TCR_Public/060124.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 24, 2006, Vol. 10, No. 20

                             Headlines

AAIPHARMA INC: Court Confirms Chapter 11 Plan of Reorganization
AES CORP.: Names Victoria Harker as Chief Financial Officer
ALLIED HOLDINGS: Lexington Wants a Decision on Georgia Lease
ALLIED HOLDINGS: Court OKs Amended Key Employee Retention Program
ALLIED HOLDINGS: Court Approves GM Delivery Contract

ALLSERVE SYSTEMS: Court Converts Case to Chapter 7 Liquidation
AMERICAN MOULDING: Wants Court to Okay Stancil & Co. as Accountant
AMERICAN MOUDLING: Wants to Reject 12 Equipment Leases
AOL LATIN AMERICA: Non-Debtor Subsidiaries to be Liquidated
ATLANTIC GULF: Ch. 7 Trustee Gets Okay to Sell Assets for $430K

BEKENTON USA: Court Okays Insurance Premium Financing from AICCO
BABCOCK & WILCOX: McDermott Shareholders Vote Resolution to Deal
BOYDS COLLECTION: Court Fixes February 14 as Claims Bar Date
BUFFETS HOLDINGS: Moody's Affirms Caa1 Sr. Unsecured Notes' Rating
CARAUSTAR INDUSTRIES: S&P Affirms Corporate Credit Rating at B+

CAREMORE HOLDINGS: Moody's Rates Proposed $150 Mil. Facility at B2
CAREMORE HOLDINGS: S&P Rates Proposed $150 Million Facilities at B
CENTRAL GARDEN: Farnam Purchase Prompts Moody's to Review Ratings
CENTRAL GARDEN: Farnam Purchase Prompts S&P's Negative Watch
CHESAPEAKE ENERGY: Buys Oil & Natural Gas Properties for $796 Mil.

DATICON INC: Files Amended List of 20 Largest Unsecured Creditors
DATICON INC: Wants to Hire Neubert Pepe as Bankruptcy Counsel
DELTA AIRLINES: Has Until July 11 to File Chapter 11 Plan
DELTA AIR: Committee Wants Aviation Specialists as Consultant
DELTA AIR: Enters Section 1110(b) Stipulation for 14 Aircraft

DMX MUSIC: Has Until February 9 to Remove Civil Actions
DONALD GATZKE: Voluntary Chapter 11 Case Summary
DPAC TECH: Nov. 30 Balance Sheet Upside-Down by $920,000
DRS TECHS: Fitch Assigns Low-B Ratings to $1.7 Billion Debts
ECHOSTAR DBS: S&P Rates $1.5 Billion 7.125% Senior Notes at BB-

ELWOOD ENERGY: S&P Affirms $402 Million Sr. Sec. Bonds' B+ Rating
EURAMAX INT'L: Moody's Affirms $190 Mil. Term Loan's Junk Rating
FLOWERS FOODS: Good Performance Cues Moody's to Review Ba2 Rating
FREEDOM 2000-1: Moody's Puts Class F Notes' B2 Rating on Watch
GENERAL MARITIME: Completes Tender Offer for 10% Senior Notes

GLIMCHER REALTY: Completes $58.3-Mil. Purchase of Tulsa Promenade
HAPPY KIDS: Sells Assets to Wear Me for $23 Million
HARTCOURT COMPANIES: Earns $104,690 of Net Income in 2nd Quarter
ICEWEB INC: Sherb & Co. Raises Going Concern Doubt
IGIA INC: Balance Sheet Upside-Down by $17 Million at November 30

IMPERIAL HOME: Wants Court to Okay 14 Avoidance Action Settlements
INVESCO CBO: Moody's Puts Class B-2 Notes' Ba3 Rating on Watch
J.L. FRENCH: S&P Withdraws CCC+ Corporate Credit Rating
L.J. MAKRANCY: Case Summary & 20 Largest Unsecured Creditors
MCDERMOTT INT'L: 98.6% of Shareholders Okay Babcock Settlement

METROMEDIA FIBER: Wants Another Delay in Entry of Final Decree
MORGAN STANLEY: S&P Rates $40 Million Class V Secured Notes at BB
MUSICLAND HOLDING: Wants to Conduct Store Closing Sales
MUSICLAND HOLDING: Can Continue Using Cash Management System
NOBEX CORP: Panel Taps NachmanHaysBrownstein as Financial Advisor

NORTHWESTERN CORP: Responds to Inquiries from Harbert Distressed
O'SULLIVAN IND: Panel Challenges Bank of NY's Security Interests
O'SULLIVAN INDUSTRIES: Panel Wants Retention Objections Overruled
OMEGA HEALTHCARE: Moody's Raises Sr. Unsecured Debt Rating to Ba3
OMNOVA SOLUTIONS: Earns $4.1 Million in Fourth Quarter of 2005

REFCO INC: Judge Drain Delays Auction of Forex Unit's Assets
RESORTS INT'L: Poor Performance Cues S&P to Junk Credit Rating
RUFUS INC: All Ballots Must be Submitted by January 25
SAINT VINCENTS: Hui Ji Yan Can Proceed With State Court Action
SANITARY & IMPROVEMENT: U.S. Trustee Amends Committee Membership

SAXON ASSET: Moody's Junks Ratings on Two Certificate Classes
SCHLOTZSKY'S INC: Wooleys Want Ch. 11 Cases Converted to Chapter 7
SIRICOMM INC: BKD LLP Raises Going Concern Doubt
SPORTS CLUB: Completes $80 Million Asset Sale to Millennium Ent.
STRESSGEN BIOTECH: Receives Final Proceeds from Sale of Bioreagent

SUNCOM WIRELESS: Moody's Reviews Junk Ratings & May Downgrade
TECHALT INC: Restates Results for Year Ended December 31, 2004
THOMAS EQUIPMENT: Restates Fiscal Year 2005 Financial Results
TIDEL TECHNOLOGIES: Hein & Associates Raises Going Concern Doubt
TRANSTECHNOLOGY CORP: Dec. 25 Balance Sheet Upside-Down by $5 Mil.

TRM CORP: S&P Holds B+ Corporate Credit & Debt Ratings on Watch
TRUMP ENT: Scott Butera Resigns as EVP & Chief Strategic Officer
TRUMP HOTELS: Court Lifts Stay to Let Koch & Faicco Pursue Claims
TRUMP HOTELS: Court Lifts Stay to Let Vuong Pursue $606,492 Claim
UAL CORP: Judge Wedoff Confirms Amended Reorganization Plan

VENTURE HOLDINGS: Section 341 Meeting Slated for February 16
VILLAS AT HACIENDA: Court Confirms WPD's Reorganization Plan
WHITE BIRCH: S&P Lowers Second-Lien Term Loan's Rating to CCC+
WHITEHALL JEWELLERS: Newcastle Able to Close $1.50 Per Share Offer
WHITEHALL JEWELLERS: Lenders Impose Limitations on Borrowings

XERIUM TECHS: Moody's Affirms B1 Ratings With Negative Outlook

* Large Companies with Insolvent Balance Sheets

                             *********

AAIPHARMA INC: Court Confirms Chapter 11 Plan of Reorganization
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware confirmed
the First Amended Plan of Reorganization of aaiPharma Inc.  The
Company expects that the Plan, which received the overwhelming
support of the Company's creditors that voted on the Plan, will
become effective by early February 2006.

Under the terms of the reorganization plan, approximately 100% of
the equity of the Company will be distributed to its current
bondholders, including amongst others JPMorgan Securities, Inc.,
which will result in the Company being a private Company.  Holders
of unsecured claims will be entitled to receive their pro rata
share of a cash distribution from a $4 million pool.  Current
holders of the Company's common stock will receive no distribution
and all shares of AAIPharma's existing common stock will be
cancelled.

The Company has also obtained commitments to refinance the
Company's existing DIP financing and to provide for the Company's
working capital needs.  The effectiveness of the Plan is subject
to the satisfaction of a number of conditions, including the
consummation of the financing.  Although no assurances can be
given that the conditions to obtaining the financing will be
satisfied, the Company believes that the financing will be
consummated by early February 2006.

"We are very pleased that the Court has confirmed our plan of
reorganization," Dr. Ludo J. Reynders, President & CEO of
AAIPharma, stated.  "Upon consummation of the plan, AAIPharma will
emerge as a healthy company with restored financial strength to
meet the needs of our customers and to provide a stable work
environment for our employees.  We look forward to the many new
opportunities available to the Company following completion of our
reorganization."

Headquartered in Wilmington, North Carolina, aaiPharma Inc. --
http://aaipharma.com/-- provides product development services to   
the pharmaceutical industry and sells pharmaceutical products that
primarily target pain management.  AAI operates two divisions:
AAI Development Services and Pharmaceuticals Division.

The Company and eight of its debtor-affiliates filed for chapter
11 protection on May 10, 2005 (Bankr. D. Del. Case No. 05-11341).
Karen McKinley, Esq., and Mark D. Collins, Esq., at Richards,
Layton & Finger, P.A.; Jenn Hanson, Esq., and Gary L. Kaplan,
Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP; and the
firm of Robinson, Bradshaw & Hinson, P.A., represent the Debtors
in their restructuring efforts.  When the Debtors filed for
bankruptcy, they reported consolidated assets amounting to
$323,323,000 and consolidated debts totaling $446,693,000.


AES CORP.: Names Victoria Harker as Chief Financial Officer
-----------------------------------------------------------
The AES Corporation reported that effective Jan. 23, 2006,
Victoria Harker will become its Chief Financial Officer and an
Executive Vice President.

Ms. Harker joins AES from MCI where she served as Senior Vice
President and Treasurer.  Ms. Harker served as Chief Financial
Officer of the $15 billion MCI Group, a publicly traded unit of
WorldCom Inc., from 1998 to 2000, and oversaw a variety of
finance, information technology and operations responsibilities
during her fifteen-year tenure at MCI.

"Victoria brings a solid set of financial management skills that
will enable her to lead our finance organization as we continue to
focus on improving our businesses and begin to build our
development pipeline," said Paul Hanrahan, AES President and Chief
Executive Officer.  "Victoria's impressive and diverse experience
will make her a valued member of our leadership team."

AES Corporation -- http://www.aes.com/-- is a leading global  
power company, with 2004 revenues of $9.5 billion.  AES operates
in 27 countries, generating 44,000 megawatts of electricity
through 124 power facilities and delivers electricity through 15
distribution companies.  AES Corp.'s 30,000 people are committed
to operational excellence and meeting the world's growing power
needs.

                        *    *    *

As reported in the Troubled Company Reporter on Jan. 11, 2006,
Moody's affirmed the ratings of The AES Corporation, including its
Ba3 Corporate Family Rating and the B1 rating on its senior
unsecured debt.  The rating outlook remains stable.

As reported in the Troubled Company Reporter on June 23, 2005,
Fitch Ratings has upgraded and removed the ratings of AES
Corporation from Rating Watch Positive, where it was initially
placed on Jan. 18, 2005, pending review of the company's year-end
financial results.  Fitch said the Rating Outlook is Stable.


ALLIED HOLDINGS: Lexington Wants a Decision on Georgia Lease
------------------------------------------------------------
LEPERQ Corporate Income Fund L.P. is the lessor of the Debtors'
headquarters facility located in Decatur, Georgia.  Lexington
leases the Facility to Allied Holdings, Inc., and its debtor-
affiliates for a 10-year term, expiring in December 2007.  The
Debtors pay over $135,000 monthly rent for the Facility, which is
valued at over $14,600,000.

While the Debtors has continued to pay required monthly rent,
they are in breach of their duty to replace the roof of the
building, Daniel P. Sinaiko, Esq., at Morris, Manning & Martin,
L.L.P., in Atlanta, Georgia, tells Judge Drake of the U.S.
Bankruptcy Court for the Northern District of Georgia.

As a result of the deteriorating condition of the roof and
Lexington's inability to lease vacant portions of the premises,
Lexington's interest in its property is not adequately protected
and Lexington is forced to bear the economic risks of further
delay, Mr. Sinaiko contends.  "The Debtors' right to use and
occupy the Georgia Premises is conditioned on the replacement of
the roof of the Facility."

A delay in the decision to assume or reject the Lease could allow
the Debtors to use the Georgia Premises and not pay for the Roof
if they decide to reject the Lease, Mr. Sinaiko points out.

Mr. Sinaiko emphasizes that as long as the Lease remains in limbo
and the Debtors retain the right to pass on potential new
tenants, Lexington cannot protect itself against the potential
injury it will suffer in the event of a rejection.

Accordingly, Lexington asks the Court to:

   (a) compel the Debtors to assume or reject the Georgia Lease
       on or before February 28, 2006;

   (b) compel the Debtors to perform their leasehold obligation
       to replace the roof of the Facility;

   (c) modify the automatic stay to allow it to exercise all
       rights which it may have under applicable state law to
       terminate the Lease; and

   (d) grant it adequate protection for its interest in the
       Premises in the event the Court declines to modify the
       automatic stay.

The nature of the interests at stake, the balance of hurt to the
litigants, the good to be achieved and the safeguards afforded to
the litigants all weigh in favor of fixing of a prompt deadline
for assumption or rejection, Mr. Sinaiko argues.

Mr. Sinaiko avers that the Debtors failed to perform its
obligation to repair the Roof within 60 days of the Petition
Date.  "The Debtors should not be permitted to continue in
possession of the Georgia Premises while failing to perform its
obligations under the Lease."

Headquartered in Decatur, Georgia, Allied Holdings, Inc. --  
http://www.alliedholdings.com/-- and its affiliates provide    
short-haul services for original equipment manufacturers and
provide logistical services.  The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.  
Case Nos. 05-12515 through 05-12537).  Jeffrey W. Kelley, Esq., at  
Troutman Sanders, LLP, represents the Debtors in their  
restructuring efforts.  When the Debtors filed for protection from  
their creditors, they estimated more than $100 million in assets  
and debts. (Allied Holdings Bankruptcy News, Issue No.  15;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ALLIED HOLDINGS: Court OKs Amended Key Employee Retention Program
-----------------------------------------------------------------
The Hon. W. Homer Drake of the U.S. Bankruptcy Court for the
Northern District of Georgia approved Allied Holdings, Inc., and
its debtor-affiliates' Key Employee Retention Program in its
entirety.

The Debtors amended their KERP to incorporate conditions set by
the Bankruptcy Court.  Pursuant to the Amended KERP, the Debtors,
the Official Committee of Unsecured Creditors and the U.S. Trustee
have conferred and agreed on the percentages of the installment
payments of retention bonuses to the Tier 1b ad Tier 2 Employees.

A full-text copy of the Amended KERP is available at no charge at

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

A full-text copy of the corrected version of the KERP Order is
available for free at:

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

Headquartered in Decatur, Georgia, Allied Holdings, Inc. --  
http://www.alliedholdings.com/-- and its affiliates provide    
short-haul services for original equipment manufacturers and
provide logistical services.  The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.  
Case Nos. 05-12515 through 05-12537).  Jeffrey W. Kelley, Esq., at  
Troutman Sanders, LLP, represents the Debtors in their  
restructuring efforts.  When the Debtors filed for protection from  
their creditors, they estimated more than $100 million in assets  
and debts. (Allied Holdings Bankruptcy News, Issue No.  15;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ALLIED HOLDINGS: Court Approves GM Delivery Contract
----------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
approved the vehicle delivery agreement between Allied Holdings,
Inc.'s subsidiary, Allied Automotive Group, Inc., and General
Motors Corporation.

As reported in the Troubled Company Reporter on Dec. 14, 2005, the
agreement with General Motors will extend Allied Automotive's
current contract through Dec. 31, 2008.  Pursuant to the terms of
the renewed agreement, Allied Automotive has retained all of the
vehicle delivery business it currently services for General Motors
in North America.

The contract renewal includes increases in the rates paid by
General Motors to Allied Automotive for vehicle delivery services
during calendar years 2006 and in 2007.  In addition, the current
fuel surcharge program and payment terms for services provided by
Allied Automotive will remain in place during the term of the
renewed agreement.

Headquartered in Decatur, Georgia, Allied Holdings, Inc. --  
http://www.alliedholdings.com/-- and its affiliates provide    
short-haul services for original equipment manufacturers and
provide logistical services.  The Company and 22 of its affiliates
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.  
Case Nos. 05-12515 through 05-12537).  Jeffrey W. Kelley, Esq., at  
Troutman Sanders, LLP, represents the Debtors in their  
restructuring efforts.  When the Debtors filed for protection from  
their creditors, they estimated more than $100 million in assets  
and debts. (Allied Holdings Bankruptcy News, Issue No.  15;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ALLSERVE SYSTEMS: Court Converts Case to Chapter 7 Liquidation
--------------------------------------------------------------
The Honorable Rosemary Gambardella of the U.S. Bankruptcy Court
for the District of New Jersey converted the chapter 11 case of
Allserve Systems Corp. into a chapter 7 liquidation proceeding.

Bunce Atkinson, Esq., the Debtor's chapter 11 Trustee, asserted
that the chapter 11 case should be converted due to:

   * the Company's inability to operate at a profit;

   * fraudulent transfers and preferences;

   * diversion of funds and assets to the Debtor's subsidiary in
     India; and

   * the Company's inability to reorganize.

Mr. Atkinson says that he decided to close the business and secure
the premises because it was not feasible to continue to operate
the business and because he feared that physical assets and
financial records would be destroyed or removed.

Mr. Atkinson adds that the Debtor is administratively insolvent.

                     Chapter 7 Trustee

Kelly Beaudin Stapleton, the U.S. Trustee for Region 3 named
Charles A. Stanziale, Jr., Esq., at McElroy, Deutsch, Mulvaney &
Carpenter, as chapter 7 Trustee for Allserve Systems Corp.

Headquartered in North Brunswick, New Jersey, Allserve Systems
Corp. is an outsourcing company for the IT industry.  The Debtor
filed for chapter 11 protection on November 18, 2005 (Bankr. D.
N.J. Case No. 05-60401).  Barry W. Frost, Esq., at Teich Groh
represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it estimated
assets between 10 million to $50 million and debts between $50
million to $100 million.


AMERICAN MOULDING: Wants Court to Okay Stancil & Co. as Accountant
------------------------------------------------------------------
American Moulding and Millwork Company asks the U.S. Bankruptcy
Court for the Eastern District of California for permission to
employ Stancil & Company as its accountants.

Stancil & Company will:

    (a) analyze the impact of the sale of the real property
        located in Stockton, California and

    (b) prepare and file the Debtor's 2005 tax returns.

Kenneth P. Martin, a partner at Stancil & Co., tells the Court
that he bills $175 per hour for his services.  Mr. Martin
discloses that the Firm's other professionals bill:

         Designation              Hourly Rate
         -----------              -----------
         Partner                     $175
         Manager                     $110
         Staff                        $75

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

The Firm can be reached at:

         Stancil & Company,
         4909 Windy Hill Drive
         Raleigh, North Carolina 27609

Headquartered in Sanford, North Carolina, American Moulding and
Millwork Company -- http://www.amfurniture.com/-- is a supplier
of real wood furniture and cabinetry.  The Company filed for
chapter 11 protection on Oct. 6, 2005 (Bankr. E.D. Calif. Case No.
05-34431).  Thomas A. Willoughby, Esq., at Felderstein Fitzgerald
Willoughby & Pascuzzi LLP represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed $17,663,776 in assets and $18,481,093 in
debts.


AMERICAN MOULDING: Wants to Reject 12 Equipment Leases
------------------------------------------------------
American Moulding and Millwork Company asks the U.S. Bankruptcy
Court for the Eastern District of California for authority to
reject a dozen forklift leases.  

The Debtor tells the Court that it no longer needs the forklifts
subject to the equipment leases.  The Debtor wants to reject these
leases:

                                Make/Model/
Lessor          Lease No.       Serial No.        Location
------          ---------       -----------       --------
G.E. Capital/   90132299828     Daewoo            Sanford, NC
Mellon                          GC20E CV-01422

G.E. Capital    90132734958     Daewoo            Sanford, NC
                                G30E CX-03490

G.E. Capital    90132299827     Daewoo            Goldston, NC
                                GC20E CV-01424

G.E. Capital/   90132299828     Daewoo            Goldston, NC
Mellon                          GC20E CV-01431

G.E. Capital    90132353922     Daewoo            Goldston, NC
                                GC20E CV-01530

G.E. Capital    90132663804     Daewoo            Goldston, NC
                                GC20E CV-01529

G.E. Capital    90132755341     Daewoo            Goldston, NC
                                GC20E CV-01104

G.E. Capital    90132755374     Daewoo            Goldston, NC
                                GC20E CV-01429

G.E. Capital    90133577294     Daewoo            Goldston, NC
                                GC20E FQ-00461

G.E. Capital    90133577290     Daewoo            Goldston, NC
                                GC20E FQ-00459

G.E. Capital    90133577328     Daewoo            Goldston, NC
                                GC20E FQ-00458

G.E. Capital                    Clarklift         Goldston, NC
                                WP45 WP45-0238-
                                8206

Headquartered in Sanford, North Carolina, American Moulding and
Millwork Company -- http://www.amfurniture.com/-- is a supplier
of real wood furniture and cabinetry.  The Company filed for
chapter 11 protection on Oct. 6, 2005 (Bankr. E.D. Calif. Case No.
05-34431).  Thomas A. Willoughby, Esq., at Felderstein Fitzgerald
Willoughby & Pascuzzi LLP represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed $17,663,776 in assets and $18,481,093 in
debts.


AOL LATIN AMERICA: Non-Debtor Subsidiaries to be Liquidated
-----------------------------------------------------------
America Online Latin America, Inc., entered into a letter
agreement with AOL S. de R.L. de C.V. aka AOL Mexico, AOL Brazil
Ltda., America Online, Inc., Time Warner, Inc., Aspen Investments
LLC and Atlantis Investments LLC on Jan. 17, 2006.

The letter agreement was entered into in connection with the joint
filing by AOLA and its wholly owned subsidiaries, AOL Puerto Rico
Management Services, Inc., America Online Caribbean Basin, Inc.,
and AOL Latin America Management LLC, of a proposed joint plan of
reorganization and liquidation and related disclosure statement in
their jointly administered chapter 11 bankruptcy cases.  The
letter agreement provides for the payment of certain wind-down
costs by AOL Mexico and AOL Brazil to America Online.  The letter
agreement stated:

The purpose of this letter agreement is to confirm AOL's
understandings and agreements relating to the payment of certain
post-petition costs and expenses associated with the wind-down of
America Online Latin America, Inc., and its subsidiaries.

As previously reported in the Troubled Company Reporter, AOLA and
certain of its subsidiaries are debtors in a jointly administered
chapter 11 case pending in the United States Bankruptcy Court for
the District of Delaware.  On or about January 17, 2006, the
debtors intend to file a joint plan of reorganization and
liquidation, which will provide for the implementation of the
wind-down.  Pursuant to the wind-down, certain of AOLA's non-
debtor subsidiaries, including AOL S. de R.L. de C.V. and AOL
Brasil Ltda. will be liquidated and/or dissolved in accordance
with applicable local laws.  America Online, Inc. is expected to
incur actual out-of-pocket costs and expenses in assisting AOLA,
AOL Mexico and AOL Brazil in their efforts to terminate service,
discontinue customers, and shut down operations in connection with
the wind-down of AOL Mexico and AOL Brazil, as set forth in an
estimate delivered by AOL to AOLA.  The parties have agreed that
AOL will be reimbursed for the wind-down costs in a manner
consistent with the following terms and conditions.  Specifically:

    - All payments made by AOL Mexico or AOL Brazil to AOL
      will be made free and clear of, and without deduction or
      withholding for or on account of, any taxes, levies,
      imposts, duties, charges, fees, deductions or withholdings,
      except Taxes AOL is required to pay;

    - AOL Mexico and AOL Brazil shall indemnify AOL, within 10
      days after written demand, for the full amount of any Non-
      Excluded Taxes paid by or with respect to AOL on or
      with respect to any payment by or on account of any
      obligation of AOL, and AOL promises to cooperate
      with AOL Mexico and AOL Brazil to contest any non-excluded
      taxes;

    - If AOL receives a refund on any tax paid by AOL Mexico or
      AOL Brazil, AOL will rebate that amount to AOLA;

    - AOL Mexico agrees, and AOLA agrees to cause AOL Mexico, to
      reimburse AOL in an amount up to $300,000 for wind-down
      costs incurred by AOL in connection with the shut-down of
      AOL Mexico.  AOL will be reimbursed for any AOL Mexico Wind-
      Down Costs -- up to the $300,000 cap -- as and when services
      resulting in AOL Mexico Wind-Down Costs are performed and
      billed to AOL Mexico.  AOL and AOLA agree to cooperate to
      produce a separate agreement between AOL and AOL Mexico and
      all other documentation reasonably required to ensure
      optimal externalization of funds in respect of the payment
      of the AOL Mexico wind-down costs.  AOL agrees to take
      reasonable commercial efforts to minimize the amount of the
      AOL Mexico wind-down costs and only to charge AOL Mexico for
      actual out-of-pocket costs and expenses incurred in
      connection with the shutdown of AOL Mexico; and

    - AOL Brazil agrees, and AOLA agrees to cause AOL Brazil, to
      reimburse AOL in an amount up to $1,004,000 for wind-down
      costs incurred by AOL in connection with the shutdown of AOL
      Brazil. AOL will be reimbursed for any AOL Brazil wind-down
      costs -- up to the $1,004,000 cap -- as and when services
      resulting in AOL Brazil Wind-Down Costs are performed and
      billed to AOL Brazil.  AOL and AOLA agree to cooperate to
      produce a separate agreement between AOL and AOL Brazil and
      all other documentation reasonably required to ensure
      optimal externalization of funds in respect of the payment
      of the AOL Brazil wind-down costs.  AOL agrees to take
      reasonable commercial efforts to minimize the amount of the
      AOL Brazil wind-down costs and to only charge AOL Brazil for
      actual out-of-pocket costs and expenses incurred in
      connection with the shut-down of AOL Brazil and, to the
      extent AOL's actual out-of-pocket costs and expenses depend
      upon negotiations with third parties, to take reasonable
      commercial efforts to minimize the amount of such costs.
      
America Online offers AOL-branded Internet service in Argentina,
Brazil, Mexico and Puerto Rico, as well as localized content and
online shopping over its proprietary network.  Its subscribers
also get access to popular AOL services like instant messaging,
online chat, e-mail, and personalized homepages.  In addition, it
maintains localized Internet portals serving users in about 20
countries.  In total, it has more than 460 thousand members.
Principal shareholders in it are Cisneros Group, one of Latin
America's media firms, Brazil's Banco Itau, and Time Warner,
through America Online.

Headquartered in Fort Lauderdale, Florida, America Online Latin
America, Inc. -- http://www.aola.com/-- offers AOL-branded
Internet service in Argentina, Brazil, Mexico, and Puerto Rico,
as well as localized content and online shopping over its
proprietary network.  Principal shareholders in AOLA are
Cisneros Group, one of Latin America's largest media firms,
Brazil's Banco Itau, and Time Warner, through America Online.
The Company and its debtor-affiliates filed for Chapter 11
protection on June 24, 2005 (Bankr. D. Del. Case No. 05-11778).
Pauline K. Morgan, Esq., and Edmon L. Morton, Esq., at Young
Conaway Stargatt & Taylor, LLP and Douglas P. Bartner, Esq., at
Shearman & Sterling LLP represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection
from their creditors, they listed total assets of $28,500,000
and total debts of $181,774,000.


