TCREUR_Public/130828.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

           Wednesday, August 28, 2013, Vol. 14, No. 170

                            Headlines

D E N M A R K

AMAGERBANKEN AS: Shareholders Sue Two Gov't Agencies
E PIHL: Files for Bankruptcy; Owes DKK2.1-Bil. to Creditors
VESTAS WIND: Ousts Chief Executive; To Focus on Restructuring


F R A N C E

PHOTONIS TECHNOLOGIES: S&P Affirms Prelim. B+ CCR; Outlook Stable
RCI BANQUE: S&P Lowers Rating on Subordinated Debt to 'BB+'


G E R M A N Y

PRAKTIKER AG: At Least 10 Investors Express Interest in Max Bahr


H U N G A R Y

KAPUVARI HUS: Liquidator Won't Call for Third Tender


I R E L A N D

ANGLO IRISH: Seeks Creditor Protection in U.S.


I T A L Y

BANCA MONTE: Management Accused of Obstructing Supervisory Duties


L A T V I A

OMINASIS LATVIA: Auction for Kemeri Sanatorium Set for Sept. 24


P O L A N D

KOMPANIA WEGLOWA: May Need State Aid After Coal Prices Plunge


R U S S I A

SEVERSTAL OAO: Moody's Alters Outlook to Positive & Keeps Ba1 CFR


S E R B I A   &   M O N T E N E G R O

* SERBIA: Fiscal Deficit Constrains Moody's B1 Bond Rating


U N I T E D   K I N G D O M

CHALLINORS SOLICITORS: Administrators Sell Business to Rivals
CO-OPERATIVE BANK: Leaders to Reassure Bail-Out on Course
JESSOPS: Costa's Plans to Extend Into Firm's Empty Store
MORE FINANCIAL: High Court Winds Up Firm Over Misleading Claims


X X X X X X X X

* Moody's Outlook on Euro Area Periphery Remains Negative


                            *********


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D E N M A R K
=============


AMAGERBANKEN AS: Shareholders Sue Two Gov't Agencies
----------------------------------------------------
Frances Schwartzkopff at Bloomberg News reports that shareholders
of collapsed Amagerbanken filed a lawsuit against Denmark's
financial regulator and bank resolution agency, alleging that the
agencies failed to warn them of risks the bank faced.

According to Bloomberg, Foreningen Amagerinvestor said in an
e-mail that Financial Supervisory Authority and the Financial
Stability Co. failed to say how weak Amagerbanken was when
shareholders were asked to invest another DK898 million in the
bank in 2010.

Foreningen Amagerinvestor so far represents 1,482 shareholders,
Bloomberg discloses.

                        About Amagerbanken

Amagerbanken, the 8th largest bank in Denmark, was hit in 2008 by
the financial crisis and needed to refinance it on the market, in
order to balance necessary asset write-downs.  After continuous
unsuccessful efforts to obtain new financing or to find other
solutions, Amagerbanken was declared bankrupt on Feb. 7, 2011.
On Feb. 6, 2011, Amagerbanken had entered into a conditional
transfer agreement with the Danish publicly owned Financial
Stability Company (FSC), as part of the Danish bank wind-up
scheme.


E PIHL: Files for Bankruptcy; Owes DKK2.1-Bil. to Creditors
-----------------------------------------------------------
Christian Wienberg at Bloomberg News reports that E. Pihl & Soen
A/S said on Monday it filed for bankruptcy after the board failed
to reach an agreement with creditors that would have allowed the
company to continue operations.

Bloomberg relates that Aarsleff, which employs about 3,600
people, said yesterday it will take over Pihl's tasks and hire
some of its workers for the two contractors' joint project to
renovate Noerreport, Copenhagen's busiest train station.

Pihl, which was founded in 1887, said it was brought down by a
strategy of expanding too aggressively during Denmark's property
boom and after costs rose more than budgeted on some projects,
Bloomberg discloses.

According to Bloomberg News' Frances Schwartzkopff, Birgit
Noergaard, Phil's chairman, as quoted by Berlingske, said the
company owes DKK2.1 billion to creditors who are likely to
experience "big loss".

Danske Bank said in an e-mail to Berlingske that it won't change
its full-year forecast or expected writedowns, Bloomberg notes.

