TCR_Public/060109.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Monday, January 9, 2006, Vol. 10, No. 7

                             Headlines

21ST CENTURY: Completes Review and Restates Financial Statements
A.B. DICK: Benesch Friedlander Approved as Litigation Counsel
ACCENTIA: Posts $39 Million Net Loss in Fiscal Year 2005
ALGOMA STEEL: Steelworkers Want Injunction Against Paulson Plan
ALLIED HOLDINGS: Torbits Apply $75K Supersedeas Bond to Judgment

ALLIS-CHALMERS: S&P Rates Proposed $150 Million Senior Notes at B-
ALLIS-CHALMERS: Moodys' Rates Pending $150 Million Sr. Notes at B3
ANALYTICAL SURVEYS: Posts $3.3MM Net Loss for Year Ended Sept. 30
ARLINGTON HOSPITALITY: Has Until Jan. 28 to File Chapter 11 Plan
ASARCO LLC: Court Okays ARCADIS as Encycle's Environmental Advisor

ASARCO LLC: Court Okays Assumption of Gault Group Services Pact
ASARCO LLC: Court Okays Assumption of OccuNet Agreement
AULT INC: Shareholders Will Get $2.90 Per Share in SL Ind. Merger
BANKATLANTIC: Officers' Equity Trading Blackout Starts on Jan. 21
BOYD GAMING: Moody's Affirms B1 Senior Subordinated Debt Rating

CALPINE CORP: U.S. Trustee Appoints One Seven-Member Committee
CALPINE CORP: Seven Creditors Balk at Motion to Reject 8 Contracts
CALPINE HIDALGO: Voluntary Chapter 11 Case Summary
CATHOLIC CHURCH: Classes & Treatment of Claims in Spokane's Plan
CENTENNIAL COMMS: Nov. 30 Balance Sheet Upside-Down by $491 Mil.

CHAMPION ENTERPRISES: S&P Lifts Rating on 7.625% Senior Notes
CHURCH & DWIGHT: 7.5M Common Shares Registered for Distribution
COLLINS & AIKMAN: Creditors Must File Claims by January 11
COLONIAL BANCGROUP: Restates FY 2002-2005 Financial Statements
CORNERSTONE PRODUCTS: Court Denies Case Conversion or Dismissal

CSK AUTO: Moody's Rates New $225 Million Convertible Notes at Ba3
DESIGNS BY SOPHIA: Voluntary Chapter 11 Case Summary
FINOVA GROUP: Paying Sr. Sec. Noteholders $29.68 Mil. on Feb. 15
FORD MOTOR: Market Share Erosion Prompts S&P to Lower Ratings
FORD MOTOR: S&P Cuts Ratings on Nine Synthetic ABS Transactions

FREEDOM RINGS: Governmental Unit Bar Date Set for April 14
GENERAL MARITIME: Debt Payment Prompts Moody's to Withdraw Ratings
GMAC MORTGAGE: Fitch Holds Low-B Ratings on Two Equity Classes
GOODING'S SUPERMARKETS: Section 341(a) Meeting Slated for Jan. 30
GOODING'S SUPERMARKETS: Taps Gronek & Latham as Bankruptcy Counsel

HIRSH INDUSTRIES: Wants Until April 3 to Remove Civil Actions
INSIGNIA SOLUTIONS: Earns $1.975 Million from Private Placement
INTERSTATE BAKERIES: Court Approves $16-Mil Bryant Sale to Amerco
INTERSTATE BAKERIES: Court OKs NEG Waste Service Pact Termination
INTRAWEST CORP: Solid Business Position Cues S&P to Hold Ratings

JEROME-DUNCAN: Suburban Ford Submits $14.8 Mil. Bid for Dealership
JO-ANN STORES: Reports Decrease in December Same-Store Sales
JO-ANN STORES: Low December Sales Prompt S&P to Cut Ratings to B+
KAISER ALUMINUM: Court Disallows 119 Workers' Pension Claims
KAISER ALUMINUM: Gramercy & SABL Want $5-Mil. Admin. Expense Paid

KRISPY KREME: Reinstates Southern California Franchisee's Licenses
LAIDLAW INTERNATIONAL: Reports Results for First Quarter 2006
LONG BEACH: Moody's Lowers Class BV Certificates' Ratings to Caa3
LORETTO-UTICA: Creditors Must File Proofs of Claim by July 22
LORETTO-UTICA: U.S. Trustee Will Meet Creditors on Jan. 19

MCI INC: Restates Financial Statements for Three Quarters of 2005
MCLEODUSA INC: Chapter 11 Cues Moody's to Lower All Ratings to C
MERISTAR HOSPITALITY: Earnings Growth Cues S&P's Positive Outlook
METROPOLITAN MORTGAGE: Hires Allen Matkins as Special Counsel
MIAD SYSTEMS: Posts CND28,492 of Net Income in Fiscal Year 2005

MIRANT CORP: Registers 1.5 Billion Shares for Plan Distributions
MONTECITO BROADCAST: Moody's Rates Planned $48MM Facilities at B3
NAVIGATOR GAS: Hires Baer & Karrer as Replacement Swiss Counsel
NRG ENERGY: Provides Business Updates on Texas Genco Acquisition
NRG ENERGY: Gets Needed Noteholders' Consent to Scrap Restriction

NRG ENERGY: S&P Junks Ratings on $500 Million Conv. Securities
O'SULLIVAN IND: U.S. Trustee Balks at Lazard's Retention
PIXIUS COMMUNICATIONS: Files Amended Plan & Disclosure Statement
PONDEROSA PINE: Bankruptcy Court Confirms Joint Chapter 11 Plans
RESIDENTIAL ASSET: Moody's Lowers Class M-I-3 Certs.' Rating to Ca

REFCO INC: Court Approves Changes to RSL's 4th Amended Stipulation
REFCO INC: Court Okays Stipulation for Asset Sale-Related Claims
REFCO INC: Wants Court OK to Sell Refco Group's Interest in PCIG
RHODES INC: Heilig-Meyers Asks Court to Allow $68 Million Claim
RHODES INC: Heilig-Meyers to Conduct Rule 2004 Probe

RHODES INC: Wants to Terminate Employee Pension Program
SAINT VINCENTS: Can Access Creditors' Collateral Until March 31
SAINT VINCENTS: HFG Sets Terms for Release from DIP Financing Deal
SATCON TECHNOLOGY: Grant Thornton Raises Going Concern Doubt
SEARS HOLDINGS: Releases Nov. and Dec. 2005 Comparable Store Sales

SECOND CHANCE: Ask Court to Approve SCAI Settlement Agreement
SFBC INT'L: Moody's Places B2 Ratings on Review & May Downgrade
SITHE INDEPENDENCE: Fitch Downgrades Secured Bonds Rating to BB-
SKYWAY COMMUNICATIONS: Wants Exclusive Period Extended to Feb. 12
SUPERIOR PACKAGING: Voluntary Chapter 11 Case Summary

TECO ENERGY: Fitch Holds Senior Unsecured Ratings at BB+
TELECONNECT INC: Auditing Firm Raises Going Concern Doubt
TRUSTREET PROPERTIES: Raises $100 Million in Term Debt Financing
WHITEHALL JEWELLERS: Asks Shareholders to Wait for Board Decision
WINN-DIXIE: Equity Panel Can Hire Jefferies & Co. as Fin'l Advisor

WINN-DIXIE: Penman Asks $220,851 Cure Amount & Ample Insurance

* BOND PRICING: For the week of Jan. 3 - Jan. 6, 2006

                             *********

21ST CENTURY: Completes Review and Restates Financial Statements
----------------------------------------------------------------
21st Century Technologies Inc. (OTC:TFCY.OB) reported that its
current management has completed a review of prior financial
statements filed under previous management regimes.  In that
review, the company has discovered items which require
restatement.  The Company will restate the financial statements
for:

    * the fiscal year ended Dec. 31, 2003,
    * the three months ended March 31, 2004,
    * the six months ended June 30, 2004, and
    * the nine months ended Sept. 30, 2004.

The company did not give a timetable as to when the restatements
would be completed.

Current management deems the restatement is necessary as a result
of inaccuracies that have been identified in the prior
management's valuations assigned to certain assets of the Company
and, to a lesser extent, revenue recognition in previously filed
financial statements.

               Auditor Withdraws Opinion

The company also announced that on Dec. 28, 2005, its former
independent auditors, Turner, Stone & Co., L.L.P., withdrew their
audit opinion covering the company's financial statements for the
year ended Dec. 31, 2003.  Therefore these financial statements,
as previously filed, can no longer be relied upon.

The company also stated that, as a result of the restatements, the
audit of its fiscal year ended Dec. 31, 2004, financial statements
is not yet complete and did not give a timetable as to when the
audit will be completed.

21st Century Technologies is a business development company
operated pursuant to the Investment Company Act of 1940.  It holds
various enterprises as investments and seeks to grow companies in
which it has an interest.  The Company's current investment
portfolio consists of prizeWise Inc., Innovative Weaponry Inc.,
Trident Technologies Corp., DLC General Contracting Inc. and Mo-DV
Inc.  The company's investment ownership in these enterprises
ranges from approximately 22% to 100%.

Headquartered in Las Vegas, Nevada, 21st Century Technologies,
Inc. -- http://www.tfctcorp.com/-- provides long-term debt and   
equity investment capital to support the expansion of companies
in a variety of industries.  The Company filed for chapter 11
protection on Nov. 1, 2005 (Bankr. D. Nev. Case No. 05-28185).
William M. Noall, Esq., at Gordon & Silver, Ltd., represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed total assets of
$13,489,476 and total debts of $2,005,224.


A.B. DICK: Benesch Friedlander Approved as Litigation Counsel
-------------------------------------------------------------          
The U.S. Bankruptcy Court for the District of Delaware gave A.B.
Dick Company, nka Blake of Chicago Corp., and its debtor-
affiliates permission to employ Benesch, Friedlander, Coplan &
Aronoff LLP as their special litigation counsel.

The Court also approved Benesch Friedlander's request to withdraw
as the Debtors' section 327(a) counsel in view of the Court's
approval of Dechert LLP as the Debtors' new general bankruptcy
counsel.

Benesch Friedlander will:

   1) represent the Debtors in two cases with the MHR Entities
      pending before the District Court for the District of
      Delaware and the U.S. Court of Appeals for the Third
      Circuit;

   2) represent the Debtors in two adversary cases with Presstek
      Inc. and ABD International, Inc. pending before the District
      of Delaware Bankruptcy Court;

   3) represent the Debtors in two adversary cases with Marconi
      Communications, Inc. pending before the District of Delaware
      Bankruptcy Court;

   4) prosecute avoidance actions under Section 547 of the
      Bankruptcy Code, including issuance of demand letters
      seeking repayment of claims, commence adversary
      proceedings in connection with the prosecution of those
      claims and prosecute approval of any settlements in
      connection with preference claims; and

   5) prosecute other specified contested matters and adversary
      proceedings that may arise in connection with the Debtors'
      chapter 11 cases.

Mark A. Phillips, Esq., a partner of Benesch Friedlander, is one
of the lead professionals from the firm performing services to the
Debtors.  Mr. Phillips charges $355 per hour for his services.  

Mr. Phillips reports Benesch Friedlander's professionals bill:

      Professional           Designation    Hourly Rate
      ------------           -----------    -----------
      Michael D. Zaverton    Counsel           $310
      David M. Nuemann       Associate         $235
      Stuart A. Laven        Associate         $215
      J. Allen Jones, III    Associate         $195

Benesch Friedlander assures the Court that it does not represent
any interest materially adverse to the Debtors and is a
disinterested person as that term is defined in Section 101(14) of
the Bankruptcy Code.

Headquartered in Niles, Illinois, A.B. Dick Company --
http://www.abdick.com/-- is a global supplier to the graphic arts  
and printing industry, manufacturing and marketing equipment and
supplies for the global quick print and small commercial printing
markets.  The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. D. Del. Lead Case No. 04-12002) on
July 13, 2004.  Frederick B. Rosner, Esq., at Jaspan Schlesinger
Hoffman, LLP, and H. Jeffrey Schwartz, Esq., at Benesch,
Friedlander, Coplan & Aronoff, LLP, represent the Debtors in their
restructuring efforts.  Richard J. Mason, Esq., at McGuireWoods,
LLP, represents the Official Committee of Unsecured Creditors.
When the Debtor filed for protection from its creditors, it listed
over $50 million in estimated assets and over $100 million in
estimated liabilities.  A.B. Dick Company changed its name to
Blake of Chicago, Corp., on Dec. 8, 2004, as required by the terms
of the APA with Presstek.  The Debtors delivered their Liquidating
Plan of Reorganization and an accompanying Disclosure Statement
explaining that Plan to the U.S. Bankruptcy Court for the District
of Delaware on Feb. 10, 2005.


ACCENTIA: Posts $39 Million Net Loss in Fiscal Year 2005
--------------------------------------------------------
Aidman, Piser & Company, PA, expressed substantial doubt about
Accentia Biopharmaceuticals, Inc.'s ability to continue as a going
concern after it audited the Company's financial statements for
the years ended Sept. 30, 2005 and 2004.  The auditing firm
pointed to the Company's $79.3 million cumulative net losses for
the three years ended Sept. 30, 2005, and a $29.6 million working
capital deficiency at the end of fiscal year 2005.

                  Fiscal 2005 Results

Accentia reported a $39.4 million consolidated net loss for the
year ended Sept. 30, 2005 -- a 70% increase over the $23.2 million
net loss incurred for the year ended Sept. 30, 2004.  

On a fully consolidated basis, the Company reported $25.2 million
in net sales for the year ended Sept. 30, 2005, as compared to
$25.9 million in net sales in the prior year.  The 2.7% decrease
in net sales is partly attributed to a $400,000 increase in the
Company's reserve for chargebacks, rebates and returns on cough,
cold, and allergy products, due to an increase in generic
competition for several of these products.

Accentia's balance sheet showed $35.5 million in total assets at
Sept. 30, 2005, and liabilities of $55.6 million, resulting in a
stockholders' deficit of approximately $20 million.  The Company's
net working capital deficit at Sep. 30, 2005, decreased by $1.8
million to $29.6 million as compared to the prior year, due to
fiscal 2005 losses which were funded through debt and equity
proceeds and refinancing of certain short-term debt to long-term.

                Initial Public Offering

Subsequent to the end of fiscal year 2005, Accentia completed its
Initial Public Offering yielding gross and net proceeds of $19.2
million and $14.3 million, respectively.  Subsequent to the IPO
and the end of 2005, the Company established a new debt facility
and amended an existing credit facility having a combined
additional borrowing availability of approximately $5.5 million.

                   About Accentia

Headquartered in Tampa, Florida, Accentia Biopharmaceuticals, Inc.
-- http://www.accentia.net-- is a biopharmaceutical company  
focused on the development and commercialization of late-stage
clinical products in the therapeutic areas of respiratory disease
and oncology.  Accentia has two operating segments consisting of
TEAMM Pharmaceuticals in the specialty pharmaceuticals business
and Analytica International for product development and market
services.  The Company also has an 81% interest in Biovest
International, Inc., which is consolidated for reporting purposes
with Accentia's product development and market services business.


ALGOMA STEEL: Steelworkers Want Injunction Against Paulson Plan
---------------------------------------------------------------
The United Steelworkers applied for a court injunction to block a
scheme by hedge fund manager Paulson & Co. that would threaten
Algoma Steel's economic viability.

The Steelworkers' injunction application was filed in Ontario
Superior Court in Sault Ste. Marie on Jan. 4, 2006.  The judge
designated to hear the case has scheduled a conference call for
Jan. 12, 2006, with the parties' lawyers, at which time the
hearing date will likely be set.  It is expected that the
application will be heard shortly.

Paulson and the investors it represents proposed last fall to
distribute $420 million to themselves and other shareholders.
Earlier in 2005, Algoma's Board of Directors approved a special
dividend and share repurchase plan that distributes more than $300
million to shareholders.  The Board rejected Paulson's proposals
for an additional distribution believing it would weaken the
company and put its future in jeopardy.

Algoma's stockholders have achieved a return of 673% in the
nearly four years since Algoma emerged from CCAA (Companies'
Creditors Arrangement Act), as compared to a return of 46% for the
S&P/TSX Composite Index and 71% for North American steel
competitors (AK Steel, Dofasco, Nucor, and U.S. Steel).  The
Steelworkers believe that Algoma has already produced
extraordinary returns and taking more cash out of the company now
would leave creditors, retirees and employees in an unfairly
vulnerable position.

Paulson's scheme ignores the Board's concern for Algoma's future
and, if it is not blocked by the Court, would force Algoma to call
a special shareholders meeting and replace the majority of the
Algoma Board with hand-picked directors who will do its bidding.
Once elected, those directors would distribute Algoma's cash
through a combination of special dividends and a share buy-back
program.  The special meeting requisitioned by Paulson is
scheduled for Mar. 22, 2006.

In its application filed on behalf of employees and pensioners,
the Steelworkers argue that the Paulson scheme threatens Algoma's
economic viability, that it frustrates the "reasonable
expectations" of employees, pensioners and other stakeholders
formed during the 2001-2 restructuring and that this oppressive
scheme meets the legal test for injunctive relief under Ontario
law.  The "Oppression Remedy", found in the Business Corporations
Act, empowers Courts to protect minority shareholders, creditors
and other stakeholders where a company is, or might be, managed in
a way that unfairly disregards their interests.  It is designed to
prevent the unfairness than can result from shareholders'
untrammeled rule.

According to an affidavit from Steelworker Staff Representative
Doug Olthuis, the Union's chief negotiator during Algoma's 2001-2
financial crisis, there were substantial concessions and
contributions by employees, pensioners and survivors, suppliers,
the City of Sault Ste. Marie, the Government of Ontario and the
Government of Canada.  These concessions and contributions were
only made on the basis that they would enable the company to
survive and to meet its future obligations.  The concessions also
included the expectation that Algoma itself shared those goals and
would manage its business prudently in order to achieve them.

The union argues that Paulson should be prevented from
implementing its scheme because to do so would reduce materially
the likelihood that Algoma will be able meet its future
obligations, therefore frustrating the legitimate expectations of
employees, pensioners and other stakeholders.

The union is supporting the original decision of the Algoma Board
and seeking a court order preventing Algoma from convening a
special shareholders' meeting.  The meeting is Paulson's effort to
do an end-run around the board's decision.

At stake is the remainder of the cash reserve accumulated by
Algoma Steel during the recent North American steel price boom
following its emergence from CCAA protection in January 2002.  As
of late October 2005, an estimated $276 million of that
accumulated cash reserve had already been paid out in the form of
special dividends and share buy-backs.

In its application and supporting affidavits, the United
Steelworkers argues that Algoma requires substantial cash reserves
to cover the cost of a major blast furnace reline which is already
overdue, to meet its pension and benefit obligations to current
and former employees, to pay down existing debts, and to enable it
to weather the inevitable downturn in the steel industry.

According to an affidavit from investment banker Leon Potok filed
in support of the Steelworker application, if Algoma enters the
next downturn without substantial cash reserves and borrowing
capacity the company runs a significant risk of its third brush
with insolvency in fifteen years.  Mr. Potok says that another
substantial cash distribution is not in the interests of the
company or in the interests of long term Algoma shareholders and
other stakeholders.

Mr. Potok's view is confirmed by a report issued December 8, 2005
by the Dominion Bond Rating Service (DBRS) which goes as far as to
say that the Paulson proposal would "significantly weaken"
Algoma's financial structure and would result in "a significant
reduction in liquidity and increase in net leverage...which would
increase the risk profile of the company."  The higher risk
profile would mean that stakeholders would face "a reasonably high
level of uncertainty as to (Algoma's) ability to pay (its
obligations) on a continuing basis in the future."

"Algoma employees and pensioners, the company's suppliers, the
City of Sault Ste. Marie and the Government of Ontario contributed
hundreds of millions of dollars to the effort to making this
company viable," said Steelworkers' Ontario/Atlantic Director
Wayne Fraser.  "The Paulson scheme treats those sacrifices with
contempt.  That's why it has to be stopped in its tracks, now."

"The fact that Paulson was not a shareholder at the time of the
restructuring - as a short-term speculative investor, the Paulson
group has owned its shares for less than two years - may explain
its lack of understanding of steel industry fundamentals and its
evident lack of respect for the sacrifices made by others to save
the company in 2001 and 2002," Mr. Fraser said.  "But it does not
give Paulson the right to ignore Algoma Steel's obligations to
employees, pensioners and survivors and local, provincial and
national governments."


ALLIED HOLDINGS: Torbits Apply $75K Supersedeas Bond to Judgment
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
allowed Ronald and Susan Torbit to apply $750,000 from the
supersedeas bond provided by Travelers Casualty and Surety Company
of America in full satisfaction of their judgment.

In addition, the Court directs the Surety to turn over the
remaining proceeds from the Bond to the Debtors after the Torbits
obtain payment.

As reported in the Troubled Company Reporter on Sept. 19, 2005,
Ronald and Susan Torbit filed a civil action against Debtor GACS
Incorporated in the City of St. Louis Circuit Court.  GACS is a
subsidiary of Allied Automotive Group, Inc., which in turn is a
subsidiary of Allied Holdings, Inc.

The Torbits asserted product liability claims and sought damages
relating to personal injuries suffered by Mr. Torbit.  The Torbit
Case was removed to the United States District Court for the
Eastern District of Missouri.

On November 19, 2002, a judgment based on a jury verdict awarded
$693,000 to Mr. Torbit and $27,000 to Ms. Torbit.  GACS appealed
the Judgment to the U.S. Court of Appeals for the Eighth Circuit.  
Pending the appeal and as a condition of the stay of the
Judgment, an $850,000 supersedeas bond was provided by Traveler's
Casualty Insurance Company, as surety, with GACS, as the
principal.

On July 28, 2005, the Court of Appeals denied GACS' appeal and
affirmed the Judgment.  Rufus T. Dorsey, IV, Esq., at Parker,
Hudson, Rainer & Dobbs, LLP, in Atlanta, Georgia, explains that
the affirmation of the Judgment substantially completes the
appellate process with the exception of a petition for panel
rehearing, a petition for rehearing en banc or a petition for
certiorari to the United States Supreme Court, to the extent GACS
believes that any valid grounds exist for that action and elects
to do so.

The Torbits subsequently asked Judge Drake to:

   (a) allow the appellate process to be completed;

   (b) declare the automatic stay inapplicable to either the
       supersedeas bond or any of their action to execute and
       apply the amounts to the Judgment; and

   (c) in the alternative, permit them to take action with regard
       to the supersedeas bond.

Headquartered in Decatur, Georgia, Allied Holdings, Inc. --
http://www.alliedholdings.com/-- and its affiliates provide    
short-haul services for original equipment manufacturers and
provide logistical services.  The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.
Case Nos. 05-12515 through 05-12537).  Jeffrey W. Kelley, Esq., at
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they estimated more than $100 million in assets
and debts.  (Allied Holdings Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ALLIS-CHALMERS: S&P Rates Proposed $150 Million Senior Notes at B-
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to oilfield services company Allis-Chalmers Energy
Inc. and its 'B-' rating to Allis' proposed $150 million senior
unsecured notes due 2014.

The outlook is stable.  Pro forma for the note issuance, Houston,
Texas-based Allis will have approximately $156 million in funded
debt.

The ratings on Allis reflect:

    * the company's limited track record and small size,
    * integration risk related to recent and pending acquisitions,
    * high debt leverage, and
    * the oilfield service industry's highly cyclical nature.

These risks are only partially mitigated by the favorable near-
term outlook for oilfield services and the business' low capital
requirements.

"High commodity prices have led to increased drilling activity,
which in turn has led to higher pricing and utilization for Allis'
products and services," said Standard & Poor's credit analyst
David Lundberg.

"At the same time, the company faces several challenges, including
integrating a large acquisition and operating under a heavy debt
burden," said Mr. Lundberg.


ALLIS-CHALMERS: Moodys' Rates Pending $150 Million Sr. Notes at B3
------------------------------------------------------------------
Moody's assigned:

   * a B3 rating to Allis-Chalmers Energy Inc.'s (ALY) pending
     $150 million of 8-year senior unsecured notes due 2014;

   * a B3 corporate family rating; and

   * a SGL-2 speculative grade liquidity rating.  

The SGL-2 liquidity rating indicates:

   * sound expected liquidity over the next four quarters from a
     combination of up-cycle cash flow;

   * available bank borrowing capacity; and

   * adequate covenant coverage.

The liquidity rating is, however, subject to ALY's ability to
generate roughly the 2006 cash flow it expects from 2005
acquisitions and from a major pending acquisition.

The rating outlook is stable but may be reduced if ALY:

  1) falls materially short of its forecasts after the Specialty
     acquisition (more than 50% of EBITDA); or

  2) conducts leveraged acquisitions before the latter of:

     * 2007, or

     * the time by which it displays results in the range of
       forecasts and boosts fixed asset coverage of debt well
       beyond pro-forma levels that benefit from large asset mark-
       ups from a series of acquisitions.

Note proceeds would fund ALY's pending $96 million acquisition of
Specialty Rental Tools, Inc. and repay $50 million of debt.
Specialty is headquartered in Lafayette, Louisiana and rents:

   * drill pipe,

   * drill collars,

   * tubing,

   * pressure control equipment (blowout preventers, choke
     manifolds, valves), and

   * other equipment

to oil and gas producers in support of their drilling activity
and, to a degree, workovers of producing wells.

ALY is a small oilfield services company growing by acquisitions
and, to a lesser degree, by organic growth.  During the drilling
of oil or gas wells, it provides casing and tubing services and
materiel, a wide array of directional drilling services,
compressed air drilling services, and rental tools.  ALY also
operates a small but growing business serving the less cyclical
production phase of oil or gas wells.

The ratings are restrained by:

   * ALY's small scale overall and relatively small scale in each
     of its markets;

   * the recent vintage of most of its business structure;

   * valuation and performance risk inherent to a proportionately
     high level of acquisitions priced during up-cycle conditions;

   * a need for visible performance commensurate with forecasts to
     confirm ALY's assumptions;

   * a low historic book fixed asset component relative to debt;
     and

   * ALY's need to demonstrate that, through post-acquisition
     performance, it will continue to have ample equity market
     access to fund its desired pace of acquisitions.

The ratings are also restrained by:

   * cash flow exposure to oil and gas producer's cyclical
     oilfield spending budgets;

   * exposure of the large majority of cash flow to even more
     cyclical exploration and development drilling activity; and

   * a limited history of acquisition due diligence and
     assimilation, or operations, on the proposed scale.

The ratings are supported by seasoned management with a relatively
successful prior record of building small firms in the highly
cyclical oilfield services sector and maintaining strong
relationships with an array of customers including a number of
leading U.S. oil and gas producers.  The ratings are supported by:

   * expected increased 2006 capital spending by oil and gas
     producers;

   * ALY's involvement in several segments and functions of the
     oilfield services business that are growing faster than the
     overall sector trend;

   * acceptable net leverage relative to expected 2006 cash flows,
     though forecasts need to be validated by post-acquisition
     performance and are exposed to cyclical forces; and

   * by what Moody's believes will be adequately conservative
     financial policy if ALY follows its statements that future
     acquisitions will be equity funded.

The ratings are also supported by the fact that ALY is acquiring
established businesses, though they are often small private firms
from which we wish to see a more visible period of performance.
Specialty has been in business for 25 years throughout highly
cyclical conditions.  The Specialty acquisition will also provide
access to 25 acres of land in Broussard, Louisiana to which ALY
believes it can centralize some of its existing activities for
cost efficiencies and from which it believes it will be able to
project more of its existing business offerings to the offshore
Gulf of Mexico market.

Specialty's fixed assets will be marked up by $70 million upon
allocation of the up-cycle acquisition price across depreciated
assets, adding uncertainty to the degree of fixed asset value
coverage of debt in down-cycle or distressed scenarios.  All
assets are also pledged to banks providing a $25 million secured
bank revolver.  Currently, low expected revolver debt does not
require notching the notes below the corporate family rating.
Indenture carve outs currently permit roughly $25 million of
secured debt.

The pro-forma capital structure would consist of:

   * approximately $5.5 million of existing private debt;
   * the $150 million note offering; and
   * approximately $57 million of net worth.  

The main components of the pro-forma asset structure would include
approximately:

   * $4.7 million of cash;

   * $32 million in receivables;

   * $5.6 million of inventory;

   * $162 million of fixed assets (the most recent mark-up of
     which will be $70.6 million for Specialty's fixed assets);

   * $19 million of goodwill and other intangibles; and

   * $5.8 million of capitalized debt issuance costs.

Direct liquidity would consist of the $4.7 million in cash and an
undrawn $25 million four year bank revolver.  Regarding free cash
flow, Moody's estimates that for the twelve months ended
Sept. 30, 2005:

   1) pro-forma EBITDA would have been in the $35million range
      (relying largely on the accuracy of ALY's Specialty
      forecast);

   2) pro-forma interest expense in the $14 million to $15 million
      range; and

   3) pro-forma capital spending in the $10 million to $12 million
      range.

Prior to a series of small 2005 acquisitions and Specialty, ALY
generated $7.8 million of 2004 EBITDA.  It generated approximately
$12 million of EBITDA during the nine months ended September 30,
2005, without full contributions from its 2005 acquisitions or the
pending Specialty acquisition.

It is favorable that ALY is accumulating an increasingly
diversified set of oilfield services businesses and is attempting
to reduce, through acquisitions, the large proportion of its cash
flows dependent on highly cyclical drilling activity.  Moody's
notes that natural gas drilling activity is at record levels and
believes the active rig count will continue to be sensitive to
decline in natural gas and oil prices.

Up-cycle sector conditions provide a window of time for ALY to
demonstrate the worth of its acquisition activity and to use up-
cycle cash flows to bolster debt protection measures and its
ratings.  To strengthen its ratings in 2006, Moody's anticipates
ALY will need to:

   * retain all earnings;

   * internally reinvest cash flows or use cash flow for net debt
     reduction; and

   * fund acquisitions with ample common equity.

ALY has minimal performance history with its recent acquisitions
and no history with its pending Specialty acquisition, which
represents over 50% of pro-forma EBITDA and is by far ALY's
largest acquisition to date.  It will be positive if ALY
demonstrates that the acquired companies will perform as well or
better under its management in developing and retaining core
relationships with leading oil and gas producers.

Allis-Chalmers Energy Inc. is headquartered in Houston, Texas.


ANALYTICAL SURVEYS: Posts $3.3MM Net Loss for Year Ended Sept. 30
-----------------------------------------------------------------
Analytical Surveys Inc. delivered its annual report on Form 10-K
for the year ended September 30, 2005, to the Securities and
Exchange Commission on December 28, 2005.

For the year ending September 31, 2005, the Company reported a
$3,340,000 net loss on $6,063,000 of revenues, compared to a
$1,247,000 net loss on $11,608,000 for the same period of 2004.

                    Going Concern Doubt

Pannell Kerr Forster Of Texas, P.C., expressed substantial doubt
about Analytical Surveys' ability to continue as a going concern
after it audited the company's financial statements for the year
ended Sept. 30, 2005.  The Company has suffered significant
operating losses in 2005 and prior years and does not currently
have external financing in place to fund working capital
requirements.

As of September 30, 2005, the company had an accumulated deficit
of $33,683,000.

Headquartered in San Antonio, Texas, Analytical Surveys Inc. --
http://www.anlt.com/-- provides technology-enabled solutions and  
expert services for geospatial data management, including data
capture and conversion, planning, implementation, distribution
strategies and maintenance services.  Through its affiliates, ASI
has played a leading role in the geospatial industry for more than
40 years.  The Company is dedicated to providing utilities and
government with responsive, proactive solutions that maximize the
value of information and technology assets.  ASI is and maintains
operations in Waukesha, Wisconsin.


ARLINGTON HOSPITALITY: Has Until Jan. 28 to File Chapter 11 Plan
----------------------------------------------------------------          
The U.S. Bankruptcy Court for the Northern District of Illinois
extended, until Jan. 28, 2006, the time within which Arlington
Hospitality, Inc. and its debtor-affiliates have the exclusive
right to file a chapter 11 plan.  The Debtors also have until
March 29, 2006, to solicit acceptances of that plan from their
creditors.

The Debtors gave the Court three reasons supporting the extension:

   1) their chapter 11 cases are large and complex and they
      need to be free from undue creditor pressure that a
      competing plan will cause during the time period in which
      they are negotiating the terms of a proposed plan with the
      different creditor constituencies;

   2) it will give them more opportunity for more meaningful
      discussions with case constituents after the lapse of the
      Dec. 15, 2005, Claims Bar Date, facilitate communication
      among the parties-in-interest and streamline the plan
      negotiation process; and

   3) the extension will not prejudice their creditors and other
      parties-in-interest and the Unsecured Creditors Committee
      support the extension.

Headquartered in Arlington Heights, Illinois, Arlington
Hospitality, Inc., and its affiliates develop and construct
limited service hotels and own, operate, manage and sell those
hotels.  The Debtors operate 15 AmeriHost Inn Hotels under leases
from PMC Commercial Trust.  Arlington Hospitality, Inc., serves as
a guarantor under these leases.  Arlington Inns Inc., an
affiliate, filed for bankruptcy protection on June 22, 2005
(Bankr. N.D. Ill. Case No. 05-24749), the Honorable A. Benjamin
Goldgar presiding.  Arlington Hospitality and additional debtor-
affiliates filed for chapter 11 protection on Aug. 31, 2005
(Bankr. N.D. Ill. Lead Case No. 05-34885).  Catherine L. Steege,
Esq., at Jenner & Block LLP, provides the Debtors with legal
advice and Chanin Capital LLC serves as the company's investment
banker.  As of March 31, 2005, Arlington Hospitality reported
$99 million in total assets and $94 million in total debts.