ATLANTIC GULF: Ch. 7 Trustee Gets Okay to Sell Assets for $430K
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
Michael B. Joseph's request to sell Atlantic Gulf Communities
Corporation and its debtor-affiliates' 14 tracts of real estate
property free and clear of all liens, claims, interests and
encumbrances to HT Land Trust, LLC.  The Court approved the sale
transaction on Jan. 6, 2006.

Mr. Joseph is the chapter 7 Trustee overseeing the liquidation of
the Debtors' estates.

Mr. Joseph and HT Land entered into a Contract for Sale on Dec. 6,
2005, calling for the sale of 14 tracts of real property in
various locations in Florida to HT Land for $430,000.  In an
auction conducted on Jan. 4, 2006, HT Land submitted the highest
and best bid for those assets.

The Court orders that any statutory lien for 2006 real estate
taxes assessed by Brevard County, Florida will remain attached to
the 14 tracts of real estate until paid in full, and will not
attach to the proceeds of the sale.  HT Land will pay all 2006
real estate taxes on the property subject to the proration
provisions of the Contract of Sale between Mr. Joseph and HT Land.

A full-text copy of the Contract of Sale is available for free at
http://ResearchArchives.com/t/s?481

Headquartered in Fort Lauderdale, Florida, Atlantic Gulf
Communities Corporation was a developer and operator of luxury
residential real estate communities.  The Company and its
affiliates filed for chapter 11 protection on May 1, 2001 (Bankr.
D. Del. Case Nos. 01-01594 through 01-01597).  Michael R.
Lastowski, Esq., at Duane Morris LLP represents the Debtor.  The
Bankruptcy Court converted the Debtors' chapter 11 cases to a
chapter 7 liquidation proceeding on June 18, 2002.  Michael B.
Joseph is the chapter 7 Truste for the Debtors' estates.  John D.
McLaughlin, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP
represents the chapter 11 Trustee.  When the Debtors filed for
chapter 11 protection, they listed $148,546,000 in assets and
$170,251,000 in liabilities.


BEKENTON USA: Court Okays Insurance Premium Financing from AICCO
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
approved the post-petition premium finance agreement between
Bekenton USA, Inc., and AICCO Inc.

The Debtor tells the Court that general liability insurance
coverage is necessary for the continued and uninterrupted
operations of the Debtor's business and to avoid any loss to the
estate resulting from potential damage to the Debtor's property.

            Insurance Coverage & Proposed Financing

The Debtor says that prior to its bankruptcy filing, it carried
and maintained general liability insurance with an annual premium
of $28,875.  In accordance with the proposed premium finance
contract, the Debtor will make an initial $8,250 installment and
pay off the $20,625 balance in nine equal monthly installments of
$2,371 -- including $715 in finance charges.  The loan accrues
interest at 8.25% per annum.

The Debtor tells the Court that it has obtained a new standard ISO
general Liability Policy through Admiral Insurance.  The Debtor
discloses that AICCO has agreed to finance the Admiral Insurance
Policy pursuant to the premium finance agreement.  AICCO's credit
extended to the Debtor shall be secured by an assignment of all
right, title and interest to the policies of insurance together
with any unearned premium, to be issued by Admiral for the General
Liability Insurance.

The Debtor discloses that if any premium due to AICCO remains
unpaid 10 days after a written notice of default was given to the
Debtor, AICCO and Admiral will be entitled to seek the immediate
cancellation of the policies in force providing for the insurance
coverage.

A copy of the three-page Premium Finance Agreement is available
for free at http://ResearchArchives.com/t/s?488

Headquartered in Miami Beach, Florida, Bekenton USA, Inc.,
manufactures tobacco products.  The Debtor filed for chapter 11
protection on Nov. 4, 2005 (Bankr. S.D. Fla. Case No. 05-60031).  
Mariaelena Gayo-Guitian, Esq., at Adorno & Yoss, P.A., represents
the Debtor in its restructuring efforts.  When the Debtor filed
for protection from its creditors, it listed assets totaling
$5,227,073 and debts totaling $15,750,548.


BABCOCK & WILCOX: McDermott Shareholders to Vote to Accept Deal
---------------------------------------------------------------
A special meeting of McDermott International, Inc.'s shareholders
was held in Houston, Texas for the purpose of voting on a
resolution approving the proposed settlement of the Chapter 11
proceeding involving The Babcock & Wilcox Company and certain of
its affiliates.  Of the 56,278,076 votes cast, approximately 98.6%
voted in favor of the resolution.  The votes in favor of the
resolution constitute a majority of all shares of common stock
outstanding and entitled to vote as of the record date.

"I appreciate our shareholders voting in such strong support of
this resolution, particularly outside the normal proxy season,"
Bruce W. Wilkinson, Chairman and Chief Executive Officer of
McDermott, said.  "Combined with the confirmation order from the
United States District Court, McDermott and B&W continue to get
ever closer to officially reuniting.  On the effective date of
B&W's plan of reorganization, McDermott will again be a leading
worldwide energy services company with a strong presence in power
generation, marine construction and government operations.  The
vote supports our expectation that the plan will be effective by
Feb. 22, 2006."

Once approved, the settlement will settle as many as 300,000
asbestos injury claims ranging $375 million to $955 million
in costs for the Company, depending on whether Congress creates
a national trust to handle all such cases.

Remaining items required for the settlement to become effective
include obtaining exit financing for B&W and the completion of
certain other conditions by Feb. 22, 2006, the effective date
deadline.  McDermott expects B&W's exit financing package will be
signed on the effective date.

Headquartered in New Orleans, Louisiana, McDermott International,
Inc. -- http://www.mcdermott.com/-- is a leading worldwide energy  
services company.  The Company's subsidiaries provide engineering,
fabrication, installation, procurement, research, manufacturing,
environmental systems, project management and facility management
services to a variety of customers in the energy and power
industries, including the U.S. Department of Energy.

Babcock & Wilcox Company, together with its debtor-affiliates,
filed for Chapter 11 protection on February 22, 2000, (Bankr. E.D.
La. Case No. 00-10992).  Jan Marie Hayden, Esq., at Heller,
Draper, Hayden, Patrick & Horn, L.L.C., represents the debtors in
their restructuring efforts.

Since February 2000, B&W has continued to be managed by McDermott;
however its results of operations have been deconsolidated from
McDermott's financial statements.  The Company wrote off its
remaining investment in B&W of $224.7 million during the second
quarter of 2002.

For the year ended Dec. 31, 2004, on a deconsolidated basis,
B&W generated operating income of $115.6 million on revenues of
$1.37 billion.  B&W's net income for the year-ended Dec. 31,
2004, was $99.1 million, including the result of favorable tax
valuation allowance adjustment of $26.2 million.  Beginning in
2005, McDermott spun off the pension plan assets and liabilities
associated with B&W's portion of McDermott Incorporated's pension
plan, creating a B&W-sponsored pension plan.  As a result of the
creation of a B&W-sponsored pension plan, beginning in 2005
expenses associated with this plan are accounted for on B&W's
financials.  In 2004, McDermott recorded approximately $38 million
in pension expense associated with B&W pension on McDermott's
income statement.  At Aug. 24, 2005, B&W had unrestricted cash &
cash equivalents of $352 million.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 14, 2005,
McDermott International, Inc., and certain of its subsidiaries
received either increased or new credit ratings from the major
rating agencies.  Each rating agency indicated its outlook for
McDermott and its subsidiaries are stable.

This table reflects the current respective ratings from each
agency:

                          Standard & Poor's       Moody's
                          Ratings Services   Investors Service
                          -----------------  -----------------
                          Previous  Current  Previous  Current
                                        (1)
                          --------  -------  --------  -------
McDermott Int'l, Inc.        B-        B+       -        B2   (2)
McDermott Incorporated       B-        B+       B3       -    (3)
J. Ray McDermott, S.A.      CCC+       B+      Caa1      B2   (4)
Babcock & Wilcox Co(5)                 B+       -        B1   (4)

     (1) S&P's corporate credit rating
     (2) Moody's corporate family rating
     (3) Moody's withdrew its rating on McDermott Inc. following
         the December 2005 MTN redemption.
     (4) Moody's senior secured rating
     (5) The Babcock & Wilcox Company ratings are newly assigned.


BOYDS COLLECTION: Court Fixes February 14 as Claims Bar Date
------------------------------------------------------------
The Honorable Duncan W. Keir of the U.S. Bankruptcy Court for the
District of Maryland set February 14, 2006, at 5:00 p.m., as the
deadline for all creditors owed money on account of claims arising
prior to October 16, 2005, against The Boyds Collection, Ltd., and
its debtor-affiliates to file proofs of claim.

Creditors must file written proofs of claim on or before the
February 14 Claims Bar Date and those forms must be sent either:

  (a) by mail to:

      The Garden City Group, Inc.
      Attn: BBC Claims Processing
      P.O. Box 9000 #6361
      Merrick, New York 11566-9000

        - or -

  (b) by messenger or overnight courier to:

      The Garden City Group, Inc.
      Attn: BBC Claims Processing
      105 Maxess Road
      Melville, New York 11747

Governmental units must file proofs of claim on or before
April 14, 2006, at 5:00 p.m.

Headquartered in McSherrystown, Pennsylvania, The Boyds
Collection, Ltd. -- http://www.boydsstuff.com/-- designs and  
manufactures unique, whimsical and "Folksy with Attitude(SM)"
gifts and collectibles, known for their high quality and
affordable pricing.  The Company and its debtor-affiliates filed
for chapter 11 protection on Oct. 16, 2005 (Bankr. Md. Lead Case
No. 05-43793).  Matthew A. Cantor, Esq., at Kirkland & Ellis LLP
represents the Debtors in their restructuring efforts.  As of
June 30, 2005, Boyds reported $66.9 million in total assets and
$101.7 million in total debts.


BUFFETS HOLDINGS: Moody's Affirms Caa1 Sr. Unsecured Notes' Rating
------------------------------------------------------------------
Moody's Investors Service affirmed Buffets Holdings, Inc.'s B2
corporate family rating and changed the outlook to developing
following the company's public announcement that it plans to
engage advisors to assist in exploring various strategic
alternatives to maximize shareholder value.  

At the same time, the rating agency affirmed Holdings' senior
unsecured rating of Caa1 as well as all ratings at Buffets, Inc.,
the operating company.

The developing outlook incorporates uncertainty as to the timing,
nature and potential impact on creditors resulting from any
actions taken by the company.  However, Moody's added that the
revised outlook anticipates a near-to-intermediate term
resolution.  The rating agency will continue to monitor
developments and take further rating action once the outcome is
announced.

Ratings affirmed with a developing outlook:

  Buffets Holdings, Inc.:

     * B2 corporate family rating and Caa1 on the senior unsecured
       notes maturing in 2010

Ratings affirmed:

  Buffets, Inc.:

     * B1 on the senior secured credit facility and B3 on the
       subordinated notes maturing in 2010

Buffets, Inc., headquartered in Eagan, Minnesota, operates
approximately 350 buffet-style restaurants in 33 states and
franchises 18 buffet-style restaurants principally under the
"Hometown Buffet" and "Old Country Buffet" brand names.


CARAUSTAR INDUSTRIES: S&P Affirms Corporate Credit Rating at B+
---------------------------------------------------------------
On Jan. 20, 2006, Standard & Poor's Ratings Services affirmed its
ratings, including its 'B+' corporate credit rating, on recycled
paperboard producer, Caraustar Industries Inc.  The outlook is
stable.
     
"The affirmation reflects our expectations that Caraustar's weak
financial profile will strengthen to a level more appropriate for
the ratings following significant debt reduction," said Standard &
Poor's credit analyst Pamela Rice.
     
The company plans to use $150 million of proceeds from the sale of
its partnership interest in its Standard Gypsum joint venture with
Temple-Inland Inc. (BBB/Stable/A-2), plus cash on hand, bank
borrowings, and proceeds from other potential asset sales to
retire more than one-half of its long-term debt.
     
Austell, Georgia-based Caraustar also announced plans to exit its
coated recycled boxboard mill and specialty contract packaging
businesses as part of its strategic transformation plan.  The sale
of these businesses will reduce the company's product diversity
and forward integration as well as eliminate the meaningful cash
dividend the company has been receiving from unrated Standard
Gypsum LLC ($26.5 million in 2005).  

However, greater focus on its remaining businesses, where it has
several leadership positions; significantly lower interest
expense; and improved earnings from the sale of certain businesses
(including the company's Hunt Valley corrugated packaging plant
that was recently sold) and that were operating at negative EBITDA
levels offset the slightly weaker business profile.  Total debt
was $546 million at Sept. 30, 2005, with trailing-12-month debt to
EBITDA, including joint venture dividends, a very aggressive 6.8x.
     
"We expect this credit measure to improve to an acceptable 4x-5x
range following these transactions," Ms. Rice said.  "The outlook
could be revised to negative if market conditions worsen, if the
company is unable to realize sufficient benefits from its cost-
reduction efforts, or if it is unable to raise selling prices to
at least offset rising raw-material costs.  Caraustar's business
profile could support a slightly higher rating; however, a
positive outlook is unlikely unless the company were committed to
a less-aggressive capital structure, even incorporating the
planned debt reduction."


CAREMORE HOLDINGS: Moody's Rates Proposed $150 Mil. Facility at B2
------------------------------------------------------------------
Moody's Investors Service assigned a B2 debt rating to CareMore
Holdings, Inc.'s proposed $150 million senior secured bank credit
facility, which consists of:

   * a $125 million seven year term loan; and
   * a $25 million six year revolving credit facility.

In conjunction with this rating, Moody's also assigned a Ba3
insurance financial strength rating to CareMore's regulated
operating subsidiary, California Health Plan.  The outlook on the
ratings is stable.

According to Moody's, JPMorgan Partners, and Crystal Cove
Partners, will use the proceeds of the term loan along with an
additional cash investment to purchase Care More.  In addition,
the Managing Partner of Crystal Cove, Alan Hoops will become the
CEO of CareMore.  Mr. Hoops was co-founder, Chairman, and CEO of
PacifiCare.

Moody's notes that while CareMore has assumed Medicare healthcare
insurance risk through risk-sharing capitation agreements since
1996, it assumed full-risk exposure in these capitation agreements
only since 2002.  The Company also operates in a health care
insurance capacity through its own health plan, which was
introduced in 2002.  Through its unique Medicare health model, the
rating agency said, the company has been successful in managing
medical cost trend; however, the administrative expenses have been
higher than those for a typical Medicare healthcare provider.
Nevertheless, according to Moody's, CareMore has produced solid
after tax margins for 2005.  Moody's stated that while the company
has capital in excess of the tangible net equity requirements of
the California Department of Managed Healthcare, the company's
NAIC risk based capital model is only 86% of company action level.

Moody's notes that while current reimbursement levels and market
conditions are favorable in the Medicare Advantage market, there
are risks associated with this business.  The chief concern is the
uncertainty of the future level of reimbursements, as budgetary
and political pressures could change the government's perspective
towards the Medicare program.  In addition, Moody's says that it
has concerns with respect to:

   * the limited geographic area in which CareMore markets its
     products;

   * its limited track record;

   * the change in leadership at the company; and

   * the sustainability of the model for an extended period of
     time.

Moody's stated that the B2 senior secured rating and Ba3 IFSR
reflect the company's dependence on the Medicare product as well
as the concerns listed above, however, they also recognize the
strong Medicare market that currently exists and the potential for
strong returns under CareMore's healthcare model.  The ratings
also reflect the company's commitment for debt repayment of only
50% of excess cash flow, and the below 100% RBC level.

Moody's says the ratings are based on the expectation:

   * that there are no changes in the methodology used by the
     Centers for Medicare and Medicaid Services (CMS) in
     determining the Medicare Advantage reimbursement rates;

   * that there are no losses or impairments to CareMore's
     Medicare contract with CMS;

   * that at least 50% of excess cash flow is used for debt
     repayment;

   * that the company issues no additional debt; and

   * that it maintains a consolidated NAIC RBC of at least 75% of
     company action level.

Moody's also expects that there are no significant changes to the
financial covenants contained in the secured bank credit facility
and all covenants will be met or exceeded.

The rating agency stated that the ratings could move up if:

   * NAIC RBC grows to 100% of company action level;

   * debt to EBITDA falls below 2 times;

   * EBITDA to interest expense exceeds 7 times; and

   * the company commits to 100% of excess cash flow being used
     for debt repayment.

However, ratings could be move down:

   * if there is a significant adverse change in Medicare
     reimbursement levels or a loss or impairment of CareMore's
     Medicare contract with CMS;

   * if EBITDA to interest expense falls below 2 times;

   * if net earnings margins fall below 3%; or

   * if a significant portion of debt is not retired each year.

CareMore is a leading healthcare provider serving approximately
20,000 Medicare beneficiaries in Los Angeles and Orange counties
in California.  Coverage is provided under two Medicare plans:

   1) Blue Shield Value Plan/65 Plus (through an agreement with
      Blue Shield of California); and

   2) California Medicare Advantage (a CareMore product).

CareMore's unique "controlled clinical approach", which is focused
on the identification and management of frail patients, preventive
care programs and prudent cost management, has led to an industry-
leading medical loss ratio.  The company also provides
administrative services for affiliated physicians.

These ratings were assigned with a stable outlook:

  CareMore Holdings, Inc.:

     * senior secured debt rating of B2

  California Health Plan:

     * insurance financial strength rating of Ba3

CareMore Holdings, Inc. will be headquartered in Downey,
California.  As of Sept. 30, 2005 California Health Plan reported
a Tangible Net Equity of approximately $8.3 million on a statutory
basis.  For the nine month period ending Sept. 30, 2005 total
revenue was $144 million.


CAREMORE HOLDINGS: S&P Rates Proposed $150 Million Facilities at B
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' counterparty
credit rating to CareMore Holdings Inc. (CHI).
     
Standard & Poor's also said that the outlook on CHI is stable.
     
At the same time, Standard & Poor's assigned its 'B' bank loan
rating and a recovery rating of '4' to CHI's proposed $125 million
senior secured credit facility due in 2013 and $25 million
revolving credit facility due in 2012, indicating the expectation
for a marginal recovery of principal (25%-50%) in the event of a
payment default.  The bank loan ratings are based on preliminary
documentation.
      
"The ratings are based on CareMore's established niche competitive
position and good earnings profile/cash-flow capacity," said
Standard & Poor's credit analyst Joseph Marinucci.  "Offsetting
these positive factors are the company's narrow product
scope/geographic concentration and marginal balance-sheet
quality."
     
CHI is a downstream holding company formed by CareMore Health
Group Inc. to acquire CareMore Medical Enterprises (CareMore),
which is a physician practice management company and parent to
California Health Plan Inc., a Managed Medicare HMO conducting
business in California in Los Angeles and Orange counties.
     
CHI will use the proceeds from the senior secured loan to
partially finance its acquisition of CareMore.  The remainder will
be financed with equity contributed by the lead financial sponsor,
JPMorgan Partners (the majority owner of CareMore Health Group
Inc.).
     
Standard & Poor's expects CareMore to achieve modest organic
enrollment growth over the near term (one year) and moderate
growth over the intermediate term (three years).  By year-end
2006, Standard & Poor's expects enrollment to grow by 5% to
20,000-22,000 members.  If CHI effectively secures its new credit
facilities and meets Standard & Poor's earnings expectations for
2006, pretax income would result in an ROR of more than 10%.  Debt
to EBITDA and interest coverage metrics would remain moderately
conservative for the rating category.
     
CareMore has an established niche competitive position.  Its
market-segment focus has enabled it to develop its brand and grow
its market presence despite the existence of larger and more
strongly financed competitors.  CareMore derives a competitive
advantage from its integrated care-management model, which has
produced relatively strong earnings and a stable cash-flow stream
that S&P expects to be sustained over the intermediate term.


CENTRAL GARDEN: Farnam Purchase Prompts Moody's to Review Ratings
-----------------------------------------------------------------
Moody's Investors Service placed the ratings of Central Garden &
Pet Company on review for possible downgrade following Central's
agreement to purchase animal health care product company, Farnam
Companies, Inc., for around $291 million.  The review is prompted
by the meaningful size of the purchase price relative to Central's
existing debt levels (around $323 million reported at September
2005), and therefore the potential for the transaction to weaken
Central's financial profile.

These ratings were placed under review for possible downgrade:

   * Corporate family rating (formerly senior implied rating),
     Ba3;

   * $125 million senior secured revolving credit facility
     due 2008, Ba2;

   * $175 million senior secured term loan "B" due 2009, Ba2; and

   * $150 million senior subordinated notes due 2013, B1.

Moody's review will focus on the financing of the proposed
acquisition and its impact on the company's credit metrics.  As
always, Moody's review will include an assessment of the earnings
and cash flow potential of the acquired business, including its
alignment with existing business units and Central's plans for
operational consolidation.  In addition, Moody's will evaluate the
acquisition in the context of Central's long-term strategic and
financial policies, including acceptable purchase price multiples
and leverage targets.

Importantly, Moody's notes that Central had substantial cushion in
its pre-acquisition financial profile (relative to its Ba3
corporate family rating), with leverage around 2.9x (September
2005, including Moody's standard adjustments).  As such, Moody's
may not consider the leverage increase associated with the
acquisition to be sufficient to warrant a downgrade of the
corporate family rating.  Nonetheless, the review will also assess
the implications of the financing on the notching of Central's
senior secured and senior subordinated debt, considering their
relative positions in the capital structure and coverages.

Central Garden & Pet Company, located in Walnut Creek, California,
manufactures a broadening array of branded lawn and garden and pet
supply products, and operates as a distributor for other
manufacturers' products in both of these segments.  Central's
subsidiaries have leading positions in niche markets, including:

in the Garden Products Group:

   * Pennington (grass seed),
   * AMDRO (fire ant bait),
   * Norcal Pottery, and
   * New England Pottery; and

in the Pet Products group:

   * Four Paws (dog and cat supplies),
   * Kaytee (birdseed),
   * All-Glass Aquarium,
   * Nylabone, and
   * TFH (pet books and dog chews) names.

Net sales for the twelve-month period ended September 2005 were
approximately $1.4 billion.


CENTRAL GARDEN: Farnam Purchase Prompts S&P's Negative Watch
------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Walnut
Creek, California-based lawn and garden and pet products supplier
Central Garden & Pet Co., including its 'BB' corporate credit
rating, on CreditWatch with negative implications.  Negative
implications means that the ratings could be affirmed or lowered
following the completion of Standard & Poor's review.  Total debt
outstanding at Sept. 24, 2005, was about $323 million.
     
The CreditWatch listing follows the announcement by Central Garden
that it has agreed to acquire the stock of Farnam Companies Inc.
for about $287 million, plus $4 million for the purchase of
related real property.  Farnam, with annual sales of about $160
million, is a manufacturer and marketer of equine and pet health
care products.  The transaction is expected to be debt financed
and is targeted to close by March 2006, subject to regulatory
approval.

Standard & Poor's estimates Central Garden's existing lease
adjusted average total debt to EBITDA of about 3.3x will increase
to well over 4x following the proposed acquisition.  Standard &
Poor's will review Central Garden's near- and longer-term growth
objectives, operating outlook, and overall financial policies to
resolve the CreditWatch listing.


CHESAPEAKE ENERGY: Buys Oil & Natural Gas Properties for $796 Mil.
------------------------------------------------------------------
Chesapeake Energy Corporation (NYSE: CHK) entered into agreements
with seven private companies to acquire oil and natural gas assets
located in its Barnett Shale, South Texas, Permian Basin, Mid-
Continent and East Texas regions for an aggregate purchase price
of approximately $796 million in cash.

On the acquired properties, Chesapeake has identified 260 proved
undeveloped and 480 probable and possible drilling locations.

After allocating $339 million of the $796 million purchase price
to unproven assets, Chesapeake's acquisition cost for the 264 bcfe
of internally estimated proved reserves will be approximately
$1.73 per thousand cubic feet of natural gas equivalent.  Based on
the company's projected development plan, which includes       
$909 million of anticipated future drilling and development costs,
Chesapeake estimates that its all-in cost of acquiring and
developing the 660 bcfe of total reserves will be $2.58 per mcfe.

Based on the current purchase price, the acquisitions are located
34% in the Barnett Shale, 34% in South Texas, 12% in the Permian
Basin, 11% in the Mid-Continent and 9% in East Texas.  
Chesapeake's Barnett Shale acreage now exceeds 73,000 net acres on
which it has drilled 54 wells to date and believes it can drill an
additional 750-850 wells.  On average, Chesapeake has developed
2.3 bcfe per well with its Barnett Shale wells to date.  In the
Barnett, Chesapeake currently operates 155 wells and has five rigs
drilling new wells.  The company intends to increase its Barnett
Shale rig count to 10 rigs by mid-2006 and to 12-15 rigs by   
year-end 2006.

Chesapeake has recently closed three of the transactions for
approximately $486 million in cash and expects to close the
remaining acquisitions by Feb. 28, 2006.  The pending acquisitions
are subject to customary closing conditions and purchase price
adjustments, but are not conditioned on the closing of any of the
other transactions.

Chesapeake intends to finance the acquisitions initially by using
its bank credit facility and ultimately by issuing a balance of
senior notes and equity securities during 2006 for any acquisition
amounts that exceed the company's cash flow less E&P capital
expenditures.

        Acquires 13 Drilling Rigs from Martex Drilling

Through its wholly-owned subsidiary Nomac Drilling Corporation,
Chesapeake has also recently agreed to acquire 13 drilling rigs
and related assets from Martex Drilling Company, L.L.P., a
privately-held drilling contractor with operations in East Texas
and North Louisiana, for $150 million.

Chesapeake is acquiring the rigs to accelerate its drilling
activity in the Barnett Shale, Ark-La-Tex and Fayetteville Shale
regions, areas where rigs are in especially short supply.  With
the ownership of more rigs, Chesapeake believes it can accelerate
the conversion of its large inventory of proved undeveloped,  
probable and possible reserves in these areas into producing
wells.

Chesapeake currently leases one of the 13 Martex rigs and an E&P
affiliate of Martex, Camterra Resources, Inc. is leasing two of
the 13 rigs through early 2008.

                       Management Comment

"We are pleased to announce these recent acquisitions for several
reasons," Aubrey K. McClendon, Chesapeake's Chief Executive
Officer, commented.  "First, they will add to our large and
growing presence in the Barnett Shale, South Texas, Permian Basin,
Mid-Continent and East Texas regions, all areas of strategic
importance to Chesapeake.  Second, these acquisitions have all of
the attributes of successful previous Chesapeake transactions --
acquisitions from private companies of low-cost, high-margin
natural gas properties that have significant exploitation and
exploration potential.  We are confident that Chesapeake can
deliver significant shareholder value from the acquired properties
for years to come."

Headquartered in Oklahoma City, Chesapeake Energy Corporation --
http://www.chkenergy.com/-- is the second largest independent  
producer of natural gas in the U.S.  The company's operations are
focused on exploratory and developmental drilling and property
acquisitions in the Mid-Continent, Permian Basin, South Texas,
Texas Gulf Coast, Barnett Shale, Ark-La-Tex and Appalachian Basin
regions of the United States.

