TCR_Public/060207.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

           Tuesday, February 7, 2006, Vol. 9, No. 32    

                          Headlines

I2 TECH: Dec. 31 Balance Sheet Upside-Down by $70.6 Million
ADELPHIA COMMS: 16 Parties Outline Positions in Arahova Litigation
AES CORP: FERC Seeks $23 Million in Refunds from Placerita Unit
AES CORP: Calls for Redemption of $115.2M Senior Sub. Debentures
ALOHA AIRGROUP: Court Confirms Modified Plan of Reorganization

AMERIGAS PARTNERS: General Partner Reports $55 Million Net Income
ANCHOR GLASS: Court Approves AT&T Sublease Contract
ANCHOR GLASS: Court Junks Florida Rocks' Bid to Terminate Contract
APPLIEDTHEORY: Settlement Pays Lenders 55% & Dismisses Chapter 11
ARMSTRONG WORLD: Requests POR Confirmation Hearing on May 2006

ASARCO LLC: Wants to Establish De Minimis Asset Sale Procedures
ASARCO LLC: All Debtors Have Until June 5 to File Chapter 11 Plan
ASARCO LLC: Local 700C Wants Similar Quid Pro Quo as USW's MOA
AUBURN FOUNDRY: Chap. 7 Trustee Taps Kruggel Lawton as Accountant
BOYD GAMING: Completes $250 Mil. 7.125% Senior Sub Notes Offering

CADMUS COMMS: Earns $1.1 Million of Net Income in FY 2006 2nd Qtr.
CALPINE CORP: Files to Reject Two Power Plant Lease Agreements
CHARLES WORTHINGTON: Case Summary & 20 Largest Unsecured Creditors
CONSTELLATION BRANDS: Declares Quarterly Preferred Dividend
CSC HOLDINGS: Lenders Waive Technical Covenant Defaults

DANA CORP: SEC Begins Formal Probe About Financial Restatements
DUNKIN' BRANDS: S&P Rates Corporate Credit & New Debts at Low-Bs
ELGRANDE INT'L: Balance Sheet Upside-Down by $1.6MM at Nov. 30
ERA AVIATION: U.S. Trustee Names Three-Member Creditors Committee
ENRON CORP: Court OKs Enron Energy's Settlement with 20 Customers

ESCHELON OPERATING: Oregon Merger Prompts Moody's Ratings' Review
EXIDE TECH: Gets Access to Additional $46M Under Sr. Sec. Facility
FLORSHEIM GROUP: Court Confirms 2nd Amended Joint Liquidation Plan
FOSTER WHEELER: S&P Affirms Senior Secured Debt Rating at CCC+
G+G RETAIL: Wants Court OK to Hire Financo as Investment Banker

HARRY & DAVID: Earns $49 Million in Second Quarter Ended Dec. 24
HCA INC: Moody's Rates $1 Billion Senior Unsecured Notes at Ba2
HCA INC: S&P Assigns BB+ Rating to $1 Billion Sr. Unsec. Notes
HERCULES INC: Dec. 31 Balance Sheet Upside-Down by $13.4 Million
INTERSTATE BAKERIES: Wants to Hold on to $27M of ABA Plan Assets

JP MORGAN: Moody's Rates Two Sub. Certificate Classes at Low-Bs
KAISER ALUMINUM: Bankruptcy Court Confirms Plan of Reorganization
KAISER ALUMINUM: Welcomes Back Thomas Gannon as VP for Marketing
KMART CORP: Court Signs Agreed Order to Liquidate Five PI Claims
LA MUTUELLE: Obtains First Order Under New Chapter 15 Law

LAND O'LAKES: Closing Wisconsin Cheese Manufacturing Facility
LIBERTY FIBERS: Wants More Time to Decide on Leases and Contracts
LORETTO-UTICA: Files Schedules of Assets and Liabilities
LYONDELL CHEMICAL: Good Performance Cues Fitch to Upgrade Ratings
MASTEC INC: Closes Purchase of Digital Satellite for $26 Million

MODAVOX INC: Posts $251,660 Net Loss in Quarter Ended November 30
MULTICARE AMC: Files Final Report & Chapter 11 Cases Closed
MUSICLAND HOLDING: Walks Away from 51 Real Property Leases
MUSICLAND HOLDING: Gets Okay to Hire Ordinary Course Professionals
MYLAN LAB: Earns $48 Mil. of Net Income in 3rd Qtr. Ended Dec. 31

NAVISTAR INT'L: Moody's Downgrades Subordinated Debt Rating to B3
NAVISTAR INT'L: Fitch Holds Low-B Debt Ratings on Negative Watch
NAVISTAR INT'L: S&P Continues Watch on BB- Corporate Credit Rating
NEIMAN MARCUS: Moody's Confirms $125 Million Debentures' B1 Rating
NEW LIFE: Case Summary & 6 Largest Unsecured Creditors

NEW WORLD: Redeeming $160M Sr. Sec. Notes & Retiring $15M Loan
NOBEX CORP: Can Access $1.2 Million Biocon DIP Loan on Final Basis
NOBEX CORP: Wants to Hire SSG Capital as Investment Banker
ON SEMICONDUCTOR: Equity Deficit Narrows to $300.3MM at Dec. 31
OPTIGENEX INC: Restates Third Quarter 2005 Financial Statements

PACIFIC GAS: Will Pay $295 Million to Settle Chromium 6 Lawsuits
PENN TRAFFIC: Board Dismisses Knox & Jones After Inquiry Findings
PERFORMANCE TRANS: Bankruptcy Prompts Moody's to Withdraw Ratings
PERSISTENCE CAPITAL: Bruilbilt Renews Bid for Chapter 11 Trustee
PERSISTENCE CAPITAL: Court Okays David Hahn as Chapter 11 Examiner

PLIANT CORP: Wants to Continue Funding Non-Debtor Subsidiaries
PLIANT CORP: Wants Until March 4 to File Schedules & Statements
PRICE OIL: Bankruptcy Administrator Proposes New Panel Members
RELIANCE: Liquidator Can't Recover Multi-Mil. Trade Pact Transfers
REVLON INC: Plans to Conduct a $110MM Rights Offering Next Month

REVLON INCORPORATED: Expects to Report $1.33 Billion in 2005 Sales
REXNORD CORP: S&P Puts B+ Corporate Credit Rating on CreditWatch
ROCKY MOUNTAIN: S&P Raises Sr. Secured Term Loans' Ratings to B
SAINT VINCENTS: Wants to Pay Claims Using Government Funds
SAINT VINCENTS: Can Use Sun Life's Cash Collateral Until April 2

SAINT VINCENTS: Wants to Set Up Residence Facility at Port Chester
SECUNDA INT'L: S&P Holds B- Corporate Credit Rating on CreditWatch
SP NEWSPRINT: Moody's Affirms B1 Corporate Family & Debt Ratings
STANDARD PACIFIC: Earns $154 Million in Fourth Qtr. Ended Dec. 31
STRATTON GARDENS: Case Summary & 45 Largest Unsecured Creditors

TRUST ADVISORS: Court Extends Claims Bar Date to March 6
UAL CORP: Incurs $17 Billion Net Loss in 2005 Fourth Quarter
URBAN HOTELS: Plans to Sell All Assets to Seemyun Kymm for $23MM
URBAN HOTELS: Wants Bids for Hotel Assets in by February 20
U.S. CONCRETE: Looks to Raise $78,750,000 from Stock Sale

USG CORP: Intends to File Plan of Reorganization This Month
VEKOMA INT'L: Chapter 15 Petition Summary
WADDINGTON NORTH: Refinancing Cues Moody's Ratings' Withdrawal
WESTPOINT STEVENS: Aretex Balks at Dist. Ct. Order Implementation
WINDOW ROCK: Court Rejects Plea for Emergency Cash Collateral Use

WINDSOR FINANCING: Moody's Rates Proposed $49.6 Mil. Notes at Ba2
WORLDGATE COMMS: Files Delinquent Sept. 30, 2005, Form 10-Q
WORLDGATE COMMS: Files Amended 2004 Financial Statements

* Laurel Isicoff to Become Fellow of American College of Bankr.

* Large Companies with Insolvent Balance Sheets

                          *********

I2 TECH: Dec. 31 Balance Sheet Upside-Down by $70.6 Million
-----------------------------------------------------------
i2 Technologies, Inc. (NASDAQ: ITWO) reported results for the
fourth quarter and fiscal year 2005.

Total revenue for the fourth quarter ending Dec. 31, 2005,
was $96.6 million, as compared to $77.4 million in the fourth
quarter of 2004.  Total revenue was $336.9 million, as compared
to $362.5 million for 2004.

Net income for fourth quarter ended Dec. 31, 2005 was $70,204,000,
compared to $1,400,000 net loss for the same period in 2004.  Net
income for the year ended Dec. 31, 2005, was $87,328,000, compared
to $1,352,000 net loss for the same period in 2004.

Year-end cash balances, including restricted cash, exceeded
the company's total debt by $17 million.

                          Balance Sheet

On Dec. 31, 2005, i2's cash, restricted cash and short-term
investments totaled $117.7 million.  During the fourth quarter, i2
recorded several significant transactions aimed at strengthening
the balance sheet.  Those transactions included:

     * Completion of the private placement of $78.8 million in
       aggregate principal amount of its 5% senior convertible
       notes due in 2015.  This included $3.8 million of the
       $11.3 million over-allotment option.  The remaining
       $7.5 million was exercised in January 2006.

     * Completion of the sale of its Content and Data Services
       business to IHS Inc. for approximately $30 million on
       Dec. 1, 2005.

     * Redemption of $263.5 million of its outstanding 5.25%     
       convertible subordinated notes due Dec. 15, 2006.

i2 Technologies, Inc. -- http://www.i2.com/-- helps business  
leaders make better supply chain decisions.  i2's flexible next-
generation solutions are designed to synchronize demand and supply
across ever-changing global business networks.  i2's innovative
supply chain management tools and services are pervasive in a wide
cross-section of industries; 20 of the AMR Research Top 25 Global
Supply Chains belong to i2 customers.

i2 is a registered trademark of i2 Technologies US, Inc. and i2
Technologies, Inc.

At Dec. 31, 2005, i2 Technologies, Inc.'s balance sheet showed a
stockholders' deficit of $70,656,000, compares to $173,033,000
deficit at Dec. 31, 2004.


ADELPHIA COMMS: 16 Parties Outline Positions in Arahova Litigation
------------------------------------------------------------------
Pursuant to the resolution process between noteholders of Arahova
Communications Corporation and the noteholders of Adelphia
Communications Corporation, approved by the U.S. Bankruptcy Court
for the Southern District of New York, 16 groups of parties-in-
interest delivered to the Court, or joined other parties in, their
final issues statement:

    1. Bank of Nova Scotia, its capacity as a lender and as
       Administrative Agent under the Parnassos Credit Facility;

    2. Wachovia Bank, National Association, for itself and as
       administrative agent under the UCA Credit Facility;

    3. JPMorgan Chase Bank, N.A., in its capacity as
       administrative agent for Frontiervision Prepetition Secured
       Lenders;

    4. Bank of America, N.A., in its individual capacity and in
       its capacity as Administrative Agent of the Century Cable
       Holdings Credit Facility;

    5. Wilmington Trust Company;

    6. Citibank, N.A., as administrative agent for the Century-TCI
       Lenders;

    7. Official Committee of Equity Security Holders of Adelphia
       Communications Corporation;

    8. The Ad Hoc Committee of Senior Preferred Shareholders of
       Adelphia Communications Corporation Preferred Stock;

    9. Ft. Myers Acquisition Limited Partnership Term Noteholders;

   10. Ad Hoc Committee of ACC Senior Noteholders;

   11. Law Debenture Trust Company of New York, as Indenture
       Trustee (joins the Ad Hoc Committee of ACC Senior
       Noteholders);

   12. Bank of Montreal, in its capacity as administrative agent
       for the Olympus Lenders;

   13. The putative class plaintiffs in a suit pending before the
       United States District Court for the Southern District of
       New York captioned In re Adelphia Communication Corp.
       Securities & Derivative Litigation; and

   14. Ad Hoc Committee of FrontierVision Noteholders;

   15. Ad Hoc Committee of Arahova Noteholders;

   16. U.S. Bank National Association, as Indenture Trustee with
       respect to the Arahova Notes.

Generally, the parties-in-interest seek a legal determination
from the Court that:

    a. recoveries are not, and will not be, impacted in any manner
       whatsoever by any of the Dispute Issues; and

    b. the Debtors' proposed Consolidation Structure, a
       substantive consolidation, is inappropriate and
       impermissible.

          Equity Committee and Senior Preferred Committee

The Equity Committee seeks a judicial determination that:

    -- the Intercompany Claims reflected in the May 2005 Amended
       Schedules are unavoidable under Chapter 5 of the Bankruptcy
       Code;

    -- the characterization of the intercompany payables in the
       May 2005 Amended Schedules are presumptively valid;

    -- the May 2005 Amended Schedules properly reflect the amount,
       characterization, and parties to each of the intercompany
       payables;

    -- the intercompany payables should be characterized as debt;

    -- the transfer of various subsidiaries, including
       corresponding assets and liabilities, among the Debtors,
       Arahova subsidiaries and Olympus Debtor Group does not
       constitute a fraudulent transfer; and

    -- the benefits and burdens of the Government Settlement
       should reside solely with the Holding Company Debtor Group.

The Equity Committee asserts that allocations among the Debtor
Groups should be based on the Asset Purchase Agreement Operating
Cash Flow methodology.

The Senior Preferred Committee joins the Equity Committee's final
statement except that it disputes the Government Settlement
containing both costs and benefits.

                             Ft. Myers

Similarly, the Ft. Myers Acquisition Limited Partnership Term
Noteholders agree to the final statements except that they take
no position with respect to the allocation of the costs and
benefits of the Government Settlement generally.  However, the
Ft. Myers Noteholders ask the Court to make a legal determination
that the allocation of the sale transaction value of the
Government Settlement should first take into account the actual
purchase price to be paid by Time Warner Cable Inc., and Comcast
Corporation for the four severable portions of the Debtors'
business identified in its purchase agreements.  Allocations
should be based on the operating cash flows of each Debtor
entity.

                           ACC Committee

The Ad Hoc Committee of ACC Senior Noteholders, subject to
reservation of rights, wants the Court to determine that:

    a. the Intercompany Schedules constitute prima facie evidence
       of the validity and amount of the Intercompany Claims;

    b. the transfers identified under the heading "Asset Ownership
       and Potential Fraudulent Conveyance Claims" in the Debtors'
       Motion were made for reasonably equivalent value and
       without an intent to hinder, delay or defraud creditors;

    c. taxes incurred as a result of the sale to Time Warner or to
       Comcast, as well as other potential tax liabilities, should
       be allocated in accordance with governing tax laws based
       on the evidence presented; and

    d. the various reserves to be established under the Plan
       should be allocated among the Debtors fairly and based on
       the evidence presented.