ASARCO LLC: Court Okays ARCADIS as Encycle's Environmental Advisor
------------------------------------------------------------------
Michael Boudloche, the Chapter 7 trustee overseeing the
liquidation of Encycle/Texas, Inc.'s estate, sought and obtained
authority from the U.S. Bankruptcy Court for the District of
Southern Texas in Corpus Christi to employ Kenneth Brandner and
ARCADIS G&M as environmental consultants.

As previously reported in the Troubled Company Reporter on Dec.
27, 2005, as environmental consultants, Mr. Brandner will assist
and advise
the Encycle Trustee in environmental matters and assist the
coordination of clean up activities.

The current hourly rates charged by ARCADIS for environmental
consulting services are:

   Principal                                           $125
   Principal Engineer/Geologist/Hydrogeologist III     $110
   Senior Engineer/Geologist/Hydrogeologist II         $105
   Associate Engineer/Geologist/Hydrogeologist I        $95
   Project Manager                                      $90
   Staff Engineer/Geologist/Hydrogeologist              $80
   Field Engineer/Geologist/Hydrogeologist              $70
   Environmental Scientist                              $85
   Technician II                                        $54
   Drafts Person                                        $57
   Word Processor                                       $42
   Clerical                                             $37

ARCADIS will apply to the Court for approval of all fees.

Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,  
smelting and refining company.  Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent.  The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.

The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525).  They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd.  Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered with
its chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News,
Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000).


ASARCO LLC: Court Okays Assumption of Gault Group Services Pact
---------------------------------------------------------------
ASARCO sought and obtained authority from the U.S. Bankruptcy
Court for the Southern District of Texas in Corpus Christi to
assume the Gault Group, Inc., professional services agreement.

As previously reported in the Troubled Company Reporter on
Dec. 19, 2005, under the Agreement, Gault Group provides
consulting services in relation with the reclamation of a portion
of the Mission Mine Complex, located within San Xavier District of
the Tohono O'odham Nation, in Arizona.

Specifically, Gault Group develops the Scope of Work on the
reclamation project to conform with 25 C.F.R. 211 and 212 and
related mine reclamation statutes and regulations, as well as to
secure financial assurance for the reclamation tasks.  Gault
Group provides regular reports that describe current practices
and operations in the reclamation project.

ASARCO believes that the Agreement provides ongoing value to its
estate and that Gault Group's continued business relationship is
critical to its operations.

Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,  
smelting and refining company.  Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent.  The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.

The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525).  They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd.  Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered with
its chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News,
Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000).


ASARCO LLC: Court Okays Assumption of OccuNet Agreement
-------------------------------------------------------
ASARCO LLC seeks authority from the U.S. Bankruptcy Court for the
Southern District of Texas in Corpus Christi to assume an
executory agreement with Occupational Networks of Texas, Inc.

James R. Prince, Esq., at Baker Botts LLP, in Dallas, Texas,
tells Judge Schmidt that the Executory Agreement concerns
OccuNet's provision of claims management and consulting services
relating to occupational injuries suffered by ASARCO's Texas
employees.

In addition to traditional third-party administrator services,
OccuNet audits bills submitted in connection with occupational
injuries and negotiates medical services discounts for employees
who participate in ASARCO's Occupational Injury Benefit Program.

According to Mr. Prince, before engaging OccuNet, ASARCO
participated in the Texas workers' compensation system and
incurred substantial expenses related to worker injuries.  After
ASARCO exited the workers' compensation system in 2003, OccuNet
helped cut injuries-related expenses by 90%.  Those savings run
in the hundreds of thousands of dollars annually, Mr. Prince
says.

Under the Agreement, ASARCO pays OccuNet a percentage of the
savings achieved, based on the difference between the amounts
invoiced to ASARCO and the actual amounts it paid.  For its
services, OccuNet bills ASARCO on an annual basis.  In addition,
the Agreement also requires ASARCO to pay OccuNet a $25,000
annual fee.

The Agreement contemplates that the Services Fee will be paid
using funds deposited in a trust account -- currently containing
$162,500 -- held by the Underwood Law Firm in Amarillo, Texas,
Mr. Prince discloses.

At present, ASARCO is in default under the Agreement, Mr. Prince
relates.  To cure that default, ASARCO must pay OccuNet $131,228,
which amount includes an outstanding Services Fee equal to
$106,228 and an unpaid Annual Fee of $25,000.

Mr. Prince notes that the amount contained in the Trust Account
is more than enough to cover the Cure Amount.

Mr. Prince also points out that the Cure Amount pales in
comparison with the costs ASARCO would incur if it were to pay
the amounts invoiced without the benefit of OccuNet's services.  
Specifically, for the time period covered by the outstanding
Services Fee, ASARCO's expenses relating to occupational injuries
would have been at least $265,000 higher absent OccuNet's
services.

Furthermore, OccuNet has made concessions that reduce ASARCO's
immediate financial obligations under the Agreement.  While the
Agreement requires ASARCO to deposit $8,000 into the Trust
Account each month, ASARCO has made no such deposit since May
2005, and is now $48,000 behind.  Mr. Prince says that OccuNet
has agreed to waive this requirement for the months of June
through November 2005.  He maintains that OccuNet's concession
makes these funds available for other purposes necessary for the
reorganization.

Mr. Prince contends that if ASARCO is not permitted to assume the
OccuNet Agreement, it would be unlikely to find and engage
another provider capable of delivering similar savings at a
comparable cost.  Moreover, by assuming the Agreement, ASARCO
will continue to keep its worker-injury costs at a manageable
level, which will, in turn, facilitate the Debtors'
reorganization.

                          *     *     *

Judge Schmidt authorizes ASARCO to assume the Agreement and
directs it to pay the $131,228 Cure Amount to OccuNet.  The Court
also directs ASARCO to deposit the $8,000 monthly savings payment
into the Trust Account.

Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,  
smelting and refining company.  Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent.  The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.

The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
through 05-20525).  They are Lac d'Amiante Du Quebec Ltee, CAPCO
Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd.  Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered with
its chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation. (ASARCO Bankruptcy News,
Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000).


AULT INC: Shareholders Will Get $2.90 Per Share in SL Ind. Merger
-----------------------------------------------------------------
Ault Incorporated (NASDAQ: AULT) signed a definitive merger
agreement with SL Industries, Inc. (AMEX & PHLX: SLI).  Under the
terms of the agreement, a wholly owned subsidiary of SL Industries
will commence a cash tender offer to acquire all of Ault's
outstanding shares of common stock.  

Upon completion of the tender offer, SL Industries will effect a
merger between this subsidiary and Ault in which the remaining
Ault shareholders will receive $2.90 per share in cash.  In
addition, SL Industries will buy Ault stock options with an
exercise price of less than $2.90 per share and all other
outstanding options will be canceled.  Following the merger, Ault
will become a wholly owned subsidiary of SL Industries.

The Board of Directors of Ault has unanimously approved the
acquisition and has voted to recommend that Ault's shareholders
accept the tender offer and tender their Ault shares.  In
addition, the Company's financial advisor, Stephens, Inc.,
provided a fairness opinion to the Board that the terms of the
transaction were fair to Ault's shareholders from a financial
point of view.

The consummation of the transaction is subject to certain
conditions; including the valid tender of at least a majority of
the outstanding shares of common stock of Ault, excluding any
shares held by SL Industries.

"We are pleased to announce this strategic combination with SL
Industries," commented Frederick M. Green, Ault's President and
Chief Executive Officer.  "We believe the agreement is a sound one
for our employees, customers and shareholders.  Our employees will
benefit by becoming part of an organization that has a larger
financial base and is a leader in the power supply industry.  Our
customers will benefit from the added resources in the areas of
purchasing, logistical support and engineering expertise.  This
translates into greater scale, increased competitiveness in our
target market segments and improved profitability.  And, our
shareholders have the opportunity to be paid a fair price for
their shares that reflects a substantial premium over the current
market price."

                  Financial Restatements

In addition to announcing the agreement with SL Industries, Ault
reported that it is restating its financial results for the first
quarter of fiscal year 2006 and its full fiscal years of 2005 and
2004 based on findings during a continuing evaluation and
remediation of financial controls at its China manufacturing
operations, Ault Xianghe.

As a result of the restatement, the previously reported loss for
the first fiscal 2006 quarter increased from $458,000 to $803,480,
the previously reported loss for fiscal 2005 increased from
$5,129,997 to $5,472,302 and the previously reported loss for
fiscal 2004 increased from $5,545,646 to $5,793,646.  

The increase in the previously reported losses is due to higher
cost of goods sold for the first quarter ended Aug. 28, 2005, by
$345,480 and for the fiscal years of 2005 and 2004 by $342,385 and
$248,000, respectively.  Increasing cost of goods sold for each
period was required due to accounting errors in accruals for
payables due to certain vendors of Ault Xianghe.

Summary financial information for the first quarter of 2006 and
fiscal 2005 reflecting the restatement follows.  The restated
results will also be presented in amendments to its Form 10-K
Report for fiscal 2005 and its Form 10-Q Report for the first
quarter of fiscal 2006 that are expected to be filed with the
Securities and Exchange Commission on or about Jan. 11, 2006.

Ault designs, manufactures and markets power conversion products.
The Company is a leading supplier to original equipment
manufacturers of telecommunications equipment, computer
peripherals and medical equipment. Ault's power conversion
products provide power at various levels from 1 to 1200 watts for
a wide variety of applications.

                            *   *   *

                       Material Weaknesses

Grant Thornton LLP in Minneapolis, Minnesota, found material
weakness in Ault Incorporated's internal control after it audited
the company's consolidated financial statements for the year ended
May 30, 2004.  Grant Thornton advised the Audit Committee and the
company's management about the material weaknesses in its internal
controls related to its Ault China subsidiaries and related to its
warehouse arrangements with third parties.  These weaknesses in
controls resulted in certain adjustments to the Company's
financial statements.


BANKATLANTIC: Officers' Equity Trading Blackout Starts on Jan. 21
-----------------------------------------------------------------
BankAtlantic, a subsidiary of BankAtlantic Bancorp, Inc., recently
retained Schwab Retirement Plan Services, Inc., as the new
investment and service provider for BankAtlantic's 401(k) plan.

As a result of the retention of a new service provider, a
conversion period is necessary to transition account and 401(k)
Plan records.  Accordingly, there would be a blackout period under
the 401(k) Plan during which no individual account transactions
can be processed.  This blackout period is expected to begin
on January 21, 2006, and is expected to end the week of
February 19, 2006.

During the blackout period, the directors and executive officers
of the Company and BankAtlantic will be prohibited from directly
or indirectly purchasing, selling or otherwise transferring the
Company's Class A Common Stock.

Any securityholder of the Company or other interested person may
obtain, without charge, the actual ending date of the blackout
period by writing the Company at:

               Corporate Communications
               BankAtlantic Bancorp, Inc.
               2100 West Cypress Creek Road
               Fort Lauderdale, Florida 33309

BankAtlantic Bancorp is a diversified financial services holding
company and the parent company of BankAtlantic and Ryan Beck & Co.

Through these subsidiaries, BankAtlantic Bancorp provides a full
line of products and services encompassing consumer and commercial
banking, and brokerage and investment banking.  
  
                         *     *     *

As reported in the Troubled Company Reporter on Aug. 5, 2004,
Fitch affirmed the ratings of BankAtlantic Bancorp, Inc., (BBX;
long-term senior 'BB+', short-term senior 'B') and its bank
subsidiary, BankAtlantic FSB, and said its Rating Outlook is
Stable.


BOYD GAMING: Moody's Affirms B1 Senior Subordinated Debt Rating
---------------------------------------------------------------
Moody's Investors Service revised the ratings outlook of Boyd
Gaming Corporation to positive from stable based on:

   * the continued strong operating results of the company's
     wholly-owned casino properties and Borgata joint venture; and

   * expectation that cash generated by these casino operations
     will provide a significant amount of funding for the
     company's recently announced Echelon Place development.

Echelon Place is a $4 billion Las Vegas Strip project that is
scheduled to open in 2010, $2.9 billion of which will be funded by
Boyd on balance sheet.  Moody's affirmed Boyd's:

   * Ba2 corporate family rating;
   * Ba2 secured bank loan rating;
   * B1 senior subordinated debt rating; and
   * SGL-2 speculative grade liquidity rating.

Boyd announced that it will develop a $4 billion, multi-faceted
resort complex that will be named Echelon Place which will include
the $2.9 billion Echelon Resort that will be wholly-owned,
operated, and funded by Boyd, as well as $1.1 billion of other
hotel and retail joint ventures that are expected to be funded on
a non-recourse basis and without any direct cash contribution from
Boyd.  Echelon Place is scheduled to open in early 2010 and will
be developed in one phase and integrate several elements.

Despite the substantial capital expenditures that will take place
through 2010 (including $2.9 billion of Echelon related capital
spending as well as other possible non-Echelon related capital
spending), and the expectation that Boyd will be a net borrower
through most of that period, continued improvement in operating
results could result in higher ratings over the next 12-18 month
period.

Moody's anticipates that Boyd will be able to fund close to half
of its capital investment spending through 2010 with a combination
of discretionary cash flow generated by wholly-owned casino
properties and cash dividends from the company's highly profitable
non-recourse Borgata joint venture.  Boyd is currently in the
process of negotiating amendments to the joint venture's bank
agreement with the intent of significantly eliminating
restrictions on the joint venture's ability to make cash
distributions, which to date, have been relatively small.

As a result, Boyd should be able to maintain debt/EBITDA at or
below 4.5 times (x) over the longer-term, a level considered
appropriate for a higher rating given Boyd's large and well-
diversified asset profile.  However, peak leverage during
construction and development is expected to be slightly higher, at
or near 5.0x.  Boyd's debt/EBITDA for the latest 12-month period
ended September 30, 2005 was about 3.8x.

Any future ratings upgrade would require that Boyd's wholly-owned
and joint venture casino properties continue to improve and
perform at or above expectations, including the company's recently
opened South Coast casino.  Lower than expected earnings could
result in the ratings outlook being revised back to stable.
Material increases in the size and scope of the Echelon Place
development and/or higher than anticipated debt levels could have
a similar effect.

During the latest quarter, five of Boyd's six operating units
reported significant year-over-year increases in quarterly revenue
and EBITDA, with only the hurricane-impacted Central Region
reporting a decline.  This continues the company's long-term trend
of overall positive same-store earnings growth.  Additionally, as
a result of last year's Coast Casinos acquisition, and the recent
opening of South Coast, Boyd is now heavily concentrated in the
high growth, low regulatory risk Las Vegas, Nevada locals market.

The positive ratings outlook does acknowledge certain risks
including the overall development risk associated with the large
Las Vegas Strip project.  While Boyd successfully developed the
Borgata in Atlantic City, Echelon Place will be larger and more
complex than anything the company has developed in the past.  Boyd
also faces competitive challenges in the Las Vegas locals market
as Red Rock Station, another new major Las Vegas locals casino,
opens in the first quarter of 2006.  Longer-term, Boyd may also
eventually see meaningful competition to its Blue Chip casino in
Indiana if the Pokagon Tribe is ever successful in building a
casino nearby.

Boyd Gaming Corporation, headquartered in Las Vegas, Nevada, is a
multi-jurisdictional gaming company.  The company owns and
operates 19 gaming, hospitality and entertainment operations
located in:

   * Illinois,
   * Indiana,
   * Louisiana,
   * Mississippi,
   * Nevada, and
   * New Jersey.


CALPINE CORP: U.S. Trustee Appoints One Seven-Member Committee
--------------------------------------------------------------
Deirdre A. Martini, the United States Trustee for Region II,
convened a meeting of Calpine's largest unsecured creditors on
Fri., Jan. 6, 2006, at the Hyatt Grand Hotel in Manhattan, for the
purpose of forming one or more official committees of unsecured
creditors pursuant to Section 1102 of the Bankruptcy Code.

Ms. Martini introduced herself to scores of Calpine creditors
interested in serving on an official committee.  Ms. Martini also
introduced creditors to the duo of trial attorneys -- Pamela J.
Lustrin, Esq., and Paul K. Schwartzberg, Esq. -- who will
represent the U.S. Trustee in Calpine's chapter 11 cases.

Ms. Martini explained the "watchdog" role of the U.S. Trustee in a
bankruptcy case, as part of the U.S. Department of Justice, and
that the Bankruptcy Code charges the U.S. Trustee with the
responsibility of appointing at least one official committee of
unsecured creditors that's representative of the interests of the
entire unsecured creditor population.

Ms. Martini advised that she and her staff received "numerous"
indications of interest from Calpine creditors anxious to serve on
an official committee during the past week.  Ms. Martini indicated
that she and her staff have carefully reviewed those solicitation
forms and will need to interview some creditors -- Wilmington
Trust and HSBC, in their Indenture Trustee roles -- to learn more
about their particular interests and how those interests align
with the general creditor population.  The goal, Ms. Martini
stressed, is to form a committee that, in her opinion, fairly and
adequately represents all unsecured creditors.

Ms. Martini advised that following their appointment to an
official committee, each committee member will be asked to certify
to the United States Trustee the dollar amount owed.  Ms. Martini
indicated that the U.S. Trustee will also request periodic
disclosures from each committee member as Calpine's restructuring
progresses.  

Ms. Martini reviewed the powers and duties of an official
committee described in Section 1103 of the Bankruptcy Code.  Ms.
Martini noted that the Committee "may" employ professionals.  

Ms. Martini introduced the audience to:

    -- Calpine's lead lawyers, Matthew A. Cantor, Esq., and
       Richard M. Cieri, Esq., at Kirkland & Ellis LLP; and

    -- Robert May, Calpine's CEO;

and turned the podium over to Mr. May for, she stressed, a brief
presentation.

"My brief remarks may reflect my brief tenure," Mr. May quipped,
reminding creditors that he joined Calpine late last year.  

Mr. May gave creditors a quick overview of Calpine's energy
business and holding company structure.  Calpine Corp. is the
parent, Calpine Power is the mezzanine parent and CalGen is the
subsidiary that owns most of the assets, which are concentrated in
California and Texas).  Calpine was formed in 1984 and the
business expanded significantly between 2001 and 2004, financed by
and unmanageable debt load.  Litigation in December had a material
adverse effect on the company's liquidity, pressuring the company
to file for chapter 11 protection.  Calpine turned to Kirkland &
Ellis for legal advice and AlixPartners for crisis management
services, placed 261 entities into bankruptcy, and has arranged a
$2 billion DIP facility.  Calpine has roughly $17 billion of debt
to restructure using, among other assets, the value of 92 power
plants that generate 26,000 megawatts of electricity.  

Mr. May told creditors that the company's next steps in the
restructuring process are to:

     (1) finalize the DIP financing (which includes $350 million
         earmarked for the Geysers Transaction);

     (2) stabilize the business;

     (3) examine all cost-saving opportunities;

     (4) create asset-by-asset cash flow projections;

     (5) determine which assets are part of Calpine's long-term
         business strategy and which assets should be sold;

     (6) review each and every contract to which Calpine is a
         party; and

     (7) walk away from or repudiate every unprofitable contract.

Ms. Martini opened the floor -- briefly she stressed again -- to
creditors for questions.  

Vladimir Jelisavcic at Longacre Management LLC asked Messrs. May
and Cieri what Calpine's interest, if any, is in the Geysers.  

Mr. Cieri explained that Calpine has no interest in those assets
today.  The Geysers Transaction embedded in the DIP Financing
Facility will give rise to Calpine's equity interest in the
underlying assets.

With no other questions coming from the floor, Ms. Martini
adjourned the meeting.  Over a three-hour period, Ms. Martini and
her staff met with creditors one-on-one while other creditors and
professionals mingled.  Ms. Martini reconvened the meeting to
announce her decision that she will appoint one Official Committee
of Unsecured Creditors in Calpine's cases and the Committee's
initial members are:

     * HSBC Bank USA;
     * Wilmington Trust Co.;
     * Franklin Advisers Inc.;
     * Acadia Power Partners LLC;
     * Amerada Hess Corp.;
     * SPO Partners & Co.; and
     * Transcanada Pipelines Ltd.
     
Ms. Martini directed the newly appointed Committee members to
introduce themselves to one another, convene their first meeting,
decide how to organize themselves, and, if they wanted to, meet
with any professionals.  

Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with  
electricity from clean, efficient, natural gas-fired and
geothermal power plants.  Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces.  Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.  The Company filed for chapter 11 protection on Dec. 20,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200).  Richard M. Cieri,
Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert
G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in
their restructuring efforts.  As of Dec. 19, 2005, the Debtors
listed $26,628,755,663 in total assets and $22,535,577,121 in
total liabilities. (Calpine Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CALPINE CORP: Seven Creditors Balk at Motion to Reject 8 Contracts
------------------------------------------------------------------          
As previously reported in the Troubled Company Reporter on Jan. 3,
2006, Calpine Corporation and its debtor-affiliates ask the
Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the
Southern District of New York for permission to reject eight
unprofitable energy-trading contracts with these companies
Petition Date:

    (1) State of California Department of Water Resources,
    (2) Southern California Edison Company,
    (3) Arcadia Power Partners, LLC,
    (4) Pacific Gas and Electric Company,
    (5) Reliant Virtual Plant,
    (6) Northern California Power Agency, and
    (7) Strategic Energy LLC.

Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York,
tells the Court that the unprofitable contracts generally consist
of energy supply contracts whereby the Debtors agreed to supply a
variable or specified amount of electricity, at a fixed price,
for a defined period.

The eight contracts represent the Debtors' most costly, money-
losing contracts.  The Debtors estimate that they would lose
approximately $1,200,000,000 or about $1,100,000 per day in 2006
if required to perform through the end of the contracts.  Because
losses of this magnitude would impose an unsustainable financial
burden on the Debtors, they determined that the eight contracts
should be rejected.

                       *     *     *

                        Objections

In separate pleadings, seven groups of creditors filed objections
to the Debtors' motion to reject eight energy trading contracts:

    1. Acadia Power Partners, LLC;

    2. Strategic energy, LLC;

    3. Northern California Power Agency, a California joint power
       agency, on behalf of its member cities Ukiah, Healdsburg,
       Lompoc, Gridley and Biggs and the Plumas Sierra Rural
       Electric Cooperative;

    4. Southern California Edison Company;

    5. Reliant Energy Electric Solutions, LLC;

    6. Pacific Gas and Electric Company;

    7. the California Department of Water Resources, California
       Electricity Oversight Board, and the People of the State of
       California, ex Rel. Bill Lockyer, Attorney General of the
       State of California.

The Objectors raise six issues:

    (a) Retroactive Rejection

Barry N. Seidel, Esq., at King and Spalding LLP, in New York,
tells the Court that APP does not challenge the Debtors' business
judgment to reject the contract entered between the Debtor and
APP, but rather, objects to the Debtors' attempt to make the
rejection of the contract retroactive to the Petition Date
because APP has performed all of its obligations since the
Petition Date.

Strategic, in an incorporated filing with NCPA, also objected to
the Retroactive Rejection Date stressing that the balance of
equities does not favor the Debtors' request to establish the
Retroactive Rejection Date, and that nunc pro tunc relief would
violate the "filed rate" doctrine because the Court might re-
price the energy delivered by the Debtors in the postpetition and
pre-rejection period in determining damages.

    (b) FERC Possesses Exclusive Jurisdiction

Patrick L. Hayden, Esq., at McGuireWoods LLP, in New York, on
behalf of Strategic and NCPA, argues that the Court lacks subject
matter jurisdiction to approve the rejection of the energy
contracts because the Federal Energy Regulatory Commission
possesses exclusive jurisdiction of the energy contracts.

SCE, PG&E and the California State Parties agreed.

    (c) Public Interest

According to the objecting parties, in evaluating the Debtors'
request to reject a wholesale energy contract, the Court must
apply a heightened standard that considers public interest rather
than applying the business judgment standard.  The Debtors have
made no showing whatsoever of the impact of rejection on the
public interest.

    (d) Insufficient Information

The Objectors also point out that the Debtors have offered scant
information relevant to their rejection damages.  The Debtors
have not met their burden of demonstrating that rejection of the
Contracts is an exercise of sound business judgment regarding
whether rejection will benefit the estates and the Debtors'
unsecured creditors.

    (e) Inadequate Opportunity for Hearing

The parties further complained that the opportunity for hearing
regarding the Rejection Motion is inadequate in light of the
importance of the contracts.

    (f) Reliant Contract Termination

Reliant Energy argues that the Rejection Motion is moot as to its
energy contract because it has exercised its contractual right to
terminate and has fixed January 4th at 11:59 p.m. as the Early
Termination Date.  The Termination Notice issued by Reliant
Energy was proper under the terms of the contract and Section 556
of the Bankruptcy Code.  Reliant Energy contends it is entitled
to proceed with its unalterable termination rights under the
contract.

                      Request for Adjournment

Harbert Distressed Investment Master Fund, Ltd., as the holder of
more than $220,000,000 of unsecured notes issued by Calpine
Corporation, asks the Court to adjourn the scheduled hearing on
the Rejection Motion for a reasonable period of time.

Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel
LLP, in New York, asserts that the creditors should be afforded a
reasonable opportunity to analyze:

    -- the potential rejection damages, which could exceed
       $1,000,000,000 by the Debtors' estimates; and

    -- the Debtors' business judgment in rejecting the Energy
       Contracts before the contracts are rejected and the
       Debtors' estates are saddled with potentially huge
       rejection damage claims.

Headquartered in San Jose, California, Calpine Corporation --
http://www.calpine.com/-- supplies customers and communities with  
electricity from clean, efficient, natural gas-fired and
geothermal power plants.  Calpine owns, leases and operates
integrated systems of plants in 21 U.S. states and in three
Canadian provinces.  Its customized products and services include
wholesale and retail electricity, gas turbine components and
services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.  The Company filed for chapter 11 protection on Dec. 20,
2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200).  Richard M. Cieri,
Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert
G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in
their restructuring efforts.  As of Dec. 19, 2005, the Debtors
listed $26,628,755,663 in total assets and $22,535,577,121 in
total liabilities. (Calpine Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CALPINE HIDALGO: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Lead Debtor: Calpine Hidalgo, Inc.
             50 West San Fernando Street
             San Jose, California 95113

Bankruptcy Case No.: 06-10026

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Calpine Hidalgo Holdings, Inc.             06-10027
      Calpine Hidalgo Power, LP                  06-10028
      Calpine Hidalgo Energy Center, L.P.        06-10029
      Calpine Hidalgo Power GP, LLC              06-10030
      Calpine PowerAmerica - NY, LLC             06-10031
      Calpine PowerAmerica - NH, LLC             06-10032

Type of Business: The Debtors are affiliates of Calpine
                  Corporation, which supplies customers and
                  communities with electricity from clean,
                  efficient, natural gas-fired and
                  geothermal power plants.  Calpine owns, leases
                  and operates integrated systems of plants in
                  21 U.S. states and in three Canadian provinces.
                  Its customized products and services include
                  wholesale and retail electricity, gas turbine
                  components and services, energy management and a
                  wide range of power plant engineering,
                  construction and maintenance and operational
                  services.  Calpine Corp. and 77 of its
                  affiliates filed for chapter 11 protection on
                  Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No.
                  05-60200).  See http://www.calpine.com/

                  Calpine California Equipment Finance
                  Company, LLC, and six affiliates also filed for
                  chapter 11 protection on Dec. 27, 2005 (Barnk.
                  S.D.N.Y. Case No. 05-60464)

Chapter 11 Petition Date: January 8, 2006

Court: Southern District of New York (Manhattan)

Judge: Burton R. Lifland

Debtor's Counsel: Richard M. Cieri, Esq.
                  Matthew A. Cantor, Esq.
                  Edward Sassower, Esq.
                  Robert G. Burns, Esq.
                  Kirkland & Ellis LLP
                  Citigroup Center
                  153 East 53rd Street
                  New York, New York 10022-4611
                  Tel: (212) 446-4800
                  Fax: (212) 446-4900

                        Estimated Assets    Estimated Debts
                        ----------------    ---------------
Calpine Hidalgo, Inc.   $1 Million to       Less than $50,000
                        $10 Million

Calpine Hidalgo         More than           More than
Holdings, Inc.          $100 Million        $100 Million

Calpine Hidalgo         Less than $50,000   Less than $50,000
Power, LP

Calpine Hidalgo         More than           More than
Energy Center, L.P.     $100 Million        $100 Million

Calpine Hidalgo         Less than $50,000   Less than $50,000
Power GP, LLC

Calpine                 Less than $50,000   Less than $50,000
PowerAmerica - NY, LLC

Calpine                 Less than $50,000   Less than $50,000
PowerAmerica - NH, LLC

The Debtors did not file a list of their 20 largest unsecured
creditors.


CATHOLIC CHURCH: Classes & Treatment of Claims in Spokane's Plan
----------------------------------------------------------------
Under its First Amended Plan of Reorganization, the Diocese of
Spokane narrowed down the classification of claims by taking out
one class -- Other Tort Claims -- from the list.

Accordingly, the Amended Plan groups claims into nine Classes:

Class   Description          Recovery Under the Plan
-----   ------------         -----------------------
N/A    Administrative       Paid in full, in cash
        Claims

N/A    Priority             Paid in full, in cash
        Unsecured Claims

N/A    Priority             Paid in full, in cash
        Tax Claims

  1     Priority Employee    The Diocese will assume and honor
        Claims               the policies after the Effective
                             Date

                             Estimated date of distribution
                             is varied depending on the
                             Employee's status and use of
                             vacation and sick leave time

                             Estimated amount: $13,527

                             Unimpaired

  2     Prepetition          Paid in full, 30 days after the
        Property Tax         Effective Date
        Secured Claims
                             Estimated amount: $5,303

                             Unimpaired

  3     General Unsecured    $500 per claim which will be paid 30
        Convenience Claims   days after the Effective Date or
                             applicable Claim Payment Due

                             Estimated amount: unknown

                             Unimpaired

  4     Parish and Catholic  Estimated distribution is $4,545,185
        Entity Unsecured
        Claims               To be paid in 60 monthly payments
                             of principal only, commencing on the
                             month following the final
                             distribution to holders of claims in
                             Class 6

                             Estimated amount: $4,545,185

                             Impaired

  5     General Unsecured    $247,714 plus 4.5% interest per
        Claims               annum, which will be paid in 60
                             equal monthly payments of principal
                             and interest beginning 30 days after
                             the Effective Date

                             Estimated amount: $247,714

                             Impaired

  6     Tort Claims          To be paid by the Plan Trust.  All
                             Tort Claimants will have their
                             Claims determined by two Trustees
                             and placed in Abuse Level
                             Categories.

                             Distribution will depend on the
                             level in which a Tort Claim is
                             placed.

                             Non-settling Tort Claimants will
                             have their claims liquidated in
                             Superior Court.

                             Estimated amount: $25,000,000 to
                                                45,000,000

                             Impaired

  7     Priest Retirement    To be paid dependent upon the timing
        Claims               of retirement, in accordance with
                             current Priest Retirement Plan, as
                             may be amended from time to time.

                             The current program may be replaced
                             with another program subject to the
                             approval of the Priests and the AOP.

                             Estimated amount: presently
                                               $4,500,000

                             Unimpaired

  8     Parish               No distribution
        Indemnification
        Claims               Estimated amount: unknown

                             Impaired

  9     Insurer              No distribution
        Reimbursement
        Claims               Estimated amount: unknown

                             Unimpaired

                    Treatment of Tort Claims

Most Reverend William S. Skylstad, D.D., the Bishop of the
Diocese of Spokane, states that under the Amended Plan, each
holder of a Tort Claim will have his or her Tort Claim reviewed by
the Claims Reviewers in an Expedited Review Process.  The Tort
Claims will be reviewed in a certain order based on the date the
Claim was filed in Superior Court or the date that a proof of
claim was subsequently filed in the Reorganization Case.  

The Plan Trustees will provide to each Tort Claimant who has filed
a proof of claim a packet of Claims Reviews Materials for
completion and submission back to the Claims Reviewers.  The Tort
Claimant will provide to the Claims Reviewers the completed
Claims Reviews Materials with any additional evidence the Tort
Claimant desires.

In response to each Tort Claim, the Diocese, with input from its
Insurers, will have the opportunity to provide evidence it has
regarding the Tort Claim, if any, including evidence pertaining to
statute of limitations defenses.  For each claim, the Claims
Reviewers will initially make a determination, based on the
evidence submitted by the Tort Claimant and any evidence submitted
by the Reorganized Diocese, including any defense based on a state
statute of limitations, as to whether there is credible and
competent evidence that the abuse claimed, more likely than not,
occurred and the Tort Claim should be allowed.

            Credible and Competent Evidence Required

A Tort Claimant must provide Credible and Competent Evidence of
exposure to sexual abuse by the Diocese's agent for which the
Diocese has legal liability.  If it is determined that the Tort
Claim should be allowed, the Claims Reviewers will then give
notice of their allowance determination to the Tort Claimant and
to the Reorganized Diocese, who will be entitled to object to the
allowance.

If the Reorganized Diocese does not object to the allowance of the
Tort Claim, the Claims Reviewers will use the Compensable Abuse
Matrix set forth in the Trust Distribution Agreement to determine
the value of Allowed Tort Claims as expeditiously as possible.

