TCR_Public/060110.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Tuesday, January 10, 2006, Vol. 10, No. 8

                             Headlines

ACURA PHARMA: Issues 330,705 Shares to Pay Interest on Sec. Notes
ADVOCAT INC: Buyer Terminates Sale of One North Carolina Facility
AIRIQ INC: In Talks with Lenders to Amend $10 Mil. Credit Facility
AMC ENT: Loews Merger Earns S&P's Junk Senior Subordinated Rating
AMERICAN TECHNOLOGIES: Posts $11MM Net Loss in FY 2006 1st Quarter

ANCHOR GLASS: AP Services Enters as Crisis Manager
ANCHOR GLASS: Court Denies Davidco's Request for Rule 2004 Probe
ANCHOR GLASS: Move to Appoint Retired Workers Committee Fails
ARLINGTON HOSPITALITY: Panel Has Until Jan. 31 to Dispute Claims
ARLINGTON HOSPITALITY: Wants Court Okay on Pact with Pyramids

ARMSTRONG WORLD: Wants to Assume Amended Automotive Rentals Pact
ASARCO LLC: Adoption of Modified Prudential Futures Contracts OK'd
AUSTIN CO: Wants to Assume and Assign Agreements to Kajima USA
BANCO DO BRASIL: Moody's Rates Proposed $300 Million Debt at Ba1
BISYS GROUP: Inks New $400 Million Credit Facility

BROKERS INC: Liquidation Plan Confirmation Hearing Set for Jan. 25
BROKERS INC: Excl. Plan Solicitation Period Stretched to March 1
BROKERS INC: Wants to Sell Real Property in Virginia for $254,034
CALPINE POWERAMERICA: Voluntary Chapter 11 Case Summary
CHESAPEAKE CORP: Industry Overcapacity Cues S&P to Lower Ratings

CINCINNATI BELL: Exercise of Put Option Cues S&P to Watch Ratings
COLLINS & AIKMAN: Plans To Close Premier Tooling Facility
COLLINS & AIKMAN: Says Breitkreuz Has No Right to Protection
COLLINS & AIKMAN: Secures Chrysler Supply Contract
CONTECH CONSTRUCTION: S&P Rates Proposed $100 Mil. Facility at B+

DATAMETRICS CORPORATION: Completes Debt Restructuring with SG DMTI
DON SIMPLOT: Hires Jerome Shulkin & Joseph Meier as Bank. Counsel
DON SIMPLOT: U.S. Trustee Will Meet Creditors on Feb. 9
ENER1 INC: Posts $33 Mil. Net Loss in Quarter Ended September 30
ENRON CORP: Court OKs Five Point Stock Purchase & Sale Agreement

ERHC ENERGY: Malone & Bailey Raises Going Concern Doubt
FASHION HOUSE: Incurs $1.5 Mil. Net Loss in Third Quarter of 2005
FEDERAL-MOGUL: Cooper Resolving Asbestos Liabilities Thru Trust
FEDERAL-MOGUL: Files Adversary Case vs. Bobby Whitley, et al.
FLYI INC: Postpones Auction and Will Amend Bidding Procedures

FOSS MANUFACTURING: Ch. 11 Trustee Hires DSI as Consultant
FOSS MANUFACTURING: Gordian Group Hired as Investment Banker
GREAT ATLANTIC: Posts $71 Million Net Loss in Third Quarter
HARBORVIEW MORTGAGE: S&P Upgrades Class B-4 Certs. to BB+ from BB
INERGY L.P.: Intends to Sell $200 Mil. Notes in Private Placement

INTERSTATE BAKERIES: Court Approves Sieckmann Settlement Pact
INTERSTATE BAKERIES: W. Spencer Buys Evans Property for $7.2M
J. CREW: Operating Unit Can Access $335M Term Loan until March 30
KAISER ALUMINUM: Court Amends Settlement Pact Order with St. Paul
KAISER ALUMINUM: Will Sell Spokane Valley Property for $418,176

LEAR CORP: Weakened Operating Profile Prompts Fitch's BB+ Rating
LONG BEACH: Fitch Junks Ratings on Four Certificate Classes
LORETTO-UTICA: Court Approves Menter Rudin as Counsel
MCI INC: Closes Merger Deal with Verizon Communications
MCLEODUSA INC: Exits Chapter 11 with Deleveraged Balance Sheet

METROPOLITAN MORTGAGE: Inks Settlement Pact with OWALC & OSLAC
METROPOLITAN MORTGAGE: Sells Lottery Receivables to Stone Street
MILLS CORPORATION: Seeks Waiver on Line of Credit Default
MILLS CORPORATION: Discloses Strategic Plan to Improve Operations
MILLS CORPORATION: Appoints Edward Civera as Independent Director

MIRANT CORP: Asks Court to Approve Russlyn Hanson-Sexton Agreement
MIRANT CORP: California DWR Sells Unsecured Claims for $189.4 Mil.
MIRANT: Gets Court Okay to Implement Equity Distribution Protocol
NDCHEALTH CORPORATION: Per-Se Completes Acquisition of Business
NDCHEALTH CORP: Wolters Kluwer Completes Purchase of IM Business

NEXMED INC: Receives Nasdaq Delisting Warning Letter
NORTHWEST AIRLINES: Committee Hires FTI as Financial Advisors
NORTHWEST AIRLINES: Court Extends Removal Period to June 12
NORTHWEST AIRLINES: Lazard Approved as Panel's Financial Advisors
O'SULLIVAN IND: Files First Amended Plan & Disclosure Statement

O'SULLIVAN IND: Taps Edward Howard as Consultant on Interim Basis
O'SULLIVAN IND: U.S. Trustee Balks at Chanin Capital's Retention
OMEGA HEALTHCARE: Gets $173.4M from Private Placement of Sr. Notes
OMNOVA SOLUTIONS: Financial Profile Earns S&P's Positive Outlook
OWENS CORNING: Wants to Implement 2006 Retention Program

PELICAN INLET: Case Summary & 9 Largest Unsecured Creditors
PINNACLE ENT: Six Mil. Equity Offering Spurs S&P to Review Ratings
QUEBECOR MEDIA: S&P Puts B Rating on Planned Bank Loan Facilities
QUIGLEY CO: Court Approves Settlement With Pfizer & Centennial
REFCO INC: Committee, et al., Balk at Ch. 11 Trustee Request

REFCO INC: Wants Court to Approve RGL $43,120 Break-Up Fee
REFCO INC: Wants Bid Procedures for PCIG Interest Sale Approved
RH DONNELLEY: S&P Rates Proposed $2.142 Billion Senior Notes at B+
ROWECOM INC: Liquidating Trustee Makes 6% Interim Distribution
SKYWAY COMMS: Judge Glenn Directs UST to Name Chapter 11 Trustee

SNAP2 CORP: Files Delinquent Fiscal Year 2004 Financial Results
TOWER AUTOMOTIVE: Retirees' Committee Seeks Clarification
TOWER AUTOMOTIVE: Retirees Committee Taps Bridge as Fin'l Advisor
TOWER AUTOMOTIVE: Wants to Reject Collective Bargaining Pacts
TRM CORP: Discloses Stockholders Reselling 2.78M Shares

U.S. PLASTIC: Wants to Sell Assets to AMPAC Capital for $5.5 Mil.
UAL CORP: Committee Taps Watson Wyatt as Investment Consultants
UAL CORP: Committee Wants Discount Rate Set for $8.3BB PBGC Claims
UAL CORP: Court Authorizes Bid for FLYi Assets
UAL CORP: Launches $3 Billion Exit Financing Facility

UAL CORP: S&P Rates $3 Billion Senior Secured Debts at B+
UNITED HOSPITAL: Selling Real Property to Port Chester for $22MM
USG CORP: Law Firms Want More Time to Complete Questionnaires
USG CORP: Wants Until June 30 to File Plan of Reorganization
WESTPOINT STEVENS: Balks at Steering Committee's Lift Stay Motion

WESTPOINT STEVENS: Steering Panel Wants Dist. Ct. Order Followed
WINBLE CORPORATION: Case Summary & 14 Largest Unsecured Creditors

* Large Companies with Insolvent Balance Sheets

                            *********
                             
ACURA PHARMA: Issues 330,705 Shares to Pay Interest on Sec. Notes
-----------------------------------------------------------------
Acura Pharmaceuticals, Inc., issued 330,705 shares of its common
stock, $.01 par value per share, to the holders of a secured
promissory note in the principal amount of $5 million, dated as of
December 20, 2002.  The issuance of the common shares represents
an in-kind payment of accrued and unpaid interest on the Note for
the quarter ended December 31, 2005.

Peter A. Clemens, Acura Pharmaceuticals, Inc.'s senior vice
president & chief financial officer, informed the Securities and
Exchange Commission in a regulatory filing on September 30, 2005,
that the Company issued the shares in reliance upon the exemption
from registration provided by Section 4(2) of the Securities Act
of 1933, as amended and Regulation D promulgated under the
Securities Act of 1933.  At the time of acquisition of the Note,
the Noteholders represented to the Company that each of them was
an accredited investor as defined in Rule 501(a) of the Securities
Act of 1933 and that the Note and any securities issued pursuant
thereto were being acquired for investment purposes.

Acura Pharmaceuticals, Inc. -- http://www.acurapharm.com/--   
together with its subsidiaries, is an emerging pharmaceutical
technology development company specializing in proprietary opioid
abuse deterrent formulation technology.

                          *     *     *

At Sept. 30, 2005, Acura Pharmaceuticals' balance sheet showed a
$4,889,000 stockholders' deficit, compared to a $1,085,000 deficit
at Dec. 31, 2004.


ADVOCAT INC: Buyer Terminates Sale of One North Carolina Facility
-----------------------------------------------------------------
Advocat Inc. (NASDAQ OTC: AVCA) has signed an agreement to extend
the lease of four Florida nursing homes for an additional term of
four years.  The Company also reported that an agreement to sell
one assisted living facility in North Carolina was terminated by
the buyer.  The facility is unrelated to the previously announced
transaction to sell 11 assisted living facilities in North
Carolina.

Advocat's lease for the four nursing homes in Florida was to
expire December 31, 2005.  Under terms of the new agreement, the
lease term was extended through February 2010.  The four nursing
homes are subject to mortgages held by Omega Healthcare Investors,
Inc., and Advocat makes the lease payments directly to Omega.

In November 2005, Advocat disclosed the sale for all its North
Carolina assisted living facilities in two transactions.  The
termination of the agreement to sell the single facility for
$3.5 million is unrelated to the agreement to sell the remaining
11 facilities for approximately $11 million to Agemark
Acquisition, LLC, a North Carolina limited liability company.
Advocat will continue to list the single facility for sale and
expects the transaction with Agemark to close sometime during the
first quarter of 2006.

Advocat Inc. -- http://www.irinfo.com/avc-- provides long-term
care services to nursing home patients and residents of assisted
living facilities in nine states, primarily in the Southeast.

                         *     *     *

As reported in the Troubled Company Reporter on Apr. 25, 2005,
BDO Seidman LLP raised substantial doubt about Advocat Inc.'s
ability to continue as a going concern after it audited the
Company's financial statements for the year ended Dec. 31, 2004.

The Company incurred operating losses in two of the three years in
the period ended December 31, 2004, and although the Company
reported a profit for the year ended December 31, 2004, that
profit primarily resulted from non-cash expense reductions caused
by downward adjustments in the Company's accrual for self-insured
risks associated with professional liability claims.


AIRIQ INC: In Talks with Lenders to Amend $10 Mil. Credit Facility
------------------------------------------------------------------
AirIQ Inc. (TSX:IQ) is in discussions with its lender to amend its
credit facility.  The credit facility is currently a $10 million
364-day non-revolving credit facility and funds drawn on the
facility bear interest at varying margins based on the lender's
Canadian prime rate, United States base rate or banker's
acceptance reference rate and are secured by a general security
agreement and first priority mortgage over all of the assets of
AirIQ.

        Non-Compliance with Financial Covenants

AirIQ also reported that it was not in compliance with two
financial covenants in the current credit agreement that governs
its credit facility.  The referenced financial covenants relate to
the three-month period ended Nov. 30, 2005 which figures were
required to be reported to the lender on January 3, 2006.

AirIQ expects that its lender will waive the requirement to have
complied with these covenants for the period ended November 30,
2005.

AirIQ Inc. - http://www.airq.com/-- trades on the Toronto Stock  
Exchange under the symbol IQ.  A leader in global wireless
security, AirIQ is headquartered in Pickering, near Toronto,
Canada, with offices in Lake Forest and San Diego, California,
U.S.A.  operates as a wireless Internet applications service
provider specializing in Telematics.  Telematics is the name given
to information and control messages sent wirelessly to and from
vehicles and vessels.  AirIQ's services are offered to five
primary markets: Commercial Fleets; Consumer; Vehicle Finance;
Indirect Distribution; and Marine Fleets.  AirIQ gives vehicle and
vessel owners the abilities to manage and protect their mobile
assets. AirIQ's services include: vehicle locating, boundary
notification, automated inventory, maintenance reminders, security
alerts, vehicle disabling, unauthorized movement alerts and many
more features.


AMC ENT: Loews Merger Earns S&P's Junk Senior Subordinated Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned ratings to the senior
secured credit facilities and the senior subordinated notes that
will be issued by AMC Entertainment Inc. upon closing of its
merger with Loews Cineplex Entertainment Corp.  AMC Entertainment
will be the surviving entity and retain its name over the merged
entity.  The company's parent will remain Marquee Holdings Inc.  
The senior secured credit facilities were rated 'B+', with a
recovery rating of '1', indicating a high expectation of full
recovery of principal in the event of a payment default.  The
senior subordinated notes were rated 'CCC+'.

At the same time, Standard & Poor's stated it expects to affirm
all its existing ratings on AMC and Marquee, including the 'B'
corporate credit ratings on the post merger company and Marquee,
upon review of the final credit agreement.  The outlook is
expected to be negative after the closing of the transaction.

The Kansas City, Missouri-based movie exhibitor is rated on a
consolidated basis with its parent.  Following the merger, the
company will have approximately $2.5 billion in debt and         
$3 billion in present value of operating leases.

"The rating reflects the company's high leverage, weak profit
margins relative to peers, participation in a highly competitive
industry, and reliance on the popularity of Hollywood films," said
Standard & Poor's credit analyst Tulip Lim.

These risks are partially offset by the company's modern theater
circuit relative to other major theater chains, its large and
geographically diverse U.S. operations, and some international
diversity.

The pending merger should strengthen the already solid competitive
profile of the combined companies in large metropolitan U.S.
markets, enhance profitability through cost reductions and scale
advantages, and allow for better coordination of assets and
capital spending.  AMC's EBITDA margins are currently somewhat
below average because of high fixed costs resulting from
its heavy reliance on lease financing.  The addition of Loews'
higher margin operations, together with expected merger benefits,
should facilitate an increase in the new AMC's EBITDA margins.
     
The merger should also allow for better management of the combined
companies' assets and capital expenditures and has the potential
to improve the combined companies' discretionary cash flow.  Even
so, the integration of the companies will take some time, and
there is the risk that the company will not execute their cost
savings strategy to the extent planned.

Pro forma lease-adjusted leverage will be high, and pro forma
lease-adjusted coverage of interest is low.  In 2005, AMC and
Loews' profitability and discretionary cash flow were strained by
negative box office trends.  If box office trends are negative in
the near-to-intermediate term, AMC's leverage will increase.  Its
liquidity will also suffer, especially given significant capital
spending plans in the short term and the cash drain from severance
payment charges.


AMERICAN TECHNOLOGIES: Posts $11MM Net Loss in FY 2006 1st Quarter
------------------------------------------------------------------
American Technologies Group, Inc., delivered its financial results
for the quarter ended Oct. 31, 2005, to the Securities and
Exchange Commission on Dec. 22, 2005.

For the three months ended Oct. 31, 2005, American Technologies
incurred an $11,459,328 net loss on $3,992,505 of net sales,
compared to a $111,554 net loss on $3,611 of net sales for the
same period in 2004.

Also, as of Oct. 31, 2005, the Company's balance sheet showed
$18,552,282 in total assets, total liabilities of $18,080,985, and
an accumulated deficit of $69,680,139.

                        Whitco Acquisition

American Technologies has entered into a letter of intent to
acquire 100% of the partnership interests of Whitco Company, LP,
from Catalyst Lighting Group, Inc., and Whitco Management, LLC,
the general partner of Whitco and a wholly owned subsidiary of
Catalyst.  The letter of intent was approved by the Board of
Directors of Catalyst Lighting Group, Inc., and signed on Dec. 23,
2005.

Whitco provides light poles to commercial and industrial markets
worldwide.  Whitco provides marketing expertise and engineering
knowledge to a nationwide contracted lighting representative base
as well as OEM customers.

"We believe this acquisition is a win-win for all parties
involved," said William N. Plamondon, CEO of American Technologies
Group.  "Their profile fits our acquisition strategy and we will
be able to work with them to grow the company."

                       Going Concern Doubt

Russell Bedford Stefanou Mirchandani LLP expressed substantial
doubt about American Technologies' ability to continue as a going
concern after it audited the Company's financial statements for
the fiscal year ended July 31, 2005.  The auditing firm pointed to
the Company's recurring losses and insufficient cash flows to meet
obligations and sustain its operations.

                  About American Technologies

American Technologies Group, Inc.,(OTC BB: ATGR), through its
wholly owned subsidiary, North Texas Steel Company, Inc., is an
American Institute of Steel Construction certified structural
steel fabrication company and provides fabrication and detailing
of structural steel components for commercial buildings, office
buildings, convention centers, sports arenas, airports, schools,
churches and bridges.


ANCHOR GLASS: AP Services Enters as Crisis Manager
--------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized Anchor Glass Container Corporation to retain AP
Services, LLC, as its crisis manager pursuant to the terms of an
engagement letter dated Sept. 6, 2005.

Under the APS Engagement Letter, Anchor and APS agree that:

    -- APS will provide, at Anchor's request, temporary employees
       to assist the Debtor in its restructuring efforts; and

    -- APS' Managing Director, John S. Dubel, will serve as the
       Debtor's Chief Restructuring Officer under the direct
       supervision of Anchor's Chief Executive Officer and the
       Special Committee of the Board of Directors.

As CRO, Mr. Dubel will assist the Debtor in evaluating and
implementing strategic and tactical options through the
restructuring process.  Mr. Dubel's hourly rate is $650.

In addition to Mr. Dubel, the Temporary Staff that APS will
provide include:

    Name          Position              Hourly Rate   Commitment
    ----          --------              -----------   ----------
    Jon Shell     Assistant Treasurer       $410      As Needed
    Ted Stenger   TBD                       $670      As Needed

Anchor will pay APS' employees at these hourly rates:

       Professional                  Hourly Rates
       ------------                  ------------
       Managing Directors             $540 - $690
       Directors                      $430 - $520
       Vice Presidents                $300 - $400
       Associates                     $225 - $280
       Analysts                       $150 - $190

The Bankruptcy Court further allowed the Debtor to pay the
contemplated Contingent Success Fee. The Contingent Success Fee is
an integral part of APS' compensation for the engagement.  The
Debtor will pay APS a $400,000 Contingent Fee on the earlier of:

    (i) confirmation of a Plan of Reorganization by the Court; or

   (ii) a sale of all or substantially all of the assets of the
        Debtor pursuant to a Court order.

The Contingent Success Fee is not payable if APS is terminated for
cause or if the Debtor's bankruptcy case is converted to Chapter
7.

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets.  The Company filed for chapter 11 protection on Aug. 8,    
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,    
Esq., at Carlton Fields PA, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts. (Anchor Glass Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ANCHOR GLASS: Court Denies Davidco's Request for Rule 2004 Probe
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
denied Davidco Investors, LLC's request to serve Anchor Glass
Container Corporation with a Rule 2004 subpoena duces tecum,
seeking production of certain documents, without examination.

As reported in the Troubled Company Reporter on Nov. 28, 2005,
Davidco, on behalf of itself as lead plaintiff and others
similarly situated, filed a consolidated amended class action
complaint against the Debtor and certain of the Debtor's officers
and directors and third parties in the U.S. District Court for the
Middle District of Florida.

Craig P. Rieders, Esq., at Geneovese Joblove & Battista, PA, in
Miami, Florida, noted that the Debtor's Schedules of Assets and
Liabilities and Statement of Financial Affairs list 21 insurance
policies.  Mr. Rieders said he also saw a list of certain policies
on an exhibit attached to the Debtor's motion to enter into an
insurance premium financing agreement.

"Some of the policies listed by the Debtor in its schedules may
provide coverage with respect to the claims at issue in the Class
Action Complaint," Mr. Rieders says.

Mr. Rieders says Davidco has made written and oral requests for
the information sought but has failed to receive the information.

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets.  The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,
Esq., at Carlton Fields PA, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts.  (Anchor Glass Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ANCHOR GLASS: Move to Appoint Retired Workers Committee Fails
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
denied Robert L. Simmons, Edna Rusnak and Hiram Miller's request
to appoint a committee of Anchor Glass Container Corporation's
retired employees under Section 1114 of the Bankruptcy Code.

As reported in the Troubled Company Reporter on Nov. 28, 2005, Mr.
Simmons, et al., asked for the formation of the retired employees'
committee in order to pursue the collection of unpaid retirement
benefit claims.

The three retirees worked for Glass Containers Corporation.  At
the time of their retirement, Mr. Simmons, et al., and their
enrolled spouses qualified to receive "retiree benefits" as the
term is defined in Section 1114(a) of the Bankruptcy Code.  The
retiree benefits are not covered by a collective bargaining
agreement.

The Debtor succeeded to GCC's obligation to provide "retiree
benefits" to Mr. Simmons, et al., through various acquisition and
merger transactions.  However, pursuant to a letter dated July 20,
2005, the Debtor informed the Mr. Simmons, et al., that effective
October 1, 2005, it is not going to pay for their retiree
benefits.

                         Court's Ruling
  
Judge Paskay explains that under Section 1114(d) of the Bankruptcy
Code, the Court is required to appoint a committee, only if a
debtor seeks to modify or not pay the retiree benefits.

Judge Paskay notes the call for retiree representation was
triggered by a July 20, 2005 letter from the Debtor's manager of
Benefits Administration, notifying the Retired Employees that the
Debtor's 1988 Plan, in which they were members would be modified
effective October 1, 2005.  The letter said that the retirees
would be made to pay all required premiums if they want to
participate under the modified Plan.

Although the July 20 Letter provided that the change to the 1988
Plan was effective October 1, 2005, the change to the 1988 Plan
was effective as of July 20, 2005, when the Letter was sent.  The
1988 Plan was therefore modified prepetition, Judge Paskay says.  
Since the modifications took place before the Petition Date,
Section 1114(d) is not applicable.

The Retired Employees were at one time employees of Glass
Containers Corporation and were participants in a Group
Comprehensive Medical & Dental Plan maintained by Glass
Containers.  Glass Containers was acquired by Container General
Corporation, which maintained a plan for the employees entitled
"General Group Benefit Plan."

In 1985, Diamond-Bathurst, Inc., acquired ownership of Container
General.

The Court notes that the record is devoid of any evidence proving
which of any of the health insurance benefits plans were in effect
at that time.

In 1987, by which time the Retired Employees were already retired,
Anchor Glass Container Corporation acquired Diamond-Bathurst.

Despite their retirements, the Retired Employees remained
participants in the benefits plan maintained by Anchor Glass and
were covered by the 1988 Plan.  Under the 1988 Plan, retirees were
entitled to participate in the health and welfare plan for
themselves and their qualified dependents for the rest of their
lives.

Judge Paskay further notes that the 1988 Plan reserved the right
to the Plan Administrator to change or eliminate benefits under
the plan and terminate the plan or portions of it.

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets.  The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,
Esq., at Carlton Fields PA, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $661.5 million in assets and
$666.6 million in debts.(Anchor Glass Bankruptcy News, Issue No.
15; Bankruptcy Creditors' Service, Inc., 215/945-7000)


ARLINGTON HOSPITALITY: Panel Has Until Jan. 31 to Dispute Claims
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Arlington
Hospitality, Inc., and its debtor-affiliates sought and obtained
an extension until Jan. 31, 2006, from the U.S. Bankruptcy Court
for the Northern District of Illinois, Eastern Division, of the
deadline within which it may dispute:

   -- the validity of LaSalle Bank National Association's
      prepetition liens; and

   -- the extent of LaSalle's secured status.

The Committee wants more time to review the value of LaSalle's
collateral to determine whether LaSalle's claims are 100% secured.  

                   Interim DIP Financing Order

The Company obtained an $11 million DIP Financing Facility
consisting of:

   -- a $6 million revolving loan;
   -- a $1 million Term Loan A; and
   -- a $4 million of Term Loan B.

Under its Interim DIP Order, the Court authorized the Debtors to
borrow up to $6 million under the revolver pending the entry of a
final order on the financing motion.  The Interim DIP Order
authorizes the Debtors to repay the prepetition indebtedness owed
to LaSalle on a provisional basis.  The Debtors subsequently drew
down on their postpetition loan and paid LaSalle approximately
$3.5 million.

The Committee tells the Court that if the provisional payment is
permitted to become final and it is subsequently determined that
LaSalle is undersecured, LaSalle will have received a cash payment
in full on account of the unsecured portion of its claim.  This
windfall, the Committee says, would be contrary to the absolute
priority rule established in the Bankruptcy Code and would deplete
the value available for distribution to the Debtors' unsecured
creditors.

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.


ARLINGTON HOSPITALITY: Wants Court Okay on Pact with Pyramids
-------------------------------------------------------------
Arlington Hospitality, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, for authority to enter into a settlement
agreement with Pyramids Allen Hotel, L.P.

On Dec. 20, 2001, Arlington sold one of its hotels in Allen,
Texas, to Pyramids.  As part of the sale, Pyramids delivered a
$300,000 stand-by purchase money installment note, due Dec. 20,
2021, and a consulting agreement.  The note is secured by a
subordinated deed of trust, assignment of leases and rents, and a
security agreement.  

The Debtors' asset purchase agreement with Sunburst Hotel
Holdings, Inc., and a back-up asset purchase agreement with Deer
Island Partners LLC, expressly exclude Pyramids' note, consulting
agreement and the deed of trust from the assets to be purchased.

The Debtors and Pyramids have reached an agreement to discount
Pyramids' obligations under the note, consulting agreement and
deed of trust.  Under the settlement, Pyramids will be released
from its obligations upon a lump payment of $200,000 to Arlington.

Liquidating the note will allow the Debtors to make distributions
to creditors more quickly than if it were required to wait until
the note becomes due in 2021.

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.


ARMSTRONG WORLD: Wants to Assume Amended Automotive Rentals Pact
----------------------------------------------------------------
On February 6, 1998, Armstrong World Industries, Inc., and
Automotive Rentals, Inc., entered into an agreement, pursuant to
which Automotive Rentals agreed to lease vehicles as may be
requested by AWI from time to time.

AWI and Automotive Rentals repeatedly amended the Lease and Fleet
Management Services Agreement.  The fourth and last amendment was
on October 8, 1999.

The principal terms of the Amended Automotive Rentals Agreement
are:

   a. Ordering, Delivery and Acceptance of Vehicles

      AWI sends Automotive Rentals written orders for vehicles to
      be leased and specifies a make, model, equipment and
      delivery point;

   b. Individual Lease Agreement

      On the delivery of each vehicle, Automotive Rentals
      delivers to AWI a Motor Vehicle Lease Agreement, which
      identifies the vehicle and sets forth the monthly rental
      payments;

   c. Vehicle Lease Term

      After the expiration of a vehicle's initial lease term, the
      lease relating to that vehicle is extended on a month-to-
      month basis until the Depreciation Period, which is 30, 36,
      40, 44, 50 or 57 months or less, as specified in a terms
      and conditions of the lease agreement;

   d. Monthly Payments

      AWI pays monthly rental payments by the 15th of every
      month.  Further, AWI pays Automotive Rentals a late payment
      penalty in the amount of the then current prime rate, as
      set forth in the "Money Rates" section of The Wall Street
      Journal, applied to the amount due of any invoice
      outstanding as of the due date;

   e. Assignment of Rentals

      Automotive Rentals may assign all of its rights, title, and
      interest in each Motor Vehicle Lease Agreement to a
      financing institution in which AWI is required to remit to
      Automotive Rental's assignee any remaining monthly rental
      payments owed;

   f. Lease Termination Fee

      AWI must pay Automotive Rentals an undisclosed lease
      termination fee;

   g. Disposition after Surrender of Leased Vehicles

      After AWI surrenders possession of a leased vehicle,
      Automotive Rentals sells that vehicle and retains any costs
      in transporting the vehicle or in making any pre-sale
      repairs.  Automotive Rentals pays to AWI, as a rental
      adjustment on automobiles and light trucks -- under
      11,000-lb gross vehicle weight -- 100% of any excess of the
      net resale proceeds over the depreciated value.  If the net
      resale proceeds are less than the depreciated value of the
      vehicle, then AWI must pay a rental adjustment for the
      deficiency, provided that Automotive Rentals guarantees to
      AWI minimum net resale proceeds equal to 20% of the
      capitalized value at the beginning of the initial lease
      term.

      If AWI extends the lease beyond the initial lease term,
      Automotive Rentals guarantees 25% of the Fair Value of the
      vehicle at the inception of the concluding month's
      extension period.  Those guarantees are limited to vehicles
      whose mileage does not exceed 1,667 miles per month;

   h. Fleet Management Services

      In addition to leasing vehicles to AWI, Automotive
      Rentals also provides certain services with respect to the
      passenger vehicles and light-duty trucks leased.  The
      Maintenance Programs -- covering the cost, term, and other
      details applicable to these services -- are:

      * Coverall Program;
      * Budget Maintenance Program;
      * 24-Hour Roadside Assistance Program;
      * Accident Reporting or Claims Analysis, Appraisals and
        Repairs Program;
      * Subrogation Recovery Program;
      * Driver Abstract Program;
      * Fleet Administration Program; and
      * Renewal Management Program;

   i. Insurance

      AWI carries insurance for Automotive Rentals' benefit, with
      a minimum single limit of $1,000,000 for bodily injury and
      a minimum single limit of $100,000 for property damage;

   j. Indemnification

      AWI must indemnify and hold Automotive Rentals harmless
      against loss or liability arising out of the condition,
      operation and possession of any vehicle, or any loss or
      liability resulting from any repair or maintenance to the
      vehicle until Automotive Rentals repossess the vehicle;

   k. Default

      In the event of a default in any payments or in the
      performance of any covenant, the non-defaulting party
      notifies the defaulting party of the default and, if the
      default remains uncorrected for 10 days, the non-defaulting
      party may pursue any remedies it may have under the Amended
      Automotive Rentals Agreement;

   l. Cancellation

      The Amended Automotive Rentals Agreement may be cancelled
      upon 60 days' written notice to the other party.

Rebecca L. Booth, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, informs Judge Fitzgerald that under the
Amended Automotive Rentals Agreement, AWI currently leases 14
vehicles for a total monthly rent of $1,500 to $2,000, inclusive
of fees related to the Maintenance Programs.

Ms. Booth relates that on August 29, 2001, Automotive Rentals
filed a prepetition general unsecured claim -- Claim No. 3451 --
against AWI for $45,586, on account of amounts allegedly due to
Automotive Rentals under the Amended Automotive Rentals Agreement.

AWI objected to the Claim.  The Court then sustained AWI's
objection pertaining to the Automotive Rentals Claim and reduced
and allowed it for $32,148.

According to Ms. Booth, since the Automotive Rentals Claim was
allowed, the parties have determined that AWI has a credit balance
equal to $86,993.  The Credit Balance represents funds accrued
prepetition in connection with the Coverall Program.

AWI continues to lease vehicles from Automotive Rentals and
believes that assuming the Amended Automotive Rentals Agreement is
in the best interests of its estate and creditors.

Thus, AWI seeks Judge Fitzgerald's authority to assume the
Agreement.  In addition, AWI seeks to offset the Credit Balance
against the amount AWI owes to Automotive Rentals pursuant to the
Automotive Rentals Claim.

Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior finishings, most notably floor
coverings and ceiling systems, around the world.  The Company and
its debtor-affiliates filed for chapter 11 protection on
December 6, 2000 (Bankr. Del. Case No. 00-04469).  Stephen
Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.
Silberglied, Esq., at Richards, Layton & Finger, P.A., represent
the Debtors in their restructuring efforts.  When the Debtors
filed for protection from their creditors, they listed
$4,032,200,000 in total assets and $3,296,900,000 in liabilities.
As of March 31, 2005, the Debtors' balance sheet reflected a
$1.42 billion stockholders' deficit. (Armstrong Bankruptcy
News, Issue No. 85; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


ASARCO LLC: Adoption of Modified Prudential Futures Contracts OK'd
------------------------------------------------------------------
ASARCO LLC sought and obtained authority from the U.S. Bankruptcy
Court for the Southern District of Texas in Corpus Christi to:

   (1) assume the Prudential Contracts, as modified;

   (2) enter into Postpetition Futures Contracts with
       Prudential; and

   (3) enter into a new Account Agreement with respect to
       Postpetition Futures Contracts.

As previously reported in the Troubled Company Reporter on
Dec. 19, 2005, ASARCO has 95 prepetition futures contracts with
Prudential Financial Derivatives, LLC, consisting of:

   * 23 contracts of December 2005 CMX copper,
   * 57 contracts of March 2006 CMX copper,
   * 13 contracts of May 2006 CMX copper, and
   * two contracts of July 2006 CMX copper.

Moreover, since it continues to be in the market for selling
copper for future delivery at fixed prices, ASARCO's operations
will be less subject to price fluctuations if it can enter into
new contracts as the former contracts terminate or run to
completion.

C. Luckey McDowell, Esq., at Baker Botts L.L.P., in Dallas,
Texas states that as the copper's current price is at an all time
high price, ASARCO may elect to use futures contracts to sell its
anticipated production forward, hence, fixing its profit on sales
against future production.  ASARCO would also use Postpetition
Futures Contracts for that purpose as well.

              Modifications to Prudential Contracts

ASARCO's prepetition positions in futures contracts were aimed at
fixed prices before the labor strike in early July 2005.  Since
the Petition Date, ASARCO has been liquidating those prepetition
positions by selling in the month of scheduled delivery of the
copper.

Mr. McDowell relates that ASARCO has been fortunate that copper
sales could be completed through delivery of copper cathode
ASARCO has continued to produce.

However, Mr. McDowell says, ASARCO has not taken on new futures
positions since the strike began because of the resulting
uncertain production levels.

With the resolution of the labor strike and the resumption of
normal copper production, Mr. McDowell tells the Court that
ASARCO will again need to offer an option to purchase copper for
forward delivery at known prices.  Pricing copper in advance
requires that ASARCO again hedge against market fluctuations by
entering into Postpetition Futures Contracts.

In support of its positions on the Prudential Contracts, ASARCO
maintains a $2,240,139 equity account, consisting of $1,620,751
in cash and $619,388 in unrealized profits.  ASARCO is a member
of the New York Commodity Exchange, a division of the New York
Mercantile Exchange, and is normally required to maintain a
margin balance equal to $2,000 per futures contract of 25,000
pounds.

Mr. McDowell recounts that on the Petition Date, ASARCO asked
NYMEX to permit it to maintain, rather than suspend, its
membership.  NYMEX accepted ASARCO's request, but it doubled
ASARCO's minimum margin balance to $4,000 per futures contract.
The higher margin balance requires ASARCO to maintain a $632,000
balance based on its current futures contracts.

Currently, ASARCO has over $2,200,000 in equity in the account,
so the revised margin requirements will not require ASARCO to post
additional capital in the account.

       Account Agreement and Postpetition Futures Contract

Subsequently, ASARCO and Prudential have agreed to permit ASARCO
to close out its positions in existing futures contracts by
allowing ASARCO to enter into offsetting positions in accordance
with this schedule:

     Schedule             No. of Lots to be Liquidated
     --------             ----------------------------
     October 2005                      3
     November 2005                    29
     December 2005                    26
     January 2006                      7
     February 2006                    14
     March 2006                        7
     April 2006                       12
     May 2006                          8
     June 2006                        10
     July 2006                         0
     August 2006                       4

Mr. McDowell tells Judge Schmidt that if ASARCO does not keep to
that schedule, Prudential may terminate some or all of the
Prudential Contracts.  In that event, ASARCO agrees that it will
not object to the termination of the contract based on theories
of delay or laches.  Prudential has agreed to accept the higher
margin balance imposed by NYMEX, but Prudential reserves its
right to increase that margin requirement at a later time if the
circumstances so require.

Prudential may also terminate its Contracts on one business day's
notice if ASARCO fails to post its required margin payments,
which rights are contained in the account agreement.

Furthermore, ASARCO and Prudential will enter into Postpetition
Futures Contracts.  Under its terms, Prudential would have the
same rights to terminate the Postpetition Futures Contracts as
are provided for under the Account Agreement or as to commodity
brokers with respect to prepetition futures contracts.

To the extent that there is a loss on the liquidation or
termination of a Postpetition Futures Contract, Prudential will
be entitled to an administrative claim under Section 503(b) of
the Bankruptcy Code.

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).


AUSTIN CO: Wants to Assume and Assign Agreements to Kajima USA
--------------------------------------------------------------
The Austin Company and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Northern District of Ohio, Eastern
Division:

   -- for authority to assume and assign certain prepetition
      executory agreements to Kajima U.S.A. Inc.; and

   -- to establish related cure amounts, pursuant to Section 365
      of the Bankruptcy Code.

As reported in the Troubled Company on Dec. 29, 2005, the Debtors
accepted a bid submitted by Kajima USA, a subsidiary of Kajima
Corporation of Japan, for the purchase of Austin's core U.S.
assets.  An affiliate of Kajima USA, Inc., has agreed to acquire
the core Austin assets for a combination of cash and assumed
liabilities.

The Debtors tell the Court that the transfer of the agreements is
necessary pursuant to terms of the asset purchase agreement.  The
Debtors determined that by assuming and assigning the agreements
to Kajima, they will avoid incurring contract rejection damages
that would result from rejection of the agreements.

The Debtors agreed to pay the cure costs in exchange for the
assignment of the agreements.  To establish the final allowed cure
cost for each agreement, the Debtors request that any non-debtor
party that does not object to the cure costs be deemed to have
consented to the cure costs.

                   About Kajima and Kajima USA

With over 160 years of experience and over 13,000 employees around
the world, Kajima Corporation is a global leader in the design,
construction and real estate development industries.  Traded
publicly on the Tokyo and London exchanges, Kajima reported over
$16 billion in revenues in 2004 and was ranked by Engineering News
Record as the eighth largest contractor in the world based on
construction volume.  When Kajima USA, a principal subsidiary of
Kajima Corporation, started its operations in 1964, its goal was
to become a full- service design/build provider for Japanese
clients in the United States.  Since then, Kajima has expanded
that goal with a group of U.S. companies that span the real estate
development, design and construction industries.

Kajima USA companies include Kajima Associates, Inc., a design and
engineering services company; Kajima Construction Services, a
design-build and construction services company; Hawaiian Dredging
Construction Company, Inc., a major general contractor in Hawaii;
KUD International, LLC, a fee developer/program manager for large
scale urban projects; Industrial Developments International, Inc.,
one of top five industrial developers in the US; Commercial
Developments International, Inc., a developer of commercial
properties; and HOK, in which Kajima holds an interest.

