that keep the capital structure in speculative-grade territory. Event risk associated with M&A as well as the potential for investment in upcoming mobile spectrum auctions in Belgium, adds further potential for re-leveraging. The company continues to up-sell triple-play services, with dual or triple play customers now representing 55% of the customer base. The churn rate of TV customers is under good control, which Fitch believes is likely to improve as triple play becomes more pervasive across the customer base. The company is generating a well-diversified revenue mix -- including a 27% contribution from TV and a further 33% from broadband (for 6M10). Premium or digital TV now accounts for 11% of total revenues, up from 9% a year ago. Cable operators have proven more resilient to the economic downturn than incumbent telecoms companies in Europe. This has proven to be the case in Belgium where the incumbent saw residential revenues fall 1.1% in H110 while over the same period Telenet grew at a rate of 10.6%. While Telenet is effectively the incumbent in the provision of TV and can therefore only expect to lose market share to its competitor Belgacom in the TV market, its success in winning broadband and telephony is more than offsetting its loss of TV access. A targeted cap on senior leverage of 4x ensures the business is unlikely to be leveraged (under normal circumstances) much above 4.5x given that finance leases add about 0.5x of leverage to the total net debt metric. Funds from operations (FFO) net adjusted leverage stood at 3.5x at end-June 2010 (on an LTM basis) comfortably inside the 4x median identified at the 'BB' rating level, under Fitch's sector credit factor methodology for the incumbent telecom and cable sector. Other financial metrics and qualitative factors are strong for the rating level. Telenet's liquidity and its debt profile are supportive of the current ratings. The company had almost EUR400 million of cash on balance sheet at end-H110 and a further EUR175 million of available under its revolving credit facility, which matures in 2014. An exchange offer in respect of the secured bank facility, currently in process, is expected to push the majority of refinancing risk out to 2017, with the first sizeable maturity of EUR158 million of bank debt falling due in 2014. =========================== C Z E C H R E P U B L I C =========================== ODEVNI PODNIK: Posts CZK92.1 Million Loss in May-July 2010 ---------------------------------------------------------- Odevni podnik Prostejov posted a loss of CZK92.1 million in May-July, CTK reports, citing information from the insolvency administrator published in the insolvency register. The report says OP's net turnover reached CZK103.9 million in May-July. According to the report, between January and May, when OP was declared bankrupt, its loss was CZK211.2 million. In total, OP's loss amounts to CZK303.3 million in January-July, the report notes. As reported by the Troubled Company Reporter-Europe on July 26, 2010, creditors, whom OP owes around CZK1.6 billion, will decide on the next steps in the bankruptcy case today, Sept. 10. Odevni podnik is a clothing manufacturer based in the Czech Republic. MORITZ ZDEKAUER: 13.5% Bearer Shares Up for Sale on Sept. 17 ------------------------------------------------------------ CTK, citing Jan Mach of Finance Zlin, reports that a package of 13.5% of bearer shares at Czech porcelain maker Starorolsky porcelan Moritz Zdekauer will be sold at an auction in Uherske Hradiste, southern Moravia, on Sept. 17. According to the report, the stake, appraised by an expert at CZK5.55 million, is sold by Moritz Zdekauer, in liquidation, whose 100% owner is Starorolsky porcelan. ============= G E R M A N Y ============= PROCREDIT HOLDING: Fitch Affirms Tier 1 TruPS at Long-Term 'BB-' ---------------------------------------------------------------- Fitch Ratings has affirmed ProCredit Holding AG's (PCH Group) ratings at Long-term Issuer Default 'BBB-', Short-term IDR 'F3', Individual 'D' and Support '2'. The Outlook is Stable. At the same time, Fitch has affirmed PCH's tier 1, perpetual, non- cumulative, non-voting trust preferred securities at Long-term 'BB-'. The IDRs and Support Rating of PCH Group reflect the support it could expect to receive from its owners, and in particular from a group of international financial institutions (IFIs) which are key voting shareholders, due to the group's specialized developmental focus. The group's Individual Rating reflects declining profitability, heightened credit risks and the challenging operating environment in several of the group's countries of operation. However, it also reflects asset quality ratios which are often better than the average in each country, improvements in liquidity management, low refinancing risk and improving capital ratios in recent years. The group reported declining profitability indicators for H110 and 2009, although it expects a small operating profit in 2010. Administrative expenses are budgeted to fall. The group's key challenges remain managing heightened credit risks, whereby the group incurs high loan impairment charges (LICs; 100% of pre- impairment profit in H110), and a slow growth environment, which puts pressure on revenue. The group's net interest margin, although still wide due to the group's focus on small business financing, is tightening, given the declining share of higher- yielding micro loans of the group's loan book. However, it may benefit from further declines in the cost of customer funding in several of the group's key operating markets. Loans past due by 30 days, the group's measure for non-performing loans (NPLs) -- which in Fitch's view is fairly conservative -- increased to 3.7% of gross loans at end-H110 from 1.7% in at end- 2008. Despite a decline from higher historical levels, coverage of NPLs remains adequate, particularly in view of the group's tightened loan underwriting criteria. The group has increased its use of loan restructurings as a risk management tool. Restructured loans, the performance of which remains to be tested, accounted for an additional 3.1% of end-H110 gross loans. Liquidity management across the group has strengthened, with the Frankfurt-based holding company, PCH, increasingly able to provide intra-group liquidity support, if needed. Funding for the group