If the Claims Reviewers determine that abuse of the Tort Claimant
more likely than not occurred for which the Diocese would have
been legally liable, but the claim should be barred because it is
untimely under the statute of limitations, the Claims Reviewers
will offer a compromise settlement of $10,000 to the Tort
Claimant.  The Claims Reviewers will also provide notice of the
settlement offer to the Reorganized Diocese, who can object to the
offer.

If there is no objection by the Reorganized Diocese, and if the
Tort Claimant accepts the settlement offer and signs a release of
the Tort Claim, the Tort Claim will be placed in a "FIFO Payment
Queue," following which the Plan Trustees will disburse payment
subject to the terms of the Trust Distribution Agreement and the
Plan Trust Agreement.

If the Tort Claimant rejects, or the Reorganized Debtor objects
to, the offer of settlement, the Tort Claimant can proceed with
the processing of his or her Tort Claim by trial or arbitration of
the Tort Claim as provided in the Trust Distribution Agreement.

If the Exposure Evidence is sufficient to allow a Tort Claim then,
based on the Exposure Evidence and Abuse Criteria presented by
each Tort Claimant, along with any evidence concerning the Claim
submitted by the Reorganized Diocese, the Claims Reviewers will
place an Allowed Tort Claim in the most serious applicable
Abuse Category Level warranted.

                  The Compensable Abuse Matrix

The Compensable Abuse Matrix includes five levels of abuse,
ranging from clergy showing pornography to a child which could
bring a victim $15,000 or more (Abuse Category Level V), to
intercourse with children which could award up to $1,500,000 to a
victim (Abuse Category Level I).

The Claims Reviewers will place each Allowed Claim in one of the
five abuse levels in accordance with the criteria set forth in the
Trust Distribution Agreement.  If an Abuse Category Level is
determined by Credible and Competent Evidence, based on the proof
of claim and any additional Claims Review Materials provided to
the Claims Reviewers, the Claims Reviewers will tender to the
Tort Claimant a "Liquidated Value Offer" for the relevant Abuse
Category Level based on the Compensable Abuse Matrix, together
with the form of release approved by the Plan Trustees.

The determination can be accepted or rejected by the Tort
Claimant.  The determination can also be accepted or objected to
by the Reorganized Diocese.  If the Liquidated Value Offer is
accepted by both the Tort Claimant and the Reorganized Diocese and
the Tort Claimant returns the release properly executed, the Tort
Claim will be placed in the FIFO Payment Queue, following which
the Plan Trustees will disburse payment subject to the terms of
the Trust Distribution Agreement and the Plan Trust Agreement.

If a Tort Claim is not Allowed, or the Tort Claimant or the
Reorganized Diocese rejects a Liquidated Value Offer, the Tort
Claimant may proceed with the processing of his or her Tort Claim
by trial or arbitration.  Tort Claimants who proceed with the
trial or arbitration of their Tort Claim retain the right to a
trial -- including the right to a trial by jury -- or arbitration
to determine their Tort Claim against the Plan Trust.  All other
Tort Claimants will have and will be deemed to have irrevocably
waived any right to a trial.  All claims and defenses that exist
under applicable law will be available to both sides at trial.

The offer of the Claims Reviewers or the positions and admissions
of the parties during any of the Expedited Claims Review Process,
which occurred prior to any trial or arbitration, will not be
admissible for any purpose at trial or arbitration by any party or
third party.

The Plan Trust will provide for, and fund the defense of, a Tort
Claim either from the Plan Trust Assets or through tender of the
defense to the Insurer or Insurers which insured the Diocese for
the time period or periods in which the events of each Claim
occurred.

If, and when, the holder of a Tort Claim obtains a "Liquidated
Value Judgment" in the tort system in accordance with the Trust
Distribution Agreement, the Liquidated Value Judgment will be
placed in the FIFO Payment Queue based on the date on which the
Judgment became final.

The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004.  Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts. (Catholic Church Bankruptcy News,
Issue No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000)


CENTENNIAL COMMS: Nov. 30 Balance Sheet Upside-Down by $491 Mil.
----------------------------------------------------------------
Centennial Communications Corp. (NASDAQ: CYCL) reported income
from continuing operations of $8.2 million, for the fiscal second
quarter of 2006 as compared to income from continuing operations
of $18.6 million, in the fiscal second quarter of 2005.  The
fiscal second quarter of 2005 included an after-tax gain of
approximately $0.09 per diluted share related to the Company's
sale of spectrum in the Midwest.  Consolidated adjusted operating
income from continuing operations for the fiscal second quarter
was $91.2 million, as compared to $89.8 million for the prior-year
quarter.

"We continue to pursue a path of long-term leadership in each of
our local markets, and are encouraged by the healthiest subscriber
growth in nearly three years in our U.S wireless business," said
Michael J. Small, Centennial's chief executive officer.  "Our
commitment to our local market strategy is stronger than it's ever
been, with great networks and great local teams remaining critical
to our ongoing success."

Centennial reported fiscal second-quarter consolidated revenue
from continuing operations of $235.6 million, which included
$111.0 million from U.S. wireless and $124.6 million from
Caribbean operations.  Consolidated revenue from continuing
operations grew 10% versus the fiscal second quarter of 2005.  The
company ended the quarter with 1.34 million total wireless
subscribers, which compares to 1.11 million for the year-ago
quarter and 1.31 million for the previous quarter ended Aug. 31,
2005.  The company reported 326,400 total access lines and
equivalents at the end of the fiscal second quarter.

"We have a proven track record of deleveraging in a highly
competitive and rapidly changing market," said Centennial chief
financial officer Thomas J. Fitzpatrick.  "We'll continue to
operate in a disciplined way to generate solid free cash flow as
we return to our path of deleveraging."


          New President of Centennial de Puerto Rico

On Sept. 23, 2005, Centennial announced that Carlos T. Blanco was
named President of Centennial de Puerto Rico.  Blanco will have
operational     responsibility for Centennial's wireless and
broadband businesses in Puerto Rico, overseeing the customer
service, human resources, marketing, network engineering and sales
teams.
    
                 Notes Offer Completion

On Dec. 21, 2005, Centennial completed its offering of $550
million in aggregate principal amount of senior notes due 2013.  
The senior notes were issued in two series consisting of:

    (i) $350 million of floating rate notes that bear interest at
        three-month LIBOR plus 5.75% and mature in January 2013
        and

  (ii) $200 million of fixed rate notes that bear interest at 10%
       and mature in January 2013.

Centennial will use the net proceeds from the offering, together
with a portion of its available cash, to pay a special cash
dividend to Centennial's common stockholders of $5.52 per share,
and prepay $39.5 million of term loan borrowings under its senior
secured credit facility.
    
Based in Wall, N.J., Centennial Communications, (NASDAQ: CYCL) --
http://www.centennialwireless.com/-- is a leading provider of  
regional wireless and integrated communications services in the
United States and the Caribbean with approximately 1.3 million
wireless subscribers and 326,400 access lines and equivalents.
The U.S. business owns and operates wireless networks in the
Midwest and Southeast covering parts of six states.  Centennial's
Caribbean business owns and operates wireless networks in Puerto
Rico, the Dominican Republic and the U.S. Virgin Islands and
provides facilities-based integrated voice, data and Internet
solutions.  Welsh, Carson, Anderson & Stowe and an affiliate of
the Blackstone Group are controlling shareholders of Centennial.

At Nov. 30, 2005, Centennial Communications' balance sheet
showed a $490,868,000 stockholders' deficit, compared to a
$518,432,000 deficit at May 31, 2005.

                       *     *     *

As reported in the Troubled Company Reporter on Dec. 14, 2005,
Standard & Poor's Ratings Services assigned its 'CCC' rating to
Wall, New Jersey-based regional wireless carrier Centennial
Communication Corp.'s proposed $200 million senior notes due 2012
and $350 million senior floating-rate notes due 2012, both to be
issued under Rule 144A with registration rights.  Proceeds from
these unsecured note issues, together with cash on hand, will be
used to pay an approximate $600 million special dividend to common
shareholders.

At the same time, Standard & Poor's raised the rating on the
company's $750 million secured bank loan to 'B' from 'B-' and the
recovery rating was upgraded to '1' from '2'.  All the other
ratings of Centennial and its related entities, including its
'B-' corporate credit rating, were affirmed and removed from
CreditWatch.  The outlook is stable.


CHAMPION ENTERPRISES: S&P Lifts Rating on 7.625% Senior Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on the 7.625%
senior notes due 2009 from Champion Enterprises Inc. (Champion;
B+/Positive/--) to 'B+' from 'B-'.  At the same time, the rating
is removed from CreditWatch with positive implications, where it
was placed Oct. 7, 2005.

At the same time, the rating is withdrawn on the 11.25% senior
unsecured notes due 2007 from the company's Champion Home
Builders Co. subsidiary.

The upgrade follows the recent closing of a $200 million secured
credit facility ('B+') and reflects the withdrawal of the former
'B-' rating on the redeemed senior unsecured notes issued by
Champion Home Builders Co.  The 11.25% notes issued by the
subsidiary, which were paid in full in December 2005, had a
priority claim on cash flow from subsidiary businesses and were
structurally senior to the 7.625% notes.  As per a springing lien
feature in the original indenture, the 7.625% notes are now
secured equally and ratably and now have the same rating as the
recently closed secured credit facility, with a lien on
substantially all of the company's assets.

Auburn Hills, Michigan-based Champion is a leader in the
fragmented manufactured housing industry, selling approximately
17,000 homes through the first nine months of 2005, generating
$841 million of manufacturing revenues.
    
                          Rating Raised
                          -------------
                                            Rating
                                            ------
Champion Enterprises Inc.                 To       From
                                          --       ----
  7.625% senior notes due 2009            B+       B-/Watch Pos
    
                        Rating Withdrawn
                        ----------------
                                            Rating
                                            ------
Champion Home Builders Co.                To       From
                                          --       ----
  11.25% senior unsecured notes due 2007  NR       B-
     
ISSUER CREDIT RATINGS OUTSTANDING
                                          Rating
                                          ------
Champion Enterprises Inc.                 B+/Positive/--
Champion Home Builders Co.                B+/Positive/--


CHURCH & DWIGHT: 7.5M Common Shares Registered for Distribution
---------------------------------------------------------------
Church & Dwight Co. filed a Registration Statement with the
U.S. Securities and Exchange Commission to allow the resale of
7.5 million shares of the Company's common stock distributed under
the Company's Profit Sharing Plan.

The distributed shares aggregate $203.45 million

Effective as of January 1, 2006, the Plan was segregated into two
profit sharing plans, one for hourly employees and the other for
salaried employees.  The Registration Statement reflects the
transfer of 1,500,653.4 common shares from the Plan to Profit
Sharing Plan for Salaried Employees, which plan is effective as of
January 1, 2006.

The Plan was amended and restated to, among other things:

   (1) exclude salaried employees from participation;

   (2) provide for the transfer of account balances of salaried
       employees who participated in the Plan prior to
       January 1, 2006, to the Salaried Plan; and

   (3) change the name of the Plan to the "Church & Dwight Co.,
       Inc. Profit Sharing Plan for Hourly Employees".

The 7.5 million shares registered includes:

   * 5 million common shares distributed under Plan; and
   * 2.5 million common shares issued with respect to the Plan
     as a result of a 3-for-2 stock split, effective as of
     September 1, 2004.

As of January 1, 2006, 1,500,653.4 shares of the 5,250,000 common
being transferred to the Salaried Plan, and 656,648.4 shares of
the 2,250,000 shares of Common Stock remaining with the Hourly
Plan, were offered and sold pursuant to the Plan.

Church & Dwight Co., Inc. manufactures and markets a wide range of
personal care, household and specialty products, under the ARM &
HAMMER brand name and other well-known trademarks. In addition to
Arm & Hammer toothpaste, the Company's oral care portfolio
includes the Mentadent brand of toothpaste and toothbrushes, and
Close-up, Aim and Pepsodent toothpastes, all of which are sold
in the U.S. and Canada, and the Pearl Drops(R) brand of tooth
polish which is primarily sold in Europe.

                         *     *     *

As reported in the Troubled Company Reporter on Nov. 18, 2005,
Standard & Poor's Ratings Services raised Church & Dwight Co.
Inc.'s bank loan rating to 'BB+' from 'BB', its senior unsecured
debt rating to 'BB-' from 'B+', and its recovery rating to '1'
from '2'.

At the same time, Standard & Poor's affirmed its 'BB' corporate
credit and 'B+' senior subordinated debt ratings on the Princeton,
New Jersey-based consumer products company.  About $650 million of
debt is affected by these actions.

As reported in the Troubled Company Reporter on, Dec. 10,
2004, Moody's Investors Service assigned a Ba3 rating to the
$175 million senior subordinated notes to be issued by Church &
Dwight, Inc.  

Existing senior unsecured and senior subordinated debt ratings
have been upgraded by one notch, to Ba2 and Ba3, respectively.  In
addition, CHD's Ba2 senior implied and senior secured debt ratings
were affirmed and the ratings outlook was revised to positive from
stable.


COLLINS & AIKMAN: Creditors Must File Claims by January 11
----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan,
Southern Division, set Jan. 11, 2006, at 5:00 p.m., as the
deadline for all creditors owed money by Collins & Aikman
Corporation and its debtor-affiliates, on account of claims
arising prior to May 17, 2005, to file formal written proofs of
claim.  

Creditors must deliver their claim forms by mail, messenger or
overnight courier to:

              Collins & Aikman Claims Processing
              c/o Kurtzman Carson Consultants LLC
              12910 Culver Boulevard Ste I
              Los Angeles, California CA 90066
              
Headquartered in Troy, Michigan, Collins & Aikman Corporation --
http://www.collinsaikman.com/-- is a global leader in cockpit  
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  When the Debtors filed for protection from their
creditors, they listed $3,196,700,000 in total assets and
$2,856,600,000 in total debts.


COLONIAL BANCGROUP: Restates FY 2002-2005 Financial Statements
--------------------------------------------------------------
The Colonial BancGroup, Inc. (NYSE: CNB) Chairman and CEO, Robert
E. Lowder, reported that the company is restating its annual
financial statements for 2002, 2003, 2004 and interim financial
statements for 2004 and 2005 to correct for the company's
technical interpretation of the derivative accounting rules.  The
changes to reported earnings are primarily non-cash and non-
operating items which reflect changes in accounting for interest
rate swaps used to hedge interest rate risk on the company's
junior subordinated debt and brokered certificates of deposits.
The company will also restate its financials for other immaterial
items.  The company expects the restatement to be a cumulative
$431,000 net increase to Sept. 30, 2005 retained earnings.
Although the cumulative impact of the adjustments on the company's
financial statements is not significant, the decision to restate
prior period financial statements resulted from the impact of the
adjustments on certain quarters.

The Company will file an amended Form 10-K for 2004 as well as
amended Forms 10-Q for each of the first three quarters of 2005.


A Current Report on Form 8-K which will be filed with the SEC will
have a summary of the expected financial results as restated and
certain ratios that changed due to the change in accounting and
the reclassification of the net cash settlement of the interest
rate swaps from net interest income to operating noninterest
income.  The company will also restate its financials for other
immaterial items.

The company expects the trend in net interest margin to remain as
previously reported and should continue to show eight quarters of
expanded net interest margin over the affected periods.

       SFAS 133 Interpretation for the Interest Rate Swaps

During December of 2005, Colonial became aware that its accounting
under SFAS 133, Accounting for Derivative Instruments and Hedging
Activities, as amended was incorrect.  After reviewing its
abbreviated method of hedge accounting under paragraph 65 of SFAS
133 for its interest rate swap agreements on its junior
subordinated debt and brokered certificates of deposit, Colonial
concluded that its interest rate swap agreements did not qualify
for the abbreviated method of hedge accounting under SFAS 133,
even though such swaps were highly effective economic hedges of
interest rate risk.

During December of 2005, Colonial terminated its interest rate
swap agreements on its junior subordinated debt.  The company
expects to use other balance sheet strategies to replace the
economics of those interest rate swap agreements.  Therefore, the
net impact of terminating those interest rate swap agreements and
the other strategies is not expected to have a material impact on
the Company's future financial results.  Colonial redesignated the
interest rate swaps on its brokered certificates of deposit as
fair value hedges utilizing the long-haul method of effectiveness
testing, and as a result should receive hedge accounting treatment
in future periods.  Accordingly, the future impact on earnings for
ineffectiveness is expected to be minimal.

The change in fair value of the aforementioned interest rate swap
agreements from October 1 to termination date or Dec. 31, 2005
will be recorded in the income statement as noninterest income.
The impact of the change in fair value in the fourth quarter is
expected to be offset by other non-operating items.

                    Material Weakness

Colonial will restate management's report on internal control over
financial reporting as of Dec. 31, 2004, pursuant to Sarbanes-
Oxley Section 404, to conclude that its accounting for certain
derivatives was not in accordance with GAAP and therefore
represents a material weakness as of Dec. 31, 2004.

Management's restated report will conclude that Colonial's
internal control over financial reporting was ineffective as of
December 31, 2004 as a result of this material weakness.  In light
of the restatement, investors should rely on the Company's
forthcoming restated financial statements and other financial
information rather than the previously filed financial statements
and other financial information for each of the years ended
December 31, 2002, 2003 and 2004 and the quarters ended March 31,
June 30 and September 30 of 2004 and 2005.

The Colonial BancGroup, Inc., with approximately $21 billion in
assets operates 301 branches in Florida, Alabama, Georgia, Nevada
and Texas.  The Company's common stock is traded on the New York
Stock Exchange under the symbol CNB. In most newspapers the stock
is listed as ColBgp.


CORNERSTONE PRODUCTS: Court Denies Case Conversion or Dismissal
---------------------------------------------------------------
Pilot Plastics, Inc., Bloom Industries, Inc., Champion Molded
Plastics and the Official Committee of Unsecured Creditors asked
the U.S. Bankruptcy Court for the Eastern District of Texas,
Sherman Division, to convert into a chapter 7 liquidation
proceeding or dismiss the case of Cornerstone Products, Inc.

The Honorable Brenda T. Rhoades believes that a conversion to a
chapter 7 liquidation proceeding or case dismissal isn't
appropriate in the Debtor's case.  Judge Rhoades, however, ordered
the Debtor to have a plan confirmed by Mar. 31, 2006.

The Court determined that the creditors were unable to prove that
cause exists to dismiss the Debtor's case.  The Court found that:

   -- the Debtor's bankruptcy filing wasn't made in bad faith;

   -- the Debtor made efforts to administer its assets and to
      maximize the value of its assets for the benefit of its
      creditors; and

   -- upon initiation of this case, the Debtor had some prospects
      of reorganization, unfortunately, those opportunities have
      been dimmed as a result of economic forces beyond its
      control; even so, the Debtor has made significant strides
      toward an orderly liquidation of its assets.

Also, the Court determined that transferring the Debtor's assets
to a chapter 7 trustee, the costs of the trustee and its
professionals, and the delay and expense of educating the
replacement fiduciaries of the estate, would be disruptive and
more costly for the bankruptcy estate.

In addition, unsecured creditors will receive distributions under
chapter 11, while they'll get nothing in a chapter 7 liquidation
proceeding.

Headquartered in Plano, Texas, Cornerstone Products, Inc.
-- http://www.cornerstoneproducts.com/-- manufactures custom  
injection molded plastic products.  The Company filed for chapter
11 protection on July 5, 2005 (Bankr. E.D. Tex. Case No.
05-43533).  Frank J. Wright, Esq., at Hance Scarborough Wright
Ginsberg & Brusilow, L.L.P., represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed total assets of $59,595,144 and total
debts of $65,714,015.


CSK AUTO: Moody's Rates New $225 Million Convertible Notes at Ba3
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to CSK Auto,
Inc.'s new $100 million senior convertible notes and $125 million
senior unsecured notes, and affirmed other existing ratings,
including the SGL-2 speculative grade liquidity rating.  The
outlook remains stable.

These ratings were assigned:

   * $100 million senior unsecured convertible notes due 2025
     at Ba3

   * $125 million senior unsecured convertible notes due 2025
     at Ba3.

These ratings were affirmed:

   * Corporate family rating at Ba3;
   * $225 million subordinated notes at B2; and
   * Speculative grade liquidity rating of SGL-2.

This rating was withdrawn:

   * Secured bank credit facility at Ba2

This rating action follows CSK's acquisition of Belleville,
Michigan-based Murray's Auto Parts, a 110 store chain for
approximately $170 million, to be 100% debt-financed with a $70
million draw on the existing unrated $325 million asset-based bank
facility and the new Ba3 rated $100 million senior unsecured
convertible notes.  The affirmation is based on CSK's relatively
stable operating performance, its practice of utilizing free cash
flow to repay debt, which has resulted in metrics that, while
strained for this acquisition due to the debt-financing, remain
reasonable for the Ba3 rating as a result of the cushion created
by past repayments.

Ratings also consider the risks inherent in the integration of any
acquisition, as well as the competitive environment and CSK's
somewhat concentrated geographic profile.  Ratings are also
supported by solid industry fundamentals resulting from vehicle
aging and the growing number of higher cost-to-maintain SUV's in
the market.

The Ba3 rating of the senior unsecured convertible notes reflects
their pari passu nature with respect to other senior unsecured
debt, with the rating at the corporate family rating justified by
the unrated $325 million asset-based credit facility possessing a
priority claim on the operating assets, buffered by the presence
of $225 million in subordinated debt below.  The notes are
guaranteed by Holdings and all current and future direct and
indirect subsidiaries.  Assuming a fully-drawn revolver, a
multiple of slightly over 3x pro forma EBITDA extinguishes all
senior secured and unsecured debt, with an additional roughly
1.25x necessary to fully repay the subordinated debt as well.

The SGL-2 rating, representing good liquidity, reflects Moody's
expectation that CSK will generate sufficient internal cash flow
to cover normal capital expenditures and mandatory debt
amortizations over the next twelve months.  CSK has a good history
of generating free cash flow and this trend is expected to
continue as its free cash flow level has reached $122 million for
the twelve months ended October 31, 2005.  The company also has
approximately $20 million of cash balances as additional sources
of internal liquidity.  The $70 million draw on the unrated $325
million secured asset-based revolver to finance the Murray
acquisition is expected to gradually reduce via application of
internally generated free cash flow during the next twelve months.

As of October 31, 2005, the company has approximately $30 and $28
million in outstanding revolver borrowings and letter of credits
usage, respectively.  In addition, substantially all of the assets
of the borrower and that of its subsidiaries are pledged as
collateral, and as a result, there are limited sources of
alternate liquidity.

The stable outlook reflects Moody's expectation that CSK will
substantially retire the revolver portion of the debt financing
from free cash flow by the end of 2006, and will ensure that
debt/EBITDA will reduce to below 5x (calculation assumes Moody's
standard analytic adjustments).  The stable outlook also assumes
that CSK will smoothly integrate the Murray's operation.

Prospectively, a positive outlook would result if CSK can
demonstrate improvement in operating margins during 2006 along
with the aforementioned reduction in debt, with a level below 4.5x
necessary.  Conversely, a negative outlook will result if the
integration does not go smoothly, or if incremental debt
reductions from free cash flow during 2006 do not materialize.

CSK Auto Inc. is the operating subsidiary of CSK Auto Corp.,
headquartered in Phoenix, Arizona.  CSK, operating primarily in
the Western U.S., is one of the largest auto parts retailers with
1,267 stores when the acquisition was completed on December 19,
2005.  CSK reported revenues of $1.6 billion for the year ended
January 2005.  The company operates stores under the names:

   * Checkers,
   * Schucks,
   * Kragen, and
   * Murray's Discount Auto Stores.


DESIGNS BY SOPHIA: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Designs By Sophia LLC
        10342 Rubio Avenue
        Granada Hills, California 91344

Bankruptcy Case No.: 06-10023

Type of Business: The Debtor previously filed for chapter 13
                  protection on Oct. 13, 2005 (Bankr. C.D. Calif.
                  Case No. 05-18799).  The case was dismissed on
                  Jan. 4, 2006.

Chapter 11 Petition Date: January 6, 2006

Court: Central District of California (San Fernando Valley)

Judge: Geraldine Mund

Debtor's Counsel: Michael A. Cardenas, Esq.
                  The Cardenas Law Group
                  19725 Sherman Way, Suite 110
                  Canoga Park, California 91303
                  Tel: (818) 990-1400

Total Assets: $3,250,015

Total Debts:  $2,447,000

The Debtor has no unsecured creditors who are not insiders.


FINOVA GROUP: Paying Sr. Sec. Noteholders $29.68 Mil. on Feb. 15
----------------------------------------------------------------
The FINOVA Group Inc. will be making a partial principal
prepayment on Feb. 15, 2006 to holders of record as of 5:00 p.m.,
New York City time, on Feb. 8, 2006, on its 7.5% Senior Secured
Notes Due 2009 with Contingent Interest Due 2016.  The partial
principal prepayment is $29,679,490, together with accrued
interest on the portion of the principal being repaid up to, but
excluding February 8.

On January 3, 2006, FINOVA advised The Bank of New York, the
Trustee of the Notes, that it would make the partial prepayment.
Including the February 2006 prepayment, FINOVA will have prepaid
45% of the $2,967,949,000 principal amount outstanding as of
December 31, 2003.

This prepayment plus the other prepayments of principal that
FINOVA has made on the Notes are:

                                                Cumulative % of
   Prepayment Date         Principal Amount    Principal Prepaid
   ---------------         ----------------    -----------------
   May 15, 2004                $237,500,000     Approximately 8%
   August 16, 2004             $326,410,310                  19%
   October 15, 2004            $118,717,960                  23%
   November 15, 2004           $118,717,960                  27%
   January 18, 2005            $178,076,940                  33%
   February 15, 2005           $ 59,358,980                  35%
   March 15, 2005              $ 59,358,980                  37%
   May 15, 2005                $ 59,358,980                  39%
   August 15, 2005             $ 89,038,470                  42%
   November 15, 2005           $ 29,679,490                  43%
   January 17, 2006            $ 29,679,490                  44%
   February 15, 2006           $ 29,679,490                  45%

Headquartered in Scottsdale, Arizona, The Finova Group, Inc.,
provides commercial financing to small and mid-sized businesses;
other services include factoring, accounts receivable management,
and equipment leasing.  The firm has three segments: Commercial
Finance, Specialty Finance, and Capital Markets.  FINOVA targets
such markets as transportation, wholesaling, communication, health
care, and manufacturing. Loan write-offs had put the firm on
shaky ground.  The Company and its debtor-affiliates and
subsidiaries filed for Chapter 11 protection on March 7, 2001
(U.S. Bankr. Del. 01-00697).  Daniel J. DeFranceschi, Esq., at
Richards, Layton & Finger, P.A., represents the Debtors.  FINOVA
has since emerged from Chapter 11 bankruptcy.  Financial giants
Berkshire Hathaway and Leucadia National Corporation (together
doing business as Berkadia) own FINOVA through the almost
$6 billion lent to the commercial finance company.

                         *     *     *

                     Going Concern Opinion

The Company's independent public accountants, Ernst & Young LLP
reports that as of Sept. 30, 2005, the Company has a substantial
negative net worth.  While FINOVA continues to pay its obligations
as they become due, the ability of the Company to continue as a
going concern is dependent upon many factors, particularly the
ability of its borrowers to repay their obligations to FINOVA and
the Company's ability to realize the value of its portfolio.

Even if the Company is able to recover the book value of its
assets, and there can be no assurance of the Company's ability to
do so, the Company would not be able to repay the Senior Notes in
their entirety at maturity in November 2009.


FORD MOTOR: Market Share Erosion Prompts S&P to Lower Ratings
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
ratings on Ford Motor Co., Ford Motor Credit Co. (Ford Credit),
and all related entities to 'BB-/B-2' from 'BB+/B-1' and removed
them from CreditWatch, where they were placed on Oct. 3, 2005,
with negative implications.  The outlook is negative.  
Consolidated debt outstanding totaled $141.7 billion at Sept. 30,
2005.

"The downgrade reflects our increased skepticism about Ford's
ability to turn around the performance of its North American
automotive operations -- a process that will require, at best, a
number of years," said Standard & Poor's credit analyst Robert
Schulz.  Even so, Ford's still-substantial liquidity will continue
to provide considerable protection against the risk of financial
distress for the next few years, but Ford is highly subject to the
pricing actions of competitor General Motors Corp. (B/Negative/B-
3) and could suffer from further turmoil at GM.

Ford suffered substantial market share erosion in the U.S. during
2005, despite earlier concerted efforts to improve the appeal of
its product offerings and minimize the use of incentives.  At the
same time, the company has experienced marked deterioration of its
product mix, given the precipitous weakening of sales of its
midsize and large SUVs, products that had been highly
disproportionate contributors to Ford's earnings.  This product
mix deterioration has occurred despite the launch of some
refreshed SUV models such as the Explorer.  With SUV demand having
plummeted industrywide, particularly during the second half of
2005, it is now dubious whether even additional new models can be
counted on to help restore the company's North American operations
to profitability.

Despite earlier downsizing, Ford is expected to announce later
this month that it will undertake yet another costly and extensive
round of production capacity cuts and workforce rationalization.
But the benefits of such measures could be undermined unless its
market share stabilizes without the company's having to resort
again to ruinous price discounting.  Despite robust industry
demand, Ford's financial performance declined sharply in 2005
compared with 2004 and initial expectations for 2005.  In light of
the $1.4 billion loss through the first nine months of 2005, we
believe the full-year pretax loss of Ford's North American
operations could approach $2 billion -- before substantial
impairment and restructuring charges -- although Ford is still
expected to be profitable on a net basis in 2005 (before special
items) thanks to earnings from its finance unit.

The rating outlook on Ford and Ford Credit is negative. Prospects
for Ford's automotive operations are clouded. The ratings could be
lowered further if we came to expect that Ford's cash generation
would worsen due to further setbacks, whether Ford-specific or
stemming from market conditions.  Ford would need to reverse its
current financial and operational trends, and sustain such a
reversal, before we would revise its outlook to stable.


FORD MOTOR: S&P Cuts Ratings on Nine Synthetic ABS Transactions
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on nine
U.S. single-issue synthetic ABS transactions related to Ford Motor
Co. (Ford; BB-/Negative/B-2) and Ford Motor Credit Co.
(Ford Credit; BB-/Negative/B-2) and removed them from CreditWatch,
where they were placed with negative implications on Oct. 5, 2005.

The Jan. 5, 2006, lowering of the ratings on Ford and its related
entities and their subsequent removal from CreditWatch negative
does not have any immediate rating impact on the Ford-related ABS
supported by collateral pools of consumer auto loans or auto
wholesale loans.

Each of the downgraded securitizations listed below is weak-linked
to the long-term corporate credit, senior unsecured debt, or
preferred stock ratings of Ford or Ford Credit.  Either Ford or
Ford Credit provide the underlying collateral or referenced
obligations in the affected securitizations, as indicated below.

The Jan. 5, 2006, lowering of the ratings on Ford, Ford Credit,
and all related entities and their subsequent removal from
CreditWatch reflects Standard & Poor's increased skepticism about
Ford's ability to turn around the performance of its North
American automotive operations.

A copy of the Ford Motor Co.-related research update, "Ford Motor
Co., Ford Credit Downgraded To 'BB-/B-2', Off CreditWatch; Outlook
Negative," dated Jan. 5, 2006, is available on RatingsDirect,
Standard & Poor's Web-based credit analysis system, at
http://www.ratingsdirect.com/
    
       Ratings Lowered and Removed from Creditwatch Negative
   
          Corporate Backed Trust Certificates Ford Motor Co.
                Debenture-Backed Series 2001-36 Trust

                 Rating
                 ------
     Class    To      From                 Role
     -----    --      ----                 ----
     A-1      BB-     BB+/Watch Neg        Underlying collateral
     A-2      BB-     BB+/Watch Neg        Underlying collateral
      
         Corporate Backed Trust Certificates, Ford Motor Co.
                   Note-Backed Series 2003-6 Trust

                Rating
                ------
     Class    To      From                 Role
     -----    --      ----                 ----
     A-1      BB-     BB+/Watch Neg        Underlying collateral
    
                  CorTS Trust for Ford Debentures

                Rating
                ------
     Class    To      From                 Role
     -----    --      ----                 ----
     Certs    BB-     BB+/Watch Neg        Underlying collateral
    
                   CorTS Trust II for Ford Notes

                Rating
                ------
     Class    To      From                 Role
     -----    --      ----                 ----
     Certs    BB-     BB+/Watch Neg        Underlying collateral
     
                     PPLUS Trust Series FMC-1

                Rating
                ------
     Class    To      From                 Role
     -----    --      ----                 ----
     Certs    BB-     BB+/Watch Neg        Underlying collateral
    
                  PreferredPLUS Trust Series FRD-1

                Rating
                ------
     Class    To      From                 Role
     -----    --      ----                 ----
     Certs    BB-     BB+/Watch Neg        Underlying collateral
     
                     SATURNS Trust No. 2003-5

                Rating
                ------
     Class    To      From                 Role
     -----    --      ----                 ----
     Units    BB-     BB+/Watch Neg        Underlying collateral
    
         Trust Certificates (TRUCs) Series 2002-1 Trust

                Rating
                ------
     Class    To      From                 Role
     -----    --      ----                 ----
     A-1     BB-      BB+/Watch Neg        Underlying collateral
    
           STEERS Credit-Backed Trust Series 2002-3 F

                Rating
                ------
     Class    To      From                 Role
     -----    --      ----                 ----
     Certs    B-      B+/Watch Neg         Referenced obligation


FREEDOM RINGS: Governmental Unit Bar Date Set for April 14
----------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware,
set on Apr. 14, 2006, at 4:00 p.m. as the deadline for all
governmental units owed money by Freedom Rings, LLC, on account of
claims arising prior to Oct. 16, 2005, to file their proofs of
claim.

