/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/061128.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, November 28, 2006, Vol. 7, Issue 236 Headlines A R G E N T I N A AGENTES CONSIGNATARIOS: Claims Verification Deadline Is Feb. 26 BOWNE & CO: Incurs US$11.7MM Net Loss in Quarter Ended Sept. 30 DIMEZ SRL: Proofs of Claim Verification Is Until Feb. 12 GENERAL MOTORS: Boosting Argentine Car Output by 12% in December L AUTO: Deadline for Proofs of Claim Verification Is Feb. 16 S.A. VINEDOS: Reorganization Proceeding Concluded SEGURIDAD ENTRE: Claims Verification Deadline Is March 7, 2007 B A H A M A S COMPLETE RETREATS: Wants to Sell All Assets for US$98 Million COMPLETE RETREATS: Non-Gov'tal Units Must File Claims by Dec. 11 COMPLETE RETREATS: Court Reaffirms CIT as Real Estate Advisor B E L I Z E PETROLEOS DE VENEZUELA: PDV Caribe Will Supply Fuel to Belize * BELIZE: PDV Caribe Will Supply Fuel to Country B E R M U D A DERWOOD MARINE: Creditors Must File Proofs of Claim by Dec. 8 HEATH FIELDING: Last Day to File Proofs of Claim Is on Dec. 8 SEA CONTAINERS: Court Okays Young Conaway as Bankruptcy Counsel B R A Z I L BANCO BRADESCO: Approves Buy Back of 5 Million Shares BANCO DO BRASIL: Approves Dividend Distribution Every Quarter BANCO NACIONAL: Formalizes Membership in ABVCAP BANCO NACIONAL: Uniao de Bancos Denies Acquisition of Bank BANCO VOTORANTIM: S&P Changes BB Ratings' Outlook to Positive CENTRAIS ELECTRICAS: S&P Changes Ratings' Outlook to Positive COMPANHIA PARANAENSE: Implementing Maua Communications Campaign COMPANHIA SIDERURGICA: Fails to Renew Insurance Policies DEVELOPERS DIVERSIFIED: Declares Preferred Stock Dividends DURA AUTOMOTIVE: Judge Carey Approves Equity Trading Procedures DURA AUTOMOTIVE: Can Pay Obligations to Employees DURA AUTOMOTIVE: Court Issues Order for Banks to Honor Checks HSBC BRASIL: S&P Changes BB Ratings' Outlook to Positive TELE NORTE: Fails to Vote on Restructuring Plan for Second Time UNIAO DE BANCOS: Denies Acquisition Talks of Banco Nacional UNIAO DE BANCOS: S&P Changes BB Ratings Outlook to Positive * BRAZIL: Peru Offers Hydropower as Alternative Energy Source C A Y M A N I S L A N D S AQFTC I: Invites Shareholders for Final Meeting on Nov. 30 ATSU CO: Shareholders Convene for Final Meeting on Nov. 30 ATSU 2 CO: Shareholders Gather for Final Meeting on Nov. 30 BA CREDIT: Invites Shareholders for General Meeting on Nov. 30 ENHANCED LOAN: Final General Meeting Is Scheduled for Nov. 30 FIGARO LTD: Final General Meeting Is Set for Nov. 30 GRAND CENTRAL: Sets Final General Meeting for Nov. 30 INTERNATIONAL WATER: Final Shareholders Meeting Is on Nov. 30 JAPAN CREDIT: Last Shareholders Meeting Is Set for Nov. 30 JUMBO ASSET: Liquidator Presents Wind Up Accounts on Nov. 30 LB AUSTRALIA: Calls Shareholders for Final Meeting on Nov. 30 MH CAPITAL: Shareholders Convene for Final Meeting on Nov. 30 MUE CAPITAL: Invites Shareholders for Last Meeting on Nov. 30 NOGIZAKA CREDIT: Shareholders Gather for Last Meeting on Nov. 30 OPTEUM HOLDINGS I: Last Shareholders Meeting Is Set for Nov. 30 PROTON CAPITAL: Sets Final Shareholders Meeting on Nov. 30 REMBRANDT ER: Final Shareholders Meeting Is Set for Nov. 30 REMBRANDT PERU: Calls Shareholders for Final Meeting on Nov. 30 SAFI MONO: Shareholders to Gather for General Meeting on Nov. 30 STEIN ROE: Shareholders Convene for General Meeting on Nov. 30 TRIBECA MORTGAGE: Sets Last Shareholders Meeting for Nov. 30 C O L O M B I A ECOPETROL: State Power Firm Issuing 58.9 Million Ordinary Shares * COLOMBIA: State Firm's Shareholders Okay Shares Issuance C O S T A R I C A * COST RICA: Opposes Free Trade Accord with US C U B A * CUBA: Intensifies Cooperation Ties with Guyana D O M I N I C A N R E P U B L I C BANCO INTERCONTINENTAL: Fraud Trial Against Ex-Officials Resumes FREESTAR TECH: Inks Service Agreement with Monex Financial J A M A I C A AIR JAMAICA: Joint Select Committee Meeting on Nov. 30 M E X I C O AMR CORP: Reports Results of Debt Securities Cash Tender Offer DELTA AIR: Comair Pilots Pickets at New York Bankruptcy Court KANSAS CITY SOUTHERN: Earns US$31.3 Mil. in 2006 Third Quarter ODYSSEY RE: Fairfax Commences Offering to Sell 9 Million Shares ODYSSEY RE: Appoints Patrick W. Kenny to Board of Directors PENN OCTANE: Reports US$1.1MM Loss from Continuing Operations RIO VISTA: Incurs US$797,000 Loss from Continuing Operations * ECATEPEC: Moody's Releases Joint Default Analysis * HUIXQUILUCAN: Moody's Releases Joint Default Analysis * MANZANILLO: Moody's Releases Joint Default Analysis * MUNICIPALITY OF CENTRO: Moody's Issues Joint Default Analysis * MEXICO: Wants New Trade Framework with Venezuela N I C A R A G U A * NICARAGUA: Businesspersons Want Trade Deals with Venezuelans P A R A G U A Y TELECOM PERSONAL: Launches Hipuu Broadband Service P E R U * PERU: Offers Hydropower as Energy Source for Brazil P U E R T O R I C O DORAL FINANCIAL: Posts US$50.9MM Net Loss for 2nd Quarter 2006 GLOBAL HOME: Can Use Madeleine's Cash Collateral Until Feb. 28 HORNBECK OFFSHORE: Earns US$23.9 Million in 2006 Third Quarter MEDIRECT LATINO: Berkovits Lago Raises Going Concern Doubt MUSICLAND HOLDING: Michigan Dept. Wants Plan Confirmation Denied MUSICLAND HOLDING: Mass. Revenue Dep't Balk at Plan Confirmation S T. K I T T S & N E V I S PETOLEOS DE VENEZUELA: Unit to Supply Fuel to St. Kitts & Nevis T R I N I D A D & T O B A G O BRITISH WEST: To Determine Size of New Airline's Workforce DIGICEL LTD: Denies Hiring Advisers for Sale of Shares in Firm DIGICEL LTD: Pursuing Legal Action Against Telecoms Experts U R U G U A Y * URUGUAY: IFC & MIGA Board Grant Financing to Orion Pulp Mill V E N E Z U E L A PETROLEOS DE VENEZUELA: Eyes Increase in Crude Exports to China PETROLEOS DE VENEZUELA: Operational Event Affects Amuay Unit PETROLEOS DE VENEZUELA: Signing Pact with Brazil's Shipbuilders * VENEZUELA: Bilateral Trade with Chile Up 30% to US$600 Million * VENEZUELA: Mexico Wants New Ties After G-3 Withdrawal - - - - - ================= A R G E N T I N A ================= AGENTES CONSIGNATARIOS: Claims Verification Deadline Is Feb. 26 --------------------------------------------------------------- Mauricio Rosenblum, the court-appointed trustee for Agentes Consignatarios de YPF Cooperativa de Provision y Consumo Ltda's bankruptcy case, will verify creditors' proofs of claim until Feb. 26, 2006. Under the Argentine bankruptcy law, Mr. Rosenblum is required to present the validated claims in court as individual reports. Court No. 19 in Buenos Aires will determine if the verified claims are admissible, taking into account the trustee's opinion and the objections and challenges raised by Agentes Consignatarios and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. Mr. Rosenblum will also submit a general report that contains an audit of Agentes Consignatarios' accounting and banking records. The report submission dates have not been disclosed. Agentes Consignatarios was forced into bankruptcy at the behest of Hector Hernandez, whom it owes US$10,705. Clerk No. 37 assists the court in the proceeding. The debtor can be reached at: Agentes Consignatarios de YPF Cooperativa de Provision y Consumo Ltda Lavalle 445 Buenos Aires, Argentina The trustee can be reached at: Mauricio Rosenblum Bme. Mitre 2296 Buenos Aires, Argentina BOWNE & CO: Incurs US$11.7MM Net Loss in Quarter Ended Sept. 30 --------------------------------------------------------------- Bowne & Co. Inc. posted an US$11.7 million net loss on US$175.1 million of net revenues for the three months ended Sept. 30, 2006, in contrast to a US$2.3 million net income on US$152.3 million of net revenues for the same period in 2005. At Sept. 30, 2006, the company's balance sheet showed US$517.5 billion in total assets and US$252.9 million in total liabilities. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?15b0 "Our sharpened focus on our core businesses is paying off, as demonstrated by our strongest third quarter in six years," said Bowne Chairman and Chief Executive Officer Philip E. Kucera. "We've accelerated the integration of Marketing & Business Communications and we continue to be optimistic about its future performance." "This was another strong quarter for Bowne," added David J. Shea, Bowne President and Chief Operating Officer. "We're particularly pleased with Financial Print's gains in transactional market share despite a decline in market activity in the third quarter. We believe the strategic decisions we've made in 2006 position us well for 2007 in all of the markets we serve." Discontinued Operations During the quarter the Company completed the sale of DecisionQuest. The 2006 third quarter loss of US$12.1 million from discontinued operations includes the US$5.1 million loss, net of tax, from the sale, and a US$4.9 million charge, net of tax, for the costs associated with exiting the leased facilities of DecisionQuest and Bowne Business Solutions. The year-to-date loss, net of tax, of US$15.9 million includes the aforementioned items, a US$6.0 million gain, net of tax, on the sale of CaseSoft, a joint venture investment held by DecisionQuest which was sold in May 2006, and a US$10.0 million goodwill impairment charge, net of tax, recorded in the second quarter related to DecisionQuest. About Bowne & Co. Based in New York City, Bowne & Co., Inc. (NYSE: BNE) -- http://www.bowne.com/-- is a printing company, which specializes in financial documents such as prospectuses, annual and interim reports, and other paperwork required by the SEC. Bowne also handles electronic filings via the SEC's EDGAR system and provides electronic distribution and high-volume mailing services. The financial printing business accounts for the bulk of the company's sales. Bowne also offers marketing and business communications services and litigation support software. The Company has 3,500 employees in 78 offices around the globe. In Latin America, Bowne has office in Argentina, Brazil and Mexico. * * * Bowne & Co., Inc.'s US$75 million Convertible Subordinated Debentures due 2033 and Corporate Family rating carry Moody's Investors Service's B2 and Ba3 rating. DIMEZ SRL: Proofs of Claim Verification Is Until Feb. 12 -------------------------------------------------------- Diana I. Panitch, the court-appointed trustee for Dimez SRL's bankruptcy proceeding, will verify creditors' proofs of claim until Feb. 12, 2007. Ms. Panitch is required to present the validated claims in court as individual reports on March 26, 2007. A court in Buenos Aires will determine if the verified claims are admissible, taking into account the trustee's opinion and the objections and challenges raised by Dimez and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. Ms. Panitch will also submit a general report that contains an audit of Dimez' accounting and banking records. The report submission date has not been disclosed. The trustee can be reached at: Diana I. Panitch Avenida Corrientes 1250 Buenos Aires, Argentina GENERAL MOTORS: Boosting Argentine Car Output by 12% in December ---------------------------------------------------------------- General Motors Corp. will increase its car production in Argentina by 12% in December, the Argentine Economy Ministry said in a statement. Dow Jones Newswires relates that executives of General Motors met with Felisa Miceli -- Argentina's Economic Minister -- and Miguel Peirano, the Industry Secretary, to present the firm's expansion plan in the nation. General Motors said in a statement that the plan includes a production increase to 450 units per day from 390. General Motors and the Economy Ministry told Dow Jones that General Motors has 2,000 workers in its plant in Rosario. The production boost will create 120 extra jobs at the plant and 400 new jobs in the area. Dow Jones underscores that General Motors produces compact and station wagon models Chevrolet Corsa Classic and Chevrolet Corsa II in Rosario. It manufactures sports utility vehicle Suzuki Gran Vitara for the domestic and Latin American markets. Pedro Betancourt, spokesperson of General Motors, told Dow Jones, "The constant growth of (Argentina's) domestic market gave us enough confidence to decide to increase production of our Chevrolet models in Rosario." General Motors implemented in September a 40% production increase GM implemented in September, Dow Jones states. General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries, including Brazil and Mexico, and its vehicles are sold in 200 countries. * * * As reported in the Troubled Company Reporter on Nov. 16, 2006, Standard & Poor's Ratings Services assigned its 'B+' bank loan rating to General Motors Corp.'s proposed US$1.5 billion senior term loan facility, expiring 2013, with a recovery rating of '1'. The 'B+' rating was placed on Creditwatch with negative implications, consistent with the other issue ratings of GM, excluding recovery ratings. As reported in the Troubled Company Reporter on Nov 16, 2006, Standard & Poor's Ratings Services assigned its 'B+' bank loan rating to General Motors Corp.'s proposed US$1.5 billion senior term loan facility, expiring 2013, with a recovery rating of '1'. The 'B+' rating was placed on Creditwatch with negative implications, consistent with the other issue ratings of GM, excluding recovery ratings. As reported in the Troubled Company Reporter on Nov. 14, 2006, Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the proposed US$1.5 Billion secured term loan of General Motors Corporation. The term loan is expected to be secured by a first priority perfected security interest in all of the US machinery and equipment, and special tools of GM and Saturn Corporation. L AUTO: Deadline for Proofs of Claim Verification Is Feb. 16 ------------------------------------------------------------ Claudio Jorge Haimovici, the court-appointed trustee for L Auto Equipament SRL's bankruptcy proceeding, will verify creditors' proofs of claim until Feb. 16, 2007. Mr. Haimovici is required to present the validated claims in court as individual reports on Apr. 4, 2007. A court in Buenos Aires will determine if the verified claims are admissible, taking into account the trustee's opinion and the objections and challenges raised by L Auto and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of L Auto's accounting and banking records will follow on May 21, 2007. The trustee can be reached at: Claudio Jorge Haimovici Sarmiento 3843 Buenos Aires, Argentina S.A. VINEDOS: Reorganization Proceeding Concluded ------------------------------------------------- S.A. Vinedos y Bodegas Jose Orfila Ltda.'s reorganization proceeding has ended. Data published by Infobae on its Web site indicated that the process was concluded after a court in Buenos Aires approved the debt agreement signed between the company and its creditors. SEGURIDAD ENTRE: Claims Verification Deadline Is March 7, 2007 -------------------------------------------------------------- Estudio Plastina, Torralba y Asociados, the court-appointed trustee for Seguridad Entre Rios SA's reorganization proceeding, will verify creditors' proofs of claim until March 7, 2007. Estudio Plastina will present the validated claims in court as individual reports on Apr. 18, 2007. Court No. 12 in Buenos Aires will then determine if the verified claims are admissible, taking into account the trustee's opinion and the objections and challenges raised by Seguridad Entre and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of Seguridad Entre's accounting and banking records will follow on June 1, 2007. On Dec. 10, 2007, Seguridad Entre's creditors will vote on a settlement plan that the company will lay on the table. Clerk No. 23 assists the court in the case. The debtor can be reached at: Seguridad Entre Rios SA Avenida Cordoba 1364 Buenos Aires, Argentina The trustee can be reached at: Estudio Plastina, Torralba y Asociados Bartolome Mitre 1131 Buenos Aires, Argentina ============= B A H A M A S ============= COMPLETE RETREATS: Wants to Sell All Assets for US$98 Million ------------------------------------------------------------- Complete Retreats LLC and its debtor-affiliates seek the U.S. Bankruptcy Court for the District of Connecticut's authority to sell substantially all of their assets to Ultimate Resort LLC for US$98,000,000, free and clear of all liens, claims and encumbrances. After exploring a variety of strategic alternatives, the Debtors ascertained that they are not able to sustain further losses on operations while a formal reorganization process takes place, Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, relates. The Debtors thus concluded that a prompt sale of substantially all of their assets is the optimal means of preserving value in the Chapter 11 cases for the benefit of all parties-in-interest. To that end, the Debtors extensively marketed their assets, negotiated with multiple potential investors and buyers, and conducted a private auction of their assets among the parties who had submitted the three best offers. Accordingly, in consultation with the support of the Official Committee of Unsecured Creditors, the Debtors have determined that Ultimate Resort's offer is the highest and best bid for the Assets. Pursuant to an asset purchase agreement between the parties, Ultimate Resort will acquire most of the Debtors' assets, properties, assumed executory contracts and unexpired leases, and rights, in exchange for cash consideration. A list of the Debtors' Domestic and Foreign Properties that Ultimate Resort will acquire is available for free at: http://researcharchives.com/t/s?15c4 The Acquired Assets do not include any of the Debtors' right, title and interest in, among others, all in force director and officer insurance policies, capital stock or equivalent ownership interests of the Debtors, amounts due to the Debtors from any other Debtor, certain real property and inventory, certain contracts and leases, and the Existing Membership Contracts. The Excluded Real Properties include: Property Location -------- -------- 4165 Kamalani Lane Princeville, HI 14 W. Cottage Circle Bluffton, SC Black Bear Condominiums Park City, UT 61 Las Ceresas, Casa de Campo Dominican Republic Casa Dorada Cabo San Lucas Esparanza #1802 Cabo San Lucas St. James Place Unit 21 Cabo San Lucas Unit 7A, Rancho Manana Scottsdale, AZ River Club Condos, Units 102 & 104 Telluride, CO Grand Summit #476/478 Park City, UT Casa Aurora Cayo Espanto, Belize Casa Brisa Cayo Espanto, Belize Casa Estrella Cayo Espanto, Belize Casa Manana Cayo Espanto, Belize Casa Olita Cayo Espanto, Belize On the effective date of the APA, Ultimate Resort will deliver to the Debtors a US$10,000,000 deposit, to be held by the Debtors in escrow. To facilitate and effect the Sale, the Debtors seek to assume and assign certain contracts to Ultimate Resort to the extent required in connection with the Sale. The Debtors intend to reject certain executory contracts and unexpired leases that are not assumed and assigned to Ultimate Resort in connection with the Sale. The Debtors will identify the Assumed and Rejected Contracts and Leases at or prior to the Sale Hearing. At the Closing, Ultimate Resort will assume: (1) postpetition ordinary course liabilities and obligations not exceeding US$200,000 for accounts payable; (2) liabilities and obligations arising out of the Assumed Contracts and all cure costs; (3) liabilities and obligations occurring on or after the Closing Date relating to or arising out of the Acquired Assets, the Assumed Liabilities, or the Debtors' business; (4) existing reservations of the Debtors' members who will accept new membership Contracts with respect to the Acquired Real Properties and, to the extent possible upon Ultimate Resort's commercially reasonable efforts to accommodate the requests, the existing reservations of members accepting new membership contracts with respect to those properties not included in the Acquired Assets that can be transferred to other Properties owned by Ultimate Resort; (5) liabilities and obligations under the New Membership Contracts; and (6) liabilities and obligations arising from the severance of any of the Debtors' employees on or after the effective date of the Sale up to US$100,000. The Debtors will retain all liabilities and obligations relating to (i) any environmental, health, or safety matter to the extent occurring prior to the Closing Date, and (ii) all present and former stockholders and members to the extent arising from facts, events or circumstances occurring prior to the Closing Date. The Debtors and Ultimate Resort will negotiate in good faith toward a management contract, which will provide that if the Closing has not occurred by December 29, 2006, Ultimate Resort will assume management of the Debtors' businesses and thereafter will fund any operating expenses and retain any operating revenues. Prior to the Closing Date, Ultimate Resort will offer employment to all of the Debtors' employees who agree to forever waive, release, and discharge to the fullest extent permitted by law the Debtors from any and all claims, causes of action, and damages. The offered employment will be on terms and conditions substantially similar to those that exist as of the Closing Date. Buyer Protections According to Mr. Daman, Ultimate Resort is concerned that another party may submit a proposal prior to the Sale Hearing to purchase the Acquired Assets for higher consideration than it would be able to provide, and that the Debtors, in the exercise of their fiduciary duties, may feel compelled to accept that higher offer and terminate the APA. Ultimate Resort has thus consented to keep its offer open through the Sale Hearing, provided that in the event the APA is terminated in favor of an alternative transaction: -- the Debtors will pay Ultimate Resort a US$2,500,000 break- up fee in the event the APA is terminated in favor of an alterative transaction; and -- the Debtors will reimburse Ultimate Resort up to US$600,000 for reasonable, out-of-pocket costs and expenses it incurred in connection with the negotiation, execution, or consummation. Membership Offer in Ultimate Resort As part of the Sale, Ultimate Resort has agreed to independently offer to each of the Debtors' destination club members a membership contract after the Closing of the Sale. Under a New Membership Contract, an Offeree could become a member of Ultimate Resort under these terms and conditions: A. Existing members of the Private Retreats Destination Club will receive a Lifetime Bronze Membership in Club 1. Existing members of the Distinctive Retreats Destination Club will receive a Lifetime Bronze Membership in Club 2. Existing members of the Legendary Retreats Destination Club will receive a Lifetime Platinum Membership in Club 2. All the offered memberships in Ultimate Resort are at no up front cost to the Debtors' Existing Members. The average target value of homes for Club 1 would be US$2,000,000, and the average target value of homes for Club 2 will be US$3,500,000. Each of Club 1 and Club 2 will be operated on a 7:1 ratio of equivalent members to club properties. B. Annual dues will be US$9,500 for Bronze Members of Club 1, US$14,000 for Bronze Members of Club 2, and US$24,500 for Platinum Members of Club 2. Daily usage fees will be US$700 for Club 1 and US$1,000 for Club 2. C. Matriculating members with Lifetime Bronze Memberships will have use of their respective Club for a minimum of 14 days per year, with one advanced reservation per year and one advanced holiday reservation every other year. They will be able to reserve an unlimited number of additional days of use, including during holiday weekends, beyond the 14 days, subject to availability and to daily use fees. D. Matriculating members with Lifetime Platinum Memberships will have use of their respective Club for a minimum of 42 days per year, with four advanced reservations per year, including two advanced holiday reservations or, at their option, may select an alternative lifetime membership plan in Club 2 if they require fewer days or wish to pay lower annual dues. They would be able to reserve an unlimited number of additional days of use, including during holiday weekends, beyond the 42 days, subject to availability and to daily use fees. E. Matriculating members will be afforded certain upgrade rights and earn "points" redeemable for additional free days or weeks of club usage or to offset other club services. F. Ultimate Resort will offer each matriculating member the option to purchase the Existing Member's pro rata share of 10% of the common equity of Ultimate Resort on a fully- diluted basis. At least 400 of the Offerees need to accept the New Membership Contracts with Ultimate Resort for the Sale to be closed, Mr. Daman informs the Court. Payment to Patriot In connection with the closing of the Debtors' DIP Financing with Ableco Finance LLC on Nov. 15, 2006, the Debtors paid all of the amounts due and owing to The Patriot Group LLC except for US$3,500,000. Patriot agreed that the Debtors could delay repaying the remaining DIP amount in exchange for an US$875,000 financing fee. If the Debtors pay the DIP Obligation by Nov. 30, 2006, Patriot agreed that the Debtors would only be obligated to pay a US$175,000 financing fee. Ultimate Resort permits the Debtors to utilize US$3,675,000 of the US$10,000,000 Deposit to pay the outstanding secured DIP financing obligations owed to Patriot, Mr. Daman states. In exchange, the Debtors agree to substitute Ultimate Resort for Patriot with all of the protections and security interests that Patriot currently has, as a DIP lender, with respect to the amount of the Remaining Patriot DIP Obligation that will be repaid from the Deposit. To the extent Ultimate Resort will be entitled to a return to all or a portion of its Deposit under the terms and conditions of the APA, Ultimate Resort would be granted a second priority lien and superpriority administrative expense claim for US$3,675,000. At the Closing, the entire amount of the Deposit will be deemed applied to the final US$98,000,000 Purchase Price. A full-text copy of the 38-page Ultimate Resort APA is available for free at http://researcharchives.com/t/s?15c6 The Debtors intend to continue operating during the Sale process. The Debtors ask the Court to exempt the proposed Sale from stamp or similar taxes. The Debtors seek the Court's authority to: (a) assume and assign certain contracts in connection with the Sale; and (b) reject certain contracts and leases that would not be assumed and assigned in connection with the Sale. The Debtors also ask the Court to schedule an initial hearing on Nov. 29, 2006, to consider the approval of: (a) the buyer protections for Ultimate Resort; (b) the payment of the remaining Patriot DIP Obligation from a portion of the Sale Deposit; (c) the substitution of Ultimate Resort for Patriot under the Amended Ableco DIP Order; and (c) the form of notice and other consent documents that Ultimate Resort would provide to the Offerees to give them sufficient information in determining whether to accept New Membership Contracts with Ultimate Resort. The Debtors further ask the Court to schedule the Sale Hearing on Dec. 19, 2006. About Complete Retreats Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor-affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford, Connecticut, serves as counsel to the Official Committee of Unsecured Creditors. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed US$308,000,000 in total debts. The Debtors' exclusive period to file a plan expires on February 18, 2007. They have until April 19, 2007, to solicit acceptance to that plan. (Complete Retreats Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). COMPLETE RETREATS: Non-Gov'tal Units Must File Claims by Dec. 11 ---------------------------------------------------------------- At the behest of an ad hoc committee of members of Complete Retreats LLC and its debtor-affiliates, the Honorable Alan H.W. Shiff of the U.S. Bankruptcy Court for the District of Connecticut extended the deadline for all non-governmental parties to file proofs of claim against the Debtors until Dec. 11, 2006. The Ad Hoc Committee consists of a group of more than 420 current and former members of debtor-affiliates Private Retreats LLC and Distinctive Retreats LLC who represent at least US$140,000,000 worth of claims in the Debtors' chapter 11 cases. In its request, the Ad Hoc Committee sought to move the claims bar date for all non-governmental parties to Dec. 29, 2006, from Nov. 27, 2006. George B. Cauthen, Esq., at Nelson Mullins Riley & Scarborough L.L.P., in Columbia, South Carolina, informed the Court that as evidenced by the Debtors' claims registers, numerous members have not yet filed claims in the Debtors' bankruptcy cases for their respective destination club. As of Nov. 15, 2006, the claims registers indicate these number of claims filed in the Debtors' cases: No. of No. of Total No. of Non-member Destination Club Members Filed Claims Claims ---------------- ------- ------------ ---------- Complete Retreats - 372 100+ Distinctive Retreats 510 102 10 Legendary Retreats 15 2 1 Private Retreats 349 74 15 As indicated by the figures in the Debtors' November 15 claims registers, hundreds of members of the Debtors' destination clubs have yet to file claims, Mr. Cauthen pointed out. The members need additional time to evaluate and file their claims. Mr. Cauthen argued that the Debtors will not be prejudiced by an extension of the claims deadline for these reasons: (1) The extension is for a limited period of time and thus, will not unduly delay the administration of the bankruptcy cases; (2) The Debtors have disputed all member claims; (3) The Debtors have not yet filed a disclosure statement or Chapter 11 plan; and (4) The Debtors have been granted an extension of the exclusivity period, among others. An extension is necessary and equitable in light of the complicated nature in which the Debtors organized their affairs and the likelihood that many of the members, most of which are individuals, have little to no prior experience with bankruptcy issues, Mr. Cauthen said. About Complete Retreats Complete Retreats, LLC, Preferred Retreats, LLC, and their subsidiaries were founded in 1998. Owned by Robert McGrath and four minority owners, the companies operate a five-star hospitality and real estate management business and are a pioneer and market leader of the "destination club" industry. Under the trade name "Tanner & Haley Resorts," Complete Retreats, et al.'s destination clubs have numerous individual and company members. Destination club members pay up-front membership deposits, annual dues, and daily usage fees. In return, members and their guests enjoy the use of first-class private residences, and receive an array of luxurious services and amenities in certain exotic vacation destinations in the United States and locations around the world, including: Abaco, Bahamas; Cabo San Lucas, Mexico; Nevis, West Indies; Telluride, Colorado; and Jackson Hole, Wyoming. Complete Retreats and its debtor-affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245 through 06-50306). Nicholas H. Mancuso, Esq., Jeffrey K. Daman, Esq., Joel H. Levitin, Esq., David C. McGrail, Esq., Richard A. Stieglitz Jr., Esq., at Dechert LLP, are representing the Debtors in their restructuring efforts. Xroads Solutions Group, LLC, is the Debtors financial and restructuring advisor. When the Debtors filed for chapter 11 protection, they listed total debts of US$308,000,000. (Complete Retreats Bankruptcy News, Issue No. 15 and 16; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). COMPLETE RETREATS: Court Reaffirms CIT as Real Estate Advisor ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Connecticut reaffirmed the employment of CIT Capital USA Inc. as Complete Retreats LLC and its debtor-affiliates' exclusive real estate advisor and disposition agent, nunc pro tunc to Aug. 18, 2006. The Court authorized CIT to enter into agreements with local or co-brokers with respect to properties in CIT's Portfolio. CIT, however, will be responsible for co-broker fees or related expenses owed to any local brokers. In the event there exists a ready, willing, and able buyer for property contained in CIT's Portfolio, but the Debtors remove that property from the Portfolio before a sale is consummated, the Court directs the Debtors to pay CIT a Transaction Fee equal to 7% of the gross offered purchase price. The Court does not permit CIT to provide potential purchasers of the Debtors' Properties with bridge loans. In addition, the Court does not grant CIT a Termination Fee. The Court also does not grant CIT a Transaction Fee with respect to a property that is: -- removed by the Debtors from CIT's Portfolio prior to the presentment of a ready, willing, and able buyer; and -- retained, prior to the presentment of a ready, willing, and able buyer by CIT, by the Debtors under a plan of reorganization. The Debtors are directed to pay CIT an Incentive Fee equal to US$300,000, which is due and payable only if either Nevis or Abaco properties are removed by the Debtors from CIT's Portfolio. As reported in the Troubled Company Reporter on Nov. 7, 2006, the Debtors obtained Court authority, on an interim basis, to employ CIT Capital as their exclusive real estate advisor and disposition agent. In that interim order, the Court permitted the Debtors to: -- pay CIT a transaction fee equal to 7% of the gross proceeds of the Sale of any property contained in CIT's Portfolio; and -- reimburse all reasonable out-of-pocket expenses incurred by CIT in connection with its retention. Prior to the Court's interim order on the motion, the Official Committee of Unsecured Creditors said it does not object to CIT Capital earning a 7% Transaction Fee on traditional sales of real property that it assists the Debtors to consummate. The Committee, however, opposed to the Application to the extent that the Transaction Fee could be read more broadly to apply to other types of "Transactions," including mergers, strategic partnership or sale of the Debtors pursuant to a plan of reorganization. Moreover, the Committee complained that the contemplated Incentive Fee for CIT is not tied to any performance benchmark and, unlike a typical broker's fee, is not contingent upon any successful sale of the Debtors' real estate. The Incentive Fee is not a "reasonable term" of employment and compensation under Section 328(a) of the Bankruptcy Code, Jonathan B. Alter, Esq., at Bingham McCutchen LLP, in Hartford, Connecticut, argued. The Committee proposed that the Incentive Fee should be: (a) mutually exclusive with the Transaction Fee. Any Transaction Fee earned should be credited toward any Incentive Fee on a dollar-for-dollar basis; (b) conditioned on CIT using good faith reasonable commercial efforts to perform the Phase I through III services with respect to the "Sale Properties;" and (c) reduced because the Debtors have made no showing whether the US$750,000 proposed fee is consistent with ordinary market terms for this type of engagement. Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, asserted that the fees paid to CIT should not unreasonably duplicate any similar fees to XRoads Solutions Group, LLC, as the Debtors' financial advisor. The Debtors' estates should not be burdened with duplicative success fees for two financial professionals related to the same type of transaction, Mr. Daman said. The Termination Fee should not be payable if CIT is terminated for cause, Mr. Daman added. As reported in the Troubled Company Reporter on Sept. 26, 2006, the Debtors told the Court that they are exiting certain of their properties. In connection with reorganization efforts, the Debtors hope to sell the Properties in the near future. Holly Felder Etlin, the Debtors' chief restructuring officer, said that the Properties are not popular with the Debtors' members and are often vacant. Ms. Etlin noted that the Debtors do not have the internal expertise, infrastructure, or staff necessary to analyze or market the Properties competently and cost-effectively. Members of CIT's Commercial Real Estate group have significant experience in the disposal of real property assets, Ms. Etlin told the Court. Moreover, CIT has a good reputation, which will lend credibility to the contemplated sale process. The Debtors will employ CIT pursuant to the terms of a Letter Agreement dated Aug. 18, 2006, between the parties. The CIT Letter Agreement is the result of arm's-length negotiations between the Debtors and CIT. Ms. Etlin stated that the Debtors selected CIT only after considering several other candidates with similar expertise. Among others, CIT will: -- provide an experienced team to value the Properties; -- craft appropriate marketing, disposition, and auction processes to sell the Properties; -- hire local brokers to assist in the sale process and save the Debtors from having to employ brokers under Section 327 of the Bankruptcy Code; -- meet and negotiate with parties who are interested in acquiring the Properties; -- negotiate stalking horse sale contracts, as necessary; and -- identify target buyers for the Properties. CIT will also establish a "fast-track" disposition for the Properties. Specifically, for certain properties in Nevis, Abaco, the Dominican Republic, and the United States, CIT will complete its due diligence, review the Debtors' objectives, and market or auction those Properties within 120 days. Upon the closing of a sale of each of the Properties, the Debtors will pay CIT a Transaction Fee equal to 7% of the gross proceeds from that sale. Any fees for local brokers retained will be included in the Transaction Fee. If the Debtors were to enter into a strategic partnership or merger that does not include the sale of any Property, CIT will be entitled to a US$75,000 Incentive Fee for advisory services performed. The Debtors will also reimburse CIT for all its out-of-pocket expenses, including marketing and travel expenses and reasonable attorneys' fees. The Debtors asked the Court not to subject the Transaction Fees to any holdbacks and not to require CIT to file and serve detailed time reports or timesheets since the firm is not seeking any monthly fees for its services. Dennis R. Irvin, CIT's executive vice president, assured the Court that the firm has no connection with, and holds no interests adverse to, the Debtors, their creditors, or any other party-in-interest. Accordingly, CIT is a "disinterested person" as referenced in Section 327(a) of the Bankruptcy Code and as defined by Sections 101(14) and 1107(b) of the Bankruptcy Code. About Complete Retreats Complete Retreats, LLC, Preferred Retreats, LLC, and their subsidiaries were founded in 1998. Owned by Robert McGrath and four minority owners, the companies operate a five-star hospitality and real estate management business and are a pioneer and market leader of the "destination club" industry. Under the trade name "Tanner & Haley Resorts," Complete Retreats, et al.'s destination clubs have numerous individual and company members. Destination club members pay up-front membership deposits, annual dues, and daily usage fees. In return, members and their guests enjoy the use of first-class private residences, and receive an array of luxurious services and amenities in certain exotic vacation destinations in the United States and locations around the world, including: Abaco, Bahamas; Cabo San Lucas, Mexico; Nevis, West Indies; Telluride, Colorado; and Jackson Hole, Wyoming. Complete Retreats and its debtor-affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245 through 06-50306). Nicholas H. Mancuso, Esq., Jeffrey K. Daman, Esq., Joel H. Levitin, Esq., David C. McGrail, Esq., Richard A. Stieglitz Jr., Esq., at Dechert LLP, are representing the Debtors in their restructuring efforts. Xroads Solutions Group, LLC, is the Debtors financial and restructuring advisor. When the Debtors filed for chapter 11 protection, they listed total debts of US$308,000,000. (Complete Retreats Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). =========== B E L I Z E =========== PETROLEOS DE VENEZUELA: PDV Caribe Will Supply Fuel to Belize ------------------------------------------------------------- PDV Caribe -- a unit of Petroleos de Venezuela SA, the state-owned oil firm of Venezuela -- has signed an accord for fuel supply to Belize as part of the so-called Petrocaribe oil program, Prensa Latina reports. Petroleos de Venezuela said in a statement that it will send Belize 4,000 barrels a day of: -- diesel, -- gasoline, -- lubricants, and -- other products. The progress Belize and Venezuela reached with the signing of the accord and the constitution of a joint venture is evident, Prensa Latina says, citing Asdrubal Chavez, vice president of PDV Caribe. Mr. Chavez told Prensa Latina, "With this agreement the Petrocaribe is reinforced, we keep on going forward to independence of the region in this field, and we consolidate the integration process with Latin America and the Caribbean." The signing of the accord will contribute to the welfare of the people in Belize. It will also strengthen relations with the Venezuelan citizens, Prensa Latina states, citing Ralph Fonseca, Belizean Interior and Public Works Minister. Petroleos de Venezuela SA -- http://www.pdv.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. * * * Standard & Poor's said on July 17 that it may lower the company's B+ foreign-currency debt rating in part because of the absence of timely financial and operating information. * BELIZE: PDV Caribe Will Supply Fuel to Country ------------------------------------------------ PDV Caribe -- a unit of Petroleos de Venezuela SA, the state-owned oil firm of Venezuela -- has signed an accord for fuel supply to Belize as part of the so-called Petrocaribe oil program, Prensa Latina reports. Petroleos de Venezuela said in a statement that it will send Belize 4,000 barrels a day of: -- diesel, -- gasoline, -- lubricants, and -- other products. The progress Belize and Venezuela reached with the signing of the accord and the constitution of a joint venture is evident, Prensa Latina says, citing Asdrubal Chavez, vice president of PDV Caribe. Mr. Chavez told Prensa Latina, "With this agreement the Petrocaribe is reinforced, we keep on going forward to independence of the region in this field, and we consolidate the integration process with Latin America and the Caribbean." The signing of the accord will contribute to the welfare of the people in Belize. It will also strengthen relations with the Venezuelan citizens, Prensa Latina states, citing Ralph Fonseca, Belizean Interior and Public Works Minister. Petroleos de Venezuela SA -- http://www.pdv.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. * * * Moody's Investor Service assigned these ratings to Belize: -- CC LT Foreign Bank Deposit, Caa3 -- CC LT Foreign Currency Debt, Caa3 -- CC ST Foreign Bank Deposit, NP -- CC ST Foreign Currency Debt, NP -- LC Currency Issuer Rating, Caa3 -- FC Currency Issuer Rating, Caa3 -- Foreign Currency Long-Term Debt, Caa3 -- Local Currency Long-Term Debt, Caa3 * * * As reported in the Troubled Company Reporter-Latin America on Aug. 8, 2006, Standard & Poor's lowered its long-term foreign currency sovereign credit rating on Belize to 'CC' from 'CCC-' while leaving its outlook on the rating at negative. Standard & Poor's affirmed its 'CCC+' long-term local currency sovereign credit rating on Belize and revised its outlook on the rating to stable from negative. The 'C' short-term sovereign credit ratings on the sovereign were affirmed by S&P. ============= B E R M U D A ============= DERWOOD MARINE: Creditors Must File Proofs of Claim by Dec. 8 ------------------------------------------------------------- Derwood Marine Resources Ltd.'s creditors are given until Dec. 8, 2006, to prove their claims to Nicholas Hoskins, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. A final general meeting will be held at the liquidator's place of business on Dec. 20, 2006, at 10:00 a.m., or as soon as possible. Derwood Marine's shareholders will determine during the meeting, through a resolution, the manner in which the books, accounts and documents of the company and of the liquidator will be disposed. Derwood Marine's shareholders agreed on Nov. 2, 2006, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Nicholas Hoskins Wakefield Quin Chancery Hall, 52 Reid Street Hamilton, Bermuda HEATH FIELDING: Last Day to File Proofs of Claim Is on Dec. 8 ------------------------------------------------------------- Heath Fielding (Latin America) Ltd.'s creditors are given until Dec. 8, 2006, to prove their claims to Robin J. Mayor, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. A final general meeting will be held at the liquidator's place of business on Dec. 29, 2006, at 9:30 a.m., or as soon as possible. Heath Fielding's shareholders will determine during the meeting, through a resolution, the manner in which the books, accounts and documents of the company and of the liquidator will be disposed. Heath Fielding's shareholders agreed on Nov. 14, 2006, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Robin J. Mayor Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, HM DX, Bermuda SEA CONTAINERS: Court Okays Young Conaway as Bankruptcy Counsel --------------------------------------------------------------- Sea Containers Ltd. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the District of Delaware to employ Young Conaway Stargatt & Taylor, LLP, as their counsel, nunc pro tunc to Oct. 15, 2006. Young Conaway will: (a) provide legal advice with respect to the Debtors' powers and duties as debtors-in-possession in their continued operation of their business and management of their properties; (b) prepare and pursue confirmation of a plan and approval of a disclosure statement; (c) prepare on the Debtors' behalf necessary applications, motions, answers, orders, reports and other legal papers; (d) appear in Court and protect the Debtors' interests before the Court; and (e) perform all other legal services for the Debtors, which maybe necessary and proper in the Chapter 11 proceedings. The Debtors will pay Young Conaway on an hourly basis, plus reimbursement of actual and necessary expenses and charges incurred. The principal attorneys and paralegal personnel designated to represent the Debtors and their current hourly rates are: Professionals Hourly Rate ------------- ----------- Robert S. Brady, Esq. US$515 Edwin J. Harron, Esq. US$460 Edmon L. Morton, Esq. US$380 Sean T. Greecher, Esq. US$270 Sanjay Bhatnagar, Esq. US$230 Thomas Hartzell US$175 The Debtors retained Young Conaway in September 2006 and they paid the firm a US$150,000 retainer in connection with the planning and preparation of initial documents, payment of Chapter 11 filing fees, and the proposed postpetition representation of the Debtors. Robert S. Brady, Esq., a partner at Young Conaway Stargatt & Taylor, LLP, assures the Court that his firm holds no interest adverse to the Debtors, their creditors or any other parties-in- interest, and it is a "disinterested person," as defined in Section 101(14) of the Bankruptcy Code. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) =========== B R A Z I L =========== BANCO BRADESCO: Approves Buy Back of 5 Million Shares ----------------------------------------------------- Banco Bradesco SA said in a statement that it has ratified a plan to buy back 5 million each of common and preferred shares at market price from Nov. 27, 2006, to May 27, 2007. Business News Americas relates that Banco Bradesco could resell or cancel the shares at a later date. According to BNamericas, Banco Bradesco bought back about 162,900 common shares and 6,000 preferred shares from May to November. Banco Bradesco has 174 million common shares and 466 million preferred shares in circulation, BNamericas states. Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. Banco -- http://www.bradesco.com.br/-- prides itself on serving low-and medium-income individuals in Brazil since the 1960s. Bradesco is Brazil's largest private bank, with more than 3,000 banking branches, and also a leader in insurance and private pension management. Bradesco has branches throughout Brazil as well as one in New York, and Japan. Bradesco offers Internet banking, insurance, pension plans, annuities, credit card services (including football-club affinity cards for the soccer-mad population), and Internet access for customers. The bank also provides personal and commercial loans, along with leasing services. * * * Fitch Ratings upgraded Banco Bradesco S.A.'s short-term local currency rating to 'F3' from 'B.' Fitch has earlier taken these rating actions on Banco Bradesco: -- Foreign Currency Issuer Default Rating upgraded to 'BB+' from 'BB', Outlook remains Stable; -- Short-term Foreign Currency rating affirmed at 'B'; -- Local Currency Issuer Default Rating affirmed at 'BBB-', Outlook Stable; -- Individual rating affirmed at 'B/C'; -- Support rating affirmed at '4'; -- National Long-term affirmed at 'AA+(bra)', Outlook remains Stable; and -- National Short-term affirmed at 'F1+(bra)'. Moody's Investors Service upgraded these ratings of Banco Bradesco S.A.: -- long-term foreign currency deposits to Ba3 from B1; and -- long- and short-term global local currency deposit ratings to A1/Prime fom A3/Prime-2. Moody's said the ratings outlook is stable. BANCO DO BRASIL: Approves Dividend Distribution Every Quarter ------------------------------------------------------------- Banco do Brasil posted on its Web site that it has agreed to a proposal to distribute dividends every quarter, starting in the first quarter of 2007. Business News Americas relates that Banco do Brasil's board also agreed to increase the number of its members to nine from seven, with minority shareholders electing three. According to BNamericas, Banco do Brasil's minority shareholders and the finance ministry will appoint one member each to the audit committee. Shareholders will vote on the two proposals at a Dec. 18 meeting, BNamericas states. Banco do Brasil is Brazil's federal bank and is the largest in Latin America with some 20 million clients and over 7,000 points of sale (3,200 branches) in Brazil, and 34 offices and partnerships in 26 other countries. In addition to its traditional retail banking services, Banco do Brasil underwrites and sells bonds, conducts asset trading, offers investors portfolio management services, conducts financial securities advising, and provides market analysis and research. * * * As reported on Mar. 3, 2006, Standard & Poor's Ratings Services raised its foreign currency counter party credit ratings on Banco do Brasil SA to 'BB' from 'BB-'. The foreign and local currency ratings of this bank are now equalized at 'BB'. S&P said the outlook is stable. BANCO NACIONAL: Formalizes Membership in ABVCAP ----------------------------------------------- Banco Nacional Desenvolvimento Economico SA aka BNDES is the newest member of Brazilian Venture Capital & Private Equity Association or ABVCAP. The adhesion was formalized on Nov. 22, during the joint meeting of consultative and deliberative councils of ABVCAP, held at BNDES' head office. The ABVCAP President Marcus Uchoa Regueira granted an adhesion certificate to BNDES vice president Armando Mariante. At the same event, the director of BNDES Capital Market area, Eduardo Rath Fingerl, took over the consultative council of the association. "This is a very important event because BNDES is becoming a member of the association which represents the Brazilian fund industry", said Mr. Fingerl, highlighting BNDES' operation in the sector, which has already developed, throughout the years, 17 different funds. "BNDES' adhesion to ABVCAP represents an historical moment of the Brazilian Venture Capital and Private Equity. More than adhesion, BNDES's entrance represents an alignment between public and private sectors, towards a long-term investment in Brazil", emphasized Mr. Regueira. In 2005, BNDES released a specific fund program in the amount of RUS$ 260 million, involving the creation of two private equity funds and seven venture capital funds. Thus, BNDES returned to have an outstanding share in entrepreneurial capital market, thereby contributing to the strengthening of this industry. Established in 2000, ABVCAP is a nonprofit institution, directed to the development and propagation of long-term investments in the real sector of Brazilian economy; from capitalization mechanisms of enterprises, entrepreneurial and infrastructure projects in Brazil. Therefore, ABVCAP operates as a Brazilian representative entity of the entrepreneurial capital sector. The association is comprised of roughly 120 affiliates, led by Brazilian and foreign fund managers of VC/PE. Banco Nacional de Desenvolvimento Economico e Social is Brazil's national development bank. It provides financing for projects within Brazil and plays a major role in the privatization programs undertaken by the federal government. * * * As reported by Troubled Company Reporter-Latin America on March 3, 2006, Standard & Poor's Ratings Services raised its foreign currency counterparty credit rating on Banco Nacional de Desenvolvimento Economico e Social SA to 'BB' with a stable outlook from 'BB-' with a positive outlook. The company's local currency credit rating was also shifted to 'BB+' with a stable outlook from 'BB' with a positive outlook. BANCO NACIONAL: Uniao de Bancos Denies Acquisition of Bank ---------------------------------------------------------- Pedro Moreira, Uniao de Bancos Brasileiros' chief executive officer, denied to Business News Americas that it has acquired Banco Nacional SA. As reported in the Troubled Company Reporter-Latin America on Nov. 23, 2006, published reports said that Uniao de Bancos reached an agreement with the Magalhaes Pinto family regarding its acquisition of Banco Nacional. A spokesperson of Uniao de Bancos said that the bank had signed an accord with Magalhaes Pinto in July 2005. The agreement called for Uniao de Bancos and Magalhaes Pinto to create a new firm with BRL150 million in capital to act as liquidator. When the liquidation ends, Magalhaes Pinto would give Uniao de Bancos full control of Banco Nacional. Local press and the market interpreted the agreement as Uniao de Bancos acquiring the rest of Banco Nacional, BNamericas notes. According to BNamericas, Mr. Moreira said, "What we did was make communication easier between the central bank, the controllers -- the [Magalhaes Pinto] family -- and creditors like Unibanco (Uniao de Bancos)." BNamericas relates that Uniao de Bancos acquired the good part of Banco Nacional in November 1995. Uniao de Bancos now wants to finish liquidating Banco Nacional quickly. "We want to put an end to this matter. We want to reach an agreement so the central bank can continue with the liquidation. The issue has been treated as a family feud, but that's not the case," Mr. Moreira told BNamericas. About Uniao de Bancos Headquartered in Sao Paulo, Brazil, Uniao de Bancos Brasileiros SA -- http://www.unibanco.com/-- is a full-service financial institution providing a range of financial products and services to a diversified individual and corporate customer base throughout Brazil. The company's businesses comprise segments: Retail, Wholesale, Insurance and Pension Plans and Wealth Management. Uniao de Bancos and its associated companies FinInvest, LuizaCred, PontoCred and Tecban (Banco 24 Horas) offer a network composed of 17,000 points of service. It also counts on 7,580 automated teller machines and all 30 Hours' products and services, including the telephone service and the Internet banking. The company's international network consists of branches in Nassau and the Cayman Islands; representatives offices in New York; banking subsidiaries in Luxembourg, the Cayman Islands and Paraguay; and a brokerage firm in New York -- Unibanco Securities Inc. About Banco Nacional Formerly Brazil's seventh-largest bank, Banco Nacional went bankrupt in 1994, fifty years after its founding in Minas Gerais. This institution represents traditional Brazilian families running business as small shops. BANCO VOTORANTIM: S&P Changes BB Ratings' Outlook to Positive ------------------------------------------------------------- Standard & Poor's Ratings Services maintained its 'BB' ratings on both of Banco Votorantim SA's foreign and local currency counterpraty credit ratings and changed the both ratings outlook to positive from stable. -- Foreign currency counterparty credit rating * to BB/Positive/B from BB/Stable/B -- Local currency counterparty credit rating * to BB/Positive/B from BB/Stable/B -- Brazil national scale rating * to brAA/Positive/brA-1 from brAA/Stable/brA-1 This is in connection with Standard & Poor's revised outlook on its long-term foreign and local currency ratings on 16 Brazilian entities to positive from stable, following the revision of the foreign and local currency rating outlooks on the Federative Republic of Brazil. At the same time, Standard & Poor's revises its outlook on the Brazil national scale ratings to positive from stable, following the same action on the sovereign. In addition, the ratings on all entities were affirmed. The positive outlooks on the sovereign-owned entities are as follows: -- Eletrobras; -- Centrais Eletricas Brasileiras; -- Banco Nacional