                         Bank of Montreal

The Bank of Montreal wants the Court to determine that:

    a. the $2,900,000,000 of intercompany claims owed to, and
       from, the "Bank of Adelphia" and the Olympus Debtors should
       be characterized and treated as debt or as equity;

    b. the potential fraudulent transfer claims relating to the
       "Transferred Out Subsidiaries" to the Olympus Debtors
       should be denied to the extent they impact the Olympus
       Lenders' collateral; and

    c. substantive consolidation is not appropriate in the ACOM
       Debtors' cases, or permissible as proposed by the Debtors
       in the Plan, and would impermissibly disenfranchise the
       Olympus Lenders.

                      Class Action Plaintiffs

As previously reported, the Class Action Plaintiffs want the
Court to determine if the Plan improperly:

    -- permits the Litigation Prosecution Fund to be used to pay
       indemnification claims of defendants in the Continuing Bank
       Actions; and

    -- provides for payment of postpetition interest on unsecured
       claims.

The Class Action Plaintiffs also ask the Court to determine if
the Plan provides for a $75,000,000 reserve to reimburse post-
Effective Date fees, costs or expenses of the ACOM Debtors'
prepetition bank lenders, in their capacity as defendants in the
Securities Class Action and the Continuing Bank Actions.

                      FrontierVision Committee

The FrontierVision Committee asks the Court to make a legal
determination that:

    -- all intercompany payables reflected on the Debtors'
       schedules as owed by the FrontierVision Operating Partners
       L.P. (FV Opco) and FrontierVision Holdings L.P. Debtor
       Silos should be treated as equity;

    -- the approximately $682,000,000 net intercompany payable
       supposedly owed by FrontierVision Partners, LP, FV Holdco's
       parent, cannot be enforced against the FV Holdco Debtors
       because the amount does not represent debt of FV Holdco or
       any of its subsidiaries; and

    -- FrontierVision Partners cannot legally be consolidated into
       the FrontierVision Holdco Silo over the objection of the FV
       Holdco creditors.

                   Arahova Noteholders Committee

The Arahova Noteholders Committee will seek several, interrelated
orders avoiding certain acts undertaken by the Debtors in respect
of prepetition inter-Debtor transactions.

According to Douglas P. Baumstein, Esq., at White & Case LLP, in
Miami, Florida, the orders are necessary to:

    -- "level the playing field" between Participants; and

    -- re-establish traditional burdens of proof in the allowance
       and disallowance of inter-Debtor claims against the
       Debtors.

Generally, the Arahova Noteholders Committee wants the Court to
determine:

    a. whether any prepetition intercompany accounts listed in the
       General Ledgers constitute "claims" within the meaning of
       Section 101(5) of the Bankruptcy Code;

    b. the amount, extent and priority of certain General Ledger
       entries, to the extent that they are in fact "claims";

    c. whether certain additional prepetition transfers
       constituted fraudulent conveyances of Arahova assets or
       cash and the appropriate ownership of those assets or cash,
       under applicable law; and

    d. whether the substantive consolidation according to the
       "Debtor Group Structure" as proposed by the Debtors' Plan
       is impermissible under applicable law.

U.S. Bank National Association, as Indentured Trustee, joins the
Arahova Noteholders Committee in its final issues statement.

Headquartered in Coudersport, Pennsylvania, Adelphia
Communications Corporation (OTC: ADELQ) is the fifth-largest cable
television company in the country.  Adelphia serves customers in
30 states and Puerto Rico, and offers analog and digital video
services, high-speed Internet access and other advanced services
over its broadband networks.  The Company and its more than
200 affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002.  Those cases are jointly
administered under case number 02-41729.  Willkie Farr & Gallagher
represents the ACOM Debtors. (Adelphia Bankruptcy News, Issue
No. 120; Bankruptcy Creditors' Service, Inc., 215/945-7000)


AES CORP: FERC Seeks $23 Million in Refunds from Placerita Unit
---------------------------------------------------------------
The Federal Energy Regulatory Commission seeks $23 million in
refunds from AES Corp. subsidiary AES Placerita, Inc., stemming
from its alleged failure to file rates to the California
Independent System Operator for 2000 and 2001.

In August 2000, the FERC investigated the organized California
wholesale power markets to determine whether rates were
reasonable.  More investigations have involved alleged market
manipulation.

At the FERC's request, AES Southland, LLC, another AES Corp.
subsidiary, and AES Placerita provided documents to cooperate with
the FERC's investigation.  The FERC determined that AES Southland
was not subject to refund liability because it did not sell into
the organized spot markets due to the nature of its tolling
agreement.

However, the Ninth Circuit Court of Appeals addressed the appeal
of the FERC's decision not to impose refunds for the alleged
failure to file rates including transaction specific data for
sales to the California Independent System Operator for 2000 and
2001.

In a September 9, 2004 order, the Ninth Circuit did not order
refunds, but remanded the case to the FERC for a refund proceeding
to consider remedial options.

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

                        *    *    *

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

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


AES CORP: Calls for Redemption of $115.2M Senior Sub. Debentures
----------------------------------------------------------------
The AES Corporation called for redemption of all outstanding
8.875% senior subordinated debentures due 2027, approximately
$115.2 million aggregate principal amount, on Feb. 2, 2006.

The redemption of the debentures is being made pursuant to the
optional redemption provisions of the indenture governing the
debentures.  The redemption date will be March 3, 2006.  The
debentures will be redeemed at a redemption price equal to 100%
of the principal amount, plus a make-whole premium determined in
accordance with the terms of the indenture, plus accrued and
unpaid interest up to the redemption date. The total estimated
pretax charge associated with redeeming the debentures is
expected to be approximately $40 million.

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

                        *    *    *

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

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


ALOHA AIRGROUP: Court Confirms Modified Plan of Reorganization
-------------------------------------------------------------
The Hon. Robert J. Faris of the U.S. Bankruptcy Court for the
District of Hawaii confirmed Aloha Airgroup, Inc., and its debtor-
affiliates' Modified First Amended Joint Plan of Reorganization.

The Court ruled that the Modified Plan complies with the
applicable provisions of Sections 1129.  The Court also ordered
that the terms in the original plan that were not modified
remained in full force and effect.

As previously reported in the Troubled Company Reporter on Dec. 1,
2005, the Court confirmed the Debtors' First Amended Joint Plan of
Reorganization.  Yucaipa Corporate is a co-plan sponsor and plan
investor for the Amended Joint Plan.

                        The Modified Plan

The Debtors tell the Court that the modified plan was a result of
extensive negotiations among the Debtors, the Official Committee
of Unsecured Creditors, Yucaipa and other parties in interest.  
The Debtors say that the modified plan has the support of the
Committee.

Under the modified plan:

    (i) the equity investment to made by the Plan Investors and
        their designees into Newco will be increased to
        approximately $63 million, from $50 million, consisting
        of:

         (a) $43.25 million cash from Yucaipa or Yucaipa's
             affiliates (a $10 million increase from the original
             plan);

         (b) $16.82 million from Aloha Aviation Investment Group
             which consists of:

              -- $6 million in cash from Aloha Shareholders,

              -- $4.82 million contribution from the Junior DIP
                 Loan Facility, and

              -- $6 million Aloha Aviation Investment Group;

         (c) $2.2 million cash from Aloha Hawaii Investors, LLC;
             and

         (d) $750,000 in cash from GMAC;

   (ii) Newco will contribute of all or a portion of Cash or
        Claims to Reorganized Aloha Airgroup in exchange for New
        Aloha Airgroup Common Stock; and

  (iii) Reorganized Aloha Airgroup will contribute of all or a
        portion of Cash or Claims to Reorganized Aloha Airlines in
        exchange for the right to retain the New Aloha Airlines
        Common Stock.

As part of the exit financing, the Plan Investors will obtain
$35 million of third-party debt financing to be provided on the
Effective Date to the Reorganized Debtors, which will include, in
whole or in part, a revolving line of credit.

Under the Modified Plan, holders of general unsecured claims
retain the right to prosecute certain designated Rights of Action
and receive the proceeds arising from those actions, if any.  The
Debtor says that the Plan Investors will provide $20,000 to assist
the Holders of General Unsecured Claims in their litigation of the
Rights of Action or reconciliation of claims.

In their confirmed plan, the Debtors remind the Court, holders of
general unsecured claims were to receive an additional $175,000 in
cash and a pro rata share of a $2 million unsecured promissory
note.  In the modified plan, holders of general unsecured claims
won't get both distributions.  However, the Debtors argue, the
modified plan won't impair the effectiveness of the Court approved
settlement stipulation dated Dec. 6, 2005 and arrangements
providing for a release of certain Hawaii Lenders upon payment of
their claims arising from Series C Stock of the Debtors.

Additionally, the Modified Plan will also provide the Debtors with
additional savings.  The Debtors say that after the settlements
and arrangements completed, the estate will obtain a present cost
reduction of $4.5 million, which includes:

    -- a $1 million reduction in professionals fees;

    -- a $1.78 million reduction from the distribution to holders
       of general unsecured claims; and

    -- reduction, payments or investments of $1.72 million.

The Debtors say that certain controlling shareholders have agreed,
to make the payments or investments for the $1.72 million amount.

                         PBGC Settlement

As part of the Modified Plan, the Debtors will enter into a
settlement agreement with Pension Benefit Guaranty Corporation.

The Debtors disclose that the delay in the consummation of the
original plan was a result of PBGC's appeals of:

    * the Confirmation Order,

    * the Memorandum Decision Regarding Distress Termination of
      Defined Benefit Plans, and

    * the Order on Distress Termination of Defined Benefit Pension
      Plans

The Debtors relate that the District Court of Hawaii did not only
affirm the Confirmation Order but also denied PBGC's appeals.  
Thus in order to prevent further delays and incur additional
expenses, the Debtors negotiated a settlement with the PBGC.

                     No Solicitation Needed

The Debtors tell the Court that the Modified Plan does not contain
material changes to the Original Plan's treatment of any non-
consenting creditors.  The Debtors say that only holders of
general unsecured claims did not give their consent to the
original but their recoveries are deemed non-material.  The
Debtors contend that even if the general unsecured claims were
material, the modified plan can still be confirmed without going
through a new solicitation of votes.

The Debtors remind the Court that holders of general unsecured
claims had voted to reject the original plan but the Court still
confirmed the original plan since it met the requirements for
"cramdown" under Section 1129(b) of the Bankruptcy Code.

             Summary of the Original Amended Joint Plan

The Plan provides for the Debtors' continuing operation after the
Effective Date as reorganized business entities and for the
Reorganized Debtors to retain substantially all of their assets.
The value of the consideration contributed by Yucaipa Corporate
and the other Plan Investor, Aloha Aviation Investment Group, LLC,
under the Plan exceeds $100,000,000.  The Plan Investors will
create a new company and contribute the Equity Investment to
Newco.

The Reorganized Debtors will not be subject to any Claims against
or Interests in the Debtors that are being discharged under the
Plan.  All Cash necessary for the Reorganized Debtors to make
payments pursuant to the Plan will be obtained from the funds
received from the Plan Investors, Newco, the Exit Financing, the
Reorganized Debtors' Cash balances, the operations of the
Reorganized Debtors or post-Effective Date borrowings, as
applicable.

On the Effective Date, a Liquidating Trust will be established for
the purpose of distributing the Distributions to the holders of
Allowed General Unsecured Claims against Aloha Airlines,
and the investigation, prosecution or settlement of Rights of
Action in accordance with the terms of the Plan.

The Amended Plan groups claims and interests into eight classes.

The Unimpaired Claims are:

  1) Secured Claims against each Debtor, which will receive either
     one or a combination of:

     a) Cash equal to the amount of the Allowed Secured Claim or
        deferred Cash payments totaling at least the allowed
        amount of the Allowed Claim, or

     b) the property of the Debtors securing the holder's Allowed
        Claim or payments of Liens amounting to the indubitable
        equivalent of the value of the holder's interest in the
        Debtors' property securing the Allowed Claim, or

     c) reinstatement of the Secured Claim or other treatment as
        the Debtors and the holder of that Claim will agree upon
        in writing;

  2) Priority Claims against Aloha Airlines, which will be paid
     the allowed amount of those Claims in full, in Cash by Aloha
     Airlines on or after the Effective Date; and

  3) Priority Claims against Aloha Airgroup, which will be paid
     the allowed amount of those Claims in full, in Cash by Aloha
     Airgroup on or after the Effective Date.

The Impaired Claims are:

  1) General Unsecured Claims against Aloha Airlines, which will
     receive $175,000 in Cash, payable on the Effective Date, and
     the Pro Rata Distribution of the proceeds of a non-interest
     bearing unsecured promissory note made by Reorganized Aloha
     Airlines in favor of the Liquidating Trust, in the principal
     amount of $2 million payable without interest;

  2) General Unsecured Claims against Aloha Airgroup, which will
     not receive anything on account of their Claims;

  3) Subordinated Unsecured Claims against Aloha Airlines, which
     will be cancelled on the Effective Date and the holders of
     those Claims will not receive anything on account of their
     Allowed Subordinated General Unsecured Claims;

  4) Subordinated Unsecured Claims against Aloha Airgroup, which
     will be cancelled on the Effective Date and the holders of
     those Claims will not receive anything nothing on account of
     their Allowed Subordinated General Unsecured Claims; and

  5) Old Securities, which will be cancelled on the Effective Date
     and the holders of Old Securities will not receive anything.

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.


AMERIGAS PARTNERS: General Partner Reports $55 Million Net Income
-----------------------------------------------------------------
AmeriGas Propane, Inc., general partner of AmeriGas Partners, L.P.
(NYSE: APU), reported net income of $55.0 million for the fiscal
quarter ended December 31, 2005, compared to adjusted net income
of $37.2 million for the same period last year, excluding the
$7.1 million gain on the sale of AmeriGas' 50% interest in a
propane import terminal in the prior year's quarter.  Net
income for last year's first quarter including the gain was
$44.3 million.  Average diluted units outstanding were 4.2% higher
for the recent quarter principally as a result of a common unit
offering in September 2005.

The Partnership's earnings before interest expense, income taxes,
depreciation and amortization (EBITDA) were $92.2 million for the
first fiscal quarter of 2006 compared to adjusted EBITDA of
$77.3 million a year ago, excluding the $9.1 million pre-tax gain
on the sale of the terminal.  EBITDA for the prior year quarter
including the gain was $86.4 million.  For the three months ended
December 31, 2005, retail volumes sold declined modestly to
291.9 million gallons from 296.8 million gallons sold in the
prior-year period.  Weather was 4.1% warmer than normal during the
recent quarter compared to weather that was 8.0% warmer than
normal in the prior-year period, according to the National
Oceanic and Atmospheric Administration.

Eugene V. N. Bissell, chief executive officer of AmeriGas, said,
"We are pleased to be reporting improved earnings for the quarter,
especially considering the warmer than normal weather, and
continuing issue of record high energy prices.  Although weather
was colder than last year, volumes sold to agricultural customers
were down due to a weak grain drying season, and we continue to
experience customer conservation due to higher propane prices.
Higher energy prices also affected vehicle fuel expense and bad
debt expense, which accounted for most of the year-on-year
increase in expenses.  We were able to offset the effects of the
lower volumes and higher vehicle fuel and bad debt expense through
operating expense control and effective margin management while
maintaining competitive prices.  While January was extraordinarily
warm, assuming normal weather for the remainder of the fiscal
year, we continue to expect adjusted EBITDA in the range of
$255 million to $265 million, excluding the loss on early
extinguishment of debt of approximately $16 million that we expect
to incur in the second fiscal quarter resulting from the
previously announced refinancing of long term debt at lower
interest rates."