Governmental units must file written proofs of claim on or before
the April 14 Claims Bar Date and those forms must be delivered to:

   If by United Postal Service:

      Donlin Recano & Company, Inc.
      Re: Freedom Rings, LLC
      P.O. Box 2003
      Murray Hill Station
      New York, New York 10156

   If by overnight courier or hand delivery:

      Donlin Recano & Company, Inc.
      Re: Freedom Rings, LLC
      419 Park Avenue South
      Suite 1206
      New York, New York 10016

Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC
is a majority-owned subsidiary and franchisee partner of Krispy
Kreme Doughnuts, Inc., in the Philadelphia region.  The Debtor
operates six out of the approximately 360 Krispy Kreme stores and
50 satellites located worldwide.  The Company filed for chapter 11
protection on Oct. 16, 2005 (Bankr. D. Del. Case No.
05-14268).  M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and
Matthew Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it estimated $10
million to $50 million in assets and debts.


GENERAL MARITIME: Debt Payment Prompts Moody's to Withdraw Ratings
------------------------------------------------------------------
Moody's Investors Service withdrew all ratings assigned to General
Maritime Corporation's debt:

Ratings Withdrawn:

  General Maritime Corporation:

     * Senior Unsecured of B2
     * Corporate Family Rating of B1

The withdrawal is due to General Maritime's purchase on December
30, 2005 of $226.46 million (or 99.99% of the then outstanding
principal amount) of its $250 million of 10% Senior Unsecured
Notes due 2013 pursuant to the Company's Tender Offer for the
notes made on Dec. 15, 2005.  According to the company, the
requisite consents needed to eliminate substantially all of the
restrictions, covenants and certain default provisions of the
Senior Notes Indenture were obtained and the Indenture was amended
on Dec. 30, 2005.  Moody's had downgraded each of these ratings by
one notch on Aug. 11, 2005, upon completion of the review for
possible downgrade initiated on Jan. 28, 2005.

General Maritime Corporation, a Marshall Islands corporation
headquartered in New York, New York, is a provider of
international transportation services of seaborne crude oil.


GMAC MORTGAGE: Fitch Holds Low-B Ratings on Two Equity Classes
--------------------------------------------------------------
Fitch Ratings affirms the following GMAC Mortgage Corporation home
equity issues:

                        Series 2004-J2

    -- Class A at 'AAA';
    -- Class M-1 at 'AA';
    -- Class M-2 at 'A';
    -- Class M-3 at 'BBB';
    -- Class B-1 at 'BB';
    -- Class B-2 at 'B'.

                  Series 2004-AR1 Group 1

    -- Class A at 'AAA'.

                  Series 2004-AR1 Group 2

    -- Class A at 'AAA'.

The affirmations reflect satisfactory credit enhancement
relationships to future loss expectations and affect approximately
$725 million in outstanding certificates as detailed above.

The mortgage loans in the series 2004-J2 consist of 30-year fixed-
rate mortgages and the mortgage loans in the series 2004-AR1
consist of 30-year adjustable-rate mortgages.  Both transactions
are extended to prime borrowers and are secured by first liens on
one- to four-family residential properties.  As of the December
2005 distribution date, series 2004-J2 is 19 months seasoned while
series 2004-AR1 is seasoned for 20 months.  The pool factor
(current principal balance as a percentage of original) is
approximately 80% for series 2004-J2.  The pool factors are 66%
and 67% for series 2004-AR1 Group 1 and series 2004-AR1 Group 2,
respectively.  GMAC Mortgage Corporation, the servicer for the
aforementioned transactions, is rated a 'RPS1' as a primary
servicer for prime residential mortgage loans by Fitch.

Fitch will continue to closely monitor these transactions.


GOODING'S SUPERMARKETS: Section 341(a) Meeting Slated for Jan. 30
-----------------------------------------------------------------          
The U.S. Trustee for Region 21 will convene a meeting of Gooding's
Supermarkets, Inc.'s creditors at 9:00 a.m., on Jan. 30, 2006, at
Suite 600, 6th Floor, 135 West Central Boulevard, Orlando, Florida
32801.  This is the first meeting of creditors required under 11
U.S.C. Sec. 341(a) in all bankruptcy cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered in Orlando, Florida, Gooding's Supermarkets, Inc.,
dba Gooding's, offers catering services and operates a chain of
supermarkets in Central Florida.  The Company filed for chapter 11
protection on Dec. 30, 2005 (Bankr. M.D. Fla. Case No. 05-17769).  
R. Scott Shuker, Esq., at Gronek & Latham, LLP represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed estimated assets of
$1 million to $10 million and estimated debts of $10 million to
$50 million.


GOODING'S SUPERMARKETS: Taps Gronek & Latham as Bankruptcy Counsel
------------------------------------------------------------------          
Gooding's Supermarkets, Inc., asks the U.S. Bankruptcy Court for
the Middle District of Florida for permission to employ Gronek &
Latham, LLP, as its general bankruptcy counsel.

Gronek & Latham will:

   1) assist and advise the Debtor of its rights and duties as a
      debtor and debtor-in-possession in its chapter 11 case;

   2) prepare on behalf of the Debtor all necessary pleadings in
      its chapter 11 case, including a disclosure statement;

   3) take all necessary action to protect and preserve the
      Debtor's estate and assist in the administration of its
      estate; and

   4) perform all other legal services to the Debtor that are
      appropriate and necessary in its chapter 11 case.

R. Scott Shuker, Esq., a partner at Gronek & Latham, is one of the
lead attorneys for the Debtor.  Mr. Shuker discloses that his Firm
received a $37,500 retainer.

Court records don't show the compensation rates of professionals
from Gronek & Latham who will render services to the Debtor.

Gronek & Latham assures the Court that it does not represent any
interest materially adverse to the Debtor and is a disinterested
person as that term is defined in Section 101(14) of the
Bankruptcy Code.

Headquartered in Orlando, Florida, Gooding's Supermarkets, Inc.,
dba Gooding's, offers catering services and operates a chain of
supermarkets in Central Florida.  The Company filed for chapter 11
protection on Dec. 30, 2005 (Bankr. M.D. Fla. Case No. 05-17769).    
When the Debtor filed for protection from its creditors, it listed
estimated assets of $1 million to $10 million and estimated debts
of $10 million to $50 million.


HIRSH INDUSTRIES: Wants Until April 3 to Remove Civil Actions
-------------------------------------------------------------
Hirsh Industries, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of Indiana to further
extend, until April 3, 2006, the period within which they can
remove prepetition civil actions.

The Debtors tell the Court that they have concentrated on the
preparation of a chapter 11 plan and related negotiations.  Thus,
they were unable to determine which prepetition actions to remove.

The extension will give the Debtors more time to make fully-
informed decisions concerning removal of each action and will
assure that they don't forfeit valuable rights under section 1452
of the Bankruptcy Code.

Headquartered in Des Moines, Iowa, Hirsh Industries, Inc.,
manufactures storage and organizational products.  Hirsh
Industries' products include metal filing cabinets, metal
shelving, wooden ready-to-assemble organizers and workshop
accessories and retail store fixtures.  The Company and two
affiliates filed for chapter 11 protection on July 6, 2005 (Bankr.
S.D. Ind. Case Nos. 05-12743 through 05-12745).  Paul V.
Possinger, Esq., at Jenner & Block LLP represents the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they estimated between $1 million
to $10 million in assets and between $50 million to $100 million
in debts.


INSIGNIA SOLUTIONS: Earns $1.975 Million from Private Placement
---------------------------------------------------------------
Insignia Solutions (Nasdaq:INSG) completed the closing of a
private placement resulting in $1,975,000 in proceeds to the
Company.

As part of the private placement, Insignia believes it will
evidence compliance with the shareholders' equity requirement for
continued listing on the Nasdaq Capital Market as of the quarter
and year ended Dec. 31, 2005.  The company expects to report
shareholders' equity of approximately $3 million as of that date.

"We are enormously pleased to get this transaction completed, as
it allows our team to focus exclusively on growing our business in
the dynamic mobile device management space," said Mark McMillan,
chief executive officer of Insignia.

                    Delisting Update

As announced previously, Insignia received a Nasdaq Staff
Determination letter indicating that the Company was not in
compliance with Marketplace Rule 4320(e)(2)(B) and that such
noncompliance is a basis for delisting the Company's securities
from The Nasdaq Stock Market.  Marketplace Rule 4320(e)(2)(B)
requires a company to have a minimum of $2,500,000 in
stockholders' equity or $35,000,000 market value of listed
securities or $500,000 of net income from continuing operations
for the most recently completed fiscal year or two of the three
most recently completed fiscal years.

Insignia had a hearing before a Nasdaq Listing Qualifications
Panel on Dec. 15, 2005, to review the determination. Pending the
outcome of this hearing, Insignia's shares will remain listed on
The NASDAQ Capital Market.  However, there can be no assurance
that the Panel will grant the Company's request for continued
listing, even after the closing of the private placement.

Headquartered in Fremont, California, Insignia Solutions PLC --
http://www.insignia.com/-- enables mobile operators and terminal  
manufacturers to manage a growing, complex and diverse community
of mobile devices.  Insignia Device Management Suite is a complete
standard-based mobile device management offering, which includes
client provisioning technologies supported by most of the mobile
devices in the past, OMA-DM based technology used by current
mobile devices and future OMA-DM based technologies.

                          *     *     *

                       Going Concern Doubt

Burr, Pilger & Mayer LLP expressed substantial doubt about
Insignia's ability to continue as a going concern after it audited
the Company's financial statements for the years ended Dec. 31,
2004 and 2003.  The auditing firm pointed to the Company's
recurring losses from operations.


INTERSTATE BAKERIES: Court Approves $16-Mil Bryant Sale to Amerco
-----------------------------------------------------------------
As reported in the Troubled Company Reporter on Dec. 15, 2005,
Interstate Bakeries Corporation and its debtor-affiliates sought
the U.S. Bankruptcy Court for the Western District of Missouri's
permission to sell their property located at 1525 Bryant Street in
San Francisco, California, to Amerco Real Estate Company, subject
to higher or better offers.

Paul M. Hoffman, Esq., at Stinson Morrison Hecker LLP, in Kansas
City, Missouri, recounts that, the Debtors, with the assistance
of Alvarez & Marsal Real Estate Advisory Services, LLC, conducted
thorough marketing efforts for the Property.  After evaluating
the proposals submitted for the Property, the Debtors have
determined that Amerco has provided the best offer for the
Property at this time and thus decided to enter in to a Sale
Agreement with Amerco as a stalking horse bidder.

The salient terms of the Sale Agreement are:

     Purchase Price:            $16,000,000

     Escrow Deposit:            $1,600,000 deposited by Amerco is
                                held in escrow until all closing
                                conditions are satisfied.

     Closing:                   The closing will occur within five
                                business days of the approval of
                                the Sale Agreement subject to the
                                payment of the Purchase Price.

     Conditions to Closing:     The Sale Agreement is subject to
                                higher and better offers as well
                                as Court approval.

     Condition of Property:     The Debtors will deliver good and
                                marketable fee simple title to the
                                Land and Improvements, free and
                                clear of liens, other than
                                Permitted Exceptions.  The
                                Property is being sold AS-IS,
                                WHERE-IS, with no representations
                                or warranties, reasonable wear and
                                tear, casualty and condemnation
                                excepted.

The Debtors request that the proposed sale be exempted from
transfer, stamp or similar taxes, conveyance fees and recording
fees, costs or expenses imposed by any federal, state, county or
other local law in connection with the transfer or conveyance of
the Property.

The Debtors also request that the Property be transferred to
Amerco, or the successful bidder free and clear of all liens,
claims and encumbrances, with the liens to attach to the proceeds
of the sale.

To maximize the value realized by their estates from the sale of
the Property, the Debtors have solicited bids of at least
$16,250,000.  As bid protection, the Debtors have agreed to
provide Amerco with a $160,000 termination fee and expense
reimbursement of up to $50,000.

                     San Francisco Objects

The City and County of San Francisco argue that a sale or
transfer prior to the entry of a confirmation order is
unauthorized under Section 1146(c) and is not entitled to tax
exemption.

San Francisco expects the Debtors to argue that its Objection is
late and thus should not be considered.  San Francisco asserts
that the Debtors should have known that it will object to the
sale considering that it had raised this ground in a timely
objection to the Debtors' sale of property at 2460 Alameda
Street, San Francisco, California.  San Francisco also complains
that it did not receive proper notice of the sale.

                           *     *     *

The Court approved the sale of the Bryant Property after the
Debtors withdrew their request for the exemption from payment of
stamp and similar taxes.

Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R).  The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.

The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts.  (Interstate Bakeries
Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


INTERSTATE BAKERIES: Court OKs NEG Waste Service Pact Termination
-----------------------------------------------------------------
As reported in the Troubled Company Reporter on Dec. 14, 2005,
pursuant to a Waste Service Agreement, effective March 1, 2004,
Interstate Bakeries Corporation utilized National Environmental
Group to provide waste hauling or recycling services at specified
locations in New York and New Jersey.  Much if not all of the
services provided by NEG were subcontracted through local waste
hauling companies.

J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP,
in Chicago, Illinois, relates that NEG breached the Agreement on
many occasions, including but not limited to failing to provide
waste hauling services for various locations for extended periods
of time.  Despite numerous communications with NEG about these
defaults, NEG continued to breach the Agreement.

On June 3, 2005, the Debtors terminated the NEG Agreement
pursuant to a letter from Jolyn Sebree, senior counsel, to Mr.
Abadi.  Thereafter, the Debtors and NEG have exchanged several
communications regarding:

    (a) whether NEG breached the Agreement;

    (b) what equipment NEG claims it can remove,

    (c) the process by which NEG has attempted to remove
        equipment,

    (d) whether and to what extent the automatic stay of Section
        362 of the Bankruptcy Code applies to NEG's actions; and

    (e) NEG's intent to pursue civil and criminal remedies against
        the Debtors.

The Debtors believe they properly terminated the NEG Agreement on
June 3, 2005.  However, out of an abundance of caution, and to
address some of the points in the subsequent communications with
NEG, the Debtors ask the Court to approve the rejection of the
Agreement effective June 3.

The Debtors reserve all rights and defenses against NEG,
including, but not limited to, the right to assert any and all
breach of contract claims and defenses that the Debtors may have
in law or equity against NEG.

                        *     *     *

The Court grants the Motion and National Environmental Group may
remove any equipment or other property that it owns from any
property owned or controlled by the Debtors only if NEG satisfies
each of these conditions:

    (a) NEG obtains the prior signed consent of the Debtors or the
        Debtors' Representative;

    (b) NEG coordinates the removal of the NEG Property with the
        Debtors' Representative, or that the NEG Property is
        removed on reasonable notice, during normal business
        hours, and without material disruption of the Debtors'
        business activity; and

    (c) NEG should be responsible for, and indemnify the Debtors
        against, any damages caused by NEG or its agents during
        the removal of the NEG Property.

Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R).  The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.

The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts.  (Interstate Bakeries
Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


INTRAWEST CORP: Solid Business Position Cues S&P to Hold Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' long-term
corporate credit and 'B+' senior unsecured debt ratings on ski and
golf resort operator Intrawest Corp.  The outlook is stable.

The ratings reflect:

    * the cyclical and seasonal resort business,
    * an aggressive financial policy, and
    * continued uncertainty in travel patterns.

These weaknesses are offset by:

    * Vancouver, British Columbia-based Intrawest's leading
      position and successful track record in owning, operating,
      and developing village-centered destination resorts in
      various markets across North America;

    * the maturing of the portfolio of resorts into a less
      capital-intensive stage; and

    * the company's disciplined resort real estate development
      strategy.

"Intrawest's business strategy is sound, with a portfolio of well-
positioned resorts and resort accommodation developments that are
supported by a strong sales and marketing team," said Standard &
Poor's credit analyst Christian Green.  The company has reduced
weather-related risk by diversifying its operations among various
geographic markets, offering a variety of leisure activities in a
resort village atmosphere.  Skier visits are supported by each
resort's inventory of "warm beds" and locations that are in close
proximity to major population centers.  Having completed the
majority of the significant capital expenditures required to
develop its resort portfolio, Intrawest is able to focus
increasingly on its sales and marketing system to further develop
its reputation as a premier resort operator.

There are a number of external and uncontrollable risks that
create ongoing challenges for Intrawest's businesses.  The key
events negatively affecting Intrawest's financial performance are
unfavorable weather conditions (on the Canadian west coast in
2004-2005 and in the U.S. southeast in the summer of 2005),
reduced international travel, and an increase in the Canadian
dollar.  

The outlook for Intrawest is stable.  Standard & Poor's expects
the credit position of the company to remain stable as the capital
requirements for most properties are now beyond the heavy capital
investment stage and approaching neutral or positive cash flow,
and as the company focuses on less capital-intensive activities
and more on leveraging the expertise of the management and the in-
place marketing, sales, and development systems.  A significant
change in the company's capital structure as a result of announced
share repurchase plans beyond its peer group, or deterioration in
EBITDA interest coverage could cause Standard & Poor's to review
its outlook.


JEROME-DUNCAN: Suburban Ford Submits $14.8 Mil. Bid for Dealership
------------------------------------------------------------------
Suburban Ford of Sterling Heights L.L.C. proposes to buy the
assets of bankrupt Jerome-Duncan Inc., subject to higher and
better offers, Sheena Harrison of Crain's Detroit Business
reports.

Suburban Ford submitted an initial bid, which includes $10 million
for real estate, $4 million for goodwill, and $800,000 for
furniture.

The auction for Jerome-Duncan's assets will be held on Jan. 17 at
Miller, Canfield, Paddock and Stone plc in Detroit, Ms. Harrison
relates.

Jerome-Duncan's bankruptcy filing resulted from a shareholder
dispute between Gail Duncan, who operates the dealership, and her
father, Richard Duncan, who co-founded the dealership and still
holds a significant ownership stake.

Gail Duncan is the majority owner by a small percentage, and
Richard Duncan is the minority owner.

Headquartered in Sterling Heights, Michigan, Jerome Duncan Inc.,
is the largest dealer of automobiles manufactured by Ford Motor
Company in the state of Michigan.  The Debtor is one of the most
well-known, modern automobile dealers in the area and has a
tradition of serving customers in southeastern Michigan for the
past 50 years.  The Debtor employs over 200 individuals in its
operations and generates between $300 and $500 million in annual
sales.  The company filed for chapter 11 protection on June 17,
2005 (Bankr. E.D. Case No. 05-59728).  Arnold S. Schafer, Esq., at
Schafer and Weiner, PLLC, represents the Debtor in its
restructuring efforts.


JO-ANN STORES: Reports Decrease in December Same-Store Sales
------------------------------------------------------------
Jo-Ann Stores, Inc. (NYSE:JAS) reported that December net sales
increased 4.6% to $273.5 million from $261.5 million in the same
period last year.  December same-store sales decreased 0.5%
compared to a same-store sales increase of 4.2% last year.

Year-to-date net sales increased 3.9% to $1.742 billion from
$1.677 billion in the prior year.  Year-to-date same-store sales
decreased 0.6%, versus a same-store sales increase of 2.9% for
last year.

              Performance Improvement Update

The company is in the process of implementing its previously
disclosed strategic transformation.  At this time the primary
focus is on inventory reduction and maximizing inventory sell-
through.  In addition, in anticipation of a challenging year in
fiscal 2007, the company is undertaking several initiatives, which
should impact the business over time:

    -- Reduction in new store openings.  The Company expects to
       reduce the number of new store openings from 44 stores in
       fiscal 2006 to 25-30 stores in fiscal 2007, and defer other
       discretionary capital spending;

    -- Adjustment of store merchandise assortments.  The company
       expects to reduce space and inventory investment in under-
       performing categories such as finished seasonal and home-
       decor, while emphasizing product categories, such as craft
       components.

    -- Gross margin rate restoration.  The company expects to
       reduce advertising spending, be more discrete with coupons,
       and take steps to reduce clearance through tighter
       purchasing disciplines.

    -- Selling, general and administrative expense reduction.  The
       company is aggressively reviewing all areas of the business
       for opportunities to reduce expenses.  Completion of the
       new distribution center in Opelika, Alabama in fiscal 2007
       should enable improved efficiencies in the distribution and
       logistics network over time.

The company also is moving ahead with the rebuilding and
strengthening of its management team.  As previously announced, it
is separating the roles of Chairman, President and Chief Executive
Officer.  Alan Rosskamm will retain the position of Executive
Chairman.  The Board has established a search committee, retained
an executive search firm and commenced a search for the new
President and CEO.  The company is seeking an entrepreneurial
leader from outside the company who can bring merchandising and
operational best practices to Jo-Ann.  While the company hopes to
complete the CEO search as expeditiously as possible, it is
committed to taking the necessary time to get the right person and
the right management team in place.

Jo-Ann Stores, Inc. -- http://www.joann.com/-- is the leading  
U.S. fabric and craft retailer with locations in 47 states,
operates 688 Jo-Ann Fabrics and Crafts traditional stores and 154
Jo-Ann superstores.

                         *     *     *

As reported in today's Troubled Company Reporter, Standard &
Poor's Ratings Services lowered its corporate credit rating on
Hudson, Ohio-based specialty retailer Jo-Ann Stores Inc. to 'B+'
from 'BB-'.  The ratings remain on CreditWatch with negative
implications, where they were placed on Oct. 6, 2005.


JO-ANN STORES: Low December Sales Prompt S&P to Cut Ratings to B+
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Hudson, Ohio-based specialty retailer Jo-Ann Stores Inc.
to 'B+' from 'BB-'.  The ratings remain on CreditWatch with
negative implications, where they were placed on Oct. 6, 2005.

"The rating action," said Standard & Poor's credit analyst Robert
Lichtenstein, "is based on weak operating trends in December, the
most important sales month of the year, and the expectation of a
challenging year ahead."  Same-store sales in December decreased
0.5% compared to a 4.2% increase the year before and margins are
expected to be significantly lower as the company continues to
focus on inventory reduction.  Moreover, debt levels at the end of
fiscal 2006 are expected to increase by about $60 million from a
year earlier.  Total debt to EBITDA was 6x at Oct. 29, 2005,
compared with 4.0x a year before.  "Standard & Poor's expects a
further deterioration in leverage, possibly resulting in a further
downgrade," said Mr. Lichtenstein.


KAISER ALUMINUM: Court Disallows 119 Workers' Pension Claims
------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
December 28, 2005, Kaiser Aluminum Corporation and its debtor-
affiliates receive 124 proofs of claim that were filed by, or on
behalf of, certain active and former employees asserting a claim
for pension benefits related to either one of the Retained Plans
or one of the PBGC Plans, as well as claim for retiree benefits.

The Pension & Retiree Benefit Claims include:

                                    Modified
     Claimant          Claim No.    Claim Amt.   Debtor
     --------          ---------    ----------   ------
     James L. Chapman    7309        $455,000    KACC
     Dean D. Dykes       7096         383,739    KAC
     Diana Dykes         7097         578,077    KAC
     James M. Hunter     1196         350,000    KACC
     Robert James         647         500,000    KAC

Ms. Newmarch says the Debtors have reviewed the claims and
determined that each is improperly asserted because it is a claim
for:

     (a) retiree benefits, in which case the Claimants asserting
         these claims are bound by the terms of the applicable
         Legacy Liability Agreement;

     (b) future pension benefits under one of the retained plans,
         in which case the pension benefits will continue to be
         paid in full in the ordinary course; and

     (c) pension benefits under one of the PBGC Plans, in which
         case the claim is duplicative of the allowed claim of
         the PBGC in respect of the unfunded benefit liabilities
         of the PBGC Plans and preempted by the Employee
         Retirement Income Security Act of 1974.

For these reasons, the Debtors asked the Court to disallow and
expunge the claims.

                       *    *    *

The Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for
the District of Delaware disallows 119 No Liability Pension
Claims.  A list of the disallowed claims is available for free at:

     http://bankrupt.com/misc/Disallowed_Claims.pdf/

The Debtors' objections to five claims are deemed withdrawn
without prejudice to the Debtors' right to file a subsequent
objection on any ground to any or all of the Withdrawn Claims:

        Claimant                       Claim No.
        --------                       ---------
        Neil A. Stephansson               1118
        Robert D. Pendleton               7105
        Ernest J. Cappell                  871
        Linda D. Crites                   7357
        Raymond J. Kujawa                  544

Judge Fitzgerald notes that the disallowance of the claims for
Retiree Benefits will not affect the Claimants' rights to receive
benefits under the applicable Legacy Liability Agreement.  

Further, she notes that to the extent that a claimant whose claim
is expunged has an asbestos-related personal injury claim, the
expunging of claims will not effect the rights of that claimant to
later file an asbestos-related personal injury proof of claim,
without the necessity to seek leave of the Court, and with the
asbestos-related personal injury proof of claim being subject to
applicable defenses of the Debtors, any bar date that may be
established by the Court relating to the assertion of asbestos-
related personal injury claims, and any other future Court orders
regarding the assertion of asbestos-related personal injury
claims.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading  
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases.  Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts.  On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 87; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


KAISER ALUMINUM: Gramercy & SABL Want $5-Mil. Admin. Expense Paid
-----------------------------------------------------------------
Michael D. Debaecke, Esq., at Blank Rome L.L.P., in Wilmington,
Delaware, relates that before February 12, 2002, Kaiser Aluminum
& Chemical Corporation owned and operated the Gramercy Refinery,
an alumina refinery that processed bauxite into alumina, in
Gramercy, Louisiana.

In 1979, the Jamaican Government granted Kaiser Bauxite Company, a
wholly owned subsidiary of KACC, a 40-year lease to mine bauxite
on the coast of Jamaica.  The Jamaican Government, through JBM, a
Jamaican state-owned corporation, joined KBC to form Kaiser
Jamaica Bauxite Company to operate the leased bauxite mine.

On May 17, 2004, KACC and KBC executed a purchase agreement to
sell to Gramercy Alumina L.L.C. and St. Ann Bauxite Limited the
Gramercy refinery and KBC's interests in KJBC.

Mr. Debaecke notes that the Purchase Agreement contains numerous
disclosure requirements surrounding KJBC operations' current and
former employees, including requirements to disclose employee-
related benefit plans.

The sale of the Gramercy refinery and KBC interests in the KJBC
operations closed on September 30, 2004.

In the ordinary course of business, SABL hired Rambarran &
Associates Limited Consulting Actuaries to perform actuarial
services of SABL's employee-related obligations.  On March 2,
2005, Rambarran informed SABL that the life and health benefit
costs accrued under certain retirement pension plans was
$7,200,000 as of September 30, 2004.

Mr. Debaecke says that prior to being informed by Rambarran,
Gramercy and SABL had no knowledge of the retirement plans or the
accrued retirement benefits as these were not disclosed in the
Purchase Agreement, in the exhibits, or schedules.

On June 17, 2005, Gramercy and SABL submitted to Kaiser Aluminum
Corporation and its debtor-affiliates a letter seeking
indemnification for the accrued retirement benefits.  The Debtors
responded on June 29, 2005, with a letter that said they "were
unable to understand the nature of the claim or to assess the
validity thereof."

However, Mr. Debaecke says the Debtors continuously provided
benefits under the retirement plans to retired employees since
1978.

Gramercy and SABL objected to the disclosure statement the
Debtors filed in connection with their Joint Plan of
Reorganization.  The Debtors amended the Plan and Disclosure
Statement, indicating that KACC does not believe that Gramercy and
SABL are entitled to indemnification in respect of the retirement
plans and the accrued retirement benefits and that the Debtors
intend to "vigorously defend against that claim."

Against this backdrop, Gramercy and SABL ask the U.S. Bankruptcy
Court for the District of Delaware to:

   (1) declare that the Debtors breached the Purchase Agreement
       because they failed to list or otherwise disclose or
       describe the retirement plans and the accrued retirement
       benefits in the Purchase Agreement;

   (2) declare that the Debtors breached the Purchase Agreement
       because they failed to satisfy the accrued retirement
       benefits that stood at $7,200,000 on the closing date;

   (3) determine that the Debtors are obligated to pay them
       $5,000,000 in connection with liabilities unknowingly
       incurred and damages suffered for at least $7,200,000.  
       The Debtors' indemnification obligations are limited to
       $5,000,000 under the Purchase Agreement; and

   (4) direct the Debtors to pay them $5,000,000 as an
       administrative expense payable under the Debtors' Chapter
       11 case.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading  
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases.  Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts.  On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 87; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


KRISPY KREME: Reinstates Southern California Franchisee's Licenses
------------------------------------------------------------------
Krispy Kreme Doughnut Corporation, a wholly owned subsidiary of
Krispy Kreme Doughnuts, Inc. (NYSE: KKD), reached an agreement
with Great Circle Family Foods, LLC, its Southern California
franchisee, to reinstate Great Circle's franchise licenses
effective immediately.

On Jan. 5, 2006, KKDC terminated Great Circle's franchise rights
for failure to pay certain royalty and Brand Fund payments.  
Krispy Kreme also filed a lawsuit in North Carolina to stop Great
Circle from using the Krispy Kreme trademarks and confidential
information following the termination of its franchise rights.  
After a judge entered a temporary restraining order prohibiting
Great Circle from using the Krispy Kreme trademarks and
confidential information, Great Circle agreed to remit the past
due royalty and brand fund fees that triggered the termination and
to pay such fees on a timely basis going forward.  KKDC will
resume product shipments to Great Circle.  Great Circle remains
indebted to KKDC for other amounts due under its franchise
agreements, and KKDC has reserved its rights to pursue payment of
those amounts.

Great Circle, Krispy Kreme's largest franchisee, currently
operates 28 Krispy Kreme locations in the Southern California
area.

Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme --
http://www.krispykreme.com/-- is a leading branded specialty    
retailer of premium quality doughnuts, including the Company's
signature Hot Original Glazed.  Krispy Kreme currently operates
approximately 350 stores and 60 satellites in 45 U.S. states,
Australia, Canada, Mexico, the Republic of South Korea and the
United Kingdom.

KremeKo, Inc., Krispy Kreme's Canadian franchisee, is currently
restructuring under the Companies' Creditors Arrangement Act.
Pursuant to the Court's Initial Order, Ernst & Young Inc. was
appointed as Monitor in KremeKo's CCAA proceedings.  The Monitor
is attempting to sell the KremeKo business.


LAIDLAW INTERNATIONAL: Reports Results for First Quarter 2006
-------------------------------------------------------------
Laidlaw International, Inc. (NYSE:LI), a holding company for North
America's largest operators of school and inter-city bus
transportation and a leading provider of public transit services,
reported financial results for its fiscal first quarter ended Nov.
30, 2005.  Laidlaw reported net income from continuing operations
of $58 million for its first quarter fiscal 2006 as compared to
net income from continuing operations of $25 million for first
quarter fiscal 2005.  The company also announced a $200 million
share buyback program.

"We are delighted with the results for the quarter," said Kevin
Benson, President and Chief Executive Officer.  "The primary
driver of our EBITDA growth was Greyhound's operating improvement.
Greyhound's increase was due in part to its continued network
restructuring, but also due to ticket price increases in a period
of strong demand.  However, we cannot rely on these first quarter
trends continuing for the balance of the year."

Mr. Benson added, "The announcement of the share buyback and the
decision to return $200 million to our shareholders reflects both
our strong cash position and our commitment to deliver value to
our shareholders."

                    First Quarter Results

Laidlaw reported consolidated revenue for the first quarter of
$847 million, up 4% from $814 million in the prior year first
quarter.  The company believes the high cost of gasoline during
the quarter provided support for Greyhound's price increases,
while strong passenger demand offset revenue reductions due to
changes to its network.  Rate increases and new contracts at
Education Services offset the effect of initiatives to exit low
return school bus contracts.

EBITDA was $155 million in the quarter, up $28 million or 22% from
the prior year, largely benefiting from Greyhound's network
changes and ticket price increases.  During the quarter, Greyhound
realized a one-time gain of $5 million from the resolution of a
business interruption claim related to the September 11, 2001
terrorist attacks.

                     Share Repurchase

The Board of Directors authorized the company to repurchase up to
$200 million of its common stock through open market or in
privately negotiated transactions at the discretion of the
company's management, and as market conditions warrant.  The share
repurchase program will be funded with available cash or by
drawing on the Company's revolving credit facility.

Additionally, the Board of Directors declared a dividend payable
of $0.15 per share to the owners of the Company's common stock.
Stockholders of record as of February 3, 2006 will be paid the
dividend on February 24, 2006.  Dividends are reviewed quarterly
and declared by the Board at its discretion.

As of Nov. 30, 2005, the Company had cash and cash equivalents of
$147 million and debt outstanding of $313 million.  Net capital
expenditures for the first quarter were $55 million, as compared
to $20 million for the prior year first quarter.

                          Outlook

With one quarter of fiscal 2006 completed, the company now
anticipates fiscal 2006 revenue will increase one to three percent
as compared to 2005.  The previous guidance was for fiscal 2006
revenue to range from a decline of one percent to an increase of
one percent as compared to 2005.

EBITDA for fiscal 2006 is now projected to range from $440 million
to $470 million as compared to the company's previous guidance of
$425 million to $450 million.  The increase in EBITDA guidance
incorporates Greyhound's strong performance in the first quarter
of fiscal 2006.  The company continues to project the improvement
in consolidated EBITDA over prior year will come principally from
the Greyhound segment.

