TCR_Public/060206.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

           Monday, February 6, 2006, Vol. 9, No. 31     

                          Headlines

ABITIBI-CONSOLIDATED: Posts CDN$355 Mil. Net Loss in 2005 4th Qtr.
ACCLAIM ENT: Wants Until April 28, 2006, to Decide on Leases
AEARO CORP: Planned Acquisition Cues S&P to Place Ratings Watch
ALOHA AIRLINES: Gets Court Approval to Emerge from Bankruptcy
AMERICAN HOME: Posts $87,137 Net Loss In Quarter Ended Nov. 30

AMERICAN PLAN: Trustee Says No More Assets Left to Distribute
AMERISOURCEBERGEN CORP: Moody's Affirms Ba2 Unsec. Notes' Ratings
AOL LATIN: Inks Severance Agreement with Pres. & CEO C. Harrington
ASARCO LLC: Court OKs Stipulation for a 3-Member Independent Board
ASARCO LLC: McAllister Appointed as Debtor's Interim CEO

ASARCO LLC: First Union & BNY Wants Final DIP Order Modified
ATA AIRLINES: Unveils 13 Statutory Requirements Under Amended Plan
AUBURN FOUNDRY: Chapter 7 Trustee Taps Baker as Special Counsel
AUBURN FOUNDRY: Chap. 7 Trustee Hires Dennis Maude as Consultant
AUSTIN COMPANY: Committee Hires BBP Partners as Financial Advisor

BCP CRYSTAL: S&P Raises Long-Term Corporate Credit Rating to BB-
BERRY-HILL: Court Okays Continuation of All Insurance Policies
BIRCH TELECOM: Hires Miller Buckfire as Financial Advisor
BLUE BIRD: Fastest Chapter 11 Reorganization in U.S. History
BOYDS COLLECTION: Panel Taps FTI Consulting as Financial Advisors

BROOKLYN HOSPITAL: Meeting of Creditors Continued to Feb. 16
BURGER KING: Moody's Rates Proposed $350MM Add-On Facility at Ba2
BURGER KING: S&P Rates Proposed $350 Million Loan Add-On at B+
CABLEVISION SYSTEMS: S&P Holds Corporate Credit Rating on Watch
CAREMORE HOLDINGS: Moody's Assigns B2 Corporate Family Rating

CATHOLIC CHURCH: Tucson Parish Incorporation Nearly Completed
CCH II: Fitch Assigns CCC+ Rating to $450 Million Senior Notes
COATES INTERNATIONAL: Posts $202K Net Loss in Third Quarter
CONSUMERS TRUST: Hires Katten Muchin as Bankruptcy Counsel
COVALENCE SPECIALTY: S&P Rates Proposed $175 Million Loan at B-

CSC HOLDINGS: Fitch Affirms Low-B Ratings With Negative Outlook
DELTA AIR: Appoints Ernst & Young as Auditors for Fiscal 2006
DENNIS SPIELBAUER: Case Summary & 6 Largest Unsecured Creditors
DOCTORS HOSPITAL: Files 2nd Amendment to DIP Financing Facility
DOMTAR INC: Posts $298 Million Net Loss in 2005 Fourth Quarter

DRS TECHS: S&P Affirms Corporate Credit Rating With Neg. Outlook
ERA AVIATION: Court Okays Continued Use of Cash Collateral
ESCHELON TELECOM: S&P Puts CCC+ Preliminary Rating on Securities
EXIDE TECHS: S&P Lowers Corporate Credit Rating to CCC form CCC+
FLEET COMMERCIAL: Notes Payment Prompts S&P to Withdraw Ratings

FOSS MANUFACTURING: Trustee Wants Jenifer Smyth's Contract Voided
GARDEN STATE: Has Until April 6 to File Chapter 11 Plan
GARDEN STATE: Has Until March 15 to Decide on New Jersey Lease
GENERAL MOTORS: Incurs Total Loss Of $3.4 Billion For 2005
GEYSERS POWER: Voluntary Chapter 11 Case Summary

GLAZED INVESTMENTS: Files Chapter 11 to Facilitate Purchase Pact
GLAZED INVESTMENTS: Case Summary & 20 Largest Unsecured Creditors
GLYCOGENESYS INC: Makes Management Changes and Cuts Work Force
GOODING'S SUPERMARKETS: Court Issues Final Cash Collateral Order
GRUMMAN OLSON: Wants Until June 1 to Object to Proofs of Claim

HANOVER INSURANCE: Moody's Affirms Senior Debt Rating at Ba1
HEXCEL CORP: Improved Performance Cues Moody's to Upgrade Ratings
HILTON HOTELS: Fitch to Lower Ratings Upon Hilton plc Acquisition
HORSEHEAD INDUSTRIES: Taps Cole Schotz as Substitute Counsel
INTEGRATED HEALTH: Abe Briarwood Wants IHS to Release $1.5 Million

JOURNAL REGISTER: S&P Rates $1 Billion Sr. Credit Facilities at BB
KAISER ALUMINUM: Wants to Pay PI Trust Trustees' Fees & Expenses
KMART CORP: Court Lifts Stay for Six Personal Injury Claimants
KNOBIAS INC: Files Amended 2004 Annual and 2005 Quarterly Reports
KRISPY KREME: Sells 12 Stores to Westward Dough for $10 Million

LA QUINTA: Moody's Downgrades Senior Unsecured Debt Rating to B2
LINENS 'N THINGS: Fitch Initiates Coverage With Low-B Ratings
MAJESCO ENTERTAINMENT: Losses Trigger Going Concern Doubt
MERISTAR HOSPITALITY: S&P Upgrades Corporate Credit Rating to B
MESABA AIRLINES: Unions Balks at Court Filing to Reject Contracts

MH/1993: Case Summary & 13 Largest Unsecured Creditors
MUSICLAND HOLDING: Wants to Maintain Existing Insurance Policies
MUSICLAND HOLDING: Walks Away from 68 Real Property Leases
NEXICON INC: Earns $316,644 of Net Income in 3rd Quarter of 2005
NMHG HOLDING: S&P Revises Outlook to Stable from Negative

NORTEL NETWORKS: S&P Rates Proposed US$1.3 Billion Facility at B-
NORTEL NETWORKS: Unit Gets $1.3 Bil. Loan to Finance Bond Maturity
NORTHWEST AIRLINES: Pilots Union Leaders Authorize Strike Ballot
NOVELIS INC: Inks Multi-Year European Supply Agreement with Prefa
PERFORMANCE TRANSPORTATION: Chapter 11 Cases Jointly Administered

PERFORMANCE TRANSPORTATION: Creditors Meeting Set for March 6
PERFORMANCE TRANSPORTATION: Has Until March 3 to File Schedules
POINT TO POINT: Court Confirms First Amended Chapter 11 Plan
RESIDENTIAL REINSURANCE: Moody's Removes Notes' Rating From Watch
RESORTS INT'L: Moody's Junks Ratings on $1.05 Billion Loans

RGIS INVENTORY: S&P Assigns B+ to Planned $370 Million Bank Loan
ROMAN CORPORATION: Seeks Protection Under CCAA
RURAL CELLULAR: Fitch Rates $475 Million Sr. Sub. Notes at CC
SECURUS TECHS: S&P Puts B+ Corporate Credit Rating on Neg. Watch
SEDGWICK CMS: S&P Assigns B+ Bank Loan Rating to $340MM Facility

SFK INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors
STEELCASE INC: S&P Assigns Preliminary BB+ Sub. Debt Rating
STELCO INC: Completes Sale of Subsidiaries' Shares to Mittal
STEVE'S SHOES: U.S. Trustee Appoints 7-Member Creditors Committee
STEVE'S SHOES: Committee Wants to Hire Kronish Lieb as Counsel

TRU 2005: Fitch Rates $1.3 Billion Unsecured Credit Agreement at B
TXU CORP: Earns $356 Million in Fourth Quarter Ended Dec. 31, 2005
UAL CORP: Reorganization Confirmation Cues S&P's Ratings Upgrade
VERIFONE INC: S&P Raises Corporate Credit & Loan Ratings to BB-
VILLAGES AT SARATOGA: Wants to Sell Property to Deer Canyon

VINTAGE PETROLEUM: Occidental Merger Cues S&P's Ratings Withdrawal
VISKASE COS: S&P Revises CreditWatch Implications to Negative
WAVERIDER COMMS: Amends 2004 Annual Report
WESTPOINT STEVENS: Steering Comm. Balks at Escrowed Funds Release
WHITEHALL JEWELLERS: Agrees to Merge with Prentice and Holtzman

WINDOW ROCK: U.S. Trustee Says Disclosures Statement is Inadequate
XERIUM TECH: Subsidiary Acquires Coldwater Covers for $6.8 Million
XEROX CAPITAL: S&P Puts $27 Mil. Certificates' B- Rating on Watch

* Gardner Carton Names Irving Apar as Partner in New York Office
* Osler's Robin Schwill Examines Canadian DIP Financing

* BOND PRICING: For the week of Jan. 30 - Feb. 3, 2006

                          *********

ABITIBI-CONSOLIDATED: Posts CDN$355 Mil. Net Loss in 2005 4th Qtr.
------------------------------------------------------------------
Abitibi Consolidated Inc. reported a fourth quarter net loss of
CDN$355 million ending Dec. 31, 2005, compared to a net loss of
CDN$108 million in the same quarter of 2004.

For the quarter ending Dec. 31, 2005, sales totaled CDN$1.31
billion, compared to CDN$1.34 billion sales for the same period in
2004.

At Dec. 31, 2005, total assets were CDN$8 billion and total
liabilities were CDN$5.6 billion, resulting in CDN$2.4 billion of
positive shareholders' equity.  

"As promised, we have taken decisive actions which have delivered
an important reduction in our debt and at the same time, sharpened
our strategic focus on our North American portfolio of assets
while still serving customers across the globe," said President
and Chief Executive Officer John Weaver.  "We have significantly
improved our balance sheet and liquidity position and we are
positioning ourselves for greater financial flexibility for the
future."

For all of 2005, net loss totaled CDN$350 million, compared to a
CDN$36 million net loss for 2004.

For all of 2005, sales totaled CDN$5.3 billion, compared to
CDN$5.2 billion of sales in 2004.

Headquartered in Montreal, Quebec, Abitibi-Consolidated Inc. --
http://www.abitibiconsolidated.com/-- is a leading producer of  
newsprint and commercial printing papers as well as a major
supplier of wood products.  Committed to the sustainable forest
management of more than 40 million acres through third-party
certification, the Company supplies customers in 70 countries from
its 45 operating facilities.  Abitibi-Consolidated is also the
largest recycler of newspapers and magazines in North America.  
Company shares are traded on the Toronto Stock Exchange (TSX: A)
and on the New York Stock Exchange (NYSE: ABY).

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 14, 2005,
Fitch Ratings has initiated coverage of Abitibi Consolidated Inc.
and has rated Abitibi's senior unsecured bonds 'B+' and secured
bank debt 'BB-'.  The issuer default rating is also 'B+'.  The
Rating Outlook is Stable.  Approximately $3.3 billion in public
securities and CDN$700 million in bank debt is affected.  The
ratings are a function of a depressed North American demand for
newsprint, a projected slow recovery in operating profits, and
Abitibi's debt level.


ACCLAIM ENT: Wants Until April 28, 2006, to Decide on Leases
------------------------------------------------------------
Allan B. Mendelsohn, Esq., the Chapter 7 Trustee overseeing the
liquidation of Acclaim Entertainment Inc., asks the U.S.
Bankruptcy Court for the Eastern District of New York to extend  
his time to assume, assume and assign, or reject executory  
contracts, licenses, license agreements, and unexpired leases to  
April 28, 2006.

Many of the video games produced by the Debtor use the name,  
image and likeness of famous persons such as sports figures.  The  
Debtor entered into license contracts for the use of those names
and likenesses in connection with each video game produced.

The Chapter 7 Trustee believes that there are several hundred
Contracts to which the Debtor is a party and the Trustee doesn't
want to lose his rights in those contracts.   

Mr. Mendelsohn tells the Bankruptcy Court that the extension to
April 28 will provide him enough time to determine which of the
executory contracts have value and should be assumed and which
don't have value and should be rejected.

The Bankruptcy Court will convene a hearing at 10:00 a.m., on
Feb. 15, 2006, to consider the Trustee's extension request.

Headquartered in Glen Cove, New York, Acclaim Entertainment was a
worldwide developer, publisher and mass marketer of software for
use with interactive entertainment game consoles including those
manufactured by Nintendo, Sony Computer Entertainment and
Microsoft Corporation as well as personal computer hardware
systems.  The Company filed a chapter 7 petition on Sept. 1, 2004
(Bankr. E.D.N.Y. Case No. 04-85595).  Jeff J. Friedman, Esq., at
Katten Muchin Zavis Rosenman represents the Debtor.  Allan B.
Mendelsohn, Esq., serves as the chapter 7 Trustee.  Salvatore
LaMonica, Esq., at La Monica Herbst & Maniscalo, LLP, represents
the chapter 7 trustee.  When Acclaim filed for bankruptcy, it
listed $47,338,000 in total assets and $145,321,000 in total
debts.  In its bankruptcy petition, Acclaim listed GMAC Commercial
Finance as its primary creditor, owed $18 million.


AEARO CORP: Planned Acquisition Cues S&P to Place Ratings Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on personal
protection equipment manufacturer Aearo Corp. (a wholly-owned
subsidiary of Aearo Technologies Inc.) on CreditWatch with
negative implications, including the 'B+' corporate credit rating
on the company.  This action follows the announcement that the
European private-equity firm Permira will acquire Aearo from Bear
Stearns Merchant Banking for $765 million.
      
"Based on this purchase price, there could be an increase in
leverage beyond what is appropriate for the current rating," said
Standard & Poor's analyst John R Sico.  

Total debt outstanding was $370 million as of Sept. 30, 2005.
     
The purchase is expected to be funded with new debt and equity.
The company had about $30 million of cash at Sept. 30, 2005.  If
the existing bank debt and subordinated debt are redeemed, the
ratings on those issues will be withdrawn.  The ratings on Aearo,
including any new debt, will depend on the as-yet-unknown capital
structure.  For the current 'B+' rating, Standard & Poor's
expectations are that total debt to EBITDA will fall in the 4x-5x
range.  The transaction is expected to close in 90 days.
     
Indianapolis, Indiana-based Aearo Corp. is a leader in the:

   * hearing,
   * eye,
   * face,
   * head, and
   * respiratory

segments of the personal protection equipment market and had sales
of $420 million for the fiscal year ended September 2005.

Standard & Poor's will review the financing of the transaction and
the company's financial policies with Aearo's management before
taking further rating action.


ALOHA AIRLINES: Gets Court Approval to Emerge from Bankruptcy
-------------------------------------------------------------
On Feb. 2, 2006, U.S. Bankruptcy Judge Robert Faris approved
modifications to a Plan of Reorganization that clears the way for
Aloha Airlines to exit bankruptcy protection by mid-February.

"We've cleared all the hurdles and we are hopeful we will have our
new funding in mid-February," said David A. Banmiller, Aloha's
President and Chief Executive Officer.  "We're excited that our
lead investor The Yucaipa Cos will be coming aboard very soon and
that we also will have participation by local investors to carry
the Aloha Airlines tradition forward."

Under the modified plan of reorganization, Aloha will emerge with
$63 million in equity and very little debt, Mr. Banmiller said.  
"Thanks to the cooperative efforts of our 3,500 employees, our
business partners, investors and advisers, the new Aloha Airlines
will emerge with a balance sheet that's stronger than ever and
exceedingly well positioned to compete in today's market.  With
the continued support of our loyal customers, Aloha Airlines is
poised to become a leader in this part of the world."

Headquartered in Honolulu, Hawaii, Aloha Airgroup, Inc. --
http://www.alohaairlines.com/-- provides air carrier service
connecting the five major airports in the State of Hawaii.  Aloha
Airgroup and its subsidiary Aloha Airlines, Inc., filed for
chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No.
04-03063).  Alika L. Piper, Esq., Don Jeffrey Gelber, Esq., and
Simon Klevansky, Esq., at Gelber Gelber Ingersoll & Klevansky
represent the Debtors in their restructuring efforts.  As of
Dec. 30, 2004, Aloha Airgroup reported $333,901 in assets and
$24,124,069 in liabilities, while Aloha Airlines reported
$9,134,873.23 in assets, and $543,709,698.75 in liabilities.


AMERICAN HOME: Posts $87,137 Net Loss In Quarter Ended Nov. 30
--------------------------------------------------------------
American Home Food Products, Inc., delivered its quarterly report
on Form 10-QSB for the quarter ending Nov. 30, 2005, to the
Securities and Exchange Commission on Jan. 27, 2006.

American Home reported a $87,137 net loss on $49,649 of revenue
for the quarter ended Nov. 30, 2005.  At Nov. 30, 2005, the
Company's balance sheet showed $503,402 in total assets and
liabilities of $3,466,745, resulting in a stockholders' deficit of
$2,963,343.

                   Going Concern Doubt

Sherb & Co., LLP, expressed substantial doubt about American
Home's ability to continue as a going concern after it audited the
Company's financial statements for the fiscal years ended May 31,
2005.  The auditing firm pointed to the Company's recurring losses
from operations, working capital deficiency and default with
certain of its debts.

A full-text copy of the regulatory filing is available at no
charge at http://researcharchives.com/t/s?4dd

Based in New York City, American Home Food Products, Inc. engages
in licensing its tradenames and marketing of construction
materials. It licenses its Por-Rok, Dash Patch, and Sta-Dri
trademarks.  The Por-Rok and Dash Patch product lines include
prepackaged concrete repair and floor resurfacing products; and
Sta-Dri product line includes masonry waterproofing products.  The
company was formerly known as Novex Systems International, Inc.
and changed its name to American Home Foods, Inc. in February
2005.


AMERICAN PLAN: Trustee Says No More Assets Left to Distribute
-------------------------------------------------------------
Lenard E. Schwartzer, the chapter 11 Trustee appointed in American
Plan LLC's bankruptcy case, amended the report he presented during  
the Section 341(a) meeting concluded last February 2, 2005.

The Trustee clarifies that no assets are available in the Debtor's
estate for distribution to creditors.  

The Trustee says that based on his investigation, the Debtor's
assets totaled $480 as of January 24, 2006.

The Trustee reported at the Sec. 341 meeting that assets were
available for distribution in the Debtor's estate.  The Trustee
also suggested a substantial likelihood that those assets would be
recovered within a reasonable period of time.

Headquartered in Henderson, Nevada, American Plan LLC, filed for
chapter 11 protection on December 30, 2004 (Bankr. D. Nev. Case
No. 04-22633).  Sam Benevento, Esq., represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated assets and debts between $1 million
and $10 million.


AMERISOURCEBERGEN CORP: Moody's Affirms Ba2 Unsec. Notes' Ratings
-----------------------------------------------------------------
Moody's Investors Service affirmed AmerisourceBergen Corporation's
(ABC's) debt ratings (Ba2 corporate family rating) and changed the
outlook to positive from stable.

The change in outlook is based on Moody's belief that:

   1) the transition to a fee-for-service business model is
      largely behind the company and core distribution margins are
      now stable to improving;

   2) cash flow relative to current debt levels is expected to
      remain solid despite very low drug distribution margins and
      challenges faced in the PharMerica segment;

   3) the company's strong liquidity position offers significant
      flexibility; and

   4) ABC is not likely to need to raise leverage to pursue
      shareholder investments.

Ratings affirmed:

  AmerisourceBergen Corporation:

     * Ba2 senior unsecured notes;
     * Ba2 corporate family rating; and
     * SGL-1 speculative grade liquidity rating.

ABC's Ba2 rating primarily reflects a leading position but high
reliance on drug distribution -- a sector that is beginning to see
stabilization after having undergone a major transition over the
past two years.  ABC's core drug distribution margins are now
stable to improving, having reached bottom during fiscal 2005.
While the elimination of buy and hold opportunities has
significantly reduced operating margins, the decline in ABC's net
income has not been as dramatic due to reduced interest expense
and income taxes.  However, reported cash flow, during this
transition period, has been very strong, benefiting by about $1.5
billion in one-time reductions in inventory as of Sept. 30, 2005.

Moody's expects that a lower level of drug inventories will result
in less volatile operating cash flows, but lower net margins.  
Moody's notes that cash flow for the first quarter of 2006 was
affected by a one-time increase in accounts payable, but the
rating agency anticipates cash flows for the balance of fiscal
2006 to be more representative of a sustainable level.

As of Dec. 31, 2005, ABC's cash was about $1.5 billion, which is
expected to provide sufficient flexibility so that ABC can engage
in moderate shareholder initiatives without raising leverage.
Moody's anticipates that ultimately, much of ABC's excess cash
will be used to finance shareholder initiatives.  

During fiscal 2005, ABC repurchased approximately $786 million in
shares and in August, the company announced board authorization of
approximately $400 million in share repurchases, which raised
total repurchase availability to $750 million.  The company
repurchased $89 million in shares in the first quarter of fiscal
2006 and Moody's anticipates the company will repurchase
approximately $425 million in total under the program by the end
of the fiscal year.

In addition to share buybacks and dividends (increased to $20
million in November 2005) Moody's anticipates ABC will use excess
cash for modest-sized acquisitions, in the $100-200 million range.
Since the beginning of fiscal 2006, the company has announced
acquisitions of two small companies for a total price of
approximately $170 million.

New regulations stemming from the Medicare Modernization Act of
2003, which became effective Jan. 1, 2006, are expected to result
in reduced profitability over the near-term for PharMerica.  This
institutional pharmacy division comprises about 15% of the
company's operating earnings.  Moody's believes that reimbursement
rates from Prescription Drug Plans will be insufficient to offset
reduced rebates from manufacturers during 2006.  This reduction in
PharMerica's profitability is expected to be offset by
improvements in the core drug distribution business.

The positive outlook assumes ABC will generate sufficient
operating cash flow to make moderate-sized acquisitions without
significantly increasing financial leverage.  The ratings could be
upgraded if Moody's believes that ABC can sustain ratios of
operating cash flow and free cash flow to adjusted debt at or
above the 20% and 15% range, respectively.  ABC's credit profile
would also be enhanced if it can:

   * improve core distribution margins;
   * maintain revenue growth at market levels; and
   * prevent further deterioration of PharMerica's profitability.

However, if ABC experiences further deterioration in margins or
its ratios of operating and free cash flow to adjusted debt fall
below 20% and 15%, respectively, the ratings or outlook could be
lowered.

AmerisourceBergen Corporation, headquartered in Valley Forge,
Pennsylvania, is one of the nation's leading wholesale
distributors of pharmaceutical products and related services.


AOL LATIN: Inks Severance Agreement with Pres. & CEO C. Harrington
------------------------------------------------------------------
America Online Latin America Inc., aka AOL Latin America Inc.,
disclosed in a Form 8-K filing with the Securities and Exchange
Commission that on Jan. 31, 2006, it entered into a Severance
Agreement and Release of Claims agreement with Charles Herington,
the company's president and chief executive officer.  The company
expects Mr. Herington's employment to end on March 2, 2006.

Under the agreement (still subject to approval by the U.S.
Bankruptcy Court for the District of Delaware), Mr. Herington will
receive $538,067 in severance pay and a $461,200 ordinary course
performance bonus for 2005.  Additionally, Mr. Herrington will
also receive either:

    (a) reimbursement for COBRA expenses for a 14-month period, or

    (b) payment of a lump sum equivalent to the cost of obtaining
        similar health insurance for a 14-month period.

The company says that the bonus payment is expected to made upon
approval by the bankruptcy court and severance payment is expected
to be paid in September 2006.

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.


ASARCO LLC: Court OKs Stipulation for a 3-Member Independent Board
------------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Nov. 25, 2005, the ASARCO Official Committee of Unsecured
Creditors asks the Honorable Richard S. Schmidt of the U.S.
Bankruptcy Court for the Southern District of Texas in Corpus
Christi to appoint Douglas McAllister as ASARCO's chief
restructuring officer to assume the rights and responsibilities of
the board of directors and CEO.

              TCEQ Supports the Committees' Request

The Texas Commission on Environmental Quality believes that the
day-to-day operations of the Debtors' operating facilities can
run on "auto-pilot" until the Official Committee of Unsecured
Creditors' request for the appointment of a chief restructuring
officer is resolved.

The Debtors' bankruptcy cases revolve around the environmental
and asbestos liabilities and the litigation surrounding the
transactions with Grupo Mexico, S.A. de C.V.  Hal F. Morris,
Esq., in Austin, Texas, contends that the Debtors' management has
to be independent of Americas Mining Corporation or Grupo Mexico
in order to make appropriate decisions, Mr. Morris points out.

Mr. Morris asserts that an independent chief restructuring
officer would be able to continue to use the skilled services of
Baker Botts LLP and the Debtors' other skilled professionals,
which would be most efficient in terms of cost and time and would
provide continuity to the bankruptcy case.

Accordingly, TCEQ asks the Court to maintain the status quo until
the time the Committee's request is resolved.

When the facts alleged by the Committee's request are proven
true, TCEQ further asks the Court to order the parties to bring
in an independent third-party chief restructuring officer.

               Committees Seek Evidentiary Hearing

The Official Committee of Unsecured Creditors of Asarco, LLC, the
Official Committee of the Subsidiary Debtors and Robert C. Pate,
Future Claims Representative of the Subsidiary Debtors, tell the
Court that they cannot support the appointment of any of the
candidates identified by Carlos Ruiz Sacristan as there is no
thorough, complete and detailed examination of their background,
business dealings, financial holdings, and any other potential
ties to Grupo Mexico, S.A. de C.V. or any of its affiliate.

The Committees and the FCR adds that they are not willing to
allow ASARCO's board to be comprised of persons not subject to
the Court's jurisdiction and process.

The Court has set a status conference for the Committees' request
for the appointment of a chief restructuring officer.

To fully allow the parties to fully prosecute the matter
including the introduction of documentary evidence and the
presentation of witness testimony, the Committees the FCR ask the
Court to convert the status conference to an evidentiary hearing.

     Evidentiary Hearing Not Needed, Americas Mining Says

Charles A. Beckham, Esq., at Haynes and Boone LLP, in Houston,
Texas, contends that the Committees' request for an evidentiary
hearing is yet another attempt to bypass the rules of procedure,
all for non-existent emergency.

ASARCO's status report makes plain that the issues around
appointing new directors are evolving and that progress is being
made, Mr. Beckham avers.

If the Court is not satisfied with the results of the status
conference, it can order an appropriate briefing and discovery
schedule at that time, Mr. Beckham asserts.  "What the Court
should not do is summarily convert the scheduled status
conference to an evidentiary hearing where the parties have not
had a fair opportunity to prepare."

Thus, Americas Mining Corporation asks the Court to deny the
Committees' request for an evidentiary hearing.

                       Parties Stipulate
         
To resolve the issues relating to the independence of the ASARCO
Board and the election of a chief executive officer, the ASARCO
Committee, the Subsidiary Debtors Committee, and the FCR agree on
these terms:

1. Appointment of Independent Directors

   Carlos Ruiz Sacristan will immediately appoint Malcolm Lovett
   and Edward R. Caine as additional directors of ASARCO.

   The additional Directors will serve through consummation of a
   plan of reorganization of ASARCO's Chapter 11 case, the
   conversion of ASARCO's Chapter 11 case to Chapter 7 or until
   their death, resignation or incapacity.

2. Replacement Directors

   Should any of the proposed Directors to be appointed resign or
   otherwise be unable to serve, the remaining members of the
   Board will select a replacement.  The Committees will have an
   opportunity to interview the replacement Director before any
   hearing.

3. Modification of Operating Agreement

   The Limited Liability Company Agreement of ASARCO will be
   amended to assure the independence of its Board of Directors
   from interests of Americas Mining Corporation and its parent,
   Grupo.

   The Operation Amendments will provide that:

      a. During ASARCO's Chapter 11 case, the size of the Board
         will be three Directors;

      b. Mr. Ruiz will be Chairman of the Board and will remain
         Chairman of the Board so long as he is a Director;

      c. Two Directors will constitute a quorum of Directors;

      d. The Board may take any action provided for or permitted
         under the Operating Agreement or Delaware law, on the
         approval of two Directors;

      e. All meetings of the ASARCO Board will be held in the
         United States unless otherwise agreed by all Board
         members;

      f. Board meetings may be held by telephone;

      g. Board meetings will be called on not less than three
         days' written notice unless all Directors consent, or
         ASARCO's counsel advises that the matters to be
         addressed are urgent to require less than three days
         notice; and

      h. The Board will select a Chief Executive Officer who will
         be responsible for the day-to-day operations of ASARCO.

4. Compensation of Directors

   The Directors will be paid $100,000 annually for their service
   as Director, commencing as of their election or appointment,
   with $25,000 paid promptly after the Court approves the
   stipulation, and the balance paid at the end of each quarter
   served after.

5. Indemnity of Directors

   The Directors will be entitled to indemnification to the full
   extent provided under Delaware law.

6. Directors and Officers Insurance

   ASARCO will seek to secure appropriate insurance for the
   directors and officers.  With the Committees' consent, ASARCO
   will set aside in a segregated account the amount is necessary
   to pay any self insured retention under the directors and
   officers insurance.

7. Interim Chief Executive Officer

   Douglas McAllister, Esq., will be appointed as interim chief
   executive officer of ASARCO.  As interim CEO, Mr. McAllister's
   salary will be increased to the level of his predecessor so
   long as he serves as interim CEO.

   The Board, including the new Directors appointed, will meet as
   promptly as possible to determine whether Mr. McAllister will
   be elected as CEO.

   If the Board determines to replace Mr. McAllister with another
   CEO, Mr. McAllister will receive $50,000 on the election of
   his successor.  Mr. McAllister will have indemnification to
   the full extent provided under the Delaware law.

Judge Schmidt approves the parties' Stipulation.

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

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

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. (ASARCO
Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service,
Inc., 215/945-7000).


ASARCO LLC: McAllister Appointed as Debtor's Interim CEO
--------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Dec. 26, 2005, three State Agencies ask Judge Schmidt of the U.S.
Bankruptcy Court for the Southern District of Texas in Corpus
Christi to appoint an examiner to check, inter alia, the
background and alleged substantial conflicts of interest posed by
ASARCO's present sole director, Carlos Ruiz Sacristan.

The States Agencies were:

   * Texas Commission on Environmental Quality;

   * State of New Jersey Department of Environmental Protection;
     and

   * Missouri Department of Natural Resources.

                       ASARCO LLC Responds

A stipulation regarding corporate governance was presented and
entered at the hearing for the request on the appointment of a
chief restructuring officer.  Under the Stipulation, Douglas E.
McAllister was appointed interim chief executive officer, two
qualified independent members were added to ASARCO's board of
directors, and changes to the ASARCO's operating agreement were
authorized.

Because ASARCO LLC now has a functioning chief executive officer
and an independent board of directors, the appointment of an
examiner to act as a watchdog over the sole director and to serve
as chief restructuring officer is unnecessary, Eric A. Soderlund,
Esq., at Baker Botts LLP, in Dallas, Texas, asserts.

Accordingly, ASARCO asks the Court to deny the request of the
three State Agencies for the appointment of an examiner.

                           *     *     *

Judge Schmidt rules that the State Agencies' request is stricken
for failure to attach a proposed order.

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

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

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. (ASARCO
Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service,
Inc., 215/945-7000).


ASARCO LLC: First Union & BNY Wants Final DIP Order Modified
------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Dec. 22, 2005, Judge Schmidt of the U.S. Bankruptcy Court for the
Southern District of Texas authorized ASARCO LLC, on a final
basis, to obtain up to $75,000,000 financing pursuant to a senior
secured revolving line of credit facility with The CIT
Group/Business Credit, Inc.  The financing includes a $50,000,000
letter of credit subfacility.

The loan amount may be increased to up to $150,000,000, at
ASARCO's option, in accordance with the terms of the DIP
Financing Agreement and subject to the DIP Agent receiving
satisfactory collateral audits, appraisals, and title and lien
reports with respect to a supplemental asset component.

To secure the prompt payment and performance of any and all
obligations, liabilities, and indebtedness of ASARCO under the
DIP Facility, Judge Schmidt grants valid and automatically
perfected security interests and liens to CIT Group in all of
ASARCO's right, title, and interest in all of the real and
personal properties and assets of ASARCO's estate.

         First Union & BNY Capital Seek Reconsideration

First Union Corporation and Bank of New York Capital ask the
Court to reconsider and modify the Final DIP Order to allow
continued priority of perfection by allowing updated financing
statements filings to be recognized as Permitted Encumbrances and
Prior Liens within the context of the Final DIP Order.

First Union and BNY Capital objected to the possible application
of the Final DIP Order to updated financing statements needed
because of ASARCO's change of state of organization and name.

At DIP Financing hearing, ASARCO agreed to review and consider
the objections.

However, the Final DIP Order did not address First Union's and
BNY Capital's objections, Michael M. Parker, Esq., at Fulbright &
Jaworski LLP, in San Antonio, Texas, contends.

CIT Group/Business Credit, Inc. offered to attach a footnote to
its Financing Documents acknowledging a name change amendment to
First Union's financing statement.  After considering the offer,
First Union and BNY do not believe the footnote will provide
necessary protection.

In CIT's Financing Documents and in the Final DIP Order, First
Union's and BNY's prepetition financing statements were
identified as Permitted Encumbrances, superior in priority to
CIT's blanket lien.

Mr. Parker notes that Permitted Encumbrances are only defined as
those related to identified financing statements and not the
collateral underlying those financing statements.  The Final DIP
Order does not explicitly recognize either First Union's amended
financial statements or First Union's and BNY's right to update
their financing statement to provide for ASARCO LLC's change in
name and change in state of organizations to still maintain and
continue their priority of perfection.

                        CIT Group Responds

Josiah M. Daniel III, Esq., at Vinson & Elkins LLP, in Dallas,
Texas, asks the Court to deny First Union's and BNY's request to
obtain postpetition enhancement of their prepetition liens.  "The
Reconsideration Motion failed to identify any procedural rule
permitting their request."

Section 552(a) of the Bankruptcy Code provides that any property
acquired by a debtor postpetition is not subject to any lien from
any prepetition security agreement, Mr. Daniel notes.

Mr. Daniel states that First Union's and BNY's security interests
became unperfected in February 2005, after failing to act
promptly under the Uniform Commercial Code.  Furthermore, First
Union's and BNY's prepetition liens as of February 2005 are
already well reflected in the Schedule of the DIP Financing
Agreement.

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

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

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-
21346) also filed for chapter 11 protection, and ASARCO has asked
that the three subsidiary cases be jointly administered with its
chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. (ASARCO
Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service,
Inc., 215/945-7000).


ATA AIRLINES: Unveils 13 Statutory Requirements Under Amended Plan
------------------------------------------------------------------
The Reorganizing ATA Holdings Corp., ATA Airlines, Inc., ATA
Leisure Corp., and ATA Cargo, Inc., stepped Judge Basil H. Lorch
through the 13 statutory requirements under Section 1129(a) of the
Bankruptcy Code necessary to confirm their First Amended Plan of
Reorganization:

A. The Amended Plan complies with Section 1129(a)(1) because it
   provides for the classification of claims and interests, and
   complies with other requirements of Sections 1122 and 1123.
   In addition to Administrative Claims and Priority Tax Claims,
   which are not required to be classified, the Amended Plan
   designates seven Classes of Claims and two Classes of
   Interests.  The Claims and Interests placed in each Class are
   substantially similar to other Claims or Interests in that
   Class.  Valid business, factual and legal reasons exist for
   separately classifying the various Classes of Claims and
   Interests created under the Amended Plan, and the Classes do
   not unfairly discriminate between holders of Claims or
   Interests.