Revenues for the quarter were $630.2 million versus $556.2 million
a year ago, principally reflecting higher propane product prices.
Operating and administrative expenses rose modestly during the
quarter mainly reflecting the impact of higher vehicle costs
associated with increased fuel prices and lease expenses and
higher bad debt expense partially offset by lower long term
compensation expense.

AmeriGas Partners, L.P. (NYSE:APU) is the nation's largest retail
propane marketer, serving nearly 1.3 million customers from over
650 locations in 46 states.  UGI Corporation (NYSE:UGI) through
subsidiaries, owns 44% of the Partnership and individual
unitholders own the remaining 56%.

                         *     *     *

As reported in the Troubled Company Reporter on Jan. 12, 2006,
AmeriGas Partners, L.P.'s $350 million senior notes due 2016,
issued jointly and severally with its special purpose financing
subsidiary AP Eagle Finance Corp., are rated 'BB+' by Fitch
Ratings.

Fitch also affirms APU's existing senior unsecured debt rating of
'BB+' and issuer default rating of 'BB+'.  Fitch said the Rating
Outlook is Stable.

As reported in the Troubled Company Reporter on Jan. 12, 2006,
Moody's Investors Service:

   * assigned a B1 rating to AmeriGas Partners, L.P.'s proposed
     $350 million senior unsecured notes due 2016;

   * upgraded its existing $415 million of senior unsecured notes
     due 2015 to B1 from B2; and

   * affirmed its Ba3 corporate family rating.

Moody's said the rating outlook is stable.


ANCHOR GLASS: Court Approves AT&T Sublease Contract
---------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
approved a sublease arrangement between Anchor Glass Container
Corporation and AT&T.  The Debtor inked the sublease agreement
with AT&T after deciding to transfer its corporate headquarters
into a smaller facility.

The Debtor's corporate headquarter is currently located in leased
premises at 4343 Anchor Plaza Parkway, in Tampa, Florida.  The
basic monthly rent for the 56,500 square feet of space at 4343
Anchor Plaza is $100,026.

Hywel Leonard, Esq., at Carlton Fields PA, in Tampa Florida, tells
the Court that the Debtor entered into negotiations to sublease
20,847 square feet of space from AT&T, identified as Suite 300 in
the Spectrum Building, at 3101 W. Martin Luther King, Jr. Blvd.,
in Tampa, Florida.  Anchor Glass will be entitled to use certain
parking spaces within the building.

The basic monthly rent under the proposed sublease for the period
January 1 to December 31, 2006, would be $27,883 per month,
including 7% sales and use tax.  The rental rate is $15 per square
foot for 2006, $15.50 per square foot for 2007 and $16 per square
foot for 2008.

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets.  The Company filed for chapter 11 protection on
Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A.
Soriano, Esq., at Carlton Fields PA, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $661.5 million in assets and
$666.6 million in debts. (Anchor Glass Bankruptcy News, Issue
No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000)


ANCHOR GLASS: Court Junks Florida Rocks' Bid to Terminate Contract
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
denied Florida Rock Industries, Inc.'s request to lift the
automatic stay so it can terminate its supply agreement with
Anchor Glass Container Corporation, or otherwise, to excuse it
from further performance.

The Court directs the Debtor to decide whether to reject or assume
the February 5, 1997, agreement by the effective date of their
Plan of Reorganization.

As reported in the Troubled Company Reporter on Jan. 16, 2006,
Florida Rock and the Debtor are parties to a supply agreement, by
which Florida Rock agreed to supply 90% of the Debtor's sand
requirements for the operation of the Jacksonville, Florida glass
plant, and 50% of its sand requirements at the Warner Robbins,
Georgia glass container plant, at favorable pricing.

Andrew M. Brumby, Esq., at Shutts & Bowen LLP, in Orlando,
Florida, informs the U.S. Bankruptcy Court for the Middle District
of Florida that the sand Florida Rock provided for manufacturing
of glass products is of limited supply.  In light of the current
needs in the construction industry throughout the United States,
particularly in the southeast, the sand is in high demand, Mr.
Brumby adds.

As of Petition Date, the Debtor owes Florida Rock $78,682.
Pursuant to the Supply Agreement, non-payment by the Debtor would
constitute grounds for termination for cause.  During the period
that the Debtor has neither assumed not rejected the Supply
Agreement, Florida Rock continued to supply the Debtor with sand.

Mr. Brumby pointed out that the Debtor can have alternative
sources of sand and these alternatives are in a position to fully
perform and provide long term commitments for the Debtor's sand
supply.

Mr. Brumby admitted that complying with the obligations under the
Supply Agreement adversely impacts Florida Rock's ability to
contract with, and otherwise supply, sand to other Construction
Trades.

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets.  The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,
Esq., at Carlton Fields PA, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts. (Anchor Glass Bankruptcy News, Issue No. 17;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


APPLIEDTHEORY: Settlement Pays Lenders 55% & Dismisses Chapter 11
-----------------------------------------------------------------
Yann Geron, the chapter 11 Trustee appointed in AppliedTheory
Corporation and its debtor-affiliates' bankruptcy cases, asks the
U.S. Bankruptcy Court for the Southern District of New York to
approve a compromise and settlement agreement that:

     a) proposes a distribution to the Debtors' secured lenders;
        and   

     b) provides for the dismissal of the Debtors' chapter 11
        cases.

The Trustee and the Debtors' secured lenders, Halifax Fund, LP,
Palladin Partners I, LP, Palladin Overseas Fund Ltd., Hatteras
Partners, LP, Spectrum Investment Partners, LP, Elliott
International, LP, and Elliott Associates, LP, inked the
compromise agreement to resolve their long-standing dispute over:

     -- alleged fraudulent conveyances made by the Debtors to the
        lenders;

     -- the amount and extent of the lenders' superpriority
        administrative expense claim and replacement liens; and

     -- the extent to which the lenders' collateral may be
        surcharged under Section 506(c) of the Bankruptcy Code.

Mr. Geron tells the Bankruptcy Court that the compromise agreement
brings finality to the Debtors' four-year bankruptcy case and is
the best settlement that can be reasonably expected from the
lenders.

            Terms of The Compromise Agreement

Pursuant to the compromise agreement, the Trustee acknowledges
these allowed first-priority secured claims:

                                         Allowed
     Lender                            Claim Amount
     ------                           --------------
     Halifax Fund, LP                 $20,950,947.22
     Palladin Partners I, LP           $1,676,076.49
     Palladin Overseas Fund, Ltd.      $2,095,096.19
     Hatteras Partners, LP             $3,771,165.74
     Spectrum Investment Partners, LP  $2,933,134.67
     Elliott Associates, LP            $2,830,065.86
     Elliott International, LP         $2,990,129.53

The lenders' secured claims will be subject and subordinate to
these specific administrative claims:

     -- $150,000 of unpaid fees for legal services rendered and
        expenses incurred by Angel & Frankel, PC;

     -- $454,927 of aggregate unpaid fees due to Geron &
        Associates, Fox Rothschild LLP, Morvillo Abramowitz,
        Grand, Iason and Silberberg, PC, and BDO Seidman LLC;

     -- $150,000 of commissions due to the Trustee; and

     -- $3,053 of unpaid commissions and wages due to by Pablo A.
        Alonso, the Debtors' employee.

Mr. Geron points out that the lenders will only be receiving
approximately 55% of their alleged $37 million aggregate claims.

In addition to the recognition of their secured claims, the
Trustee also agrees to transfer all the Debtors' remaining assets,
free and clear of liens, to Halifax, as the lenders' collateral
agent.

The Debtors chapter 11 cases will be dismissed after completion of
all other pending preference actions commenced by the Trustee, the
determination of any pending administration claims and final
distribution of the estates' remaining funds.

            What Will Unsecured Creditors Get?

Unsecured creditors will not receive further distributions from
the Debtors' estates because of limited funds and the Trustees'
decision not to pursue the litigation against the lenders.

Mr. Geron was called in to serve as an independent fiduciary in
the Debtors' bankruptcy cases in order to investigate all
potential claims against the lenders.  He concluded, after
studying every potential litigation theory presented by the
Committee of Unsecured Creditors, that there is no rational basis
to continue litigating in the face of the settlement offered by
the lenders.

The Committee continues to urge Mr. Geron to press the fight
against the lenders and has even threatened the Trustee with
accusations of wrongdoing after learning of his intention to enter
into the compromise agreement.

However, the Trustee is unwilling to lose the opportunity to enter
into a reasonable settlement with the lenders, or to gamble the
recoveries of administrative claimants, all in an effort to
further the Committee's purportedly misguided litigation agenda.

While unsecured creditors won't get anything out of the compromise
agreement, the Trustee explains that unsecured creditors have
already enjoyed substantial recoveries from the Debtors' estates.

The Trustee tells the Bankruptcy Court that:

   -- the Committee persuaded the Debtors and the lenders to
      support Fastnet Corporation's bid for the Access Business
      rather than Cogent's bid.

      The Fastnet bid offered $900,000 less in the cash value of
      its purchase price, but contemplated the assumption of
      executory contracts with the accompanying cure of defaults
      totaling approximately $6.5 million.

      By supporting and accepting Fastnet's bid, the Debtors and
      lenders permitted at least $6.5 million in general unsecured
      claims to be paid in full; and

   -- as part of the auction of the Debtors assets, the Committee
      convinced the buyers to purchase a waiver of avoidance
      actions against essential vendors.  Since these vendors were
      also unsecured creditors, they benefited by being permitted
      to retain otherwise avoidable transfers.

AppliedTheory Corporation provides internet service for business
and government, including direct internet connectivity, internet
integration, web hosting and management service. The Company
filed for chapter 11 protection on April 17, 2002 (Bankr. D.
Alaska Case No. 05-02265).  Joshua Joseph Angel, Esq., and Leonard
H. Gerson, Esq., at Angel & Frankel, P.C., represent the Debtors
in their restructuring efforts. When the Company filed for
protection from its creditors, it listed $81,866,000 in total
assets and $84,128,000 in total debts.


ARMSTRONG WORLD: Requests POR Confirmation Hearing on May 2006
--------------------------------------------------------------
Armstrong World Industries, Inc. reported that at a status
conference in its Chapter 11 case held in Philadelphia on Friday,
Feb. 3, 2006, Judge Robreno of the U.S. District Court indicated
that he would approve a proposed order scheduling a hearing to
commence on or about May 23, 2006, to consider confirmation of a
modified plan of reorganization to be filed by AWI on or before
Feb. 21, 2006.  AWI expects the Court to issue a formal order on
this matter shortly.

The Modified Plan will be substantially similar to AWI's
previously filed Fourth Amended Plan of Reorganization except that
it will eliminate the distribution of warrants to shareholders of
AWI's parent company, Armstrong Holdings, Inc.  This modification
is consistent with the recent decision by the Third Circuit Court
of Appeals upholding Judge Robreno's previous ruling that the
issuance of the warrants under the Fourth Amended Plan violated
the so-called "absolute priority rule" of the Bankruptcy Code.

The POR, Disclosure Statement and related press releases are
available at http://www.armstrongplan.com/
  
Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior floor coverings and ceiling
systems, around the world.  The Company and its debtor-affiliates
filed for chapter 11 protection on December 6, 2000 (Bankr. Del.
Case No. 00-04469).  Stephen Karotkin, Esq., at Weil, Gotshal &
Manges LLP, and Russell C. Silberglied, Esq., at Richards, Layton
& Finger, P.A., represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $4,032,200,000 in total assets and
$3,296,900,000 in liabilities.


ASARCO LLC: Wants to Establish De Minimis Asset Sale Procedures
---------------------------------------------------------------
Before ASARCO LLC and its debtor-affiliates filed for bankruptcy,
they periodically sold personal and real property that were no
longer beneficial and are continuing those sales postpetition.

Jack L. Kinzie, Esq., at Baker Botts LLP, in Dallas, Texas,
contends that if assets to be sold are of de minimis value
relative to the size of the Debtors' business, the preparation
and filing of a motion for approval of the sale of each separate
asset is cost-prohibitive and unduly time-consuming.

Thus, Mr. Kinzie asserts, it is in the Debtors' best interests to
have streamline sale procedures for:

   (a) personal property with a purchase price of $100,000 or
       less; and

   (b) real property with a purchase price of $500,000 or less.

Mr. Kinzie clarifies that personal property constituting a de
minimis asset excludes Accounts and Inventory as defined in the
October 27, 2005 DIP Financing Agreement.

                De Minimis Asset Sale Procedures

At least 10 days before the occurrence of the sale of a de
minimis asset, the Debtors propose to provide notice of the
proposed sale, through e-mail or postal mail, to these notice
parties:

   * The U.S. Trustee for the Southern District of Texas,

   * Counsel for the Official Committee of Unsecured Creditors of
     ASARCO LLC,

   * Counsel for the Official Committee of Unsecured Creditors of
     the Asbestos Subsidiary Debtors,

   * Counsel for the Future Claimants Representative,

   * Counsel for the CIT Group/Business Credit, Inc., and

   * Any other Lienholder.

The notice of the proposed sale will describe:

   (1) the assets sold;

   (2) the estimated value;

   (3) the appraisal and basis for the Debtors' estimated value;

   (4) the Debtors' marketing efforts, if any;

   (5) the business purpose of the proposed sale;

   (6) the proposed purchase price;

   (7) the name of the proposed buyer; and

   (8) the proposed purchaser's description  has to any of the
      Debtors or any of the Debtors' insiders.

If a Notice Party objects to a particular sale going forward,
that party must submit an objection to the proposed sale to the
Debtors within the Notice Period.  Neither the Debtors' notice of
the proposed sale nor the Notice List's objection will be filed
with the Court, Mr. Kinzie points out.

If no objections are timely filed, the Debtors will continue with
the sale, free and clear of all liens, claims and interests,
without need of any further Court order.

The Debtors will file a formal motion for approval of the sale
with the Court and serve it on all parties-in-interest if
objections are timely filed.

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: All Debtors Have Until June 5 to File Chapter 11 Plan
-----------------------------------------------------------------
Because the debtor subsidiaries of ASARCO LLC did not file for
bankruptcy on the same date, the U.S. Bankruptcy Court for the
Southern District of Texas in Corpus Christi has set the deadlines
for the exclusive period for filing a plan and for obtaining
acceptances for the plan for the different groups of Debtors at
different dates.

The Court has set the deadline for the Exclusive Period for
ASARCO, Encycle, Inc., and ASARCO Consulting, Inc. -- the
Asbestos Subsidiaries -- on March 7, 2006, and their Solicitation
Period on May 6, 2006.