Earnings per share guidance from continuing operations is now
expected to range from $1.30 to $1.50 per share for fiscal 2006 as
compared to the previous guidance of $1.20 to $1.35 per share, and
reflects the expected impact of the announced share buyback
program.

Net capital expenditures for fiscal 2006 are projected to be
approximately $200 million to $235 million reflecting higher
spending after two years of restraint at Education Services and an
increase in bus lease buy-outs at Greyhound.

Headquartered in Arlington, Texas, Laidlaw, Inc., now known as   
Laidlaw International, Inc. -- http://www.laidlaw.com/-- is            
North America's #1 bus operator.  Laidlaw's school buses transport   
more than 2 million students daily, and its Transit and Tour   
Services division provides daily city transportation through more   
than 200 contracts in the US and Canada.  Laidlaw filed for   
chapter 11 protection on June 28, 2001 (Bankr. W.D.N.Y. Case No.   
01-14099).  Garry M. Graber, Esq., at Hodgson Russ LLP, represents   
the Debtors.  Laidlaw International emerged from bankruptcy on   
June 23, 2003.   

                         *     *     *   

As reported in the Troubled Company Reporter on June 6, 2005,   
Moody's Investors Service has upgraded the ratings of Laidlaw   
International Inc. senior implied to Ba2 from B1.  In a related   
action, Moody's assigned Ba2 ratings to the company's $300 million
Term Loan and $300 million Revolving Credit facility.  Moody's
said the rating outlook is stable.


LONG BEACH: Moody's Lowers Class BV Certificates' Ratings to Caa3
-----------------------------------------------------------------
Moody's Investors Service downgraded two certificates from one
deal issued by Long Beach Mortgage Company in 2000.  The
transaction is backed by primarily first-lien adjustable and
fixed- rate subprime mortgage loans originated by Long Beach.  The
master servicer on the deals is Long Beach Mortgage Company.

The two subordinate classes from the adjustable-rate group have
been downgraded because existing credit enhancement levels may be
low given the current projected losses on the underlying pools.
The transaction has taken significant losses causing gradual
erosion of the overcollateralization.

In the 2000-LB1 transaction, the adjustable-rate pool has stepped
down and the most subordinate certificate is receiving all of the
unscheduled prepayments.  This is causing the M2V tranche to
gradually lose credit enhancement until it reaches its target OC.
In addition, the severity of loss on the liquidated loans has
increased in the past year possibly due in part to a relatively
high concentration of manufactured housing loans.

Moody's complete rating actions are:

Issuer: Asset Backed Securities Corporation, Long Beach Home
        Equity Loan Trust 2000-LB1, Home Equity Loan Pass-Through
        Certificates

  Downgrades:

     * Series 2000-LB1; Class M2V, downgraded to Baa3 from Aa2
     * Series 2000-LB1; Class BV, downgraded to Caa3 from B3


LORETTO-UTICA: Creditors Must File Proofs of Claim by July 22
-------------------------------------------------------------
The United States Bankruptcy Court for the Northern District of
New York, set at 4:00 p.m. on July 22, 2006, as the deadline for
all creditors owed money by Loretto-Utica Properties Corporation
on account of claims arising prior to December 15, 2005, to file
their proofs of claim.

Creditors must file written proofs of claim on or before the July
22 Claims Bar Date and those forms must be delivered to:

              Richard G. Zeh
              Clerk of the Bankruptcy Court
              Alexander Pirnie Federal Building
              10 Broad Street, Room 230
              Utica, NY 13502
              Telephone: 315-793-8101

The Claims Bar Date for governmental units is June 13, 2006.           
          
Headquartered in Syracuse, New York, Loretto-Utica Properties
Corporation filed for chapter 11 protection on Dec. 15, 2005
(Bankr. N.D.N.Y. Case No. 05-73473).  Jeffrey A. Dove, Esq., at
Menter, Rudin & Trivelpiece, P.C., represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated $1 million to $10 million in assets
and estimated $10 million to $50 million in debts.


LORETTO-UTICA: U.S. Trustee Will Meet Creditors on Jan. 19
----------------------------------------------------------
The United States Trustee for Region 2 will convene a meeting of
Loretto-Utica Properties Corporation's creditors at 10:00 a.m., on
Jan. 19, 2006, at the Alexander Pirate Federal Building located at
10 Broad Street, Room 106 in Utica, New York.  This is the first
meeting of creditors required under 11 U.S.C. Sec. 341(a) in all
bankruptcy cases.

All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered in Syracuse, New York, Loretto-Utica Properties
Corporation filed for chapter 11 protection on Dec. 15, 2005
(Bankr. N.D.N.Y. Case No. 05-73473).  Jeffrey A. Dove, Esq., at
Menter, Rudin & Trivelpiece, P.C., represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated $1 million to $10 million in assets
and estimated $10 million to $50 million in debts.


MCI INC: Restates Financial Statements for Three Quarters of 2005
-----------------------------------------------------------------
MCI, Inc. (Nasdaq: MCIP) made amended filings with the Securities
and Exchange Commission to reflect a restatement of previously
issued financial statements for the quarterly periods ended:

    * March 31, 2005;
    * June 30, 2005; and
    * September 30, 2005.

As a result of a comprehensive review of its contributions to the
Federal Universal Service Fund, MCI determined that previously
issued financial statements included an error related to these
contributions for the years ended December 31, 2004 and 2003 as
well as the first three quarters of 2005 which cumulatively over-
stated net income for the nine-month period ended September 30,
2005 by $52 million.  The Company determined that it should
restate the previously issued 2005 quarterly results.

              Material Weakness in Form 10-K

In light of the restatement, the amended condensed consolidated
financial statements for the first three quarters of 2005 should
be read in place of the Form 10-Q documents previously filed with
the SEC.  Form 10-K has been amended to reflect a material
weakness under Section 404.  MCI's management made this
determination on Jan. 4, 2006 after consultation with its
independent auditors and review by the Company's audit committee.  
Amounts related to periods prior to Dec. 31, 2004 are being
recorded as a cumulative adjustment of $35 million in MCI's fourth
quarter 2005 financial results.

The restatement will have no impact on MCI's pending merger with
Verizon.

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global  
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532).  On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts.  The Bankruptcy Court confirmed WorldCom's Plan on
October 31, 2003, and on April 20, 2004, the company formally
emerged from U.S. Chapter 11 protection as MCI, Inc.


MCLEODUSA INC: Chapter 11 Cues Moody's to Lower All Ratings to C
----------------------------------------------------------------
Moody's Investors Service downgraded to C from Caa3 all the debt
ratings of McLeodUSA Inc., following the company's voluntary
filing for relief under Chapter 11 of the United States Bankruptcy
Code.

The outlook is stable.

This concludes the review initiated in May 2005.

McLeodUSA is a facilities-based telecommunications services
provider headquartered in Cedar Rapids, Iowa.


MERISTAR HOSPITALITY: Earnings Growth Cues S&P's Positive Outlook
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on domestic
lodging REIT MeriStar Hospitality Corp. to positive from stable.
At the same time, Standard & Poor's affirmed its ratings,
including its 'B-' issuer credit rating, on the company.
Approximately $1.6 billion in total debt was outstanding as of
Sept. 30, 2005.

The outlook revision reflects MeriStar's gradually improving
credit measures driven by earnings growth and the company's
progress in disposing of certain nonstrategic assets, with
proceeds primarily used to reduce debt.  On Jan. 3, MeriStar
announced that it sold five hotels for $58.5 million.  This was in
addition to the sale of four hotels for $45.8 million in 2005.
During 2005, the company announced that it would expand its asset
sale program and sale proceeds could exceed $300 million.  
"Ratings could be raised by one notch if the company is successful
with this plan," said Standard & Poor's credit analyst Sherry Cai,
"with proceeds used to reduce debt, thereby leading to a further
improvement in credit measures."


METROPOLITAN MORTGAGE: Hires Allen Matkins as Special Counsel
-------------------------------------------------------------
Metropolitan Mortgage & Securities Co., Inc., and Summit
Securities, Inc., obtained permission from the U.S. Bankruptcy
Court for the Eastern District of Washington to employ Allen
Matkins Leck Gamble & Mallory LLP as their special counsel.

The Firm will represent the Debtors in matters involving Watt-
Solus, LLC, including modifications to the initial Loan Documents
executed by Metropolitan and Watt-Solus.

Gerben Hoeksma, Esq., a Partner at Allen Matkins who leads the
engagement, will bill $500 per hour for his services.

Mr. Hoeksma assures the Court that his Firm does not hold any
interest adverse to the Debtors' estate.

Headquartered in Spokane, Washington, Metropolitan Mortgage &
Securities Co., Inc., owns insurance businesses.  Metropolitan
filed for Chapter 11 protection (Bankr. E.D. Wash. Case No.
04-00757), along with Summit Securities Inc., on Feb. 4, 2004.
Bruce W. Leaverton, Esq., at Lane Powell Spears Lubersky LLP and
Doug B. Marks, Esq., at Elsaesser, Jarzabek, Anderson, Marks,
Elliot & McHugh represent the Debtors in their restructuring
efforts.  When Metropolitan Mortgage filed for chapter 11
protection, it listed total assets of $420,815,186 and total debts
of $415,252,120.


MIAD SYSTEMS: Posts CND28,492 of Net Income in Fiscal Year 2005
---------------------------------------------------------------
Sloan Partners LLP of Ontario, Canada, added an explanatory
paragraph expressing substantial doubt about MIAD Systems Ltd.'s
ability to continue as a going concern after it audited the
Company's financial statements for the years ended Sept. 30, 2005
and 2004.  

In the audit report accompanying MIAD Systems' form 10-KSB
submitted with the Securities and Exchange Commission on Dec. 29,
2005, Sloan Partners pointed to the Company's CND321,107 working
capital deficit at Sept. 30, 2005.

                Fiscal 2005 Results

MIAD Systems earned CND28,492 of net income for the fiscal year
ended Sept. 30, 2005, in contrast to a CND251,676 net loss in the
prior year.  Revenues for the fiscal year ended Sept. 30, 2005,
increased by 19.1% from CND6,984,990 in 2004 to CND8,321,083.    

At Sept. 30, 2005, the Company had CND1,537,169 in total assets
and liabilities of CND1,695,319.  Net working capital deficit
declined by CND66,190 to $321,107 as of Sept. 30, 2005, as
compared to a CND387,297 net working capital deficit as of year-
end Sept. 30, 2004.

                    About MAID Systems

Markham, Ontario-based MIAD Systems -- http://www.miad.com/-- is  
an established full-line supplier of business computer systems as
well as a provider of computer maintenance, installation and
networking services.  MIAD does not sell to individuals but
provides these goods and services to its major clients who are
primarily engaged in the corporate, institutional, municipal,
utilities and education fields, typically as part of their
computer networks.


MIRANT CORP: Registers 1.5 Billion Shares for Plan Distributions
----------------------------------------------------------------
Mirant Corporation filed a Registration Statement with the U.S.
Securities and Exchange Commission to allow the resale of
1.5 billion shares of common stock, a portion of which will be
distributed under the Company's plan of reorganization.  

The company is also registering two series of warrants to purchase
common shares.  

The Company successfully emerged from Chapter 11 bankruptcy
protection on Jan. 3, 2006.  

As reported in the Troubled Company Reporter on Jan. 4, 2006,
under its Plan of Reorganization, Mirant is converting more than
$6 billion of debt and liabilities into equity in the reorganized
company and will nearly halve its overall debt.

In accordance with the Plan of Reorganization, Mirant will issue
300 million shares of common stock to its creditors and existing
equity holders.  Additional shares will be reserved for issuance
pursuant to the company's employee stock programs, and for
issuance in connection with the Series A and Series B Warrants
being distributed under the Plan of Reorganization.  Mirant has
begun its initial distributions of common stock and cash provided
for in its Plan of Reorganization, and expects to complete these
initial distributions by the middle of January 2006.

                   Description of Common Stock

The Company is authorized to issue up to an aggregate of
1.5 billion common shares.  The Company is also authorized to
issue up to an aggregate of 100 million shares of preferred stock,
$0.01 par value per share, in one or more series.  Each series of
preferred stock will have powers, preferences and rights
(including voting rights), as will be determined by the Company's
Board of Directors. The rights of holders of common shares will be
subject to, and may be adversely affected by, the rights of
holders of any preferred stock that may be issued in the future.

Holders of common shares share ratably in all dividends as may
from time to time be declared by the Company's Board of Directors
in respect of the Common Stock, whether upon liquidation or
dissolution or otherwise.

Holders of common shares do not have any preemptive rights with
respect to the Common Stock or any other securities of the
Company, or to any obligations convertible (directly or
indirectly) into the Company's securities.

All of the voting power of the Company's stockholders will be
vested in the holders of common shares.

                   Description of the Warrants

The Warrants will expire at 5:00 p.m., New York City time, on
January 3, 2011.

The Series A Warrants will entitle the holders to purchase
initially an aggregate of up to 35,294,118 common shares.  The
Series B Warrants will entitle the holders to purchase initially
an aggregate of up to 17,647,059 common shares.

The exercise price of the Series A Warrants will initially be set
at a price equal to $21.87 per share, and the exercise price of
the Series B Warrants will initially be set at a price equal to
$20.54 per share.  

The Company has applied for re-listing with the New York Stock
Exchange and expects to begin trading on Jan. 11, 2006, under the
ticker symbol MIR.

A full-text copy of the Registration Statement is available for
free at http://ResearchArchives.com/t/s?430

Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally.  Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590).  Thomas E. Lauria, Esq., at White &
Case LLP, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.


MONTECITO BROADCAST: Moody's Rates Planned $48MM Facilities at B3
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating to
Montecito Broadcast Group.  Additionally, Moody's assigned B1
ratings to the proposed $115 million first lien senior secured
credit facilities ($20 million revolving credit facility due 2012,
$95 million term loan B due 2013) and a B3 rating to the proposed
$48 million second lien facility.

Proceeds of $143 million from the transaction (revolving credit
facility will be undrawn at closing) along with $121 million of
cash equity from the Blackstone Group and SJL Broadcast Group will
be used to finance the acquisition of four television stations
from Emmis Communications for $264 million (purchase price
equivalent to about 12.4 times TTM EBITDA as of November 2005).
This is the first time Moody's has assigned ratings to Montecito
Broadcast Group, LLC.

The B2 corporate family rating reflects:

   * Montecito's strong position in the Portland and
]    Hawaii markets;

   * relatively strong broadcast cash flow and EBITDA margins
     (about 38% and 34%, respectively for TTM as of
     November 2005);

   * seasoned management team; and

   * significant equity contribution

balanced by:

   * a lack of scale and geographic diversity; and

   * high financial leverage (pro forma for the transaction,
     leverage is 6.2 times, as measured as total debt to EBITDA,
     FY 2006 estimate).

Moody's assigned these ratings:

Montecito Broadcast Group, LLC (co-borrowers SJL of Kansas Corp.,
Montecito Hawaii, LLC, Montecito Portland, LLC):

   1) B1 rating to the proposed $20 million revolving credit
      facility due 2012;

   2) B1 rating to the proposed $95 million first lien term loan B
      due 2013;

   3) B3 rating to the proposed $48 million second lien term loan
      facility due 2013; and

   4) B2 corporate family rating.

The rating outlook is stable.

The ratings are supported by Montecito's strong market position
(#1 or #2 in terms of revenue or audience share) and the strength
of its local news programming in its two largest markets that
allows Montecito to capture above average share of local
advertising in their regions, and diversity of network
affiliations (2 NBC affiliates, 1 FOX, 1 CBS).

Additionally, Moody's believes that Montecito benefits from an
experienced management team through SJL Broadcast, which has a
track record for buying stations and improving operating
performance.  Further, the ratings are supported by the underlying
asset value of the company's station portfolio, particularly
Portland, Oregon which is the 24th largest DMA.  Lastly, the
ratings reflect the financial support of the sponsor's $121
million cash equity component (representing 46% of total purchase
price for the four Emmis stations).

The ratings are constrained by Montecito's lack of overall scale
and geographic diversity which leaves it more vulnerable to
potential economic downturns in its:

   * Portland,
   * Kansas, and
   * Hawaii markets.

As such, this puts Montecito at a competitive disadvantage against
its larger, better capitalized, more diversified peers who can
look to broader markets for support.  Additionally, Moody's
believes with the exception of KOIN-TV in the Portland, Oregon
market, Montecito's broadcast operations are in much less
attractive markets (i.e. three remaining stations located in DMAs
that rank from the 66th to 137th largest in the United States)
which may provide less cushion over the company's debt securities
in a distress scenario.  Lastly, the ratings incorporate the
increasing business risk associated with the broadcast television
industry overall with its declining audiences and the increasing
diversification of advertising spend over a growing number of
mediums (e.g. Internet, satellite radio and outdoor).

The stable outlook reflects Moody's expectation that the company
will benefit from the return of political and Olympic revenues in
2006.  Additionally, Moody's believes the company's free cash flow
profile will strengthen given Montecito's reduced capital
expenditure requirements going forward (digital conversion largely
complete with the exception of KSNW in Wichita Kansas).  It also
reflects Moody's belief that cost cutting at the four stations
will result in improved operating performance and, as such,
Moody's expects leverage will decline to within 5 times by FY 2007
given the benefit of expected 2006 political advertising.

Given the high leverage and lack of scale and geographical
diversity, substantial cash flow growth or a sizeable de-
leveraging event would be necessary before a positive outlook
would be considered.  Downward pressure on the ratings would
likely result from the inability of management to achieve
anticipated cost reductions at the newly acquired stations
retarding expected deleveraging or any large debt-financed
acquisition.

Pro forma for the transaction, Montecito's leverage is high at 6.2
times (as measured as total debt to EBITDA, FY 2006 estimate) and
cash flow coverage of interest is low at 1.9x.  Moody's expects
credit metrics to strengthen over the ratings horizon as Montecito
implements planned cost reductions.  It is Moody's expectation
that leverage will fall to under 5 times for FY 2007 and will not
exceed 5 times at the end of FY 2008 despite the absence of
political ad revenue.

The senior secured credit facilities are guaranteed by the parent
(Montecito Broadcast Group, LLC) and each of the direct and
indirect subsidiaries of the co-borrowers.  The B1 ratings on the
first lien senior secured facilities reflect their first priority
interest in substantially all of the tangible and intangible
assets.  The positive one notch differential from the B2 corporate
family rating also reflects the benefits of the security package,
reflecting the asset value of the station portfolio (Moody's
expects the first lien holders to be covered about 3 times).

The B3 ratings on the second lien facility are notched one level
below the corporate family rating reflecting their second priority
interest in the assets behind the first lien holders and the
reduced level of asset coverage, particularly in a distressed
scenario.

Montecito Broadcast Group, LLC, headquartered in Montecito,
California, is a television broadcaster comprised of stations
located in:

   * Oregon,
   * Kansas, and
   * Hawaii.


NAVIGATOR GAS: Hires Baer & Karrer as Replacement Swiss Counsel
---------------------------------------------------------------
The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York gave the Official Committee of
Unsecured Creditors appointed in Navigator Gas Transport PLC
and its debtor-affiliates' chapter 11 cases, permission to
employ Baer & Karrer as its Swiss Counsel, nunc pro tunc to
Nov. 28, 2005.

                  Enforcement Proceedings

On June 24, 2004, the Court entered a $440,000 judgment against
Cambridge Gas Transport, the Debtors' largest shareholder, and its
directors, Giovanni Mahler and Shaun Fergusson Cairns, in addition
to 9% post-judgment interest as a civil contempt sanction, as well
as $876,874 in legal fees.  The monetary judgment came as a result
of the Court's sanction order after the shareholders filed a
petition seeking to prevent the implementation of the Committee's
Court-approved Plan.  The Court also authorized the Committee to
enforce all terms of the judgment including those terms relating
to recovery by the Debtor.  

Baer & Karrer will continue the enforcement proceedings initiated
against Mr. Mahler by the Committee's previous Swiss counsel,
Felder Riva Soldati Marcellini.  Felder Riva withdrew as the
Committee's counsel due to the Debtors' failure to pay the Firm's
retainer for eight months.

The Committee tells the Court that it has selected Baer & Karrer
as replacement counsel based upon the Firm's reputation and its
attorneys' experience and qualifications.  

Cesare Jermini, a Partner at Baer & Karrer, and his associate,
Andrea Gamba, lead the engagement.  

The Committee discloses that both Mr. Jermini and Ms. Gamba have
experience with Swiss enforcement proceedings as well as extensive
commercial civil litigation experience.

The Firm's professionals will bill:

      Professionals          Designation     Hourly Rate
      -------------          -----------     -----------
      Cesare Jermini         Partner         $550
      Andrea Gamba           Associate       $400

The Committee asks the Court to direct the Debtors to advance
$25,000 for the Firm's retainer.  

Mr. Jermini assures the Court that his Firm does not hold any
interests materially adverse to the Committee and is disinterested
as that term is defined in Section 101(14) of the Bankruptcy Code.

Headquartered in Castletown, Isle of Man, Navigator Gas Transport
PLC, transports liquefied petroleum gases and petrochemical gases
between ports throughout the world.  The Company along with its
debtor-affiliates filed for chapter 11 protection on Jan. 27, 2003
(Bankr. S.D.N.Y. Case No. 03-10471).  Adam L. Shiff, Esq., at
Kasowitz, Benson, Torres & Friedman LLP represents the Debtors in
the United States.  When the Company filed for protection, it
listed $197,243,082 in total assets and $384,314,744 in total
debts.


NRG ENERGY: Provides Business Updates on Texas Genco Acquisition
----------------------------------------------------------------
NRG Energy, Inc. (NYSE:NRG) provided financial, operational and
strategic updates in advance of its launch of the financing for
its pending acquisition of Texas Genco LLC.

               Texas Genco Acquisition Update

With Hart-Scott-Rodino clearance and Federal Energy Regulatory
Commission approval already received, NRG anticipates closing the
TG acquisition in early February 2006, after and subject to final
approval from the Nuclear Regulatory Commission.  The companies
are well advanced in the integration planning, having worked
together productively and cooperatively since announcing the deal
last October.

"This transaction represents a major milestone for the Company and
for the competitive power generation sector," said David Crane,
NRG President and Chief Executive Officer.  "It enhances NRG's
geographic breadth, technical expertise and diversity of fuel
sources and will further enhance the Company's financial strength
and flexibility."

                   Portfolio Developments

Apart from the Company's focus on the TG acquisition and
integration, NRG continues to manage its existing asset base
actively and, in that regard, the Company reports the following
significant developments since its last report of quarterly
earnings:

                        Australia

NRG is currently considering various strategic alternatives with
respect to NRG Australia -- either to reposition its assets more
effectively within the National Electricity Market or to monetize
its investment.  Over the next few months, the Company will seek
to determine the best option which may include a joint venture,
equity spin-off, asset swap for U.S. generation assets or trade
sale.

         Connecticut Reliability-Must-Run Payments

On December 20, 2005, NRG, the ISO-NE, the Connecticut Department
of Public Utility Control and Connecticut Office of Consumer
Counsel filed an Offer of Settlement at the FERC.  The purpose of
the settlement was to resolve all issues associated with NRG's RMR
filing of November 1, 2005.  Under the settlement, NRG will
receive $98 million per year in fixed cost recovery for its Devon,
Middletown and Montville plants and will receive 35% of any energy
and ancillary service revenues from the plants, which on a gross
margin basis approximates what NRG received with respect to its
Connecticut RMRs in 2005.  The settlement provides that the RMR
payments will continue until suitable market reforms occur, or
until the units are no longer needed for reliability. The settling
parties have requested an effective date for the settlement rates
of January 1, 2006.  FERC is expected to take final action with
respect to the proposed settlement in the first quarter (with
retroactive effect).

                     West Coast Power

On Dec. 27, 2005, NRG entered into purchase and sale agreements
designed to unwind the 50-50% partnership it has to date with
Dynegy Inc.  Under these agreements, NRG will acquire Dynegy's 50
percent ownership interest in West Coast Power LLC and will become
the 100 percent owners of WCP's 1,808 megawatts  of generation in
Southern California.  In addition, NRG will sell to Dynegy its 50
percent ownership interest in Rocky Road Power LLC, a 330 MW gas-
fueled, simple cycle peaking plant located in East Dundee,
Illinois.  NRG will pay Dynegy a net purchase price of $160
million, effectively funded by cash held by the WCP partnership.
The Company anticipates closing both transactions during the first
quarter 2006, upon receiving approval from FERC.

                        Audrain

On Dec. 16, 2005, NRG entered into an Asset Purchase and Sale
Agreement to sell its Audrain Generating Station, a gas fired 577
MW peaking facility in Vandalia, Missouri to AmerenUE, a
subsidiary of Ameren Corporation.  The purchase price is $115
million, subject to customary purchase price adjustments, plus the
assumption of $240 million of non-recourse capital lease
obligations and assignment of $240 million note receivable.  Of
the $115 million in cash proceeds, approximately $93 million will
be paid to the project lenders with the balance of approximately
$22 million paid to NRG.  The transaction will result in the
removal of $412 million of liabilities (including $240 million of
non-recourse capital lease obligations and $172 million in non-
current liabilities) and $412 million of assets (including $240
million note receivable and $172 million in PP&E and inventory)
from NRG's balance sheet.  This sale is subject to FERC approval,
Hart-Scott-Rodino review and potentially Missouri Public Service
Commission approval.

                  Solid Fuel-Fired Development

Upon closing the TG acquisition, NRG plans to continue initiatives
already begun by TG in pursuit of brownfield opportunities in
Texas.  NRG expects to be in a position to file an air permit
application for up to 800 MW of coal-fired baseload generation at
either Limestone or other sites owned by the Company.  This Texas
brownfield coal development adds to the Big Cajun II unit 4 coal-
fired unit already permitted in Louisiana and a variety of other
projects in earlier stages of development in the Northeast and
Western regions.

                         Guidance

                      2005 NRG Update

During November, and continuing into December, Northeast spot
power prices declined while emission credit prices increased in
excess of 40% from Oct. 31, 2005 levels.  Dispatch of our units
into the spot market is based upon market prices for emissions to
ensure the value received for generation exceeds the market value
of the allowances.  As a result of the lower power prices,
combined with the higher market for emission credits, the
generation dispatch in the Northeast was lower than forecasted as
we initiated sales of emission credits in lieu of generation.  In
connection with these sales, approximately $15 million of emission
credits had not been physically transferred at Dec. 31, 2005 and
therefore, will be recorded to revenues in early 2006.  While this
does not have an economic impact to the Company, adjusted EBITDA
for 2005 will be lower by this amount.  Cash flow from operations
guidance for 2005 continues to be approximately $109 million
excluding the $44 million cash payment associated with the TG
acquisition bridge commitment.

               2006 and 2007 Combined Company

The TG acquisition, and the related financings, will have a
material impact on NRG's earnings and cash flow.  While it is
unusual for the Company to provide guidance this early in the
year, the Company's contracted portfolio provides a basis for
estimating performance for both 2006 and 2007.  The contracted
position for the combined NRG portfolio in 2006 is currently 79%
and is currently 68% in 2007.

The 2006 cash flow from operations includes the return of $406
million of collateral posted in 2005 for transactions that will
settle in 2006.  The 2007 guidance is heavily influenced by TG's
average sale price for its hedged output of $39/MWh, which
reflects an embedded delivered gas price of $4.88/mmBtu, a price
which is both below the gas price embedded in TG's post-2007
hedges and well below the current forward strip for delivered
natural gas.  The guidance also assumes, among other things,
normal weather patterns and operating performance as well as lower
New York City capacity revenues.

NRG Energy, Inc. currently owns and operates a diverse portfolio
of power-generating facilities, primarily in the Northeast, South
Central and Western regions of the United States.  Its operations
include baseload, intermediate, peaking, and cogeneration
facilities, thermal energy production and energy resource recovery
facilities.  NRG also has ownership interests in generating
facilities in Australia and Germany.

                      *     *     *

As reported in today's Troubled Company Reporter, Standard &
Poor's Ratings Services affirmed its 'B+' corporate credit rating
on power generation company NRG Energy Inc.  The rating
affirmation follows the company's announcement that it will issue
various securities to finance its planned acquisition of Texas
Genco LLC.

At the same time, Standard & Poor's lowered its short-term rating
on NRG to 'B-2' from 'B-1' and removed the rating from CreditWatch
with negative implications.  The rating action reflects the fact
that NRG has a business strategy that includes acquisitions, which
will tend to use cash, and that cash may be used when NRG is
called upon to post cash margin in a volatile commodity price
environment.  The short-term rating was originally placed on
CreditWatch Oct. 3, 2005.

Standard & Poor's also assigned its:

    * 'BB-' rating and '1' recovery rating to NRG's $3.2 billion
      first lien term loan B and $2 billion revolving credit and
      LOC facilities,

    * 'B-' rating to NRG's $3.6 billion unsecured notes, and

    * 'CCC+' rating to NRG's $500 million mandatory convertible
      securities.


NRG ENERGY: Gets Needed Noteholders' Consent to Scrap Restriction
-----------------------------------------------------------------
NRG Energy, Inc., (NYSE: NRG) had received valid tenders and
consents from holders of approximately $1,078,137,353 in aggregate
principal amount of NRG's 8% second priority senior secured notes
due 2013 (CUSIP No. 629377AS1), representing approximately 99.78%
of the outstanding NRG Notes, in connection with its previously
announced tender offer and consent solicitation for the NRG Notes
pursuant to NRG's Offer to Purchase and Consent Solicitation
Statement dated December 15, 2005, relating to the NRG Notes.

With the receipt of the requisite consents, NRG will execute a
supplemental indenture governing the NRG Notes, which satisfies
the "Supplemental Indenture Condition," as defined in NRG's
Offer to Purchase and Consent Solicitation Statement dated
December 15, 2005, relating to the NRG Notes, and will:

   (1) amend the indenture under which the NRG Notes were issued
       to eliminate substantially all of the restrictive covenants
       and events of default and related provisions in the
       indenture; and

   (2) waive the application of the restrictive covenants in the
       indenture to allow a portion of the funds to be raised in
       connection with NRG's pending acquisition of Texas Genco
       LLC to be held in escrow pending the closing of that
       acquisition.

The amendments to the indenture will not become operative until
payment for all validly tendered NRG Notes is made by NRG, but the
waiver will become effective immediately upon execution of the
supplemental indenture.

Consummation of the tender offer is conditioned upon the
satisfaction of certain conditions, including:

   (a) NRG having obtained funds sufficient to pay the
       consideration, costs and expenses of the tender offer and
       consent solicitation from the financing transactions
       related to the pending acquisition of Texas Genco LLC;

   (b) the consummation of the pending acquisition of Texas Genco
       LLC; and

   (c) certain other customary conditions.

NRG Notes may be tendered pursuant to the tender offer until
5:00 p.m., New York City time, on January 31, 2006, if not
extended.  Holders who validly tender NRG Notes after 5:00 p.m.,
New York City time, on December 29, 2005, but on or prior to the
Expiration Date will not be eligible to receive the consent
payment of $30.00 per $1,000 principal amount of the NRG Notes.  
Any NRG Notes not tendered and purchased pursuant to the tender
offer will remain outstanding and the holders will be bound by the
amendments contained in the supplemental indenture eliminating
substantially all of the restrictive covenants in the indenture
even though they have not consented to the amendments.

The complete terms and conditions of the tender offer and consent
solicitation are described in the Offer to Purchase and Consent
Solicitation Statement dated December 15, 2005, relating to the
NRG Notes, copies of which may be obtained from MacKenzie
Partners, Inc., the information agent for the tender offer and
consent solicitation, at 800.322.2885 (U.S. Toll Free) and
212.929.5500 (collect).

NRG has engaged Morgan Stanley & Co. Incorporated and Citigroup
Corporate and Investment Banking to act as dealer managers and
solicitation agents in connection with the tender offer and
consent solicitation.  Questions regarding the tender offer and
consent solicitation may be directed to Morgan Stanley & Co.
Incorporated, at 800.624.1808 (U.S. Toll Free) and 212.761.1457
(collect) or Citigroup Corporate and Investment Banking at
800.558.3745 (U.S. Toll Free) and 212.723.6106 (collect).  Law
Debenture Trust Company of New York is the Depositary for the
tender offer and consent solicitation and can be contacted at
212.750.0888.

NRG Energy, Inc., owns and operates a diverse portfolio of
power-generating facilities, primarily in the United States.  Its
operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities.  The company, along with its
affiliates, filed for chapter 11 protection (Bankr. S.D.N.Y. Case
No. 03-13024) on May 14, 2003.  The Company emerged from chapter
11 on December 5, 2003, under the terms of its confirmed Second
Amended Plan.  James H.M. Sprayregen, Esq., Matthew A. Cantor,
Esq., and Robbin L. Itkin, Esq., at Kirkland & Ellis, represented
NRG Energy in its $10 billion restructuring.

                         *     *     *

As reported in the Troubled Company Reporter on Oct. 6, 2005,
Moody's Investors Service affirmed the ratings of NRG Energy, Inc.
(NRG: B1 Corporate Family Rating) and Texas Genco, LLC (TGN: Ba3
Corporate Family Rating).  This action follows the announcement
that NRG has agreed to acquire all the outstanding equity of TGN
for about $5.8 billion and the assumption of about $2.5 billion of
TGN net debt.  The rating outlook for NRG is revised to developing
from stable.  The rating outlook for TGN continues to be stable.

Ratings affirmed at NRG include:

   * Secured term loan and secured revolving credit rated Ba3;
   * Corporate Family Rating at B1;
   * Second lien secured notes rated B1;
   * Preferred stock at B3;
   * Speculative Grade Liquidity Rating of SGL-1.