   The Amended Plan specifies the Classes of Claims and Interests
   that are impaired under the Plan and the treatment of impaired
   Claims and Interests in all Classes.  The Plan also provides
   for the same treatment for each Claim or Interest in each
   Class unless the holder of a particular Claim has agreed to
   less favorable treatment with respect to the Claim or the law
   allows for a different treatment.

   Moreover, the Amended Plan provides adequate and proper means
   for its implementation, including:

       (a) the creation of a New Holding Company;

       (b) the continued organizational existence of the
           Reorganizing Debtors;

       (c) provision for debt and equity "exit" financing; and

       (d) the execution, delivery, filing or recording of all
           contracts, instruments, releases, indentures, and other
           agreements or related documents.

   The Articles of Incorporation and Bylaws will prohibit the
   issuance of nonvoting equity securities to the extent required
   by Section 1123(a)(6).

   The proposed appointment or employment of the individuals and
   the proposed compensation and indemnification arrangements for
   officers and directors are consistent with the interests of
   the holders of Claims and Interests and with public policy.

   The Amended Plan's provisions are appropriate and consistent
   with the applicable provisions of the Bankruptcy Code,
   including, provisions for:

       -- distributions to holders of Allowed Claims;

       -- the disposition of executory contracts and unexpired
          leases;

       -- the retention of, and right to enforce, sue on, settle
          or compromise with respect to claims or causes of action
          against third parties, to the extent not waived and
          released under the Amended Plan;

       -- resolution of Disputed Claims and Disputed Interests;

       -- allowance of Claims;

       -- indemnification obligations;

       -- releases by the Reorganizing Debtors;

       -- the restructuring of the Old ATSB Loan;

       -- substantive consolidation of the Reorganizing Debtors to
          the extent set forth in the Amended Plan; and

       -- releases by holders of Claims and Interests that voted
          to accept the Amended Plan.

    The Amended Plan is dated December 14, 2005, and identifies
    the entities submitting it.

B. The Plan Proponents have complied with the applicable
   provisions of the Bankruptcy Code, thereby satisfying Section
   1129(a)(2).  Specifically, the Reorganizing Debtors are the
   proper debtors under Section 109 and the Plan Proponents are
   proper proponents of the Plan under Section 1121(a).  The Plan
   Proponents have complied with the applicable provisions of the
   Bankruptcy Code, including as provided or permitted by orders
   of the Bankruptcy Court, the Bankruptcy Rules, and the
   Solicitation Procedures Order in transmitting the Plan, the
   Disclosure Statement, the Ballots and related documents and
   notices, and in soliciting and tabulating votes on the Plan.

C. Following good faith negotiations among the Plan Proponents,
   the ATSB Lenders, the Official Committee of Unsecured
   Creditors and other parties-in-interest, the Plan Proponents
   have proposed the Plan in good faith and not by any means
   forbidden by law, thus satisfying Section 1129(a)(3) of the
   Bankruptcy Code.  In determining that the Amended Plan has
   been proposed in good faith, the Bankruptcy Court has examined
   the totality of the circumstances surrounding the filing of
   the Chapter 11 cases and the formulation of the Amended Plan.
   The Chapter 11 cases were filed and the Amended Plan was
   proposed with the legitimate and honest purpose of
   reorganizing and maximizing the value of each of the
   Reorganizing Debtors and the recovery to the holders of
   Claims and Interests under the circumstances of the Chapter 11
   cases.

D. Any payment made or to be made by the Reorganizing Debtors for
   services or for costs and expenses in connection with the
   Chapter 11 cases, including all administrative expense and
   substantial contribution claims under Sections 503 and 507 of
   the Bankruptcy Code, or in connection with the Plan and
   incident to the Chapter 11 cases, has been approved by, or is
   subject to the approval of, the Court as reasonable.

E. The Plan Proponents have disclosed the initial officers of the
   Reorganized Companies.  Specifically, on the Reorganizing
   Debtors' behalf, James M. Carr, Esq., at Baker & Daniels, in
   Indianapolis, Indiana, notified the Court that the seven
   persons proposed to serve on the initial board of directors
   for the New Holding Company on the Effective Date, are:

      Proposed Director          Background
      -----------------          ----------
      Marc Chodock               A management consultant at
                                 McKinsey & Company before joining
                                 MatlinPatterson Global Advisers
                                 LLC in February 2003

      Peter Schoels              Joined MatlinPatterson in July
                                 2002 and serves on the board of
                                 Texon International on behalf of
                                 MatlinPatterson

      Lawrence M. Teitelbaum     Joined MatlinPatterson as chief
                                 financial official in
                                 October 2002

      Robert H. Weiss            Joined MatlinPatterson as general
                                 counsel in October 2002

      Michael J. Watzky          Joined MatlinPatterson in 2002,
                                 and currently serves on the
                                 boards of directors of Opus LLC,
                                 Polymer Group and Kgen on behalf
                                 of various MatlinPatterson funds

      Harvey L. Tepner           A partner at the International
                                 investment banking firm of
                                 Compass Advisers, LLP, and is in
                                 charge of its Restructuring
                                 Group.  Mr. Tepner serves as a
                                 financial advisor to the
                                 Official Committee of Unsecured
                                 Creditors in the Reorganizing
                                 Debtors' Chapter 11 cases.  He is
                                 also a member of the board of
                                 directors of Core-Mark
                                 Holding Company, Inc.

      John G. Denison            Joined ATA Airlines, Inc., in
                                 January 2005 as co-chief
                                 restructuring officer and was
                                 appointed chief executive officer
                                 of the ATA Airlines in February
                                 2005 and of ATA Holdings Corp.,
                                 effective August 31, 2005

   Mr. Carr further disclosed that Messrs. Schoels and Tepner are
   not U.S. citizens.  The parties-in-interest are continuing to
   evaluate whether and to what extent their citizenship status
   may affect their service as directors.

   The senior officers of the New Holding Company and ATA, as of
   the Effective Date, will be those Persons currently serving as
   the senior officers of ATA Holdings and ATA.  On the Effective
   Date, the term of the current members of the board of
   directors of each of the Reorganizing Debtors will expire.
   Subsequent boards of directors of New Holding Company will
   consist of the Chief Executive Officer of Reorganized ATA and
   six members appointed by the "New Investor" -- as referenced
   in the Plan and the Disclosure Statement -- subject to the
   terms of the Minority Shareholder Protection Term Sheet.
   On the Effective Date, the articles of incorporation of ATA
   Holdings will be amended to reduce the size of its board of
   directors to one director.  Brian Hunt, ATA Holdings' vice
   president, general counsel and secretary, is designated as the
   sole director of ATA Holdings from and after the Effective
   Date.  The Reorganized Companies have not, and are not
   planning to, employ or retain an insider.

   The requirements of Section 1129(a)(5) have thus, been met.

F. Section 1129(a)(6) is satisfied because the Plan does not
   provide for any change in rates over which a governmental
   regulatory commission has jurisdiction.

G. The Plan satisfies Section 1129(a)(7).  The liquidation
   analysis attached to the Disclosure Statement and evidence
   admitted at the Confirmation Hearing:

       (1) are persuasive, credible and accurate as of the dates
           the evidence was prepared, presented, or proffered;

       (2) either have not been controverted by other persuasive
           evidence or have not been challenged;

       (3) are based on reasonable and sound assumptions;

       (4) provide a reasonable estimate of the liquidation values
           of the Reorganizing Debtors upon conversion to a case
           under Chapter 7 of the Bankruptcy Code; and

       (5) establish that each holder of a Claim or Interest in an
           Impaired Class that has not accepted the Amended Plan
           will receive or retain under the Plan, on account of
           the Claim or Interest, property of a value, as of the
           Effective Date of the Plan, that is not less than the
           amount that it would receive if the Reorganizing
           Debtors were liquidated under Chapter 7 of the
           Bankruptcy Code.

H. The Court finds that, other than Classes 2 and 3, all voting
   Impaired Classes as set forth on the ballot reports have voted
   to accept the Amended Plan.  Although Fleet did not cast
   ballots with respect to the treatment of its Secured Claims in
   Classes 2 and 3, the treatment of the claims is consistent
   with the Fleet Stipulation.  Counsel for the Reorganizing
   Debtors reported at the Confirmation Hearing that Fleet has
   acquiesced to the treatment provided for Fleet's Secured
   Claims in Classes 2 and 3 as meeting the requirements of
   Section 1129 of the Bankruptcy Code.  Classes 8 and 9 are
   deemed to have rejected the Plan and, accordingly,
   confirmation as to those Classes only is sought pursuant to
   Section 1129(b).  Class 5 and any Reinstated Class 4 Claims
   are deemed to have accepted the Amended Plan since they are
   Unimpaired.

I. The treatment of Administrative Claims and Other Priority
   Claims under the Amended Plan satisfies the requirements of
   Section 1129(a)(9)(A) and (B) of the Bankruptcy Code, and the
   treatment of Priority Tax Claims under the Amended Plan
   satisfies the requirements of Section 1129(a)(9)(C).

J. Each Impaired Class of Claims and Interests has voted to
   accept the Plan.  Thus, Section 1129(a)(10) is satisfied.

K. The financial projections in the Disclosure Statement and
   evidence admitted at the Confirmation Hearing:

       (i) are persuasive and credible;

      (ii) have not been controverted by other evidence or
           sufficiently challenged in any of the objections to the
           Amended Plan; and

     (iii) establish that the Amended Plan is feasible and that
           confirmation of the Amended Plan is not likely to be
           followed by the liquidation or the need for further
           financial reorganization of the Reorganizing Debtors or
           the Reorganized Companies.

   On the Effective Date, the Reorganizing Debtors and the
   Reorganized Companies will have sufficient operating cash and
   liquidity to meet their financial obligations under the
   Amended Plan, to fund ongoing business operations, and pay all
   anticipated Allowed Administrative Claims and Allowed priority
   Claims.  Accordingly, the Amended Plan satisfies Section
   1129(a)(11).

L. The Reorganizing Debtors have paid or, pursuant to the Plan,
   will pay by the Effective Date, fees payable under 28
   U.S.C. Section 1930, thereby satisfying Section 1129(a)(12).

M. Section 1129(a)(13) requires that, following the Effective
   Date of the Plan, the payment of all retiree benefits, if any,
   will continue at the levels established pursuant to
   subsections (e)(1)(B) or (g) of Section 1114 of the Bankruptcy
   Code, at any time prior to the entry of the Confirmation
   Order, for the duration of the period the debtors have
   obligated themselves to provide the benefits.  To the extent
   Reorganizing Debtors have any retiree benefits to pay,
   including certain travel benefits, they will do so and,
   therefore, Section 1129(a)(13) is satisfied.

Finding that the Amended Plan satisfies the requirements, Judge
Lorch confirmed the Reorganizing Debtors' Amended Plan on
January 31, 2006.

Under the confirmed Plan, unsecured creditors will receive upon
emergence distributions of common stock representing 7% of the
outstanding equity in the newly formed privately held holding
company, which will become the ultimate parent company of ATA
Airlines.  Unsecured creditors will receive warrants to acquire 2%
of the New Common Stock outstanding upon emergence.

Ballots have revealed that a rights offering providing qualifying
Class 6 unsecured creditors the opportunity to purchase
$25,000,000 in value of New Common Stock has been fully
subscribed.  As a result, the qualifying unsecured creditors will
also receive an additional 2% of the New Common Stock.

In addition, the confirmed Plan includes an investment of
$95,000,000 from ATA's new investor, MatlinPatterson, which
consists of:

    (a) $30,000,000 in DIP financing, which will be converted into
        equity upon emergence;

    (b) $45,000,000 to New ATA Holdings Corp., in the form of an
        equity investment, reflecting the full subscription of New
        Common Stock in the rights offering; and

    (c) an additional $20,000,000 of exit debt financing upon
        emergence.

                      Use of Cash Collateral

As part of the last steps in achieving Plan confirmation, ATA
recently finalized certain outstanding agreements relative to the
Plan, including settlement terms on its loan from the Air
Transportation Stabilization Board.

Accordingly, all of the terms and provisions of the ATSB Cash
Collateral Order will continue to apply and govern the
Reorganizing Debtors' use of cash collateral, as well as all of
the parties' rights and obligations, until the occurrence of the
Effective Date.

The Reorganized Debtors anticipate emerging from Chapter 11 by
late February 2006.

                     Objections are Resolved

Three additional parties filed objections to confirmation of the
Plan -- Key Equipment Finance, Inc., Stanfield Capital Partners
LLC, and The Royal Bank of Canada.  To address Key Equipment's
objection, the Debtors promised to amend the cure amounts
disclosed in the Plan.

As previously reported, NatTel, LLC, asserted that the Plan is not
confirmable.

According to the Reorganizing Debtors, NatTel's objection is
entirely without legal or factual merit because, among others,
NatTel is not a creditor of the Reorganizing Debtors and, thus,
has no standing to object to the Amended Plan.

The Official Committee of Unsecured Creditors also points out that
NatTel's Objection is replete with broad, sweeping and repetitive
allegations, wholly lacking in support.  Moreover, none of
NatTel's allegations have any basis in either law or fact.

However, Jack E. Robinson, president of NatTel, LLC, contended
that the Reorganizing Debtors have waived any and all challenges
to NatTel's standing to object to the Amended Plan because they
failed to challenge NatTel's standing to object to the Disclosure
Statement.

The Court overruled the Objections that have not been withdrawn,
waived, or settled.

A full-text copy of the Confirmation Order and the Court's
findings and conclusions of law is available at:

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

                   ATA Looks Forward to Emergence

"Throughout this process, I have never doubted that our employees
were contributing everything they had to making our restructuring
a success," said ATA Chairman, President and CEO John Denison in a
ress release.  "[The] ruling reflects their incredible
accomplishments.  Thanks to their hard work in developing an
effective business plan, ATA has been able to transform itself
into a more viable airline ready to emerge from Chapter 11. I
believe the same efforts our employees applied during this
challenging period will allow us to exceed the expectations of
customers for many years to come."

"Reaching this positive end to the restructuring process is even
more rewarding because it is the result of consensual agreements
reached between ATA, various stakeholders, interested parties and
the Unsecured Creditors' Committee," explained ATA Interim Chief
Financial Officer Frank Conway.  "Reaching such agreements so
quickly is an unusual achievement and has contributed greatly
toward allowing ATA to regain a solid operational and financial
footing in a remarkably short amount of time."

Doug Yakola, who will assume the role of ATA's Chief Financial
Officer upon emergence, agreed with Conway.  "With a strengthened
cash balance thanks to our new investment partner MatlinPatterson,
a substantially lower CASM due to several cost-saving initiatives,
and the right operational plan to leverage our strengths, all the
pieces are in place to help secure the Company's future," said
Yakola.  "As we anticipate emergence, we look forward with a
renewed sense of confidence in ATA's enduring success."

                  Stronger Airline, Fresh Takeoff

The Company notes that the Court's ruling came exactly one week
following its announcement that it is expanding its codeshare
agreement with Southwest Airlines to increase service between
Hawaii and the West Coast and introduce new flights between
Houston and New York.  Earlier in the year, the U.S. Department of
Transportation approved both carriers entering into the seven-year
expanded codeshare agreement as a crucial part of ATA's
restructuring efforts.

"During the restructuring, we've made substantial strides in
identifying broader and more robust sources of revenue through our
enhanced codeshare agreement and strategic route realignment,"
emphasized ATA Executive Vice President and Chief Operating
Officer Subodh Karnik.  "Starting with our announcement of new
service from Houston and increased flights between Hawaii and the
mainland, we will be focusing on taking off in new directions as a
Company that open up our unique brand of convenient business and
leisure travel to thousands more customers across the country.  By
doing so, we will be reinforcing our position as a leading
provider of affordable travel in markets that have been
traditionally underserved by value-based carriers."

The flight additions further detail a strategy previously outlined
in ATA's Plan of Reorganization that accounts for scheduled
service to remain a core element of its operations.  To ensure
profitability, the Company has worked to identify routes that not
only further leverage the codeshare, but that also make efficient
utilization of its aircraft and slot portfolios while enhancing
markets that were historically robust for the carrier.  As
demonstration of its commitment to these priorities as well as its
military charter operations, the Company also recently realigned
its senior leadership team responsibilities to drive down
accountability to every area of its operations.

Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th  
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers.  ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft.  The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations.  Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange.  The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868
through 04-19874).  Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$745,159,000 in total assets and $940,521,000 in total debts.  
(ATA Airlines Bankruptcy News, Issue No. 47; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


AUBURN FOUNDRY: Chapter 7 Trustee Taps Baker as Special Counsel
---------------------------------------------------------------
Rebecca Hoyt Fischer, Esq., the chapter 7 Trustee overseeing the
liquidation of Auburn Foundry, Inc., asks the U.S. Bankruptcy
Court for the Northern District of Indiana for permission to
employ Baker & Daniels LLP as her special counsel.

Baker & Daniels will provide legal services to the chapter 7
Trustee with respect to certain matters involving the bankruptcy
estate and represent the Trustee in all other matters requested by
her in the Debtor's bankruptcy proceeding.  

John R. Burns, Esq., a partner at Baker & Daniels, is one of the
lead attorneys from his Firm performing services to the chapter 7
Trustee.  Mr. Burns charges $375 per hour for his services.

Mr. Burns reports Baker & Daniels' professionals bill:

    Professional          Designation    Hourly Rate
    ------------          -----------    -----------
    Mark Werling          Associate         $240
    Mark F. Juba          Associate         $160
    Jacklyn L. Faulkner   Paralegal         $140

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

Headquartered in Auburn, Indiana, Auburn Foundry, Inc. --
http://www.auburnfoundry.com/-- produces iron castings for the  
automotive industry and automotive aftermarket industry.  The
Company filed for chapter 11 protection on February 8, 2004
(Bankr. N.D. Ind. Case No. 04-10427).  John R. Burns, Esq.,
and Mark A. Werling, Esq., at Baker & Daniels, represent the
Debtor.  When the Company filed for chapter 11 protection, it
listed estimated assets and debts of $10 million to $50 milion.  
The Debtor's chapter 11 case was converted into a chapter 7
liquidation proceeding on Oct. 11, 2005.  Rebecca Hoyt Fischer,
Esq., is the chapter 7 Trustee for the Debtor's estate.  Lewis C.
Laderer, Esq., at Laderer & Fischer, PC represents the chapter 7
Trustee.


AUBURN FOUNDRY: Chap. 7 Trustee Hires Dennis Maude as Consultant
----------------------------------------------------------------
Rebecca Hoyt Fischer, the chapter 7 Trustee overseeing Auburn
Foundry, Inc.'s liquidation, sought and obtained permission from
the U.S. Bankruptcy Court for the Northern District of Indiana to
employ Dennis Maude as her consultant.

Ms. Fischer informs the Court that as the Debtor's former Chief
Financial Officer, Mr. Maude is familiar with the Debtor's books
and records.  His knowledge, Ms. Fischer says, is necessary for
her to perform her duties.

Mr. Maude is expected to:

   a) assist the Trustee with the assembly of documentation
      necessary for the preparation of W-2 forms, 1099 forms, tax
      returns and to address other tax issues;

   b) assist the Trustee's Special Counsel in responding to
      discovery requests in preference recovery actions; and

   c) provide any other documentation or information required by
      the Trustee or Trustee's Special Counsel or Accountant.

Ms. Fischer discloses that Mr. Maude will bill $100 per hour for
his services.

Ms. Fischer assures the Court that Mr. Maude does not represent
any interest adverse to the Trustee or the Debtor.

Headquartered in Auburn, Indiana, Auburn Foundry, Inc. --
http://www.auburnfoundry.com/-- produces iron castings for the  
automotive industry and automotive aftermarket industry.  The
Company filed for chapter 11 protection on February 8, 2004
(Bankr. N.D. Ind. Case No. 04-10427).  John R. Burns, Esq.,
and Mark A. Werling, Esq., at Baker & Daniels, represent the
Debtor.  When the Company filed for chapter 11 protection, it
listed estimated assets and debts of $10 million to $50 milion.  
The Debtor's chapter 11 case was converted into a chapter 7
liquidation proceeding on Oct. 11, 2005.  Rebecca Hoyt Fischer,
Esq., is the chapter 7 Trustee for the Debtor's estate.  Lewis C.
Laderer, Esq., at Laderer & Fischer, PC represents the chapter 7
Trustee.


AUSTIN COMPANY: Committee Hires BBP Partners as Financial Advisor
-----------------------------------------------------------------
The Hon. Pat E. Morgenstern-Clarren of the U.S. Bankruptcy Court
for the Northern District of Ohio authorized the Official
Committee of Unsecured Creditors of The Austin Company and its
debtor-affiliates to retain BBP Partners, LLC, as its financial
advisor, nunc pro tunc to Nov. 21, 2005.

The Committee tells the Bankruptcy Court that BBP is specifically
qualified to provide the services it requires.  BBP is a specialty
accounting and consulting services firm that provides financial
advisory and investigative accounting services to parties in
litigation and bankruptcy.

The Committee needs BBP to assist in evaluating whether the
proposed sale of substantially all of the Debtors' assets is in
the best interest of creditors.  BBP will determine the economics
of the sale, and the advantages and disadvantages of the Debtors'
assumption and assignment of executory contracts, which is
proposed as part of that sale.

In addition, BBP will also:

     -- assist with the procurement and analysis of other
        potential offers for the assets of the Debtors;

     -- analyze other sources of recovery for the Committee;

     -- provide forensic accounting services and evaluations
        regarding pre-petition transactions entered into by the
        Debtors; and

     -- assist in the evaluation or preparation of a plan of
        reorganization for the Debtors.

The lead professionals who will serve in this engagement and their
hourly rates are:

     Professional             Designation           Hourly Rate     
     ------------             -----------           ----------
     Christopher R. Brauser   Partner-in-Charge        $245
                              Bankruptcy and
                              Reorganization
                              Practice

     Robert M. Brlas          Partner and Managing     $295
                              Member

     John Ellis               Director of Valuation    $225
                              Services

The customary hourly rates for BBP's other professionals are:

     Designation                   Hourly Rate
     -----------                   -----------
     Partners                      $245 to $300
     Managers and Directors        $200 to $245
     Senior Analysts               $160 to $200
     Analysts                       $95 to $155
     Other Paraprofessionals        $60 to  $95

Christopher R. Brauser, a partner at BBP, assures the Bankruptcy
Court that his firm does not hold any interest adverse to the
Debtor's estate and is a "disinterested persons" as that term is
defined in Section 101(14) of the Bankruptcy Code.

A full-text copy of the Committee's eight-page engagement letter
is available for a fee at:

     http://www.researcharchives.com/bin/download?id=060203032046

BBP Partners -- http://bbppartners.com/-- is a boutique  
accounting and consulting firm providing financial advisory and
investigative accounting services to parties in litigation,
bankruptcy and other situations.  The firm can be reached at:

           BBP Partners
           Eaton Center
           1111 Superior Avenue
           Suite 1025
           Cleveland, Ohio 44114

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


BCP CRYSTAL: S&P Raises Long-Term Corporate Credit Rating to BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on BCP Crystal US Holdings Corp., a subsidiary of
Celanese Corp., to 'BB-' from 'B+'.  The ratings of related
entities were also raised.  At the same time, Standard & Poor's
raised its recovery ratings on the company's secured credit
facilities to '2' from '3'.
     
All ratings are removed from CreditWatch, where they were placed
with positive implications on Dec. 14, 2005.  The outlook is
stable on this Dallas, Texas-based company.
     
The upgrade of the long-term ratings reflects:

   * Standard & Poor's expectations for stronger earnings in 2006;

   * continued favorable supply and demand fundamentals during the
     next few years in the global market for Celanese's well-
     integrated and leading acetyls business; and

   * the company's plans to strengthen its competitive position in
     acetyls.

"Moreover, improving discretionary cash flows enhance prospects
for meaningful debt reduction, which would help sustain cash
flow protection measures at levels appropriate for the revised
ratings," said Standard & Poor's credit analyst Wesley E. Chinn.
     
The revised recovery ratings indicate the likelihood of
substantial recovery -- 80% to 100% --in a default scenario,
compared with the prospect of meaningful recovery, or 50% to 80%,
under a '3' rating.  The improved recovery rating reflects the
non-use (and subsequent expiration) of a delayed draw term loan
and the elimination of virtually all of the minority shareholders
of Celanese AG (now a subsidiary).
     
The ratings on chemical producer BCP Crystal US Holdings Corp.
reflect:

   * the still considerable debt load of Celanese;

   * the cyclicality of Celanese's businesses; and

   * exposure of operating margins to oil and natural gas-based
     raw materials.

The high debt resulted primarily from borrowings in 2004 to fund
the Blackstone Group's tender offer for the shares of Celanese AG,
a transaction valued at about $3.4 billion.  These weaknesses are
only partially offset by the company's solid business profile as
an integrated producer of diverse commodity and industrial
chemicals, and improving internal funds generation which enhances
the flexibility to reduce debt and make bolt-on acquisitions.
     
With annual revenues of over $6.0 billion, Celanese ranks among
the larger and more diversified global chemical businesses.


BERRY-HILL: Court Okays Continuation of All Insurance Policies
--------------------------------------------------------------
The Honorable Robert E. Gerber of the U.S. Bankruptcy Court for
the Southern District of New York authorized Berry-Hill Galleries,
Inc., and its affiliate, Coram Capital LLC, to:

   a) continue their workers' compensation insurance programs and
      policies; and

   b) pay all their obligations on all other related insurance
      policies and agreements.

Judge Gerber also authorized the Debtors to make all required
premium payments under the Insurance Policies, including, if
necessary, payment of any outstanding prepetition amounts.

The Insurance Policies, the Debtors told Judge Gerber, are
necessary for the survival of their businesses and to avoid
exposure to substantial liability for any damages.

Specifically, the Debtors maintain these Insurance Policies:

   1. a Workers' Compensation Policy;

   2. Liability Insurance Policies;

   3. Property Insurance Policies; and

   4. Art Insurance Policies.

A table listing Berry-Hill's insurance carriers and summarizing
the company's aggregate annual premiums is available for free at
http://ResearchArchives.com/t/s?4f4

Headquartered in New York, New York, Berry-Hill Galleries, Inc.
-- http://www.berry-hill.com/-- buys paintings and sculpture  
through outright purchase or on a commission basis and also
exhibits artworks.  The Debtor and its affiliate, Coram Capital
LLC, filed for chapter 11 protection on Dec. 8, 2005 (Bankr.
S.D.N.Y. Case Nos. 05-60169 & 05-60170).  Robert T. Schmidt, Esq.,
at Kramer, Levin, Naftalis & Frankel, LLP, represents the Debtors
in their restructuring efforts.  When the Debtors filed for
protection from their creditors, they estimated assets between $10
million and $100 million and debts between $1 million and $50
million.


BIRCH TELECOM: Hires Miller Buckfire as Financial Advisor
---------------------------------------------------------
Birch Telecom, Inc. and its debtor-affiliates sought and obtained
authority from the U.S. Bankruptcy Court for the District of
Delaware to employ Miller Buckfire & Co., LLC, as their financial
advisor and investment banker, nunc pro tunc to Nov. 1, 2005.

As previously reported in the Troubled Company Reporter on
Dec. 16, 2005, Miller Buckfire will:

  (a) assist the Debtors in the analysis, design and formulation
      of its various options in connection with a restructuring,
      financing or sale;

  (b) advise and assist the Debtors in the structuring and
      effectuation of the financial aspects of a transaction;

  (c) provide financial advice and assistance to the Debtors in
      developing and seeking approval of a restructuring plan,
      including assisting the Debtors in negotiations with
      entities or groups affected by the plan and participate in
      hearings before the Bankruptcy Court;

  (d) if applicable, provide financial advice and assistance in
      identifying and negotiating with potential purchasers in
      connections with any sale, including preparation of a
      memorandum to be used for solicitation of any potential
      purchasers; and

  (e) if applicable, provide financial advice and assistance in
      identifying and negotiating with potential financing
      sources in connection with any financing, including the
      preparation of a memorandum to be used for solicitation of
      any potential financing sources.

The Firm will receive:

  (a) a $150,000 monthly financial advisory fee commencing as of
      Nov. 1, 2005;

  (b) a restructuring transaction fee or financing fee upon
      consummation of any restructuring or financing, provided
      that 100% of any monthly advisory fee received after
      Oct. 1, 2004, will be credited against any restructuring
      transaction fee or financing fee payable; and

  (c) a sale transaction fee upon consummation of any sale,
      provided that 100% of the fee received after Nov. 1, 2005,
      will be credited against any payable.

The Debtors paid Miller Buckfire $1.9 million for prepetition fees
and expenses.

Qazi M. Fazal, a Managing Director of Miller Buckfire, assures the
Court that his Firm does not hold any interest adverse to the
Debtors or their estates.

Headquartered in Kansas City, Missouri, Birch Telecom, Inc., and
its subsidiaries -- http://www.birch.com/-- own and operate an   
integrated voice and data network, and offer a broad portfolio of
local, long distance and Internet services.  The Debtors provide
local telephone service, long-distance, DSL, T1, ISDN, dial-up
Internet access, web hosting, VPN and phone system equipment for
small- and mid-sized businesses.  Birch Telecom and 28 affiliates
filed for chapter 11 protection on Aug. 12, 2005 (Bankr. D. Del.
Case Nos. 05-12237 through 05-12265).  When the Debtors filed for
protection from their creditors, they estimated more than
$100 million in assets and debts.


BLUE BIRD: Fastest Chapter 11 Reorganization in U.S. History
------------------------------------------------------------
Blue Bird, which manufacturers of the iconic yellow school buses
in the U.S., filed a pre-packaged Chapter 11 plan in the
bankruptcy court in Nevada on Thursday, Jan. 26, 2006.  On Friday,
Jan. 27, 2006, the plan was confirmed, over the objection of one
of the impaired creditors, restructuring approximately $215
million in debt.  The company's stay in bankruptcy lasted about 32
hours, which is the shortest span between the filing of Chapter 11
petitions and confirmation of a reorganization plan of any Chapter
11 case in history.  

Lawyers at Allen & Overy represented The Royal Bank of Scotland
plc (RBS) and Lloyds TSB Bank plc.  

"This is a ground-breaking example of our clients' willingness to
use the entire range of restructuring tools in ever more novel
ways.  But it was not only the company's stay in Chapter 11 that
was record-breaking.  The Chapter 11 plan, senior and junior debt
documentation and restructuring agreement were developed,
documented, negotiated and closed in 10 days of round-the-clock
activity with a diverse lender group located across several time
zones.  In an area of the law that can sometimes require months or
even years of negotiation to arrive at a solution this result is
all the more remarkable," said Peter Schulz, lead Allen & Overy
partner on the deal.

The case arose when Volvo pulled out of talks to acquire Blue Bird
early in January.  The company and its financial advisers informed
the secured lender group that the company could not survive a
traditional Chapter 11 case.  Hence, the need for speed if the
company was to be saved.

RBS and Lloyds TSB, as joint co-ordinators for the secured
lenders, led the negotiations with a diverse lender group,
including UK, European and US institutions and par and distressed
holders.  The Chapter 11 plan involved a partial secured debt to
equity conversion (including cram-down of dissenting lenders),
elimination of the existing equity, no debtor-in-possession
financing, an equity kicker for the exit facility lenders,
amendment of the terms of the unconverted secured debt and a new
priority revolving credit facility for working capital.

                     About Allen & Overy LLP

The Allen & Overy team was led in London by Peter Schulz and David
Frauman, and in New York by Hugh McDonald and Ernie Chung, with
key roles being played by Carolyn Conner, Kathleen Wong, Cara
Hunt, Dorothee Fischer-Appelt, Jennifer Manning and Stephen
Beattie in London, and Marc Bennett, William Westbrook and Kieran
Brenner in New York.  Stephen Fiamma, Joanna Norland, Derek Sloan,
Henry Morgenbesser and Ken Rivlin provided advice on U.S. tax, UK
and U.S. pensions and environmental issues.

Allen & Overy LLP can be reached at:

         Allen & Overy LLP
         1221 Avenue of the Americas
         New York, New York 10020
         Tel: (212) 610-6300
         Fax: (212) 610-6399
         http://www.allenovery.com

Allen & Overy LLP is a limited liability partnership registered in
England and Wales with registered number OC306763. It is regulated
by the Law Society of England and Wales.  Allen & Overy LLP is a
multi-jurisdictional legal practice with lawyers admitted to
practice in a variety of jurisdictions.  The term partner is used
to refer to a member of Allen & Overy LLP or an employee or
consultant with equivalent standing and qualifications. A list of
the members of Allen & Overy LLP and of the non-members who are
designated as partners is open to inspection at its registered
office, One New Change London EC4M9QQ and at the New York address.

                            *   *   *  

Blue Bird Body Company and five affiliates filed for chapter 11
protection on Jan. 26, 2006 (Bankr. D. Nev. Case No. 06-50026).  
Founded in 1927, Blue Bird -- http://www.blue-bird.com/-- has  
nearly 3,000 employees and three facilities in two countries.  The
Debtors also have an extensive network of distributors and service
parts facilities throughout North America.

Jay M. Goffman, Esq., Van C. Durrer II, Esq., and Mark A.
McDermott, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
provided Blue Bird with legal advice and Kroll Zolfo Cooper
provided the company with financial advisory services.


BOYDS COLLECTION: Panel Taps FTI Consulting as Financial Advisors
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in The
Boyds Collection and its debtor-affiliates' chapter 11 proceedings
sought and obtained approval from the U.S. Bankruptcy Court for
the District of Maryland to retain FTI Consulting, Inc., as its
financial advisors, nunc pro tunc to Nov. 14, 2005.

As previously reported in the Troubled Company Reporter on
Dec. 28, 2005, FTI Consulting will:

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

   -- assist with a review of the Debtors proposed key employee
      retention and other critical employee benefit programs;

   -- assist with a review of the Debtors' performance of
      cost/benefit evaluations with respect to the affirmation or
      rejection of various executory contracts and leases;

   -- assist regarding the valuation of the present level of
      operations and identification of areas of potential cost
      savings, including overhead and operating expense
      reductions and efficiency improvements;

   -- assist in the review of financial information distributed
      by the Debtors to creditors and others, including, but not
      limited to, cash flow projections and budgets, cash
      receipts and disbursement analysis, analysis of various
      asset and liability accounts, and analysis of proposed
      transactions for which Court approval is sought;

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

   -- assist in the review or negotiation of any proposals for a
      plan of reorganization;

   -- assist in the review and/or preparation of information and
      analysis necessary for the confirmation of a plan in these
      chapter 11 proceedings;

   -- provide assistance in the evaluation and analysis of
      avoidance actions, including fraudulent conveyances and
      preferential transfers;

   -- assist in the review of potential tax attributes of the
      Debtor; and

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

Steven Simms, Esq., disclosed that his Firm's professionals bill:

      Designation                       Hourly Rate
      -----------                       -----------
      Senior Managing Directors         $560 - $625
      Directors/Managing Directors      $395 - $560
      Associates/Consultants            $195 - $385
      Administration/Paraprofessionals   $95 - $168

Mr. Simms assures the Court that FTI Consulting does not represent
any interest adverse to the Committee.

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.


BROOKLYN HOSPITAL: Meeting of Creditors Continued to Feb. 16
------------------------------------------------------------
The U.S. Trustee for Region 7 rescheduled the meeting of The
Brooklyn Hospital Center and its debtor-affiliate's creditors to
9:00 a.m., on Feb. 16, 2006.  The meeting will be held at 515 Rusk
Street, Suite 3401, in Houston, Texas.