The remaining group of Debtors' -- the October Filing
Subsidiaries -- Exclusive Period will expire on Feb. 10, 2006, and
their Solicitation Period will expire on April 11, 2006.

The October Filing Subsidiaries are:

   * ALC, Inc.,
   * American Smelting and Refining Company,
   * AR Mexican Explorations, Inc.,
   * AR Sacaton LLC,
   * Asarco Master, Inc.,
   * Asarco Oil and Gas Company, Inc.,
   * Bridgeview Management Company, Inc.,
   * Covington Land Company,
   * Government Gulch Mining Company, Ltd., and
   * Salero Ranch, Unit III, Community Association, Inc.

The Debtors seek a unified deadline for their Exclusive and
Solicitation Periods.

Thus, the Debtors ask the Court to extend their Exclusive and
Solicitation Period to the same date for all Debtors:

   (a) June 5, 2006, for filing a plan of reorganization; and

   (b) Aug. 4, 2006, for solicitation of acceptances of the
       plan.

Jack L. Kinzie, Esq., at Baker Botts LLP, in Dallas, Texas,
asserts that setting the expiration of the Exclusive Periods on
the same dates for all the Debtors will assist in the efficient
management of the Debtors' cases.

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: Local 700C Wants Similar Quid Pro Quo as USW's MOA
--------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Nov. 25, 2005, at ASARCO's behest, Judge Schmidt of the U.S.
Bankruptcy Court for the Southern District of Texas in Corpus
Christi approved the Debtor's Agreement with the Unions.  ASARCO
is authorized to honor its employee and retiree benefit and
pension plan obligations under the collective bargaining
agreements, as amended.  The Arizona Litigation is stayed.

On July 2, 2005, 1,500 miners and other workers at five ASARCO
LLC's facilities in Arizona and a refinery in Amarillo, Texas,
went on strike.  The five facilities in Arizona are the Ray Mine
near Kearney, the Mission and Silver Bell mines in Sahurita and
Marana, and ASARCO's smelter at Hayden.

The strikers are members of these unions:

   * the United Steelworkers;

   * Local 2181 of the International Association of Machinists
     and Aerospace Workers;

   * Locals 518, 570, and 602 of the International Brotherhood
     of Electrical Workers;

   * Local 741 of the United Association of Journeymen and
     Apprentices of the Plumbing and Pipe Fitting Industry;

   * Local 627 of the international Brotherhood of Boiler
     Makers, Iron Ship Builders, Black Smiths, Forgers and
     Helpers;

   * Millwrights Local 1914;

   * the General Teamsters, State of Arizona, Local 104; and

   * Local 428 of the International Union of Operating
     Engineers.

After many weeks of negotiations, ASARCO and the Union
representatives have reached a Memorandum of Agreement, which
will become effective upon ratification by the Union members and
Court approval.  The Agreement will terminate on Dec. 31, 2006.
The Official Committee of Unsecured Creditors supports the
Agreement.

                        ICWU/UFCW Responds

International Chemical Workers Union Council of the United Food
and Commercial Workers Union opposes ASARCO LLC's request for
settlement approval.

The transfer of the health insurance retiree litigation by the
U.S. District Court Judge in Arizona was done, in part, on
assurances that the litigation would proceed to trial actively
before the Bankruptcy Court, Robert W. Lowrey, Esq., in Akron,
Ohio, tells the Court.

Mr. Lowrey contends that absent Local 700C's agreement to the
one-year stay of the Retiree Litigation, the ICWU expects and
urges that the Litigation proceed expeditiously as previously
indicated.

The Collective Bargaining Agreement between Local 700C and ASARCO
LLC expired on Nov. 20, 2005.  The local ASARCO management at
the Tennessee zinc mine, and Local 700C are willing to extend the
ICWU/UFCW and its Local 700C for one year.

The Local, however, do not agree to a one-year stay of the
Retiree Litigation and opposes the stay, unless Local 700C also
receives a similar quid pro quo from ASARCO, as outlined in the
USW's Memorandum of Agreement.

Absent ASARCO's agreement to extend these promises to Local 700C,
Local 700C must oppose approval of the MOA so long as it contains
the agreement to stay the Health Insurance Litigation.

If ASARCO includes the one-year extension of the Local 700C CBA,
it will support the USW's MOA and the stay of the litigation for
one year, Mr. Lowrey discloses.

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).


AUBURN FOUNDRY: Chap. 7 Trustee Taps Kruggel Lawton as Accountant
-----------------------------------------------------------------
Rebecca Hoyt Fischer, the chapter 7 Trustee for Auburn Foundry,
Inc., sought and obtained permission from the U.S. Bankruptcy
Court for the Northern District of Indiana to employ Kruggel,
Lawton & Company, LLC, as her accountant.

Kruggel Lawton will provide the Trustee with accounting services.

John S. Frizzo, a partner at Kruggel Lawton, discloses his Firm's
professionals bill:

      Professional         Hourly Rate
      ------------         -----------
      Partner                 $175
      Manager              $90 - $140
      Staff CPA            $60 - $85
      Support Staff           $45

Mr. Frizzo assures the Court that Kruggel Lawton does not
represent any interest adverse to the Debtor or its estate.

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 in its restructuring efforts.  When the Company filed for
protection from its creditors, it listed both estimated debts and
assets of over $10 million.  The Debtor's chapter 11 case was
converted into a liquidation proceeding under chapter 7 of the
Bankruptcy Code on Oct. 11, 2005.


BOYD GAMING: Completes $250 Mil. 7.125% Senior Sub Notes Offering
-----------------------------------------------------------------
Boyd Gaming Corporation completed its offering of $250 million
7.125% Senior Subordinated Notes due 2016.  

The Notes were issued pursuant to the terms stated in the
Company's First Supplemental Indenture, dated as of Jan. 30, 2006,
entered into between the Company and Wells Fargo Bank, National
Association.  

The Supplemental Indenture supplements the base indenture with
respect to Subordinated Debt Securities, entered into between the
Company and Wells Fargo as of Jan. 25, 2006.  The Notes are the
Company's unsecured and subordinated obligations and will mature
on Feb. 1, 2016, with interest payable semiannually on February 1
and August 1, beginning on Aug. 1, 2006.  Interest will accrue
from the issue date of the Notes.

At any time prior to Feb. 1, 2011, the Company may redeem the
Notes, in whole or in part, at a redemption price equal to 100% of
the principal amount of the Notes redeemed plus the applicable
premium, pursuant to the terms set forth in the Supplemental
Indenture.

In addition, at any time prior to Feb. 1, 2009, the Company can
choose to redeem up to 35% of the outstanding Notes with money
that the Company raises in one or more public equity offerings, as
long as:

   (a) the Company pays 107.125% of the principal amount of the
       Notes, plus accrued and unpaid interest to the date of
       redemption;

   (b) the Company redeems the Notes within 45 days of closing the
       public equity offering; and

   (c) at least 65% of the aggregate principal amount of the Notes
       issued remains outstanding afterwards (excluding Notes held
       by the Company and its subsidiaries).

On or after Feb. 1, 2011, the Company may redeem any or all of the
Notes at the redemption prices, plus accrued and unpaid interest,
if any.  The applicable redemption dates, if redeemed during the
twelve-month period beginning on February 1 of the years
indicated, are:

           Year                        Redemption Price
           ----                        ----------------
           2011                            103.563%
           2012                            102.375%
           2013                            101.188%
           2014 and thereafter             100.000%

The Supplemental Indenture also provides that upon a change in
control, holders of the Notes will have the right to require the
Company to purchase those holder's Notes at 101% of the aggregate
principal amount of the Notes repurchased, if any, plus accrued
and unpaid interest, if any, as specified in the Supplemental
Indenture.

A full-text copy of the First Supplemental Indenture of Boyd
Gaming Corporation's 7.125% Senior Subordinated Notes Due 2016 is
available at no charge at http://ResearchArchives.com/t/s?4fb

Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) --
http://www.boydgaming.com/-- is a leading diversified owner and
operator of 18 gaming entertainment properties, plus one under
development, located in Nevada, New Jersey, Mississippi, Illinois,
Indiana and Louisiana.

                       *    *    *

As previously reported in the Troubled Company Reporter on
Jan. 30, 2006, Standard & Poor's Ratings Services assigned a 'B+'
rating to Boyd Gaming Corp.'s proposed $250 million senior
subordinated notes due 2016.

At the same time, Standard & Poor's affirmed its existing ratings
on the Las Vegas-based casino operator, including its 'BB' issuer
credit rating.  The outlook is stable.  Total debt outstanding at
Sept. 30, 2005, was about $2.4 billion.


CADMUS COMMS: Earns $1.1 Million of Net Income in FY 2006 2nd Qtr.
------------------------------------------------------------------
Cadmus Communications Corporation (Nasdaq: CDMS) reported net
sales of $114.2 million for the second quarter of fiscal 2006, an
increase of 5% from $109.1 million in last year's second quarter.  

Operating income was $5.2 million and net income was $1.1 million
for the second quarter of fiscal 2006, compared to operating
income of $8.6 million and net income of $3.5 million in the
second quarter of fiscal 2005.

"As we stated in our pre-release last week, we are pleased with
the continued solid performance of our Specialty Packaging segment
which is performing in line with our business plan.  However, in
our Publisher Services segment, results have been adversely
affected by equipment and other delays in our previously announced
consolidation of our Lancaster and Science Press operations,"
Bruce V. Thomas, president and chief executive officer, remarked.  
"These delays have substantially reduced both our available
capacity and our operating efficiencies at those sites.  In
addition, we experienced a significant increase in volume at
year-end that was both unexpected and disruptive.  This
combination of reduced capacity and unexpectedly high year-end
volume resulted in high levels of overtime, offloading (both
within Cadmus and to outside printers) and much reduced
efficiencies in nearly all of our printing plants."

Net sales for the first six months of fiscal 2006 totaled
$221.4 million compared with $212.1 million last year, an increase
of 4%.

For the six months ended Dec. 31, 2005, operating income was
$14.4 million, compared to $15.8 million last year.  Income for
the six months ended Dec. 31, 2005 totaled $4.7 million, compared
with income of $6 million last year.  

At Dec. 31, 2005, assets totaled $351,645,000 and liabilities
totaled 293,783,000, resulting in a stockholders' equity of
$57,862,000.

Cadmus Communications Corporation -- http://www.cadmus.com/--     
provides end-to-end, integrated graphic communications services to  
professional publishers, not-for-profit societies and  
corporations.  Cadmus is the world's largest provider of content  
management and production services to scientific, technical and  
medical journal publishers, the fifth largest periodicals printer  
in North America, and a leading provider of specialty packaging  
and promotional printing services.   

                          *     *     *  

Cadmus Communications' 8-3/8% Senior Subordinated Notes due 2014
carry Moody's Investors Service's B2 rating and Standard & Poor's
single-B rating.


CALPINE CORP: Files to Reject Two Power Plant Lease Agreements
--------------------------------------------------------------
Calpine Corporation (OTC Pink Sheets: CPNLQ) has filed a Notice of
Rejection of certain Facility Lease Agreements related to the
control of two combined-cycle power plants in New England.

Calpine filed its Notice with the U.S. Bankruptcy Court for the
Southern District of New York as part of its Chapter 11
restructuring proceedings.  This action is part of Calpine's
recently announced plan to stabilize, improve, and strengthen the
company's core power generation business and its financial health.

Calpine's leasehold interest in the two power plants is
extinguished as of Feb. 6, 2006, unless the bankruptcy court
determines otherwise.  The owner-lessor, a subsidiary of Philip
Morris Capital Corporation, will take possession and control of
the plants.

"After careful review, we determined that continuing to operate
the facilities under the terms of these leases would be uneconomic
for Calpine and would cause significant harm to the bankruptcy
estate," Robert P. May, Calpine's Chief Executive Officer, said.  
"This is a necessary step we must take to ensure Calpine emerges
from its Chapter 11 restructuring as a profitable and competitive
power company."

The affected power plants, located in Rumford, Maine and Tiverton,
Rhode Island, represent a combined 530 megawatts of installed
capacity with the output sold into the New England wholesale
market.  Calpine will cooperate fully with PMCC to facilitate a
smooth transition and ensure the plants' continued ability to
deliver clean, reliable power.  Notwithstanding the filing of its
Notice, Calpine remains available to provide PMCC with necessary
transition services related to operations, maintenance, and energy
management services until alternate arrangements are made for the
facilities.

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


CHARLES WORTHINGTON: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Charles F. Worthington
        650 First Avenue Northeast, Suite 99
        Issaquah, Washington 98027

Bankruptcy Case No.: 06-10251

Chapter 11 Petition Date: February 3, 2006

Court: Western District of Washington (Seattle)

Judge: Philip H. Brandt

Debtor's Counsel: Michael J. Gearin, Esq.
                  Preston Gates & Ellis LLP
                  925 4th Avenue, Suite 2900
                  Seattle, Washington 98104-1158
                  Tel: (206) 370-6666
                  Fax: (206) 370-6067

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

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Shell Oil Products            Trade debt                $435,080
Equilon Enterprises
12700 Northborough
Drive MS1012
Houston, TX 77607

Renton Fuels Co. LLC                                    $195,800
c/o Inslee Best (A. Caso)
P.O. Box C-90016
Bellevue, WA 98009

Countrywide                                             $158,827
450 American Street
MS:SV#-70
Simi Valley, CA 93065

Estate of Joseph Esser                                  $120,000

John Veary                                              $115,000

Estate of Jerry N. Parks                                $100,000

Wells Fargo Business Line                                $46,160

Bank of America, N.A.                                    $36,628

American Express                                         $32,202

Academy Collection Service Inc.                          $30,252

American Express                                         $27,285

American Express                                         $25,772

MBNA American Bank NA                                    $22,792

Macy's                                                   $22,508

Chase Manhattan Bank USA                                 $20,869

Household Bank                                           $18,303

Transwestern Publishing                                  $16,861

NCO Financial Systems                                    $16,461

Bank of America/Fleet                                    $16,021

MBNA America Bank                                        $15,879


CONSTELLATION BRANDS: Declares Quarterly Preferred Dividend
-----------------------------------------------------------
The Board of Directors of Constellation Brands, Inc. (NYSE: STZ,
ASX: CBR) has approved and declared a quarterly dividend on the
Company's 5.75% Series A Mandatory Convertible Preferred Stock,
payable on March 1, 2006, to shareholders of record on Feb. 15,
2006.  Payment will be $0.359375 per depositary share.

                            Financials

Constellation Brands, Inc., filed its financial statements for the
quarter ended Nov. 30, 2005, in a Form 10-Q filed with the
Securities and Exchange Commission on Jan. 9, 2006.

Constellation Brands reported $108,961,000 of net income on
$1,567,869,000 of sales for the three months ended Nov. 30, 2005.
As of Nov. 30, 2005, Constellation Brands has $7,702,505 in total
assets, $4,795,784 in total liabilities, and $2,906,721 in total
positive stockholders' equity.