is sourced locally at the individual bank level from customer deposits (end-H110: 70% of total funding was retail), with the remainder primarily provided by IFIs and "socially responsible" investors. Frankfurt-based PCH was set up as an equity investment company in 1998 to invest in the global network of PCH Group banks. These banks were established by private and public investors to provide financing for micro and small business customers. As of end-H110, the group had total assets of EUR5.2bn and consisted of 21 subsidiaries, primarily banks, in central and eastern Europe (11), Latin America (seven) and Africa (three). ============= H U N G A R Y ============= MKB BANK: Fitch Maintains Watch Negative on Support Rating ---------------------------------------------------------- Fitch Ratings is maintaining Hungary-based MKB Bank Zrt's (MKB) Support Rating of '2' on Rating Watch Negative. The rating action follows a periodic review of the RWN that the agency placed on the Support Rating on December 23, 2009. The rating is currently driven by potential support for MKB from its 89.79% parent Bayerische Landesbank (BayernLB, 'A+'/RWN). As MKB's parent has yet to obtain the European Commission's (EC) decision in respect of its restructuring plan the RWN cannot yet be resolved. The agency will resolve the RWN once the EC's decision is announced and there is greater clarity in respect to BayernLB's plans for MKB. ============= I R E L A N D ============= AER ARANN: 14 Groups Eye Investment; Sept. 20 Bid Deadline Set -------------------------------------------------------------- Ciaran Hancock and Ray Managh at The Irish Times report that the High Court has been informed that 14 groups have expressed an interest in investing in Aer Arann and the examiner hopes to have secured a deal for the airline by Oct. 10. The Irish Times relates in a report submitted to the court, Michael McAteer of Grant Thornton, who was confirmed as examiner of the airline on Wednesday by Ms. Justice Finlay Geoghegan, states that indicative offers must be lodged on Sept. 20 while final offers will have to be presented on Oct. 6. According to The Irish Times, the examiner said he wants to run the investment process over a "tight timeframe" in light of "cash constraints within the business". A scheme of arrangement would then be put to creditors, with a meeting of creditors pencilled in for Oct. 15, The Irish Times notes. Any agreement would be subject to the High Court's approval, The Irish Times states. The Irish Times relates Judge Finlay Geoghegan confirmed Mr. McAteer as examiner after considering reports to the effect that the company had a reasonable prospect of survival if certain measures were taken. According to The Irish Times, Rossa Fanning, counsel for the examiner, said Mr. McAteer had to report again to the court within 35 days and this would bring the matter up to within four days of the new law term. He was granted an extension until Oct. 11 to present the examiner's next report, The Irish Times says. As reported by the Troubled Company Reporter-Europe on Aug. 30, 2010, The Irish Times said Aer Arann entered interim examinership. The Irish Times disclosed the High Court was told on Aug. 26 that the airline was seeking the protection of the court because it is currently insolvent and cannot pay its debts. It is understood that the decision to petition for examinership was also prompted by the company's difficulties in servicing its contracts with aircraft leasing companies, according to The Irish Times. The court heard that the airline's creditors include AIB, which is owed EUR3.9 million, the Revenue Commissioners, the Dublin Airport Authority, Aer Lingus and the Irish Aviation Authority, The Irish Times disclosed. Aer Arann operates 13 aircraft. It employs 320 people at its bases in Dublin and Galway, as well as in Shannon, Cork, Waterford and the Isle of Man. ANGLO IRISH: To Be Split Into Two, Finance Ministry Says -------------------------------------------------------- Joe Brennan and Louisa Fahy at Bloomberg News report that Ireland's Finance Ministry on Tuesday said Anglo Irish Bank will be split into a "Funding Bank" and an "Asset Recovery Bank". "It is intended that in due course the Recovery Bank will be sold in whole or in part or that its assets will be run off over a period of time," the Finance Ministry said, according to Bloomberg. Bloomberg relates the finance ministry said the central bank will determine by October how much capital will be needed by the two Anglo Irish institutions it creates from the split. According to Bloomberg, Anglo Irish Chief Executive Officer Mike Aynsley said in an interview earlier Tuesday that clarity from the government on the future of the bank may help stem a decline in deposits. Customer deposits fell by about EUR4 billion to EUR23.1 billion in the first half of the year, Bloomberg discloses. 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 July 23, 2010, the A3/P-1 bank deposit and senior debt ratings as well as the Ba1 dated subordinated debt rating and the Caa2 undated subordinated debt rating of Anglo Irish Bank have been maintained under review for possible downgrade as the key rating driver in Moody's Investors Service's view remains the bank's restructuring plan that is currently waiting EU approval. Moody's said the outlook on the bank's E BFSR, mapping to a Caa1 on the long-term scale, is stable. On April 7, 2010, the Troubled Company Reporter-Europe reported that 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'. ANGLO IRISH: Makes Further EUR700MM Provision for Quinn Losses -------------------------------------------------------------- Simon Carswell at The Irish Times reports that Anglo Irish Bank has set aside a further EUR700 million for potential losses on borrowings to Sean Quinn, bringing to EUR1.7 billion the potential loss the bank expects to incur on loans of EUR2.8 billion owed by the businessman and his family. The report says the increase on the expected loss on the loans to the Quinn family -- Anglo's biggest borrower -- was taken in its accounts published last week covering the first six months of the year but was not disclosed by the nationalized bank. The so-called bad loan provision of EUR700 million was included in the record six-month loss of EUR8.2 billion reported by Anglo, according to the report. The uncertainty over the future of Quinn Insurance, the most profitable part of Mr. Quinn's business, has forced Anglo to lower its expectation on how much of the loans it is likely to recover, the report notes. It's understood that Anglo may be forced to set aside a further EUR500 million, though this may be the extent of the write-off as the bank has security worth about EUR600 million over the family's extensive international property interests, the report states. 