E. Pihl & Soen A/S is one of Denmark's largest contracting
companies.  Outside Denmark, the company has building contracts
in Lebanon, Norway, Sri Lanka and Sweden.  The company has 2,400
employees.


VESTAS WIND: Ousts Chief Executive; To Focus on Restructuring
-------------------------------------------------------------
Richard Milne at The Financial Times reports that the chairman of
Vestas has said the focus of the embattled company will now be
"stable profitability", after it jettisoned its chief executive
in the wake of multiple profit warnings and thousands of job
losses.

On Wednesday, Ditlev Engel was replaced as chief executive of the
Danish company by Anders Runevad, a career executive at Sweden's
Ericsson, which also provided Vestas' chairman, Bert Nordberg,
the FT relates.

"The reason for this leadership change is that we want to
finalize the restructuring and go into a phase of stable,
profitable growth," the FT quotes Mr. Nordberg as saying.

Mr. Engel, who was appointed chief executive in 2005, became a
lightning rod for investor dissatisfaction in Vestas, which was
overtaken as the world's biggest manufacturer of wind turbines by
General Electric last year, the FT recounts.  He was criticized
for an aggressive expansion undertaken as the 2008 financial
crisis pushed Vestas into deep financial trouble, which had to be
unwound at a cost of almost a third of its workers' jobs, the FT
discloses.

Last year, the Danish group was forced to delay its half-year
test of financial covenants after four profit warnings caused
many investors to lose faith in the company, the FT relates.

Overall, Vestas' net loss widened from EUR8 million to EUR62
million in the second quarter by EUR535 million from a year
earlier, the FT discloses.

Vestas is a wind turbine manufacturer.



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


PHOTONIS TECHNOLOGIES: S&P Affirms Prelim. B+ CCR; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B+'
preliminary long-term corporate credit rating on Photonis
Technologies SAS, a France-headquartered electro-optic component
manufacturer.  The outlook is stable.

At the same time, S&P affirmed its 'B+' preliminary issue rating
on Photonis' EUR250 million (about US$325 million) proposed six-
year first-lien secured loan.  The preliminary recovery rating of
'3' on the first-lien loan indicates S&P's expectation of
meaningful (50%-70%) recovery for the lenders in the event of a
payment default.  S&P withdrew its 'B-' preliminary issue and '6'
recovery ratings on the 6.5-year second-lien loan.

The ratings are primarily constrained by S&P's view of Photonis'
"highly leveraged" financial risk profile and "aggressive"
financial policy, reflecting that the company was acquired
through a leveraged buyout.  S&P's assessment is based on its
expectation that the company's proposed refinancing transaction
will be completed as presented to us by Photonis and its majority
owner, AXA Private Equity.

"We assume that the current financial structure will be replaced
by a EUR250 million six-year term loan and a EUR30 million
revolving credit facility (RCF).  We also assume the existing
non-cash interest-bearing convertible bond (EUR175 million at
year-end 2012) provided by shareholders and preferred shares
(EUR25 million at year-end 2012) will remain in place.  When
calculating fully adjusted debt, we treat both instruments as
debt-like in nature. The company's Standard & Poor's-adjusted
debt-to-EBITDA ratio for 2013-2014 is slightly above 8x and funds
from operations (FFO) to debt about 8%.  We have noted the change
in conditions for the EUR250 million six-year term loan and
foresee that it may be more difficult for the company to sustain
a cash interest cover ratio around 3x, a level we see as ratings-
commensurate," S&P said.

Excluding the non-cash interest-bearing debt, S&P forecasts debt
to EBITDA at 4.0x-4.5x and FFO to debt at slightly above 15%.
These metrics are for informative purposes only and are not to be
construed as an indication that S&P do not treat the non-cash
interest-bearing instruments as debt-like.

The outlook is stable, based on S&P's anticipation that Photonis
will maintain its solid market shares and operating margins in
the coming years.  In S&P's view, ratings-commensurate credit
metrics include a cash interest cover ratio of about 3x and
continuously positive discretionary cash flow.

S&P could lower the ratings if Photonis were to report weaker
revenues and profitability than currently.  Additionally, ratings
downside could occur if the company were to adopt a more
shareholder-friendly financial policy as a result of its private
equity ownership.  Acquisitions and tight credit metrics for the
current rating level could also prompt a negative rating action.

S&P believes that an upgrade is unlikely in the next two years,
given Photonis' highly leveraged capital structure.  S&P already
factors its forecast of continued strong operating performance
into the ratings.