Constellation Brands, Inc. -- http://www.cbrands.com/-- is a
leading international producer and marketer of beverage alcohol
brands with a broad portfolio across the wine, spirits and
imported beer categories. Well-known brands in Constellation's
portfolio include: Corona Extra, Corona Light, Pacifico, Modelo
Especial, Negra Modelo, St. Pauli Girl, Tsingtao, Black Velvet,
Fleischmann's, Mr. Boston, Paul Masson Grande Amber Brandy, Chi-
Chi's, 99 Schnapps, Ridgemont Reserve 1792, Effen Vodka, Stowells,
Blackthorn, Almaden, Arbor Mist, Vendange, Woodbridge by Robert
Mondavi, Hardys, Nobilo, Alice White, Ruffino, Robert Mondavi
Private Selection, Blackstone, Ravenswood, Estancia, Franciscan
Oakville Estate, Simi and Robert Mondavi Winery brands.

                      *    *    *

As previously reported in the Troubled Company Reporter on
Jan. 13, 2006, Fitch has initiated rating coverage of
Constellation Brands, Inc. (NYSE: STZ):

     -- Issuer default rating 'BB';
     -- Bank credit facility 'BB';
     -- Senior unsecured notes 'BB';
     -- Senior subordinated notes 'BB-'.

The Rating Outlook is Stable.  Approximately $2.9 billion of debt
is covered by these actions.

As previously reported in the Troubled Company Reporter on
Dec. 13, 2005, Standard & Poor's Ratings Services affirmed its
'BB' corporate credit rating and other ratings on beverage alcohol
producer and distributor Constellation Brands Inc.

As reported in the Troubled Company Reporter on Nov. 16, 2005,
Moody's Investors Service assigned a (P)Ba2 rating to
Constellation Brands, Inc.'s proposed $1.2 billion senior secured
credit facility, proceeds of which are to be used to finance the
potential purchase of Vincor International Inc. -- no debt rated
by Moody's -- for approximately $1.2 billion.

Moody's assigned these ratings:

   * (P)Ba2 for the proposed $1.2 billion incremental senior
     secured credit facility consisting of:

     -- a $300 million tranche A2 term loan, maturing in 2010, and
     -- a $900 million tranche C term loan, maturing in 2012

These ratings were confirmed:

   * Ba2 Corporate Family Rating

   * $2.9 billion senior secured credit facility consisting of a:

     -- $500 million revolver,
     -- $600 million tranche A1 term loans, and
     -- $1.8 billion tranche B term loans, Ba2

   * $200 million 8.625% senior unsecured notes, due 2006, Ba2

   * $200 million 8% senior unsecured notes, due 2008, Ba2

   * GBP 80 million 8.5% senior unsecured notes, due 2009, Ba2

   * GBP 75 million 8.5% senior unsecured notes, due 2009, Ba2

   * $250 million 8.125% senior subordinated notes, due 2012, Ba3

The ratings outlook is changed to negative from stable.

The Speculative Grade Liquidity rating is SGL-2.


CSC HOLDINGS: Lenders Waive Technical Covenant Defaults
-------------------------------------------------------
CSC Holdings, Inc., completed its comprehensive debt covenant
compliance review.  That review identified certain technical
covenant compliance issues under the CSC Holdings' Seventh Amended
and Restated Credit Agreement and under the Rainbow National
Services LLC Loan Agreement.

During the course of preparing for the financing of CSC Holdings'
proposed special dividend, the Company found some technical
covenant violations existing under its bank credit agreement and
certain possible technical covenant violations under other debt
instruments.

CSC Holdings and Rainbow National Services LLC have received
waivers from the lenders under these agreements and certain
technical and clarifying amendments have been made to the Rainbow
National Services LLC Loan Agreement.  The covenant compliance
issues under the CSC Holdings credit agreement necessitated
certain waivers under the Company's agreements covering its
monetizations and interest rate swaps, all of which have been
obtained.  No fees were paid to the lenders and counterparties in
connection with these waivers and amendments.  The Company and its
subsidiaries are in compliance with all of their debt agreements
and instruments.

The Company has determined that no reclassification of debt or
other adjustments to its previously issued financial statements
are required as a result of the review.

The Company's Board of Directors is expected to begin
reconsideration of a possible special dividend at its regularly
scheduled meeting in March.  There can be no assurance that the
Board will decide to move forward with a special dividend or as to
the size or timing of any dividend.

CSC Holdings is the operating company of Cablevision Systems
Corporation -- http://www.cablevision.com/-- one of the largest
cable and entertainment firms in the US.  Its operations include a
cable television system serving about 2.9 million customers in the
New York City area; Madison Square Garden, owner of the famous
sports arena and its teams, the New York Knicks and Rangers; as
well as Rainbow Media, a cable television network holding company
with such assets as American Movie Classics and the Independent
Film Channel.  Cablevision also operates New York's famed Radio
City Music Hall.  Chairman Charles Dolan and his family control
Cablevision.

                             *   *   *

As previously reported in the Troubled Company Reporter on
Dec, 19, 2005, Standard & Poor's Ratings Services assigned its
'B+' rating to CSC Holdings Inc.'s proposed $1 billion senior
notes due 2015 to be issued under Rule 144A, with registration
rights and a 'BB+' rating with a '1' recovery to CSC Holdings'
proposed $4.5 billion in combined senior secured bank loan
facilities.  This rating is based on preliminary information,
subject to receipt of final documentation.

As previously reported in the Troubled Company on Dec. 15, 2005,
Moody's lowered Cablevision Systems Corporation's corporate family
rating to B1 from Ba3, assigned a Ba3 to the company's proposed
secured credit facilities, and lowered its senior notes to B2 and
senior subordinated notes to B3.  The downgrade and ratings
reflect Cablevision's high financial leverage following the
transaction and very modest coverage of interest, as well as
ongoing concerns regarding the company's focus on returns to
shareholders at the expense of debt holders.

  CSC Holdings, Inc.:

     * Senior Subordinated Bonds, Downgraded to B3 from B2
     * Senior Unsecured Bonds Downgraded to B2 from B1
     * Senior Secured Bank Credit Facility, Assigned Ba3

  Cablevision Systems Corporation:

     * Corporate Family Rating, Downgraded to B1 from Ba3

Outlook changed to stable from rating under review.


DANA CORP: SEC Begins Formal Probe About Financial Restatements
---------------------------------------------------------------
The U.S. Securities and Exchange Commission is conducting a formal
investigation on Dana Corporation's restatements of its financial
statements for:

   * the year ending December 31, 2004;
   * the quarter ending March 31, 2005; and
   * the quarter ending June 30, 2005.

The SEC's investigation is a non-public, fact-finding inquiry to
determine whether any violations of the law have occurred.

In September 2005, the Company's management was investigating
accounting matters arising out of incorrect entries related to a
customer agreement in its Commercial Vehicle business unit and
that the Audit Committee of the Company's Board of Directors had
engaged outside counsel to conduct an independent investigation of
these matters.  The outside counsel informed the SEC of the
commencement, nature and scope of the independent investigation
and volunteered full cooperation with the SEC staff.

During October and November 2005, the Company reported the
preliminary findings of the investigations and the determination
that the company would restate its financial statements for the
first and second quarters of 2005, and for the years 2002 through
2004.

On December 30, 2005, Dana filed Forms 10-Q/A for the periods
ended June 30 and March 31, 2005, and a Form 10-K/A for the year
ended December 31, 2004, containing the restated financial
statements.  The investigation undertaken by the Audit Committee
concluded at about the same time.

Throughout the period of the investigation, outside counsel
engaged by the Audit Committee cooperated with the SEC Staff,
supplied information requested by the Staff, and met or spoke with
the Staff periodically.

Michael L. DeBacker, the Company's Vice President, General Counsel
and Secretary, said the Company would continue to cooperate fully
with the SEC in its investigation.

Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world.  Dana is focused on
being an essential partner to automotive, commercial, and      
off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually.  A leading supplier of axle,
driveshaft, engine, frame, chassis, and transmission technologies,
Dana employs 46,000 people in 28 countries.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 13, 2006,
Fitch Ratings has downgraded the ratings of Dana Corporation:

     -- Issuer default rating to 'B' from 'BB-';
     -- Senior unsecured debt to 'B' from 'BB-'.

Fitch has also upgraded this bank facility rating since Dana's
banks have taken limited security with the bank line.

     -- Senior secured bank facility to 'BB' from 'BB-'.

The ratings for Dana remain on Rating Watch Negative by Fitch,
focusing on:

     * the company's accounting practices,

     * the ability of Dana to file its third-quarter financial
       statements, and

     * the resolution of the reporting requirement violation under
       its existing bond indentures.


DUNKIN' BRANDS: S&P Rates Corporate Credit & New Debts at Low-Bs
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to quick-service restaurant operator Dunkin' Brands
Inc.  It also assigned its 'B+' ratings to the company's proposed
$150 million secured revolving credit facility, and $700 million
secured term loan B.  A recovery rating of '1' was assigned to the
credit facility, indicating the expectation for 100% recovery of
principal in the event of a payment default.  The outlook is
negative.
     
The ratings are based on preliminary terms and are subject to
change after review of final documents.  Proceeds from the these
bank facilities will be used to:

   * finance the acquisition of Dunkin' by:

     -- Bain Capital Partners, LLC,
     -- The Carlyle Group, and
     -- Thomas H Lee Partners, LP; and

   * for general corporate purposes.
      
"The ratings reflect Dunkin's very highly leveraged capital
structure, thin cash flow protection measures, narrow product
focus and participation in the intensely competitive quick service
sector of the restaurant industry," said Standard & Poor's credit
analyst Diane Shand.

Standard & Poor's expects the investor group to fund $1.5 billion
of their $2.4 billion acquisition of Canton-Massachusetts-based
Dunkin' with debt.  Standard & Poor's estimates that after the
transaction, the company's leverage will be very high at more than
8.5x and cash flow protection measures will be very thin with
EBITDA coverage of interest less than 1.5x.  Because the
amortization schedule is minimal, leverage is expected to remain
high.


ELGRANDE INT'L: Balance Sheet Upside-Down by $1.6MM at Nov. 30  
--------------------------------------------------------------
Elgrande International, Inc., delivered its quarterly report on
Form 10-QSB for the quarter ended Nov. 30, 2005, to the Securities
and Exchange Commission on Jan. 17, 2006.

The Company reported a $172,111 net loss on $159,282 of revenues
for the quarter ended Nov. 30, 2005.  At Nov. 30, 2005, the
Company's balance sheet showed $384,474 in total assets,
$1,922,470 of liabilities and $128,719 in commitment and
contingencies, resulting in a $1,666,715 stockholders' deficit.

Williams & Webster, PS, expressed substantial doubt about
Elgrande's ability to continue as a going concern after it audited
the Company's financial statements for the fiscal years ended
March 31, 2005 and 2004.  The auditing firm pointed to the
Company's significant operating losses.

A full-text copy of the regulatory filing is available at no
charge at http://researcharchives.com/t/s?4f9

                 Debenture Financing

Elgrande inked an agreement with Divine Capital Markets LLC for
access to up to $600,000 in convertible debenture financing.  The
debentures are due three years from the closing date and are
convertible into restricted common stock of the Company.  

                    About Elgrande

Elgrande International - http://www.elgrande.com/specializes in  
sourcing, importing, marketing and distributing unique European-
designed quality products in the medium to high-end tabletop
market.  Their products are exclusively produced for the North
American home decor, giftware and artware sectors.  The Company
has a North American sales and distribution infrastructure that
currently services approximately 650 customers with over 1,100
retail locations that include independent retailers and national
key accounts.


ERA AVIATION: U.S. Trustee Names Three-Member Creditors Committee
-----------------------------------------------------------------
Ilene J. Lashinsky, the U.S Trustee for Region 18, appointed three
creditors to serve on the Official Committee of Unsecured
Creditors in Era Aviation and its debtor-affiliates' chapter 11
cases:

   1. Crowley Marine Services, Inc.
      Attn: Gary C. Sleeper, Esq.
      Suite 300, 3000 A Street,
      Anchorage, Alaska 99503
      Tel: (907) 563-8844
      Fax: (907) 563-7322

   2. Power Associates, Inc.
      Attn: Michael Hodde, President
      13117 Greenriver Drive, Houston, Texas
      Tel: (281) 459-4653 Ex. 111
      Fax: (281) 459-4654 or (281) 458-9124

   3. Arctic Information Technology
      Attn: Steve Dike
      Suite 600, 3601 C. Street, B,
      Anchorage, Alaska 99503
      Tel: (907) 646-7301
      Fax: (907) 770-2291

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.

Official 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 that
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 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 (Bankr. D. Alas. Case No. 05-02265).  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.


ENRON CORP: Court OKs Enron Energy's Settlement with 20 Customers
-----------------------------------------------------------------
Before Enron Corporation and its debtor-affiliates filed for
bankruptcy protection, Enron Energy Services, Inc., was a party to
various transactions for the sale of products or services with 20
Customers:

    1. Accent Energy California LLC;

    2. Aluminum Precision Products, Inc.;

    3. American Ukrainian Youth Association;

    4. Around The Clock;

    5. Atlantic Detroit Diesel-Allison, LLC;

    6. E&J Textile Group, Inc.;

    7. E.R. Smith Enterprise, Inc.;

    8. Ed Schmidt Pontiac-GMC Truck, Inc.;

    9. Fabrica International, Inc., and Monterey Color Systems,
       Inc.;

   10. Jordan Industries, Inc.;

   11. KPR Holdings, Inc.;

   12. Providence Health Systems-Southern California;

   13. Radiant Services Corp.;

   14. Seneca County Commissioners;

   15. Southern Management Corporation;

   16. Super Dyeing LLC;

   17. The Toro Company;

   18. Valley Converting Co., Inc.;

   19. Woodlawn, Inc.

In separate motions, EESI sought and obtained the Court's approval
of the settlement agreements with the Customers.  Pursuant to the
Settlements, EESI and the Customers agree that:

    a. the Customers will pay EESI the amounts owed as agreed in
       the Contracts;

    b. the Parties will mutually release all claims related to the
       Contracts;

    c. all scheduled liabilities of, among others, American
       Ukrainian, Cornerstone, E&J, E.R. Smith, Ed Schmidt, Jordan
       Industries, Providence, Seneca, Southern Management, Toro,
       WestEd and Woodlawn will be deemed irrevocably withdrawn,
       with prejudice, and to the extent applicable expunged and
       disallowed in its entirety;

    d. EESI and Aluminum Precision will provide a letter to the
       City of Santa Ana California acknowledging remittance of
       a UUT Payment to the City and payment by Aluminum of the
       UUT Payment to various utilities in full, and further
       offering to assist Aluminum in obtaining a refund, if
       consistent with City's Ordinance;

    e. EESI and Fabrica will cooperate to dismiss an adversary
       proceeding filed by the Debtor against Fabrica's
       predecessor Chroma Systems, Inc.; and

    d. EESI and E&J will stipulate to dismiss an adversary
       proceeding filed by the Debtor against E&J.

Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply. Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed. The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts. (Enron Bankruptcy News, Issue No. 167;
Bankruptcy Creditors' Service, Inc., 15/945-7000)


ESCHELON OPERATING: Oregon Merger Prompts Moody's Ratings' Review
-----------------------------------------------------------------
Moody's Investors Service placed Eschelon Operating Company's
ratings on review for possible downgrade following the company's
announcement that it is acquiring Oregon Telecom Inc., for $20
million in cash.  Given the company's $30 million cash balance as
of Sept. 30, 2005, Moody's expects the acquisition will be largely
financed with new debt.  The potential financing would increase
Eschelon's pro forma leverage, thereby pressuring the ratings
downwards.  Moody's also notes that Eschelon has recently filed a
shelf registration to raise up to $150 million in debt or equity.

The review for possible downgrade will focus on:

   1) Eschelon's potential financing alternatives and the likely
      consequences;

   2) the company's strategy for successfully integrating Oregon
      Telecom's operations and generating meaningful cost
      reductions;

   3) the company's ability to generate sustainable pro forma free
      cash flows; and

   4) Eschelon's ongoing acquisition strategy and its potential
      impact on the company's capital structure.

Moody's also affirmed Eschelon's Speculative Grade Liquidity
rating at SGL-3; however, the liquidity rating would come under
pressure if Eschelon were to close the proposed acquisition of OTI
using existing cash on the balance sheet without raising
additional capital from external sources.

These ratings are under review for possible downgrade:

  Eschelon Operating Company:

     * Corporate Family Rating -- B3
     * $92.1 Million 8.375% Global Notes due in 2010 -- B3

This rating is affirmed:

     * Speculative Grade Liquidity Rating -- SGL-3

Eschelon, headquartered in Minneapolis, Minnesota, is a
competitive local exchange carrier servicing 406 thousand access
lines in 19 markets in the western United States.


EXIDE TECH: Gets Access to Additional $46M Under Sr. Sec. Facility
------------------------------------------------------------------
Exide Technologies (NASDAQ: XIDE) has secured an amendment that
will upsize the Company's existing senior secured bank facility by
approximately $46 million.  The primary interest rate on the
Company's senior secured bank facility remains at LIBOR plus 5.25
percent.

Other key components of Exide's amended bank facility include:

   -- removal of most financial covenants with the exception of
      trailing 12-month consolidated EBITDA (as defined in the
      credit agreement), maximum capital expenditures and a
      leverage ratio test for permitted acquisitions, which were
      modified;

   -- elimination of scheduled amortization;

   -- rhe ability of the Company to retain all proceeds from
      certain non-core asset sales of an amount not to exceed
      $30 million; and

   -- extended call protection for the lenders that now includes
      the revolving credit facility.

"We are pleased with the ongoing and expanded support of our bank
group as we continue our business turnaround plans," said Gordon
A. Ulsh, President and Chief Executive Officer of Exide
Technologies.

Deutsche Bank AG New York Branch and Black Diamond Commercial
Finance, L.L.C., are providing the additional $46 million of
liquidity to Exide on a 50/50 basis.  A full-text copy of the
Sixth Amendment and Consent to Credit Agreement is available for
free at http://ResearchArchives.com/t/s?505

Headquartered in Princeton, New Jersey, Exide Technologies --
http://www.exide.com/-- is the worldwide leading manufacturer and     
distributor of lead acid batteries and other related electrical
energy storage products.  The Company filed for chapter 11
protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125).
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland &
Ellis, represent the Debtors in their restructuring efforts.
Exide's confirmed chapter 11 Plan took effect on May 5, 2004.  On
April 14, 2002, the Debtors listed $2,073,238,000 in assets and
$2,524,448,000 in debts.

                         *     *     *

As reported in the Troubled Company Reporter on July 8, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Exide Technologies to 'CCC+' from 'B-', and removed the
rating from CreditWatch with negative implications, where it was
placed on May 17, 2005.

"The rating action reflects Exide's weak earnings and cash flow,
which have resulted in very high debt leverage, thin liquidity,
and poor credit statistics," said Standard & Poor's credit analyst
Martin King.  Lawrenceville, New Jersey-based Exide, a
manufacturer of automotive and industrial batteries, has total
debt of about $740 million, and underfunded post-employment
benefit liabilities of $380 million.


FLORSHEIM GROUP: Court Confirms 2nd Amended Joint Liquidation Plan
------------------------------------------------------------------
The Hon. Carol A. Doyle of the U.S. Bankruptcy Court for the
Northern District of Illinois confirmed Florsheim Group, Inc.,
and its debtor-affiliates' Second Amended Joint Plan of
Liquidation and approved their Second Amended Disclosure Statement
on Jan. 31, 2006.

The Court ruled that the Amended Plan meets the 13 standards for
confirmation required under Section 1129(a) of the Bankruptcy
Code.  Judge Doyle also determined that the Disclosure Statement
contains "adequate information" pursuant to Section 1125 of the
Bankruptcy Code.

                Summary of Amended Joint Plan

As previously reported in the Troubled Company Reporter on Dec. 9,
2005, the Amended Plan will transfer all of Florsheim's remaining
assets to a liquidating trust to be established for the benefit of
all creditors.  The provisions of the Creditors' Trust and the
Plan will be implemented by Richard M. Fogel, the Plan Trustee and
Disbursing Agent to be appointed under the Plan.

The Plan will be funded by the orderly liquidation of all
remaining property of the Debtors' estates.  Distributions of
proceeds from the Creditors' Trust will start on or after the
effective date of the Plan.  

              Treatment of Claims and Interests

A) Non-tax priority claims, with allowed claims estimated at less
   than $100,000, will be paid in full on or after effective date
   of the Plan.  

B) Secured claims, totaling approximately $1,750,000, at
   Florsheim's sole election will either retain their legal,
   equitable and contractual rights, or receive the collateral
   securing those claims, or be paid with the liquidation proceeds
   of the collateral securing those claims, less Florsheim's costs
   of liquidation including professional fees and expenses.

C) Unsecured claims, totaling approximately $40 million, will
   receive their pro rata share of the $750,000 carve-out provided
   by BT Commercial Corp., the agent for the Debtors' secured
   lenders.  The unsecured claims' pro rata share of the carve-out
   will include accrued interest through the distribution date, in
   addition to all liquidating funds not needed to pay
   unclassified claims, non-tax priority claims and secured
   claims, if any.

D) Untimely filed claims, consisting of all creditor claims filed
   after the July 22, 2002 general bar date and all governmental
   unit claims filed after the August 28, 2002 bar date and claims
   increased through any amendment after those bar dates but only
   to the extent of that amendment, will not receive any
   distributions under the Plan.

E) Equity interests in Florsheim will be administratively
   dissolved and holders of those interests will not receive any
   distributions under the Plan.

The Court will convene a hearing on April 26, 2006, at 10:30 a.m.,
for implementation of the Plan and on the entry of a final decree.

Headquartered in Chicago, Illinois, Florsheim Group, Inc.,
marketed, designed, sourced and distributed products in the middle
to upper price range of the men's quality footwear market.  The
Company filed for chapter 11 protection to facilitate the sale of
its U.S. wholesale business and 23 retail stores of its U.S.
assets to the Weyco Group, Inc., for $45.6 million in cash, which
the Court approved in May 2002.  The Company and its affiliates
filed for chapter 11 protection on March 4, 2002 (Bankr. N.D. Ill.
Case No. 02-08209).  Steven B Towbin, Esq., and Mark L Radtke,
Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC
represents the Debtors.  When the Debtors filed protection from
their creditors, their listed total assets of $156,755,000 and
total debts of $159,692,000.


FOSTER WHEELER: S&P Affirms Senior Secured Debt Rating at CCC+
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Foster Wheeler Ltd. to stable from negative.  At the same time,
Standard & Poor's affirmed its 'B-' corporate credit rating and
'CCC+' senior secured debt rating on the Clinton, New Jersey-based
engineering and construction company.  Standard & Poor's estimates
that as of 2005 year-end, Foster Wheeler had approximately
$315 million of total debt outstanding.
      
"The outlook revision reflects the company's reduced debt levels
and improved business prospects, which should help its liquidity
position," said Standard & Poor's credit analyst James Siahaan.

The company has continued its deleveraging efforts with its recent
exercise of warrants, which should generate proceeds of
approximately $75 million for debt reduction.  Meanwhile, strength
in the company's end markets has led to a pickup in orders and
revenues.
     
The ratings on Foster Wheeler reflect its still-highly-leveraged
financial profile and its vulnerable business risk profile.  The
company participates in intensely competitive markets.  The
ratings also factor in the company's past operating difficulties,
along with more recent improvement.  Foster Wheeler is furthermore
burdened by underfunded pension obligations and other
postretirement employee benefit liabilities, as well as by net
asbestos liabilities.
     
The company operates through two reporting segments:

   * the Global Engineering & Construction Group, and
   * the Global Power Group.

The first services the process sectors (oil and gas, energy,
chemicals, and pharmaceuticals).  The global power unit designs,
manufactures, and erects steam generators for:

   * industrial power plants,
   * power stations, and
   * cogeneration facilities.
     
The company's markets are cyclical and fragmented and also, at
times, characterized by intense pricing pressures.  Several
important competitors, such as Fluor Corp. (A-/Stable/A-2) and
KBR, a subsidiary of Halliburton Co. (BBB/Positive/A-2) -- as well
as unrated Jacobs Engineering Group Inc., and Bechtel Corp. --
have much stronger financial profiles than Foster Wheeler, which
is essential to obtaining new project awards.
     
The oil and gas market and the energy market are currently robust,
partly as a result of high commodity prices, while the
pharmaceutical market has become less robust, partly because of
declining sector profitability.  The U.S. power market, meanwhile,
after having been very weak for the past couple of years, has seen
a renewal in capital spending: New orders in the company's global
power group totaled $681 million for the first nine months of
2005, which is an increase of more than 70% from the corresponding
period last year.


G+G RETAIL: Wants Court OK to Hire Financo as Investment Banker
---------------------------------------------------------------
G+G Retail, Inc., seeks the U.S. Bankruptcy Court for the Southern
District of New York's authority to employ and retain Financo,
Inc., as its investment banker, nunc pro tunc to Jan. 25, 2006.

Financo is expected to:

   a) meet with the Debtor's management and familiarize itself
      with the business, operations, properties, assets,
      liabilities, financial condition and prospects of the
      Debtor;

   b) evaluate the Debtor's short-term and long-term borrowing
      capacity;

   c) consult with, advise and assist the Debtor in identifying
      and evaluating various potential financing and strategic
      alternatives that may be available to the Debtor including
      potential improvements to agreements with existing lenders,
      landlords, and credit card program operators;

   d) advise the Debtor as to the timing, structure and pricing
      of a potential transaction;

   e) assist the Debtor, its management and advisors in the
      preparation of a written memorandum describing the Debtor,
      its business, financial condition, results of operations,
      prospects and other material matters concerning the Debtor
      for the purpose of soliciting interest from third parties
      to engage in potential capital investment;

   f) assist the Debtor, its management and advisors in the
      preparation of a written memorandum and other materials
      that will be useful in soliciting offers for the sale of
      the company's PR Division;

   g) identify, update, review and approach on an ongoing basis a
      list of parties that might be interested in acquiring the
      PR Division;

   h) assist in arranging for a DIP financing;

   i) meet with the Debtor's Board of Directors to discuss the
      financial implications of a transaction; and
  
   j) provide expert testimony when necessary.

Under an engagement agreement, the Debtor proposes to pay Financo:

   a) an engagement fee of $50,000 for services connected with
      the sale of the PR Division;

   b) capital engagement fee of $50,000 for services connected
      with obtaining a capital investment;

   c) a success fee in the event that the Debtor's Puerto Rico
      business and assets are sold;

   d) a success fee in the event that Financo arranges a capital
      investment; and

   e) a success fee upon the consummation of a sale of the
      company.

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

Financo Inc. -- http://www.financo.com/-- is an investment  
banking firm that provides investment banking services to retail
and consumer businesses on a wide variety of corporate matters,
including merger and acquisition transactions, debt
restructurings, private placements of debt and equity securities
and corporate valuation.  The financial advisory firm can be
reached at its New York office:

              Financo Inc.
              535 Madison Avenue
              New York, NY 10022
              Tel: 212-593-9000
              Fax: 212-593-0309

Headquartered in New York, New York, G+G Retail Inc. retails
ladies wear and operates 566 stores in the United States and
Puerto Rico under the names Rave, Rave Girl and G+G.  The Debtor
filed for Chapter 11 protection on Jan. 25, 2006 (Bankr.
S.D.N.Y. Case No. 06-10152).  William P. Weintraub, Esq., Laura
Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A.
Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C.
represent the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it estimated
assets of more than $100 million and debts between $10 million
to $50 million.


HARRY & DAVID: Earns $49 Million in Second Quarter Ended Dec. 24
----------------------------------------------------------------
Harry & David Holdings, Inc. reported financial results for the
second fiscal quarter and twenty-six weeks ended Dec. 24, 2005.

Net sales for the second quarter of fiscal 2006 were
$362.4 million, an increase of 8.2%, or $27.5 million, from
$334.9 million recorded in the second quarter of fiscal 2005.

Net income for the thirteen weeks ended Dec. 24, 2005, was
$49 million, compared to $69.6 million for the same period in
2004.

"We were very encouraged by our 8.2% net sales growth in the
December quarter, despite the closing of fourteen stores since
February 2005 and following last year's second quarter sales
growth of 8.6%," Bill Williams, President and Chief Executive
Officer, said.  "We experienced sales growth during the quarter in
all of our operating segments:  Harry and David Direct Marketing,
Harry and David Stores, Jackson & Perkins, and our 'Other'
segment, resulting from growth in the Harry and David Wholesale
division.  In addition, we experienced solid increases in orders
received and packages shipped in the December quarter and improved
customer satisfaction as measured by fewer replacements, returns
and allowances, customer service calls and late delivery
complaints.  However, these gains were offset by unexpected
pressure on our gross profit margin, which we are taking steps to
correct."

Gross profit margin was 48.9% in the second quarter of fiscal
2006, compared to 52.2% in the same period last year, primarily
due to two factors: higher delivery expense and lower product
margins.  

For the twenty-six weeks ended Dec. 24, 2005, the Company
reported net sales of $420.1 million, as compared to net sales of
$388.6 million for the same fiscal period last year.  Net income
for the twenty-six weeks ended Dec. 24, 2005 was $31.7 million,
compared to net income of $48.9 million for the twenty-six weeks
ended Dec. 25, 2004.

Headquartered in Medford, Oregon, Harry & David Holdings, Inc. --
http://www.hndcorp.com/-- (formerly Bear Creek Holdings Inc.) is  
a leading multi-channel specialty retailer and producer of branded
premium gift-quality fruit and gourmet food products and gifts
marketed under the Harry and David(R) brand, and premium rose
plants, horticultural products and home and garden decor, marketed
under the Jackson & Perkins(R) brand.

Harry & David Holdings, Inc.'s 9.41% Senior Floating Rate
Notes due 2012 carry Moody's Investors Service's B3 rating
and Standard & Poor's B- rating.


