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, May 20, 2008, Vol. 9, No. 99 Headlines A R G E N T I N A AGROIMPULSO CEREALES: Court Concludes Reorganization AOMI SA: Proofs of Claim Verification Deadline is Aug. 12 CUVERA AGROPECUARIA: Individual Reports to be Filed on Aug. 27 DANA CORP: District Judge Dismisses Jasco Tools' US$20 Mln Claim DANA CORP: Earns US$685 Mln in First Quarter of Fiscal Year 2008 ESTABLECIMIENTO AVICOLA: Individual Reports Filing on Sept. 12 RESIDENTIAL CAPITAL: Gets Consents for US$14B Note Tender Offers SIEMBRA Y COSECHA: Trustee to File Individual Reports on Aug. 12 SOL OBRAS: Files for Reorganization in Court SU TAXI: Buenos Aires Court Concludes Reorganization TALLERES LLAVE: Proofs of Claim Verification Deadline Is Aug. 12 B E R M U D A ADVANCED MICRO: Board Appoints Clegg to Compensation Committee ADVANCED MICRO: Randy Allen to Head Computing Solutions Group SCOTTISH RE: S&P Puts D Rating on US$125 Million Preferred Stock B R A Z I L AMR CORP: EBITDAR Covenant Waived under Citicorp Credit Facility BANCO ITAU: Credit Card Sales to Increase to BRL18.4 Bln. in May BOMBARDIER INC: Fitch Lifts Issuer Default Rating to BB+ CENTRAIS ELETRICAS: Net Profit Increases to BRL842MM in 1st Qtr. COMPANHIA PARANAENSE: Will Dispatch Araucaria Thermo Plant DELPHI CORP: Sues Appaloosa Management for Reneging on EPCA EL PASO: Share-Repurchase Program Won't Affect S&P's Ratings GENERAL MOTORS: To Resume Production as Axle & UAW Reach Pact GERDAU SA: Unit Secures US$200MM Loan from Inter-American Dev't. SHARPER IMAGE: Court Approves Selling of Business, Assets SHARPER IMAGE: Can Pay Obligations Under US$3.6MM Severance Plan SHARPER IMAGE: Wants to Employ GVS as Valuation Analyst SHARPER IMAGE: Court Allows Employment of RCS as Consultant SPECTRUM BRANDS: Not In Talks for Sale of Home and Garden Biz UAL CORP: Moody's Holds Debt Ratings; Changes Outlook to Neg. UAL CORPORATION: ALPA Reserves US$10 Million to Get Better Deals UAL CORPORATION: Operating Unit Undergoes Organizational Changes C A Y M A N I S L A N D S ALCHEMY ADVISORS: Proofs of Claim Filing Deadline Is May 26 BOMBAY CO: Court Approves A.S.K. Financial as Litigation Counsel CAKEWALK MARINE: Proofs of Claim Filing Is Until May 26 NANTUCKET CLO: Proofs of Claim Filing Deadline Is May 23 SLOANE ROBINSON: Sets Final Shareholders Meeting for May 23 TOKYO UNITED: Proofs of Claim Filing Deadline Is May 24 C H I L E AES CORPORATION: Prices US$625 Million 8% Senior Notes Offering C O L O M B I A COLOMBIA MOVIL: Duff & Phelps Raises Rating to BB- From B+ MACY'S INC: Moody's Cuts Subordinated Shelf Rating to (P)Ba1 G U A T E M A L A IMAX CORP: Must Keep US$7.5MM Available Cash Under Wachovia Loan SBARRO INC: Posts US$2.8 Million Net Loss in 2008 First Quarter J A M A I C A AIR JAMAICA: Must Stop Free First Class Travel to Politicians M E X I C O AMERICAN AXLE: Reaches Tentative Labor Agreement with UAW AXTEL SAB: Turns Around With MXN87.98 Mil. Profit in 1Q 2008 CABLEMAS SA: S&P Places BB- Ratings on CreditWach Positive CHEROKEE INTERNATIONAL: Earns US$12,000 in 2008 First Quarter CLEAR CHANNEL: Moody's Maintains Rating Review on Pending Deal FIAT SPA: Retains European Market Share in April 2008 GRAFTECH INT'L: Earns US$39 Million in First Quarter 2008 LIBBEY INC: Gets Approval on Shelf Registration Statement Filing PILGRIM'S PRIDE: Closes US$177 Million Common Stock Offering PILGRIM'S PRIDE: S&P Holds 'BB-' Credit Rating on Stock Sale PQ CORPORATION: Moody's Puts Corporate Family Rating at B2 QUEBECOR WORLD: Seeks Approval to Sell Aircraft for US$20.3 Mil. QUEBECOR WORLD: Renews US$60 Mil. Multi-Year Deal with Bauer QUEBECOR WORLD: Quebec Court Extends CCAA Stay Until July 25 QUEBECOR WORLD: Wants Schedules Filing Dates Extended to July 18 SATELITES MEXICANOS: Books US$11.6 Mil. Net Loss in 1Q 2008 UNITED RENTALS: S&P Puts 'BB+' Rating on Proposed US$1B Facility * STATE OF NYARIT: Moody's Downgrades Issuer Rating to Ba1 P E R U BRASKEM: May Invest US$2.5B With Petrobras for Peruvian Plants P U E R T O R I C O ADELPHIA: MI-Connection Wants Duke Pact Assignment Clarified ADELPHIA COMMS: Recovery Trust Wants Declaration Amended ADELPHIA COMMS: Wants Claims Objection Deadline Set for Sept. 12 CLAIRE'S STORES: US$350MM Notes PIK Plan Won't Affect S&P's Rtgs MAXXAM INC: March 31 Balance Sheet Upside-Down by US$296.1 Mil. SIRVA INC: Files Financial Info Related to Share Purchase Deal SIRVA INC: Triple Net Withdraws Appeal on DIP Financing UNIVISION COMMS: Fitch Says 1Q Results In-Line With Expectations V E N E Z U E L A CHRYSLER: CAW Labor Pact Aids in Canadian Biz Competitiveness DEL MONTE FOODS: Fitch Says Ratings Unaffected by StarKist Plan * Large Companies With Insolvent Balance Sheet - - - - - ================= A R G E N T I N A ================= AGROIMPULSO CEREALES: Court Concludes Reorganization ---------------------------------------------------- Agroimpulso Cereales S.A. concluded its reorganization process, according to data released by Infobae on its Web site. The closure came after the National Commercial Court of First Instance in Buenos Aires, homologated the debt plan signed between the company and its creditors. AOMI SA: Proofs of Claim Verification Deadline is Aug. 12 --------------------------------------------------------- Eduardo Armando Prol, the court-appointed trustee for Aomi S.A.'s bankruptcy proceeding, will be verifying creditors' proofs of claim until Aug. 12, 2008. Mr. Prol will present the validated claims in court as individual reports. The National Commercial Court of First Instance in Buenos Aires will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Aomi 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 Aomi's accounting and banking records will be submitted in court. Infobae didn't state the submission dates for the reports. Mr. Prol is also in charge of administering Aomi's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Aomi S.A. San Jose 1962 Buenos Aires, Argentina The trustee can be reached at: Eduardo Armando Prol Avenida Belgrano 634 Buenos Aires, Argentina CUVERA AGROPECUARIA: Individual Reports to be Filed on Aug. 27 -------------------------------------------------------------- Alfredo Yanny, the court-appointed trustee for Cuvera Agropecuaria S.A.'s reorganization proceeding, will present the validated claims as individual reports in the National Commercial Court of First Instance in Buenos Aires on Aug. 27, 2008. Mr. Yanny will be verifying creditors' proofs of claim until July 1, 2008. He will submit to court a general report containing an audit of Cuvera Agropecuaria's accounting and banking records on Oct. 8, 2008. Creditors will vote to ratify the completed settlement plan during the assembly on March 10, 2009. The debtor can be reached at: Cuvera Agropecuaria SA Ciudad de la Paz 306 Buenos Aires, Argentina The trustee can be reached at: Alfredo Yanny Viamonte 1446 Buenos Aires, Argentina DANA CORP: District Judge Dismisses Jasco Tools' US$20 Mln Claim ---------------------------------------------------------------- The Honorable Richard M. Berman of the U.S. District Court for the Southern District of New York affirms the order of Honorable Robert Lifland of the U.S. Bankruptcy Court for the Southern District of New York, disallowing Jasco Tools, Inc.'s US$20 million claim for breach of contract, misappropriation of trade secrets, prima facie tort, and unjust enrichment. Judge Berman finds the Bankruptcy Court properly resolved the Debtors' objection to Jasco's Claim as a motion for summary judgment and that the Bankruptcy Court gave Jasco sufficient notice and time to respond to the Debtors' claim objection. Judge Berman notes that Jasco has not shown that the Bankruptcy Court abused its discretion in concluding that additional discovery "at this stage [is] meritless," as "Jasco had [had] nearly four years to conduct discovery," during which Jasco took 18 depositions and received voluminous documentation from the Debtors. Judge Berman also affirms the Bankruptcy Court's ruling that the the renewal clause under the agreement between the Debtors and Jasco "rests on the need to negotiate a future, extended agreement, and thus it is inherently unenforceable." Furthermore, Judge Berman holds that the Bankruptcy Court properly determined that the fact that the Debtors knew that former Jasco employees become its competitor's employees is not probative of a conspiracy or proof of trade secret misappropriation or prima facie tort. About DANA Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/ -- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Nov. 30, 2007, the Debtors listed US$7,131,000,000 in total assets and US$7,665,000,000 in total debts resulting in a total shareholders' deficit of US$534,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represented the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represented the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC served as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Third Amended Joint Plan of Reorganization of the Debtors on Dec. 26, 2007. The Debtors' Third Amended Joint Plan of Reorganization was deemed effective as of Jan. 31, 2008. Dana Corp., starting on the Plan Effective Date, operated as Dana Holding Corporation. (Dana Corporation Bankruptcy News, Issue No. 74; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter-Latin America on Feb. 13, 2008, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Dana Holding Corp. following the company's emergence from Chapter 11 on Feb. 1, 2008. The outlook is negative. At the same time, Standard & Poor's assigned Dana's US$650 million asset-based loan revolving credit facility due 2013 a 'BB+' rating (two notches higher than the corporate credit rating) with a recovery rating of '1', indicating an expectation of very high recovery in the event of a payment default. In addition, S&P assigned a 'BB' bank loan rating to Dana's US$1.43 billion senior secured term loan with a recovery rating of '2', indicating an expectation of average recovery. The TCR-LA reported on Jan. 9, 2008, that Moody's Investors Service affirmed the ratings of the reorganized Dana Holding Corporation as: Corporate Family Rating, B1; Probability of Default Rating, B1. In a related action, Moody's affirmed the Ba3 rating on the senior secured term loan and raised the rating on the senior secured asset based revolving credit facility to Ba2 from Ba3. Moody's said the outlook is stable. DANA CORP: Earns US$685 Mln in First Quarter of Fiscal Year 2008 ---------------------------------------------------------------- Dana Holding Corporation disclosed its first-quarter 2008 results. As a result of its January 31 emergence from Chapter 11 reorganization, Dana's first-quarter financial statements include two months presented under the provisions of "fresh start" accounting required for companies emerging from reorganization. First-Quarter Profits Improved Dana delivered improved profitability in the first quarter of 2008 versus the same period one year ago, highlighted by: -- Net sales of US$2,312 million, an increase of approximately 8 percent compared to 2007, primarily because of currency effects. -- Net income of US$685 million, including a one-time gain of US$754 million after taxes, reflecting effects of emergence and adoption of fresh start accounting. This compares to a net loss of US$92 million in the first quarter of 2007. -- Earnings before interest, taxes, depreciation, amortization, and restructuring (EBITDA) of US$148 million, compared with US$90 million in 2007. This reflects improved pricing and lower costs. -- Strong liquidity of US$1.6 billion at March 31, 2008. "We are making progress in our turnaround effort despite a tough environment," said Executive Chairman John Devine. "As discussed earlier this year, we have much more to do and remain focused on our top priorities. With a new management team coming together, a strong balance sheet, and a clear sense of urgency, we are committed to repositioning Dana for a strong future." Added Chief Executive Officer Gary Convis, "As we pursue improved financial performance, we are taking aggressive actions to enhance our operational excellence. Chief among these are the establishment of shared, targeted metrics across all of our businesses; the implementation of the Dana Operating System, a coordinated approach to drive continuous improvement throughout our operations; and the review of our global manufacturing footprint to ensure that we are producing the right products in the right places to best serve the needs of our customers." Business Segment Highlights First-quarter EBITDA for Dana's Automotive Systems Group (ASG) totaled US$109 million, compared to US$72 million in 2007. Sales increased US$106 million compared to 2007. Each of the ASG businesses was adversely impacted by the effects of lower North American volume, including the effects of a labor disruption at a major automotive parts supplier. Offsetting the weakness in the North American markets were stronger production levels elsewhere in the world, currency, and benefits from customer pricing actions. EBITDA for Dana's Heavy Vehicle Systems Group (HVSG) totaled US$60 million for the first quarter of 2008, compared to US$56 million last year. The group's Commercial Vehicle segment reported a sales decline of 10 percent, primarily because of lower North American production following the buying surge in advance of 2007 emission regulations. The Off-Highway Products segment reported a US$95 million increase in sales compared to the first quarter of 2007. Off-Highway sales benefited from increased production, new programs, and currency. Unprecedented Steel Costs Contribute to Challenging Environment In addition to vehicle production declines in several North American sectors, Dana's results are being significantly impacted by steel costs. Dana purchases approximately 1.5 million tons of steel and products with significant steel content annually. Average prices for scrap and hot-rolled steel increased by approximately 30 percent during the first quarter of 2008, and prices have continued to climb. While the company has taken certain available measures to mitigate these costs, at average scrap steel prices of US$525 per ton for 2008, Dana could experience an adverse impact of US$70 million to US$100 million on the annual cost of its steel and steel-based products. A full-text copy of Dana Corporation's first quarter 2008 financial report is available for free at: http://bankrupt.com/misc/Dana_Form10Q_1stQ2008.html Dana Holding Corporation Unaudited Consolidated Balance Sheet As of March 31, 2008 ASSETS CURRENT ASSETS Cash and cash equivalents US$1,283,000,000 Restricted cash 0 Accounts receivable Trade, net of US$23,000,000 allowance 1,444,000,000 Other 364,000,000 Inventories Raw materials 383,000,000 Work in process and finished goods 634,000,000 Assets of discontinued operations 0 Other current assets 123,000,000 -------------- Total current assets 4,231,000,000 Goodwill 310,000,000 Intangibles 678,000,000 Investments and other assets 252,000,000 Investments in affiliates 183,000,000 Property, plant and equipment, net 2,049,000,000 -------------- Total Assets US$7,703,000,000 ============== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes payable, including current portion of long-term debt US$127,000,000 Debtor-in-possession financing 0 Accounts payable 1,214,000,000 Accrued payroll and employee benefits 268,000,000 Liabilities of discontinued operations 0 Taxes on income 142,000,000 Other accrued liabilities 555,000,000 -------------- Total current liabilities 2,306,000,000 Liabilities subject to compromise 0 Deferred employee benefits and other non-current liabilities 907,000,000 Long-term debt 1,321,000,000 Minority interest in consolidated subsidiaries 115,000,000 Commitments and contingencies 0 -------------- Total liabilities 4,649,000,000 -------------- Shareholders' Equity: Preferred Stock, Series A 242,000,000 Preferred Stock, Series B 529,000,000 Common stock 1,000,000 Prior Dana common stock 0 Additional paid-in capital 2,267,000,000 Retained earnings (deficit) (29,000,000) Accumulated other comprehensive income 44,000,000 -------------- Total stockholders' equity 3,054,000,000 -------------- Total Liabilities & Stockholders' Equity US$7,703,000,000 ============== Dana Holding Corporation Unaudited Consolidated Statement of Operations For Three Months Ended March 31, 2008 Net sales US$2,312,000,000 Costs and expenses Cost of sales 2,179,000,000 Selling, general and administrative expenses 99,000,000 Amortization of intangibles 12,000,000 Realignment charges, net 17,000,000 Other income, net 40,000,000 -------------- Income from continuing operations before interest, reorganization items and income taxes 45,000,000 Interest expense 35,000,000 Reorganization items, net 107,000,000 Fresh start accounting adjustments 1,009,000,000 -------------- Income (loss) from continuing operations before income taxes 912,000,000 Income tax expense (219,000,000) Minority interests (4,000,000) Equity in earnings of affiliates 3,000,000 -------------- Income(loss) from continuing operations 692,000,000 Loss from discontinued operations (7,000,000) -------------- Net income (loss) US$685,000,000 ============== Dana Holding Corporation Unaudited Consolidated Statement of Cash Flows For Three Months Ended March 31, 2008 OPERATING ACTIVITIES: Net income US$685,000,000 Depreciation and amortization 90,000,000 Amortization of inventory valuation 15,000,000 Minority interest 4,000,000 Deferred income taxes 189,000,000 Gain on settlement of liabilities subject to compromise (27,000,000) Payment of claims (88,000,000) Reorganization items net of cash payments 61,000,000 Fresh start adjustments (1,009,000,000) Payments to VEBAs (788,000,000) Loss on sale of businesses and assets 8,000,000 Changes in working capital (185,000,000) Other, net (4,000,000) -------------- Net cash provided by (used for) operating activities (1,049,000,000) INVESTING ACTIVITIES: Purchases of property, plant and equipment (45,000,000) Proceeds from sale of businesses and assets 5,000,000 Change in restricted cash 93,000,000 Other 3,000,000 -------------- Net cash flows provided by (used for) investing activities 56,000,000 FINANCING ACTIVITIES: Proceeds from (repayment of) DIP facility (900,000,000) Net change in short-term debt (25,000,000) Payment of DCC Medium Term Notes (136,000,000) Proceeds from Exit Facility Debt 1,430,000,000 Original issue discount fees (114,000,000) Deferred financing fees (40,000,000) Repayment of Exit Facility Debt (4,000,000) Issuance of Series A and Series B preferred stock 771,000,000 Other (6,000,000) -------------- Net cash flows provided by (used for) financing activities 976,000,000 Net (decrease) in cash and cash equivalents (17,000,000) Cash and cash equivalents, beginning of period 1,271,000,000 Effect of exchange rate changes on cash balances 25,000,000 Net change in cash of discontinued operations 4,000,000 -------------- Cash and cash equivalents, end of period US$1,283,000,000 ============== About DANA Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/ -- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Nov. 30, 2007, the Debtors listed US$7,131,000,000 in total assets and US$7,665,000,000 in total debts resulting in a total shareholders' deficit of US$534,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represented the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represented