RCI BANQUE: S&P Lowers Rating on Subordinated Debt to 'BB+'
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it has corrected its
rating on RCI Banque's nondeferrable subordinated debt by
lowering it to 'BB+' from 'BBB-'.

Under S&P's criteria, it rates subordinated debt one notch below
a bank's stand-alone credit profile (SACP) when the SACP is 'bbb-
' or higher.  When S&P took a rating action on RCI Banque on Nov.
5, 2012, it inadvertently did not lower the rating on the
subordinated debt.

This action corrects this error.



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


PRAKTIKER AG: At Least 10 Investors Express Interest in Max Bahr
----------------------------------------------------------------
Dorothee Tschampa at Bloomberg News, citing Bild, reports that at
least 10 investors are interested in buying insolvent DIY chain
Max Bahr with up to 180 outlets.

According to Bloomberg, Bild said that insolvency administrators
will examine bids next week to select investors for concrete
negotiations.  Potential investors have until Aug. 31 to submit
their bids, Bloomberg discloses.

As reported by the Troubled Company Reporter-Europe on August 1,
2013, Reuters related that the insolvency administrators of
Praktiker on July 30 said they have stepped up the search for an
investor by appointing Macquarie as advisor.  The administrators
hope that by finding an investor they can secure as many jobs and
stores as possible at the group, which has around 20,000 full and
part-time employees, Reuters disclosed.  They said they did not
expect any results from the search before the start of September,
but that all the 300 stores affected by the insolvency would
continue trading for now, Reuters related.  Of the 300 stores in
the insolvency process, 168 are Praktiker stores, 78 are Max Bahr
stores and a further 54 are Praktiker-branded shops that have
recently been converted to the Max Bahr signage, Reuters noted.

Praktiker AG is a German home-improvement retailer.



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


KAPUVARI HUS: Liquidator Won't Call for Third Tender
----------------------------------------------------
MTI-Econews reports that the liquidator for Kapuvari Hus will not
call a third tender for the company following two unsuccessful
tenders earlier this year.

Pal Peter Jendrolovics, the bailiff, told MTI on Monday that
Kapusvari Hus liquidators will attempt to sell the company's
assets rather than continue to search for an investor.

Kapuvari Hus, which has been under liquidation since the autumn
of 2012, owes its creditors more than HUF8 billion, MTI
discloses.

Kapuvari Hus is a Hungarian meat company.



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I R E L A N D
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ANGLO IRISH: Seeks Creditor Protection in U.S.
----------------------------------------------
Peg Brickley, writing for Daily Bankruptcy Review, reported that
the liquidation vehicle for what was once one of Ireland's
largest banks filed for U.S. bankruptcy protection Monday to
protect U.S. assets of the former Anglo Irish Bank Corp. from
being seized by creditors.

                       About Anglo Irish

Anglo Irish Bank was an Irish bank headquartered in Dublin from
1964 to 2011.  It went into wind-down mode after nationalization
in 2009.  In July 2011, Anglo Irish merged with the Irish
Nationwide Building Society, with the new company being named the
Irish Bank Resolution Corporation (IBRC).

Standard & Poor's Ratings Services said that it lowered its long-
and short-term counterparty credit ratings on Irish Bank
Resolution Corp. Ltd. (IBRC) to 'D/D' from 'B-/C'.   S&P also
lowered the senior unsecured ratings to 'D' from 'B-'.  S&P then
withdrew the counterparty credit ratings, the senior unsecured
ratings, and the preferred stock ratings on IBRC.  At the same
time, S&P affirmed its 'BBB+' issue rating on three government-
guaranteed debt issues.

The rating actions follow the Feb. 6, 2013, announcement that the
Irish government has liquidated IBRC.



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I T A L Y
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BANCA MONTE: Management Accused of Obstructing Supervisory Duties
-----------------------------------------------------------------
Sonia Sirletti at Bloomberg News reports that Banca Monte dei
Paschi di Siena SpA's management was accused by Italy's market
regulator Consob of obstructing its supervisory duties last year
by giving incorrect or incomplete information on past financing
and derivatives deals that led to a fraud probe.

According to a document reviewed by Bloomberg and originally
obtained by consumer group Codacons, Consob wrote in a note to
prosecutors in Siena dated Feb. 15 that the bailed-out bank
misled the regulator between April 2012 and July 2012 in response
to Consob request for information on the financing of Banca
Antonveneta SpA's purchase in 2008.