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 July 23, 2010, the A3/P-1 bank deposit and senior debt ratings as well as the Ba1 dated subordinated debt rating and the Caa2 undated subordinated debt rating of Anglo Irish Bank have been maintained under review for possible downgrade as the key rating driver in Moody's Investors Service's view remains the bank's restructuring plan that is currently waiting EU approval. Moody's said the outlook on the bank's E BFSR, mapping to a Caa1 on the long-term scale, is stable. On April 7, 2010, the Troubled Company Reporter-Europe reported that 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'. BANK OF IRELAND: May Opt Out of State Guarantee for EUR50BB Debt ---------------------------------------------------------------- Laura Noonan at Irish Independent reports that Bank of Ireland is considering migrating some of its EUR50 billion short-term corporate deposits out of the state guarantee scheme at the end of the month, even though the support has been extended until Dec. 30. The report relates the bank's deliberations come amid concerns about the cost of the extended guarantee, with brokers NCB on Wednesday warning that the premium demanded "has the potential to materially erode earnings for Irish banks". According to the report, BoI chief executive Richie Boucher recently committed his bank to "disengaging" from bank guarantees, and market sources on Wednesday night said that the bank was "likely" not to make full use of this week's extension. The report notes sources close to the bank confirmed that it was exploring the potential of not bringing its entire EUR50 billion corporate debt pile into the guarantee in a bid to minimize cost. The most likely option is to offer more attractive interest rates on unguaranteed deposits, the report says. Headquartered in Dublin, Bank of Ireland -- http://www.bankofireland.com/-- provides a range of banking and other financial services. These include checking and deposit services, overdrafts, term loans, mortgages, business and corporate lending, international asset financing, leasing, installment credit, debt factoring, foreign exchange facilities, interest and exchange rate hedging instruments, executor, trustee, life assurance and pension and investment fund management, fund administration and custodial services and financial advisory services, including mergers and acquisitions and underwriting. The Company organizes its businesses into Retail Republic of Ireland, Bank of Ireland Life, Capital Markets, UK Financial Services and Group Centre. It has operations throughout Ireland, the United Kingdom, Europe and the United States. * * * As reported by the Troubled Company Reporter-Europe on July 23, 2010, Moody's Investors Service affirmed Bank of Ireland's long- term bank deposit and senior debt ratings. These were A1 for long-term bank deposits and senior debt, A2 for dated subordinated debt, Ba3 for undated subordinated debt, B1 for cumulative tier 1 securities and Caa1 for non-cumulative tier 1 securities. Moody's said the outlook on these ratings is stable. BoI's bank financial strength rating is D, on review for possible upgrade and this was also unaffected by the rating action. BLACKROCK CABS: Liquidator Appointed; Creditors May Get Nothing --------------------------------------------------------------- Sean McCarthaigh at The Irish Examiner reports that creditors of insolvent Blackrock Cabs have been told that they are unlikely to receive any money owed to them. The report relates Alan Fitzpatrick of Alan Fitzpatrick & Co., was appointed liquidator to the firm after a meeting of creditors in a Dublin hotel on Wednesday. Among the creditors are the Revenue Commissioners, who are owed EUR77,000, the report notes. According to the report, Dublin City Sheriff, John Fitzpatrick, who had the shareholding in Blackrock Cabs transferred to him by court order, said the firm was "hopelessly insolvent". Blackrock Cabs is a taxi firm owned by alleged "pyramid" investment scheme operator Breifne O'Brien. MCINERNEY HOMES: Banks Appoint Receiver to McInerney Services ------------------------------------------------------------- Barry O'Halloran at The Irish Times reports that banks have taken control of McInerney Services, a McInerney Homes subsidiary, that is not under the High Court's protection from its creditors. The report relates Bank of Ireland, Anglo Irish and KBC have appointed a receiver to McInerney Services, a treasury operation that owes them EUR40 million, but which is not included in the examinership. According to the report, the company was used to borrow money from the banks, which was used to fund some of McInerney's operations in Britain. The five Irish companies in interim examinership guaranteed the loan to McInerney Services, which gave the banks the right to appoint their receiver, the report discloses. The report relates the High Court recently appointed Billy O'Riordan of PricewaterhouseCoopers as interim examiner to a number of McInerney companies. The case is set to be heard today, Sept. 10, the report states. The case was due for a full hearing on Tuesday, Sept. 7, but was adjourned after it emerged that three banks, to which the building group owes a total of EUR111 million, are opposing the examiner's appointment, the report notes. If the court finalizes the appointment, an examiner will have up to 100 days to come up with a rescue plan for the company, the report says. McInerney Homes is an Irish housebuilder. * IRELAND: Extends Guarantee for Short-Term Bank Liabilities ------------------------------------------------------------ Carmel Crimmins, John O'Donnell and Padraic Halpin at Reuters report that Ireland on Tuesday extended its guarantee for short- term bank liabilities, including corporate and interbank deposits, as expected as the government sought to reassure investors. Reuters