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

Headquartered in Houston, Texas, Global Empire Investments &
Holdings, LLC, filed for chapter 11 protection on Dec. 6, 2005
(Bankr. S.D. Tex. Case No. 05-95389).  Richard L. Fuqua, II, Esq.,
at Fuqua & Keim, represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it estimated assets and debts between $10 million to $50 million.


BURGER KING: Moody's Rates Proposed $350MM Add-On Facility at Ba2
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Burger King
Corporation's (BKC) proposed $350 million senior secured term loan
B add-on facility.  Moody's also affirmed the company's Ba2
corporate family rating as well as the Ba2 rating assigned to
BKC's:

   * $250 million senior secured term loan A;
   * $750 million senior secured term loan B; and
   * $150 million senior secured revolving credit facility.  

In addition, Moody's changed the outlook for BKC to negative from
stable.

Proceeds from the term loan B add-on, along with cash on hand,
will be used to fund a $400 million dividend to private equity
holders.  In addition, Burger King Holdings, Inc. (BKH) recently
announced its intentions to execute an initial public offering in
the latter half of 2006 with the intentions to use the proceeds to
the company from the transaction to reduce outstanding debt at
BKC.

The change in outlook to negative from stable reflects BKC's
weaker credit metrics due in large part to higher debt levels
associated with its proposed dividend initiatives.  Pro forma for
the incremental debt levels and adjusted for operating leases,
leverage on an adjusted debt to EBITDA basis is expected to exceed
6.0x and is not anticipated to fall below 4.0x until fiscal year
2009 based on Moody's assumptions.

The outlook could change back to stable if credit metrics improved
to levels that were more reflective of the current rating level
with:

   * leverage approaching 4.0x,

   * coverage improving towards 3.0x, and

   * retained cash flow less capex to adjusted debt of around 10%
     on a sustained basis.

Although stronger credit metrics will largely be driven by a
sustained improvement in operating performance, BKC could
recognize a greater near term improvement if BKH successfully
executes its proposed initial public offering and the proceeds are
applied to debt reduction at BKC.

Affirmation of the Ba2 corporate family rating and assignment of
the Ba2 senior secured term loan B add-on reflect BKC's:

   * significant brand equity;
   * geographic diversity;
   * improving operating performance; and
   * good liquidity.

However, the ratings also incorporate BKC's relatively weak credit
profile, due in part to:

   * higher debt levels associated with funding its proposed
     dividend;

   * significant competitive pressures;

   * mature operating environment; and

   * relatively aggressive growth plans.

Moody's believes upward ratings momentum from the current Ba2
corporate family rating is unlikely until the company exceeds the
credits metrics referenced above on a sustained basis while
maintaining adequate liquidity.  However, the ratings would be
lowered if a sustained deterioration in same store sales or
average unit volumes lead to persistent weakness or deterioration
in credit metrics or liquidity.

It is Moody's understanding that the $350 million term loan B add-
on will have the same terms and conditions as the existing credit
facility that is currently rated.  Moody's also anticipates that
covenants will be adjusted for the proposed increase in the term
loan B allowing for full access to the company's $150 million
revolving credit.  As of Sept. 30, 2005, there were no
outstandings on the revolving credit facility and the company had
full access to the revolver based on covenants.

Burger King Corporation, with headquarters in Miami, Florida,
operates 1,225 and franchises 9,915, (for an aggregate of 11,141
restuarants worldwide) Burger King hamburger quick service
restaurants in the United States and 66 other countries.  
Corporate revenue for the 2005 fiscal year ending June 30, 2005
was about $1.9 billion and total sales across the Burger King
system were about $12 billion.


BURGER KING: S&P Rates Proposed $350 Million Loan Add-On at B+
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
quick-service restaurant operator Burger King Corp.'s proposed
$350 million add-on to its existing secured term loan B, which
matures in 2012.  The recovery rating on the company's $1.496
billion credit facility was lowered to '3' from '2'.  The rating
and recovery rating indicate the expectation for meaningful (50%-
80%) recovery of principal in the event of a payment default.  At
the same time, Standard & Poor's placed its ratings on Burger
King, including the 'B+' corporate credit and bank loan ratings,
on CreditWatch with positive implications.
     
"The lower bank recovery rating is attributable to the increased
debt the company will have to cover," said Standard & Poor's
credit analyst Diane Shand. Total pro forma funded debt is
approximately $1.4 billion.
     
The ratings are based on preliminary terms and are subject to
change after a review of final documents.  The proceeds from the
debt offering will be used to fund the majority of a $400 million
special dividend to the company's private equity holders.
     
The CreditWatch listing on Miami-based Burger King reflects its
improving operating performance and the company's plans to offset
the majority of the $400 million dividend with proceeds from an
IPO.  The company recently announced plans to file an S-1 with the
SEC for an IPO of its common stock for at least $600 million.  The
proceeds from the IPO will be split between the company and its
investor group (Texas Pacific Group, Bain Capital, and Goldman
Sachs Capital Partners).  Burger King will use the majority of its
proceeds to repay the $350 million add-on to term loan B.
     
If the transaction is successfully completed as proposed, and the
company operating results improve such that leverage falls to less
than 5x in fiscal 2006, all ratings would be raised to a 'BB-' and
a stable outlook would be assigned.  If the company is not
successful with the IPO, ratings would most likely be affirmed at
'B+', with a stable outlook.


CABLEVISION SYSTEMS: S&P Holds Corporate Credit Rating on Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services held its ratings for Bethpage,
New York-based cable TV operator Cablevision Systems Corp. and its
related entities on CreditWatch, with developing implications,
including its 'BB-' corporate credit rating, where they originally
were placed with negative implications on June 20, 2005.
      
"This follows the company's Jan. 31, 2006, announcement in an 8K
filing that it has completed the debt covenant compliance review,
announced on Dec. 19, 2005; while the company has identified
certain technical covenant compliance issues under its CSC
Holdings Inc. and Rainbow National Services LLC credit agreements,
it has obtained waivers from the lenders under these agreements
and amendments have also been made to the Rainbow National
Services loan agreement," said Standard & Poor's credit analyst
Catherine Cosentino.
     
Waivers also have been obtained for certain monetization
transactions affected by the CSC Holdings covenant compliance
issues.  While the company is now in compliance with its various
credit arrangements, at this point it has not yet addressed the
upcoming refinancing of approximately $1.5 billion maturing in
June 2006 under the CSC Holdings bank facility.

In addition, Cablevision indicated in its 8K filing that the board
of directors will reconsider initiation of a possible special
dividend at its regularly scheduled March meeting.  The ratings
have been on CreditWatch since June 20, 2005, first with negative
implications and subsequently developing implications.  The latter
revision occurred on Dec. 20, 2005, when the corporate credit
rating was lowered to 'BB-' from 'BB' to reflect heightened
concern for a potential near-term default under its bank
agreements, and the implications changed to developing.  At that
time, the company had indicated in an 8K filing that it had
committed certain technical covenant violations under its CSC
Holdings bank credit agreement and may have breached certain
covenants under other debt instruments.
     
While Standard & Poor's does not know the size of any potential
special dividend, the rating agency notes that on Dec. 2, 2005, it
indicated that the company's 'BB' rating at the time could absorb
a fully debt funded $3 billion special dividend, given the level
of on-going operating cash flows generated predominately by its
cable TV operations.  However, failure to secure refinancing for
the upcoming bank maturity in a timely manner could result in a
downgrade.  Conversely, if the company addresses the maturity
overhang, given the strength of its cable TV business, ratings
could be raised back to 'BB'.  


CAREMORE HOLDINGS: Moody's Assigns B2 Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating to
CareMore Holdings, Inc.  Previously, the rating agency had
assigned a B2 senior debt rating to CareMore's proposed $150
million senior secured bank credit facility.  The outlook on all
the ratings is stable.

Moody's says that the B2 corporate family rating reflects:

   * CareMore's dependence on the Medicare Advantage product;

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

   * its limited track record;

   * the change occurring in the leadership at the company; and

   * the sustainability of the company's unique model to control
     healthcare costs for an extended period of time.

However, the rating also recognizes the strong Medicare market
that currently exists and the potential for strong returns should
the provisions of the Medicare Modernization Act with respect to
government reimbursement levels remain intact.  The rating agency
added that the rating also reflects the company's commitment for
debt repayment of only 50% of excess cash flow, and an NAIC risk-
based capital ratio below 100% of company action level.

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:

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

   * 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.

CareMore Holdings, Inc. will be headquartered in Downey,
California.  As of Sept. 30, 2005, California Health Plan,
CareMore's operating subsidiary, reported 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.

Information about Moody's and Standard & Poor's rating of
CareMore's $150 million senior secured bank credit facility
appeared in the Troubled Company Reporter on Jan. 24, 2006.


CATHOLIC CHURCH: Tucson Parish Incorporation Nearly Completed
-------------------------------------------------------------
Bob Scala of The New Vision, a monthly newspaper of the Diocese of
Tucson, reports that the articles of incorporation for all 74
parishes in the Diocese were filed with the Secretary of State in
November 2005.  In December 2005, the articles of incorporation
for each parish were published in a newspaper of record in the
county where that parish is located.

The formal incorporation process will be complete once the Arizona
Corporation Commission has received copies of the actual
publication copy of the articles.  That process may already be
completed.  

Mr. Scala says the next and last big step will be the deeding of
the properties of each parish to that parish, which must be
accomplished by April 15, 2006.  The properties are presently held
in trust by the Diocese for the parishes.

The Roman Catholic Church of the Diocese of Tucson filed for
chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on
September 20, 2004, and delivered a plan of reorganization to the
Court on the same day.  Susan G. Boswell, Esq., Kasey C. Nye,
Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson
Diocese.  (Catholic Church Bankruptcy News, Issue No. 51
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CCH II: Fitch Assigns CCC+ Rating to $450 Million Senior Notes
--------------------------------------------------------------
Fitch Ratings assigned a 'CCC+' rating and 'RR3' Recovery Rating
to the $450 million of 10.25% senior notes due 2010 issued by CCH
II, LLC, in a private transaction.  CCH II, LLC, is an indirect
subsidiary of Charter Communications, Inc.  The proceeds from the
issuance are expected to be used to repay borrowings under the
Charter Communications Operating, LLC, credit facility.

In addition, Fitch has placed Charter's 'CCC' Issuer Default
Rating and the individual issue ratings of Charter and its
subsidiaries on Rating Watch Negative.  Approximately $19.1
billion of debt is affected by Fitch's action.

Fitch's rating action reflects Charter's precarious liquidity
position beyond 2006, which increases the default risk associated
with Charter's credit profile and downward pressure on recovery
prospects.  Fitch acknowledges that CCH II, LLC's issuance of $450
million in senior notes improves Charter's near-term liquidity
profile by increasing the available borrowing capacity under
Charter Communications Operating, LLC's revolver from $648 million
(as of the end of third-quarter 2005) to approximately $1 billion
(pro forma for the issuance as of the end of third-quarter 2005).

Fitch believes that entering 2006, Charter will have approximately
$1.4 billion (which aggregate availability is subject to maximum
leverage covenants) of available liquidity between its revolver
and the $435 million senior bridge loan at CCO Holdings, LLC,
which should be sufficient to fund operational and debt service
requirements during 2006.  Given the company's increasingly
untenable capital structure that will require additional cash to
service a growing amount of cash interest expense and ongoing
capital expenditures, Fitch expects Charter to generate negative
free cash flow through 2007.

From Fitch's perspective the company's financial flexibility is
becoming more constrained and the company does not have sufficient
liquidity resources in place to meet its business and debt service
requirements beyond 2006.  Given Charter's existing corporate
structure, Charter's ability to raise financing at its various
intermediate holding companies is becoming increasingly limited
due to additional indebtedness covenants.  Charter's liquidity
position will be further pressured during 2007 by $385 million of
scheduled maturities consisting of $280 million of bank debt and
the maturity of Charter Communications Holdings, LLC, 8.25% notes
due 2007.

The Rating Watch Negative also incorporates the downward pressure
on recovery prospects for bondholders, reflecting asset valuations
and expected increases in outstanding debt, which could lead to a
lowering of the Recovery Ratings assigned across Charter's capital
structure.

In resolving the Negative Rating Watch, the company will need to
demonstrate sufficient financial flexibility and have liquidity
resources in place that will satisfy the company's 2007 cash
requirements.

Overall, Fitch's current ratings for Charter reflect the company's
highly levered balance sheet and the absence of any prospects to
meaningfully de-lever its balance sheet over the near term.
Additionally, the ratings incorporate Fitch's expectation that
Charter will continue to generate negative free cash flow given:

   * the company's operating profile;

   * ongoing capital expenditures; and

   * the increasing cash interest requirements on debt that has
     converted or is scheduled to convert to cash interest
     payment.

Moreover, Fitch's ratings continue to incorporate the competitive
threat posed by the direct broadcast satellite operators, ILECs,
and new industry participants.


COATES INTERNATIONAL: Posts $202K Net Loss in Third Quarter
-----------------------------------------------------------
Coates International, Ltd., delivered its financial results for
the quarter ended Sept. 30, 2005, to the Securities and Exchange
Commission on Jan. 27, 2006.

Coates reported a $202,478 net loss for the three months ended
Sept. 30, 2005, compared to $165,136 of net income for the
corresponding three-month period in 2004.  The net loss for the
three-month period ended Sept. 30, 2005 included the Company's
share of losses  based on its equity ownership in Coates
Motorcycle amounting to $54,059.

No revenues were generated during the three-month periods ended
Sept. 30, 2005 and 2004.

The Company's balance sheet at Sept. 30, 2005, showed $2,335,473
in total assets and liabilities of $2,926,796, resulting in a
$591,323 stockholders' deficit.

Coates working capital deficit of $1,669,180 at Sept. 30, 2005,
represents a $394,965 or 58% increase over the $676,949 working
capital deficit position at Sept. 30, 2004.

                 Going Concern Doubt

Rosenberg Rich Baker Berman & Company expressed substantial doubt
about Coates' 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 lack of operating revenue, substantial losses and
limited capital resources.

Coates International, Ltd. -- http://www.coatesengine.com/-- has  
completed the development of a spherical rotary valve SRV Engine,
the development of which was  initiated by its founder, George J.
An engine equipped with the CSRV can run on any number of fuels
while reducing emissions and increasing efficiency.  The Company
plans to license its CSRV engine technology to makers of heavy-
duty vehicles, automobiles, and industrial engines.  CIL owns 30%
of former subsidiary Coates Motorcycle Co., which plans to market
a V-twin bike powered by CSRV technology.


CONSUMERS TRUST: Hires Katten Muchin as Bankruptcy Counsel
----------------------------------------------------------
The Consumers Trust sought and obtained authority from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Katten Muchin Rosenman LLP, as its bankruptcy counsel.

As reported in the Troubled Company Reporter on Dec. 9, 2005,
Katten Muchin will:

   a) advise the Debtor with respect to its powers and duties as
      debtor-in-possession in the continued management of its
      business;

   b) work with the other professionals retained in this case to
      ensure an efficient chapter 11 process in the United States
      and Canada;

   c) attend meetings and negotiate with creditors and other
      parties-in-interest and advise and consult on the conduct
      of the case, including all of the legal and administrative
      requirements of operating in chapter 11;

   d) take all necessary actions to maximize the value of the
      Debtor's estate, including the prosecution of actions on
      the Debtor's behalf, the defense of any actions commenced
      against the estate, negotiations concerning litigation in
      which the Debtor may be involved, and objections to claims
      filed against the estate;

   e) prepare motions, applications, answers, orders, reports and
      papers necessary to the administration of the estate;

   f) negotiate and prepare the plan of reorganization,
      disclosure statement and related agreements and documents
      and taking any necessary actions on behalf of the Debtor to
      obtain confirmation of such plan;

   g) appear before this Court, any appellate courts, and the
      U.S. Trustee to protect the interests of the Debtor's
      estate; and

   h) perform other necessary legal services in connection with
      the prosecution of this chapter 11 case.

Jeff J. Friedman, Esq., a Katten Muchin partner, discloses the
Firm's professionals hourly rates:

           Professional               Hourly Rate
           ------------               -----------
           Partners                   $305 - $725
           Counsel                    $345 - $625
           Associates                 $170 - $435
           Paraprofessionals          $100 - $300

The Firm received a $250,000 retainer prior to the Debtor's
chapter 11 filing.

Mr. Friedman assures the Court that Katten Muchin is a
"disinterested person" as that term is defined in sections 101(14)
and 327 of the bankruptcy code.

Headquartered in London, England, The Consumers Trust filed for
chapter 11 protection on Dec. 5, 2005 (Bankr. S.D.N.Y. Case No.
05-60155).  Jeff J. Friedman, Esq., at Katten Muchin Rosenman LLP,
represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it estimated
between $1 million to $10 million in total assets and more than
$100 million in total debts.


COVALENCE SPECIALTY: S&P Rates Proposed $175 Million Loan at B-
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' rating and a
recovery rating of '3' to Covalence Specialty Materials Corp.'s
proposed $175 million second-priority senior loan due 2013, based
on preliminary terms and conditions.  These ratings denote the
likelihood that lenders to the second-priority senior loan would
experience meaningful recovery of principal (50%-80%) in a payment
default scenario.

At the same time, ratings on the company's proposed $200 million
second-priority senior secured floating-rate notes due 2013 were
withdrawn to recognize changes made to the company's pending
financing plans.  Additional changes include:

   * an increase to the company's proposed senior secured first-
     lien term loan to $350 million from $325 million; and

   * a reduction in the amount of the proposed senior subordinated
     notes to $265 million from $295 million.
     
At the same time, Standard & Poor's affirmed all ratings,
including its 'B' corporate credit rating, that were assigned on
Jan. 26, 2006.  The outlook remains positive.  Transaction
proceeds will be used to finance the equity sponsor-led
acquisition and related fees and expenses.  Pro forma for the
transaction, Princeton, New Jersey-based Covalence had total debt
outstanding of about $790 million at Dec. 31, 2005.
     
In December 2005, Apollo Management L.P. entered into a definitive
agreement to purchase the plastics and adhesives businesses of
Tyco International Ltd. (BBB+/Watch Neg/A-2) for $945 million.  If
completed as proposed, the financing plan will include:

   * $700 million in senior secured credit facilities (including a
     $175 million revolving credit facility, a $350 million first-
     lien term loan B, and a $175 million second-priority senior
     loan due 2013);

   * $265 million senior subordinated notes due 2016; and

   * $205 million in equity and perpetual preferred stock
     contribution from Apollo and management.

The transaction should close in the first calendar quarter of
2006, subject to customary closing conditions.
      
"Ratings could be raised in the intermediate term if the company
establishes a track record of earnings improvement and free cash
flow generation, successfully establishes itself as a stand-alone
entity, and demonstrates its commitment to maintain debt at
manageable levels," said Standard & Poor's credit analyst Liley
Mehta.
     
The ratings reflect Covalence's vulnerable business risk profile
incorporating its:

   * exposure to industrial and other end markets tied to general
     economic activity;

   * potential vulnerability to volatile raw-material costs if
     business conditions weaken;

   * challenges associated with operating as a stand-alone
     company, aggressive debt leverage; and

   * low operating margins that reflect a moderate dependence on
     commodity-like products.

These negative factors outweigh the benefits of:

   * leading market positions in various plastic films market
     segments;

   * considerable scale; and

   * decent product and customer diversity.
     
With pro forma revenues of about $1.7 billion, Covalence is among
the largest producers of plastic film products in North America.


CSC HOLDINGS: Fitch Affirms Low-B Ratings With Negative Outlook
---------------------------------------------------------------
Fitch Ratings affirmed and removed from Rating Watch Negative the
ratings for CSC Holdings, Inc.

  CSC:

   -- Issuer Default Rating (IDR) 'B+'
   -- Senior secured bank facility 'BB/RR1'
   -- Senior unsecured debt 'BB-/RR3'
   -- Senior subordinated debt 'B/RR5'

CSC's Rating Outlook is Negative.  Approximately $8.6 billion of
CSC debt (as of Sept. 30, 2005) is affected by Fitch's action.

Fitch's rating action follows CSC's announcement that it has
concluded its debt covenant review, which was initiated on
Dec. 19, 2005 and identified additional covenant compliance issued
under the company's bank agreement related to monetization
transactions and interest rate swaps.  CSC indicates that it has
received the necessary waivers from the lenders party to the bank
agreement and that the company and its subsidiaries are in
compliance with all of their debt agreements and instruments.

CSC also announced that its board of directors will once again
consider the payment of a special dividend at its regularly
scheduled meeting in March. Fitch downgraded CSC's IDR on
Dec. 15, 2005, reflecting the company's decision to materially
increase its leverage to fund the special dividend to Cablevision
System Corporation's common shareholders.  Fitch believes that the
board will reach a similar conclusion upon reconsideration of the
special dividend in March.

Fitch originally placed CSC on Rating Watch Negative on
Dec. 19, 2006, following disclosure that the company had violated
technical covenants contained in CSC's $2.4 billion bank facility
and has potentially violated technical covenants contained in
other debt instruments.


DELTA AIR: Appoints Ernst & Young as Auditors for Fiscal 2006
-------------------------------------------------------------
Delta Air Lines (Other OTC:DALRQ) reported that the audit
committee of its Board of Directors selected Ernst & Young LLP
as the company's independent auditors for the fiscal year ending
Dec. 31, 2006.

The audit committee annually considers the selection of Delta's
independent auditors.  The selection followed a competitive bid
process, which included proposals by large accounting firms.  The
audit committee selected Ernst & Young because of its experience
both with airlines and companies involved in reorganization
proceedings.

Its current independent auditors, Deloitte & Touche LLP, are
completing the audit of Delta's financial statements for the
fiscal year ended Dec. 31, 2005.  The change for fiscal 2006 was
not the result of any disagreement between Delta and Deloitte &
Touche on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure or
any decision by Deloitte & Touche to resign or refuse to stand for
re-election.

"We believe that Ernst & Young, with its relevant experience, is
the appropriate professional firm for Delta's current needs,"
Edward H. Bastian, Delta's Executive Vice President and Chief
Financial Officer, said.  "We appreciate the efforts of Deloitte &
Touche over the last several years."

Delta's engagement of Ernst & Young as the company's independent
auditors for 2006 is subject to bankruptcy court approval.  
Accordingly, Delta will file a retention application on the
appointment of Ernst & Young with the bankruptcy court.

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.


DENNIS SPIELBAUER: Case Summary & 6 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Dennis S. Spielbauer
        P.O. Box 720835
        San Jose, California 95172

Bankruptcy Case No.: 06-50153

Chapter 11 Petition Date: February 3, 2006

Court: Northern District of California

Judge: Arthur S. Weissbrodt

Debtor's Counsel: David A. Boone, Esq.
                  LODAB PC
                  1611 The Alameda
                  San Jose, California 95126
                  Tel: (408) 291-6000
                  Fax: (408) 291-6016

Estimated Assets: $10 Million to $50 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 6 Largest Unsecured Creditors:

   Entity                        Claim Amount
   ------                        ------------
Cal Coast Credit Services              $2,739
2906 McBride Lane
Santa Rosa, CA 95403

Washington Mutual                      $2,485
540 E. Main Street
Stockton, CA 95020-3030

ER Solutions                             $739
800 SW 39th Street
Renton, WA 98055

Bally Total Fitness                      $232
12440 E. Imperial, Suite 3
Norwalk, CA 90650

Professional Recovery                     $68
3005 Almaden Expressway
San Jose, CA 95118-1202

U.S. Attorney General                 Unknown
Civil Trial Sec. Western
P.O. Box 683 Ben Franklin
Washington, D.C. 20044


DOCTORS HOSPITAL: Files 2nd Amendment to DIP Financing Facility
---------------------------------------------------------------
Doctors Hospital 1997, L.P., asks the U.S. Bankruptcy Court for
the Southern District of Texas, to approve a second amendment to
its DIP Financing Facility.  The Second Amendment extends the term
of the Debtor's loan agreements with GE HFS Holdings, Inc., and
Bruckmann, Rosser, Sherrill & Co., L.P., through March 31, 2006.  
Additionally, the Debtor provided the DIP Lender with a [non-
public] Cash Flow Budget for the 26-week period beginning
Jan. 27, 2006.

The Debtor reminds the Court that under to the terms of the GE DIP
Loan Agreement, it was allowed to borrow an amount determined
pursuant to a Borrowing Base, plus $4,000,000 of Overadvances.  In
December 2005, the Debtor experienced a liquidity crisis and was
forced to ask for additional funds from GE HFS.  The Debtor and GE
HFS negotiated a first amendment to the DIP Agreement under which
GE HFS allowed the Debtor to borrow an additional $625,000.  That
agreement, the Debtor says, along with a loan from Bruckmann
Rosser, expired on Jan. 31, 2006.

Joshua W. Wolfshohl, Esq., at Porter & Hedges, L.L.P., in
Houston, Texas, tells the Court that the Debtor needs continued
financing under the GE DIP Loan Agreement and the BRS DIP Note to
allow it to continue to operate its hospitals.  "Absent the
proposed extension, the Debtor will be forced to curtail
substantially all of its normal operations with concomitant harm
to the value of its business, to say nothing of the immediate
public health risk such a curtailment would engender when the
Debtor lacks the funds necessary to provide for the care and
comfort of the patients residing in its hospitals," Mr. Wolfshohl
relates.  

The Second DIP Amendment also provides:

    -- with respect to leased property located at 510 West
       Tidwell in Houston, Texas, the Debtor stipulates to the
       arrearages under the Lease and promises to pay
       $100,000 per month to Healthcare Financial Services,
       L.L.C., GE HFS' affiliate who purchased the Tidwell
       Property and the current lessor of the property lease;

    -- for limitations disbursements by the Debtor during the
       extended term of the DIP Loan Agreement, in accordance
       with the Cash Flow Budget; and

    -- for the Debtor to pay a $16,500 extension fee as
       partial consideration for GE extending the DIP Loan  
       Agreement and entering into the Second Amendment.

A full-text copy of the Second Amendment to the Debtor's
DIP Financing Facility is available at no charge at
http://ResearchArchives.com/t/s?4f5

Headquartered in Houston, Texas, Doctors Hospital 1997 LP, dba
Doctors Hospital Parkway-Tidwell, operates a 101-bed hospital
located in Tidwell, Houston, and a 152-bed hospital located in
West Parker Road, Houston.  The Company filed for chapter 11
protection on April 6, 2005 (Bankr. S.D. Tex. Case No. 05-35291).  
James M. Vaughn, Esq., at Porter & Hedges, L.L.P., represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed total assets of
$41,643,252 and total debts of $66,306,939.


DOMTAR INC: Posts $298 Million Net Loss in 2005 Fourth Quarter
--------------------------------------------------------------
Domtar Inc. reported a net loss of $298 million in the fourth
quarter of 2005 compared to a net loss of $26 million in the
fourth quarter of 2004 and a net loss of $52 million in the third
quarter of 2005.

The Company also recorded sales of $1.4 billion in the fourth
quarter of 2005 compared to sales of $1.2 billion in the fourth
quarter of 2004.

At Dec. 31, 2005, assets totaled $4.4 billion and liabilities
totaled $3.1 billion, resulting to a stockholders' equity of $1.3
billion.

"In November 2005, faced with a number of economic conditions that
adversely impacted our business, such as higher energy prices and
the rapid rise of the Canadian dollar, we announced a plan aimed
at returning the Company to profitability as quickly as possible,"
Raymond Royer, Domtar's President and Chief Executive Officer,
said.  "This plan included permanent closures of mills and paper
machines, which will mean an 18% reduction in our work force.  
Although the plan is on schedule, our fourth quarter performance
was hit with a restructuring charge of approximately $400 million.  
Additional restructuring costs of approximately $80 million will
occur over the next few years."

For the full year of 2005, Domtar recorded a net loss of $333
million compared to a net loss of $42 million in 2004.

For the full year of 2005, the Company recorded sales of $4.6
billion compared to sales of $5 billion in 2004.

Free cash flow declined by $116 million in 2005 compared to 2004.  
This deterioration mainly reflects a decline in profitability as
well as increased requirements for working capital.

Based in Montreal, Quebec, Domtar Inc. -- http://www.domtar.com/
-- is the third largest producer of uncoated freesheet paper in
North America.  It is also a leading manufacturer of business
papers, commercial printing and publication papers, and technical
and specialty papers.  Domtar manages according to internationally
recognized standards 18 million acres of forestland in Canada and
the United States, and produces lumber and other wood products.  
Domtar has 10,000 employees across North America.  The company
also has a 50% investment interest in Norampac Inc., the largest
Canadian producer of containerboard.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 14, 2005,
Moody's Investors Service downgraded Domtar Inc.'s corporate
family and senior unsecured debt ratings to B1 from Ba2.  The
outlook is negative.  

Ratings downgraded:

Outlook: Negative

   * Corporate family rating: to B1 from Ba2
   * Senior unsecured notes and debentures: to B1 from Ba2
   * Senior Unsecured Shelf: to (P)B1 from (P)Ba2


DRS TECHS: S&P Affirms Corporate Credit Rating With Neg. Outlook
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on DRS
Technologies Inc., including the 'BB-' corporate credit rating,
and removed the ratings from CreditWatch, where they were placed
with negative implications on Sept. 22, 2005.  The affirmation,
which was originally indicated on Nov. 7, 2005, reflects the
acquisition of Engineered Support Systems Inc. (ESSI) on terms
similar to those originally presented to Standard & Poor's.  The
ratings on the new $700 million credit facility and $900 million
of new public debt securities were not on CreditWatch and are not
affected.  The outlook is negative.
      
"The $2 billion, largely debt-financed acquisition is expected to
result in improved customer and program diversity," said Standard
& Poor's credit analyst Christopher DeNicolo.  "However, the
improved business risk profile is offset somewhat by the increase
in leverage and deterioration in cash flow protection measures,"
the analyst continued.  

The rating assumes no significant debt-financed acquisitions for
at least the next year.
     
The $43 per share purchase consideration was paid 70% in cash and
30% in DRS stock.  The $1.3 billion cash portion, including fees
and expenses and repaying bank debt at DRS and ESSI, was financed
with cash on hand and the proceeds from the new credit facility
and new public debt securities.
     
The ratings on Parsippany, New Jersey-based DRS reflect:

   * high debt leverage;

   * participation in the competitive defense electronics market;
     and

   * integration risks of an active acquisition program.

These factors are partly offset by the generally favorable
environment for defense spending and the company's leading
positions in niche markets.
     
DRS is a supplier of defense electronics products and systems,
providing:

   * naval combat display workstations,
   * thermal imaging devices,
   * electronic sensor systems,
   * mission recorders, and
   * deployable flight incident recorders.

The business environment for military contractors is generally
favorable due to high levels of spending for both the military and
homeland security, especially for defense electronics products.
ESSI, which will comprise the new Services and Support Group,
provides support and logistics services related to military
sustainment and also designs and manufactures integrated military
electronics and support equipment.  Pro forma funded backlog for
the combined company is around $2.5 billion.
     
The acquisition of ESSI will result in weaker credit protection
measures in the near term due to higher leverage.  The failure to
reduce leverage as expected or material integration problems could
result in a downgrade.  The current ratings also assume no
significant debt-financed acquisitions for at least the next year.
The outlook could be revised to stable if debt is reduced faster
than current expectations.


ERA AVIATION: Court Okays Continued Use of Cash Collateral
----------------------------------------------------------
The Hon. Donald MacDonald IV of the U.S. Bankruptcy Court for the
District of Alaska authorized Era Aviation, Inc., to continue
using cash collateral securing repayment of its prepetition
obligations to CapitalSource Finance, LLC.

The Debtor can use CapitalSource's cash collateral from Jan. 7,
2006, through Feb. 17, 2006, in accordance with a six-week budget.  
A copy of that budget is available for free at:

           http://researcharchives.com/t/s?4f8

As adequate protection for any diminution in the value of the
CapitalSource's collateral, the Debtor grants CapitalSource a
postpetition lien on the cash collateral, and on all of its
postpetition assets, including all assets in which CapitalSource
holds a valid and perfected prepetition lien.  The lien will be
retroactive to the time of commencement of the Debtor's Chapter 11
case, and will cover all property that exists as of the
termination of the order.

If the postpetition lien granted does not provide CapitalSource
with collateral of a value equal to the value of any cash
collateral consumed by the Debtor, Judge MacDonald rules that
CapitalSource will have an administrative claim under Section
507(a)(1) of the Bankruptcy Code for that shortfall.

Except for the postpetition lien provision, Judge MacDonald
clarifies that no additional liens or payments by the Debtor are
required for purposes of adequate protection at this time.

Judge MacDonald also directs the Debtor to file weekly cash flow
statements that accurately compare the weekly cash flow with the
actual cash flow for each week.  The weekly statements must be
filed no later than February 8th, 15th and 22nd and e-mailed to
CapitalSource's counsel.

A final hearing to consider use of cash collateral beyond Feb. 17
will be held on Feb. 14, 2006 at 10:00 a.m.

Headquartered in Anchorage, Alaska, Era Aviation, Inc. --
http://www.flyera.com/-- provides air cargo and package express  
services.  The Debtor filed for chapter 11 protection on Dec. 28,
2005.  Cabot C. Christianson, Esq., at Christianson & Spraker,
represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it estimated
assets and debts between $10 million and $50 million.


ESCHELON TELECOM: S&P Puts CCC+ Preliminary Rating on Securities
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
rating of 'CCC+' to the debt securities under a $150 million
universal shelf registration by Eschelon Telecom, Inc., filed
on Feb. 1, 2006.
      
"This rating is only for the senior second secured debt securities
at the company's Eschelon Operating Co. intermediate holding
company, and is based on the current capital structure and assumes
no material priority obligations including first lien debt," said
Standard & Poor's credit analyst Allyn Arden.

At the same time, Standard & Poor's affirmed its 'CCC+' corporate
credit rating on Eschelon.  The outlook remains positive.
     
The ratings on Minneapolis, Minnesota-based competitive local
exchange carrier Eschelon Telecom Inc. reflect the company's
vulnerable business position resulting from, among other factors,
the highly competitive nature of the competitive local exchange
carrier (CLEC) business, including substantial competition from
the regional Bell operating companies.  

Additionally, the ratings incorporate Eschelon's limited liquidity
and negative discretionary cash flow generation.  Tempering
factors include the company's low cost structure and flexibility
with respect to capital spending.  Total debt was approximately
$97 million as of Sept. 30, 2005.


EXIDE TECHS: S&P Lowers Corporate Credit Rating to CCC form CCC+
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Exide Technologies to 'CCC' from 'CCC+' because of
Exide's continued poor operating performance and rising debt
leverage.  Alpharetta, Georgia-based Exide, a manufacturer of
automotive and industrial batteries, has total debt of about $837
million and underfunded postemployment benefit liabilities of
about $400 million.
     
The senior secured rating on Exide's recently enlarged first-lien
credit facility was lowered to 'CCC' from 'B-', and the recovery
rating was lowered to '2' from '1', because of the lower corporate
credit rating and the weaker asset protection for the enlarged
facility.  The senior secured rating and the recovery rating
reflect Standard & Poor's expectation that lenders will realize a
substantial recovery of principal (80%-100%) in the event of
default or bankruptcy.
     
The senior secured rating on Exide's second-lien notes was lowered
to 'CC' from 'CCC', reflecting the lower corporate credit rating
and an increase in priority debt.
      
"Exide expects to report lower earnings for its third quarter
ended Dec. 31, 2005, than it did in the same quarter last year,"
said Standard & Poor's credit analyst Martin King.  "The shortfall
is a result of lower sales in the company's transportation
segment, a sharp rise in lead prices to new historic highs, and
unfavorable exchange rate movements.  Although the company has
undertaken initiatives to increase product prices, earnings will
likely continue to be depressed in the fourth quarter and in
fiscal 2007 (ending March 31, 2007)."
     