Bloomberg relates that Consob said in the document Monte Paschi
also withdrew information on a derivative contract with Nomura
Holdings Inc. in its communications to the regulator from
November 2011 through October 2012.  The document said that the
Rome-based agency asked prosecutors to start a probe into alleged
regulator obstruction, Bloomberg notes.

Magistrates are accusing former executives, including ex-chairman
Giuseppe Mussari and General Manager Antonio Vigni of withholding
information from regulators about how the bank financed its
purchase of Antonveneta, Bloomberg discloses.  Prosecutors are
also probing whether former managers at Monte Paschi, which piled
up losses of EUR7.9 billion (US$10.5 billion) in the past two
years, used derivative contracts to obscure more than EUR700
million of losses, Bloomberg says.

                               Loss

As reported by the Troubled Company Reporter-Europe on Aug. 9,
2013, Bloomberg News related that Banca Monte dei Paschi di Siena
-- the Italian bank seeking to persuade European regulators it
deserves a bailout -- reported a fifth straight loss in the
second quarter on the cost of state aid and higher provisions for
bad loans.  The net loss fell to EUR279.3 million (US$372
million) from EUR1.64 billion a year earlier, when Monte Paschi
wrote down goodwill and intangible assets by more than EUR1.5
billion, Bloomberg disclosed.

                         Restructuring Plan

Chief Executive Officer Fabrizio Viola is waiting for European
regulators to approve the latest restructuring plan for Monte
Paschi to retain rights to EUR4.1 billion of state aid, which it
got from selling bonds to the government, Bloomberg said.  The
Siena-based bank, which must pay 9% annual interest on the bonds,
plans more asset disposals, branch cuts and savings to return to
profit this year, a necessary condition under the plan to avoid
surrendering a stake to the government, Bloomberg noted.

Banca Monte dei Paschi di Siena SpA -- http://www.mps.it/-- is
an Italy-based company engaged in the banking sector.  It
provides traditional banking services, asset management and
private banking, including life insurance, pension funds and
investment trusts.  In addition, it offers investment banking,
including project finance, merchant banking and financial
advisory services.  The Company comprises more than 3,000
branches, and a structure of channels of distribution.  Banca
Monte dei Paschi di Siena Group has subsidiaries located
throughout Italy, Europe, America, Asia and North Africa.  It has
numerous subsidiaries, including Mps Sim SpA, MPS Capital
Services Banca per le Imprese SpA, MPS Banca Personale SpA, Banca
Toscana SpA, Monte Paschi Ireland Ltd. and Banca MP Belgio SpA.

                          *     *     *

As reported by the Troubled Company Reporter-Europe on June 19,
2013, Standard & Poor's Ratings Services said that it lowered its
long-term counterparty credit rating on Italy-based Banca Monte
dei Paschi di Siena SpA (MPS) to 'B' from 'BB', and affirmed the
'B' short-term rating.  S&P also lowered its rating on MPS' Lower
Tier 2 subordinated notes to 'CCC-' from 'CCC+'.  S&P affirmed
the ratings on MPS' junior subordinated debt at 'CCC-' and on its
preferred stock at 'C'.  At the same time, S&P removed the
ratings from CreditWatch, where it placed them with negative
implications on Dec. 5, 2012.



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L A T V I A
===========


OMINASIS LATVIA: Auction for Kemeri Sanatorium Set for Sept. 24
---------------------------------------------------------------
The Baltic Times, citing Nozare.lv, reports that the property of
the insolvent Ominasis Latvia, including the Kemeri Sanatorium,
will be sold at auction on Sept. 24, insolvency administrator
Ainars Kreics said.

The starting price of the company's property will be LVL3,905,901
(EUR5.5 million), which will be partly applied to value added
tax. This will be the first auction of Kemeri Sanatorium, the
report says.

According to The Baltic Times, the Finance Ministry's
Communications Department Director Aleksis Jarockis told
Nozare.lv that the Jurmala City Council had not submitted
information on the necessary financing needed to maintain the
Kemeri Sanatorium over the next several years, as well as its
vision, together with financial calculations, on how the
sanatorium would be utilized.