                       *     *     *

As reported in the Troubled Company Reporter on Nov. 8, 2005,
Standard & Poor's Ratings Services assigned its 'BB' rating to oil
and gas exploration and production company Chesapeake Energy
Corp.'s $500 million senior notes due 2020 and its $600 million
2.75% contingent convertible senior notes due 2035.

Standard & Poor's also assigned its 'B' rating to Chesapeake's
$500 million 5% cumulative convertible preferred stock issue.
Amounts do not include overallotment options.

At the same time, Standard & Poor's affirmed its 'BB/B-1'
corporate credit rating on the company.

The outlook is stable.  Pro forma for the recent capital raises,
Oklahoma City, Oklahoma-based Chesapeake will have $5.4 billion in
debt outstanding.


DATICON INC: Files Amended List of 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Daticon, Inc., delivered to the U.S. Bankruptcy Court for the
District of Connecticut in New Haven an amended list of its 20
largest unsecured creditors.

The Debtor added Carl Keil to the list, and dropped Aircomm
Communications from the list.

The Debtor's 20 Largest Unsecured Creditors are:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Relational Funding Corporation   Equipment Lease     $1,218,111
3701 Algonquin Road, Suite 600
Rolling Meadows, IL 60008-3120

Hilltop Investment, LLC          Office Lease          $398,156
209 West Town Street
Norwich, CT 06360

Hogan & Hartson LLP              Legal Services        $229,223
555 Thirteenth Street NW
Washington, DC 20004-1109

EOP Operating Limited Partners   Los Angeles           $149,418
550 South Hope Street            Office Lease
Suite 2200
Los Angeles, CA 90071

Cendant Mobility                 Relocation             $92,026
                                 Services

RM Holdings, LLC                 Office Lease           $90,440

Carl Keil                                               $60,000

Citicorp Vendor Finance, Inc.    Equipment Lease        $57,328

DeLage Landen                    Equipment Lease        $55,000

Norwich Public Utilities         Utility                $48,724

The Oliver Group                 Tape Restoration       $32,531
                                 Services  

Marsh USA Inc.                   Insurance Brokerage    $19,746
                                 Services

Bearing Point                    Valuation              $18,900
                                 Services

Passumpsic Management LLC        Professional           $12,500
                                 Services

Staples Business Advantage       Office Supplies        $10,554

Corporate Express                Production and         $10,260
                                 Operating Supplies

Scan-Optics, LLC                 Office Equipment        $9,935
                                 Maintenance

Federal Express                  Freight provider        $7,595

Minogue Birnbaum LLP             Legal Services          $5,505

Consumers Interstate                                     $4,555

Headquartered in Norwich, Connecticut, Daticon, Inc. --
http://www.daticon.com/-- works with law firms, corporations and  
government agencies to capture, review and manage the volumes of
electronic data and paper documents generated by complex
litigation, merger and acquisition transactions, and
investigations.  The Debtor filed for chapter 11 protection on
Jan. 17, 2006 (Bankr. D. Conn. Case No. 06-30034).  Douglas S.
Skalka, Esq., at Neubert, Pepe & Monteith, PC, represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed $9,089,033 in assets and
$18,997,028 in debts as of Dec. 31, 2005.


DATICON INC: Wants to Hire Neubert Pepe as Bankruptcy Counsel
-------------------------------------------------------------
Daticon, Inc., asks the Honorable Lorraine Murphy Weil of the U.S.
Bankruptcy Court for the District of Connecticut in New Haven for
permission to employ Neubert, Pepe & Monteith, PC, as its
bankruptcy counsel.

Neubert Pepe will:

   (a) advise the Debtor of its rights, powers and duties as
       debtor-in-possession continuing to operate and manage the
       business and property;

   (b) advise and assist the Debtor concerning the negotiation and
       documentation of financing agreements, debt restructuring
       and related transactions;

   (c) review the nature and validity of any liens asserted
       against the property of the Debtor and advise the Debtor
       concerning the enforceability of those liens;

   (d) advise the Debtor concerning the actions that might be
       taken to collect and recover property for the benefit of
       the Debtor's estate;

   (e) prepare, on the Debtor's behalf, necessary and appropriate
       applications, motions, pleadings, draft orders, notices,
       schedules and other documents and review all financial and
       other reports to be filed in the Debtor's case;

   (f) advise and prepare the Debtor's responses concerning
       applications, motions, pleadings, notices and other papers
       filed and served in the Debtor's case;

   (g) counsel the Debtor in connection with the formulation,
       negotiation and prosecution of a plan of reorganization and
       related documents; and

   (h) perform all other legal services for and on behalf of the
       Debtor, which may be necessary or appropriate in the
       administration of the Debtor's bankruptcy case.

Douglas S. Skalka, Esq., a principal at Neubert, Pepe & Monteith,
PC, disclosed that the Firm will be paid its customary hourly
rates.  Papers filed with the Court did not specify those rates.

Mr. Skalka assures the Court that Neubert, Pepe & Monteith, PC, is
disinterested as that term is defined in Section 101(14) of the
U.S. Bankruptcy Code.

With offices in New Haven and Southport, Connecticut, Neubert,
Pepe & Monteith, PC -- http://www.npmlaw.com/-- has substantial  
expertise in the areas of civil litigation and appeals, labor and
employment law, corporate law, bankruptcy, administrative law,
banking, real estate, health care, and managed care.

The Firm can be contacted at:

          Neubert, Pepe & Monteith, PC
          195 Church Street
          New Haven, CT 06510
          Tel: (203) 821-2000
          Fax: (203) 821-2009

Headquartered in Norwich, Connecticut, Daticon, Inc. --
http://www.daticon.com/-- works with law firms, corporations and  
government agencies to capture, review and manage the volumes of
electronic data and paper documents generated by complex
litigation, merger and acquisition transactions, and
investigations.  The Debtor filed for chapter 11 protection on
Jan. 17, 2006 (Bankr. D. Conn. Case No. 06-30034).  When the
Debtor filed for protection from its creditors, it listed
$9,089,033 in assets and $18,997,028 in debts as of Dec. 31, 2005.


DELTA AIRLINES: Has Until July 11 to File Chapter 11 Plan
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended until July 11, 2006, the period within which Delta Air
Lines Inc. and its debtor-affiliates have the exclusive right to
file a chapter 11 plan.  The Court also extended the Debtors'
period to solicit acceptances of that plan until Sept. 9, 2006.

As reported in the Troubled Company Reporter on Jan. 3, 2006, the
Debtors want to avoid the necessity of formulating a
Reorganization Plan prematurely and to ensure that their
Reorganization Plan best addresses the interests of their estates,
employees, and creditors.

Since the Petition Date, the Debtors have worked diligently to
stabilize their businesses and reassure customers, suppliers and
employees.  Among other things, the Debtors:

   (a) have obtained Court approval for postpetition credit
       facilities totaling $2,200,000,000 that are expected to
       provide sufficient liquidity to enable them to operate
       while in Chapter 11;

   (b) have been seeking to enter into a new agreement with a
       credit card processor;

   (c) have been seeking to complete the sale of a major
       operating subsidiary;

   (d) have started the process of analyzing hundreds of leases
       and executory contracts, including aircraft and equipment
       leases, to identify those that are beneficial to their
       estates and to reject those that are not;

   (d) have been working with the Section 1114 committee
       appointed by the Court to effect certain changes to health
       benefits; and

   (e) have been addressing a multitude of creditor, supplier and
       customer inquiries from around the world;

Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York,
relates that the Debtors have also devoted significant attention
to evaluate their numerous aircraft and equipment leases and
rationalizing their fleet.  The Debtors have unilaterally agreed
to perform their obligations under Section 1110 of the Bankruptcy
Code with respect to a number of their aircraft and have also
negotiated numerous stipulations with aircraft lessors regarding
Section 1110-related matters.

In addition, the Debtors have spent extensive time and resources
negotiating and finalizing an interim agreement with the pilots'
union regarding modifications to their collective bargaining
agreement.  The Debtors have a pending request under Section 1113
to reject the CBA after negotiations were initially unsuccessful.
The Debtors have devoted substantial resources to preparing for
and litigating that request.

Although the Debtors' developing business plan is a work in
progress and will continue to evolve, the Debtors have been
engaged with the Official Committee of Unsecured Creditors on
their progress and have made multiple formal and informal
presentations to the Creditors Committee or its advisors about
it.  Mr. Huebner says that the Creditors Committee and its
advisors have been given access to the Debtors' financial
advisors and financial officers, and to voluminous information,
in order to help the Creditors Committee evaluate the Debtors
businesses and plans.

The Debtors' goal is to develop and propose a Reorganization Plan
that will receive support from their various constituencies.
Additional work and progress is necessary on many fronts in
connection with the eventual development of a Reorganization
Plan.  Mr. Huebner explains that continued progress, among other
things, on the Section 1110 process and the Section 1113 process,
including securing a comprehensive permanent agreement with the
pilots' union, make it premature at this time for the Debtors to
submit a Reorganization Plan.

Specifically, an extension of the Debtors' Exclusive Periods is
required to enable the Debtors to:

   (i) continue to refine their business model to deliver both a
       more efficient cost-structure and future revenue growth so
       that the Debtors can compete effectively within the global
       commercial passenger aviation industry;

  (ii) further implement specific restructuring initiatives, like
       the rationalization of their route structure and aircraft
       fleet and a reduction in their employee-related costs;

(iii) begin to explore possible sources of exit financing to
       provide adequate liquidity upon emergence from Chapter 11;
       and

  (iv) develop a Reorganization Plan reflecting the desired
       initiatives set forth and the many others that are
       underway.

Mr. Huebner assures the Court that the request is not intended as
a negotiation tactic or a means of maintaining leverage over any
group of creditors whose interests may be harmed by an extension.

Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  As of June 30, 2005, the Company's balance
sheet showed $21.5 billion in assets and $28.5 billion in
liabilities.  (Delta Air Lines Bankruptcy News, Issue No. 18;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


DELTA AIR: Committee Wants Aviation Specialists as Consultant
-------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Delta
Air Lines Inc. and its debtor-affiliates chapter 11 cases, seeks
the U.S. Bankruptcy Court for the Southern District of New York's
consent to retain Aviation Specialists Group, Inc., as its
aircraft valuation consultant, effective as of Dec. 19, 2005.

Jordan S. Weltman, chairperson of the Creditors Committee, asserts
that ASG is qualified to assist the Committee with respect to
critical valuation and other issues involving the 89 aircraft that
are subject to the Restructuring Term Sheet entered into by the
Debtors and an ad hoc committee of holders of aircraft indebtness,
and other matters affecting the Debtors' aircraft.

According to Mr. Weltman, ASG has valued billions of dollars worth
of jetliners, regional aircraft, corporate airplanes, engines and
spare parts, and has extensive practical aviation industry
experience, including in the areas of finance, operating leasing,
asset management, airframe and engine maintenance and market
analysis.

ASG will:

   (a) review the Debtors' operating lease rental levels;

   (b) review the Debtors' maintenance reserves;

   (c) review lease return conditions;

   (d) provide testimony in Court on behalf of the Committee,
       if necessary and appropriate, with respect to market terms
       and competitive issues involved in connection with the
       transaction contemplated in the Restructuring Term Sheet
       and other matters in connection with the Debtors' chapter
       11 cases; and

   (e) provide other services as may be appropriate.

ASG will be paid at $250 per hour for consulting services rendered
by its principals.  ASG will also seek reimbursement of out-of-
pocket expenses incurred in connection with its retention by the
Creditors Committee.

The Creditors Committee proposes that the Debtors indemnify ASG
from and against losses, claims, damages or liabilities in
connection with ASG's retention.

Fred J. Klein, president of ASG, will head the team that will
provide consulting services to the Committee.  Mr. Klein
discloses that, from time to time, ASG has provided services, and
likely will continue to provide services, to certain creditors and
equity holders of the Debtors in matters unrelated to their
Chapter 11 cases.

Mr. Klein also reports that ASG has performed aircraft appraisals
and inspections and audits of aircraft maintenance records
concerning various aircraft owned and operated by Delta Air
Lines, Inc.

Mr. Klein anticipates that ASG will be required by its
longstanding clients to continue performing services with regard
to Delta Aircraft while the Firm is employed by the Creditors
Committee.  However, he assures the Court that ASG will establish
an "ethical wall" between him and his partner, Stuart Rubin, who
will be responsible for matters involving the Delta Aircraft.

In addition, ASG will not, while employed by the Creditors
Committee, perform any services for its other clients concerning
aircraft that are subject of (i) the Restructuring Term Sheet, or
(ii) any other matters concerning which ASG is performing
consulting services for the Committee.

Mr. Klein assures the Court that ASG is a "disinterested person"
as defined in Section 101(14) of the Bankruptcy Code.

Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  As of June 30, 2005, the Company's balance
sheet showed $21.5 billion in assets and $28.5 billion in
liabilities.  (Delta Air Lines Bankruptcy News, Issue No. 18;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


DELTA AIR: Enters Section 1110(b) Stipulation for 14 Aircraft
-------------------------------------------------------------
Delta Air Lines Inc. and its debtor-affiliates entered into a
stipulation under Section 1110(b) of the Bankruptcy Code with
various parties who maintain interests in 14 Boeing 737 Aircraft
bearing U.S. Registration Nos. N301DL, N302DL, N303DL, N304DL,
N305DL, N306DL, N308DL, N309DL, N314DA, N326DL, N329DL, N330DL,
N305WA, and N306WA.

The Aircraft Parties are Castle Harbour-1 Limited Liability
Company, GE Commercial Aviation Services, LLC, General Electric
Capital Corporation, and SGE (New York) Associates.

The Aircraft are entitled to protections under Section 1110.  
However, the automatic stay under Section 362 vaporizes on the
60th day after the Petition Date, unless a debtor commits to full
contractual performance and cures on any defaults pursuant to a
Section 1110(a) Election.

Pursuant to Section 1110(b), however, the Debtors may enter into  
stipulations with aircraft lessors and financiers extending the  
time to perform the Section 1110 obligations.

The Debtors and the Aircraft Parties agree to extend the 60-day
period on undisclosed terms and conditions.

Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  As of June 30, 2005, the Company's balance
sheet showed $21.5 billion in assets and $28.5 billion in
liabilities.  (Delta Air Lines Bankruptcy News, Issue No. 18;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


DMX MUSIC: Has Until February 9 to Remove Civil Actions
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave DMX
Music, Inc. and its debtor-affiliates, until Feb. 9, 2006, to
remove actions and related proceedings pursuant to 28 U.S.C. Sec.
1452 of and Rule 9027 of the Federal Rules of Bankruptcy
Procedure.

The Debtors tell the Court that they been focusing all their
efforts on obtaining Court approval for the sale of substantially
all of their assets and the formulation of an appropriate plan of
liquidation.  The Debtors relate that they haven't had an
opportunity to thoroughly review pre-petition actions that needs
to be removed from other jurisdictions.

The Debtors say that the extension would afford them opportunity
to make fully informed decisions regarding the removal of each
pre-petition action and assure them that they do not forfeit
valuable rights under Section 1452 of the Bankruptcy Code.

Headquartered in Los Angeles, California, Maxide Acquisition,
Inc., dba DMX MUSIC, Inc. -- http://www.dmxmusic.com/-- is   
majority-owned by Liberty Digital, a subsidiary of Liberty Media
Corporation, with operations in more than 100 countries.  DMX
MUSIC distributes its music and visual services worldwide to more
than 11 million homes, 180,000 businesses, and 30 airlines with a
worldwide daily listening audience of more than 100 million
people.  The Company and its debtor-affiliates filed for chapter
11 protection on Feb. 14, 2005 (Bankr. D. Del. Case No. 05-10431).  
The case is jointly administered with Maxide Acquisition, Inc.
(Bankr. D. Del. Case No. 05-10429).  Curtis A. Hehn, Esq., 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 estimated more than $100 million in assets and
debts.


DONALD GATZKE: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Donald A. Gatzke
        Trustee for Donald A. Gatzke Trust
        243 Lake Blaine Drive
        Kalispell, Montana 59901-7629

Bankruptcy Case No.: 06-60020

Type of Business: The Debtor is a trustee for the
                  Donald A. Gatzke Trust.

Chapter 11 Petition Date: January 20, 2006

Court: District of Montana (Butte)

Debtor's Counsel: Gregory A. Luinstra, Esq.
                  Alexander, Baucus, Paul & Young, PLLC
                  P.O. Box 3169
                  Great Falls, Montana 59403
                  Tel: (406) 761-4800

Total Assets: $7,875,235

Total Debts:  $2,737,258

The Debtor does not have unsecured creditors who are not insiders.


DPAC TECH: Nov. 30 Balance Sheet Upside-Down by $920,000
--------------------------------------------------------
DPAC Technologies Corp. (OTCBB:DPAC) reported results for its
fiscal year 2006 third quarter ended Nov. 30, 2005.  

For the third fiscal quarter, net sales from continuing operations
were $378,000 compared to net sales of $334,000 for the third
quarter of the previous year.

DPAC's net loss from continuing operations totaled $504,000.  The
net loss from continuing operations for the prior year's third
quarter was $1.4 million.

For the nine months ended Nov. 30, 2005, net sales from continuing
operations were $1.2 million as compared to $957,000 for the same
period in the prior fiscal year.

DPAC's net loss from continuing operations for the current-year
period totaled $3.2 million.  The net loss from continuing
operations for the prior year's nine-month period was $5 million,
and included $573,000 of restructuring charges.  During the
current year's nine-month period, DPAC expensed $595,000 of
acquisition costs incurred in regard to the QuaTech acquisition
transaction.

                      Balance Sheet Summary

At Nov. 30, 2005, DPAC had total assets of $1.2 million, including
cash and cash equivalents of $501,000 and no assets related to
discontinued operations.  This compares to total assets of     
$4.1 million at Feb. 28, 2005, which included $2.7 million in cash
and cash equivalents and $164,000 of assets related to
discontinued operations.

Working capital at November 30, 2005 was a deficit of $386,000
compared to working capital of $1.5 million at February 28, 2005.

As of Nov. 30, 2005, DPAC Technologies Corp.'s balance sheet
showed a stockholders' deficit of $920,000, compared to a
$1,439,000 positive equity in Feb. 28, 2005.

DPAC Technologies Corp., fka Dense-Pac Microsystems, Inc. --
http://www.dpactech.com/-- provides wireless connectivity   
products for industrial, transportation, medical and other
commercial applications.  The Airborne(TM) wireless Local Area
Network Node Module was introduced in September 2003 after an
initial year of research and development.  The product is designed
to enable OEM equipment designers to incorporate 802.11 wireless
LAN connectivity into their device, instrument or equipment
through the inclusion of the Company's Wireless LAN Node Module in
their system design.  The Company also sells Airborne(TM) Direct
plug-and-play wireless products that add 802.11 wireless
connectivity to legacy instruments and equipment that have a
pre-existing serial or Ethernet data port.

                          *     *     *

                       Going Concern Doubt

Moss Adams, LLP, expressed substantial doubt about DPAC
Technologies' ability to continue as a going concern after it
audited the Company's financial statements for the fiscal year
ended Feb. 28, 2005.  The auditing firm points to the Company's
continuing losses from operations and negative operating cash
flow.

The Company's former independent auditor, Deloitte & Touche, LLP,
had issued a clean and unqualified opinion after auditing the
Company's financial statements for the fiscal years ended June 30,
2004 and 2003.


DRS TECHS: Fitch Assigns Low-B Ratings to $1.7 Billion Debts
------------------------------------------------------------
Fitch Ratings has initiated these ratings for DRS Technologies,
Inc.:

    * Issuer Default Rating 'B+';

    * proposed senior secured credit facility 'BB+'/Recovery
      Rating '1';

    * proposed senior notes 'BB/RR2'; and

    * proposed and existing senior subordinated notes 'B-/RR6'.

Rating Outlook Stable.

These actions assume that the Engineered Support Systems, Inc.
(EASI) acquisition and associated debt issuances close under the
announced terms.  Approximately $1.7 billion of existing and
proposed debt is covered by these actions.

On Sept. 22, 2005, DRS announced its plans to acquire EASI for
$2.1 billion utilizing a combination of new debt, DRS shares and
cash on hand.  Pricing for the transaction is approximately 12.4
times fiscal 2005 EBITDA.  The transaction, which remains subject
to shareholder approval of both companies, is expected to close by
the end of January.

The ratings reflect:

   * continued high levels of defense spending;

   * good pro forma free cash flow generation;

   * DRS' proven ability to increase margins at acquired
     companies;

   * expected growth in homeland security spending; and

   * healthy pro forma EBITDA margins.

The ratings also consider DRS' diversification within the defense
and homeland security arena, and the alignment between DRS'
products and services and expected Department's of Defense (DoD)
and Homeland Security needs, all of which will be aided by the
EASI acquisition.  Fitch's concerns center on:

   * DRS' ability to integrate EASI;

   * the company's future acquisition plans;

   * limited financial flexibility due to high debt levels;

   * potential changes within the DoD budget;

   * the price being paid for EASI; and

   * Securities and Exchange Commission investigations of
     EASI.

Fitch's ratings and Stable Outlook incorporate expectations for
deployment of free cash flow toward debt reduction in the next 12
months.  In addition, the Outlook is based on the favorable effect
of DoD supplemental budgets offset by near-term concerns about
uncertainty in the DoD budget related to overall spending
pressures due to the federal budget deficit, the Quadrennial
Defense Review (QDR), and 'transformation.'

The recovery ratings and notching in the debt structure reflect
Fitch's recovery expectations under a scenario in which distressed
enterprise value is allocated to the various debt classes.  The
recovery ratings for the senior secured credit facility ('RR1',
reflecting expected 100% recovery) and the senior unsecured notes
('RR2', reflecting expected recovery of 70%-90%) benefit from
substantial cushions of subordinated debt and equity as well as
covenants that preclude the issuance of significant amounts of
debt without sizable increases in EBITDA.  The senior subordinated
debt ratings ('RR6') reflect the expectation of poor recovery
prospects in a distressed case.

Potential DoD budgetary constraints going forward remain a concern
for the defense sector, as do potential funding shifts within the
DoD budget.  Current indications are that the QDR will be less
disruptive than anticipated, reducing Fitch's concerns.  As such,
Fitch believes that large program cancellations would be a
surprise, but program restructurings such as reductions or
deferrals are likely.  Fitch expects that DRS could benefit from
new program delays as they would lead to more upgrade and
modernization business for existing platforms.  DRS' diverse
contract base also mitigates the risk of program delays or funding
shifts.  The loss of revenues resulting from an end to the
conflicts in Iraq and Afghanistan is also a concern, but the
impact would probably result in slower organic growth rather than
overall revenue declines.

In the longer term, U.S. budget pressures could strengthen the
trend in U.S. government outsourcing, providing defense service
providers such as EASI an opportunity to enter new markets.

In acquiring EASI, DRS will be increasing its standalone projected
fiscal 2007 revenues of $1.7 billion by nearly three-quarters to
$2.9 billion, making it by far DRS' largest acquisition.
Mitigating the risks related to the acquisition are DRS' successes
in managing prior acquisitions and the lack of product overlap
between the two companies.  Given DRS' acquisitive nature, Fitch
is concerned about the company's acquisition appetite going
forward, but management has indicated it plans to digest EASI and
improve credit ratios prior to making significant acquisitions.
Pricing for the EASI transaction is high, but it is in line with
recent acquisitions in the defense sector.  In addition, the
acquisition complements DRS' existing portfolio, which should
allow DRS to provide turn-key solutions to customers.

The SEC investigations of EASI revolve around potential insider
trading by a former director and officer in one instance.  The
other investigation is related to whether or not a stop-work order
was a material enough event to warrant disclosure at the time it
occurred.  Fitch does not expect the outcome of the investigations
to have a material impact on DRS.

Pro forma leverage utilizing Fitch's global definition of debt-to-
operating EBITDA was 5.4x for the LTM ended Sept. 30, 2005,
substantially higher than actual results of 3.7x.  Pro forma
interest coverage, using Fitch's global definition of operating
EBITDA-to-interest, was 2.9x for the same period, significantly
lower than the actual results of 4.1x.  

Going forward, Fitch expects these ratios to improve as DRS
utilizes free cash to reduce debt.


ECHOSTAR DBS: S&P Rates $1.5 Billion 7.125% Senior Notes at BB-
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' rating to
EchoStar DBS Corp.'s $1.5 billion 7.125% senior notes due 2016.
This offering represents an upsizing of the previously announced
$1 billion senior notes, which we rated on Jan. 19, 2006.  
EchoStar DBS is a subsidiary of EchoStar Communications Corp., a
Littleton, Colorado-based satellite DTH TV provider.
     
Proceeds will be used to call the $442 million 9.125% senior notes
due 2009 and for general corporate purposes.  The 'BB-'corporate
credit rating on EchoStar and its subsidiaries was affirmed.
     
The transaction will boost EchoStar's cash balance by about $1
billion and increase gross debt to EBITDA leverage to about 3.8x,
from 3.3x, for the 12 months ended Sept. 30, 2005, still within an
acceptable limit for the ratings.


ELWOOD ENERGY: S&P Affirms $402 Million Sr. Sec. Bonds' B+ Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' rating on
Elwood Energy LLC's $402 million 8.159% ($335 million outstanding)
senior secured bonds due 2026.
     
At the same time, the outlook was revised to stable from negative,
reflecting an improvement in the near-term prospects of Aquila
Inc. (B-/Watch Pos/B-3), a major power offtaker whose ratings were
placed on CreditWatch with positive implications on
Sept. 22, 2005.
     
Elwood is a 1,409 MW peaking power plant that sells into the Mid-
American Interconnected Network (MAIN), and is fully contracted
through 2012 and partially through 2017.
     
The ratings on Elwood reflect Aquila's:

   * credit risk;

   * exposure to partial merchant risk from 2013;

   * full merchant risk after 2017; and

   * power contracts that are above market due to the MAIN's
     excess generating capacity, which could depress power prices
     for years to come.
     
Offsetting these risks are:

   * revenues from a highly creditworthy offtaker,
     Exelon Generation Co. LLC (BBB+/Watch Neg/A-2), representing
     52% of cash flows through 2012;

   * $37.7 million of collateral posted by Aquila that covers 12
     months of capacity payments; and

   * a good operations track record, with availabilities that have
     averaged above 99% since operations began.
      
"A downgrade could occur if Aquila's credit deteriorates, and an
upgrade is unlikely until prospects for merchant peak generators
in the MAIN improve," said Standard & Poor's credit analyst
Chinelo Chidozie.

Nevertheless, Elwood's ratings remain notched above those of
Aquila because of stable cash flows from its purchase-power
agreement with Exelon Corp. and a solid liquidity position.


EURAMAX INT'L: Moody's Affirms $190 Mil. Term Loan's Junk Rating
----------------------------------------------------------------
Moody's Investors Service affirmed the long term debt ratings of
Euramax International, Inc.  The ratings outlook is stable.