NRG ENERGY: S&P Junks Ratings on $500 Million Conv. Securities
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on power generation company NRG Energy Inc.  The
rating affirmation follows the company's announcement that it will
issue various securities to finance its planned acquisition of
Texas Genco LLC.

At the same time, Standard & Poor's lowered its short-term rating
on NRG to 'B-2' from 'B-1' and removed the rating from CreditWatch
with negative implications.  The rating action reflects the fact
that NRG has a business strategy that includes acquisitions, which
will tend to use cash, and that cash may be used when NRG is
called upon to post cash margin in a volatile commodity price
environment.  The short-term rating was originally placed on
CreditWatch Oct. 3, 2005.

Standard & Poor's also assigned its:

    * 'BB-' rating and '1' recovery rating to NRG's $3.2 billion
      first lien term loan B and $2 billion revolving credit and
      LOC facilities,

    * 'B-' rating to NRG's $3.6 billion unsecured notes, and

    * 'CCC+' rating to NRG's $500 million mandatory convertible
      securities.

The 'BB-' rating and '1' recovery rating on the $3.2 billion term
loan B and $2 billion revolving credit and LOC facilities indicate
the expectation of full recovery of principal in the event of a
payment default.

Standard & Poor's affirmed its 'CCC+' ratings on NRG's preferred
stock issues.

The stable outlook reflects Standard & Poor's view that NRG's
credit quality should not significantly deteriorate in the short
term.

"In the near term, NRG should continue to benefit from high
commodity prices and the hedges the company has in place at Texas
Genco," said Standard & Poor's credit analyst Arleen Spangler.


O'SULLIVAN IND: U.S. Trustee Balks at Lazard's Retention
--------------------------------------------------------
As previously reported in the Troubled Company Reporter on
December 14, 2005, the Honorable C. Ray Mullins of the U.S.
Bankruptcy Court for the Northern District of Georgia gave
O'Sullivan Industries Holdings, Inc., authority to retain Lazard
Freres & Co., LLC, as their Chapter 11 financial advisor on an
interim basis.

                      U.S. Trustee Complains

Felicia S. Turner, the United States Trustee for Region 21, asks
the Court to strike its order approving the Debtors' application
to employ Lazard Freres & Co., LLC.

The U.S. Trustee notes that Lazard's Retention Letter contains a
"fee-tail" provision, which purports to address the issue of
compensation due in the event of termination or expiration of the
retention agreement.  Lazard contends that it is "entitled" to
full payment of fees contemplated in the retention agreement in
respect to any "Restructuring, Sale Transaction and Financing" for
which a definitive agreement is executed during the period from
the date of the retention agreement until 10 months after the
termination or expiration of the retention agreement.

The U.S. Trustee asserts that there is no legal basis in the
Bankruptcy Code on which Lazard may claim entitlement to fees of
any kind.

Lazard may seek compensation by application for any fees which it
contends arose in the fee-tail period, the U.S. Trustee states.  
However, Lazard should state with particularity:

   -- the services it provided prior to commencement of the fee-
      tail period, which resulted in a definitive agreement after
      the fee-tail period commenced; and

   -- the benefit conferred on the Debtors and their estates by
      the services.

Furthermore, the U.S. Trustee argues that the appropriate standard
for Lazard's indemnification is simple negligence.  The
U.S. Trustee points out that Lazard is a fiduciary of the
Debtors.  Lazard is subject to a higher duty of care towards the
Debtors than the rather low standard represented by bad faith or
gross negligence, the U.S. Trustee emphasizes.

Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings,
Inc. -- http://www.osullivan.com/-- designs, manufactures, and  
distributes ready-to-assemble furniture and related products,
including desks, computer work centers, bookcases, filing
cabinets, home entertainment centers, commercial furniture, garage
storage units, television, audio, and night stands, dressers, and
bedroom pieces.  O'Sullivan sells its products primarily to large
retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and
Office Depot.  The Company and its subsidiaries filed for chapter
11 protection on October 14, 2005 (Bankr. N.D. Ga. Case No. 05-
83049).  On September 30, 2005, the Debtor listed $161,335,000 in
assets and $254,178,000 in debts.  (O'Sullivan Bankruptcy News,
Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000)


PIXIUS COMMUNICATIONS: Files Amended Plan & Disclosure Statement
----------------------------------------------------------------
Pixius Communications, LLC, delivered to the U.S. Bankruptcy Court
for the District of Kansas a Second Amended Disclosure Statement
for its Amended Plan of Reorganization.

The Debtor's Plan provides for the continuation of its business
under current management, with restructured debt and equity.

                    Claims Treatment

Administrative and priority claims will be paid in full.

General Electric Capital Corp. holds a purchase money security
interest on the Debtor's telephone system in Junction City,
Kansas.  It will be paid $16,800 with a 6% annual interest over a
three-year period.  GECC will retain its lien on the telephone
system pending full payment of its claim.

Ellis Davis, asserting a $2,882,114 claim, will be paid a total of
$500,000 in cash, payable over a five-year period.  Mr. Davis will
also get a 100,000 membership units in the Reorganized Debtor, and
receive the artwork located in Bumsville, Minnesota.

The Debtor's former employees asserting wage claims will be paid
at most $4,925 each, on the Effective Date.

Unsecured creditors will receive periodic dividends of 17% without
interest over a five-year period.

Existing equity securities will be cancelled, and new equity
ownership in the Reorganized Debtor will be issued.

These modifications are reflected in the Amended Plan:

   * all prepetition contracts with Qwest Communications will be
     assumed; the prepetition defaults for $15,506 and any
     postpetition default will be cured on the Effective Date;

   * these contracts and leases will be rejected on the Effective
     Date:

      a. Tower lease with Highland House (separate Order entered
         on November 6, 2005);

      b. Marysville, Kansas equipment space lease with Jan   
         Smith;

      c. Clay Center, Kansas equipment space lease with Randy
         Rundle; and

      d. Wichita East Holiday Inn tower lease with Wichita East
         Hotel Association;

   * Bruce Chapin has been replaced by Jay S. Maxwell as chief
     financial officer;

   * the Debtor may borrow from insiders or otherwise to fund
     cash dividends to creditors, which may be converted to
     equity;

   * additional debt to equity conversions may be approved; and

   * the U.S. Dept. of Agriculture, Rural Utilities Service's
     claim will be paid $1,270,275 in cash on the Effective Date,
     and the balance of $5,087,511 will be discharged.

Headquartered in Wichita, Kansas, Pixius Communications, LLC --
http://www.pixiuscorp.com/-- provides broadband internet service  
at speeds from 364 Kbps to 45 Mbps.  The Company filed for
chapter 11 protection on Dec. 14, 2004 (Bankr. D. Kans. Case No.
04-16825).  William B. Sorensen, Jr., Esq., at Morris Laing Evans
Brock & Kennedy, represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it estimated between $100,000 to $500,000 in total assets and
between $10 million to $50 million in total debts.


PONDEROSA PINE: Bankruptcy Court Confirms Joint Chapter 11 Plans
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey confirmed
on Dec. 20, 2005, the First Modified Joint Chapter 11 Plans for
Ponderosa Pine Energy Partners, Ltd., and its debtor-affiliates
proposed by Brazos Electric Power Cooperative, Inc., and JPMorgan
Chase Bank, N.A., as Agent.

JPMorgan and Brazos are Ponderosa's two largest creditors and DIP
lenders.

As previously reported, the lenders had outlined to the Court
their own plan when they asked for the termination of the Debtors'
exclusive plan filing period.

                  About the Modified Plan

The lenders' Modified Plan, dated Dec. 19, 2005, provides for the:

   a) transfer of substantially all of Ponderosa's assets to
      Brazos Electric;

   b) payment by Brazos Electric to KBC Bank NV of $30 million;
      and

   c) the $2 million payment by Brazos Electric to Ponderosa Pine
      Energy, LLC, on the Effective Date.

The Joint Plan contemplates that Brazos will issue a note, which
is part of an exit facility, to satisfy all claims of the Agent
and the senior secured lenders.  The exit facility will comprise
all amounts owed by Ponderosa under a Prepetition Credit Agreement
and an additional $50 million credit facility for the repair of
the Cleburne Plant.  Brazos will assume all obligations under the
exit facility in exchange for an assignment of substantially all
of Ponderosa's assets.  In addition, Brazos will subordinate its
claim to the general unsecured creditors.

                    Terms of the Plan

Under the Plan, these claims will be paid in full:

   -- $5,580,064 administrative claims;
   -- $1,679,475 priority tax claims; and
   -- $2,791,746 general unsecured claims.

Chase Bank Group's $135,725,500 claim will be fully paid in cash
except claims that arise from those Secured Interest Rate
Protection Agreements that Ponderosa assumes and assigns to Brazos
Electric.

Brazos Electric's $51,644,957 claim will be deemed resolved and
compromised on the Effective Date.

KBC Bank's claim is allowed for $222,723,921.  DPC Ponderosa, LLC,
will irrevocably transfer, convey, and assign its interest in PPE
LLC to the KBC Bank Group on the Effective Date.

Holders of equity interests won't receive anything under the Plan.

A full-text copy of the Joint First Modified Plans is available
for a fee at:

  http://www.researcharchives.com/bin/download?id=060106010108

Headquartered in Morristown, New Jersey, Ponderosa Pine Energy,
LLC, and its affiliates are utility companies that supply
electricity and steam.  The Company and its debtor-affiliates
filed for chapter 11 protection on April 14, 2005 (Bankr. D. N.J.
Case No. 05-22068).  Mary E. Seymour, Esq., Sharon L. Levine,
Esq., and Kenneth A. Rosen, Esq., at Lowenstein Sandler PC
represent the Debtor in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
estimated assets and debts of more than $100 million.


RESIDENTIAL ASSET: Moody's Lowers Class M-I-3 Certs.' Rating to Ca
------------------------------------------------------------------
Moody's Investors Service downgraded seven certificates and placed
on review for downgrade three certificates from three Residential
Asset Mortgage Products, Inc. Trust asset-backed securitization
deals issued in 2002.  The transactions consist of a fixed-rate
pool and an adjustable-rate pool.  These pools are made up of
mortgages that are not eligible for inclusion in Residential
Funding Corporation's (RFC) specific loan program securitization
because they do not satisfy the underlying guidelines for those
programs.  The mortgage loans were originated by a variety of
different sellers and are serviced by HomeComings Financial
Network, Inc., a wholly owned subsidiary of RFC.

The certificates are being downgraded or reviewed for downgrade
based on the weaker than anticipated performance of the mortgage
pools and the resulting erosion of credit support.  Specifically,
the overcollateralization in the 2002-RS1 fixed rate pool and in
the 2002-RS2 fixed and adjustable rate pools has been fully
exhausted and the Class M-1-3 certificates from both deals have
realized losses.

In addition, the overcollateralization in the 2002-RS1 and in the
2002-RS3 adjustable rate pools is being depleted and pipeline
losses for these pools could cause eventual losses on the most
subordinate tranches.  Furthermore, some of the credit support
deterioration can be attributed to the deals passing performance
triggers and therefore paying down the subordinate tranches.

Complete rating actions are:

Issuer: Residential Asset Mortgage Products, Inc.

  Downgrades:

     * Series 2002-RS1: Class M-I-2, downgraded from A2 to Ba1
     * Series 2002-RS1: Class M-I-3, downgraded from Ba3 to Caa3
     * Series 2002-RS1: Class M-II-3, downgraded from Ba3 to Caa1
     * Series 2002-RS2: Class M-I-2, downgraded from Aa3 to Baa1
     * Series 2002-RS2: Class M-I-3, downgraded from B3 to Ca
     * Series 2002-RS2: Class M-II-3, downgraded from B3 to Caa2
     * Series 2002-RS3: Class M-II-3, downgraded from Ba3 to B1

  Review for Downgrade:

     * Series 2002-RS1: Class M-I-1, current rating Aa2, under
       review for possible downgrade

     * Series 2002-RS2: Class M-I-1, current rating Aaa, under
       review for possible downgrade

     * Series 2002-RS3: Class M-II-2, current rating A2, under
       review for possible downgrade


REFCO INC: Court Approves Changes to RSL's 4th Amended Stipulation
-----------------------------------------------------------------          
As previously reported, the Original Stipulation imposed
limitation on the activities of Refco Securities, LLC, only with
respect to securities, customer property or other instruments
that it may receive from Refco Capital Markets, Ltd.

The First Amended Stipulation imposed additional limitations on
RSL's activities, prohibiting it from transferring any securities
or customer property, no matter what the source, without the
express written consent of then Interim Chief Executive Officer
Robert Dangremond, but permitted RSL to transfer Securities or
Customer Property that:

    -- were not received from, or held on behalf of, RCM; and

    -- are held in retail accounts by natural persons who have
       fully satisfied liabilities owed to RSL.

The Fourth Amended Stipulation, now in effect through January 11,
2006, effectively prohibits RSL from closing out any ordinary
course customer accounts or returning to any customers any
Securities or Customer Property that are in those accounts.

Richard Levin, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
in New York, informs the U.S. Bankruptcy Court for the Southern
District of New York that RSL had not been aware until Dec. 21,
2005, of how the breadth of the prohibitions contained in the
Stipulations prohibited the return of customer property in the
ordinary course of business.  When it became aware, RSL
immediately stopped returning any Customer Property to its
ordinary course customers who wished to withdraw from or close out
their accounts.

On December 23, 2005, the Securities and Exchange Commission and
the Securities Investor Protection Corporation expressed serious
concern about the effect of the Amended Stipulation on RSL and on
its customers.  SIPC notified RSL that it was considering
initiating a proceeding against RSL under the Securities Investor
Protection Act to supersede the provisions of the latest Amended
Stipulation and provide customers immediate access to their
accounts and customer property.

RSL believes that a SIPA proceeding would be very damaging to
RSL, its customers and especially to Refco Inc., and its debtor-
affiliates and their estates.  In addition, the continuing
prohibition on return of Customer Property could provide an undue
hardship on customers who have Customer Property on deposit in
segregated funds at RSL and could have an adverse effect on the
continued operation of RSL, Mr. Levin notes.

As an interim measure, RSL proposes that the Fourth Amended
Stipulation be amended to permit transfers to or at the direction
of customers, with certain modifications intended to:

    -- recognize developments in the Chapter 11 cases since the
       First Amended Stipulation; and

    -- provide the Official Committee of Unsecured Creditors the
       opportunity to seek an order with respect to any particular
       proposed transfer.

Mr. Levin relates that the Fourth Amended Stipulation provides
that "if any such relief [from the terms of the Stipulation]
results in exempting Refco Securities from its obligations under
this Fourth Amended Stipulation, then any stay or standstill
pertaining to litigation against Refco Securities shall
simultaneously dissolve."

RSL believes that the relief sought is not an exemption from its
obligations under the Fourth Amended Stipulation but is a
modification to protect RSL customers in a manner that does not
affect the protections provided to RCM and the other Debtors
under the Fourth Amended Stipulation and so should not trigger
the stay relief contained in the same Stipulation.

                       *     *     *

The Honorable Robert D. Drain of the Southern District of New York
Bankruptcy Court grants RSL's request.  Effective immediately, RSL
and
its affiliates are authorized to use, transfer, convert,
dissipate, hypothecate, liquidate, or otherwise dispose of any
Securities, Customer Property, or Other Instruments not received
from, or held on behalf of, RCM by RSL and not transferred from
or held in Euroclear accounts 92917 or 11982:

    (a) in satisfaction of non-customer obligations incurred in
        the ordinary course of business with the express written
        consent of the Chief Executive Officer of Refco, Inc.,
        after consultation with Houlihan Lokey Howard & Zukin,
        financial advisor to the Committee; or

    (b) to or at the direction of a customer, if the Securities,
        Customer Property, or Other Instruments are held in
        accounts with a balance of less than $1,000,000 of
        customers who are not affiliated with RSL and who have
        fully satisfied any liabilities owed to RSL, but not to
        exceed $5,000,000 in the aggregate until further Court
        order.

The Court finds that the stay relief provision under the Fourth
Amended Stipulation constitute a modification of RSL's
obligations under the Fourth Amended Stipulation, not an
exemption.  Judge Drain rules that the stay relief provision
under the Fourth Amended Stipulation will not apply.

Headquartered in New York, New York, Refco Inc. --
http://www.refco.com/-- is a diversified financial services  
organization with operations in 14 countries and an extensive
global institutional and retail client base.  Refco's worldwide
subsidiaries are members of principal U.S. and international
exchanges, and are among the most active members of futures
exchanges in Chicago, New York, London and Singapore.  In addition
to its futures brokerage activities, Refco is a major broker of
cash market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products.  Refco is one of the largest global clearing firms for
derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Refco
reported $16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.  (Refco
Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


REFCO INC: Court Okays Stipulation for Asset Sale-Related Claims
----------------------------------------------------------------          
As previously reported, the U.S. Bankruptcy Court for the Southern
District of New York authorized Refco Inc., and its debtor-
affiliates to enter into and perform under an Acquisition
Agreement dated as of November 13, 2005, by and among the Debtors,
as sellers, and Man Financial, Inc., as buyer -- the Chapter 11
Sale Order.  

The Court approved the sale of Sellers' regulated futures
commission merchant business and the assumption and assignment of
certain related executory contracts and unexpired leases to be
designated by Man Financial.

On November 25, 2005, Refco LLC, filed a voluntary petition for
relief under Chapter 7 of the Bankruptcy Code.  On the Petition
Date, the United States Trustee appointed Albert Togut to act as
interim chapter 7 trustee for Refco LLC's estate.

On the Petition Date, the Trustee filed an Emergency Motion for
authority to:

    -- assume and perform under the Acquisition Agreement;

    -- sell the Regulated Futures Commission Merchant Business;
       and

    -- assign Certain Related Executory Contracts.

The Court approved the Trustee's request.

On the Petition Date, the Court also authorized the Trustee to
continue to operate Refco LLC's business to effectuate the sale
to Man Financial and the terms of the Chapter 7 Sale Order.

Subsequently, the parties consummated the sale of Refco LLC's
futures commission merchant business to Man Financial and
thereafter commenced the process of updating, verifying and
finalizing Refco LLC's books and records for purposes of
determining the remaining amounts that are owed to the Sellers
under the Acquisition Agreement.

Under the Chapter 7 Sale Order, the Trustee was authorized to
make certain payments to meet Refco LLC's obligations under the
Acquisition Agreement, including transition lease and other
contract payments required to be made under the Acquisition
Agreement and the Buyer Transition Services Agreement, as well as
the payment of cure amounts associated with contracts assumed and
assigned to Man Financial.

Man Financial asserts that the Acquisition Agreement also require
the Sellers to timely satisfy other prepetition liabilities
relating to the business it acquired not listed specifically in
the Acquisition Agreement and TSA.  Man Financial further asserts
that if the Sellers fail to satisfy those prepetition
liabilities, the Sellers will be liable for any consequential
damages it will suffer.

The Trustee, the Sellers, the Official Committee of Unsecured
Creditors and the agent for the Chapter 11 Debtors' prepetition
lenders, disagree with Man Financial's assertions.

Moreover, Refco LLC has not yet filed schedules and the Trustee
is unable to verify what obligations may be due in accordance
with Refco LLC's books and records.

However, the Trustee recognizes the possibility of damage to the
business acquired by Man Financial and the possibility of
consequential damage claims against the Debtor's estate.

Accordingly, in a Court-approved stipulation, the parties agreed
that:

    (a) In furtherance of the Chapter 7 Sale Order and the
        Trustee's authority to operate Refco LLC's business
        pursuant to the Operating Order, the Trustee is authorized
        to pay prepetition claims for which Refco LLC is liable,
        to the extent that:

        -- those claims relate to the business acquired by Man
           Financial; and

        -- non-payment of those claims would negatively impact the
           business acquired by Man Financial, each as determined
           by the Trustee in his sole discretion.

        The Trustee will be entitled to all of the protections
        afforded him under the Operating Order in making any of
        those determinations;

    (b) Nothing in the Stipulation will be deemed to waive or
        affect the Trustee's rights under sections 549 and 550 of
        the Bankruptcy Code to avoid and recover any transfers or
        payments that are determined to relate to an invalid
        prepetition liability or exceed the amount of Refco LLC's
        liability;

    (c) The parties acknowledge and agree that as soon as
        practicable, any and all payments made pursuant to the
        Stipulation will be reconciled to Refco LLC's books and
        records, and to the extent any payments related to an
        invalid prepetition liability, exceeded the amount of
        Refco LLC's liability, or should have been made by Man
        Financial pursuant to the Acquisition Agreement or by a
        Seller other than Refco LLC, that payment will be
        allocated to the appropriate party and Refco LLC's estate
        will be reimbursed by way of payment to the Trustee or
        credit against amounts otherwise due that party.

        The Trustee will provide the parties with reasonable prior
        notice of the proposed reconciliation and allocation of
        liability for any and all payments made pursuant to the
        Stipulation, and the Bankruptcy Court will have exclusive
        jurisdiction to determine any disputes relating to that
        reconciliation and allocation of liability; and

    (d) Without the express written consent of all parties to the
        Stipulation or further Court order, the Trustee will not
        make payments of more than $6,000,000 in the aggregate or
        more than $250,000 to any single creditor pursuant to the
        authority granted under the Stipulation.  To the extent
        practicable, the Trustee will provide the parties to the
        Stipulation with reasonable prior notice of the
        prepetition liabilities to be satisfied pursuant to the
        authority granted hereunder, and with a list of all
        amounts actually paid at the end of each calendar month
        pursuant to the authority granted.

Headquartered in New York, New York, Refco Inc. --
http://www.refco.com/-- is a diversified financial services  
organization with operations in 14 countries and an extensive
global institutional and retail client base.  Refco's worldwide
subsidiaries are members of principal U.S. and international
exchanges, and are among the most active members of futures
exchanges in Chicago, New York, London and Singapore.  In addition
to its futures brokerage activities, Refco is a major broker of
cash market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products.  Refco is one of the largest global clearing firms for
derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Refco
reported $16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.  (Refco
Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


REFCO INC: Wants Court OK to Sell Refco Group's Interest in PCIG
----------------------------------------------------------------          
Refco Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to authorize Refco
Group Ltd., LLC, to sell "Purchase Shares," consisting of 14.29%
minority stake in Partners Capital Investment Group, L.L.C., under
the terms of a proposed repurchase agreement.

Partners Capital is a non-regulated international investment
advisory firm primarily involved in providing investment advisory
and financial consulting services to institutions and high net
worth individuals, as well as acting as general partner to six
investment funds sponsored by Refco Group, with approximately
$880,000,000 of assets under management.

Shortly after the Petition date, Partners Capital approached the
Debtors to propose a repurchase of the Purchase Shares.  The
Debtors and the Purchaser then engaged in intense negotiations
over several weeks, culminating in the agreement memorialized in
the Purchase Agreement.

Pursuant to the Purchase Agreement, Refco Group will transfer,
subject to Court approval and an auction process, its 14.29%
interest in Partners Capital to Partners Capital in exchange for
$1,540,000 in cash, without deduction or setoff of any kind.

Based on the results of their analysis of the Debtors' ongoing
and future business prospects, the Debtors' management and
financial advisors have concluded that the best way to maximize
value for the Debtors' estates is to sell the Purchase Shares to
Partners Capital and thereby avoid a liquidation sale or sale at
a depressed price, Sally McDonald Henry, Esq., at Skadden, Arps,
Slate, Meagher & Flom, LLP, in New York, relates.

Headquartered in New York, New York, Refco Inc. --
http://www.refco.com/-- is a diversified financial services  
organization with operations in 14 countries and an extensive
global institutional and retail client base.  Refco's worldwide
subsidiaries are members of principal U.S. and international
exchanges, and are among the most active members of futures
exchanges in Chicago, New York, London and Singapore.  In addition
to its futures brokerage activities, Refco is a major broker of
cash market products, including foreign exchange, foreign exchange
options, government securities, domestic and international
equities, emerging market debt, and OTC financial and commodity
products.  Refco is one of the largest global clearing firms for
derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Refco
reported $16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.  (Refco
Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


RHODES INC: Heilig-Meyers Asks Court to Allow $68 Million Claim
---------------------------------------------------------------
Heilig-Meyers Company asks the U.S Bankruptcy Court for the
Northern District of Georgia in Atlanta to temporarily allow its
$68 million claim in aggregate claims against Rhodes, Inc., and
its debtor-affiliates.  Heilig-Meyers wants the claims allowed for
purposes of voting to accept or reject the Debtors' Second Amended
and Restated Joint Plan of Liquidation.

The Plan, scheduled for confirmation on Feb. 2, 2006, treats
Heilig-Meyers' claims as Class 6 unsecured claims.  However,
pending objections filed by the Debtors may result in the
disallowance of these claims.

Troy Savenko, Esq., at LeClair Ryan, notes that the language of
the ballot makes it unclear if Heilig-Meyers may vote to accept or
reject the plan.  The ballot states that a claim is provisionally
allowed for voting purposes if the Debtor has not objected to the
claim.  Since the Debtor has objected to its claims, Heilig-
Meyers' wants the Bankruptcy Court to temporarily allow the claims
to ensure its fair representation in the plan voting process.  

                 Heilig-Meyers' Claim

In 1999, a group led by Rhodes' existing management purchased
Rhodes, Inc., from Heilig-Meyers for $60 million in cash and a $40
million subordinated PIK note due 2004.

Heilig-Meyers filed for bankruptcy protection in August 2000 and
Rhodes subsequently filed proofs of claim against Heilig-Meyers on
account of setoff right against amounts due under the note.  
Heilig-Meyers objected to the claim and sought a money judgment
for amounts owed by the Debtors.

To resolve the dispute, the Debtors executed a $48 million consent
judgment on behalf of Heilig-Meyers.  The parties also agreed to
reduce the principal amount of the note to $20 million.

Heilig-Meyers filed separate proofs of claim for the consent
judgment and the amended note in March 2005.  The Debtors have
filed objections to both claims.   Heilig-Meyers maintains that
the Debtors' objections are frivolous and are without merit.

                  About Rhodes, Inc.

Headquartered in Atlanta, Georgia, Rhodes, Inc., will continue to
offer brand-name residential furniture to middle- and upper-
middle-income customers through 63 stores located in 11 southern
and Midwestern states (after disposing of the locations listed
above).  The Company and two of its debtor-affiliates filed for
chapter 11 protection on Nov. 4, 2004 (Bankr. N.D. Ga. Case No.
04-78434).  Paul K. Ferdinands, Esq., and Sarah Robinson Borders,
Esq., at King & Spalding represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they estimated less than $50,000 in assets and
more than $50 million in total debts.

                  About Heilig-Meyers

Heilig-Meyers Company filed for chapter 11 protection on Aug. 16,
2000 (Bankr. E.D. Va. Case No. 00-34533), reporting $1.3 billion
in assets and $839 million in liabilities.  When the Company filed
for bankruptcy protection it operated hundreds of retail stores in
more than half of the 50 states.  In April 2001, the company shut
down its Heilig-Meyers business format.  In June 2001, the Debtors
sold its Homemakers chain to Rhodes, Inc.  GOB sales have been
concluded and the Debtors are liquidating their remaining Heilig-
Meyers assets.  Bruce H. Matson, Esq., Vernon E. Inge, Jr., Esq.,
Katherine Macaulay Mueller, Esq., at LeClair Ryan, represent the
Debtors.


RHODES INC: Heilig-Meyers to Conduct Rule 2004 Probe
----------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia in
Atlanta authorized Heilig-Meyers Company to examine Rhodes, Inc.,
and its debtor-affiliates pursuant to Rule 2004 of the Federal
Rules of Bankruptcy Procedure.

Heilig-Meyers, the sole creditor of Rhodes Holdings II, wants to
explore potential claims against certain of the Debtors' directors
and officers.  These claims stem from alleged breaches of
fiduciary duty and conspiracy by the directors and officers in
conjunction with unnamed third parties.

The Bankruptcy Court directs the Debtors to:

   a) submit to a Bankruptcy Rule 2004 examination by Heilig-
      Meyers scheduled on Jan. 19, 2006, at 10:00 a.m.; and

   b) produce any and all documents concerning their:

         1) financial condition on a consolidated and
            unconsolidated basis from Jan. 1, 2003, through
            present;

         2) decision to file bankruptcy, including but not limited
            to Board of Director meeting minutes, from Jan. 1,
            2003, through present.

         3) decision to reject any and all debt-restructuring
            proposals from Heilig-Meyers, including but not
            limited to Board of Director meeting minutes, from
            Jan. 1, 2003, through present.

         4) efforts to restructure its debt prior to filing
            bankruptcy, including but not limited to Board of
            Director meeting minutes, from Jan. 1, 2003, through
            present.

         5) relationship with Citibank USA, NA, and Citicorp
            Venture Capital Ltd., from Jan. 1, 2003, through
            present.

         6) decision to appoint M. Saleem Maqaddam to the Board of
            Directors, from Jan. 1, 2003, through present.

         7) decision to hire Steve Fishman from Jan. 1, 2003,
            through present.

         8) decision to terminate the employment of Bill Kimbrell
            from Jan. 1, 2003, through present.

         9) hiring or consideration of hiring a financial advisor
            or financial advisors from Jan. 1, 2003, through  
            Nov. 4, 2004.  

Heilig-Meyers also wants to obtain all documents prepared by any
financial advisor between Jan. 1, 2003, and Nov. 4, 2004,
concerning the Debtors financial condition and their ability to
reorganize.

In addition, Heilig-Meyers seeks information on insurance policies
concerning any of the Debtors' directors and officers dated on or
after Jan. 1, 2003.

Headquartered in Atlanta, Georgia, Rhodes, Inc., will continue to
offer brand-name residential furniture to middle- and upper-
middle-income customers through 63 stores located in 11 southern
and Midwestern states (after disposing of the locations listed
above).  The Company and two of its debtor-affiliates filed for
chapter 11 protection on Nov. 4, 2004 (Bankr. N.D. Ga. Case No.
04-78434).  Paul K. Ferdinands, Esq., and Sarah Robinson Borders,
Esq., at King & Spalding represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they estimated less than $50,000 in assets and
more than $50 million in total debts.

Heilig-Meyers Company filed for chapter 11 protection on Aug. 16,
2000 (Bankr. E.D. Va. Case No. 00-34533), reporting $1.3 billion
in assets and $839 million in liabilities.  When the Company filed
for bankruptcy protection it operated hundreds of retail stores in
more than half of the 50 states.  In April 2001, the company shut
down its Heilig-Meyers business format.  In June 2001, the Debtors
sold its Homemakers chain to Rhodes, Inc.  GOB sales have been
concluded and the Debtors are liquidating their remaining Heilig-
Meyers assets.  Bruce H. Matson, Esq., Vernon E. Inge, Jr., Esq.,
Katherine Macaulay Mueller, Esq., at LeClair Ryan, represent the
Debtors.


RHODES INC: Wants to Terminate Employee Pension Program
-------------------------------------------------------
Rhodes, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Northern District of Georgia in Atlanta for
authority to terminate their Employees' Pension Plan and appoint
the Pension Benefit Guaranty Corporation as pension plan trustee.

The PBGC advised the Debtors in August 2005 that the pension plan
should be terminated because it has failed to meet the minimum
funding standard and will be unable to pay benefits when due.

The Debtors dispute PBGC's allegations that the pension plan
pension plan has insufficient funds to pay all required benefits
when due.  However, the Debtors agree that the termination is in
the best interest of their estates since they are in the process
of winding-down business operations and consequently lacks
sufficient personnel and resources to properly administer the
pension plan.

Headquartered in Atlanta, Georgia, Rhodes, Inc., will continue to
offer brand-name residential furniture to middle- and upper-
middle-income customers through 63 stores located in 11 southern
and Midwestern states (after disposing of the locations listed
above).  The Company and two of its debtor-affiliates filed for
chapter 11 protection on Nov. 4, 2004 (Bankr. N.D. Ga. Case No.
04-78434).  Paul K. Ferdinands, Esq., and Sarah Robinson Borders,
Esq., at King & Spalding represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they estimated less than $50,000 in assets and
more than $50 million in total debts.


SAINT VINCENTS: Can Access Creditors' Collateral Until March 31
---------------------------------------------------------------
At the request of Saint Vincents Catholic Medical Centers of New
York and its debtor-affiliates, the Hon. Prudence Carter Beatty of
the U.S. Bankruptcy Court for the Southern District of New York
modified the Final Cash Collateral Order dated Sept. 7, 2005, to
the extent necessary, to extend the Debtors' continued use of Cash
Collateral through March 31, 2006.

As reported in the Troubled Company Reporter on Sept. 27, 2005,
the Debtors asked the Bankruptcy Court's permission to access Cash
Collateral securing repayment of prepetition secured debts owed
to:

      Total   
     Amount     Collateral
      Owed        Value      Lender
  ------------ ------------  ------
  $179,000,000 $349,000,000  Dormitory Authority of the  
                             State of New York

    77,000,000  196,000,000  Sun Life Assurance Company of Canada

    16,000,000   76,000,000  RCG Longview II, L.P.

    50,000,000   84,000,000  Commerce Bank

    35,000,000  134,000,000  HFG HealthCo-4 LLC

     6,000,000    2,200,000  Primary Care Development Corporation

The Bankruptcy Court grants the holders of Liens on the Cash
Collateral valid, automatically perfected and enforceable
replacement liens upon, and security interests in, accounts
receivable generated after the Petition Date.