relates Irish bond spreads hit fresh peaks on Tuesday on renewed jitters about the health of the European banking sector exerting more pressure on Ireland. According to Reuters, analysts said while the guarantee kept Ireland on the hook for its struggling banks, it at least gave them breathing space ahead of a crucial month in which they need to refinance around EUR26 billion of funding. Reuters says the move will likely help its main lenders, Allied Irish Banks and particularly Bank of Ireland test debt markets in the coming weeks. The spike in Irish borrowing costs will make it more costly for Irish banks to refinance this month's debt and wean themselves off a government guarantee of their funding, Reuters states. Irish Prime Minister Brian Cowen insisted the economic situation was manageable, Reuters notes. =========================== U N I T E D K I N G D O M =========================== CONNAUGHT PLC: Retail Investors May Get Nothing Following Demise ---------------------------------------------------------------- Alistair Gray at The Financial Times reports that retail investors who piled into Connaught stock shortly before the company went into administration were unlikely to recover any value. A Financial Times analysis of figures provided by JunctionRDS, the data provider, shows that several well known institutional investors, including Fidelity Investments, Aviva Investors, F&C Asset Management and Scottish Widows Investment Partnership, had already endured multi-million pound paper losses. The demise of Connaught also highlights the dangers of passive investment strategies, the FT notes. Many professional shareholders bailed out in the days and weeks after Connaught's first profit warning as the company replaced senior executives and drafted in Deloitte to conduct an independent review of its accounting practices, the FT relates. As reported by the Troubled Company Reporter-Europe on Sept. 9, 2010, Bloomberg News said Connaught appointed partners from KPMG as administrators after the business as a whole failed to secure "sufficient support" to trade as a going concern. Bloomberg disclosed the company said in a statement on Tuesday that administrators were appointed to Connaught Plc and Connaught Partnerships Ltd. Connaught Compliance Ltd., National Britannia Holdings Ltd., Fountains Ltd. and Connaught Environmental Ltd. and their subsidiaries have not been put into administration, Bloomberg noted. Connaught was suspended from London trading on Tuesday after saying an "adequate solution" to its funding problems was "increasingly uncertain," according to Bloomberg. Connaught plc -- http://www.connaught.plc.uk/-- is a United Kingdom-based company engaged in the provision of integrated asset services to the public and private sectors. The Company operates in two business segments: social housing and compliance. Social Housing segment provide social housing landlords throughout the United Kingdom with a range of planned and response maintenance services, as well as compliance and estate management. The Compliance segment provides safety, health and risk management solutions. It has information, advisory, training and servicing capabilities to provide integrated compliance solution throughout the United Kingdom. On July 22, 2009, the Company completed the acquisition of UK Fire (International) Limited and Igrox Limited. On September 15, 2008, the Company completed the acquisition of Lowe Group Holdings Ltd. On November 26, 2008, the Company completed the acquisition of certain assets of Predator Pest Control Plc. DECO SERIES 2005: Fitch Affirms EUR5.7MM Class H Notes at 'CCCsf' ----------------------------------------------------------------- Fitch Ratings has affirmed DECO Series 2005 - Pan Europe 1 plc (PE1) and revised the Outlooks on class D and E notes to Stable from Negative. The rating actions are: EUR8.5m class A2 due July 2014 (XS0227107538) affirmed at 'AAAsf'; Outlook Stable EUR24.2m class B due July 2014 (XS0227110326) affirmed at 'AAAsf'; Outlook Stable EUR39.2m class C due July 2014 (XS0227112884) affirmed at 'AAAsf'; Outlook Stable EUR9.8m class D due July 2014 (XS0235684114) affirmed at 'AAsf'; Outlook revised to Stable from Negative EUR24.5m class E due July 2014 (XS0227113692) affirmed at 'Asf'; Outlook revised to Stable from Negative EUR19.6m class F due July 2014 (XS0227115630) affirmed at 'BBsf'; Outlook Negative EUR12.2m class G due July 2014 (XS0227116950) affirmed at 'Bsf'; Outlook Negative EUR5.7m class H due July 2014 (XS0227117503) affirmed at 'CCCsf'; assigned a Recovery Rating of 'RR5' The rating action reflects the stable collateral performance since the review last September and the de-leveraging of the transaction. Two loans have repaid. Project Suisse, which repaid at loan maturity in January 2010, benefited from strong rental income and long leases. The other loan to repay at maturity was Trabrennbahn, whose low balance (EUR12 million) aided refinancing. Fitch advance rates -- defined as debt outstanding over asset value -- have improved significantly following these repayments. Most of these estimates of value will not be tested before 2012, when there is a spike in loan maturities. However, the Hanover loan, which accounts for 22% of the note balance, is due imminently, in October 2010. The secondary nature of the charged assets weakens re-letting prospects, and may hamper their marketability to investors or other lenders. This is reflected in Fitch's estimate of a whole loan-to-value ratio (LTV) of 108%. With final legal maturity of the bonds in July 2014, the use of loan extension at maturity is tightly constrained, which raises the likelihood of enforcement as a workout route for loans that default at maturity. Many of the underlying buildings in the portfolio are secondary in quality and location, and so in spite of an impressive roll of tenants, few properties will have materially grown in value since the last rating review. As a result, there continues to be significant balloon risk, which largely offsets the benefits of deleveraging and modest scheduled loan amortization, especially for junior noteholders. ILKESTON TOWN: High Court Orders Liquidation Over Unpaid Tax Debt ----------------------------------------------------------------- BBC News reports that Ilkeston Town Football Club has been wound up by the High Court over