Ratings affirmed include:

Euramax International, Inc. and co-issuer Euramax International
Holdings B.V.:

   * B2 - Guaranteed first lien senior secured tranche B term
     loan, $332 million due 2012

   * Caa1 - Guaranteed second lien senior secured term loan,
     $190 million due 2012

Euramax Netherlands B.V., Euramax Holdings Limited (UK), Euramax
Europe B.V.:

   * B2 - Guaranteed first lien senior secured tranche B term
     loan, $118 million due 2012

Euramax International, Inc., co-issuer Euramax International
Holdings B.V., Euramax Holdings Limited (UK), Euramax Europe B.V.,
Euramax Netherlands B.V.:

   * B2 - Guaranteed first lien senior secured revolving credit
     facility, $80 million due 2011

Euramax International, Inc.:

   * B2 - Corporate Family Rating

Euramax's B2 corporate family rating incorporates:

   * its leading market position in a number of niche markets,
     including:

     -- roof drainage products and

     -- fabricated aluminum, steel, fiberglass, and vinyl products
        for construction and recreation vehicles; and

   * its ability to consistently generate free cash flow despite
     high financial leverage.  

Moody's believes that operating margins will remain relatively
stable despite the strain from raw material inflation, increased
labor costs, and competitive pressures.  The ratings also capture
Euramax's:

   * high degree of financial leverage;

   * vulnerability to cyclical end-use markets and raw material
     price volatility; and

   * significant customer concentration risks with retail home
     centers.

The stable outlook reflects Moody's belief that despite prospects
for continued weakness should home repair and remodeling activity
wane as interest rates increase and the potential negative impact
that higher fuel costs could have on RV sales, Euramax will
continue to generate free cash flow in FY2006.  However, given
recent weak operating performance, Moody's believes the company
could have limited capacity to increase borrowings under its
senior secured revolver due to potentially narrow compliance with
restrictive financial covenants during the 1st and 2nd quarters of
2006 given seasonal working capital needs.  Factoring in next
year's expected level of EBITDA, free cash flow and debt
amortization requirements, the stable outlook is predicated on
Euramax maintaining EBITDA margins of approximately 10%, debt-to-
EBITDA under 6.0x (or approximately 6.5x including the holding
company PIK note) and free cash flow-to-debt of at least 4%.

The rating affirmation reflects Moody's belief that despite the
unlikely near-term prospect the company will be able to refinance
its outstanding holding company PIK notes and 2nd lien debt with
$315 million in operating company subordinated debt as was planned
back in September 2005 when Moody's downgraded the company's
ratings.  The company's equity sponsors have clearly demonstrated
their intention to place the additional financial leverage on the
operating company given the 1st lien credit agreement amendment
permitting the issuance of subordinated debt remains in place.

In addition, while the 2nd lien credit agreement does not permit
the issuance of subordinated debt and would have to be refinanced
with the proceeds of any such capital markets transaction, Moody's
believes that the company's credit metrics will not improve as
anticipated when the initial ratings were assigned in June 2005
due to:

   * weak sales in:

     -- roof drainage products in home retail centers,
     -- fabricated aluminum and steel roofing, and
     -- siding to rural contractors; and

   * depressed margins resulting from higher raw material and
     operating costs and a competitive pricing environment.

At this time, Moody's does not see any upward rating pressure.
However, the ratings could come under additional pressure if the
company liquidity position is weakened by lower than anticipated
free cash flow generation and/or a furthering narrowing in
covenant compliance due to weak operating performance or high
seasonal working capital needs over the next 6 months.

The two-notch differential between the first and second lien
senior secured term loans reflect contractual subordination and
poor recovery prospects in the event of a default given the high
level of first lien debt compared to tangible assets or even
enterprise value.

Headquartered in Norcross, Georgia, Euramax International Inc. is
an international producer of value-added:

   * aluminum,
   * steel,
   * vinyl, and
   * fiberglass products.

The company reported revenues of $1.1 billion for the LTM ended
Sept. 30, 2005.


FLOWERS FOODS: Good Performance Cues Moody's to Review Ba2 Rating
-----------------------------------------------------------------
Moody's Investors Service placed the Ba2 corporate family rating
for Flowers Foods, Inc. under review for possible upgrade.  The
review is prompted by:

   * Flowers' continuing solid operating performance;
   * its strong organic growth; and
   * its conservative capital structure.

The review will focus on:

   * the longer-term outlook for Flowers' operating performance;

   * the degree to which its growth strategy may include debt-
     financed acquisitions; and

   * the company's financial policies which -- over the past
     year -- included a material increase in share repurchases.

Should Moody's become comfortable that Flowers will manage its
growth and financial strategies in a manner resulting in a
continuation of a strong financial profile, its ratings could be
upgraded.

Rating placed on review for possible upgrade is:

   * Corporate Family Rating at Ba2,

Headquartered in Thomasville, Georgia, Flowers Foods, Inc. is a
regional producer and distributor of:

   * fresh bread,
   * rolls, and
   * snack cakes

for retail and foodservice markets.


FREEDOM 2000-1: Moody's Puts Class F Notes' B2 Rating on Watch
--------------------------------------------------------------
Moody's Investors Service placed on watch for possible upgrade the
rating of this class of notes issued by Freedom 2000-1 CDO Ltd.
(formerly CIGNA CDO 2000-1 Ltd.), a collateralized debt obligation
issuer:

   a) U.S.$263,000,000 Senior Secured Class A Floating Rate Notes
      due 2012

      Prior Rating: A2
      Current Rating: A2 (on watch for possible upgrade)

Moody's also placed on watch for possible downgrade the rating of
this class of notes issued by Freedom 2000-1 CDO:

   a) U.S. $37,000,000 Senior Secured Class B Floating Rate Notes
      due 2012

      Prior Rating: B2
      Current Rating: B2 (on watch for possible downgrade)

The rating action with respect to the Class B notes reflect the
deterioration in the credit quality of the transaction's
underlying collateral portfolio, consisting primarily of corporate
bonds, as well as the continued failure of certain collateral and
structural tests, according to Moody's.  The rating action with
respect to the Class A notes reflect the delevering of the
transaction which more than offsets the unfavorable aspects of the
transaction's performance, Moody's noted.


GENERAL MARITIME: Completes Tender Offer for 10% Senior Notes
-------------------------------------------------------------
General Maritime Corporation (NYSE: GMR) has completed its tender
offer and consent solicitation for any and all of its outstanding
10% Senior Notes due 2013 (CUSIP 370290AC2).   The tender offer
for the Notes expired at 5:00 pm, New York City time, on Jan. 17,
2006 and is subject to the terms and conditions set forth in the
Company's Offer to Purchase for Cash and Solicitation of Consents
dated Dec. 15, 2005.

On Dec. 30, 2005, General Maritime Corporation accepted for
purchase and paid for $226,460,000 principal amount of Notes
tendered prior to the expiration of the Company's consent
solicitation at 5:00 pm, New York City time, on Dec. 29, 2005,
representing approximately 99.99% of the total principal amount of
Notes outstanding.  Holders who validly tendered (and did not
validly withdraw) Notes prior to the Consent Time received total
consideration per $1,000.00 principal amount of Notes tendered of
$1,151.12, which amount included a consent payment of $30.00, plus
accrued and unpaid interest on the Notes tendered up to, but not
including, the First Payment Date.

No additional Notes were tendered subsequent to the Consent Time
and prior to the Expiration Time.  In light of the Company's
purchase on Dec. 30, 2005 of all the Notes tendered prior to the
Consent Time, the second supplemental indenture entered into among
the Company, certain subsidiary guarantors of the Notes and
LaSalle Bank National Association, as trustee will become
operative.  The Second Supplemental Indenture amends the indenture
under which the Notes were issued, to eliminate substantially all
of the restrictive covenants and certain default provisions in the
Indenture.  The Amendments are binding upon holders of Notes who
did not tender their Notes pursuant to the Offer to Purchase even
though such holders have not consented to the Amendments.

Goldman, Sachs & Co. acted as the exclusive dealer manager and
solicitation agent for the tender offer and consent solicitation.  
D.F. King & Co., Inc. served as the information agent for the
tender offer and consent solicitation.

Headquartered in New York City, General Maritime Corporation --
http://www.generalmaritimecorp.com/-- is a provider of  
international seaborne crude oil transportation services
principally within the Atlantic basin, which includes ports in the
Caribbean, South and Central America, the United States, West
Africa, the Mediterranean, Europe and the North Sea.  The Company
also currently operates tankers in other regions including the
Black Sea and Far East.  General Maritime Corporation currently
owns and operates a fleet of 31 tankers -- 20 Aframax, 7 Suezmax
tankers and 4 Suezmax newbuilding contracts with a carrying
capacity of approximately 3.8 million dwt.  Following the
completion of the Company's recent vessel sales, the Company will
own and operate a fleet of 30 tankers -- 19 Aframax, 7 Suezmax
tankers, and 4 Suezmax newbuildings.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 9, 2006,
Moody's Investors Service withdrew all ratings assigned to General
Maritime Corporation's debt.

Ratings Withdrawn:

  General Maritime Corporation

     * Senior Unsecured of B2
     * Corporate Family Rating of B1

The withdrawal is due to General Maritime's purchase on Dec. 30,
2005 of $226.46 million (or 99.99% of the then outstanding
principal amount) of its $250 million of 10% Senior Unsecured
Notes due 2013 pursuant to the Company's Tender Offer for the
notes made on Dec. 15, 2005.  According to the company, the
requisite consents needed to eliminate substantially all of the
restrictions, covenants and certain default provisions of the
Senior Notes Indenture were obtained and the Indenture was amended
on Dec. 30, 2005.


GLIMCHER REALTY: Completes $58.3-Mil. Purchase of Tulsa Promenade
-----------------------------------------------------------------
Glimcher Realty Trust, (NYSE: GRT) closed on the purchase, from
Coyote Tulsa Mall, L.L.C., of Tulsa Promenade, located in Tulsa,
Oklahoma for total consideration of $58.3 million.  The Company
funded the acquisition though its existing credit facility.

Tulsa Promenade consists of approximately 927,000 square feet of
gross leasable area and is a highly productive retail center
located in a strong and stable trade area.  The property is a
newly renovated two-story regional mall anchored by Dillard's,
Foley's and JC Penney and featuring a 12-screen Hollywood Theaters
with stadium seating and approximately 235,000 square feet of
small shop retailers.  The mall shop stores are generating sales
per square foot of approximately $305.

Based in Columbus, Ohio, Glimcher Realty Trust --
http://www.glimcher.com/-- is a recognized leader in the  
ownership, management, acquisition and development of enclosed
regional and super-regional malls.

Glimcher Realty Trust's common shares are listed on the New York
Stock Exchange under the symbol "GRT."  Glimcher Realty Trust's
Series F and Series G preferred shares are listed on the New York
Stock Exchange under the symbols "GRT.F" and "GRT.G."  Glimcher
Realty Trust, a real estate investment trust, is a component of
the Russell 2000 Index, representing small cap stocks, and the
Russell 3000 Index, representing the broader market.

                         *     *     *

As reported in the Troubled Company Reporter on Sept. 26, 2005,
Standard & Poor's Ratings Services revised its outlook on Glimcher
Realty Trust to stable from negative.  At the same time, the 'BB'
corporate credit and 'B' preferred stock ratings are affirmed.
$210 million in outstanding rated preferred stock is affected.


HAPPY KIDS: Sells Assets to Wear Me for $23 Million
---------------------------------------------------
The Honorable Stuart M. Bernstein of the U.S. Bankruptcy Court for
the Southern District of New York in Manhattan approved the sale
of substantially all of Happy Kids Inc. and its debtor-affiliates'
assets to Wear Me Apparel Corp. for $23 million.  The sale is free
and clear of liens, claims and encumbrances.

Judge Bernstein also approved the assumption and assignment of
certain executory contracts and liabilities under the asset sale.

No auction was held because no bidder challenged Wear Me's bid.

As previously reported in the Troubled Company Reporter, the
assets for sale included:

  1) all title, right and license granted to the Debtors by:

     a) Calvin Klein Jeanswear Company and CKJ Holdings Inc.,
        pursuant to a Sublicense Agreement dated as of
        June 18, 2003,

     b) Calvin Klein Jeanswear Company and CKJ Holdings Inc., as
        Licensor, and Warnaco Inc., as Underwear Licensor,
        pursuant to an Agreement dated as of June 13, 2003,

     c) Phillips-Van Heusen Corporation, pursuant to a Specified
        Children's Wear License Agreement and a Children's
        Outerwear License Agreement, each dated as of Oct. 20,
        2003, and

     d) the Basketball Marketing Company, Inc., d/b/a AND 1,
        pursuant to a an Amended and Restated Trademark
        License Agreement dated as of June 11, 1999;

  2) all tradenames owned or used by any of the Debtors, including
     Happy Kids' private label and the business conducted by the
     Debtors in connection with those tradenames;

  3) all of the Debtors' right, title, benefit and interest in the
     inventory, work in process, open purchase orders and the
     assumption of all outstanding letter of credit obligations
     related to that work in process and open purchase orders,
     patterns, samples and designs related to the Trademark
     License Agreement and the Tradenames owned or used by the
     Debtors at the time of the closing of the Sale Transaction;

  4) all sales orders, rights to payment, vendor discounts,
     credits and rebates owned, used by the Debtors at the time of
     closing of the Sale Transaction; and

  5) cash equal to approximately $1,400,000, which represents the
     value of employee receivables related to split-dollar life
     insurance policies held by the named insureds, and all
     deposits, cash and petty cash held by the Debtors at the time
     of closing of the Sale Transaction.

The CIT Group/Commercial Services, Inc., received the sale
proceeds of the Assets in an amount necessary to satisfy a
portion of the Debtors' obligations in accordance with Section 2.5
of the Purchase Agreement and the Letters of Indemnity duly
executed and delivered to CIT.

The CIT Group is one of the Debtors' DIP Lender and cash
collateral owner.

A full-text copy of the blacklined Court Order approving the sale
of Happy Kids' assets is available at no charge at
http://ResearchArchives.com/t/s?482

Headquartered in New York, New York, Happy Kids Inc. and its
affiliates are leading designers and marketers of licensed,
branded and private label garments in the children's apparel
industry.  The Debtors' current portfolio of licenses includes
Izod (TM), Calvin Klein (TM) and And1 (TM).  The Company and its
debtor-affiliates filed for chapter 11 protection on Jan. 3, 2005
(Bankr. S.D.N.Y. Case No. 05-10016).  Sheldon I. Hirshon, Esq., at
Proskauer Rose LLP, represents the Debtors in their restructuring
efforts.  When the Debtor filed for protection from its creditors,
it listed total assets of $54,719,000 and total debts of
$82,108,000.


HARTCOURT COMPANIES: Earns $104,690 of Net Income in 2nd Quarter
----------------------------------------------------------------
The Hartcourt Companies, Inc., delivered its financial results for
the quarter ended Nov. 30, 2005, to the Securities and Exchange
Commission on Jan. 18, 2006.

Hartcourt earned $104,690 of net income on $11,936,548 of revenue
for the three months ended Nov. 30, 2005, as compared to $9,787 of
net income on $19,945,688 of revenue for the same period in 2004.  
Management attributes the decrease in revenues to the Company's
exit from the Zhejiang province market following Samsung's product
distribution channel re-arrangement.

Hartcourt's balance sheet showed $15,948,857 in total assets at
Nov. 30, 2005, and liabilities of $6,959,636.  The Company has an
accumulated deficit of $67,004,865 as of Nov. 30, 2005.    

                    Going Concern Doubt

As reported it the Troubled Company Reporter on Oct. 6, 2005,
Kabani & Company, Inc., CPA's, expressed substantial doubt about
Hartcourt's ability to continue as a going concern after it
audited the Company's financial statements for the fiscal year
ended May 31, 2005.  The auditing firm pointed to the Company's
accumulated deficit and negative cash flow from operations.

                 About Hartcourt Companies

Hartcourt Companies Inc. -- http://www.hartcourt.com/-- is a  
business development company specializing in the Chinese
Information Technology market.  It researches and identifies
Chinese companies in the IT industry that meet its acquisition
criteria.  The Company then acquires equity ownership or assets in
the targeted companies to be part of its investment portfolio.
Hartcourt distributes internationally well-known brand named IT
hardware products and related software and services.  The main
products are Samsung branded notebooks and monitors.  The Company
also distributes audio and video conferencing products.


ICEWEB INC: Sherb & Co. Raises Going Concern Doubt
--------------------------------------------------
Sherb & Co., LLP, expressed substantial doubt about IceWEB, Inc.'s
ability to continue as a going concern after it audited the
Company's financial statements for the fiscal years ended
Sept. 30, 2005 and 2004.  The auditing firm pointed to the
Company's consecutive net loss for fiscal year 2005 and 2004.

                Fiscal Year 2005 Results

IceWEB reported a $904,000 net loss for the fiscal year ended
Sept. 30, 2005, in contrast to a $2 million net loss a year
earlier.  For the year ended Sept. 30, 2005, the Company generated
revenues of $6,809,590, a 3% increase from sales recorded for the
year ended Sept. 30, 2004.

As of Sept. 30, 2005, IceWEB had $2,788,263 in total assets and
liabilities of $2,118,404.

                  Comerica Loan Default

In fiscal year 2005, IceWEB failed to meet Quick Ratio and
Tangible Net Worth goals set up in connection with a $500,000
Revolving Loan and Security agreement with Comerica Bank.  The
amount outstanding under the credit facility was $461,269 as of
Sept. 30, 2005.

The terms of the agreement gives Comerica Bank a first position on
the Company's assets.  Advances on the credit line bear interest
at a variable rate equal to one percentage point above the Prime
Rate.  The agreement includes financial covenants for a Quick
Ratio of at least 1.00 to 1.00 and Tangible Net Worth of $390,000
through Jan. 30, 2006.

On Dec. 23, 2005, the Company inked a $1 million credit facility
with Sand Hill Finance and closed the Comerica Bank facility.

                   About IceWEB

Headquartered in Herndon, Virginia, IceWEB, Inc. (OTC BB: IWEB)  
-- http://www.iceweb.com/-- enables small and medium sized  
organizations with its, hardware, software and professional
services.  The Company's application service provider software
delivery model reduces the customer's Total Cost of Ownership and
improves the efficiency of IT environments.


IGIA INC: Balance Sheet Upside-Down by $17 Million at November 30
-----------------------------------------------------------------
IGIA, Inc., delivered its quarterly report for the three months
ended Nov. 30, 2005, to the Securities and Exchange Commission on
Jan. 13, 2006.

IGIA reported a $2,139,207 net loss for the three months ended
Nov. 30, 2005, in contrast to a $6,711,550 for the same period in
the prior year.  

The fiscal third quarter net loss $469,762 of net expenses
incurred in with the restructuring and reorganization under
chapter 11 of its wholly owned operating subsidiary, Tactica
International, Inc.  The U.S. Bankruptcy Court for the Southern
District of New York confirmed Tactica's reorganization plan on
Jan. 12, 2006.

IGIA recorded $7,921,688 of net sales for the three months ended
Nov. 30, 2005, a 418.9% increase over the $1,526,539 of net sales
for the three months ended Nov. 30, 2004.

At Nov. 30, 2005, the Company's balance sheet showed $5,676,884 in
total assets and liabilities of $23,115,831, resulting in a
stockholders' deficit of $17,438,947.  As of Nov. 30, 2005, the
Company had a $17.1 million working capital deficit.

                    Going Concern Doubt

Russell Bedford Stefanou Mirchandani LLP expressed substantial
doubt about IGIA's ability to continue as a going concern after it
audited the Company's financial statements for the fiscal years
ended Feb. 28, 2005.  The auditing firm pointed to the Company's
recurring losses from operations and net capital deficiency.

                     Material Weakness

During the quarter ended Nov. 30, 2005, IGIA's management
continued implementing corrective measures intended to address the
material weaknesses discovered in the Company's system of
disclosure controls and procedures following the audit of its
financial statements for the year ended Feb. 28, 2005.  

Russell Bedford identified material weaknesses related to the
Company's internal controls and procedures within the areas of
revenue recognition, accounts payable, cash disbursements,
inventory accounting and document retention.

Among the changes being implemented are:

Revenue Recognition

     -- criteria and procedures established to reconcile invoicing
        and shipping records;

     -- criteria and procedures established to reconcile direct
        response sales activity records;

     -- control function established to review and monitor
        compliance to new procedures; and

     -- improved document control and file check out procedures

Cash Disbursements and Liability Recognition

     -- document control system established and monitored for
        compliance;

     -- cut-off procedures formalized and consistently applied;

     -- centralized departmental budgets and accountability
        established;

     -- purchasing procedures have been formalized and
        implementation has begun;

Account Reconciliations

     -- procedures established and personnel assigned to
        reconcile key accounts on a timely basis;

     -- control function added to review reconciliations

                      About IGIA

Headquartered in New York City, IGIA, Inc., through its subsidiary
Tactica, designs, develops, imports, and distributes personal care
and household products in the United States and Canada.  The
Company purchases its products from unaffiliated manufacturers,
most of which are located in the People's Republic of China and
the United States.


IMPERIAL HOME: Wants Court to Okay 14 Avoidance Action Settlements
------------------------------------------------------------------
Montague S. Claybrook, the Chapter 7 Trustee appointed in Imperial
Home Decor Group Holdings, Inc., and its debtor-affiliates'
liquidation proceedings, asks the U.S. Bankruptcy Court for the
District of Delaware to approve certain avoidance action
settlements.

The Trustee has identified approximately 76 potential defendants
who may have received preferential transfers ranging from $5,000
to $250,000.  The Trustee relates that he served demands letters
and as a result has settled causes of action against 19 defendants
after initiating an adversary proceeding.  The Trustee also tells
the Court that it has settled claims against 21 defendants after
initiating an adversary proceeding.

The Trustee reminds the Court that on Dec. 5, 2005, it approved 28
settlements of avoidance actions.  The Trustee asks the Court to
approve of another 14 settlements.

Pursuant to the proposed settlements, the potential defendants and
the defendants will make certain payments to the estate and will
release various claims against the Debtors.  In exchange, the
Trustee will release various claims asserted against the potential
defendants and asserted against the defendants in filed adversary
proceedings.

Mr. Claybrook tells the Court that the proposed settlements would
allow the Debtors to collect significant payments while avoiding
the cost, uncertainty and delay of litigation.

A list of the 14 defendants is available at no charge at
http://ResearchArchives.com/t/s?489

Headquartered in Cleveland, Ohio, Imperial Home Decor Group, Inc.
-- http://www.ihdg.com-- manufactures and distributes home and
commercial wall-coverings.  The Company also provides online
wall-covering information sales services.  Products and services
are sold to multiple industries.  The Company and its
debtor-affiliates filed for chapter 11 protection on Dec. 27, 2003
(Bankr. D. Del. Case No. 03-13899).  The Debtors' cases were
converted to chapter 7 on Sept. 1, 2004.  Prior to the conversion
date, substantially all of the Debtors' assets were liquidated.
Currently, the estates are administratively insolvent.  On
Sept. 9, Montague S. Claybrook was appointed as chapter 7 Trustee.
Duane David Werb, Esq., at Werb & Sullivan represents the Debtors.
When the Debtor filed for protection from its creditors, it
estimated $100 million in total assets and $100 million in debts.


INVESCO CBO: Moody's Puts Class B-2 Notes' Ba3 Rating on Watch
--------------------------------------------------------------
Moody's Investors Service placed on watch for possible downgrade
the ratings of these classes of notes issued by Invesco CBO 2000-1
Ltd., a collateralized debt obligation issuer:

   1) The U.S.$19,500,000 Class B-1L Floating Rate Notes Due 2012

      Prior Rating: Baa3
      Current Rating: Baa3 (on watch for possible downgrade)

   2) The U.S.$8,000,000 Class B-2 11.15% Notes Due 2012

      Prior Rating: Ba3
      Current Rating: Ba3 (on watch for possible downgrade)

The rating actions reflect the deterioration in the credit quality
of the transaction's underlying collateral portfolio, consisting
primarily of corporate bonds, as well as the failure of the
transaction's weighted average coupon test, according to Moody's.


J.L. FRENCH: S&P Withdraws CCC+ Corporate Credit Rating
-------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'CCC+' corporate
credit rating on automotive supplier J.L. French Automotive
Castings Inc.  The rating had been placed on CreditWatch with
negative implications on Dec. 15, 2005, following reports
that the company did not make a bond interest payment due
Dec. 1, 2005.  Standard & Poor's has not confirmed the reports and
does not have sufficient information to form a credible opinion
about the company's credit risk. J.L. French is privately held and
does not file public financial statements with the SEC.  The
Sheboygan, Wisconsin-based company had total debt of about $700
million on June 30, 2005, including the present value of operating
leases and debt-like preferred stock.
     
J.L. French has suffered from the intense challenges of the
automotive-casting industry, which is fragmented, highly capital
intensive, and subject to volatile demand and customer pricing
pressures.  The company's earnings and cash flow were pressured
during 2005 by vehicle production cuts and price reductions
instigated by its major customers . Especially hard hit were the
carmakers' SUVs and light-truck platforms, which experienced sharp
sales declines because of:

   * shifting consumer preferences,
   * tough competition, and
   * high gas prices.

Products for SUVs and light trucks account for a disproportionate
share of J.L. French's sales and profits.


L.J. MAKRANCY: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: L.J. Makrancy & Sons Landscaping and Lawn Service, Inc.
        947 Kuser Road
        Trenton, New Jersey 08619

Bankruptcy Case No.: 06-10419

Type of Business: The Debtor provides landscape design,
                  construction and maintenance.  The Debtor also
                  provides site evaluation, hardscape construction
                  and irrigation design, construction and
                  maintenance.  See http://www.ljmakrancy.com/

Chapter 11 Petition Date: January 20, 2006

Court: District of New Jersey (Trenton)

Debtor's Counsel: Michael A. Zindler, Esq.
                  Teich Groh Frost and Zindler
                  691 State Highway 33
                  Trenton, New Jersey 08619
                  Tel: (609) 890-1500

Estimated Assets: Less than $50,000

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Internal Revenue Service         Federal 941           $252,575
Attn: Special Procedures         Taxes
955 South Springfield Avenue
P.O. Box 724,
Building A, 3rd Floor
Springfield, NJ 07081

Cananwil, Inc.                                         $103,894
1234 Market Street, Suite 340
Philadelphia, PA 19107

State of New Jersey              Unemployment &         $79,626
Department of Labor              Disability Taxes
CN 110                           from Mar. 31,
Trenton, NJ 08625                2005, to
                                 Jan. 20, 2006

Storr Tractor Co.                Trade Debt             $72,000
3191 Route 22
Somerville, NJ 08876

Verizon Advertising              Trade Debt             $45,887
P.O. Box 64809
Baltimore, MD 21264-4809

Barton Nursery                   Trade Debt             $44,716
949 New Durham Road
Edison, NJ 08817

Verizon Directory Corp.                                 $44,300
c/o Allied Consultants
P.O. Box 1207
Oaks, PA 19456-1207

National Seed Co.                Trade Debt             $43,962
18B Jules Lane
New Brunswick, NJ 08901

Gres Paving                                             $43,214
117 Caroline Avenue
Trenton, NJ 08610

County Line Nurseries                                   $31,715
462 Parvins Mill Road
Bridgeton, NJ 08302

State of New Jersey              Sales & Use Tax        $31,509
Division of Taxation             from June 30, 2005
Bankruptcy Section               to Dec. 31, 2005
P.O. Box 245
Trenton, NJ 08646-0245

Cherry Valley Tractor                                   $29,517
55 West Route 70
Marlton, NJ 08053-3099

Harter Equipment                                        $27,293
615 Highway 33
Englishtown, NJ 07726

Tuckahoe Nurseries, Inc.         Trade Debt             $24,120
P.O. Box 576
Tuckahoe, NJ 08250

Eisch Farms                                             $22,661
110 Hoffman Road
Monroe Township, NJ 08831

CitiBusiness Card                Credit Card            $22,543
P.O. Box 410437
Salt Lake City, UT 84141-0437

Del Vel Chem Company                                    $20,169
P.O. Box 67
Medford, NJ 08055

Hough Petroleum                                         $18,646
340 Fourth Street
Trenton, NJ 08638-2799

Binder Machinery Co.                                    $18,545
2820 Hamilton Boulevard
South Plainfield, NJ 07080

AC Scott Electric                                       $15,873
606 New York Avenue
Trenton, NJ 08638


MCDERMOTT INT'L: 98.6% of Shareholders Okay Babcock Settlement
--------------------------------------------------------------
McDermott International, Inc., (NYSE:MDR) reported results from a
special meeting of shareholders held in Houston, Texas.  The
purpose of the special meeting was for McDermott's shareholders to
vote on a resolution approving the proposed settlement of the
Chapter 11 proceeding involving The Babcock & Wilcox Company and
certain of its affiliates.  Of the 56,278,076 votes cast,
approximately 98.6% voted in favor of the resolution.  The votes
in favor of the resolution constitute a majority of all shares of
common stock outstanding and entitled to vote as of the record
date.