As additional adequate protection of, and to protect against
diminution in, the value of the Secured Creditors' interest in the
Cash Collateral, the Secured Creditors will be entitled to an
administrative expense claim under Section 507(b) of the
Bankruptcy Code with priority over any or all of the
administrative expenses specified in Section 507(a)(1).

The Final Cash Collateral Order incorporates the individual
stipulations the Debtors entered into to resolve objections by:

   -- Comprehensive Cancer Corporation of New York, Inc.,

   -- Sun Life Assurance Company of Canada and Sun Life Assurance
      Company of Canada (U.S.), and

   -- RCG Longview II, L.P.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the  
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts.  (Saint Vincent Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


SAINT VINCENTS: HFG Sets Terms for Release from DIP Financing Deal
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved a stipulation setting the terms for the termination of
the DIP facility provided by HFG Healthco-4, LLC for Saint
Vincents Catholic Medical Centers of New York and its debtor-
affiliates.  The stipulation also provides for the release of
HFG's liens and security interests in the Debtors' assets.

To terminate the HFG Healthco-4, LLC DIP Facility and obtain a
release of HFG's liens and security interests in the Debtors'
assets, the Debtors are required, and have agreed, to repay any
and all undisputed amounts due and owing under the HFG DIP
Facility, including all fees and expenses.

HFG asserts an Exit Fee equal to 1% of the HFG DIP Facility, or
$1,000,000, which HFG says is payable on the maturity date.  The
Debtors dispute their liability for the Exit Fee.

On December 23, 2005, the Court authorized the Debtors to obtain
replacement DIP financing from General Electric Capital
Corporation.  To facilitate the closing of the GE Replacement DIP
Facility, to obtain the required release by HFG of its liens
against and security interests in the Debtors' assets, and to
adequately protect HFG's rights to payment of the Exit Fee, the
Debtors, GE Capital and HFG agree:

   (i) that the Debtors will pay any and all undisputed amounts
       under the HFG DIP Facility to HFG upon the closing of the
       GE Replacement DIP Facility except for the Exit Fee;

  (ii) that the Debtors will establish an escrow account funded
       by the Debtors in the amount of the Exit Fee plus certain
       additional amounts;

(iii) that HFG's liens will transfer to the escrow account; and

  (iv) to establish a procedure for determining HFG's entitlement
       to the Exit Fee.

GE Capital will deposit into an interest bearing attorney escrow
account at Garfunkel, Wild & Travis, P.C., the Debtors' special
corporate, healthcare and finance counsel, $1,200,000,
representing:

   (i) the full amount of the Exit Fee claimed to be due by HFG;
       plus

  (ii) an additional amount to cover (a) any fees and expenses
       that may be incurred by HFG, including reasonable
       attorneys fees, in reaching a determination as to whether
       all or any portion of the Exit Fee is due and payable to
       it, and (b) any interest payable to HFG in respect of the
       unpaid Exit Fee.

HFG will be granted a valid, perfected first priority lien and
security interest in and against the Escrow Account and the
Escrow Amount.  HFG will not be required to file any financing
statement, notice of lien or other instrument in any jurisdiction
or filing office, or take any other action to validate or perfect
its lien and security interest in the Escrow Account and Escrow
Amount.

HFG's and the Debtors' business representatives will meet in
January 2006 to reach an agreement as to whether HFG is entitled
to all or any portion of the Exit Fee.  In the event an agreement
is reached as to HFG's Entitlement, the Parties will give written
instructions to the Escrow Agent as to how the Escrow Amount is
to be paid out and distributed.

In the event at any time after January 15, 2006, either the
Debtors or HFG determine that continued meetings are not
productive, one party may serve on the other a letter or other
writing demanding mediation.

A mediator will conduct mediation at which each side can present
their arguments and evidence on the issue of Entitlement.  The
order of the Mediator will be final and binding.  The order will
be provided to the Escrow Agent, and the Escrow Agent will
disburse to HFG the Ordered Amount from the Escrow Account.  The
Debtor will pay a percentage of the Mediator's fees equal to the
Ordered Amount divided by $1,000,000, and HFG will pay the
difference.

In addition to the Ordered Amount required to be disbursed to HFG
from the Escrow Account, the Escrow Agent will also disburse to
HFG from the Escrow Amount:

   (i) the amount of its out-of-pocket fees and expenses,
       including reasonable attorneys fees, incurred in
       connection with the determination of HFG's Entitlement and
       the Mediation -- except in the event the Debtors or the
       Official Committee of Unsecured Creditors have objected to
       the out-of-pocket fees and expenses on the grounds of
       unreasonableness, unless the Court has denied the
       objection; and

  (ii) any interest payable to HFG in respect of the unpaid Exit
       Fee.

In the event the out-of-pocket fees and expenses of HFG exceed
the balance of the Escrow Fee Amount, HFG may assert an
administrative claim against the Debtors' estate for the excess.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the  
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts.  (Saint Vincent Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


SATCON TECHNOLOGY: Grant Thornton Raises Going Concern Doubt
------------------------------------------------------------
Grant Thornton LLP expressed substantial doubt about SatCon
Technology Corporation's ability to continue as a going concern
after it audited the Company's financial statements for the fiscal
years ended Sept. 30, 2005 and 2004.  

Grant Thornton pointed to the Company's recurring losses from
operations.  In addition, the auditing firm noted the Company's
need to comply with certain restrictive covenants related to a
line of credit agreement.

During the fiscal year ended Sept. 30, 2005, SatCon Technology
incurred a $10.2 million net loss compared to an $11 million net
loss in the prior fiscal year.  For each of the past ten fiscal
years, the Company has experienced losses from operating its
businesses.  As of Sept. 30, 2005, the Company had an accumulated
deficit of approximately $137.9 million.

The Company's balance sheet showed $27.7 million in total assets
at Sept. 30, 2005, and liabilities of $12.1 million.

              About SatCon Technology

SatCon Technology Corporation - http://www.satcon.com/is a  
developer and manufacturer of electronics and motors for the
Alternative Energy, Hybrid-Electric Vehicle, Grid Support, High
Reliability Electronics and Advanced Power Technology markets.


SEARS HOLDINGS: Releases Nov. and Dec. 2005 Comparable Store Sales
------------------------------------------------------------------
Sears Holdings Corporation (Nasdaq: SHLD) reported domestic
comparable store sales for the nine-week period ended Dec. 31,
2005 for its Kmart and Sears stores.  Kmart comparable store sales
increased by 1.0% as higher apparel sales were partially offset by
a decline in home goods.  Sears domestic comparable store sales
declined by 11.9% reflecting a reduction in certain promotional
events intended to improve gross margin and poor apparel sales due
to weaker than anticipated customer response to fashion offerings.

In its Current Report on Form 8-K furnished to the SEC on Dec. 6,
2005, Holdings reported pro forma net income of $589 million for
the 13 weeks ended January 26, 2005.  The pro forma results were
prepared as though Kmart and Sears had been combined as of the
beginning of 2004 but were not adjusted to reflect any operating
efficiencies that have been, or may be realized as a result of the
combination.  Holdings currently expects that net income for its
fourth quarter ending Jan. 28, 2006 will be between $570 million
and $635 million.  The results contemplate an estimated $15
million of pretax gains ($9 million after-tax) from the sale of
assets during the quarter.

The earnings estimates do not include the approximately $40
million pretax gain ($25 million after-tax) from the sale of the
Kmart headquarters which closed on Dec. 20, 2005 and which gain
will be recognized for accounting purposes when the subdivision of
the property is recorded by the municipality.  The prior year's
fourth quarter pro forma results include $35 million of pretax
gains ($22 million after-tax) on the sale of assets.  The expected
results are preliminary and subject to change based on actual
performance in January, as well as year-end adjustments.  Holdings
currently expects to end the fiscal year with over $3.5 billion in
cash excluding Sears Canada.  The expected results and cash
balance indicated do not give effect to any share repurchase
activity after December 31, 2005.  Holdings expects to release its
fourth quarter and full-year financial results on or about March
15, 2006 and does not intend to update this information prior to
that date.

Currently, Holdings has no plans to close stores other than in the
ordinary course of business, primarily as a result of lease
expirations or terminations.

Sears Canada completed the sale of its credit business in the
fourth quarter.  The $680 million pretax gain on the sale is
expected to be recognized as a component of purchase accounting
relating to the merger of Sears Roebuck and Kmart and as such
would not affect earnings in the fourth quarter.

During the nine weeks ended Dec. 31, 2005, Holdings repurchased
approximately 826,000 shares of its common stock at an average
price of $115.43 per share.  The remaining authority under
Holdings' existing repurchase program is $471 million.

The results of Sears Canada are reported to Holdings on a one-
month lag basis.  As such, Holdings' projected fourth quarter
financial results include the results of Sears Canada from
October 2, 2005 through December 31, 2005 and the prior year pro
forma results include the results of Sears Canada from October 3,
2004 through January 1, 2005.

Sears Holdings Corporation -- http://www.searsholdings.com/-- is  
the nation's third largest broadline retailer, with approximately
$55 billion in annual revenues, and with approximately 3,900 full-
line and specialty retail stores in the United States and Canada.  
Sears Holdings is the leading home appliance retailer as well as
one of the leading retailers of tools, lawn and garden, home
electronics and automotive repair and maintenance.  Key
proprietary brands include Kenmore, Craftsman and DieHard, and a
broad apparel offering, including such well-known labels as Lands'
End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and
Covington brands.  It also has Martha Stewart Everyday products,
which are offered exclusively in the U.S. by Kmart and in Canada
by Sears Canada.  Holdings is the nation's largest provider of
home services, with more than 14 million service calls made
annually.

                      *     *     *

As reported in the Troubled Company Reporter on Dec. 30, 2005,
Moody's Investors Service assigned a speculative grade liquidity
rating of SGL-1 to Sears Holdings Corporation and affirmed the
long-term ratings of the company and its subsidiaries with a
stable rating outlook.

Ratings affirmed:

  Sears Holdings Corp.:

     * Corporate family rating at Ba1

  Sears Roebuck Acceptance Corp.:

     * Senior secured bank facility at Baa3
     * Senior unsecured notes at Ba1

Rating assigned:

     * Speculative grade liquidity rating of SGL-1

The SGL-1 speculative grade liquidity rating is based on:

   * Sears Holdings' very good liquidity that reflects significant
     cash balances;

   * revolving credit availability; and

   * readily salable assets, including non-core brands and
     extraneous real estate, a sizeable amount of which is valued
     below market as a result of Kmart's significant
     post-Chapter 11 rebase of its pre-petition real estate
     portfolio.

Sears Holdings' very good liquidity is a key positive rating
factor underpinning the company's Ba1 corporate family rating.


SECOND CHANCE: Ask Court to Approve SCAI Settlement Agreement
-------------------------------------------------------------
Second Chance Body Armor, Inc., n/k/a SCBA Liquidation, Inc., asks
the U.S. Bankruptcy Court for the Western District of Michigan to
approve the settlement agreement relating to Jamaican Government
Order.

The Debtor and its non-debtor affiliate Second Chance
International, Inc., received various orders for product from the
Government of Jamaica.  The Government was required to pay
deposits in connection with these orders, and transferred $556,400
to Second Chance International on account of such orders.

Although a portion, which is $311,000, of the deposit, was paid on
account of an order that appears to have been placed with the
Debtor, Second Chance International has continually held all of
the deposit.

The contract between the Debtor and the Government of Jamaica was
assigned to Second Chance Armor, Inc., the purchaser of all of the
Debtor's assets.

Second Chance International is now insolvent and unable to fulfill
the remainder of its contract with the Government of Jamaica.

In order to satisfy the claim of the Jamaican Government, the
Debtor had negotiated the settlement with Second Chance Armor:

   a) Second Chance Armor would assume the undertaking of Second
      Chance International under the remaining helmet order in the
      amount of $78,600, from the Government of Jamaica (in
      addition to its undertakings under the vest order in the
      amount of $311,000, already assigned by the Debtor to SCAI
      as part of the sale), and make payment of certain sales
      commissions associated with such order.

   b) Second Chance International and the Debtor would consent to
      the transfer to Second Chance Armor of $350,000 from the
      deposit, to be used by Second Chance Armor to fund
      completion of the orders of the Government of Jamaica, and
      Second Chance Armor would waive any claim to any balance
      of the deposit.  Such amount would be inclusive of the
      Debtor's portion of the deposit.

   c) The balance of the deposit would be retained by Second
      Chance International for payment of its various debts and
      obligations.

Based in Central Lake, Michigan, Second Chance Body Armor, Inc.
-- http://www.secondchance.com/-- manufactures wearable and soft  
concealable body armor.  The Company filed for chapter 11
protection on Oct. 17, 2004 (Bankr. W.D. Mich. Case No. 04-12515)
after recalling more than 130,000 vests made wholly of Zylon, but
it did not recall vests made of Zylon blended with other
protective fibers.  Stephen B. Grow, Esq., at Warner Norcross &
Judd, LLP, represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
estimated assets and liabilities of $10 million to $50 million.
Daniel F. Gosch, Esq., at Dickinson Wright PLLC, represents the
Official Committee of Unsecured Creditors.


SFBC INT'L: Moody's Places B2 Ratings on Review & May Downgrade
---------------------------------------------------------------
Moody's Investors Service placed the ratings of SFBC International
under review for possible downgrade following:

   * the resignation of several key employees;

   * continued government inquiries and investigations into its
     business practices; and

   * the impact of the adverse publicity on its core business.

Moody's notes that the company has lowered its earnings forecasts
to reflect higher ongoing legal expenses and the cancellation of
existing and new contracts.

These ratings were placed under review for possible downgrade:

   * Senior Secured Credit Facilities, rated B2
   * Corporate Family Rating, rated B2

Moody's rating review will focus on the financial impact of the
increased regulatory and legislative scrutiny of SFBC's business
practices, including:

   * higher ongoing legal expenses,
   * potential fines and fees that the company may pay, and
   * the loss of additional contracts and customers.  

Moody's will also analyze the company's:

   * liquidity and ability to fund operating expenses;

   * working capital; and

   * capital expenditures through operating cash flow and
     available cash on the balance sheet.

The ratings also reflect:

   * the challenges of managing a business that has grown rapidly
     through acquisitions over the past few years;

   * the integration risk associated with the PharmaNet
     transaction;

   * the decentralization of the company's operations and systems;

   * its smaller size relative to larger competitors; and

   * high geographic concentration of business in the U.S and
     Canada.

Moody's also notes that the company must strengthen the
effectiveness of PharmaNet's controls to be in compliance with
Sarbanes-Oxley by the end of 2005.  Moody's is concerned with the
historically low levels of free cash flow generation on a combined
basis.

SFBC also faces industry risks such as:

   * the short duration and lack of visibility on future business;
   * potential cancellation of existing contracts; and
   * strong customer buying power.

Factors mitigating these concerns include:

   * an attractive and diversified customer base;

   * high level of repeat business from existing pharmaceutical
     customers;

   * strong underlying growth in research and development spending
     by the pharmaceutical industry; and

   * solid growth prospects from generic manufacturers.

Additional factors supporting the rating include the minimal
amount of capital expenditure requirements to support future
growth, and the strategic fit and synergistic potential of the
PharmaNet acquisition.

Moody's also notes that the company used the proceeds of a recent
equity offering to reduce total long-term debt by $125 million to
slightly over $143 million.

SFBC International, based in Miami, Florida, is a leading North
American contract research organization providing specialized drug
development services to:

   * pharmaceutical,
   * biotechnology, and
   * generic pharmaceutical companies.

SFBC offers Phase I through Phase IV and bioanalytical laboratory
services.  Subsequent to its initial public offering in 2000, the
company has completed nine acquisitions; SFBC has 30 offices and
in excess of 2,000 employees.


SITHE INDEPENDENCE: Fitch Downgrades Secured Bonds Rating to BB-
----------------------------------------------------------------
Fitch Ratings has downgraded the rating of Sithe/Independence
Funding Corporation's secured bonds to 'BB-' from 'BB' and has
removed them from Rating Watch Negative.  The rating action
follows the full review of the borrower's credit quality,
including performance of the underlying power project and
structural characteristics of the borrower.

The rating was placed on Rating Watch Negative upon the announced
acquisition by Dynegy Inc. (issuer default rating, IDR, of 'B-' by
Fitch) of Sithe Energies, the indirect owner of the
Sithe/Independence power project (the project).  The acquisition
was part of Dynegy's efforts to eliminate long-term power tolling
obligations while focusing on the sale of electricity from
company-owned assets.  A Dynegy subsidiary had previously executed
long-term power agreements for approximately 950 MW of the
project's electrical output.  Those obligations are guaranteed by
Dynegy Holdings Inc., (IDR of 'B-' by Fitch).

Based on Fitch's discussions with Dynegy management, Fitch
believes that no material changes will be made to the project
structure as a result of the acquisition.  Specifically, the
corporate structure and governance will remain unchanged.  Project
cash flows will remain under the control of the trustee and will
be administered according to existing loan documents.  Existing
bank accounts will remain open and in the name of the Sithe
entity. Dynegy continues to make payments required under the power
agreements to the trustee.  Surplus cashflow, after payment of the
project's operating costs and both senior and subordinated debt
service obligations, is returned to Dynegy in the form of
distributions as permitted under the loan documents.

Fitch continues to view the project as a distinct entity, separate
from the project's owner.  However, in light of the Dynegy
companies' dual role as owner and offtaker as well as their
current credit ratings, Fitch views the project's credit profile
as being closely analogous to a separately secured financing of
Dynegy Inc.  Were a meaningful increase in Dynegy's credit ratings
to occur, Fitch would likely base the rating of the project on its
stand-alone financial performance, which Fitch expects will
provide senior debt service coverage ratios in the range of 1.5
times (x) to 1.7x, based on existing contractual arrangements.

In a hypothetical scenario of Dynegy filing a bankruptcy petition,
Fitch believes that a separate bankruptcy petition would
simultaneously be filed for the project entity.  Furthermore,
Fitch expects the project entity would remain in bankruptcy until
a joint plan of reorganization for the parent and the project
entity is confirmed.  In such a proceeding, the liabilities and
assets of the project entity would likely not be consolidated in
Dynegy's bankruptcy estate, but remain in the estate of the
project entity.  Accordingly, recovery prospects for holders of
the project's bonds would be enhanced by the favorable economics
of the project's existing capacity contract with Consolidated
Edison (IDR of 'A' by Fitch).

Fitch is preparing an updated research report that will provide
additional details of its review and analysis.


SKYWAY COMMUNICATIONS: Wants Exclusive Period Extended to Feb. 12
-----------------------------------------------------------------
Skyway Communications Holding Corp. asks the U.S. Bankruptcy
Court for the Middle District of Florida, Tampa Division, to
further extend until Feb. 12, 2006, its exclusive period to file
a chapter 11 plan.  The Debtor also wants until April 13, 2006,
to solicit acceptances of that plan.

The Debtor has negotiated a commitment with an investor group that
will offer for the infusion of $10 million in equity into the
Debtor, which will provide the basis for the Debtor's plan of
reorganization.

The extension will allow the Debtor to formulate a plan that will
maximize the recovery to creditors and parties-in-interest.

Headquartered in Clearwater, Florida, SkyWay Communications
Holding Corp. fka I-Teleco.com, Inc., fka Mastertel Communications
Corp. -- http://www.skywaynet.us/-- develops ground to air in-  
flight aircraft communication.  The Debtor filed for chapter 11
protection on June 14, 2005 (Bankr. M.D. Fla. Case No. 05-11953).  
When the Debtor filed for protection from its creditors, it listed
$1 million to $10 million in assets and $10 million to $50 million
in debts.


SUPERIOR PACKAGING: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Superior Packaging Equipment Corporation
        3 Edison Place
        Fairfield, New Jersey 07004

Bankruptcy Case No.: 06-10144

Type of Business: The Debtor manufactures horizontal end loading
                  cartoners and infeed systems.  All cartoners can
                  accommodate either chipboard or corrugated
                  cartons.  Carton closure systems are available
                  for many carton styles, including conventional
                  glue straight or reverse tuck, fifth panel gable
                  top and others.  
                  See http://www.superiorpack.com/

Chapter 11 Petition Date: January 7, 2006

Court: District of New Jersey (Newark)

Debtor's Counsel: Stuart Gold, Esq.
                  Mandelbaum, Salsburg, Gold, Lazris,
                  Discenza & Steinberg, P.C.
                  155 Prospect Avenye
                  West Orange, New Jersey 07052
                  Tel: (973) 736-4600
                  Fax: (973) 325-7467

Estimated Assets: Less than $50,000

Estimated Debts:  $1 Million to $10 Million

The Debtor did not file a list of its 20 largest unsecured
creditors.


TECO ENERGY: Fitch Holds Senior Unsecured Ratings at BB+
--------------------------------------------------------
Fitch has affirmed the senior unsecured ratings of TECO Energy,
Inc. at 'BB+' and subsidiary Tampa Electric Company at 'BBB+'.  
The Rating Outlooks for both TECO and Tampa are Stable.

TECO's 'BB+' ratings reflect the upstream dividend support
provided by the core Tampa Electric subsidiary and remaining
diversified operations as well as the company's still high
consolidated leverage.  Approximately 60% of TECO's $3.8 billion
of consolidated debt (including trust preferred securities) was
issued or guaranteed by the parent company as of Sept. 30, 2005.
The elimination of the last merchant operations in 2005
substantially reduced business risk and removed the drag on cash
flow from these operations, but legacy debt from merchant
activities remains on the balance sheet.  The five remaining core
businesses generate positive free cash flow, which should enable
reduction of the significant parent company indebtedness,
including repayment of $357 million of debt due to mature in 2007.
A phase-out of the synthetic fuel program would reduce cash in-
flows in 2006 and 2007 by approximately $145 million per year
(excluding the benefits from oil price hedges in 2006 worth
approximately $20 million) and could slow de-leveraging efforts.

TECO has ample liquidity.  There was consolidated cash and cash
equivalents of $354 million on-hand and available commitments
under bank credit facilities of $591 million as of Sept. 30, 2005.

The 'BBB+' ratings of Tampa Electric reflect the consistently
sound operations, healthy economies in the utilities' service
territories, constructive Florida regulatory climate and strong
balance sheet, as well as the risks associated with ownership by a
leveraged parent company.  While cash flow stability is enhanced
through regulatory adjustment mechanisms for fuel and purchased
power, environmental compliance related expenditures, and storm
costs, actual fuel costs in 2005 were higher than forecast,
leading to under-recovery.  These deferred fuel costs will be
recovered in 2006 as a result of the 2006 fuel filing that was
approved by the Florida Public Service Commission in November of
2005.

The Stable Rating Outlook reflects Fitch's expectation that
improving trends in credit quality will persist, but restoration
of investment grade credit metrics could take longer than the one-
to two-year horizon for Rating Outlooks.  The Rating Outlook also
incorporates uncertainty regarding receipt of cash from the syn-
fuel program given today's oil price environment.

TECO Energy, Inc. is a holding company with two primary
subsidiaries:

    * Tampa Electric Company and
    * TECO Diversified, Inc.

Tampa Electric serves more than 625,000 electric customers in West
Central Florida and the Peoples Gas division serves approximately
314,000 gas distribution customers in Florida.  Diversified
operations include coal and barging as well as power operations in
Guatemala.

TECO Energy, Inc.:

    -- Issuer default rating (IDR) 'BB+';

    -- Senior unsecured debt 'BB+';

    -- Trust preferred securities (issued by TECO Capital
       Trust II) 'BB'.

Tampa Electric Company:

    -- IDR 'BBB';
    -- Senior unsecured debt 'BBB+';
    -- Short-term CP 'F2'.


TELECONNECT INC: Auditing Firm Raises Going Concern Doubt
---------------------------------------------------------
Murrell, Hall, McIntosh & Co., PLLP, expressed substantial doubt
about Teleconnect Inc.'s ability to continue as a going concern
after it audited the Company's financial statements for the fiscal
year ended Sept. 30, 2005.  The auditing firm pointed to the
Company's recurring losses from operations and net capital
deficiency at the end of fiscal 2005.

Teleconnect incurred a $3 million net loss on $4.9 million of
sales for the year ended Sept. 30, 2005, in contrast to a $3.2
million net loss on $6.2 million of sales in the prior year.
Revenues during fiscal year 2005 were derived primarily from
providing a range of integrated telephone service solutions to
clients such as prepaid calling cards and prepaid fixed line long
distance calling.

The Company's balance sheet showed $1 million in total assets and
liabilities of $7.2 million at Sept. 30, 2005, resulting in a
stockholders' deficit of approximately $6 million.  As of Sept.
30, 2005, the Company had negative working capital of
approximately $6.6 million, compared to negative working capital
of $8 million a year earlier.

                 About Teleconnect

Teleconnect, formerly ITS Network, began as a call back service
for foreign visitors to the south coast of Spain, but now provides
prepaid fixed-line and mobile long-distance and rechargeable
prepaid calling cards.  After changing management in 2000, the
company acquired Spanish telecom firm ITS Europe.  In 2002
Teleconnect acquired prepaid calling card business Teleconnect
Comunicaciones.  Teleconnect sold its postpaid telephone
operations to Affinalia in 2003.


TRUSTREET PROPERTIES: Raises $100 Million in Term Debt Financing
----------------------------------------------------------------
Trustreet Properties, Inc. (NYSE: TSY) exercised the accordion
feature on its existing senior credit agreement raising an
additional $100 million in term debt financing.  The facility is
an add-on to an existing $175 million term facility.

The $275 million matures in April 2010.  The interest rate for the
term financing is LIBOR plus 2.00%.

The net proceeds were used to repay indebtedness outstanding on
the company's revolving line of credit and fund a portion of the
$119.1 million acquisition of restaurant properties from Wendy's
International, Inc. that closed on Dec. 29, 2005.

Trustreet Properties, Inc. -- http://www.trustreet.com/-- is the  
largest self-advised restaurant real estate investment trust in
the United States.  Trustreet, traded on the NYSE under the ticker
symbol TSY, provides a complete range of financial, real estate
and advisory services to operators of national and regional
restaurant chains.

                      *     *     *

As reported in the Troubled Company Reporter on Sept. 15, 2005,
Fitch Ratings affirms these ratings for Trustreet Properties, Inc.

   -- Senior secured credit facility 'BB+';
   -- Senior unsecured notes 'BB-';
   -- Preferred stock 'B+';

The Rating Outlook is Stable.


WHITEHALL JEWELLERS: Asks Shareholders to Wait for Board Decision
-----------------------------------------------------------------
Whitehall Jewellers, Inc. (OTC Pink Sheets: JWLR) reported that it
has been advised by Newcastle Partners, L.P. that it does not have
a firm commitment to fund its proposed tender offer and merger,
but that it was revising its tender offer to $1.50 per share,
including the conditions thereto such as the refinancing of or
consent under the company's senior credit facility.  The Board of
Directors will disclose its position with respect to the revised
tender offer and the reasons therefore following its review of the
terms of Newcastle's revised offer.  In the meantime, the Company
urges its stockholders to take no action with respect to
Newcastle's tender offer.

Whitehall's Board of Directors had previously determined that it
cannot consider any proposal that does not have a firm commitment
for the refinancing, an agreement with the company's vendors for
the payment of amounts owed to them and the necessary committed
funds to close the transaction.  The company has engaged in
numerous discussions with Newcastle about potential financing.  
Newcastle has failed to demonstrate its ability to refinance the
company's outstanding debt and expected financing needs.  The
company has repeatedly requested such information over the past
month and most recently requested evidence of a binding commitment
for the refinancing be provided no later than Jan. 4, 2006.  
Instead, Newcastle chose to make yet another offer, first in a
press release, still failing to address these fundamental issues.

Newcastle announced that its tender offer is still subject to the
closing of a replacement senior credit facility and that it
intends to honor the company's agreement with creditors.  The
Company notes that if the Prentice transaction does not close,
then the vendor agreement terminates and the amounts outstanding
under the company's current senior credit facility come due by its
terms on January 31, 2006.  As the company disclosed in its proxy
statement, unless it secures financing in the next several weeks,
there is substantial doubt whether the Company will have
sufficient capital to continue to operate its business as
currently conducted.  In such a case, the company may be forced to
pursue a restructuring under applicable bankruptcy law.

Whitehall Jewellers, Inc. is a national specialty retailer of fine
jewelry, operating 387 stores in 38 states.  The company has
announced that it intends to close a number of stores in the near
term.  The company operates stores in regional and super regional
shopping malls under the names Whitehall Co. Jewellers, Lundstrom
Jewelers and Marks Bros. Jewelers.

                        *     *     *

                   Needs Additional Capital

As previously reported, Whitehall is reviewing its financial
situation in light of current and forecasted operating results and
management changes.  The Company believes it needs additional
capital to support its operations.  The Company is evaluating
various alternatives to meet these needs, including the raising of
additional debt or equity financing.  The Company has requested
temporary extensions of payment terms from some of its key
suppliers in order to manage liquidity and has also slowed its
accounts payable schedules generally.  In addition, the Company
plans to retain restructuring professionals to assist it.

                         Lender Talks

The Company is actively engaged in discussing alternatives with
its bank lenders and other parties.  There is no assurance that
the discussions will result in additional financing or that an
alternative transaction will be available.  If the Company is not
able to procure additional financing or otherwise able to obtain
additional liquidity, it may be forced to pursue other
alternatives, such as a restructuring of its obligations.


WINN-DIXIE: Equity Panel Can Hire Jefferies & Co. as Fin'l Advisor
------------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Oct. 21, 2005, the Official Committee of Equity Security Holders
seeks authority from the U.S. Bankruptcy Court for the Middle
District of Florida to retain Jefferies & Company, Inc., as its
financial advisor in the Debtors' Chapter 11 cases, effective as
of Sept. 1, 2005.

Jefferies will be paid:

   -- a $125,000 monthly fee until the firm has been paid
      $375,000 in total monthly fees, and $100,000 per month
      thereafter; and

   -- a success fee equal to:

      (1) 1% of any recoveries by the holders of the Debtors'
          equity securities aggregating $150,000,000;

      (2) 1.25% of any recoveries by Equity aggregating between
          $150,000,000 and $300,000,000; and

      (3) 1.5% of any recoveries by Equity aggregating in excess
          of $300,000,000.

      A credit equal to 50% of all Monthly Fees paid to Jefferies
      in excess of $375,000 will be applicable against the
      Success Fee, if any.

                           Court Ruling

Judge Funk authorizes the Official Committee of Equity Security
Holders to retain Jefferies & Company, Inc., as financial advisor
nunc pro tunc to Sept. 1, 2005.

To the extent not previously withdrawn or resolved, any
objections to the Equity Committee's employment application are
overruled in their entirety.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest  
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000).


WINN-DIXIE: Penman Asks $220,851 Cure Amount & Ample Insurance
--------------------------------------------------------------
At Penman Plaza Associates, Ltd.'s behest, the U.S. Bankruptcy
Court for the Middle District of Florida compelled Winn-Dixie
Stores, Inc., and its debtor-affiliates to assume or reject their
lease with Penman Plaza Associates, Ltd., by Nov. 18, 2005.

Accordingly, the Debtors seek the Court's authority to assume
the Lease effective as of Nov. 18, 2005.

Penman is the owner of the premises at Neptune Beach in Duval
County, Florida.

The Debtors will satisfy the requirements of Section 365(b) of
the Bankruptcy Code by paying Penman $103,907.  To the extent
that Penman believes that a different cure amount may be due, the
Debtors ask the Court to compel Penman to file an objection.

                      Penman's Demand

Michael Bowlus, Esq., at Ford, Bowlus, Duss, Morgan, Kenney,
Safer & Hampton, PA, in Jacksonville, Florida, notes that the
Debtors' shareholders' equity has dropped below $100,000,000.
Pursuant to the terms of their lease with Penman Plaza
Associates, Ltd., the Debtors are required to provide proof of
insurance on the improvements, the stock and trade of their
leased premises and for premises liability.

Mr. Bowlus reports that the Debtors have failed to provide the
required proof of insurance and cannot "cure" the default under
the Lease until the proof has been supplied.

Mr. Bowlus reminds the Court that the Debtors' assumption of the
Penman Lease requires them to provide adequate assurance that
they will pay for the adjustments to the common area maintenance
charges of 2005 once the calculations have been done and the
invoices are submitted to the Debtors in January 2006.

The Debtors' prior refusal to pay the CAM Charges due for 2004
has brought extreme hardship on Penman, Mr. Bowlus relates.  The
Debtors are the tenants of the largest space in the Penman's
shopping center and their refusal to make timely payments
increases the costs and risks to Penman.

Penman does not intend to waive any claims it has against the
Debtors for cure and compensation under the lease.

In this regard, Penman demands that the Debtors pay its $220,851
cure claim and provide proof of sufficient insurance on the
leased premises, its contents and improvements.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest  
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000).