de Desenvolvimento Economico e Social; and -- Banco do Nordeste do Brasil. This positive outlooks reflect the linkage of the credit quality of these entities to that of the sovereign. Standard & Poor's considers these entities to be closely integrated into the government and its finances, and that there are strong incentives for the sovereign to support these companies. As such, rating actions and outlook revisions on these entities should continue to mirror those on the sovereign going forward. "The positive outlooks on the financial services entities reflect our perception of improvements in industry and economic risks for the banking industry in Brazil, including the country's reduction in fiscal vulnerability and external indebtedness," said Standard & Poor's credit analyst Daniel Araujo. An upgrade of the banks would depend not only on the upgrade of the sovereign, but also on the banks' intrinsic creditworthiness, especially as measured by the quality and sustainability of asset quality and profitability. The positive outlooks on the insurance and asset management companies reflect their role as core subsidiaries of Unibanco and these are: -- Uniao de Bancos Brasileiros SA; -- Banco Bradesco SA; and -- Banco Itau SA. CENTRAIS ELECTRICAS: S&P Changes Ratings' Outlook to Positive ------------------------------------------------------------- Standard & Poor's Ratings Services changed the rating outlooks on Centrais Eletricas Brasileiras S.A. aka Eletrobras to positive from stable: -- Foreign currency corporate credit rating: * to BB/Positive/-- from BB/Stable/-- -- Local currency corporate credit rating * to BB+/Positive/-- from BB+/Stable/-- This is in connection with Standard & Poor's revised outlook on its long-term foreign and local currency ratings on 16 Brazilian entities to positive from stable, following the revision of the foreign and local currency rating outlooks on the Federative Republic of Brazil. At the same time, Standard & Poor's revises its outlook on the Brazil national scale ratings to positive from stable, following the same action on the sovereign. In addition, the ratings on all entities were affirmed. The positive outlooks on the sovereign-owned entities are as follows: -- Eletrobras; -- Centrais Eletricas Brasileiras; -- Banco Nacional de Desenvolvimento Economico e Social; and -- Banco do Nordeste do Brasil. This positive outlooks reflect the linkage of the credit quality of these entities to that of the sovereign. Standard & Poor's considers these entities to be closely integrated into the government and its finances, and that there are strong incentives for the sovereign to support these companies. As such, rating actions and outlook revisions on these entities should continue to mirror those on the sovereign going forward. "The positive outlooks on the financial services entities reflect our perception of improvements in industry and economic risks for the banking industry in Brazil, including the country's reduction in fiscal vulnerability and external indebtedness," said Standard & Poor's credit analyst Daniel Araujo. An upgrade of the banks would depend not only on the upgrade of the sovereign, but also on the banks' intrinsic creditworthiness, especially as measured by the quality and sustainability of asset quality and profitability. The positive outlooks on the insurance and asset management companies reflect their role as core subsidiaries of Unibanco and these are: -- Uniao de Bancos Brasileiros SA; -- Banco Bradesco SA; and -- Banco Itau SA. As core entities, the outlooks on these entities will move in tandem with those on their parents. COMPANHIA PARANAENSE: Implementing Maua Communications Campaign --------------------------------------------------------------- Companhia Paranaense de Energia, along with Eletrosul, is implementing a communications campaign to decrease resistance to the 361-megawatt BRL1 billion Maua hydroelectric project, Business News Americas reports. BNamericas relates that Companhia Paranaense and Eletrosul plan to build the Maui project in Parana's Tigabi river basin. The two firms won the project in October in the federal auction after government lawyers overturned court injunctions that hindered the project's development. The report says that environmental groups have filed several lawsuits against the project, claiming that it would affect the Tigabi river basin. Ronaldo Custodio, technical director of Eletrosul, told BNamericas, "The suits are a considerable risk but approval of the environment impact study [EIS] is a good thing." According to BNamericas, Companhia Paranaense and Eletrosul have held public hearings with local communities to talk about the project. "The tension will be reduced because Eletrosul and Copel (Companhia Paranaense) are two well-known, traditional companies in the region. We will concentrate our efforts to make links with the local community." The environmental groups are also questioning the licensing process, BNamericas notes. The groups claimed that the Parana environmental protection authority failed to consider social changes since the environmental impact study was ratified in December 2005. CNEC, an engineering firm and a unit of Brazil's Camargo Correa, developed the study that indicated Maua's 99 square-kilometer reservoir would affect 1,360 people living in three municipalities, according to BNamericas. BNamericas emphasizes that Eletrosul estimated that the licensing process to take one year, allowing construction to begin in 2008 and commercial operations by 2011. Mr. Custodio told BNamericas that development would move quickly as standby construction contracts have been signed. An Eletrosul spokesperson said that the firm is seeking an extra BRL98 million in its 2007 budget for Maua from federal authorities on top of the BRL162 million already approve for 2007, BNamericas relates. BNamericas underscores that Companhia Paranaense and Eletrosul are negotiating with BNDES for 70% of project financing. Companhia Paranaense and Eletrosul will use its own resources for 30% of the project. The two firm plan to offer receivables from Maua's 30-year power sale contracts as a guarantee for the BNDES loan, BNamericas states, citing Mr. Custodio. Headquartered in Parana, Brazil, COPEL aka Companhia Paranaense de Energia SA -- http://www.copel.com/-- transmits and distributes electricity to more than 3 million customers in the state of Paran and has a generating capacity of nearly 4,600 MW, primarily from hydroelectric plants. COPEL also offers telecommunications, natural gas, engineering, and water and sanitation services. The company restructured its utility operations in 2001 into separate generation, transmission, and distribution subsidiaries to prepare for full privatization, which has been indefinitly postponed. In response, COPEL is re-evaluating its corporate structure. The government of Parana controls about 59% of COPEL. * * * Copel's BRL100,000,000 debentures due March 1, 2007, is rated Ba3 by Moody's. COMPANHIA SIDERURGICA: Fails to Renew Insurance Policies -------------------------------------------------------- Local press says that Companhia Siderurgica Nacional has failed to renew insurance policies that expired on Nov. 23. Valor Economico relates that Companhia Siderurgica faced double premiums and higher deductions after a blast furnace in January caused an estimated US$550 million in damages. According to Gazeta Mercantil, international insurers placed Companhia Siderurgica's claim at US$350 million. Valor Economico underscores that Companhia Siderurgica's policies allowed for claims up to US$750 million. Meanwhile, Gazeta Mercantil says the limit was US$700 million. An insurance executive told Gazeta Mercantil, "They had to ask for a 30-day extension to find someone on the international market who would accept their risk." Valor Economico notes that for the 30-day extension, Companhia Siderurgica will pay US$17.5 million premiums, compared with the previous US$7.80 million. Deductions will increase to US$25 million, compared with US$10 million before. IRB-Brasil Re, a federal reinsurer, has taken on 29% of the risk, Valor Economico notes. Meanwhile, Guy Carpenter, a US reinsurance firm, is placing the rest on international markets. Companhia Siderurgica Nacional is one of the lowest-cost steel producers in the world, which is a result of its access to proprietary, high-quality iron ore at the Casa de Pedra mine; self-sufficiency in energy; streamlined facilities; and logistics advantages. This is in addition to the group's strong market position in the fairly concentrated steel industry in Brazil. * * * Standard & Poor's Ratings Services affirmed on Aug. 4, 2006, its 'BB' long-term corporate credit rating on Brazil-based steel maker Companhia Siderurgica Nacional after the announcement of its association with US-based steel maker Wheeling-Pittsburgh Corp. in the US. S&P said the outlook is stable. Fitch Ratings viewed the proposed merger of Companhia Siderurgica Nacional's or CSN North American operations with those of Wheeling-Pittsburgh Corporation or WPSC to be neutral to CSN's credit quality. Fitch's ratings of CSN include: -- Foreign currency Issuer Default Rating: 'BB+'; -- Local currency IDR: 'BBB-'; -- National scale rating: 'AA (bra)'; -- Senior unsecured notes 'BB+'; and -- Brazilian Real denominated debentures: 'AA (bra)'. DEVELOPERS DIVERSIFIED: Declares Preferred Stock Dividends ---------------------------------------------------------- Developers Diversified has declared its fourth quarter 2006 Preferred Class F and Preferred Class G stock dividends: * Fourth Quarter 2006 Preferred Class F Stock Dividend: US$0.5375 per depositary share Each Class F Depositary Share is equal to one tenth of a share of Developers Diversified's 8.60% Class F Cumulative Redeemable Preferred Stock. This dividend covers the period beginning on Sept. 15, 2006, and ending on Dec. 14, 2006. The declared Preferred Class F Dividend is payable Dec. 15, 2006, to shareholders of record at the close of business on Dec. 1, 2006. * Third Quarter 2006 Preferred Class G Stock Dividend: US$0.5000 per depositary share Each Class G Depositary Share is equal to one tenth of a share of Developers Diversified's 8.00% Class G Cumulative Redeemable Preferred Stock. This dividend covers the period beginning on Sept. 15, 2006, and ending on Dec. 14, 2006. The declared Preferred Class G Dividend is payable Dec. 15, 2006, to shareholders of record at the close of business on Dec. 1, 2006. In addition, also declared its fourth quarter 2006 common share dividend of US$0.59 per share, which is payable Jan. 8, 2007, to shareholders of record at the close of business on Dec. 22, 2006. About Developers Diversified Based in Beachwood, Ohio, Developers Diversified Realty Corporation -- http://www.ddr.com/-- currently owns and manages over 500 retail operating and development properties in 44 states, plus Puerto Rico and Brazil, totaling 118 million square feet. The Company is a self-administered and self-managed real estate investment trust operating as a fully integrated real estate company which acquires, develops and leases shopping centers. * * * As reported in the Troubled Company Reporter on Oct. 31, 2006, Fitch Ratings affirmed Developers Diversified Realty Corp.'s ratings following the company's announcement of the pending acquisition of Inland Retail Real Estate Trust Inc. Ratings affirmed include the Company's BBB Issuer Default Rating, BBB Senior unsecured debt and BB+ preferred stock rating. DURA AUTOMOTIVE: Judge Carey Approves Equity Trading Procedures --------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware granted, on a final basis, DURA Automotive Systems Inc. and its debtor-affiliates' request for the institution of procedures for the trading of their equity securities to which parties must adhere as a precondition of the effectiveness of the trades. The Company says that the procedures for the trading of its equity securities, is meant to protect and preserve the federal net operating losses. Over the past several years, through Sept. 30, 2006, the Debtors have incurred consolidated federal NOLs of approximately US$437,000,000, Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates. Mr. Collins explains that the NOLs are valuable to the Debtors and their estates because the Debtors can carry forward NOLs to set off future taxable income for up to 20 taxable years, thus reducing future tax obligations and freeing up funds to meet working capital requirements and service debt. The Debtors may also utilize the NOLs to set off any taxable income generated by transactions completed during their stay in Chapter 11. According to Mr. Collins, unrestricted trading of Dura equity securities could adversely affect the Debtors' NOLs if: (a) too many 5% or greater blocks of equity securities are created; or (b) too many shares are added to or sold from the blocks such that, together with previous trading by 5% shareholders during the preceding three-year period, an ownership change within the meaning of Section 382 of the Internal Revenue Code, as amended, is triggered prior to emergence and outside the context of a confirmed Chapter 11 plan of reorganization. Without the restrictions on trading, the Debtors' ability to use their NOLs could be severely limited or even eliminated, and could lead to negative consequences for the Debtors, their estates and the overall reorganization process, Mr. Collins asserted. Under Section 382, change of ownership occurs when the percentage of a company's equity held by one or more 5% shareholders increases by more than 50 percentage points over the lowest percentage of stock owned by the shareholders at any time during a three-year rolling testing period. In addition, Section 382 limits the amount of taxable income that can be set off by a pre-change-of-ownership loss to the long-term tax-exempt bond rate, as of the ownership change date, multiplied by the value of the stock of the loss corporation immediately before the ownership change. Under certain circumstances, built-in losses recognized during the five-year period after the change date are subject to similar annual limitations. NOL Procedures By establishing procedures for continuously monitoring the trading of equity securities, the Debtors can preserve their ability to seek substantive relief at the appropriate time, particularly if it appears that additional trading may jeopardize the use of the Debtors' NOLs, Mr. Collins tells the Court. Judge Carey authorized the Debtors to establish these procedures for trading of equity securities: (i) Any person or entity who is currently a substantial shareholder must file with the Court, and serve upon the Debtors and counsel to the Debtors, a Notice of Status as a substantial shareholder, on or before 40 days after the effective date of the notice of entry of an interim order approving the NOL Procedures. (ii) Before effectuating any transfer of equity securities that would result in an increase in the amount of common stock of Dura beneficially owned by a substantial shareholder or would result in a person or entity becoming a substantial shareholder, the substantial shareholder or person or entity must file with the Court, and serve on the Debtors and attorneys for the Debtors, an advance written notice of the intended transfer of equity securities. (iii) Before effectuating any transfer of equity securities that would result in a decrease in the amount of common stock of Dura beneficially owned by a substantial shareholder or would result in a person or entity's ceasing to be a substantial shareholder, the substantial shareholder must file with the Court, and serve on the Debtors and attorneys for the Debtors, an advance written notice of the intended transfer of equity securities. (iv) The Debtors would have 15 calendar days after, receipt of a notice of proposed transfer to file with the Court and serve on the substantial shareholder an objection to any proposed transfer of equity securities described in the notice of proposed transfer on the grounds that the transfer might adversely affect the Debtors' ability to utilize their NOLs. If the Debtors file an objection, the transaction would not be effective unless approved by a final and non-appealable order of the Court. If the Debtors do not object within the 15-day period, the transaction could proceed solely as set forth in the notice of proposed transfer. Further transaction must be the subject of additional notices, with an additional 15-day waiting period. The Debtors define a "substantial shareholder" as any person or entity that beneficially owns at least 850,000 shares -- representing approximately 4.5% of all issued and outstanding shares -- of the common stock of Dura. "Beneficial ownership" of equity securities includes direct and indirect ownership, ownership by the holder's family members and persons acting in concert with the holder to make a coordinated acquisition of stock. Mr. Collins tells the Court that the NOL Procedures will allow the Debtors to monitor certain transfers of Dura equity securities so they can act expeditiously to prevent the transfers, if necessary, and preserve the NOLs. Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A., are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co. LLC is the Debtors' investment banker. Glass & Associates Inc. gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims, and balloting for the Debtors. Brunswick Group LLC acts as the Debtors' Corporate Communications Consultants. As of July 2, 2006, the Debtor had US$1,993,178,000 in total assets and US$1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Can Pay Obligations to Employees ------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware authorized DURA Automotive Systems Inc. and its debtor-affiliates, on a final basis, to: (i) pay certain prepetition: (i) wages, salaries, bonuses, severance payments, and other compensation, (ii) employee medical and similar benefits, and (iii) reimbursable employee expenses; and (b) make deductions from employees' paychecks. The Debtors also obtained the Court's authority to direct banks and other financial institutions to receive, process, honor, and pay all checks presented for payment and electronic payment requests relating to the employee obligations. The Debtors also intended to satisfy their obligations to pay postpetition wages and certain benefits of their employees in the ordinary course, as they become due. The Debtors employ 6,440 employees in the United States, of whom approximately 4,950 are hourly employees and 1,490 are salaried employees. Additionally, the Debtors employ 690 employees in Canada, of whom approximately 140 are full-time salaried employees and approximately 550 are hourly employees. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, related that the Debtors' employees perform a variety of critical functions, including product manufacturing and a variety of engineering, administrative, accounting, supervisory, consultant, management, and other tasks. Hence, the Debtors must retain their employees' skills, knowledge, and understanding of the Debtors' infrastructure, operations and customer relations to effect a successful reorganization and maximize creditors' recoveries, Mr. Collins asserted. Mr. Collins averred that nonpayment of employee compensation and benefits could severely undermine morale and impose real hardship on the employees, generate doubts about the stability of the Debtors and their prospects for reorganization, and create a significant risk of attrition. Employee Obligations A. Unpaid Compensation The Debtors' average aggregate monthly gross compensation for employees, including wages, salaries, and bonuses, is US$19,440,000 for the U.S. employees and US$2,640,000 for the Canadian employees. Approximately 90% of payroll is made by direct deposit through electronic transfer of funds directly to employees' accounts, and the remaining 10% of employees is paid via checks. As of Oct. 30, 2006, the Debtors have not paid their employees all prepetition wages held in arrears. Additionally, compensation may be due and owing as of their bankruptcy filing because: (a) some discrepancies may exist between the amounts paid and amounts employees or others believe should have been paid, which, upon resolution, may reveal that additional amounts are owed to the employees; (b) some payroll checks issued prepetition to employees may not have been presented for payment or cleared the banking system and, accordingly, have not been honored and paid as of Oct. 30, 2006; or (c) variations in the Debtors' various payroll schedules. The Debtors have funded their payroll for both hourly and salaried employees that would normally be due. The Debtors estimate that as of their bankruptcy filing, one hourly pay period is outstanding and as much as one salary pay period may still be outstanding, consisting of US$6,480,000 in accrued wages, salaries, overtime pay, commissions, and other compensation earned, prior to the filing for chapter 11 protection, by non-union U.S. Employees. The Debtors also estimate that roughly one hourly pay period and one salary pay period is outstanding to the non-union Canadian employees, consisting of a further CDNUS$485,000 of unpaid compensation due and owing. The Debtors said it will not pay any employee more than US$10,000 for the unpaid compensation. Additionally, the Debtors have certain employees whose employment is governed by collective bargaining agreements. As of Oct. 30, 2006, the outstanding unpaid compensation owed to union employees also consists of approximately one hourly pay period and one salary pay period, or approximately US$805,000 for U.S. employees and approximately CDNUS$405,000 for union employees in Canada. The Debtors have also entered into various employment agreements with several of their executives and certain of their other employees. The Debtors are not currently seeking to assume or reject these employment agreements at this time, but are seeking authority and discretion to continue honoring those employment agreements in accordance with their terms. B. Deductions and Withholdings During each applicable pay period, the Debtors routinely deduct certain amounts from paychecks, including, without limitation: (a) union dues; (b) credit union deposits and payments; (c) garnishments, child support, and similar deductions; and (d) other pre-tax and after-tax deductions payable pursuant to certain of the employee benefit plans, as well as deductions for individual insurance programs selected by the employees. The Debtors forward the deducted amounts to various third party recipients. Further, the Debtors are required by law to withhold: -- from their U.S. Employees' wages amounts related to federal, state and local income taxes, social security and Medicare taxes for remittance to the appropriate federal, state or local taxing authority. -- from their Canadian Employees' wages amounts related to federal and provincial income taxes, the Quebec/Canada Pension Plan, unemployment taxes and provincial health insurance taxes. The withheld amounts and deductions typically total US$3,750,000 from the U.S. employees' paychecks and CDNUS$325,000 from the Canadian employees' paychecks each Pay Period. The deductions are US$2,160,000 from the U.S. employees' paychecks and CDNUS$50,000 from the Canadian employees' paychecks. However, due to the Debtors' bankruptcy filing, some of the funds were deducted from employees' earnings, but may not have been forwarded to the appropriate third party recipients before their bankruptcy filing. The Debtors' payroll taxes, including the employee and employer portion, typically total US$2,400,000 each combined hourly and salary pay period. In each combined hourly and salary pay period, the Debtors typically withhold US$1,600,000 in the aggregate from the U.S. employees' paychecks and CDNUS$275,000 from the Canadian employees' paychecks. Before their bankruptcy filing, the Debtors withheld the appropriate amounts from employees' earnings for the payroll taxes, but the funds may not have been forwarded to the appropriate taxing authorities prior to Oct. 30, 2006. C. Reimbursable Expenses The Debtors routinely reimbursed employees for certain expenses incurred on the Debtors' behalf. With respect to plant locations that have not transitioned to the Debtors' centralized shared services initiative, reimbursable expenses total approximately US$220,000 per month. The Debtors' Canadian plants typically incur CDNUS$83,000 in reimbursable expenses each month. As of Oct. 30, 2006, less than US$255,000 in reimbursable expenses remained unpaid to employees whose expenses are not governed by the Debtors' centralized shared services program. In addition, to streamline the process of paying expenses incurred by employees on the Debtors' behalf, the Debtors have implemented a program through which certain banks, including Bank of America, N.A., issued company credit cards to approximately 950 employees for business use. Amounts charged to these company credit cards are billed directly to the Debtors and historically averaged US$1,100,000 per month. The Debtors believe that this full monthly amount may be outstanding as of Oct. 30, 2006. D. Atwood Gainsharing Plan Approximately 2,600 employees in certain of the Atwood Mobile Products' plants are eligible to participate in an annual incentive plan, which provides employees with cash incentives if certain production performance goals are met. The Debtors have distributed approximately US$560,000 in cash incentives for achieved performance goals in the first two quarters of 2006. E. Dura Automotive Systems Inc. Annual Bonus Plan Approximately 150 Employees participate in the Dura Automotive Systems Inc. Annual Bonus Plan, which is open to employees holding certain management positions ranging from technology and quality mangers to plant managers. The Debtors did not make any bonus payments under the ABP in 2006 based on the Company's 2005 performance, and do not intend to make any payments in 2007 based on the Company's 2006 performance. Indeed, the Debtors do not expect to make bonus payments pursuant to the ABP until February 2008. F. Enterprise Resource Planning Approximately 25 employees have agreed to participate in the Debtors' Enterprise Resource Planning and QAD Implementation Initiative -- a software program designed to centralize and streamline the Debtors' administrative functions and to unify the Debtors' time-worked tracking and attendance system and the Debtors' manufacturing tracking system. Each of the 25 employees has entered into an employment agreement with the Debtors, which outlines, among other terms, the base salary and incentive payments for completion of the initiative. The Debtors estimate that the total payout for incentive bonus payments earned will be US$205,000. G. Severance Payments and Obligations The Debtors are party to a number of severance agreements with current and former employees that provide for varied, yet prescribed, amounts of severance payments in consideration for services provided and to allow the Debtors' planned operational restructuring initiatives to take place through reductions in the labor force. In this connection, the Debtors have, as of Oct. 30, 2006, terminated 275 employees and transferred another 30 employees to alternate positions within the Debtors' operations. About 125 terminated employees have severance agreements that provide for severance payments totaling approximately US$1,950,000 in the aggregate, of which US$800,000 has already been paid and US$1,150,000 is budgeted to be paid over the coming weeks. During the next 30 days after their bankruptcy filing, the Debtors expect to pay less than US$675,000 in prepetition severance payments and obligations. In some cases, provisions in applicable CBAs or employment agreements provide for a greater measure of severance benefits to terminated employees. Of these terminated U.S. employees, the Debtors estimate that only eight have claims exceeding the US$10,000 priority limit contained in Section 507(a) of the Bankruptcy Code for unpaid severance obligations. Unpaid severance obligations for seven of these eight former employees range from approximately US$10,400 to approximately US$13,700. The Debtors are concerned that their failure to honor the severance agreements in the midst of an operational restructuring will cause employees who may be terminated in the future as the operational restructuring continues, to place little faith in offers of severance pay that may be made down the line. Hence, the Debtors seek authority to continue to honor