"I appreciate our shareholders voting in such strong support of
this resolution, particularly outside the normal proxy season,"
Bruce W. Wilkinson, Chairman and Chief Executive Officer of
McDermott, said.  "Combined with the confirmation order from the
United States District Court, McDermott and B&W continue to get
ever closer to officially reuniting.  On the effective date of
B&W's plan of reorganization, McDermott will again be a leading
worldwide energy services company with a strong presence in power
generation, marine construction and government operations.  The
vote supports our expectation that the plan will be effective by
Feb. 22, 2006."

Once approved, the settlement will settle as many as 300,000
asbestos injury claims ranging $375 million to $955 million
in costs for the Company, depending on whether Congress creates
a national trust to handle all such cases.

Remaining items required for the settlement to become effective
include obtaining exit financing for B&W and the completion of
certain other conditions by Feb. 22, 2006, the effective date
deadline.  McDermott expects B&W's exit financing package will be
signed on the effective date.

Babcock & Wilcox Company, together with its debtor-affiliates,
filed for Chapter 11 protection on February 22, 2000, (Bankr. E.D.
La. Case No. 00-10992).  Jan Marie Hayden, Esq., at Heller,
Draper, Hayden, Patrick & Horn, L.L.C., represents the debtors in
their restructuring efforts.

Since February 2000, B&W has continued to be managed by McDermott;
however its results of operations have been deconsolidated from
McDermott's financial statements.  The Company wrote off its
remaining investment in B&W of $224.7 million during the second
quarter of 2002.

For the year ended Dec. 31, 2004, on a deconsolidated basis,
B&W generated operating income of $115.6 million on revenues of
$1.37 billion.  B&W's net income for the year-ended Dec. 31,
2004, was $99.1 million, including the result of favorable tax
valuation allowance adjustment of $26.2 million.  Beginning in
2005, McDermott spun off the pension plan assets and liabilities
associated with B&W's portion of McDermott Incorporated's pension
plan, creating a B&W-sponsored pension plan.  As a result of the
creation of a B&W-sponsored pension plan, beginning in 2005
expenses associated with this plan are accounted for on B&W's
financials.  In 2004, McDermott recorded approximately $38 million
in pension expense associated with B&W pension on McDermott's
income statement.  At Aug. 24, 2005, B&W had unrestricted cash &
cash equivalents of $352 million.

Headquartered in New Orleans, Louisiana, McDermott International,
Inc. -- http://www.mcdermott.com/-- is a leading worldwide energy  
services company.  The Company's subsidiaries provide engineering,
fabrication, installation, procurement, research, manufacturing,
environmental systems, project management and facility management
services to a variety of customers in the energy and power
industries, including the U.S. Department of Energy.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 14, 2005,
McDermott International, Inc., and certain of its subsidiaries
received either increased or new credit ratings from the major
rating agencies.  Each rating agency indicated its outlook for
McDermott and its subsidiaries are stable.

This table reflects the current respective ratings from each
agency:

                          Standard & Poor's       Moody's
                          Ratings Services   Investors Service
                          -----------------  -----------------
                          Previous  Current  Previous  Current
                                        (1)
                          --------  -------  --------  -------
McDermott Int'l, Inc.        B-        B+       -        B2   (2)
McDermott Incorporated       B-        B+       B3       -    (3)
J. Ray McDermott, S.A.      CCC+       B+      Caa1      B2   (4)
Babcock & Wilcox Co(5)                 B+       -        B1   (4)

     (1) S&P's corporate credit rating
     (2) Moody's corporate family rating
     (3) Moody's withdrew its rating on McDermott Inc. following
         the December 2005 MTN redemption.
     (4) Moody's senior secured rating
     (5) The Babcock & Wilcox Company ratings are newly assigned.


METROMEDIA FIBER: Wants Another Delay in Entry of Final Decree
--------------------------------------------------------------
AboveNet, Inc., fka Metromedia Fiber Network, Inc., and its
debtor-affiliates asks the U.S. Bankruptcy Court for the Southern
District of New York to further delay, until April 17, 2006, entry
of a final decree closing their chapter 11 cases.

The Court confirmed the Debtors' Second Amended Plan of
Reorganization on Aug. 21, 2003, and the Plan took effect on
Sept. 8, 2003.

The Debtors tell the Court that they have been working diligently
to review and reconcile proofs of claim filed in these cases.  
Aside from resolving all pending claim objections, they have other
matters that will need to be brought before the Court, such as
potential claims objections currently subject to objection
deadline extension with various counterparties and litigation of
various causes of action.

Accordingly, the Debtors need a delay in entry of final decree in
order to prosecute or resolve the pending claim objections and to
collect and distribute the assets of their estates for the benefit
of their creditors.

Headquartered in White Plains, New York, Metromedia Fiber Network,
Inc., n/k/a AboveNet Inc., builds urban fiber-optic networks and
supplies fiber to all types of telecom carriers as well as to
other businesses.  The Company and most of its domestic
subsidiaries filed for chapter 11 protection (Bankr. S.D.N.Y. Case
No. 02-22736) on May 20, 2002.  Lawrence C. Gottlieb, Esq., at
Kronish Lieb Weiner & Hellman, LLP represents the Reorganized
Debtors.  When Metromedia filed for protection from its creditors,
it listed $7,024,208,000 in total assets and $4,262,000,000
in total debts.  Metromedia Fiber emerged from chapter 11 on
Sept. 8, 2003, and changed its name to AboveNet Inc.


MORGAN STANLEY: S&P Rates $40 Million Class V Secured Notes at BB
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating to
Morgan Stanley Managed ACES SPC Series 2005-2 Segregated
Portfolio's $40 million class V secured floating-rate notes series
2005-2 due 2013.
     
The rating reflects the class-specific subordination amount with
respect to the reference portfolio and the credit quality of the
underlying securities, Capital One Multi-Asset Execution Trust's
class A(2006-1) Card series notes due 2016 ('AAA').  The rating
also addresses the likelihood of the trust making payments on the
notes as required under the trust agreement.


MUSICLAND HOLDING: Wants to Conduct Store Closing Sales
-------------------------------------------------------
Musicland Holding Corp. and its debtor-affiliates seek Judge
Bernstein's permission to conduct "Store Closing Sales" in order
to liquidate inventory, furniture, equipment and trade fixtures,
and other assets located at some or all of the Debtors' store
locations.

Bloomberg News reports that according to Musicland's attorney,
James Stempel, the Company wants to begin going out of business
sales at 284 stores.

The Debtors also seek the U.S. Bankruptcy Court for the Southern
District of New York's authority to schedule and conduct an
auction for the right to be the "Agent" in connection with the
Store Closing Sales.

James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, in New
York, relates that prior to the Petition Date, the Debtors
extensively reviewed the performance of their retail store
locations, including a review of the profitability of each store
on a stand-alone basis.  As a result of this review process, Mr.
Sprayregen says, the Debtors identified the Closing Stores as
underperforming and unprofitable stores that should be closed as
part of the Debtors' overall business strategy.

The Debtors further determined that conducting Store Closing
Sales and or GOB Sales at the Closing Locations prior to their
closing would provide the best opportunity for maximizing the
value of the inventory located within those stores.  The Debtors
believe that any attempt to restore the profitability of the
Closing Locations would not only prove to be futile, but perhaps
more significantly, would distract management from critical
efforts to restructure the Debtors' ongoing operations and burden
the estates with additional carry costs.

According to Mr. Sprayregen, each of the Closing Locations are
contributing to the Debtors' negative cash flow from operations
and has inventory and other items that must be sold to maximize
value.  "The realization of fair value for the Assets as promptly
as possible will inure to the benefit of all parties-in-interest.
In addition, the Debtors' post-petition financing documents
require the Debtors to commence the Store Closing Sales by
February 1, 2006."

The Debtors believe that they can expedite the Store Closing
Sales and maximize the return from the Assets by conducting an
open Auction and soliciting offers from competing bidders who wish
to liquidate the Assets.  Mr. Sprayregen notes that allowing a
professional liquidator to liquidate the Assets will enable the
Debtors to maximize sale proceeds for the Assets while minimizing
distraction from the restructuring effort.  Moreover, Mr.
Sprayregen continues, it is more cost effective for the Debtors to
allow a liquidation agent to conduct the Store Closing Sales than
to conduct those sales on their own.  Liquidation agents generally
have extensive knowledge, expertise and experience in conducting
store closing sales.

Accordingly, the Court will convene a hearing on January 27, 2006,
to consider approval of the Store Closing Sales.  An auction will
be held on January 26, 2006, at 11:00 a.m.

All competing bids must be submitted in writing and served on
counsel for the Debtors, counsel to Wachovia and counsel to the
Secured Trade Creditors no later than January 25, 2006, at 5:00
p.m.  A full-text copy of the Store Closing Sale Bidding
Procedures is available for free at:

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

The Sale Approval Order, when approved, will authorize the
Debtors to enter into an "Agency Agreement" with the highest or
best bidder at the Auction, and that highest or best bidder will
serve as the Debtors' Agent in conducting the Store Closing
Sales.

Specifically, but by way of example only, the Debtors want the
Agent to:

    (a) administer the Store Closing Sales without complying with:

           (i) any applicable state and local statutes, rules or
               ordinances governing liquidation or "going-out-of-
               business" sales,

          (ii) any court order or other decree of any federal,
               state or local governmental authority or regulatory
               body that would impair, or is required for the
               Debtors' consummation of the transactions
               contemplated, or

         (iii) any contract or other agreement to which the
               Debtors are a party or by which the Debtors are
               otherwise bound that would prevent or impair the
               consummation of the Store Closing Sales or the
               other transactions contemplated;

    (b) sell the Assets at the Store Closing Sales free and
        clear of all liens, claims and interests, pursuant to
        section 363(f) of the Bankruptcy Code, with liens to
        attach to the proceeds of sale in the same priority as
        those liens had against the property sold and with any
        good faith buyer to be afforded all of the protections
        afforded by section 363(m) of the Bankruptcy Code; and

    (c) sell the Assets free from any warranties, except that
        the Debtors will, to the extent legally permissible, pass
        on all manufacturer's warranties to customers.

The Liquidating Agent will have the right to use the Closing
Locations and the Debtors' related services, FF&E and other assets
located in the Closing Locations in conducting the Store Closing
Sales.  In addition, the Liquidating Agent will also have a
limited license to use the Debtors' trade names, logos and
customer lists related to and used in connection with the
operation of the Closing Locations, solely for the purpose of
advertising the Store Closing Sales.

The Debtors further seek to conduct the Store Closing Sales
notwithstanding any provisions in the Closing Location's leases
restricting the Debtors' ability to do so.

Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they estimated
more than $100 million in assets and debts.  (Musicland Bankruptcy
News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


MUSICLAND HOLDING: Can Continue Using Cash Management System
------------------------------------------------------------
The Office of the United States Trustee has established certain
operating guidelines for debtors-in-possession to supervise the
administration of chapter 11 cases, including changes to Musicland
Holding Corp. and its debtor-affiliates' cash management system.

The Debtors maintain a cash management system, which is located in
the United States.  According to the Debtors, they have utilized
their existing cash management system for more than 10 years.  The
cash management system consists of numerous accounts.

The Debtors maintain a concentration account, payroll direct
deposit account, blocked collection account, payroll controlled
disbursements account, accounts payable controlled disbursements
account, personal property tax controlled disbursement account and
money market investment account at Wells Fargo Bank.

A flow chart summarizing the Debtors' Cash Management System is
available for free at:

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

A. Inflow of Funds

    The vast majority of the Debtors' stores have their own
    depository account maintained with one of numerous banks
    throughout the United States.  Store cash and check deposits
    are swept via the Automated Clearing House from the Store
    Depository Accounts and ultimately to the blocked collection
    account at Wells Fargo Bank.

    The funds in the Wells Fargo Blocked Collection Account are
    wired daily to the Wachovia Congress Financial Account, which
    is the credit facility agent bank account, to pay down the
    Debtors' revolver.

    Credit card sales at the Debtors' stores are transmitted
    within 24 hours to credit card processors.  Meanwhile, third
    party credit card receipts, checks received from vendors or
    partners and employee payments for expense report items are
    made weekly to the Wells Fargo Blocked Collection Account and
    are wired daily to the Wachovia Congress Financial Account.

B. Disbursements

    Drawdowns on the Wachovia Congress Financial Account are wired
    daily to the concentration account at Wells Fargo Bank.  Those
    drawdowns in the Wells Fargo Concentration Account are then
    used to fund, via zero balance account the:

       (1) daily check clearings from the payroll controlled
           disbursement account averaging $300,000 per day;

       (2) daily check clearings from the accounts payable
           controlled disbursements account averaging $15,000,000
           per day and depending on payments issued;

       (3) daily check clearings from the personal property tax
           controlled disbursement account averaging $10,000 per
           day; and

       (4) weekly check clearings from the direct deposit payroll
           account averaging $1,000,000 per week.

C. Investment Accounts.

    The Debtors maintain a currently inactive investment account
    with Wells Fargo Bank.

According to James H.M. Sprayregen, Esq., at Kirkland & Ellis
LLP, in New York, it is critical to continuing to operate of the
Debtors' businesses and preserving the value of those businesses
that the Debtors be allowed to continue to utilize their existing
cash management system without disruption.

Substantially disrupting those cash management procedures would
severely impair the Debtors' ability to preserve and enhance their
going concern values and to successfully reorganize during their
Chapter 11 cases, Mr. Sprayregen says.

Moreover, he continues, creating an entirely new cash management
system would also inevitably have a deleterious effect on the
Debtors' recordkeeping -- which would subvert the goal of the
United States Trustee Guidelines.

By this motion, the Debtors seek the U.S. Bankruptcy Court for the
Southern District of New York's permission to continue utilizing
their current integrated cash management system.

The Debtors further ask the Court for permission to:

    -- conduct transactions by debit, wire or Automated Clearing
       House payments and other similar methods; and

    -- allow third party benefit administrators to write checks on
       their behalf.

                           *     *     *

Judge Stuart Bernstein grants the Debtors' requests.

Judge Bernstein authorizes the Debtors to continue utilizing their
integrated Cash Management System in a manner consistent with
their prepetition practices.

In addition, Judge Bernstein allows the Debtors to disburse funds
by debit, wire, ACH payments or other means and to continue to
allow third party benefit providers to write checks on their
behalf.

Headquartered in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they estimated
more than $100 million in assets and debts.  (Musicland Bankruptcy
News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


NOBEX CORP: Panel Taps NachmanHaysBrownstein as Financial Advisor
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Nobex
Corporation's chapter 11 case asks the U.S. Bankruptcy Court for
the District of Delaware for permission to employ
NachmanHaysBrownstein, Inc., as its financial advisor.

NHB will:

   1) review and analyze the Debtor's business, management,
      operations, properties, financial condition and the
      assumptions underlying the business plans and cash flow
      projections for the assets involved in any potential
      transaction;

   2) determine the reasonableness of the projected performance of
      the Debtor and review and analyze all its material contracts
      and agreements;

   3) monitor, evaluate and report to the Committee with
      respect to the Debtor's near term liquidity needs, material
      operational changes and related financial and operations
      issues;

   4) assist, procure and assemble any necessary validations of
      the Debtor's asset values and assist the Committee's legal
      counsel;

   5) evaluate the Debtor's capital structure and make
      recommendations to the Committee with respect to the
      Debtor's efforts to reorganize its business operations and
      confirm a chapter 11 plan;

   6) assist the Committee in preparing documentation required in
      connection with supporting or opposing a chapter 11 plan and
      participate in negotiations on behalf of the Committee with
      the Debtor or any groups affected by that plan; and

   7) perform all other financial advisory services to the
      Committee that is required in the Debtor's chapter 11 case.

John Bambach, Jr., and Ted Gavin are the lead professionals from
NHB performing services to the Committee. Mr. Bambach charges $325
per hour, while Mr. Gavin charges $300 per hour.

Mr. Bambach reports that NHB's compensation rates for principals,
advisors and associates will range from $250 to $450 per hour.

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

Headquartered in Durham, North Carolina, Nobex Corporation --
http://www.nobexcorp.com/-- is a drug delivery company developing   
modified drug molecules to improve medications for chronic
diseases.  The company filed for chapter 11 protection on
Dec. 1, 2005 (Bankr. D. Del. 05-20050).  When the Debtor filed for
protection from its creditors, it estimated between $1 million to
$10 million in assets and $10 million to $50 million in
liabilities.


NORTHWESTERN CORP: Responds to Inquiries from Harbert Distressed
----------------------------------------------------------------
NorthWestern Corporation, d/b/a NorthWestern Energy, (Nasdaq:
NWEC) reported that its Board of Directors sent a letter to Philip
A. Falcone of Harbert Distressed Master Fund, Ltd. responding to
the letter received on Jan. 12, 2006.  

Northwestern's Board did not comment on Mr. Falcone's  
mischaracterizations of the Board's actions.  According to the
Board, Harbert Distressed Assets only desires a quick sale of its
shares.

In the letter, the Board answered the inquiries made by Mr.
Falcone:

   1) As to the date of the 2006 annual shareholders' meeting,
      as required by law, Harbert Distressed will receive notice
      of a Board decision at the same time as all other
      shareholders.

   2) As requested for further clarification of the Board's
      intended application of the shareholders' rights plan as
      it relates to various actions that Harbert is apparently
      contemplating.  The Board's answers to the queries asked
      by Harbert Distressed are of general nature.  

     * Will the Board claim that Harbert's seeking of the names of
       potential board nominees from other stockholders triggers
       the shareholders' rights plan?

       Delaware courts have held it is within the appropriate
       scope of a corporate board's power to adopt a rights plan
       that defines the formation of a beneficial ownership group
       as a triggering event.  This is the case even if membership
       in the group is revocable.  An oral agreement to vote
       shares together constitutes beneficial ownership for
       securities laws purposes and those of the rights plan.

       Harbert cannot seek the names of potential board nominees
       from other stockholders for any purpose other than to form
       a voting coalition with such stockholders.  Accordingly,
       the Board reserves its right to regard such an action as
       triggering the rights plan.

     * Will the Board claim that other stockholders who provide
       Harbert with names of potential nominees have secretly
       entered into an "agreement, arrangement or understanding"
       with Harbert, thus triggering the shareholders' rights
       plan?

       All members of a beneficial ownership group are beneficial
       owners.  Thus, the Board reserves its right to regard
       shareholders who participate in a Harbert voting coalition
       as triggering the rights plan as well.

     * Will the Board claim that the shareholders' rights plan is
       triggered if Harbert communicates with other stockholders
       and encourages them to vote for its nominees?

       The Board will not consider the rights plan to have been
       triggered solely because Harbert submits its own slate of
       board nominees and encourages other shareholders to vote
       for them at the annual shareholders' meeting.

The Board reiterates that these are general principles as to how
the Board intends to apply the rights plan.  Under the case law
the application of a rights plan, and the determination of whether
or not different actions trigger a rights plan, depends on the
specific facts at issue.

NorthWestern Corporation, d/b/a NorthWestern Energy --
http://www.northwesternenergy.com/-- is one of the largest
providers of electricity and natural gas in the Upper Midwest and
Northwest, serving more than 617,000 customers in Montana, South
Dakota and Nebraska.

                         *     *     *

As reported in the Troubled Company Reporter on Nov. 30, 2005,
Fitch Ratings has affirmed NorthWestern Corp.'s outstanding senior
secured debt obligations at 'BBB-' and the senior unsecured
revolving credit facility at 'BB+'.  The Rating Outlook has been
revised to Evolving from Positive.  The rating action follows the
disclosure by NOR on Nov. 23, 2005 that it is evaluating a merger
proposal received from Black Hills Corporation, Inc.


O'SULLIVAN IND: Panel Challenges Bank of NY's Security Interests
----------------------------------------------------------------
The Official Committee of Unsecured Creditors tells the U.S.
Bankruptcy Court for the Northern District of Georgia that before
the Petition Date, O'Sullivan Industries Holdings, Inc., and its
debtor-affiliates entered into a Credit Agreement with General
Electric Capital Corporation providing for up to $40,000,000 of
revolving loans and letters of credit to the Debtors.

Pursuant to a Security Agreement dated September 29, 2003, among
the Debtors and GECC, and an Intercreditor Agreement dated
September 29, 2003, among GECC, The Bank of New York, and the
Debtors, the obligations of the Debtors under the GECC Credit
Agreement are secured by a first-priority lien on and security
interest in all of the Debtors' accounts receivable, inventory,
deposit accounts, certain books and records and intellectual
property rights; and a second-priority lien and security interest
in some of the Debtors' other assets.

                 Senior Secured Notes Indenture

Pursuant to an Indenture, dated September 29, 2003, among the
Debtors and the Bank of New York as trustee, the Debtors issued
and have outstanding $100,000,000 principal amount of 10.63%
senior secured notes due 2008.

The Trustee and the Senior Secured Noteholders purport to be
secured by a security interest in and lien on the Debtors'
property pursuant to these agreements and other transactions:

   1. Security Agreement -- grants the Trustee a first-priority
      security interest in the Note Priority Lien Collateral and
      a second-priority security interest in the Credit Agreement
      Priority Lien Collateral as security for the Note
      Obligations;

   2. Real Property Interests Securing the Senior Secured Notes
      -- pursuant to a Deed of Trust entered into by O'Sullivan
      Industries - Virginia, Inc., the Trustee, and GECC, the
      Debtors grant the Trustee Notes Indenture, a first priority
      lien on and security interest in the property located in
      South Boston, Virginia.  In addition, pursuant to a
      Deed of Trust entered into by O'Sullivan Industries, Inc.,
      the Trustee, and GECC, the Debtors grant the Trustee a
      first priority lien on and security interest in the
      property located in Lamar, Missouri;

   3. Trademark Agreement -- grants the Trustee a security
      interest in all trademarks and trademark licenses owned or
      acquired by O'Sullivan Industries, OSI - Virginia and OFFO;

   4. Patent Security Agreement -- grants the Trustee a security
      interest in all patents and patent applications owned and
      submitted by O'Sullivan Industries, OSI - Virginia and
      OFFO;

   5. Collateral Account Control Agreement -- grants the Trustee
      control in deposit accounts established at the Bank of New
      York;

   6. UCC-1 Financing Statements Filed on Behalf of the Secured
      Parties -- purports to cover all personal property of the
      Debtors;

   7. Stock Certificate -- a Stock Certificate, representing 100  
      of the Debtors' common shares is in the possession of the
      the Trustee; and

   8. Documents Evidencing Perfection of Security Interests in
      Property Outside the United States -- The Committee
      believes that no documents were filed in any jurisdiction
      outside of the United States to perfect the security
      interests that were granted to the Trustee to secure the
      Note Obligations in connection with any property located
      outside of the United States, or in connection with any
      intellectual property registered in jurisdictions outside
      of the United States.

                     Assets Outside the U.S.

The Creditors Committee informs the Court that certain of the
Debtors' accounts receivable relate to sales made outside of the
United States, including sales made in Canada and the United
Kingdom.  In addition, the Debtors have trademarks and patents
registered in over 25 different countries outside of the United
States, including without limitation Canada and the United
Kingdom.  

The Debtors also have four wholly owned subsidiaries located in
Australia.  The Committee says the Australian Subsidiaries are
separate legal entities, which are distinct from the Debtors and
have not have not filed any insolvency proceedings in Australia.  
The Australian Subsidiaries are also not obligors of the Note
Obligations, did not guarantee any of the Note Obligations, and
did not grant a security interest in their assets to secure the
Note Obligations.  The Committee believes that the stock of the
Australian Subsidiaries was not pledged to the Trustee.

                 Adequate Protection Stipulation

On the Petition Date, the Debtors sought and obtained the Court's
authority to use the Senior Secured Noteholders' cash collateral
and provide adequate protection to the Senior Secured Noteholders
for the use.  Pursuant to a stipulation approved by the Court, the
Debtors and the Bank of New York, on behalf of the Senior
Secured Noteholders, agreed to fix the indebtedness under the
Senior Secured Notes at $100,000,000 plus accrued and unpaid
interest, costs, and fees.

The Debtors agreed that the Note Obligations are valid and
enforceable in accordance with their terms, and are not subject to
offsets, defenses, counterclaims, avoidance, disallowance or
subordination pursuant to the Bankruptcy Code or applicable non-
bankruptcy law.  The Debtors granted the Senior Secured
Noteholders postpetition replacement security liens in all the
proceeds from the sale or disposition of the Prepetition Secured
Note Collateral and a superpriority claim equal to the aggregate
decrease in the value of the Bank of New York's interest in the
Prepetition Secured Note Collateral.

The Debtors also paid for certain fees and expenses incurred by an
ad hoc committee of Senior Secured Noteholders, including legal
fees.

         Creditors Committee Challenges BNY's Interests

The Creditors Committee disputes the validity of the Note
Obligations.  In this regard, the Committee asks the Court to find
that:

   a) the Trustee's security interests do not extend to any
      real or personal property owned by the Australian
      Subsidiaries;

   b) the Trustee's security interests in cash, deposit accounts,
      vehicles, Canadian property, U.K. property, and the foreign
      trademarks and patents are unperfected;

   c) the Trustee's security interests do not extend to new
      products; and

   d) the Trustee's allowed claim has unmatured interest.

The Creditors Committee contends that the Trustee did not have
possession of the Cash as of the Petition Date and never took any
action to control the Deposit Accounts as required by the Uniform
Commercial Code.

With regards to the Trustee's $100,000,000 claim, the Committee
argues that pursuant to Section 502(b)(2) of the Bankruptcy Code,
a claim for "unmatured interest" should be disallowed.

The Committee also seeks avoidance of the security interests
asserted by the Trustee in the Debtors' assets.

Moreover, the Committee asserts that the Trustee's allowed claim
is greater than the value of its interest in the Debtors' assets.  
The Committee seeks disallowance of any claim for postpetition
interest or postpetition fees or expenses by the Trustee.