                     About The Austin Company

Headquartered in Cleveland, Ohio, The Austin Company is an
international firm offering a comprehensive portfolio of in-house
architectural, engineering, design-build, construction management
and consulting services.  The Company also offers value-added
strategic planning services including site location,
transportation and distribution consulting, and facility and
process audits.  The Company and two affiliates filed for
chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ohio Case No.
05-93363).  Christine M. Pierpont, Esq., at Squire, Sanders &
Dempsey, LLP, represents the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they estimated between $10 million to $50 million in
total assets and debts.


BANCO DO BRASIL: Moody's Rates Proposed $300 Million Debt at Ba1
----------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Banco do Brasil
S.A.- Grand Cayman Branch's proposed US$300 million perpetual non-
cumulative junior-subordinated securities.  The Ba1 rating is the
result of joint probabilities of default that are incorporated
into Banco do Brasil's credit risk rating, which is indicated by
its A3 global local currency rating, and by Brazil's Ba3 foreign
currency ceiling for bonds and notes.  The outlook on the rating
is stable.

Moody's noted that the subordination and other features of the
proposed securities were taken into consideration in the
assignment of the bond rating.  However, given the A3 global local
currency rating, the notching that would usually be applied to
subordinated issues does not affect the final foreign currency
rating outcome.

In addition, the rating agency noted that the proposed securities
were assigned a basket B on its Debt-Equity Continuum (A is most
debt-like and E is most equity-like).  As such, they will be
treated as 25% equity and 75% debt when Moody's applies its
adjustments to Banco do Brasil's credit metrics.  Moody's noted
that upon approval of Tier 1 regulations by the Central Bank of
Brazil, Banco do Brasil may elect to qualify the securities as
Tier 1 capital, at which point Moody's may reassess its basket
treatment.

In determining the basket assignment under its Hybrid Criteria,
Moody's ranks hybrid securities relative to the features of common
equity, including:

   * No Maturity,
   * No Ongoing Payments, and
   * Loss Absorption.

The rankings can be either none, weak, moderate or strong relative
to common equity, with none being the closest to debt and strong
the closest to equity.

Moody's basket B designation considered the features of the
proposed securities, including the perpetual maturity, and
optional, non-cumulative payment deferral mechanism.  The
securities represent the bank's most junior subordinated debt and
rank pari passu with the most senior preferred stock, if any would
be issued (Banco do Brasil currently has no preferred stock
outstanding).  Moreover, there are limited rights to investors, no
material events of default, and the securities do not cross-
default.  As such, the securities would form a loss-absorbing
cushion for senior creditors.

Banco do Brasil is the largest bank in Brazil, with assets of
approximately US$110 billion as of September 2005.  The bank's
franchise and distribution network, which is geographically and
product-diversified, ensures its dominance over the banking
system's core deposits, with 21% market share.  The increasing
contribution of core revenues to the bank's profits reflects the
strength of its business franchise and the commitment of its
management to align the bank with market standards.

Moody's has recently upgraded Banco do Brasil's financial strength
rating to D, in an indication of improved financial metrics,
earnings and capital quality, in particular.  Moody's also assigns
an A3 global local currency rating to Banco do Brasil , which
incorporates the strong likelihood of government support in the
event of a systemic crisis.  This conclusion is based on:

   * Banco do Brasil's dominant share of the Brazilian deposits
     market;

   * its importance to the Brazilian banking system; and

   * its ownership and history of support.

Banco do Brasil S.A. is headquartered in Brasilia, Brazil, and it
had total assets of approximately US$110 billion as of September
2005.

This rating was assigned:

Banco do Brasil S.A. Grand Cayman Branch's US$300 million
perpetual non-cumulative junior- subordinated securities -- Ba1
long-term foreign currency subordinated bond rating.

Outlook is stable.


BISYS GROUP: Inks New $400 Million Credit Facility
--------------------------------------------------
The BISYS Group, Inc. entered into a new credit facility that
provides for:

    (i) a revolving credit facility of up to $100 million which is
        immediately available and may be used for working capital
        and other corporate purposes, and

   (ii) a term loan in an aggregate amount of up to $300 million
        which would be available, if necessary, to repay the
        company's currently outstanding $300 million of 4%
        convertible notes due March 15, 2006.

SunTrust Bank serves as the Administrative Agent for the new
facility.  The company's previous $150 million revolving credit
facility has been terminated.  No borrowings were outstanding
under the prior agreement at the time of termination.

The new facility, which has a term of one year, provides the
company with immediate borrowing availability and simplifies its
financial covenants and reporting obligations.  The current
interest rates payable under the revolving portion of the new
facility are comparable to those in its prior credit facility.
Should the company choose to fund the term loan portion of the
facility, its interest expense may increase, as the borrowing
costs associated with the term loan are higher than those
associated with the Company's currently outstanding 4% convertible
notes.

The Company expects to close the sale of the Information Services
business prior to Feb. 28, 2006.  The company intends to use a
portion of the proceeds from this sale to retire its convertible
notes, but if the closing of the sale is delayed, it may choose to
repay the maturing notes with the term loan portion of the new
facility.

The BISYS Group, Inc. (NYSE: BSG) - http://www.bisys.com/--  
provides outsourcing solutions that enable investment firms,
insurance companies, and banks to more efficiently serve their
customers, grow their businesses, and respond to evolving
regulatory requirements.  Its Investment Services group provides
administration and distribution services for mutual funds, hedge
funds, private equity funds, retirement plans and other investment
products.  Through its Insurance Services group, BISYS is the
nation's largest independent wholesale distributor of life
insurance and a leading independent wholesale distributor of
commercial property/casualty insurance, long-term care,
disability, and annuity products.  BISYS' Information Services
group provides industry-leading information processing, imaging,
and back-office services to banks, insurance companies and
corporate clients. Headquartered in New York, BISYS generates more
than $1 billion in annual revenues worldwide.

                           *     *     *

                          Lenders' Consent

As reported in the Troubled Company Reporter  on Dec. 19, 2005,
BISYS obtained a consent from the lenders under its Senior
Unsecured Credit Facility:

     * to extend the cure periods with respect to defaults
       resulting from the company's failure to file certain
       required financial reports and

     * to deliver the related compliance certificates.  The
       filings of these reports are being delayed pending
       completion of the restatement.

The cure periods with respect to its Form 10-Q for the fiscal
quarter ended March 31, 2005 and Form 10-K for the fiscal year
ended June 30, 2005 have each been extended to Jan. 31, 2006.  The
cure period with respect to the company's Form 10-Q for the fiscal
quarter ended Sept. 30, 2005 was previously extended to
Jan. 31, 2006.  In connection with this consent, BISYS repaid the
$53.7 million term loan portion of the Credit Facility in full and
agreed that it will not request credit under the Credit Facility
until such time as it files its Form 10-K for the fiscal year
ended June 30, 2005 and completes the Information Services sale.
BISYS believes that its operating cash flows and cash on hand will
be sufficient to support its near-term working capital and other
cash requirements through the expected closing of such sale.


BROKERS INC: Liquidation Plan Confirmation Hearing Set for Jan. 25
------------------------------------------------------------------          
The U.S. Bankruptcy for the Middle District of North Carolina will
convene a confirmation hearing at 11:00 a.m., on Jan. 25, 2006,
for the Second Amended Plan of Liquidation filed by Brokers
Incorporated.  The Court approved the adequacy of the Debtor's
Modified Disclosure Statement explaining the Plan on Dec. 9, 2005.  

             Summary of Amended Liquidation Plan

The Amended Plan proposes the liquidation of the Debtor's
remaining assets for the highest possible value with the net sale
proceeds and collections to be distributed to creditors.  A
Liquidation Fund will be established in an interest-bearing
deposit account to be funded from the net proceeds of the sale of
the remaining assets.

              Treatment of Claims and Interests

A) Class 1 claims consist of allowed administrative claims will be
   fully paid in cash, after the effective date of the Plan or in
   five business days after the entry of an order approving those
   claims.

B) Class 2 claims consist of allowed priority claims other than
   priority security deposit claims and priority tax claims under
   11 U.S.C. Section 507(a)(6) and 507(a)(8) will be paid from the
   proceeds of the Liquidation Fund after full payment of all
   allowed class 1 claims.

C) Class 3 claims consist of allowed priority security deposit
   claims under 11 U.S.C. 507(a)(8) will be fully paid from the
   proceeds of the Liquidation Fund after the effective date or on
   other terms agreed between the Debtor and the holders of those
   claims;

D) Class 4 claims consist of tax claims having priority under 11
   U.S.C. 507(a)(8) and totaling approximately $248,156 will be
   paid from the proceeds of the Liquidation Fund after full
   payment of all allowed class 1, class 2 and class 3 claims.

E) Class 5 claim consists of the secured claim of Branc Bank and
   Trust and Class 6 claims consisting of the secured claim of
   SunTrust Banks, Inc., have both been paid in full during the
   Debtor's bankruptcy proceeding and they will no longer receive
   any payments under the Plan.

F) Class 7 claim consists of the allowed claim of SunTrust Bank
   pursuant to the Promissory Note dated Sept. 20, 2004, and under
   the SunTrust Loan II Agreement, which totals approximately
   $200,000.  The Debtor's obligation under the Loan II Agreement
   will be modified to extend the maturity to three years and the
   terms of the Agreement will remain in full force after the
   Plan's confirmation.

G) Class 8 claim consists of the allowed secured claim of Bank of
   North Carolina pursuant to the BNC Loan Documents totaling
   approximately $492,827.  The terms of the terms of Loan
   Documents will remain in full force after the Plan's
   confirmation and BNC's claim will be paid from the liquidation
   of the first BNC property and the rent collections from the
   second BNC property.

H) Class 9 claims consist of the disputed secured claim of Carlton
   Eugene Anderson.  In the event that Mr. Anderson's claim is
   allowed, his claim will be paid from the Anderson Reserve
   Account upon the entry of a final order determining the
   Debtor's exact liability for that claim, but if that claim is
   disallowed, Mr. Anderson will not receive anything.

I) Class 10 claims consist of all general unsecured claims,
   estimated at approximately 1,213,937 will be paid in full after
   full payment of all class 1, class 2, class 3 and class 4
   claims.  Class 10 claims' payments will have an interest of
   6.25% beginning from the petition date until those claims are
   paid in full.

J) Class 11 claim consists of the claim of the Estate of Dolen J.
   Bowers, which will be paid from the proceeds of the Liquidation
   Fund after full payment of all class 1, class 2, class 3, class
   4, class 6, class 7, class 8, class 9 and class 10 claims.

K) Class 12 claims consist of equity security holders, who will
   retain their equity interest in the Debtor but will not receive
   any distribution until full payment of all class 1, class 2,
   class 3, class 4, class 5, class 6, class 7, class 8, class 9
   and class 10 claims.

A full-text copy of the Modified Disclosure Statement is available
for a fee at:

   http://www.researcharchives.com/bin/download?id=060109024656

Objections to the Amended Plan, if any, must be filed and served
by Jan. 11, 2006.

Headquartered in Thomasville, North Carolina, Brokers
Incorporated, filed for chapter 11 protection on Nov. 22, 2004
(Bankr. M.D. N.C. Case No. 04-53451).  Christine L. Myatt, Esq.,
at Nexsen Pruet Adams Kleemeier, PLLC, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed estimated assets of $10 million to
$50 million and $1 million to $10 million in estimated debts.


BROKERS INC: Excl. Plan Solicitation Period Stretched to March 1
----------------------------------------------------------------          
The U.S. Bankruptcy for the Middle District of North Carolina
extended until March 1, 2006, the period within which Brokers
Incorporated may solicit acceptance for its Second Amended Plan of
Liquidation.  The confirmation hearing for that Plan is currently
scheduled on Jan. 25, 2006.

The Debtor gave the Court three reasons supporting the extension:

   1) although the confirmation hearing is scheduled for Jan. 25,
      the Debtor sought the extension out of abundance of caution
      on its part so it can have no impediments in the plan
      solicitation process;

   2) the Debtor believes that proceeds from real property it
      already liquidated and the anticipated proceeds from real
      property to be sold in the next 60 days, pending Court
      approval, will make available funds necessary to pay all
      holders of allowed claims and to place sufficient sums in
      the reserve fund to pay all disputed claims; and

   3) the Unsecured Creditors Committee supports the extension of
      the exclusive plan solicitation period.

Headquartered in Thomasville, North Carolina, Brokers
Incorporated, filed for chapter 11 protection on Nov. 22, 2004
(Bankr. M.D. N.C. Case No. 04-53451).  Christine L. Myatt, Esq.,
at Nexsen Pruet Adams Kleemeier, PLLC, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed estimated assets of $10 million to
$50 million and $1 million to $10 million in estimated debts.


BROKERS INC: Wants to Sell Real Property in Virginia for $254,034
-----------------------------------------------------------------
Brokers Inc. asks the U.S. Bankruptcy Court for the Middle
District of North Carolina for authority to sell four residential
lots in Virginia, free and clear of all liens, interests and
encumbrances.

The lots total 156.655 acres and is located at Ferry Road,
Hermitage Road and River Oak Drive in Danville, Pittsylvania
County, Virginia.  On October 28, 2005, the Debtor entered into a
purchase agreement for the property with Derek Mitchell, Marcus
Shelton and Johnny Haymore.

The Purchase Agreement states that:

   a) the closing will occur within 30 days after the Court
      approves the sale of the property;

   b) at closing, the Buyers will pay $254,034 for the property;
      and

   c) the Buyers will deposit $5,000 towards their obligations
      under the Purchase Agreement.

The sale proceeds will be used for distribution to creditors.

Headquartered in Thomasville, North Carolina, Brokers
Incorporated, filed for chapter 11 protection on Nov. 22, 2004
(Bankr. M.D. N.C. Case No. 04-53451).  Christine L. Myatt, Esq.,
at Nexsen Pruet Adams Kleemeier, PLLC, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed more than $10 million in assets and
more than $1 million in debts.


CALPINE POWERAMERICA: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Lead Debtor: Calpine PowerAmerica-OR,LLC
             50 West San Fernando Street
             San Jose, California 95113

Bankruptcy Case No.: 06-10034

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Calpine Hidalgo Design, L.P.               06-10039

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 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 (Bankr.
                  S.D.N.Y. Case No. 05-60464)

                  Calpine Hidalgo, Inc., and six affiliates also
                  filed for chapter 11 protection on Jan. 8, 2006
                  (Bankr. S.D.N.Y. Case No. 06-10026).

Chapter 11 Petition Date: January 9, 2006

Court: Southern District of New York (Manhattan)

Judge: Burton R. Lifland

Debtors' 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                  Less than $50,000   Less than $50,000
PowerAmerica-OR,LLC

Calpine Hidalgo          $10 Million to      Less than $50,000
Design, L.P.             $50 Million

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


CHESAPEAKE CORP: Industry Overcapacity Cues S&P to Lower Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Richmond, Virginia-based Chesapeake Corp. to 'BB-' from
'BB'.  Standard & Poor's also lowered its senior unsecured debt
rating to 'B+' from 'BB' and its subordinated debt rating to 'B'
from 'B+'.  The outlook is stable.

"The downgrade of the corporate credit rating reflects industry
overcapacity and current soft demand in Europe, that when combined
with expected higher debt levels to fund the company's        
cost-reduction program, will result in credit measures over the
next few years that are more commensurate with a 'BB-' rating,"
said Standard & Poor's credit analyst Dominick D'Ascoli.

The lowering of the unsecured debt rating to one notch below the
corporate credit rating reflects a higher level of priority
obligations than previously expected.  Chesapeake's use of its
revolving credit facility to fund an acquisition and repay
subordinated debt, and the likelihood of additional revolver
borrowings to fund costs associated with the cost-reduction
program have meaningfully increased the amount of priority debt
that ranks ahead of unsecured lenders.

Standard & Poor's expects a meaningful amount of priority debt
will remain outstanding over the intermediate term.

The ratings on paperboard and plastics packaging producer
Chesapeake reflect:

     * negative to weak discretionary cash flow,

     * a aggressive debt leverage,

     * industry overcapacity,

     * competitive pricing pressures,

     * ability to pass on raw-material cost increases to customers
       and,

     * the diversity of the company's end markets and operations.

Discretionary cash flow is expected to be negative in 2006 and
thin in 2007, leading to an expected increase in debt.  This is in
addition to the $65 million increase in debt during the third
quarter of 2005 for the acquisition of Impaxx Pharmaceutical
Packaging Group Inc., which resulted in total debt of $444 million
on Oct. 2, 2005.  Excluding debt associated with the Arlington
Press acquisition, total debt to EBITDA was an aggressive 3.8x on
Oct. 2, 2005.  The Arlington Press acquisition increases
Chesapeake's financial leverage.  A further increase in financial
leverage is expected in 2006 as the company funds its cash
shortfall.

Standard & Poor's expects the 2006 cash shortfall to approximate
the expenditures made in connection with the company's $25 million
cost-reduction program.  As savings are realized from the two-year
program, leverage as measured by total debt to EBITDA should begin
to improve somewhat.


CINCINNATI BELL: Exercise of Put Option Cues S&P to Watch Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed on CreditWatch with
positive implications its recovery ratings of '3' on $650 million
of secured credit facilities and $50 million of secured notes of
Cincinnati Bell Inc.

At the same time, Standard & Poor's affirmed its other ratings on
the diversified telecommunications carrier, including the 'B+'
corporate credit rating and 'B+' secured bank loan and secured
notes ratings, and the 'BB-' rating on the senior unsecured debt
of its wholly owned incumbent local exchange carrier subsidiary,
Cincinnati Bell Telephone Co.  The outlook is negative.

As of Sept. 30, 2005, the combined company had $2.1 billion of
total debt outstanding.

The CreditWatch placement and rating affirmations followed recent
disclosure that Cingular Wireless LLC has exercised its put option
on its 19.9% share in its wireless partnership with CBI for     
$83 million.  To date, the minority share of the partnership was
excluded from the bank loan and secured note analysis.

"With exercise of the put, the additional value included in the
bank loan and secured note analysis provides sufficient coverage
of the fully drawn bank loan and secured notes to support a
recovery rating of '2'," said Standard & Poor's credit analyst
Catherine Cosentino.

A recovery rating of '2' represents prospects for substantial
recovery of principal in a payment default.  Upon completion of
the transaction and inclusion of the additional share of the
wireless venture in the security package, the recovery ratings
will be raised.

The ratings on CBI reflect the company's aggressive leverage,
coupled with prospects for increasing competition faced by both
its ILEC subsidiary, CBT, and Cincinnati Bell Wireless LLC.

Management is taking steps to mitigate threats to CBT, which
provides the majority of consolidated cash flow.  These steps
include a plan to offer alternative video services in 2006 using
asymmetrical digital subscriber loop 2+ (ADSL2+) technology.  
However, competition from cable telephony poses the potential for
both increased access line losses and pricing pressure at the
ILEC.  And, although the overall wireless industry has continued
to grow, CBI has experienced some recent wireless subscriber
losses.  The company's modest capital spending needs should enable
it to continue to generate sizable free cash flows, somewhat
mitigating these challenges.

CBI is aggressively leveraged, given its substantial business
risk.  The Cingular transaction is expected to close around    
mid-February 2006, based on terms in the partners' operating
agreement.

CBT faces the challenge of combating line losses by marketing its
bundled communications offerings.  CBT lost 5.2% of its access
lines in its incumbent local telephone region, largely as a result
of wireless substitution.  However, this decline was partially
offset by gains in the company's competitive local exchange
carrier operation.

Although wireless substitution will continue to some extent,
Standard & Poor's views cable telephony as a more formidable
longer term threat to the incumbent telephone business.  Time
Warner Cable Inc., the cable television service provider in the
greater Cincinnati market, launched cable telephony service in
mid-2004 and is expected to continue to market this service
aggressively over the next few years.  Rising competition may also
begin to pressure the company's local telephone EBITDA margins,
which have been quite strong.

Besides actively marketing bundled services, CBT has begun to
aggressively roll out digital subscriber line service to counter
increased wireline competition.


COLLINS & AIKMAN: Plans To Close Premier Tooling Facility
---------------------------------------------------------
Collins & Aikman Corporation (CKCRQ) plans to close its Premier
Tooling operation in Sterling Heights, Michigan, by March 31,
2006.  The facility currently has approximately 140 employees who
fabricate tooling for molded plastic products in support of future
programs.  The Company intends to complete existing fabrication
work at the facility with employment levels expected to balance-
out during the first quarter.

"Following careful and in-depth evaluation, we have elected to
exit the injection mold tooling fabrication portion of the
business, which will alleviate difficult capital requirements on
our balance sheet and improve our cash flow," said Frank Macher,
Collins & Aikman's President and CEO.  "While the rationale
supporting this action is compelling, we deeply regret the impact
this closing will have on our employees."  Macher added, "We are
fully prepared to execute this plan with no disruption of service
to our customers."

Collins & Aikman will transfer equipment to its facilities in New
Hampshire and North Carolina where it will continue to fabricate
tooling to support its proprietary manufacturing processes in
plastics skins, soft trim and flooring.  The Company will utilize
existing suppliers to build plastic injection molds, fixtures and
gages for future programs.

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. (Collins & Aikman Bankruptcy News,
Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000)


COLLINS & AIKMAN: Says Breitkreuz Has No Right to Protection
------------------------------------------------------------
Collins & Aikman Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Eastern District of Michigan to deny
Breitkreuz Molds and Plastics, Inc.'s request for adequate
protection payments and allowance of administrative claims.

Marc J. Carmel, Esq., at Kirkland & Ellis LLP, in New York,
asserts that Breitkreuz, has no claim, secured or otherwise, with
respect to certain molds purchased by the Debtors.  Breitkreuz has
no right to adequate protection, he maintains.

                        Breitkreuz Claims

As reported in the Troubled Company Reporter on Dec. 5, 2005, the
Debtors and Breitkreuz inked a contract for the production of
plastic injection molds for the General Motors 2005 GMX001
Chevrolet Cavalier program.

Pursuant to the Contract, the Debtors were obligated to pay
$469,800 for the Molds production subject to a discount, which the
parties agreed would be $4,500.  The total amount due is $465,300.  
In March 2004, the Debtors paid $145,500 leaving a balance of
$319,800.

The Internal Revenue Service served a levy on the Debtors to
collect the amounts due to Breitkreuz on the account receivable.  
However, Mr. Hawley relates, the Debtors refused to comply with
the legally enforceable levy, despite having the obligation to do
so.  Instead, on November 1, 2004, the Debtors paid $168,169
leaving a remaining unpaid balance of $151,631.

By virtue of the levy, Mr. Hawley points out that the IRS
succeeded to the rights of payment of Breitkreuz and became a
fully secured creditor for the remaining balance.

The Debtors have not made the required payment to the IRS for use
of the Molds postpetition.  As a result, the IRS is entitled to an
administrative expense claim for the postpetition use of the Molds
for $90,475 -- seven months times $12,925 - calculated through
Dec. 17, 2005.

Breitkreuz and the IRS asked the U.S. Bankruptcy Court for the
Eastern District of Michigan to:

    -- grant the IRS adequate protection of its secured claim in
       the form of adequate protection payments of $12,925 per
       month payable on the 15th day of each month commencing
       December 15, 2005; and

    -- allow the IRS' administrative expense claim for
       postpetition tooling usage for $90,475.

                        Debtors' Response

Mr. Carmel explains that the Molds were severely defective upon
receipt by the Debtors.  The defects in the Molds were so severe
that the Molds never completed a Production Part Approval Process,
which must be completed before payment is due.  If anything, Mr.
Carmel argues that Breitkreuz owes the Debtors for the costs and
expenses incurred in connection with the defective Molds.

As a result of the defective Molds, the Debtors incurred costs and
expenses totaling $1,140,000.  Pursuant to the Uniform Commercial
Code, Mr. Carmel points out that Breitkreuz is required to
reimburse the Debtors for the costs and expenses they incurred as
a result of the defective Molds.  This amount, Mr. Carmel notes,
far exceeds the amount allegedly owed to Breitkreuz by the
Debtors.  Even after deducting the amount allegedly owed to
Breitkreuz, Mr. Carmel relates that Breitkreuz owes the Debtors a
net amount of no less than $988,365.

Thus, at the very least, Breitkreuz does not have a claim against
the Debtors, and, if anything, Breitkreuz owes the Debtors money,
Mr. Carmel says.

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. (Collins & Aikman Bankruptcy News,
Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000)


COLLINS & AIKMAN: Secures Chrysler Supply Contract
--------------------------------------------------
DaimlerChrysler AG's Chrysler Group has selected Collins & Aikman
Corporation (CKCRQ) as the supplier for a significant portion of
the interior systems on a future platform of vehicles scheduled
for 2008.

"We are extremely pleased to be selected by DaimlerChrysler and
appreciate their confidence in our ability to fully support this
major program," said Frank Macher, President and CEO of Collins &
Aikman.  "An award of this magnitude reflects Collins & Aikman's
ability to compete and deliver on cost, quality, craftsmanship and
innovation across our full line of interior products."

Supplying a complete range of services, Collins & Aikman will be
responsible for all design, engineering, logistics and quality
planning for instrument panels, integrated cockpit systems, center
floor consoles, pillar and garnish trim, rear package trays,
molded carpet flooring systems, accessory mats, rear cargo and
trunk trim and other components for the future vehicle program.

Multiple existing Collins & Aikman facilities will produce the
components and systems to support the program.

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. (Collins & Aikman Bankruptcy News,
Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000)


CONTECH CONSTRUCTION: S&P Rates Proposed $100 Mil. Facility at B+
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on West
Chester, Ohio-based Contech Construction Products Inc., and
removed the ratings from CreditWatch where they were placed with
negative implications on Nov. 29, 2005, in connection with the
sale of the company to Apax Partners L.P.  The corporate credit
rating was lowered to 'B+' from 'BB-'.  The outlook is stable.
     
At the same time, Standard & Poor's assigned its 'B+' bank loan
rating and '2' recovery rating to Contech's proposed $100 million
revolving credit facility due in 2012 and $425 million term loan
due in 2013, based on preliminary terms and conditions.  The
recovery rating indicates the likelihood of substantial recovery
in the event of a payment default.  S&P's expectations are for
recovery at the higher end of this range.

Proceeds from the credit facilities, and $225 million of senior
subordinated notes due in 2014, will be used to finance the      
$1 billion acquisition of the company, including fees and
expenses, from the previous equity sponsor.  Contech's existing
debt will be repaid, and the related ratings withdrawn.  Total
debt, including capitalized operating leases, will be $666 million
at closing, with total debt to last-12-months EBITDA, pro forma
for a full year of fiscal 2005 acquisitions, of 5.7x at        
Dec. 31, 2005.

The downgrade reflects the weaker financial profile that Contech
will have following this transaction.
      
"The increase in debt leverage to more than 5.5x from around 3x
currently indicates a meaningfully more aggressive financial
policy," said Standard & Poor's credit analyst Lisa Wright.
"Contech is adding about $325 million of debt with the proposed
transaction, which will increase interest costs by about        
$30 million annually."

The ratings on Contech reflect:

     * its exposure to the cyclical commercial and residential
       construction sectors,

     * volatile raw-material costs,

     * low barriers to entry, and
  
     * very aggressive financial policy.

Partially offsetting these risks are the company's:

     * variable cost structure,
     * relatively stable operating margins, and
     * strong market shares in niche and local markets.

The company has leading market shares in such product subsectors
as regional corrugated metal pipe markets and steel pedestrian
bridges.


DATAMETRICS CORPORATION: Completes Debt Restructuring with SG DMTI
------------------------------------------------------------------
DataMetrics Corporation (OTCBB:DMTI) completed a major
restructuring and capital investment deal with SG DMTI Capital,
LLC.

According to Daniel Bertram, President and CEO of DataMetrics, the
transaction includes:

    * the conversion of approximately $3.4 million of debt to
      equity,

    * an infusion of $500,000 fresh operating capital through a
      new loan from SG DMTI, and

    * up to an additional $500,000 in the form of preferred stock
      subject to the attainment of certain milestones.

This follows the sale/leaseback of its headquarters building with
an affiliate of SG DMTI.

SG DMTI is part of a private equity firm that specializes in
corporate turnarounds and is managed by Philip Sassower and Andrea
Goren.

"DataMetrics had a debt load and capitalization structure that was
constricting and we felt there was a great upside if we could
remove these obstacles," said Mr. Sassower in explaining why SG
DMTI decided to make the investment.  "With this restructuring and
investment, together with the sale/leaseback transaction,
DataMetrics can now focus on growth, both internal and through
acquisition, and on becoming the worldwide leader in the market
for rugged IT solutions."

As reported in the Troubled Company Reporter  on Nov. 24, 2005,
the company closed on the sale of its headquarters building
located at 1717 Diplomacy Row, Orlando Florida to SG DMTI, LLC.  
Concurrent with the closing, DataMetrics Corporation and SGD
entered into a five year triple-net lease with an additional five
year option.

Daniel Bertram, President and CEO of DataMetrics, further
announced that the company and SGD also have an agreement in
principle for a restructuring of the Company's debt obligations
which, if consummated, will result in the infusion of fresh
operating capital into the company.  Financial details were not
immediately available.

                            Sale

On Nov. 4, 2005  DataMetrics  Corporation  closed on the sale of
its headquarters building located at 1717 Diplomacy Row, Orlando
Florida to SG DMTI, LLC for gross proceeds of $1,500,000.  The net
proceeds of the sale, after satisfaction of mortgage, taxes,
liens, and other obligations of the Company were approximately
$117,000.  Concurrent with the closing of the sale of
the property,  the Company and SGD entered into a five year
triple-net lease for rent in amount of $150,000 per year.  The
lease also has an additional  five year renewal option.

                         Bridge Loan

On Nov. 7, 2005, the Company received $200,000 from SGD.  The
Bridge Loan is evidenced by a promissory note secured by
substantially all of the Company's assets.  The note accrues
interest at a rate of 10% per annum and matures on Dec. 7, 2005.
The funds are being utilized for operating  capital.  In
connection  with certain  financial restructuring of the Company,
the Company anticipates executing a second promissory note in
favor of SGD in the amount of $500,000.  It is contemplated that
the $500,000 note will offset the Bridge Loan.  There can be no
assurances, however, that the restructuring will be consummated.

The DataMetrics Corporation -- http://www.datametrics.com/--  
designs, develops, and manufactures ruggedized printers, plotters,
workstations, PCs, flat panel monitors, VMEs and peripherals (disk
drives, tape drives, keyboards, trackballs and other equipment)
for government, defense, aerospace, and industrial customers
worldwide.  DataMetrics also offers a wide range of services
including engineering design, environmental testing, and build-to-
print capability that utilize our 40 years of experience.

At Apr. 30, 2004, DataMetrics Corporation's balance sheet showed a
$2,765,000 stockholders' deficit compared to a $2,733,000 deficit
at Jan. 31, 2004.


DON SIMPLOT: Hires Jerome Shulkin & Joseph Meier as Bank. Counsel
-----------------------------------------------------------------
Don J. Simplot asks the U.S. Bankruptcy Court for the District of
Idaho for permission to employ, as his bankruptcy counsel:

   -- Jerome Shulkin, Esq., at Shulkin Hutton, Inc., P.S., and
   -- Joseph M. Meier, Esq., at Cosho, Humphrey, LLP.

Mr. Shulkin will serve as the Debtor's general counsel, while Mr.
Meier will serve as Mr. Simplot's local counsel in Idaho.

Messrs. Shulkin and Meier are expected to:

   a) give the Debtor legal advice with respect to his powers and
      duties as debtor-in-possession;

   b) advise the Debtor in matters concerning creditors, claims,
      property rights and the operation of business while in
      chapter 11;

   c) prepare on behalf of the Debtor all necessary applications,
      answers, orders and reports; and

   d) perform all other legal services necessary in the Debtor's
      chapter 11 proceeding.

Mr. Meier bills at $200 per hour while Mr. Shulkin's billing rate
was not disclosed in Court documents.

To the best of the Debtor's knowledge, both counsel are
"disinterested persons" as that term is defined in Section 101(14)
of the Bankruptcy Code.

Headquartered in Boise, Idaho, Don J. Simplot owns 50% interest in
EEX Acquisition, LLC, which filed for chapter 11 protection on
Oct. 14, 2005 (Bankr. W.D. Wash. Case No. 05-28286)(J.
Overstreet).  The Debtor is also an affiliate of G B Vessel
Acquisition LLC, which also filed for bankruptcy protection on
Oct. 14, 2005 (Bankr. W.D. Wash. Case No. 05-28316).  The Debtor
filed for chapter 11 protection on Jan. 4, 2006 (Bankr. D. Idaho
Case No. 06-00002).  When the Debtor filed for protection from his
creditors, he listed $10 million to $50 million in assets and
debts.


DON SIMPLOT: U.S. Trustee Will Meet Creditors on Feb. 9
-------------------------------------------------------
The United States Trustee for Region 18 will convene a meeting of
Don J. Simplot's creditors at 9:00 a.m., on Feb. 9, 2006, at 720
Park Boulevard, Suite 210 located at Washington Group Central
Plaza in Idaho.  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 Boise, Idaho, Don J. Simplot owns 50% interest in
EEX Acquisition, LLC, which filed for chapter 11 protection on
Oct. 14, 2005 (Bankr. W.D. Wash. Case No. 05-28286)(J.
Overstreet).  The Debtor is also an affiliate of G B Vessel
Acquisition LLC, which also filed for bankruptcy protection on
Oct. 14, 2005 (Bankr. W.D. Wash. Case No. 05-28316).  The Debtor
filed for chapter 11 protection on Jan. 4, 2006 (Bankr. D. Idaho
Case No. 06-00002).  Jerome Shulkin, Esq., at Shulkin Hutton Inc.,
P.S., and Joseph M. Meier, Esq., at Cosho Humphrey, LLP, represent
the Debtor in his restructuring efforts.  When the Debtor filed
for protection from his creditors, he listed $10 million to $50
million in assets and debts.


ENER1 INC: Posts $33 Mil. Net Loss in Quarter Ended September 30
----------------------------------------------------------------
Ener1, Inc., incurred a $32,619,000 net loss on $25,000 of net
sales for the quarter ended Sept. 30, 2005, versus $1,150,000 of
net income on zero sales for the comparable period in 2004.  

The Company has experienced net operating losses since 1997 and
negative cash flows from operations since 1999, and had an
accumulated deficit of $157 million as of Sept. 30, 2005.  
Management says that the Company could continue to incur negative
cash flows through Sept. 30, 2006.

Ener1's balance sheet showed $13,957,000 in total assets at
Sept. 30, 2005, and liabilities of $94,834,000, resulting in a
stockholders' deficit of $80,877,000.  

As of Sept. 30, 2005, the Company had a $62 million working
capital deficit.  Working capital included $7 million in cash and
$700,000 in prepaid expenses, offset by $1.6 million in accounts
payable, accrued expenses and accrued exit costs and $67.5 million
in derivative liabilities on conversion features of securities.

                           About Ener1

Ener1, Inc. (OTCBB: ENEI) -- http://www.ener1.com -- is an  
alternative energy technology company.  The company's interests
include: 80.5% of EnerDel (www.enerdel.com), a lithium battery
company in which Delphi Corp. owns 19.5%; 49% of Enerstruct, a
Japanese lithium battery technology company in which Ener1's
strategic investor ITOCHU owns 51%; wholly owned subsidiary
EnerFuel, a fuel cell testing and component company
(www.enerfuel.com); and wholly owned subsidiary NanoEner, which
develops nanotechnology-based materials and manufacturing
processes for batteries and other applications (www.nanoener.com).


ENRON CORP: Court OKs Five Point Stock Purchase & Sale Agreement
----------------------------------------------------------------
Reorganized Debtors Enron Corp. and Enron Alligator Alley
Pipeline Company ask the U.S. Bankruptcy Court for the Southern
District of New York to approve a Stock Purchase and Sale
Agreement dated Nov. 16, 2005, between Enron Transportation
Services, LLC, and Five Point Florida, LLC.

Under the Stock Agreement, Enron Transportation will transfer to
Five Point Florida:

   (1) the Alligator Alley Pipeline;

   (2) Enron Transportation's shares of capital stock, par value
       $1.00 per share, in Alligator Alley; and

   (3) a sum of cash.

                 Alligator Alley and the Pipeline

Alligator Alley is a wholly owned subsidiary of non-debtor Enron
Transportation.  Enron Transportation is a limited liability
company that is solely managed by EOC Preferred, L.L.C., which,
in turn, is solely managed by Enron.

Alligator Alley's sole asset is a 110-mile petroleum crude oil
product pipeline and related structures and equipment located in
the Everglades area of Florida.  Alligator Alley has no employees
and no business operations.

During the pendency of its Chapter 11 case, Alligator Alley did
not assume any of the contracts, easements, rights of way,
permits or commitments held in connection with the Alligator
Alley Pipeline.  All of Alligator Alley's executory contracts and
unexpired leases were deemed rejected pursuant to the Reorganized
Debtors' Chapter 11 Plan.

Alligator Alley has only four prepetition third-party creditors
and one intercompany creditor, Brian S. Rosen, Esq., at Weil,
Gotshal & Manges LLP, in New York, relates.  Three of the
creditors held Allowed Secured or Allowed Convenience Claims,
which have been paid in full.  The remaining creditor holds an
Allowed General Unsecured Claim and pursuant to the Plan, will
continue to receive distributions on that claim.  The claim of
Enron Operations Services Corp., a Reorganized Debtor, will be
satisfied pursuant to the terms of the Plan.

According to Mr. Rosen, Alligator Alley ceased to operate the
Alligator Alley Pipeline in 1998.  Subsequently, Alligator Alley
began the process of preparing to abandon the pipeline and its
associated property, including necessary remediation efforts.  At
the time Alligator Alley was approached by Five Point, Alligator
Alley had begun the process of remediation and demolition before
abandoning the property, pursuant to a plan approved by the
Florida Department of Environmental Protection.

As the current owner of the property, Alligator Alley has a
continuing obligation to complete the remediation activities.  
Mr. Rosen relates that the remediation effort is approximately
33% complete and at Five Point's request, was suspended during
the pendency of the sale.

Alligator Alley estimates that the remaining remediation would
cost in excess of $500,000, and additional costs may be incurred
in order to abandon the assets.  Mr. Rosen tells the Court that
the work remaining to be done may include:

   -- aeration and removal of soil;

   -- installment of monitoring wells; and

   -- evaluation and implementation of the remaining requirements
      to meet Department of Transportation requirements for
      abandonment.

                           Five Point

Five Point is a wholly owned subsidiary of Five Point Energy, an
exploration and production company with operations in the Florida
Everglades.  The Reorganized Debtors believe that Five Point will
use a portion of the Alligator Alley Pipeline in connection with
its ongoing operations and the remainder of the Pipeline will be
abandoned, after completion of the necessary remediation
requirements.