and enter into agreements to provide the severance payments and obligations in their sole discretion, in the ordinary course of their businesses, pursuant to CBA provisions, where applicable, and to pay any prepetition amounts owed in connection therewith. H. Other Employee Compensation Programs On Aug. 21, 2006, the Debtors implemented a key management incentive program, which offers 55 key employees the opportunity to participate in a discretionary bonus plan program. The Key Management Incentive Program, which runs through Dec. 31, 2007, is designed to provide incentives in the form of periodic cash bonus awards to motivate the key employees to attain specific performance goals articulated under the plan. On Sept. 29, 2006, the Debtors made their first payment to participants, in the aggregate amount of US$952,480. The Debtors will separately seek Court authority before making any payout under the Key Management Incentive Plan. As of Oct. 30, 2006, at least one former U.S. non-union employee is owed significantly more than US$10,000 in unpaid severance payments. His unpaid severance payments total approximately US$180,000 and consist of a severance payment period of 12 months. The Debtors intend to seek Court authority to continue these payments via a separate pleading to be filed with the Court. Employee Benefits The Debtors provide employees, in the ordinary course of business, with a number of employee benefits, including, but not limited to: (a) medical, dental, and vision insurance; (b) workers' compensation; (c) vacation time; (d) sick leave; (e) pension, savings and retiree medical plans; and (f) other miscellaneous employee benefits. A. Medical, Dental, and Vision Plans The Debtors offer these benefits plans and insurance policies to their U.S. Employees for medical, dental, and vision coverage: (a) The Dura Choice Plan -- Approximately 5,500 employees participate in the Dura Choice Plan, the Debtors' primary self-insured medical and prescription drug plan. The Debtors paid approximately US$39,000,000 in 2005 under the self-insured plan, including approximately US$1,300,000 in administrative fees paid to third party administrators, NGS American and MedCo Health Solutions, Inc. (b) The HMOs -- The Debtors also offer four fully insured medical plans to certain of their Employees: (i) the Priority Health of Northern Michigan Medical Plan, (ii) the Priority Health of Western Michigan Medical Plan, (iii) the Health Alliance Plan for the Metro-Detroit Region, and (iv) the Health Spring Medical Plan for Tennessee. Each of these HMOs is fully insured with the respective insurer and together provide coverage to approximately 380 of the Debtors' employees. In 2005, the Debtors paid about US$2,700,000 in premiums to maintain this coverage, which represents approximately 85% of the cost of total coverage. The participating Employees contribute the remainder of the cost. (c) Dura Choice Dental Plan -- NGS American administers the Debtors' self-insured dental plan on behalf of 5,900 participating employees. In 2005, the Debtors paid US$2,250,000 to maintain this plan, which amount is included in the approximate cost of the Dura Choice Plan. (d) Employee-Paid Vision Plan -- The Debtors provide the Employees with the option to participate in a vision plan, which is fully insured through Vision Service Plan. The 3,800 participating Employees contribute 100% of the premiums in exchange for the coverage. The Debtors offer these medical and dental programs to their Canadian Employees: (i) Supplementary Health Plan -- The Supplementary Health Plan is the Debtors' Canadian medical and prescription drug plan. The plan is insured through Manulife Financial and the Debtors paid a CNUS$1,840,000 in annual premiums in 2005 to maintain the plan. The Debtors expect to pay approximately CNUS$1,850,000 in premiums for 2006. (ii) Dental Plan -- All Canadian Employees participate in the Dental Plan, which is also insured through Manulife Financial. The Debtors paid approximately CNUS$750,000 in premiums in 2005 to maintain this plan. The Debtors expect to pay approximately CNUS$850,000 in premiums in 2006. B. Workers' Compensation Pursuant to state laws, the Debtors must maintain workers' compensation liability coverage in the ordinary course of business. Generally, the Debtors self-insure their workers' compensation liabilities up to US$500,000 per claim and use The St. Paul Travelers Companies as their third-party administrators and insurer. The Debtors also maintain workers' compensation insurance coverage for certain liabilities pertaining to Employees of certain Atwood Mobile Products' plant locations with Raffles Insurance Ltd., for which Zurich Services Corporation acts as the Debtors' third party administrator. In connection with the Workers' Compensation Programs, the Debtors have provided these letters of credit as collateral: (i) a letter of credit for US$17,829,000 to Travelers Indemnity Company; (ii) a letter of credit for US$1,120,597 to the Royal Bank of Canada; and (iii) a letter of credit for US$100,000 to the state of Michigan. Certain benefits under the Workers' Compensation Programs have been awarded prepetition, but have yet to be fully paid. Certain other claims were filed prepetition, but have yet to be resolved. For the claims administration process to operate in an efficient manner and to ensure that they comply with their state law requirements, the Debtors propose to continue their claim assessment, determination and adjudication process to pay prepetition workers' compensation claims. The costs associated with the Workers' Compensation Programs fluctuate according to the various claims submitted, however, the Debtors' overall claims costs associated with their Workers' Compensation Programs were US$2,877,079 during the period from Jan. 1, 2006, through July 31, 2006. In Canada, the payment of workers' compensation benefits is insured and administered through the federal and provincial governments. The Debtors are required by law to pay monthly premiums to the Workers' Compensation Board to maintain these benefits. The monthly premiums vary depending upon each covered Employee's earned wages; however, the Debtors' September 2006 premiums for their Canadian facilities and Employees totaled approximately CDNUS$88,500. C. Vacation and Sick Pay The Debtors provide vacation time to their employees as a paid time-off benefit. The Debtors generally pay employees for any earned, but unused, vacation time upon termination. In addition, certain Salaried U.S. employees are eligible for salary continuation for absences due to illness or injury for up to 26 weeks. Other salaried U.S. employees are eligible for salary continuation equal to 75% of their pay for up to 26 weeks, and hourly U.S. employees are eligible to receive a prescribed weekly amount of up to US$200 for a maximum of 26 weeks. After 26 weeks, the Debtors' long-term disability benefits manages salaried U.S. employees' claims if the salaried U.S. smployee's application to Unum Provident, the Debtors' long-term disability insurance carrier, is approved. Certain salaried Canadian employees are also eligible for salary continuation for absences due to illness or injury for up to 52 weeks pursuant to the Debtors' policy, as are Hourly Canadian employees. After 52 weeks, the Debtors' long-term disability benefits manages Canadian employees' claims if the Canadian Employee's application to Manulife Financial is approved. D. Employee Pension, Savings, and Retiree Medical Plans The Debtors maintain several pension, savings and retiree medical plans for the benefit of their employees, including, but not limited to, the 401 (k) Plans, the Non-Qualified 401(k) Look-a- Like Plan, the Canadian Defined Contribution Plan for Salaried Employees, the Pension Plans, and the Retiree Medical Plans: (i) 401(k) Plans The Debtors maintain three 401(k) savings plans for the benefit of their Employees. Each 401(k) Plan provides for automatic pre-tax salary deductions of eligible compensation up to the limits set by the Internal Revenue Code. Approximately 61% of the U.S. employees participate in the 401(k) Plans, and the aggregate monthly amount withheld from employees' paychecks is US$840,000. The Debtors also pay matching contributions depending on Employee classification, collective bargaining provisions and plan participation. The Debtors' monthly matching contributions with respect to the 401(k) Plans are approximately US$470,000. (ii) The Non-Qualified 401(k) Look-a-Like Plan The Debtors also maintain a rabbi trust with T. Rowe Price to hold funds attributable to a non-qualified deferred compensation plan that is fully funded by the participants and not by the Debtors. The Debtors pay T. Rowe Price US$1,000 per year to administer the Non-Qualified 401(k) Look-a-Like Plan. Currently, the Non-Qualified 401(k) Look-a-Like Plan has five participants: four active Employees and one retired Employee who has elected to receive installment payments over three years' time. No employee currently contributes to the Non-Qualified 401(k) Look-a-Like Plan. (iii) Canadian Defined Contribution Plan for Salaried Employees The Debtors maintain one defined contribution plan on behalf of their Canadian employees. The Canadian Defined Contribution Plan for salaried employees provides for automatic pre-tax salary deductions of eligible compensation up to a limit of 18% of earned income per Employee or CDNUS$19,000. The Canadian Defined Contribution Plan for salaried employees has approximately 180 participants, and the approximate aggregate monthly amount withheld from employees' paychecks is CDNUS$31,000. The Debtors also pay matching contributions of 100% on the first 3% of contributions and 50% on the next 2% of contributions. Employees are also offered the opportunity to contribute an additional 6% of earnings, which are not matched by the Debtors. During the first nine months of 2006, the Debtors paid CDNUS$40,000 to maintain the Canadian Defined Contribution Plan. (iv) U.S. Pension Plans The Debtors maintain four pension plans on behalf of certain of their U.S. employees. The Dura Master Pension Plan is a consolidation of six pension plans that have been "frozen" -- its participants are accruing vesting rights but not benefits under the plan. The Debtors maintain two plans for union employees under which benefits continue to accrue -- the Mancelona Pension Plan and the LaGrange Pension Plan -- while benefits under the Atwood Supplementary Pay Plan no longer accrue. The Debtors fund these U.S. Pension Plans on behalf of 4,943 Employees. (v) Canadian Pension Plans The Debtors maintain six pension plans on behalf of certain of their Canadian employees, three of which are maintained on behalf of hourly, unionized Canadian employees and three of which are maintained on behalf of certain salaried Canadian employees. As of Dec. 31, 2005, the Canadian Pension Plans contained approximately 900 participants and cost the Debtors approximately CDNUS$2,750,000 annually to fund. (vi) Retiree Medical Programs Certain union employees will be entitled to receive retiree medical and prescription drug benefits upon their retirement from the Company, and certain former union and non-union employees are receiving retiree medical and prescription drug benefits under a number of retiree medical plans. As of the Oct. 30, 2006, 229 currently retired union and non-union employees were receiving retiree benefits pursuant to the Dura Retiree Medical Plans. The Debtors' costs vary depending upon medical claims submitted, but in 2005, medical claims totaling US$2,400,000 were paid. In 2005, the Debtors paid US$54,000 in administrative fees to maintain the Dura Retiree Medical Plans. In a separate program for retired Employees, the Debtors provide approximately 265 participating retirees with partial Medicare premium reimbursements. As of Aug. 1, 2006, the 2006 annual cost for the Medicare Stipend Program was estimated to be approximately US$400,000. The Debtors also provide Company-sponsored self-insured death benefits for approximately 565 eligible retirees, which benefits range from US$1,100 to 6,000 per person. (vii) Canadian Retiree Medical Programs All participating vested Canadian employees will be entitled to receive retiree medical and prescription drug benefits upon their retirement from the Company. The Canadian Retiree Medical Plan consists of an active plan insured by Manulife Financial and a closed plan, which is self-insured and for which GreenShields acts as the Debtors' third-party plan administrator. As of Oct. 30, 2006, approximately 85 currently retired Employees were receiving retiree benefits pursuant to the Canadian Retiree Medical Plan. In 2005, medical claims totaling approximately CDNUS$265,000 were paid under the Canadian Retiree Medical Plan. E. Excluded Employee Benefit Plans The Debtors provide certain deferred compensation plans to certain of their employees and members of their boards of directors, including the 1979 and 1998 Excel Deferred Compensation Plans, the Dura Supplemental Executive Retirement Plan, and the Atwood Executive Leadership Deferred Compensation Plan. The Debtors are not requesting authority to continue, assume or reject these Other Deferred Compensation Plans at this time. F. Additional Employee Benefits (1) Life Insurance, Accidental Death and Dismemberment Insurance and Optional Life Programs The U.S. employees receive: -- primary life insurance coverage, through Unum Provident, for which the Debtors pay approximately US$60,000 per month in the aggregate; -- Accidental Death and Dismemberment Insurance, through Union Provident, for which monthly premiums total approximately US$9,000; and -- optional life programs, the premiums for which are paid by the Employees, and cost approximately US$65,000 in the aggregate per month. The Debtors also provide primary Life Insurance for their Canadian employees through Manulife Financial. All of the Debtors' Canadian employees receive the coverage, which costs the Debtors approximately CDNUS$175,000 in annual premiums. In addition, the Debtors provide Accidental Death and Dismemberment Insurance to their Canadian Employees through Manulife Financial, for which annual premiums total approximately CDNUS$20,000. (2) Disability The Debtors provide U.S. employees with short-term and long-term disability benefits, paid through a third party administrator, Unum Provident. The approximate cost incurred by the Debtors for short-term disability benefits during the first eight months of 2006 was US$700,000 for paid claims plus an additional US$2,178 per month in administrative fees. The Debtors' portion of the costs for long-term disability benefits is approximately US$30,000 per year. The Debtors provide Canadian employees with short-term and long-term disability benefits, which are fully insured through Manulife Financial. The Debtors paid premiums totaling CDNUS$575,000 Weekly Indemnity Benefits and CDNUS$65,000 Long-Term Disability Benefits in 2005. (3) Flexible Spending The Debtors offer their U.S. employees the ability to contribute a portion of their compensation into flexible spending accounts for health and dependent care through NGS American, which operates as a third party administrator to the plans. Approximately 300 U.S. Employees participate in the Flexible Spending Program, which costs the Debtors less than US$20,000 per year to administer. The Debtors also offer the "Flex Perquisite" program for 13 designated senior management Employees, which allows participants to use a prerequisite allowance for certain business benefits that have the most value to the participant. The annual allowances under the Flex Perquisite plan total US$269,500 for 2006. (4) Group Travel Accident Insurance The Debtors provide accident insurance coverage for Employees while traveling on official company business, which consists of life insurance coverage and business travel assistance coverage, provided by AIG Business Travel Insurance Company. The coverage premiums cost US$20,000 per year and are paid through Aug. 1, 2007. (5) Tuition Reimbursement Pursuant to a tuition reimbursement program for certain Employees, the Debtors reimburse employees for 100% of tuition costs and registration fees for approved course work at college-level institutions. During the first eight months of 2006, the Debtors have provided Employees with approximately US$170,000 of non-taxable tuition benefits and US$30,000 of taxable tuition benefits. As of their bankruptcy filing, the Debtors estimate the aggregate amount of reimbursements due under the tuition reimbursement program to be de minimis. Other Benefits The Debtors maintain premium-based directors and officers' liability insurance policies and excess liability policies with American International Companies, XL Specialty, Chubb and Axis. The annual premiums for the D&O Policies total approximately US$735,000. As of their bankruptcy filing, the Debtors do not believe that they owe any premiums for the D&O Policies prior to their bankruptcy filing. All of the Debtors' employees are also eligible to receive awards for developing patents the Debtors use in their business operations. For each patent that issues, a single inventor is provided with a monetary reward of US$1,000, and a total of US$2,000 is provided to, and shared by, multiple inventors. In addition, a few of the Debtors' employees participate in an expatriate program, which provides for benefits to employees they require to relocate overseas. Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A., are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co. LLC is the Debtors' investment banker. Glass & Associates Inc. gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims, and balloting for the Debtors. Brunswick Group LLC acts as the Debtors' Corporate Communications Consultants. As of July 2, 2006, the Debtor had US$1,993,178,000 in total assets and US$1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Court Issues Order for Banks to Honor Checks ------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware granted, on a final basis, DURA Automotive Systems Inc. and its debtor-affiliates' request, pursuant to Sections 105(a), 363(b), 363(c), 507(a) and 1107 of the Bankruptcy Code, to: -- authorize and direct all banks to honor checks for employee wages and salaries prior to the Debtors' filing for chapter 11 protection, and all associated taxes; and -- prohibit banks from placing any holds on, or attempt to reverse, any automatic transfers to employee accounts for payroll amounts prior to the filing for chapter 11 protection, pending the hearing on the Debtors' "first day" motions and applications in the Chapter 11 cases. Judge Carey previously directed Bank of America, N.A., which maintains the Debtors' master payroll account, not to honor more than US$500,000 in the aggregate on account of the Payroll Checks, unless otherwise ordered by the Court. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, informed the Court that the Debtors issued checks and direct deposits to their salaried employees aggregating US$4,790,000 on Oct. 27, 2006, for the pay period ended Oct. 31, 2006. The Debtors also issued checks and directed deposits to their hourly employees totaling US$3,150,000 on Oct. 27, 2006, for the pay period ended Oct. 20, 2006. Given the relatively brief period of time between the Oct. 27, 2006, payroll and the date they filed for bankruptcy, the Debtors believe that many of the employee checks had not cleared as of their bankruptcy filing. Nevertheless, since approximately 90% of these payments were made via direct deposit, the Debtors estimate that no more than US$500,000 in Payroll Checks, before their bankruptcy filing, remains outstanding. The Debtors were wary that the Banks would not honor outstanding Payroll Checks absent a Court order authorizing the payment. The Debtors maintain that, at this critical juncture in their cases, it is essential that the employee-workforce remains in place and properly motivated. According to Mr. Collins, if the Debtors fail to meet their payroll, the employees would have little incentive to remain on the job. Even if the employees do not leave their jobs, the Debtors' failure to meet payroll obligations will have a significant detrimental effect on employee morale and thus reduce the employees' willingness to aid in the restructuring of the Debtors through a successful reorganization of the Debtors' business, he asserted. Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A., are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co. LLC is the Debtors' investment banker. Glass & Associates Inc. gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims, and balloting for the Debtors. Brunswick Group LLC acts as the Debtors' Corporate Communications Consultants. As of July 2, 2006, the Debtor had US$1,993,178,000 in total assets and US$1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). HSBC BRASIL: S&P Changes BB Ratings' Outlook to Positive -------------------------------------------------------- Standard & Poor's Ratings Services maintained its 'BB' ratings on both of HSBC Bank Brasil S.A.'s foreign and local currency counterparty credit ratings and changed both ratings outlook to positive from stable. -- Foreign currency counterparty credit rating * to BB/Positive/B from BB/Stable/B -- Local currency counterparty credit rating * to BB/Positive/B fromBB/Stable/B This is in connection with Standard & Poor's revised outlook on its long-term foreign and local currency ratings on 16 Brazilian entities to positive from stable, following the revision of the foreign and local currency rating outlooks on the Federative Republic of Brazil. At the same time, Standard & Poor's revises its outlook on the Brazil national scale ratings to positive from stable, following the same action on the sovereign. In addition, the ratings on all entities were affirmed. The positive outlooks on the sovereign-owned entities are as follows: -- Eletrobras; -- Centrais Eletricas Brasileiras; -- Banco Nacional de Desenvolvimento Economico e Social; and -- Banco do Nordeste do Brasil. This positive outlooks reflect the linkage of the credit quality of these entities to that of the sovereign. Standard & Poor's considers these entities to be closely integrated into the government and its finances, and that there are strong incentives for the sovereign to support these companies. As such, rating actions and outlook revisions on these entities should continue to mirror those on the sovereign going forward. "The positive outlooks on the financial services entities reflect our perception of improvements in industry and economic risks for the banking industry in Brazil, including the country's reduction in fiscal vulnerability and external indebtedness," said Standard & Poor's credit analyst Daniel Araujo. An upgrade of the banks would depend not only on the upgrade of the sovereign, but also on the banks' intrinsic creditworthiness, especially as measured by the quality and sustainability of asset quality and profitability. The positive outlooks on the insurance and asset management companies reflect their role as core subsidiaries of Unibanco and these are: -- Uniao de Bancos Brasileiros SA; -- Banco Bradesco SA; and -- Banco Itau SA. As core entities, the outlooks on these entities will move in tandem with those on their parents. TELE NORTE: Fails to Vote on Restructuring Plan for Second Time --------------------------------------------------------------- Published reports say that Tele Norte Leste Participacoes SA was unable to vote on its corporate restructuring plan for the second time as the shareholders meeting failed to reach quorum. As reported in the Troubled Company Reporter-Latin America on Nov. 20, 2006, a second Tele Norte extraordinary shareholders meeting was slated for Nov. 24 to decide on the firm's corporate restructuring plan. The restructuring plan of Tele Norte was not approved as the Nov. 13 shareholder meeting did not have quorum. For a valid decision on the restructuring plan, Tele Norte needed 50% plus one of preferential shareholders to attend. However, 29.17% of the shareholders turned up for the meeting. As previously reported, Anatel, the telecoms regulator in Brazil, authorized Tele Norte's corporate restructuring plan. Once the plan gets the shareholders' approval at a shareholders meeting, Tele Norte will be able to: -- simplify the structure of its three units: * Telemar Participacoes, * Tele Norte Leste Participacoes, and * Telemar Norte Leste; and -- bring its shareholders together under one company called Oi Particicoes. The operation would involve a major share exchange program, with each preferential share (without voting rights) being exchanged for an ordinary share. Estado de S Paulo relates that the Nov. 24 assembly was attended by almost 35% of Tele Norte's preferred shareholders, which was more than the 29.17% of the number that attended the first assembly on Nov. 13. Tele Norte has scheduled a third meeting for Nov. 27, Business News Americas notes. BNamericas underscores that a court in Rio de Janeiro upheld a decision on Nov. 23 that stopped the controllers that hold around 6% of the preferential shares from participating in the vote. The owners of ordinary shares could use their preferential shares to vote to benefit themselves in the share swap, BNamericas states. Headquartered in Rio de Janeiro, Brazil, Tele Norte Leste Participacoes SA -- http://www.telemar.com.br-- is a provider of fixed-line telecommunications services in South America. The company markets its services under its Telemar brand name. Tele Norte's subsidiaries include: -- Telemar Norte Leste SA, -- TNL PCS SA, -- Telemar Internet Ltda., and -- Companhia AIX Participacoes SA. * * * As reported on Aug. 21, 2006, Fitch Ratings upgraded Tele Norte Leste Participacoes SA's foreign currency issuer default rating to 'BB+' from 'BB'. UNIAO DE BANCOS: Denies Acquisition Talks of Banco Nacional ----------------------------------------------------------- Pedro Moreira, Uniao de Bancos Brasileiros' chief executive officer, denied to Business News Americas that it has acquired Banco Nacional. As reported in the Troubled Company Reporter-Latin America on Nov. 23, 2006, published reports said that Uniao de Bancos reached an agreement with the Magalhaes Pinto family regarding its acquisition of Banco Nacional. A spokesperson of Uniao de Bancos said that the bank had signed an accord with Magalhaes Pinto in July 2005. The agreement called for Uniao de Bancos and Magalhaes Pinto to create a new firm with BRL150 million in capital to act as liquidator. When the liquidation ends, Magalhaes Pinto would give Uniao de Bancos full control of Banco Nacional. Local press and the market interpreted the agreement as Uniao de Bancos acquiring the rest of Banco Nacional, BNamericas notes. According to BNamericas, Mr. Moreira said, "What we did was make communication easier between the central bank, the controllers -- the [Magalhaes Pinto] family -- and creditors like Unibanco (Uniao de Bancos)." BNamericas relates that Uniao de Bancos acquired the good part of Banco Nacional in November 1995. Uniao de Bancos now wants to finish liquidating Banco Nacional quickly. "We want to put an end to this matter. We want to reach an agreement so the central bank can continue with the liquidation. The issue has been treated as a family feud, but that's not the case," Mr. Moreira told BNamericas. About Banco Nacional Formerly Brazil's seventh-largest bank, Banco Nacional went bankrupt in 1994, fifty years after its founding in Minas Gerais. This institution represents traditional Brazilian families running business as small shops. About Unioa de Bancos Headquartered in Sao Paulo, Brazil, Uniao de Bancos Brasileiros SA -- http://www.unibanco.com/-- is a full-service financial institution providing a range of financial products and services to a diversified individual and corporate customer base throughout Brazil. The company's businesses comprise segments: Retail, Wholesale, Insurance and Pension Plans and Wealth Management. Uniao de Bancos and its associated companies FinInvest, LuizaCred, PontoCred and Tecban (Banco 24 Horas) offer a network composed of 17,000 points of service. It also counts on 7,580 automated teller machines and all 30 Hours' products and services, including the telephone service and the Internet banking. The company's international network consists of branches in Nassau and the Cayman Islands; representatives offices in New York; banking subsidiaries in Luxembourg, the Cayman Islands and Paraguay; and a brokerage firm in New York -- Unibanco Securities