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 Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05-
83049).  On Sept. 30, 2005, the Debtor listed $161,335,000 in
assets and $254,178,000 in debts.  (O'Sullivan Bankruptcy News,
Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000)


O'SULLIVAN INDUSTRIES: Panel Wants Retention Objections Overruled
-----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Dec. 16, 2005, Felicia S. Turner, the U.S. Trustee for Region 21,
asked the U.S. Bankruptcy Court for the Northern District of
Georgia to strike its order authorizing the Official Committee of
Unsecured Creditors of O'Sullivan Industries Holdings, Inc. and
its debtor-affiliates to retain Chanin Capital Partners, LLC, as
financial advisor.

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 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."

                        Committee Responds

On behalf of the Official Committee of Unsecured Creditors,
Michael H. Goldstein, Esq., at Stutman, Treister & Glatt, P.C., in
Los Angeles, California, asserts that the terms in the Chanin
Capital Partners Engagement Letter are fair and comparable to
market rates.  According to Mr. Goldstein, because Chanin's
compensation and indemnification provisions reflect market
standards, the proposed engagement of Chanin by the Creditors
Committee is reasonable and standard under the circumstances.

The Creditors Committee asks the Court to overrule the Objections.

                         Deferred Fee

The U.S. Trustee argues that the Deferred Fee to be paid to
Chanin is unnecessary because the monthly fee paid to Chanin is
presumed to "fully compensate Chanin for its services on an on-
going basis."

Mr. Goldstein clarifies that the Deferred Fee specified in the
Engagement Letter represents only a portion of the overall
compensation due to Chanin for its work on behalf of the
Creditors Committee and is not some separate amount that acts as
either a bonus or success.

The Ad Hoc Committee argues that payment of Chanin's Deferred Fee
out of the estate funds would be unfair.  The Ad Hoc Committee's
definition of unfairness is not controlling or relevant, Mr.
Goldstein contends.  Sections 328 and 330 of the Bankruptcy Code
specifically allows the Committee's professionals to be paid out
of estate funds.  Thus, the payment of Chanin's compensation
should come from estate funds, Mr. Goldstein insists.

Mr. Goldstein warns that Chanin is not bound to work for the
Committee if its Deferred Fee is either reduced by its monthly
compensation or in anyway contingent on the ultimate distribution
to the Committee's constituency.  Without the Deferred Fee as part
of Chanin's compensation, the Committee would not be able to
engage Chanin.  Indeed, without the ability to engage a financial
advisor on market-based terms, the Committee would be unable to
employ any other financial advisor, Mr. Goldstein maintains.  

                          Tail Provision

Both the U.S. Trustee and the Ad Hoc Senior Secured Noteholders
Committee object to the inclusion of a tail provision in the
Creditors Committee's agreement with Chanin, pursuant to which
Chanin would receive the Deferred Fee upon a Restructuring
Transaction being consummated within 18 months after the effective
date of Chanin's termination.

Mr. Goldstein clarifies that the Tail Provision is a common
provision found in the engagement agreements of financial advisors
which protect financial advisors from their clients "jumping ship"
as soon as a deal is ready to be consummated.

The terms of the tail provision, like the Deferred Fee, were
negotiated at arm's-length between the Creditors Committee and
Chanin and determined to be fair in light of the circumstances of
these cases, Mr. Goldstein explains.  Hence, as a provision driven
primarily by the market for financial advisors, the inclusion of
the term should not be a barrier to the Court's approval of
Chanin's retention on a final basis, Mr. Goldstein maintains.

                         Indemnification

The Creditors Committee has agreed to indemnify Chanin for any
liabilities that arise in connection with the services Chanin
performs on behalf of the Committee, except for liabilities found
to result from Chanin's gross negligence or willful misconduct.  
Although the U.S. Trustee objects to the Indemnification Provision
as being inconsistent with Chanin's fiduciary duties to the
Committee, it cites nothing in support of its objection, Mr.
Goldstein tells the Court.

Mr. Goldstein explains that Chanin ordinarily insists including an
indemnification provision in its retention agreements.  
Without that provision, Chanin would require different terms for
the engagement.  Mr. Goldstein also notes that indemnification
provisions are now common in the restructuring market for
financial advisors.

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 Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05-
83049).  On Sept. 30, 2005, the Debtor listed $161,335,000 in
assets and $254,178,000 in debts.  (O'Sullivan Bankruptcy News,
Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000)


OMEGA HEALTHCARE: Moody's Raises Sr. Unsecured Debt Rating to Ba3
-----------------------------------------------------------------
Moody's Investors Service raised the ratings of Omega Healthcare
Investors, Inc. (senior unsecured debt to Ba3, from B1).  The
rating outlook is stable.  

According to Moody's, this rating action reflects Omega's
increased size and improvement in asset quality and performance.
The rating agency also notes that Omega has:

   * adequate liquidity with no near-term debt maturities;
   * a modest dividend payout; and
   * a mostly unencumbered asset base.

Moody's is encouraged by the significant progress that Omega
continues to make in executing its strategic plan, solidifying its
financial flexibility, and repositioning its healthcare
properties.  The REIT's new investment activities (roughly $200
million net in 2005), sale of non-core healthcare properties, and
repositioning of existing assets has improved the quality of
Omega's property portfolio, and property-level rent coverages have
continued to rise.

Moreover, the REIT's growth has been well financed, earmarked by
its consistent issuance of common equity.  Moody's also notes that
as a result of Omega's recent tender for its 2007 senior unsecured
bonds, the REIT has no debt maturities, excluding its secured
credit line, until 2014.  Omega's low levels of secured debt (8%
of gross assets at 3Q05) and increased fixed charge coverage
(2.16x for 9M05) provide further support for the rating upgrade.

These credit strengths are counterbalanced by Omega's property
type concentration in skilled nursing facilities (about 95% of
total revenues), which is a segment of the healthcare market
heavily reliant on government reimbursement, and subject to
material volatility.  Though Moody's believes that the outlook for
government reimbursement is stable through 2006, the longer term
outlook is uncertain given the level of state and federal budget
deficits.

Given Omega's property-type concentration in skilled nursing
facilities, in order to achieve a rating upgrade to Ba2 the REIT
would need to increase its property portfolio size to above $1.5
billion in gross assets, achieve fixed charge coverage above 2.5x,
while maintaining leverage in the mid-50% range and secured debt
at less than 10% of assets.  Alternatively, establishing size in a
second property type that contributes at least 25% to Omega's
revenues, and reducing operator concentration so that the top five
operators contribute less than 50% of total revenue, would also
likely lead to a rating upgrade.  A rating downgrade would most
likely result from operator problems or adverse shifts in
government healthcare reimbursements resulting in fixed charge
coverage below 1.9x.

These ratings were raised with a stable outlook:

  Omega Healthcare Investors, Inc.:

     * Senior unsecured debt to Ba3, from B1
     * senior debt shelf to (P)Ba3, from (P)B1
     * preferred stock to B2, from B3
     * preferred stock shelf to (P)B2, from (P)B3

Omega Healthcare Investors, Inc. [NYSE: OHI] headquartered in
Timonium, Maryland, USA, is a real estate investment trust
investing in and providing financing to the long-term healthcare
industry -- predominately skilled nursing facilities.  At
Sept. 30, 2005, the REIT owned or held mortgages on 216 SNFs (95%
of revenue) and assisted living facilities (3% of revenue) with
approximately 22,407 beds located in 28 states, and operated by 38
third-party healthcare companies.


OMNOVA SOLUTIONS: Earns $4.1 Million in Fourth Quarter of 2005
--------------------------------------------------------------
OMNOVA Solutions Inc. (NYSE: OMN) reported net income of       
$4.1 million for the fourth quarter of 2005, compared to a net
loss of $14.7 million for the fourth quarter of 2004.

Net sales increased 6.1%, or $11.8 million, to $205.8 million for
the fourth quarter of 2005 as compared to $194 million during the
same period a year ago.

Gross profit increased to $45.5 million in the fourth quarter of
2005 as compared to $37.9 million in 2004.

"Strong results in the fourth quarter contributed to a        
much-improved year for OMNOVA Solutions.  We delivered nearly a 9%
increase in sales and more than $24 million improvement in
operating profit for full year 2005 versus 2004.  The
operating momentum was broad-based, as all three business units
exceeded their results versus the same quarter last year in a very
challenging environment," Kevin McMullen, OMNOVA Solutions'
Chairman and Chief Executive Officer, said.  "The improved
operating profit and cash flow results were driven by aggressive
cost reductions, increased pricing and new products.  

In 2005, net sales increased $64.4 million, or 8.6%, to $810.1
million versus $745.7 million in 2004.  Gross profit increased to
$170.3 million in 2005, as compared to $168.2 million in 2004.  

Headquartered in Fairlawn, Ohio, OMNOVA Solutions Inc. --
http://www.omnova.com/-- is a technology-based company with 2004
sales of $746 million and 2,000 employees worldwide.  OMNOVA is an
innovator of emulsion polymers, specialty chemicals, and
decorative and functional surfaces for a variety of commercial,
industrial and residential end uses.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 10, 2006,
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.


REFCO INC: Judge Drain Delays Auction of Forex Unit's Assets
------------------------------------------------------------
The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York approved, on Jan. 18, 2005, an order
delaying the auction and related deadlines for the proposed sale
of assets of Refco Inc.'s online foreign-exchange trading unit,
namely:

     * more than 17,000 retail client accounts of Refco FX
       Associates LLC; and

     * the 35% share of Forex Capital Markets LLC currently owned
       by Refco.

FXCM, a Futures Commission Merchant registered with the CFTC and a
member of the National Futures Association, provides a foreign
currency-trading platform and execution services to retail
investors.

The adjournment was sought to provide potential bidders with more
time for due diligence and to schedule management meetings on the
sale and came after agreement with the current "stalking horse"
bidder FXCM and Refco's Official Committee of Unsecured Creditors
and the Agent for its bank lending group.

Judge Drain's order establishes the new deadlines and dates:

     * Latest date for interested parties to qualify as potential
       bidders and access the virtual data room: Feb. 10, 2006, at
       noon;

     * Deadline for the submission of a qualified bid package:
       Feb. 13, 2006, at 10:00 a.m.;

     * Potential bidders will be notified whether they are a
       "qualified bidder" under the Bidding Procedures Order by
       10:00 a.m. on Feb. 15, 2006;

     * If there is more than one "qualified bidder," an auction
       would be held at the offices of Skadden, Arps, Slate,
       Meagher & Flom LLP on Feb. 16, 2006 at 10:00 a.m.; and

     * A hearing to approve the sale to the winning bidder will be
       held at the U.S. Bankruptcy Court in lower Manhattan on
       Feb. 17, 2006, at 10:00 a.m.

The bidding procedures for the sale of Refco's retail foreign
exchange assets are similar to those employed in the sale of the
assets of Refco LLC, the company's regulated commodity futures
business, which was completed on Nov. 25, 2005.

"We are pleased that we were able to reach an agreement and obtain
the Court's approval of the revised bidding timeline and look
forward to holding a robust auction for these assets," Harrison J.
Goldin, Refco's chief executive officer, said.

If approved by the U.S. Bankruptcy Court, the transaction will
ultimately preserve all the account balances in the transferred
retail client accounts.

All those interested in taking part in the bidding process should
contact:

     Ashish Contractor at Greenhill & Co.
     Telephone: (212) 389-1500

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.


RESORTS INT'L: Poor Performance Cues S&P to Junk Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on casino
operator Resorts International Holdings LLC, including its
corporate credit rating to 'CCC+' from 'B'.  The outlook is
negative.
     
The downgrade follows the deterioration of operating performance
based on publicly available information through December 2005 at
the company's Atlantic City-based property and through November
2005 at its Indiana-based property, which signifies management's
continued inability to stabilize the business since it took over
operations in April 2005.

"Despite the fact that the company recently amended its bank
agreements due to violations of its covenants for the third
quarter ended Sept. 30, 2005, it is likely that Resorts may be in
violation of its newly amended covenants given operating trends
released so far for the fourth quarter.  The company's liquidity
position could weaken materially as a result," said Standard &
Poor's credit analyst Peggy Hwan.


RUFUS INC: All Ballots Must be Submitted by January 25
------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware approved Rufus, Inc.'s Disclosure Statement
explaining its Plan of Reorganization.  Judge Walrath said the
Disclosure Statement contains adequate information as defined in
Section 1125 of the U.S. Bankruptcy Code.

All impaired creditors can now vote on the Plan.  All ballots must
be submitted by Jan. 25, 2006, at 4:00 p.m. to:

        Logan & Company, Inc.
        546 Valley Road,
        Upper Montclair, NJ 07043
        Attn: Rufus Balloting Center

                        Terms of the Plan

As previously reported in the Troubled Company Reporter on
Dec. 21, 2005, the Plan provides for the merger of substantially
all of the Debtor's assets with Maxie Biggz, LLC.  The business
operations, after plan confirmation, will be solely conducted by
Maxie.  Once the merger is consummated, Maxie will assume some of
the Debtor's liabilities.

Under the Plan, these claims, aggregating $18,579,166, will be
paid in full:

         -- administrative claims;
         -- priority tax claims;
         -- non-priority claims;
         -- Penn claim; and
         -- other secured claims;

MVP II/MVP DIP lender claims will be contributed to capital in the
Debtor prior to the merger.

General unsecured creditors will receive their pro rata share from
a $150,000 pool and other forms of distribution.  Warranty claims
will share in a distribution of up to $25,000.  These two creditor
classes assert claims totaling $4,365,852.

Equity holders won't receive any distribution under the Plan.

An Administrator will be appointed to administer the Plan and make
distributions to creditors.

                     Plan Objection Documents

Objections to the Plan's confirmation, if any, must be in writing
and received on or before Jan. 25, 2006, at 4:00 p.m., and filed
with:

         Clerk of the Bankruptcy Court
         District of Delaware
         824 North Market Street, 3rd Floor
         Wilmington, DE 19801

Copies must be sent to:

   (a) Counsel for the Debtor;
   (b) Counsel to the Committee;
   (c) Counsel to MVP II;
   (d) Counsel to Hunte; and
   (e) the United States Trustee

The objections must:

   (a) state the name and address of the objecting party and the
       amount of its claim or the nature of its interest in the
       Debtor's case;

   (b) state the particular provision or provisions of the Plan
       objected to, for any objection asserted, and the legal and
       factual basis for those objection; and

   (c) propose remedy to the objection.

Judge Walrath established a hearing on Feb. 7, 2006, at 2:00 p.m.
to consider confirmation of the Debtor's Plan.

Headquartered in Meriden, Connecticut, Rufus, Inc., sells dogs,
dog food, supplies and accessories.  The Debtor also operates a
chain of six retail stores in the Northeastern United States.  The
Company filed for chapter 11 protection on Aug. 10, 2005 (Bankr.
D. Del. Case No. 05-12218).  Edward J. Kosmowski, Esq., and Ian S.
Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Debtor in its bankruptcy proceeding.  When the
Debtor filed for protection from its creditors, it listed $1.8
million in total assets and $12.7 million in total debts.


SAINT VINCENTS: Hui Ji Yan Can Proceed With State Court Action
--------------------------------------------------------------
On Aug. 30, 2004, Hui Ji Yan filed a malpractice action, alleging
improper and unnecessary breast surgery, against St. Vincent's
Hospital and Medical Center in the Supreme Court of the State of
New York, County of New York.  Discovery has commenced in the
State Court Action.

Accordingly, Ms. Yan asks the U.S. Bankruptcy Court for the
Southern District of New York to lift the stay to allow her to
proceed with the State Court Action.

Robert D. Becker, Esq., at Becker & D'Agostino, P.C., in New
York, relates that the patient in the State Court Action has
suffered devastating, permanent injuries.  "Delaying the
resolution of the Action would result in the aging of evidence,
and the loss of witnesses, and could effectively deny Ms. Yan her
opportunity to litigate."

Comparatively, the Debtor's hardship would be small or non-
existent if Ms. Yan is allowed to proceed as her claims are
covered by insurance, Mr. Becker notes.

Since the State Court Action was commenced before the Petition
Date and was proceeding against not only the Debtor, but against
another party, the State Court is the only forum that can
determine the liability of all parties, Mr. Becker avers.

Moreover, pursuant to Section 157(b)(2)(B) of the Bankruptcy
Code, the Bankruptcy Court cannot hear or determinate the claims
which are the subject of the Action since they are personal
injury tort claims.

                        Debtors Respond

The Debtors have presented to the Court a preliminary methodology
to address requests to lift the bankruptcy stay and the universe
of medical malpractice claims.

To permit parties-in-interest the opportunity to consider the
most effective and efficient means to liquidate malpractice
claims and to provide medical malpractice claimants to comment on
the Debtors' proposed methodology, the Debtors ask the Court to
adjourn the hearing on Ms. Henderson's request.

                       Parties Stipulate

Ms. Yan has been advised, is fully aware, and accepts the risk
that there may not be sufficient Primary Insurance to pay in full
her malpractice claim if and to the extent that claim is valid
and liquidated.  Ms. Yan nonetheless wants the automatic stay
lifted not only to prosecute her medical malpractice action, but
also to collect any amount determined in her medical malpractice
action by a final order or settlement to be due to her
exclusively from the Debtors' Primary Insurance, if any.

To resolve their dispute, the parties stipulate that:

   (a) The Automatic Stay is modified solely to permit Ms. Yan to
       proceed with her medical malpractice action to judgment or
       settlement and collection from the Debtors' Primary
       Insurance without further Court action, provided that:

          (1) Ms. Yan limits her malpractice claim against the
              Debtors or against practitioners who are covered by
              the Debtors' Primary Insurance to the available
              proceeds from the Debtors' Primary Insurance, if
              any;

          (2) Ms. Yan waives her right, if any, to collect any
              amount with respect to her medical malpractice
              claim against the Debtors' estates and any
              practitioner covered by the Debtors' Primary
              Insurance;

          (3) Ms. Yan will not file a further proof of claim in
              the Debtors' Chapter 11 cases or otherwise seek to
              recover from the Debtors' estates in any manner
              with respect to any claim arising from, or related
              to, her malpractice claim or medical malpractice
              action.  To the extent a proof of claim already has
              been filed, that proof of claim will be disallowed;
              and

          (4) Primary Insurance is paying defense costs and other
              related fees and expenses in connection with Ms.
              Yan's medical malpractice action;

   (b) The Lift Stay Motion is withdrawn, with prejudice; and

   (c) The Stipulation may be modified pursuant to the terms of a
       confirmed plan of reorganization in the Debtors' Chapter
       11 cases, provided, however, that if the Plan modifies or
       limits Ms. Yan's ability to collect from Primary
       Insurance, Ms. Yan will be free to assert a claim against
       SVCMC in an amount in excess of the Primary Insurance.
       That claim will be allowed or disallowed, and subject to
       objection, in accordance with Section 502 of the
       Bankruptcy Code.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the   
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts.  (Saint Vincent Bankruptcy
News, Issue No. 19; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


SANITARY & IMPROVEMENT: U.S. Trustee Amends Committee Membership
----------------------------------------------------------------
The United States Trustee for Region 13, amended the appointment
of creditors serving on the Official Committee of Unsecured
Creditors in Sanitary & Improvement District 425 of Douglas
County, Nebraska's chapter 9 case:

One member has been added to the Committee:

       Michael J. Mooney
       Gross & Welch, P.C.
       2120 South 72nd Street, Suite 1500
       Omaha, Nebraska 68124
       Tel: (402) 392-1500
       Fax: (402) 392-1538

The Creditors' Committee's current members are:

    1. Vantage Investment Advisors LLC
       Attn: John Woolway
       8500 Shawnee Mission Parkway, Suite 220
       Merriam, Kansas 66202
       Tel: (913) 895-0456
       Fax: (913) 895-0356

    2. Allan Lozier
       Attn: Jerry G. Banks
       6336 Pershing Drive
       Omaha, Nebraska 68110
       Tel: (402) 457-8589
       Fax: (402) 457-8187

    3. William R. Hengstler
       P.O. Box 105
       Creighton, Nebraska 68729
       Tel: (402) 358-3730
       Fax: (402) 358-3730

       Winter Address:

       William R. Hengstler
       11026 W. Waikiki Drive
       Sun City, Arizona 95351-1500
       Tel: (623) 974-6665
       Fax: (623) 974-6665

    4. First National Bank and Trust Co.
       Attn: Del L. Sommerhalder
       1701 Stone Street
       Falls City, Nebraska 68355
       Tel: (469) 547-9062
       Fax: (214) 615-7034

Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense.  They may investigate the Debtors' business and financial
affairs.  Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.  Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest.  If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee.  If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

Sanitary & Improvement District 425 of Douglas County, Nebraska
filed for chap. 9 protection on Oct. 26, 2005 (Bankr. D. Nebr.
Case No. 05-85871).  Mark James LaPuzza, Esq., at Pansing Hogan
Ernst & Bachman, LLP, represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it estimated assets between $500,000 to $1 million and estimated
debts between $10 million to $50 million.


SAXON ASSET: Moody's Junks Ratings on Two Certificate Classes
-------------------------------------------------------------
Moody's Investors Service downgraded two certificates, upgraded
one certificate and place on review for upgrade one certificate
from two transactions, issued by Saxon Asset Securities Trust in
1999 and 2000.  These certificates are secured by fixed-rate home
equity loans.  The review will focus on the bonds' current credit
enhancement levels compared to the current projected loss numbers.

The underlying collateral of the certificates being downgraded
appear to be performing worse than Moody's original expectations.
In addition, the severity of loss on the liquidated loans may
increase due to a higher concentration of manufactured housing
loans.

The credit profile of the certificates being upgraded and placed
on review for upgrade has strengthened.  This is in large part due
to the build-up of credit enhancement relative to expected future
losses in the underlying mortgage pool.

Moody's complete rating actions are:

  Downgrades:

     * Series 1999-5; Class BF-1, downgraded to Caa1 from Ba2
     * Series 2000-1, Class BF-1, downgraded to Caa2 from B3

  Upgrade:

     * Series 1999-5; Class MF-1, upgraded to Aaa from Aa2

  Under Review for Possible Upgrade:

     * Series 2000-1; Class MF-1, current rating Aa2, under review
       for possible upgrade


SCHLOTZSKY'S INC: Wooleys Want Ch. 11 Cases Converted to Chapter 7
------------------------------------------------------------------
Jeffrey J. Wooley and John C. Wooley ask the U.S. Bankruptcy Court
for the Western District of Texas to convert Schlotzsky's, Inc.,
nka SI Restructuring, Inc., and its debtor-affiliates' chapter 11
cases to chapter 7 liquidation proceedings.

The Wooleys are secured creditors of SI Restructuring and
Schlotzsky's Franchisor, LLC, an affiliate of the Debtors,
pursuant to several promissory notes, employment agreements and
loan agreements.  The promissory notes are secured by, among other
collateral, all of SI Restructuring and Franchisor's contract
rights.  The Wooleys' total unsecured claims against the Debtors
exceed $3 million.

In January 2005, the Debtors closed the sale of substantially all
of their assets to the Bobby Cox Companies for $28 million.  On
Jan. 6, 2006, the Court approved the sale of the Debtors' only
remaining tangible asset, a parcel of real estate property located
in Travis County, Texas.

The Debtors' proposed Amended Joint Plan of Liquidation is
scheduled for a confirmation hearing on March 10, 2006.  The
Wooleys have also filed an objection to several provisions of that
Plan.

The Wooleys give the Court four reasons in favor of their request:

   1) the Debtors have no on-going operations and virtually no
      revenue, the only remaining employee is the turnaround
      expert retained prior to the bankruptcy filing and there is
      a continuing loss to the estate every month that their cases
      remains in place even with only one employee;

   2) the September Monthly Operating Report (the last operating
      report filed by the Debtors) shows they have incurred over
      $5,211,871 in professional fees and administrative costs and
      they have failed to filed their operating reports since
      then;

   3) the proposed Plan acknowledges that the Debtors have little
      or no source of revenue to meet their current or future
      obligations; and

   4) determining the claim priorities will be less costly if made
      by a chapter 7 trustee and administering the remaining
      assets can be accomplished efficiently in a chapter 7
      liquidation.

Headquartered in Austin, Texas, Schlotzsky's, Inc., nka SI
Restructuring, Inc. -- http://www.schlotzskys.com/-- was a  
franchisor and operator of restaurants.  The Debtors filed for
chapter 11 protection on August 3, 2004 (Bankr. W.D. Tex. Case No.
04-54504).  Amy Michelle Walters, Esq., and Eric Terry, Esq., at
Haynes & Boone, LLP, represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $111,692,000 in total assets and
$71,312,000 in total debts.  On Dec. 8, 2004, the Court approved
the sale of substantially all of the Debtors' assets to the Bobby
Cox Companies for $28 million.


SIRICOMM INC: BKD LLP Raises Going Concern Doubt
------------------------------------------------
BKD, LLP, expressed substantial doubt about SiriCOMM, Inc.'s
ability to continue as a going concern after it audited the
Company's financial statements for the fiscal years ended Sept.
30, 2005 and 2004.  The auditing firm pointed to the Company's
recurring losses and negative operating cash flows.

The Company's auditors can be reached at:

         BKD, LLP
         Hammons Tower
         901 E. St. Louis Street
         Suite 1800
         Springfield, Missouri 65806
         http://www.bkd.com/

              Fiscal Year 2005 Results

SiriCOMM incurred a $3,240,268 net loss on $193,741 of revenue for
the fiscal year ended Sept. 30, 2005, in contrast to a $2,778,407
net loss on zero revenue in the prior year.  Revenues were solely
derived from the Company's offering of its In Touch Internet
service.

At Sept. 30, 2005, the Company's balance sheet showed $5,702,086
in total assets and liabilities of $902,535.

              Sunflower Loan Agreement

Because SiriCOMM has never generated meaningful revenue and
currently operates at a loss, the Company is completely dependent
on the continued availability of financing in order to continue
its business.  The Company will use the proceeds of the loan as
general working capital.

On Dec. 27, 2005, SiriCOMM, inked a $500,000 loan agreement with
Sunflower Capital, LLC, a limited liability company managed by
William P. Moore, a company director.  The loan is evidenced by a
convertible promissory note due July 1, 2006.

As consideration for making the loan, SiriCOMM issued to Sunflower
a warrant to purchase 200,000 shares of the Company's common stock
at $1.26 per share.  The warrant expires Dec. 15, 2010.

                       About SiriCOMM

SiriCOMM, Inc., http://www.siricomm.com/-- is an application  
service provider specializing in wireless Internet connectivity
and productivity applications tailored to the transportation
industry.  By providing both network access and a robust
application host platform, SiriCOMM delivers a responsive and
convenient way for all industry stakeholders to interact with
information needed on a regular basis.  The company uses Wi-Fi
technologies to create hot spots at locations convenient to
highway travel.


SPORTS CLUB: Completes $80 Million Asset Sale to Millennium Ent.
----------------------------------------------------------------
The Sports Club Company, Inc. (Pink Sheets:SCYL) completed the
sale of five of its nine sports and fitness Clubs to an affiliate
of Millennium Entertainment Partners for $80 million.  Concurrent
with the asset sale, the Company also completed a $60 million
financing of the Sports Club/LA -- Los Angeles property.  Proceeds
from these transactions were used to retire the Company's      
$100 million Senior Secured Notes that were due to mature in March
2006.