* BOND PRICING: For the week of Jan. 3 - Jan. 6, 2006
-----------------------------------------------------

Issuer                                Coupon  Maturity  Price
------                                ------  --------  -----
Adelphia Comm.                        3.250%  05/01/21     2
Adelphia Comm.                        6.000%  02/15/06     1
Adelphia Comm.                        7.500%  01/15/04    61
Adelphia Comm.                        7.750%  01/15/09    57
Adelphia Comm.                        7.875%  05/01/09    58
Adelphia Comm.                        8.125%  07/15/03    59
Adelphia Comm.                        8.375%  02/01/08    57
Adelphia Comm.                        9.250%  10/01/02    55
Adelphia Comm.                        9.375%  11/15/09    60
Adelphia Comm.                        9.500%  02/15/04    55
Adelphia Comm.                        9.875%  03/01/05    54
Adelphia Comm.                        9.875%  03/01/07    56
Adelphia Comm.                       10.250%  11/01/06    58
Adelphia Comm.                       10.250%  06/15/11    62
Adelphia Comm.                       10.500%  07/15/04    60
Adelphia Comm.                       10.875%  10/01/10    59
Aladdin Gaming                       13.500%  03/01/10     0
Allegiance Tel.                      11.750%  02/15/08    25
Allegiance Tel.                      12.875%  05/15/08    20
Alt Living Scvs                       7.000%  06/01/04     1
Amer & Forgn PWR                      5.000%  03/01/30    69
Amer Color Graph                     10.000%  06/15/10    69
Amer Plumbing                        11.625%  10/15/08    16
American Airline                      9.980%  01/02/15    67
American Airline                      9.980%  01/02/15    67
American Airline                      9.980%  01/02/15    67
American Airline                     10.430%  09/15/08    70
American Airline                     10.430%  09/15/08    70
AMR Corp.                             9.880%  06/15/20    74
AMR Corp.                            10.000%  04/15/21    74
AMR Corp.                            10.125%  06/01/21    71
AMR Corp.                            10.150%  05/15/20    71
AMR Corp.                            10.200%  03/15/20    72
AMR Corp.                            10.290%  03/08/21    68
AMR Corp.                            10.550%  03/12/21    69
Amtran Inc.                           9.625%  12/15/05     4
Anchor Glass                         11.000%  02/15/13    72
Anker Coal Group                     14.250%  09/01/07     0
Antigenics                            5.250%  02/01/25    58
Apple South Inc.                      9.750%  06/01/06     3
Archibald Candy                      10.000%  11/01/07     0
Armstrong World                       6.350%  08/15/03    72
Armstrong World                       6.500%  08/15/05    72
Armstrong World                       7.450%  05/15/29    72
Asarco Inc.                           7.875%  04/15/13    56
Asarco Inc.                           8.500%  05/01/25    60    
ATA Holdings                         12.125%  06/15/10     4
ATA Holdings                         13.000%  02/01/09     4
At Home Corp.                         4.750%  12/15/06     0
Atlantic Coast                        6.000%  02/15/34     3
Atlas Air Inc                         8.770%  01/02/11    52
Autocam Corp.                        10.875%  06/15/14    70
Bank New England                      8.750%  04/01/99     6
Bank New England                      9.500%  02/15/96     3
Big V Supermkts                      11.000%  02/15/04     0
BTI Telecom Corp                     10.500%  09/15/07    52
Budget Group Inc.                     9.125%  04/01/06     0
Builders Transpt                      8.000%  08/15/05     0
Burlington North                      3.200%  01/01/45    60
Cell Therapeutic                      5.750%  06/15/08    51
Cell Therapeutic                      5.750%  06/15/08    56
Cellstar Corp.                       12.000%  01/15/07    42
Cendant Corp                          4.890%  08/17/06    50
Charter Comm Inc                      5.875%  11/16/09    74
Charter Comm Hld                      8.625%  04/01/09    74
Charter Comm Hld                      9.625%  11/15/09    74
Charter Comm Hld                     10.000%  04/01/09    75
Charter Comm Hld                     10.000%  05/15/11    58
Charter Comm Hld                     10.250%  01/15/10    67
Charter Comm Hld                     10.750%  10/01/09    72
Charter Comm Hld                     11.125%  01/15/11    56
CIH                                  10.000   05/15/14    56
Clark Material                       10.750%  11/15/06     0
Collins & Aikman                     10.750%  12/31/11    46
Color Tile Inc                       10.750   12/15/01     0
Comcast Corp.                         2.000%  10/15/29    40
Compudyne Corp                        6.250%  01/15/11    66
Cons Container                       10.125%  07/15/09    63
Covad Communication                   3.000%  03/15/24    58
CPNL-Dflt12/05                        4.000%  12/26/06    10
CPNL-Dflt12/05                        4.750%  11/15/23    28
CPNL-Dflt12/05                        6.000%  09/30/14    22
CPNL-Dflt12/05                        7.625%  04/15/06    45
CPNL-Dflt12/05                        7.750%  04/15/09    45
CPNL-Dflt12/05                        7.750%  06/01/15     9
CPNL-Dflt12/05                        7.875%  04/01/08    46
CPNL-Dflt12/05                        8.500%  02/15/11    31
CPNL-Dflt12/05                        8.625%  08/15/10    30
CPNL-Dflt12/05                        8.750%  07/15/07    44
CPNL-Dflt12/05                       10.500%  05/15/06    46
Cray Inc.                             3.000%  12/01/24    55
Cray Research                         6.125%  02/01/11    30
Curagen Corp.                         4.000%  02/15/11    66
Curagen Corp.                         4.000%  02/15/11    64
Curative Health                      10.750%  05/01/11    64
DAL-DFLT09/05                         9.000%  05/15/16    21
Dana Corp                             5.850%  01/15/15    72
Dana Corp                             7.000%  03/15/28    73
Dana Corp                             7.000%  03/01/29    73
Decrane Aircraft                     12.000%  09/30/08    51
Delco Remy Intl                       9.375%  04/15/12    31
Delco Remy Intl                      11.000%  05/01/09    38
Delphi Auto Syst                      6.500%  05/01/09    55
Delphi Auto Syst                      7.125%  05/01/29    54
Delphi Corp                           6.500%  08/15/13    54
Delphi Trust II                       6.197%  11/15/33    26
Delta Air Lines                       2.875%  02/18/24    20
Delta Air Lines                       7.541%  10/11/11    63
Delta Air Lines                       7.700%  12/15/05    21
Delta Air Lines                       7.900%  12/15/09    22
Delta Air Lines                       8.000%  06/03/23    20
Delta Air Lines                       8.187%  10/11/17    62
Delta Air Lines                       8.300%  12/15/29    22
Delta Air Lines                       8.540%  01/02/07    26
Delta Air Lines                       8.540%  01/02/07    29
Delta Air Lines                       8.540%  01/02/07    53
Delta Air Lines                       8.540%  01/02/07    29
Delta Air Lines                       9.200%  09/23/14    44
Delta Air Lines                       9.250%  12/27/07    17
Delta Air Lines                       9.250%  03/15/22    21
Delta Air Lines                       9.300%  01/02/10    40
Delta Air Lines                       9.300%  01/02/10    54
Delta Air Lines                       9.320%  01/02/09    55
Delta Air Lines                       9.450%  02/26/06    54
Delta Air Lines                       9.480%  06/05/06    46
Delta Air Lines                       9.750%  05/15/21    21
Delta Air Lines                       9.875%  04/30/08    68
Delta Air Lines                      10.000%  08/15/08    22
Delta Air Lines                      10.000%  05/17/09    62
Delta Air Lines                      10.000%  06/01/09    44
Delta Air Lines                      10.000%  06/01/10    64
Delta Air Lines                      10.000%  06/01/10    68
Delta Air Lines                      10.000%  06/01/11    26
Delta Air Lines                      10.000%  06/05/11    54
Delta Air Lines                      10.000%  06/18/13    58
Delta Air Lines                      10.060%  01/02/16    59
Delta Air Lines                      10.080%  06/16/07    59
Delta Air Lines                      10.125%  01/02/10    34
Delta Air Lines                      10.125%  05/15/10    20
Delta Air Lines                      10.125%  06/16/10    61
Delta Air Lines                      10.375%  02/01/11    20
Delta Air Lines                      10.375%  12/15/22    20
Delta Air Lines                      10.430%  01/02/11    20
Delta Air Lines                      10.500%  04/30/16    65
Delta Air Lines                      10.790%  09/26/13    20
Diva Systems                         12.625%  03/01/08     0
Duane Reade Inc                       9.750%  08/01/11    67
Dura Operating                        9.000%  05/01/09    55
Dura Operating                        9.000%  05/01/09    56
DVI Inc.                              9.875%  02/01/04    14
Epix Medical Inc.                     3.000%  06/15/24    61
Exodus Comm. Inc.                     5.250%  02/15/08     0
Exodus Comm. Inc.                    11.625%  07/15/10     0
Falcon Products                      11.375%  06/15/09     2
Fedders North AM                      9.875%  03/01/14    72
Federal-Mogul Co.                     7.375%  01/15/06    34
Federal-Mogul Co.                     7.500%  01/15/09    35
Federal-Mogul Co.                     8.160%  03/06/03    33
Federal-Mogul Co.                     8.330%  11/15/01    33
Federal-Mogul Co.                     8.370%  11/15/01    31
Federal-Mogul Co.                     8.800%  04/15/07    34
Fibermark Inc.                       10.750%  04/15/11    74
Finova Group                          7.500%  11/15/09    35
FMXIQ-DFLT09/05                      13.500%  08/15/05     9
Foamex L.P.-DFLT                      9.875%  06/15/07     9
Ford Holdings                         9.300%  03/01/30    73
Ford Motor Co.                        6.500%  08/01/18    63
Ford Motor Co.                        6.625%  02/15/28    64
Ford Motor Co.                        7.400%  11/01/46    58
Ford Motor Co.                        7.500%  08/01/26    66
Ford Motor Co.                        7.700%  05/15/97    60
Ford Motor Co.                        7.750%  06/15/43    60
Ford Motor Co.                        8.900%  01/15/32    70
Ford Motor Co.                        8.215%  09/15/21    75
Ford Motor Cred                       4.350%  02/20/09    75
Ford Motor Cred                       4.900%  05/20/09    71
Ford Motor Cred                       5.000%  09/21/09    74
Ford Motor Cred                       5.000%  02/22/11    69
Ford Motor Cred                       5.100%  02/22/11    72
Ford Motor Cred                       5.200%  03/21/11    70
Ford Motor Cred                       5.250%  03/21/11    72
Ford Motor Cred                       5.250%  03/21/11    66
Ford Motor Cred                       5.250%  09/20/11    71
Ford Motor Cred                       5.300%  03/21/11    71
Ford Motor Cred                       5.300%  04/20/11    73
Ford Motor Cred                       5.350%  02/22/11    73
Ford Motor Cred                       5.400%  06/22/09    70
Ford Motor Cred                       5.400%  09/20/11    64
Ford Motor Cred                       5.400%  10/20/11    71
Ford Motor Cred                       5.400%  10/20/11    71
Ford Motor Cred                       5.450%  04/20/11    73
Ford Motor Cred                       5.450%  10/20/11    73
Ford Motor Cred                       5.500%  04/20/11    74
Ford Motor Cred                       5.500%  09/20/11    72
Ford Motor Cred                       5.500%  10/20/11    72
Ford Motor Cred                       5.550%  08/22/11    69
Ford Motor Cred                       5.550%  09/20/11    69
Ford Motor Cred                       5.600%  04/20/11    73
Ford Motor Cred                       5.600%  08/22/11    73
Ford Motor Cred                       5.600%  09/20/11    71
Ford Motor Cred                       5.600%  11/21/11    67
Ford Motor Cred                       5.600%  11/21/11    69
Ford Motor Cred                       5.650%  05/20/11    73
Ford Motor Cred                       5.650%  07/20/11    71
Ford Motor Cred                       5.650%  11/21/11    73
Ford Motor Cred                       5.650%  11/21/11    71
Ford Motor Cred                       5.650%  12/20/11    67
Ford Motor Cred                       5.650%  01/21/14    66
Ford Motor Cred                       5.700%  05/20/11    73
Ford Motor Cred                       5.700%  12/20/11    72
Ford Motor Cred                       5.700%  01/20/12    70
Ford Motor Cred                       5.750%  08/22/11    72
Ford Motor Cred                       5.750%  12/20/11    74
Ford Motor Cred                       5.750%  02/21/12    72
Ford Motor Cred                       5.750%  01/21/14    67
Ford Motor Cred                       5.750%  02/20/14    68
Ford Motor Cred                       5.750%  02/20/14    68
Ford Motor Cred                       5.800%  11/22/10    74
Ford Motor Cred                       5.850%  05/20/10    71
Ford Motor Cred                       5.850%  06/21/10    75
Ford Motor Cred                       5.850%  07/20/11    72
Ford Motor Cred                       5.850%  01/20/12    72
Ford Motor Cred                       5.900%  07/20/11    72
Ford Motor Cred                       5.900%  02/20/14    67
Ford Motor Cred                       6.000%  12/20/10    74
Ford Motor Cred                       6.000%  01/20/12    71
Ford Motor Cred                       6.000%  01/21/14    69
Ford Motor Cred                       6.000%  03/20/14    66
Ford Motor Cred                       6.000%  03/20/14    67
Ford Motor Cred                       6.000%  03/20/14    67
Ford Motor Cred                       6.000%  03/20/14    67
Ford Motor Cred                       6.000%  11/20/14    66
Ford Motor Cred                       6.000%  11/20/14    66
Ford Motor Cred                       6.000%  11/20/14    66
Ford Motor Cred                       6.000%  01/20/15    65
Ford Motor Cred                       6.000%  02/20/15    65
Ford Motor Cred                       6.050%  06/20/11    68
Ford Motor Cred                       6.050%  03/20/12    74
Ford Motor Cred                       6.050%  02/20/14    70
Ford Motor Cred                       6.050%  03/20/14    68
Ford Motor Cred                       6.050%  04/21/14    65
Ford Motor Cred                       6.050%  12/22/14    65
Ford Motor Cred                       6.050%  12/22/14    66
Ford Motor Cred                       6.050%  12/22/14    65
Ford Motor Cred                       6.050%  02/20/15    67
Ford Motor Cred                       6.100%  06/20/11    73
Ford Motor Cred                       6.100%  02/20/15    66
Ford Motor Cred                       6.150%  12/22/14    67
Ford Motor Cred                       6.150%  01/20/15    66
Ford Motor Cred                       6.200%  05/20/11    73
Ford Motor Cred                       6.200%  06/20/11    74
Ford Motor Cred                       6.200%  04/21/14    66
Ford Motor Cred                       6.200%  03/20/15    67
Ford Motor Cred                       6.250%  08/20/10    71
Ford Motor Cred                       6.250%  06/20/11    75
Ford Motor Cred                       6.250%  12/20/13    69
Ford Motor Cred                       6.250%  12/20/13    72
Ford Motor Cred                       6.250%  04/21/14    68
Ford Motor Cred                       6.250%  01/20/15    67
Ford Motor Cred                       6.250%  03/20/15    67
Ford Motor Cred                       6.300%  05/20/14    70
Ford Motor Cred                       6.300%  05/20/14    65
Ford Motor Cred                       6.350%  09/20/10    73
Ford Motor Cred                       6.350%  04/21/14    68
Ford Motor Cred                       6.500%  12/20/13    67
Ford Motor Cred                       6.500%  02/20/15    71
Ford Motor Cred                       6.500%  03/20/15    68
Ford Motor Cred                       6.520%  03/10/13    72
Ford Motor Cred                       6.550%  12/20/13    69
Ford Motor Cred                       6.550%  07/21/14    63
Ford Motor Cred                       6.600%  10/21/13    71
Ford Motor Cred                       6.650%  10/21/13    71
Ford Motor Cred                       6.650%  06/20/14    68
Ford Motor Cred                       6.750%  10/21/13    71
Ford Motor Cred                       6.750%  06/20/14    70
Ford Motor Cred                       6.800%  06/20/14    69
Ford Motor Cred                       6.800%  06/20/14    72
Ford Motor Cred                       6.800%  03/20/15    71
Ford Motor Cred                       6.850%  05/20/14    69
Ford Motor Cred                       6.850%  06/20/14    73
Ford Motor Cred                       6.950%  05/20/14    71
Ford Motor Cred                       7.000%  11/26/11    73
Ford Motor Cred                       7.000%  08/15/12    74
Ford Motor Cred                       7.050%  09/20/13    73
Ford Motor Cred                       7.100%  09/20/13    73
Ford Motor Cred                       7.250%  07/20/17    68
Ford Motor Cred                       7.250%  07/20/17    66
Ford Motor Cred                       7.300%  04/20/15    75
Ford Motor Cred                       7.350%  03/20/15    73
Ford Motor Cred                       7.350%  09/15/15    69
Ford Motor Cred                       7.400%  08/21/17    71
Ford Motor Cred                       7.500%  08/20/32    65
Ford Motor Cred                       7.550%  09/30/15    69
Ford Motor Cred                       7.900%  05/18/15    72
Gateway Inc.                          1.500%  12/31/09    73
Gateway Inc.                          2.000%  12/31/11    69
General Motors                        7.125%  07/15/13    68   
General Motors                        7.400%  09/01/25    59
General Motors                        7.700%  04/15/16    65
General Motors                        8.100%  06/15/24    61   
General Motors                        8.250%  07/15/23    66    
General Motors                        8.375%  07/15/33    67     
General Motors                        8.800%  03/01/21    65
General Motors                        9.400%  07/15/21    67
General Motors                        9.450%  11/01/11    73
GMAC                                  5.250%  01/15/14    71
GMAC                                  5.350%  01/15/14    69
GMAC                                  5.700%  10/15/13    71
GMAC                                  5.750%  01/15/14    72
GMAC                                  5.850%  05/15/13    72
GMAC                                  5.850%  06/15/13    75
GMAC                                  5.900%  12/15/13    73
GMAC                                  5.900%  12/15/13    71
GMAC                                  5.900%  01/15/19    66
GMAC                                  5.900%  01/15/19    67
GMAC                                  5.900%  02/15/19    65
GMAC                                  5.900%  10/15/19    65
GMAC                                  6.000%  11/15/13    70
GMAC                                  6.000%  12/15/13    72
GMAC                                  6.000%  02/15/19    67
GMAC                                  6.000%  02/15/19    64
GMAC                                  6.000%  02/15/19    68
GMAC                                  6.000%  03/15/19    67
GMAC                                  6.000%  03/15/19    68
GMAC                                  6.000%  03/15/19    71
GMAC                                  6.000%  03/15/19    69
GMAC                                  6.000%  03/15/19    72
GMAC                                  6.000%  04/15/19    70
GMAC                                  6.000%  09/15/19    66
GMAC                                  6.000%  09/15/19    68
GMAC                                  6.050%  08/15/19    59
GMAC                                  6.050%  08/15/19    68
GMAC                                  6.050%  10/15/19    67
GMAC                                  6.100%  09/15/19    71
GMAC                                  6.125%  10/15/19    67
GMAC                                  6.150%  08/15/19    70
GMAC                                  6.150%  09/15/19    69
GMAC                                  6.150%  10/15/19    68
GMAC                                  6.200%  11/15/13    73
GMAC                                  6.200%  04/15/19    71
GMAC                                  6.250%  07/15/13    73
GMAC                                  6.250%  10/15/13    73
GMAC                                  6.250%  11/15/13    71
GMAC                                  6.250%  12/15/18    66
GMAC                                  6.250%  01/15/19    70
GMAC                                  6.250%  04/15/19    70
GMAC                                  6.250%  05/15/19    68
GMAC                                  6.250%  07/15/19    68
GMAC                                  6.300%  03/15/13    72
GMAC                                  6.300%  11/15/13    73
GMAC                                  6.300%  08/15/19    68
GMAC                                  6.300%  08/15/19    68
GMAC                                  6.350%  04/15/19    66
GMAC                                  6.350%  07/15/19    68
GMAC                                  6.350%  07/15/19    69
GMAC                                  6.400%  12/15/18    67
GMAC                                  6.400%  11/15/19    71
GMAC                                  6.400%  11/15/19    69
GMAC                                  6.500%  03/15/13    75
GMAC                                  6.500%  04/15/13    75
GMAC                                  6.500%  05/15/13    75
GMAC                                  6.500%  06/15/18    72
GMAC                                  6.500%  11/15/18    68
GMAC                                  6.500%  12/15/18    70
GMAC                                  6.500%  12/15/18    71
GMAC                                  6.500%  05/15/19    71
GMAC                                  6.500%  01/15/20    71
GMAC                                  6.500%  02/15/20    73
GMAC                                  6.550%  12/15/19    71
GMAC                                  6.600%  08/15/16    73
GMAC                                  6.600%  05/15/18    73
GMAC                                  6.600%  06/15/19    69
GMAC                                  6.600%  06/15/19    70
GMAC                                  6.650%  06/15/18    72
GMAC                                  6.650%  10/15/18    70
GMAC                                  6.650%  10/15/18    73
GMAC                                  6.650%  02/15/20    71
GMAC                                  6.700%  07/15/12    72
GMAC                                  6.700%  05/15/14    75
GMAC                                  6.700%  06/15/14    74
GMAC                                  6.700%  08/15/16    74
GMAC                                  6.700%  06/15/18    73
GMAC                                  6.700%  06/15/18    73
GMAC                                  6.700%  11/15/18    74
GMAC                                  6.700%  06/15/19    73
GMAC                                  6.700%  12/15/19    71
GMAC                                  6.750%  11/15/09    75
GMAC                                  6.750%  07/15/16    73
GMAC                                  6.750%  08/15/16    72
GMAC                                  6.750%  09/15/16    73
GMAC                                  6.750%  06/15/17    71
GMAC                                  6.750%  03/15/18    72
GMAC                                  6.750%  07/15/18    74
GMAC                                  6.750%  09/15/18    72
GMAC                                  6.750%  10/15/18    71
GMAC                                  6.750%  05/15/19    72
GMAC                                  6.750%  05/15/19    73
GMAC                                  6.750%  06/15/19    70
GMAC                                  6.750%  06/15/19    71
GMAC                                  6.750%  03/15/20    72
GMAC                                  6.800%  09/15/18    72
GMAC                                  6.800%  10/15/18    74
GMAC                                  6.850%  05/15/18    71
GMAC                                  6.875%  08/15/16    66
GMAC                                  6.875%  07/15/18    69
GMAC                                  6.900%  06/15/17    65
GMAC                                  6.900%  07/15/18    73
GMAC                                  6.900%  08/15/18    71
GMAC                                  6.950%  06/15/17    74
GMAC                                  7.000%  06/15/16    75
GMAC                                  7.000%  06/15/16    75
GMAC                                  7.000%  07/15/16    74
GMAC                                  7.000%  05/15/17    75
GMAC                                  7.000%  05/15/17    74
GMAC                                  7.000%  06/15/17    73
GMAC                                  7.000%  07/15/17    74
GMAC                                  7.000%  07/15/17    74
GMAC                                  7.000%  02/15/18    73
GMAC                                  7.000%  03/15/18    71
GMAC                                  7.000%  05/15/18    74
GMAC                                  7.000%  05/15/18    72
GMAC                                  7.000%  08/15/18    75
GMAC                                  7.000%  02/15/21    73
GMAC                                  7.000%  09/15/21    68
GMAC                                  7.000%  09/15/21    73
GMAC                                  7.000%  06/15/22    69
GMAC                                  7.000%  11/15/23    70
GMAC                                  7.000%  11/15/24    69
GMAC                                  7.000%  11/15/24    68
GMAC                                  7.000%  11/15/24    70
GMAC                                  7.050%  05/15/17    74
GMAC                                  7.050%  03/15/18    73
GMAC                                  7.050%  04/15/18    73
GMAC                                  7.125%  04/15/17    74
GMAC                                  7.125%  07/15/17    74
GMAC                                  7.150%  10/15/17    70
GMAC                                  7.150%  01/15/25    70
GMAC                                  7.150%  03/15/25    74
GMAC                                  7.200%  10/15/17    71
GMAC                                  7.200%  10/15/17    74
GMAC                                  7.250%  12/15/17    75
GMAC                                  7.350%  03/15/17    75
GMAC                                  7.250%  07/15/17    74
GMAC                                  7.250%  09/15/17    74
GMAC                                  7.250%  09/15/17    75
GMAC                                  7.250%  09/15/17    75
GMAC                                  7.250%  04/15/18    73
GMAC                                  7.250%  08/15/18    74
GMAC                                  7.250%  01/15/25    71
GMAC                                  7.250%  02/15/25    74
GMAC                                  7.000%  01/15/18    74
GMAC                                  7.350%  11/15/16    75
GMAC                                  7.500%  03/15/25    72
Golden Books Pub                     10.750%  12/31/04     0
Graftech Int'l                        1.625%  01/15/24    72
Gulf Mobile Ohio                      5.000%  12/01/56    72
Gulf States STL                      13.500%  04/15/03     0
HNG Internorth                        9.625%  03/15/06    37
Home Interiors                       10.125%  06/01/08    73
Human Genome                          2.250%  08/15/12    73
Human Genome                          2.250%  08/15/12    74
Huntsman Packag                      13.000%  06/01/10    20  
Impsat Fiber                          6.000%  03/15/11    70
Inland Fiber                          9.625%  11/15/07    50
Integrat Elec SV                      9.375%  02/01/09    68
Integrat Elec SV                      9.375%  02/01/09    71
Iridium LLC/CAP                      10.875%  07/15/05    27
Iridium LLC/CAP                      11.250%  07/15/05    27
Iridium LLC/CAP                      13.000%  07/15/05    24
Iridium LLC/CAP                      14.000%  07/15/05    26
Isolagen Inc.                         3.500%  11/01/24    52
Jacobson's                            6.750%  12/15/11     0
Jts Corp.                             5.250%  04/29/02     0
Kaiser Aluminum & Chem.              12.750%  02/01/03     9
Kellstrom Inds                        5.500%  06/15/03     0
Key3Media Group                      11.250%  06/15/11     0
Kmart Corp.                           8.540%  01/01/15    16
Kmart Corp.                           8.990%  07/05/10    21
Kmart Corp.                           9.350%  07/05/10    26
Kmart Corp.                           9.780%  01/05/20    73
Kmart Funding                         8.800%  07/01/10    30
Kmart Funding                         9.440%  07/01/18    61
Level 3 Comm. Inc.                    2.875%  07/15/10    64
Level 3 Comm. Inc.                    6.000%  09/15/09    65
Level 3 Comm. Inc.                    6.000%  03/15/10    63
Liberty Media                         3.750%  02/15/30    55
Liberty Media                         4.000%  11/15/29    59
LTV Corp.                             8.200%  09/15/07     0
Macsaver Financl                      7.400%  02/15/02     3
Macsaver Financl                      7.600%  08/01/07     1
Macsaver Financl                      7.875%  08/01/03     0
Mcms Inc.                             9.750%  03/01/08     0
Merisant Co                           9.500%  07/15/13    62
MHS Holdings Co                      16.875%  09/22/04     0
Metamot Worldwid                      2.940%  08/15/04     0
MRS Fields                            9.000%  03/15/11    70
MSX Int'l Inc.                       11.375%  01/15/08    69
Muzak LLC                             9.875%  03/15/09    61
Natl Steel Corp.                      8.375%  08/01/06     0
New Orl Grt N RR                      5.000%  07/01/32    72
Nexprise Inc.                         6.000%  04/01/07     0
North Atl Trading                     9.250%  03/01/12    62
Northern Pacific RY                   3.000%  01/01/47    60
Northern Pacific RY                   3.000%  01/01/47    60
Northwest Airlines                    6.625%  05/15/23    37
Northwest Airlines                    7.068%  01/02/16    69
Northwest Airlines                    7.248%  01/02/12    16
Northwest Airlines                    7.360%  02/01/20    71
Northwest Airlines                    7.625%  11/15/23    36
Northwest Airlines                    7.626%  04/01/10    56
Northwest Airlines                    7.875%  03/15/08    37
Northwest Airlines                    8.070%  01/02/15    27
Northwest Airlines                    8.130%  02/01/14    31
Northwest Airlines                    8.304%  09/01/10    73
Northwest Airlines                    8.700%  03/15/07    38
Northwest Airlines                    8.875%  06/01/06    38
Northwest Airlines                    8.970%  01/02/15    21
Northwest Airlines                    9.179%  04/01/10    40
Northwest Airlines                    9.875%  03/15/07    38
Northwest Airlines                   10.000%  02/01/09    36
NTK Holdings Inc.                    10.750%  03/01/14    63
Nutritional Src.                     10.125%  08/01/09    70
Oakwood Homes                         7.875%  03/01/04    13
Oakwood Homes                         8.125%  03/01/09     8
Osu-Dflt10/05                        13.375%  10/15/09     0
Outboard Marine                       9.125%  04/15/17     0
Overstock.com                         3.750%  12/01/11    73
Owens-Crng Fiber                      8.875%  06/01/02    74
PCA LLC/PCA Fin                      11.875   08/01/09    23
Pegasus Satellite                    12.375%  08/01/06     8
Pegasus Satellite                    12.500%  08/01/07     7
Pegasus Satellite                    13.500%  03/01/07     0
Pen Holdings Inc.                     9.875%  06/15/08    62
Piedmont Aviat                        9.900%  11/08/06     0
Piedmont Aviat                       10.000%  11/08/12     9
Piedmont Aviat                       10.000%  05/13/12     0
Piedmont Aviat                       10.250%  01/15/49     0
Piedmont Aviat                       10.350%  03/28/11     9
Piedmont Aviat                       10.350%  03/28/11     0
Pinnacle Airline                      3.250%  02/15/25    74
Pixelworks Inc.                       1.750%  05/15/24    66
Pliant Corp.                         13.000%  06/01/10    20
Polaroid Corp.                        6.750%  01/15/02     0
Polaroid Corp.                       11.500%  02/15/06     0
Pope & Talbot                         8.375%  06/01/13    75
Primedex Health                      11.500%  06/30/08    55
Primus Telecom                        3.750%  09/15/10    32
Primus Telecom                        5.750%  02/15/07    63
Primus Telecom                        8.000%  01/15/14    60
Primus Telecom                       12.750%  10/15/09    54
Psinet Inc.                          10.000%  02/15/05     0
Psinet Inc.                          11.000%  08/01/09     0
Psinet Inc.                          11.500%  11/01/08     0
Railworks Corp.                      11.500%  04/15/09     0
RDM Sports Group                      8.000%  08/15/03     0
Read-Rite Corp.                       6.500%  09/01/04    15
Reliance Group Holdings               9.000%  11/15/00    20
Reliance Group Holdings               9.750%  11/15/03     0
Salton Inc.                          12.250%  04/15/08    54
Scotia Pac Co                         7.710%  01/20/14    74
Solectron Corp.                       0.500%  02/15/34    75
Specialty PaperB                      9.375%  10/15/06    75
Sterling Chem                        11.250%  04/01/07     0
Tekni-Plex Inc.                      12.750%  06/15/10    56
Toys R Us                             7.375%  10/15/18    73
Trans Mfg Oper                       11.250%  05/01/09    62
Transtexas Gas                       15.000%  03/15/05     1
Tribune Co                            2.000%  05/15/29    74
Trism Inc.                           12.000%  02/15/05     0
Triton Pcs Inc.                       8.750%  11/15/11    73
Triton Pcs Inc.                       9.375%  02/01/11    74
Twin Labs Inc.                       10.250%  05/15/06     5
United Air Lines                      6.831%  09/01/08    74
United Air Lines                      7.270%  01/30/13    59
United Air Lines                      7.371%  09/01/06    35
United Air Lines                      7.762%  10/01/05    58
United Air Lines                      7.870%  01/30/19    59
United Air Lines                      8.250%  04/26/08     3
United Air Lines                      9.000%  12/15/03    20
United Air Lines                      9.020%  04/19/12    64
United Air Lines                      9.125%  01/15/12    23
United Air Lines                      9.200%  03/22/08    52
United Air Lines                      9.350%  04/07/16    71
United Air Lines                      9.560%  10/19/18    64
United Air Lines                      9.750%  08/15/21    23
United Air Lines                     10.020%  03/22/14    59
United Air Lines                     10.250%  07/15/21    22
United Air Lines                     10.670%  05/01/04    22
United Air Lines                     11.210%  05/01/14    21
United Homes Inc                     11.000%  03/15/05     0
Univ. Health Services                 0.426%  06/23/20    57
Universal Stand                       8.250%  02/01/06     1
US Air Inc.                          10.250%  01/15/49    25
US Air Inc.                          10.250%  01/15/49    12
US Air Inc.                          10.250%  01/15/49     7
US Air Inc.                          10.550%  01/15/49    25
US Air Inc.                          10.610%  06/27/07     0
US Air Inc.                          10.680%  06/27/08     3
US Air Inc.                          10.700%  01/01/49    26
US Air Inc.                          10.700%  01/15/49     3
US Air Inc.                          10.700%  01/15/49    25
US Air Inc.                          10.750%  01/15/49    13
US Air Inc.                          10.800%  01/01/49     4
US Air Inc.                          10.800%  01/01/49    27
US Air Inc.                          10.800%  01/01/49    28
US Airways Pass                       6.820%  01/30/14    65
Universal Stand                       8.250%  02/01/06     1
Venture Hldgs                         9.500%  07/01/05     0
Venture Hldgs                        11.000%  06/01/07     0
Venture Hldgs                        12.500%  06/01/07     0
WCI Steel Inc.                       10.000%  12/01/04    68
Werner Holdings                      10.000%  11/15/07    26
Westpoint Steven                      7.875%  06/15/05     0
Westpoint Steven                      7.875%  06/15/08     0
Wheeling-Pitt St                      5.000%  08/01/11    71
Wheeling-Pitt St                      6.000%  08/01/10    71
Winstar Comm                         10.000%  03/15/08     0
Winstar Comm                         12.750%  04/15/10     0
World Access Inc.                     4.500%  10/01/02     4

                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.  
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                             *********

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 is a daily newsletter co-published by  
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,  
USA, and Beard Group, Inc., Frederick, Maryland, USA.  Yvonne L.  
Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P.
Laureno, Cherry A. Soriano-Baaclo, Marjorie C. Sabijon, Terence
Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo
Junior M. Pinili, Tara Marie A. Martin and Peter A. Chapman,
Editors.

Copyright 2006.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.


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