an unpaid tax bill. BBC relates lawyers acting for the club had pleaded with the court to give it more time to pay the outstanding GBP0,000 to HM Revenue and Customs. But HMRC pressed on with the winding up petition with the club being described as "plainly insolvent" by the court, BBC notes. The court heard Ilkeston Town's chairman, Gary Hodder, was negotiating with investors interested in purchasing the Blue Square Bet North club, BBC discloses. Ilkeston Town Football Club is an English football club based at the New Manor Ground in Ilkeston, Derbyshire. JKRS: In Administration; RSM Tenon Recovery Seeks Buyer ------------------------------------------------------- Neil Gerrard at Caterersearch.com reports that JKRS, which operates the Links Country Park hotel and golf club in Cromer and its sister hotel the Peveril of the Peak in Ashbourne, Derbyshire, has gone into administration. According to the report, Timothy Dolder and Trevor Binyon of insolvency practitioners RSM Tenon Recovery are dealing with the administration of both properties. The report relates a spokeswoman for RSM Tenon said: "The plan is indeed to sell the business and this is in progress currently -- any interested parties' details are being passed to our appointed agents, but nothing has been finalized yet. There are managing agents in place running the hotels, so from that perspective it's very much business as usual." JKRS is a hotel firm based in the United Kingdom. KICKWORLDWIDE: Bought Out of Administration by Founders ------------------------------------------------------- How-Do reports that Kickworldwide's founders, Steve Cartwright and Steve Bellis, have bought the company out of administration. "As far as we're concerned it is business as usual," How-Do quoted Mr. Cartwright as saying. "The administrator made all of the staff redundant and although it's early days, we intend to reemploy them and we'll be meeting with our landlord soon." As reported by the Troubled Company Reporter-Europe on Sept. 9, 2010, Mark Goldstein Associates was appointed as administrator of Kickworldwide. Kickworldwide is the Cheshire-based company behind reality TV format, Soccer Prince. LOCAL BILLING: Wound Up Following Insolvency Service Probe ---------------------------------------------------------- Twenty-seven companies involved in the mis-selling of health supplements have been wound up in the High Court following an investigation by Company Investigations of the Insolvency Service. The investigation found that all of the companies had their registered offices in the County Durham area but traded internationally, mainly from locations in Barcelona and Malta by placing "Free Trial Offers" for health supplements on numerous websites. Customers responding to a "Free Trial Offer" supplied their payment card details believing that only a small charge to cover postage and packaging (typically GBP3.95) was required. However, if the customer failed to cancel the "Free Trial Offer" within the cancellation period (usually 15 days) they were deemed to have agreed to an ongoing supply of the product from the companies, at a cost of around GBP70 to GBP80 each month. Commenting on the case, Stephen Speed, Chief Executive of The Insolvency Service said; "The Insolvency Service is determined to come down hard on companies who seek to rip off the public by mis-selling products. I urge all consumers to be vigilant when it comes to 'free trial offers', and remember if it looks to good to be true, it often is." Analysis of the available records for just seven of the companies found that they had turnover in excess of US$19 million in the period August 2009 to March 2010 which was processed through merchant accounts based in Germany. The products offered by the companies included Acai Berry Detox, Acai Power, Effective Acai, Acai Detox, Absolute Acai, Colon Cleanse Fresh, Colon Purify, Life Cleanse, Resveratrol, Resvmax, Miraculous Teeth Whitening, PureClean Teeth, Dermasensation and Dermainfuse. The investigation found that there was a serious lack of transparency as to who controlled the companies with the named directors being otherwise unconnected individuals residing in Insolvency Service detoxes the business world of 27 misleading the Consett area of County Durham. Those spoken to by the investigators said they knew nothing about the affairs of the company of which they were the only director and said their only task was to forward any post received for the companies to a local formation agent, Brinken Merchant Incorporations Limited. Each had been approached to act as a director by Brinken who paid them around GBP150 a year. However, the Court heard that 25 of the companies were found to be under the common control of Local Billing Solutions Limited ("Local Billing"), a company registered in Malta. Local Billing maintained throughout the inquiry that it acted only as a payment processor and that the beneficial interest in the companies belonged to Canonizado International, a company said to be registered in Panama, of which the investigators could find no trace. On the documents available, the investigation established that the beneficiaries of the companies' trading were most likely to be Local Billing and its principal Clayton Douglass. Grounds for winding up the companies included: * The Web sites used by the companies misled customers into believing that the trial offer was risk free and limited in nature; * The terms and conditions of the offer were designed to confuse the customer and were not provided in any durable medium; * The length of the trial offer was not made clear. Customers were provided with a 30-day supply of the product, but had, typically, only 12 days from receipt of the product in which to cancel any future supply; and * The companies abused the privilege of trading through a limited company by effectively continuing the same method of operating as that used by Trading Planet Limited, Viv3lab Limited and Vivera Limited. Those three companies having previously been wound up by the Court in the public interest. The winding up orders were all made on August 26, 2010. Winding up petitions were presented on June 21, 2010 against: LB Belvedere Limited, LB Cygnus Media Limited, LB Deluxepass Limited, LB Eridanus Entertainment Limited, LB Evil Angel Limited, LB Friendfinder Limited, LB Global Web Solutions