Inc. * * * As reported on Sept. 4, 2006, Moody's Investors Service upgraded these ratings of Uniao de Bancos Brasileiros SA: -- long-term foreign currency deposits to Ba3 from Ba1; and -- long- and short-term global local currency deposit ratings to A1/Prime-1 from A3/Prime-2. Moody's rating action was the direct result of the upgrade of Brazil's country ceiling for foreign currency bonds and notes to Ba2, from Ba3, as well as Brazil's country ceiling for foreign currency bank deposits to Ba3, from B1, and the local currency bank deposit ceiling to A1, from A3. UNIAO DE BANCOS: S&P Changes BB Ratings Outlook to Positive ----------------------------------------------------------- Standard & Poor's Ratings Servcies maintained its 'BB' ratings on both of Uniao de Bancos Brasileiros S.A. aka Unibanco's foreign and local currency counterparty credit ratings and changed both ratings outlook to positive from stable. -- Foreign currency counterparty credit rating * to BB/Positive/B from BB/Stable/B -- Local currency counterparty credit rating * to BB/Positive/B from BB/Stable/B This is in connection with Standard & Poor's Ratings revised outlook on its long-term foreign and local currency ratings on 16 Brazilian entities to positive from stable, following the revision of the foreign and local currency rating outlooks on the Federative Republic of Brazil. At the same time, Standard & Poor's revises its outlook on the Brazil national scale ratings to positive from stable, following the same action on the sovereign. In addition, the ratings on all entities were affirmed. The positive outlooks on the sovereign-owned entities are as follows: -- Eletrobras; -- Centrais Eletricas Brasileiras; -- Banco Nacional de Desenvolvimento Economico e Social; and -- Banco do Nordeste do Brasil. This positive outlooks reflect the linkage of the credit quality of these entities to that of the sovereign. Standard & Poor's considers these entities to be closely integrated into the government and its finances, and that there are strong incentives for the sovereign to support these companies. As such, rating actions and outlook revisions on these entities should continue to mirror those on the sovereign going forward. "The positive outlooks on the financial services entities reflect our perception of improvements in industry and economic risks for the banking industry in Brazil, including the country's reduction in fiscal vulnerability and external indebtedness," said Standard & Poor's credit analyst Daniel Araujo. An upgrade of the banks would depend not only on the upgrade of the sovereign, but also on the banks' intrinsic creditworthiness, especially as measured by the quality and sustainability of asset quality and profitability. The positive outlooks on the insurance and asset management companies reflect their role as core subsidiaries of Unibanco and these are: -- Uniao de Bancos Brasileiros SA; -- Banco Bradesco SA; and -- Banco Itau SA. As core entities, the outlooks on these entities will move in tandem with those on their parents. * BRAZIL: Peru Offers Hydropower as Alternative Energy Source ------------------------------------------------------------- Peruvian President Alan Garcia, in a bid to bolster bilateral ties with Brazil, said that Peru's abundant water supply could be converted into electricity for Brazil's consumption, the Associated Press reports. The Peruvian leader underscores that hydropower could free Brazil from its dependence on natural gas producers like Bolivia and Venezuela, the AP says. "The gas can run out or they can turn off the tap," the Peruvian leader was quoted by AP as saying. "Water never stops flowing." Speaking before Brazil's business and industry executives in Sao Paulo, President Garcia encourages boosting bilateral energy and economic ties between the two nations even though the two are members of separate South American economic blocs, the AP relates. Peru's president also noted that leftist governments could threaten Brazil's future economic growth because of the states' control over natural gas resources. Half of Brazil's power needs is being supplied by Bolivia. However, relations with its Andean neighbor have been constrained since the gas sector in Bolivia was nationalized in May, calling for state control on foreign-operated oil fields and price hikes. Meanwhile, through Venezuela's ambitious US$20 billion pipeline that would cut across the amazon, President Hugo Chavez's country would eventually become Brazil's supplier of natural gas. The project has been dubbed as an ecological disaster by some environmental groups. Venezuela has the potential of becoming the world's largest oil producer once suspected 340 billion barrels of reserves in its Orinoco oil belt will be proven. President Garcia describes how new hydroelectric plants near the Andes, would be better than building a pipeline through the amazon, AP relates. "I could light up all of northwestern Brazil and give (the jungle industrial center of) Manaus all the energy it needs, instead of building a strange US$20 billion (?15.55 billion) natural gas pipeline." "I extend my hand to Petrobras and give my word that things won't change," President Garcia told reporters after his speech. Peru belongs to the Andean Community of Nations while Brazil is a member of the Mercosur trade bloc. Venezuela dropped out of the Andean Community in favor of Mercosur because President Chavez opposed trade deals signed by Peru and Colombia with the United States. As reported on Nov. 24, 2006, Standard & Poor's Ratings Services revised its outlook on its long-term ratings on the Federative Republic of Brazil to positive from stable. Standard & Poor's also affirmed these ratings on the Republic of Brazil: -- 'BB'for long-term foreign currency credit rating, -- 'BB+' for long-term local currency credit rating, and -- 'B' for short-term currency sovereign credit rating. =========================== C A Y M A N I S L A N D S =========================== AQFTC I: Invites Shareholders for Final Meeting on Nov. 30 ---------------------------------------------------------- AQFTC I's shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: Richard Gordon Phillip Hinds Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands ATSU CO: Shareholders Convene for Final Meeting on Nov. 30 ---------------------------------------------------------- Atsu Co., Ltd.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidator can be reached at: Richard Gordon Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands ATSU 2 CO: Shareholders Gather for Final Meeting on Nov. 30 ----------------------------------------------------------- Atsu 2 Co., Ltd.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidator can be reached at: Richard Gordon Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands BA CREDIT: Invites Shareholders for General Meeting on Nov. 30 -------------------------------------------------------------- BA Credit Card Corp. Ltd.'s shareholders will convene for a final general meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: Helen Allen Joshua Grant Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands ENHANCED LOAN: Final General Meeting Is Scheduled for Nov. 30 ------------------------------------------------------------- Enhanced Loan Facility III, Ltd.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidator can be reached at: Richard Gordon Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands FIGARO LTD: Final General Meeting Is Set for Nov. 30 ---------------------------------------------------- Figaro Ltd.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidator can be reached at: Emile Small Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands GRAND CENTRAL: Sets Final General Meeting for Nov. 30 ----------------------------------------------------- Grand Central CDO I Ltd.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidator can be reached at: Jan Neveril Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands INTERNATIONAL WATER: Final Shareholders Meeting Is on Nov. 30 ------------------------------------------------------------- International Water Services Ltd.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidator can be reached at: Mike Hughes Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands JAPAN CREDIT: Last Shareholders Meeting Is Set for Nov. 30 ---------------------------------------------------------- Japan Credit Management Co., Ltd. II 's shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: Phillip Hinds Joshua Grant Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands JUMBO ASSET: Liquidator Presents Wind Up Accounts on Nov. 30 ------------------------------------------------------------ Jumbo Asset Finance Ltd.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidator can be reached at: Emile Small Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands LB AUSTRALIA: Calls Shareholders for Final Meeting on Nov. 30 ------------------------------------------------------------- LB Australia and Asia Investments Ltd.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidator can be reached at: Richard Gordon Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands MH CAPITAL: Shareholders Convene for Final Meeting on Nov. 30 ------------------------------------------------------------- MH Capital Ltd.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidator can be reached at: Mike Hughes Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands MUE CAPITAL: Invites Shareholders for Last Meeting on Nov. 30 ------------------------------------------------------------- Mue Capital One Holdings Inc. 's shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited P.O. Box 1093GT, Queensgate House South Church Street, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: Liam Jones Mark Wanless c/o Maples Finance Jersey Limited 2nd Floor Le Masurier House La Rue Le Masurier St. Helier, Jersey JE2 4YE NOGIZAKA CREDIT: Shareholders Gather for Last Meeting on Nov. 30 ---------------------------------------------------------------- Nogizaka Credit Management Company Ltd.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidator can be reached at: Phillip Hinds Joshua Grant Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands OPTEUM HOLDINGS I: Last Shareholders Meeting Is Set for Nov. 30 --------------------------------------------------------------- Opteum Holdings I, Ltd.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidator can be reached at: Richard Gordon Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands PROTON CAPITAL: Sets Final Shareholders Meeting on Nov. 30 ---------------------------------------------------------- Proton Capital Inc.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: Phillip Hinds Emile Small Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands REMBRANDT ER: Final Shareholders Meeting Is Set for Nov. 30 ----------------------------------------------------------- Rembrandt Er Ltd.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: Carrie Bunton Joshua Grant Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands REMBRANDT PERU: Calls Shareholders for Final Meeting on Nov. 30 --------------------------------------------------------------- Rembrandt Peru Finance Ltd.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: Carrie Bunton Joshua Grant Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands SAFI MONO: Shareholders to Gather for General Meeting on Nov. 30 ---------------------------------------------------------------- The Safi Mono Fund Ltd.'s shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidator can be reached at: Mike Hughes Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands STEIN ROE: Shareholders Convene for General Meeting on Nov. 30 -------------------------------------------------------------- Stein Roe & Farnham CLO I Ltd.'s shareholders will convene for a final general meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidator can be reached at: Richard Gordon Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands TRIBECA MORTGAGE: Sets Last Shareholders Meeting for Nov. 30 ------------------------------------------------------------ Tribeca Mortgage Fund I's shareholders will convene for a final meeting on Nov. 30, 2006, at: Maples Finance Limited Queensgate House, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: Carrie Bunton Emile Small Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands =============== C O L O M B I A =============== ECOPETROL: State Power Firm Issuing 58.9 Million Ordinary Shares ---------------------------------------------------------------- Shareholders of Interconexion Electrica SA, the state power and transmission firm of Colombia, authorized the company to issue 58.9 million ordinary shares to Ecopetrol, the state-owned oil company, Business News Americas reports. BNamericas underscores that the ordinary shares amount to a 5% stake. As reported in the Troubled Company Reporter-Latin America on Nov. 23, 2006, Ecopetrol could acquire a 5% stake in Interconexion Electrica. Interconexion Electrica would agree to the 5% sale as part of its plan to acquire Ecopetrol's 30% stake in Transelca -- a transmission firm which is 65% owned by Interconexion Electrica. BNamericas relates that Interconexion Electrica in return will gain 633 million ordinary shares that Ecopetrol holds in Transelca, Colombia's second largest transmission firm. Interconexion Electrica controls 65% of Transelca, while Ecopetrol holds the remainder. This operation will be carried out by the end of December, BNamericas states, citing the spokesperson. Ecopetrol is an integrated-oil company that is wholly owned by the Colombian government. The company's activities include exploration for and production of crude oil and natural gas, as well as refining, transportation, and marketing of crude oil, natural gas and refined products. Ecopetrol is Latin America's fourth-largest integrated-oil concern. Operations are organized into Exploration & Production, Refining & Marketing, Transportation, and International Commerce & Gas. On June 27, 2006, Fitch Ratings revised the rating outlook of the long-term foreign currency issuer default rating of Ecopetrol S.A. to Positive from Stable. This rating action follows the recent revision in the Rating Outlook to Positive from Stable of the 'BB' foreign currency IDR of the Republic of Colombia. Ecopetrol's IDR remain strongly linked with the credit profile of the Republic of Colombia. * COLOMBIA: State Firm's Shareholders Okay Shares Issuance ---------------------------------------------------------- Interconexion Electrica SA, the state power and transmission firm of Colombia, told Business News Americas that its shareholders have agreed to issue ordinary shares to help fund its investment plan and optimize its capital structure. Interconexion Electrica said in a press release that it plans to issue in the local and international markets up to 88.4 million shares, each of which would have a nominal value of COP32.88 per share. The total value would be COP2.90 billion. A spokesperson of Interconexion Electrica explained BNamericas that the unit price is for reference purposes only. Given Interconexion Electrica's current market share price the firm estimates the shares to be worth COP500 billion. According to a statement, the shares account for 8.43% of Interconexion Electrica's resulting share capital. The spokesperson told BNamericas that Interconexion Electrica will issue the shares in April 2007. BNamericas relates that shareholders authorized Interconexion Electrica to issue 58.9 million ordinary shares, which amount to a 5% stake, to Ecopetrol. Interconexion Electrica in return will gain 633 million ordinary shares that Ecopetrol holds in Transelca, Colombia's second largest transmission firm. Interconexion Electrica controls 65% of Transelca, while Ecopetrol holds the remainder. This operation will be carried out by the end of December, BNamericas states, citing the spokesperson. * * * On July 25, 2006, Fitch rated the Republic of Colombia's US$1 billion issue of fixed-rate Global Bonds maturing Jan. 27, 2017, 'BB'. The rating is in line with Fitch's long-term foreign currency rating on Colombia. Fitch said the Rating Outlook is Positive. =================== C O S T A R I C A =================== * COST RICA: Opposes Free Trade Accord with US ---------------------------------------------- Rafael Cuevas, a Guatemalan historian and Costa Rican resident, told Prensa Latina that Costa Rica is against a free trade agreement with the United States. Prensa Latina underscores that ICE unions, teacher's associations and other sectors like the public universities are against the agreement. The accord with the US, which was legitimized by the Costa Rican government, is a strategy on distorting the changing reality of Costa Rica, Prensa Latina relates, citing Mr. Cuevas. Mr. Cuevas told Prensa Latina that the US free trade pact with Central America and the Dominican Republic seeks institutional changes to cover investments of the transnationals. Mr. Cuevas said that all are protesting the acceptance of the unequal treaty and loss of benefits of social security that was achieved in previous governments, Prensa Latina notes. Legislators have to get majority approval on the accord, Mr. Cuevas told Prensa Latina. * * * As reported on Aug. 21, 2006, Fitch Ratings upgraded Costa Rica's country ceiling to BB+ from BB. ======= C U B A ======= * CUBA: Intensifies Cooperation Ties with Guyana ------------------------------------------------ Cuba has deepened cooperation ties with Guyana in the sugar, energy, agriculture, education, health and sports sectors, Prensa Latina reports. Marta Lomas, Cuba's minister for foreign investment and economic collaboration, signed the Cuban-Guyanese Joint Collaboration Commission's Final Act with Henry Jeffrey, Guyana's minister of foreign trade and international cooperation, Prensa Latina relates. * * * Moody's assigned these ratings on Cuba: -- CC LT Foreign Bank Deposit, Caa2 -- CC LT Foreign Currency Debt, Caa1 -- CC ST Foreign Bank Deposit, NP -- CC ST Foreign Currency Debt, NP -- Issuer Rating, Caa1 =================================== D O M I N I C A N R E P U B L I C =================================== BANCO INTERCONTINENTAL: Fraud Trial Against Ex-Officials Resumes ---------------------------------------------------------------- The Banco Intercontinental SA fraud trial case continued on Nov. 24 at the National District's 1st Collegiate Court, after months of motions, Dominican Today reports. According to Dominican Today, the trial entered the phase of prosecution's arguments based on the indictment the Justice Ministry, the Banks Superintendence and the Central Bank filed against former Banco Intercontinental executives: -- Ramon Baez Figueroa, -- Vivian Lubrano, -- Jesus Maria Troncoso, -- Luis Alvarez Renta, and -- Marcos Antonio Baez. The report says that the hearing on Nov. 22 was focused on the rejection of the indictment by the defendants. The defense lawyers argued that the indictment exceeded the terms of the charges against the former officials. Dominican Today relates that the defendants arrived in the court together with their legal representatives. Meanwhile, the judges entered the courtroom one half hour after the 10:00 a.m. schedule of the start of the trial. The trial is expected to speed up, Dominican Today states. Banco Intercontinental collapsed in 2003 as a result of a massive fraud that drained it of about US$657 million in funds. As a consequence, all of its branches were closed. The bank's current and savings accounts holders were transferred to the bank's new owner -- Scotiabank. The bankruptcy of Baninter was considered the largest in world history, in relation to the Dominican Republic's Gross Domestic Product. It cost Dominican taxpayers DOP55 billion and resulted to the country's worst economic crisis. FREESTAR TECH: Inks Service Agreement with Monex Financial ---------------------------------------------------------- FreeStar Technology Corp. has entered into a service agreement with Monex Financial Services Limited, a world leader in the provision of multi currency & card based acquiring solutions and particularly Dynamic Currency Conversion solutions. Under the terms of the agreement, FreeStar Technology will provide Monex with a fully multi-currency enabled cross-border technological platform for payments processing. Furthermore, Monex will enhance FreeStar Technology's product offering by providing a comprehensive treasury facility enabling dynamic currency conversion to both its existing and prospective client base. Paul Egan, chief executive officer of FreeStar Technology, said, "By partnering with Monex, FreeStar Technology increases its value added service offerings in the market place. Monex is a world leader in the DCC arena and we are confident we can improve our product offerings and shareholder value as a result." Mr. Egan added, "Monex client base which includes Ryanair, Hertz and Europcar will boost FreeStar Technology's profile in a highly competitive market place and we look forward to developing a mutually beneficial relationship with Monex moving forward." Frank Murphy, managing director of Monex, said, "By having a proven technological partner in FreeStar Technology, we are enhancing our value to the market. By leveraging FreeStar Technology's proven technological platform and its business model, Monex's product offering has gained a reliable and future proof solution that can be of great benefit to our own revenue model and our clients alike." About FreeStar Technology FreeStar Technology Corp. -- http://www.freestartech.com/-- is a payment processing company. Its wholly owned subsidiary Rahaxi Processing Oy, based in Helsinki, is a robust Northern European BASE24 credit card processing platform. Rahaxi currently processes in excess of 1 million card payments per month for those companies as Finnair, Ikea, and Stockman. FreeStar is focused on exploiting a first-to-market advantage for its Enhanced Transactional Secure Software, which is a software package that empowers consumers to consummate e- commerce transactions with a high level of security using credit, debit, ATM (with PIN), electronic cash or smart cards. The company, based in Dublin, maintains satellite offices in Helsinki, Santo Domingo, Dominican Republic, and Geneva. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 16, 2006, Russell Bedford Stefanou Mirchandani LLP expressed substantial doubt about FreeStar Technology Corporation's ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended June 30, 2006. The auditing firm pointed to the Company's difficulty in generating sufficient cash flow to meet it obligations and sustain its operations. At June 30, 2006, the company's balance sheet showed total assets of US$8,387,891, total liabilities of US$1,071,245, and stockholders' deficit of US$7,316,646. ============= J A M A I C A ============= AIR JAMAICA: Joint Select Committee Meeting on Nov. 30 ------------------------------------------------------ The Joint Select Committee created to review Air Jamaica's financial situation will hold a meeting at Gordon House on Nov. 30, the Jamaica Observer reports. As reported in the Troubled Company Reporter-Latin America on Nov. 13, 2006, the select committee was created in February but has not had one session. Although the government eventually agreed to a bipartisan select committee on Feb. 28 to examine Air Jamaica's financial and operational status, the group has not met. The committee comprises: -- Dr. Omar Davies, minister of finance and planning and the chairperson of the committee; -- Dr. Wykeham McNeil, minister of state for tourism; -- Dr. Fenton Ferguson, minister of state for transport; -- Dr. Morais Guy, government backbencher; -- Audley Shaw, opposition spokesperson on finance; -- Mike Henry, opposition spokesperson on transport; and -- Clive Mullings, opposition spokesperson on energy. The Observer relates that the committee will examine Air Jamaica's financial operations to determine whether: -- the airline can be made into a viable business that can fund itself; -- it can operate with some defined subsidy from government; -- what that subsidy would be; and -- whether, in the interest of the country, it would be appropriate to make that subsidy available. A business plan, which the board and management of Air Jamaica passed to the cabinet, was rejected on Nov. 1. The board urged to confine itself to the current US$30 million per annum subsidy from the government, The Observer states. Headquartered in Kingston, Jamaica, Air Jamaica -- http://www.airjamaica.com-- was founded in 1969. It flies passengers and cargo to almost 30 destinations in the Caribbean, Europe, and North America. Air Jamaica offers vacation packages through Air Jamaica Vacations. The company closed its intra-island services unit, Air Jamaica Express, in October 2005. The Jamaican government assumed full ownership of the airline after an investor group turned over its 75% stake in late 2004. The government had owned 25% of the company after it went private in 1994. The Jamaican government does not plan to own Air Jamaica permanently. * * * On July 21, 2006, Standard & Poor's Rating Services assigned B long-term foreign issuer credit rating on Air Jamaica Ltd., which is equal to the long-term foreign currency sovereign credit rating on Jamaica, is based on the government's unconditional guarantee of both principal and interest payments. =========== M E X I C O =========== AMR CORP: Reports Results of Debt Securities Cash Tender Offer -------------------------------------------------------------- AMR Corp. disclosed that its tender offers to purchase for cash any and all of the outstanding selected debt securities, having an aggregate principal amount of US$338,352,000, expired at 5 p.m. New York City time on Nov. 22, 2006. According to information provided by Global Bondholder Services Corporation, the Depositary and Information Agent for the tender offers, a total of US$61,849,344 principal amount of Securities has been tendered. AMR has accepted for purchase all tendered Securities. In 2006, AMR has taken several steps to strengthen its balance sheet, including the issuance of US$400 million of common stock and the open market purchase of US$128 million of its debt; in addition, in calendar year 2006 AMR has scheduled debt amortization of US$1.2 billion. Going forward, depending on market conditions, AMR's cash position and other considerations, AMR may from time to time redeem or acquire its debt (including Securities that remain outstanding after consummation of the tender offers) or take other steps to reduce its debt or lease obligations. CUSIP/ISIN Number: 00176LBZ3/US00176LBZ31 Amount Outstanding Upon Commencement of Tender Offers: US$22,500,000 Title of Securities: 10.40% Medium Term Notes, Series B, Due March 10, 2011 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$50,000 CUSIP/ISIN Number: 00176LCG4/US00176LCG41 Amount Outstanding Upon Commencement of Tender Offers: US$6,600,000 Title of Securities: 10.45% Medium Term Notes, Series B, Due March 10, 2011 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$466,000 CUSIP/ISIN Number: 00176LCC3/US00176LCC37 Amount Outstanding Upon Commencement of Tender Offers: US$10,650,000 Title of Securities: 10.40% Medium Term Notes, Series B, Due March 15, 2011 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$8,360,000 CUSIP/ISIN Number: 00176LCK5/US00176LCK52 Amount Outstanding Upon Commencement of Tender Offers: US$5,000,000 Title of Securities: 10.42% Medium Term Notes, Series B, Due March 15, 2011 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$3,064,000 CUSIP/ISIN Number: 00176LCM1/US00176LCM19 Amount Outstanding Upon Commencement of Tender Offers: US$4,000,000 Title of Securities: 9.96% Medium Term Notes, Series C, Due May 2, 2011 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$0 CUSIP/ISIN Number: 00176LCS8/US00176LCS88 Amount Outstanding Upon Commencement of Tender Offers: US$1,000,000 Title of Securities: 9.88% Medium Term Notes, Series C, Due May 16, 2011 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$1,000,000 CUSIP/ISIN Number: 00176LCV1/US00176LCV18 Amount Outstanding Upon Commencement of Tender Offers: US$2,000,000 Title of Securities: 10.13% Medium Term Notes, Series C, Due June 15, 2011 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$0 CUSIP/ISIN Number: 00176LDD0/US00176LDD01 Amount Outstanding Upon Commencement of Tender Offers: US$2,550,000 Title of Securities: 9.82% Medium Term Notes, Series C, Due Oct. 25, 2011 