HCA INC: Moody's Rates $1 Billion Senior Unsecured Notes at Ba2
---------------------------------------------------------------
Moody's Investors Service affirmed the ratings of HCA Inc. (Ba2
corporate family rating) following the announcement that the
company would take down $1.0 billion in debt from an available
$1.5 billion shelf registration.  Moody's assigned a Ba2 rating to
the $1.0 billion ten year senior unsecured note offering.

Moody's expects the proceeds of the offering to be used to repay
interim financing and a portion of the amount outstanding on HCA's
$1.75 billion revolving credit facility.  Interim financing was
put in place in the fourth quarter of 2005 to partially fund the
company's $2.5 billion share repurchase program.  The outlook for
the ratings is stable.

The affirmation of HCA's existing ratings reflects Moody's belief
that the company will maintain metrics in accordance with Moody's
Global For-Profit Hospital Industry Rating Methodology following
the issuance of the $1.0 billion senior unsecured notes.  As the
largest hospital company in the nation, HCA's large portfolio of
hospitals provides the company with scale and a relatively high
level of market diversity.

Additionally, cash flow coverage of debt, one of the most heavily
weighted factors in Moody's rating methodology, continues to be
appropriate for the current rating category.  Based on unaudited
financial information, Moody's estimates that pro forma adjusted
operating cash flow to debt was in the mid-20% range and adjusted
free cash flow to debt was slightly below 10% for fiscal year
2005.

The stable ratings outlook reflects Moody's expectation that HCA
will be able to offset lower admission growth trends with expense
management, especially in the areas of salaries, wages and
benefits and supply costs.  Medicare and managed care
reimbursement are also expected to remain favorable for the near
term, adding a level of stability to expected revenue and cash
flow generation.

If volume and pricing trends stabilize and the company can
continue to improve operating performance through cost reductions,
Moody's may consider changing the outlook to positive.  If the
company were expected to achieve sustainable levels of adjusted
cash flow from operations to debt and adjusted free cash flow to
debt of approximately 21% and 14%, respectively, the ratings could
be upgraded.

Moody's continues to believe the company's commitment to maintain
or grow shareholder value primarily through share repurchases will
constrain and, possibly, create downward pressure on HCA's
ratings.  Furthermore, the ratings could be downgraded if the
company were to engage in either a large debt financed acquisition
or if recent trends in same facility adjusted admissions and
uninsured volumes were to worsen.  The ratings and outlook could
be downgraded if the ratios of adjusted cash flow from operations
to debt and adjusted free cash flow to debt were expected to fall
below 18% and 12%, respectively, for an extended period.

Ratings assigned:

    *  $1.5 billion senior shelf rating, rated (P)Ba2
       ($500 million remaining available following the announced
       $1.0 billion take down)

    *  $1.0 billion ten year senior unsecured notes, rated Ba2

Ratings affirmed:

    *  Corporate family rating, Ba2
    *  Senior unsecured bank credit facility, Ba2
    *  Senior unsecured note ratings, Ba2
    *  Speculative grade liquidity rating, SGL-2

HCA Inc., headquartered in Nashville, Tennessee, is the largest
acute care hospital company operating 182 hospitals and 94
freestanding surgery centers at Dec. 31, 2005.  HCA reported
revenue of approximately $24.5 billion for the year ended
Dec. 31, 2005.


HCA INC: S&P Assigns BB+ Rating to $1 Billion Sr. Unsec. Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' rating to
hospital operator HCA Inc.'s $1 billion senior unsecured notes due
2016.  These notes are being issued as a Rule 415 shelf drawdown.
Proceeds will be used to repay existing debt.
     
At the same time, Standard & Poor's affirmed its existing ratings
on the company, including the 'BB+' corporate credit rating.  The
outlook is stable.  Total outstanding debt was $10.5 billion as of
Dec. 31, 2005.
      
"The speculative-grade rating on HCA reflects the company's
aggressive financial policy, which is not consistent with an
investment-grade rating considering the key industry risks the
company faces, such as uncertain third-party reimbursement and
rising bad debt," explained Standard & Poor's credit analyst David
Peknay.  "These factors are mitigated by the generally strong
cash-generating nature of HCA's diverse hospital operations."
     
HCA, the largest owner and operator of acute care hospitals, has a
diversified portfolio of 182 hospitals and 94 ambulatory surgery
centers (of which seven hospitals and seven ambulatory surgery
centers are owned through equity joint ventures) in:

   * 22 states,
   * the U.K., and
   * Switzerland.

Five of the hospitals are in the process of being sold to
LifePoint Hospitals Inc.  With strong positions in several of its
markets (including the key states of Florida and Texas), HCA
currently enjoys relatively favorable overall reimbursement.
     
The company's recent operating performance has been relatively
flat, with operating margins at about 16%, though they would be
slightly weaker if the beneficial effect on earnings from HCA's
discounting policies for uninsured patients was excluded.  While
managed care pricing remains good, reimbursement pressure from
government sources, stagnant patient volume, and further growth
in the number of uninsured patients will continue to threaten
future financial results.

Return on capital will likely remain in the 17%-18% range.  HCA's
operating cash flow is significant, and Standard & Poor's expects
the company to continue to generate ample funds internally for the
next couple of years at a level that is far in excess of ongoing
capital needs.


HERCULES INC: Dec. 31 Balance Sheet Upside-Down by $13.4 Million
----------------------------------------------------------------
Hercules Incorporated (NYSE:HPC) reported a net loss for the
quarter ended Dec. 31, 2005 of $67.9 million, as compared to net
income of $49 million for the fourth quarter of 2004.  

Net income from ongoing operations for the fourth quarter of 2005
was $18.9 million.  This compares to net income from ongoing
operations of $20.2 million in the fourth quarter of 2004.

Net sales in the fourth quarter of 2005 were $502.2 million, a
decrease of 1%, excluding unfavorable rates of exchange, from the
same period last year.

Fourth quarter 2005 net sales increased in all regions of the
world except Europe as compared to the same period in 2004.  Net
sales increased 4% in North America, 4% in Latin America, and 4%
in Asia Pacific. Europe was lower by 6% excluding the weaker Euro.

"Our fourth quarter and full year results were impacted by the
hurricanes that devastated the Gulf Coast and drove already
elevated raw material, utility and freight costs even higher,"
Craig Rogerson, President and Chief Executive Officer, said.  "In
spite of these significant challenges, which increased our costs
$94 million in 2005, our ongoing earnings were comparable to 2004
and our cash flow continued to improve."

Cash flow from operations for the year ended Dec. 31, 2005 was
$138 million, an increase of 15% compared to 2004.  This follows a
$98 million increase in cash flow from operations in 2004 compared
to 2003.

The Company's net loss for the year ended Dec. 31, 2005 was
$29.8 million, as compared to net income of $28.1 million for
the year ended Dec. 31, 2004.  Net income from ongoing operations
for the year ended Dec. 31, 2005 was $93.6 million.  This compares
to net income from ongoing operations of $90.5 million for the
year ended Dec. 31, 2004.

Net sales for the year ended Dec. 31, 2005 were $2.069 billion, an
increase of 4% from the same period in 2004.

Haeadquartered in Wilmington, Delaware, Hercules Incorporated --
http://www.herc.com/-- manufactures and markets chemical  
specialties globally for making a variety of products for home,
office and industrial markets.

At Dec. 31, 2005, Hercules Incorporated's balance sheet showed a
stockholders' deficit of $13.4 million, compared to $111.9 million
positive equity at Dec. 31, 2004.


INTERSTATE BAKERIES: Wants to Hold on to $27M of ABA Plan Assets
----------------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates seek
equitable relief against the American Bakers Association
Retirement Plan, the American Bakers Association Retirement Trust,
and four trustees of the ABA Trust -- Robert MacKie, Steve Gebben,
Chuck Wellard and Byron Magafas.

The Debtors want to maintain the status quo and prevent the
improper transfer of $27,000,000 of ABA Plan assets pending a
determination from the Pension Benefit Guaranty Corporation
regarding the status of the ABA Plan as either a multiple
employer plan or an aggregate of single employer plans.

                       The ABA Plan

The ABA Plan is a defined benefit pension plan, as defined by
Employment Retirement Income Security Act of 1974.  The ABA Plan
was established on October 1, 1961 to provide benefits to certain
employees of various unrelated employers in the bakery industry.

Currently, there are seven participating employers that are
obligated to make contributions to the ABA Plan, including
Interstate Bakeries Corporation and Sara Lee Corporation.  Sara
Lee is the second largest employer in the ABA Plan.

The ABA Plan currently provides benefits to IBC's 430 active
participants, 400 retirees and beneficiaries, and 650 terminated
vested participants.

The ABA Trust was established to provide the funding medium for
the ABA Plan.  IBC is a Participating Employer in the ABA Trust.

                    Dispute over the ABA Plan

The dispute between the parties that is now being considered by
the PBGC centers on the proper characterization of the ABA Plan,
Paul M. Hoffmann, Esq., at Stinson Morrison Hecker LLP, in Kansas
City, Missouri, says.

IBC contends that the ABA Plan is a multiple employer plan while
the Defendants and Sara Lee assert that the Plan is an aggregate
of single employer plans.

In an aggregate of single employer plans, each participating
employer is a sponsor of a separate plan covering only its
employees, each employer's contributions are used to fund only
the benefits of its employees and these separate plans are merely
administered in an aggregate fashion for administrative
convenience.

A multiple employer plan pools the contributions of the        
participating employers to pay all of the plan participants
regardless of whether the participants were ever employed by the
employer whose contributions are being used to fund the benefits.

Mr. Hoffman states that under the ERISA, assets held to fund the
benefits accrued by a plan's participants must be allocated to
participants in accordance with a priority scheme, often referred
to as a "waterfall priority scheme".  Under the waterfall
priority scheme, retirees are given priority over active
participants.

The parties entered into a standstill agreement on July 20, 2005,
which provided that no actions would be taken to withdraw, or
prevent the withdrawal of, the disputed portion of the remaining
Plan Assets for 120 days.  With Sara Lee's transfer of
approximately 3,700 participants -- 940 of whom were retirees --
from the ABA Plan after the parties entered into the Standstill
Agreement, IBC currently has the largest number of retirees in
the Plan.

Thus, IBC's interests are particularly affected if the ABA Plan
is determined to be a multiple employer plan, Mr. Hoffman notes.

The ABA Plan Trustees met on September 8, 2005.  Over the
objection of Plan Trustee Edwin Gladbach, the Trustee Defendants
voted to permit Sara Lee to spin-off an additional $27,000,000 as
soon as practicable after December 1, 2005, based on an
assumption that the ABA Plan was an aggregate of single employer
plans.  This agreement has been memorialized in a transfer
agreement between Sara Lee and the ABA Plan.

As a result and upon application of the waterfall priority
scheme, the ABA Plan has approved a Sara Lee withdrawal, now or
in the future, of a total of $98,000,000, representing
approximately 80% of the ABA Plan's assets, Mr. Hoffman tells the
Court.

Mr. Hoffman points out that if those assets are improperly
transferred, IBC will be forced to expend estate assets to fund
the liabilities associated with the transferred assets.

Mr. Hoffman adds that if the Plan is determined by the PBGC to be
a multiple employer plan, the proposed withdrawal of 80% of the
ABA Plan's assets would cause the Plan to violate Section 208 of
ERISA, as well as Section 414(l) of the Internal Revenue Code of
1986, which could result in the loss of the Plan's tax qualified
status.

                       PBGC's Investigation

In support of its position, the ABA Plan representatives rely on
a 1979 letter from the PBGC in which the PBGC determined that the
ABA Plan was an aggregate of single employer plans.  However, on
November 2, 2005, the PBGC informed IBC, the ABA Plan and Sara
Lee that it was revisiting its 1979 determination and asked the
parties to submit any statements or documents for it to consider
in its decision-making process, Mr. Hoffman notes.

To that end, by December 2, 2005, the ABA Plan, Sara Lee and IBC
submitted position papers to the PBGC.

Mr. Hoffman argues that by authorizing a transfer of ABA Plan
assets in accordance with an aggregate of single employer plan
model, before the PBGC has ruled on the Plan's status, the ABA
Plan Trustees are effectively circumventing the process set in
motion by the PBGC.

Accordingly, IBC asks the U.S. Bankruptcy Court for the Western
District of Missouri to:

   (a) declare that the ABA Plan violates the automatic stay if
       the Plan has caused, or will cause, any transfer of assets
       out of the ABA Plan prior to a determination by the PBGC
       as to the ABA Plan's status;

   (b) declare that the Trustee Defendants violate fiduciary
       duties under Section 404 of ERISA by voting in favor of
       the transfer of assets and taking actions to further
       transfer;

   (c) temporarily restrain the Defendants from transferring or
       spinning off assets to any party, including Sara Lee, from
       the ABA Plan and its Trust before the PBGC's determination
       of the Plan's status as an aggregation of single employer
       plans or multiple employer plan;

   (d) preliminarily enjoin the Defendants from transferring or
       spinning off assets to any party, including Sara Lee, from
       the ABA Plan and its Trust before the PBGC's determination
       of the Plan's status as an aggregation of single employer
       plans or multiple employer plan; and

   (e) determine that the Defendants' decision to transfer or
       spin-off assets to Sara Lee, prior to completion of the
       PBGC's determination of the Plan's status as an aggregate
       of single employer plans or multiple employer plan, is in
       violation of Section 362 of the Bankruptcy Code.

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

The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts.  (Interstate Bakeries
Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


JP MORGAN: Moody's Rates Two Sub. Certificate Classes at Low-Bs
---------------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
certificates issued by JP Morgan Mortgage Acquisition Corp 2006-
FRE1, and ratings ranging from Aa1 to Ba2 to the subordinate
certificates in the deal.

The securitization is backed by Fremont Investment & Loan
originated, adjustable-rate (88%) and fixed-rate (12%), subprime
mortgage loans acquired by JP Morgan Mortgage Acquisition Corp.

The ratings are based primarily on:

   * the credit quality of the loans; and

   * on the protection from:

     -- subordination,

     -- excess spread,

     -- overcollateralization, and

     -- an interest rate swap agreement provided by JP Morgan
        Chase Bank NA.

Moody's expects collateral losses to range from 5.70% to 6.20%.

JP Morgan Chase Bank NA will service the loans.

The complete rating actions are:

JP Morgan Mortgage Acquisition Corp, Series 2006-FRE1 Asset-Backed
Pass-Through Certificates, Series 2006-FRE1

    * Class A-1, Assigned Aaa
    * Class A-2, Assigned Aaa
    * Class A-3, Assigned Aaa
    * Class A-4, Assigned Aaa
    * Class M-1, Assigned Aa1
    * Class M-2, Assigned Aa2
    * Class M-3, Assigned Aa3
    * Class M-4, Assigned A1
    * Class M-5, Assigned A2
    * Class M-6, Assigned A3
    * Class M-7, Assigned Baa1
    * Class M-8, Assigned Baa2
    * Class M-9, Assigned Baa3
    * Class M-10, Assigned Ba1
    * Class M-11, Assigned Ba2


KAISER ALUMINUM: Bankruptcy Court Confirms Plan of Reorganization
-----------------------------------------------------------------
Kaiser Aluminum reported that the U.S. Bankruptcy Court for the
District of Delaware has confirmed the company's second amended
Plan of Reorganization.  The confirmation order must now be
affirmed by the United States District Court before the company
can emerge, and is also subject to appeal.