                    Environmental Obligations

After the Closing Date of the Agreement, Alligator Alley, as
owner of the property, will continue to be responsible for
meeting environmental obligations associated with the property,
regardless of its new ownership.  Neither Enron Transportation
nor any Debtor other than Alligator Alley itself ever owned or
operated the properties owned by Alligator Alley.  No claim has
been asserted against Enron or Enron Transportation with respect
to environmental conditions at properties owned by Alligator
Alley, Mr. Rosen notes.

Pursuant to the Stock Agreement, Five Point will become the sole
owner of Alligator Alley and will become solely responsible for
the associated environmental obligations.

The other salient terms of the Stock Agreement are:

A. Sale and Purchase of Assets

Enron Transportation will sell, and Five Point will purchase, the
Alligator Alley Pipeline and the Shares on an as is, where is
basis, without any recourse.  Enron Transportation will pay Five
Point $233,039 as remediation cost in consideration for Five
Point acquiring the Shares and assuming all responsibility for
Alligator Alley's environmental obligations and liabilities
pertaining to the operation of Alligator Alley.

B. Post-Closing Obligations

After the Closing, Enron Transportation will have no further
responsibility for any obligations of Alligator Alley, with the
exception of liability for accounts of all creditors holding
allowed claims against Enron Transportation and for which the
Plan provides for distributions to be made.  Five Point will also
waive and release Enron Transportation from all liability,
responsibility or obligation.

D. Indemnification

After the Closing, Five Point will indemnify and hold harmless
Enron Transportation, its affiliates, their officers, directors,
employees or representatives against all losses, claims, suits
liabilities, damages or expenses incurred by any Seller
Indemnitee arising after Closing with respect to the Shares or
Alligator Alley's operations or administration.

"[T]he sale contemplated by the Agreement has no direct impact on
the creditors of Alligator Alley," Mr. Rosen assures the Court.

A full-text copy of the Stock Agreement is available for free at:

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

                          *     *     *

Judge Gonzalez approves the Reorganized Debtors' request in its
entirety.

Headquartered in Houston, Texas, Enron Corporation --
http://www.enron.com/-- is in the midst of restructuring various   
businesses for distribution as ongoing companies to its creditors
and liquidating its remaining operations.  Before the company
agreed to be acquired, controversy over accounting procedures had
caused Enron's stock price and credit rating to drop sharply.

Enron filed for chapter 11 protection on December 2, 2001 (Bankr.
S.D.N.Y. Case No. 01-16033).  Judge Gonzalez confirmed the
Company's Modified Fifth Amended Plan on July 15, 2004, and
numerous appeals followed.  The Confirmed Plan took effect on
Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen,
Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in
their restructuring efforts.  (Enron Bankruptcy News, Issue No.
166; Bankruptcy Creditors' Service, Inc., 15/945-7000)


ERHC ENERGY: Malone & Bailey Raises Going Concern Doubt
-------------------------------------------------------
Malone & Bailey, PC, expressed substantial doubt about ERHC Energy
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 since inception and dependence on outside sources
of financing for the continuation of its operations.

                  Fiscal Year 2005 Results

During the year ended Sept. 30, 2005, ERHC Energy incurred an
$11,270,478 net loss, compared to a $3,593,388 net loss for the
fiscal year ended Sept. 30, 2004.  A significant portion of the
increase in net loss for fiscal year 2005 was attributable to a
$5,749,575 loss on extinguishment of debt related to the
inducement to Chrome Oil Services, Ltd., to convert debt into
common stock and the addition of board compensation of $1,990,361.

ERHC Energy generated no revenues during 2005 and 2004 and thus
relied on borrowings funded from its line of credit provided by
Chrome as well as the sale of common stock.

At Sept. 30, 2005, the Company's balance sheet showed $6,720,210
in total assets and liabilities of $2,779,011.  Its current
liabilities exceed current assets by $1,758,428 as of Sept. 30,
2005.

ERHC Energy's current focus is to exploit its assets, which are
rights to working interests in exploration acreage in the Joint
Development Zone between the Democratic Republic of Sao Tome &
Principe and the Federal Republic of Nigeria, and in the exclusive
territorial waters of Sao Tome.  The Company has formed
relationships with upstream oil and gas companies to assist the
Company in exploiting its assets in the JDZ.

                           About ERHC

ERHC Energy is an independent oil and gas company.  The Company
was formed in 1986, as a Colorado corporation, and was engaged in
a variety of businesses until 1996, when it began its current
operations as an independent oil and gas company.


FASHION HOUSE: Incurs $1.5 Mil. Net Loss in Third Quarter of 2005
-----------------------------------------------------------------
The Fashion House Holdings, Inc., fka TDI Holding Corporation,
delivered its financial results for the quarter ended Sept. 30,
2005, to the Securities and Exchange Commission on Jan. 3, 2006.

Fashion House incurred a $1,501,745 net loss in the third quarter
of 2005 in contrast to $1,176,072 of net income for the same
period last year.  Management attributes the net loss to lower net
sales, increased operating expenses and increased interest
expense.  In addition, the Company benefited from a $1,350,000
gain on the sale of trademark rights during the third quarter of
2005.

Sales in the quarter ended Sept. 30, 2005, decreased to $455,867
from sales of $1,407,856 in the third quarter of 2004.  The entire
decrease in sales was due to the sale of the Nicole Miller
trademark rights in 2004.

At Sept. 30, 2005, Fashion House's balance sheet showed $1,339,276
in total assets and liabilities of $2,924,220, resulting in a
stockholders' deficit of $1,584,944.  The Company had a working
capital deficit of $1,938,601 and an accumulated deficit of
$5,731,838 at the end of the third quarter of 2005.

                       Going Concern Doubt

Hein & Associates LLP expressed substantial doubt about Fashion
House's ability to continue as a going concern after it audited
the Company's financial statements for the fiscal years ended
March 31, 2005, and 2004.  The auditing firm pointed to the
Company's working capital stockholders' deficits.

                       About Fashion House

The Fashion House Holdings, Inc., designs, develops, and markets a
diversified selection of women's dress and casual fashion
footwear.  It targets moderate to premium priced categories of the
women's fashion footwear market.  Fashion House's business centers
on the licensing of recognized brand names.


FEDERAL-MOGUL: Cooper Resolving Asbestos Liabilities Thru Trust
---------------------------------------------------------------
Cooper Industries, Ltd., and other parties involved in the
resolution of the Federal-Mogul Corporation bankruptcy proceeding
have reached an agreement regarding Cooper's participation in
Federal-Mogul's 524(g) asbestos claimants' trust.  By
participating in this trust, Cooper will resolve its liability for
asbestos claims arising from Cooper's former Abex Friction
Products business.  The proposed settlement agreement is subject
to court approval, approval of 75 percent of the current Abex
asbestos claimants and certain other approvals.  The settlement
will resolve more than 38,000 pending Abex claims.  Future claims
will be resolved through the bankruptcy trust, and Cooper will be
protected against future claims by an injunction to be issued by
the district court upon plan confirmation.

"Since Federal-Mogul's bankruptcy process began in October 2001,
we have worked tirelessly to bring this matter to a constructive
conclusion," said Kirk Hachigian, chief executive officer and
president, Cooper Industries.  "At the same time, we have
strengthened the Company's financial position and improved our
strategic flexibility.  Given the costs of continued litigation,
the uncertainty of legislative reforms and the risks inherent in
remaining in the tort system, we believe resolving the Abex
liabilities through the trust is the preferable option for our
shareholders.  With this settlement in place, we will have
certainty and finality on the Abex liability and can focus
management resources on executing our strategic plan."

The claims to be resolved through the bankruptcy trust relate to
the Abex Friction Products business of Cooper's former Automotive
Products segment.  Cooper sold its Automotive Products business to
FMC in October 1998.  Cooper began defending against these claims
pursuant to its guaranty obligations to the prior owner of Abex
when Federal-Mogul filed a Chapter 11 bankruptcy petition and
indicated that it may not honor its indemnity obligations to
Cooper.

     Key terms and aspects of the Proposed Settlement Agreement:

     -- Cooper has agreed to pay $130,000,000 in cash into the
        trust, with $100,000,000 payable upon Federal-Mogul's
        emergence from bankruptcy.  The remainder will be paid in
        two $15,000,000 installments due on January 15, 2006 and
        January 15, 2007, or upon emergence from bankruptcy, if
        later.  Cooper will receive a total of $37,500,000 during
        the funding period from other parties associated with the
        Federal-Mogul bankruptcy;

     -- Cooper will provide the trust 1.4 million shares of the
        Company's stock upon Federal-Mogul's emergence from
        bankruptcy.  The agreement provides that the trust may,
        during the first year after issuance, sell these shares
        to Cooper at market prices and, thereafter, in open
        market transactions;

     -- The agreement also provides for further payments by
        Cooper subject to the amount and timing of insurance
        proceeds.  Cooper has agreed to make 25 annual payments
        of up to $20,000,000 each reduced by certain insurance
        proceeds received by the trust.  In years that the
        insurance proceeds exceed $17,000,000, Cooper will be
        required to contribute $3,000,000 with the excess
        insurance proceeds carried over to the next year;

     -- Cooper, through Pneumo-Abex LLC, has access to Abex
        insurance policies with remaining limits on policies with
        solvent insurers in excess of $800,000,000.  The trust
        will retain 10% of the insurance proceeds for indemnity
        claims paid by the trust until Cooper's obligation is
        satisfied and will retain 15% thereafter.  The agreement
        also provides for Cooper to receive the insurance
        proceeds related to indemnity and defense costs paid
        prior to the date a stay of current claims is entered by
        the bankruptcy court; and

     -- Cooper will also be required to forego certain claims and
        objections in the Federal-Mogul bankruptcy proceedings.
        In addition, the parties involved have agreed to petition
        the court for a stay on all current claims outstanding.

Although the payments related to the settlement could extend to
25 years and the collection of insurance proceeds could extend
beyond 25 years, the liability and insurance will be undiscounted
on Cooper's balance sheet as the amount of the actual annual
payments is not reasonably predictable.  Cooper is in the process
of finalizing the amount of insurance recoveries that will be
included in the charge to discontinued operations.  Cooper
anticipates taking an after-tax charge to "loss from discontinued
operations" of between $150,000,000 and $225,000,000 in the fourth
quarter ended December 31, 2005.  The range of the charge to
discontinued operations primarily related to insurance recoveries,
which in any scenario when finalized will be on the lower end of
the range of potential insurance recovery estimates.

In addition to Cooper, parties to the agreement include FMC;
Federal-Mogul Products, Inc.; the Future Claimants' Representative
for FMC and FMP appointed in the Chapter 11 cases known as In re
Federal-Mogul Global Inc., T&N Limited, et al., No. 01-10578,
pending in the United States Bankruptcy Court for the District of
Delaware; the Official Committee of Asbestos Claimants for FMC and
FMP appointed in the Reorganization Cases; Pneumo-Abex LLC; and
PCT International Holdings Inc.  These parties have agreed to the
terms of the proposed settlement agreement.

                     About Cooper Industries

Cooper Industries, Ltd., with 2004 revenues of $4,500,000,000, is
a global manufacturer of electrical products and tools and
hardware.  Headquartered in Houston, Texas, Cooper has
approximately 29,000 employees serving more than 90 locations
around the world, and sells products to customers in more than
50 countries.  

                       About Federal-Mogul

Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some US$6
billion.  The Company filed for chapter 11 protection on Oct. 1,
2001 (Bankr. Del. Case No. 01-10582).  Lawrence J. Nyhan Esq.,
James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin
Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang,
Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed US$10.15 billion in
assets and US$8.86 billion in liabilities.  At Dec. 31, 2004,
Federal-Mogul's balance sheet showed a US$1.925 billion
stockholders' deficit.  At Nov. 30, 2005, Federal-Mogul's balance
sheet showed a US$1,450.4 billion stockholders' deficit, compared
to a US$1.926 billion deficit at Dec. 31, 2004.  Federal-Mogul
Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill,
Bradford.  (Federal-Mogul Bankruptcy News, Issue No. 100;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


FEDERAL-MOGUL: Files Adversary Case vs. Bobby Whitley, et al.
-------------------------------------------------------------
Federal-Mogul Corporation, Federal-Mogul Products, Inc., the
Official Committee of Asbestos Claimants and Eric D. Green, as
acting representative of future asbestos personal injury
claimants, seek declaratory and injunctive relief against:

   (1) Bobby Whitley;

   (2) certain individuals and their legal representatives; and

   (3) all unknown present and future claimants holding claims or
       demands of the type defined as Pneumo Asbestos Claims.

Edwin J. Harron, Esq., at Young Conaway Stargatt & Taylor LLP, in
Wilmington, Delaware, relates that the Defendants consist of all
claimants who are currently plaintiffs in judicial actions
pending in federal or state court and who allege liability
directly or indirectly for asbestos-related deaths or personal
injuries against:

   * Pneumo Abex LLC, successor by merger to Pneumo Abex
     Corporation, or any other Pneumo Protected Party on account
     of products produced by or the operation of the former
     friction products division of a predecessor of Pneumo Abex;
     and

   * any Pneumo Protected Party to the extent those claims arise
     out of Wagner Electric Corporation's automotive brake
     business during the period that Wagner or its successors-in-
     interest were direct or indirect subsidiaries of Cooper LLC.

                     The 1990 Transactions

In 1994, Wagner acquired certain assets from Pneumo Abex Corp.,
which prior to the closing, comprised the Friction Products
Division.  As part of the 1994 Pneumo/Abex Asset Purchase
Agreement, Wagner agreed to indemnify Pneumo Abex and its
affiliates on an after-insurance basis from certain asbestos-
related claims relating to the assets and business purchased by
Wagner.

In 1997, Cooper, Wagner's then parent, merged Wagner into Moog
Automotive, another of Cooper's subsidiaries.  By operation of
law, Moog, as the surviving entity, became liable for Wagner's
indemnification and other obligations under the 1994 APA.

In October 1998, Federal-Mogul purchased 100% of the stock of
Moog from Cooper pursuant to a stock purchase agreement and
renamed the company FMP.  By operation of law, FMP continued to
be obligated under Wagner's contractual indemnity and other
obligations in favor of Pneumo Abex and its affiliates as set
forth in the 1994 APA.

                         Cooper's Claims

During the period between the 1998 SPA and the Petition Date, FMP
performed its obligations in favor of Pneumo Abex by:

   -- defending Pneumo Abex against asbestos-related personal
      injury claims; and

   -- paying defense costs and indemnity payments.

After the Petition Date, FMP ceased performing any obligations
under the 1994 APA, Mr. Harron relates.  Accordingly, Pneumo Abex
filed a proof of claim against FMP prior to the Claims Bar Date,
based on the indemnification provisions of the 1994 APA.

Cooper, Wagner's then corporate parent, guaranteed Wagner's
performance of its contractual obligations under the 1994 APA in
favor of Pneumo Abex.  As part of the 1998 SPA, Federal-Mogul
agreed to indemnify Cooper with respect to Cooper's guaranty of
FMP's performance.  Accordingly, Cooper filed proofs of claim
against the Debtors, among other parties, arising out of the 1994
APA and 1998 SPA with respect to asbestos-related claims against
Pneumo Abex and Cooper's purported payment of those claims.

As part of the 1998 SPA, Federal-Mogul also agreed to indemnify
Cooper for all asbestos-related personal injury claims arising
out of Wagner's automotive brake business.  Accordingly, Cooper
filed contingent claims against one or more of the Debtors
invoking that indemnity.

Mr. Harron notes that FMP's asbestos-related liabilities relate
primarily to:

   (i) Wagner's manufacture and sale of Wagner-branded brake
       products; and

  (ii) the 1994 acquisition of the Friction Products Division.

                      The Cooper Settlement

Pursuant to a Term Sheet executed on December 15, 2005, the
Plaintiffs have compromised and settled Cooper's substantial
claims against the Debtors, their estates, and their non-Debtor
Affiliates.  In exchange for Cooper's substantial contribution of
insurance proceeds and related rights, cash, stock and other
consideration, the Debtors agreed to provide the Pneumo Protected
Parties:

   (i) Inclusion in the Plan of a Section 524(g) channeling
       injunction; and

  (ii) A Litigation Stay which, if granted, will provide interim
       injunctive relief analogous to the agreed-upon channeling
       injunction under the Plan.

The Pneumo Protected Parties include:

   (1) Cooper Industries, Ltd.;

   (2) Cooper Industries, LLC, successor by merger to Cooper
       Industries, Inc.;

   (3) PCT International Holdings Inc.;

   (4) Pneumo Abex;

   (5) each of the Pneumo Parties' past, present and future
       affiliates;

   (6) the Pneumo Parties' successors or assigns, including the
       Flavors Company but excluding Pepsi Americas, Inc. and its
       Predecessors; and

   (7) each of the Pneumo Parties and their affiliates' past,
       present and future officers, directors, employees, agents,
       affiliates, shareholders, lenders, attorneys, accountants,
       financial advisors, consultants and other representatives.

Pursuant to Section 362 of the Bankruptcy Code, the filing of
FMP's Chapter 11 petition operates as an automatic stay
applicable to all entities which, inter alia, stays the
commencement or continuation of all pending and future Pneumo
Asbestos Claims against any Pneumo Protected Party, Mr. Harron
reminds the Court.

"A justifiable controversy exists between Plaintiffs, on the one
hand, and Defendants, on the other hand, in that notwithstanding
the filing of FMP's voluntary chapter 11 petition and the
operation of the automatic stay, Defendants, or some of them,
have commenced actions post-petition or proceeded with
prepetition litigation against the Pneumo Protected Parties,
seeking recovery on Pneumo Asbestos Claims relating to the
Friction Products Division, or claims arising out of Wagner's
automotive brake business prior to the 1998 SPA," Mr. Harron
asserts.

Accordingly and in compliance with the Cooper Settlement, the
Debtors ask the Court to:

   (a) declare that the automatic stay enjoins the Defendants
       from commencing or continuing any act or judicial or
       administrative proceeding to liquidate, enforce or recover
       any Pneumo Asbestos Claim against the Pneumo Protected
       Parties or their insurers; and

   (b) restrain and enjoin the Defendants from commencing or
       prosecuting any judicial or administrative action or
       proceeding seeking to liquidate, enforce or recover on
       any Pneumo Asbestos Claim against the Pneumo Protected
       Parties or their insurers, pending the earlier of:

          -- the confirmation and effectiveness of the Plan; or

          -- the termination of the injunction for cause.

Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some US$6
billion.  The Company filed for chapter 11 protection on Oct. 1,
2001 (Bankr. Del. Case No. 01-10582).  Lawrence J. Nyhan Esq.,
James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin
Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang,
Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed US$10.15 billion in
assets and US$8.86 billion in liabilities.  At Dec. 31, 2004,
Federal-Mogul's balance sheet showed a US$1.925 billion
stockholders' deficit.  At Nov. 30, 2005, Federal-Mogul's balance
sheet showed a US$1,450.4 billion stockholders' deficit, compared
to a US$1.926 billion deficit at Dec. 31, 2004.  Federal-Mogul
Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill,
Bradford.  (Federal-Mogul Bankruptcy News, Issue No. 100;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


FLYI INC: Postpones Auction and Will Amend Bidding Procedures
-------------------------------------------------------------
The Hon. Eugene R. Wedoff authorized UAL Corporation and its
debtor-affiliates to submit a bid for FLYi, Inc.'s assets.

On December 16, 2005, the Debtors submitted a bid for an  
undisclosed amount of FLYi's assets.

                     FLYi Postpones Auction

FLYi, Inc., has recently advised the U.S. Bankruptcy Court for the
District of Delaware that it will not proceed with the auction of
its assets.

While FLYi received multiple expressions of interest for its
business and assets, FLYi's counsel Brendan Linehan Shannon,
Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington,
Delaware, relates that only one formal bid contemplated the
continuation of the company's operations as a going concern.  The
Going Concern Bid, however, had several features that prevented
FLYi from accepting proposal as a viable bid for its business.

Mr. Shannon notes that since the beginning of December 2005, FLYi
and the Official Committee of Unsecured Creditors appointed in
its Chapter 11 case have been focused on developing the going
concern expressions of interest.

Mr. Shannon explains that the Going Concern Bid:

   -- provided insufficient consideration;

   -- had numerous conditions that were beyond FLYi's control to
      satisfy including the renegotiation of certain material
      contracts on terms acceptable to the bidder; and

   -- did not provide for funding for the significant operating
      losses and cash burn FLYi expected to incur prior to
      closing of the transaction.

Mr. Shannon further relates that since receiving the Going
Concern Bid, FLYi and its Committee have been focused on
developing and improving that bid, as well as continuing
discussions with bidders that had expressed interest in a going
concern transaction in the past.  Ultimately, however, FLYi was
unable to substantially improve the Going Concern Bid or find an
attractive alternative going concern bidder.

After intensive evaluation of all of their alternatives, FLYi
concluded that the value of its estates would be maximized by
discontinuation of its scheduled flight operations and
liquidation of its assets pursuant to one or more sale or other
transactions that do not contemplate the continued operation of
Independence Air as a going concern.

FLYi will be amending the bidding procedures.

FLYi may retain one or more firms to assist in devising an
auction process that maximizes the value of certain assets in a
post-discontinuation of operations environment.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the  
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.  (United Airlines
Bankruptcy News, Issue No. 111; Bankruptcy Creditors' Service,
Inc., 215/945-7000)

Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent  
of Independence Air Inc., a small airline based at Washington
Dulles International Airport.  The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017).  Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.  As of Sept. 30, 2005, the Debtors listed
assets totaling $378,500,000 and debts totaling $455,400,000.


FOSS MANUFACTURING: Ch. 11 Trustee Hires DSI as Consultant
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Hampshire gave
Patrick J. O'Malley, the Chapter 11 Trustee of Foss Manufacturing
Company, Inc., permission to employ Development Specialists, Inc.,
as his consultant, nunc pro tunc to Oct. 28, 2005.

Development Specialists is a consulting firm that specializes in
providing consulting, liquidation, and management services to
insolvent, bankrupt, troubled or reorganizing businesses.

The Firm's services will include counseling and management
services in connection with accounting, asset disposition,
litigation support, preference analysis and claims analysis.

The Firm's charges will be included in the Trustee's fee
applications.

Mr. O'Malley assures the Court that the Firm does not hold any
interest materially adverse to the Debtor's estate.

Headquartered in Hampton, New Hampshire, Foss Manufacturing
Company, Inc. -- http://www.fossmfg.com/-- is a producer of  
engineered, non-woven fabrics and specialty synthetic fibers, for
a variety of applications and markets.  The Company filed for
chapter 11 protection on Sept. 16, 2005 (Bankr. D.N.H. Case No.
05-13724).  Andrew Z. Schwartz, Esq., at Foley Hoag LLP represents
the Debtor in its restructuring efforts.  When the Debtor filed
for protection from its creditors, it listed estimated assets of
$10 million to $50 million.


FOSS MANUFACTURING: Gordian Group Hired as Investment Banker
------------------------------------------------------------
Patrick J. O'Malley, the chapter 11 trustee for Foss Manufacturing
Company, Inc., sought and obtained authority from the U.S.
Bankruptcy Court for the District of New Hampshire to retain
Gordian Group LLC as his investment banker.

Gordian Group will:

   a) advise the Trustee as to any potential financial
      transaction;

   b) assist in the development of a list of potential acquirers,
      investors and strategic partners, and interaction with such
      parties in an effort to create interest in one or more
      financial transactions;

   c) assist in negotiation with current or potential lenders,
      creditors, shareholders and other interested parties
      regarding the Debtor's operations and prospects and any
      potential financial transaction;

   d) assist with the development, negotiation and implementation
      of one or more financial transactions, including
      participation in negotiations with creditors, stockholders
      and other parties involved in a financial transaction;

   e) assist in valuing the Debtor or valuing the Debtor's assets
      or operations;

   f) provide expert advice and testimony relating to financial
      matters at any time prior to consummation of a financial
      transaction;

   g) assist in preparing proposals to creditors, employees,
      shareholders and other parties-in-interest in connection
      with any financial transaction;

   h) assist with presentations made to the Bankruptcy Court, the
      Trustee and creditors or stockholders regarding the
      potential financial transactions or other issues related
      thereto;

   i) render other investment banking services as may be mutually
      agreed upon by the parties; and

   j) have no duties or responsibilities in respect of the
      company's subsidiaries or any disposition of their
      respective assets.  If desired, any duties or
      responsibilities, and the consideration therefore, will be
      set forth in a further engagement letter mutually agreed to
      among the parties hereto and thereto.

Gordian and the Trustee have agreed to a one-time, upfront fee of
$75,000, plus a transaction fee equal to:

     -- 1.75% of the aggregate gross consideration paid or
        payable or received in connection with all financial
        transactions; and

     -- in the case of a reorganization, the greater of 1.75% of:

           i) the aggregate amount of any new debt and equity
              financing committed to or raised in connection
              with the reorganization, and

          ii) the enterprise value (as mutually determined by
              the parties in good faith) of the Debtor upon
              consummation of the reorganization;

Notwithstanding any other term of the agreement, the aggregate
fees payable or paid to the Firm will not exceed $675,000,
inclusive of the upfront fee.

Peter S. Kaufman, head of Restructuring and Distressed M&A of
Gordian, assures the Court that the firm is a "disinterested
person" as that term is defined in section 101(14) of the
Bankruptcy Code.

Headquartered in Hampton, New Hampshire, Foss Manufacturing
Company, Inc. -- http://www.fossmfg.com/-- is a producer of  
engineered, non-woven fabrics and specialty synthetic fibers, for
a variety of applications and markets.  The Company filed for
chapter 11 protection on Sept. 16, 2005 (Bankr. D.N.H. Case No.
05-13724).  Andrew Z. Schwartz, Esq., at Foley Hoag LLP represents
the Debtor in its restructuring efforts.  When the Debtor filed
for protection from its creditors, it listed estimated assets of
$10 million to $50 million.


GREAT ATLANTIC: Posts $71 Million Net Loss in Third Quarter
-----------------------------------------------------------
The Great Atlantic & Pacific Tea Company, Inc. (A&P, NYSE Symbol:
GAP) reported unaudited fiscal 2005 third quarter and year-to-date
results for the 12 and 40 weeks ended Dec. 3, 2005.

For the third quarter, U.S. sales were $1.58 billion, compared
with $1.67 billion in the third quarter of fiscal 2004.  Fiscal
2004 third quarter total sales of $2.52 billion include $850
million related to A&P Canada which was sold in August 2005.

U.S. total comparable store sales increased 1.8% vs. year-ago.
Excluding New Orleans, U.S. comparable store sales decreased 0.3%
vs. year-ago.  Net loss for the quarter was $71 million this year
versus a loss of $75 million last year.

Reported EBITDA for the third quarter was negative $35 million
this year versus a positive $16 million for the third quarter of
fiscal 2004.  EBITDA for both quarters includes items the Company
considers non-operating in nature that management excludes when
evaluating the results of the U.S. on-going business.

The current quarter includes:

    * a $2 million benefit related to the Visa/Mastercard lawsuit
      settlement,

    * charges of $19 million related to Midwest operations exit
      costs,

    * net charges of $15 million in restructuring costs relating
      to the cost reduction initiatives within administration and
      supply and logistics,

    * charges of $8 million related to impairment charges on long-
      lived assets,

    * charges of $13 million related to store closures in New
      Orleans as a result of Hurricane Katrina,

    * charges of $3 million related to early extinguishment of
      debt and write off of deferred financing fees for the prior
      credit facility and

    * $4 million of real estate related losses.

Fiscal 2004 third quarter results include $27 million from A&P
Canada, $9 million in one-time savings in employee benefit costs,
charges of $35 million related to impairment on long-lived assets,
$1 million in net restructuring costs and $2 million of real
estate related losses.

For the 40 weeks year to date, U.S. sales were $5.41 billion
versus $5.61 billion in fiscal 2004. Total sales of $7.13 billion
for the 40 weeks year to date and $8.29 billion in fiscal 2004
include $1.72 billion and $2.68 billion in sales, respectively,
related to A&P Canada which was sold in August 2005.  U.S. total
comparable store sales were unchanged from last year.  Excluding
New Orleans, U.S. comparable store sales decreased 0.6% vs. year-
ago.  Net income for the 40 weeks year to date was $432 million
which included the gain on the sale of Canada, compared with a
loss of $182 million for fiscal 2004.

Reported EBITDA for the 40 weeks year to date and fiscal 2004 was
negative $101 million and positive $120 million, respectively.
EBITDA for the 40 weeks year to date includes:

    * $68 million from A&P Canada,

    * a $2 million benefit related to the Visa/Mastercard
      settlement,

    * $22 million of real estate related gains,

    * charges of $105 million related to Midwest operations exit
      costs,

    * $89 million in net restructuring costs,

    * charges of $18 million related to impairment charges on
      long-lived assets,

    * charges of $18 million related to Hurricane Katrina,

    * charges of $15 million related to the Canadian hedging
      agreement and

    * charges of $33 million for early extinguishment of debt and
      write off of deferred financing fees related to the prior
      credit facility.

EBITDA for fiscal 2004 includes:

    * $64 million from A&P Canada,

    * $9 million in one-time savings in employee benefit costs,

    * charges of $35 million related to impairment on long-lived
      assets,

    * $2 million in net restructuring costs and

    * $1 million of real estate related losses.

Christian Haub, Executive Chairman, said, "I am very encouraged by
the progress generated by our new management team in both reducing
costs and improving sales trends, especially through the latter
stages of the third quarter.  Accordingly, our results, excluding
special items, were significantly improved, a positive sign that
we are on track to achieve our profitability objectives as
planned."

Eric Claus, President & Chief Executive Officer, said "I'm very
proud of our team's execution of key cost management, operating
and selling strategies in the third quarter.  Our store level
initiatives are clearly resonating with customers, resulting in
improved sales.  These positive outcomes at such an early stage of
our rebuilding process bode well for the achievement of ongoing
sales momentum, and progress toward overall profitability by
fiscal 2007.

"Going forward, we plan to continue to improve operating results
by further reducing costs, while marketing aggressively and
investing to bring our store facilities to new quality standards
both on the fresh and discount sides."  Mr. Claus said.

Founded in 1859, A&P is one of the nation's first supermarket
chains.  The Company operates 407 stores in 9 states and the
District of Columbia under the following trade names: A&P,
Waldbaum's, The Food Emporium, Super Foodmart, Super Fresh, Farmer
Jack, Sav-A-Center and Food Basics.

Headquartered in Montvale, New Jersey, The Great Atlantic &  
Pacific Tea Company, Inc. operates 637 supermarkets in 10 states,  
the District of Columbia and Ontario, Canada.  Sales for the  
fiscal year ended February 26, 2005 were approximately $10.8  
billion.

                       *     *     *

As reported in the Troubled Company Reporter  on Dec. 30, 2005,
Moody's Investors Service confirmed the B3 corporate family rating
and other long-term ratings of The Great Atlantic & Pacific Tea
Company, Inc., upgraded the company's Speculative Grade Liquidity
Rating to SGL-1 from SGL-3 and assigned a stable outlook.  The
confirmation of A&P's long term ratings is based upon Moody's view
that the positive impact on credit metrics from the recent
reduction in debt and the significant increase in liquidity from
asset sale proceeds is not sufficient to offset weak comparable
store sales in the face of:

   * intense competition;

   * low profitability in the company's U.S. operations; and

   * ongoing negative free cash flow generation as A&P continues
     the aggressive capital expenditures necessary to upgrade its
     store base.

The stable rating outlook incorporates the more solid capital
structure given A&P's current large cash balances and lower debt
levels following the sale of its Canadian operations.  This rating
action concludes the review for possible upgrade begun on July 20,
2005.

Ratings confirmed:

  The Great Atlantic & Pacific Tea Company, Inc.:

     * Long Term Corporate Family Rating at B3

     * Senior unsecured notes and bonds at Caa1

     * Multi-seniority shelf at (P)Caa1 for senior, at (P)Caa2 for
       subordinated, at (P)Caa2 for junior subordinated, and at
       (P)Caa3 for preferred stock

  A&P Finance I, A&P Finance II and A&P Finance III:

     * Trust preferred securities shelf at (P)Caa2

Rating confirmed and to be withdrawn:

     * Senior secured and guaranteed bank agreement at B2;
       Facility was cancelled in October 2005

Rating upgraded:

     * Speculative Grade Liquidity Rating to SGL-1 from SGL-3

The outlook is stable.


HARBORVIEW MORTGAGE: S&P Upgrades Class B-4 Certs. to BB+ from BB
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on four
classes from HarborView Mortgage Loan Trust 2003-1.  At the same
time, ratings are affirmed on the remaining rated classes from
this transaction and on 270 other classes of certificates from
various HarborView Mortgage Loan Trust transactions.
     
The raised ratings on series 2003-1 are the result of:

     * accelerated principal prepayments,
     * positive loan performance, and
     * the shifting interest payment structure of the transaction.

These factors have allowed credit support percentages to increase
to levels that are adequate for the higher ratings.  Projected
credit support for these certificates ranged from 2.00x to 2.10x
the levels associated with the higher ratings.

The affirmations are based on pool performance that has allowed
credit support to remain at levels that are adequate to support
the current ratings on the certificates.

The performance of the pools of mortgage loans backing all of
these trusts has been very good.  Cumulative losses range from
0.00% to 0.03% of the original pool balances.  Total delinquencies
range from 0.15% to 5.61% of the current pool balances.

Credit support for all of the HarborView transactions is provided
through subordination.  The underlying collateral for these
transactions consists mostly of 30-year fixed-, adjustable-, and
hybrid-rate mortgage loans secured by first liens on one- to  
four-family properties.  Additionally, some of the transactions
include mortgages with a negative amortization feature.
   
                         Ratings Raised
   
                 HarborView Mortgage Loan Trust

                            Rating
             Series     Class         To        From
             ------     -----         --        ----
             2003-1     B-1           AA+       AA
             2003-1     B-2           A+        A
             2003-1     B-3           BBB+      BBB
             2003-1     B-4           BB+       BB
  
                        Ratings Affirmed
   
                 HarborView Mortgage Loan Trust

     Series     Class                                Rating
     ------     -----                                ------
     2003-1     A, A-R                               AAA
     2003-1     B-5                                  B
     2003-2     1-A, A-R, 2-A-1, 2-X, 2-A-2, 3-A     AAA
     2003-2     B-1                                  AA
     2003-2     B-2                                  A
     2003-2     B-3                                  BBB
     2003-2     B-4                                  BB
     2003-2     B-5                                  B
     2003-3     1A-1, A-R, 2A-1, 2A-2, 2A-3, A-X     AAA
     2003-3     B-1                                  AA
     2003-3     B-2                                  A
     2003-3     B-3                                  BBB
     2003-3     B-4                                  BB
     2003-3     B-5                                  B
     2004-1     1-A, 2-A, 3-A, 4-A, X, A-R           AAA
     2004-1     B-1                                  AA
     2004-1     B-2                                  A
     2004-1     B-3                                  BBB
     2004-1     B-4                                  BB
     2004-1     B-5                                  B
     2004-2     1A-1, 2A-1, AX, A-R                  AAA
     2004-2     B-1                                  AA
     2004-2     B-2                                  A
     2004-2     B-3                                  BBB
     2004-2     B-4                                  BB
     2004-2     B-5                                  B
     2004-3     1-A, 2-A, A-R                        AAA
     2004-3     B-1                                  AA
     2004-3     B-2                                  A
     2004-3     B-3                                  BBB
     2004-3     B-4                                  BB
     2004-3     B-5                                  B
     2004-4     1-A, 2-A, 3-A, X-1, X-2, A-R         AAA
     2004-4     B-1                                  AA
     2004-4     B-2                                  A
     2004-4     B-3                                  BBB
     2004-4     B-4                                  BB
     2004-4     B-5                                  B
     2004-5     1-A, 2-A-1, 2-A-2A, 2-A-2B, 2-A-3    AAA
     2004-5     2-A-4, 2-A-5, 2-A-6, 3-A, X, AR      AAA
     2004-5     B-1                                  AA
     2004-5     B-2                                  A
     2004-5     B-3                                  BBB
     2004-5     B-4                                  BB
     2004-5     B-5                                  B
     2004-6     1-A, 2-A, 3-A-1, 3-A-2A, 3-A-2B      AAA
     2004-6     4-A, 5-A, A-R                        AAA
     2004-6     B-1                                  AA
     2004-6     B-2                                  A
     2004-6     B-3                                  BBB
     2004-6     B-4                                  BB
     2004-6     B-5                                  B
     2004-7     1-A, 2-A-1, 2-A-2, 2-A-3, 3-A-1      AAA
     2004-7     3-A-2, 4-A, X-1, X-2, A-R            AAA
     2004-7     B-1                                  AA
     2004-7     B-2                                  A
     2004-7     B-3                                  BBB
     2004-7     B-4                                  BB
     2004-7     B-5                                  B
     2004-8     1-A, 2-A-1, 2-A-2, 2-A-3, 2-A4A      AAA
     2004-8     2-A4B, 3-A1, 3-A2, X, A-R            AAA
     2004-8     B-1                                  AA
     2004-8     B-2                                  A
     2004-8     B-3                                  BBB
     2004-8     B-4                                  BB
     2004-8     B-5                                  B
     2004-9     1-A, 2-A, 3-A, 4-A1A, 4-A1B          AAA
     2004-9     4-A2, 4-A3, X, A-R                   AAA
     2004-9     B-1                                  AA
     2004-9     B-2                                  A
     2004-9     B-3                                  BBB
     2004-9     B-4                                  BB
     2004-9     B-5                                  B
     2004-10    1-A-1, 1-A-2A, 1-A-2B, 2-A           AAA
     2004-10    3-A-1A, 3-A-1B, 4-A, X-1             AAA
     2004-10    X-2, X-3, A-R                        AAA
     2004-10    B-1                                  AA
     2004-10    B-2                                  A
     2004-10    B-3                                  BBB
     2004-10    B-4                                  BB
     2004-10    B-5                                  B
     2004-11    1-A, 2-A1A, 2-A1B, 2-A2A             AAA
     2004-11    2-A2B, 2-A3, 3-A1A, 3-A1B            AAA
     2004-11    3-A2A, 3-A2B, 3-A3, 3-A4             AAA
     2004-11    X-1, X-2, X-3, X-B, X-R              AAA
     2004-11    B-1                                  AA
     2004-11    B-2                                  A
     2004-11    B-3                                  BBB
     2004-11    B-4                                  BB
     2004-11    B-5                                  B
     2005-1     1-A, 2-A1A, 2-A1B, 2-A2              AAA
     2005-1     X, A-R                               AAA
     2005-1     B-1                                  AA
     2005-1     B-2                                  A
     2005-1     B-3                                  BBB
     2005-1     B-4                                  BB
     2005-1     B-5                                  B
     2005-2     1-A, 2-A-1A, 2-A-1B, 2-A-1C          AAA
     2005-2     2-A2, X, PO, A-R                     AAA
     2005-2     B-1                                  AA
     2005-2     B-2                                  A
     2005-2     B-3                                  BBB
     2005-2     B-4                                  BB
     2005-2     B-5                                  B
     2005-3     1-A, 2-A1A, 2-A1B, 2-A1C             AAA
     2005-3     2-A2, X-1, X-2, PO-1, PO-2, A-R      AAA
     2005-3     B-1                                  AA
     2005-3     B-2                                  A
     2005-3     B-3                                  BBB
     2005-3     B-4                                  BBB-
     2005-3     B-5                                  BB
     2005-3     B-6                                  B
     2005-4     1-A, 2-A, 3-A1, 3-A2, 4-A, 5-A, A-R  AAA
     2005-4     B-1                                  AA
     2005-4     B-2                                  A
     2005-4     B-3                                  BBB
     2005-4     B-4                                  BBB-
     2005-4     B-5                                  BB
     2005-4     B-6                                  B
     2005-5     1-A-1A, 1-A-1B, 2-A-1A, 2-A-1B       AAA
     2005-5     2-A-1C, X-1, X-2, PO-1, PO-2, A-R    AAA
     2005-5     B-1                                  AA
     2005-5     B-2                                  A
     2005-5     B-3                                  BBB
     2005-5     B-4                                  BBB-
     2005-5     B-5                                  BB
     2005-5     B-6                                  B
     2005-6     1-A-1A, 1-A-1B, X, A-R               AAA
     2005-6     B-1                                  AA
     2005-6     B-2                                  A
     2005-6     B-3                                  BBB
     2005-6     B-4                                  BB
     2005-6     B-5                                  B
     2005-7     1-A-1, 1-A2, 1-X, 1-PO, A-R          AAA
     2005-7     2-A1, 2-A2A, 2-A2B, 2-X, 2-PO        AAA
     2005-7     1-B1, 2-B1                           AA
     2005-7     1-B2, 2-B2                           A
     2005-7     1-B3, 2-B3                           BBB
     2005-7     1-B4, 2-B4                           BB
     2005-7     1-B5, 2-B5                           B


INERGY L.P.: Intends to Sell $200 Mil. Notes in Private Placement
-----------------------------------------------------------------
Inergy, L.P. (NASDAQ:NRGY) and its wholly owned subsidiary Inergy
Finance Corp. reported that they intend to sell in a private
placement, subject to market conditions, $200 million senior
unsecured notes due 2016.