The Baltic Times relates that Kreics, in an effort to prevent
Ominasis Latvia property from depreciating and due to conditions
set by the Municipal Loan and Guarantee Control and Supervision
Council, has decided to organize an auction of the Kemeri
Sanatorium.

This past July, the report recalls, creditors of Ominasis Latvia,
the company that previously privatized the Kemeri Sanatorium,
decided to sell the sanatorium complex to the Jurmala City
Council without going to auction.  They unanimously agreed to
sell the property to the Jurmala City Council for LVL4.6 million.

However, law firm Raidla Lejins & Norcous, representing Ominasis
Latvia, said in a letter to the Jurmala City Council that the
sale of the Kemeri Sanatorium to the Jurmala City Council without
going to auction contradicts legal requirements and creditor
interests, the report notes.



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P O L A N D
===========


KOMPANIA WEGLOWA: May Need State Aid After Coal Prices Plunge
-------------------------------------------------------------
Agnieszka Barteczko and Dagmara Leszkowicz at Reuters report that
Kompania Weglowa is considering asking a state agency for a
bailout.

According to Reuters, Poland still relies heavily on coal for its
energy needs, but two sources familiar with the matter said
Kompania Weglowa needs state aid after being hit by plunging coal
prices over the past year.  Like other state miners, the company
also has to contend with high extraction costs in Poland, Reuters
notes.  The combination of high costs and low prices has served
to make domestic coal more expensive than the imported variety,
resulting in the company's large stockpiles almost doubling in
the past year, Reuters discloses.

The sources said that Kompania Weglowa could soon turn to the
Agency for Industrial Development (ARP), which most recently
bailed out troubled builder Polimex, Reuters relates.

"Such talks are being held at the agency, but (the)
technicalities are not clear at this stage", a person close to
the matter told Reuters.  A second source confirmed that
discussions were taking place.

Kompania Weglowa declined to comment and the ARP said that the
miner had not formally asked for a bailout, Reuters notes.

Though Kompania Weglowa has not released any financial data for
this year, smaller KHW said it lost PLN70 million (US$22 million)
in the first six months of 2013, Reuters states.

Kompania Weglowa is a Polish mining company.  It is the biggest
hard coal producer in the European Union.



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


SEVERSTAL OAO: Moody's Alters Outlook to Positive & Keeps Ba1 CFR
-----------------------------------------------------------------
Moody's Investors Service has changed to positive from stable the
outlook on OAO Severstal ratings. Moody's has also affirmed
Severstal's corporate family rating and probability of default
rating at Ba1 and Ba1-PD, respectively. Concurrently, Moody's has
affirmed the ratings on the senior unsecured debt and med-term
notes program issued by Steel Capital S.A. at Ba1 and (P)Ba1
(with a loss-given default assessment of LGD4, 54%),
respectively.

"[This] change in outlook reflects Severstal's strong operating
performance, favorable cost structure and the company's
commitment to keeping its leverage ratio as measured by net
debt/EBITDA at below 2.0x over the next 12-18 months" says Denis
Perevezentsev, a Moody's Vice President and lead analyst for
Severstal. "This strongly positions the company's credit profile
among its global peers in the highly competitive steel sector".

Ratings Rationale:

The positive outlook reflects Moody's view that Severstal's
financial metrics will be resilient, even in the currently
challenging macroeconomic environment and soft global steel
market. The company's exposure to the Russian and US markets,
where end-user demand and capacity utilizations are quite strong
compared with Europe, and its fairly conservative leverage as
measured by net debt/EBITDA will continue to position the company
favorably among its global steel peers. The outlook also
incorporates the rating agency's expectation that the company
will maintain a solid liquidity profile.

Moody's expects that Severstal will be able to maintain its
current cost-competitive position as a result of the company's
high level of vertical integration into key raw materials and
self-sufficiency in coal and iron ore. Moreover, Moody's expects
that Severstal's mining segment, into which the company is
vertically integrated, will continue to be one of the main
contributors to the company's EBITDA, primarily as a result of
Severstal's adequate cash cost position and strong market
environment in the iron ore sector, despite somewhat elevated
cash costs and currently low prices for coking coal.

What Could Change The Rating Up/Down

Moody's would consider upgrading Severstal's rating if the
company were to continue to demonstrate a conservative financial
profile, with (1) gross debt /EBITDA below 2.0x on a sustainable
basis; (2) EBIT margin sustainably in the mid-teens in percentage
terms; and (3) prudent liquidity management.