The Clubs sold to Millennium include the Company's interest in:

     * Reebok Sports Club/NY,
     * The Sports Club/LA in Washington, D.C.,
     * The Sports Club/LA in Boston, Massachusetts,
     * The Sports Club/LA in San Francisco, California, and
     * The Sports Club/LA in the Upper East Side in New York.

The Company's management agreement covering the Club in Miami was
also terminated.  The Company received $50 million in cash from
the sale and received two Notes from Millennium for the remaining
$30 million.  The first note of $22.2 million is due on Jan. 31,
2006 and is secured by the two Clubs in New York that were sold to
Millennium.  The second Note of $7.8 million is due in 2013 and is
secured by a pledge of the Company's Series B and Series C
Preferred Stock owned by Millennium.  Both Notes are also
guaranteed by an affiliate of Millennium.

Following the sale, the Company continues to own and operate four
Clubs:

     * The Sports Club/LA -- Los Angeles,
     * The Sports Club/LA -- Beverly Hills,
     * The Sports Club/LA -- Orange County, and
     * The Sports Club/LA -- New York at Rockefeller Center.

The financing of The Sports Club/LA -- Los Angeles was provided by
Bank of America, N.A.  The mortgage note, which matures in January
2016, is secured by all of the real estate and assets at The
Sports Club/LA -- Los Angeles, bears interest at 6.48% and
requires monthly payments of principal and interest over a  
twenty-five year amortization period.

"These two transactions combined with the retirement of our Senior
Secured Notes place the Company in a substantially strengthened
financial position and provide the basis for our future growth and
development," Rex A. Licklider, Chief Executive Officer, stated.  
"We continue to own and control The Sports Club/LA brand and as
part of our agreement with Millennium, have given our members
continued access to all ten Clubs for the foreseeable future.  We
plan on immediately investing approximately $5 million to further
enhance the four Clubs we continue to own ensuring their position
as the finest sports and fitness complexes in the world."

Based in Los Angeles, California, The Sports Club Company, Inc. --
http://www.thesportsclubla.com/-- owns and operates luxury sports  
and fitness complexes nationwide under the brand name "The Sports
Club/LA."

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 20, 2006,
Moody's Investors Service withdrew the ratings of The Sports Club
Company, Inc., following the completion of the sale of five of its
nine sports and fitness clubs to an affiliate of Millennium
Entertainment Partners for $80 million.  Concurrent with the asset
sale, Sports Club also completed a $60 million financing (not
rated by Moody's) of its Sports Club/LA -- Los Angeles property.
Proceeds from these transactions were used to retire the $100
million senior secured notes that were due to mature in March
2006.

Moody's withdrew these ratings:

   * $100 million 11.375% Senior Secured Notes due 2006, Caa2
   * Corporate family rating, Caa2


STRESSGEN BIOTECH: Receives Final Proceeds from Sale of Bioreagent
------------------------------------------------------------------
Stressgen Biotechnologies (TSX:SSB) received approximately
$720,000 from Stressgen Bioreagents Corporation, a company funded
by Ampersand Ventures.  This money was being held in escrow in
connection with the previously announced sale of the Company's
bioreagent business.  The release of money held in escrow was not
scheduled until April of this year.  In consideration for early
release, the Company provided, among other things, a small
financial discount on the aggregate amount held in escrow.

"This is another small financial milestone toward implementing our
new strategic plan," Gregory M. McKee, President and Chief
Executive Officer of Stressgen Biotechnologies, stated.  "We
continue to focus on more substantive transactions, such as
partnering efforts and other initiatives, to obtain the necessary
funds to continue development of the HspE7 program."

Stressgen Biotechnologies Corporation -- http://www.stressgen.com/
-- a biopharmaceutical company that focuses on the discovery,
development and commercialization of innovative therapeutic
vaccines for the treatment of infectious diseases and cancer.  The
corporation is publicly traded on the Toronto Stock Exchange under
the symbol SSB.

                         *     *     *

                      Going Concern Doubt

The Company's auditor, Deloitte & Touche LLP, expressed
substantial doubt about the Company's ability to continue as a
going concern, in its March 14, 2005, audit report, pointing to
the Company's recurring losses from operations and difficulty in
generating sufficient cash flow to meet its obligations and
sustain its operations.

On June 30, 2005, the Company had cash, cash equivalents and
short-term investments totaling $13,230,000, working capital of
$9,400,000 and accumulated deficit of $222,409,000.

On Dec. 31, 2004, the Company had cash, cash equivalents and
short-term investments totaling $21,578,000, working capital of
$19,335,000 and accumulated deficit of $212,349,000.  The Company
incurred a net loss from continuing operations of $17,520,000 for
the six months ended June 30, 2005, and a net loss from continuing
operations of $31,845,000 for the year ended Dec. 31, 2004.
The Company used $16,967,000 of net cash in operations for the six
months ended June 30, 2005.


SUNCOM WIRELESS: Moody's Reviews Junk Ratings & May Downgrade
-------------------------------------------------------------
Moody's Investors Service placed the ratings of Suncom Wireless,
Inc. (formerly known as Triton PCS, Inc.) on review for possible
downgrade.  This review is triggered by the very weak financial
results for 4Q05 recently announced by the company, as well as
their announcement that the company has retained Lazard Freres &
Co. to act as its financial advisor to assist in evaluating
options to improve its financial condition, increasing the
likelihood that the company will seek to restructure it balance
sheet.  Moody's review will focus on the likely asset value of the
company that will be available to the company's creditors, and
should be resolved within the next 60 to 90 days in accordance
with Moody's standard practice for rating reviews.

The ratings on review are:

  On Review for Possible Downgrade:

  Issuer: Triton PCS, Inc

     * Corporate Family Rating, placed on review for possible
       downgrade, currently Caa1

     * Senior Secured Bank Credit Facility, placed on review for
       possible downgrade, currently B2

     * Senior Subordinated Regular Bond/Debenture, placed on
       review for possible downgrade, currently Ca

     * Senior Unsecured Regular Bond/Debenture, placed on review
       for possible downgrade, currently Caa1


Outlook changed to rating under review from negative.

Moody's also lowered the company's speculative grade liquidity
rating to SGL-4 from SGL-2 reflecting:

   * Moody's opinion of the company's weak liquidity profile based
     upon its inability to generate free cash flow in the
     intermediate term;

   * the high probability that the company will seek to
     restructure its balance sheet in the near term; and

   * the uncertainty regarding the parent company's willingness to
     use its liquidity to support its rated subsidiary.

The company consumed $210 million of cash in the last 12 months
ended Dec. 31, 2005, and while consolidated cash and liquid
investments were approximately $350 million at 4Q05, Moody's
estimates that over $190 million of that amount resides at
unrestricted entities above the rated issuer, leaving
approximately $160 million at the Suncom Wireless, Inc. level.
Moody's notes that the company does have unencumbered assets that
it could sell to bolster its liquidity (tower and excess spectrum,
primarily).

Nonetheless, the combination of high cash burn rates, likelihood
of a balance sheet restructuring, and uncertainty that the parent
company will use its liquidity to support its rated subsidiary
make the company's liquidity position weak in Moody's opinion,
warranting an SGL-4 rating.

Based in Berwyn, Pennsylvania, Suncom Wireless is a wireless
service provider serving over 965 thousand subscribers at year-end
2005.


TECHALT INC: Restates Results for Year Ended December 31, 2004
--------------------------------------------------------------
TechAlt, Inc., amended its annual report for the year ended
Dec. 31, 2004 to reflect:

     a) the possibility that holders of the Company's Series A
        Preferred Stock may be entitled to certain  rescission
        rights.  The Company's balance sheet at Dec. 31, 2004, was
        restated to reclassify the gross proceeds received from
        the sale of the securities.  The consolidated  statement
        of stockholders' equity for the year ended Dec. 31, 2004
        was similarly restated based on the reclassification.  

     b) the revaluation of warrants issued, which had been
        initially recorded using values determined utilizing the
        Black-Scholes valuation model with a volatility factor of
        0%, and have been revised utilizing a volatility factor of
        71%.  The net effect of the change in volatility factor on  
        the Company's Dec. 31, 2004 financial statements increased
        net loss by $203,100.  There was no effect on total
        stockholders' deficit or cash flows.

     c) the accounting of registration rights agreement as a   
        derivative at fair value.  The effect of this restatement
        is to increase the registration rights liability at   
        Dec. 31, 2004 to $480,000, with a corresponding charge to
        Other expenses; and

     d) a constructive dividend and credit to Series A Preferred
        Stock for the $1,806,125 intrinsic value of the beneficial
        conversion feature.

The aggregate net effect on operations of these adjustments is to
increase net loss by $623,100 and net loss attributable to common
stockholders by $2,429,225.

                   Going Concern Doubt

Salberg & Company, PA, expressed substantial doubt about TechAlt's
ability to continue as a going concern after it audited the
Company's financial statements for the years ended Dec. 31, 2004
and 2003.  The auditing firm pointed to the Company's recurring
net losses and working capital deficit.

                      About TechAlt
                                                                   
Based in Arlington Heights, Illinois, TechAlt, Inc., sells
wireless, and multi-network communications hardware and software
solutions. TechAlt's multi-network capable communications modules
are used to transmit video and data to police, fire, and emergency
services vehicles.


THOMAS EQUIPMENT: Restates Fiscal Year 2005 Financial Results
-------------------------------------------------------------
Thomas Equipment, Inc., amended its Form 10-K for the period ended
June 30, 2005, originally filed with the Securities and Exchange
Commission on Sept. 28, 2005, to properly account for options and
warrants issued in connection with, and derivative instruments
embedded in, the Company's debt agreements with Laurus Master
Fund, Ltd and in its series A preferred stock.

The amended financial statements record the options and warrants
as derivative instrument liabilities rather than as equity.  The
embedded conversion options related to the debt and series A
preferred stock, together with other embedded derivative
instruments, have been bifurcated from the debt and series A
preferred stock hosts and accounted for separately as derivative
instrument liabilities.

In addition, Thomas Equipment modified the estimated volatility
used in the Black-Scholes option pricing model used to value the
Company's options, warrants and the conversion options embedded in
its debt and series A preferred stock.

The non-cash changes related to accounting separately for these
derivative instrument liabilities and modification of the
estimated volatility increased the Company's net loss attributable
to common shareholders by $38,102.   The effect on consolidated
balance sheet as of June 30, 2005 was a decrease in stockholders'
equity of $76,885.

The Company's restated balance sheet as of June 30, 2005, show
$96,048,000 in total assets and liabilities of $163,177,000,
resulting in a stockholders' deficit of $67,129,000.

                    Going Concern Doubt

The Company's former auditors, PricewaterhouseCoopers LLP
expressed substantial doubt about Thomas Equipment's ability to
continue as a going concern after it audited the Company's
financial statements for the years June 30, 2004 and 2003.  The
auditing firm pointed to the Company's losses as well as Working
Capital and Stockholders' deficits.

Kingery & Crouse, PA, issued a clean and unqualified opinion after
it audited the Company's financial statements for the fiscal year
ended June 30, 2005.

                  About Thomas Equipment

Thomas Equipment, Inc. -- http://www.thomas-equipment.com/-- is a  
technologically advanced global manufacturer of a full line of
skid steer and mini skid steer loaders as well as attachments,
mobile screening plants and six models of mini excavators.  Thomas
distributes its products through a worldwide network of
distributors and wholesalers.  In addition, Thomas' wholly owned
subsidiaries manufacture specialty industrial and construction
products, a complete line of potato harvesting and handling
equipment, fluid power components, pneumatic and hydraulic
systems, spiral wound metal gaskets, and packing material.


TIDEL TECHNOLOGIES: Hein & Associates Raises Going Concern Doubt
----------------------------------------------------------------
Hein & Associates LLP expressed substantial doubt about Tidel
Technologies, Inc.'s ability to continue as a going concern after
it audited the Company's financial statements for the fiscal years
ended Sept. 30, 2005 and 2004.  The auditing firm pointed to the
Company's recurring losses from operations and accumulated deficit
as of Sept. 30, 2005.

               Fiscal Year 2005 Results

Tidel incurred a $3,285,922 net loss for the year ended Sept. 30,
2005, in contrast to $11,317,572 of net income a year earlier.  

The Company recorded a $8,359,530 loss from continuing operations
in fiscal year 2005, versus $14,606,170 of net income for the year
ended Sept. 30, 2004.  Management attributes the significant
decrease in operating profit to a gain on early extinguishment of
debt of approximately $18.8 million.

At Sept. 30, 2005, Tidel's balance sheet showed $17,536,528 in
total assets and liabilities of $15,273,210.  The Company had an
accumulated deficit of $28,905,810 as of Sept. 30, 2005.

                   ATM Unit Sale

As reported in the Troubled Company Reporter on Jan. 17, 2006,  
Tidel completed the sale of its ATM Business to NCR Corporation on
Jan. 3, 2006.  

The total purchase price was approximately $10.4 million.  The
Company applied approximately $8,200,000 of the ATM Sale proceeds
towards the repayment of outstanding indebtedness held by Laurus
Master Fund, Ltd.  

                    About Tidel Technologies

Tidel Technologies, Inc. (Other OTC: ATMS.PK) --
http://www.tidel.com/-- manufacturers cash security equipment  
designed for specialty retail marketers.


TRANSTECHNOLOGY CORP: Dec. 25 Balance Sheet Upside-Down by $5 Mil.
------------------------------------------------------------------
TransTechnology Corporation (OTC:TTLG) reported that fiscal third
quarter 2006 operating income increased 12% to $3.1 million from
$2.8 million in the prior year period.

The Company reported net income of $400,000 for the third quarter
of the fiscal year ending March 31, 2006, compared to a net loss
of $1.3 million in the year earlier period, which included a   
pre-tax loss of $2.2 million from the extinguishments of debt as a
result of the Company's refinancing of its credit facilities in
fiscal 2005's third quarter.

Net sales for the fiscal 2006 third quarter decreased 6% to   
$16.3 million from $17.3 million for the corresponding period of
last year.

"We were very pleased with the exceptional level and quality of
new orders received during the third quarter, especially our H3
and H53 three-year overhaul and repair contract renewal with the
U.S. Navy which aggregated $9.6 million," Robert L. G. White,
President and Chief Executive Officer of the Company, said.  "As
we noted at the end of the second quarter, we had expected our
sales in the third quarter to be higher than those reported in
last year's third quarter.  However, as the result of the timing
of customer orders and customer requested shipping dates, we did
not achieve our targeted sales level for the quarter.  With the
very strong bookings that we received during the quarter, however,
we are confident that the shortfall will be made up in the fourth
quarter.  Sales of overhaul and repair products were up $400,000,
or 13% from last year's third quarter, sales of spares were down
$1.8 million or 29%, and new equipment sales were up $300,000 or
4% from last year's third quarter."

For the nine months ended Dec. 25, 2005, the Company reported that
operating income increased 18% to $7.8 million from $6.6 million
in the prior year period.  Adjusted EBITDA for the nine months
of fiscal 2006 rose 15% to $8.9 million from last year's
$7.8 million.  Net sales decreased 10% to $42.3 million from the
prior year's same period sales of $47.1 million.  Net income for
the nine months of the current fiscal year was $500,000.  For last
fiscal year's nine-month period the Company reported a net loss of
$2.4 million.

TransTechnology Corporation -- http://www.transtechnology.com/--    
operating as Breeze-Eastern -- http://www.breeze-eastern.com/--    
designs and manufactures sophisticated lifting devices for
military and civilian aircraft, including rescue hoists, cargo
hooks, and weapons-lifting systems.  The company, which employs
approximately 180 people at its facility in Union, New Jersey,
reported sales from continuing operations of $64.6 million in the
fiscal year ended March 31, 2004.

At Dec. 25, 2005 TransTechnology Corporation's balance sheet
showed a $5,734,000 stockholders' deficit, compared to a
$6,359,000 deficit at March 31, 2005.


TRM CORP: S&P Holds B+ Corporate Credit & Debt Ratings on Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services held its 'B+' corporate credit
and senior secured debt ratings on ATM and photocopier service
provider TRM Corporation on CreditWatch with negative
implications, following the company's announcement that it has
hired Allen & Co. to advise its board on strategic alternatives to
increase shareholder value.
     
The actions resulting from such a review may have a negative
effect on the company's financial profile.  The ratings were
placed on CreditWatch on Sept. 6, 2005, reflecting uncertainties
with respect to financing arrangements of the $78 million Travelex
acquisition.  The CreditWatch listing was expanded on
Nov. 17, 2005, to include the effect of third quarter earnings
declines on future leverage and cash flow.  
     
The Portland, Oregon-based company reported a sharp and
unanticipated decline in earnings in the quarter ended
Sept. 30, 2005, primarily because of an unusually high level of
ATM theft and vandalism in the U.K., and to a lesser extent, lost
revenue from certain photocopiers.  EBITDA dropped to about $6.3
million from the prior-period level of $10.6 million.  It remains
unclear if TRM can rapidly and effectively shore up weaker
profitability over the near to middle term.  Because of reduced
profitability, the company's cash flow remains under pressure.
Capital spending requirements, which run in the $2 million to $3
million range per quarter, absorb much of the company's operating
cash flow.  The company also faces term loan amortization of about
$7.5 million per year.
     
While leverage has been reduced because of an equity offering,
proceeds of which were applied to debt reduction, the company
intends to finance its $78 million acquisition of Travelex with
debt, which likely will increase leverage from the current level
of 3.2x, pro forma for the equity sale.  Standard & Poor's will
monitor the company's progress in restoring profitability, the
completion of the Travelex acquisition and its financing, and any
actions recommended by Allen & Co. to determine the final impact
on the rating.


TRUMP ENT: Scott Butera Resigns as EVP & Chief Strategic Officer
----------------------------------------------------------------
Scott C. Butera left his position as executive vice president and
chief strategic officer of Trump Entertainment Resorts, Inc., on
Dec. 20, 2005, to pursue other endeavors, Robert M. Pickus,
executive vice president and secretary of TER, Inc., discloses
with the Securities and Exchange Commission.

In light of Mr. Butera's resignation:

   -- his employment agreement with TER, Inc., and Trump
      Entertainment Resorts Holdings, L.P., which was scheduled
      to expire on Sept. 2, 2006, was terminated; and

   -- Mr. Butera and TER Holdings entered into a consulting
      agreement, dated as of Dec. 20, 2005, under which Mr.
      Butera has agreed to:

      (a) consult, advise and assist TER Holdings with respect
          to certain business matters that he was involved in
          prior to his resignation;

      (b) present business opportunities to TER Holdings that are
          within TER Holdings' scope of business; and

      (c) consult, advise and assist TER Holdings in other
          strategic and financial matters.

The Consulting Agreement will expire on Sept. 30, 2006.  In
consideration for Mr. Butera's consulting services, Mr. Butera
was paid $250,000 on Jan. 2, 2006, and $250,000 when the sale
of Trump Indiana, Inc., was consummated.

In addition, Mr. Butera will receive:

   * 25,000 shares of the TER, Inc.'s common stock, par value
     $0.001 per share, on March 3, 2006; and

   * 25,000 shares of Common Stock on Sept. 30, 2006.

Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc., nka Trump Entertainment Resorts, Inc. --
http://www.thcrrecap.com/-- through its subsidiaries, owns and  
operates four properties and manages one property under the Trump
brand name.  The Company and its debtor-affiliates filed for
chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No.
04-46898 through 04-46925).  Robert A. Klymman, Esq., Mark A.
Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and
Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N.
Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano,
P.A., represent the Debtors in their successful chapter 11
restructuring.  When the Debtors filed for protection from their
creditors, they listed more than $500 million in total assets and
more than $1 billion in total debts.  The Court confirmed the
Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005,
and the plan took effect on May 20, 2005.  (Trump Hotels
Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service,
Inc., 215/945-7000).

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 10, 2005,
Moody's Investors Service affirmed the ratings of Trump
Entertainment Resorts, Inc.  Trump's rating outlook is stable:

     -- $200 million senior secured revolver due 2010 -- B2;

     -- $150 million senior secured term loan due 2012 -- B2;

     -- $150 million senior secured delayed draw term loan due
        2012 -- B2;

     -- $1.25 billion second lien senior secured notes due 2015 --
        Caa1;

     -- Speculative grade liquidity rating -- SGL-3; and

     -- Corporate family rating -- B3.


TRUMP HOTELS: Court Lifts Stay to Let Koch & Faicco Pursue Claims
-----------------------------------------------------------------
Two claimants filed proofs of claim against some of the
Debtors for injuries sustained:

   -- Mary Koch, together with her husband Thomas Koch, filed
      Claim No. 217 against Trump Plaza Associates; and

   -- Donna Faicco filed Claim No. 1769 for $500,000,000
      against Trump Taj Mahal Associates.

Trump Hotels & Casino Resorts, Inc., nka Trump Entertainment
Resorts, Inc., have carefully reviewed the Claims and determined
that allowing the Claimants relief from the automatic stay to
pursue their claims in the appropriate non-bankruptcy court or
forum is in the best interest of all parties.

In separate Court-approved stipulations, the Debtors and the
Claimants agree that:

   (a) the stay is lifted to allow the Claimants to pursue their
       Claims in the appropriate non-bankruptcy court;

   (b) any final judgment entered in a Claimant's favor or any
       settlement between the Claimants and the Debtors will be
       satisfied in accordance with the terms of the Debtors'
       Plan of Reorganization.  The amount that the Claimants are
       entitled to received under the Plan on account of a final
       judgment or settlement of the Claims will be capped at the
       amount set forth in the Claim.

Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc., nka Trump Entertainment Resorts, Inc. --
http://www.thcrrecap.com/-- through its subsidiaries, owns and  
operates four properties and manages one property under the Trump
brand name.  The Company and its debtor-affiliates filed for
chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No.
04-46898 through 04-46925).  Robert A. Klymman, Esq., Mark A.
Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and
Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N.
Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano,
P.A., represent the Debtors in their successful chapter 11
restructuring.  When the Debtors filed for protection from their
creditors, they listed more than $500 million in total assets and
more than $1 billion in total debts.  The Court confirmed the
Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005,
and the plan took effect on May 20, 2005.  (Trump Hotels
Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service,
Inc., 215/945-7000).


TRUMP HOTELS: Court Lifts Stay to Let Vuong Pursue $606,492 Claim
-----------------------------------------------------------------
Before the bankruptcy filing, Ben Vuong filed an action against
Trump Taj Mahal in the Superior Court of New Jersey.  Mr. Vuong
sought payment of bonus pay, severance pay and counsel fees
pursuant to his employment contract with Trump Taj Mahal.  The
complaint was dismissed and Mr. Vuong filed a notice of appeal
which is currently pending before the Superior Court of New
Jersey, Appellate Division.

Mr. Vuong timely filed Claim No. 1330 for $606,492 against Debtor
Trump Taj Mahal Associates relating to the New Jersey Action.

The Debtors deny the allegations that are the basis for Claim No.
1330 and the New Jersey Action.

The Debtors have carefully reviewed the Claim and believe that
allowing Mr. Vuong to pursue his Claim through the New Jersey
Action is in the best interest of the Parties.

Accordingly, in a Bankruptcy Court-approved stipulation, the
Debtors and Mr. Vuong agree that:

   (1) the automatic stay is lifted with respect Mr. Vuong's
       Claim so that he may pursue his Claim through the New
       Jersey Action; and

   (2) Mr. Vuong acknowledges that any amount that he will be
       entitled to receive under the Plan on account of a final
       judgment will be capped at $606,493.

Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc., nka Trump Entertainment Resorts, Inc. --
http://www.thcrrecap.com/-- through its subsidiaries, owns and  
operates four properties and manages one property under the Trump
brand name.  The Company and its debtor-affiliates filed for
chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No.
04-46898 through 04-46925).  Robert A. Klymman, Esq., Mark A.
Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and
Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N.
Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano,
P.A., represent the Debtors in their successful chapter 11
restructuring.  When the Debtors filed for protection from their
creditors, they listed more than $500 million in total assets and
more than $1 billion in total debts.  The Court confirmed the
Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005,
and the plan took effect on May 20, 2005.  (Trump Hotels
Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service,
Inc., 215/945-7000).


UAL CORP: Judge Wedoff Confirms Amended Reorganization Plan
-----------------------------------------------------------
Chad J. Husnick, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, stepped Judge Wedoff of the U.S. Bankruptcy Court for
the Northern District of Illinois through the 13 statutory
requirements under Section 1129(a) of the Bankruptcy
Code necessary to confirm the Amended Plan of Reorganization of
UAL Corporation, United Airlines, Inc., and their debtor-
affiliates:

(A) The Plan Complies with Section 1129(a)(1):

     a. The Plan satisfies the classification requirements under
        Section 1122.  Unsecured creditors have been separately
        classified based on their different rights and the
        different attributes of their claims.  Mr. Husnick says
        that not a single party objected to the rationale behind
        the Plan's classification scheme.

     b. The Plan meets Section 1123(a)'s seven mandatory
        requirements, and no party has filed an objection
        suggesting otherwise.  Sections 1123(a)(1)-(7) require
        that a plan:

        -- designate classes of claims and interests;

        -- specify unimpaired classes of claims and interests;

        -- specify treatment of impaired classes of claims and
           interests;

        -- provide the same treatment for each claim or interest
           of a particular class, unless the holder of a
           particular claim agrees to a less favorable treatment
           of that particular claim or interest;

        -- provide adequate means for the plan's implementation;
  
        -- provide for the prohibition of nonvoting equity
           securities and provide an appropriate distribution of
           voting power among the classes of securities; and

        -- contain only provisions that are consistent with the
           interests of the creditors and equity security holders
           and with public policy with respect to the manner of
           selection of the reorganized company's officers and
           directors.

(B) The Debtors have complied with Section 1129(a)(2) by
     distributing their Disclosure Statement and soliciting
     acceptances of their Plan through their solicitation agent.
     No party has suggested that the Debtors did not fulfill
     their solicitation obligations in connection with the Plan.

(C) Pursuant to Section 1129(a)(3), the Debtors have proposed
     the Plan in good faith, with the legitimate and honest  
     purposes of reorganizing their ongoing business and
     maximizing the value of each of the Debtor's value and the     
     recovery to creditors.

(D) The Plan provides for Court approval of certain
     administrative payments in accordance with Section
     1129(a)(4).

(E) The Debtors have complied with all the elements of Section
     1129(a)(5).  The Debtors have disclosed that the existing
     offers and directors of all Debtors except UAL, whose
     existing officers will continue to serve initially in their
     current capacities on and after the Effective Date.

(F) The Plan does not provide for any change in rates that
     require regulatory approval.  Accordingly, Section
     1129(a)(6) is inapplicable to the Plan.

(G) Pursuant to Section 1129(a)(7), the Plan is in the best
     interests of creditors and interest holders.  As           
     demonstrated by the liquidation and valuation analyses in
     the Disclosure Statement, estimated recoveries for members
     of each Impaired Class are equal to or in excess of the
     recoveries estimated in a hypothetical Chapter 7 case.

(H) Section 1129(a)(8) requires that each class of claims or
     interests must either accept a plan or be unimpaired under a
     plan.  All Impaired Classes that cast ballots voted to
     accept the Plan on a consolidated basis.  Moreover, on an
     unconsolidated basis, all Impaired Classes that cast ballots
     voted to accept the Plan, except Class 17E.  