Inergy, L.P. intends to use the net proceeds from the private
placement to repay borrowings under its revolving acquisition
credit facility.

Inergy L.P. -- http://www.inergypropane.com/-- sells and leases  
propane, propane supplies and equipment to retail consumers
(residential, commercial, industrial and agricultural) under a
number of regional brand names.  In addition to its retail
business, the company also operates a natural gas storage business
and provides wholesale propane supply, price risk management and
distribution services to customers throughout the United States
and Canada.

                       *     *     *

As reported in the Troubled Company Reporter  on Dec. 14, 2005,
Standard & Poor's Ratings Services raised its corporate credit
rating on propane distributor Inergy L.P. to 'B+' from 'B'.  The
outlook was also revised to stable from positive.

In addition, the 'B-' rating on the company's $425 million, 6.875%
senior notes was raised to 'B'.

Kansas City, Missouri-based Inergy had about $561 million of debt
as of Sept. 30, 2005.

"The ratings upgrade reflects consistent financial performance and
adequate credit measures, despite rapid acquisitive growth over
the past year," said Standard & Poor's credit analyst Kevin L.
Beicke.  "In addition, the successful integration of the Star Gas
Propane assets alleviates some previous concerns, and the upgrade
further reflects an improved business profile due to the recent
acquisition of the Stagecoach natural gas storage facility," he
continued.

The ratings are limited by Inergy's master limited partnership
structure and weak business profile, which is characterized by:

     * acquisition risk and exposure to weather,
     * seasonal demand patterns, and
     * changing commodity prices.

These concerns are only partially countered by:

     * Inergy's natural gas storage operations,
     * the propane segment's favorable service territory, and
     * high ownership percentage of customer tanks.

The stable outlook is based on the solid operating performance of
the partnership's propane segment and the expectation of continued
financial performance.  The stable outlook is contingent on
progress toward a timely Phase II completion in mid-2007, as well
as the maintenance of Inergy's current financial profile.  Future
large acquisitions or acquisitions of assets considered of greater
risk than the company's current operations would likely result in
an outlook revision to negative or a ratings downgrade.


INTERSTATE BAKERIES: Court Approves Sieckmann Settlement Pact
-------------------------------------------------------------
After obtaining relief from the automatic stay, Brenda Sieckmann
prosecuted her lawsuit against Interstate Brands Corporation
filed in the Circuit Court of the City of St. Louis, Missouri,
relating to the death of her husband, Mark Sieckmann.

Ms. Sieckmann has obtained a judgment against Interstate Brands
in the Wrongful Death Action in the net amount of $9,750,500,
which Judgment is being appealed by Interstate Brands.
Approximately $1,500,000 of the Judgment has been satisfied.

Interstate Brands, through its insurance broker, Lockton
Companies, Inc., purchased an insurance policy from Property &
Casualty Insurance Company with effective dates of June 15, 2003,
to July 1, 2004.  Interstate Brands, through Lockton, also
purchased an insurance policy from National Union Fire Insurance
Company of Pittsburgh, PA, with effective dates of July 1, 2003,
to July 1, 2004.  The Insurers deny that they provided coverage
for the Judgment against Interstate Brands at the layer of
$2,500,000 through $3,500,000, which results in an alleged
$1,000,000 gap in Interstate Brands' insurance coverage.

J.D. Kutter Insurance Associates, Inc., insurance broker for Mr.
Sieckmann's employer, issued a certificate of insurance
providing, among other things, that Interstate Brands was to be
named as an additional insured under a policy of insurance issued
by Crum & Forster Specialty Insurance with effective dates of
February 28, 2003, to February 1, 2004.  Crum & Forster has
denied that Interstate Brands is an additional insured.

Interstate Brands maintains that it should be an additional
insured under Crum & Forster Policy No. GLO 0000262.  Interstate
Brands believes there is insurance coverage for the entirety of
the Judgment, and that if there is any Gap, it is because of the
fault and negligence of other parties.

On June 15, 2005, National Union filed a declaratory judgment
action against Interstate Brands and Ms. Sieckmann in the United
States District Court for the Eastern District of Missouri, which
concerns the alleged Gap and other coverage issues.

On August 15, 2005, Ms. Sieckmann filed an action against
Interstate Brands, Lockton, Discover, National Union and J.D.
Kutter in the City of St. Louis, which concerns, in part, the
alleged Gap in Interstate Brands' insurance coverage, and, in
part, whether Interstate Brands was made an additional insured
under the Crum & Forster policy of insurance, as represented by
J.D. Kutter.  Papers filed with the Court do not specify the role
of Discover.

Interstate Brands and Ms. Sieckmann have engaged in extensive
discussions.  They believe that their interests are aligned in
the National Union Action and the Gap Action to the extent that
each believes Interstate Brands is, or but for the fault of other
parties would be, fully insured for the Judgment.

Specifically, Interstate Brands and Ms. Sieckmann agree that:

    (a) Interstate Brands assigns and transfers to Ms. Sieckmann
        all of the recovery and proceeds from its rights, claims,
        causes of action, remedies, and defenses, regardless of
        their nature, that Brands has against Lockton, Discover,
        National Union, J.D. Kutter, Crum & Forster, and any other
        person or entity that in any way arises out of or is
        related to Interstate Brands' insurance coverage, or lack
        thereof, for the Gap and the SIR;

    (b) Interstate Brands waives any claim or argument that the
        February 17 Agreed Order allowing Ms. Sieckmann to pursue
        the Wrongful Death Lawsuit, and an April 27, 2005
        Plaintiff's Reply to Interstate Brands' Response to
        Plaintiff's Motion to Remand filed in the Eastern District
        of Missouri, resulted in Ms. Sieckmann's waiver of any
        right to collect damages or other monetary losses from
        Brands with respect to the Gap.  However, Interstate
        Brands reserves all other rights and claims regarding the
        Agreed Order and the Reply Memorandum;

    (c) The Parties enter into a joint defense and prosecution
        agreement under which, inter alia:

          (i) Interstate Brands appoints Robert Radice to act as
              counsel for Interstate Brands to prosecute and
              defend all rights, claims, causes of action,
              remedies, and defenses for which the recovery and
              proceeds are being assigned;

         (ii) Ms. Sieckmann agrees to pay all fees, costs and
              other expenses associated with the prosecution and
              defense of all rights claims causes of action,
              remedies and defenses for which the recovery and
              proceeds are being assigned;

        (iii) Ms. Sieckmann agrees to defend and indemnify and
              hold Interstate Brands harmless from and against any
              liability or claim or action by any third party,
              whether by direct action, third party action, cross
              or counterclaim, contribution, subrogation, or
              otherwise, arising out of or related to Interstate
              Brands' association with the defense or prosecution
              of the rights, claims, causes of action, remedies
              and defenses for which the recovery and proceeds are
              being assigned;

         (iv) Interstate Brands agrees to reasonably cooperate
              with Ms. Sieckmann, and her counsel, in the
              prosecution and defense of all claims, causes of
              action, remedies and defenses for which the recovery
              and proceeds are being assigned;

          (v) The counsel for each Party should act or be deemed
              to act as legal counsel for the benefit of their
              clients only; and

         (vi) The information shared pursuant to the Agreement
              will be kept confidential and both Parties should
              take all reasonable steps to preserve the
              confidentiality of the information;

    (d) Ms. Sieckmann agrees not to levy execution by garnishment,
        or otherwise collect or attempt to collect, on any
        property, asset, or right of Interstate Brands or any of
        its affiliates with respect to the Judgment or any future
        judgment entered against IBC arising out of the alleged
        wrongful death of Mr. Sieckmann or arising out of any and
        all attempts to obtain, from any source, the payment of
        damages, interest, insurance proceeds, or other
        compensation allegedly due because of the alleged wrongful
        death of Mr. Sieckmann;

    (e) Ms. Sieckmann agrees to dismiss the negligent and
        fraudulent misrepresentation counts against Interstate
        Brands in the Sieckmann Insurance Action with prejudice,
        each party to bear its own costs and fees.  Interstate
        Brands understands and acknowledges that Ms. Sieckmann
        will file an Amended Petition in the Ms. Sieckmann
        Insurance Action only asserting a claim for garnishment
        against Interstate Brands, and that the action will be
        defended by Gap Counsel;

    (f) To the extent that Ms. Sieckmann recovers from J.D. Kutter
        or Crum & Forster related to Interstate Brands' status as
        an additional insured under Crum & Forster Policy No. GLO
        0000262 pursuant to the assignment of recovery and
        proceeds, any recovery will be applied to the SIR;

    (g) Nothing contained in the Agreement will affect the
        Parties' claims, defenses, or rights pending or yet to be
        raised in the Wrongful Death Action or any appeal;

    (h) Nothing contained in the Agreement will affect Claim No.
        6623 filed by Ms. Sieckmann in Interstate Brands'
        bankruptcy case, and both Parties acknowledge that
        Interstate Brands, at some future date, may object to the
        Claim.  Should Interstate Brands object to the Claim, then
        at the time as the objection is made, both Parties reserve
        their rights to litigate the alleged waiver of the SIR
        before the Bankruptcy Court; and

    (i) The Parties are reserving and preserving all claims and
        actions that they have or may have against any other
        person or entity and related in any way to Interstate
        Brands' insurance coverage for the Judgment.

J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP,
in Chicago, Illinois, explains that the terms and conditions of
the Agreement were reached only after arm's-length negotiations
between the Parties, and resolve actual and potential disputes
and controversies that, if permitted to continue, would involve
time-consuming and expensive proceedings, and thus expose the
Debtors to significant costs as well as the possibility of
adverse decisions.

Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, the Debtors ask the Court to approve the Agreement.

                        *     *     *

The Court grants the Motion effective on December 19, 2005.

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: W. Spencer Buys Evans Property for $7.2M
-------------------------------------------------------------
As reported in the Troubled Company Reporter on Dec. 16, 2005,
Interstate Bakeries Corporation and its debtor-affiliates propose
to sell their property located at 1995 Evans Avenue in San
Francisco, California, to WYL Orion Properties, LLC, subject to
higher and better offers.

The principal terms of the Sale Agreement signed by the Parties
are:

     Purchase Price:            $6,000,000

     Escrow Deposit:            WYL Orion deposited $600,000 which
                                is being held in escrow until all
                                closing conditions are met.

     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.

                     San Francisco Objects

The City and County of San Francisco ask the Court to deny the
Debtors' Sale Motion because the Debtors seek an exemption of the
sale from stamp and similar taxes pursuant to Section 1146(c) of
the Bankruptcy Code.

Michael J. McQuaid, Esq., at Carr, McClellan, Ingersoll, Thompson
& Horn, in Burlingame, California, argues that in the case of
Baltimore County v. Hechinger Liquidation Trust, 335 F.3d 243
(3rd Cir. 2003) and NVR Homes, Inc. v. Clerks of the Circuit
Courts, 189 F.3d 442 (4th Cir. 1999), cert. denied, 528 U.S. 117,
120 S. Ct. 936, 145 L.Ed. 2d 915 (2000), the courts held that a
sale or transfer prior to the entry of a confirmation order is
unauthorized under Section 1146(c) and is not entitled to the tax
exemption.

According to Mr. McQuaid, the Debtors will likely argue that San
Francisco's 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.

                           *     *     *

At the December 9, 2005 auction, William D. Spencer outbid WYL
Orion Properties, LLC, for the Evans Property.  Mr. Spencer's
final bid of $7,200,000 was declared by the Debtors as the
highest offer submitted.

The Debtors withdrew their request for the exemption from payment
of stamp and similar taxes.

Accordingly, the Court approved the Sale of the Evans Property to
Mr. Spencer.

In the event that the Successful Bidder fails to close for any
reason, the Debtors are authorized to consummate the sale
transaction with the next highest and best bidder, and that
bidder will be deemed to be the Successful Bidder and all of the
terms of the Sale Order will apply to that bidder as if it were
the original Successful Bidder.

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)


J. CREW: Operating Unit Can Access $335M Term Loan until March 30
-----------------------------------------------------------------
J. Crew Operating Corp., a J. Crew Group, Inc., subsidiary,
entered into an amendment to an October 3, 2005, commitment letter
with Goldman Sachs Credit Partners L.P., Bear Stearns Corporate
Lending Inc., Bear, Stearns & Co. Inc. and Wachovia Bank, National
Association.

Under the agreement, the financing institutions committed, subject
to certain conditions, to provide a senior secured term loan to
Operating with a principal amount of up to $295 million -- which
may be increased in certain circumstances to $335 million at
Operating's option.  The amendment extended the banks' commitments
to provide the Term Loan to March 30, 2006.

J. Crew Group is a nationally recognized retailer of men's and
women's apparel, shoes and accessories.  The Company operates
157 retail stores, the J. Crew catalog business,
http://www.jcrew.com/and 45 factory outlet stores.

As of October 29, 2005, J. Crew's equity deficit narrowed to
$525 million from a $578 million deficit at October 30, 2004.

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 19, 2005,
Standard & Poor's Ratings Services raised its corporate credit
rating on specialty apparel retailer J. Crew Group Inc. to 'B'
from 'B-'.  The rating remains on CreditWatch with positive
implications due to the planned recapitalization of the company,
which includes an IPO of its common stock and debt refinancing.

As reported in the Troubled Company Reporter on Sept. 22, 2005,
Moody's placed the ratings of J. Crew Group, Inc. on review for
possible upgrade following the company's filing for an upcoming
initial public offering and plan to utilize the proceeds to de-
lever its balance sheet.

These ratings were placed on review for possible upgrade:

   * Corporate family rating of B3
   * Senior discount notes of Caa2


KAISER ALUMINUM: Court Amends Settlement Pact Order with St. Paul
-----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
December 23, 2005, the Honorable Judith Fitzgerald of the U.S.
Bankruptcy Court for the District of Delaware approved Kaiser
Aluminum and Chemical Corporation's settlements, in their
entirety, with seven of the eight Settling Insurers:

    -- Associated International Insurance Company,
    -- Affiliated FM Insurance Company,
    -- Evanston Insurance Company,
    -- Employers Mutual Casualty Company,
    -- Federal Insurance Company,
    -- New York Marine Parties,
    -- Allstate Insurance Company, and
    -- St. Paul Surplus Lines Insurance Company.

                            *    *    *

Judge Fitzgerald amends her order approving the Debtors'
settlement agreement and mutual release with St. Paul Surplus
Lines Insurance Company.

The Debtors will dismiss with without prejudice their Claims
against St. Paul in the Products Action.  The parties will bear
their own costs and expenses in the Products Action.  Nothing in
the Order, however, will prevent the Debtors from recovering their
costs and expenses in the Products Action from any entity other
than St. Paul.

The Court authorizes the Debtors to sell the St. Paul insurance
policies back to St. Paul, free and clear of liens.

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: Will Sell Spokane Valley Property for $418,176
---------------------------------------------------------------
Kaiser Aluminum Corporation and its debtor-affiliates notify the
U.S. Bankruptcy Court for the District of Delaware that they
intend to sell a real property located in Spokane Valley, Spokane
County, Washington, to Lawrence B. Stone for $418,176, in
accordance with sale procedures for miscellaneous assets
established by the Court.

The Debtors will sell the Property "as is, where is," free and
clear of liens.

The Purchaser has delivered a $20,000 earnest money deposit.
The Purchase Price will be subject to certain adjustments.

Spokane Valley Property consists of 24 acres of unimproved real
property, which has been zoned for heavy industrial use.  Kaiser
Aluminum & Chemical Corporation originally acquired the Property
in 1990 for the development of a new production facility.  That
facility was never constructed and the Property is being held by
KACC as part of its discontinued operations.

The parties have entered into a Real Estate Purchase and Sale
Agreement dated September 21, 2005.  The Purchase Agreement has
been amended twice, in October and in December.

The purchaser is not related to the Debtors.

The Debtors will pay an 8% commission to Kiemle & Hagood Company,
the selling and listing agent.

Executory contracts or unexpired leases related to the Property
will not be assumed or assigned as part of the sale.

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)


LEAR CORP: Weakened Operating Profile Prompts Fitch's BB+ Rating
----------------------------------------------------------------
Fitch Ratings has downgraded Lear Corp.'s issuer default rating,
senior secured bank lines, and senior unsecured notes to 'BB+'
from 'BBB-'.  The Outlook remains Negative.

The downgrade reflects Fitch's concerns regarding limited free
cash flow generation due to a weakened operating profile, which
increases the potential for further balance sheet deterioration in
the near-term.

In addition, the company potentially has up to $717 million in
maturities coming due in 2007.  Of the total $717 million,     
$317 million is attributable to the first put date of a
convertible debt issue with an equity strike price in excess of
$60 per share and $400 million is a maturing term loan.  However,
the company has adequate liquidity with approximately $1.5 billion
in available revolver.

While Lear is likely to experience negative free cash flow for
full year 2005, Fitch expects the company to be breakeven to
slightly positive free cash flow in 2006, mitigating the extent of
Fitch's rating downgrade to one notch.

Issues that impaired Lear's recent negative free cash flow
performance include:

     * higher raw material costs,

     * significantly lower customer volumes of SUV products on
       which Lear has a substantial amount of content,

     * a one-time extension of customer payment terms,

     * costs associated with restructuring, and

     * increased capital spending due to a heavy North American
       launch schedule in 2005 and investment in new technology.

During 2005, launches representing 40% of Lear's North American
revenue reduced the company's operating leverage.  Also, the Ford
Explorer, General Motors' truck based SUVs, and the Dodge Durango
-- some of Lear's highest contented vehicles -- all saw production
declines in excess of 30% in 2005.  Compounding the decline in
operating leverage, the Explorer and the GM SUV products
constituted a large portion of the 2005 launches.

In 2006, Fitch expects Lear's free cash flow to improve as a
result of operating leverage from:

     * the 2005-launched new business,
     * more stable customer SUV production volumes,
     * ramp-up of 2006 new business programs,
     * lower capital investment, and
     * initial cost savings from 2005 restructuring efforts.  

Fitch believes that SUV production should continue to decline but
not in the erratic way or to the degree which volumes were reduced
by automakers in 2005, barring prolonged gas prices around $3 per
gallon.  Fitch also assumes continued high raw material costs.

Longer term, Fitch projects Lear could return to sustainable free
cash flow performance and to reduce debt.  The company continues
to be an innovator, demonstrated by the 'flexible seat
architecture' technology launched in new products this year as
well as advances in interior electronics.  Lear has successfully
attracted new customers, increasing non-U.S. Big 3 business to
about 46% of total revenue and to roughly 50% of $4 billion in
total new business backlog.

Fitch sees minimal execution risk in the company's restructuring
plan, which includes relocating operations in low-cost countries
and should be completed in late 2006 to early 2007.  Total cash
cost is expected to be around  $205 million, excluding proceeds
from asset sales.  However, operating income should improve by
$100 million to $125 million in 2007 as a result of these actions.  
Also in 2007, Fitch believes there could be some relief from raw
material costs.


LONG BEACH: Fitch Junks Ratings on Four Certificate Classes
-----------------------------------------------------------
Fitch Ratings has taken rating actions on these Long Beach
Mortgage Loan Trust issue:

   Series 2002-2 Group 1

     -- Class I-A affirmed at 'AAA';
     -- Class I-M2 downgraded to 'BBB' from 'A';
     -- Class I-M3 downgraded to 'B' from 'BBB-';
     -- Class I-M4A downgraded to 'CCC' from 'B';
     -- Class I-M4B downgraded to 'CCC' from 'B'.

   Series 2002-2 Group 2

     -- Class II-M2 downgraded to 'BBB' from 'A';
     -- Class II-M3 downgraded to 'B' from 'BBB-';
     -- Class II-M4A downgraded to 'CCC' from 'B';
     -- Class II-M4B downgraded to 'CCC' from 'B'.

All of the mortgage loans in the series 2002-2 transactions were
either originated or acquired by Long Beach Mortgage Company.  
Group 1 consists of first lien, adjustable-rate and fixed-rate
mortgage loans with principal balances that conform to Fannie Mae
loan limits, and Group 2 consists of first and second lien,
adjustable-rate and fixed-rate mortgage loans with principal
balances that generally do not conform to Fannie Mae loan limits.

As of the December 2005 distribution date, series 2002-2
transaction is 42 months seasoned, and the pool for Group 1 and
Group 2 are approximately 16% and 10%, respectively.

Long Beach Mortgage Company is the master servicer for this
transaction, and Washington Mutual Bank, rated 'RPS2' for subprime
products by Fitch, is the subservicer for all of the mortgage
loans.

Classes M2, M3, M4A and M4B represent interests in both loan
groups, and solely for purposes of determining distributions of
principal and interest and the allocation of losses realized on
mortgage loans, each class consists of two components: I-M2 and
II-M2; I-M3 and II-M3; I-M4A and II-M4A; and I-M4B and II-M4B.  
The credit enhancement for a component class may differ between
the loan groups.  However, a default of a component class would
result in a default of the entire class and therefore the ratings
reflect the credit risk to the weaker of the two components.

The affirmation reflects a satisfactory relationship between CE
and future loss expectations and affects approximately        
$22.5 million of outstanding certificates.  Additionally, the
affirmation on class I-A reflects a guaranty provided by the
Federal National Mortgage Association, whose financial strength is
rated 'AAA' by Fitch.

The negative rating actions, which affect approximately      
$105.1 million of outstanding certificates, reflect deterioration
in the relationship between CE and future loss expectations.  Both
Group 1 and Group 2 have experienced high monthly losses, which
have exceeded the available excess spread, resulting in the
deterioration of overcollateralization.  Additionally, faster than
expected prepayment in this transaction has created relatively
high delinquency trigger threshold, which has allowed Group 1 to
pass its trigger event in December 2005, thereby allowing its
target OC to step down significantly.

As of the December 2005 distribution date, the OC for Group 1 is
$3,192,857 or 3.50% of the collateral balance.  The six-month
average monthly loss after application of excess spread is
approximately $295,315, and Group 1 has incurred cumulative losses
to date of 3.18%.  Approximately 28.15% of the remaining pool
balance is more than 60 days delinquent.

As of the December 2005 distribution date, the OC for Group 2 is
$2,457,732 or 5.85% of the collateral balance.  The six-month
average monthly loss after application of excess spread is
approximately $244,113, and Group 2 has incurred cumulative losses
to date of 3.22%.  Approximately 32.36% of the remaining pool
balance is more than 60 days delinquent.

Further information regarding current delinquency, loss, and
credit enhancement statistics is available on the Fitch Ratings
Website at http://www.fitchratings.com/


LORETTO-UTICA: Court Approves Menter Rudin as Counsel
-----------------------------------------------------
Loretto-Utica Properties sought and obtained permission from the
U.S. Bankruptcy Court for the Northern District of New York to
employ Menter, Rudin & Trivelpiece, P.C., as its counsel.

The Firm will:

  (a) give legal advice with respect to its powers and duties as
      debtor-in-possession in the continued operation of its
      business and management of its property;

  (b) prepare on behalf of the Debtor necessary applications,
      answers, reports, orders and other legal papers; and

  (c) perform all other legal services for the Debtor as
      necessary.

The Firm's professionals bill:

         Designation             Hourly Rate
         -----------             -----------
         Partners                $275 - $260
         Associates              $160 - $225
         Law Clerks                 $100
         Paralegals                  $90

Jeffrey A. Dove, Esq., a member at Menter Rudin, leads the
engagement.  He disclosed that the Firm will charge $100,000 as a
general retainer plus up to $1,039 reimbursement for filing fees.  

Mr. Dove assures the Court that his Firm is a "disinterested
person" as that term is defined in Section 101(14) in the
Bankruptcy Code.

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: Closes Merger Deal with Verizon Communications
-------------------------------------------------------
Verizon Communications Inc. (NYSE:VZ) and MCI, Inc., closed
on their merger, enhancing Verizon's ability to deliver the
benefits of converged communications, information and
entertainment to customers across the country and around the
world.

"This milestone for Verizon creates a new competitive force with
the power of the global MCI network and the reach of Verizon's
broadband and wireless networks in the U.S.," said Verizon
Chairman and CEO Ivan Seidenberg.  "Our added network capabilities
and strong customer relationships provide a solid foundation for
innovative and integrated wireless, wireline and multimedia
services designed to meet customer demands for speed, mobility
and control."

Mr. Seidenberg added, "Our strategy is to be a customer-focused
leader in consumer broadband and video, as well as business and
government services, in both the landline and wireless
environments.  We believe that our superior networks are the basis
for innovation and competitive advantage in communications.  The
combination of our world-class wireless and broadband access
networks with the leading global IP (Internet protocol) backbone
will allow us to deliver the highest quality end-to-end experience
for our customers."

Following the merger, Verizon, which continues to be based in New
York, has approximately $90 billion in annual total consolidated
operating revenues and approximately 250,000 employees, serving
customers in 150 countries.

               New Unit Named 'Verizon Business'

Verizon Business is the name of the new Verizon business unit
encompassing business and government customers and related
functions of the former MCI as well as similar businesses that
previously were part of Domestic Telecom, including the former
Verizon Enterprise Solutions Group.

Verizon now operates three network-based businesses:

   -- Verizon Business;

   -- Verizon Wireless, operator of America's most reliable
      wireless network; and

   -- Verizon's landline segment, which is deploying the most
      advanced wireline broadband and video network in America
      today.

Verizon Business serves medium and large businesses and government
customers, and it will announce details of new products and
services later this month.

This new business segment boasts a highly trained and experienced
force of sales and service professionals deployed in hundreds of
sales offices around the world.  It owns and operates an end-to-
end, global IP network spanning more than 100,000 miles, providing
next-generation IP network services to medium and large businesses
and government customers.

As previously announced, John Killian has been named president of
this new unit, and his leadership team executives have been
overseeing integration planning for their respective functions
since October.

"We have the team in place to hit the ground running and offer
Verizon Business customers greater value from Day One," said Mr.
Killian.  "We believe that our strong commitment to customers and
our integrated product offerings will deliver the most advanced
business communications solutions and best customer experience
available in today's marketplace."

While further details about Verizon Business will be announced at
the upcoming market launch, Verizon will continue to build on the
success of its "master brand" strategy.

Other segments of the former MCI are being combined with similar
existing functions in Verizon.  For example, the MCI Foundation
will be part of the Verizon Foundation.

                      Transaction Details

The merger was announced on Feb. 14, 2005, and received the
required state, federal and international regulatory approvals by
year-end 2005.  Verizon and MCI have been engaged in integration
planning since the merger was approved by MCI shareholders on
Oct. 6, 2005.

Under terms of the merger agreement, MCI shareholders will receive
0.5743 shares of Verizon and cash for each of their MCI shares.  
Verizon elected to make a supplemental cash payment of $2.738 per
MCI share (or $779 million in the aggregate), rather than issue
additional shares of Verizon, so that the merger consideration was
equal to at least $20.40 per share of MCI.  The parties mutually
agreed that there would be no purchase price adjustment related to
the amount of certain MCI liabilities.

The merger was also structured as a tax-free reorganization, and
generally MCI shareholders will be taxed only to the extent of a
previously paid special dividend and the supplemental cash
payment.

Effective Jan. 6, trading in MCI's common stock (NASDAQ:MCIP) has
been halted.

MCI shareholders holding certificates will very shortly receive
information about how to exchange their shares.  MCI shareholders
who hold their shares in book entry or through a broker will have
their shares automatically exchanged for Verizon shares and cash.  
Verizon shareholders need not take any action.

                  Verizon's Leadership Team   

Verizon's top management team and Board of Directors remain
unchanged.  Michael Capellas, former president and CEO of MCI, is
leaving the business now that the merger has been completed.

Mr. Seidenberg said, "Michael's work in transforming MCI over
these past few years has been extraordinary.  He has been a great
leader, and he leaves a legacy as an architect of one of the
world's great, next-generation communications companies -- a
strong competitive force focused on customer innovation."

Verizon Communications Inc. (NYSE:VZ) -- http://www.verizon.com/
-- a Dow 30 company, is a leader in delivering broadband and other
communication innovations to wireline and wireless customers.  
Verizon operates America's most reliable wireless network, serving
49.3 million customers nationwide; one of the most expansive
wholly-owned global IP networks; and one of the nation's premier
wireline networks, serving home, business and wholesale customers.  
Based in New York, Verizon has a diverse workforce of
approximately 250,000 and generates annual consolidated operating
revenues of approximately $90 billion.  

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. (WorldCom
Bankruptcy News, Issue No. 110; Bankruptcy Creditors' Service,
Inc., 215/945-7000)

                         *     *     *

As reported in the Troubled Company Reporter on Feb. 22, 2005,
Standard & Poor's Ratings Services placed its ratings of Ashburn,
Virginia-based MCI Corp., including the 'B+' corporate credit
rating, on CreditWatch with positive implications.  The action
affects approximately $6 billion of MCI debt.


MCLEODUSA INC: Exits Chapter 11 with Deleveraged Balance Sheet
--------------------------------------------------------------
McLeodUSA Incorporated emerges from Chapter 11 protection after
its Joint Prepackaged Plan of Reorganization took effect on
Friday, Jan. 6, 2006.

The U.S. Bankruptcy Court for the Northern District of Illinois
approved the Plan on Dec. 16, 2005, after having received the
affirmative vote of more than 90% of the creditors who voted on
the Plan.

                           New CEO

The company named Royce J. Holland as the Company's new Chief
Executive Officer.  Mr. Holland brings more than 30 years
experience in the telecommunications, energy and
engineering/construction industries to McLeodUSA.  Most recently,
Mr. Holland was co-founder, Chairman and CEO of Allegiance
Telecom, Inc., an integrated telecommunications services provider
active in 36 major metropolitan areas across the USA.  Allegiance
was acquired by XO Communications in 2004.  Previously, Mr.
Holland was President and a co-founder of MFS Communications
Company, Inc., one of the country's first competitive local
exchange carriers, with operations in 52 metropolitan areas in
North America, Europe and Asia.  Founded in 1988, MFS was acquired
by WorldCom in 1996.

                  New Board of Directors

Effective upon the company's emergence on Jan. 9, 2006, the
company also named a new Board of Directors.  In addition to Mr.
Holland, the members of the new Board are:

    * John Hank Bonde,
    * Donald C. Campion,
    * Eugene Davis,
    * John D. McEvoy,
    * Alex Stadler and
    * D. Craig Young.

                     New Credit Facility

Under the terms of the Plan, the Company has significantly
deleveraged its balance sheet by eliminating approximately
$677 million in debt, plus interest, and reducing its annual
interest expense by over $50 million.  The company's remaining
debt was reduced to approximately $73 million using proceeds from
the recent sale of the company's headquarters facility.  As of the
effective date of the Plan, the company has debt outstanding, net
of available cash, of approximately $50 million.  McLeodUSA has
also entered into a new credit facility that provides the Company
with access to an additional $50 million, comprised of a $40
million dollar revolving credit facility and a new $10 million
term loan.

"This is an important day for McLeodUSA," said Stan Springel,
Chief Restructuring Officer.  "The Company has substantially
strengthened its balance sheet and significantly reduced
liabilities by over $677 million.  Our new $50 million credit
facility will provide continued assurance to our customers,
employees and vendors about our strong liquidity position."

"It is a testament to our employees, customers and vendors, and
their continued confidence in our business, that we were able to
emerge from bankruptcy in only ten weeks, without disruption and
while continuing to pay our trade creditors in full," added Joe
Ceryanec, the Company's acting Chief Financial Officer.

Royce Holland, the Company's new Chief Executive Officer, added
further, "I am extremely happy to be joining McLeodUSA at this
time. I believe that the Company's new financial structure,
coupled with its strong suite of products and high quality
service, leaves us well-positioned for success."

Consistent with the Plan, McLeodUSA's former Preferred and Common
Stock has been cancelled, and the Company's stock will no longer
be publicly traded.

                     Overview of the Plan

As reported in the Troubled Company Reporter on Nov. 2, 2005, the
principal economic terms of the Plan, Stanford Springel, chief
restructuring officer of McLeodUSA, relates, provide for the
Company's balance sheet to be restructured by:

   (a) converting Senior Prepetition Lender Claims into New
       Term Loan Notes;

   (b) converting Junior Prepetition Lender Claims into 100% of
       the New Common Stock, subject to dilution by the
       Management Stock Plan Awards; and

   (c) canceling the Company's existing Preferred Stock and
       Common Stock.

Importantly, Mr. Springel says, all other unsecured claims,
except for the claims held by landlords of a designated group of
leases of non-residential real property that the Debtors intend
to reject, are unimpaired under the Plan.  Under the Plan,
holders of the Rejected Lease Claims will be paid 100% of the
allowed amount of their claims as determined by Section 502(b)(6)
of the Bankruptcy Code.

Under the Plan, there are three classes of Impaired Claims:

   -- Class 4 Senior Prepetition Lender Claims,
   -- Class 5 Junior Prepetition Lender Claims, and
   -- Class 6 Lease Rejection Claims

There are two classes of Impaired Interests:

   -- Class 8 Old Preferred Stock Interests and Subordinated
      Claims, and

   -- Class 9 Old Common Stock Interests and Subordinated
      Claims.

All other Claims and Interests are Unimpaired:

   -- Class 1 Non-Tax Priority Claims,
   -- Class 2 Other Secured Claims,
   -- Class 3 General Unsecured Claims, and
   -- Class 7 Equity Interests in Debtors' Subsidiaries

Holders of unimpaired claims and interests will be unaffected by
the Plan.

According to Mr. Springel, the value of the Company is
significantly less than the aggregate amount of the Claims held
by the Prepetition Lenders, which Claims are secured by
substantially all assets of the Company.  The Plan essentially
provides for the transfer of ownership of the Company to the
Junior Prepetition Lenders.

Headquartered in Cedar Rapids, Iowa, McLeodUSA Incorporated --
http://www.mcleodusa.com/-- provides integrated communications
services, including local services in 25 Midwest, Southwest,
Northwest and Rocky Mountain states.  The Debtor and its
affiliates filed for chapter 11 protection on Oct. 28, 2005
(Bankr. N.D. Ill. Case Nos. 05-53229 through 05-63234).  Peter
Krebs, Esq., and Timothy R. Pohl, Esq., at Skadden, Arps, Slate,
Meagher and Flom, represent the Debtors in their restructuring
efforts.  As of June 30, 2005, McLeodUSA Incorporated reported
$674,000,000 in total assets and $1,011,000,000 in total debts.

McLeodUSA Inc. previously filed for chapter 11 protection on
January 30, 2002 (Bankr. D. Del. Case No. 02-10288).  The Court
confirmed the Debtor's chapter 11 plan on April 5, 2003, and
that Plan took effect on April 16, 2002.  The Court formally
closed the case on May 20, 2005.


METROPOLITAN MORTGAGE: Inks Settlement Pact with OWALC & OSLAC
--------------------------------------------------------------
Metropolitan Mortgage Securities Co., Inc., and Summit Securities,
Inc., ask the U.S. Bankruptcy Court for the Eastern District of
Washington to approve a compromise of intercompany claims with Old
West Annuity & Life Insurance Company and Old Standard Life
Assurance Company.

Under the settlement, the parties agree:

   * to exchange mutual releases;

   * to a $200,000 payment from Old Standard to Summit to settle
     Old West's $1.176 million tax obligation under the
     intercompany tax sharing agreement; and

   * that Old West will pay $175,0000 to Metropolitan to settle
     overpaid timeshare receipts of $300,000 and allocated
     management services of $188,000 owed under the management
     services contract.

The Debtors believe that the terms of the settlement with their
insurers are fair and equitable, and in the best interest of the
estates, considering the risks and expenses associated with
resolving these claims through litigation.

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.


METROPOLITAN MORTGAGE: Sells Lottery Receivables to Stone Street
----------------------------------------------------------------
Metropolitan Mortgage & Securities Co., Inc., and Summit
Securities, Inc., ask the U.S. Bankruptcy Court for the Eastern
District of Washington to approve the sale of their lottery
receivables to Stone Street Capital, Inc., for $670,953.

The Debtors believe that the sale of the receivables to Stone
Street represents a fair value and will generate more distribution
for the estates' creditors.  

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.


MILLS CORPORATION: Seeks Waiver on Line of Credit Default
---------------------------------------------------------
The Mills Corporation reported that it will restate its audited
financial results from 2000 through 2004 and its unaudited
quarterly results for 2005 to correct accounting errors related
primarily to certain investments by a wholly-owned taxable REIT
subsidiary, Mills Enterprises, Inc., and changes in the accrual of
the compensation expense related to its Long-Term Incentive Plan
(LTIP).

MEI was formed in 1998 to enable the company to make investments
in development-stage tenants, including in the retail, food and
beverage, and entertainment sectors.  Based upon a review of the
accounting for various investments by MEI and one similar
investment by one of our mall joint ventures, the company
determined that the accounting for certain of these investments
was inappropriate (primarily equity versus loan accounting, the
impairment of loans, reversal of a gain on the sale of partnership
interest, and the timing of recognition of various items).  The
impact of these adjustments is expected to reduce Net Loss by
approximately $0.03 per diluted share and increase FFO by
approximately $0.04 per diluted share in the first nine months of
2005 due to the reversal of the third quarter allowance against a
note receivable, which is now recorded in the restatement of the
prior period.