the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC served as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Third Amended Joint Plan of Reorganization of the Debtors on Dec. 26, 2007. The Debtors' Third Amended Joint Plan of Reorganization was deemed effective as of Jan. 31, 2008. Dana Corp., starting on the Plan Effective Date, operated as Dana Holding Corporation. (Dana Corporation Bankruptcy News, Issue No. 74; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter-Latin America on Feb. 13, 2008, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Dana Holding Corp. following the company's emergence from Chapter 11 on Feb. 1, 2008. The outlook is negative. At the same time, Standard & Poor's assigned Dana's US$650 million asset-based loan revolving credit facility due 2013 a 'BB+' rating (two notches higher than the corporate credit rating) with a recovery rating of '1', indicating an expectation of very high recovery in the event of a payment default. In addition, S&P assigned a 'BB' bank loan rating to Dana's US$1.43 billion senior secured term loan with a recovery rating of '2', indicating an expectation of average recovery. The TCR-LA reported on Jan. 9, 2008, that Moody's Investors Service affirmed the ratings of the reorganized Dana Holding Corporation as: Corporate Family Rating, B1; Probability of Default Rating, B1. In a related action, Moody's affirmed the Ba3 rating on the senior secured term loan and raised the rating on the senior secured asset based revolving credit facility to Ba2 from Ba3. Moody's said the outlook is stable. ESTABLECIMIENTO AVICOLA: Individual Reports Filing on Sept. 12 -------------------------------------------------------------- Estudio Castro, Danovara y Asociados -- the court-appointed trustee for Establecimiento Avicola La Campesina SA's reorganization proceeding -- will present the validated claims as individual reports in the National Commercial Court of First Instance in Buenos Aires on Sept. 12, 2008. Estudio Castro will be verifying creditors' proofs of claim until July 17, 2008. The trustee will submit to court a general report containing an audit of the firm's accounting and banking records on Oct. 24, 2008. Establecimiento Avicola's creditors will vote on the completed settlement plan during an informative assembly on April 30, 2009. The debtor can be reached at: Establecimiento Avicola La Campesina SA Emilio Castro 7440 Buenos Aires, Argentina The trustee can be reached at: Estudio Castro, Danovara y Asociados Jeronimo Salguero 2533 Buenos Aires, Argentina RESIDENTIAL CAPITAL: Gets Consents for US$14B Note Tender Offers ---------------------------------------------------------------- Residential Capital, LLC, disclosed that, in connection with its pending private exchange offers and cash tender offers for any and all of the U.S. dollar equivalent US$14 billion in aggregate principal amount of its outstanding notes, it has received requisite consents relating to the offers and has entered into supplemental indentures adopting the proposed amendments to the indentures under which the old notes were issued. The amendments to the old notes release the subsidiary guarantees of ResCap's obligations under the old notes and eliminate certain of the restrictive covenants and events of default in the indentures. Accordingly, claims with respect to all new notes issued in the exchange offers will be effectively senior to claims with respect to unexchanged old notes to the extent of the value of all assets of the subsidiary guarantors as well as the collateral securing the new notes. In addition, ResCap extended the early delivery time to 5:00 p.m., New York City time, on Wednesday, May 21, 2008. Notes tendered prior to the early delivery time will be eligible to receive the early delivery payment described in the informational documents. Tendered old notes may no longer be withdrawn. The offers will expire at 11:59 p.m., New York City time, on June 3, 2008, unless extended by ResCap with respect to any or all series of old notes. The offers are subject to significant conditions that are further described in the informational documents. In particular, the offers are conditioned on ResCap entering into a new first lien senior secured credit facility, providing for US$3.5 billion of commitments on terms acceptable to ResCap. As a result of these conditions, ResCap may not be required to exchange or purchase any of the old notes tendered. Documents relating to the offers will only be distributed to noteholders who complete and return a letter of eligibility confirming that they are within the category of eligible investors for this private offer. Noteholders who desire a copy of the eligibility letter should contact Global Bondholder Service Corporation, the information agent for the offers, at (866) 470-3800 (U.S. Toll-free) or (212) 925-1630 (Collect). Headquartered in Minneapolis, Minnesota, Residential Capital LLC -- http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. Its Latin American operations are located in Argentina, Brazil, Chile, Colombia, Mexico and Venezuela. * * * As reported in the Troubled Company Reporter-Latin America on May 7, 2008, Moody's Investors Service downgraded to Ca, from Caa1, its ratings on the senior debt of Residential Capital, LLC subject to the bond exchange announced by ResCap on May 2, 2008. The rating of ResCap's approximately US$1.2 billion of bonds maturing on June 9, 2008 was affirmed at Caa1. All ratings remain under review for downgrade. Standard & Poor's Ratings Services lowered selected ratings on Residential Capital LLC, including lowering the long-term corporate credit rating to 'CC' from 'CCC+', following the company's launch of an exchange offer for unsecured bonds that S&P interpret as a distressed debt exchange. The ratings remain on CreditWatch with negative implications, where they were placed on April 24, 2008. Fitch Ratings has downgraded Residential Capital LLC's Issuer Default Rating to 'C' from 'BB-' following the company's debt exchange offer announcement. ResCap remains on Rating Watch Negative pending execution of the debt exchange offer. Upon completion of the exchange, Fitch will downgrade ResCap's IDR to 'D' indicating a default has occurred in accordance with Fitch's criteria on distressed debt exchanges. SIEMBRA Y COSECHA: Trustee to File Individual Reports on Aug. 12 ---------------------------------------------------------------- Sergio Mazzitelli, the court-appointed trustee for Siembra y Cosecha S.A.'s bankruptcy proceeding, will present the validated claims as individual reports in the National Commercial Court of First Instance in Buenos Aires on Aug. 12, 2008. Mr. Mazzitelli will be verifying creditors' proofs of claim until June 13, 2008. He will submit to court a general report containing an audit of Siembra y Cosecha's accounting and banking records on Sept. 23, 2008. Mr. Mazzitelli is also in charge of administering Siembra y Cosecha's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Siembra y Cosecha SA Vuelta de Obligado 4776 PB Buenos Aires, Argentina The trustee can be reached at: Sergio Mazzitelli Viamonte 1546 Buenos Aires, Argentina SOL OBRAS: Files for Reorganization in Court -------------------------------------------- Sol Obras SA has requested for reorganization approval after failing to pay its liabilities since March 13, 2008. The reorganization petition, once approved by the court, will allow Sol Obras to negotiate a settlement with its creditors in order to avoid a straight liquidation. The case is pending in the National Commercial Court of First Instance No. 10 in Buenos Aires. Clerk No. 19 assists the court in this case. The debtor can be reached at: Sol Obras SA Santa Fe 3388 Buenos Aires, Argentina SU TAXI: Buenos Aires Court Concludes Reorganization ---------------------------------------------------- Su Taxi S.A. concluded its reorganization process, according to data released by Infobae on its Web site. The closure came after the National Commercial Court of First Instance in Buenos Aires, homologated the debt plan signed between the company and its creditors. TALLERES LLAVE: Proofs of Claim Verification Deadline Is Aug. 12 ---------------------------------------------------------------- The court-appointed trustee for Talleres Llave S.A.'s bankruptcy proceeding, will be verifying creditors' proofs of claim until Aug. 12, 2008. The trustee will present the validated claims in court as individual reports on Sept. 24, 2008. The National Commercial Court of First Instance in Buenos Aires will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Talleres Llave 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 Talleres Llave's accounting and banking records will be submitted in court on Nov. 5, 2007. The trustee is also in charge of administering Talleres Llave's assets under court supervision and will take part in their disposal to the extent established by law. ============= B E R M U D A ============= ADVANCED MICRO: Board Appoints Clegg to Compensation Committee -------------------------------------------------------------- The Board of Directors of Advanced Micro Devices, Inc., appointed Frank Clegg to the Board's Compensation Committee and Nominating and Corporate Governance Committee, effective May 8, 2008. Mr. Clegg will receive similar benefits the company provides to non-employee independent directors for his Board and Committee service. Headquartered in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- provides innovative processing solutions in the computing, graphics and consumer electronics markets. Outside the United States, the company has subsidiaries in Belgium, Brazil, China, Germany, Japan, Malaysia and Bermuda. At Dec. 29, 2007, the company's consolidated balance sheet showed