Weak cash flow has forced the company to increase the size of its
first-lien secured credit facility by $47.6 million to provide
much-needed liquidity.  Meanwhile, lenders have eliminated
scheduled amortization requirements and relaxed financial covenant
requirements.  Still, debt leverage has increased because of the
company's higher debt levels and weaker earnings.  Debt to EBITDA
is estimated at about 7x, and this will not meaningfully decline
in the near term given the company's negative cash flow.  Exide
also has substantial underfunded postemployment benefit
obligations that require about $35 million of funding each year.


FLEET COMMERCIAL: Notes Payment Prompts S&P to Withdraw Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on the
class A-2, B-1, B-2, C-1, C-2, D-1, and D-2 notes issued by Fleet
Commercial Loan Master LLC series 2000-1, a balance sheet
corporate CLO transaction.

The rating withdrawals follow the full redemption of these notes
on the Nov. 16, 2005, payment date.
   
Ratings withdrawn:
   
          Fleet Commercial Loan Master LLC series 2000-1
   
                       Rating             Balance (mil. $)
        Class      To         From    Previous    Current
        -----      --         ----    --------    -------
        A-2        NR         AAA      830.100      0.000
        B-1        NR         A         39.900      0.000
        B-2        NR         A         32.600      0.000
        C-1        NR         BBB       45.600      0.000
        C-2        NR         BBB       37.300      0.000
        D-1        NR         BB        21.700      0.000
        D-2        NR         BB        17.700      0.000


FOSS MANUFACTURING: Trustee Wants Jenifer Smyth's Contract Voided
-----------------------------------------------------------------
Patrick J. O'Malley, the chapter 11 Trustee for Foss Manufacturing
Company, Inc., asks the Honorable Mark W. Vaughn of the U.S.
Bankruptcy Court for the District of New Hampshire to release the
Debtor from its five-year contract with Jenifer Smyth, daughter of
the company's former CEO Stephen Foss, Patrick Cronin of the
Hampton Union reports.

Ms. Smyth signed on as the company's director of marketing in
August 2005, receiving, Mr. Cronin relates:

    (a) an annual salary of $104,000 plus a guaranteed 3% increase
        per year;

    (b) participation in an incentive plan where she could earn up
        to 30% of her salary; and

    (c) 60% reimbursement of her health club membership dues.

"In light of the fact that the debtor's bankruptcy estate does not
require her services, rejection of the employment agreement is
appropriate," Mr. O'Malley states in court documents Mr. Cronin
reviewed.

Headquartered in Hampton, New Hampshire, Foss Manufacturing
Company, Inc. -- http://www.fossmfg.com/-- is a producer of
engineered, non-woven fabrics and specialty synthetic fibers, for
a variety of applications and markets.  The Company filed for
chapter 11 protection on Sept. 16, 2005 (Bankr. D.N.H. Case No.
05-13724).  Andrew Z. Schwartz, Esq., at Foley Hoag LLP represents
the Debtor in its restructuring efforts.  When the Debtor filed
for protection from its creditors, it listed $49,846,456 in assets
and $53,419,673 in debts.


GARDEN STATE: Has Until April 6 to File Chapter 11 Plan
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey extended
until April 5, 2006, the period within which Garden State MRI
Corporation has the exclusive right to file a chapter 11 plan.  
The Court also gave the Debtor more time to solicit acceptances of
that plan from their creditors, until June 5, 2006.

The extension will give the Debtor more time to continue to
stabilize its business and to continue to implement its long-term
business plan in order to complete negotiations for a
reorganization plan with its creditors.  The extension will also
allow the Debtor to pursue and formulate a feasible reorganization
plan.

Headquartered in Vineland, New Jersey, Garden State MRI
Corporation, dba Eastlantic Diagnostic Institute --
http://www.eastlanticdiagnostic.com/-- operates an out-patient  
imaging and radiology facility.  The Company filed for chapter 11
protection on June 9, 2005 (Bankr. D. N.J. Case No. 05-29214).
Arthur Abramowitz, Esq. and Jerrold N. Poslusny, Jr., Esq., at
Cozen O'Connor, represent the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
estimated assets of less than $50,000 and estimated debts between
$10 million to $50 million.


GARDEN STATE: Has Until March 15 to Decide on New Jersey Lease
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey extended
until Mar. 15, 2006, the time within which Garden State MRI
Corporation can elect to assume, assume and assign, or reject its
unexpired nonresidential real property lease.

The Debtor leases office space located at 1170 East Landis
Avenue in Vineland, New Jersey, from Daystar Concepts, Inc.

The Debtor tells the Court that it needs more time to fully
explore its options and complete negotiations.

According to the Debtor:

   1) a premature decision to reject the lease would have a
      detrimental affect on patients in the community who rely
      upon the services provided by Debtor; and

   2) the requested extension will not prejudice the landlord of
      the lease because the Debtor is current on all post-petition
      obligations under the lease.

Headquartered in Vineland, New Jersey, Garden State MRI
Corporation, dba Eastlantic Diagnostic Institute --
http://www.eastlanticdiagnostic.com/-- operates an out-patient  
imaging and radiology facility.  The Company filed for chapter 11
protection on June 9, 2005 (Bankr. D. N.J. Case No. 05-29214).
Arthur Abramowitz, Esq. and Jerrold N. Poslusny, Jr., Esq., at
Cozen O'Connor, represent the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
estimated assets of less than $50,000 and estimated debts between
$10 million to $50 million.


GENERAL MOTORS: Incurs Total Loss Of $3.4 Billion For 2005
----------------------------------------------------------
In its financial statements delivered to the Securities and
Exchange Commission on Jan. 26, 2006, General Motors Corporation
reported that it incurred a total loss of $3.4 billion for the
fiscal year 2005 compared to a net income of $3.6 billion for
fiscal year 2004.

Including special items, GM reported a loss of $8.6 billion,
compared to a net income of $2.8 billion.  GM's revenues for 2005
were $192.6 billion, compared to $193.5 billion in 2004.

Including special items, GM reported a loss of $4.8 billion in the
fourth quarter of 2005, compared to a loss of $99 million in the
fourth quarter of 2004.  For the fourth quarter of 2005, revenues
were $51.2 billion compared to $51.4 billion in 2004.

General Motor's losses for the fourth quarter and the entire year
of 2005 were far worse than the "more moderate losses" Wall Street
analysts had predicted.  GM's losses have been caused by loss of
market share in North America due to competition from European and
Japanese carmakers, high fuel costs and increased expenditures for
employees' health care, raw materials and advertising costs.  GM's
financial results for 2005 were also adversely affected by charges
for restructuring and matters associated with Delphi Corp.'s
chapter 11 filing.  Delphi Corp. is the now-bankrupt spin-off of
General Motors' auto parts manufacturing operations.

                  GM's Automotive Operations

GM's automotive operations reported an adjusted loss of $5.3
billion in 2005, compared to adjusted earnings of $1.2 billion in
2004.  The decline was principally driven by large losses in North
America, partially offset by improved results in Europe and in the
Latin America, Africa and Middle East region.  GM North America
(GMNA) reported an adjusted loss of $5.6 billion in 2005,
compared to adjusted earnings of $1.1 billion in 2004

GM is also planning to close a dozen plants and lay off up to
30,000 workers in North America as part of its efforts to avert a
bankruptcy filing.

As of Dec. 31, 2005 GM reported total assets $475,284,000,000 and
total liabilities of $457,511,000,000.  As of Dec. 31, 2005, GM
reported total stockholders' equity of $16,734,000,000, compared
to stockholders' equity of $27,401,000,000 for Dec. 31, 2004.

A full-text copy of GM's Form 8-K filed with the SEC and
containing these financial disclosures is available for free at
http://ResearchArchives.com/t/s?4f0

General Motors Corporation -- http://www.gm.com/--  
headquartered in Detroit, Michigan, is the world's largest
producer of cars and light trucks.  Founded in 1908, GM today
employs about 325,000 people around the world. It has
manufacturing operations in 32 countries and its vehicles are sold
in 200 countries.  General Motors Acceptance Corporation, a
wholly-owned subsidiary of GM, provides retail and wholesale
financing in support of GM's automotive operations and is one of
the world's largest non-bank financial institutions.  Residential
Capital Corporation, a real estate finance company based in
Minneapolis, Minnesota, is a wholly owned subsidiary of GMAC.
     
                      *     *     *

As reported in the Troubled Company Reporter on Jan. 30, 2006,
Moody's Investors Service placed the B1 long-term rating of
General Motors Corporation on review for possible downgrade
following the company's announcement of full-year 2005 results
that include fourth quarter automotive operating cash generation
that is materially below the rating agency's expectations.  

The ratings of General Motor's Acceptance Corporation (Ba1/review
with direction uncertain and Not-Prime/review for possible
upgrade) and of Residential Capital Corporation (Baa3 and Prime-
3/review direction uncertain) remain unchanged.  

As reported in the Troubled Company Reporter on Dec. 14, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
rating on General Motors Corp. to 'B' from 'BB-' and its short-
term rating to 'B-3' from 'B-2' and removed them from CreditWatch,
where they were placed on Oct. 3, 2005, with negative
implications.  The outlook is negative.

The 'BB/B-1' ratings on General Motors Acceptance Corp. and the
'BBB-/A-3' ratings on Residential Capital Corp. remain on
CreditWatch with developing implications, reflecting the potential
that GM could sell a controlling interest in GMAC to a highly
rated financial institution.  Consolidated debt outstanding
totaled $285 billion at Sept. 30, 2005.


GEYSERS POWER: Voluntary Chapter 11 Case Summary
------------------------------------------------
Lead Debtor: Geysers Power Company, LLC
             50 West San Fernando Street
             San Jose, California 95113

Bankruptcy Case No.: 06-10197

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Silverado Geothermal Resources, Inc.       06-10198

Type of Business: The Debtors are affiliates of Calpine Corp.

Chapter 11 Petition Date: February 3, 2006

Court: Southern District of New York (Manhattan)

Debtors' Counsel: Matthew Allen Cantor, Esq.
                  Kirkland & Ellis LLP
                  Citigroup Center
                  153 East 53rd Street
                  New York, New York 10022-4611
                  Tel: (212) 446-4800
                  Fax: (212) 449-4900

Debtors' Special
Counsel:          Covington & Burling LLP

                     -- and --

                  Thelen Reid & Priest LLP

Debtors' Crisis
Managers:         AP Services, LLC

Debtors'
Auditors:         PricewaterhouseCoopers LLP

Debtors'
Financial
Advisors:         Miller Buckfire & Co., LLC

Debtors' Tax
Consultants:      KPMG LLP

Debtors' Energy
Industry
Consultants:      PA Consulting Group, Inc.

Debtors' Claims
And Noticing
Agent:            Kurtzman Carson Consultants LLC

Estimated Assets: More than $100 Million

Estimated Debts:  More than $100 Million

The Debtors did not file a list of their 20 Largest Unsecured
Creditors.


GLAZED INVESTMENTS: Files Chapter 11 to Facilitate Purchase Pact
----------------------------------------------------------------
Krispy Kreme Doughnuts, Inc. (NYSE: KKD) and Westward Dough, the
Krispy Kreme area developer for Nevada, Utah, Idaho, Wyoming and
Montana, reported on Feb. 3, 2006 that Westward Dough has reached
an agreement to purchase certain of the assets of Glazed
Investments, LLC.  Glazed Investments is the Krispy Kreme area
developer for Colorado, Minnesota and Wisconsin.  The agreement
calls for Westward Dough to purchase twelve Krispy Kreme stores,
as well as the franchise development rights for Colorado,
Minnesota and Wisconsin, for approximately $10 million.

As a condition of the purchase agreement, and at the request of
Westward Dough, Glazed Investments has agreed to conduct the sale
under Chapter 11 Section 363 of the US Bankruptcy Code.  The
Chapter 11 filing made Friday, Feb. 3, 2006, by Glazed Investments
will facilitate the sale by permitting the assets to be sold free
and clear of all liens, claims and encumbrances.  Other qualifying
bidders will have an opportunity to submit bids for Glazed
Investments through a court-supervised competitive bidding
process.

Krispy Kreme currently has a 97% ownership interest in Glazed
Investments.  Upon completion of Westward Dough's acquisition of
Glazed Investments, Krispy Kreme will no longer retain an
ownership position.

"We are very excited to have reached an agreement to purchase the
Krispy Kreme franchise in Colorado, Minnesota and Wisconsin," said
Lincoln Spoor, Principal of Westward Dough.  "We are pleased with
the opportunity to combine Glazed Investment's strengths and best
practices with our own, to create a truly great company.  The
Krispy Kreme brand deserves nothing less."

"Completing this transaction represents another step forward in
Krispy Kreme's restructuring," said Steve Panagos, President and
Chief Operating Officer of Krispy Kreme.  "Lincoln Spoor and his
team at Westward Dough have a proven track record of successfully
operating Krispy Kreme locations, and we are very pleased that
they have decided to further expand their relationship with the
Company."

Westward Dough currently operates 15 Krispy Kreme stores located
in Nevada, Utah, Idaho, Wyoming and Montana.

                        About Krispy Kreme

Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme --
http://www.krispykreme.com/-- is a leading branded specialty  
retailer of premium quality doughnuts, including the Company's
signature Hot Original Glazed.  There are currently approximately
320 Krispy Kreme stores and 80 satellites operating systemwide in
43 U.S. states, Australia, Canada, Mexico, the Republic of South
Korea and the United Kingdom.

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

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


GLAZED INVESTMENTS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Glazed Investments, LLC
        1211 West 22nd Street, Suite 700
        Oak Brook, Illinois 60523

Bankruptcy Case No.: 06-00932

Type of Business: The Debtor makes and sells doughnuts.  The
                  Debtor is a majority-owned unit of Krispy Kreme.

Chapter 11 Petition Date: February 3, 2006

Court: Northern District of Illinois

Judge: Pamela S. Hollis

Debtor's Counsel: Daniel A. Zazove, Esq.
                  Perkins Coie LLP
                  131 S. Dearborn, Suite 1700
                  Chicago, Illinois 60603-5559
                  Tel: (312) 324-8605
                  Fax: (312) 324-9400

Estimated Assets: $10 Million to $50 Million

Estimated Debts:  $10 Million to $50 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                          Nature of Claim   Claim Amount
   ------                          ---------------   ------------
Moac Mall Holdings, LLC            Trade Debt            $203,626
National City Center
115 W. Washington
Indianapolis, IN 46204

Penske Truck Leasing Co., LP       Trade Debt            $162,696
Route 10 Greenshill
Reading, PA 19603

Ryder Transportation Services      Trade Debt             $99,607
55 Shuman Boulevard, Suite 350
Naperville, IL 60565

Xcel Energy                        Trade Debt             $76,441
414 Nicollet Mall
Minneapolis, MN 55484-9477

American Express                   Trade Debt             $51,000
200 Vesey Street
New York, NY 10285

Fleetcor Corp.                     Trade Debt             $34,914

Aspen Waste Systems Inc.           Trade Debt             $24,976

Wisconsin Public Service Corp.     Trade Debt             $22,670

Perlgrant, LLC                     Trade Debt             $21,667

KEMPS, LLC                         Trade Debt             $18,086

CON0CO                             Trade Debt             $17,738

CenterPoint Energy                 Trade Debt             $16,445

We Energies                        Trade Debt             $14,361

Roto Rooter                        Trade Debt             $13,577

Robinson Dairy Inc.                Trade Debt             $13,087

Aramark Uniform Services, Inc.     Trade Debt             $12,987

Macerich Citadel, LP               Trade Debt              $9,403

Shaker Advertising Agency          Trade Debt              $9,399

Industrial Towel & Uniform, Inc.   Trade Debt              $9,106

General Information                Trade Debt              $8,959
Services, Inc.


GLYCOGENESYS INC: Makes Management Changes and Cuts Work Force
--------------------------------------------------------------
GlycoGenesys, Inc. (Nasdaq: GLGS) and its subsidiaries have filed
voluntary petitions to restructure under Chapter 11 of the U.S.
Bankruptcy Code in the Bankruptcy Court for the District of
Massachusetts.

In addition, the Company laid off over half of its work force and
effected senior management changes to allow it time to pursue
strategic alternatives including a sale of the Company.  As a part
of this effort, the Board of Directors appointed John W. Burns,
the Company's Senior Vice President and Chief Financial Officer,
to the additional positions of Interim Chairman of the Board of
Directors and Treasurer and Frederick E. Pierce, II, the Company's
VP Business Development, to the additional positions of Interim
Chief Executive Officer and President.

Bradley J. Carver has stepped down as the Chief Executive Officer,
a position he held since June 2000.  Mr. Carver will continue to
provide services to the Company as a consultant and remain a
member of the Board of Directors.

Dr. Burns and Mr. Pierce, together with other retained employees,
will utilize their extensive backgrounds in healthcare and finance
to pursue strategic alternatives for the Company while in Chapter
11.  Through work force reductions the Company has recognized an
immediate reduction of over 40% of its payroll beginning Feb. 1,
2006.

"We are concentrating the Company's efforts on significantly
reducing and containing monthly expenses in Chapter 11,
maintaining our multiple myeloma clinical trial, and securing a
strategic alliance or other alternative to enable the Company to
emerge stronger from Chapter 11," said Mr. Pierce.

Dr. Burns has been the Company's Chief Financial Officer since
January 2000, a Senior Vice President since March 2001 and a
Director since June 2002.  Prior thereto, Dr. Burns was the
CFO/Senior Vice President, Finance & Business Operations for South
Shore Hospital, a regional healthcare services provider based in
South Weymouth, MA, from February 1993 to February 1999.  From
January 1989 to December 1992, Dr. Burns was the Vice
President/Treasurer and a subsidiary CFO/Vice President, Finance
for Eastern Enterprises, a NYSE company.  Dr. Burns has also held
corporate finance and treasury positions with Allied-Signal,
Citicorp Investment Bank and International Paper.  He began his
career with Ciba Giegy (now Novartis) as a biostatistician.  Dr.
Burns holds a Master of Business Administration in Finance from
New York University and holds a Doctor of Philosophy in
Mathematics from Stevens Institute of Technology.

Mr. Pierce has been Vice President of Business Development for the
Company since August 2002 and Vice President of Finance and
Investor Relations since June 1998.  Prior to joining
GlycoGenesys, Mr. Pierce was at Lehman Brothers, where he was the
New England private client services liaison to healthcare
investment banking.  In addition, Mr. Pierce had over seven
additional years experience at Kidder Peabody and Merrill Lynch.  
Mr. Pierce received a B.S. in chemistry from Hampshire College.

                    About GlycoGenesys, Inc.

Headquartered in Boston, Massachusetts, GlycoGenesys, Inc. --
http://www.glycogenesys.com/-- is a biotechnology company focused  
on carbohydrate drug development.  The Company's drug candidate
GCS-100, a unique compound to treat cancer, has been evaluated in
previous clinical trials at low dose levels in patients with
colorectal, pancreatic and other solid tumors with stable disease
and partial response documented.  The Company currently is
completing a Phase I dose escalation trial to evaluate higher dose
levels of GCS-100LE, a low ethanol formulation of GCS-100, at
Sharp Memorial Hospital, Clinical Oncology Research in San Diego,
California and the Arizona Cancer Center in both Tucson and
Scottsdale, Arizona.  In addition, GCS-100LE is being evaluated in
a Phase I/II trial for multiple myeloma at the Dana-Farber Cancer
Institute in Boston, Massachusetts, Roswell Park Cancer Institute
in Buffalo, New York and Emory's Winship Cancer Institute,
Atlanta, Georgia.

The Company filed for chapter 11 protection on Feb. 2, 2006,
(Bankr. D. Mass. Case No. 06-10214).  Andrew G. Lizotte, Esq.,
at Hanify & King, P.C., represents the Debtors in their
restructuring efforts.  When the Debtor filed for protection
from their creditors, their total assets and total debts ranged
from $1 million to 10 million.


GOODING'S SUPERMARKETS: Court Issues Final Cash Collateral Order
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
approved, on a final basis, Gooding's Supermarkets, Inc.'s
authority to use cash collateral securing repayment of prepetition
debts to National Commerce Bank, FSB, and Associated Grocers of
Florida, Inc.

As previously reported in the Troubled Company Reporter on
Jan. 5, 2006, the cash collateral, in which National Commerce and
Associated Grocers asserted an interest, was comprised of funds on
hand and funds to be received from the Debtor's collection of
accounts receivable.

The Debtor owes $235,076 to the Associated Grocers and
$2.7 million to National Commerce.

To provide the lenders with adequate protection against any
diminution in the value of their collateral, the Debtor will grant
them replacement liens having the same validity, extent and
priority as the lenders' prepetition liens.

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


GRUMMAN OLSON: Wants Until June 1 to Object to Proofs of Claim
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Grumman
Olson Industries, Inc.'s chapter 11 case, asks the U.S. Bankruptcy
Court for the Southern District of New York to extend until
June 1, 2006, the deadline within which it can raise objections to
proofs of claim filed against the Debtor's estate.

On October 19, 2004, the Court confirmed the first amended joint
liquidating plan proposed by the Debtor and the Committee.  The
plan became effective on November 10, 2005.

Pursuant to the plan, any objections to claims filed against the
Debtor will be filed and served upon the applicable claimants
within 90 days after the Effective Date.  The Committee, with the
assistance of Paul Gunther, the Debtor's president and sole
director, has worked diligently to reconcile claims filed against
the company.

The Committee believes that the extension is necessary to complete
its review to objected claims and will able the Debtor to make
final distribution to creditors and close this case.

Grumman Olson Industries, Inc., which derives its operating
revenues primarily from the sale of truck bodies, filed for
chapter 11 protection on December 9, 2002 (Bankr. S.D.N.Y. Case
No. 02-16131). Sanford Philip Rosen, Esq., at Sanford P. Rosen &
Associates, P.C., and James M. Matthews, Esq., at Carl A. Greci,
Esq., represent the Debtor in its restructuring efforts.  When
the Company filed for protection from its creditors, it listed
$30,022,000 in total assets and $38,920,000 in total debts.


HANOVER INSURANCE: Moody's Affirms Senior Debt Rating at Ba1
------------------------------------------------------------
Moody's Investors Service affirmed the ratings of The Hanover
Insurance Group, Inc. (THG; senior debt at Ba1) and of Hanover
Insurance Company (insurance financial strength at Baa1).  The
rating outlook has been changed to stable from negative.  The Ba1
insurance financial strength rating and the stable outlook on
First Allmerica Financial Life Insurance Co. (FAFLIC) remain
unaffected.

According to Moody's, the change to a stable outlook reflects a
greater certainty regarding the ultimate size of the company's
hurricane losses incurred in the last half of 2005.  As of
Dec. 31, 2005, after-tax hurricane losses represent approximately
10% of shareholders' equity.  The company is in the process of
reducing its gross catastrophe exposure in:

   * Florida,
   * Louisiana, and
   * Massachusetts.

Moody's expects that the company will continue to evaluate its
risk management practices in relation to catastrophe "tail risk".
Further, the losses from the hurricanes do not appear to have had
a negative impact on the company's franchise nor caused a
significant disruption to its agency distribution network.

Moody's Baa1 insurance financial strength ratings of Hanover
Insurance Company reflect:

   * good underwriting experience (excluding catastrophes);
   * adequate statutory capitalization;
   * significant investments in technology; and
   * a risk profile that is weighted towards personal lines.

In addition, the company's new business production and retention
rates in both personal lines and commercial lines have improved.

Offsetting these strengths are:

   * challenges the company faces in growing its existing
     portfolio of businesses;

   * reducing its high underwriting expense ratio; and

   * competing against companies with more significant financial
     and technological resources.

On Sept. 19, 2005, Moody's changed the ratings' outlook to
negative from stable based on uncertainty related to Hurricane
Katrina and the potential disruption to its independent agency
network.

These ratings were affirmed with a stable outlook:

  The Hanover Insurance Group, Inc.:

     -- senior unsecured debt rating at Ba1

  AFC Capital Trust 1:

     -- preferred stock rating at Ba2

  Hanover Insurance Company:

     -- insurance financial strength at Baa1

THG writes predominantly personal and commercial lines insurance
on a regional basis, including in:

   * Michigan,
   * Massachusetts,
   * New York,
   * New Jersey, and
   * Louisiana.

For the quarter ended Dec. 31, 2005, THG reported net income of
$114.5 million versus $63.1 million during the prior year quarter.
As of Dec. 31, 2005, shareholders' equity was $1.95 billion.


HEXCEL CORP: Improved Performance Cues Moody's to Upgrade Ratings
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of Hexcel
Corporation (Corporate Family Rating to B1 from B2) in response to
continued strengthening in the company's credit profile owing to:

   * improved recent operating results; and

   * the expectation of continued strong financial performance for
     the intermediate term.

The ratings outlook is stable.

The ratings upgrades reflect the company's improved financial
performance in FY 2005 and expectations for further improvement in
2006 due to strengthening demand in key market sectors in which
the company operates, particularly in commercial aerospace.
However, ratings also consider thin projected levels of free cash
flow due to continued investments the company is expected to
undertake to support the expansion of its business during the on-
going recovery in the commercial aircraft OEM supply sector.

The stable outlook reflects Moody's expectations that Hexcel will
modestly grow its revenue base and operating profits over the near
term, owing primarily to anticipated strong demand in the
commercial aerospace sector and augmented by improving prospects
in the company's industrial and wind energy segments.  Ratings or
their outlook may improve if, as a result of continued improvement
in key business segments, free cash flow were to exceed 15% of
debt over a sustained period, while leverage (Debt/EBITDA as
defined per Moody's standard methodology) were to remain below 3
times, and EBIT coverage of interest were to remain in excess of 3
times.

Conversely, ratings or their outlook could be subject to downward
revision if the company suffers deteriorating operating
performance in key business segments, possibly:

   * due to an unexpected drop in OEM commercial or military
     aircraft production;

   * if the company were to increase debt levels for any reason,
     such that free cash flow were to be remain persistently below
     5% of debt over a prolonged period;

   * if leverage were to exceed 4 times; or

   * if EBIT/interest were to fall below 2 times.

On Jan. 25 2006, Hexcel reported FY 2005 (ending December)
financial results that show a continued trend towards revenue
growth and margin and cash flow improvement that has resulted from
robust economic conditions in the company's key markets despite
temporary set-backs in the OEM supplier sector in the third
quarter.  Although the company repaid only modest amounts of debt
over 2005 ($11 million, or 3%), most credit metrics have exceeded
targets for upward rating movement as suggested by Moody's press
release of Jan. 26 2005.  

At that time ratings were upgraded in conjunction with a
refinancing.  With total debt of $513 million (using Moody's
standard adjustments) as of December 2005, Hexcel's leverage has
improved to 2.9 times, versus about 3.8 times as of March 2005
(after the re-financing).  EBIT/interest coverage similarly
improved to 3.1 times (versus 1.6 times as of year-end 2004).
These metrics are both quite strong relative to the B1 rating.
However, ratings remain somewhat constrained by relatively thin
free cash flows and the long term volatility of the commercial OEM
aerospace sector.  

In 2005, Hexcel generated only $13 million of free cash flow, or
about 2.5% of total debt, owing largely to an increase in capital
expenditures ($63 million) and use of cash for working capital
purposes ($46 million) as well as certain non-recurring litigation
and re-financing costs.  

Going forward, the company anticipates increased spending on CAPEX
in FY 2006 (approximately $100 million) primarily related to
expanding its carbon fiber capacity, while continued growth in
business levels should result in continued increases in working
capital.  The company expects that further revenue growth and
margin expansion will cover such cash requirements, but Moody's
believes that free cash flows will remain modest through 2006,
reflecting the cash requirements to support growth.

Furthermore, if the company were to falter in meeting targeted
revenue growth, or if margins were to tighten, the company would
find the need to draw on its cash or its $125 million liquidity
facility to fund planned 2006 capital spending.  With about $10
million drawn and about $9 million used for letters-of-credit
purposes as of September 2005, the company had total availability
under the existing facility of about $106 million (including
foreign facilities), in addition to a cash balance of about $20
million at year-end.

The Ba3 rating on Hexcel's $350 million senior secured credit
facilities, one notch above the Corporate Family Rating, reflects
the seniority in claim provided to these facilities over the
Company's senior subordinated notes, which are essentially all of
the remaining debt.  The senior secured facilities are secured by
a lien on all of the company's U.S. assets plus 65% of the shares
of the first tier foreign subsidiaries.  

As of December 2005, the company had total asset of about $879
million, and about $804 million of tangible assets after goodwill
and other intangibles.  Of this amount, approximately $285 million
represented fixed assets, while a large majority of the remaining
balance comprised accounts receivable ($156 million) and
inventories ($150 million).  

With approximately $100 million of planned investment in
production capacity in 2006, Hexcel will have added a substantial
amount of fixed assets to the collateral pool securing the senior
secured facilities, further improving asset coverage.  Moody's
believes this suggests good asset coverage to the $315 million of
total committed senior secured debt, warranting the one notch
differential with the Corporate Family Rating.  The B3 rating
assigned to Hexcel's senior subordinated notes, two notches below
the Corporate Family Rating, reflects the structural subordination
of these notes to all existing and future senior indebtedness of
the company.

These ratings have been upgraded:

   * Senior secured revolving credit facility due 2010, to Ba3
     from B2;

   * Senior secured term loan due 2012, to Ba3 from B2;

   * Senior subordinated notes due 2015, to B3 from Caa1; and

   * Corporate Family Rating, to B1 from B2.

This rating has been withdrawn, as the issue had been redeemed:

   * Senior secured notes due 2008, rated B3.

Hexcel Corporation, headquartered in Stamford, Connecticut, is a
leading advanced structural materials company.  It develops,
manufactures and markets:

   * lightweight, high-performance reinforcement products;
   * composite materials; and
   * composite structures

for use in:

   * commercial aerospace,
   * space and defense,
   * electronics, and
   * industrial applications.

The company had FY 2005 revenues of $1.16 billion.


HILTON HOTELS: Fitch to Lower Ratings Upon Hilton plc Acquisition
-----------------------------------------------------------------
Fitch Ratings expects to downgrade these ratings for Hilton Hotels
Corporation (Hilton) upon completion of its acquisition of Hilton
plc:

  -- Issuer Default Rating (IDR) to 'BB' from 'BBB-';

  -- Senior unsecured to 'BB' from 'BBB-'; and

  -- Proposed $5.75 billion senior secured credit facility
     at 'BB'.

Fitch will also remove Hilton from Rating Watch Negative, where it
was originally placed on Dec. 29 2005.  The Rating Outlook will be
Stable.

These actions reflect Hilton's significantly levered balance sheet
subsequent to the completion of its $6 billion acquisition of
Hilton PLC, which is expected to close some time in first-quarter
2006 (1Q'06).  Hilton intends to fund the $6 billion transaction
with:

   * $1.2 billion of cash,
   * $4.6 billion of bank debt, and
   * $130 million of assumed Hilton PLC debt.

The new debt will consist of:

   * a $3.25 billion revolver ($1.86 billion outstanding),
   * a $2 billion equivalent term loan A, and
   * a $500 million term loan B.

The proposed revolving credit facility, term loans and all senior
debt will be secured by 100% of the capital stock of Hilton's U.S.
domestic subsidiaries and 100% of the capital stock in the U.K.
acquisition entity.

Additionally, Fitch believes pro forma lease payments could
approach $500 million, up from $57 million in 2004, due to the
significant number of leased rooms (43,000) being acquired from
Hilton PLC.  Fitch includes in its calculation of off balance
sheet items annual lease expense.  As a result of the debt funded
transaction and the assumed increase in annual lease expense,
Fitch anticipates Hilton's pro forma adjusted debt number will
exceed $12 billion.

The rating also takes into consideration Hilton's superior and
diversified asset base, its improved cash flow generating
capabilities and the favorable lodging industry outlook.  Hilton
is a leading hotel engaged in the ownership and management of
lodging facilities.  Brands within Hilton cover the value chain
and include:

   * Hilton,
   * Hilton Garden Inn,
   * Doubletree,
   * Embassy Suites,
   * Hampton,
   * Homewood Suites by Hilton, and
   * Conrad.

Hilton PLC owns the rights to the Hilton brand name outside of the
U.S. as well as the Scandic and Conrad brands.  The transaction
with Hilton International will increase the number of rooms in the
Hilton system by more than 25% to over 475,000 (80% managed or
franchised, 17% owned/leased).  Pro forma 2005 EBITDA allocation
is:

   * 43% owned;
   * 33% managed/franchised;
   * 16% leased; and
   * 8% timeshare.

Approximately:

   * 71% of pro forma EBITDA will be generated in the Americas;
   * 26% in Europe/Africa; and
   * 3% in the Middle East/Asia Pacific.

Subsequent to the transaction, Fitch expects Hilton to generate a
significant amount of free cash flow despite a large capital
program and healthy dividend payments.  Assuming that in 2006
Hilton can generate revenue per available room (RevPAR) gains in
the upper single digits, slightly improve margins, keep its
capital spending near $635 million and maintain dividend payments
of $67 million, Fitch believes free cash flow could approach $200
million.  Additionally, management has suggested it will continue
to divest some owned assets, although no target has been revealed.
The credit facility includes a mandatory prepayment of the Term
Loan A with proceeds from asset sales outside of the U.S.

Furthermore, Hilton management reiterated in its recent quarterly
conference call that its strategy is to sell 'many of the HI
(Hilton International) assets and use the proceeds to pay down
debt.'  Fitch believes that the robust lodging environment should
also allow Hilton to make progress at reducing debt in the near to
intermediate term.  Fitch expects the industry's fundamentals to
remain strong in 2006, as solid demand growth should again
outstrip very modest expansion in the supply of available rooms.
Improvements in pricing will be supported by robust demand in all
segments of the industry (luxury, upscale, and limited service).
Lodging demand from business, group and leisure segments should
increase modestly in 2006 based on GDP growth of 2%-3%.

Complementing the increased demand will be reduced supply growth,
particularly in the U.S.  Two factors expected to contribute to
the limited supply growth are:

   * rising construction costs, and
   * increasing interest rates.  

As a result of stronger lodging demand and limited additional room
supply, Fitch expects average RevPAR to increase for the third
consecutive year.  Reasonable margin improvements are anticipated
for most lodging companies as RevPAR growth will likely exceed
growth in labor, utility, and insurance costs.

The Stable Outlook is based on Fitch's expectations for the
lodging industry along with Hilton successfully integrating the
acquired assets.  Also incorporated in the Stable Outlook are
meaningful asset sales in the intermediate term and strong cash
flow with the proceeds directed toward debt reduction.


HORSEHEAD INDUSTRIES: Taps Cole Schotz as Substitute Counsel
------------------------------------------------------------
Horsehead Industries, Inc., n/k/a HH Liquidating Corp., and its
debtor-affiliates ask the U.S. Bankruptcy Court for the Southern
District of New York for permission to employ Cole, Schotz,
Meisel, Forman & Leonard, P.A. as substitute counsel to replace
Angel & Frankel, P.C.

As previously reported in the Troubled Company Reporter, the
Bankruptcy Court approved Angel & Frankel's retention as counsel
to the Debtors.  Effective Jan. 1, 2006, each of the attorneys of
Angel & Frankel joined Cole Schotz.

For purposes of efficiency and continuity, the same attorneys from
Angel & Frankel should continue their representation of the
Debtors as attorneys of Cole Schotz.