The impact of these adjustments is expected to reduce Net Income
by approximately $0.03 per diluted share in 2004, approximately
$0.08 per diluted share in 2003 and approximately $0.23 per
diluted share in 2002.  The impact of these adjustments is
expected to reduce FFO by approximately $0.03 per diluted share in
2004, approximately $0.07 per diluted share in 2003 and
approximately $0.23 per diluted share in 2002.  The impact of
these adjustments on years prior to 2002 is expected to be an
increase in accumulated deficit as of December 31, 2001 for The
Mills of approximately $9 million.

After giving effect to the restatement, The Mills' investment in
MEI is expected to total approximately $5 million, primarily
related to its investment in Foodbrand, the operator of food
courts in several of the Company's projects.

As the Company reviewed the accounting for its LTIP program in
preparation for the adoption of FAS123R, it determined that errors
had been made in matching the accrual of its LTIP liability with
the applicable employee service periods.  There is no change in
the amount of LTIP compensation related to these adjustments.  The
impact of this adjustment is expected to increase net loss and
reduce FFO by approximately $0.01 per diluted share in the first
nine months of 2005 and to reduce net income and FFO by
approximately $0.02 per diluted share in 2004, approximately $0.06
per diluted share in 2003 and approximately $0.06 per diluted
share in 2002.  The LTIP adjustment does not impact any years
prior to 2002 and is not expected to have a material impact on
future periods.  In addition, the LTIP adjustment does not impact
actual cash compensation paid to employees, which was correctly
paid under the terms of the LTIP.

                     Line of Credit Default

As a result of these events, the company is in default of certain
provisions of its line of credit and certain project-related
loans.  The company has commenced its efforts to obtain a waiver
of the default and certain consents from its bank group and other
lenders.  To provide short-term liquidity, the company has secured
a $150 million term loan from JP Morgan.

The adjustments to the Company's accounting practices have been
discussed with its independent auditor, Ernst & Young LLP.  The
Company will include the restated results for the fiscal years
ended December 31, 2002, 2003 and 2004 in an amended 2004 Annual
Report on Form 10-K and for each quarterly period for 2005 in
amended Form 10-Qs.  In the interim, investors should no longer
rely on the 2002, 2003 and 2004 financial statements and the
associated auditor's report currently on file with the SEC in the
Company's 2004 Form 10-K or on 2005 Form 10-Qs currently on file
with the SEC.

            Material Weakness in Internal Controls

The company is aware that the occurrence of a restatement of
previously issued financial statements to correct errors is a
strong indicator that material weaknesses in internal controls
exist.  At this time, the company expects to report a material
weakness in its internal control over financial reporting in its
2005 Form 10-K.

Based in Arlington, Virginia, The Mills Corporation, --
http://www.themills.com/-- is a developer, owner and manager of a  
diversified global portfolio of retail destinations including
regional shopping malls, market dominant retail and entertainment
centers, and international retail and leisure destinations.  It
currently owns 42 properties in the U.S., Canada and Europe,
totaling 51 million square feet.  In addition, The Mills has
various projects in development, redevelopment or under
construction around the world.  Its portfolio of real estate
properties generated more than $8.7 billion in retail sales in
2004.  The Mills is traded on the New York Stock Exchange under
the ticker: MLS.


MILLS CORPORATION: Discloses Strategic Plan to Improve Operations
-----------------------------------------------------------------
The Mills Corporation (NYSE: MLS) disclosed, on Jan. 6, 2006, a
strategic plan designed to focus on the Company's core operations
and development opportunities, streamline management, increase
operating efficiencies and reduce costs.  The initial steps of the
plan include:

    -- Enhanced focus on core operations; scaling back of
       predevelopment pipeline.

    -- Workforce reduction and other departures affecting 17
       officers.

    -- Establishment of a Best Practices Office to implement
       improvements in accounting and information technology;
       retained Deloitte Consulting LLP.

    -- Appointment of a new independent Board member with
       financial expertise who will serve on the Audit Committee.

    -- Appointment of a new head of asset management.

"The significant actions that we are announcing reflect our
absolute commitment to do the right thing for the Company and our
shareholders," said Larry C. Siegel, Chairman and Chief Executive
Officer of The Mills.  "We have a strong portfolio of retail
properties and development opportunities and the underlying
fundamentals of our business remain solid.  We are confident that
our renewed focus on our core operations, along with the measures
that are being taken to increase operating efficiencies and
improve our cost structure, should result in a stronger company,
better able to deliver sustained future growth and value to our
shareholders."

"We intend to enhance our focus on those projects with the
greatest potential for shareholder value creation," said Mark D.
Ettenger, President of The Mills.  "Our approach to every project
will continue to stress discipline and a careful evaluation of
risk-adjusted return, so that we can determine if the value to be
created warrants the level of capital and management attention
needed to pursue each opportunity."

Domestically, The Mills will continue to concentrate its efforts
on those development and predevelopment projects which the company
believes are most likely to enhance shareholder value, including
Meadowlands Xanadu (Bergen County, NJ); 108 North State Street
(Chicago, IL); and Potomac Town Center (Woodbridge, VA) and the
redevelopment projects at Del Amo Fashion Center (Los Angeles,
CA); The Shops at Riverside (Bergen County, NJ); Stoneridge (San
Francisco, CA) and other selected properties in the company's
portfolio.  Accordingly, ten predevelopment projects will be
written off, including six domestic projects.

Internationally, The Mills will focus on Europe and Canada, both
of which have been historically successful geographic regions for
the Company.  Within Europe, the Company will concentrate on the
redevelopment of St. Enoch, the development of Mercati Generali in
Rome and other select projects.

The fourth quarter restructuring charge related to the projects
being written off totals approximately $71 million.  The company
intends to explore opportunities to recover on its investment in
certain of its domestic projects.

                     Workforce Reduction

As a result of a reduction in force previously disclosed in the
Form 8-K filed on Jan. 4, 2006, combined with expected retirements
and other management departures, a total of 17 officers have left
or will leave the company.  The company currently estimates that
its workforce reduction plan and other termination charges will
result in a one-time charge in the fourth quarter of 2005 of
approximately $5 million, consisting of severance and termination
costs, all of which has been or will be paid in cash.

The company is in the process of determining the impact of the
payroll and benefit cost savings resulting from these management
changes on future earnings and Funds From Operations.  The 2005
compensation expense related to the departing officers totals
approximately $8 million, which does not include other payroll-
related expenses such as benefits.  The company noted that it is
in the process of developing its guidance for 2006 and expects to
provide further details on the expected impact of the management
changes and other restructuring items when it provides its
guidance on its 2005 year end conference call.

                            New Office

The Mills also announced that it has established a Best Practices
Office, reporting to Mr. Ettenger, to implement improvements in
the company's accounting and information technology departments.
In connection with this, Deloitte Consulting LLP has been retained
to help implement these changes, many of which are already
underway.  Deloitte Consulting LLP also will be assisting with the
completion of the Company's year end close process.

                       Material Weakness

The company also will continue to implement process improvements
to address the weaknesses in its internal controls over financial
reporting identified in its Form 10-Q for the third quarter of
2005 and the anticipated material weakness in its internal control
over financial reporting related to the restatement of its
financial statements described below.  The company incurred costs
of approximately $1 million in consulting fees associated with the
creation of the Best Practices Office.

                    Restructuring Charges

In aggregate, the Company expects to incur one-time restructuring
charges in the fourth quarter of 2005 of approximately $77 million
comprised of approximately $71 million in project write-offs,
approximately $5 million of severance costs and approximately $1
million in consulting fees associated with the creation of the
Best Practices Office.

              Enhanced Supplemental Disclosures

The Mills also announced that beginning with its fourth quarter
2005 results, the company will revise the format of its quarterly
supplemental financial package to include additional disclosures
to further investors' understanding of the Company's business and
allow investors to evaluate The Mills' results more effectively.
The company's construction in progress schedule will be enhanced
through the inclusion of costs incurred and The Mills' capital
contribution for every project with a balance of more than $3
million of CIP.  The enhanced supplemental disclosure will also
include a quarterly proportionate share FFO statement for the
current quarter and all prior quarters in 2005.  Additional items
that will be added to the supplemental disclosure include The
Mills' share of Net Operating Income from both consolidated and
unconsolidated joint ventures.

Based in Arlington, Virginia, The Mills Corporation, --
http://www.themills.com/-- is a developer, owner and manager of a  
diversified global portfolio of retail destinations including
regional shopping malls, market dominant retail and entertainment
centers, and international retail and leisure destinations.  It
currently owns 42 properties in the U.S., Canada and Europe,
totaling 51 million square feet.  In addition, The Mills has
various projects in development, redevelopment or under
construction around the world.  Its portfolio of real estate
properties generated more than $8.7 billion in retail sales in
2004.  The Mills is traded on the New York Stock Exchange under
the ticker: MLS.


MILLS CORPORATION: Appoints Edward Civera as Independent Director
-----------------------------------------------------------------
On Dec. 30, 2005, The Mills Corporation appointed Edward S. Civera
as a new independent member of the Company's Board of Directors.  
Mr. Civera will serve as a member of the Audit Committee.  Mr.
Civera spent 25 years with Coopers & Lybrand (now
PricewaterhouseCoopers LLP), the last 15 years as both a partner
and managing partner.  Mr. Civera is currently the Chairman of the
Board of HealthExtras, Inc., and is also a board member of MedStar
Health, a non-profit healthcare organization. Mr. Civera is also a
member of the board of MCG Capital, a public regulated investment
company. Previously, Mr. Civera was the president and co-chief
executive officer of United Payor & United Providers, Inc.

"We are pleased to welcome Mr. Civera to our Board," said Mr.
Siegel.  "With his career as a public company executive, combined
with his experience in finance and accounting, Ed will provide
significant insight to The Mills as we work to enhance
transparency and discipline throughout the organization."
The Company also announced that Scott Ball has been appointed as
the new head of the Company's asset management division.  Mr. Ball
joined The Mills in March 2005, having spent 19 years at the Rouse
Company.  Mr. Ball will work closely with Mr. Siegel and Mr.
Ettenger to improve core performance and drive operating
efficiencies at The Mills.

Based in Arlington, Virginia, The Mills Corporation, --
http://www.themills.com/-- is a developer, owner and manager of a  
diversified global portfolio of retail destinations including
regional shopping malls, market dominant retail and entertainment
centers, and international retail and leisure destinations.  It
currently owns 42 properties in the U.S., Canada and Europe,
totaling 51 million square feet.  In addition, The Mills has
various projects in development, redevelopment or under
construction around the world.  Its portfolio of real estate
properties generated more than $8.7 billion in retail sales in
2004.  The Mills is traded on the New York Stock Exchange under
the ticker: MLS.

                        *     *     *

                    Line of Credit Default

As a result of restating its audited financial results from 2000
through 2004 and its unaudited quarterly results for 2005, the
company is in default of certain provisions of its line of credit
and certain project-related loans.  The company has commenced its
efforts to obtain a waiver of the default and certain consents
from its bank group and other lenders.  To provide short-term
liquidity, the company has secured a $150 million term loan from
JP Morgan.

The adjustments to the Company's accounting practices have been
discussed with its independent auditor, Ernst & Young LLP.  The
Company will include the restated results for the fiscal years
ended December 31, 2002, 2003 and 2004 in an amended 2004 Annual
Report on Form 10-K and for each quarterly period for 2005 in
amended Form 10-Qs.  In the interim, investors should no longer
rely on the 2002, 2003 and 2004 financial statements and the
associated auditor's report currently on file with the SEC in the
Company's 2004 Form 10-K or on 2005 Form 10-Qs currently on file
with the SEC.

             Material Weakness in Internal Controls

The company is aware that the occurrence of a restatement of
previously issued financial statements to correct errors is a
strong indicator that material weaknesses in internal controls
exist.  At this time, the company expects to report a material
weakness in its internal control over financial reporting in its
2005 Form 10-K.


MIRANT CORP: Asks Court to Approve Russlyn Hanson-Sexton Agreement
------------------------------------------------------------------
Mirant Mid-Atlantic, LLC, a Mirant Corporation debtor-affiliate,
operates an electric generation facility located in Prince
George's County in Maryland, commonly known as "Chalk Point."

Michelle C. Campbell, Esq., at White & Case LLP, in Miami,
Florida, relates that Russlyn Hanson-Sexton was employed under a
contract at Mirant Chalk Point from July 2000 to November 2002.
At all times, Ms. Hanson-Sexton was an employee of Richard Lawson
Excavating.

On March 19, 2004, Ms. Hanson-Sexton commenced a lawsuit in the
United States District Court for the District of Maryland,
Southern Division, against MIRMA seeking monetary damages for
alleged injuries and damages arising during the period of her
employment at Chalk Point.  She alleged discrimination based on
sex, hostile work environment, and retaliation, and seeks
$500,000 in damages for lost future wages and $1,000,000 in
compensatory damages and certain legal costs.

The Maryland District Court stayed the Lawsuit pending a decision
by the Bankruptcy Court regarding whether the Lawsuit should
proceed before the Maryland District Court.  MIRMA denies any
liability with respect to the Lawsuit.

On August 10, 2004, Ms. Hanson-Sexton filed two proofs of claim
based on the Complaint:

    -- Claim No. 7796 for $2,000,000 against Mirant Corp.; and
    -- Claim No. 7797 for $2,000,0000 against MIRMA.

Subsequently, the Debtors reached a settlement agreement with Ms.
Hanson-Sexton.  The principal terms of the Agreement provide that
Ms. Hanson-Sexton will:

    a. have an allowed unsecured claim for $60,000 against MIRMA;

    b. release MIRMA from all claims in relation to the Complaint;

    c. cooperate in the dismissal of the Lawsuit;

    d. pay any taxes, levies and assessments received by her
       relating to the Settlement Agreement; and

    e. waive any right to future employment with the Company.

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.  
(Mirant Bankruptcy News, Issue No. 90 Bankruptcy Creditors'
Service, Inc., 215/945-7000)


MIRANT CORP: California DWR Sells Unsecured Claims for $189.4 Mil.
------------------------------------------------------------------
The California Department of Water Resources reported that
California parties have sold their unsecured claims against Mirant
Americas Energy Marketing for $189.4 million.  The claims were the
result of a comprehensive $750 million settlement for the
company's alleged misconduct during the 2000-2001 energy crisis.

The sale will provide electricity ratepayers with the full value
of the energy settlement plus interest.  At the time the
settlement was reached, the unsecured claims were subject to a
discount of at least 50 percent through Mirant's bankruptcy
proceedings.

As part of the overall settlement, which was approved by the
Mirant bankruptcy court and the Federal Energy Regulatory
Commission in April 2005, DWR and the state's three Investor-
Owned Utilities (IOUs) were given unsecured claims totaling
$177.25 million. Of that total, DWR received unsecured claims
totaling $89.75 million while the IOUs -- Pacific Gas & Electric,
Southern California Edison and San Diego Gas & Electric --
received a combined unsecured claim for $87.5 million.

The sale of the claims, which was brokered by Credit Suisse First
Boston L.L.C., comes on the heels of another multi-million dollar
savings for ratepayers secured by the Governor Schwarzenegger
Administration with other state and private parties.  In December,
the state saved ratepayers nearly $145 million by refinancing a
portion of its power supply revenue bonds.  In total, Gov.
Schwarzenegger has guided successful energy settlements totaling
more than $3.2 billion on behalf of electricity ratepayers since
2004.

As in prior settlements, DWR will return its portion of the
settlement to California ratepayers by reducing its next revenue
requirement determination, which is submitted annually to the
California Public Utilities Commission.  The revenue requirement
recovers DWR's cost for power it delivers to customers of the
IOUs.

For more information on the Mirant settlement, the recent
refinancing or other energy settlements, visit DWR's energy Web
site at http://www.cers.water.ca.gov/

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.  
(Mirant Bankruptcy News, Issue No. 90 Bankruptcy Creditors'
Service, Inc., 215/945-7000)


MIRANT: Gets Court Okay to Implement Equity Distribution Protocol
-----------------------------------------------------------------
Mirant Corporation and its debtor-affiliates Plan of
Reorganization provides for a number of distribution provisions
relating to making payments to holders of public securities and
bank debts.  Specifically, the Plan provides certain mechanics for
making distributions under the Plan on account of:

    * Public Debt Securities -- MAG Short-term Note Claims, MAG
      Long-term Note Claims and Mirant Note Claims; and

    * Allowed Equity Interests.

Michelle C. Campbell, Esq., at White & Case LLP, in Miami,
Florida, believes that it is critical for Mellon Investor
Services, LLC, as transfer agent; the Old Indenture Trustees; the
Depository Trust Company; and certain Facility Agents to
implement and maintain accurate records of various public
securities and bank debt holders as of the Effective Date to
effectuate distributions.

Ms. Campbell adds that to facilitate distributions under the
Plan, which is scheduled to occur on January 3:

     (a) the Transfer Agents, Old Indenture Trustees and DTC must
         close their transfer ledgers and related registers as of
         the Effective Date; and

     (b) the Debtors must provide notification to the Transfer
         Agents, the Old Indenture Trustees and DTC of the need to
         close the transfer records and maintain accurate and
         complete records of ownership as of the Effective Date.

However, nothing in the Plan specifically requires the Transfer
Agent, the Old Indenture Trustees, the DTC, or the Facility
Agents to implement and maintain those records, Ms. Campbell
informs Judge Lynn.

Thus, the Debtors ask the U.S. Bankruptcy Court for the Northern
District of Texas to approve uniform procedures necessary to
facilitate Plan Distributions to public securities and bank debt
holders:

A. Mellon Investor and the Old Indenture Trustees, or their
    agents, will:

    a. close the transfer ledgers for the Public Debt Securities
       -- the MAG Short-term Notes, the Mirant Notes, the MAG
       Long-term notes and the Subordinated Notes -- and the
       Allowed Equity Interests as of the close of business on
       January 3; and

    b. provide accurate and complete lists of all record holders
       of Public Debt Securities and Allowed Equity Interests as
       of the close of business on January 3 to:

       * New Mirant,

       * the Plan Trustees,

       * the official creditors committees of Mirant Corporation
         and Mirant Americas Generation LLC; and

       * the Official Committee of Equity Holders.

      Except with respect to the MAG Long-term Notes, Mellon
      Service and the Old Indenture Trustees will not recognize
      any transfers after the Effective Date in the Public Debt
      Securities.

B. DTC will close the registers it maintained for the Public
    Securities as of the close of business on January 3.  Except
    for the MAG Long-term Notes, the DTC will not recognize any
    transfers after the Effective Date in the Public Securities.
    The DTC will establish an "escrow cusip" with respect to each
    of the cusips relating to the Public Debt Securities and
    Allowed Equity Interests.

C. As of the close of business day on January 3, the Facility
    Agents will:

    a. close the transfer ledgers for the:

       * MAG Revolvers;
       * Mirant "C" Facility;
       * Mirant 364-Day Revolver;
       * Mirant 4-Year Revolver;
       * Commodity Prepay Facility; and
       * the Equipment Warehouse Facility; and

    b. provide accurate and complete lists of all records holders
       of the Mirant Facilities to New Mirant, the Plan Trustees,
       the Mirant Committee, the MAG Committee and the Equity
       Committee.

D. Plan Distributions on account of Public Debt Securities will
    be made by New Mirant to the Old Indenture Trustees for the
    Public Debt Securities; provided, however, that with respect
    to distributions of New Mirant Common Stock, New Mirant and
    the Old Indenture Trustees will coordinate with the
    stock transfer agent to effect the distributions.

    The Old Indenture Trustees, the stock transfer agent, or their
    agents, will make the Plan Distributions in accordance with
    the Old Indentures to the DTC.  DTC will make the Plan
    Distributions directly to the registered holders of the Public
    Debt Securities for the benefit of the beneficial holders on
    the DTC Register.

E. Plan Distributions on account of the Allowed Equity Interests
    will be made by New Mirant directly to the registered holders
    of the Allowed Equity Interests on January 3 except for those
    holders of record of Allowed Equity Interests who are listed
    on the DTC Register.  With respect to those holders of record
    of Allowed Equity Interests who are listed on the DTC
    Register, Plan Distributions will be made by New Mirant to the
    DTC, which will make the Plan Distributions directly to the
    holders of record of Allowed Equity Interests on the DTC
    Register.

F. Plan Distributions on account of the Mirant Facilities will
    be made by New Mirant to their Facility Agents; provided,
    however, that the Disbursing Agent and the Facility Agents
    will coordinate with the stock transfer agent to effect the
    distributions.  The Facility Agents for the Mirant Facilities,
    or their agents and the stock transfer agent, will make the
    Plan Distributions in accordance with the relevant credit
    facility agreements to the registered holders of the Credit
    Facilities.

G. Except with respect to the MAG Long-term Notes, the National
    Association of Securities Dealers, Inc., the Nasdaq National
    Market and Nasdaq's Market Integrity Department will ensure
    that all trading in Public Debt Securities and Allowed Equity
    Interests is suspended on the OTC Bulletin Board/Pink Sheets
    and the PORTAL Market, as of the close of business on
    January 3 and will not permit any trading after the Effective
    Date in the Allowed Equity Interests or the Public Debt
    Securities.  Except with respect to the MAG Long-term Notes,
    NASD, Nasdaq and Market Integrity will remove the trading
    symbols and eliminate market makers' quotations on the Allowed
    Equity Interests and the Public Debt Securities as of the
    close of business on the Effective Date.

E. New Mirant will ensure the proper distribution of the
    Designated Net Litigation Distributions, if any, to each
    holder of:

    a. an Allowed Mirant Debtor Class 3-Unsecured Claim;

    b. a Contested Mirant Debtor Class 3-Unsecured Claim that
       subsequently becomes Allowed; and

    c. Allowed Mirant Debtor Class 5-Equity Interests.

                           Court Order

Judge Michael D. Lynn grants the Debtors' request to implement the
procedures to effectuate the Plan Distributions to holders of
public securities and bank debt.

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.  
(Mirant Bankruptcy News, Issue No. 89 Bankruptcy Creditors'
Service, Inc., 215/945-7000)


NDCHEALTH CORPORATION: Per-Se Completes Acquisition of Business
---------------------------------------------------------------
Per-Se Technologies, Inc. (Nasdaq: PSTI) reported the successful
completion of its acquisition of NDCHealth Corporation (NYSE:
NDC).

NDCHealth stockholders will receive $14.05 in cash and 0.2253 of
Per-Se common stock for each share of NDCHealth.  The amount of
Per-Se common stock is based on the weighted average volume sales
price of Per-Se common stock (as traded on the Nasdaq National
Market) for the 20 consecutive full trading days ending on the
third trading day prior to, but not including, the closing date of
the merger (Jan. 6, 2006).  The weighted average volume sales
price of Per-Se common stock for this period was $24.188.  The
trading of NDCHealth common stock will be suspended before the
opening of the market on Jan. 9, 2006.

As approved by Per-Se stockholders on Jan. 5, 2006, the company
issued $200 million, or approximately 8.3 million shares, of
common stock in connection with the acquisition.  The company also
secured financing in the form of a new senior credit facility
consisting of:

    * a $435 million Term Loan B and
    * a $50 million revolving credit facility.

The Term Loan B bears interest at a rate of LIBOR plus 2.25% and
matures in seven years.  The revolving credit facility has an
interest rate that varies between LIBOR plus 1.50% and LIBOR plus
2.50%, based on performance, and matures in five years.  The
company has incurred no borrowings under the revolving credit
facility.  All outstanding debt of NDCHealth was retired in
connection with the closing of the transaction.

Per-Se expects to provide financial guidance on the combined
company when it releases fourth quarter 2005 earnings in early
March 2006.  Per-Se continues to expect that its acquisition of
NDCHealth will be accretive to diluted earnings per share and
significantly accretive to cash flow per share in 2006.

As part of the transaction, Wolters Kluwer, based in Amsterdam,
the Netherlands, purchased the pharmaceutical information
management business from NDCHealth.

                 About Per-Se Technologies

Per-Se Technologies (Nasdaq: PSTI) - http://www.per-se.com/-- is  
the leader in Connective Healthcare.  Connective Healthcare
solutions from Per-Se enable healthcare providers to achieve their
income potential by creating an environment that streamlines and
simplifies the complex administrative burden of providing
healthcare.  Per-Se's Connective Healthcare solutions help reduce
administrative expenses, increase revenue and accelerate the
movement of funds to benefit providers, payers and patients.

                About NDCHealth Corporation

Headquartered at Atlanta, Ga., NDCHealth Corporation --
http://www.ndchealth.com/-- is a leading information solutions
company serving all sectors of healthcare.  Its network solutions
have long been among the nation's leading, automating the exchange
of information among pharmacies, payers, hospitals and physicians.
Its systems and information management solutions help improve
operational efficiencies and business decision making for
providers, retail pharmacy and pharmaceutical manufacturers.

                        *     *     *

As reported in the Troubled Company Reporter on Sept. 1, 2005,
Moody's Investors Service has placed the ratings of Per Se
Technologies, Inc. and NDCHealth Corporation on review for
possible downgrade, following Per Se's announcement of August 29th
to acquire NDCHealth's physician, hospital, and retail pharmacy
businesses for $665 million.  The transaction is expected to be
funded with a combination of cash and equity and is likely to
increase Per-Se's debt leverage substantially.  The acquisition is
expected to close by early calendar 2006 and is subject to
shareholder and regulatory approvals.

Per-Se's total acquisition consideration of $665 million includes
refinancing NDCHealth's outstanding $270 million debt at closing.
As part of the transaction, Wolters Kluwer will purchase the
pharmaceutical information management business from NDCHealth for
$382 million in cash.  NDCHealth's review will focus on the
refinancing plan for NDCHealth's $270 million outstanding debt.
To the degree all of this debt is refinanced as anticipated by
Per-Se, the outstanding ratings for NDCHealth will likely be
withdrawn.

Per Se's review will focus on:

   1) the prospects for revenue and cost synergies associated with
      the acquisition;

   2) levels of debt and equity financing chosen to consummate the
      transaction;

   3) anticipated integration costs associated with the
      acquisition;

   4) prospects to reduce NDCHealth's costs for accounting
      controls, which have elevated over the past twelve months as
      NDCHealth has restated revenues within its physician
      business;  and

   5) anticipated revenues and costs associated with NDCHealth's
      information management business, anticipated to be sold to
      Wolters Kluwer.

Per Se ratings on review for possible downgrade:

   * Corporate Family rating of B1

   * $75 million secured revolving credit facility maturing
     June 2007 rated B1

NDC ratings on review for possible downgrade:

   * Corporate Family rating of B1

   * $125 million secured term loan due 2008 rated B1

   * $100 million secured revolving credit facility due 2008
     rated B1

   * $200 million senior subordinated notes due 2012 rated B3.


NDCHEALTH CORP: Wolters Kluwer Completes Purchase of IM Business
----------------------------------------------------------------
Wolters Kluwer completed the acquisition of the NDCHealth
Information Management business.  The Information Management (IM)
business is now a part of Wolters Kluwer Health's Pharma Solutions
unit and all IM products are adopting the brand name Source(TM)
reflecting the unique business intelligence strength these tools
offer biotech and pharmaceutical manufacturers.

Wolters Kluwer's intent to acquire NDCHealth Information
Management, a leading provider of pharmaceutical data and business
intelligence products, was announced on August 29, 2005, with the
acquisition completed today after the Per-Se Technologies and
NDCHealth shareholders agreed to the acquisition on January 5.
Anti-trust authorities had earlier approved the acquisition.

Wolters Kluwer CEO and Chairman of the Executive Board Nancy
McKinstry said, "This acquisition fully supports our strategic
focus for the Health division.  By incorporating NDCHealth
Information Management into our existing business, Wolters Kluwer
can grow significantly as a provider of solutions and tools that
biotech, pharmaceutical and medical device customers need to make
informed decisions about their critical marketing and product
development strategies."

"We are committed to serving the current needs of IM's customers
while investing in the analytical data solutions they'll need
moving forward," said Jeff McCaulley, CEO of Wolters Kluwer
Health.  "Adding the newly-named Source product portfolio to our
intelligence products in drug discovery and development provides
the foundation for a powerful suite of value-added content tools
that will help our customers be more successful in their markets."

NDCHealth Information Management's 384 employees, based primarily
in Phoenix, Arizona, are now a part of Wolters Kluwer Health's
Pharma Solutions unit.

                  Terms of Acquisition

The acquisition took place at the agreed-upon purchase price of
$382 million, paid in cash.  This represents approximately a
multiple of 2.3 times the IM group's anticipated 2005 revenues,
and 10.6 times its adjusted EBITDA1 .  The acquisition is expected
to be accretive to ordinary earnings per share in 2006 by
approximately 3 euro cents.

Wolters Kluwer acquired NDCHealth Information Management from
NDCHealth Corporation.  The remainder of NDCHealth was secured by
Per-Se Technologies.

                About Wolters Kluwer Health

Wolters Kluwer Health (Conshohocken, Pa.) is a leading provider of
information for professionals and students in medicine, nursing,
allied health, pharmacy and the pharmaceutical industry. Major
brands include Lippincott Williams & Wilkins and Facts &
Comparisons for medical and drug reference tools and textbooks;
Ovid Technologies, Medi-Span and SKOLAR for electronic
information; and Adis International and Source for pharmaceutical
information.

Wolters Kluwer is a leading multinational publisher and
information services company. The Company's core markets are
spread across the health, corporate services, financial services,
tax, accounting, law, regulation, and education sectors. Wolters
Kluwer has annual revenues (2004) of EUR 3.3 billion, employs
approximately 18,400 people worldwide and maintains operations
across Europe, North America and Asia Pacific. Wolters Kluwer is
headquartered in Amsterdam, the Netherlands. Its depositary
receipts of shares are quoted on the Euronext Amsterdam (WKL) and
are included in the AEX and Euronext 100 indices. For more
information, see www.wolterskluwer.com.

                About NDCHealth Corporation

Headquartered at Atlanta, Ga., NDCHealth Corporation --
http://www.ndchealth.com/-- is a leading information solutions
company serving all sectors of healthcare.  Its network solutions
have long been among the nation's leading, automating the exchange
of information among pharmacies, payers, hospitals and physicians.
Its systems and information management solutions help improve
operational efficiencies and business decision making for
providers, retail pharmacy and pharmaceutical manufacturers.

                        *     *     *

As reported in the Troubled Company Reporter on Sept. 1, 2005,
Moody's Investors Service has placed the ratings of Per Se
Technologies, Inc. and NDCHealth Corporation on review for
possible downgrade, following Per Se's announcement of August 29th
to acquire NDCHealth's physician, hospital, and retail pharmacy
businesses for $665 million.  The transaction is expected to be
funded with a combination of cash and equity and is likely to
increase Per-Se's debt leverage substantially.  The acquisition is
expected to close by early calendar 2006 and is subject to
shareholder and regulatory approvals.

Per-Se's total acquisition consideration of $665 million includes
refinancing NDCHealth's outstanding $270 million debt at closing.
As part of the transaction, Wolters Kluwer will purchase the
pharmaceutical information management business from NDCHealth for
$382 million in cash.  NDCHealth's review will focus on the
refinancing plan for NDCHealth's $270 million outstanding debt.
To the degree all of this debt is refinanced as anticipated by
Per-Se, the outstanding ratings for NDCHealth will likely be
withdrawn.

Per Se's review will focus on:

   1) the prospects for revenue and cost synergies associated with
      the acquisition;

   2) levels of debt and equity financing chosen to consummate the
      transaction;

   3) anticipated integration costs associated with the
      acquisition;

   4) prospects to reduce NDCHealth's costs for accounting
      controls, which have elevated over the past twelve months as
      NDCHealth has restated revenues within its physician
      business;  and

   5) anticipated revenues and costs associated with NDCHealth's
      information management business, anticipated to be sold to
      Wolters Kluwer.

Per Se ratings on review for possible downgrade:

   * Corporate Family rating of B1

   * $75 million secured revolving credit facility maturing
     June 2007 rated B1

NDC ratings on review for possible downgrade:

   * Corporate Family rating of B1

   * $125 million secured term loan due 2008 rated B1

   * $100 million secured revolving credit facility due 2008
     rated B1

   * $200 million senior subordinated notes due 2012 rated B3.


NEXMED INC: Receives Nasdaq Delisting Warning Letter
----------------------------------------------------
NexMed, Inc. (NASDAQ: NEXM) received a notice from Nasdaq
indicating that it did not comply with the minimum $50 million
market value of listed securities requirement for continued
listing set forth in Marketplace Rule 4450(b)(1)(A).  
Additionally, the Company does not comply with the alternative
Marketplace Rule 4450(b)(1)(B) which requires total assets and
total revenue of $50 million each for the most recently completed
fiscal year or two of the last three most recently completed
fiscal years.

Nasdaq will provide written notice that the Company's common stock
will be delisted from the Nasdaq National Market at the opening of
business on Jan. 31, 2006 unless the Company's market value of
listed securities is $50 million or more for a minimum of 10
consecutive business days during the 30-day period ended Jan. 30,
2006 or if the company's total stockholder equity is above $10
million before January 30, 2006 in accordance with Marketplace
Rule 4450 (a)(3).  Should the Company receive such notice, it
plans to file a request for a hearing with the Nasdaq's Listing
Qualifications Panel to appeal the Nasdaq determination.  The
company has been informed that the appeal process may take up to 4
weeks during which the Company's stock will remain listed on the
Nasdaq National Market.

As of Dec. 29, 2005 the market value of listed securities based on
current shares outstanding of 54,530,382 was $41,443,090.  In
order to comply with the $50 million market value criteria, the
Company's share price would have to be $0.92 or greater for 10
consecutive days before January 30, 2006.

There can be no assurance that the Nasdaq Listing Qualifications
Panel will decide to allow the Company to remain listed or that
any Company actions to attempt to comply with alternative listing
criteria will prevent the delisting of its common stock from the
Nasdaq National Market.

NexMed, an innovative drug developer, offers large pharmaceutical
companies the opportunity to save considerably on R&D costs,
develop new patient-friendly transdermal products, and extend
patent lifespans and brand equity, through participation in early
stage licensing and development partnerships.  NexMed currently
has a host of medicines in development, such as treatments for
nail fungus, sexual disorders and more, all based on its
proprietary NexACT drug delivery technology.  Current partners
include Novartis International Pharmaceutical for a topical anti-
fungal nail treatment, and Schering AG for Alprox-TD, a topical
treatment for erectile dysfunction.

                         *     *     *

                      Going Concern Doubt

PricewaterhouseCoopers LLP expressed substantial doubt about
NexMed's ability to continue as a going concern after it audited
the Company's financial statements for the year ended Dec. 31,
2004 2003 and 2002.  The auditing firm pointed to the Company's
recurring losses, negative cash flows from operations and limited
capital resources.


NORTHWEST AIRLINES: Committee Hires FTI as Financial Advisors
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized the Official Committee of Unsecured Creditors of
Northwest Airlines Corp. and its debtor-affiliates to retain FTI
Consulting, Inc., as its financial advisors, effective as of
Oct. 6, 2005.

R. Douglas Greco, Esq., chairperson of the Committee, told the
Court that FTI's services are necessary to enable the Committee
to assess and monitor the efforts of the Debtors and their
professional advisors to maximize the value of their estates and
reorganize successfully.

As advisor to the Committee, FTI will:

   (a) assist the Committee in the review of financial related
       disclosures required by the Court, including the
       Schedules of Assets and Liabilities, the Statement of
       Financial Affairs and Monthly Operating Reports;

   (b) review the Debtors' short-term cash management procedures;

   (c) review the Debtors' employee benefit programs, including
       key employee retention, incentive, pension and other
       post-retirement benefit plans;

   (d) assist and advise the Committee with respect to the
       Debtors' identification of core business assets and the
       disposition of assets or liquidation of unprofitable
       operations;

   (e) review the Debtors' performance of cost/benefit
       evaluations with respect to the affirmation or rejection
       of various executory contracts and leases;

   (f) assist in the evaluation of the Debtors' operations
       and identification of areas of potential cost savings,
       including overhead and operating expense reductions and
       efficiency improvements;

   (g) review financial information distributed by the Debtors,
       including, but not limited to, cash flow projections and
       budgets, cash receipts and disbursement analyses, analyses
       of various asset and liability accounts, and analyses of
       proposed transactions for which Court approval is sought;

   (h) assist the Committee with information and analyses, as it
       relates to the other services, required pursuant to any
       DIP financing including, but not limited to, preparation
       for hearings regarding the use of cash collateral and any
       DIP financing;

   (i) attend meetings and assist in discussions with the
       Debtors, potential investors, banks, other secured
       lenders, the Committee and any other official committees
       organized in the Debtors' Chapter 11 proceedings, the U.S.
       Trustee, other parties-in-interest and professionals hired
       by the Committee, as requested;

   (j) assist in the review and preparation of information
       and analysis, as it relates to the other services,
       necessary for the confirmation of a plan in the Debtors'
       Chapter 11 proceedings;

   (k) assist in the evaluation and analysis of avoidance
       actions, including fraudulent conveyances and preferential
       transfers; and

   (1) assist in various tax matters including, but not limited
       to, the impact of the Debtors' claims and equity trading
       and tax issues related to a plan of reorganization;

   (m) provide litigation advisory services with respect to
       accounting and tax matters, along with expert witness
       testimony on case related issues as required by the
       Committee; and

   (n) render other general business consulting or other
       assistance as the Committee or its counsel may deem
       necessary that are consistent with the role of a financial
       advisor and not duplicative of services provided by other
       professionals in this proceeding.

FTI will be paid $275,000 per month, plus reimbursement of actual
and necessary expenses it incurs.

FTI reserves the right to request a success or completion fee,
which will be subject to approval by both the Committee and the
Court.

Samuel Star, senior managing director at FTI, disclosed that the
firm was retained in 2004 by Boise Schiller & Flexner, LLP, on
behalf of Northwest Airlines, Inc., in an antitrust matter before
the United States District Court for the District of Minnesota.
A nominal amount of work was performed in 2004, which was not,
and will not be, billed.  FTI will not perform any work in
connection with this matter during the Debtors' Chapter 11
proceedings, Mr. Star assures the Court.

FTI has also been involved with other litigation matters in the
airline industry.

In addition, Anna Schaefer who will become the Debtors' vice
president of finance and chief accounting officer, effective
Dec. 1, 2005, is the sister of one of FTI's non-management
employees within our administrative support practice.  That
employee, however, has no access to client information and in no
way is involved with the Debtors' Chapter 11 proceedings or the
FTI engagement team serving the Committee.

George P. Stamas, Esq., a partner at Kirkland & Ellis, is
currently a member of FTI's Board of Directors.  Mr. Stamas is
not involved with the Kirkland & Ellis team in the Debtors'
Chapter 11 proceedings, nor does Mr. Stamas have any professional
involvement in this matter in any capacity.

Mr. Star told the Court that FTI is not a "Creditor" with
respect to fees and expenses of any of the Debtors within the
meaning of Section 101(10) of the Bankruptcy Code.

Northwest Airlines Corporation -- http://www.nwa.com/-- is
the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $14.4 billion in total assets and $17.9
billion in total debts.  (Northwest Airlines Bankruptcy News,
Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000)


NORTHWEST AIRLINES: Court Extends Removal Period to June 12
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended Northwest Airlines Corp. and its debtor-affiliates' time
to file notices of removal to numerous actions currently
pending in various states.  The State Court Actions involve a
wide variety of claims, including, but not limited to, breach of
contract and personal injury claims.