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$5,000 CUSIP/ISIN Number: 00176LDK4/US00176LDK44 Amount Outstanding Upon Commencement of Tender Offers: US$3,900,000 Title of Securities: 10.45% Medium Term Notes, Series C, Due Nov. 15, 2011 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$181,000 CUSIP/ISIN Number: 00176LDN8/US00176LDN82 Amount Outstanding Upon Commencement of Tender Offers: US$8,575,000 Title of Securities: 9.20% Medium Term Notes, Series C, Due Jan. 30, 2012 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$874,000 CUSIP/ISIN Number: 00176LEB3/US00176LEB36 Amount Outstanding Upon Commencement of Tender Offers: US$1,100,000 Title of Securities: 9.14% Medium Term Notes, Series D, Due Feb. 21, 2012 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$10,000 CUSIP/ISIN Number: 00176LCU3/US00176LCU35 Amount Outstanding Upon Commencement of Tender Offers: US$1,000,000 Title of Securities: 10.15% Medium Term Notes, Series C, Due May 15, 2020 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$87,000 CUSIP/ISIN Number: 00176LCF6/US00176LCF67 Amount Outstanding Upon Commencement of Tender Offers: US$2,450,000 Title of Securities: 10.29% Medium Term Notes, Series B, Due March 8, 2021 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$85,000 CUSIP/ISIN Number: 00176LCJ8/US00176LCJ89 Amount Outstanding Upon Commencement of Tender Offers: US$4,100,000 Title of Securities: 10.55% Medium Term Notes, Series B, Due March 12, 2021 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$375,000 CUSIP/ISIN Number: 00176LCT6/US00176LCT61 Amount Outstanding Upon Commencement of Tender Offers: US$675,000 Title of Securities: 10.125% Medium Term Notes, Series C, Due June 1, 2021 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$84,000 CUSIP/ISIN Number: 001765AU0/US001765AU07 Amount Outstanding Upon Commencement of Tender Offers: US$88,407,000 Title of Securities: 9% Debentures due Aug. 1, 2012 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$12,648,000 CUSIP/ISIN Number: 001765AC0/US001765AC09 Amount Outstanding Upon Commencement of Tender Offers: US$78,215,000 Title of Securities: 9% Debentures due Sept. 15, 2016 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$17,271,844 CUSIP/ISIN Number: 001765AE6/US001765AE64 Amount Outstanding Upon Commencement of Tender Offers: US$22,835,000 Title of Securities: 10.20% Debentures due 2020 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$5,309,500 CUSIP/ISIN Number: 001765AG1/US001765AG13 Amount Outstanding Upon Commencement of Tender Offers: US$9,705,000 Title of Securities: 9.88% Debentures due 2020 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$1,816,000 CUSIP/ISIN Number: 001765AK2/US001765AK25 Amount Outstanding Upon Commencement of Tender Offers: US$34,302,000 Title of Securities: 10% Debentures due Apr. 15, 2021 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$2,140,000 CUSIP/ISIN Number: 001765AP1/US001765AP12 Amount Outstanding Upon Commencement of Tender Offers: US$16,818,000 Title of Securities: 9-3/4% Debentures due Aug. 15, 2021 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$1,118,000 CUSIP/ISIN Number: 001765AQ9/US001765AQ94 Amount Outstanding Upon Commencement of Tender Offers: US$11,970,000 Title of Securities: 9.8% Debentures due Oct. 1, 2021 Aggregate Principal Amount Tendered and Accepted for Purchase by AMR: US$6,905,000 The payment of the tender offer consideration for such Securities, plus any accrued and unpaid interest thereon, will be made on Nov. 28. A total of US$276,502,656 principal amount of Securities will remain outstanding following settlement. Morgan Stanley served as the Dealer Manager and Global Bondholder Services Corporation served as Depositary and Information Agent for the tender offers. For further information, investors and brokers should call: Global Bondholder Services Corporation Tel: 866-795-2200 (toll-free) -- or -- Morgan Stanley Tel: 800-624-1808 (toll-free) 212-761-5746 (call collect) AMR Corp. operates primarily in the airline industry through its principal subsidiary American Airlines, Inc. During the year ended Dec. 31, 2005, American provided scheduled jet service to approximately 150 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. AMR Eagle Holding Corporation, a wholly owned subsidiary of AMR, owns two regional airlines: American Eagle Airlines, Inc. and Executive Airlines, Inc. (Executive) (collectively, the American Eagle carriers). The American Eagle carriers provide connecting service from eight of American's high-traffic cities to smaller markets throughout the United States, Canada, Mexico and the Caribbean. American also contracts with three independently owned regional airlines, which does business as the American Connection. At Dec. 31, 2005, AMR Corp.'s equity deficit doubled to US$1.478 billion from a US$581 million deficit from Dec. 31, 2004. * * * Fitch Ratings placed on Oct. 20, 2006, a B- rating on AMR Corp. Fitch said the outlook is stable. Standard & Poor's Ratings Services, effective June 6, 2006, placed its ratings on AMR Corp. (B-/Watch Pos/B-3) and subsidiary American Airlines Inc. (B-/Watch Pos/--) on CreditWatch with positive implication. DELTA AIR: Comair Pilots Pickets at New York Bankruptcy Court ------------------------------------------------------------- The pilots of Comair, represented by the Air Line Pilots Association, International or ALPA, will conduct informational picketing at the U.S. Bankruptcy Court for the Southern District of New York. Comair operates under the "Delta Connection" livery and is a wholly owned subsidiary of Delta Air Lines, Inc. The pilots picketed on Nov. 27, 2006, to demonstrate their frustration with management's efforts to sidestep the negotiating process by filing an 1113(c) motion with the bankruptcy court. If approved, this motion could repudiate and breach the pilots' labor contract and allow Comair management to unilaterally impose terms of employment. In 2005, the Comair pilots agreed to concessions to help their airline better manage its finances. Later that year, Comair and parent company Delta filed for Chapter 11 bankruptcy. In more recent contract talks, Comair management has taken an unreasonable position concerning the level of additional concessions the pilots must provide. The pilots want Comair to demonstrate that the concessions sought are necessary for the company's recovery, and not simply a means of applying pressure to other Delta Connection pilot groups to lower their compensation and work rules. In contrast, the pilots have been flexible, submitting numerous proposals that offer substantial contract relief. Finally, the Comair pilots would like something in exchange for this sacrifice, such as job security and wage snap-back provisions in later years, especially since the airline has already returned to profitability. Unfortunately, Comair management appears to prefer to litigate in bankruptcy court rather than seriously negotiate with its pilots. Founded in 1931, ALPA is the world's largest pilot union, representing more than 60,000 pilots at 39 airlines in the United States and Canada. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading US carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed US$21.5 billion in assets and US$28.5 billion in liabilities. KANSAS CITY SOUTHERN: Earns US$31.3 Mil. in 2006 Third Quarter -------------------------------------------------------------- Kansas City Southern Railway reported a US$31.3 million net income on US$415.7 million of revenues for the third quarter ended Sept. 30, 2006, compared with a US$112.7 million net income on US$384.6 million of revenues for the same period in 2005. Consolidated net income for the third quarter of 2006 decreased US$81.4 million primarily due to a one-time, non-cash gain of US$131.9 million as a result of a VAT claim and put settlement with the Mexican Government recorded in the third quarter of 2005. This settlement resulted in the company attaining 100% ownership of Grupo KCSM, S.A. de C.V. The company also recorded, based on an actuarial study, an expense of US$37.8 million for personal injury liabilities in the third quarter. These items have a US$14.5 million tax benefit. Revenue growth for the third quarter of 2006 was due to a 1.9% increase in volumes, and a continued recognition of the value of the company's freight services. Consolidated operating expenses decreased reflecting reductions in all cost categories except fuel and compensation and benefits inflation. At Sept. 30, 2006, the company's balance sheet showed US$4.5 billion in total assets, US$2.9 billion in total liabilities, US$100 million in minority interest, and US$1.5 billion in total stockholders' equity. Full-text copies of the company's consolidated financial statements are available for free at: http://researcharchives.com/t/s?155f Kansas City Southern is a Delaware holding company with principal operations in rail transportation. The company owns and operates domestic and rail operations in North America that are strategically focused on the growing north/south freight corridor connecting key commercial and industrial markets in the central U.S. with major industrial cities in Mexico. The company's rail network extends from the Midwest and Southeastern portions of the U.S. south into Mexico and connects with all other Class I railroads providing shippers with an effective alternative to other railroad routes and giving direct access to Mexico and the southeastern and southwestern U.S. through less congested interchange hubs. The company also owns 50% of the stock of the Panama Canal Railway Company, which holds the concession to operate a 47-mile coast-to-coast railroad located adjacent to the Panama Canal. The railroad handles containers in freight service across the isthmus. Panarail Tourism Company, Panama Canal Railway's wholly owned subsidiary, operates commuter and tourist railway services over the lines of the Panama Canal Railway. * * * As reported in the Troubled Company Reporter on Sept. 6, 2006, Standard & Poor's Ratings Services affirmed its ratings, including the 'B' corporate credit rating on Kansas City Southern and removed the rating from CreditWatch. S&P said the outlook is negative. ODYSSEY RE: Fairfax Commences Offering to Sell 9 Million Shares --------------------------------------------------------------- Fairfax Financial Holdings Limited commenced an underwritten public offering to sell 9,000,000 shares of Odyssey Re Holdings Corp. common stock. Fairfax will grant the underwriters an option to purchase up to 1,350,000 additional common shares of common stock to cover over-allotments, if any. The proposed offering will be jointly led by Citigroup Corporate and Investment Banking and Wachovia Capital Markets, LLC. Fairfax, which will continue to own a majority of the shares of Odyssey Re after the proposed offering, intends to use the proceeds it receives from the proposed offering for general corporate purposes, which may include opportunistically effecting open market or privately negotiated repurchases of its outstanding debt or shares. Odyssey Re will not receive any proceeds from the sale of the shares. A written prospectus relating to the offering, when available, may be obtained from: Citigroup Corporate and Investment Banking Brooklyn Army Terminal, 140 58th Street 8th Floor, Brooklyn, NY 11220 Tel: 718-765-6732 -- or -- Wachovia Capital Markets, LLC Attn: Equity Syndicate 375 Park Avenue, 4th Floor New York, NY 10152 E-mail: equity.syndicate@wachovia.com Fairfax Financial Holdings Limited is a financial services holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance, investment management and insurance claims management. Odyssey Re Holdings Corp. is an underwriter of property and casualty treaty and facultative reinsurance, as well as specialty insurance. Odyssey Re operates through its subsidiaries, Odyssey America Reinsurance Corp., Hudson Insurance Co., Hudson Specialty Insurance Co. Clearwater Insurance Co., Newline Underwriting Management Limited and Newline Insurance Co. Ltd. The Company underwrites through offices in the United States, London, Paris, Singapore, Toronto and Mexico City. Odyssey Re Holdings Corp. is listed on the New York Stock Exchange under the symbol ORH. * * * Odyssey Re Holdings Corp.'s preferred stock rating carries Ba2 from Moody's and BB from Fitch. The Company's senior unsecured debt and long-term issuer default ratings also carry BB+ from Fitch. Moody's placed its rating on Oct. 12, 2005 with a stable outlook. Fitch placed its ratings on March 23, 2006. ODYSSEY RE: Appoints Patrick W. Kenny to Board of Directors ----------------------------------------------------------- Odyssey Re Holdings Corp. disclosed that Patrick W. Kenny has been elected to the company's Board of Directors and appointed to its Audit, Compensation, and Transaction Review committees. Mr. Kenny is president and chief executive officer of the International Insurance Society, a position he has held since June 2001. Mr. Kenny has held a number of senior positions in the insurance and finance sectors, most recently serving as Executive Vice President of Frontier Insurance Group, Inc., with oversight of the group's finance and accounting functions and its financial and strategic planning. He previously served as Senior Vice President of SS&C Technologies, a provider of comprehensive investment management systems, and as Group Executive, Finance & Administration, and Chief Financial Officer of Aetna Life & Casualty. Mr. Kenny began his career with KPMG Peat Marwick, where he worked for 23 years, last serving as Senior Audit Partner. Mr. Kenny is currently a director of Foresters, where he serves on the Human Resources and Compensation, and Investment committees, and of the ING Funds, where he chairs the Compliance Committee and serves on the Audit and the International Investment Review committees. He is also a director of Assured Guaranty Ltd., where he chairs the Compensation Committee and serves on the Audit Committee. OdysseyRe also announced today that Frank B. Bennett has resigned from OdysseyRe's Board of Directors. Mr. Bennett, who has served as a director, and as a member of OdysseyRe's Audit and Compensation committees, since 2003, will continue to serve on the Board of Directors and Audit Committee of OdysseyRe's majority shareholder, Fairfax Financial Holdings Limited. Andrew A. Barnard, Chief Executive Officer of the Company, commented on these developments, "Pat Kenny brings a wealth of industry experience and financial expertise to OdysseyRe's Board and to its Audit Committee. I look forward to working with him. "Frank Bennett has served OdysseyRe admirably during a challenging and dynamic period, and he will be missed. I am pleased, however, that Frank will be continuing his association with the Company, albeit more indirectly, through his service on the board of Fairfax, OdysseyRe's largest shareholder." Odyssey Re Holdings Corp. is an underwriter of property and casualty treaty and facultative reinsurance, as well as specialty insurance. Odyssey Re operates through its subsidiaries, Odyssey America Reinsurance Corp., Hudson Insurance Co., Hudson Specialty Insurance Co. Clearwater Insurance Co., Newline Underwriting Management Limited and Newline Insurance Co. Ltd. The Company underwrites through offices in the United States, London, Paris, Singapore, Toronto and Mexico City. Odyssey Re Holdings Corp. is listed on the New York Stock Exchange under the symbol ORH. * * * Odyssey Re Holdings Corp.'s preferred stock rating carries Ba2 from Moody's and BB from Fitch. The Company's senior unsecured debt and long-term issuer default ratings also carry BB+ from Fitch. Moody's placed its rating on Oct. 12, 2005 with a stable outlook. Fitch placed its ratings on March 23, 2006. PENN OCTANE: Reports US$1.1MM Loss from Continuing Operations ------------------------------------------------------------- Penn Octane Corp. reported financial results for the quarter ended Sept. 30, 2006. The company reported a loss from continuing operations of (US$1.1) million or (US$0.07) per share. During the quarter ended Sept. 30, 2005, the company reported net income from continuing operations of US$0.2 million or US$0.01 per share. Excluding losses allocable to minority interest in earnings of Rio Vista Energy Partners L.P. for the quarter ended Sept. 30, 2006, net loss from continuing operations was (US$1.9) million. During the quarter ended Sept. 30, 2006, the company's losses from its Fuel Sales Business were principally due to the price volatility of Fuel Products. During the quarter ended Sept. 30, 2006, the company also reported a gain from discontinued operations, in connection with the company's sale of certain of its LPG assets to TransMontaigne Product Services Inc. during August 2006, of US$6.8 million, net of minority interest in earnings of Rio Vista and income tax expense, or US$0.44 per share. Three Months Ended Sept. 30, 2006 Revenues Revenues for the three months ended Sept. 30, 2006, were US$42.9 million compared with US$37.4 million for the three months ended Sept. 30, 2005, an increase of US$5.5 million or 14.8%. Of this increase, US$4.8 million was attributable to increases in average sales prices of Fuel Products sold during the three months ended Sept. 30, 2006, US$0.3 million was attributable to increased volumes of Fuel Products sold during the three months ended Sept. 30, 2006, and US$0.2 million was attributable to increases in LPG Transportation Business revenues which commenced during August 2006. Cost of Goods Sold Cost of goods sold for the three months ended Sept. 30, 2006, was US$43.4 million compared with US$37.0 million for the three months ended Sept. 30, 2005, an increase of US$6.4 million or 17.3%. Of this increase, US$6.4 million was attributable to increases in average costs of Fuel Products sold during the three months ended Sept. 30, 2006, US$0.3 million was attributable to increased volumes of Fuel Products sold during the three months ended Sept. 30, 2006, and US$0.1 million was attributable to decreases in other direct costs associated with the Fuel Sales Business during the three months ended Sept. 30, 2006, partially offset by US$0.4 million of reduced costs associated with operation of the Retained Assets during the three months ended Sept. 30, 2006. Nine Months Ended Sept. 30, 2006 Revenues Revenues for the nine months ended Sept. 30, 2006, were US$108.3 million compared with US$93.2 million for the nine months ended Sept. 30, 2005, an increase of US$15.2 million or 16.3%. Of this increase, US$24.2 million was attributable to increases in average sales prices of Fuel Products sold during the nine months ended Sept. 30, 2006, and US$0.2 million was attributable to increases in LPG Transportation Business revenues which commenced during August 2006, partially offset by US$9.4 million attributable to decreased volumes of Fuel Products sold during the nine months ended Sept. 30, 2006. Cost of Goods Sold Cost of goods sold for the three months ended Sept. 30, 2006, was US$109.0 million compared with US$92.8 million for the nine months ended Sept. 30, 2005, an increase of US$16.2 million or 17.5%. Of this increase, US$25.5 million was attributable to increases in average costs of Fuel Products sold during the nine months ended Sept. 30, 2006, and US$0.2 million was attributable to increases in other direct costs associated with the Fuel Sales Business during the nine months ended Sept. 30, 2006, partially offset by US$9.3 million attributable to decreased volumes of Fuel Products sold during the nine months ended Sept. 30, 2006 and US$0.3 million of reduced costs associated with operation of the Retained Assets during the nine months ended Sept. 30, 2006. Headquartered in Palm Desert, California, Penn Octane Corporation (NASDAQ:POCC) -- http://www.pennoctane.com/-- formerly known as International Energy Development Corporation buys, transports and sells liquefied petroleum gas for distribution in northeast Mexico, and resells gasoline and diesel fuel. The company has a long-term lease agreement for approximately 132 miles of pipeline, which connects ExxonMobil Corporation's King Ranch Gas Plant in Kleberg County, Texas and Duke Energy's La Gloria Gas Plant in Jim Wells County, Texas, to the company's Brownsville Terminal Facility. Going Concern Doubt As reported in the Troubled company Reporter on May 4, 2006, Burton McCumber & Cortez, L.L.P., Brownsville, Texas, raised substantial doubt about the ability of Penn Octane Corporation to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. Burton McCumber pointed to the company's insufficient cash flow to pay its obligations when due, inability to obtain additional financing because substantially all of the company's assets are pledged or committed to be pledged as collateral on existing debt, existing credit facility may be insufficient to finance its liquefied petroleum gas and Fuel Sales Business, and working capital deficiency. RIO VISTA: Incurs US$797,000 Loss from Continuing Operations ------------------------------------------------------------ Rio Vista Energy Partners L.P. reported a net loss from continuing operations of (US$797,000) and a net loss from continuing operations allocable to its common units of (US$789,000) or (US$0.41) per common unit. During the quarter ended Sept. 30, 2005, Rio Vista reported a net loss from continuing operations of (US$1.7) million and a net loss from continuing operations allocable to its common units of (US$1.7) million or (US$0.89) per common unit. During the quarter ended Sept. 30, 2006, Rio Vista also reported a gain from discontinued operations, in connection with Rio Vista's sale of certain of its LPG assets to TransMontaigne Product Services Inc. during August 2006, of US$5.5 million, or US$2.82 per common unit. For tax purposes, gain will be allocated to holders of common units in accordance with Rio Vista's amended and restated limited partnership agreement and applicable law. Unitholders should consult their individual tax advisors regarding the tax consequences associated with ownership of Rio Vista's common units. Rio Vista's results of operations from continuing operations excludes the results of operations related to sale of certain LPG assets, including revenues, direct costs and associated interest expenses, which have been reclassified as discontinued operations. As a result, the results of operations from continuing operations reflects only the results associated with the LPG transportation business which began on Aug. 22, 2006 pursuant to an agreement between Rio Vista and TransMontaigne, including all costs associated with operation of the US-Mexico Pipelines and Matamoros Terminal Facility and all indirect income and expenses of Rio Vista. Three Months Ended Sept. 30, 2006 Revenues Revenues for the three months ended Sept. 30, 2006, were US$0.2 million. There were no revenues during the three months ended Sept. 30, 2005, since the LPG Transportation business did not commence until Aug. 22, 2006. All revenues prior to Aug. 22, 2006, were derived from Rio Vista's LPG sales business and have been reclassified as discontinued operations. Cost of Goods Sold Cost of goods sold for the three months ended Sept. 30, 2006 was US$0.4 million compared with US$0.8 million for the three months ended Sept. 30, 2005, a decrease of US$0.4 million or 50.0%. The cost of goods sold consists primarily of costs associated with operation of the US-Mexico Pipelines and Matamoros Terminal Facility. All costs associated with Rio Vista's LPG sales business have been reclassified as discontinued operations. Nine Months Ended Sept. 30, 2006 Revenues Revenues for the nine months ended Sept. 30, 2006, were US$0.2 million. There were no revenues during the nine months ended Sept. 30, 2005, since the LPG Transportation business did not commence until Aug. 22, 2006. All revenues prior to Aug. 22, 2006, were derived from Rio Vista's LPG sales business and have been reclassified as discontinued operations. Cost of Goods Sold Cost of goods sold for the nine months ended Sept. 30, 2006, was US$1.4 million compared with US$1.7 million for the nine months ended Sept. 30, 2005, a decrease of US$0.3 million or 17.6%. The cost of goods sold consists primarily of costs associated with operation of the US-Mexico Pipelines and Matamoros Terminal Facility. All costs associated with Rio Vista's LPG sales business have been reclassified as discontinued operations. About Rio Vista Headquartered in Houston, Texas, Rio Vista Energy Partners L.P. buys, transports and sells liquefied petroleum gas. Rio Vista owns and operates terminal facilities in Brownsville, Texas and in Matamoros, Tamaulipas, Mexico and approximately 23 miles of pipelines, which connect the Brownsville Terminal Facility to the Matamoros Terminal Facility. The primary market for Rio Vista's LPG is the northeastern region of Mexico, which includes the states of Coahuila, Nuevo Leon and Tamaulipas. Going Concern Doubt As reported on the Troubled company Reporter on May 5, 2006, Burton Mccumber & Cortez, L.L.P., in Brownsville, Texas, raised substantial doubt about the ability of Rio Vista Energy Partners L.P. to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2004, and 2005. * ECATEPEC: Moody's Releases Joint Default Analysis --------------------------------------------------- In connection with Moody's Investors Service published rating results of the application of the joint default analysis or JDA methodology for non-U.S. regional and local governments or RLGs in the Americas, the rating agency affirmed the Municipality of Ecatepec's issuer ratings at B1 and Baa2.mx, with a stable outlook. The rating is based on: -- a BCA of 14, -- Ba3 rating on the state of Mexico, -- 20% probability of support and, -- 90% default dependence. In October 2006, Moody's published a Special Comment report, entitled "The Application of Joint Default Analysis to Regional and Local Governments". The JDA methodology formally disaggregates the ratings of RLGs into four components: (i) an assessment of the RLG's baseline credit risk (on a scale of 1 to 21, where 1 represents the equivalent risk of Aaa, 2 represents Aa1 and so forth), (ii) the higher-tier or supporting government's domestic currency rating, (iii) an estimate of the default dependence between the RLG and the supporting government (expressed as a percentage), and (iv) an estimate of the likelihood of extraordinary support from the supporting government (expressed as a percentage). The application of JDA in the Americas resulted in 24 RLG ratings upgraded, 75 RLG ratings affirmed, and ratings on 2 associated entities upgraded. As a reflection of the application of JDA to government related issuers (GRIs), for which certain RLGs are the supporting governments, Moody's also raised the ratings on 6 GRIs. * HUIXQUILUCAN: Moody's Releases Joint Default Analysis ------------------------------------------------------- In connection with Moody's Investors Service published rating results of the application of the joint default analysis or JDA methodology for non-U.S. regional and local governments or RLGs in the Americas, the rating agency affirmed the Municipality of Huixilucan's issuer ratings at B1 and Baa3.mx, with a stable outlook. The rating is based on: -- a BCA of 14, -- Ba3 rating on the State of Mexico, -- 20% probability of support and, -- 90% default dependence. Moody's also affirmed that the senior secured ratings are at Baa2/Aa2.mx. In October 2006, Moody's published a Special Comment report, entitled "The Application of Joint Default Analysis to Regional and Local Governments". The JDA methodology formally disaggregates the ratings of RLGs into four components: (i) an assessment of the RLG's baseline credit risk (on a scale of 1 to 21, where 1 represents the equivalent risk of Aaa, 2 represents Aa1 and so forth), (ii) the higher-tier or supporting government's domestic currency rating, (iii) an estimate of the default dependence between the RLG and the supporting government (expressed as a percentage), and (iv) an estimate of the likelihood of extraordinary support from the supporting government (expressed as a percentage). The application of JDA in the Americas resulted in 24 RLG ratings upgraded, 75 RLG ratings affirmed, and ratings on 2 associated entities upgraded. As a reflection of the application of JDA to government related issuers (GRIs), for which certain RLGs are the supporting governments, Moody's also raised the ratings on 6 GRIs. * MANZANILLO: Moody's Releases Joint Default Analysis ----------------------------------------------------- In connection with Moody's Investors Service published rating results