Limited, LB Internet Media Productions Limited, LB Ilogic Solutions Limited Winding up petitions were presented on June 22, 2010 against: LB LFP Internet Limited, LB Lyra Entertainment Limited, LB Nomad Media Limited, LB Pegasus Media Limited, LB Price Communications Limited, LB RSC Limited, LB Southint Prop Limited, LB Watt Media Limited Winding up petitions against the following companies were presented on June 23, 2010, and on June 25, 2010 the Official Receiver was appointed as Provisional Liquidator of the companies: LB Carsed Marketing Limited, LB Nakedsword Limited, LB Cassiopeia Media Limited, LB Cybernet Entertainment Limited, LB RHS Limited, LB Pride Studios Limited, Intercontinental Consignment Logistics Limited and Gillmap Limited Petitions to wind up Fyso-UK Limited and H5-UK Limited were presented on July 13, 2010. SHEFFIELD WEDNESDAY: Seeks Investors for Long-Term Survival ----------------------------------------------------------- BBC Radio Sheffield reports that Sheffield Wednesday chairman Howard Wilkinson says any potential investors must be able to protect the League One club's long-term future. "When we do get investment they will have to show they can manage the club properly on a sound basis," Mr. Wilkinson told BBC Radio Sheffield. "Investment is crucial, but investment on its own will not solve the problem." As reported by the Troubled Company Reporter-Europe on Sept. 9, 2010, BBC Radio Sheffield said Sheffield Wednesday have been saved from administration after reaching an agreement with their bank over unpaid tax. BBC Radio Sheffield disclosed the Owls was due at the High Court on Wednesday over a GBP1.1 million unpaid bill to HM Revenue & Customs. But the League One club brokered a deal with the Co-operative Bank to secure its immediate future, according to BBC Radio Sheffield. On July 26, 2010, the Troubled Company Reporter-Europe, citing the Financial Times, reported that Sheffield Wednesday had total debts of about GBP26 million. The FT disclosed the club owes GBP21.5 million to the Co-Op Bank. The club has for some time been seeking buyers, at an asking price in the region of GBP10 million, according to the FT. Sheffield Wednesday Football Club is a football club based in Sheffield, South Yorkshire, England, who will compete in the Football League One in the 2010/11 season, in England. Sheffield Wednesday is one of the oldest professional clubs in the world and the third oldest in the English league. * Fitch Takes Various Rating Actions on Lehman Currency Swap Deals ------------------------------------------------------------------ Fitch Ratings has upgraded four and affirmed 39 tranches of seven UK non-conforming transactions, which no longer have currency swaps in place due to the bankruptcy of Lehman Brothers in September 2008. In addition, the senior tranches carrying ratings above 'CCC' were removed from Rating Watch Negative. Tranches of notes carrying a rating above 'CCC' have been affirmed and removed from Rating Watch Negative, on which they were placed on July 19, 2010. The rating action on these tranches follows the judgment delivered by the English High Court on July 30, 2010 in the case of BNY Corporate Trustee Services Limited -v- Eurosail UK 2007-3BL PLC. In his judgment the Chancellor of the English High Court ruled that Eurosail UK 2007-3BL PLC was not unable to pay its debts under the UK Insolvency Act 1986. The Chancellor also ruled that the existence of a post-enforcement call option in the transaction had no effect on the solvency of Eurosail UK 07-3 BL PLC. On August 20, 2010 the class A3 noteholders filed an appeal against the Chancellor's judgment that the issuer was not insolvent under the Act. Fitch currently has no information on when the appeal is likely to be heard by the English Court of Appeal, but the agency expects that the outcome of the appeal may not be known for the next several months. The outcome of the appeal could have an impact on the rating of the notes in all seven transactions. Fitch will be publishing a more detailed comment on the Eurosail Case over the next few days. The agency will review any future developments in the Eurosail Case and will take rating action as necessary. The upgrades of A1 and A2 notes of EMF UK 2008-1 and B1a notes of Eurosail UK 07-4 reflect the movement of foreign exchange (FX) rates in favor of the issuers since December 2008 when Fitch downgraded the notes and the resulting deleveraging of some of the senior notes. Fitch now expects the class A1 notes of the EMF UK 2008-1 transaction to pay in full in December 2010. The absence of currency swaps due to the bankruptcy of Lehman Brothers resulted in Fitch's downgrade in December 2008 as adverse FX movements left the transactions significantly under- collateralized. The issuers of the transactions are exchanging proceeds received from borrowers at current FX rates, causing a variance in the repayment of GBP-denominated notes compared with the EUR- and/or USD-denominated equal ranking notes. Similarly, the upgrade of the class ETc notes in the Eurosail UK 07-3 transaction is a result of Fitch's expectation that those notes will pay in full on the upcoming payment dates due to a stabilisation of underlying collateral performance. However, on the past two payment dates the Eurosail UK 07-3 transaction's ability to generate excess spread has been put under pressure with a number of properties being sold with resulting losses for the transaction. For this reason, the upgrade has been limited to 'CCC'. The ratings on the transactions remain exposed to further FX movements, which could eventually move in favour of the issuers. In the meantime, due to their structures, the EMF UK 2008-1 and the Mortgage Funding 2008-1 transactions are also more exposed to the risk of interest shortfalls on the class A notes, as a result of tightening in excess spread following deterioration in asset performance. With the collapse of Lehman Brothers, the transactions also remain un-hedged for basis and fixed/floating risks. The hedges put in place at the closings of the transactions were provided by Lehman Brothers Special Financing, Inc. (LBSFI). In Fitch's view the absence of a basis hedge in these transactions is having a limited impact on their ability to generate excess spread, as the current mismatch between Libor and BBR stands at 