Judge Gropper extended the period within which the Debtors, with
the exception of NWA Aircraft Finance, Inc., may seek to remove
civil actions pending on the Petition Date to and including the
earlier to occur of:

   (a) June 12, 2006; or

   (b) 30 days after entry of an order terminating the automatic
       stay with respect to the particular action sought to be
       removed.

The period within which Aircraft Finance may seek to remove civil
actions pending as of September 30, 2005, is extended to and
including the earlier to occur of:

   (a) June 28, 2006; or

   (b) 30 days after entry of an order terminating the automatic
       stay with respect to the particular action sought to be
       removed.

Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, explained that, to determine whether to remove any of
the State Court Actions, the Debtors must conduct a comprehensive
analysis of their pending civil actions and evaluate various
factors under Section 1452 of the Judicial Procedures Code, and
determine whether the outcome of a State Court Action may alter
their rights and liabilities and affect the ultimate distribution
to their creditors.

At present, the Debtors have not yet had an opportunity to
evaluate these factors and determine which State Court Actions
they will remove, Mr. Petrick related.  Thus, the Debtors will
not have sufficient time to properly and accurately analyze
each of the State Court Actions and make the appropriate
determinations concerning removal of specific actions within
the original time period prescribed by Rule 9027 of the Federal
Rules of Bankruptcy Procedure.

Mr. Petrick asserted that the extension of the Removal Period will
afford the Debtors a sufficient opportunity to make informed
decisions concerning removal of each State Court Action and will
assure that they do not forfeit their valuable removal rights.

The rights of the Debtors' adversaries will not be prejudiced by
the extension, Mr. Petrick contended.  In that regard, Section
362(a) of the Bankruptcy Code automatically stays prosecution of
the State Court Actions against Debtors.

Mr. Petrick said that if the Debtors are ultimately successful in
removing any of the State Court Actions to federal court, any
party to the action may seek to have it remanded to the state
court pursuant to Section 1452(b).  Therefore, the extension will
not prejudice the rights of other parties in the State Court
Actions.

Northwest Airlines Corporation -- http://www.nwa.com/-- is the
world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-
17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $14.4 billion in total assets and $17.9 billion in total
debts.  (Northwest Airlines Bankruptcy News, Issue No. 12;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


NORTHWEST AIRLINES: Lazard Approved as Panel's Financial Advisors
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
allowed the Official Committee of Unsecured Creditors of Northwest
Airlines Corp. and its debtor-affiliates, to retain Lazard Freres
& Co. LLC as its financial advisors, nunc pro tunc to Oct. 6,
2005.

R. Douglas Greco, Esq., chairperson of the Creditors Committee,
informed the Court that since October 6, the Firm has:

   (i) reviewed the Debtors' operating and financial information
       and conducted general due diligence on the Debtors'
       business and case matters;

  (ii) met with the Debtors' management, advisors and other
       professionals involved in the cases;

(iii) participated in meetings with the Committee; and

  (iv) responded to inquiries from creditors.

Lazard is an investment banking firm focused on providing
financial and investment banking advice and transaction execution
on behalf of its clients.  It is a registered broker-dealer and
investment advisor registered with the U.S. Securities and
Exchange Commission and is also a member of the National
Association of Securities Dealers.

Mr. Greco related that the Firm's professionals have been
employed as financial advisors and as investment bankers in a
number of troubled company situations.  Those who will continue
to represent the Air Transportation Stabilization Board in the
ATA Airlines, Inc., Chapter 11 cases, and Lufthansa in the United
Air Lines proceedings will not be involved in the present
engagement, Mr. Greco assured the Court.

Pursuant to an engagement letter, dated October 6, 2005, Lazard
agrees to:

   (a) review and analyze the business model, operations,
       liquidity situation, properties, assets and liabilities,
       financial condition and prospects of the Debtors;

   (b) review, analyze and report to the Creditors Committee with
       respect to the Debtors' business plan;

   (c) evaluate the Debtors' debt capacity in light of their
       projected cash flows;

   (d) review and provide an analysis of any proposed capital
       structure for the Debtors;

   (e) review and provide an analysis of any valuation of the
       Debtors or their assets;

   (f) advise and attend meetings of the Committee as well as due
       diligence meetings with the Debtors or other third parties
       as appropriate;

   (g) advise and assist the Committee in evaluating any
       potential DIP loan or other financing by the Debtors;

   (h) review, analyze and advise the Committee with respect to
       the existing debt structures of the Debtors, and
       refinancing alternatives to existing secured debt;

   (i) review, analyze and provide advice with respect to the
       Debtors' pension plans;

   (j) advise and assist the Committee in analyzing strategic
       alternatives available to the Debtors;

   (k) review and provide an analysis of all proposed
       restructuring plans proposed by any party;

   (l) review and provide an analysis of any new securities,
       other consideration or other inducements to be offered
       and issued under the Plan;

   (m) assist the Committee in negotiations with the Debtors; and

   (n) provide other financial advisory services as the Committee
       or counsel may from time to time request consistent with
       expertise.

The Committee has also retained FTI Consulting, Inc., to provide
financial advisory services.  Mr. Greco explained that in most
complex airline restructuring cases, the creditors committee has
routinely retained two firms -- the UAL Committee retained
Saybrook Restructuring Advisors and Mesirow Financial; the Delta
Air Lines Committee is seeking to retain Houlihan Lokey Howard &
Zukin and Mesirow Financial.

Mr. Greco said Lazard and FTI have developed an appropriate
allocation of responsibilities, thus substantially eliminating
any risk of duplicate work product or inconveniences to the
Debtors.  In addition, Lazard and FTI have both implemented
certain internal measures to improve coordination among
themselves, the Committee and the Debtors, like establishing a
single contact person from each firm and using a single e-mail
address for communication with all the professionals of each
firm.

Lazard will be paid a $275,000 financial advisory fee per month
until the termination of its engagement, subject to any recapture
or credit adjustment and holdback requirements

The Firm will also charge for all reasonable out-of-pocket
expenses incurred on submission of statements for those expenses.

The parties agree that all matters relating to Lazard's
entitlement, if any, to an additional "success" or "completion"
fee will be deferred until the later part of the Debtors' Chapter
11 case.

The Creditors Committee requested that the Debtors provide certain
indemnification and contribution obligations to Lazard.

Daniel Aronson, managing director at Lazard, assured the Court
that Lazard is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code.

Mr. Aronson, however, disclosed that Lazard has advised, or
transacted with, various parties-in-interest in matters unrelated
to the Debtors' Chapter 11 cases.  He added that, in 1994, a
predecessor company of Lazard participated in a public offering
of 20 million common shares of NWA Corp. as a syndicate member.
The predecessor company was allocated 300,000 shares for
offering, representing less than 2% of the offering, and received
a de minimis fee.

Moreover, as part of its regular business operations, Lazard's
asset management affiliate, Lazard Asset Management LLC, may act
as investment advisor for or trade securities, including on
behalf of creditors, equity holders or other parties-in-interest
in the Debtors' cases, and Lazard managing directors and
employees.  Some of these LAM accounts and funds may now or in
the future hold debt or equity securities of the Debtors.  Lazard
has in place compliance procedures to ensure that no confidential
or non-public information concerning the Debtors has been or will
be available to employees of LAM, Mr. Aronson assures Judge
Gropper.

Northwest Airlines Corporation -- http://www.nwa.com/-- is
the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $14.4 billion in total assets and $17.9
billion in total debts.  (Northwest Airlines Bankruptcy News,
Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000)


O'SULLIVAN IND: Files First Amended Plan & Disclosure Statement
---------------------------------------------------------------
O'Sullivan Industries, Inc., and its debtor-affiliates delivered
their First Amended Joint Plan of Reorganization and First
Amended Disclosure Statement to the U.S. Bankruptcy Court for the
Northern District of Georgia on January 3, 2006.

The Debtors report that, as of the Petition Date, they had
approximately $6,000,000 in outstanding borrowings under the
revolving credit line and approximately $14,400,000 in outstanding
letters of credit under their 2003 Senior Credit Facility with
General Electric Capital Corporation.  Proceeds from their
$35,000,000 DIP Facility with The CIT Group/Business
Credit, Inc., as agent, lender, and letter of credit issuer, and
GoldenTree Asset Management L.P. and the other financial
institutions were used to repay the borrowings and have been used
to issue back-to-back letters of credit with respect to the L/C
outstanding under the Senior Credit Facility.

Accordingly, the Debtors do not believe they will have any
outstanding obligations under the Senior Credit Facility as of the
Effective Date of the Plan, although the Debtors do not know with
any certainty when the balance of the $500,000 they deposited into
the segregated account with GE Capital to fund indemnification
obligations will be returned.

Under the DIP Facility, the interest rate on borrowings through
March 31, 2006, is, at the Debtors' option, LIBOR plus 4% or an
index rate plus 2%.  From then, the margin fluctuates based on the
Debtors' average borrowing availability under the DIP Facility.  
There is also a fee for L/C of the LIBOR margin less 0.25% and a
0.5% unused commitment fee.

The Debtors may prepay their obligations under the DIP Facility,
in whole or in part, without premium or penalty, except for the
payment of an early termination fee of 1% multiplied by the
Revolving Line of Credit Amount, in the event that the DIP
Facility is refinanced within six months of the closing date by
lenders other than the DIP Lenders.

The DIP Facility will terminate on the earlier of October 20,
2006, or the Debtors' emergence from bankruptcy.

To date, the Debtors obligations under the DIP Facility total
approximately $23,200,000, which includes approximately
$14,400,000 in outstanding L/Cs, with remaining availability of
approximately $6,800,000.

The Debtors' EBITDA decreased from $19,300,000 for Fiscal Year
2004 to $1,340,000 for Fiscal Year 2005.  The Debtors also
experienced liquidity constraints and had only about $1,300,000 of
cash on hand as of the Petition Date.

              Exit Facility & Issuance of New Notes

The Debtors are in the process of obtaining financing under an
Exit Credit Facility with Reorganized O'Sullivan Industries as
borrower.  The Debtors anticipate that the Exit Credit Facility
will be:

   -- in an aggregate principal amount equal to $40,000,000 to
      $50,000,000, consisting of an Exit Credit Facility
      Revolver, and an the Exit Credit Facility Term Loan; and

   -- sufficient in amount to provide for the distributions
      contemplated under the Plan plus availability of up to
      $15,000,000.

Various obligations under the Exit Credit Facility will be secured
by first and second priority Liens on, and security interests in,
substantially all of the Reorganized Debtors' Assets, and that
Reorganized O'Sullivan Industries' obligations under the Exit
Credit Facility will be guaranteed by O'Sullivan
Industries Holdings, Inc., O'Sullivan Industries Virginia, Inc.,
and O'Sullivan Furniture Factory Outlet, Inc.

In addition, Reorganized O'Sullivan Industries will issue the New
Notes, in the aggregate principal amount of $10,000,000.  The New
Notes will be secured by liens and security interests on all or
substantially all of the assets of the Reorganized Debtors that
are junior in priority only to the security interests granted to
the Exit Credit Facility Lenders.

The New Notes will (a) bear interest at a rate equal to 150 basis
points higher than the non-default interest rate under, and (b)
will mature six months beyond the maturity date of, the Exit
Credit Facility Term Loan.  Under certain conditions, based on the
Reorganized Debtors' operating cash flows, Reorganized
O'Sullivan Industries may, in its sole discretion, pay any
interest due under the New Notes in-kind rather than in Cash.

                        New Common Stock

On the Effective Date, Reorganized O'Sullivan Holdings will issue
10,000,000 shares of New O'Sullivan Holdings Common Stock to the
Holders of Allowed Claims in Class 2C.  As of the Effective Date,
the 10,000,000 shares of New O'Sullivan Holdings Common Stock will
collectively represent 100% of the outstanding shares of New
O'Sullivan Holdings Common Stock on a fully diluted basis.

                   Distributions Under the Plan

The Debtors provide an estimate of the Allowed amount of claims on
the Effective Date for these Classes:

      Claim Description        Estimated Claim Amount
      -----------------        ----------------------
      Administrative Claims    $5,500,000

      DIP Facility Claims      $21,800,000

      Tax Claims               $1,068,771

      Class 2A
      Unimpaired Claims        The Debtors have paid all
      (Senior Credit           outstanding Allowed Senior
      Facility Claims)         Credit Facility Claims from
                               the proceeds of the DIP
                               Facility.  The Debtors believe
                               that there will not be any
                               Allowed Senior Credit Facility
                               Claims as of the Effective
                               Date, although the Debtors do
                               not know when any balance of
                               the $500,000 deposited by them
                               into the segregated account with
                               GECC to fund indemnification
                               obligations will be returned.

      Class 2C                 $89,400,000
      Impaired Claims
      (Senior Secured
      Notes Secured Claims)

      Class 4 Claims           To date, the Debtors estimate
                               the total amount of Allowed Class
                               4 Claims to be approximately
                               $99,800,000 under the BancBoston
                               Note and the Tandy Agreements,
                               plus approximately $18,600,000 in
                               the Senior Secured Notes
                               Deficiency Claims totaling
                               approximately $118,400,000.

Under the Amended Plan, holders of Impaired Class 3 General
Unsecured Claims are entitled to a pro rata share of the
Avoidance Recoveries, if any, which will be distributed only until
the Allowed Senior Secured Notes Deficiency Claims, together with
all Senior Secured Notes Postpetition Interest, have been paid in
full.  Furthermore, the holders of Impaired
Class 3 General Unsecured Claims are entitled to vote on the
Plan.
            
To date, the Debtors estimate the total amount of Allowed Class 3
Claims to be $132,000,000 by the Effective Date of the Plan.  The
total claim amount consists of:

   (a) $102,400,000 in Senior Subordinated Notes Claims;

   (b) $11,000,000 for all other General Unsecured Claims; plus

   (c) $18,600,000 in Senior Secured Notes Deficiency Claims.

A full-text copy of the Debtors' First Amended Plan of
Reorganization is available for free at:

   http://bankrupt.com/misc/OSUL1stAmendedDisclosureStatement.pdf

A full-text copy of the Debtors' First Amended Disclosure
Statement is available for free at:

   http://bankrupt.com/misc/OSUL1stAmendedPlan.pdf

The Debtors relate that the hearing to consider confirmation of
the Plan is scheduled for February 16, 2006, at 9:30 a.m.

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. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000)


O'SULLIVAN IND: Taps Edward Howard as Consultant on Interim Basis
-----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
November 3, 2005, O'Sullivan Industries Holdings, Inc., and its
debtor-affiliates sought the U.S. Bankruptcy Court for the
Northern District of Georgia's authority to employ Edward Howard &
Co., as their public relations consultant.

Edward Howard provides strategic counseling in corporate
relations, financial relations, and public affairs and has
experience in serving as a public relations consultant to Chapter
11 debtors in the automotive, chemical, home decor, retail
pharmaceutical, steel, and technological industries, among others.

The Debtors tell the Court that they are familiar with the Edward
Howard's professional standing and reputation and that the firm is
skilled in providing communications consulting services in
restructurings and reorganizations.

                           *    *    *

At the Debtors' behest, the Court approved the motion on an
interim basis.

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)


O'SULLIVAN IND: U.S. Trustee Balks at Chanin Capital's Retention
----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
December 16, 2005, the U.S. Bankruptcy Court for the Northern
District of Georgia authorized the Official Committee of Unsecured
Creditors of O'Sullivan Industries Holdings, Inc., and its debtor-
affiliates' chapter 11 cases, on an interim basis, to retain
Chanin Capital Partners, LLC, as its financial advisor.

                     U.S. Trustee Responds

Felicia S. Turner, the United States Trustee for Region 21, asks
the Court to strike its order authorizing the Official Committee
of Unsecured Creditors to retain Chanin Capital Partners, LLC, as
financial advisor.

Leroy Culton, Esq., in Atlanta, Georgia, notes that the Retention
Order incorporates and approves certain provisions of the
Retention Letter executed between the Creditors Committee and
Chanin dated October 27, 2005.

In particular, the Retention Letter contains a fee-tail provision,
which entitles Chanin to compensation in the event the retention
agreement is terminated.  Pursuant to that provision,
Chanin asserts that it is entitled to a deferred fee if a
restructuring transaction is consummated within 18 months of the
effective date of Chanin's termination.

There is no legal basis in the Bankruptcy Code on which Chanin may
assert entitlement to fees of any kind, Mr. Culton argues.

The U.S. Trustee relates that Chanin may seek compensation by
application for any fees during the fee-tail period provided that
the application state with particularity the:

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

   -- the benefit was conferred on the Debtors' estates by the
      services.

In addition, the Retention Letter provides Chanin a $450,000
Deferred Fee payable on the effective date of a Restructuring
Transaction, in addition to a $125,000 regular monthly advisory
fee.

"The Retention Letter provides no reason for the Deferred Fee,
especially since, logically, the regular monthly advisory fee is
intended to fully compensate Chanin for its services on a non-
going basis," the U.S. Trustee contends.  "The Retention Letter
provides no methodology of assessing the reasonableness of the fee
based on independently verifiable factors."

The Retention Letter provides that the Creditors Committee must
indemnify Chanin from the harmful consequences of Chanin's actions
except for those consequences found by a court of competent
jurisdiction to have resulted from Chanin's "gross negligence or
willful misconduct", Mr. Culton notes.  "This indemnification
provision is inconsistent with Chanin's fiduciary duties to the
Creditors Committee."

                   Ad Hoc Committee Supports
                    U.S. Trustee's Objection

GoldenTree Asset Management L.P., Mast Credit Opportunities I,
(Master) Ltd., and Breakwater Fund Management, LLC, as the Ad Hoc
Senior Secured Noteholders Committee, assert that the Deferred
Fee is entirely unreasonable and unwarranted and would grossly
overcompensate Chanin regardless of whether its services confer
any benefit on its constituency or the Debtors' estates.

Dennis J. Connolly, Esq., at Alston & Bird, LLP, in Atlanta,
Georgia, argues that the Deferred Fee is inappropriate for five
reasons:

   (a) It is not tied to Chanin's success in representing
       general, unsecured creditors, but rather, is simply a
       fixed, non-contingent fee that is payable on the effective
       date of a Restructuring Transaction;

   (b) It would become payable even in the event that the
       Restructuring Transaction that triggers the Deferred Fee
       were to involve a restructuring of debt other than the
       debt owed to Chanin's constituency;

   (c) It would be payable to Chanin even if its constituency
       -- holders of general, unsecured claims -- receives no
       distribution of the Debtors' reorganization value under a
       confirmed plan of reorganization;

   (d) If Chanin's retention is terminated by the Creditors
       Committee, Chanin would be entitled to payment of the
       Deferred Fee if a Restructuring Transaction were to be
       consummated within 18 months of the effective date of the
       termination; and

   (e) In contradistinction to the analogous transaction-based
       fees to be paid to Lazard Freres & Co., LLC, and
       Rothschild, Inc., the Deferred Fee is not subject to being
       reduced by any portion of the Monthly Fees paid to Chanin
       during the course of the Debtors' Chapter 11 cases.

In the event the Court decides to authorize the Deferred Fee as a
form of compensation to Chanin, the Ad Hoc Committee seeks that:

   -- the Deferred Fee be paid from the distributions, if any, to
      Unsecured Creditors under the Plan and not from the
      Debtors' estates;

   -- the Deferred Fee be subject to reduction to reflect an
      appropriate credit of the monthly fees paid to Chanin; and

   -- the Tail Period should be eliminated.

The Retention Order also provides that Chanin will be compensated
pursuant to the standard of review in Section 328(a) of the
Bankruptcy Code.  Mr. Connolly argues that in light of the fact
that Chanin's constituency is out of the money by a substantial
margin, tying Chanin's compensation to the extremely restrictive
standard of review prescribed by Section 328(a) is entirely
inappropriate.  Chanin's compensation should be subject to a
Court review for reasonableness under the standard prescribed by
Section 330(a)(1) of the Bankruptcy Code, Mr. Connolly contends.

In this regard, the Ad Hoc Committee asks the Court to:

   (i) strike the Deferred Fee as an element of Chanin's
       compensation; and

  (ii) subject Chanin's fees and expenses to a Court review for
       reasonableness in accordance with the standard prescribed
       by Section 330.

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)


OMEGA HEALTHCARE: Gets $173.4M from Private Placement of Sr. Notes
------------------------------------------------------------------
On December 30, 2005, Omega Healthcare Investors, Inc., issued
$175 million of 7% Senior Notes due 2016 through a private
placement to qualified institutional buyers pursuant to Rule 144A
and in offshore transactions pursuant to Regulation S, promulgated
under the Securities Act of 1933, as amended.

The Notes were sold pursuant to a December 20, 2005, Purchase
Agreement among Omega and its subsidiaries, as guarantors, to:

         * Deutsche Bank Securities Inc.,
         * Banc of America Securities LLC, and
         * UBS Securities LLC

The Notes were sold at an issue price of 99.109% of the principal
amount of the notes, resulting in gross proceeds to Omega of
$173.4 million.  

A full-text copy of the Purchase Agreement is available for free
at http://ResearchArchives.com/t/s?432

                       Terms of the Notes

The Notes bear an interest rate of 7%, payable semi-annually in
arrears on January 15 and July 15 of each year, commencing on
July 15, 2006.  Interest on the Notes will accrue from Dec. 30,
2005.  The Notes mature on January 15, 2016.  The Notes are
unconditionally guaranteed, jointly and severally, on a senior
unsecured basis by Omega and its subsidiaries until certain
conditions are met.

The Notes are Omega's unsecured senior obligations and rank
equally with all of Omega's existing and future senior debt, and
senior to all of Omega's existing and future subordinated debt.
The Notes are, and will be, effectively subordinated to Omega's
existing and future secured debt.  The Notes are, and will be,
unconditionally guaranteed by Omega's existing and future
subsidiaries that guarantee Omega's Senior Credit Facility or any
of Omega's other indebtedness.  These guarantees are unsecured
senior obligations of the guarantors and rank equally with
existing and future unsecured senior debt of such guarantors, and
senior to all existing and future subordinated debt of such
guarantors.  The guarantees are effectively subordinated to
existing and future secured debt of the guarantors.

                         Use of Proceeds

Omega intends to use the net proceeds from the sale of the Notes:

   (1) to repurchase its $100 million aggregate principal amount
       of 6.95% notes due 2007, including the payment of
       applicable premiums and consent fees related to the
       repurchase;

   (2) to repay a portion of its outstanding indebtedness under
       its March 22, 2004, Credit Agreement, among:

       -- OHI Asset, LLC,
       -- OHI Asset (ID), LLC,
       -- OHI Asset (LA), LLC,
       -- OHI Asset (TX), LLC,
       -- OHI Asset (CA), LLC,
       -- Delta Investors I, LLC,
       -- Delta Investors II, LLC, and
       -- Bank of America, N.A.,

   (3) for working capital and general corporate purposes; and

   (4) to pay related fees and expenses.

Bank of America, N.A., is an affiliate of Banc of America
Securities LLC.  In addition, each of the other initial purchasers
serve in various agent capacities under the Senior Credit
Facility.

The Notes are issued pursuant to a December 30, 2005, Indenture
between Omega and U.S. Bank National Association, as trustee.

A full text copy of the Indenture is available for free at
http://ResearchArchives.com/t/s?433
  
Headquartered in Timonium, Maryland, Omega HealthCare Investors,
Inc. -- http://www.omegahealthcare.com/-- is a real estate
investment trust investing in and providing financing to the long-
term care industry. At September 30, 2005, the Company owned or
held mortgages on 216 skilled nursing and assisted living
facilities with approximately 22,407 beds located in 28 states and
operated by 38 third-party healthcare operating companies.

                          *     *     *

Omega Healthcare's 6.95% notes due 2007 and 7% notes due 2014
carry Moody's Investors Service's B1 rating, Standard & Poor's BB-
rating and Fitch's BB- rating.


OMNOVA SOLUTIONS: Financial Profile Earns S&P's Positive Outlook
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on OMNOVA
Solutions Inc. to positive from negative.

At the same time, S&P affirmed all of its ratings on the company
including the 'B' corporate credit rating.

Fairlawn, Ohio-based OMNOVA Solutions, with about $800 million of
annual sales and approximately $187 million of total debt
outstanding as of Aug. 31, 2005, manufactures emulsion polymers,
decorative and functional surfaces, such as commercial wall
coverings, and specialty chemicals.

"The outlook revision reflects the strengthening of the financial
profile as pricing initiatives in the performance chemicals
business and continued focus on cost reduction allowed OMNOVA to
offset higher raw-material costs," said Standard & Poor's credit
analyst George Williams.

The rating could be raised by one notch over the next year or two
if the company continues to demonstrate the ability to
successfully manage a difficult raw material pricing environment
while achieving further improvements to the financial profile.

The ratings reflect the company's fair market positions and decent
product diversification, offset by competitive markets, exposure
to volatile raw-material costs, and a highly leveraged financial
profile.

OMNOVA was created in October 1999 as a spin-off of GenCorp Inc.'s
polymer products businesses.  The performance chemicals segment,
which accounts for 56% of revenues, focuses on the manufacture of
latex and a portfolio of specialty chemicals.  In particular, the
company is the second-largest producer of styrene butadiene latex,
which is used in carpet-backing applications and in manufacturing
coated paper.  The decorative and building product segments
focuses on polyvinyl chloride and paper-based decorative surface
products and single-ply roofing systems.  Proficiency in vinyl
applications and design capabilities support the company's    
well-established global share of commercial wall coverings and
good positions in coated fabrics and decorative laminates.  
However, these industry segments result in considerable exposure
to the commercial real estate cycle.


OWENS CORNING: Wants to Implement 2006 Retention Program
--------------------------------------------------------
Owens Corning's 2004 Employee Retention Program expires for
certain participants on December 31, 2005, unless extended
pursuant to an evergreen provision.  Norman L. Pernick, Esq., at
Saul Ewing LLP, in Wilmington, Delaware, tells the U.S. Bankruptcy
Court for the District of Delaware that as with the prior
programs, the 2004 Retention Program was a success.  Voluntary
turnover of Key Employees in 2004 and 2005 was 1%, compared with a
manufacturing industry median of 5.5%.

The 2004 Retention Program was structured as an evergreen program
which renews on an annual basis if the Debtors have not emerged
as of each January 1st.  The Committees and the Futures
Representative have a right to object to the continuation of the
program on an annual basis.

Starting in September 2005, the Debtors' Human Resources
Leaders, working with the Chairman of the Compensation Committee
of the Debtors' Board of Directors and Mercer Resources
Consulting, Inc. -- the Debtors' human resources consultants --
conducted a detailed analysis of the need for, and the
reasonableness of, continuing the 2004 Retention Program beyond
2005.

The Retention Team concluded that continuation of the 2004
Retention Program, subject to modifications, was necessary to
achieve the goal of retaining the Debtors' Key Employees,
particularly given the very favorable results of the prior
programs.  The recommendations of the Retention Team were adopted
by the full Compensation Committee at a meeting on November 30,
2005.  

On September 14, 2005, the Debtors sought Court authority to
amend the Debtors' Key Management Severance Agreements with David
T. Brown, the Debtors' Chief Executive Officer and Michael H.
Thaman, the Debtors' Chief Financial Officer and Chairman of the
Debtors' Board of Directors.  A hearing on the Severance Motion
is currently scheduled for February 7, 2006.

By letter dated December 15, 2005, the Debtors provided formal
notice to counsel to the Committees and the Futures
Representative of their intent to continue the 2004 Retention
Program, subject to these modifications as approved by the
Compensation Committee:

   (a) The employee participation levels have been reduced from
       25% to 100% of base salary to 25% to 75% of base salary;

   (b) The cap on the annual cost of the plan has been reduced
       from $19,500,000 to $13,900,000; and

   (c) Messrs. Brown and Thaman will not participate in the 2006
       Retention Program.

The 2006 Retention Program will have a limited number of
participants at 275, with firm dollar caps on individual
participation levels as well as the aggregate annual retention
payments.  

Mr. Pernick tells the Court that confirmation of the Debtors'
Fifth Amended Plan of Reorganization carries with it its own
level of uncertainty for employees, and the Debtors are fearful
that Key Employees may be recruited by other companies who can
provide greater corporate certainty and security, including stock
awards and options.  Losing the Key Employees will severely harm
the Debtors in many ways:

   (1) Employees of a debtor-in-possession are difficult to
       replace because experienced job candidates often find
       the prospect of working for a company in Chapter 11
       unattractive;

   (2) The Debtors may have to pay executive search firm fees to
       recruit suitable replacement employees, as well as signing
       bonuses, reimbursement for relocation expenses, and
       above-market salaries to induce qualified candidates to
       accept employment with chapter 11 debtors.  The hidden
       costs of retraining are more difficult to calculate, but
       just as high, if not higher; and

   (3) The loss of any important employee can lead to additional
       employee departures, as employees often follow the example
       of their resigning colleagues, mentors or leaders.

The Debtors believe that the 2006 Retention Program will
significantly benefit their cases by boosting employee morale at
a time when employee dedication and loyalty is needed most.  The
2006 Retention Program is necessary to facilitate successful
emergence from bankruptcy, and the Debtors believe that it is a
sound exercise of their business judgment given its relatively
reasonable cost, Mr. Pernick says.

Accordingly, the Debtors ask the Court to approve and authorize
the implementation of the 2006 Retention Program.

Owens Corning -- http://www.owenscorning.com/-- manufactures
fiberglass insulation, roofing materials, vinyl windows and
siding, patio doors, rain gutters and downspouts.  Headquartered
in Toledo, Ohio, the Company filed for chapter 11 protection on
October 5, 2000 (Bankr. Del. Case. No. 00-03837).  Mark S. Chehi,
Esq., at Skadden, Arps, Slate, Meagher & Flom, represents the
Debtors in their restructuring efforts.  (Owens Corning Bankruptcy
News, Issue No. 123; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


PELICAN INLET: Case Summary & 9 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Pelican Inlet Aqua Farms, Inc.
        5787 SW 9th Court
        Cape Coral, Florida 33914

Bankruptcy Case No.: 06-00044

Type of Business: The Debtor is a clam seed supplier.

Chapter 11 Petition Date: January 6, 2006

Court: Middle District of Florida (Ft. Myers)

Debtor's Counsel: Jeffrey W. Leasure, Esq.
                  Jeffrey W. Leasure, PA
                  P.O. Box 61169
                  Fort Myers, Florida 33906-1169
                  Tel: (239) 275-7797

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 9 Largest Unsecured Creditors:

   Entity                                 Claim Amount
   ------                                 ------------
   Pine Island Market Trust One             $1,800,000
   c/o Thomas G. Eckerty
   Successor Trustee
   12734 Kenwood Lane, Suite 89
   Fort Myers, FL 33907

   Pine Island Properties, Ltd.               $406,900
   1850 Victoria Avenue
   Fort Myers, FL 33901

   Lee County Tax Collector                    $16,000
   1446 Lee Street
   Fort Myers, FL 33901

   Internal Revenue Service                     $3,550
   P.O. Box 105404
   Atlanta, GA 30348-5404

   Suncoast Portable Toilet Co.                   $997

   Bean, Whitaker, Lutz & Kareh, Inc.             $555

   Waste Services of Florida                      $226

   Bill Keyes, Esq.                               $193

   State of Florida                               $100
   Department of Agriculture


PINNACLE ENT: Six Mil. Equity Offering Spurs S&P to Review Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Pinnacle
Entertainment Inc., including the 'B+' corporate credit rating, on
CreditWatch with positive implications following the company's
announcement that it intends to offer 6 million shares of its
common stock, with an overallotment option granted to the
underwriters for an additional 900,000 shares, for estimated net
proceeds of approximately $163 million.

The proceeds of the proposed offering will be used for general
corporate purposes, including the pursuit of one or more of
identified capital projects, which comprise new hotel towers at
the company's Belterra Casino Resort, L'Auberge du Lac in Lake
Charles, Louisiana, and at its Boomtown New Orleans asset in New
Orleans, Louisiana.  Proceeds may also be used to fund a portion
of the construction costs of ongoing St. Louis, Missouri,
projects.  Total debt outstanding at Sept. 30, 2005, was
approximately $700 million.

"The CreditWatch listing reflects the material impact the proposed
equity offering will have on the company's consolidated financial
profile and liquidity situation at a time when it is pursuing
multiple capital spending initiatives," said Standard & Poor's
credit analyst Michael Scerbo.

In resolving the CreditWatch listing, Standard & Poor's will meet
with Pinnacle's management to review its financial policies and
future operating strategies.  If an upgrade were the ultimate
outcome of Standard & Poor's analysis, it would be limited to one
notch, to 'BB-'.


QUEBECOR MEDIA: S&P Puts B Rating on Planned Bank Loan Facilities
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to
Montreal, Quebec-based Quebecor Media Inc.'s proposed bank loan
facilities, which are comprised of:

     * a CDN$125 million revolving credit facility due 2011,
     * a CDN$150 million term loan A facility due 2011, and
     * a $500 million term loan B facility due 2013.

The loan is rated two notches below the 'BB-' long-term corporate
credit rating, reflecting its junior position in the company's
capital structure with debt at wholly owned subsidiaries,
Videotron Ltee and Sun Media Corp., ranking ahead the proposed
facilities.

In addition, all ratings outstanding on Quebecor Media, Videotron,
and Sun Media were affirmed.  The outlook on all companies is
stable.

Proceeds from the proposed new bank facilities will be used to
repay a significant portion of the notes and related swaps
currently outstanding at Quebecor Media, as well as to fund a
CDN$75 million dividend to the company's shareholders.

"Authorized debt facilities for Quebecor Media are not expected to
increase following the transaction; however, interest expense will
be significantly lowered given the more favorable interest rate of
the proposed bank facilities compared with that which applies to
the company's existing notes," said Standard & Poor's credit
analyst Lori Harris.  

The ratings on Quebecor Media, one of the largest cable and media
companies in Canada, are based on the credit risk profile of the
company and its consolidated subsidiaries, including Videotron and
Sun Media.  Both Videotron, a leading cable distributor in the
province of Quebec and third largest in Canada, and Sun Media,
second-largest newspaper publisher in Canada, are rated the same
as the parent company, Quebecor Media.

The ratings on Quebecor Media largely reflect:

     * its aggressive financial profile,

     * its high debt leverage,

     * its reduced free cash flow due to a substantial increase in
       capital expenditures,

     * its challenging industry fundamentals in the company's
       newspaper division, and

     * intense competition in all of its business segments.

These factors are partially offset by Quebecor Media's solid
market position in cable and newspapers, which together accounted
for about 70% of revenues and 83% of reported operating income for
the nine months ended Sept. 30, 2005.

The stable outlook reflects Standard & Poor's expectation that
Quebecor Media's operating assets will maintain their solid market
positions and that credit measures will remain in line with the
ratings.  The outlook could be revised to positive or the ratings
could be raised if the company improves its financial profile and
is able to sustain better operating performance and stronger
credit measures.  The outlook could be revised to negative if the
company fails to meet expectations, resulting in the weakening of
Quebecor Media's operating performance and credit measures.


QUIGLEY CO: Court Approves Settlement With Pfizer & Centennial
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved a settlement agreement among Quigley Company, Inc.,
Pfizer Inc., and Centennial Insurance Company.  

             The Litigation and Insurance Policy

As previously reported, Centennial Insurance issued to Pfizer a
general liability Insurance Policy that provides $2 million of
coverage from Oct. 1, 1978 through Oct. 1, 1979 for products and
completed operations, including asbestos-related bodily injury
claims.  The Insurance Policy also provides coverage to Quigley,
as a subsidiary of Pfizer, during that period.

In 1993, Pfizer and Quigley commenced an action against certain
insurers, including Centennial.  That Litigation involved disputes
concerning the obligations of certain insurers, including
Centennial, for asbestos-related bodily injury claims in
connection with certain insurance policies, including the
Insurance Policy.

             The 1999 Agreement and Shortfall Action

To settle the Litigation, Quigley, Pfizer and Centennial entered
into an Agreement on March 17, 1999.  The 1999 Agreement governs
the application of the Insurance Policy to Asbestos-Related Bodily
Injury Claims, and defines the manner in which Quigley and Pfizer
may bill and Centennial would pay for Asbestos-Related Bodily
Injury Claims under the Insurance Policy.  Pfizer and Quigley
agreed to dismiss Centennial from the Litigation with prejudice
upon execution of the 1999 Agreement.

In 2001, Pfizer, Quigley and other plaintiffs brought the
Shortfall Action against Centennial.  That action addresses
amounts Quigley or Pfizer may become liable to pay in settlement
of a judgment on claims or lawsuits alleging that Quigley or
Pfizer are obligated for amounts initially allocated to members of
the Center for Claims Resolution (CCR) who withdrew from the CCR
and have filed for chapter 11 protection, as well as fees and
expenses incurred in connection with the defense and disposition
of those claims.

         Summary of the September 2005 Settlement Agreement

In September 2005, the Debtor, Pfizer and Centennial entered into
the Settlement Agreement to resolve the Shortfall Action.  The
salient terms of that Settlement Agreement are:

   1) Centennial will pay $2 million to the Asbestos PI Trust,
      with:

      a) $600,000 to be paid without further delay and $700,000 to
         be paid soon after the Debtor's Third Amended Plan of
         Reorganization is confirmed, and

      b) $700,000 to be paid within one year of the date of the
         confirmation order; and

   2) Quigley and Pfizer will dismiss Centennial from the
      Shortfall Action with prejudice, and Centennial will dismiss
      Quigley and Pfizer from the Shortfall Action with prejudice.

A full-text copy of the September 2005 Settlement Agreement is
available for free at http://ResearchArchives.com/t/s?3cf

Headquartered in Manhattan, Quigley Company, Inc., is a subsidiary
of Pfizer, Inc., which used to produce and market a broad range of
refractories and related products to customers in the iron, steel,
glass and other industries.  The Company filed for chapter 11
protection on Sept. 3, 2004 (Bankr. S.D.N.Y. Case No. 04-15739) to
resolve legacy asbestos-related liability.  When the Debtor filed
for protection from its creditors, it listed $155,187,000 in total
assets and $141,933,000 in total debts.  Michael L. Cook, Esq.,
Lawrence V. Gelber, Esq., and Jessica L. Fainman, Esq., at Schulte
Roth & Zabel LLP, represent the Company in its restructuring
efforts.  Albert Togut, Esq., at Togut Segal & Segal serves as the
Futures Representative.


REFCO INC: Committee, et al., Balk at Ch. 11 Trustee Request
------------------------------------------------------------         
As reported in the Troubled Company Reporter on Dec. 14, 2005,
Deirdre A. Martini, the United States Trustee for Region 2, asked
the Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York to appoint a Chapter 11 trustee in
Refco Inc., and its debtor-affiliates' chapter 11 cases pursuant
to Section 1104(a)(2) of the Bankruptcy Code.

Andrew D. Velez-Rivera, Esq., trial attorney for the U.S. Trustee,
tells the Court that the appointment of a truly independent
fiduciary to investigate the Debtors' prepetition affairs and to
maximize the recoveries for their estates has been of paramount
concern to the U.S. Trustee since Refco, Inc., filed for
bankruptcy protection.