US$11.550 billion in total assets, US$8.295 billion in total liabilities, US$265.0 million in minority interest in consolidated subsidiaries, and US$2.990 billion in total stockholders' equity. * * * As reported on Troubled Company Reporter-Latin America on April 11, 2008, Standard & Poor's Ratings Services placed its 'B' corporate credit and senior unsecured ratings on Advanced Micro Devices Inc. on CreditWatch with negative implications. As reported in the Troubled Company Reporter-Latin America on Jan. 28, 2008, Fitch downgraded these ratings on Advanced Micro Devices Inc., including its Issuer Default Rating to 'B-' from 'B'; and its Senior unsecured debt to 'CCC'/RR6 from 'CCC+/RR6'. The Rating Outlook remains Negative. ADVANCED MICRO: Randy Allen to Head Computing Solutions Group ------------------------------------------------------------- AMD disclosed several organizational and executive changes as part of the company's ongoing efforts to re-architect its business for sustained profitability. "We are accelerating AMD's transformation, reshaping the organization and bolstering our management team to lead in our x86 microprocessor and graphics businesses," Dirk Meyer, AMD president and COO, said. "Placing experienced leaders in new, more focused roles will enhance our execution and progress towards sustained profitability and long-term success. The creation of a Centralized Engineering organization aligns and focuses AMD's world-class engineers and intellectual property portfolio on the strong business opportunities in front of us." In his new role as Senior Vice President, Computing Solutions Group, Randy Allen reports into President and COO Dirk Meyer and is responsible for the development and management of AMD's broad and growing portfolio of consumer and commercial microprocessor solutions and platforms. The twenty-four year AMD veteran was most recently responsible for AMD's Server and Workstation business and previously oversaw microprocessor engineering for the company, including the successful introductions of the AMD Opteron(TM) and AMD Athlon(TM) 64 processors. The newly formed Central Engineering organization will be co-led by Chekib Akrout, who is joining AMD, and Jeff VerHeul, corporate vice president of design engineering at AMD. The Central Engineering leadership team will direct the development and execution of AMD's technology and product roadmaps in partnership with AMD's business units and will report directly to Dirk Meyer. Akrout is joining AMD after serving as vice president of design technology at Freescale Semiconductor. Prior to Freescale, Akrout worked at IBM and managed the development of a wide range of products including microprocessors, application specific integrated circuits (ASICs) and mixed signal devices. He was responsible for IBM's work on the development of the Cell processor, the Xbox 360 processor for Microsoft, and embedded PowerPC cores. VerHeul joined AMD in August 2005 after a twenty-five year career with IBM. Most recently, he led the AMD's microprocessor design engineering organization. AMD also promoted Allen Sockwell to senior vice president, human resources and Chief Talent Officer responsible for developing AMD's leadership assets and employee talent. As part of these management changes, Mario Rivas, formerly executive vice president, Computing Solutions Group and Michel Cadieux, formerly senior vice president and Chief Talent Officer, have left AMD to pursue new opportunities. Headquartered in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- provides innovative processing solutions in the computing, graphics and consumer electronics markets. Outside the United States, the company has subsidiaries in Belgium, Brazil, China, Germany, Japan, Malaysia and Bermuda. At Dec. 29, 2007, the company's consolidated balance sheet showed US$11.550 billion in total assets, US$8.295 billion in total liabilities, US$265.0 million in minority interest in consolidated subsidiaries, and US$2.990 billion in total stockholders' equity. * * * As reported on Troubled Company Reporter-Latin America on April 11, 2008, Standard & Poor's Ratings Services placed its 'B' corporate credit and senior unsecured ratings on Advanced Micro Devices Inc. on CreditWatch with negative implications. As reported in the Troubled Company Reporter-Latin America on Jan. 28, 2008, Fitch downgraded these ratings on Advanced Micro Devices Inc., including its Issuer Default Rating to 'B-' from 'B'; and its Senior unsecured debt to 'CCC'/RR6 from 'CCC+/RR6'. The Rating Outlook remains Negative. SCOTTISH RE: S&P Puts D Rating on US$125 Million Preferred Stock ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its preferred stock rating on Scottish Re Group Ltd.'s $125 million noncumulative perpetual preferred stock issue to 'D' from 'CCC-'. The rating had been on CreditWatch with negative implications. "The rating action reflects the company's discretionary decision to not declare or pay dividends on the April 15, 2008, dividend date because of its financial conditions," explained Standard & Poor's credit analyst Robert A. Hafner. The company does not expect to declare or pay dividends on the July 2008 dividend date and also cautioned that under the terms of the issue, it might be precluded from declaring or paying dividends on the Oct. 15, 2008, dividend date. Scottish Re Group Ltd. -- http://www.scottishre.com/-- is a global life reinsurance specialist. Scottish Re has operating businesses in Bermuda, Grand Cayman, Guernsey, Ireland, the United Kingdom, United States, and Singapore. Its flagship operating subsidiaries include Scottish Annuity & Life Insurance Company (Cayman) Ltd. and Scottish Re (US), Inc. Scottish Re Capital Markets, Inc., a member of Scottish Re Group Ltd., is a registered broker dealer that specializes in securitization of life insurance assets and liabilities. On Sept. 30, 2007, Scottish Re reported total assets of US$13.4 billion and shareholder's equity of US$869 million. =========== B R A Z I L =========== AMR CORP: EBITDAR Covenant Waived under Citicorp Credit Facility ---------------------------------------------------------------- American Airlines, Inc., as the borrower, and AMR Corp., as guarantor, previously entered into an Amended and Restated Credit Agreement, dated as of March 27, 2006, with Citicorp USA, Inc., as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, and a syndicate of lenders arranged by Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., as joint lead arrangers and joint book-running managers. The loan facilities under the Credit Agreement consist of an undrawn US$255 million secured revolving credit facility with a final maturity on June 17, 2009, and a fully drawn US$439 million secured term loan facility with a final maturity on Dec. 17, 2010. The Credit Agreement contains a covenant requiring AMR to maintain, for specified periods, a minimum ratio of cash flow to fixed charges. The minimum ratios for the four quarter periods ending as of specified dates are currently as: Four Quarter Period Ending Minimum Ratio -------------------------- ------------- June 30, 2008 1.40:1.00 September 30, 2008 1.40:1.00 December 31, 2008 1.40:1.00 March 31, 2009 1.40:1.00 June 30, 2009 1.50:1.00 American and AMR have obtained the approval by the requisite lenders of an amendment to the Credit Agreement, pursuant to which: (1) compliance with the EBITDAR Covenant will be irrevocably waived for all periods ending on any date from (and including) June 30, 2008 through March 31, 2009 and (2) the EBITDAR Covenant will be amended to provide that thereafter, AMR will be required to maintain, for each period, a ratio of cash flow to fixed charges of not less than the amount specified below for such period. Period Minimum Ratio ------ ------------- Quarter ending June 30, 2009 0.90:1.00 Two quarters ending September 30, 2009 0.95:1.00 Three quarters ending December 31, 2009 1.00:1.00 Four quarters ending March 31, 2010 1.05:1.00 Four quarters ending June 30, 2010 1.10:1.00 Four quarters ending September 30, 2010 1.15:1.00 No other changes to the Credit Agreement will be effected by the Amendment. American will pay certain fees to the lenders under the Credit Agreement in connection with obtaining the Amendment. Effectiveness of the Amendment is subject to the satisfaction of certain conditions, and American and AMR expect that these conditions will be satisfied and the Amendment will become effective May 15, 2008. Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * As reported in the Troubled Company Reporter-Latin America on March 26, 2008, Standard & Poor's Ratings Services revised its outlook on the long-term ratings on AMR Corp. (B/Negative/B-3) and subsidiary American Airlines Inc. (B/Negative/--) to negative from positive. S&P also lowered its short-term rating on AMR to 'B-3' from 'B-2' and affirmed all other ratings on AMR and American. BANCO ITAU: Credit Card Sales to Increase to BRL18.4 Bln. in May ---------------------------------------------------------------- Banco Itau Holding Financeira SA's Card Division Marketing Chief Fernando Chacon told the press that Mother's Day will help increased Brazil's credit card sales by 21.6% to BRL18.4 billion in May 2008, compared to May 2007. May 2008 will likely be the highest monthly sales volume since December 2007, when credit card sales totaled BRL21.5 billion, Mr. Chacon commented to BNamericas. Despite rising interest rates, sales volume will increase 22.9% in the first five months of 2008, compared to the same period in 2007, Mr. Chacon added. Mr. Chacon told BNamerica that increasing food costs will affect sales, especially among low-income earners. They could decrease purchases of "superfluous products," Mr. Chacon added. According to BNamericas, Mr. Chacon said that the default rate for credit cards in Brazil remained stable. It even dropped a little so far in 2008, Mr. Chacon said. BNamericas relates that the bank expects the number of credit cards in circulation to increase 16.3% to 98.6 million in May 2008, compared to May 2007. The number of cards in circulation will total the 100 million in June, Banco Itau added. Banco Itau Holding Financeira SA -- http://www.itau.com.br/-- is a private bank in Brazil. The company has four principal operations: banking -- including retail banking through its wholly owned subsidiary, Banco Itau SA(Itau), corporate banking through its wholly owned subsidiary, Banco Itau BBA SA (Itau BBA) and consumer credit to non-account hold customers through Itaucred -- credit cards, asset management and insurance, private retirement plans and capitalization plans, a type of savings plan. Itau Holding provides a variety of credit and non-credit products and services directed towards individuals, small and middle market companies and large corporations. The bank has offices in Miami, New York, Hongkong, Lisbon, Luxembourg, Bahamas, the Cayman Islands, Chile and Uruguay. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 12, 2007, Fitch changed the outlook of Banco Itau Holding Financiera S.A.'s 'BB+' foreign currency IDR rating to positive from stable. BOMBARDIER INC: Fitch Lifts Issuer Default Rating to BB+ -------------------------------------------------------- Fitch Ratings has upgraded the Issuer Default Rating and long- term debt rating for Bombardier Inc. to 'BB+' from 'BB'. -- IDR to 'BB+' from 'BB'; -- Senior unsecured debt to 'BB+' from 'BB'; -- Preferred stock to 'BB-' from 'B+'. The Rating Outlook is Stable. The ratings affect approximately US$4.7 billion of outstanding debt and preferred stock as of Jan. 31, 2008. The upgrades to BBD's ratings reflect improved credit metrics, the company's progress in realizing higher margins and cash flow, and a solid outlook for many of its end-markets. The ratings are also supported by a large backlog, the company's business diversification, its leading market positions, the robust business jet market, and its healthy liquidity position. The company's ratings were previously upgraded one notch in January 2008 when it used high cash balances to reduce debt by approximately $1 billion. BBD is focused on building a stronger capital structure and further reducing leverage, which would help reduce its cost of funds and improve the company's financial and strategic flexibility. Although Fitch anticipates that BBD could further strengthen its financial profile over the long term, the Stable Outlook incorporates shorter term operating challenges that the company continues to address. These include margins that, while improving, remain relatively low by industry standards, particularly in the business jet and regional aircraft businesses. In fiscal 2008 aerospace margins increased to 5.8% compared to 3.9% in fiscal 2007. As a result of an accounting change, the aerospace business may attain BBD's margin target of 8% as early as fiscal 2009, but the company could reset its target to reflect the accounting change and its outlook for the business. In the transportation business, margins in fiscal 2008 before special charges increased to 4.4%, up from 3.9% in fiscal 2007. The increase includes the benefits of a previously completed restructuring program which have been partially offset by special charges and a reduction in scope related to BBD's participation in the Metronet project. Fitch believes BBD should be able to complete the rest of the project at a reasonable level of profitability, but the recent program adjustments represent a delay in BBD's long-term plans to grow margins to 6% and expand its presence and capabilities in signaling and services work in the transportation sector. Other rating concerns include business jet market cyclicality and the impact of exchange rate volatility on margins, financial results, and planning. Aerospace concerns include risks inherent in developing new aircraft models, new entrants in the regional jet (RJ) market, and contingent obligations related to past aircraft sales, although these contingent obligations are spread out over time and are not a near-term concern. Tighter conditions in the credit markets could potentially prompt BBD to provide aircraft financing, at least on an interim basis, that could increase its funding needs and make it more difficult to achieve better credit metrics. BBD continues to hold significant market shares in its aerospace and transportation markets. During fiscal 2008 BBD's total orders increased significantly due to growing international demand for business jets and a rebound in demand for larger regional aircraft. Aerospace unit orders were 698 aircraft in fiscal 2008 compared to 363 aircraft in fiscal 2007, bringing the aerospace backlog to US$22.7 billion. Orders in the transportation segment were comparatively stable at US$11.3 billion after increasing in fiscal 2007 to US$11.8 billion due to large orders for rolling stock. Transportation's backlog rose to US$30.9 billion. Bombardier's total backlog at the end of fiscal 2008 was US$53.6 billion, up from US$40.7 billion. After meeting with the management of the CSeries program, Fitch has become more positive on the business case for the program, although risks are still present. Fitch's concerns regarding the program include execution of the development and certification plan (which is a common concern for all new aircraft programs), the potential need for BBD to finance some deliveries, the supply chain, market demand, and potential competitor responses. Fitch's previous concerns about the CSeries' source of technological advantage have been reduced by BBD's disciplined approach to designing the plane, which has increased the likelihood that the CSeries will produce the expected fuel efficiency, noise reduction and reduced emissions. The technology supporting these benefits includes the new geared turbofan engine from Pratt & Whitney and an increased use of advanced materials (composites and an aluminum-lithium alloy). The interior is also attractive, incorporating many features which are similar to those found in the Boeing 777 and 787. Potential competition from Boeing, Airbus and RJ manufacturers represents a significant concern, including pricing actions on existing aircraft from Boeing and Airbus. In February 2008, BBD's board of directors authorized CSeries sales offers to customers. BBD has not announced any launch orders, but if sufficient orders are received, BBD could launch the CSeries by the end of 2008, with entry into service expected in 2013. The CSeries would serve as BBD's entry into the mainline aircraft market, targeting the low end of the 100-149 seat range (110-130 seats). Expenditures for development and tooling are estimated at approximately US$3.2 billion, with BBD picking up about one-third of the cost and suppliers and governments picking up the rest. Fitch estimates that BBD should be able to fund the program with internally generated cash or cash balances. In addition to lower operating costs, an important foundation of BBD's business case for the CSeries is the argument that the aircraft will be the only plane in the market specifically designed for the 100-149-seat segment, with all other aircraft in the segment scaled up or down from other models. Free cash flow rose substantially in fiscal 2008 to US$1.9 billion. The receipt of customer advances in fiscal 2008 generated an unusually large amount of cash from working capital. While a similar cash inflow is not expected to recur, free cash flow should be supported by BBD's large backlog, especially in the aerospace segment. Cash deployment is primarily directed toward capital expenditures that include the development of new aircraft such as the CSeries. Expenditures are expected to be spread out over several years, so the impact of the development programs on BBD's financial position should be manageable. BBD's credit protection measures at the end of fiscal 2008 continued to improve as debt/EBITDA declined to 3.24 times (x) compared to 4.74x one year earlier. Stronger free cash flow measures were largely attributed to the impact of working capital as described above. Although FFO Interest Coverage declined to 2.54x in fiscal 2008 from 3.47x in fiscal 2007, it included the impact of a large, US$826 million pension contribution. Going forward, the ratio should benefit from a lower pension contribution in fiscal 2009, estimated by BBD at US$315 million, as well as BBD's US$1 billion debt reduction debt completed at the end of fiscal 2008. At Jan. 31, 2008, BBD maintained US$3.6 billion of unrestricted cash balances, not including US$1.3 billion of restricted cash related to its letter of credit (LOC) facility. Restricted cash balances are not available for liquidity purposes or for the benefit of unsecured bond holders. Bombardier's unrestricted cash balances are the company's sole source of liquidity as it does not have a bank facility available; the LOC facility is restricted to LOC issuance. BBD's liquidity position benefits from a reduction in net pension liability following significant contributions in 2008. In addition, debt maturities are minimal until fiscal 2013. About Bombardier Inc. Headquartered in Canada, Bombardier Inc. -- http://www.bombardier.com/-- (TSE:BBD.B) manufactures innovative transportation solutions, from regional aircraft and business jets to rail transportation equipment, systems and services. The company manufactures rail equipment through its Bombardier Transportation unit. Bombardier Transport's Europe management office is located in