Negative rating pressure would occur if Severstal's Moody's-
adjusted gross debt/EBITDA ratio moved above 3.0x or if its (CFO-
dividends)/debt ratio declined to below 20% on a sustainable
basis. A deterioration in the company's currently strong
liquidity position would also exert pressure on the rating and/or
outlook.

The principal methodology used in these ratings was the Global
Steel Industry published in October 2012. Other methodologies
used include Loss Given Default for Speculative-Grade Non-
Financial Companies in the U.S., Canada and EMEA published in
June 2009.

Severstal is a vertically integrated global steel and steel-
related mining company, with assets in Russia, the US, Ukraine,
Latvia, Poland, Italy, Liberia and Brazil. Severstal is listed on
the Moscow Interbank Currency Exchange (MICEX) and the company's
global depository receipts are traded on the London Stock
Exchange (LSE). Currently approximately 79.17% of Severstal's
share capital is indirectly controlled by Mr. Alexey Mordashov,
the company's CEO. In 2012, Severstal had revenue of $14.1
billion (2011: US$15.8 billion) and EBITDA of US$2.1 billion
(2011: US$3.6 billion). Severstal's crude steel production in
2012 reached 15.1 million tonnes (2011: 15.3 million tonnes).



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S E R B I A   &   M O N T E N E G R O
=====================================


* SERBIA: Fiscal Deficit Constrains Moody's B1 Bond Rating
----------------------------------------------------------
Moody's Investors Service says that Serbia's B1 government bond
rating incorporates the government's relatively high fiscal
deficits and rising government debt burden, as well as the
economy's uncertain growth prospects. The rating also
incorporates the institutional and economic benefits that will
accrue as Serbia proceeds along the path of accession to the EU.
The rating has a stable outlook.

The rating agency's report is an update to the markets and does
not constitute a rating action.

Moody's says that Serbia's general government fiscal deficit
increased to about 6.4% of GDP in 2012 from 2.6% of GDP in 2008,
while government debt has risen to 59% of GDP from 33.4% over the
same period, and is expected to rise to 63% of GDP in 2013. As a
large portion of total government debt is denominated in or
indexed to foreign currencies, the government's debt-servicing
costs are vulnerable to exchange-rate fluctuations. Moreover, in
contrast to its historical reliance on multilateral and bilateral
debt, over the last few years the government has turned to the
international bond market for its deficit-financing needs.
Consequently, its public finances are increasingly vulnerable to
international market volatility and interest-rate trends as well.

On the other hand, Moody's notes that Serbia's scores on survey
indicators of governance have improved over the last few years,
and compare well to those of several similarly rated peers.
Moody's also notes that Serbia's per capita income levels are
relatively high compared to similarly rated peers, as are
infrastructure and labor force education levels.

However, having averaged about 5% in the five years prior to the
global financial crisis, GDP growth has decelerated to an average
of 0.3% in the past three years, largely reflecting the effect of
euro area uncertainties on trade and investment. GDP contracted
by 1.7% in 2012 and Moody's expects GDP growth to range between
1.5% -2.5% in 2013-14, which is lower than the median growth rate
for similarly rated peers. Serbia's rating also incorporates
macroeconomic imbalances, as reflected in wide current account
deficits, high inflation and unemployment and rising external
debt.

The rating outlook would improve with (1) a material reduction in
government fiscal deficits and debt levels; or (2) a sustainable
acceleration in growth that also reduces existing macroeconomic
imbalances. Conversely, downward pressure on the rating could
arise from (1) continued high fiscal deficits and increases in
government debt levels to levels beyond what the economy can
sustain; or (2) a slowdown or disruption in the EU accession
process that suggests that anticipated institutional and
operating environment improvements will not occur.



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


CHALLINORS SOLICITORS: Administrators Sell Business to Rivals
-------------------------------------------------------------
Edward Devlin at insidermedia.com reports that the operations of
Midlands law firm Challinors have been sold to a group of rivals,
including two based in Birmingham, after RSM Tenon was appointed
as administrator of the stricken business.

The report relates that a substantial part of the firm's
operational functions have been sold to various law firms
including Clarke Willmott and Shoosmiths.  As part of the client
protection work, all the live client files were transferred to
the new firms prior to the administration.

The company's personal injury caseload was sold earlier this week
to Liverpool firm SGI Legal, the report relates.