Cole Schotz will:

     (a) provide legal advice to the Debtors with respect to their
         powers and duties in the continued operation of their
         businesses as debtors-in-possession;

     (b) prepare, on the Debtor's behalf, all necessary
         applications, answers, orders and other legal papers
         required in connection with the administration of the
         Chapter 11 estate;

     (c) appear before the Bankruptcy Court (and any other court)
         to represent and protect the Debtors' interests and
         estate, except as to matters assigned to other retained
         counsel;

     (d) represent the Debtors in any adversary proceeding, either
         commenced by or against the Debtors;

     (e) assist the Debtors in the formulation and implementation
         of a Chapter 11 plan; and

     (f) perform all other legal services for the Debtors, as
         debtors-in-possession, that may be necessary.

Joshua J. Angel, Esq., a member at Cole Schotz, discloses his
Firm's professionals bill:

              Professional             Hourly Rate
              ------------             -----------
              Members                  $375 - $750
              Counsel                  $280 - $370
              Associates               $360 - $165
              Legal Assistants         $115 - $150

To the best of the Committee's knowledge, the Firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.

Horsehead Industries, Inc., d/b/a Zinc Corporation of America,
the largest zinc producer, filed for chapter 11 protection on
August 19, 2002 in the U.S. Bankruptcy Court for the Southern
District of New York.  When the Company filed for protection
from its creditors, it listed $215,579,000 in assets and
$231,152,000 in debts.


INTEGRATED HEALTH: Abe Briarwood Wants IHS to Release $1.5 Million
------------------------------------------------------------------
Integrated Health Services, Inc., and Abe Briarwood Corp. entered
into a Stock Purchase Agreement under which Briarwood was to
effectively acquire all of Briarwood's assets.

Laurie S. Polleck, Esq., at Jaspan Schlesinger Hoffman LLP, in
New York, relates that one of the major assets acquired by
Briarwood under the SPA and the IHS Debtors' Plan of
Reorganization were IHS' account receivables.

According to Ms. Polleck, IHS' account receivables include
receivables owed from the United States Centers for Medicare and
Medicaid Services -- a portion of which had been subjected to an
administrative freeze pending resolution of certain CMS claims
subject to an appeals process.

The appeals process resulted in a deduction of the CMS claim from
the amount administratively frozen with the excess amount
allocated to IHS for $1,554,815.

Ms. Polleck asserts that the $1,554,815 Medicare receivable was an
asset purchased by Briarwood and, therefore, belongs to Briarwood.  
However, through inadvertence or otherwise, CMS recently paid the
$1,554,815 Medicare receivable to IHS Liquidating LLC.

Briarwood demanded IHS Liquidating to turnover the $1,554,815
Medicare receivable.  IHS agreed but stated that the receivable
will be held in escrow by Briarwood's counsel, pending an
appropriate Court order permitting its release.

Ms. Polleck informs the Court that IHS Liquidating has failed to
provide any real explanation as to why IHS Liquidating is entitled
to receive the $1,554,815 Medicare receivable.  IHS Liquidating
also failed to advise Briarwood of any request for preliminary or
pre-judgment relief, which would restrain the turnover of the
Medicare receivable to Briarwood.

Against this backdrop, Briarwood asks the U.S. Bankruptcy Court
for the District of Delaware to permit the release of the
$1,554,815 Medicare receivable, currently held in escrow.

Integrated Health Services, Inc. -- http://www.ihs-inc.com/--  
operated local and regional networks that provide post-acute care
from 1,500 locations in 47 states.  The Company and its
437 debtor-affiliates filed for chapter 11 protection on
February 2, 2000 (Bankr. Del. Case No. 00-00389).  Rotech Medical
Corporation and its direct and indirect debtor-subsidiaries broke
away from IHS and emerged under their own plan of reorganization
on March 26, 2002.  Abe Briarwood Corp. bought substantially all
of IHS' assets in 2003.  The Court confirmed IHS' Chapter 11 Plan
on May 12, 2003, and that plan took effect September 9, 2003.
Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D.
Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP,
represent the IHS Debtors.  On September 30, 1999, the Debtors
listed $3,595,614,000 in consolidated assets and $4,123,876,000 in
consolidated debts.  (Integrated Health Bankruptcy News, Issue
No. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000)


JOURNAL REGISTER: S&P Rates $1 Billion Sr. Credit Facilities at BB
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' ratings and
recovery ratings of '2' to Journal Register Co.'s $1.0 billion
senior secured credit facilities, indicating a substantial
recovery (80%-100%) of principal in the event of a payment
default.  These facilities consist of $375 million revolving
credit and $625 million tranche A term loan facilities due August
2012.  The new facilities were used to refinance the former $1.05
billion in credit facilities.
     
At the same time, Standard & Poor's affirmed its 'BB' corporate
credit rating on the Trenton, New Jersey-headquartered newspaper
publisher.  The outlook is stable.  Journal Register had about
$755 million borrowed under the new facilities.
     
The company's financial profile is currently weak for the ratings.
However, ratings stability assumes that Journal Register will
focus on debt reduction in coming periods and make progress in
reducing its debt to EBITDA measure to the 5.0x and under area
that Standard & Poor's deems appropriate for the company at the
'BB' corporate credit rating.  An outlook revision to negative or
possibly a downgrade would be considered if Journal Register's
financial position deteriorates as a result of:

   * acquisitions;

   * additional share repurchases beyond the current
     authorization; and/or

   * meaningfully weaker operating performance.


KAISER ALUMINUM: Wants to Pay PI Trust Trustees' Fees & Expenses
----------------------------------------------------------------
A key feature in Kaiser Aluminum Corporation and its debtor-
affiliates' Plan of Reorganization is the establishment of four
personal injury trusts, to which, all present and future asbestos,
silica, coal tar pitch volatile and noise-induced hearing loss
claims will be accordingly channeled:

    (1) the Asbestos PI Trust
    (2) the Silica PI Trust
    (3) the CTPV PI Trust
    (4) the NIHL PI Trust

Kimberly Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, relates that more than $27,000,000 in cash
and rights to proceeds under various insurance policies will be
transferred to a funding vehicle trust once the Debtors' Plan is
confirmed and becomes effective.  Additionally, 100% of the
outstanding shares of reorganized KAE Trading, Inc., and
approximately 6.5% of the outstanding shares of reorganized
Kaiser Aluminum Corporation will be transferred to the Asbestos
PI Trust and the Silica PI Trust.

The Funding Vehicle Trust will distribute cash, less certain
expenses and other amounts, to the four Trusts, pursuant to the
terms of a Funding Vehicle Trust Agreement.  Thus, each of the PI
Trusts needs to be prepared to administer the assets they receive
as soon as possible.

The proposed trustees to the Trusts are:

    * Mark M. Gleanon, Ken M. Kawaichi, and Robert A. Marcis
      for the Asbestos PI Trust;

    * Anne M. Ferazzi for the Silica & CTPV PI Trusts; and

    * Jack T. Marionneaux for the NIHL PI Trust.

Ms. Newmarch tells the U.S. Bankruptcy Court for the District of
Delaware that if the Proposed PI Trustees cannot commence work on
the PI Trusts in advance of the Effective Date, an unacceptable
and potentially detrimental delay may occur while they prepare to
responsibly manage the assets of the
Trusts.

"This could expose the PI Trusts' beneficiaries to risks they
would not otherwise face if the Proposed PI Trustees were able to
prepare for PI Trust administration before the Effective Date,"
Ms. Newmarch explains.

As it currently stands under the Plan, the Proposed PI Trustees
and their professionals cannot be compensated until after the
Effective Date, when each of the PI Trusts is formed.  Hence,
counsel for the PI Trusts asked the Debtors to provide funding, in
advance of the Effective Date, to enable the proposed PI
Trustees to commence certain preparatory work for the Trusts,
which work includes:

    -- setting up the PI Trusts so that they are in a position to
       begin processing tort claims for payment as soon as
       practical after the Effective Date; and

    -- ensuring that the rights, obligations and authority granted
       under the documents pertaining to the PI Trusts are
       sufficient to permit the Proposed PI Trustees to adequately
       fulfill their duties.

Notwithstanding these duties, the proposed PI Trustees will not
have the right to re-negotiate the terms of the documents
pertaining to the Funding Vehicle Trust or the PI Trusts and will
not have standing to appear or be heard in connection with the
Debtors' Chapter 11 cases, Ms. Newmarch adds.

The funding to be advanced by the Debtors prior to the Effective
Date will be limited pursuant to these terms:

    (a) Compensation of:

         * the Proposed Asbestos PI Trustees will not exceed
           $5,000 each, per month, plus a per diem allowance of
           $1,500, and reimbursement of reasonable out-of-pocket
           expenses;

         * the Proposed Silica PI Trustee will not exceed $5,000,
           per month, plus hourly allowance of $400, and
           reimbursement reasonable of out-of-pocket expenses;

         * the Proposed CTPV PI Trustee will not exceed $400 per
           hour plus reimbursement of reasonable out-of-pocket
           expenses; and

         * the Proposed NIHL PI Trustee will not exceed a monthly
           amount to be agreed upon, plus reimbursement of
           reasonable out-of-pocket expenses.

    (b) To the extent the Proposed PI Trustees will retain experts
        and consultants to assist in conceptualizing and
        instituting their PI Trust's administrative procedures to
        process claims and make payments to claimants, the fees
        and expenses of the experts and consultants will not
        exceed:

             PI Trust             Monthly Fee
             --------             -----------
             Asbestos               $50,000
             Silica & CTPV          $25,000
             NIHL                 To be agreed

    (c) The aggregate amount for fees and expenses of each PI
        Trust's counsel must not exceed:

             PI Trust             Monthly Fee
             --------             -----------
             Asbestos               $75,000
             Silica & CTPV          $35,000
             NIHL                 To be agreed

    (d) To the extent the Proposed PI Trustees engage investment
        advisors to advise them on an investment strategy to
        maximize the overall value of the PI Trusts, the fees for
        the investment advisors must not exceed:

             PI Trust             Monthly Fee
             --------             -----------
             Asbestos              $100,000
             Silica & CTPV          $35,000
             NIHL                 To be agreed

In addition to the monthly limits, Ms. Newmarch says the aggregate
amount reimbursable with respect to each set of professionals will
be limited to three times the stated monthly limit.

All advance funding will reduce, and will be deducted from, the
funding obligations owed to the Funding Vehicle Trust on the
Effective Date pursuant to the Plan.  The Funding Vehicle Trust
will, in turn, allocate the deducted amounts among the PI Trusts
based on the fees and expenses advanced for the benefit of each
PI Trust.

Any fees reimbursed to the PI Trusts for work performed by
attorneys or other professionals retained by any of the Proposed
PI Trustees will not be treated as compensation for work performed
in connection with the Chapter 11 cases.  Accordingly, no fee
applications would be filed.

Against this backdrop, the Debtors seek the Court's authority to
pay the proposed PI Trustees and their professionals for fees and
expenses incurred in connection with preparatory work for the PI
Trusts.

Ms. Newmarch maintains that allowing the Debtors to compensate the
proposed PI Trustees will not harm the Chapter 11 estates in any
way because all amounts advanced by the Debtors will reduce,
dollar-for-dollar, the Debtors' cash funding obligations under the
Plan.  The limits placed in the advances will also provide
certainty that the advances will not exceed a specified, agreed
amount absent Court approval.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading  
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases.  Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts.  On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 89; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


KMART CORP: Court Lifts Stay for Six Personal Injury Claimants
--------------------------------------------------------------
Judge Susan Pierson Sonderby of U.S. Bankruptcy Court for the
Northern District of Illinois signs separate Agreed Orders between
Kmart Corporation and six personal injury claimants, lifting the
automatic stay and injunction provision under Kmart's Plan of
Reorganization to permit the litigation the claimants initiated to
proceed and continue to a final judgment or settlement:

   Claimant            Date of Injury     Location
   --------            --------------     --------
   Deborah & Lowell    January 7, 2003    Kmart Store No. 3043
   Earnest                                1500 C. Colfax Ave.,
                                          Aurora, Colorado

   Lynette Cowser      March 24, 2002     Kmart Store No. 4486
                                          2701 S. Chase Ave.,
                                          Milwaukee, Wisconsin

   Mei-Yan Chiu        June 23, 2002      Kmart Store No. 7359
                                          9903 Military Trail,
                                          Boynton Beach, Florida

   Semaj Matthews      December 8, 2002   Kmart Store No. 7169
                                          400 South Broadway,
                                          Salina, Kansas

   Teresa Vale         July 8, 1997       Kmart Store No. 4732
                                          Road 2KM 126.5
                                          Aguadilla, Puerto Rico

   The Estate of       December 24, 2002  Kmart Store No. 4912
   Patricia Wood                          4075 West Ina Road,
                                          Tucson, Arizona

The automatic stay and the Plan Injunction will remain in effect
with respect to any and all actions by the Claimants to execute on
any final judgment or settlement against Kmart or any of its
property.

Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- operates  
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues.  The
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act expired on Jan. 27, without complaint by the Department of
Justice.  (Kmart Bankruptcy News, Issue No. 106; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


KNOBIAS INC: Files Amended 2004 Annual and 2005 Quarterly Reports  
-----------------------------------------------------------------
Knobias, Inc., delivered amended financial statements for the year
ended Dec. 31, 2004, the quarter ended March 31, 2005, and the
quarter ended June 30, 2005, to the Securities and Exchange
Commission on Jan. 30, 2006.

As reported in the Troubled Company Reporter on Dec. 15, 2005,
Knobias amended its financial statements to correct errors in its
treatment of the beneficial conversion feature of its convertible
debt, issued in December 2004.

The Company's revised balance sheet for the year ended Dec. 31,
2004, reflect a decrease in total debt and an increase in its
paid-in capital totaling $190,300.

                    Going Concern Doubt

Russell Bedford Stefanou Mirchandani LLP expressed substantial
doubt about Knobias' ability to continue as a going concern after
it audited the Company's financial statements for the year ended
Dec. 31, 2004.  The auditing firm pointed to the Company's
significant operating losses.

A copy of the Company's amended annual report for the year ended
Dec. 31, 2004, is available for free at:

            http://researcharchives.com/t/s?4f1

A copy of the Company's amended quarterly report for the quarter
ended March 31, 2005, is available for free at:

            http://researcharchives.com/t/s?4f2

A copy of the Company's amended quarterly report for quarter ended
June 30, 2005, is available for free at:

            http://researcharchives.com/t/s?4f3

                       About Knobias

Knobias, Inc. - http://www.knobias.com/-- provides complete  
financial information solutions for institutional market
participants, corporations and industry professionals.  Actionable
data is delivered via high-quality applications consisting of
proprietary products; analytics; streaming information; financial
data; fundamental research; and third-party research.  Primarily
through its wholly owned subsidiary, Knobias.com, LLC, it markets
its products to individual investors, day-traders, financial
oriented websites, public issuers, brokers, professional traders
and institutional investors.

At Sept. 30, 2005, Knobias' liabilities exceeded its assets by
$2,059,985.


KRISPY KREME: Sells 12 Stores to Westward Dough for $10 Million
---------------------------------------------------------------
Krispy Kreme Doughnuts, Inc. (NYSE: KKD) and Westward Dough, the
Krispy Kreme area developer for Nevada, Utah, Idaho, Wyoming and
Montana, reported on Feb. 3, 2006 that Westward Dough has reached
an agreement to purchase certain of the assets of Glazed
Investments, LLC.  Glazed Investments is the Krispy Kreme area
developer for Colorado, Minnesota and Wisconsin.  The agreement
calls for Westward Dough to purchase twelve Krispy Kreme stores,
as well as the franchise development rights for Colorado,
Minnesota and Wisconsin, for approximately $10 million.

As a condition of the purchase agreement, and at the request of
Westward Dough, Glazed Investments has agreed to conduct the sale
under Chapter 11 Section 363 of the US Bankruptcy Code.  The
Chapter 11 filing made Friday, Feb. 3, 2006, by Glazed Investments
will facilitate the sale by permitting the assets to be sold free
and clear of all liens, claims and encumbrances.  Other qualifying
bidders will have an opportunity to submit bids for Glazed
Investments through a court-supervised competitive bidding
process.

Krispy Kreme currently has a 97% ownership interest in Glazed
Investments.  Upon completion of Westward Dough's acquisition of
Glazed Investments, Krispy Kreme will no longer retain an
ownership position.

"We are very excited to have reached an agreement to purchase the
Krispy Kreme franchise in Colorado, Minnesota and Wisconsin," said
Lincoln Spoor, Principal of Westward Dough.  "We are pleased with
the opportunity to combine Glazed Investment's strengths and best
practices with our own, to create a truly great company.  The
Krispy Kreme brand deserves nothing less."

"Completing this transaction represents another step forward in
Krispy Kreme's restructuring," said Steve Panagos, President and
Chief Operating Officer of Krispy Kreme.  "Lincoln Spoor and his
team at Westward Dough have a proven track record of successfully
operating Krispy Kreme locations, and we are very pleased that
they have decided to further expand their relationship with the
Company."

Westward Dough currently operates 15 Krispy Kreme stores located
in Nevada, Utah, Idaho, Wyoming and Montana.

                       About Krispy Kreme

Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme --
http://www.krispykreme.com/-- is a leading branded specialty  
retailer of premium quality doughnuts, including the Company's
signature Hot Original Glazed.  There are currently approximately
320 Krispy Kreme stores and 80 satellites operating system-wide in
43 U.S. states, Australia, Canada, Mexico, the Republic of South
Korea and the United Kingdom.

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


LA QUINTA: Moody's Downgrades Senior Unsecured Debt Rating to B2
----------------------------------------------------------------
Moody's Investors Service downgraded the ratings on the senior
unsecured debt of La Quinta to B2, from Ba2, and upgraded the B1
preferred stock ratings of the company to Ba3; Moody's will
withdraw all ratings assigned to La Quinta.  

According to Moody's, these rating actions follow the announcement
on Jan. 25, 2006 that an affiliate of the Blackstone Group has
completed its acquisition of La Quinta in an all cash transaction
valued at $3.4 billion.  In December 2005, La Quinta commenced a
tender offer and consent solicitation for all of its outstanding
unsecured debt.  

As of Jan. 25, 2006, over 90% of each unsecured debt issue was
tendered.  As a result, substantially all of the restrictive
covenants contained in the bond indentures have been removed.  On
Jan. 13, 2006, La Quinta announced its plans to redeem all shares
of its 9% Series A Cumulative Preferred Stock and the
corresponding depositary shares, effective Feb. 12, 2006. At
closing on Jan. 25, 2006, the funds to do so were deposited into a
trust.

According to Moody's, the downgrade of La Quinta's unsecured debt
reflects that the company's post-acquisition capital structure is
highly levered with substantial amounts of secured debt, as well
as lack of covenant protection for the remaining untendered debt.
Blackstone has funded this transaction with $500 million in equity
and $2.96 billion of primarily secured debt financing, resulting
in a debt to assets of 87%, and debt to recurring annualized 2005
EBITDA of 8.8X.  The upgrade of La Quinta's preferred stock to Ba3
reflects the refunding of these securities in anticipation of
their redemption on Feb. 12, 2006.

These ratings were downgraded and will be withdrawn:

  La Quinta Properties, Inc.:

     -- Senior unsecured debt to B2, from Ba2
     -- senior unsecured debt shelf to (P)B2, from (P)Ba2
     -- subordinated debt shelf to (P)B3, from (P)Ba3
     -- preferred stock shelf to (P)Caa1, from (P)B1

  La Quinta Corporation:

     -- Senior unsecured debt shelf to (P)Caa1, from (P)B1
     -- subordinated debt shelf to (P)Caa2, from (P)B2
     -- preferred stock shelf to (P)Caa3, from (P)B3

This rating was upgraded and will be withdrawn:

  La Quinta Properties, Inc.:

     -- Preferred stock to Ba3, from B1

La Quinta (NYSE: LQI) is a paired-share hospitality firm
consisting of a REIT -- La Quinta Properties, Inc. -- and La
Quinta Corporation.  La Quinta owns, operates or franchises more
than 600 hotels in 39 states under the:

   * La Quinta Inns,
   * La Quinta Inns & Suites,
   * Baymont Inn & Suites,
   * Woodfield Suites, and
   * Budgetel brands.

The firm is based in Irving, Texas, USA.


LINENS 'N THINGS: Fitch Initiates Coverage With Low-B Ratings
-------------------------------------------------------------
Fitch initiated rating coverage of Linens 'n Things, Inc. (LIN)
as:

   -- Issuer default rating 'B-';
   -- Proposed asset-based revolver 'BB-/RR1'; and
   -- Proposed senior secured notes 'B-/RR4'.

The Rating Outlook is Negative.  These actions assume that the
announced leveraged buyout and associated debt issuances close
under the announced terms.  Approximately $1,250 million of debt
is covered by these actions.

On Nov. 8, 2005, LIN announced that it had entered into a
definitive agreement to be acquired by Apollo Management, L.P.
together with certain co-investors including NRDC Real Estate
Advisors I, LLC, for approximately $1.3 billion, or $28.00 per
share in cash.  LIN's acquisition is to be completed utilizing new
debt and an equity contribution of approximately $650 million
each, as well as cash on hand.  Pricing for the transaction is
approximately 8.7x latest 12 months ended Oct. 1, 2005 (LTM)
operating EBITDA.  The transaction, which has already been
approved by LIN shareholders on Jan. 30, is expected to close
simultaneously with the proposed notes offering.

The ratings reflect LIN's position as the second largest specialty
retailer of home furnishings as well as its broad geographic
reach.  The ratings are also based on:

   * LIN's significant leverage pro forma for the leveraged
     buyout;

   * its weak operating performance; and

   * intense competition in the home furnishings space.

LIN has a broad geographic presence with 542 stores across 47
states and six Canadian provinces with LTM revenues of $2.7
billion.  The company has increased its number of stores and
square footage at a rapid pace, with compound annual growth rates
of 11% and 10%, respectively, over the last three years.  New
stores have not performed as well as the company's more mature
stores.  In addition, the home furnishings market is highly
competitive with many different types of retailers, including
department stores, discounters and specialty retailers, selling
home furnishings.  As a result, LIN's comparable net sales have
declined in each quarter of 2005, significantly weaker than its
closest competitor.

Following the leveraged buyout, the company intends to reduce new
store openings and focus on improving the operations of its
existing stores, while reducing capex from current levels.  The
company also plans to:

   * reduce the overall number of SKUs (stock-keeping units) in
     its stores;

   * establish a key item program; and

   * price key items competitively.  

LIN could benefit from operational improvement through its
proposed initiatives; however, it remains to be seen how
successfully such initiatives are implemented.

Pro forma for the transaction, LIN's adjusted leverage, as defined
by total adjusted debt to EBITDAR, would have been over 7.0x for
the LTM ended Oct. 1, 2005.  Liquidity is expected to be almost
$600 million, consisting primarily of $500 million in asset-based
revolving loans available.  LIN will have adequate financial
flexibility to meet its near-term capital requirements and debt
service obligations.

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 asset-based revolver ('RR1', reflecting
expected 91%-100% recovery) benefit from substantial collateral of
inventory and receivables, as well as borrowing limitations due to
borrowing base computation, mandatory prepayments, and permanent
reduction in commitment in certain circumstances, which preclude
the issuance of significant amounts of debt without sizable
increases in assets.  The senior secured floating rate notes
('RR4', reflecting expected recovery of 31%-50%) reflect the
expectation of average recovery prospects in a distressed case.


MAJESCO ENTERTAINMENT: Losses Trigger Going Concern Doubt   
---------------------------------------------------------
Goldstein Golub Kessler LLP expressed substantial doubt about
Majesco Entertainment Company's ability to continue as a going
concern after it audited the Company's financial statements for
the fiscal years ended Oct. 31, 2005 and 2004.  The auditing firm
pointed to the Company's recurring losses.

The Company's auditors can be reached at:

           Goldstein Golub Kessler LLP
           1185 Avenue of the Americas
           New York, NY 10036-2602
           https://www.ggkllp.com/

Majesco reported a $70.9 million net loss for the fiscal year
ended Oct. 31, 2005, versus an $11.2 million net loss last year.  
The increase in net loss is attributed to weak sales across all of
the Company's product lines, primarily its premium game releases,
which resulted in significant reserves relating to capitalized
costs, increased provisions in price protection and other
allowances.  The Company generated revenue of $59.7 million for
the 2005 fiscal year as compared to $121 million in fiscal 2004.

At Oct. 31, 2005, the Company's balance sheet showed $30,081,000
in total assets and liabilities of $25,320,000.  The Company had
an $87,388,000 accumulated deficit at the end of fiscal 2005.

Due to general weakness in the sector experienced both in its
fourth quarter and the subsequent holiday selling season, coupled
with the rising costs of developing and marketing Next Generation
games, the Company revised its product strategy, and decided to
sell-off its rights to development or to cancel many of its
premium console titles still in development.

In addition, the Company evaluated its game line-up for 2006 and
beyond to determine the capitalized costs that were not fully
recoverable.  Accordingly, operating loss for fiscal 2005 included
provisions for impairment of capitalized software costs and
prepaid license fees of $26.3 million, relating to the sale,
cancellation, or anticipated non-recoverable costs of such games.

Jesse Sutton, President of Majesco commented, "This has been a
difficult year for Majesco.  We entered the premium console market
with a high expectation for success, but as a result of a variety
of factors we were not able to meet our expectations. Recently, we
evaluated our product portfolio and have sold or cancelled most of
our premium console titles that were scheduled for release in 2006
and beyond.  The increased operating loss we reported today is
largely a result of the non-cash charges that we recognized in the
fourth quarter relating to these events."

         Revised Strategy and Corporate Restructuring

Due to challenging market conditions, rising development and
marketing costs for current and Next Generation console titles,
and the disappointing results for the titles the Company published
in the last year, Majesco is repositioning itself and shifting its
product strategy away from the premium console game market.  Going
forward, Majesco will focus primarily on publishing value and
handheld video games.

Said Jesse Sutton, "Publishing value priced software and games for
handheld systems has historically been one of our strengths.  We
believe that this strategy is more prudent for Majesco at this
time and offers us the most opportunity for success as it requires
a relatively low investment in development and marketing."

To appropriately align its resources with its revised strategy and
financial expectations the Company completed a recent
restructuring, principally a 20% reduction in headcount.  The
Company expects to realize the full effect of the cost reductions
in the second quarter ending April 30, 2006.  In addition, the
Company's sale of two titles, subsequent to the close of fiscal
2005, raised $8 million and together with the cancellation of
titles, reduced its 2006 required cash outlay by roughly $30
million.

                       About Majesco

Headquartered in Edison, New Jersey, Majesco Entertainment Company
(NASDAQ: COOL) -- http://www.majescoentertainment.com/-- provides  
digital entertainment products and content.  The Company's diverse
product lineup includes video games such as Infected(TM) for the
PSP(PlayStation Portable) system, Aeon Flux(TM), and the
forthcoming JAWS(TM) Unleashed, as well as digital entertainment
products like Frogger(R) TV Arcade.  Majesco now offers Game Boy
Advance Video versions of DreamWorks Animation movies Shrek, Shrek
2 and Shark Tale.


MERISTAR HOSPITALITY: S&P Upgrades Corporate Credit Rating to B
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on hotel
operating company MeriStar Hospitality Corp., including its
corporate credit rating to 'B' from 'B-'.
     
The outlook is stable.  The Washington, D.C.-based company had
about $1.6 billion in total debt outstanding as of Sept. 30, 2005.
     
The upgrade follows MeriStar's announcement today that it has
signed a definitive agreement to sell a portfolio of nine hotels
and a golf and tennis club to an affiliate of The Blackstone Group
for about $367 million in cash.  The transaction is expected to
close by the end of the first quarter of 2006, and the company
plans to use the majority of the proceeds to further reduce debt.

Additionally, Standard & Poor's expects MeriStar's operating
performance to remain solid in the intermediate term given a
healthy U.S. lodging environment.


MESABA AIRLINES: Unions Balks at Court Filing to Reject Contracts
-----------------------------------------------------------------
Mesaba Airlines filed a motion in bankruptcy court that requests
authority to reject the collective bargaining agreements with the
Air Line Pilots Association, International (ALPA), the Association
of Flight Attendants (AFA), and the Aircraft Mechanics Fraternal
Association (AMFA).  The unions have made every effort possible to
respond to management's request for cost savings, but are at odds
over the depth of management's proposed cuts, especially in light
of the enormous sums of money that Mesaba has transferred to its
parent, MAIR Holdings.

"It is outrageous for Mesaba management to go to these extremes to
gut our pay, work rules and benefits, especially in light of the
fact that Mesaba has been profitable for many years," stated Kevin
Wildermuth, Negotiating Committee chairman of the Mesaba AMFA
unit.  "Our technicians have worked hard on behalf of our company,
and our profitability led us to believe that our futures were
secure."

"ALPA has yet to see proof that these concessions are warranted --
and certainly not concessions that would force professional,
skilled pilots' income levels to drop below federal poverty
guidelines," claimed Captain Tom Wychor, chairman of the Mesaba
ALPA unit.  "It is clear that Mesaba is simply trying to
manipulate the bankruptcy process to attack labor, and it is
wrong."

Mesaba management has proposed to slash wages while also imposing
a 60% increase in health insurance premiums.  Management is also
seeking the right to outsource many jobs currently protected by
job security provisions.  Pilot pay currently starts at $21,000
per year.  Flight attendants earn just $14,000 in starting pay,
and mechanics start at $27,000.  The cuts proposed by Mesaba are
drastic -- in 2012 a starting pilot who elects family health
insurance will gross just $10,700 annually.

The unions point to Mesaba's parent, MAIR Holdings, as a critical
factor in the bankruptcy.  Mesaba produces almost all of MAIR's
revenue, and MAIR held $120 million in cash and equivalents at the
time Mesaba filed for bankruptcy.  Big Sky Airlines, another MAIR
subsidiary, has accrued over $13 million in losses since the
carrier was purchased in December of 2002.  Big Sky has not filed
for bankruptcy protection.

This year marks the 75th anniversary of the flight attendant
profession and the 60th anniversary of the Association of Flight
Attendants -- http://www.afanet.org/ More than 46,000 flight  
attendants join together to form AFA-CWA, the world's largest
flight attendant union.  AFA-CWA is part of the 700,000-member
strong Communications Workers of America, AFL-CIO.  

Maintenance technicians at Mesaba are represented by AMFA --
http://www.amfanatl.org/-- a craft oriented, independent aviation  
union created in 1962 with over 16,000 members at eight airlines.  
AMFA's creed is, "Safety In The Air Begins With Quality
Maintenance On The Ground."  

Founded in 1931, ALPA -- http://www.alpa.org/-- celebrates its  
75th anniversary this year representing 62,000 pilots, including
850 Mesaba pilots, at 39 airlines in the U.S. and Canada.  

Mesaba Aviation, Inc., d/b/a Mesaba Airlines --
http://www.mesaba.com/-- operates as a Northwest Airlink      
affiliate under code-sharing agreements with Northwest Airlines.  
The Company filed for chapter 11 protection on Oct. 13, 2005
(Bankr. D. Minn. Case No. 05-39258).  Michael L. Meyer, Esq., at
Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed total assets of $108,540,000 and
total debts of $87,000,000.


MH/1993: Case Summary & 13 Largest Unsecured Creditors
------------------------------------------------------
Debtor: MH/1993/Foods, Inc.
        aka Michele Foods
        1600 W 167th Street, Suite 20
        Calumet City, Illinois 60409

Bankruptcy Case No.: 06-00935

Chapter 11 Petition Date: February 3, 2006

Court: Northern District of Illinois

Judge: Carol A. Doyle

Debtor's Counsel: Bruce Dopke, Esq.
                  P.O. Box 681246
                  Schaumburg, Illinois 60168
                  Tel: (847) 524-4811
                  Fax: (847) 524-4131

Estimated Assets: $100,000 to $500,000

Estimated Debts:  $1 Million to $10 Million

Debtor's 13 Largest Unsecured Creditors:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
Market Choice, Inc.              Services             $1,000,000
1829 Mecklenburg Highway
Mooresville, NC 28115

Michele Hoskins                  Loans                   $75,000
1600 West 167th Street, Suite 20
Calumet City, IL 60409

Michele Foods                    Agreement               $52,775
Manufacturing, Inc.
3965 Virginia Avenue
Cincinnati, OH 45227

Exel Transportation              Services                $34,546
Services, Inc.

Chicago Sweeteners, Inc.         Security Interest       $14,179

Internal Revenue Service         Taxes                   $14,000

Holman Financial Group, Ltd.     Security Interest       $10,000

ShoreBank                        Business Assets          $6,142

Dell Financial Services          Equipment Lease          $4,059

Land & Company                   Payment Plan             $3,227

GFC Leasing                      Equipment Lease            $884

Monogram Credit Card Bank        Security Interest          $511

Home Depot Credit Services       Credit Card Charges        $314


MUSICLAND HOLDING: Wants to Maintain Existing Insurance Policies
----------------------------------------------------------------
Musicland Holding Corp. and its debtor-affiliates maintain
numerous insurance policies that provide coverage for general
liability, workers' compensation, directors and officers
liability, umbrella liability, automotive liability, crime,
special risk, fiduciary liability and property.

Those policies are essential to the preservation of the Debtors'
business, property and assets.  In many cases, coverage is
required by various regulations, laws and contracts that govern
the Debtors' business conduct.

James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, tells the
U.S. Bankruptcy Court for the Southern District of New York that
the Debtors finance the premiums on some of their policies
pursuant to premium financing agreements.  Accordingly, the total
annual premium for the policies currently financed by the Debtors
is $1,772,964.

The Debtors have four unpaid Premium Financing Agreements with
AFCO Credit Corporation and one with St. Paul Travelers.  AFCO
alleges that it is a secured creditor with regard to the AFCO
PFAs.

Mr. Sprayregen discloses that the total annual premium for the
Policies is $1,772,966.  In June 2005, November 2005, December
2005 and January 2006, the Debtors made down payments totaling
$444,887 and have financed the remaining $1,328,077 pursuant to
the Existing PFAs.

The Existing PFAs presently require monthly installments totaling
$141,074 and bear total finance charges of $20,413 on the
$905,970 total financed amount.

Mr. Sprayregen points out that if the Debtors were unable to
continue making payments on the Existing PFAs, the insurers would
try to terminate the Policies, or AFCO would seek modification of
the automatic stay to cancel the AFCO-financed Policies and
receive its collateral.

In addition, if the Policies were terminated, the Debtors would be
required to obtain replacement insurance on an expedited basis and
at tremendous cost.

If the Debtors do not pay the premiums for the Policies, some
carriers may be reluctant to continue doing business with the
Debtors.  In the current insurance market, any reduction in the
number of available carriers may result in an increase in the
Debtors' future insurance premiums.  Further, maintenance of the
directors and officers liability policy is also necessary to the
retention of the Debtors' management.

Mr. Sprayregen informs that the Debtors are presently engaged in
negotiations with various premium-financing companies to decide
the most favorable means of financing those premiums.

Therefore, the Debtors ask the Court's permission to pay the
financed premiums for the Policies and make loan payments to AFCO
on account of the AFCO PFAs.

Further, the Debtors seek the Court's authority to enter into new
PFAs under Section 364(c)(2) of the Bankruptcy Code and the
collateral be the unearned premiums that will be created.

Mr. Sprayregen notes that the Debtors do not seek to assume the
Policies at this time.

                    Creditors Committee Objects

The Official Committee of Unsecured Creditors tells the Court that
it is necessary for the Committee to review the Policies in order
to properly respond to the Debtors' request.

According to Mark T. Power, Esq., at Hahn & Hessen LLP, in New
York City, the Committee has requested information about the
Policies from the Debtors and their financial advisors.  However,
as of January 25, 2006, neither the Committee nor their financial
advisors have received sufficient information to enable the
Committee to evaluate the merits of the request.  