of the application of the joint default analysis or JDA methodology for non-U.S. regional and local governments or RLGs in the Americas, the rating agency affirmed the Municipality of Manzanillo's issuer ratings at Ba1 and A1.mx, with a stable outlook. The rating is based on: -- a BCA of 11, -- the credit risk profile of the State of Colima, -- 20% probability of support and, -- 90% default dependence. Moody's also affirmed that the senior secured ratings are at Baa2/Aa2.mx. In October 2006, Moody's published a Special Comment report, entitled "The Application of Joint Default Analysis to Regional and Local Governments". The JDA methodology formally disaggregates the ratings of RLGs into four components: (i) an assessment of the RLG's baseline credit risk (on a scale of 1 to 21, where 1 represents the equivalent risk of Aaa, 2 represents Aa1 and so forth), (ii) the higher-tier or supporting government's domestic currency rating, (iii) an estimate of the default dependence between the RLG and the supporting government (expressed as a percentage), and (iv) an estimate of the likelihood of extraordinary support from the supporting government (expressed as a percentage). The application of JDA in the Americas resulted in 24 RLG ratings upgraded, 75 RLG ratings affirmed, and ratings on 2 associated entities upgraded. As a reflection of the application of JDA to government related issuers (GRIs), for which certain RLGs are the supporting governments, Moody's also raised the ratings on 6 GRIs. * MUNICIPALITY OF CENTRO: Moody's Issues Joint Default Analysis --------------------------------------------------------------- In connection with Moody's Investors Service published rating results of the application of the joint default analysis or JDA methodology for non-U.S. regional and local governments or RLGs in the Americas, the rating agency affirmed the Municipality of Centro's issuer ratings at Ba2 and A2.mx, with a stable outlook. The rating is based on: -- a BCA of 12, -- Baa3 rating on the State of Tabasco, -- 50% probability of support and -- 90% default dependence. Moody's also affirmed that the senior secured debt ratings are at Ba2/A2. In October 2006, Moody's published a Special Comment report, entitled "The Application of Joint Default Analysis to Regional and Local Governments." The JDA methodology formally disaggregates the ratings of RLGs into four components: (i) an assessment of the RLG's baseline credit risk (on a scale of 1 to 21, where 1 represents the equivalent risk of Aaa, 2 represents Aa1 and so forth), (ii) the higher-tier or supporting government's domestic currency rating, (iii) an estimate of the default dependence between the RLG and the supporting government (expressed as a percentage), and (iv) an estimate of the likelihood of extraordinary support from the supporting government (expressed as a percentage). The application of JDA in the Americas resulted in 24 RLG ratings upgraded, 75 RLG ratings affirmed, and ratings on 2 associated entities upgraded. As a reflection of the application of JDA to government related issuers (GRIs), for which certain RLGs are the supporting governments, Moody's also raised the ratings on 6 GRIs. * MEXICO: Wants New Trade Framework with Venezuela -------------------------------------------------- Mexico wants to negotiate a new preferential trade framework with Venezuela after the latter's formal withdrawal from the G-3 trade bloc, the Associated Press reports. In a statement, the Mexican Department of Economy said that it's willing to forge new trade pacts with Venezuela under the Latin American Integration Association, where both countries hold membership status. "For Mexico, the trade relation with Venezuela is a priority. Therefore, Mexico will continue trying to reach the Venezuelan authorities in order to develop a new juridical framework for the purposes of economic and trade links of both countries," AP says, citing the Department's statement. * * * As reported in the Troubled Company Reporter on April 17, 2006, Standard & Poor's Ratings Services placed an mxBB+ long-term rating with stable outlook on the state of Mexico. ================= N I C A R A G U A ================= * NICARAGUA: Businesspersons Want Trade Deals with Venezuelans -------------------------------------------------------------- Efe news agency reports that a group of Nicaraguan businessmen will head for Venezuela in March 2007 in search of new trade deals, according to Ivan Saballos, chief executive officer of the Nicaraguan Center for Export Promotion (Nicaexport). "During the mission individual meetings in Caracas and Port of Spain will be held between Nicaraguan producers and exporters and importers of those countries," Mr. Saballos was quoted by Efe as saying. "Venezuela is a major importer of agricultural alimentary goods." * * * Moody's Investor Service assigned these ratings to Nicaragua: Rating Rating Date Long Term Caa1 June 30, 2003 Senior Unsecured Debt B3 June 30, 2003 =============== P A R A G U A Y =============== TELECOM PERSONAL: Launches Hipuu Broadband Service -------------------------------------------------- Telecom Personal, Telecom Argentina's unit in Paraguay, has launched a broadband service called Hipuu, La Nacion reports. Business News Americas relates that Telecom Personal operates a GSM network and goes by the brand name of Nucleo. According to BNamericas, initial coverage includes: -- Asuncion, -- Lambare, and -- Fernando de la Mora. Telecom Personal will expand in the near future to other areas in greater Asuncion and other major cities in Paraguay, BNamericas notes. Manuel Correa, commercial manager of Telecom Personal, told BNamericas that Internet penetration is very low compared to other nations in the region. With the new service Telecom Personal will greatly increase the use of the Internet in Paraguay. BNamericas emphasizes that Telecom Personal expects the service to attract 10,000 corporate and residential customers by the end of 2007. For the corporate segment, Hipuu will offer products like virtual private networks and alternative connection options, among other services, BNamericas states. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 13, 2006, Fitch Ratings affirmed Telecom Personal SA's foreign and local currency Issuer Default Rating at 'B', and the senior unsecured at 'B/RR4', and revised the Rating Outlook of the international scale IDRs to Positive from Stable. Approximately US$200 million in debt is affected by the rating action. Fitch has also upgraded the national scale rating of Personal to 'A(arg)' from 'BBB+(arg)' with a Stable Rating Outlook. ======= P E R U ======= * PERU: Offers Hydropower as Energy Source for Brazil ----------------------------------------------------- Peruvian President Alan Garcia, in a bid to bolster bilateral ties with Brazil, said that Peru's abundant water supply could be converted into electricity for Brazil's consumption, the Associated Press reports. The Peruvian leader underscores that hydropower could free Brazil from its dependence on natural gas producers like Bolivia and Venezuela, the AP says. "The gas can run out or they can turn off the tap," the Peruvian leader was quoted by AP as saying. "Water never stops flowing." Speaking before Brazil's business and industry executives in Sao Paulo, President Garcia encourages boosting bilateral energy and economic ties between the two nations even though the two are members of separate South American economic blocs, the AP relates. Peru's president also noted that leftist governments could threaten Brazil's future economic growth because of the states' control over natural gas resources. Half of Brazil's power needs is being supplied by Bolivia. However, relations with its Andean neighbor have been constrained since the gas sector in Bolivia was nationalized in May, calling for state control on foreign-operated oil fields and price hikes. Meanwhile, through Venezuela's ambitious US$20 billion pipeline that would cut across the amazon, President Hugo Chavez's country would eventually become Brazil's supplier of natural gas. The project has been dubbed as an ecological disaster by some environmental groups. Venezuela has the potential of becoming the world's largest oil producer once suspected 340 billion barrels of reserves in its Orinoco oil belt will be proven. President Garcia describes how new hydroelectric plants near the Andes, would be better than building a pipeline through the amazon, AP relates. "I could light up all of northwestern Brazil and give (the jungle industrial center of) Manaus all the energy it needs, instead of building a strange US$20 billion (?15.55 billion) natural gas pipeline." "I extend my hand to Petrobras and give my word that things won't change," President Garcia told reporters after his speech. Peru belongs to the Andean Community of Nations while Brazil is a member of the Mercosur trade bloc. Venezuela dropped out of the Andean Community in favor of Mercosur because President Chavez opposed trade deals signed by Peru and Colombia with the United States. * * * As reported in the Troubled Company Reporter on Nov. 22, 2006, Standard & Poor's Ratings Services raised its long-term foreign currency sovereign credit rating on the Republic of Peru to 'BB+' from 'BB' and its long-term local currency sovereign credit rating to 'BBB-' from 'BB+'. Standard & Poor's also raised its short-term local currency sovereign credit rating to 'A-3' from 'B', and affirmed its 'B' short-term foreign currency sovereign credit rating on the republic. The outlook on the ratings was revised to stable from positive. Standard & Poor's also raised its assessment of the risk of transfer and convertibility to 'BBB' from 'BBB-'. ===================== P U E R T O R I C O ===================== DORAL FINANCIAL: Posts US$50.9MM Net Loss for 2nd Quarter 2006 -------------------------------------------------------------- In its Form 10-Q filed with the U.S. Securities and Exchange Commission, Doral Financial Corporation reported financial results for the first quarter ended March 31, 2006, and second quarter ended June 30, 2006. For the first quarter, Doral Financial reported a net income of US$17.1 million, compared to a net income of US$39.2 million for the same period in 2005. The company also reported a net loss of US$50.9 million for the second quarter ended June 30, 2006, compared to a net loss of US$22.8 million for the comparable period of 2005. For the first six months of 2006, Doral Financial incurred a net loss of US$33.8 million, compared to net income of US$16.4 million for the same period of 2005. Filing Concerns "With the filing of our results for the first half of the year, we have completed another difficult chapter as we move forward in our effort to transform Doral's business and operations into a higher margin financial services enterprise," stated Glen Wakeman, Chief Executive Officer. "Since the beginning of this past summer, Doral has installed a new senior management team, recruiting experienced executives with both the skills set and values to build competitive advantages for Doral in the marketplace, including capitalizing on the potential of the Doral brand in Puerto Rico. Senior Notes Refinancing In moving forward, Doral is also addressing substantial challenges. Among the key challenges are the refinancing of the Company's US$625 million floating rate senior notes that mature in July 2007, the restructuring of the balance sheet to enhance future earnings and the resolution of remaining restatement related issues. The Board and new senior management team are committed to resolving these challenges in a manner that serves the long-term interests of Doral and all its stakeholders. With respect to its US$625 million floating rate senior notes that mature in July 2007, Doral will require outside financing or other sources of capital to refinance this indebtedness at maturity. Accordingly, Doral is in the process of selecting a financial advisor to assist the Company in reviewing a number of possible alternatives to refinance this indebtedness and in examining alternatives to restructure its balance sheet in order to enhance future earnings," stated Mr. Wakeman. Filing Delay Although with the filing of its results for the first half of the year Doral has become current in its SEC regulatory filings, the Company does not expect, because of the delay in filing its prior SEC reports, that it will be able to file its quarterly report on Form 10-Q for the third quarter of 2006 by its due date. "The transformation of Doral is going to be done prudently and will take time. Central to this long-term effort is to capitalize on and expand the Doral brand in Puerto Rico and, where appropriate, in other Hispanic market segments in the U.S. It is our goal to offer a diverse higher margin product portfolio, improved customer technologies and outstanding customer service, all within an environment that is focused on tight cost control, enhanced productivity and strong corporate values. Our portfolio will include, among its products and services, a full suite of mortgage products to allow Doral to remain a leading mortgage originator in Puerto Rico," said Mr. Wakeman. Overview of Financial Condition and Results of Operations Doral Financial's consolidated financial statements for the first six months of 2006 reflect the difficult business environment and challenges faced by the Company. Doral Financial's results of operations for the first six months of 2006 were principally impacted by: (1) reduced net interest income due principally to the interest rate environment and the repricing and maturity mismatch in the Company's assets and liabilities; (2) a net loss on mortgage loan sales and fees due to market value adjustments on the Company's held for sale portfolio, losses related to the restructuring of mortgage loan transfers to local financial institutions and lower margins on sales of mortgage loans; (3) increased expenses associated with the Company's restatement and reengineering initiative; and (4) a change in tax position from a tax expense for the first six months of 2005 to a tax benefit for the first six months of 2006. Key Components of Financial Performance (1) Interest Income Net interest income for the six months ended June 30, 2006 was US$114.1 million, compared to US$151.4 million for the same period in 2005, a decrease of 24.7%. The decrease in net interest income resulted from a decrease in net interest margin from 1.74% in the first half of 2005 to 1.46% for the first half of 2006, coupled with a decrease in average interest-earning assets from US$17.5 billion for the first half of 2005 to US$15.7 billion for the first half of 2006, principally due to a decrease in investment and mortgage-backed securities and in money market investments. The reduction in net interest margin resulted from the flattening of the yield curve, as on average, the Company's interest bearing liabilities, principally wholesale funding and loans payable, re-priced at higher frequency and rates than the Company's interest-earning assets. The decrease in the Company's interest margin has been particularly significant with respect to its portfolio of investment securities. Assuming a funding cost equal to the weighted-average cost of the Company's repurchase agreements, the average interest rate spread on the Company's portfolio of investment securities was approximately 0.41% for the six months ended June 30, 2006, compared to 1.36% for the Company's interest earning assets taken as a whole. The impact of the flattening yield curve on the Company's net interest margin is magnified by the current mismatch in the duration of the Company's assets and liabilities. The Company's interest-earning assets include a large portfolio of fixed-rate long-term investments securities and mortgage loans that were generally financed with short-term or callable liabilities. This mismatch exposes the Company to significant interest rate risk in a rising rate environment because, as these short-term or callable liabilities re-price at higher market rates, the Company's interest rate margin is further compressed. The Company's interest rate risk exposure is further complicated by the negative convexity inherent in the Company's portfolio of fixed rate mortgage-backed securities and mortgage loans. The combination of this negative convexity and the current composition of the Company's liabilities exposes the Company to margin compression risks even during certain declining interest rate environments. (2) Loan and Lease Losses The provision for loan and lease losses for the first six months of 2006 was US$11.0 million, compared to US$7.7 million for the comparable 2005 period. The increase in the provision for loan and lease losses primarily reflects an increase in the allowance for the Company's construction loan portfolio, as well as an increase in the delinquency trends of the Company's overall loans portfolio. (3) Non-Interest Income and Loss Non-interest loss for the first six months of 2006 was US$31.2 million, compared to non-interest income of US$461,000 for the same period in 2005. The non-interest loss was primarily due to a net loss on mortgage loan sale and fees of US$41.5 million, compared to a gain of US$23.3 million for the corresponding 2005 period. This loss was principally due to the Company reassessment of its mortgage loans held for sale portfolio in light of the more stringent requirements of the U.S. secondary mortgage market, which has become its principal outlet for non-conforming loans as a result of reduced demand for this product from Puerto Rico financial institutions, and also to losses on sales of mortgage loans driven by the Company's decision to restructure previous mortgage loan transfers to local financial institutions. During the first quarter of 2006, management transferred US$876.2 million from its mortgage loans held for sale portfolio to its loan receivable portfolio, which resulted in a market value adjustment of US$12.3 million that was taken as a charge against earnings during the first quarter of 2006. During the second quarter of 2006, the Company recognized an aggregate net loss of approximately US$8.2 million as a result of the restructuring of certain prior mortgage loan transfers. In addition, the Company made downward market value adjustments of US$5 million in the first quarter and US$17.5 million in the second quarter to reflect the impact of rising interest rates on the Company's mortgage loans held for sale portfolio, as well as market terms for secondary sales in the U.S. market. During 2006, the Company has also experienced lower margins on sales of mortgage loans as the Company sold its non-conforming loan production in the U.S. market at a lower gain. The Company also incurred a net loss on securities held for trading, including gains and losses on the fair value of IOs, of US$17.5 million for the first six months of 2006, compared to a net loss of US$36.4 million for the comparable 2005 period. The positive variance in trading activities during the first half of 2006, compared to the first half of 2005, was principally due to net gains on the Company's derivative instruments of US$25.4 million for the first six months of 2006, as compared to net losses of US$57.5 million during the first half of 2005. Offsetting the gains on derivative instruments were net unrealized losses of US$42.9 million on the value of the Company's IOs for the first six months of 2006, compared to net unrealized gains of US$15.6 million for the comparable 2005 period. Losses on the value of the Company's IOs during the first half of 2006 were primarily related to floating rate IOs that did not have caps on the pass-through interest rate payable to investors. During the second quarter of 2006, Doral Financial was able to restructure its prior mortgage loan transfers giving rise to floating rate IOs and all of its remaining portfolios of floating rate IOs have caps on the pass-through interest rate payable to investors. These net losses were partially offset by higher servicing income related with an increase in the Company's MSRs valuation due to a decrease in anticipated mortgage prepayment rates and higher commissions, fees and other income. (4) Non-Interest Expenses Non-interest expenses for the first half of 2006 were US$134.6 million, compared to US$122.0 million for the same period in 2005. Non-interest expenses for the period continue to reflect significant expenses for professional services associated with the restatement of the Company's prior period financial statements and related legal and accounting matters. Non-interest expenses for the first half of 2006 also reflect significant expenses associated with advisory services relating to the reengineering of the Company's business and operating practices, as well as US$7.4 million in severance payments in connection with the related headcount reduction. (5) Income Tax For the first half of 2006, Doral Financial recognized an income tax benefit of US$28.9 million, compared to an income tax expense of US$5.7 million for the corresponding period in 2005. The decrease in the tax provision for 2006 was principally due to an increase in the Company's net deferred tax asset combined with a decrease in pre-tax income, offset in part by higher net operating losses in certain subsidiaries that under the Puerto Rico Internal Revenue Code of 1994 could not be used to offset gains in other subsidiaries. (6) Other Losses During the first half of 2006, the Company had other comprehensive loss of approximately US$125.2 million related principally to the adverse impact of the increase in interest rates on the value of the Company's portfolio of available for sale securities. As of June 30, 2006, the Company's accumulated other comprehensive loss reached US$250.6 million. (7) Loan Production Doral Financial's loan production for the first six months of 2006 was US$1.4 billion, compared to US$2.8 billion for the comparable period in 2006, a decrease of approximately 50%. The decrease in Doral Financial's loan production is due to a number of factors including changes in the underwriting processes, economic conditions in Puerto Rico, and competition from other financial institutions. Doral Financial is in the process of implementing new underwriting procedures. The implementation of these procedures has caused disruption in the Company's loan originations. The Company believes that these underwriting standards will allow it to more efficiently underwrite assets with better credit quality and risk price its loan products in the future. The Company anticipates that, for the foreseeable future, loan production volume will continue to be below historical levels as these new underwriting procedures are implemented and new product offerings are developed. For example, loan production for the third quarter of 2006 was approximately US$329.8 million. However, the Company is starting to see improving trends in its loan production during the fourth quarter of 2006. Doral Financial and its banking subsidiaries remain "well capitalized" for bank regulatory purposes as of June 30, 2006. About Doral Financial Based in New York City, Doral Financial Corp. (NYSE: DRL) -- http://www.doralfinancial.com/-- a financial holding company, is a residential mortgage lender in Puerto Rico, and the parent company of Doral Bank, a Puerto Rico based commercial bank, Doral Securities, a Puerto Rico based investment banking and institutional brokerage firm, Doral Insurance Agency, Inc. and Doral Bank FSB, a federal savings bank based in New York City. * * * As reported in the Troubled Company Reporter on Oct. 31, 2006, Standard & Poor's Ratings Services removed from CreditWatch and affirmed its ratings on Doral Financial Corp., including its 'B+' counterparty rating. The ratings were placed on CreditWatch with negative implications on April 19, 2005. The outlook is negative. GLOBAL HOME: Can Use Madeleine's Cash Collateral Until Feb. 28 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave Global Home Products LLC and its debtor-affiliates authority to continue using the cash collateral securing repayment of their obligations to Madeleine LLC until Feb. 28, 2007. The Debtors' authority to use the cash collateral expired on Oct. 31, 2006. The Debtors will use the funds to meet payroll and other operating expenses and to maintain vendor support. Madeleine is a creditor holding approximately US$200,000,000 in secured claims. As adequate protection, the Debtors grant Madeleine a valid, perfected and enforceable lien upon all of their assets and superpriority administrative claim over any and all administrative expenses. Headquartered in Westerville, Ohio, Global Home Products, LLC -- http://www.anchorhocking.com/and http://www.burnesgroup.com/ -- sells houseware and home products and manufactures high quality glass products for consumers and the food services industry. The company also designs and markets photo frames, photo albums and related home decor products. The company and 16 of its affiliates, including Burnes Puerto Rico, Inc., and Mirro Puerto Rico, Inc., filed for Chapter 11 protection on April 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Debtors. Bruce Buechler, Esq., at Lowenstein Sandler, P.C., and David M. Fournier, Esq., at Pepper Hamilton LLP represent the Official Committee of Unsecured Creditors. Huron Consulting Group LLC gives financial advice to the Committee. When the company filed for protection from their creditors, they estimated assets between US$50 million and US$100 million and estimated debts of more than US$100 million. HORNBECK OFFSHORE: Earns US$23.9 Million in 2006 Third Quarter -------------------------------------------------------------- Hornbeck Offshore Services Inc. reported a US$23.9 million net income on US$77.5 million of revenues for the third quarter ended Sept. 30, 2006, compared with a US$9.4 million net income on US$46.5 million of revenues for the same period in 2005. The increase in net income in the third quarter of 2006 compared to the same period in 2005 was primarily due to the increase in revenues in the third quarter of 2006. Revenues for the three months ended Sept. 30, 2006 were US$31.0 million, or 66.8%, higher than the same period in 2005 due to stronger market conditions in the United States Gulf of Mexico for services provided by offshore supply vessels and tugs and tank barges, in addition to increasing demand for barge transportation services in the northeastern United States. Revenues also increased due to the incremental contribution of three double-hulled tank barges under the company's first tug and tank barge newbuild program placed into service during the fourth quarter of 2005 and a shore-based facility acquired in December 2005. At Sept. 30, 2006, the company had cash and cash equivalents of US$310.6 million. At Sept. 30, 2006, the company's balance sheet showed US$911.9 million in total assets, US$416.6 million in total liabilities, and US$495.3 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2006, are available for free at: http://researcharchives.com/t/s?15b3 Hornbeck Offshore Services, Inc., a diversified marine service company headquartered in Covington, Louisiana, is a leading provider of technologically advanced, new generation OSVs primarily in the GoM and select international markets, and is a leading transporter of petroleum products through its fleet of ocean-going tugs and tank barges primarily in the northeastern U.S., the GoM and in Puerto Rico. Hornbeck currently owns a fleet of over 60 vessels primarily serving the energy industry. * * * As reported in the Troubled Company Reporter on Nov. 17, 2006, Moody's Investors Service affirmed Hornbeck Offshore Services Inc.'s Ba3 corporate family rating, Ba3 Probability of Default Rating, Ba3 and LGD4, 55% senior unsecured note ratings, and changed the outlook from stable to negative. MEDIRECT LATINO: Berkovits Lago Raises Going Concern Doubt ---------------------------------------------------------- Berkovits, Lago & Company, LLP, expressed substantial doubt about Medirect Latino Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the fiscal year ended June 30, 2006. The auditing firm pointed to the company's inability to obtain outside long term financing and recurring losses from operations. Medirect Latino reported a net loss of US$24.6 million on US$6.7 million of sales for the fiscal year ended June 30, 2006, compared with a US$2.6 million net loss on US$279,000 of sales in fiscal 2005. At June 30, 2006, the company's balance sheet showed US$2.9 million in total assets and US$3.2 million in total liabilities, resulting in a US$316,000 stockholders' deficit. Additionally, accumulated deficit stood at US$28.6 million as of June 30, 2006. The company's balance sheet also showed strained liquidity with US$2.5 million in total current assets available to pay US$3.2 million in total current liabilities. Sales increased in fiscal 2006 mainly as a result of the commencement of the company's direct response national marketing campaign on Telemundo Television Network on Sept. 20, 2005. 