According to the report, Challinors originally filed notice of
intention to appoint insolvency practice KSA as administrator in
July 2013 before replacing the firm with RSM Tenon, which itself
was bought in a pre-pack deal by Baker Tilly on Aug. 22, 2013.

Andrew Hosking and Simon Bonney from RSM Tenon were officially
appointed as joint administrators of Challinors on Aug. 21, 2013,
the report notes.

insidermedia.com relates that the firm, which had offices in
Birmingham, West Bromwich, Halesowen, Nottingham, Leicester,
Loughborough and Wolverhampton, was placed into administration
following a statutory demand issued by a creditor against the
Challinors partners.


CO-OPERATIVE BANK: Leaders to Reassure Bail-Out on Course
---------------------------------------------------------
Roland Gribben at The Telegraph reports that leaders of the
Co-operative Group will this week attempt to head off suggestions
that the financial crisis facing the GBP8 million strong mutual
group is even worse than forecast.

The group announced a GBP1.5 billion capital raising program to
cover the bail-out of its banking arm just two months ago, The
Telegraph recounts.  Further write-offs on loans in its
commercial property and mortgage loans business that largely came
with the acquisition of Britannia Building Society have been
forecast to top GBP1 billion, The Telegraph notes.  But interim
financial results to be announced tomorrow, Aug. 29, are expected
to show a lower figure, The Telegraph states.

The latest estimates suggest the total will be under the
GBP1 billion mark, although senior executives recognize that
whatever the size of the reduction, it will do nothing to ease
the crisis or the need for a costly bail-out, The Telegraph
discloses.

Bondholders, concerned that they will end up as losers in the
reconstruction program, have written to George Osborne,
Chancellor of the Exchequer, and Mark Carney, Governor of the
Bank of England, for help, according to The Telegraph.

The Bank has insisted the Co-op finds GBP1.5 billion to
strengthen reserves, The Telegraph states.  The Co-op parent
organization is aiming to provide GBP1 billion to retain a
majority holding in the bank, with the balance coming from the
sale of its life and savings business to Royal London, and the
disposal of its general insurance operation, The Telegraph says.

Euan Sutherland, the Co-op Group's new chief executive, and Niall
Booker, who replaced Barry Tootell as bank chief executive, will
attempt to provide reassurance with this week's results that the
bail-out program is on course, The Telegraph discloses.

Some analysts, however, believe the group will be forced to
increase bank writedowns later this year with the result that the
parent will face fresh strains, The Telegraph notes.

Co-op Bank -- part of the mutually owned food-to-funerals
conglomerate Co-operative Group -- traces its history back to
1872.  The bank gained prominence for specializing in ethical
investment.  It refuses to lend to companies that test their
products on animals, and its headquarters in Manchester is
powered by rapeseed oil grown on Co-operative Group farms.

Founded in 1863, the Co-op Group has more than six million
members, employs more than 100,000 people and has turnover of
more than GBP13 billion.

                           *     *     *

As reported by the Troubled Company Reporter-Europe on May 13,
2013, Moody's Investors Service downgraded the deposit and senior
debt ratings of Co-operative Bank plc to Ba3/Not Prime from
A3/Prime 2, following its lowering of the bank's baseline credit
assessment (BCA) to b1 from baa1.  The equivalent standalone bank
financial strength rating (BFSR) is now E+ from C- previously.


JESSOPS: Costa's Plans to Extend Into Firm's Empty Store
--------------------------------------------------------
Oxford Mail reports that the Costa coffee shop in the Market
Place, Abingdon, is planning to extend and take over the
Jessops store next door which has stood empty since January.

The report relates that Jessops, the national camera chain, went
into administration last year and shut its shops early this year.

Costa's has applied for planning permission to the Vale of White
Horse District Council to change the Jessops shop signs to
Costa's signs, the report notes.

A decision is due to be taken by October 16.


MORE FINANCIAL: High Court Winds Up Firm Over Misleading Claims
---------------------------------------------------------------
More Financial (MFL) Ltd, a loan brokerage company that took
money from people in financial difficulties based on misleading
claims, was wound up by the High Court on Aug. 19, 2013,
following an investigation by the Insolvency Service.

The petition to wind up the companies was brought on behalf of
the Secretary of State for Business, Innovation and Skills in the
public interest.