                          *     *     *

               Responses from Creditors Committee,
              RCM Customer Group & Josefina Sillier

(A) Creditors Committee

The U.S. Trustee fails to establish the need for a Chapter 11
Trustee, Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy
LLP, in New York, argues.

The Trustee Motion calls for an independent fiduciary to
investigate claims of prepetition misconduct by the Debtors'
management and to maximize the recoveries for the estate.  Yet
nowhere in the request does the U.S. Trustee explain why the
appointment of a Chapter 11 trustee is necessary to address those
concerns, let alone offer "clear and convincing evidence" of the
need for a trustee in the Debtors' cases, Mr. Despins contends.

Moreover, the recent appointment of Harrison J. Goldin as the
Debtors' chief executive officer effectively moots the need for a
Chapter 11 Trustee, Mr. Despins points out.  Mr. Goldin is an
independent fiduciary uniquely qualified to maximize the value of
the Debtors' estates for the benefit of their creditors,
customers and parties-in-interest, Mr. Despins explains.  

In addition, Mr. Goldin has been appointed as a fiduciary in
other cases by the U.S. Trustee itself.  The U.S. Trustee is
therefore effectively estopped from contending that Mr. Goldin is
not a well-qualified fiduciary, Mr. Despins argues.

The Official Committee of Unsecured Creditors is actively
involved in monitoring the Debtors' Chapter 11 cases and has
confidence that Mr. Goldin will act as an independent fiduciary
for the benefit of all parties, Mr. Despins assures Judge Drain.  

The Debtors' "consent" to the appointment of a trustee -- as
evidenced by a stipulation presented by the U.S. Trustee -- is
irrelevant and should not be given any weight by the Court, Mr.
Despins maintains.  "The Debtors' board 'consented' to executing
the Stipulation under extreme pressure from the government, and
[as of January 3, 2005] the Debtors have provided no explanation,
much less proof, that such consent was a sound exercise of
business judgment by the board."

Accordingly, the U.S. Trustee's request should be denied.

In the alternative, the Creditors Committee asks the Court to
adjourn the U.S. Trustee request as premature.

Mr. Despins says that the Court should first rule on whether
Refco Capital Markets, Ltd.'s Chapter 11 case should be converted
to one under Chapter 7.  A conversion, if granted, would require
the displacement, as to the RCM estate, of any Chapter 11 trustee
appointed for the Debtors.

Even if the Court were ultimately to order the appointment of a
Chapter 11 trustee, the Creditors Committee wants the Court to
direct the U.S. Trustee to hold an immediate election pursuant to
Section 1104(b) of the Bankruptcy Code.  The Court should defer
final approval of a Chapter 11 trustee until a Section 1104(b)
election can be held.

(B) RCM Customer Group

Customers of Refco Capital Markets, Ltd., holding claims
aggregating over $500,000,000, note that the call for appointment
of a Chapter 11 trustee is predicated on the assumption that RCM
is an eligible debtor for a Chapter 11 reorganization case.

"If that assumption is incorrect, and RCM can only be subject to
a chapter 7 stockbroker liquidation pursuant to Subchapter III,
then this case will be converted and a separate chapter 7 trustee
for RCM will be required," Thomas J. Moloney, Esq., at Cleary
Gottlieb Steen & Hamilton LLP, in New York, points out.

The Customer Group previously asked the Court to convert RCM's
Chapter 11 case to a Chapter 7 Stockbroker Liquidation.  The
Court should therefore postpone consideration of the Chapter 11
Trustee Motion until after the important threshold subject matter
jurisdictional question posed by the Customer Group's request to
convert RCM's case, Mr. Moloney asserts.

The Customer Group asks the Court to deny the Chapter 11 Trustee
Motion as premature.

(C) Josefina Sillier

Josefina Franco Sillier asserts that the benefits derived by the
appointment of a Chapter 11 trustee should be considered against
the cost of that appointment.

Ms. Sillier believes that the "practical realities" of the RCM
proceeding mandate conversion to a stockbroker liquidation
pursuant to Subchapter III of Chapter 7, not the appointment of a
Chapter 11 trustee.

RCM is a stockbrokerage business that no longer continues to
operate and has no hope of rehabilitation, James W. Giddens,
Esq., at Hughes Hubbard & Reed LLP, in New York, relates.  "In
such cases, it was Congress' specific intent that the entity be
liquidated under this specific statutory scheme, not through a
Chapter 11 trustee administering a liquidating plan for all Refco
debtor entities."

Ms. Sillier asks the Court to deny the Trustee Motion as it
relates to RCM.

Mr. Sillier is a customer of RCM and maintains a brokerage firm
account at RCM containing no less than $32,862,418 of cash and
securities.

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. 18; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


REFCO INC: Wants Court to Approve RGL $43,120 Break-Up Fee
----------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Jan. 9, 2005, Refco Inc., and its debtor-affiliates asked 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.

                          *     *     *

Sally McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher &
Flom, LLP, in New York, relates that Partners Capital Investment
Group, L.L.C., has expended and likely will continue to expend
considerable time, money and energy pursuing the Purchase
Agreement with Refco Group Ltd., LLC.

In recognition of this expenditure of time, energy and resources
and the benefits to Refco Group's estates of securing a minimum
bid, Refco Group seeks bid protections for Partners Capital:

    (a) A $43,120 Break-up Fee;

    (b) Reimbursement of Partners Capital's documented expenses
        incurred in connection with the Acquisition Transaction
        and the Debtors' Chapter 11 cases up to $15,000;

    (c) An initial Overbid Requirement of any Qualified Bid in the
        minimum amount of $50,000, with further bidding increments
        in the minimum amount of $10,000;

    (d) A requirement that any party bidding at the Auction must
        overbid the Acquisition Transaction with a cash portion of
        the consideration sufficient to satisfy the Expense
        Reimbursement and Breakup Fee and must otherwise undertake
        the Acquisition Transaction on terms in the aggregate no
        less favorable to Refco Group as Partners Capital's offer
        pursuant to the Purchase Agreement;

    (e) An Adequate Assurance Requirement that any potential
        bidder must:

        -- provide written evidence to Refco Group of its
           financial wherewithal to complete the Acquisition
           Transaction; and

        -- execute a non-disclosure agreement;

    (f) A Disclosure Requirement that Refco Group assemble a
        Disclosure Package that contains certain information
        concerning Partners Capital provided by Partners Capital
        to Refco Group on a confidential basis and that Disclosure
        Packages may not be distributed to any party other than a
        Potential Bidder that has executed a Non-disclosure
        Agreement;

    (g) A requirement that Refco Group provide Disclosure Packages
        to Potential Bidders only and that each Potential Bidder
        is required to certify that it has returned or destroyed
        all copies of, compilations of, and notes concerning, the
        Disclosure Package in accordance with the Non-disclosure
        Agreement; and

    (h) A requirement that any Breakup Fee or Expense
        Reimbursement required to be made by Refco Group to
        Partners Capital will be paid at the closing of any
        transaction involving the Purchase Shares and will be
        deemed to be administrative expenses, under Sections
        503(b) and 507(b) of the Bankruptcy Code.

Ms. Henry tells the Court that the Bid Protections were a material
inducement for, and a condition of, Partners Capital's entry into
the Purchase Agreement.

Refco believes that the Bid Protections are fair and reasonable
in view of the fact that Partners Capital's efforts have
increased the chances that Refco Group will receive the highest
and best offer for the Purchase Shares by:

    -- establishing a minimum for other bidders and thereby
       attracting other bidders to the Auction;

    -- waiving certain re-purchase and tag-along rights which
       materially enhance Refco Group's ability to conduct an
       auction; and

    -- agreeing that member approvals under the Operating
       Agreement will be subject to a reasonableness limitation.

Accordingly, the Debtors ask the Court to approve the Bid
Protections and authorize payment of the Expense Reimbursement
and Break-up Fee.

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 Bid Procedures for PCIG Interest Sale Approved
---------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Jan. 9, 2005, Refco Inc., and its debtor-affiliates asked 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.

                       *     *     *

The Debtors propose to implement uniform bid procedures for the
sale of Refco Group Ltd., LLC's 14.29% minority stake in Partners
Capital Investment Group, L.L.C.

A full-text copy of the Bid Procedures is available for free at:

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

The Bid Procedures contemplate an auction process similar to that
conducted for the sale of the assets of Refco, LLC:

    * qualification of bidders,
    * access to information, and
    * a minimum initial overbid requirement.

The Bid Procedures also contemplate certain protections for
Partners Capital, as the opening bidder, who has committed to a
floor price for the Auction.

The Bid Procedures specifically provide that:

    (a) The Minimum Bid must be equal or exceed the sum of:

           * the $1,540,000 purchase price; plus
           * the $50,000 Minimum Overbid Increment; plus
           * the Break-Up Fee; plus
           * the Expense Reimbursement.

    (b) The initial overbid requirement of any qualified bid is an
        amount not less than $50,000, with further bidding in
        $10,000 increments;

    (c) If the Debtors receive a Qualified Bid other than the
        Acquisition Transaction, an auction will be held on
        January [__] 2006, at __:00 _.m. Eastern Time, at the
        offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four
        Times Square, New York, NY 10036 or at any other location
        as the Debtors may designate.

    (d) Refco Group is permitted to assemble a Disclosure Package,
        containing:

           * Partners Capital 2003 & 2004 Financials,

           * Partners Capital September 30, 2005 Financials,

           * Last 4 Quarters Income Statement and Balance Sheet,
             and

           * Fourth Amended and Restated Limited Liability Company
             Agreement dated July 31, 2005;

    (e) If there are qualified competing bids, the Debtors will
        allow Partners Capital and qualified bidders to submit
        improved bids.  Based on the terms of the bids received
        and other information as the Debtors deem relevant, the
        Debtors, in their sole discretion, after consultation with
        representatives of the Official Committee of Unsecured
        Creditors, may adopt rules for the submission of improved
        bids and conduct the auction in all respects in a manner
        they determine, in their reasonable business judgment,
        will better promote the goals of obtaining the highest,
        best or otherwise financially superior proposal that is
        not consistent with any of the provisions of the Bidding
        Procedures Order or the Bankruptcy Code;

    (f) At the close of the Auction, the Debtors will identify
        which Qualified Bidder had the highest or otherwise best
        bid, which will be determined by considering:

           * the total consideration to be received by the
             Debtors;

           * the likelihood of each Qualified Bidder's ability to
             timely close a transaction and make any deferred
             payments, if applicable; and

           * the net benefit to the estate, taking into account
             the Breakup-Fee and Expense Reimbursement.

    (g) The sale hearing will be held on January [__], 2006, at
         __:__ _.m. Eastern Time.

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)


RH DONNELLEY: S&P Rates Proposed $2.142 Billion Senior Notes at B+
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
these proposed notes to be issued by R.H. Donnelley Corp.
(BB/Watch Neg/--):

     * $332 million senior discount notes due 2013;
     * $600 million senior discount notes due 2013; and
     * $1.21 billion senior notes due 2016.

At the same time, Standard & Poor's placed the new ratings on
CreditWatch with negative implications.  R.H. Donnelley Corp. is a
yellow page directory publisher based in Cary, North Carolina.

Following the close of RHD's acquisition of Dex Media Inc. for
about $4.2 billion, plus debt assumption of $5.4 billion as of
September 2005, Standard & Poor's will lower its ratings on the
proposed notes issues one notch to 'B'.

At that time, Standard & Poor's will lower its long-term corporate
credit ratings on RHD and operating subsidiary R.H. Donnelley Inc.
to 'BB-' from 'BB', remove the ratings from CreditWatch with
negative implications, and assign a stable outlook.  The ratings
on the proposed notes are two notches below the corporate credit
rating, reflecting the structural subordination of the notes to
debt at RHD Inc.

Additionally, Standard & Poor's has affirmed its ratings on Dex
and operating subsidiaries Dex Media West LLC and Dex Media East
LLC, including the 'BB-' long-term corporate credit ratings, with
a stable outlook.

Proceeds from the proposed RHD notes will be used to redeem     
$332 million of RHD's remaining preferred shares outstanding from
partnerships affiliated with the Goldman Sachs Group, and to
finance $1.85 billion of the cash acquisition cost.  RHD will
issue $2.4 billion in common equity to complete the financing of
the Dex acquisition.

The corporate credit ratings on RHD and Dex entities would both be
at the 'BB-' level after the acquisition closes, reflecting the
consolidated credit quality of ultimate parent company RHD, a
holding company with no direct operations and significant debt to
be serviced by the cash flows of RHD Inc., Dex West, and Dex East.  
While RHD Inc., Dex West, and Dex East have different financial
profiles with separate financing structures, the operations of the
entities are expected to be managed as one company with the same
senior management team.

"Ratings reflect RHD's substantial pro forma debt levels,
significant acquisitions over the past few years at both RHD and
Dex, material dividend payments at Dex, and preferred share
redemptions at RHD," said Standard & Poor's credit analyst Emile
Courtney.  "This is offset somewhat by the company's strong market
positions, predictable sales and cash flow levels, and geographic
and customer diversity."

RHD will be the third-largest print and Internet directory
publisher in the U.S., with 2005 pro forma EBITDA of
$1.53 billion.  The combined company will publish more than 600
directories in 28 states with circulation of 73 million, 600,000
advertisers, and more than 1,800 sales representatives.


ROWECOM INC: Liquidating Trustee Makes 6% Interim Distribution
--------------------------------------------------------------
The Liquidating Trustee overseeing the liquidation of RoweCom,
Inc., under the chapter 11 plan confirmed by the U.S. Bankruptcy
Court for the District of Massachusetts sent creditors a letter
dated December 28, 2005, saying:

     CRAIG AND MACAULEY | Professional Corporation
       COUNSELLORS AT LAW
                                      www.craigmacauley.com

                                      FEDERAL RESERVE PLAZA
                                      600 ATLANTIC AVENUE
                                      BOSTON, MASSACHUSETTS 02210
                                      TEL (617) 367-9500
                                      FAX (617) 742-1788

                                      December 28, 2005

          RE: In re Sabine, Inc. (f/k/a RoweCom, Inc.)
              and its Substantively Consolidated Debtors
              (collectively, the "Debtors"), Chapter 11;
              Case No. 03-10668, United States Bankruptcy
              Court for the District of Massachusetts
              -------------------------------------------

To Interested Parties:

As you may know, I and my firm represented the Official Committee
of Unsecured Creditors (the "Committee") in the above-referenced
matter. I have been appointed as the Liquidating Trustee of the
Liquidating Trust of Sabine, Inc. f/k/a RoweCom, Inc. (the
"Liquidating Trust") established under the confirmed Third Amended
Joint Plan of Liquidating Proposed by the Debtors and Creditors'
Committee Dated November 23, 2004 (the "Plan").  Pursuant to the
Plan, the Liquidating Trustee is charged with the distributing the
assets of the Debtors' estates.  The Plan further provides the
terms pursuant to which distributions are to be made to the
creditors of the Debtors' estates.

The Liquidating Trustee has commenced an interim distribution for
allowed priority and general unsecured claims pursuant to the
Plan. Interim distribution checks for such claims will be issued
prior to the end of December, 2005.  Interim Pursuant to the Plan,
allowed priority claims are to be paid in full.  For holders of an
allowed general unsecured claim the distribution represents a pro
rate distribution on account of the claim.  The percentage
dividend on this initial distribution is slightly more than 6% of
the amount of the claimholder's allowed general unsecured claim.

The aggregate amount of general unsecured claims in the Debtors'
bankruptcy cases is approximately $73,673,000.  The Plan requires
that the Liquidating Trust maintain reserves for administrative
expenses and "Disputed Claims" that have not yet been resolved.  
As of the date of this letter, the aggregate amount of claims that
remain subject to dispute is approximately 5582,000.00.

Additionally, certain assets of Liquidating Trust have yet to be
fully liquidated including, without limitation, the Liquidating
Trust's claim in the bankruptcy case of enivid, inc. f/k/a divine,
inc. and certain causes of action brought by the Litigation Trust.
In light of the foregoing considerations and after consultation
with the Creditors' Committee, the Liquidating Trustee has decided
to distribute approximately $5,000,000 to creditors.  Any further
and final distribution in the Debtors' case will follow final
resolution of the Liquidating Trust's claim in the enivid, inc.
bankruptcy and the litigation pursued by the Liquidating Trustee.

Questions regarding the initial distribution and/or claims must be
in writing (by regular mail or email) and addressed to Brendan
Recupero of this office (email: brecupero@craigmacauley.com) with
a copy to

          Jill Costie
          c/o Development Specialists, Inc.
          Three First National Plaza, Suite 2300
          Chicago, IL 60602-4250
          email: jcostie@dsi.biz

If inquiring via email, you must include "Sabine" or "RoweCom" in
the subject line. Thank you.

                                   Sincerely

                                      /s/ Christopher J. Panos

                                   Christopher J. Panos

Rowecom, Inc., offered content sources and innovative technologies
and provides information specialists, particularly in the library,
with complete solutions serving all their information needs, in
print or electronic format.  The Company, together with six of its
affiliates, filed for chapter 11 protection on January 27, 2003
(Bankr. Mass. Case No. 03-10668).  Stephen E. Garcia, Esq., Mindy
D. Cohn, Esq., at Kaye Scholer LLC and Jeffrey D. Sternklar, Esq.,
Jennifer L. Hertz, Esq., at Duane Morris, LLP represent the
Debtors in their restructuring efforts. When the Company filed for
protection from its creditors, it listed estimated assets and
debts of over $50 million each.


SKYWAY COMMS: Judge Glenn Directs UST to Name Chapter 11 Trustee
----------------------------------------------------------------
The Hon. Paul M. Glenn of the U.S. Bankruptcy Court for the Middle
District of Florida, Tampa Division, directs the U.S. Trustee for
Region 21 to appoint a Chapter 11 Trustee for Skyway
Communications Holding Corp.

As previously reported, a consortium of lenders known as the Talib
Parties asked the Court to dismiss or appoint a chapter 11 trustee
in the Debtor's chapter 11 case.

The Talib Parties alleged:

   a) prepetition mismanagement by the Debtor's officers;

   b) prepetition misrepresentations by the Debtor's officers
      concerning the viability of Skyway's technology and the
      status of development;

   c) false representations in public documents; and

   d) excessive expenditures by the Debtor's officers.

The Talib group consist of:  

              * Nuwave Limited,
              * Omar S. Bangaitah,
              * Ahmed Salem Bugshan,
              * Ahmad M. Al Ajlan,
              * Ali Al Sabah,
              * Castle Bridge Investors Ltd.,
              * Ibrahim Al Therban,
              * International Financial Advisors K.S.C.C.,
              * Khalid Al Attal,
              * Kuwait Investment Company,
              * Kuwait Real Estate Company,
              * Q Invest Inc.,
              * Madi M. Haider,
              * Mohammad H. Al Dall,
              * Nedal Al Massoud,
              * Osama A Al Abduljaleel,
              * Mahmoud H. Haider,
              * Pearl of Kuwait Real Estate Co.,
              * Saleh Al Salmi
              * Taiba Group, Inc.,
              * Therfield Holdings,
              * Waleed A. Al Essa,
              * Yasser Zakaria Al Nahhas,
              * Yousef Al Saleh, and
              * Nazar F. Talib.

The Talib group is represented by:

              Stanford R. Solomon
              The Solomon Tropp Law Group, P.A.
              400 North Ashley Plaza, Suite 3000
              Tampa, Florida 33602-4331
              Tel: 813-225-1818
              Fax: 813-225-1050

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.


SNAP2 CORP: Files Delinquent Fiscal Year 2004 Financial Results  
---------------------------------------------------------------
Bagell Josephs & Company, LLC, expressed substantial doubt about
Snap2 Corporation's ability to continue as a going concern after
it audited the Company's financial statements for the years ended
Sept. 30, 2004 and 2003.  In a report addressed to Snap2's board
of directors and stockholders, dated Aug. 25, 2005, the auditing
firm pointed to the Company's net losses and substantial
accumulated deficit.

                    Fiscal Year 2004 Results

For the fiscal year ended Sept. 30, 2004, Snap2 incurred a
$4,526,823 net loss on $2,116,074 of revenues, as compared to a
$145,624 net loss on zero revenues in the prior year.

Snap2's balance sheet showed $2,037,918 in total assets at
Sept. 30, 2005, and liabilities of $1,321,297.

                 Fiscal Year 2003 Restatements

The Company restated its Sept. 30, 2003 financial statements,
filed on Nov. 17, 2003, because internal management prepared them
and not audited by an independent registered public accounting
firm.  The restatement resulted in a $139,624 increase in net
loss.
  
                        About Snap2

Snap2, originally founded as ISES Corporation in 1997, is a
software company focusing on providing applications, middleware
and software services for next generation consumer devices.


TOWER AUTOMOTIVE: Retirees' Committee Seeks Clarification
---------------------------------------------------------
The Official Committee of Retired Employees in Tower Automotive
Inc. and its debtor-affiliates' chapter 11 cases asks Judge
Gropper to clarify the Court order dated November 10, 2005,
approving the appointment of the Retirees Committee, to render
clear for all of the parties whether the Retirees Committee:

   (a) represents recent retirees;
   (b) will represent future retirees; and
   (c) should raise issues unique to recent and future retirees.

Steven C. Bennett, Esq., at Jones Day, in New York, tells the
Court that the most recent retirees, who retired prior to
January 1, 2006, might arguably have claims for violation of
Section 1114 of the Bankruptcy Code, which provides a status quo
safeguard to retirees during the plan negotiation process and
requires the Debtors to pay in a timely fashion and refrain from
modifying any retiree benefits until a determination is made as
to what modifications are necessary.  If recent retirees retired
on the mistaken belief that the Debtors could and would terminate
their retirement benefits if they did not retire early, they may
have some remedy that would not be applicable to the remainder of
the retiree group, Mr. Bennett points out.

The most recent and future retirees, Mr. Bennett continues, may
have separate arrangements with the Debtors of which the Retiree
Committee is unaware.

According to Mr. Bennett, the severance deals arguably constitute
additional compensation, not available to pre-existing retirees,
that might be counted as compensation for some part of the
Debtors' reduction in other retirement benefits.

"It is unclear whether the Retiree Committee should be inquiring
into, and taking account of, any such separate severance deals,"
Mr. Bennett says.

                       Debtors Respond

The Debtors ask Judge Gropper to clarify the Appointment Order to
indicate that the four people who retired on December 1, 2005,
are included among the Retirees Committee's constituents, since
these retirees retired before the January 1, 2006 termination
date.

Anup Sathy, Esq., at Kirkland & Ellis LLP, in New York, tells
Judge Gropper that the Court should not allow the Retirees
Committee to confuse the issues and extend its representation to
the current non-union employees whose interests it does not
rightfully represent.

Mr. Sathy discloses that the Debtors are currently implementing a
comprehensive cost reduction model for improving their North
American operations.  In connection with this process, the
Debtors have determined that, to remain competitive in the
industry, they must reduce benefit costs associated with their
current employees and retirees.  In addition to recently
terminating future retiree benefits for current employees, the
Debtors intend to utilize the "Section 1113/1114" process to the
extent necessary to effect the necessary reductions for their
union employees and retirees currently receiving benefits.

For this reason, the Debtors want the Retirees Committee's
request denied, or in the alternative, granted for the limited
purpose of explicitly referencing the December retirees as
members of Retirees Committee's representative constituency whose
interests it may represent and advocate in the context of the
Debtors' cases.  The Debtors also ask the Court to declare that
the Debtors' employees who retire on or after the Termination
Date are not included in the Retirees Committee's constituency or
represented persons.

"The attempt by the Retiree Committee to raise issues to the
contrary should be disregarded or, at best, recognized for what
they are -- a disguised attempt to bolster their position and
further frustrate the Debtors' necessary agenda with respect to
the Section 1114 process," Mr. Sathy asserts.

The Official Committee of Unsecured Creditors supports the
Debtors' position in its entirety.

                  Retirees Committee Talks Back

Steven C. Bennett, Esq., at Jones Day, in New York, tells Judge
Gropper that the Debtors are simply asserting that at all times,
their retiree welfare benefit plans expressly permitted amendment
and termination of benefits at any time for any reason, while
providing no sufficient information to the Retirees Committee to
confirm that assertion.

Furthermore, the Debtors have asserted that they are currently
implementing a comprehensive cost reduction model, which
indicates that they must reduce benefit costs associated with
their current union and non-union employees and retirees.  The
Retirees Committee has not been provided with sufficient
information on this, Mr. Bennett maintains.

Recent discussion between the Debtors' professionals and the
Retirees Committee's professionals indicates that the Debtors
have deliberately withheld vital information required for a full
understanding of their business plan, Mr. Bennett tells the
Court.

As a result, the Retirees Committee is in the process of
preparing a request, pursuant to Rule 2004 of the Federal Rules
of Bankruptcy Procedure, to compel the Debtors to provide
essential information.

"It is quite troubling, however, that the Debtors have apparently
chosen to 'hide the ball' until the very eve of a hearing at
which interested parties may be compelled to schedule an
evidentiary hearing in less than a month's time," Mr. Bennett
remarks.

Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and
producer of vehicle structural components and assemblies used by
every major automotive original equipment manufacturer,
including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda,
Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo.  Products
include body structures and assemblies, lower vehicle frames and
structures, chassis modules and systems, and suspension
components.  The Company and 25 of its debtor-affiliates filed
voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y.
Case No. 05-10576 through 05-10601).  James H.M. Sprayregen, Esq.,
Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq.,
and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent
the Debtors in their restructuring efforts.  When the Debtors
filed for protection from their creditors, they listed
$787,948,000 in total assets and $1,306,949,000 in total
debts.  (Tower Automotive Bankruptcy News, Issue No. 25;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


TOWER AUTOMOTIVE: Retirees Committee Taps Bridge as Fin'l Advisor
-----------------------------------------------------------------
The Official Committee of Retired Employees of Tower Automotive
Inc. and its debtor-affiliates asks the U.S. Bankruptcy Court for
the Southern District of New York for authority to retain Bridge
Associates, LLC, as its financial advisors, nunc pro tunc to
November 29, 2005.

Retirees Committee Chairperson Michael W. Doherty relates that
the Committee selected Bridge Associates because of its extensive
and diverse experience, knowledge, and reputation in the field of
financial crisis consulting, financial structure analysis, and
bankruptcy reorganization.

As financial advisor, Bridge Associates will:

   (a) review and analyze the Debtors' business operations,
       including historical financial results and future
       projections, and assist the Retirees Committee in
       assessing the Debtors' current business and financial
       condition;

   (b) review and analyze the Debtors' business plans, cash flow
       projections and other reports or analyses prepared by the
       Debtors or their professionals to advise the Retirees
       Committee on the viability of the continuing operations
       and the reasonableness of projections and underlying
       assumptions;

   (c) analyze the financial ramifications of proposed
       transactions for which the Debtors seek Court approval
       including, but not limited to, assumption or rejection of
       leases, asset sales, management compensation, retention
       plan, and any plan of reorganization;

   (d) analyze the Debtors' internally prepared financial
       statements and related documentation to evaluate the
       Debtors' performance as compared to projected results;

   (e) advise the Retirees Committee regarding strategic options
       available for the Debtors' business operations and assets;

   (f) review and evaluate any asset sale program proposed by
       Debtors;

   (g) analyze the terms of, and report to the Retirees Committee
       on, the value of any offers the Debtors may make to settle
       the claims asserted by the Retirees Committee and its
       constituents;

   (h) review all retiree benefit plans and:

       -- report to the Retirees Committee on potential or actual
          commonality of benefits;

       -- evaluate the Debtors' individual and collective
          liability under the retiree benefit plans; and

       -- work with any benefits actuary and consultant the
          Retirees Committee engages to establish the actual
          dimensions of the current and future claims represented
          by the Retirees Committee;

   (i) assist the Retirees Committee and its counsel in preparing
       responses to any of the Debtors' request to modify or
       terminate retiree benefit plans pursuant to Section 1114
       of the Bankruptcy Code and participate in negotiations
       over any proposed termination or modification to retiree
       benefit plans to resolve any dispute amicably, or prepare
       for and testify in support of, the Retirees Committee's
       position in litigation;

   (j) assist the Retirees Committee in negotiating the terms of
       the Debtors' plan of reorganization, including, as may be
       necessary, developing, evaluating, proposing, negotiating
       and documenting alternatives to the Debtors' plan;

   (k) analyze and value any securities and other assets to be
       distributed under the Debtors' plan or alternatives to the
       Debtors' plan proposed by the Retirees Committee or other
       third parties;

   (l) review, analyze and investigate any potential causes of
       action that the Retirees Committee and its constituents
       may have against the Debtors and other parties-in-
       interest;

   (m) attend and participate in meetings with the Retirees
       Committee, its counsel and the Debtors' representatives;

   (n) provide other financial advisory services as may be
       requested by the Retirees Committee; and

   (o) perform all other financial advisory services for the
       Retirees Committee that may be necessary or appropriate to
       assist it in performing its duties under Section 1114.

Bridge Associates' ordinary and customary hourly rates are:

       Managing Directors            $300 - $450
       Directors                     $300 - $450
       Senior Consultants            $300 - $450
       Principals                    $250 - $300
       Senior Associates             $250 - $300
       Consultants                   $250 - $300
       Associates                    $150 - $250
       Consultants                   $150 - $250

Anthony H.N. Schnelling, Esq., a managing director at Bridge
Associates, assures the Court that the firm does not hold or
represent any interest adverse to the Retirees Committee in the
matters for which the firm is proposed to be retained.

Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and
producer of vehicle structural components and assemblies used by
every major automotive original equipment manufacturer,
including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda,
Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo.  Products
include body structures and assemblies, lower vehicle frames and
structures, chassis modules and systems, and suspension
components.  The Company and 25 of its debtor-affiliates filed
voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y.
Case No. 05-10576 through 05-10601).  James H.M. Sprayregen, Esq.,
Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq.,
and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent
the Debtors in their restructuring efforts.  When the Debtors
filed for protection from their creditors, they listed
$787,948,000 in total assets and $1,306,949,000 in total
debts.  (Tower Automotive Bankruptcy News, Issue No. 25;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


TOWER AUTOMOTIVE: Wants to Reject Collective Bargaining Pacts
-------------------------------------------------------------
Section 1113(c) of the Bankruptcy Code permits a debtor who
satisfies a number of procedural and substantive prerequisites to
reject a collective bargaining agreement.  After bargaining in
good faith and sharing relevant information with its unions, the
debtor must make proposals to modify its existing CBA that are
"necessary to permit the reorganization" of the debtor.

Section 1114(g) of the Bankruptcy Code, on the other hand,
requires a debtor seeking to modify medical benefits for current
retirees, to satisfy requirements that are identical to those of
Section 1113(c).

Pursuant to Sections 1113(c) and 1114(g), Tower Automotive Inc.
and its debtor-affiliates seek the U.S. Bankruptcy Court for the
Southern District of New York's authority to reject their
collective bargaining agreements with:

   * the International Union, United Automobile, Aerospace and
     Agricultural Implement Workers of America;

   * the PACE/United Steelworkers of America;

   * the International Union of Electronic, Electrical, Salaried,
     Machine & Furniture Workers - Communication Workers of
     America; and

   * Milwaukee Unions composed of:

     -- Smith Steel Workers, AFL-CIO;

     -- International Association of Machinists and Aerospace
        Workers;

     -- Technical Engineers Association;

     -- International Brotherhood of Electrical Workers;

     -- Service Employees International Union;

     -- Steamfitters Union; and

     -- Chicago Regional Council of Carpenters

The Debtors also seek the Court's authority to modify the retiree
benefits of retirees represented by the Official Committee of
Retired Employees, the UAW, and the IUE/CWA.

John F. Hagan, Jr., Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, relates that the Debtors, as automotive suppliers, are
facing daunting revenue and cost challenges in an unstable
market.  On the revenue side, major automobile manufacturers like
General Motors, Ford, and Chrysler, which provide the majority of
the Debtors' business, have suffered declining market share and
financial losses, forcing them to close plants, fire employees,
reduce the number of vehicles they are making, and intensify
pressure for price concessions from suppliers, just to stabilize
their own operations.

At the same time, increasing costs for labor, steel, and other
inputs have squeezed the Debtors' profits from the cost side,
forcing the Debtors' North American operations, as well as
several other automotive suppliers, to file for Chapter 11.

The Debtors' retiree benefit obligations in particular are
staggering, Mr. Hagan discloses.  The Debtors estimate that the
net present value of their accumulated postretirement benefit
obligation is $178,000,000.  Of this amount, $133,000,000 is
attributed to current retirees, and $45,000,000 is attributed to
anticipated costs of projected future retirees.

The Debtors also project having to contribute a minimum of
$88,000,000 to their defined benefit plans from 2005 through 2008
and at least $92,100,000 from 2005 through 2010.  The Debtors
contribute $400,000 to the IAM National Pension Plan and $700,000
to the United Furniture Workers Pension Fund A annually.

Mr. Hagan tells Judge Gropper that emerging from bankruptcy will
require the Debtors to successfully execute their business plan
by both improving revenue opportunities and decreasing costs.

Mr. Hagan notes that as disappointing as this reality is, the
Debtors' unionized employees and retirees must now equitably
contribute to the Debtors' reorganization to survive.

Since the Petition Date, the Debtors have made significant
strides toward improving their profits, mitigating cash burn and
cutting non-labor costs.  However, despite all of their
restructuring initiatives, the Debtors' cash flow "has been --
and remains -- in the red, leaving little doubt that a feasible
plan of reorganization hinges on the Debtors' ability to reduce
its uncompetitive labor costs," Mr. Hagan explains.

Without the savings from the proposed rejection of the CBAs, the
Debtors project that their North American operations would be
cash flow negative through 2010.  Thus, the Debtors' survival and
long-term viability unquestionably depend on their ability to
obtain the labor cost relief.

Over the past several months, Mr. Hagan says, the Debtors have
made every effort to make the process of reducing their labor and
legacy costs a consensual one, including:

   (i) opening their books and financial records to their unions
       and to the Retirees Committee -- the Representatives --
       and providing them with the documents and information
       necessary to evaluate the Debtors' proposals; and

  (ii) urging negotiations toward a mutually agreeable
       resolution.

The Debtors believe that none of the Representatives has "good
cause" under either Section 1113 or Section 1114 for refusing to
agree to their proposals.

Mr. Hagan asserts that the Debtors have met the Section 1113 and
1114 requirements in that they:

   (a) have already made proposals to each of their Unions and
       Representatives for cost reductions that would allow the
       Debtors to return to profitability, obtain exit financing,
       and leave Chapter 11 once and for all;

   (b) are treating all employees fairly, as the Debtors'
       proposals seek to:

       -- place all union employees at similar wage rates in each
          of their geographic regions;

       -- have all employees contribute a similar amount for
          health care; and

       -- treat all union employees the same with respect to wage
          freezes or reductions, 401(k) match and the pension
          freeze; and

   (c) are treating retirees fairly, as the Debtors propose a
       quintessential equity by eliminating retiree medical for
       both current and future retirees.

Moreover, other stakeholders, like the Debtors' officers,
salaried and management employees, vendors, and customers, have
contributed substantially to the Debtors' cost-cutting efforts,
making the requested labor reductions fair and equitable, Mr.
Hagan notes.

In the aggregate, the Debtors' current proposals for active
employees will save the Debtors on average $19,600,000 annually
from 2006 to 2010.  The proposals to retirees will save an
additional $20,000,000 annually.

"With the savings from its proposals, Tower will be on the path
toward being able to effectively compete for new business,
generating positive cash flow, and being able to raise the
liquidity to exit and stay out of Chapter 11," Mr. Hagan assures
Judge Gropper.  "Without these savings, Tower will be left in
limbo, unable to pursue a feasible business plan or plan of
reorganization."

Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and
producer of vehicle structural components and assemblies used by
every major automotive original equipment manufacturer,
including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda,
Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo.  Products
include body structures and assemblies, lower vehicle frames and
structures, chassis modules and systems, and suspension
components.  The Company and 25 of its debtor-affiliates filed
voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y.
Case No. 05-10576 through 05-10601).  James H.M. Sprayregen, Esq.,
Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq.,
and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent
the Debtors in their restructuring efforts.  When the Debtors
filed for protection from their creditors, they listed
$787,948,000 in total assets and $1,306,949,000 in total
debts.  (Tower Automotive Bankruptcy News, Issue No. 25;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


TRM CORP: Discloses Stockholders Reselling 2.78M Shares
-------------------------------------------------------
Fifteen stockholders of TRM Corporation's shares of common stock
will be reselling the 2,778,375 shares, which were subject to
a Registration Statement filed with the U.S. Securities and
Exchange Commission and reported in the Troubled Company Reporter
on Jan. 3, 2006.

The selling stockholders are:

   Selling Stockholders                 Number of Shares Offered
   --------------------                 ------------------------
   Steelhead Investments Ltd.                            800,000
   SF Capital Partners Ltd.                              100,000
   D.E. Shaw Valence Portfolios, L.L.C.                   93,500
   Calm Waters Partnership                                68,800
   Walker Smith International Fund, Ltd.                  57,000
   Trenton Capital (QP), Ltd.                             48,193
   Walker Smith Capital (QP), L.P.                        41,400
   Camden Partners Limited Partnership                    21,000
   Nite Capital, L.P.                                     15,000
   WS Opportunity Fund International, Ltd.                 9,800
   Trenton Capital, Ltd.                                   7,882
   Walker Smith Capital, L.P.                              7,300
   WS Opportunity Fund, L.P.                               7,500
   WS Opportunity Fund (QP), L.P.                          7,000
   D.E. Shaw Investment Group, L.L.C.                      6,500

The Company's common stock is traded on the Nasdaq National Market
under the symbol "TRMM."  The Company's common shares traded
around $15 in early October.  Trading price of the Company's
shares steadily dropped to around $12 in November.  The Company's
stock now trades around $7.

A full-text copy of the Registration Statement is available for
free at http://ResearchArchives.com/t/s?413

Headquartered in Portland, Oregon, TRM Corporation --
http://www.trm.com/-- is a consumer services company that
provides convenience ATM and photocopying services in high-traffic
consumer environments.  TRM's ATM and copier customer base has
grown to over 35,000 retailers throughout the United States and
over 46,200 locations worldwide, including 6,400 locations across
the United Kingdom and over 4,900 locations in Canada.  TRM
operates one of the largest multi-national ATM networks in the
world, with over 22,000 locations deployed throughout the United
States, Canada, Great Britain, including Northern Ireland and
Germany.

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 2, 2005,
Standard & Poor's Ratings Services raised its recovery rating on
TRM Corporation's senior secured bank loan to '3' from '4'.  This
indicates that lenders can expect meaningful recovery of principal
in the event of a payment default or bankruptcy.  The 'B+' bank
loan and corporate credit ratings were affirmed.


U.S. PLASTIC: Wants to Sell Assets to AMPAC Capital for $5.5 Mil.
-----------------------------------------------------------------
U.S. Plastic Lumber Corp. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of Florida, West Palm
Beach Division, for authority to sell substantially all of their
assets to AMPAC Capital Solutions, LLC, for $5.5 million,
consisting of:

   -- $2.3 million in cash; and

   -- the satisfaction and release of $3.2 million of
      postpetition loans provided by AMPAC under a DIP Facility
      Agreement.