100% of the sales for fiscal 2006 were derived from patients covered by medicare and other party payers. Operating expenses grew to US$29.9 million in fiscal 2006 compared to US$2.7 m in fiscal 2005, which accounts for the substantial net loss of US$24.6 million in fiscal 2006 compared to the net loss of US$2.6 million in fiscal 2005. The bulk of this increase came from increases in selling, general and administrative expenses, mainly salaries and wages of administrative and sales personnel, as well as the costs attributable to stock based compensation. The company incurred interest and financing costs for fiscal 2006 of US$1.4 million compared to US$1 million in fiscal 2005. Full-text copies of the company's consolidated financial statements are available for free at: http://researcharchives.com/t/s?1580 Medicare and other Healthcare Regulations Approximately 100% of the company's diabetes patients are covered by Medicare or other party payers. As a result, changes to the Medicare program can impact the company's revenues and income. These regulatory changes can affect also permissible activities, the relative costs associated with doing business, and reimbursement amounts paid by federal, state and other third-party payers. At present, Medicare reimburses at 80% of the government-determined fee schedule amounts for reimbursable supplies, and the company bills the remaining balance either to third-party payers or directly to patients. The auditors can be reached at: Berkovits, Lago & Company 8211 West Broward Boulevard Suite 340 Fort Lauderdale, Florida 33324 Tel: 954-475-3199 Fax: 954-472-2308 -- or -- 1401 Brickell Avenue Suite #825 Miami, Florida 33131 Tel: 305-402-3103 About Medirect Latino Headquartered in Pompano Beach, Florida, Medirect Latino, Inc. -- http://www.medirectlatino.org./is an early stage company. It is a federally licensed, direct-to-consumer, participating provider of Medicare Part B Benefits primarily focused on supplying diabetic testing supplies to the Hispanic Medicare-eligible community domestically and in Puerto Rico. The company also distributes 'quality of life' enhancing products like walking assistance devices, to customers who have circulatory and mobility related afflictions resulting from diabetes. The company also maintains offices in San Juan, Puerto Rico. The company was formerly known as Interaxx Digital Tools, Inc., one of four stand alone companies resulting from a second joint plan of reorganization filed under Chapter 11 of the bankruptcy code. The reorganization was treated as a reverse merger and subsequently, Interaxx Digital changed its name to Medirect Latino, Inc. as the new operating entity. MUSICLAND HOLDING: Michigan Dept. Wants Plan Confirmation Denied ---------------------------------------------------------------- The Michigan Department of Treasury asks the U.S. Bankruptcy Court for the Southern District of New York to deny the confirmation of Musicland Holding Corp. and its debtor-affiliates' Second Amended Plan of Liquidation. The business activities of the Debtors have resulted in liabilities to the state of Michigan for sales, use and single business taxes, Michael A. Cox, Attorney General for the state of Michigan, relates. The Debtors have, however, failed to file a notice of discontinuance and tax returns for sales and use tax for April 2006 through November 2006, Mr. Cox tells the Court. The Debtors also failed to remit taxes, penalties and interest due for the same period, Mr. Cox adds. As a result, Michigan Treasury Department filed several claims against certain Debtors. Mr. Cox contends that the Debtors' failure to file postpetition tax returns and quarterly estimates and their failure to pay administrative tax liabilities constitute violations of Section 960 of the Judiciary and Judicial Procedures Code. "The Debtors' disregard of Section 960 raises a doubt as to whether the Debtors' proposed plan is offered in good faith as required by Section 1129(a)(3) of the Bankruptcy Code," Mr. Cox says. The existence of administrative tax liabilities in unknown amounts, Mr. Cox points out, prevents the Court from determining whether the Debtors' Plan can meet the requirements of Section 1129(a)(9)(A) and (C). The Plan proposes that priority tax claims accrue a "simple interest on any outstanding balance from the Effective Date calculated at the interest rate available on 90 days United States Treasuries on the Effective Date, but in no event greater than 7.0% per annum." Mr. Cox argues that the interest required by Section 1129(a)(9)(C) must be in accordance with Section 511 of the Bankruptcy Code, which states, "the rate of interest will be the rate determined under applicable non-bankruptcy law." Treasury current interest rate for bankruptcy tax claims is 8.2%, Mr. Cox informs the Court. Moreover, the Michigan Treasury Department objects to any attempt of the Plan to discharge the debts of the Debtors or the Reorganized Debtors. Section 1141(d)(3) of the Bankruptcy Code prohibits the discharge of a debtor that liquidates or ceases business operations, Mr. Cox maintains. Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than US$100 million in assets and debts. (Musicland Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000) MUSICLAND HOLDING: Mass. Revenue Dep't Balk at Plan Confirmation ---------------------------------------------------------------- Stephen G. Murphy, Esq., counsel to the Commissioner of the Massachusetts Department of Revenue, asserts that the Debtors' Second Amended Plan of Liquidation fails to comply with numerous provisions of the Bankruptcy Code. Section 1129(a)(9)(C) of the Bankruptcy Code requires that a plan must provide that the holder of a priority tax claim will receive regular installment payments of cash "of a total value, as of the Effective Date, equal to the allowed amount of the claim" within five years of the petition date." Section 511 of the Bankruptcy Code provides that the rate of interest will be the rate determined under applicable non-bankruptcy law if payment of interest on a tax claim or payment of interest to enable a creditor to receive the present value of the allowed amount of a tax claim is required. In the case of taxes paid under a confirmed plan, the rate of interest will be determined as of the calendar month when the plan is confirmed. Thus, Mr. Murphy contends, Section 511, and not the Plan, should govern the rate of interest that must accrue on the deferred payments of priority tax claims. "Assuming confirmation occurs prior to Dec. 31, 2006, the rate of interest on the priority tax claims held by [MDOR] under applicable non-bankruptcy law will be 9% compounded daily," Mr. Murphy notes. The MDOR has filed several proofs of claim against the Debtors: Debtor Claim No. Priority Amt. Gen. Amount ------ --------- ------------- ----------- Media Play 3346 US$67,434 -- Musicland Holding 1038 935 US$54 Musicland Purchasing 1040 456 -- Musicland Group 1039 195,360 975 Suncoast Group 3347 79,159 989 The Plan is a liquidation plan and not a plan for the reorganization of a continuing business. Thus, Section 1141(d)(3) of the Bankruptcy Code prohibits the Debtors from obtaining a discharge. While the Plan does not purport to grant the Debtors a discharge, it does attempt to provide persons associated with the Debtors relief that a discharge cannot grant and that is only rarely permitted for persons associated with a reorganized business, Mr. Murphy points out. Moreover, the Plan specifically singles out and impairs a special category of creditors -- the holders of priority tax claims, Mr. Murphy emphasizes. "It impairs the rights of the holders of priority tax claims by preventing actions the taxing authorities, and in particular, MDOR, may lawfully undertake." Accordingly, the MDOR asks the Court to sustain its objection and deny confirmation of the Plan. Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than US$100 million in assets and debts. (Musicland Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000) ============================= S T. K I T T S & N E V I S ============================= PETOLEOS DE VENEZUELA: Unit to Supply Fuel to St. Kitts & Nevis --------------------------------------------------------------- PDV Caribe, a subsidiary of Petroleos de Venezuela S.A. and the Ministry of Public Works of St. Kitts & Nevis signed a one-year fuel supply agreement, pursuant to which the Venezuelan State oil company will supply 21,000 barrels per month of by-products, such as jet A1, Diesel, fuel oil and asphalt, for the internal consumption of this Caribbean nation, as part of the Petrocaribe Energy Cooperation Agreement. Petrleos de Venezuela's Refining Vice-President and the president of PDV Caribe, Alejandro Granado, disclosed that the fuel supply will start on Jan. 1, 2007. The total figure includes 1,700 barrels of asphalt per year, the first cargo of 400 barrels arriving at the islands on December, together with the shipments that are going to Dominica. "St. Kitts and Nevis join the group of Caribbean countries that are making true the initiative for integrating and uniting people under Petrocaribe's Energy Cooperation Agreement, operated by PDV Caribe," stated Mr. Granado. In turn, the Minister of Energy and Public Works of St. Kitts & Nevis, Earl Asim Martin, highlighted the social impact of the supply agreement, whereas it will allow "major savings in resources that will be used to drive projects that will improve the standard of living of the people of these islands." The supply agreement is governed by the conditions set forth in the Energy Cooperation Agreement with Petrocaribe, signed on June 29, 2005, and ratified by the bilateral agreements signed in Montego Bay, Jamaica, on Sept. 6. Petrocaribe is an energy cooperation initiative proposed by the Bolivarian Government of Venezuela, with the purpose of solving the differences in access to energy resources, in an equitable and fair manner among the countries of the Caribbean. Petroleos de Venezuela SA -- http://www.pdv.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. * * * Standard & Poor's said on July 17 that it may lower the company's B+ foreign-currency debt rating in part because of the absence of timely financial and operating information. ================================= T R I N I D A D & T O B A G O ================================= BRITISH WEST: To Determine Size of New Airline's Workforce ---------------------------------------------------------- Officials of British West Indies Airlines aka BWIA told Newsday that the specific number of workers for Caribbean Airlines will be determined as plans for the structure of the new carrier are developed. As reported in the Troubled Company Reporter-Latin America on Nov. 27, 2006, the Aviation Communication and allied Workers Union or ACAWU said that the Caribbean Airlines would hire 500 workers while outsourcing several operations to other firms. Curtis John, the ACAWU's president, said that the union received word from reliable sources that BWIA's 1,800 workers will be reduced to 500 employees for Caribbean Airlines. ACAWU believed the 500 workers that would be retained would mainly include: -- engineers, -- maintenance staff, -- flight attendants, -- pilots, and -- managers to oversee each of these categories of workers. Peter Davies, chief executive officer of BWIA, has implied that Caribbean Airlines could have a staff between 500 and 700 persons, Newsday says, citing BWI officials. While Mr. John claimed that Caribbean Airlines' code-share accord with British Airways for the Port-of-Spain to London route meant a loss of revenue, Mr. Davies said that customers traveling from Port-of-Spain to London will enjoy enhanced consistency and a higher quality of service at competitive ticket prices, Newsday states. "Caribbean Airlines will also stand to gain financially from all seats booked on the service," Mr. Davies told Newsday. Caribbean Airlines is preparing to unveil its newly branded Boeing 737 aircraft at Hangar Ten, Newsday reports. British West Indies aka BWIA was founded in 1940, and for more than 60 years has been serving the Caribbean islands from Trinidad and Tobago, the hub of the Americas, linking the twin island republic and many other Caribbean islands with North America, South America, the United Kingdom and Europe. The airline was losing US$1 million a week due to poor operational management. The Trinidad & Tobago government, which owns 97.188% of BWIA, decided to shut down the airline on Dec. 31, 2006, and reopen a new airline that will be called Caribbean Airlines. The government approved a substantial capital injection for the creation of Caribbean Airlines. DIGICEL LTD: Denies Hiring Advisers for Sale of Shares in Firm -------------------------------------------------------------- Digicel Ltd. has denied to the Jamaica Observer a report from Bloomberg saying that Denis O'Brien, the firm's chairperson, has hired JPMorgan Chase & Co. and Citibank to advise on the sale of Digicel shares. According to Bloomberg, the Sunday Times' Ireland edition said that the sale of shares might value Digicel at US$2.5 billion and raise about US$500 million, which Mr. O'Brien may use to finance an expansion into the United States. The sale is slated for late January or early February 2007. "It's not true. That was a story in the Times that was a rumor," Maureen Rabbitt, the corporate communications manager of Digicel, told The Observer. Digicel Ltd. is a wireless services provider in the Caribbean region founded in 2000, and controlled by Denis O'Brien. The company started operations in Jamaica in April 2001 and now offers GSM mobile services in Caribbean countries including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados, Bermuda, Cayman, and Curacao among others. Digicel finished FY2005 with 1.722 million total subscribers -- 97% pre-paid -- estimated market share of 67% and revenues and EBITDA of US$478 million and US$155 million, respectively. * * * On July 12, 2006, Moody's Investors Service assigned a B3 senior unsecured rating to the US$150 million add-on Notes offering of Digicel Ltd. and affirmed Digicel's existing B3 senior unsecured and B1 Corporate Family Ratings. Moody's changed the outlook to stable from positive. * * * Fitch Ratings assigned on July 14, 2006, a 'B' rating to Digicel Ltd's proposed add-on offering of US$150 million 9.25% senior notes due 2012. These notes are an extension of the US$300 million notes issued in July 2005. In addition, Fitch also affirms Digicel's foreign currency Issuer Default Rating and the existing US$300 million senior notes due 2012 at 'B'. Fitch said the rating outlook is stable. DIGICEL LTD: Pursuing Legal Action Against Telecoms Experts ----------------------------------------------------------- Digicel Ltd. is pursuing a legal action against a team of experts hired by the Telecommunications Authority of Trinidad and Tobago, the telecoms regulator, for rejecting the firm's interconnection fee proposal, Business News Americas reports. According to BNamericas, Digicel wanted Telecommunications Services of Trinidad and Tobago aka TSTT, its rival in Trinidad and Tobago, to pay higher fees than Digicel would have to pay the TSTT for the same service. However, TSTT argued that the panel decided that the degree of network build out and the client acquisition costs applicable to each firm did not warrant the use of separate cost structures, BNamericas notes. BNamericas underscores that the interconnection conflict between Digicel and TSTT started when Digicel won a license to enter the Trinidad mobile market in June 2005. TSTT initially claimed it lacked the proper equipment to provide interconnection. An official from the Telecommunications Authority told BNamericas that the networks are supposed to be interconnecting calls while an interconnection accord is formulated. However, Digicel has claimed that TSTT is still blocking calls from being connected. Digicel then filed an injunction against TSTT, The Trinidad Guardian relates. For the country to achieve a truly liberalized market, new competitors must be allowed to interconnect with the incumbent's network for landline-to-mobile and mobile-to-mobile connections, Digicel told BNamericas. BNamericas notes that the 1999 telecommunications act calls for a liberalized market to improve the quality of service in the country. TSTT should have known that eventually other operators were going to seek interconnection, BNamericas states, citing Digicel. Digicel Ltd. is a wireless services provider in the Caribbean region founded in 2000, and controlled by Denis O'Brien. The company started operations in Jamaica in April 2001 and now offers GSM mobile services in Caribbean countries including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados, Bermuda, Cayman, and Curacao among others. Digicel finished FY2005 with 1.722 million total subscribers -- 97% pre-paid -- estimated market share of 67% and revenues and EBITDA of US$478 million and US$155 million, respectively. * * * On July 12, 2006, Moody's Investors Service assigned a B3 senior unsecured rating to the US$150 million add-on Notes offering of Digicel Ltd. and affirmed Digicel's existing B3 senior unsecured and B1 Corporate Family Ratings. Moody's changed the outlook to stable from positive. * * * Fitch Ratings assigned on July 14, 2006, a 'B' rating to Digicel Ltd's proposed add-on offering of US$150 million 9.25% senior notes due 2012. These notes are an extension of the US$300 million notes issued in July 2005. In addition, Fitch also affirms Digicel's foreign currency Issuer Default Rating and the existing US$300 million senior notes due 2012 at 'B'. Fitch said the rating outlook is stable. ============= U R U G U A Y ============= * URUGUAY: IFC & MIGA Board Grant Financing to Orion Pulp Mill -------------------------------------------------------------- The boards of directors of the International Finance Corp. and the Multilateral Investment Guarantee Agency have approved a US$170 million investment by IFC and a guarantee of up to US$350 million from MIGA for the Orion pulp mill project in Uruguay. The two organizations, after completing a thorough review of the facts, are convinced that the mill will generate significant economic benefits for Uruguay and cause no environmental harm. The Orion mill, majority owned by Finnish company Oy Metsa-Botnia Ab, will be operated to the highest global standards and comply with IFC and MIGA's respective environmental and social standards. A recently issued independent report provided conclusive evidence that the local area, including the Argentine city of Gualeguaychu, will not experience adverse environmental impacts. "Today's decision paves the way for us to move forward and engage with stakeholders to maximize economic, environmental, and social benefits to local communities on both sides of the river," said Lars Thunell, Executive Vice President of IFC. The regional environmental improvements related to the mill include: -- treating wastewater from the nearby town of Fray Bentos; -- generating electricity from mill operations that will offset 68,000 tons a year of carbon dioxide and reduce acid rain by replacing oil burned in public generating plants; -- treating the untreated effluent of an older, unrelated pulp mill in the nearby town of Mercedes; and -- producing sufficient sodium chlorate to allow local mills in Argentina and Uruguay to move to elemental chlorine-free pulp production. The Orion mill represents the largest foreign investment in Uruguay's history and will help the country move up the value chain beyond the export of raw materials, while generating some 2,500 much needed local jobs. The plant will generate value added equivalent to 2% of Uruguay's entire GDP (based on 2005 figures) and slightly more than 8 percent of the country's exports for each year of full-capacity production. IFC and MIGA carried out an extensive due diligence process, which included the conclusive and positive findings of a cumulative impact study and a subsequent review of the study undertaken by independent experts (the Hatfield report). The experts' report assessed the final cumulative impact study, which examined the combined impacts of the Orion plant and Grupo Empresarial ENCE's Celulosa de M'Bopicua plant. The experts concluded that their recommendations and findings made in April 2006 were addressed in the final study. IFC and MIGA are not taking any position on the eventual outcome of the case brought by Argentina pending with the International Court of Justice in The Hague. For a copy of the cumulative impact study and the experts' report, and for more information, please visit: http://www.ifc.org/ifcext/lac.nsf/content/Uruguay_Pulp_Mills For definition of best available techniques on integrated pollution prevention and control (IPPC), see European Union Web site, http://europa.eu/scadplus/leg/en/lvb/l28045.htm * * * On Sept 11, 2006, Fitch rated Uruguay's US$400 million issue of 5% inflation-indexed bonds payable in U.S. dollars and maturing Sept. 14, 2018, at 'B+'. ================= V E N E Z U E L A ================= PETROLEOS DE VENEZUELA: Eyes Increase in Crude Exports to China --------------------------------------------------------------- A top official of Petroleos de Venezuela told Business News Americas that Venezuela's exports of heavy and extra-heavy crude to China could increase to 300,000 barrels per day by January or February next year. Asdrubal Chavez, trade supply director of Petroleos de Venezuela, explained to BNamericas, "We are exporting roughly 100,000-150,000 barrels per day to China, but for next year the goal is to go much higher, to some 300,000 barrels per day by January or February." According to BNamericas, the Bolivian government previously said it wanted to reach 300,000 barrels per day by in 2007. However, Petroleos de Venezuela will be able to reach this goal sooner due to the August operational start of the 100,000 barrels per day Sinovensa joint venture between the company and China National Petroleum Corp. BNamericas underscores that Sinovensa's extra-heavy crude was initially meant to help manufacture orimulsion, a patented boiler fuel primarily used to power thermoelectric generation plants. However, Petroleos de Venezuela called for production of orimulsion to stop earlier in 2006, as upgrading extra-heavy crude and mixing it with lighter ones is more valuable. Petroleos de Venezuela has worked to restructure Sinovensa to produce and export extra-heavy crude and lighter crude mixes, BNamericas states. Petroleos de Venezuela SA -- http://www.pdv.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. * * * Standard & Poor's said on July 17 that it may lower the company's B+ foreign-currency debt rating in part because of the absence of timely financial and operating information. PETROLEOS DE VENEZUELA: Operational Event Affects Amuay Unit ------------------------------------------------------------ "An operational event was registered that affected a furnace of the Hydrosulfurization Unit Number 4 of the Amuay refinery," Petroleos de Venezuela SA, the state-owned oil firm of Venezuela, said in a statement. Petrolworld relates that the event happened on Nov. 24 at 9:21 p.m. Petroleos de Venezuela did not say in its statement what the operational event was, Petrolworld notes. The unit affected was in startup, after being shutdown for maintenance in September, Petrolworld says, citing Petroleos de Venezuela. Petroleos de Venezuela told Petrolworld that there had been no injuries. The other refinery units had not been affected. The company did not expect the event to affect fuel supply commitments. However, El Nacional underscores that witnesses said there was an explosion at Amuay and blackouts in the neighboring towns. Three witnesses in the area of the refinery told Reuters that they felt and heard an explosion. "The explosion was felt from 10 kilometers (6.2 miles) away," a resident of the area told Reuters. Petroleos de Venezuela SA -- http://www.pdv.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. * * * Standard & Poor's said on July 17 that it may lower the company's B+ foreign-currency debt rating in part because of the absence of timely financial and operating information. PETROLEOS DE VENEZUELA: Signing Pact with Brazil's Shipbuilders --------------------------------------------------------------- An official of Petroleos de Venezuela SA, the state-owned oil firm of Venezuela, told Business News Americas that it will sign an agreement with a group of Brazilian shipbuilders by the end of November to build several vessels to transport crude and refinery products. Asdrubal Chavez, the trade and supply director of Petroleos de Venezuela, told BNamericas, "With Brazil, we should be concluding everything [in the week]. We will sign in a ceremony here [Caracas]." According to BNamericas, the pact would cover eight Panamax-type crude tankers and two smaller refinery-products vessels. BNamericas underscores that among other things, the new ships would handle an increase in exports of Venezuelan crude and liquid fuels to China and other Asian markets. The government of Brazil had sent representatives to Venezuela to discuss the role of Brazilian shipyards in Petroleos de Venezuela's US$2-billion shipbuilding project, BNamericas notes. Petroleos de Venezuela will buy a total of 42 new vessels in 2006-12 to support exports. BNamericas emphasizes that PDV Marina, the maritime unit of Petroleos de Venezuela, handles 15% of the latter's exports, which exceed 2 million barrels per day. The unit aims to boost its capacity to 42%. The report says that PDV Marina has signed shipbuilding accords with Argentina's Rio Santiago and with China State Shipbuilding and China Shipbuilding Industry. PDV Marina will sign a deal with Spanish shipbuilders later in 2006, BNamericas states. Petroleos de Venezuela SA -- http://www.pdv.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. * * * Standard & Poor's said on July 17 that it may lower the company's B+ foreign-currency debt rating in part because of the absence of timely financial and operating information. * VENEZUELA: Bilateral Trade with Chile Up 30% to US$600 Million ---------------------------------------------------------------- "We are next to go over US$600 million in negotiations. This relationship has increased by 30% in 2006, as compared to 2005," Chilean Ambassador to Venezuela Claudio Huepe Garcia was quoted by El Universal as saying. Separately, Cadivi Institutional Communications Management came to a similar conclusion in a press release quoted by official news agency ABN. "Chile procures a large amount of Venezuelan products, including urea -- an excellent fertilizer, aluminum and metal-mechanic items that are very important for our economy. For its part, Venezuela imports from Chile copper and food, such as fruits and wine," according to Cadivi's statement. * * * Venezuela's foreign currency long-term debt is rated B1 by Moody's, B+ by Standard & Poor's, and BB- by Fitch. * VENEZUELA: Mexico Wants New Ties After G-3 Withdrawal ------------------------------------------------------- Mexico wants to negotiate a new preferential trade framework with Venezuela after the latter's formal withdrawal from the G-3 trade bloc, the Associated Press reports. In a statement, the Mexican Department of Economy said that it's willing to forge new trade pacts with Venezuela under the Latin American Integration Association, where both countries hold membership status. "For Mexico, the trade relation with Venezuela is a priority. Therefore, Mexico will continue trying to reach the Venezuelan authorities in order to develop a new juridical framework for the purposes of economic and trade links of both countries," AP says, citing the Department's statement. * * * Venezuela's foreign currency long-term debt is rated B1 by Moody's, B+ by Standard & Poor's, and BB- by Fitch. *********** 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 - Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Marjorie C. Sabijon, Sheryl Joy P. Olano, Stella Mae Hechanova, and Christian Toledo, Editors. Copyright 2006. 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