Mr. Power says, that without an understanding of the basic
provisions of the Policies as to coverage and terms, the
Committee and the Court lack the information needed to determine
whether the Debtors' request is appropriate.

Accordingly, the Committee asks the Court to adjourn the hearing
until the Committee and the Court can properly review the Policies
underlying the PFAs.

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. 4; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


MUSICLAND HOLDING: Walks Away from 68 Real Property Leases
----------------------------------------------------------
Musicland Holding Corp. and its debtor-affiliates have commenced
the Chapter 11 Cases with a goal to promptly facilitate a balance
sheet and operational reorganization by pursuing a business plan
focused on a smaller group of core stores, together with their web
platform and new business categories.

James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, explains
that to avoid paying unnecessary administrative expenses, the
Debtors have identified 68 nonresidential real property leases
that are no longer integral to the Debtors' ongoing business
operations and present burdensome contingent liabilities.

While some of these Leases may have expired prior to or on
January 31, 2006, the Debtors sought and obtained the U.S.
Bankruptcy Court for the Southern District of New York's
permission to reject the Leases as of the later of:

   -- the date that the Debtors vacate the premises by delivering
      the keys to the landlord at the mall manager's office; or

   -- January 31, 2006.

Further, any property left in the premises after the effective
date of rejection will be deemed abandoned by the Debtors.

Mr. Sprayregen notes that some of the Leases have kick-out
provisions that give the Debtors the right to terminate the Lease
and vacate the property based on not having earned a specified
dollar amount in sales.

The Debtors will serve a copy of the Court order granting their
request and notice of the Order to parties-in-interest.  The
Notice will provide that any objection to entry of the Order must
be filed with the Court no later than 10 days after the service of
the Order and served upon counsel to the Debtors and the Notice
Parties.  If no objection is timely filed and served, the request
will be considered granted on a final basis.

If any objection to the Order is timely and properly filed and
served, the Debtors will attempt to reach a consensual resolution
of the objection.  If the parties are unable to so resolve any
objection, the Debtors will schedule a hearing before the Court.  
If the objection is overruled by the Court or withdrawn the
rejection of the affected lease will be deemed effective on the
Petition Date.

A schedule of the 68 Real Property Leases is available for free at
http://bankrupt.com/misc/Musicland_68jan31leases.pdf

                          Objections

(1) Taubman Landlords

Andrew S. Conway, Esq., at Honigman Miller Schwartz & Cohn LLP, in
Bloomfield Hills, Michigan, tells the Court that the Debtors
entered into non-residential real property leases, which are
limited to commercial use, at Woodfield in Schaumburg, Illinois,
and Stamford Town Center in Stamford, Connecticut.

However, the Debtors failed to pay administrative rent under the
Taubman Leases since January 12, 2006.  The Debtors' failure to
pay rent and other charges results in a substantial injury to the
landlords.

Mr. Conway also asserts that pursuant to Section 365 (d)(3) of the
Bankruptcy Code, the Taubman Landlords are entitled to a
reimbursement of their attorney's fee as part of the requirement
that the Debtors fulfills all of their contractual obligations.

Therefore, the Taubman Landlords ask the Court to compel the
Debtors to immediately pay all postpetition administrative amounts
due, including the amounts due for the January 12 through
January 31, 2006, along with interests and attorneys fees.

(2) CBL and Glimcher Properties

On behalf of CBL & Associates Management, Inc., and Glimcher
Properties Limited Partnership, Ronald E. Gold, Esq., at Frost
Brown Todd LLC, in Cincinnati, Ohio, points out that the Debtors
should not be permitted to reject the Leases prior to vacating the
leased premises in the Shopping Centers because the Debtors have
not offered any basis for nunc pro tunc rejection of the Leases.

In addition, although the Debtors do not indicate their objective
with respect to the payment of rent and other obligations under
the Leases, Mr. Gold tells the Court that any rejection of the
Leases must comply with the Debtors' obligations under Section
365 to timely pay all rent and other obligations due under the
Leases through the later of the effective date of rejection and
the date the Debtors vacate the Leased Premises.

Mr. Gold discloses that as of January 27, 2006, the Debtors have
not paid the Objecting Landlords stub rent for January 2006.

Furthermore, an order authorizing the rejection of the Leases must
require the Debtors to return the Leased Premises to the Objecting
Landlords in accordance with the terms and conditions of the
Leases, and must provide that any property remaining at the Leased
Premises after the Debtors vacate will be deemed abandoned.

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. 4; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


NEXICON INC: Earns $316,644 of Net Income in 3rd Quarter of 2005
----------------------------------------------------------------
Nexicon, Inc., delivered its financial results for the quarter
ended Sept. 30, 2005, to the Securities and Exchange Commission on
Feb. 1, 2006.

In the third quarter of 2005, Nexicon earned $316,644 of net
income, in contrast to a $1,407,798 net loss for the same period
last year.  The Company generated $171,490 of revenue for the
three months ended Sept. 30, 2005, as compared to $448,510 of
revenue for the same period in 2004.

The Company's balance sheet at Sept. 30, 2005, showed $300,973 in
total assets, $1,544,298 of total current liabilities and
$1,715,903 of derivative financial instruments, resulting in a
stockholders' deficit of $2,959,228.  As of Sept. 30, 2005, the
Company had a working capital deficit of $1,434,581,

                     Going Concern Doubt

Stark, Winter, Schenkein & Co., LLP, expressed substantial doubt
about Nexicon's ability to continue as a going concern after it
audited the Company's financial statements for the year ended Dec.
31, 2004 and 2003.  The auditing firm pointed to the Company's
recurring losses from operations as well as working capital and
stockholders' deficits.

                        About Nexicon

Headquartered in Albuquerque, New Mexico, Nexicon --
http://www.nexiconinc.com/-- offers next-generation products and  
services for intellectual property security, business
intelligence, network monitoring and unified threat management,
and billing support systems.  The Charon Billing System serves as
the adaptable, available and scalable nexus of Nexicon's powerful
core process technology delivering highly efficient and effective
solutions to customers worldwide.


NMHG HOLDING: S&P Revises Outlook to Stable from Negative
---------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
Portland, Oregon-based forklift truck manufacturer NMHG Holding
Co., including the 'BB-' corporate credit rating on the company.
At the same time, Standard & Poor's revised its outlook to stable
from negative.  At Sept. 30, 2005, the company had approximately
$469 million of total debt outstanding.
      
"The outlook revision reflects our opinion that NMHG's
profitability should meaningfully improve in 2006 as the company
fully achieves the benefits of pricing actions, as well as
continued volume strength and lower new product implementation
costs," said Standard & Poor's credit analyst Joel Levington.
"Because of these improvements, we believe NMHG's prospective
credit profile will be consistent with our expectations at the
current ratings level."
     
The speculative-grade ratings reflect NMHG's:

   * aggressive financial risk profile,
   * fair liquidity, and
   * weak business risk profile assessment,

reflecting the company's leading positions within cyclical and
volatile markets.
     
NMHG competes in the global forklift truck market, which is
limited in size, somewhat consolidated, and moderately capital
intensive.  Over the business cycle, the industry grows at GDP-
like rates.  Larger forklift manufacturers like NMHG are also
gaining market share from vendor consolidation, which will give
the company additional national account opportunities.  However,
the industry is both cyclical and volatile; currently, demand is
solid for lift trucks, following weakness in the 2000-2002 period,
although Standard & Poor's expects growth rates to decelerate in
the near term.
     
Although volumes are robust, NMHG's margins have been under
significant pressure because of higher raw material prices and
production inefficiencies caused by the company's changeover in
most product lines.  However, Standard & Poor's is anticipating
that the company will be able to achieve stronger pricing and more
fully realize the benefits of the significant operating leverage
inherent in the business, which should drive operating margin
expansion and profitability.  Nonetheless, Standard & Poor's
continue to view NMHG's profitability as weak, as the company has
razor-thin margins and meaningful fixed capital investments.
     
NMHG's strengths include:

   * its brands (both Hyster and Yale);

   * its economies of scale; and

   * its strong distribution network (particularly in the
     Americas).

Its independent dealer network and large installed base in North
America provide opportunities for the company to gain market share
and participate in higher-margin aftermarket service and parts
markets.  Customer diversity is considered good, although the
company's exposure to the automotive market will somewhat temper
its good demand prospects.  In the intermediate term, NMHG's
strategic thrust will mainly be to improve internal operations.
The company continues to implement demand flow technology,
focusing on global procurement and new product introductions, all
of which should improve margins and cash flow in the intermediate
term.  No acquisitions are expected.


NORTEL NETWORKS: S&P Rates Proposed US$1.3 Billion Facility at B-
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' debt rating
to Nortel Networks Inc.'s (NNI) proposed US$1.3 billion credit
facility due February 2007.  NNI is a wholly owned subsidiary of
Brampton, Ontario-based Nortel Networks Ltd. (NNL).  Combined
proceeds from the facility will be used to refinance maturing
debt, primarily the US$1.3 billion NNL senior notes due Feb. 15,
2006.  At the same time, Standard & Poor's affirmed its 'B-' long-
term corporate credit and its 'B-2' short-term ratings on NNL.  
The outlook is stable. NNL, NNI, and NNL's parent, Nortel Networks
Corp. (NNC), are collectively referred to as Nortel.
     
"On completion of the refinancing, liquidity will remain at an
adequate level, with total cash balances estimated to remain
relatively unchanged from the year-end 2005 balance of US$3.0
billion," said Standard & Poor's credit analyst Joe Morin.  
     
The proposed US$1.3 billion one-year term credit facility will
include a US$850 million senior secured Tranche A, as well as a
US$450 million senior unsecured Tranche B.  Tranche A of the
facility, along with the existing NNL US$200 million notes due
2023 and the EDC support facility, will be secured by the U.S. and
Canadian assets of NNL and its U.S. and Canadian subsidiaries.

In addition, the facility will be guaranteed by NNL and NNC.  
Total secured debt and other obligations, which for analytical
purposes includes just the US$300 million committed portion of the
EDC support facility, will be US$1.35 billion, and will rank ahead
of all other unsecured indebtedness of NNL and publicly listed
parent NNC.  The secured obligations rank ahead of unsecured debt
with respect to the U.S. and Canadian assets.  

Standard & Poor's does not currently assign recovery ratings to
secured bridge or short-term facilities of one year or less, which
includes NNL's proposed interim facility.  A recovery rating,
therefore, has not been assigned and the ratings on the secured
debt are, accordingly, equivalent to the corporate credit rating.
The unsecured debt is also rated the same as the corporate credit
rating, as total priority debt and obligations (US$1.35 billion in
secured obligations) are less than 15% of total adjusted assets.
In addition, the unsecured debt is only disadvantaged with respect
to the U.S. and Canadian assets, which represent about 60% of
NNL's total assets.   
     
The ratings on NNL are based on the consolidation with its parent,
NNC.  The ratings reflect:

   * a weak but stable spending environment for telecom equipment
     and services globally;

   * a highly competitive industry;

   * the company's high debt level;

   * weak credit protection measures; and

   * profitability that is lagging its global peers.
     
These factors are only partially mitigated by the company's
liquidity position, which should provide adequate financial
flexibility in the medium term.  Other key credit concerns are the
remaining material weaknesses in the company's internal controls
and a substantial amount of litigation against the company, the
financial effect of which is not quantifiable at this point,
including the potential effect of mediation with respect to
certain litigation.
     
The stable outlook reflects expectations for modest improvements
in Nortel's operating performance, including modest growth in
revenues, EBITDA, and cash flow.  The company's current cash
balances provide it with adequate flexibility at the current
rating level, including the ability to repay the proposed credit
facilities on maturity in February 2007.  

Should Nortel demonstrate more substantial improvements in
performance, and credit measures strengthen as a result, the
outlook could be revised to positive or the rating could be
raised.  Still, the substantial amount of litigation outstanding
and material weaknesses in internal controls will be constraining
factors on the rating until resolved.  Conversely, should
unexpected challenges in market conditions cause Nortel's
performance measures to deteriorate further in the near term, the
outlook could be revised to negative.


NORTEL NETWORKS: Unit Gets $1.3 Bil. Loan to Finance Bond Maturity
------------------------------------------------------------------
Nortel Networks Corporation (NYSE/TSX: NT) and the Company's
indirect subsidiary, Nortel Networks Inc. (NNI) have entered into
binding commitments for a new one year credit facility in the
aggregate principal amount of $1.3 billion arranged by:

     * J.P. Morgan Securities Inc.,
     * Citigroup Corporate and Investment Banking,
     * ChaseBank N.A.,
     * Royal Bank of Canada, and
     * Export Development Canada

Subject to the terms and conditions of the commitments, the
Lenders have agreed to provide NNI with a credit facility in the
aggregate amount of $1.3 billion, consisting of:

     b) a senior secured one-year term loan facility in the
        amount of $850 million and

     c) a senior unsecured one-year term loan facility in the
        amount of $450 million.

This new facility, which would mature in February 2007, will be
used to refinance the outstanding $1.275 billion aggregate
principal amount of 6.125% Notes due Feb. 15, 2006 of the
Company's principal operating subsidiary, Nortel Networks Limited
(NNL).

The Company has elected to proceed with this financing while it
continues to pursue important objectives, including the ongoing
mediation efforts relating to two of its significant pending class
action lawsuits in the United States.  As the Company has
previously disclosed, it cannot predict whether such mediation
efforts will result in achieving a global settlement
encompassing these two actions.

The secured loan would be secured by a first priority lien
on substantially all of the U.S. and Canadian assets of the
Company, NNL and NNI.  NNL's $200 million 6.875% Notes due
June 15, 2023 and amounts outstanding under NNL's $750 million
EDC performance-related support facility would be equally and
ratably secured with the secured loan.  The Company and NNL would
guarantee NNI's obligations under the secured loan and amounts
outstanding under NNL's $750 million EDC performance-related
support facility during the term of the secured loan.  As of Jan.
30, 2006, there was approximately $156 million of outstanding
support utilized under the EDC Support Facility.

The loans under the facility would bear interest equal to LIBOR
plus an applicable margin as set forth in the commitment letter.  
The loan documentation would contain representations, warranties,
covenants and events of default customary for financings of this
type, including a minimum Adjusted EBITDA covenant for the secured
loan and a covenant applicable to both loans that unrestricted
cash and cash equivalents of NNC on a consolidated basis must at
all times exceed $1 billion.

NNI would be required to prepay the facility in certain
circumstances, including in the event of certain debt or equity
offerings or asset dispositions of collateral by the Company, NNL
or NNI.  The financing commitments permit the lenders, in
consultation with the Company, to further syndicate the facility
and are subject to the completion of definitive documentation for
the facility and other customary conditions.  The Company and
NNI have agreed to a demand right exercisable at any time after
May 31, 2006 pursuant to which they would be required to take all
reasonable actions to issue senior unsecured debt securities in
the capital markets to repay the credit facility.

The Company's consolidated cash balance at the end of 2005 was
approximately $3 billion.

Headquartered in Ontario, Canada, Nortel Networks Corporation --
http://www.nortel.com/-- is a recognized leader in delivering  
communications capabilities that enhance the human experience,
ignite and power global commerce, and secure and protect the
world's most critical information.  Serving both service provider
and enterprise customers, Nortel delivers innovative technology
solutions encompassing end-to-end broadband, Voice over IP,
multimedia services and applications, and wireless broadband
designed to help people solve the world's greatest challenges.  
Nortel does business in more than 150 countries.

Nortel Network Corp.'s 4-1/4% Senior Notes due 2008 carry Moody's
Investors Service's B3 rating and Standard & Poor's B- rating.


NORTHWEST AIRLINES: Pilots Union Leaders Authorize Strike Ballot
----------------------------------------------------------------
The elected representatives of the Northwest pilots union, as
represented by the Air Line Pilots Association, Int'l (ALPA),
voted unanimously on Feb. 3, 2006, to ballot the pilot group to
authorize a strike.  The exact timing of the ballot was left to
the discretion of Master Executive Council (MEC) Chairman Capt.
Mark McClain.

This action by the NWA MEC comes after another week of
negotiations with NWA management that produced few results.  
Although ALPA continues to present fair and competitive proposals,
NWA management continues to act unreasonably by making demands
instead of working with the pilot group to better secure NWA's
future.

The 1113(c) hearing, which opened Jan. 17, is expected to conclude
Monday, Feb. 6.  If ALPA and management are unable to reach an
agreement, Judge Allan Gropper's ruling on whether or not to
reject the pilot contract is expected no later than Feb. 16.

If the U.S. Bankruptcy Court rejects ALPA's collective bargaining
agreement with Northwest and the company unilaterally implements
terms and conditions on pilots, NWA pilots have the right to
strike.  MEC Chairman Captain Mark McClain stated, "We must make
contingency preparations in order to protect the quality of our
careers here at Northwest Airlines.  The strike vote will give our
pilots an opportunity to demonstrate their opposition to
management's overreaching demands."

Throughout negotiations, Northwest pilots have bargained in good
faith to achieve a fair consensual agreement that meets the
requirements of NWA pilots and the needs of Northwest Airlines.  
At the same time, the pilot group has stood firm in its resolve to
defend NWA pilots' jobs, wages and working conditions, denouncing
the unreasonable demands made by management both in court and in
negotiations.

"Northwest pilots have already made tremendous sacrifices,
including a 39% pay cut, to help our airline through these
difficult times," Capt. McClain said.  "If management is allowed
to impose terms and conditions that cost NWA pilot jobs, we will
have no choice but to defend our livelihoods and our careers."

Founded in 1931, ALPA represents 62,000 pilots at 39 airlines in
the U.S. and Canada.  ALPA represents approximately 5,000 active
NWA pilots and 700 furloughed pilots.  Visit the ALPA website at
http://www.alpa.organd the NWA pilot group website at  
http://www.nwaalpa.org.

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


NOVELIS INC: Inks Multi-Year European Supply Agreement with Prefa
-----------------------------------------------------------------
Novelis Inc. (NYSE: NVL) (TSX: NVL) signs a long-term contract for
the supply of pre-painted aluminum sheet to Prefa.  Details of the
multi-million dollar supply agreement were not released.

In addition, Novelis and Prefa will collaborate on initiatives to
expand the use of pre-painted aluminum sheet in roofing
applications.  The companies will partner on extended supply chain
initiatives to meet the service requirements of architects,
builders and installers.  As well, they will work jointly to
develop innovative paint systems to enhance the aesthetics,
durability and life-cycle benefits of their roofing products.

Novelis has also awarded Prefa a license for the distribution of
Falzonal(R), a pre-painted, standing-seam quality aluminum sheet
produced by Novelis for a wide range of roofing and fagade
architecture (http://www.falzonal.com/). Under the terms of the  
license, Prefa becomes sole distributor of Falzonal(R) in a number
of European countries, most notably Germany and Austria.  The
material will be marketed alongside the full range of Prefa
roofing systems and products, offering customers "one-stop
shopping" for their roofing needs.
    
"We are delighted that this strengthening of our co-operation with
Novelis will provide a solid platform for innovation and growth,
which will help develop our overall offer to the thriving market
for aluminum roofing," Walter Pacher, Prefa managing director,
said.
    
"Novelis firmly believes in the value of working closely with its
customers," Erwin Mayr, president of Novelis' Automotive, Painted
and Specialties business unit, added.  "This agreement with Prefa
will provide many opportunities for joint work on product
development and supply chain initiatives.  Prefa's extensive
experience in aluminum roofing, together with Novelis' materials
and coatings expertise, will be a powerful combination in
developing roofing solutions of the future."

Prefa -- http://www.prefa.com/-- is one of Europe's fastest  
growing aluminum roofing manufacturers and marketers.  With
production facilities in Marktl, Austria, and Wasungen, Germany,
as well as sales offices throughout Europe, the company has over
50 years' experience in the fabrication of aluminum roofing.

Based in Atlanta, Georgia, Novelis Inc. -- http://www.novelis.com/
-- is the global leader in aluminum rolled products and aluminum
can recycling.  The company has 36 operating facilities in 11
countries and more than 13,000 employees.  Novelis has the
unrivalled capability to provide its customers with a regional
supply of technically sophisticated rolled aluminum products
throughout Asia, Europe, North America, and South America.  
Through its advanced production capabilities, the company supplies
aluminum sheet and foil to the automotive and transportation,
beverage and food packaging, construction and industrial, and
printing markets.

Novelis Inc.'s 7-1/4% Senior Notes due 2015 carry Moody's
Investors Service's and Standard & Poor's single-B ratings.


PERFORMANCE TRANSPORTATION: Chapter 11 Cases Jointly Administered
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York in
Buffalo approved Performance Transportation Services, Inc., and
its 13 debtor-affiliates' request for the joint administration of
their bankruptcy cases.

Judge Kaplan directs that all pleadings and papers filed in their
Chapter 11 cases be captioned:

    UNITED STATES BANKRUPTCY COURT
    WESTERN DISTRICT OF NEW YORK
    -------------------------------------
                                        :
    In re: Leaseway Motorcar Transport  :
           Company, et al.,             : Case No. 1-06-00107
                                        : Chapter 11
                            Debtors.    :
                                        :
    -------------------------------------

Judge Kaplan makes it clear that a creditor filing a proof of
claim against any of the Debtors will file the claim in the
particular Debtor's bankruptcy case and not in the jointly
administered case.

Rule 1015(b) of the Federal Rules of Bankruptcy Procedure provides
that if two or more petitions are pending in the same court by or
against a debtor and an affiliate, the court may order a joint
administration of the estates.

"Many of the motions, hearings and orders that will arise in the
[Debtors'] Chapter 11 Cases will jointly affect each and every
Debtor," Garry M. Graber, Esq., at Hodgson Russ LLP, in Buffalo,
New York, says.

Mr. Graber asserted that joint administration will enable the
Debtors to reduce fees and costs resulting from the administration
of their Chapter 11 Cases and ease the onerous administrative
burden of having to file multiple and duplicative documents.

In addition, Mr. Graber contended that as a result of the joint
administration:

    -- all of the Debtors' creditors will benefit from the reduced
       costs;

    -- the Court will be relieved of the burden of entering
       duplicative orders and maintaining duplicative files; and

    -- supervision of the administrative aspects of the Chapter 11
       Cases by the United States Trustee will be simplified.

Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest  
transporter of new automobiles, sport-utility vehicles and light
trucks in North America.  The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment.  The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.

Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors
in their restructuring efforts.  When the Debtors filed for
protection from their creditors, they estimated assets between $10
million and $50 million and more than $100 million in debts.
(Performance Bankruptcy News, Issue No. 1; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


PERFORMANCE TRANSPORTATION: Creditors Meeting Set for March 6
-------------------------------------------------------------
Deirdre A. Martini, the United States Trustee for Region 2, will
convene a meeting of creditors of Performance Transportation
Services, Inc., and its debtor-affiliates on March 6, 2006, at
10:00 a.m.  The meting will take place at the Office of the United
States Trustee at 42 Delaware Avenue, Suite 100 in Buffalo, New
York.

This Meeting of Creditors is required under 11 U.S.C. Sec. 341(a)
in all bankruptcy cases.  All creditors are invited, but not
required, to attend.

This Meeting of Creditors offers the one opportunity in a
bankruptcy proceeding for creditors to question a responsible
office of the Debtors under oath about the company's financial
affairs and operations that would be of interest to the general
body of creditors.

Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest  
transporter of new automobiles, sport-utility vehicles and light
trucks in North America.  The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment.  The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.

Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors
in their restructuring efforts.  When the Debtors filed for
protection from their creditors, they estimated assets between $10
million and $50 million and more than $100 million in debts.
(Performance Bankruptcy News, Issue No. 1; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


PERFORMANCE TRANSPORTATION: Has Until March 3 to File Schedules
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
extended, until March 3, 2006, Performance Transportation
Services, Inc., and its debtor-affiliates' deadline to file their
Schedules and Statements.

Pursuant to Section 521(1) of the Bankruptcy Code, a debtor must
file with the applicable court a schedule of all assets and
liabilities, schedules of current income and expenditures and a
statement of financial affairs.

Rule 1007(c) of the Federal Rules of Bankruptcy Procedure allows a
debtor to file its Schedules and Statements within 15 days of the
commencement date of a bankruptcy case.  An extension of time may
be granted for "cause."

Due to the nature of the Debtors' businesses, limited staff
available to perform the required internal review of the Debtors'
business and affairs, and the press of numerous other matters
incident to the commencement of their Chapter 11 Cases, the
Debtors said that the 15-day automatic extension under Bankruptcy
Rule 1007(c) will not be sufficient.

"Indeed, it would be onerous, if not impossible, to complete the
Schedules and Statements within that deadline," Garry M. Graber,
Esq., at Hodgson Russ LLP, in Buffalo, New York, stated.

The Debtors asserted that the volume of material that must be
compiled and reviewed by their limited staff provides ample
"cause" justifying the extension of time for filing the Schedules
and Statements.

Headquartered in Wayne, Michigan, Performance Transportation
Services, Inc. -- http://www.pts-inc.biz/-- is the second largest  
transporter of new automobiles, sport-utility vehicles and light
trucks in North America.  The Company provides transit stability,
cargo damage elimination and proactive customer relations that are
second to none in the finished vehicle market segment.  The
company's chapter 11 case is administered jointly under Leaseway
Motorcar Transport Company.

Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors
in their restructuring efforts.  When the Debtors filed for
protection from their creditors, they estimated assets between $10
million and $50 million and more than $100 million in debts.
(Performance Bankruptcy News, Issue No. 1; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


POINT TO POINT: Court Confirms First Amended Chapter 11 Plan
------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri
confirmed the First Amended Plan of Reorganization filed by
Point to Point Business Development, Inc.  The Court confirmed the
Debtor's Amended Plan on Jan. 20, 2006.

The Court ruled that the Amended Plan:

   1) complies with the applicable provisions of Sections
      1129(a)(1) and (2) and was proposed in good faith
      as required under Section 1129(a)(3) of the Bankruptcy Code;
      
   2) is fair and equitable to all parties-in-interest, including
      without limitation the Debtor, all unsecured creditors and
      all secured creditors; and

   3) complies with each of the other nine requirements for
      confirmation outlined in Sec. 1129(a) of the Bankruptcy
      Code.

As reported in the Troubled Company Reporter on Dec. 20, 2005, the
Plan provides for the recovery of the bankruptcy assets, and
the continuing operation of the Debtor to pay the amounts due
under it.  The Plan is drafted to allow for confirmation to
proceed before final implementation of the Debtor's turnaround
and before any value can be realized from the bankruptcy assets,
because it passes the value of those assets directly to creditors
on a pro rata basis.

                     Treatment of Claims

Administrative Claims and Priority Claims will be paid in full as
they appear in the schedules.

Secured creditors will receive a lump sum payment of $121,500 out
of funds held in escrow immediately upon entry of an order
approving the settlement between the Debtor and the secured
creditors, plus $218,500 from amounts recovered or released by the
estate's prosecution of the Declaratory Judgment Action.

General unsecured creditors will be paid:

   -- their pro rata share of 20% the amount of monthly net profit
      actually earned in accordance with Generally Accepted
      Accounting Principles, at the end of each calendar quarter
      following confirmation of the Plan; plus    

   -- 50% of net cash held at the end of the calendar year
      starting in 2006, payable in January the following year,
      from the operation of the Debtor's business for a period of
      not less than the length of time needed to pay to creditors
      the gross amount paid through the Plan on hard assets plus
      20% or 30 months.

In addition, as soon as practicable, unsecured creditors will get
a pro rata distribution from any net bankruptcy assets collected
or received by the estate.

Equity security holders will be retained in exchange for new value
contributions as follows:

   -- $250,000 to be contributed to operations as needed to
      capitalize operations and cover cash shortfalls; plus

   -- the guarantee of an additional $250,000 in loans to be made
      to the Debtor.

A full-text copy of the Debtor's chapter 11 plan of reorganization
is available for a fee at:

   http://www.researcharchives.com/bin/download?id=051018035536

Based in Liberty, Missouri, Point to Point Business Development,
Inc. -- http://www.P2PMRO.com/-- says it helps clients lower   
costs through its maintenance, repair and operating (MRO) Web
platform which enables manufacturers to streamline the process of
supply ordering, reduce excess in inventory management, and more
efficiently manage supply chains.  Point to Point filed for
chapter 11 protection (Bankr. W.D. Mo. Case No. 05-44642) on July
7, 2005.  The Debtor estimated at the time of its chapter 11
filing that it had less than $50,000 in assets and $1 million to
$10 million of debt.


RESIDENTIAL REINSURANCE: Moody's Removes Notes' Rating From Watch
-----------------------------------------------------------------
Moody's Investors Service removed from its watchlist for possible
downgrade the $160 million of Variable Rate Notes Due June 8, 2006
currently rated Ba2 and issued by Residential Reinsurance 2003,
Limited, a catastrophe bond.

Moody's noted that in spite of the severe hurricane activity
experienced in 2006, and in particular the effects of Hurricane
Katrina, the transaction's Ultimate Net Losses for the Loss
Occurrence Period is not expected to reach the attachment point
due to these events.  The attachment point for Residential Re 2003
is approximately $600 million and three months after the last
event, the current estimate for the Ultimate Net Losses for the
period does not exceed $470 million.  The exposure period runs
until May 2006 with the only additional loss exposure to the
transaction arising from the potential occurrence of destructive
earthquakes in the U.S. in the next 4 months.

Rating Action: Remove from Moody's Watchlist for possible
               downgrade

Issuer: Residential Reinsurance 2003, Limited

   * The ratings of the $160 million of Variable Rate Notes due
     June 8, 2006 currently rated Ba2 have been removed from the
     Moody's Watchlist for possible downgrade.


RESORTS INT'L: Moody's Junks Ratings on $1.05 Billion Loans
-----------------------------------------------------------
Moody's Investors Service lowered the ratings of Resorts
International Holdings, LLC and assigned a negative ratings
outlook following the company's announcement that it is not in
compliance with certain quarterly leverage covenants, and that
this non-compliance constitutes an event of default under the loan
agreement.  This non-compliance which is based on the company's
Dec. 31, 2005 results, follows bank loan amendments in late 2005
that addressed previous covenant violations.

These ratings were downgraded:

   -- Corporate family rating, to Caa1 from B2;

   -- $75 million first lien revolver due 2010, to Caa1 from B2;

   -- $625 million first lien term loan due 2012; to Caa1 from B2;

   -- $350 million second lien term loan due 2013, to Caa2 from
      B3; and

   -- Speculative grade liquidity rating, to SGL-4 from SGL-3.

In addition to Resorts' deteriorating operating results,
particularly for the month of December 2005, and continued
covenant violations, the ratings and negative outlook take into
account the uncertainty surrounding how bank lenders choose to
apply their rights and remedies at this point in time as well as
the uncertainty regarding the company's ability to stabilize
operating results, even though there are indications that January
2006 results will show some improvements.

Resorts International Holdings, LLC, owns and operates casino in:

   * Atlantic City, New Jersey;
   * the Chicagoland gaming market; and
   * Tunica, Mississippi.


RGIS INVENTORY: S&P Assigns B+ to Planned $370 Million Bank Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to RGIS Inventory Specialists.  At the same time,
Standard & Poor's assigned its 'B+' rating to the company's
planned $370 million bank loan.  A recovery rating of '3' was also
assigned to the loan, indicating the expectation of meaningful
(50%-80%) recovery of principal in the event of a payment default.
Proceeds from the bank loan will be used to pay a $300 million
dividend to shareholders.
      
"The ratings on RGIS," said Standard & Poor's credit analyst
Robert Lichtenstein, "reflect inconsistent operating performance,
a new management with little industry experience, and a highly
leveraged capital structure that limits cash flow protection."


ROMAN CORPORATION: Seeks Protection Under CCAA
----------------------------------------------
Roman Corporation Limited (TSX:RMN) and its active subsidiaries
have filed for protection under the Companies' Creditors
Arrangement Act (CCAA) to facilitate a restructuring and allow the
group to return to profitability as a leading Canadian supplier of
recycled boxboard and manufacturer of printed folding cartons.

"These restructuring measures are required because of industry-
wide problems affecting the North American paperboard and
packaging industries which have negatively impacted our
profitability," Helen Roman-Barber, Chairman and Chief Executive
Officer of Roman, said.  "Working with our lenders, we intend to
implement a plan of restructuring that will be the foundation of a
reorganized and profitable business.  Roman expects that the
reorganization will involve a sale of the reorganized business."  
It is not expected that there will be any value for the equity
holders in this process.

Also, Roman has negotiated $8 million debtor-in-possession
financing to provide working capital during the restructuring
process so that the company will have stability to operate its
business as usual during the restructuring process and permit the
company to provide uninterrupted service to its customers.

The recycled paperboard packaging industry has been beset by
serious difficulties over the past years, including the rise in
the value of the Canadian dollar against the U.S. dollar leading
to unprecedented price competition and margin compression.  At the
same time as currency fluctuations have depressed revenues and
margins, a number of commodity price increases, most significantly
in energy costs, have also served to depress margins.

As reported on Jan. 23, 2006, Roman Corporation Limited reported
that its senior lenders have granted a short-term waiver for a
scheduled principal payment due on Friday Jan. 20, 2006, with
respect to the Company's senior secured term loan.  The senior
lenders continue to monitor the Company's situation.  The Company
is continuing its previously announced refinancing efforts and,
although no transaction has as yet been approved by the Company's
board of directors, the Company expects to make an announcement
imminently.  

Roman Corporation Limited -- http://www.romancorp.com/-- is a  
leading manufacturer of paperboard packaging for the consumer
packaged goods industry.  The Company's products are the packaging
choice for some of the most recognizable national and private
label brand manufacturers in North America.  Consumer goods
packaged with the Company's products range from food and household
goods such as frozen and dry food, beverages, powered laundry
detergent, batteries and light bulbs to toys, pet products and
hardware.  The Company operates production facilities that
manufacturer 100% recycled paperboard as well conversion of
paperboard into printed folding cartons.


RURAL CELLULAR: Fitch Rates $475 Million Sr. Sub. Notes at CC
-------------------------------------------------------------
Fitch assigned ratings for Rural Cellular Corporation (RCCC) as:

    * Issuer default rating (IDR) 'CCC';
    * $60 million first lien credit facility 'B/RR1';
    * $510 million second lien secured notes 'B-/RR2';
    * $325 million senior unsecured notes 'CCC-/RR5';
    * $475 million senior subordinated notes 'CC/RR6';
    * 11.375% senior exchangeable preferred stock 'C/RR6';
    * 12.25% junior exchangeable preferred stock 'C/RR6'.

The Rating Outlook is Stable.

The IDR rating incorporates the very high leverage and competitive
operating environment for RCCC.  Fitch remains concerned over:

   * the limited expectation for operating cash flow growth;

   * the event risk associated with potential universal service
     funding reform; and

   * the on-going subscriber growth challenges.

While the company has adequate liquidity, no near term maturities,
and expectations for modest free cash flow in 2006 primarily due
to the decline in capital expenditures, Fitch believes the lack of
expected cash flow growth does not adequately support RCCC's
capital structure, currently evidenced by the nonpayment of
approximately $50 million in annual cash dividends related to its
exchangeable preferred securities, which total in excess of $400
million.

Over the longer term, Fitch believes the company must address the
preferred stock issue.  However, options may be somewhat limited
when considering the company's relatively low market
capitalization compared with its total debt obligation.  It's also
noteworthy that two classes of preferred stock holders control
four board positions with the potential for two additional seats
to be elected by junior preferred stock holders if the nonpayment
of preferred dividends continues.  In addition, with the drawdown
on RCCC's credit facility, the company does not have significant
leeway under its financial covenants, which could prove
challenging in the event of unfavorable business or economic
conditions or significant Universal Service Fund (USF) reform.