23bps. Should the margin between Libor and BBR reach levels seen in 2008 (in excess of 100bps), the transactions are likely to struggle to generate sufficient revenue necessary to meet all the payments due in accordance with the priority of payment schedules. On the other hand, most of the loans in the underlying pools have reverted to variable rates; therefore the absence of a fixed/floating swap will continue to have little to no impact on the excess spread levels generated by the transactions. In addition, Lehman Brothers Bauhaus AG, London Branch was the liquidity facility provider on the EMF-UK and the Mortgage Funding UK transactions and has not been replaced since September 2008. In October 2009, Danske Bank failed to renew the liquidity facility agreement on the Eurosail Prime UK 2007-A and the Eurosail UK 07-5 transactions. Danske Bank also stated that due to the issuers' inability to meet the 'no default' representation of the underlying liquidity facility agreement, these transactions were unable to make stand-by drawdowns, as indicated in the transaction documentation in such events. A similar issue occurred recently in the Eurosail UK 07-6 and the Eurosail UK 07-4 transactions, leaving Eurosail 07-3 as the only transaction out of the seven referred to above with a liquidity facility in place. In Fitch's view, the absence of a liquidity facility does not affect the ratings of these transactions, as its purpose is to provide support for short-term liquidity shortfalls, which would typically occur in higher rating scenarios. The performance of the underlying assets in most of the transactions has followed the trends seen in other UK non- conforming transactions, i.e., arrears have stabilized and the volume of outstanding repossessions has seen a significant decline compared with levels seen 12 months earlier. Loss recognition in the Eurosail UK 07-3, the Eurosail UK 07-4 and the Mortgage Funding 2008-1 transactions has, however, remained quite high in comparison to most other UK non-conforming transactions. All three pools contain significant portions of second lien mortgagees which are partly the cause of the high loss severities reported in June 2010. The servicer has proactively been selling high numbers of repossessed properties with losses, which is another factor behind the tightening in excess spread levels. Although this has caused a reserve fund draw in the Eurosail UK 07-4 transaction, the sale of properties soon after repossession reduces the cost of carry for the relevant noteholders. Most of the loans in the underlying pools have now reverted to variable rates, and are benefiting from low interest rates. Fitch believes that this is the main cause behind the stabilization in arrears reported by most UK non-conforming issuers. The agency expects interest rate rises in 2011, at which stage the ability of borrowers to meet their monthly payments may be put under pressure. Fitch also believes that these deals remain exposed to the effects of unemployment. Both factors are likely to lead to another wave of arrears and repossessions, which will impact the transaction's ability to generate excess spread. The rating actions are: Eurosail -- UK 2007-3 BL plc Class A1b (ISIN XS0308649309) affirmed at 'BBBsf'; removed from RWN; assigned Stable Outlook; assigned Loss Severity Rating 'LS-2' Class A1c (ISIN XS0308653244) affirmed at 'BBBsf'; removed from RWN; assigned Stable Outlook; assigned Loss Severity Rating 'LS-2' Class A2a (ISIN XS0308648673) affirmed at 'BBsf'; removed from RWN; assigned Negative Outlook; assigned Loss Severity Rating 'LS- 2' Class A2b (ISIN XS0308650224) affirmed at 'BBsf'; removed from RWN; assigned Negative Outlook; assigned Loss Severity Rating 'LS- 2' Class A2c (ISIN XS0308659795) affirmed at 'BBsf'; removed from RWN; assigned Negative Outlook; assigned Loss Severity Rating 'LS- 2' Class A3a (ISIN XS0308666493) affirmed at 'CCsf'; Recovery Rating revised to 'RR3' from 'RR4' Class A3c (ISIN XS0308710143) affirmed at 'CCsf'; Recovery Rating revised to 'RR3' from 'RR4' Class B1a (ISIN XS0308672384) affirmed at 'Csf'; Recovery Rating 'RR5' Class B1c (ISIN XS0308716421) affirmed at 'Csf'; Recovery Rating 'RR5' Class C1a (ISIN XS0308673192) affirmed at 'Csf'; Recovery Rating 'RR5' Class C1c (ISIN XS0308718047) affirmed at 'Csf'; Recovery Rating 'RR5' Class D1a (ISIN XS0308673945) affirmed at 'Csf'; Recovery Rating 'RR5' Class E1c (ISIN XS0308725844) affirmed at 'Csf'; Recovery Rating 'RR5' Class ETc (ISIN XS0309312543) upgraded to 'CCCsf' from 'Csf'; Recovery Rating revised to 'RR3' from 'RR5' Eurosail-UK 07-4 BL PLC Class A1a (ISIN XS0311594740) affirmed at 'BBBsf'; removed from RWN; assigned Stable Outlook; assigned Loss Severity Rating 'LS-2' Class A1c (ISIN XS0311598907) affirmed at 'BBBsf'; removed from RWN; assigned Stable Outlook; assigned Loss Severity Rating 'LS-2' Class A2a (ISIN XS0311680747) affirmed at 'BBsf'; removed from RWN; assigned Negative Outlook; assigned Loss Severity Rating 'LS- 2' Class A3a (ISIN XS0311702657) affirmed at 'CCCsf'; removed from RWN; Recovery Rating 'RR3' Class A3c (ISIN XS0311704356) affirmed at 'CCCsf'; removed from RWN; Recovery Rating 'RR3' Class B1a (ISIN XS0311705759) upgraded to 'CCsf' from 'Csf'; Recovery Rating revised to 'RR4' from 'RR5' Class C1a (ISIN XS0311708696) affirmed at 'Csf'; Recovery Rating 'RR5' Class D1a (ISIN XS0311713001) affirmed at 'Csf'; Recovery Rating 'RR5' Class E1c (ISIN XS0311717416) affirmed at 'Csf'; Recovery Rating 'RR5' Eurosail-UK 07-5 NP PLC Class A1a (ISIN XS0328024608) affirmed at 'CCCsf'; Recovery Rating 'RR3' Class A1c (ISIN XS0328025241) affirmed at 'CCCsf'; Recovery Rating 'RR3' Class B1c (ISIN XS0328025324) affirmed at 'Csf'; Recovery Rating 'RR5' Class C1c (ISIN XS0328025597) affirmed at 'Csf'; Recovery Rating 'RR5' Class D1c (ISIN XS0328025670) affirmed at 'Csf'; Recovery Rating 'RR5' Eurosail-UK 07-6 NC PLC Class A1a (ISIN XS0332284651) affirmed at 'BBsf'; removed from RWN; assigned Stable Outlook.; assigned Loss Severity Rating 'LS- 2' Class A2a (ISIN XS0332285039) affirmed at 'Bsf'; removed from RWN; assigned Negative Outlook; assigned Loss Severity Rating 'LS-2' Class A3a (ISIN XS0332285971) affirmed at 'CCsf'; Recovery Rating 'RR5' Class B1a (ISIN XS0332286862) affirmed at 'Csf'; Recovery Rating 'RR5' Class C1a (ISIN XS0332287084) affirmed at 