Germany. The company also has production facilities in France, Spain, Switzerland, Belgium, Italy, Austria, Hungary, Czech Republic, Poland, Denmark, Sweden, Norway an the United Kingdom. Other production facilities are located at Brazil, China, India and Australia. CENTRAIS ELETRICAS: Net Profit Increases to BRL842MM in 1st Qtr. ---------------------------------------------------------------- Centrais Eletricas Brasileiras SA's net profit increased 261% to BRL842 million in the first quarter 2008, compared to BRL233 million in the first quarter 2007. Business News Americas relates that Centrais Eletricas' net revenue grew 27% to BRL6.52 billion in the first quarter 2008, from the same period last year. The firm's operating revenue increased 305% to BRL1.64 billion. Centrais Eletricas told BNamericas that the results in part indicate reduced exchange rate losses. Centrais Eletricas Brasileiras SA aka Eletrobras operates in the electric power sector in Brazil. The objective of Eletrobras is to perform activities involving studies, projects, construction and operation of electric power plants, transmission and distribution lines as well as underlying trade operations arising therefrom. Eletrobras is tasked with the preparation of studies and with drawing up construction projects for hydroelectric generation, transmission lines and substations to supply Brazil. It engages areas involving granting loans and financing, providing guarantees, locally or abroad, and acquiring debentures of companies and holders of public electric power services under their control; providing loans and guarantees, locally or abroad, for technical and scientific research institutions; and promoting and supporting researches relating to the power sector, linked to the generation, transmission and distribution of electric power. * * * As reported in the Troubled Company Reporter-Latin America on May 22, 2007, Standard & Poor's Ratings Services raised its long-term foreign currency counterparty credit rating on Centrais Eletricas Brasileiras S.A. aka Eletrobras to 'BB+' from 'BB'. S&P said that outlook is positive. COMPANHIA PARANAENSE: Will Dispatch Araucaria Thermo Plant ---------------------------------------------------------- Companhia Paranaense de Energia SA's President Ruben Ghilardi said in a Web cast that the firm will dispatch its 480-megawatt Araucaria thermo plant at full capacity to help Brazil boost power exports to Argentina, Business News Americas reports. BNamericas relates that Brazil agreed to export up to 1.5 gigawatts of electricity to Argentina from June-August this year. It already began the export at 300 megawatts. Argentina will also export electricity to Brazil in September-November. Due to grid operator Operador Nacional do Sistema Eletrico's decision to dispatch thermos to spare hydro reservoirs during the rainy season, the Araucaria plant began the year operating at above-average levels, BNamericas notes. The plant worked full time from September 2007 through March 2008, when it was shut down due to planned maintenance. Mr. Ghilardi told BNamericas that the plant is now back on the grid, but not yet at full capacity. Headquartered in Parana, Brazil, COPEL aka Companhia Paranaense de Energia SA -- http://www.copel.com/ir-- (NYSE: ELP/LATIBEX: XCOP/BOVESPA: CPLE3, CPLE5, CPLE6) transmits and distributes electricity to more than 3 million customers in the state of Parana and has a generating capacity of nearly 4,600 megawatts, 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 indefinitely postponed. In response, Copel is re-evaluating its corporate structure. The government of Parana controls about 59% of Copel. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 13, 2006, Moody's America Latina upgraded the corporate family rating of Companhia Paranaense de Energia aka Copel to Ba2 from Ba3 on its global scale. Moody's also upgraded its rating on the company's BRL500 million senior unsecured guaranteed debentures due 2007 to Ba2 from Ba3 (Global Local Currency) as well as its rating on the BRL400 million senior secured Guaranteed debentures due 2009 to Ba1 from Ba2 (Global Local Currency). Moody's said the rating outlook is stable. This rating action concludes the review process initiated on July 26, 2006, and still hold to date. DELPHI CORP: Sues Appaloosa Management for Reneging on EPCA ----------------------------------------------------------- Delphi Corp. and its debtor-affiliates filed complaints against Appaloosa Management L.P. and eight other plan investors and related parties, who on April 4, 2008 refused to honor their equity financing commitment of up to US$2.55 billion and refused to participate in the closing that would have led to Delphi's successful emergence from Chapter 11 last month. The complaints were filed in the U.S. Bankruptcy Court for the Southern District of New York. As reported in the Troubled Company Reporter on April 17, 2008, the Debtors believe that Plan Investors A-D Acquisition Holdings, LLC, Harbinger Del-Auto Investment Company, Ltd., Merrill Lynch, Pierce, Fenner & Smith Inc., UBS Securities LLC, Goldman, Sachs & Co., and Pardus DPH Holding LLC, wrongfully terminated the New Equity Purchase and Commitment Agreement and disputed the allegations that it breached the New EPCA or failed to satisfy any condition to the Plan Investors' obligations. At the time ADAH delivered its April 4 Termination Notice, the representatives of Delphi's exit financing lenders, General Motors Corp., the Official Committee of Unsecured Creditors, the Official Committee of Equity Security Holders, and all other parties needed for the Debtors' successful closing and emergence from Chapter 11, other than the Plan Investors, were present and were prepared to move forward. Moreover, all actions necessary to consummate the Plan, including obtaining US$6,100,000,000 of exit financing, were taken other than the concurrent closing and funding of the New EPCA. Delphi Corp. Vice President and Chief Restructuring Officer John D. Sheehan relates in a regulatory filing with the Securities and Exchange Commission that Delphi's Board of Directors had: (a) formed a special litigation committee; and (b) engaged independent legal counsel to consider and pursue any and all available equitable and legal remedies, including the commencement of legal action in the U.S. Bankruptcy Court for the Southern District of New York to seek all appropriate relief, including the Plan Investors' specific performance of their obligations under the New EPCA. "We believe that the plan investors breached their obligations under the Equity Purchase and Commitment Agreement that was the financial foundation for our Court-approved plan of reorganization," David Sherbin, Delphi vice president, general counsel and chief compliance officer, said. "The plan investors vigorously pursued a prominent role in our restructuring, received over $60 million in fees for their commitments and positioned themselves to reap substantial profits after consummation of the Plan," Mr. Sherbin said. Delphi's court filing alleges that the plan investors schemed to avoid their obligations rather than fulfill them. Following the failed April 4 closing, Delphi retained special litigation counsel to evaluate the company's legal rights and report its recommendations to a committee of the Board of Directors. The litigation commenced is the result of that process. "Delphi has been unwavering in its commitment to meet the needs of our customers and employees and to achieve a successful reorganization," Mr. Sherbin said. "Our efforts to emerge were seriously undermined when we failed to close because of the actions of Appaloosa and the other plan investors. We hold them accountable for the harm they have caused to Delphi and our stakeholders." Defendants named in the complaints are: -- Appaloosa Management L.P.; -- A-D Acquisition Holdings, LLC; -- Harbinger Del-Auto Investment Company, Ltd.; -- Pardus DPH Holding LLC; -- Merrill Lynch, Pierce, Fenner & Smith Incorporated; -- Goldman Sachs & Co.; -- Harbinger Capital Partners Master Fund I, Ltd.; -- Pardus Special Opportunities Master Fund L.P.; and -- UBS Securities LLC. Delphi asserts claims for breach of contract and fraud, and asks the Bankruptcy Court to enter a judgment of specific performance requiring the plan investors to provide equity funding in an amount up to US$2.55 billion pursuant to the EPCA and to pay compensatory and punitive damages in an amount to be determined at trial. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed US$11,446,000,000 in total assets and US$23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. (Delphi Bankruptcy News, Issue No. 129; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) EL PASO: Share-Repurchase Program Won't Affect S&P's Ratings ------------------------------------------------------------ Standard & Poor's Rating Services said that its 'BB' corporate credit rating and positive outlook on energy company El Paso Corp. and affiliates would not immediately be affected after the company announced a US$300 million share-repurchase program and dividend increase. The stock repurchase will be funded through the cash flow that El Paso generates in excess of its original 2008 guidance due to elevated commodity prices. Because S&P do not expect the stock buyback to result in increased leverage, the rating and positive outlook remain unchanged. Headquartered in Houston, Texas, El Paso Corporation (NYSE: EP) -- http://www.elpaso.com/-- is an energy company that provides natural gas and related energy products. The company owns North America's interstate pipeline system, which has approximately 55,500 miles of pipe. It also owns approximately 470 billion cubic feet of storage capacity and a liquefied natural gas import facility with 806 million cubic feet of daily base load send out capacity. El Paso's exploration and production business is focused on the exploration for and the acquisition, development and production of natural gas, oil and natural gas liquids in the United States, Brazil and Egypt. It operates in three business segments: Pipelines, Exploration and Production and Marketing. It also has a Power segment, which holds its remaining interests in international power plants in Brazil, Asia and Central America. GENERAL MOTORS: To Resume Production as Axle & UAW Reach Pact ------------------------------------------------------------ General Motors Corp. is gearing up to continue production by car plants affected by the strike at American Axle & Manufacturing Holdings Inc. following a labor agreement reached by Axle and the United Auto Workers union, Terry Kosdrosky and John D. Stoll of The Wall Street Journal report citing an unnamed source. As reported in the Troubled Company Reporter-Latin America on May 12, 2008, the work stoppage at supplier Axle negatively impacted GM's liquidity by US$2.1 billion for the three months ended March 31, 2008. Approximately 30 of GM's plants in North America have been fully or partially idled by the work stoppage. GM, however, said the work stoppage has not negatively impacted the company's ability to meet customer demand due to the high levels of inventory at its dealers. GM North America's results were negatively impacted by US$800 million as a result of the loss of approximately 100,000 production units in the three months ended March 31, 2008. The automaker anticipates that this lost production will not be fully recovered after this work stoppage is resolved, due to the current economic environment in the United States and to the market shift away from the types of vehicles that have been most strongly affected by the action at American Axle. GM also had agreed to provide Axle with upfront financial support capped at US$200 million to help fund employee buyouts, early retirements and buydowns to facilitate a settlement of the work stoppage. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. At March 31, 2008, GM's balance sheet showed total assets of US$145,741,000,000 and total debts of US$186,784,000,000, resulting in a stockholders' deficit of US$41,043,000,000. Deficit, at Dec. 31, 2007, and March 31, 2007, was US$37,094,000,000 and US$4,558,000,000, respectively. * * * As reported in the Troubled Company Reporter-Latin America on May 7, 2008, Standard & Poor's Ratings Services said its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. remain on CreditWatch with negative implications, where they were placed March 17, 2008. The update follows the announcement by Residential Capital LLC (CC/Watch Neg/C) that it is launching an exchange offer for unsecured bonds, which S&P interpret to be a distressed debt exchange. (Residential Capital is a unit of 49%-owned unit GMAC LLC [B/Negative/C]. GERDAU SA: Unit Secures US$200MM Loan from Inter-American Dev't. ---------------------------------------------------------------- Business News Americas reports that Gerdau SA's unit Gerdau Acominas SA has secured a US$200 million loan from the Inter- American Development Bank to help buy slab casting equipment for its Ouro Branco steel mill in Minas Gerais. BNamericas notes that the loan has a nine-year term. It has a 24-year grace period and a disbursement period of 24 months. According to Intern-American Development, it is granting Gerdau Acominas some US$50 million. Gerdau Acominas will get US$150 million from financial institutions that enter into participation agreements with the bank. BNamericas states that the project will require total investment of US$370 million. Inter-American Development's Project Team Leader Rubens Noguchi commented to BNamericas, "This project is expected to modernize the Ouro Branco mill and improve competitiveness by increasing Gerdau Acominas' productivity and improving product quality." Headquartered in Porto Alegre, Brazil, Gerdau SA -- http://www.gerdau.com.br/-- produces and distributes crude steel and related long rolled products, drawn products, and long specialty products. In addition to Brazil, Gerdau operates in Argentina, Canada, Chile, Colombia, Uruguay, India and the United States. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 26, 2007, Moody's Investors Service affirmed Gerdau S.A.'s Ba1 corporate family rating and stable outlook. SHARPER IMAGE: Court Approves Selling of Business, Assets --------------------------------------------------------- Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware authorized Sharper Image Corp. to sell its business and assets. Judge Gross also permitted a joint venture among Hilco Merchant Resources, LLC, Hilco Consumer Capital, LLC, Gordon Brothers Retail Partners, LLC, and OB Brands, LLC, to serve as the stalking horse bidder. Auction of the assets will be on May 28, 2008. Judge Gross approved the asset purchase agreement entered on May 13, 2008, between the Debtor and the Joint Venture. The APA provides that the Debtor will pay the Joint Venture (i) a break- up fee not exceeding 2% of the assets' purchase price if it is not the successful purchaser, and (ii) not exceeding US$500,000 as reimbursement for out-of-pocket expenses incurred by the Joint Venture in connection with the asset sale. The Break-Up Fee and the Expense Claim will be deemed an administrative claim against the Debtor. A full-text copy of the Joint Venture APA is available for free at http://bankrupt.com/misc/SI_AssetPurchaseAgreement.pdf Offers other than from the Stalking Horse Bidder must be unconditional and not contingent on any event, including any due diligence investigation, the receipt of financing and further bidding approval. Offers must exceed the purchase price of the Stalking Horse Bidder, plus the Break-Up Fee and Expense Reimbursement, plus the minimum overbid still to be determined by the Debtor during the Auction. Offers will not be shared among offerors. All offers are irrevocable until June 5, 2008. If no offers other than from the Stalking Horse Bidder is received, the Court will convene a hearing on May 29, 2008, to consider the sale of the Debtor's assets to the Joint Venture. Roberta A. DeAngelis, acting United States Trustee for Region 3, will appoint a consumer privacy ombudsman no later than May 20, 2008. The Ombudsman will help protect the sale of the Debtor's personally identifiable information of its customers. The Ombudsman, the Debtor and the Statutory Creditors' Committee will confer and attempt to agree on a cap on fees and expenses of the Ombudsman. To the extend of any dispute as to the appropriate amount of the Cap, the issue will be presented to the Court for resolution on an expedited basis. In connection with the sale of the Debtor's assets, it submitted to the Court a list of the executory contracts and unexpired leases it intends to assume and the proposed cure costs, if any, it will pay in connection with the assumption and assignment of the leases and contracts. A schedule of the Contracts and Cure Amounts is available for free at: http://bankrupt.com/misc/SI_AmendedCureSchedule.pdf Inadequate Discovery Period and Incorrect Cure Amounts, Parties Assert Before the hearing on the approval of the asset sale procedures, several entities filed objections complaining that the asset sale procedures fail to (i) give them adequate time after the May 28 Auction to evaluate a successful bidder and, if necessary, conduct discovery and prepare an appropriate objection, before the May 29 Sale Hearing; and (ii) specify when adequate assurance packages are to be provided. The objecting entities include: * the U.S. Trustee for Region 3. * Irvine Company, * Chagrin Retail, LLC, * Ontario Two, LLC, * Returns Management, Inc., * Kravco Simon Company, * RCPI Landmark Properties, L.L.C., * The Taubman Landlords, * Bayer Retail Company II, LLC, * BP 111 Huntington Avenue, LLC, * Stopen, LLC, * Simon Property Group, Inc., * Westfield, LLC, * Inland Southwest Management, LLC * General Growth Properties, Inc., Developers Diversified Realty Corp. and Turnberry Associates, and * The Macerich Company, RREEF Management Company, Cousin Properties Incorporated, and The Forbes Company. The Taubman Landlords and The Irvine Company told the Court that the amounts stated by the Debtor in the schedule of cure amounts are incorrect. Taubman asserted that it is entitled to cure amounts totaling US$196,090, not US$6,297, as stated by the Debtor. Taubman also asserted that it is entitled to a US$15,000 reimbursement for its attorneys' fees. Irvine asserted that the Debtor owe it US$20,559 with respect to two leases. Objections to the proposed assumption and assignment of the Leases and Contracts and the Cure Amounts must be filed by May 21, 2008, and served on the Debtor, the attorneys for the Secured Lender and the Creditors Committee, and the U.S. Trustee. Objections will be heard on May 29, 2008. Hilco/GB Joint Venture's Statement A joint venture led by Hilco Consumer Capital, L.P. and GB Brands, LLC, in partnership with Windsong Brands, LLC and Crystal Capital, announced that it was approved as the stalking horse bidder for certain assets of The Sharper Image Corporation. HCC and GBB have developed a global licensing strategy for wholesale, retail, direct-to-retail (DTR), e-commerce and catalog businesses which will exploit The Sharper Image's heritage of quality, excitement, innovation and fun. During its 32-year history, The Sharper Image has developed one of America's most widely recognized and positively perceived consumer brands. HCC and GBB recognize The Sharper Image's blend of upscale specialty