(I) As required by Section 1129(a)(9), the Plan provides for
     payment in full of the unpaid amount of Administrative
     Claims and in cash.  The Plan further provides that each
     Holder of an Allowed Priority Tax Claim that is due and     
     payable on or prior to the Effective Date will be provided
     with:

     -- payment in full in cash;

     -- deferred quarterly cash payments, over a period not
        exceeding six years after the date of assessment of the
        Priority Tax Claim; or

     -- other amount and terms as agreed to by the Debtor and
        Holder.

(I) The Plan complies with Section 1129(a)(10), which provides
     that at least one impaired class of claims or equity
     interests must accept the plan, excluding acceptance by any
     insider.  Mr. Husnick discloses that 11 Impaired Classes --
     representing more than 16,000 creditors and $17,300,000,000
     of accepting dollar amounts -- voted to accept the Plan on a
     consolidated basis, while 64 Impaired Classes voted to
     accept the Plan on an unconsolidated basis.

(J) In accordance with Section 1129(a)(11), the Debtors have
     thoroughly analyzed their ability to meet their obligations
     under the Plan postconfirmation.  Mr. Husnick points out
     that confirmation of the Plan is not likely to be followed
     by liquidation or the need for further reorganization.  
     Based on Financial Projections, the Debtors believe that  
     with a significantly deleveraged capital structure, their
     business will return to viability.  The decrease in the
     amount of debt on the Debtors' balance sheet will  
     substantially reduce their interest expenses and improve
     cash flow.  Upon emergence, Mr. Husnick relates that
     the Debtors will have billions less of debt and other
     liabilities on their balance sheet.  Thereafter, the Debtors
     should have sufficient cash flow to pay and service their
     debt obligations, including the exit facility, and to fund
     operations.

(K) Section 1129(a)(12) requires the payment of all fees payable
     under Section 1930 of the Judiciary Code.  The Plan provides
     that these fees will be paid on or before the Effective
     Date.  

(L) The Plan provides that following the Effective Date, payment
     of all retiree benefits as defined in Section 1114 of the
     Bankruptcy Code will continue.  Thus, the Plan satisfies the
     requirements of Section 1129(a)(13) and no party has
     objected to the Plan's satisfaction of this requirement.

To the extent necessary, Mr. Husnick says that the Plan meets
Section 1129(b)'s "cramdown" requirements.  

The Plan satisfies the absolute priority rule with respect to all
Claims and Interests.  Mr. Husnick notes that no junior Holder of
a Claim or Interest receives any distribution when the Holders of
higher priority Claims do not receive the full value of their
Claims.  Furthermore, similarly situated claimants will receive
substantially similar treatment.  Mr. Husnick maintains that all
Holders of Unsecured Claims receive the same treatment under the
Plan on account of those Claims -- a pro rata share of the
Unsecured Distribution, which is estimated at 4-8% of the value of
each Unsecured Claim.

Accordingly, Judge Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006.

A full-text copy of the Court's Confirmation Order is available at
no charge at:

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

A full-text copy of the Debtors' confirmed Plan of Reorganization
is available at no charge at:

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

                         UAL's Statement

UAL Corporation (OTC Bulletin Board: UALAQ.OB) the holding company
whose primary subsidiary is United Airlines, announced that the
U.S. Bankruptcy Court for the Northern District of Illinois has
confirmed the Company's Plan of Reorganization (POR), setting the
stage for United to emerge from Chapter 11 in early February.

In confirming the plan, the court determined that it provided fair
and equitable treatment of creditors and otherwise satisfied the
requirements of the Bankruptcy Code.  The company's creditors
previously voted overwhelmingly in support of the plan. Further,
the Creditors' Committee withdrew all objections to the Plan, an
important accomplishment as the company concludes its very complex
restructuring.

"The confirmation of our plan validates more than three years of
work to make United a sustainable enterprise, ready to compete
successfully with the strongest carriers," said Glenn Tilton,
United's President, Chairman and CEO.  "The tremendous work of our
employees during the most difficult times is an indication of what
we are capable of moving forward.  We will build on our momentum
as we continue to differentiate United in the marketplace and
focus fully on our customers for a stronger future."

"Throughout this process, we worked with our stakeholders to
consensually resolve issues and put forward a reorganization plan
that maximizes the value of United for all, and that provides a
solid foundation on which United can compete," said Jake Brace,
Executive Vice President and Chief Financial Officer.  "We
appreciate the work of our Creditor's Committee and all our
stakeholders for resolving issues cooperatively with us and now,
with strong relationships in place, look forward to working with
our business partners going forward for our mutual benefit."

Pursuant to the confirmed plan of reorganization, current UAL
common stock, preferred stock and ToPRS will be canceled on the
emergence date, and no distribution will be made to holders of
those securities.

The company said that creditor distributions would likely begin
shortly after its emergence.

As previously reported, United has secured $3 billion in exit
financing to be provided by JPMorgan, Citigroup and GE Capital.  
Exit financing will be used by United to repay the debtor-in-
possession facility, to make other payments required upon exit
from bankruptcy, and to ensure strong cash balances to conduct
post-reorganization operations.

Both Standard & Poors and Moody's credit ratings agencies have
given United's business better ratings than any other network
carrier.

The company announced the composition of its Board of Directors
that will begin service upon United's emergence from Chapter 11.

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.  Judge Wedoff confirmed
the Debtors' Amended Plan of Reorganization on Jan. 20, 2006.  
(United Airlines Bankruptcy News, Issue No. 115; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


VENTURE HOLDINGS: Section 341 Meeting Slated for February 16
------------------------------------------------------------
The U.S. Trustee for Region 9 will convene a meeting of Venture
Holdings Company, LLC, and its debtor-affiliates' creditors at
10:30 a.m., on Feb. 16, 2006, at the Office of the Trustee,
located in 211 West Fort St., Room 315, Detroit, Michigan.

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.

As reported in the Troubled Company Reporter on Jan. 13, 2006, the
Hon. Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern
District of Michigan, Southern Division, converted the chapter 11
case of Venture Holdings Co. LLC into a chapter 7 liquidation
proceeding.  

Judge Tucker converted the Debtor's case after it failed to
file a plan or sought an extension of the plan-filing deadline.  
The Debtor's period to file a plan of liquidation expired on
Dec. 19, 2005.  

Headquartered in Fraser, Michigan, Venture Holdings Company, LLC,
nka NM Holdings Company, LLC, and its debtor-affiliates filed for
chapter 11 protection (Bankr. E.D. Mich. Case No. 03-48939) on
March 28, 2003.  Deluxe Pattern Corporation and its debtor-
affiliates filed for chapter 11 protection on May 24, 2004 (Bankr.
E.D. Mich. Case No. 04-54977).  As of March 31, 2002, the Debtors
had total assets of $1,459,834,000 and total debts of
$1,382,369,000.  Venture's prepetition lenders acquired Venture's
assets during the chapter 11 proceeding.  John A. Simon, Esq., at
Foley & Lardner LLP represent the Debtors.  John A. Karaczynski,
Esq., and Robert M. Aronson, Esq., at Akin Gump Strauss Hauer &
Feld LLP, and Joel D. Applebaum, Esq., at Clark Hill PLC represent
the Creditors' Committee.


VILLAS AT HACIENDA: Court Confirms WPD's Reorganization Plan
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona confirmed
First Amended Plan of Reorganization filed by Western Plains
Development Corp. in Villas at Hacienda del Sol, Inc.'s chapter 11
case, on Jan. 17, 2006.  WPD is a creditor of Villas at Hacienda.

The Court determined that the Plan satisfies the 13 standards for
confirmation required under Section 1129(a) of the Bankruptcy
Code.

                       Overview of the Plan

WPD's Plan provides for the sale of the Debtor's apartment project
for $20 million, or a higher amount obtained after an auction.
WPD's says that its calculations indicate that the $20 million
sale price will result in full payment of all secured creditors,
and in a substantial distribution to unsecured creditors,
depending upon the resolution of the dispute with Lenox Mortgage
VI LLC concerning the prepayment penalty and unearned interest.

                       Treatment of Claims

Under WPD's Plan, Administrative Expense Claims will be paid in
full on the later of:

    (a) the third business day after the Effective Date,

    (b) the date on which it becomes an allowed claim, or

    (c) the date that payment of the Claim is due under ordinary
        business terms.

The secured claim of Lenox will be paid in full on the Effective
Date from the proceeds of the sale.

WPD tells the Court that its Secured Claim totals $1,879,640 and
bears simple interest at 10% per annum from the date of filing of
the petition.  WPD's secured claim will be paid in full, plus
interest, on the fourth business day after the Effective Date.

However, WPD says that it will subordinate repayment of its claims
to repayment of the claims of WPD's Subcontractors.  WPD discloses
that its Subcontractors' Claims total $1,015,450.  The amount will
be deducted from the payments due to WPD, and paid directly to
each Subcontractor by the Disbursing Agent.  Sales or others taxes
owed on account of payment to WPD's claims, the amount of the
taxes will be paid directly to the applicable taxing authority by
the Disbursing Agent.

The secured claims of the Debtor's Subcontractors total $142,785
and bears simple interest at 10% per annum.  Holders of these
claims will be paid in full:

    (1) on the fifth business day after the Effective Date;

    (2) after payment of Lenox and WPD's secured claims; and

    (3) after establishment of a reserve for disputed Lenox and
        WPD claims.

Governmental Secured Claims, bearing 10% simple interest, will be
paid in full on the effective date.

WPD tells the Court Other Secured Claims also bear 10% simple
interest from the filing of the petition and will be paid in full:

    (1) on the sixth business day after the Effective Date from
        the proceeds of the Sale,

    (2) after satisfaction of the Lenox and WPD's secured claims,
        secured claims of the Debtor's subcontractors and
        governmental secured claims; and

    (3) after establishment of a reserve for disputed Lenox, WPD,
        Debtor's subcontractors and governmental claims.

Unsecured Priority Taxes and Other Debts Owed to Governmental
Units. Will be paid in full on the later of:

    (a) the seventh business day after the Effective Date,

    (b) the date on which it becomes an allowed claim, or

    (c) the date on which the claim becomes due in the ordinary
        course of business.

Holder of General Unsecured Claims will be paid:

    (i) the proceeds remaining from the Sale after:

         * payment of closing costs, expenses of administration,
           priority claims, and all other claims, and

         * establishment of a reserve for disputed claims other
           than general unsecured claims; and

   (ii) the net proceeds of Preserved Causes of Action.

In addition to any distributions from the sale proceeds, the net
recovery, if any, received from litigation conducted by the
Creditors' Representative from time to time shall be deposited in
the Creditor Funds Account.  The Disbursing Agent shall reserve an
amount for disputed claims or make a pro rata distribution from
the Creditor Funds Account to the holders of general unsecured
claims.

Creditors holding general unsecured claims of $5,000 or less may
elect to:

    (a) participate in the general treatment for unsecured claims
        or

    (b) receive a single, prompt distribution from the Disbursing
        Agent equal to the lesser of:

         * $250.00, or

         * 10.00% of the amount of the allowed claim, in full
           satisfaction of the claim.

The Disbursing Agent will pay the holders of general unsecured
claims electing to accept the small claim distribution within 30
days after the later of:

    -- the Effective Date of the Plan, or

    -- the date the claim becomes an allowed claim.

WPD says that in the absence of an affirmative election, holders
of general unsecured claims that meet the small claim criteria
shall be treated under the foregoing small claim distribution
provisions.

Surety Claims of the Ohio Casualty Insurance Company will be
disallowed pursuant to Section 502(e) of the Bankruptcy Code, to
the extent that the Surety's claim for reimbursement or
contribution is contingent as of the date of the Confirmation
Hearing.  The Surety shall have the rights of subrogation to the
extent provided in Section 509 of the Bankruptcy Code.

Holders of equity interests in the Debtor shall receive nothing
under WPD's Plan.

Headquartered in Tucson, Arizona, Villas At Hacienda Del Sol, Inc.
-- http://www.thevillasathaciendadelsol.com/-- filed for chapter
11 protection on March 28, 2005. (Bankr. D. Ariz. Case No.
05-01482).  Matthew R.K. Waterman, Esq., at Waterman & Waterman,
PC, represents the Debtor.  When the Company filed for protection
from its creditors, it estimated assets and liabilities ranging
from $10 million to $50 million.


WHITE BIRCH: S&P Lowers Second-Lien Term Loan's Rating to CCC+
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its bank loan and
recovery ratings on White Birch Paper Co.'s second-lien term loan
to 'CCC+' and '4' from 'B-' and '3'.  The 'B' corporate credit
rating and all other debt ratings were affirmed.  The outlook
is positive.
     
"Our rating action reflects the greater disadvantage term loan C
lenders will face after the proposed $130 million debt-financed
acquisition of unrated Papier Masson Ltee," said Standard & Poor's
credit analyst Dominick D'Ascoli.
     
The company intends to:

   * increase its revolving credit facility maximum borrowing
     capacity by $20 million;

   * increase its first-lien term loan B by $89 million; and

   * increase its second-lien term loan C by $41 million.

The potential $109 million of additional priority debt places term
loan C lenders at a greater disadvantage.
     
The overall credit impact from the acquisition of Papier Masson is
somewhat negative as the improvement in the company's operating
diversity and market position is more than offset by the new
mill's higher unit cost of production and the increase to
financial leverage.  Nevertheless, Standard & Poor's expects White
Birch to reduce debt levels during 2006, given the current
industry conditions.
     
White Birch was formed on April 8, 2005, by acquiring a 100%
interest in Stadacona Inc., Bear Island Paper Co. LLC, and F.F.
Soucy Inc.  The company is a newsprint producer with the ability
to produce a small amount of other products including:

   * directory paper,
   * paperboard, and
   * lumber.  

Newsprint is the company's primary focus and area of expertise.
     
Pro forma leverage is very aggressive, with pro forma total debt
of $535 million and pro forma debt to capital at 84% on
Sept. 30, 2005.  Assuming the transaction was consummated
Jan. 1, 2005, total debt to EBITDA for the full 2005 year would be
greater than 5x.  Standard & Poor's expects that this ratio will
improve to the mid-4x range by the end of 2006, as 2005 cost
reduction efforts improve EBITDA and debt is repaid.  However, if
the U.S. dollar continues to weaken, performance will be hurt at
the three Canadian mills, as the majority of their costs are in
Canadian dollars, while newsprint sales are denominated in U.S.
dollars.
     
Ratings could be raised during the next two years if the company
meaningfully reduces the amount of outstanding debt.
     
"We believe this is possible given current industry conditions and
the benefit from cost-saving projects completed in 2005," Mr.
D'Ascoli said.  "Specifically, we would like to see debt to EBITDA
average no more than 4.5x and funds from operations to debt
average at least 13% through a cycle, plus ample liquidity.  If
debt is not reduced meaningfully and cost reductions are not
achieved as expected, or if there is an unexpected decline in
newsprint prices resulting in moderately lower-than-expected
earnings and cash flows, the outlook could be revised to stable."


WHITEHALL JEWELLERS: Newcastle Able to Close $1.50 Per Share Offer
------------------------------------------------------------------
Whitehall Jewellers, Inc. (Pink Sheets: JWLR) criticized Newcastle
Partners, L.P. and its ability and willingness to close its tender
offer to purchase all of the outstanding shares of Whitehall for
$1.50 per share in cash.

Throughout this process Whitehall has consistently worked to
establish roadblocks to Newcastle's offer, although Newcastle
believes its $1.50 offer is clearly superior to Prentice's
proposal.  Newcastle does not understand why the Whitehall Board
is working against its stockholders.

Newcastle questions the accuracy of Whitehall's statement that if
the Prentice transaction is not approved the Company is likely to
file bankruptcy.

Newcastle issued a statement saying that stockholders should not
let Whitehall coerce them into voting for an inferior offer.

Newcastle is ready, willing and able to proceed with its offer at
$1.50 per share.

The solicitation and the offer to buy Whitehall Jewellers, Inc.'s
common stock is only made pursuant to the Offer to Purchase and
related materials that Newcastle Partners, L.P. and JWL
Acquisition Corp. filed on Dec. 5, 2005, as amended Dec. 22, 2005,
Jan. 4, 2006, Jan. 5, 2006 and Jan. 9, 2006.

Stockholders should read the Offer to Purchase and related
materials carefully because they contain important information,
including the terms and conditions of the offer.  Stockholders can
obtain the Offer to Purchase and related materials free at the
SEC's website at http://www.sec.gov/from MacKenzie Partners, the  
Information Agent for the offer, or from Newcastle Partners, L.P

Whitehall Jewellers, Inc. is a national specialty retailer of fine
jewelry, operating 387 stores in 38 states. The Company has
announced that it intends to close a number of stores in the near
term. The Company operates stores in regional and super regional
shopping malls under the names Whitehall Co. Jewellers, Lundstrom
Jewelers and Marks Bros. Jewelers

                          *     *     *

As previously reported in the Troubled Company Reporter, the Board
of Directors of Whitehall Jewellers, Inc. (OTC:JWLR.PK) reported
that Newcastle Capital Management, L.P. finally has made an offer
that does not have a financing contingency.  Newcastle has
initiated an unsolicited tender offer for Whitehall stock.

To consider whether the Newcastle proposal is a superior offer,
the Board requires that Newcastle provide conclusive evidence that
it has the cash to complete a transaction as well as evidence of
its ability and commitment to promptly complete a transaction.

The Board hopes that Newcastle will quickly provide the requested
evidence as the Board and the Company can no longer afford delays.
Specifically, the company's bank line expires on Jan. 31, 2006, as
does the company's bridge loan and its vendors can terminate their
agreement to accept payment of their past due invoices over time.

                   Bankruptcy Warning

Without a firm deal, such as one the company currently has in
place with Prentice Capital Management, L.P., the company will
likely be forced to pursue a restructuring or bankruptcy, which
may severely impact the Company's stockholders as well as the
Company's other constituencies.  The Board is dedicated to seeing
that this does not occur.  The Board is hopeful that Newcastle
will understand and provide the Board with the needed information
in the extremely short period available.  The company once again
reiterates its recommendation that stockholders vote for the
management/Prentice proposals and nominees at the Jan. 19, 2005,
shareholders meeting.


WHITEHALL JEWELLERS: Lenders Impose Limitations on Borrowings
-------------------------------------------------------------
Whitehall Jewellers, Inc. (OTC:JWLR.PK) received notices from its
senior lenders that they have imposed a $5 million discretionary
reserve effective on Jan. 18, 2006, and will impose an additional
discretionary reserve of $5 million effective on Jan. 24, 2006.  
These reserves limit the amount the Company is able to borrow
under its Senior Credit Agreement.

Nevertheless, the senior lenders have indicated that they intend
to continue to fund payments of payroll, taxes and other critical
expenses.  The imposition of the reserves is likely to result in
the inability of the Company to meet its current financial
obligations in the near term.  The Company, therefore, is
dependent on the infusion of cash provided by the closing of the
$50 million convertible notes financing with Prentice/Holtzman, or
from other sources, since it believes that Newcastle is unwilling
to close its tender offer and merger.

Whitehall has reviewed its financial situation in light of the
senior lenders' actions, Newcastle's failure to commit to a
transaction and its imminent liquidity needs.  The Company needs
immediate additional capital to support its operations.  The
Company has continuously and diligently evaluated its various
alternatives to meet these needs, including the Prentice and
Newcastle transactions.  If the shareholders vote against the
Company's proposals and, as a result, the Company is not able to
consummate the Prentice transaction or is not otherwise able to
obtain additional liquidity, of which there is no assurance, it is
likely to be forced to pursue a restructuring of its obligations
under the bankruptcy laws.

In view of these developments, if the Company's proposals to
consummate the Prentice transaction are not approved at the
January 25 meeting, it is highly likely that the Company will be
forced into filing a bankruptcy petition, which may substantially
reduce or eliminate value to shareholders.

Despite Newcastle's public announcements to the contrary, the
Company has been engaged in a serious on-going attempt to
negotiate the final terms of the tender offer and merger
agreements with Newcastle.  Despite their public pronouncements,
Newcastle has failed to follow through and engage in productive
negotiations with the Company.  The Company has provided Newcastle
extensive due diligence on multiple occasions.

Over nine days ago, in a Jan. 11, 2006 letter and subsequent SEC
filing, Newcastle claimed that its deal could be negotiated and
documented within 48 hours.  However, despite the continuing
efforts and initiatives of the Company's Board and management,
Newcastle has not only failed to provide first drafts of the key
documents it needs for its proposal, but also has not produced a
revised draft of the merger agreement in response to the Company's
comments provided to Newcastle five days ago.  In essence, the
Company is no closer to a transaction with Newcastle than it was
when this process began. Newcastle has once again failed to live
up to its public pronouncements to provide a real alternative
deal.

Based upon Newcastle's actions, the Company believes that
Newcastle is unwilling to proceed with its proposal and to commit
the funds necessary to close its tender offer, the proposed merger
and the related refinancings.  Instead, the Company believes that
Newcastle is seeking only to gain control of the Company Board,
after which there will be no assurance whatsoever that Newcastle
will consummate its tender offer or any other transaction for the
benefit of stockholders.

Even though Newcastle removed its financing contingency, it
requested the Company's assistance in communication with Company's
senior lenders.  In a good faith effort to expedite a transaction,
the Company requested that the Company's senior lenders meet or
communicate with Newcastle.  After the senior lenders met with
Newcastle, the Company was advised by its senior lenders that, at
this time, if Newcastle causes a "change in control" of the
Company under the Company's loan facility, the lenders will not
agree to waive the resulting event of default.

The Company continues to strongly recommend that stockholders use
the White proxy card to vote for the proposals required to
consummate the Prentice financing transaction and for the election
of the Company's nominees at the January 25 Special Meeting.  The
Company recommends that stockholders who have already returned a
proxy card furnished by Newcastle revoke that proxy, and vote for
the proposals required to consummate the Prentice financing
transaction, by signing, dating and returning the White proxy card
provided by the Company.  The latest dated proxy is the only one
that counts.  Any proxy may be revoked at any time prior to the
special meeting by delivering a written notice of revocation or a
later dated proxy for the special meeting to:

     Whitehall Jewellers, Inc.
     c/o D. F. King & Co., Inc.
     448 Wall Street, 22nd Floor
     New York, NY 10005

or to the Secretary of the Company, or by voting in person at the
special meeting.

Whitehall Jewellers, Inc. is a national specialty retailer of fine
jewelry, operating 387 stores in 38 states. The Company has
announced that it intends to close a number of stores in the near
term. The Company operates stores in regional and super regional
shopping malls under the names Whitehall Co. Jewellers, Lundstrom
Jewelers and Marks Bros. Jewelers

                          *     *     *

As previously reported in the Troubled Company Reporter, the Board
of Directors of Whitehall Jewellers, Inc. (OTC:JWLR.PK) reported
that Newcastle Capital Management, L.P. finally has made an offer
that does not have a financing contingency.  Newcastle has
initiated an unsolicited tender offer for Whitehall stock.

To consider whether the Newcastle proposal is a superior offer,
the Board requires that Newcastle provide conclusive evidence that
it has the cash to complete a transaction as well as evidence of
its ability and commitment to promptly complete a transaction.

The Board hopes that Newcastle will quickly provide the requested
evidence as the Board and the Company can no longer afford delays.
Specifically, the company's bank line expires on Jan. 31, 2006, as
does the company's bridge loan and its vendors can terminate their
agreement to accept payment of their past due invoices over time.

                   Bankruptcy Warning

Without a firm deal, such as one the company currently has in
place with Prentice Capital Management, L.P., the company will
likely be forced to pursue a restructuring or bankruptcy, which
may severely impact the Company's stockholders as well as the
Company's other constituencies.  The Board is dedicated to seeing
that this does not occur.  The Board is hopeful that Newcastle
will understand and provide the Board with the needed information
in the extremely short period available.  The company once again
reiterates its recommendation that stockholders vote for the
management/Prentice proposals and nominees at the Jan. 19, 2005,
shareholders meeting.


XERIUM TECHS: Moody's Affirms B1 Ratings With Negative Outlook
--------------------------------------------------------------
Moody's Investors Service changed the outlook on Xerium
Technologies, Inc.'s ratings to negative from stable, and affirmed
the company's corporate family rating at B1.  At the same time,
Moody's downgraded Xerium's speculative grade liquidity rating to
SGL-4 from SGL-3.  The change in outlook to negative reflects
Xerium's weaker than expected operating performance primarily due
to production inefficiencies in North America and delays in
achieving benefits from cost reduction initiatives.  Moody's
believes the impact of these issues, coupled with a difficult
pricing environment for roll covers and to a lesser extent
clothing products, will continue to negatively affect operating
performance over the intermediate term.

Rating actions are:

  Ratings Affirmed:

     * Corporate family rating; B1
     * Guaranteed senior secured term loan B; B1
     * Guaranteed senior secured revolving credit facility; B1

  Ratings Lowered:

     * Speculative grade liquidity rating; To SGL-4 from SGL-3

The B1 corporate family rating reflects the company's stable
market position and geographic diversity.  However, the ratings
incorporate:

     * the limited scope and modest size of the company's
       operations;

     * elevated business risk due to its focus on the paper
       industry;

     * its acquisitive nature;

     * high customer concentration;

     * competitive pressures;

     * high debt levels;

     * weak liquidity; and

     * potential dividend requirements.

Due to Xerium's business risks and limited product diversity,
Moody's expects the company to generate stronger credit metrics
than many other B1 rated companies.  As a result, over the next 12
months, if the company fails to improve operating performance,
adjusted EBITDA falls below $150 million on a trailing 12 month
basis, and the company fails to generate any free cash flow, the
ratings could be lowered.  

Other factors that could negatively impact the ratings would be:

   * a deterioration in paper industry fundamentals resulting in a
     further decline in paper production;

   * weaker liquidity; or

   * a larger-than-anticipated debt financed acquisition.

In Moody's opinion, it is unlikely that there would be positive
pressure on the company's ratings over the intermediate term.

The downgrade of the speculative grade liquidity rating to SGL-4
reflects Moody's view that over the next twelve months bank
covenant compliance under Xerium's credit agreement is uncertain
as financial covenants tighten significantly, which may require it
to obtain waivers or amendments in order to maintain access to its
revolving credit facility.  Moody's SGL ratings and SGL rating
methodology do not assume that borrowers will be able to obtain
waivers or amendments, which implies that the banks could demand
full repayment of the bank facility term loan and revolver within
the time horizon of the SGL rating.  

The company's leverage ratio steps down in the second quarter of
2006 and will most likely require some modification since
operating performance or margins will not significantly improve.
At the same time, Moody's expects Xerium to generate positive free
cash flow over the next 12 months and to meet all its normal
operating cash obligations through internal sources.  Furthermore,
Moody's notes that if the company is able to obtain covenant
relief, the SGL rating will likely return to SGL-3 without
impacting the outlook.  As of Sept. 30, 2005, the company's cash
balance was approximately $60 million.

Xerium Technologies, Inc., headquartered in Westborough,
Massachusetts, is a manufacturer and supplier of consumable
products used primarily in the production of paper.


* 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)
Emisphere Tech          EMIS         (6)          29        5
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
Level 3 Comm. Inc.      LVLT       (632)       7,580      502
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         (58)         408       67
NPS Pharm Inc.          NPSP        (55)         354      258
Omnova Solutions        OMN         (13)         355       46
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
Tivo Inc.               TIVO         (9)         163       36
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.


                    *** End of Transmission ***