MFL was wound up for taking a "brokerage" fee from clients
seeking loans, based on misleading claims made on a number of
websites and through telephone sales.

The company claimed that its services left virtually no chance of
failing to get a loan and that more than 90 per cent of its
lenders were not on other comparison websites. It also claimed
that it did not charge upfront fees, while charging 69.50
'processing fees' for presenting the client with a lender and
lender options.

In fact, none of those claims were true and all MFL did was to
provide details of lenders to the clients who would then have to
apply separately.

Investigators found that over 50,000 customers had paid the up-
front fee between January 2012 and January 2013, including over
10,000 in January 2013 alone. Only one client in every thousand
appears to have been successful in their applications.

Furthermore, there were claims that the company deducted fees
from the bank accounts of clients without permission. Because of
the lack of transparency with which the company operated, clients
were unable to obtain refunds or make complaints either by
telephone or by email.

These failings were aggravated by the fact that:

   * The company was controlled by an individual not named as a
     current director at Companies House and who regularly used
     an alias.

   * The directors and shareholders failed to co-operate and
     actively hindered the investigation.

   * The company failed to maintain or preserve adequate trading
     records.

   * The company filed false or unverifiable accounts at
Companies
     House.

   * Over GBP1 million was taken from the company's account after
     the investigation started without proper explanation.

Commenting on the case, Alex Deane, an Investigation Supervisor
with the Insolvency Service, said: "This company targeted
individuals, many of whom were already in financial difficulties,
and promised loans which it failed to deliver. This is
unacceptable and the winding up orders should serve as a warning
that the Insolvency Service will close down companies that
operate in this way."

The petition to wind up the company in the public interest was
presented to the High Court under s124A of the Insolvency Act
1986 on June 13, 2013, following confidential enquiries carried
out by Company Investigations under section 447 of the Companies
Act 1985, as amended.

A provisional liquidator was appointed to the company on June 13,
2013 and the company was wound up on Aug. 19, 2013.



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


* Moody's Outlook on Euro Area Periphery Remains Negative
---------------------------------------------------------
The countries of the euro area periphery (Cyprus, Greece,
Ireland, Italy, Portugal and Spain) have made significant
progress towards addressing the internal and external imbalances
and the associated losses in competitiveness that were among the
drivers of their unsustainably high public debt burdens, says
Moody's Investors Service in a Special Comment entitled "Update
on Structural Reforms in the Euro Area Periphery."

However, these improvements are not in and of themselves a
sufficient condition for sustainable growth, and the rating
outlooks on periphery countries remain negative to reflect their
remaining adjustment needs, the ongoing institutional
developments at the euro area level and their overall sluggish
macroeconomic prospects. Overall, Moody's does not expect the
periphery to record pre-crisis GDP levels before 2016-17.

Moody's notes that the reversal of the current account imbalances
in the periphery continued last year. As of the end of 2012, all
periphery countries had restored their current account balances
to mid-1990 levels (-1.0% on average). Moreover, the rating
agency expects Ireland, Portugal and Spain to be in surplus by
the end of this year.

The periphery's positive trade balance since 2011 is the main
driver of these changes in the current account. These trade
balance gains were initially driven by a contraction in imports,
but have since been increasingly driven by stronger exports due
to competitiveness improvements and increasing geographical
diversification. However, it is unclear whether these
competitiveness gains are sufficiently sustainable to enable the
adjustment to be completed. Moody's also notes that structural
reform programs have also progressed (with full implementation in
some cases) for most periphery countries, which should provide
some long-term support to the competitiveness gains.

However, Moody's says that the return to pre-crisis GDP levels is
taking longer for these countries than for other economies that
have experienced financial shocks in the past. One of the reasons
for this longer adjustment timeline may be that the common euro
area currency prevents these countries from using a nominal
depreciation of their currencies and requiring "internal
devaluations" in order to improve international competitiveness.

The report is an update on a Special Comment published last year.
In it, Moody's re-assesses the extent of the economic adjustment
achieved to date by the euro area periphery, and consider how far
they still have to go.


                            *********

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., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
Joy A. Agravante, Ivy B. Magdadaro, Frauline S. Abangan and Peter
A. Chapman, Editors.

Copyright 2013.  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$775 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 Peter Chapman at 215-945-7000 or Nina Novak at
202-241-8200.


                 * * * End of Transmission * * *