Operating trends over the past several quarters have been negative
due to RCCC's 2.5 generation (G) network migration, which has
resulted in:

   * higher SG&A and network costs;

   * customer service and network quality issues; and

   * pressure on roaming revenue with churn increasing to 3% for
     the latest quarter compared with a low 2% from a year ago.

Margins have declined from mid-40s to the high-30s.  Positively,
with the completion of the 2.5G overlay in its markets, roaming
revenue appears to have stabilized and is expected to grow with
the increase in roaming minutes outpacing decreases in roaming
yields.  Nevertheless, with only 35% of its subscriber base
migrated to either CDMA or GSM networks, RCCC will likely face
continued postpaid subscriber declines and elevated churn until a
majority of subscribers are migrated.  As a result, while ARPU is
materially higher with 2.5G subscribers, Fitch does not expect
that significant improvements in revenue and operating cash flow
are realistic due to the above pressures.

Additionally, rural wireless operators, including RCCC, over the
past few years have identified USF disbursements as an opportunity
to materially increase cash flow at little to no additional cost
to their operational plans.  With the current USF program expiring
in June 2006, Fitch expects that USF reform will likely lead to a
more focused disbursement on providers' true investment in rural
areas and wireless disbursements face the greatest amount of event
risk associated with reductions.  For RCCC, high cost support
through the USF funding has risen materially since 2003 when it
reached approximately $9 million per year growing to an estimated
$41 million in 2005.  Fitch calculates that this subsidy support
represented approximately 6% of cash flow from operations in 2003
and has risen to more than 40% in 2005.  Obviously, USF reform
that leads to a material percentage reduction in support
disbursements to RCCC could dramatically affect the company's
financial strength.

RCCC's liquidity position is adequate.  Pro forma cash for the end
of the third quarter of 2005 is approximately $120 million.  RCCC
drew down the majority of its revolving credit facility during the
fourth quarter after making payment on four periods of senior
preferred dividends to remedy the voting rights trigger event,
which restricted RCCC from refinancing its debt or drawing on its
credit facility.  However, with the nonpayment of its recent
senior preferred dividend, the voting rights trigger event was
reinstated.  Since RCC was able to refinance its senior
subordinated debt due 2008, RCCC extended any maturities to 2010.

The recovery ratings and notching among the different classes of
debt reflect Fitch's modest expectations for recovery valuations
in a distressed scenario given RCCC's total debt obligation and
high reliance on roaming revenue and USF subsidy.


SECURUS TECHS: S&P Puts B+ Corporate Credit Rating on Neg. Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' corporate
credit and senior secured debt ratings on telecommunications
services provider Securus Technologies Inc. CreditWatch with
negative implications.
     
The CreditWatch listing reflects the company's recent announcement
that it has received a notice from AT&T Operations Inc. (AT&T/SBC)
indicating its intentions to terminate its billing and collections
agreement and the associated services with Securus, effective
April 11, 2006.
     
This notice followed preliminary approval by the Superior Court of
the State of California of a settlement agreement surrounding
allegations that Securus' subsidiaries, along with other inmate
telecommunications providers, incorrectly charged for collect
calls from a number of facilities as a result of systematic
defects in inmate calling platforms.  AT&T/SBC's decision to
terminate this relationship was prompted by concerns that such a
settlement may be viewed as admission of wrongdoing.  Ongoing
discussions between Securus and AT&T/SBC have resulted in the
delay of the effective date of the termination notice until
Feb. 11, 2006, as Securus aims to have the termination notice
withdrawn.
     
AT&T/SBC is a key provider of billing services to Dallas-based
Securus, accounting for about $90 million of invoices during 2005.
Based upon reported revenue during the first nine months of 2005,
Securus' full year revenue base is estimated at $375 million.
Should AT&T/SBC proceed with the termination of this relationship,
Securus would be required to seek alternative billing methods,
including direct billing by the company, within the AT&T/SBC
territory.  This would likely have a material adverse effect on
collections performance and the company's financial condition and
future operating results, and likely result in at least a one-
notch downgrade.  Standard & Poor's will continue to monitor the
discussions between Securus and AT&T/SBC and review the ratings
and outlook following a resolution.


SEDGWICK CMS: S&P Assigns B+ Bank Loan Rating to $340MM Facility
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' counterparty
credit rating to Sedgwick CMS Holdings Inc.  The outlook is
stable.
     
At the same time, Standard & Poor's assigned its 'B+' bank loan
rating to the company's senior secured credit facility totaling
$340 million.  The facility consists of:

   * a $300 million seven-year adjustable rate term B loan; and

   * a $40 million revolving credit facility, $25 million of which
     remains untapped at debt issuance.
      
"The ratings reflect the company's good competitive position as
the second-largest domestic third-party administrator, stable
long-term recurring contracts, and a diversified revenue base,"
explained Standard & Poor's credit analyst Donovan Fraser.

Offsetting the company's strengths is the relatively low interest
coverage due to Sedgwick's increased debt burden and prospective
integration risks associated with the acquisition by Fidelity
National Financial Inc. (NYSE:FNF; BBB-/Watch Pos/--) and a group
of financial investors.
     
The aggregate purchase price of $635 million and other expenses
was funded through a combined:

   * $330 million of cash equity investments from:

     -- FNF,
     -- Thomas H. Lee Partners L.P., and
     -- Evercore Capital Partners; and

   * $315 million in borrowings under the senior secured credit
     facility at the Sedgwick holding company level.

FNF has about a 40% equity stake in Sedgwick, Thomas H. Lee owns
approximately 40%, and Evercore owns the remaining 20%.
     
The outlook is stable.  Pro forma debt-to-total capital is
expected to be about 47% with GAAP pretax interest coverage of
approximately 2.1x.
     
Standard & Poor's estimates that the company's ROR will decrease
to about 5% in 2006 from 11% at year-end 2005 due to additional
interest and amortization expenses related to the company's
increased debt burden.  Partially offsetting Standard & Poor's
concerns are the company's long-term recurring contracts, and
FNF's history of paying down debt ahead of schedule.


SFK INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: SFK International, LLC
        fka SFK International Corp.
        304 Park Avenue South
        New York, New York 10010

Bankruptcy Case No.: 06-10196

Chapter 11 Petition Date: February 3, 2006

Court: Southern District of New York (Manhattan)

Judge: Robert E. Gerber

Debtor's Counsel: Sheila E. Carson, Esq.
                  Lowenstein Sandler PC
                  65 Livingston Avenue
                  Roseland, New Jersey 07068
                  Tel: (973) 597-2500
                  Fax: (973) 597-2400

Total Assets:   $198,448

Total Debts:  $1,197,695

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Shanghai Kane Top                Trade                 $404,029
Import and Export
Flat J, 6/F Huamin Empire Plaza
No. 726, West Yan Road
Shanghai 200050

Kesco Shipping Corp.             Freight               $236,725
15015 183rd Street
Springfield Gardens, NY 11413

Scanwell Logistics, Inc.         Freight               $119,353
1995 Linden Boulevard
Elmont, NY 11003

EPE Fashion Factory Co.          Trade                  $86,000
Flat 704B706, 7th Floor
13 Hok Yuen Street
Hunghorn KLN

US Customs                       Prepetition            $75,897
301 East Ocean Boulevard         Customs Duty
14th Floor
Long Beach, CA 90802-4828

Rical Logistics                  Freight                $48,756
One Cross Island Plaza
Rosedale, NY 11422

Cargo Connection Logistics       Freight                $41,661
c/o Accord Financial, Inc.
P.O. Box 6704
Greenville, SC 29606

UTI                              Freight                $29,501
P.O. Box 19043
Newark, NJ 07195

Delia's                          Trade                  $24,115
435 Hudson Street
New York, NY 10014

Faro Services, Inc.              Freight                $15,736
3275 Alum Creek Drive
Columbus, OH 43207

VA Resources, Inc.               Computer               $14,552
3200 Broadway, Suite 250
Garland, TX 75043

Evrim Giyim Sanayi               Trade                  $11,183
Seyhli Koyu Transtek Cad.
No. 39, 34906 Pendik
Istanbul, Turkey

World Fashion Exchange, Inc.     Trade                  $10,450
301 N. Harrison Street, Suite 217
Princeton, NJ 08540

APL Logistics                    Freight                 $9,108
P.O. Box 2969
Carol Stream, IL 60132

St. Paul Travellers Club         Insurance               $9,082
& Specialty Remittance Center
Hartford, CT 06183

Nationwide Warehouse             Freight                 $8,078
P.O. Box 2400
Newark, NJ 07114

Steven F. Kimmel                 Member Services         $7,083
23 Regency Place                 Agreement
Weehawken, NJ 07086

Suleyman S. Coruh                Payroll                 $6,000
Cal Hasan Street Aksoy
Apartment B
Blok 6/3 Camlik Etiler
Istanbul, Turkey 34337

William Paganini                 Severance Package       $5,770
252 Grand Boulevard
Long Beach, NY 11561

Grunfeld, Desiderio, Lebowitz    Legal Services          $4,657
399 Park Avenue, 25th Floor
New York, NY 10022


STEELCASE INC: S&P Assigns Preliminary BB+ Sub. Debt Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'BBB-'
senior unsecured debt rating and preliminary 'BB+' subordinated
debt rating to Steelcase Inc.'s recently filed universal shelf
registration.  At the same time, Standard & Poor's affirmed its
outstanding ratings on Steelcase, including the 'BBB-' corporate
credit rating.
     
The new shelf has an undesignated notional amount in accordance
with the new SEC rules effective Dec. 1, 2005.  Future proceeds
from the issuance of securities off this shelf are expected to be
used for general corporate purposes.  The new shelf replaces the
company's existing $200 million debt shelf registration filed in
October 2004.  As such, the preliminary 'BBB-' senior unsecured
debt rating has been withdrawn.
     
The outlook is stable. Grand Rapids, Michigan-based Steelcase had
about $268.1 million of total debt outstanding at Nov. 25, 2005.
     
"The ratings on Steelcase reflect its leading market position in
the office furniture industry, broad distribution capability, and
strong liquidity position," said Standard & Poor's credit analyst
David Kang.  "These factors are somewhat offset by the competitive
and volatile nature of the office furniture industry, the
company's sensitivity to raw-material price fluctuations, and its
leveraged financial profile."
     
Steelcase is the world's leading designer, marketer, and
manufacturer of office furniture and complementary products and
services.  Steelcase operates on a worldwide basis within three
reportable segments:

   * North America (57% of sales for the nine months ended
     Nov. 25, 2005);

   * Steelcase Design Partnership (12%); and

   * Other (31%), which includes International Sales (21.8%).
     
The U.S. office furniture industry is highly competitive, with
five companies garnering a significant portion of the market.
Among these five, Steelcase is the largest, with about $2.8
billion in sales for the 12 months ended Nov. 25, 2005.  Two other
rated industry participants include:

   * Herman Miller Inc., with about $1.7 billion in sales for the
     12 months ended Dec. 3, 2005; and

   * Knoll Inc., with about $779 million in sales for the 12
     months ended Sept. 30, 2005.
     
Steelcase benefits from a broad distribution network, including
independent and owned dealers in more than 800 locations
throughout the world.  The office furniture industry is influenced
by a variety of cyclical macroeconomic factors such as:

   * corporate profitability,
   * capital spending,
   * employment rates, and
   * commercial office construction.

However, near-term growth prospects remain favorable.  After three
years of contraction, the U.S. office furniture industry grew by
about 5% in calendar year 2004, with about 12% growth expected for
2005, according to the Business and Institutional Furniture
Manufacturer's Association.
     
The company's credit protection measures, though stronger than the
medians for the 'BBB' rating category, remain appropriate for the
ratings.  Standard & Poor's expects the company to maintain credit
protection measures stronger than the medians for the 'BBB' rating
category, to offset the slightly weaker business risk profile.


STELCO INC: Completes Sale of Subsidiaries' Shares to Mittal
------------------------------------------------------------
Stelco Inc. (TSX:STE) received a Court Order facilitating the
sale of the shares of Norambar Inc., Stelwire Ltd. and Stelfil
Lt,e to Mittal Canada Inc.  The Order was granted at a hearing
held Feb. 1, 2006, notwithstanding that Stelwire was still an
applicant under Stelco's Companies' Creditors Arrangement Act
proceedings.  As a result of this Order, the transaction closed
that day.

A definitive agreement in this matter was announced on Nov. 23,
2005 with the stated expectation that the transaction would close
early in 2006.  The Court approved the sale on Dec. 12, 2005.

Courtney Pratt, Stelco President and Chief Executive Officer,
said, "I'm pleased for all concerned that the Court has
facilitated the closing of this transaction.  It provides the
subsidiaries with ownership that views them as strategic assets.  
It provides certainty to their employees and retirees.  And it
assists Stelco in focusing on its integrated steel business going
forward."

Stelco, Inc. -- http://www.stelco.ca/-- is a large, diversified
steel producer.  Stelco is involved in all major segments of the
steel industry through its integrated steel business, mini-mills,
and manufactured products businesses.

In early 2004, after a thorough financial and strategic review,
Stelco concluded that it faced a serious viability issue.  The
Corporation incurred significant operating and cash losses in 2003
and believed that it would have exhausted available sources of
liquidity before the end of 2004 if it did not obtain legal
protection and other benefits provided by a Court-supervised
restructuring process.  Accordingly, on Jan. 29, 2004, Stelco and
certain related entities filed for protection under the Companies'
Creditors Arrangement Act.

The Court extended the stay period under Stelco's Court-supervised
restructuring from Dec. 12, 2005, until Mar. 3, 2006.


STEVE'S SHOES: U.S. Trustee Appoints 7-Member Creditors Committee
-----------------------------------------------------------------
The United States Trustee for Region 20 appointed seven creditors
to serve on the Official Committee of Unsecured Creditors in
Steve's Shoes, Inc.'s chapter 11 case:

     1. Wolverine World Wide, Inc.
        Attn: Dorothy M. Morris
        Credit Dept. - Mail Code HC-1-24
        9345 Courtland Dr.
        Rockford, Michigan 49351
        Phone: 616-866-6203, Fax: 1-800-888-6142

     2. Dr. Martens AirWair USA LLC
        Attn: Michael D. Kelsay
        10 Northwest 10th Ave.
        Portland, Oregon 97209
        Phone: 503-417-7080, Fax: 503-222-6880

     3. Keen Footwear
        Attn: Ed Shollenberger
        1201 Marina Village Pkwy, Ste. 301
        Alameda, California 94501
        Phone: 510-337-3033 ext. 203, Fax: 510-522-8255

     4. Julie M. Minnick
        General Growth Properties
        110 N. Wacker Dr.
        Chicago, Illinois 60606
        Phone: 312-960-2707, Fax: 312-960-5993

     5. Simon Property Group, LP
        Attn: Ronald M. Tucker
        115 W. Washington St.
        Indianapolis, Indiana 46204
        Phone: 317-263-2346, Fax: 317-263-7901

     6. ECCO USA, Inc.
        Attn: Anthony Fabrizio
        16 Delta Dr.
        Londonderry, New Hampshire 03053
        Phone: 603-537-7300

     7. Deckers Outdoor Corp.
        Attn: Michael Hida
        495-A S. Fairview Ave.
        Goleta, California 93117
        Phone: 805-967-7611, ext. 153, Fax: 603-537-9321

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.

Headquartered in Lenexa, Kansas, Steve's Shoes, Inc. --
http://www.stevesshoes.com/-- is a shoe retailer.  The  
Company filed for chapter 11 protection on Jan. 6, 2006 (
Bankr. D. Kans. Case No. 06-20015). Thomas M. Mullinix, Esq.,
and Joanne B. Stutz, Esq., Evans & Mullinix, P.A., represents
the Debtor in its restructuring efforts.  When the Debtor filed
for protection from its creditors, it listed total assets of
$9,494,325 and total debts of $20,200,821.


STEVE'S SHOES: Committee Wants to Hire Kronish Lieb as Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors in Steve's Shoes,
Inc.'s chapter 11 case asks the U.S. Bankruptcy Court for the
District of Kansas for permission to employ Kronish Lieb Weiner &
Hellman LLP as its counsel.

Kronish Lieb will:

   1) review financial information furnished by the Debtor to the
      Committee and review the Debtor's schedules, statement of
      affairs and business plan;

   2) review and investigate the liens of purported secured party
      or parties and review and analyze accountant's work product
      and reports to the Committee;

   3) confer with the Debtor's management and counsel and
      coordinate efforts to sell assets of the Debtor in a manner
      that maximizes the value for unsecured creditors;

   4) advise the Committee about the ramifications regarding all
      of the Debtor's activities and motions before the Bankruptcy
      Court and investigate potential causes of action that may
      inure to the benefit of the Committee's constituency;

   5) attend the meetings of the Committee and file appropriate
      pleadings on behalf of the Committee;

   6) prepare various applications and memoranda of law submitted
      to the Court for consideration and handle all other matters
      relating to the representation of the Committee that may
      arise;
   
   7) assist the Committee in negotiations with the Debtor and
      other parties in interest on any plan of reorganization or
      liquidation that may be proposed; and

   8) perform all other legal services to the Committee that are
      necessary or proper in the Debtor's bankruptcy proceedings.

Jay R. Indyke, Esq., a partner at Kronish Lieb, is one of the lead
attorneys from the Firm performing services to the Committee.  
Mr. Indyke charges $650 per hour.  

Mr. Indyke reports Kronish Lieb's professionals bill:

      Professional          Designation    Hourly Rate
      ------------          -----------    -----------
      Richard S. Kanowitz   Partner           $585
      Greogry Plotko        Associate         $410
      Brent Weisenberg      Associate         $350
      Noah Falk             Associate         $245
   
Kronish Lieb assures the Court that it does not represent any
interest materially adverse to the Committee, the Debtor or its
estate pursuant to Section 327(a) of the Bankruptcy Code.

Headquartered in Lenexa, Kansas, Steve's Shoes, Inc. --
http://www.stevesshoes.com/-- is a shoe retailer.  The  
Company filed for chapter 11 protection on Jan. 6, 2006 (
Bankr. D. Kans. Case No. 06-20015). Thomas M. Mullinix, Esq.,
and Joanne B. Stutz, Esq., Evans & Mullinix, P.A., represents
the Debtor in its restructuring efforts.  When the Debtor filed
for protection from its creditors, it listed total assets of
$9,494,325 and total debts of $20,200,821.


TRU 2005: Fitch Rates $1.3 Billion Unsecured Credit Agreement at B
------------------------------------------------------------------
Fitch Ratings assigned a rating of 'B/RR3' to the $1.3 billion
unsecured credit agreement of TRU 2005 RE Holding Co. I, LLC, a
special purpose subsidiary of Toys 'R' Us, Inc.  The proceeds were
allocated as:

   * $927 million was used to repay part of the $1.9 billion
     unsecured bridge loan;

   * $285 million was used to pay down the secured revolver; and

   * the balance was used to pay expenses and fund reserves.

Fitch rates TOY's IDR 'B-', and the Rating Outlook is Negative.

The facility expires in December 2008 and has two one-year
extension options.  The borrowing entity has ownership of and
leasehold interests in:

   * 382 of TOY's U.S. Toys 'R' Us and Babies 'R' Us stores;
   * three distribution centers; and
   * the corporate headquarters in Wayne, New Jersey.

The loan is serviced through a rent payment made by Toys 'R' Us -
Delaware, Inc. to the borrowing entity.

The structural features of the facility and the borrowing entity
cause Fitch to view this facility as having similar recovery
prospects as TOY's other secured debt.  These features include the
bankruptcy-remote nature of the borrowing entity and the entity's
ownership of the underlying properties, giving it first claim on
those assets in a distressed situation.


TXU CORP: Earns $356 Million in Fourth Quarter Ended Dec. 31, 2005
------------------------------------------------------------------
TXU Corp. (NYSE: TXU) reported consolidated results for the fourth
quarter and full year ended Dec. 31, 2005.

TXU reported net income available to common shareholders of
$356 million for the fourth quarter 2005 compared to a net loss
available to common shareholders of $625 million for the fourth
quarter 2004.

Reflecting the successful execution of the company's ongoing
restructuring and performance improvement program, operational
earnings per share for the fourth quarter 2005 increased 153
percent relative to the fourth quarter 2004.  Operational
earnings, which exclude special items and discontinued operations,
extraordinary gains or losses, and cumulative effect of changes in
accounting principles, were $414 million during the fourth quarter
2005 compared to $184 million for the fourth quarter 2004.

For the full year 2005, TXU reported net income available to
common shareholders of $1.712 billion, compared to a net loss
available to common shareholders of $386 million for 2004.

Operational earnings per share for the full year 2005 increased
136% relative to 2004.  In 2005, operational earnings were
$1.615 billion, compared to $887 millionfor 2004.  

TXU's outlook for operational earnings for 2006 remains at a range
of $5.50 to $5.75 per share of common stock, with the midpoint
representing a 69% increase over 2005, and the outlook for 2007
operational earnings remains at a two% increase relative to the
midpoint of the 2006 outlook.

After the successful restructuring of the company in 2004, TXU
substantially completed the implementation of a broad-based
continuous improvement program in 2005.  The success of these
efforts is evident in the company's 2005 fourth quarter and annual
results.

Based in Dallas, Texas, TXU Corp. -- http://www.txucorp.com/--  
is an energy company that manages a portfolio of competitive and
regulated energy businesses in North America.  In TXU Corp.'s
unregulated business, TXU Energy provides electricity and related
services to 2.5 million competitive electricity customers in
Texas, more customers than any other retail electric provider in
the state.  TXU Power has over 18,300 megawatts of generation in
Texas, including 2,300 MW of nuclear and 5,837 MW of lignite/coal-
fired generation capacity.  The company is also one of the largest
purchasers of wind-generated electricity in Texas and North
America.  TXU Corp.'s regulated electric distribution and
transmission business, TXU Electric Delivery, complements the
competitive operations, using asset management skills developed
over more than one hundred years, to provide reliable electricity
delivery to consumers.  TXU Electric Delivery operates the largest
distribution and transmission system in Texas, providing power to
more than 2.9 million electric delivery points over more than
99,000 miles of distribution and 14,000 miles of transmission
lines.

TXU Corp.'s 6.55% Senior Notes due 2034 carry Moody's Investors
Service's Ba1 rating and Standard & Poor's BB+ rating.


UAL CORP: Reorganization Confirmation Cues S&P's Ratings Upgrade
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
ratings on UAL Corp. and subsidiary United Air Lines Inc. to 'B'
from 'D', following confirmation of the companies' plan of
reorganization.  The new long-term rating outlook is stable.  The
'B+' rating and '1' recovery rating on United's bank credit
facility are not affected, and are affirmed, as those ratings,
assigned Jan. 9, 2006, were based on an assumption of UAL and
United exiting bankruptcy and on certain other conditions.
Standard & Poor's at that time indicated that it expected to
assign 'B' corporate credit ratings, with a stable outlook, to UAL
and United upon their bankruptcy emergence.
      
"The revised corporate credit ratings reflect United's
participation in the price-competitive, cyclical, and capital-
intensive airline industry, and difficult industry conditions,
characterized by high and volatile fuel prices and fierce
competition from low-cost carriers in the U.S. domestic market,"
said Standard & Poor's credit analyst Philip Baggaley.  "The
ratings also reflect UAL's highly leveraged financial profile.
These weaknesses are mitigated to some extent by United's
extensive and well-positioned route system [which provides good
revenue potential, especially on international routes] and by
reductions in labor costs and financial obligations achieved in
bankruptcy," the credit analyst continued.
     
United is the second-largest U.S. airline, and like other
traditional, hub-and-spoke airlines ("legacy carriers"), it has
suffered heavy losses since 2001, due to the effects of:

   * terrorism,
   * high fuel prices, and
   * low-cost competition in the U.S. domestic market.

United and UAL entered Chapter 11 in December 2002, and, through a
long and difficult reorganization, used the bankruptcy process to:

   a) reduce United's exposure to the competitive U.S. domestic
      market from almost two-thirds of flying to slightly more
      than half;

   b) secure substantial labor cost reductions in negotiations
      with its unions;

   c) terminate defined-benefit pension plans; and

   d) reduce total debt and lease obligations.
     
UAL should report gradually improving earnings and credit
measures, but the extent of improvement will depend significantly
on general airline industry conditions, in particular on fuel
prices and the degree of price competition in the U.S. domestic
market.  The outlook could be revised to positive if UAL can
execute on its planned revenue and operating cost initiatives,
which could, along with favorable industry conditions, permit the
financial improvements forecast beyond 2006.  Adverse industry
conditions, which could include, in addition to those already
cited, the effects of an economic slowdown, terrorism, or a global
outbreak of epidemic disease, are the most likely potential causes
of a revision to a negative outlook.


VERIFONE INC: S&P Raises Corporate Credit & Loan Ratings to BB-
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit and
senior secured bank loan ratings on San Jose, California-based
VeriFone Inc. to 'BB-' from 'B+'.  The outlook is stable.
      
"The upgrade reflects the company's improved financial profile, as
well as strong revenue and earnings growth," said Standard &
Poor's credit analyst Martha Toll-Reed.
     
The company reported revenues of $485.4 million in the fiscal year
ended October 2005, up 24% over the prior year.  EBITDA margins
have benefited from operating leverage and an emphasis on cost
reductions, and are expected to remain in the mid- to high-teens
percent range.  With an outsourced manufacturing model and minimal
capital expenditures, free operating cash flow is expected to be
moderately positive.
     
Debt reductions and earnings growth have strengthened VeriFone's
financial profile.  Although VeriFone has a limited history of
making acquisitions, the company has stated its strategic intent
to bolster growth through acquisitions.  The current rating
incorporates the capacity for VeriFone to make measured, modest-
size acquisitions without impacting the rating.


VILLAGES AT SARATOGA: Wants to Sell Property to Deer Canyon
-----------------------------------------------------------
The Villages at Saratoga Springs, L.C., asks the U.S. Bankruptcy
Court for the District of Utah for permission to sell its property
to Deer Canyon Saratoga, LLC, free and clear of all liens,
interests and encumbrances pursuant to Section 363 of the
Bankruptcy Code.

The property is a 474-acre tract of undeveloped land with
associated contract rights and development information located at
Saratoga Springs, Utah.  The Debtor believes that these entities
have valid liens on the property:

    1. Eagle Mortgage Company, Inc.'s claim totaling approximately
       $12.3 million as of December 2005, plus accruing interest
       and fees and is secured by notes and deeds of trust; and

    2. Utah County real property taxes totaling approximately
       $267,000.

The Debtor reminds the Court that while considering Eagle
Mortgage's motion for relief from stay, the Court learned that the
property is valued at $25,326,000.  

                    Deer Canyon Agreement

The Debtor reveals that it received an offer of $22 million for
the property from Deer Canyon Saratoga, LLC.  The Debtor assures
the Court that Deer Canyon is neither an insider nor an affiliate.

Pursuant to the purchase agreement, Deer Canyon will deposit
$1 million and pay the balance at the closing of the purchase.
In addition, the Debtor says, Deer Canyon will also pay a
contingent amount of up to $2 million from future sales proceeds
of the last 200 developed lots to be sold by Deer Canyon to the
extent those lots sell for more than $110,000 each.

              Projects Full Payment to Creditors

The Debtor believes the proceeds from the proposed sale will be
greater than the aggregate value of all liens against the
property.  In fact, the Debtor believes that proceeds from the
sale, after payment of the costs of sale, real property taxes and
secured claims, will be sufficient to pay all costs of
administration and allowed unsecured claims in full.

Headquartered in Spanish Fork, Utah, The Villages at Saratoga
Springs, LC filed for chapter 11 protection on Aug. 29, 2005
(Bankr. D. Utah Case No. 05-33380).  Robert Fugal, Esq., at Bird &
Fugal, represents the Debtor in its restructuring efforts.  When
the Debtor filed for protection from its creditors, it listed
$26,002,293 in assets and $15,188,610 in debts.


VINTAGE PETROLEUM: Occidental Merger Cues S&P's Ratings Withdrawal
------------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'BB-/B-2'
corporate credit rating on oil and gas exploration and production
company Vintage Petroleum Inc. after the close of the company's
acquisition by Occidental Petroleum Corp.
     
The rating had been on CreditWatch with positive implications
reflecting the acquirer's stronger credit quality.
      
"The ratings on Vintage's debt were equalized with those of
Occidental, reflecting the expectation that Occidental will
provide guarantees," said Standard & Poor's credit analyst Ben
Tscocanos.
     
The ratings on Vintage's debt were removed from CreditWatch with
positive implications.  The ratings were placed on CreditWatch
Oct. 14, 2005 when the deal was announced.


VISKASE COS: S&P Revises CreditWatch Implications to Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services revised the CreditWatch
implications on its ratings for Viskase Cos. Inc. to negative from
developing.  The 'B-' corporate credit rating and senior secured
debt rating were originally placed on CreditWatch on May 5, 2005.
Viskase is a casings producer based in Willowbrook, Illinois.
      
"The CreditWatch revision reflects Viskase's deteriorating
operating performance and liquidity position due to ongoing
business challenges including a decline in sales volumes and
higher costs related to the company's restructuring activities,"
said Standard & Poor's credit analyst Robyn Shapiro.
     
The ratings could be lowered modestly if unfavorable operating
trends persist or if Viskase is unable to preserve its liquidity
position.  Viskase previously announced that its Board of
Directors has engaged Harris Williams Advisors to evaluate
strategic alternatives, which include debt and/or equity
financings, the sale of the company, and a rights offering.  The
CreditWatch is expected to be resolved as soon as more information
becomes available related to the company's strategic direction, or
if operating results deteriorate to the extent that would result
in lower ratings.
     
The ratings on Viskase reflect:

   * its vulnerable business risk profile as a global producer in
     the highly competitive casings niche within the packaging
     industry;

   * a narrow scope of operations; and

   * a highly leveraged financial risk profile, following the
     company's emergence from Chapter 11 bankruptcy protection in
     April 2003.

Partially offsetting factors include:

   * steady end markets,
   * diversified customer relationships, and
   * consistency in raw-material costs.
     
Viskase remains aggressively leveraged with total debt (adjusted
to include capitalized operating leases) to EBITDA of about 5x.


WAVERIDER COMMS: Amends 2004 Annual Report
------------------------------------------
WaveRider Communications Inc. delivered an amendment to its annual
report for the years ended Dec. 31, 2004 and 2003 to the
Securities and Exchange Commission on Jan. 30, 2006.

The restatement arose from the Company's determination that it had
not accounted for certain provisions of the Convertible
Debentures, entered into on July 14, 2003, April 24, 2004 and
November 15, 2004, as embedded derivatives.

WaveRider determined that upon issuance of the first Convertible
Debenture, that net-share settlement was no longer in the
Company's control.  As a result, the fair value of the embedded
derivatives and certain instruments convertible or exercisable
into common shares (notably the Company's Warrants) should be
recorded as a liability, with any changes in the fair value
between reporting dates recorded as derivative income or expense,
as appropriate.

WaveRider's restated balance sheet for the year ended Dec. 31,
2004, showed $3,837,572 in total assets and liabilities of
$4,711,229, resulting in a stockholders' deficit of $873,657.

The restated balance sheet for the year ended Dec. 31, 2003,
showed $5,485,834 in total assets and liabilities of $5,777,186,
resulting in a stockholders' deficit of $291,352.

                    Going Concern Doubt

Wolf & Company, PC, expressed substantial doubt about WaveRider's
ability to continue as a going concern after it audited the
Company's financial statements for the years ended Dec. 31, 2004
and 2003.  The auditing firm pointed to the Company's recurring
losses from operations and significant accumulated deficit.

                      About WaveRider

WaveRider Communications Inc. -- http://www.waverider.com/-- is a   
leader in broadband wireless deployments and technologies.
WaveRider's Last Mile Solution(R) non-line-of-sight 900 MHz and
5.8 GHz networks enable communications providers to establish
full-saturation coverage networks, deliver advanced communications
services, and generate a rapid return on their investment.
WaveRider is committed to the development of standards-based
wireless technologies that support advanced applications and
address the needs of the North American and International markets.


WESTPOINT STEVENS: Steering Comm. Balks at Escrowed Funds Release
-----------------------------------------------------------------
As reported in the Troubled Company Reporter on May 17, 2005, the
2nd Lien Agent asked the U.S. Bankruptcy Court for the Southern
District of New York to:

    (a) terminate the adequate protection escrow, direct the
        Escrow Agent to release the escrowed adequate protection
        payments forthwith to the 2nd Lien Agent, and reinstate
        direct payments from WestPoint Stevens, Inc. and its
        debtor-affiliates to the 2nd Lien Agent; or

    (b) establish a schedule for the submission of expert reports
        concerning the valuation of the 2nd Lien Lenders'
        collateral as of the Petition Date and set a hearing
        for further determination of its Motion.

                    The Escrow Order

Gary M. Becker, Esq., at Kramer Levin Naftalis & Frankel LLP, in
New York, relates that adequate protection payments of $31 million
were made to Wilmington Trust Company, as Agent to the 2nd Lien
Credit Agreement, through July 2004.  In August 2004, R2 Top Hat,
as holder of 40% of the 1st Lien claims, objected to the
continuation of adequate protection payments to the 2nd Lien
Lenders.  To avoid a distracting fight over the issue at that
time, the 1st Lien Agent, 2nd Lien Agent, the Debtors and the
agent under the DIP Loan agreed, in a Court-approved stipulation,
to escrow future adequate protection payments due the 2nd Lien
Lenders.

Since the entry of the Escrow Order, $2 million per month in
adequate protection payments, starting with the payment due at the
end of August 2004, have been placed in an account with the escrow
agent, Wells Fargo Bank, N.A.  As of May 10, 2005, the amount in
escrow exceeds $18 million, with another $2 million due to be
deposited at the end of May.  Therefore, the amount in escrow at
the Purchaser Selection Hearing on June 24, 2005, is expected to
be $20 million.  Pursuant to the Escrow Order, amounts held in
escrow may be released by the Escrow Agent upon the entry of an
order from the Court adjudicating the relative rights of the DIP
lender, the 1st Lien Lenders, the 2nd Lien Lenders and the Debtors
to the escrowed funds.  The Escrow Order also provides that none
of the amounts in escrow may be released to the Debtors or any
other party -- except the DIP Lenders, 1st Lien Lenders or 2nd
Lien Lenders -- until the DIP, the 1st Lien Obligations and the
2nd Lien Obligations have been satisfied in full.

The Escrow Order contemplates that, once a hearing date has been
set for the sale of substantially all the Debtors' assets or for
confirmation of a plan of reorganization, the 2nd Lien Agent may
file a motion seeking a determination as to the allocation of the
amounts held in escrow.

                    Steering Committee Objects

On behalf of the Steering Committee, Sidney P. Levinson, Esq., at
Hennigan, Bennett & Dorman, LLP, in Los Angeles, California, argue
that based on the District Court's Opinion and Order, the funds in
the adequate protection escrow should not be released to the
Second Lien Agent or the Second Lien Lenders.

Mr. Levinson relates that in its Opinion, the District Court
rejected the premise that any adequate protection right of the
Second Lien Lenders was sufficient to authorize the impairment of
the contractual rights of the Objecting First Lien Lenders.

Based on the District Court's ruling, the Bankruptcy Court is to
determine whether the Second Lien Lenders can now receive the
escrowed funds without impairment or derogation of the existing
contractual and other rights of the Objecting First Lien Lenders.

Mr. Levinson states that if the Court is not prepared to deny the
request to release escrow, the Court must defer issuing a final
ruling until it determines how much cash is realized by the sale
of the Securities in which the Objecting First Lien Lenders and
the Second Lien Lenders were granted replacement liens.