positioning, iconic stature, outstanding consumer recognition and appeal across a wide demographic. Jamie Salter, CEO of HCC, commented, "The Sharper Image's brand versatility encompasses a vast array of products which demonstrates the powerful and consistent brand attributes of quality, excitement, innovation and fun." He added, "Whether it is electronics, housewares, health and fitness or unique gifts in personal care or travel, The Sharper Image brand delivers on all of the brand's attributes." Stephen Miller of GBB continued, "GBB envisions this to be a terrific opportunity to transform a tier-one, iconic American brand into a global, multi-channel platform of diverse and unique consumer products using leading technologies and trend- setting innovations. This reflects the core transformational competencies of the joint venture partners and we look forward to working with new licensees to grow the brand worldwide and in multiple categories." The joint venture will partner with a number of global institutions in the ongoing development of The Sharper Image brand. About Hilco Consumer Capital Hilco Consumer Capital http://www.hilcocc.com/is a private equity firm that makes strategic investments in consumer lifestyle brands through acquisitions of North American manufacturers, wholesalers, intellectual property and retailers. HCC investments range from US$25 million to US$250 million. Current portfolio brands and companies include Caribbean Joe(R), Ellen Tracy, Halston(R), Tommy Armour Golf(R), RAM Golf(R), and Bombay Brands, LLC. HCC is a unit of The Hilco Organization, a Chicago-based, international provider of diversified financial and operational services, including business asset valuations, asset acquisition and disposition services, M&A services and retail consulting. About GB Brands, LLC GB Brands, LLC is a member of the Gordon Brothers Group family of companies. GB Brands LLC purchases, sells, and licenses brands and other intellectual property. Founded in 1903, Gordon Brothers Group http://www.GordonBrothers.com/is a global advisory, restructuring and investment firm specializing in retail and consumer products, industrial and real estate sectors. Gordon Brothers Group maximizes value for both healthy and distressed companies by purchasing or selling all categories of assets, appraising assets, providing debt financing, making private equity investments, and operating businesses for extended periods. Gordon Brothers Group conducts over US$40 billion in annual transactions and appraisals. Its private equity fund, 1903 Equity Fund, holds majority or minority positions in a portfolio of companies including Como Fred David, Clair de Lune, Deb Shops, Dollarama, Grafton-Fraser, Laura Secord, Things Remembered and Toys R Us. About Windsong Brands LLC Windsong Brands, LLC http://www.windsongbrands.com/is a private equity firm that focuses on investments in leading middle market consumer companies that own strong recognizable brands. The team has a diverse background of consumer expertise that assists and guides company management to unlock the true potential of their brand. Windsong Brands makes majority and minority investments in both public and private companies. Investments and portfolio brand companies include Ellen Tracy, Caribbean Joe, Joe's Jeans, Field & Stream, Como Sport, and Alerion Aviation. About Crystal Capital Established by a team of experienced financial professionals, Crystal Capital is an investment firm that provides capital for middle market companies across all industries. The founding principals each have over 25 years of experience and have provided in excess of US$15 billion in creative capital commitments for buyouts, recapitalizations, refinancings and growth opportunities. About Sharper Image Based in San Francisco, California, Sharper Image Corp. -- http://www.sharperimage.com/-- is a multi-channel specialty retailer. It operates in three principal selling channels: the Sharper Image specialty stores throughout the U.S., the Sharper Image catalog and the Internet. The company has operations in Australia, Brazil and Mexico. In addition, through its Brand Licensing Division, it is also licensing the Sharper Image brand to select third parties to allow them to sell Sharper Image branded products in other channels of distribution. The company filed for Chapter 11 protection on Feb. 19, 2008 (Bankr. D.D., Case No. 08-10322). Steven K. Kortanek, Esq. at Womble, Carlyle, Sandridge & Rice, P.L.L.C. represents the Debtor in its restructuring efforts. An Official Committee of UnsecuredCreditors has been appointed in the case. When the Debtor filed for bankruptcy, it listed total assets of US$251,500,000 and total debts of US$199,000,000. (Sharper Image Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SHARPER IMAGE: Can Pay Obligations Under US$3.6MM Severance Plan ---------------------------------------------------------------- Judge Kevin Gross of the U.S. District Court for the District of Delaware authorized Sharper Image Corp. to honor obligations under the amended severance program and take all actions necessary to implement and effectuate the Amended Severance Program. Prior to the hearing on the approval of the severance program, Roberta A. DeAngelis, acting United States Trustee for Region 3, told Judge Gross that, under a law in the U.S. Court of Appeals for the Third Circuit, any payments relating to the length-of- service award under the Debtor's Amended Severance Program are subject to proration into their prepetition and postpetition components, with only the postpetition component receiving administrative expense treatment. Since the Petition Date, approximately 187 of the Debtor's employees have been terminated and approximately 247 employees have resigned. However, approximately 1,966 of the Debtor's employees have remained with the company during the Chapter 11 process and contributed value by providing uninterrupted labor during this uncertain time. Importantly, these employees have remained, in part, in reliance on the belief that they would receive certain of their benefits, including severance, even if the Debtor determined that a reorganization of the business was not feasible. Unfortunately, since the Petition Date, the operations of the Debtor's ongoing stores have been below projections. Given the numerous operational difficulties, the current liquidity crisis, and the restrictive terms of its postpetition financing agreement with Wells Fargo Retail Finance, LLC, the Debtor has determined that the only way to preserve and maximize the value of its estate is to sell its assets. Steven K. Kortanek, Esq., at Womble Carlyle Sandridge & Rice, PLLC, in Wilmington, Delaware, states that the success of the sale process depends on the commitment and stability provided by the Debtor's employees. Accordingly, the Debtor asked the Court to authorize it to amend its existing severance policy as to non-management employees, and pay approximately US$3,600,000 as severance for those of its employees terminated on or before May 1, 2008, in full and final satisfaction of their claims for the benefits against the Debtor. Severance Program To effectively manage employee separations, prior to the Petition Date, the Debtor established a severance program to (i) minimize the disruption of workflow, (ii) protect its assets, and (iii) provide support for any employees who are displaced due to business circumstances. Mr. Kortanek notes that the Debtor has determined, in consultation with its professionals and the Statutory Creditors' Committee, that approval of the Prepetition Severance Program with certain modifications is necessary to recognize employees' substantial contributions and to ensure a successful sale of its remaining assets. The Amended Severance Program allows the Debtor to manage employee separations and achieve the Severance Goals while providing it with greater flexibility regarding when and to whom to provide severance benefits. Moreover, it seeks to treat fairly those employees who, although terminated postpetition, provided the Debtor with substantial benefits during the store closing sales process and throughout the Chapter 11 case. The Amended Severance Program will continue to provide severance benefits to selected eligible employees if their employment is permanently terminated as a result of a reduction in the Debtor's workforce or an elimination of the employees' present job position. To be eligible for severance under the Amended Severance Program, the employee must be classified as a regular, full time or part-time employee. Moreover, the employee must be in good standing with the Debtor and termination cannot be for cause, retirement, or resignation, prior to the offering of separation benefits. Pursuant to the terms of the Amended Severance Program, if an employee meets the eligibility requirements, the employee is entitled to severance payments at the sole discretion of the Debtor: (a) two weeks severance for employees employed between zero months and a year; and (b) two weeks severance plus an additional one week of service pay for each completed year of service subject to a maximum Severance Period of eight weeks, for employees employed for more than one year. Should any employee be retained by a purchaser of the Debtor's assets pursuant to a sale, the employee will not be entitled to any severance pay under the Amended Severance Program. About Sharper Image Based in San Francisco, California, Sharper Image Corp. -- http://www.sharperimage.com/-- is a multi-channel specialty retailer. It operates in three principal selling channels: the Sharper Image specialty stores throughout the U.S., the Sharper Image catalog and the Internet. The company has operations in Australia, Braz