'Csf'; Recovery Rating 'RR5' Class D1a (ISIN XS0332287597) affirmed at 'Csf'; Recovery Rating 'RR5' Eurosail Prime-UK 2007-A plc Class A (ISIN XS0328494157) affirmed at 'CCCsf'; Recovery Rating 'RR3' Class M (ISIN XS0328496368) affirmed at 'Csf'; Recovery Rating 'RR6' Class B (ISIN XS0328504567) affirmed at 'Csf'; Recovery Rating 'RR6' Class C (ISIN XS0328511265) affirmed at 'Csf'; Recovery Rating 'RR6' Class D (ISIN XS0328517205) affirmed at 'Csf'; Recovery Rating 'RR6' EMF-UK 2008-1 Plc Class A1 (ISIN XS0352307184) upgraded to 'Bsf' from 'CCCsf'; assigned Stable Outlook; assigned Loss Severity Rating 'LS-1' Class A2 (ISIN XS0352307770) upgraded to 'CCCsf' from 'CCsf'; Recovery Rating revised to 'RR2' from 'RR3' Class A3 (ISIN XS0352932643) affirmed at 'CCsf'; Recovery Rating 'RR3' Mortgage Funding 2008-1 plc Class A (ISIN XS0350039912) affirmed at 'CCCsf'; Recovery Rating 'RR2' =============== X X X X X X X X =============== * BOOK REVIEW: Competition in the Health Care Sector ---------------------------------------------------- Author: Warren Greenberg, Ph.D. Publisher: Beard Books Softcover: 410 pages List Price: US$34.95 Review by Henry Berry Competition in the Health Care Sector covers a landmark Federal Trade Commission (FTC) conference in June 1977. The conference was attended by over 600 individuals, including healthcare administrators, government policymakers, sociologists and other academics, and medical doctors. All were present to try to get a better appreciation for the role and impact of economics in healthcare services. At that time (and still true today), Medicaid and Medicare were growing larger, health maintenance organizations (HMOs) were assuming a central place in the healthcare system, payment methods were proliferating and becoming more complicated, and consumers were becoming more informed about and involved with their healthcare options. Both government agencies and the private sector recognized that economic principles and phenomena were at work in the healthcare sector. The FTC conference was called to clarify the economic factors and their effects in healthcare in order to gain better control over the sector, particularly its escalating costs. The 24 chapters in Competition in the Health Care Sector are presented in four sections. The first is "Opening Remarks and Introduction," followed by sections on "Competition in Selected Sectors," "Insurance, Competition, and Alternative Delivery Systems," and "Competition and Regulation." Many of the chapters are titled "Comment," which contain comments by an individual on one of the topics presented in the four major sections. There is also a detailed index that leads readers to specific subjects of interest. Despite its general title, the first section gets right to the substance of the conference as connoted in the title. It is a staff report prepared by the FTC's Bureau of Economics. At the time of the conference, Greenberg was a staff economist with the FTC and presumably he had an appreciable hand in the report. There is a note that the FTC "has not adopted the report in whole or part." But this is a pro forma entry because there is little to adopt or reject in this government paper. The staff report is a summary of the lengthy and often detailed informative and analytic papers that follow in the remaining 400 pages of Competition in the Health Care Sector. In an address opening the conference, Michael Pertschuk, then FTC chairman, stresses that, "The Federal Trade Commission is not a health or medical agency . . . [W]e recognize, along with most Americans, that the delivery of health care is business, an industry of vast proportions and vital effect. Health care has become [the FTC's] business." That the FTC, charged with monitoring and regulating businesses, has come to regard the healthcare industry in the same terms as other business sectors plainly evidences the nature of modern-day healthcare. Healthcare executives and administrators as well as doctors and related health professionals concurred with the perspective of the FTC Chairman. Dr. Theodore Cooper, dean of Cornell University's Medical College at the time, said in his opening remarks that, "I have to admit that one can no longer discuss health policy without an appreciation of the importance of economic factors." Dr. Cooper also stated that, "the political and technical discussions about health policy will continue to expand." And he said that, "if the conference can clarify how competition fits into the 'scheme of things,' this will be a milestone for doctors, patients, and hospitals." The critical issue of competition in the healthcare industry was omnipresent during the conference. Most of the topics covered during the conference addressed, to some degree or another, the effects of competition. The impact of competition on physicians, hospitals, and insurers was analyzed. Another area of discussion focused on the interrelationship between competition and alternative means of payment. Appropriately for a conference sponsored by the FTC, the interrelation of competition and regulation came under study. Analyses follow the introduction of each topic. For example, "Competition Among Physicians," is followed by expert commentary. The style of the papers is, as is well described by the author, "a mix of technical jargon and mathematical exposition common to most economists, and language suitable for non-economists and public policy-makers." The conference did not arrive at definite conclusions about the place and effects of economics on the thriving, sprawling, complex healthcare industry that encompasses innumerable organizations and professionals of many different kinds. It did, however, succeed in its objective of presenting data, offering illuminating analyses, providing knowledgeable perspectives, and eliciting expert commentary. All this is offered in a reprint of a 1978 book that still has a place on everyone's bookshelf as a fundamental text and reference on economics in the healthcare field. Warren Greenberg has a Ph.D. in economics from Bryn Mawr University. Author of many books and articles in the area of industrial organization economics and healthcare, Greenberg is also a professor of Health Economics and of Health Care Sciences at George Washington University. ********* 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 * * *