Furthermore, Mr. Levinson tells that if the sale of the Securities
does not yield a sufficient amount to pay the Objecting First Lien
Lenders in full, and the Escrowed Interest Payments are
distributed to the Second Lien Lenders, then the Court should not
impair the contractual rights of the Objecting First Lien Lenders
to provide adequate protection to the Second Lien Lenders.

In the event the Court concludes on a final basis that the
Second Lien Lenders are entitled to the escrowed funds, Mr.
Levinson asserts that the Second Lien Agent's Proposed Order
should be modified.

Specifically, Mr. Levinson says, the provisions dissolving the
escrow and directing payment of the escrowed funds should be
modified considering that the immediate transfer of the funds and
the dissolution of the account prior to completion of any appeal
initiated with respect to the Proposed Order would violate the
terms in the Adequate Protection Escrow Stipulation.

Mr. Levinson notes that under the terms of the Adequate
Protection Escrow Stipulation, escrowed funds cannot be released
until there is the entry of an order adjudicating the rights to
the funds and the order becomes a final non-appealable order, or
any appeal of that order has been finally resolved with no further
appeal.

In addition, Mr. Levinson points out that the Proposed Order
contains other provisions that were not part of the Court's
Preliminary Ruling or otherwise inconsistent, which should be
deleted.  The Proposed Order includes:

    -- a finding by the Bankruptcy Court that interprets the
       District Court's November 16 Opinion and Order as it
       applies to the escrowed funds to which the Bankruptcy Court
       has yet to express any opinion of the effect;

    -- findings that the right of the First Lien Lenders to seek
       additional adequate protection could only be adjudicated in
       accordance with Rule 9024 of the Federal Rules of
       Bankruptcy Procedure and the decisions interpreting the
       requirements of that rule.  The Court's Preliminary Ruling
       made no mention of Rule 9024, nor any findings that the
       First Lien Lenders' rights to request additional adequate
       protection were constrained in any way by the limitations
       imposed by Rule 9024; and

    -- a finding that "no evidence was presented to the Court
       that, as of the date the Escrow Stipulation was entered, a
       diminution in value had occurred in the First Lien Lenders'
       collateral that would have entitled them to any form of
       additional adequate protection."  The Court did not make
       the finding in its Preliminary Ruling, rather it indicated
       the opposite.

Accordingly, the Steering Committee asks the Court to deny, or
defer ruling on, the request to release escrow; or in the
alternative, modify the Proposed Order in accordance with its
proposed revisions.

Headquartered in West Point, Georgia, WestPoint Stevens, Inc. --
http://www.westpointstevens.com/-- is the #1 US maker of bed  
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings.  It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers.  (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores.  Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens.  The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532).  John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts. (WestPoint Bankruptcy
News, Issue No. 61; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


WHITEHALL JEWELLERS: Agrees to Merge with Prentice and Holtzman
---------------------------------------------------------------
Whitehall Jewellers, Inc. (OTC:JWLR.PK) inked a merger agreement
with Prentice Capital Management, LP and Holtzman Opportunity
Fund, L.P.

Prentice and Holtzman will commence a cash tender offer for all
outstanding shares of Whitehall common stock at $1.60 per share,
net to the seller in cash, subject to certain limited conditions.  
The offer is expected to commence on or about Feb. 8, 2006, and
will remain open for a minimum of 20 business days.  Any shares
not purchased in the offer will be acquired for the same price in
cash in a second-step merger, subject to certain limited
conditions.

After consultation with the Company's financial and legal
advisors, the Board of Directors of Whitehall concluded that the
previously announced Newcastle proposal no longer constitutes a
"Superior Proposal" in light of the revised Prentice transaction.  
In connection with the merger agreement, the parties are
terminating the securities purchase agreement previously entered
into with Prentice and Holtzman.

The special meeting of stockholders that was previously postponed
to Feb. 6, 2006 in connection with the Company's proxy and that
securities purchase agreement has been cancelled.

The Jan. 31, 2006 maturity of Whitehall's bridge term loan credit
agreement dated Oct. 3, 2005 is being extended for three years,
subject to customary conditions, in connection with the merger
agreement, and the Lenders are making an additional $20 million
loan to Whitehall for working capital and general corporate
purposes.  On Feb. 1, 2006, Whitehall was in default under its
senior credit agreement.  However, Whitehall's senior lenders
are waiving these defaults and consenting to the extension of the
bridge term loan maturity date and the making of the additional
$20 million loan.  The senior lenders also are reinstating
$10 million in availability under the credit facility.

Headquartered in Chicago, Illinois, Whitehall Jewellers, Inc. --
http://www.whitehalljewellers.com/-- 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.


WINDOW ROCK: U.S. Trustee Says Disclosures Statement is Inadequate
------------------------------------------------------------------
Steven J. Katzman, Esq., the U.S. Trustee for Region 16, objects
to the Disclosure Statement explaining the Plan of Reorganization
proposed by Window Rock Enterprises Inc.  The U.S. Trustee says
that the Disclosure Statement does not contain adequate
information -- neither the right amount or the right kind -- for
creditors to make informed decisions when the Debtor asks them to
vote to accept the Plan.

The U.S. Trustee's objections to the Disclosure Statement include:

     a) the Debtor's failure to disclose that recoveries of
        approximately $4 million from Bancroft Life & Casualty
        Inc. have already been collected;

     b) the Debtors failure to account for almost $6 million in
        prepetition expenses for professional fees, deposits and
        retainers;

     c) a provision in the Disclosure Statement purportedly giving
        the Debtor the right to treat equity interests based on a
        side agreement with its sole shareholder, Mr. Stephen
        Cheng, and not on the application of the Bankruptcy Code
        and controlling case law;

     d) the lack of key information with regard to expected
        recoveries of unsecured creditors in the event of a
        chapter 7 liquidation; and       

     c) a provision allowing Mr. Cheng to retain his 100%
        ownership in the Debtor by contributing new value and
        cramming down the plan over the objection of unsecured
        creditors, who will not be paid in full.  Mr. Cheng
        proposes to invest $500,000 as new value.  However, the
        U.S. Trustee says the Debtor failed to describe how this
        figure was agreed on as an amount sufficient to
        satisfy the "market test" approach to new value.  The
        "market test" approach attempts to determine the adequacy
        of any proposed new value by exposing it to market forces.

The U.S. Trustee also complains that the Disclosure Statement
fails to satisfactorily provide information on the proposed
settlement with Mr. Cheng and his affiliates.

The Debtor may hold claims for damages against Mr. Cheng for his
alleged mismanagement of the Debtor's business that gave rise to
litigation with the Federal Trade Commission.  Mr. Cheng wants to
settle these claims for $500,000.  The U.S. Trustee says the
Debtors don't provide information in the Disclosure Statement that
will help creditors determine if this amount is reasonable.

Headquartered in Brea, California, Window Rock Enterprises Inc. --
http://windowrock.net/-- manufactures and sells all-natural   
dietary and nutritional supplements.  The Debtor is also producing
its own TV, radio and print advertising campaigns for nutritional
and dietary supplements and has distribution in over 40,000 Food
Drug Mass Clubs as well as Health and Fitness Channels.  The
Company filed for chapter 11 protection on Nov. 23, 2005 (Bankr.
C.D. Calif. Case No. 05-50048).  Robert E. Opera, Esq., Winthrop
Couchot, PC represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it listed
estimated assets of $10 million to $50 million and estimated debts
of more than $100 million.


XERIUM TECH: Subsidiary Acquires Coldwater Covers for $6.8 Million
------------------------------------------------------------------
Xerium Technologies, Inc. (NYSE: XRM) acquires privately-held
Coldwater Covers, Inc. from The Coldwater Group, Inc. of Atlanta,
Georgia.  Under the terms of the transaction, Xerium's subsidiary
-- Stowe Woodward LLC -- acquired all of the equity of Coldwater
Covers, Inc., together with the company's manufacturing facility
located in Oxford, Alabama, for a total purchase price of
approximately $6.8 million.

"The Coldwater Covers business is an ideal extension to the line
of roll covers and mechanical services that we provide through the
global operations of our Stowe Woodward division," Tom Gutierrez,
Xerium's President and Chief Executive Officer, said.  "Coldwater
Covers has brought to market several new and innovative roll cover
technologies and, like Stowe Woodward, has established a strong
reputation for quality and customer service."

                  About Coldwater Covers, Inc.

Headquartered in Atlanta, Georgia, Coldwater Covers, Inc. --
http://www.coldwatercovers.com/-- manufactures polyurethane and  
composite roll covers and bowed rolls, primarily for the paper
industry.  A division of The Coldwater Group, Inc., Coldwater
Covers provides a broad array of mechanical services for rolls
used in papermaking and a variety of other industrial
applications.  The Coldwater Group, Inc. retained Coldwater Seals,
Inc., a manufacturer of suction roll sealing strips and paper
machine drainage elements.

                 About Xerium Technologies, Inc.

Headquartered in Wesborough, Massachusetts, Xerium Technologies,
Inc. -- http://xerium.com/-- is a leading global manufacturer and
supplier of two types of products used primarily in the production
of paper: clothing and roll covers.  The company, which operates
around the world under a variety of brand names, owns a broad
portfolio of patented and proprietary technologies to provide
customers with tailored solutions and products integral to
production, all designed to optimize performance and reduce
operational costs.  With 35 manufacturing facilities in 15
countries around the world, Xerium Technologies has approximately
3,900 employees.

Headquartered in Westborough, Massachusetts, Stowe Woodward, a
unit of Xerium Technologies, Inc., is a leading supplier of roll
covers, bowed rolls and manufacturing services for the pulp and
paper industry.  Stowe Woodward has established a record for
success through a combination of technological innovation and
attentive customer service.  A global technology leader in roll
covers since it was founded in 1886, Stowe Woodward has
manufacturing operations around the world.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 24, 2006,
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.  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.

Affirmed ratings are:

     * Corporate family rating; B1
     * Guaranteed senior secured term loan B; B1
     * Guaranteed senior secured revolving credit facility; B1


XEROX CAPITAL: S&P Puts $27 Mil. Certificates' B- Rating on Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B-' rating on the
$27 million corporate-backed trust securities certificates issued
by CorTS Trust for Xerox Capital Trust I on CreditWatch with
positive implications.
     
This swap-independent synthetic transaction is weak-linked to the
underlying $27 million 8% series B capital securities due Feb. 1,
2027, issued by Xerox Capital Trust I.  The CreditWatch placement
reflects the Jan. 26, 2006, placement of the ratings on the
underlying assets on CreditWatch with positive implications.


* Gardner Carton Names Irving Apar as Partner in New York Office
----------------------------------------------------------------
Gardner Carton & Douglas LLP reported that Irving C. Apar, Esq.,
has joined the firm as a partner in its Corporate and Corporate
Trust Practice in New York.

Mr. Apar brings more than 20 years of experience as a corporate
and securities attorney to the firm.  Mr. Apar's practice focuses
on representing clients with respect to corporate trust matters.  
Mr. Apar has represented financial institutions serving in trustee
and various other capacities in numerous transactions, including
global financings, corporate and municipal financings, TIA
qualified and exempt financings, secured and unsecured debt
transactions, private placements, project financings, escrows,
taxable and tax-exempt securities offerings, sale/leasebacks,
equipment leases, mortgages and other conduit financings.

Mr. Apar has also been active in the development of various new
banking products, working with numerous issuers and underwriters
to structure financings and develop documentation relating to
these new financial products.

"We are delighted to have Irv join our growing corporate and
corporate trust practice," said Harold Kaplan, Chairman of Gardner
Carton & Douglas and a leading corporate trust practitioner who is
particularly well known for his work in bond defaults.  "I have
personally known Irv and admired him for many years as he is truly
a leader in the corporate trust bar.  His addition to GCD further
enhances the strength of our practice and our commitment to
serving our clients nationally and, especially, in New York."

Prior to joining Gardner Carton & Douglas, Mr. Apar was co-head of
the Corporate Trust Practice Group of Emmet, Marvin & Martin, LLP
in New York, where he had also served as a member of the firm's
executive, strategic, compensation and hiring committees.  Mr.
Apar received his J.D. from Columbia University School of Law in
1981 and his B.A., summa cum laude, from Queens College in 1977.

              About Gardner Carton & Douglas LLP

Founded nearly 100 years ago, Gardner Carton & Douglas LLP is a
leading national law firm with offices in Chicago, Washington, DC,
New York, Milwaukee and Albany.  The firm has approximately 230
lawyers and advisors practicing in corporate law, corporate
restructuring, customs and international trade, government
relations, health law, HR law (employee benefits and employment),
intellectual property, litigation and dispute resolution, real
estate and environmental law, and wealth planning and
philanthropy.  GCD is the by-invitation firm representing Chicago
in the World Law Group, a global consortium of firms in large
cities worldwide.


* Osler's Robin Schwill Examines Canadian DIP Financing
-------------------------------------------------------
Robin B. Schwill, Esq., at Osler, Hoskin & Harcourt LLP, examines
each of the significant changes in insolvency law reform initiated
by the enactment of Bill C-55 and how those changes will impact
"debtor-in-possession" (DIP) financing in an article posted at
http://www.osler.com/resources.aspx?id=10732&tracklink=em10732

Post-petition financing "is of direct interest to debtors facing
the need to restructure, to lenders active or contemplating
entering the DIP financing market, and to all existing secured
lenders and other stakeholders that are often directly affected by
a court's granting of a DIP financing order," Mr. Schwill says.

"If Bill C-55 is proclaimed into force as drafted, a new mid-
market for DIP financing will be created, granting priority to a
DIP lender over existing secured lenders will have statutory
authority, and the ability to obtain DIP financing upon an initial
application will be significantly curtailed.  In its hurried
enactment, Bill C-55 misses the opportunity to address a number of
significant issues in this area which would have gone a long way
to increasing the overall efficiency of the existing common law
DIP financing regime, Mr. Schwill continues.

Mr. Schwill is a partner in the Insolvency & Restructuring Group
of Osler, Hoskin & Harcourt LLP's Business Law Department.  From
Toronto, his practice focuses on corporate turnarounds, work-outs,
and restructurings; distressed asset sales and acquisitions;
secured and unsecured creditor rights enforcement; and all facets
of Companies' Creditors Arrangement Act and Bankruptcy and
Insolvency Act proceedings.  Mr. Schwill has acted for debtors,
purchasers, secured creditors, unsecured creditors, private and
court-appointed receivers, interim receivers, monitors and
trustees in bankruptcy in all facets of insolvency, credit
recovery and asset realization proceedings.


* BOND PRICING: For the week of Jan. 30 - Feb. 3, 2006
------------------------------------------------------

   Issuer                             Coupon  Maturity  Price
   ------                             ------  --------  -----
ABC Rail Product                     10.500%  12/31/04     0
Adelphia Comm.                        3.250%  05/01/21     2
Adelphia Comm.                        6.000%  02/15/06     3
Adelphia Comm.                        7.750%  01/15/04    59
Adelphia Comm.                        7.750%  01/15/09    64
Adelphia Comm.                        7.875%  05/01/09    68
Adelphia Comm.                        8.125%  07/15/03    63
Adelphia Comm.                        8.375%  02/01/08    69
Adelphia Comm.                        9.250%  10/01/02    68
Adelphia Comm.                        9.375%  11/15/09    71
Adelphia Comm.                        9.875%  03/01/05    68
Adelphia Comm.                        9.875%  03/01/05    68
Adelphia Comm.                        9.875%  03/01/07    69
Adelphia Comm.                       10.250%  06/15/11    73
Adelphia Comm.                       10.250%  11/01/06    66
Adelphia Comm.                       10.500%  07/15/04    65
Adelphia Comm.                       10.875%  10/01/10    69
Allegiance Tel.                      11.750%  02/15/08    24
Allegiance Tel.                      12.875%  05/15/08    28
Alt Living Svcs                       7.000%  06/01/04     1
Amer & Forgn Pwr                      5.000%  03/01/30    60
Amer Color Graph                     10.000%  06/15/10    73
American Airline                      9.980%  01/02/13    69
Ames Dept. Stores                    10.000%  04/15/06     0
AMR Corp.                             9.800%  10/01/21    71
AMR Corp.                            10.125%  06/01/21    74
AMR Corp.                            10.200%  03/15/20    75
AMR Corp.                            10.290%  03/08/21    73
Amtran Inc.                           9.625%  12/15/05     4
Anker Coal Group                     14.250%  09/01/07     0
Antigenics                            5.250%  02/01/25    58
Anvil Knitwear                       10.875%  03/15/07    46
Apple South, Inc.                     9.750%  06/01/06     3
Archibald Candy                      10.000%  11/01/07     0
Asarco Inc.                           7.875%  04/15/13    61
Asarco Inc.                           8.500%  05/01/25    61
AT Home Corp.                         4.750%  12/15/06     1
ATA Holdings                         12.125%  06/15/10     4
ATA Holdings                         13.000%  02/01/09     5
Atlantic Coast                        6.000%  02/15/34    11
Atlas Air, Inc.                       8.770%  01/02/11    57
Autocam Corp.                        10.875%  06/15/14    70
Aviation Sales                        8.125%  02/15/08    54
Avondale Mills                       10.250%  07/01/13    71
Bank New England                      8.750%  04/01/99     8
Bank New England                      9.500%  02/15/96     5
Big V Supermarkets                   11.000%  02/15/04     0
BTI Telecom Corp.                    10.500%  09/15/07    52
Budget Group, Inc.                    9.125%  04/01/06     0
Builders Transpt                      8.000%  08/15/05     0
Burlington North                      3.200%  01/01/45    57
Cellstar Corp.                       12.000%  01/15/07    42
Charter Comm. Hld.                    8.625%  04/01/09    74
Charter Comm. Hld.                   10.000%  04/01/09    75
Charter Comm. Hld.                   10.000%  05/15/11    51
Charter Comm. Hld.                   10.250%  01/15/10    70
Charter Comm. Hld.                   11.125%  01/15/11    53
Charter Comm. Inc.                    5.875%  11/16/09    72
CIH                                  10.000%  05/15/14    51
Ciphergen                             4.500%  09/01/08    75
Clark Material                       10.750%  11/15/06     0
CMI Industries                        9.500%  10/01/03     0
Collins & Aikman                     10.750%  12/31/11    31
Color Tile Inc.                      10.750%  12/15/01     0
Comcast Corp.                         2.000%  10/15/29    39
Covad Communicat                      3.000%  03/15/24    68
CPNL-Dflt12/05                        4.000%  12/26/06    10
CPNL-Dflt12/05                        4.750%  11/15/23    27
CPNL-Dflt12/05                        6.000%  09/30/14    19
CPNL-Dflt12/05                        7.625%  04/15/06    43
CPNL-Dflt12/05                        7.750%  04/15/09    43
CPNL-Dflt12/05                        7.750%  06/01/15     9
CPNL-Dflt12/05                        7.875%  04/01/08    44
CPNL-Dflt12/05                        8.500%  02/15/11    28
CPNL-Dflt12/05                        8.625%  08/15/10    28
CPNL-Dflt12/05                        8.750%  07/15/07    45
CPNL-Dflt12/05                       10.500%  05/15/06    42
Cray Inc.                             3.000%  12/01/24    75
Cray Research                         6.125%  02/01/11    25
Curagen Corp.                         4.000%  02/15/11    72
Curagen Corp.                         4.000%  02/15/11    73
Curative Health                      10.750%  05/01/11    61
DAL-Dflt09/05                         9.000%  05/15/16    23
Dana Corp.                            5.850%  01/15/15    69
Dana Corp.                            7.000%  03/01/29    69
Dana Corp.                            7.000%  03/15/28    69
Decrane Aircraft                     12.000%  09/30/08    71
Delco Remy Intl.                      9.375%  04/15/12    36
Delco Remy Intl.                     11.000%  05/01/09    43
Delphi Auto Syst.                     6.500%  05/01/09    57
Delphi Corp.                          6.500%  08/15/13    57
Delphi Trust II                       6.197%  11/15/33    28
Delta Air Lines                       2.875%  02/18/24    22
Delta Air Lines                       7.541%  10/11/11    63
Delta Air Lines                       7.700%  12/15/05    23
Delta Air Lines                       7.900%  12/15/09    24
Delta Air Lines                       8.000%  06/03/23    23
Delta Air Lines                       8.187%  10/11/17    61
Delta Air Lines                       8.300%  12/15/29    24
Delta Air Lines                       8.540%  01/02/07    29
Delta Air Lines                       8.540%  01/02/07    29
Delta Air Lines                       8.540%  01/02/07    54
Delta Air Lines                       8.540%  01/02/07    61
Delta Air Lines                       9.200%  09/23/14    73
Delta Air Lines                       9.250%  03/15/22    23
Delta Air Lines                       9.250%  12/27/07    17
Delta Air Lines                       9.300%  01/02/10    54
Delta Air Lines                       9.375%  09/11/07    69
Delta Air Lines                       9.450%  02/26/06    54
Delta Air Lines                       9.480%  06/05/06    47
Delta Air Lines                       9.750%  05/15/21    23
Delta Air Lines                       9.875%  04/30/08    72
Delta Air Lines                      10.000%  05/17/09    62
Delta Air Lines                      10.000%  06/01/10    49
Delta Air Lines                      10.000%  06/01/10    69
Delta Air Lines                      10.000%  06/01/11    26
Delta Air Lines                      10.000%  06/01/11    64
Delta Air Lines                      10.000%  06/05/11    54
Delta Air Lines                      10.000%  06/18/13    63
Delta Air Lines                      10.000%  08/15/08    23
Delta Air Lines                      10.060%  01/02/16    62
Delta Air Lines                      10.080%  06/16/07    60
Delta Air Lines                      10.080%  06/16/08    58
Delta Air Lines                      10.080%  06/16/08    58
Delta Air Lines                      10.080%  06/16/08    58
Delta Air Lines                      10.125%  01/02/10    39
Delta Air Lines                      10.125%  05/15/10    23
Delta Air Lines                      10.125%  06/16/10    58
Delta Air Lines                      10.125%  06/16/10    58
Delta Air Lines                      10.125%  06/16/10    61
Delta Air Lines                      10.375%  02/01/11    23
Delta Air Lines                      10.375%  12/15/22    24
Delta Air Lines                      10.430%  01/02/11    20
Delta Air Lines                      10.500%  04/30/16    69
Delta Air Lines                      10.790%  03/26/14    20
Delta Mills Inc.                      9.625%  09/01/07    39
Diva Systems                         12.625%  03/01/08     1
Duane Reade Inc.                      9.750%  08/01/11    73
Dura Operating                        9.000%  05/01/09    52
Dura Operating                        9.000%  05/01/09    52
Duty Free Intl.                       7.000%  01/15/04     4
DVI Inc.                              9.875%  02/01/04    15
Enrnq-Dflt05/05                       7.375%  05/15/19    39
Epix Medical Inc.                     3.000%  06/15/24    64
Exodus Comm Inc.                      5.250%  02/15/08     0
Exodus Comm Inc.                     11.625%  07/15/10     0
Falcon Products                      11.375%  06/15/09     3
Fedders North Am                      9.875%  03/01/14    61
Federal-Mogul Co.                     7.375%  01/15/06    37
Federal-Mogul Co.                     7.500%  01/15/09    36
Federal-Mogul Co.                     8.160%  03/06/03    34
Federal-Mogul Co.                     8.370%  11/15/01    33
Federal-Mogul Co.                     8.800%  04/15/07    36
Finova Group                          7.500%  11/15/09    34
FMK-Dflt03/04                        10.750%  04/15/11    74
FMXIQ-Dflt09/05                      13.500%  08/15/05    15
Foamex LP-Dflt                        9.875%  06/15/07    13
Ford Motor Co.                        6.500%  08/01/18    69
Ford Motor Co.                        6.625%  02/15/28    69
Ford Motor Co.                        7.400%  11/01/46    68
Ford Motor Co.                        7.500%  08/01/26    70
Ford Motor Co.                        7.700%  05/15/97    68
Ford Motor Co.                        7.750%  06/15/43    66
Ford Motor Cred                       5.250%  03/21/11    73
Ford Motor Cred                       5.500%  10/20/11    74
Ford Motor Cred                       5.570%  01/21/14    73
Ford Motor Cred                       5.570%  02/20/14    73
Ford Motor Cred                       5.570%  02/20/14    73
Ford Motor Cred                       5.650%  12/20/11    73
Ford Motor Cred                       5.750%  02/21/12    73
Ford Motor Cred                       6.000%  01/20/15    73
Ford Motor Cred                       6.000%  02/20/15    74
Ford Motor Cred                       6.000%  03/20/14    74
Ford Motor Cred                       6.000%  03/20/14    74
Ford Motor Cred                       6.000%  03/20/14    74
Ford Motor Cred                       6.000%  11/20/14    72
Ford Motor Cred                       6.050%  02/20/14    73
Ford Motor Cred                       6.050%  03/20/12    74
Ford Motor Cred                       6.050%  03/20/14    74
Ford Motor Cred                       6.050%  04/21/14    74
Ford Motor Cred                       6.050%  12/22/14    73
Ford Motor Cred                       6.050%  12/22/14    73
Ford Motor Cred                       6.050%  12/22/14    74
Ford Motor Cred                       6.100%  02/20/15    72
Ford Motor Cred                       6.150%  01/20/15    70
Ford Motor Cred                       6.150%  12/22/14    72
Ford Motor Cred                       6.200%  03/20/15    73
Ford Motor Cred                       6.250%  01/20/15    71
Ford Motor Cred                       6.250%  03/20/15    72
Ford Motor Cred                       6.500%  02/20/15    74
Ford Motor Cred                       6.500%  03/20/15    75
Ford Motor Cred                       6.550%  12/20/13    74
Ford Motor Cred.                      7.250%  07/20/17    74
Gateway Inc.                          2.000%  12/31/11    70
General Motors                        7.400%  09/01/25    69
General Motors                        7.700%  04/15/16    74
General Motors                        8.100%  06/15/24    70
General Motors                        8.250%  07/15/23    73
General Motors                        8.375%  07/15/33    75
General Motors                        8.800%  03/01/21    74
Global Health SC                     11.000%  05/01/08     1
GMAC                                  5.900%  01/15/19    74
GMAC                                  5.900%  10/15/19    74
GMAC                                  6.150%  09/15/19    72
GMAC                                  6.750%  03/15/20    72
Golden Books Pub                     10.750%  12/31/04     0
Gulf Mobile Ohio                      5.000%  12/01/56    74
Gulf States Stl                      13.500%  04/15/03     0
HNG Internorth                        9.625%  03/15/06    37
Imperial Credit                       9.875%  01/15/07     0
Inland Fiber                          9.625%  11/15/07    49
Insight Health                        9.875%  11/01/11    67
Iridium LLC/CAP                      10.875%  07/15/05    25
Iridium LLC/CAP                      11.250%  07/15/05    24
Iridium LLC/CAP                      13.000%  07/15/05    25
Iridium LLC/CAP                      14.000%  07/15/05    25
Isolagen Inc.                         3.500%  11/01/24    54
JIS Corp.                             5.250%  04/29/02     0
Kaiser Alum&Chem                      9.875%  02/15/02    51
Kaiser Alum&Chem                     10.875%  10/15/06    50
Kaiser Alum&Chem                     10.875%  10/15/06    51
Kaiser Alum&Chem                     12.750%  02/01/03     9
Kellstrom Inds.                       5.500%  06/15/03     1
Key3Media Group                      11.250%  06/15/11     0
Kmart Corp.                           8.540%  01/02/15    16
Kmart Corp.                           8.990%  07/05/10    14
Kmart Corp.                           9.350%  01/02/20    26
Kmart Corp.                           9.780%  01/05/20    73
Kmart Funding                         8.800%  07/01/10    30
Kmart Funding                         9.440%  07/01/18    56
Level 3 Comm. Inc.                    2.875%  07/15/10    71
Level 3 Comm. Inc.                    6.000%  09/15/09    69
Liberty Media                         3.750%  02/15/30    55
Liberty Media                         4.000%  11/15/29    59
Lifecare Holding                      9.250%  08/15/13    55
LTV Corp.                             8.200%  09/15/07     0
MacSaver Financl                      7.400%  02/15/02     3
MacSaver Financl                      7.600%  08/01/07     3
MCMS Inc.                             9.750%  03/01/08     0
Merisant Co.                          9.500%  07/15/13    63
Metamor WorldWid                      2.940%  08/15/04     1
MHS Holdings Co.                     16.875%  09/22/04     0
Motels of Amer.                      12.000%  04/15/04    68
Movie Gallery                        11.000%  05/01/12    73
Mrs. Fields                           9.000%  03/15/11    70
MSX Int'l. Inc.                      11.375%  01/15/08    70
Muzak LLC                             9.875%  03/15/09    62
Nat'l Steel Corp.                     8.375%  08/01/06     9
Nat'l Steel Corp.                     9.875%  03/01/09    10
New Orl. Grt. N. Rr.                  5.000%  07/01/32    72
Nexprise Inc.                         6.000%  04/01/07     0
North Atl Trading                     9.250%  03/01/12    60
Northern Pac Ry                       3.000%  01/01/47    58
Northern Pac Ry                       3.000%  01/01/47    58
Northwest Airlines                    6.625%  05/15/23    35
Northwest Airlines                    7.248%  01/02/12    13
Northwest Airlines                    7.360%  02/01/20    70
Northwest Airlines                    7.625%  11/15/23    35
Northwest Airlines                    7.626%  04/01/10    61
Northwest Airlines                    7.875%  03/15/08    34
Northwest Airlines                    8.070%  01/02/15    60
Northwest Airlines                    8.130%  02/01/14    43
Northwest Airlines                    8.700%  03/15/07    37
Northwest Airlines                    8.875%  06/01/06    37
Northwest Airlines                    8.970%  01/02/15    25
Northwest Airlines                    9.179%  04/01/10    26
Northwest Airlines                    9.875%  03/15/07    35
Northwest Airlines                   10.000%  02/01/09    35
NTK Holdings Inc.                    10.750%  03/01/14    64
Nutritional Src                      10.125%  08/01/09    60
NWA Trust                            11.300%  12/21/12    69
Oakwood Homes                         7.875%  03/01/04    14
Oakwood Homes                         8.125%  03/01/09    14
OSU-Dflt10/05                        13.375%  10/15/09     0
O'Sullivan Ind.                      10.630%  10/01/08    61
Outboard Marine                       9.125%  04/15/17     0
Overstock.com                         3.750%  12/01/11    65
PCA LLC/PCA Fin                      11.875%  08/01/09    23
Pegasus Satellite                     9.625%  10/15/05     9
Pegasus Satellite                    12.375%  08/01/06    10
Pegasus Satellite                    12.500%  08/01/07    10
Pegasus Satellite                    13.500%  03/01/07     0
Pen Holdings, Inc.                    9.875%  06/15/08    62
Phar-Mor Inc.                        11.720%  09/11/02     1
Piedmont Aviat                        9.900%  11/08/06     0
Piedmont Aviat                       10.000%  11/08/12     9
Piedmont Aviat                       10.200%  05/13/12     0
Piedmont Aviat                       10.250%  01/15/49     0
Piedmont Aviat                       10.250%  01/15/49     9
Piedmont Aviat                       10.350%  03/28/11     0
Pinnacle Airline                      3.250%  02/15/25    74
Pixelworks, Inc.                      1.750%  05/15/24    67
Pliant-Dflt01/06                     13.000%  06/01/10    20
Pliant-Dflt01/06                     13.000%  06/01/10    22
Polaroid Corp.                        6.750%  01/15/02     0
Polaroid Corp.                       11.500%  02/15/06     0
Primedex Health                      11.500%  06/30/08    57
Primus Telecom                        3.750%  09/15/10    32
Primus Telecom                        5.750%  02/15/07    64
Primus Telecom                        8.000%  01/15/14    63
Primus Telecom                       12.750%  10/15/09    58
PSINet Inc.                          10.000%  02/15/05     0
PSINet Inc.                          11.000%  08/01/09     0
Railworks Corp.                      11.500%  04/15/09     0
Read-Rite Corp.                       6.500%  09/01/04    15
Refco Finance                         9.000%  08/01/12    64
Reliance Grp Hld                      9.000%  11/15/00    23
Reliance Grp Hld                      9.750%  11/15/03     0
RJ Tower Corp.                       12.000%  06/01/13    73
Salton Inc.                          12.250%  04/15/08    68
Solectron Corp.                       0.500%  02/15/34    74
Source Media Inc.                    12.000%  11/01/04     0
Sterling Chem                        11.250%  04/01/07     0
Tekni-Plex Inc.                      12.750%  06/15/10    59
Teligent Inc.                        11.500%  12/01/07     0
Tom's Foods Inc.                     10.500%  11/01/04     5
Toys R Us                             7.375%  10/15/18    74
Trans Mfg. Oper.                     11.250%  05/01/09    62
Transtexas Gas                       15.000%  03/15/05     1
Tribune Co.                           2.000%  05/15/29    73
Triton Pcs Inc.                       8.750%  11/15/11    66
Triton Pcs Inc.                       9.375%  02/01/11    66
Tropical Sportsw                     11.000%  06/15/08    10
Twin Labs Inc.                       10.250%  05/15/06     2
United Air Lines                      7.270%  01/30/13    62
United Air Lines                      7.371%  09/01/06    58
United Air Lines                      7.762%  10/01/05    68
United Air Lines                      7.870%  01/30/19    64
United Air Lines                      8.250%  04/26/08     3
United Air Lines                      9.000%  12/15/03    21
United Air Lines                      9.020%  04/19/12    71
United Air Lines                      9.125%  01/15/12    21
United Air Lines                      9.350%  04/07/16    71
United Air Lines                      9.560%  10/19/18    70
United Air Lines                      9.750%  08/15/21    23
United Air Lines                     10.250%  07/15/21    22
United Air Lines                     10.670%  05/01/04    23
United Air Lines                     11.210%  05/01/14    23
Univ Health Svcs                      0.426%  06/23/20    57
Universal Stand                       8.250%  02/01/06     1
US Air Inc.                          10.250%  01/15/49     6
US Air Inc.                          10.250%  01/15/49     6
US Air Inc.                          10.250%  01/15/49     6
US Air Inc.                          10.250%  01/15/49     7
US Air, Inc.                         10.550%  01/15/49    25
US Air, Inc.                         10.700%  01/01/49    26
US Air, Inc.                         10.700%  01/15/49     3
US Air, Inc.                         10.700%  01/15/49    25
US Air, Inc.                         10.750%  01/15/49    13
US Air, Inc.                         10.750%  01/15/49    25
US Air, Inc.                         10.800%  01/01/49     4
US Air, Inc.                         10.800%  01/01/49    27
US Air, Inc.                         10.800%  01/01/49    28
US Air, Inc.                         10.900%  01/01/49     6
Us Airways Pass                       6.820%  01/30/14    65
Venture Holdings                      9.500%  07/01/05     1
Venture Holdings                     11.000%  06/01/07     1
Venture Holdings                     12.000%  06/01/09     0
WCI Steel Inc.                       10.000%  12/01/04    69
Werner Holdings                      10.000%  11/15/07    21
Westpoint Steven                      7.875%  06/15/05     0
Westpoint Steven                      7.875%  06/15/08     0
Wheeling-Pitt St                      5.000%  08/01/11    70
Winstar Comm Inc.                    10.000%  03/15/08     0
Winstar Comm Inc.                    12.750%  04/15/10     0

                          *********

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 Soriano-Baaclo, Marjorie Sabijon, Terence Patrick
F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili,
Jr., Tara Marie A. Martin, Marie Therese V. Profetana, Shimero R.
Jainga and Peter A. Chapman, Editors.

Copyright 2005.  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 $675 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 ***