Additionally, AMPAC has agreed to assume $582,000 of obligations
incurred by the Debtors in the ordinary course of business.

Prior to their bankruptcy filings, the Debtors borrowed under a
Loan and Security Agreement, dated Dec. 19, 2002, with Guaranty
Business Credit Corporation.  In May 2004, Guaranty Business
assigned to AMPAC Capital its rights, title and interest in the
loan agreement.  As of the petition date, the Debtors' outstanding
balance under the credit pact is approximately $7.5 million.  In
March 2005, the Debtors paid about $2 million from the proceeds of
the sale of their Ocala, Florida, assets to reduce the loan
balance to $5.5 million.

The Debtors determined that the sale of their assets is the only
course of action left to them.  Having filed an amended plan of
reorganization in Sept. 2005, the Debtors were nearing the closing
of an investment purchase agreement with Skiritai Capital LLC, and
an exit facility agreement with certain creditors.  However, the
resignation of Bruce Disbrow, the Debtors' chief executive officer
in mid-October 2005, ruined any chances of the Debtors' continued
operations.  Because of Mr. Disbrow's resignation, Skiritai
withdrew from its intention to put an investment in the
Reorganized Debtors.  At the same time, the exit facility lenders
also backed out of talks with the Debtors.

The Debtors add that the sale of their assets will preserve the
jobs of their existing employees.

                         Siemens Objects

Siemens Financial Services, Inc., asserts perfected, first-
priority liens on some of the equipment that the Debtors are
selling to AMPAC, on account of $2,551,563 promissory notes.  
Siemens wants its interest protected pursuant to Section 363(e) of
the Bankruptcy Code and Rule 4001(a)(1) of the of Federal Rules of
Bankruptcy Procedure.

Siemens asserts that if the sale of the Debtors' assets will be
approved, the value of its collateral must be paid immediately
upon closing and in cash.

Headquartered in Boca Raton, Florida, U.S. Plastic Lumber --  
http://www.usplasticlumber.com/-- manufactures plastic lumber and  
is the technology leader in the industry. The Company filed for a
chapter 11 protection on July 23, 2004 (Bankr. S.D. Fla. Case No.
04-33579). Stephen R. Leslie, Esq., at Stichter, Riedel, Blain &
Prosser, P.A., represents the Debtor in its restructuring efforts.  
When the Debtor filed for protection from its creditors, it listed
$78,557,000 in total assets and $48,090,000 in total debts.


UAL CORP: Committee Taps Watson Wyatt as Investment Consultants
---------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in UAL
Corporation and its debtor-affiliates seeks the U.S. Bankruptcy
Court for the Northern District of Illinois' authority to retain
Watson Wyatt & Company and Watson Wyatt Investment Consulting,
Inc., as actuarial and investment consultants, effective as of
Jan. 3, 2006.

Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP, in
Chicago, Illinois, relates that Watson Wyatt has extensive
actuarial experience in all aspects of tax qualified employee
pension benefits.

As consultants, Watson Wyatt will:

   (a) provide consulting advice and develop actuarial analyses
       associated with determining plan liabilities;

   (b) provide consulting advice concerning the appropriate
       investment rates of return to be used in discounting
       the Debtors' benefit plan liabilities;

   (c) provide consulting and actuarial services in connection
       with the Pension Benefit Guaranty Corporation's requests
       for admissions, interrogatories, and document production
       requests;

   (d) provide consulting in areas in which Watson Wyatt
       generally consults with its clients as reasonably
       requested by the Committee; and

   (e) attend meetings and negotiation sessions.

Watson Wyatt's activities may also include:

   -- reviewing documents and testimony that the Committee deems
      relevant;

   -- performing analyses; and

   -- if requested, rendering opinions in connection with the
      trial, including possible deposition or trial testimony.

According to Mr. Jacobson, Watson Wyatt intends to work closely
with other professionals retained by the Committee to ensure that
there is no unnecessary duplication of services performed or
charged to the Debtors.

Watson Wyatt will be paid based on its current hourly rates
ranging from $150 to $642 per hour.

David Riddell, a member of the firm, assures the Court that
Watson Wyatt is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code.  Watson Wyatt,
Mr. Riddell continues, does not hold or represent an interest
adverse to the interest of the estates or of any class of
creditors or equity security holders.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the  
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.  (United Airlines
Bankruptcy News, Issue No. 111; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


UAL CORP: Committee Wants Discount Rate Set for $8.3BB PBGC Claims
------------------------------------------------------------------
As previously reported, UAL Corporation and its debtor-affiliates
proposed a plan of reorganization that allows the general
unsecured claim filed by the Pension Benefit Guaranty Corporation
for unfunded benefit liabilities "in an amount determined under
PBGC Regulations."

The Official Committee of Unsecured Creditors argued that the
calculation of the Claim based on the PBGC regulations conflicted
with the policy of equality of distribution to similarly situated
creditors reflected in Sections 1123 and 1129 of the Bankruptcy
Code.

However, the Court issued a summary judgment declaring that the
amount of the PBGC Claim must be determined in accordance with
the Employee Retirement Income Security Act of 1974 and the PBGC
regulations rather than the policies and provisions of bankruptcy
law.

             Committee Discusses PBGC Discount Rate

Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP, in
Chicago, Illinois, argues that the Court must set a discount rate
to establish the present value of the PBGC Claim as of the
Petition Date.  The Court must take the lump sum amount
calculated under the PBGC regulations and discount that amount
from the termination dates to the Petition Date.

Furthermore, the Court must consider evidence regarding the
appropriate discount rate.  Mr. Jacobson notes that the Creditors
Committee will produce evidence on the appropriate discount rate
that should be used.

The Creditors Committee believes that the Treasury bill rate
suggested by the Court does not take into account the significant
variation in the discount rate set by the PBGC regulations over
the relevant period or the varied rate of return on the assets.

Mr. Jacobson asserts that the PBGC Claim must be adjusted to
account for Section 1362 of the Labor Code's "Special Rule" for
unfunded benefit liability that exceeds 30% of the plan sponsor's
worth.  When the liability exceeds 30%, Mr. Jacobson says, the
entire amount is not immediately due and owing.  Instead, the
PBGC is only entitled to payments "under commercially reasonable
terms prescribed by the corporation."

Mr. Jacobson argues that anything that the PBGC received in
excess of what it relinquished must act as a credit against any
claim allowed on behalf of the PBGC.  The PBGC has acknowledged
that the offset issues remain outstanding and subject to further
discovery.  Therefore, the parties must submit evidence regarding
the value of the consideration provided and received by the
Debtors and the PBGC.

Since the PBGC is not entitled to postpetition interest on its
unsecured claim under Section 502(b)(2) of the Bankruptcy Code,
the Court must also review the components of the PBGC Claim and
disallow any part attributable to interest.

Mr. Jacobson notes that the Court must likewise hear evidence on
any dispute with respect to the calculation of the Claim in the
event that ERISA and the PBGC regulations were employed in a
calculation, but were improperly applied.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the  
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.  (United Airlines
Bankruptcy News, Issue No. 111; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


UAL CORP: Court Authorizes Bid for FLYi Assets
----------------------------------------------
The Hon. Eugene R. Wedoff authorized UAL Corporation and its
debtor-affiliates to submit a bid for FLYi, Inc.'s assets.

On December 16, 2005, the Debtors submitted a bid for an  
undisclosed amount of FLYi's assets.

                     FLYi Postpones Auction

FLYi, Inc., has recently advised the U.S. Bankruptcy Court for the
District of Delaware that it will not proceed with the auction of
its assets.

While FLYi received multiple expressions of interest for its
business and assets, FLYi's counsel Brendan Linehan Shannon,
Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington,
Delaware, relates that only one formal bid contemplated the
continuation of the company's operations as a going concern.  The
Going Concern Bid, however, had several features that prevented
FLYi from accepting proposal as a viable bid for its business.

Mr. Shannon notes that since the beginning of December 2005, FLYi
and the Official Committee of Unsecured Creditors appointed in
its Chapter 11 case have been focused on developing the going
concern expressions of interest.

Mr. Shannon explains that the Going Concern Bid:

   -- provided insufficient consideration;

   -- had numerous conditions that were beyond FLYi's control to
      satisfy including the renegotiation of certain material
      contracts on terms acceptable to the bidder; and

   -- did not provide for funding for the significant operating
      losses and cash burn FLYi expected to incur prior to
      closing of the transaction.

Mr. Shannon further relates that since receiving the Going
Concern Bid, FLYi and its Committee have been focused on
developing and improving that bid, as well as continuing
discussions with bidders that had expressed interest in a going
concern transaction in the past.  Ultimately, however, FLYi was
unable to substantially improve the Going Concern Bid or find an
attractive alternative going concern bidder.

After intensive evaluation of all of their alternatives, FLYi
concluded that the value of its estates would be maximized by
discontinuation of its scheduled flight operations and
liquidation of its assets pursuant to one or more sale or other
transactions that do not contemplate the continued operation of
Independence Air as a going concern.

FLYi will be amending the bidding procedures.

FLYi may retain one or more firms to assist in devising an
auction process that maximizes the value of certain assets in a
post-discontinuation of operations environment.

Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent  
of Independence Air Inc., a small airline based at Washington
Dulles International Airport.  The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017).  Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.  As of Sept. 30, 2005, the Debtors listed
assets totaling $378,500,000 and debts totaling $455,400,000.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the  
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.  (United Airlines
Bankruptcy News, Issue No. 111; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


UAL CORP: Launches $3 Billion Exit Financing Facility
-----------------------------------------------------
UAL Corporation (OTC Bulletin Board: UALAQ), the holding company
whose primary subsidiary is United Airlines, reported the launch
of its exit financing loan for up to $3 billion.  The six-year
loan will be secured by substantially all available assets and
comprised of a $300 million revolving credit facility and an up to
$2.7 billion term loan, both priced at LIBOR + 450 basis points.

Proceeds will be used for several purposes:

    * to repay outstanding loans under United's debtor-in-
      possession financing;

    * certain bankruptcy-related expenses;

    * working capital; and

    * other general corporate purposes.

The financing is led by JPMorgan and Citigroup.  GE Capital will
act as syndication agent.

"We have been pleased that our debtor-in-possession loan has been
oversubscribed, and we look forward to successful syndication of
our exit facility," said Kathryn Mikells, United vice president
and treasurer.

A hearing to confirm United's plan of reorganization is scheduled
for Jan. 18, 2006 at the U.S. Bankruptcy Court for the Northern
District of Illinois, and the company is planning to exit
bankruptcy on or about Feb. 1, 2006.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.


UAL CORP: S&P Rates $3 Billion Senior Secured Debts at B+
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
United Air Lines Inc.'s (rated 'D') senior secured bank revolving
credit and term loan of up to $3 billion, due 2011, currently
being syndicated.

In addition, a '1' recovery rating is assigned, indicating a high
expectation of full recovery of principal in the event of a second
United bankruptcy.

The ratings assume emergence from Chapter 11 bankruptcy
proceedings by United and its UAL Corp. (rated 'D') parent,
targeted for early February 2006, and satisfaction of other
conditions precedent to the bank facility becoming effective.  
Upon United's and UAL's emergence, Standard & Poor's anticipates
assigning its 'B' corporate credit rating to both companies.  The
expected rating outlook is stable.

The 'B+' bank loan rating is based upon the anticipated 'B'
corporate credit ratings of United and UAL, and on a high
likelihood of full recovery of principal in any future United
bankruptcy.

"The anticipated 'B' corporate credit rating reflects United's
participation in the price-competitive, cyclical, and      
capital-intensive airline industry; on difficult industry
conditions, characterized by high and volatile fuel prices and
fierce competition from low-cost carriers in the U.S. domestic
market; and on UAL's highly leveraged financial profile," said
Standard & Poor's credit analyst Philip Baggaley.  "These
weaknesses are mitigated to some extent by United's extensive and
well-positioned route system providing good revenue potential,
especially on international routes, and by reductions in labor
costs and financial obligations achieved in bankruptcy."
     
The proposed senior secured credit facilities of up to $3 billion
consist of a $300 million revolving credit facility maturing six
years from closing and a $2.7 billion term loan B maturing six
years from closing.  The facilities are secured by substantially
all of United's unencumbered assets, principally aircraft and
related assets such as spare engines and spare parts,
international route rights and unrestricted cash (covenant minimum
of $1.2 billion initially, reducing after Dec. 31, 2006, to      
$1 billion if United is in compliance with a fixed charge coverage
test).

Standard & Poor's used a discrete asset approach and applied
discounts to the various types of collateral in its simulated
default scenario.  In that scenario, stressed collateral coverage
was in the 1x to 1.3x range.  Given the conservative assumptions
used in modeling and the likelihood that UAL and United would be
able to reorganize in any such bankruptcy, recovery prospects
were judged sufficient to support a '1' recovery rating and 'B+'
bank loan rating.


UNITED HOSPITAL: Selling Real Property to Port Chester for $22MM
----------------------------------------------------------------
New York United Hospital Medical Center and U.H. Housing Corp.,
ask the U.S. Bankruptcy Court for the Southern District of New
York for authority to sell certain real property assets to Port
Chester Redevelopment Group, subject to higher and better offers.

On Nov. 17, 2005, the parties entered into an asset sale
agreement, which calls for the sale of the Debtors' real property
assets located in Port Chester, in New York, for $22 million in
cash.

The Debtors remind the Court that they are in the process of
winding-down their operations and are in the process of preparing
a plan of liquidation.  The Debtors believe that the sale of the
properties will return a greater benefit to their estates than any
of the alternatives, including:

   -- a sale at a later date;
   -- property leases; or
   -- the sale of the properties in separate parcels.

The Debtors believe that their secured lenders, the Dormitory
Authority of the State of New York, Kimco Capital Corporation and
SB Capital Group LLC, will consent to the sale of the properties
with their liens attaching to, and being paid out from, the sale
proceeds in the same order of priority as currently exists.

The Debtors tell the Court that the sale proceeds will be used to
provide for the orderly liquidation and distribution to the
Debtors' creditors.  

To protect the buyer's bid, the Debtors propose a $220,000 break-
up fee.  The Debtors request that the sale hearing be held on
Jan. 24, 2006, at 10:00 a.m.  

Alvarez & Marsal LLC serves as the Committees' financial advisor
assigned to market the assets.

Headquartered in Port Chester, New York, New York United Hospital
Medical Center is a 224-bed, community healthcare provider and a
member of the New York-Presbyterian Healthcare System, serving
several Westchester communities, including Port Chester, Rye,
Mamaroneck, Rye Brook, Purchase, Harrison and Larchmont.  The
Company filed for chapter 11 protection on December 17, 2004
(Bankr. S.D.N.Y. Case No. 04-23889).  Lawrence M. Handelsman,
Esq., at Stroock & Stroock & Lavan LLP, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed total assets of $39,000,000 and
total debts of $78,000,000.


USG CORP: Law Firms Want More Time to Complete Questionnaires
-------------------------------------------------------------
Baron & Budd, P.C., Foster & Sear, LeBlanc & Waddell, LLP, and
Silber Pearlman, LLP, ask the United States District Court for
the District of Delaware to extend the time for them to complete
and return the standard questionnaires in the chapter 11 cases of
USG Corporation and its debtor-affiliates to select personal
injury asbestos claimants until February 8, 2006.

Pursuant to an order dated October 17, 2005, Judge Conti directed
the Debtors to serve the Questionnaire on a sample of 2000 PI
claimants.  The PI Estimation Order also requires the
Questionnaire to be timely returned by mail no later than
January 9, 2006.

Daniel K. Hogan, Esq., at The Hogan Firm, in Wilmington,
Delaware, relates that Baron & Budd, LeBlanc & Waddell and Silber
Pearlman have 100 Questionnaires for which they have primary
responsibility for completion, while Foster & Sear is accountable
for 30 Questionnaires.

Each of the Objecting Law Firms then began reviewing its files
for the information necessary to accurately complete the detailed
27-page Questionnaires.  Simultaneous with their work on the USG
Questionnaires, the Objecting Law Firms were also reviewing their
files and completing the 10-page Asbestos Personal Injury
Questionnaire for their clients who are holders of asbestos PI
prepetition litigation claims in W.R. Grace & Co.'s Chapter 11
cases, for submission by January 12, 2006.

Mr. Hogan notes that completing each USG Questionnaire involves
answering 100 questions -- most of which are multi-part -- and
compiling and submitting copies of medical reports and records.
Mr. Hogan reminds Judge Conti that she has previously recognized
the complexity of the Questionnaires.

Although the Objecting Law Firms have worked diligently to
complete the Questionnaires, the diversion of attorneys and staff
resources to the work on completing the voluminous number of
Questionnaires -- coupled with the intervening holiday season and
its attendant attorney and staff vacations -- has made completion
of the USG Questionnaires by the January 9 Deadline impossible,
Mr. Hogan points out.

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.  The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.
01-02094).  David G. Heiman, Esq., and Paul E. Harner, Esq., at
Jones Day represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.  (USG
Bankruptcy News, Issue No. 101; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


USG CORP: Wants Until June 30 to File Plan of Reorganization
------------------------------------------------------------
USG Corporation and its debtor-affiliates ask Judge Judith K.
Fitzgerald of the U.S. Bankruptcy Court for the District of
Delaware to further extend:

   * the period during which they have the exclusive right
     to file a plan of reorganization to and including
     June 30, 2006; and

   * the period during which they have the exclusive right to
     solicit acceptances of that plan to and including
     September 1, 2006.

                    The Estimation Proceedings

Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, relates that although the vastly different
perspectives regarding the estimated amount of asbestos
personal injury claims have made the path to emergence from the
Debtors' Chapter 11 cases difficult, the parties are now moving
steadily down that path.  Specifically, the parties are engaged
in discovery in the estimation proceedings and the United States
District Court for the District of Delaware has indicated that it
intends to conduct the hearings on estimation shortly after the
conclusion of discovery.

The Debtors anticipate that once the District Court has estimated
the Asbestos PI Claims liability, they will be able to develop
and file a plan of reorganization that will fairly address the
interests of all stakeholders.

"The process for estimation of the Asbestos PI Claims is even
more defined now, and, accordingly, the bases for the
continuation of the Exclusive Periods are equally clear," Mr.
Heath says.  "Furthermore, during the next six-month period, the
creditors will not be at risk because the Debtors' businesses
continue to perform at a record pace, resulting in growing
estates in which all stakeholders will share," he assures the
Court.

According to Mr. Heath, the Asbestos PI Claimants have served the
Debtors with an expansive document request, interrogatories and
requests for admissions.  The Debtors have undertaken a massive
effort to provide the Asbestos PI Claimants with the materials
they require, which has already resulted in the production of
over 700,000 pages of documents.

Moreover, in October 2005, the Debtors have already served
questionnaires to gather the pertinent facts from a sample of
2,000 present claimants, Mr. Heath tells Judge Fitzgerald.
Pursuant to District Judge Conti's order, the responses to the
questionnaires are due on January 9, 2006.  In addition, the
parties have exchanged lists of prospective expert and fact
witnesses, and the Debtors are continuing to develop the evidence
they will present during the estimation hearing.

Mr. Heath notes that the Asbestos PI Claimants' views on how
estimation should be conducted are dramatically different than
the Debtors' views.  Thus, Mr. Heath says, only through an
extended period of briefing and argument, which started soon
after Judge Conti's appointment and continued until October 2005,
were the Debtors able to secure the right to present the evidence
that they are now gathering.  That result will ensure that the
interests of all stakeholders are duly considered before a plan
of reorganization is formulated
and later approved.

Under Judge Conti's discovery schedule, fact discovery will close
on June 30, 2006. There will be a hearing before the District
Court on July 18, 2006, to set the expert discovery schedule, and
the tentative date for the exchange of expert reports is August
4, 2006.

                  The Declaratory Relief Action

The Debtors have asked Bankruptcy Court to determine which Debtor
is liable for any allowed Asbestos PI Claims, Mr. Heath states.  
The PI Claimants have sought to dismiss the Declaratory Relief
Action.

Over the past six months, the Debtors have been actively engaged
in a discovery process with respect to the Action.  Mr. Heath
points out that it is uncertain whether the Court will decide on
the issue prior to the filing of a plan of reorganization in the
Debtors' Chapter 11 cases.

                 Asbestos Property Damage Claims

Mr. Heath reports that the Debtors also continue to make progress
in narrowing the issues on the asbestos property damage claims.
As of the end of December 2005, the Debtors have filed five
omnibus objections to PD Claims based on the absence or
inadequacy of product identification information.  These
objections have led to the disallowance of over 400 PD Claims.
In addition, as a result of discussions with counsel purporting
to represent a large number of PD Claimants, more than 100 PD
Claims have been withdrawn.

The Debtors have continued to pursue, informally, both
discussions and access to information intended to facilitate the
resolution of additional PD Claims.  The Debtors envision the
likely need to pursue additional objections to PD Claims that
they believe are factually or legally deficient, and as to which
the Debtors and the PD Claimants have been unable to reach a
consensual resolution.

           Cooperation and Discussions with Stakeholders

The Debtors attest that, notwithstanding the key issues that are
in litigation, they have endeavored to maintain a constructive
dialogue with their key creditor constituencies and have,
throughout their bankruptcy cases, shared all significant
financial and other relevant information with their constituents.

           USG's Businesses Continue To Be Profitable

Mr. Heath notes that the Debtors have continued to operate their
businesses profitably and expect to continue to generate
significant cash from operations during the proposed extension of
the Exclusive Periods.  Specifically, during the first nine
months of 2005, the Debtors generated record sales exceeding
$3,800,000,000 and net earnings during that same period increased
by approximately 52%, compared with net earnings during the first
nine months of 2004.  In addition, the Debtors have realized
record sales of $1,340,000,000 for the third quarter of 2005,
during which earnings were up approximately 76% compared to the
third quarter of 2004.

The Debtors' extraordinary operational performance, Mr. Heath
points out, demonstrates yet again that their management has not
allowed the bankruptcy to distract it from the most important
objective of all: the maximization of the value of the Debtors'
estates to be shared by all stakeholders.  Although the Debtors
are more anxious than any other party to exit Chapter 11 as soon
as possible, they continue to protect the economic interests of
all stakeholders, Mr. Heath relates.

                      Extension is Necessary

Mr. Heath asserts that absent a merits-based evaluation of the
Asbestos PI Claims liability, the value of the estates cannot be
allocated fairly among the Debtors' stakeholders.  Therefore, the
filing of any plan of reorganization in the Debtors' cases at
this time would be premature, and would, by necessity, be
contentious and not confirmable.

Moreover, the plan process in the Debtors' bankruptcy cases
cannot proceed without first resolving the issues surrounding the
nature and extent of U.S. Gypsum Co.'s alleged asbestos
liability, Mr. Heath says.  Given this fact, the Debtors' request
for an extension of the Exclusive Periods is warranted.

                          Court Hearing

The Court will convene a hearing on February 21, 2006, to
consider the Debtors' request.  By application of Del.Bankr.LR
9006-2, the deadline is automatically extended until the Court
rules on the request.

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.  The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.
01-02094).  David G. Heiman, Esq., and Paul E. Harner, Esq., at
Jones Day represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.  (USG
Bankruptcy News, Issue No. 101; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


WESTPOINT STEVENS: Balks at Steering Committee's Lift Stay Motion
-----------------------------------------------------------------
As previously reported, WestPoint Stevens, Inc. and its debtor-
affiliates sold substantially all of their assets to WestPoint
International, Inc., and WestPoint Home, Inc.  The consideration
paid by the Purchasers included equity securities in the form of
common stock and Subscription Rights in WPI, along with the
assumption by the Purchasers of certain liabilities.

The First Lien Lenders and Second Lien Lenders were granted
replacement liens in the Sale Proceeds, including the Parent
Shares and Subscription Rights, "to the same extent, validity and
priority that they attached to the Purchased Assets immediately
prior to the Closing."

Contrarian Funds, LLC, Satellite Senior Income Fund, LLC, CP
Capital Investments, LLC, Wayland Distressed Opportunities Fund
I-B, LLC, and Wayland Distressed Opportunities Fund I-C, LLC, as
members of the Steering Committee, and Beal Bank, S.S.B., as the
First Lien Collateral Trustee, acting on behalf of First Lien
Lenders other than Aretex LLC appealed the Sale Order to the
United States District Court for the Southern District of New
York.

In November 2005, the District Court made it clear that the
Objecting First Lien Lenders are entitled to realize cash from the
sale of the Securities subject to their Interests, including but
not limited to all of the Subscription Rights.

In December 2005, the District Court clarified that the Interests
granted to First Lien Lenders under the Sale Order continue to
attach to all of the replacement collateral, which includes
Parent Shares and Subscription Rights distributed to Aretex under
the Sale Order and in accordance with all requirements imposed by
the Asset Purchase Agreement, in full payment and satisfaction of
Aretex's First Lien Indebtedness.

The matter has been remanded to the Bankruptcy Court.

By this motion, the Steering Committee asks the Court to lift the
automatic stay to permit it and the First Lien Collateral Trustee
to exercise any and all rights and remedies that may exist with
respect to any and all of the Collateral that secures the
outstanding First Lien Indebtedness owed by the Debtors.

Sidney P. Levinson, Esq., at Hennigan, Bennett & Dorman, LLP, in
Los Angeles, California, asserts that relief from stay is
mandatory under Section 362(d)(2) of the Bankruptcy Code given
that the Debtors have no equity in the Securities and cannot
demonstrate that the Securities are necessary for an effective
reorganization.  Even if relief from stay were not mandatory, Mr.
Levinson contends that the Court should grant relief from stay for
cause under Section 362(d)(1).

Under the Sale Order, the Court held the value of the Securities
was $575,800,000, which is at least $78,000,000 below the total
principal amount of the First Lien Indebtedness and the Second
Lien Indebtedness as of July 8, 2005, not even taking into account
unpaid accrued interest, fees, expenses since August 1, 2005, of
more than $13,000,000.

Mr. Levinson adds that the Debtors also cannot carry their burden
to prove that the Securities are necessary for an effective
reorganization.  Mr. Levinson notes that the Debtors have
abandoned all prospects for a plan of reorganization, as evidenced
by their motion to dismiss their cases filed August 2005.

The Debtors remain administratively insolvent, unable to
reorganize the business, which has been sold, or fund a
liquidating plan of reorganization, Mr. Levinson points out.

The Debtors now face accrual of interest on the outstanding First
Lien Indebtedness of more than $3,000,000 per month.  Given the
Debtors' admission that reorganization is impossible and that
there is no reasonable likelihood of rehabilitation, Mr. Levinson
asserts, immediate relief from the automatic stay is warranted.

In the alternative, Mr. Levinson maintains that cause exists by
reason of the Debtors' inability to provide the Objecting First
Lien Lenders and the Steering Committee with adequate protection
of their secured claims.

                      Second Lien Lenders Object

GSC Partners, Pequot Capital Management, Inc., and Perry
Principals LLC, as lenders under the Second Lien Credit Agreement
dated June 29, 2001, tell the Court that the Steering Committee's
request is moot and should be dismissed as moot, without prejudice
to other proceedings.  The Court has already lifted the automatic
stay with respect to the proceeds of the sale of the Debtors'
business.

                          Debtors Respond

The Debtors believe that relief from the automatic stay for the
purpose of allowing the Steering Committee or the First Lien
Agent to foreclose on the Securities is premature.

The Debtors point out that:

    (1) It is not clear whether the Securities held by Aretex
        should be sold in order to comply with the District
        Court's ruling.

    (2) Lifting the automatic stay, presumably to allow state law
        foreclosure on the Securities, may not maximize the value
        of the Securities for the First Lien Lenders and Second
        Lien Lenders.

    (3) Aretex is seeking to appeal the decision of the District
        Court.  Granting relief from the automatic stay could make
        that appeal moot.

However, the Debtors ask the Court to deny the Lift Stay Motion to
the extent that the Steering Committee seeks to interfere in any
way with the obligations of the Purchaser under the APA to pay
third parties directly for certain obligations, including without
limitation, the expenses incurred in winding down the Debtors'
estates.

Headquartered in West Point, Georgia, WestPoint Stevens, Inc. --
http://www.westpointstevens.com/-- is the #1 US maker of bed  
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings.  It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers.  (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores.  Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens.  The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532).  John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts. (WestPoint Bankruptcy
News, Issue No. 61; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


WESTPOINT STEVENS: Steering Panel Wants Dist. Ct. Order Followed
----------------------------------------------------------------
The Steering Committee and Beal Bank, S.S.B., as first lien
administrative agent and collateral trustee, appealed to the
United States District Court for the Southern District of New York
from certain provisions of the Bankruptcy Court order authorizing
the sale of substantially all of the WestPoint Stevens, Inc., and
its debtor-affiliates' assets.

The Steering Committee comprises of Contrarian Funds, LLC,
Satellite Senior Secured Income Fund, LLC, CP Capital Investments,
LLC, Wayland Distressed Opportunities Fund I-B, LLC, and Wayland
Distressed Opportunities Fund 1-C, LLC.

District Court Judge Laura Taylor Swain amended certain portions
of the District Court's November 16, 2005, Order relating to the
Sale Order Appeal.

Judge Swain clarifies that the Sale Order is vacated to the extent
it precludes treatment of the claims and collateral of the
objecting First Lien Lenders and of the Second Lien Lenders under
a Chapter 11 plan in a manner conflicting with or derogating from
the provisions of the Sale Order or the Asset Purchase Agreement,
and not the Intercreditor Agreement.

           Panel Wants District Court Order Implemented

The Steering Committee asks Judge Drain to implement an order
issued by the United States District Court for the Southern
District of New York on November 16, 2005, as amended on
December 7, 2005.

The Order is premised on the District Court's ruling that, as a
matter of law, the First Lien Lenders were not paid and satisfied
in full with the securities issued by WestPoint International,
Inc., that constitute proceeds of the sale.  As a consequence, the
Opinion concluded that:

      "The provisions for such claim satisfaction and the release
      of liens in connection therewith will be vacated insofar as
      they apply to the Objecting First Lien Lenders, and the
      matter will be remanded to the Bankruptcy Court for further
      proceedings consistent with this Opinion.  The Subscription
      Rights currently held in escrow pursuant to the Stay Order
      will continue so to be held pending further order of the
      Bankruptcy Court."

By virtue of the Order's vacation of the claim satisfaction
provisions, the First Lien Lenders continue to be owed principal
under the First Lien Credit Agreement for about $293,000,000 plus
interest and fees that have accrued since August 1, 2005, totaling
more than $13,000,000.

Moreover, as a result of the Order's vacation of the lien release
provisions in the Sale Order, the replacement liens granted to the
First Lien Lenders in the replacement collateral remain intact,
and have not been released under the Sale Order.

In addition, the District Court expressly contemplated that the
collateral securing the First Lien Lenders' claims would be sold,
with the cash realized from that sale used to pay the Objecting
First Lien Lenders and, to the extent any surplus remained after
payment in full of the First Lien Lenders, then to pay the Second
Lien Lenders.

The Steering Committee believes that there are a few matters
before the Bankruptcy Court that must be addressed in light of the
District Court's ruling.  Among those matters, most of which are
ministerial in nature, are:

    (a) Registration of escrowed subscription rights on WPI's
        books and records in the name of the First Lien Collateral
        Trustee;

    (b) Registration of all of the Securities that constitute
        replacement collateral with the Securities and Exchange
        Commission;

    (c) The District Court's ruling impacts the Bankruptcy Court's
        preliminary ruling concerning the Adequate Protection
        Escrow Account.  Rather than revisit that ruling now, the
        Steering Committee proposes that the Bankruptcy Court
        defer issuing any final ruling, pending the sale of the
        Securities, as that sale may generate sufficient proceeds
        to moot the dispute concerning distribution of the
        proceeds in the Adequate Protection Escrow Account;

    (d) With respect to the Steering Committee's Motion for
        Reallocation, the Bankruptcy Court should enter an order
        that the proceeding is moot, based on the Order, which
        vacates the provisions of the Sale Order calling for
        distribution to the Second Lien Lenders, as well as the
        prohibition on post-closing reallocation that was formerly
        contained in the Sale Order; and

    (e) The Court should lift any stay that currently applies to
        the adversary proceeding, to allow the Steering Committee
        to amend its complaint to incorporate, among other things,
        the Order and recent actions undertaken by WPI's board of
        directors and controlling shareholder that give rise to
        further causes of action.

The Steering Committee members are Contrarian Funds LLC,
Satellite Senior Income Fund, LLC, CP Capital Investments, LLC,
Wayland Distressed Opportunities Fund I-B, LLC and Wayland
Distressed Opportunities Fund I-C, LLC.

                    Second Lien Lenders Respond

GSC Partners, Pequot Capital Management, Inc., and Perry
Principals LLC, as lenders under the Second Lien Credit Agreement
dated June 29, 2001, contend that the Court should require the
Objecting First Lien Lenders to provide some reasonable
description of their intended course of action and should
additionally require that the Objecting First Lien Lenders "give
up for sale" the Securities they have already received.

The Second Lien Lenders assert that the District Court Opinion had
nothing to do with the Adequate Protection Escrow Account and the
Bankruptcy Court's alternative holding awarding the Adequate
Protection Escrow Account to the Second Lien Lenders regardless of
whether the First Lien Lenders were paid in full was clearly
correct on the merits.

Headquartered in West Point, Georgia, WestPoint Stevens, Inc. --
http://www.westpointstevens.com/-- is the #1 US maker of bed  
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings.  It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers.  (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores.  Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens.  The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532).  John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts. (WestPoint Bankruptcy
News, Issue No. 61; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


WINBLE CORPORATION: Case Summary & 14 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Winble Corporation of Colorado
        P.O. Box 77
        Durango, Colorado 80302-0077

Bankruptcy Case No.: 06-10053

Chapter 11 Petition Date: January 8, 2006

Court: District of Colorado (Denver)

Judge: Michael E. Romero

Debtor's Counsel: Philipp C. Theune, Esq.
                  Theune Law Offices, PC
                  1775 Sherman Street, 31st Floor
                  Denver, Colorado 80203-1100
                  Tel: (303) 832-1150

Total Assets: $7,040,384

Total Debts:  $7,397,145

Debtor's 14 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Wells Fargo Bank                 2005 Loan              $54,507
21680 Gateway Center Drive
Suite 280
Diamond Bar, CA 91765

Durango Heating & Refrigeration  Trade Debt              $1,070
150 Whistling Horse Trail
Durango, CO 81301-8991

City of Durango                  Utilities                 $877
P.O. Box J2830
Durango, CO 81302-2830

Encompasse Insurance             Trade Debt                $196

J & T Distributing               Trade Debt                $184

Qwest                            Utilities                 $172

Griegos Lock & Key               Trade Debt                $138

San Juan Copy Systems            Trade Debt                $106

City of Cortez                   Trade Debt                 $95

Sundance Carpet Cleaning         Carpet Cleaning            $88
                                 Services

Superior Alarm                   Trade Debt                 $81

Central Distributing             Trade Debt                 $74

Primus                           Trade Debt                  $9

Empire Electric                  Trade Debt                  $0


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------  
                                Total  
                                Shareholders  Total     Working  
                                Equity        Assets    Capital  
Company                 Ticker  ($MM)          ($MM)     ($MM)  
-------                 ------  ------------  -------  --------  
Abraxas Petro           ABP         (27)         120       (4)
Accentia Biophar        ABPI         (8)          34      (20)
AFC Enterprises         AFCE        (44)         216       53
Alaska Comm Sys         ALSK         (9)         589       49
Alliance Imaging        AIQ         (43)         643       42
AMR Corp.               AMR        (729)      29,436   (1,882)
Atherogenics Inc.       AGIX        (98)         213      190
Bally Total Fitn        BFT      (1,463)         486     (442)
Biomarin Pharmac        BMRN       (65)          209      (38)
Blount International    BLT        (201)         427      110
CableVision System      CVC      (2,486)      10,204   (1,881)
CCC Information         CCCG        (95)         112       34
Centennial Comm         CYCL       (488)       1,511       69
Cenveo Inc              CVO         (12)       1,146      127
Choice Hotels           CHH        (165)         289      (34)
Cincinnati Bell         CBB        (672)       1,893      (10)
Clorox Co.              CLX        (532)       3,570     (229)
Columbia Laborat        CBRX        (13)          17       10
Compass Minerals        CMP         (83)         686      149
Crown Media HL          CRWN        (64)       1,250     (125)
Deluxe Corp             DLX        (101)       1,461     (297)
Denny's Corporation     DENN       (261)         498      (72)
Domino's Pizza          DPZ        (553)         414        3
DOV Pharmaceutic        DOVP         (3)         116       94
Echostar Comm           DISH       (785)       7,533      321
Emeritus Corp.          ESC        (134)         713      (62)
Empire Resorts          NYNY        (18)          65       (4)
Foster Wheeler          FWLT       (375)       1,936     (186)
Guilford Pharm          GLFD        (20)         136       60
Graftech International  GTI         (13)       1,026      283
Hollinger Int'l         HLR        (177)       1,001     (396)
I2 Technologies         ITWO       (144)         352      112
ICOS Corp               ICOS        (67)         232      141
IMAX Corp               IMAX        (34)         245       30
Immersion Corp.         IMMR        (15)          46       29
Indevus Pharma          IDEV       (115)         113       79
Intermune Inc.          ITMN        (30)         194      109
Investools Inc.         IED         (20)          64      (46)
Kulicke & Soffa         KLIC        (32)         386      186
Ligand Pharm            LGND        (96)         306      (99)
Lodgenet Entertainment  LNET        (69)         283       22
Maxxam Inc.             MXM        (677)       1,044      114
Maytag Corp.            MYG         (95)       2,989      371
McDermott Int'l         MDR         (53)       1,627      244
McMoran Exploration     MMR         (61)         407      118
NPS Pharm Inc.          NPSP        (55)         354      258
Owens Corning           OWENQ    (8,443)       8,142      976
ON Semiconductor        ONNN       (317)       1,171      300
Quality Distribu        QLTY        (26)         377       20
Quest Res. Corp.        QRES        (27)         244      (29)
Qwest Communication     Q        (2,716)      23,727      822
Revlon Inc.             REV      (1,169)         980       86
Riviera Holdings        RIV         (28)         221        6
Rural/Metro Corp.       RURL        (93)         315       56
Rural Cellular          RCCC       (460)       1,367       46
SBA Comm. Corp.         SBAC        (47)         886       25
Sepracor Inc.           SEPR       (213)       1,193      703
St. John Knits Inc.     SJKI        (52)         213       80
Sun Healthcar           SUNH       (110)         320      (27)
Tiger Telematics        TGTL        (66)          31      (76)
Tivo Inc.               TIVO         (9)         163       36
US Unwired Inc.         UNWR        (76)         414       56
Unigene Labs Inc.       UGNE        (15)          14       (9)
Unisys Corp             UIS        (141)       3,888      318
Vector Group Ltd.       VGR         (38)         536      168
Vertrue Inc.            VTRU        (35)         441      (80)
Visteon Corp.           VC       (1,430)       8,823      404
Vocus Inc.              VOCS         (9)          21      (10)
Worldspace Inc.         WRSP     (1,475)         765      249
WR Grace & Co.          GRA        (574)       3,465      848

                             *********

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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