"We are very pleased by the ruling and it means that the finish
line is within sight," Jack Hockema, president and chief executive
officer, Kaiser Aluminum, said.  "We are hopeful that we can
proceed quickly through the steps necessary for us to emerge
before the end of the first quarter of 2006.  We will continue our
present course as a globally competitive company with world-class
products and service, well positioned to best serve the needs of
our customers.  We also plan to emerge with a strong balance sheet
that will provide financial strength to support the ability to
grow in our key transportation and industrial markets."

In addition to U.S. District Court affirmation of the confirmation
order, there are other conditions that must be satisfied before
the company can emerge.  

The company's restructuring would resolve prepetition claims that
are currently subject to compromise including retiree medical,
pension, asbestos, and other tort, bond, and note claims.

The POR would result in the cancellation of the equity interests
of current stockholders and the distribution of equity in the
emerging company to creditors or creditor representatives.  The
majority of the new equity would be distributed to two voluntary
employee benefit associations that were created in 2004 to provide
medical benefits or funds to defray the cost of medical benefits
for salaried and hourly retirees.  Retiree medical plans existing
at that time were cancelled.

All personal injury claims relating to both prepetition and future
claims for asbestos, silica and coal tar pitch volatiles, and
existing claims regarding noise-induced hearing loss, would be
permanently resolved by the formation of certain trusts funded
primarily by the company's rights to proceeds from certain of its
insurance policies and the establishment of channeling injunctions
that would permanently channel these liabilities away from the
company and into the trusts.

A full-text copy of the Plan of Reorganization is available at no
charge at: http://ResearchArchives.com/t/s?50a

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 Feb. 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 ALUMINUM: Welcomes Back Thomas Gannon as VP for Marketing
----------------------------------------------------------------
Kaiser Aluminum reported the return of Thomas P. Gannon to the
company as vice president of Marketing, Aerospace and Distribution
Products. Gannon worked previously with Kaiser Aluminum from 1977
to 1999.

"Tom brings a great deal of knowledge and experience to the
commercial team at Kaiser Aluminum," said Keith Harvey, vice
president, Sales & Marketing, Aerospace & Distribution.  "His
addition will make our organization stronger as we pursue new
growth opportunities and solidify our position in the
marketplace."

Based out of Cleveland, Ohio, Mr. Gannon will report to Mr. Harvey
and help lead the commercial efforts in the marketing of Kaiser
Aluminum's sheet & plate, rod, bar, tube and soft alloy extrusion
products globally.

Mr. Gannon first joined Kaiser Aluminum in 1977 and assumed
progressively higher-level positions in sales and marketing
management, primarily in the company's forgings and extrusions
business.  From 1999 to 2005, he worked at Alcan Corporation,
first as automotive market director and then as vice president,
managing the industrial products and automotive commercial effort
for Alcan's North American rolled products division.

With the subsequent spin-off of the majority of Alcan's rolling
assets into Novelis, Gannon continued as vice president and
maintained the commercial responsibility for over 450 million
pounds annually of rolled product sales.

Mr. Gannon is a recognized leader in the automotive aluminum
industry, serving as chairman of the Aluminum Association's
Automotive Executive Council.  In this position, he leads the
industry efforts to advance aluminum's penetration in the light
vehicle segment.

Mr. Gannon earned a B.Sc. in Educational Communications from
Ithaca College and an MBA from Gannon University.  He brings to
Kaiser Aluminum over 28 years of industry experience.

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 Signs Agreed Order to Liquidate Five PI Claims
----------------------------------------------------------------
Certain personal injury claimants and Kmart Corporation agree that
the automatic stay and injunction provision of Kmart's Plan of
Reorganization is lifted to permit the Claimants' pending
litigations, wherein they seek to establish and liquidate their
personal injury claims, to proceed and continue to a final
judgment or settlement:

  Claimant                   Pending Litigation
  --------                   ------------------
  Carol Hoolan               Common Pleas Court, Delaware County
                             Pennsylvania

  Mary Ellen Gerard          Circuit Court for the County of
                             Oakland, State of Michigan

  Sheldon & Mary Funk        Court of Common Pleas,
                             Trumbull County, Ohio

  Jesse Hollifield           Circuit Court of Perry County,
                             Kentucky

  Edwin Alberto              Tribunal De Primera Instancia,
  Irizarry, a minor,         Sala Superior De Caguas,
  Edwin Irizzary Villafane,  Puerto Rico
  His father, Virginia
  Campos Rivera, and
  Virginia Rivera Espada

All of Kmart's rights to pursue any other claims, cause of action,
or potential offsets against the Claim of Sheldon and Mary Funk
are reserved.

Judge Susan Pierson Sonderby of the U.S. Bankruptcy Court for the
Northern District of Illinois signs the Agreed Order presented by
the parties.

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)


LA MUTUELLE: Obtains First Order Under New Chapter 15 Law
---------------------------------------------------------
La Mutuelle du Mans IARD United Kingdom Branch MMA Account made
international bankruptcy law history by obtaining the first order
granting a petition under the new Chapter 15 of the United States
Bankruptcy Code.  The Hon. Burton R. Lifland of the U.S.
Bankruptcy Court for the Southern District of New York approved
the Debtor's chapter 15 petition.

Chapter 15, which became effective Oct. 17, 2005, broadens the
mechanism through which representatives of non-US proceedings
might obtain relief, including injunctive relief, in the United
States, expands the powers of US Bankruptcy Courts, and enhances
the rights of both US and non-US creditors.   

The national law firm of Edwards Angell Palmer & Dodge serves as
La Mutuelle's counsel.  Insurance and Reinsurance Department Chair
Alan J. Levin and Insolvency & Creditors' Rights partner Selinda
A. Melnik led the EAPD team of attorneys.

"We had to grapple with a series of 'firsts' in this case," said
Ms. Melnik, noting its significance for more than being the first
major case to test the limits of US Chapter 15.  According to Ms.
Melnik, the case also represents the first time a US Court has
interpreted where the "center of main interests" of a foreign
debtor lies -- a hotly debated concept in the European Union
designed to determine which country will have pivotal primary
jurisdiction over a debtor and its assets where the debtor has
contacts in multiple countries.  

In addition, the case is of considerable interest to the
international insurance community, as the order confirms that a US
Bankruptcy Court may grant relief to aid the effective
implementation of a solvent scheme of arrangement for the payment
of claims against a foreign re/insurer in runoff.

"The combined international insurance and international insolvency
expertise of the Firm enabled us to bring to this challenging
assignment a breadth of knowledge and experience unique in the
industry," added Levin who is resident in the Firm's Hartford,
Connecticut and New York City offices.

                    About Edwards Angell

Edwards Angell Palmer & Dodge LLP -- http://www.eapdlaw.com/-- is  
a full-service law firm with more than 520 lawyers in nine
offices.  The firm offers a full array of legal services to
clients worldwide with a special industry-based focus in the
Financial Services, Insurance and Reinsurance, Life Sciences,
Education, Airport, Technology and Private Equity/Venture Capital
sectors.  Edwards Angell Palmer & Dodge has offices in: New York
City, New York; Boston, Massachusetts; Ft. Lauderdale and West
Palm Beach, Florida; Hartford and Stamford, Connecticut;
Providence, Rhode Island; Short Hills, New Jersey; Wilmington,
Delaware; and a representative office in London, England.

Headquartered in Reading, U.K., La Mutuelle du Mans Assurances
IARD United Kingdom Branch MMA Account provides insurance
services.  Jeffrey John Lloyd, in his capacity as foreign
representative, filed a chapter 15 ancillary proceeding for the
Debtor on Nov. 11, 2005 (Bankr. S.D.N.Y. Case No. 05-60100).  
Selinda A. Melnik, Esq., at Edwards Angell Palmer & Dodge LLP,
represents Mr. Lloyd in the United States.


LAND O'LAKES: Closing Wisconsin Cheese Manufacturing Facility
-------------------------------------------------------------
Land O'Lakes disclosed plans to close its Greenwood, Wisconsin
cheese manufacturing facility.

"The decision to close the manufacturing operations came after
considerable study of market trends and plant capabilities." said
Land O'Lakes Executive Vice President and Chief Operating Officer
for Dairy Foods Industrial Alan Pierson.

"There is declining milk production in the upper Midwest," Mr.
Pierson said.  "Given these market conditions, it is not feasible
to competitively operate our Greenwood facility.  A facility
review indicated other Land O'Lakes plants were the appropriate
choice for continued production, based on available space,
production capacity and manufacturing flexibility.  Closing
Greenwood was a difficult decision, but a necessary one."

The Greenwood facility closing will affect approximately 30
employees.  Mr. Pierson said Land O'Lakes would work with
employees on outplacement services as well as other benefits.

Company officials indicated the plant would be offered for sale.

Land O'Lakes, Inc. -- http://www.landolakesinc.com/-- is a
national farmer-owned food and agricultural cooperative with
annual sales of more than $7 billion.  Land O'Lakes does business
in all fifty states and more than fifty countries.  It is a
leading marketer of a full line of dairy-based consumer,
foodservice and food ingredient products across the United States;
serves its international customers with a variety of food and
animal feed ingredients; and provides farmers and ranchers with an
extensive line of agricultural supplies (feed, seed, crop
nutrients and crop protection products) and services.

                        *    *    *

As previously reported in the Troubled Company Reporter on Nov.
21, 2005, Moody's Investors Service upgraded Land O'Lakes, Inc.'s
long term ratings (corporate family rating to B1 from B2) with a
positive rating outlook and affirmed the cooperative's SGL-2
speculative grade liquidity rating.

Ratings upgraded are:

  Land O'Lakes, Inc.:

     * $200 million senior secured revolving credit facility
       to Ba3 from B1

     * $175 million 9.0% senior secured 2nd lien notes to B1
       from B2

     * $350 million 8.75% senior unsecured notes to B2 from B3

     * Corporate family rating to B1 from B2

  Land O'Lakes Capital Trust I:

     * $191 million 7.45% capital securities to B3 from Caa1

Ratings affirmed are:

  Land O'Lakes, Inc.:

     * Speculative grade liquidity rating at SGL-2


LIBERTY FIBERS: Wants More Time to Decide on Leases and Contracts
-----------------------------------------------------------------
Maurice K. Guinn, the chapter 7 Trustee overseeing the liquidation
proceeding of Liberty Fibers Corporation, f/k/a Silva Acquisition
Corporation, asks the U.S. Bankruptcy Court for the Eastern
District of Tennessee permission to extend, until Feb. 20, 2006,
the period within which he can elect to assume, assume and assign,
or reject the Debtor's executory contracts and unexpired
nonresidential real property leases.

The debtor's estate includes myriad challenges.  The Trustee has
devoted a substantial amount of time to the Debtor's estate since
his appointment, but he needs additional time in which to review
the agreements between the Debtor and the parties of the unexpired
leases.

The Debtor's lists of its unexpired leases and contracts are not
available.

Headquartered in Lowland, Tennessee, Liberty Fibers Corporation,
fka Silva Acquisition Corporation, manufactures rayon staple
fibers.  The Debtor filed for chapter 11 protection on
Sept. 29, 2005 (Bankr. E.D. Tenn. Case No. 05-53874).  Robert M.
Bailey, Esq., at Bailey, Roberts & Bailey, PLLC, represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed $14,610,857 in assets and
$20,024,777 in debts.


LORETTO-UTICA: Files Schedules of Assets and Liabilities
--------------------------------------------------------
Loretto-Utica Properties Corporation delivered its Schedules of
Assets and Liabilities to the U.S. Bankruptcy Court for the
Northern District of New York, disclosing:

     Name of Schedule             Assets        Liabilities
     ----------------             ------        -----------
  A. Real Property               $3,500,000
  B. Personal Property             $545,686
  C. Property Claimed
     as Exempt
  D. Creditors Holding                          $20,960,865
     Secured Claims
  E. Creditors Holding                             
     Unsecured Priority Claims
  F. Creditors Holding                           $7,571,490
     Unsecured Nonpriority
     Claims
                                 ----------     -----------
     Total                       $4,045,686     $28,532,355

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


LYONDELL CHEMICAL: Good Performance Cues Fitch to Upgrade Ratings
-----------------------------------------------------------------
Fitch Ratings has upgraded these ratings for Lyondell Chemical
Company and Equistar Chemicals L.P.:

  Lyondell:

     -- Issuer default rating to 'BB-' from 'B';

     -- Senior secured credit facility to 'BB+' from 'BB/RR1' (RR1
        subsequently withdrawn);

     -- Senior secured notes and debentures to 'BB+' from
        'BB-/RR2' ('RR2' subsequently withdrawn); and

     -- Subordinated notes to 'B+' from 'B/RR4' ('RR4'
        subsequently withdrawn).

  Equistar:

     -- IDR to 'B+' from 'B-';

     -- Senior secured credit facility to 'BB+/RR1' from
        'BB-/RR1'; and

     -- Senior unsecured notes to 'BB-/RR3' from 'B/RR3'.

In addition, Fitch affirms these Millennium Chemicals Inc.'s
ratings:

   * Convertible senior unsecured debentures at 'BB/RR2'; and
   * IDR at 'B+'.

Fitch also affirms Millennium America Inc.'s ratings:

   * Senior secured credit facility and term loan rating at
     'BB+/RR1';

   * Senior unsecured notes at 'BB/RR2'; and

   * IDR at 'B+'.

For Lyondell, approximately $2.9 billion of debt is covered; for
Equistar, approximately $2.3 billion of debt is covered; and for
Millennium Chemicals, approximately $1.1 billion of debt is
covered by these actions.  The Rating Outlooks for Lyondell and
Equistar were revised to Stable from Positive.  Millennium's
Rating Outlook remains Stable.

The ratings upgrade for Lyondell is supported by:

   * significant debt reduction,
   * improved cash flow metrics, and
   * better than expect results in 2005.

Lyondell's consolidated total debt decreased, by $1.43 billion, to
$6.44 billion at Dec. 31, 2005, from $7.86 billion at 2004 year-
end.

Lyondell's debt reduction efforts exceeded Fitch's expectations.
Fitch continues to expect debt reduction to be the highest
priority for cash in the near term.  Lyondell's IDR rating also
incorporates the company's highly integrated businesses in:

   * refining,
   * petrochemicals, and
   * performance products.

Lyondell benefits from access to multiple cash sources including
its own propylene oxide (PO) and related products operations, and
its investments in Equistar and Lyondell Citgo-Refinery (LCR).
Furthermore Lyondell's size, liquidity, access to capital markets
and significant earnings leverage during the peak of the chemical
cycle support the ratings.

Concerns include:

   * Lyondell's exposure to potential weakness in methyl tertiary
     butyl ether (MTBE) markets and the loss of profitability if
     alternative products are produced;

   * continued high raw material prices and its impact on demand;

   * dividends; and

   * debt levels.

Like 2005, operating results in 2006 are likely to be unstable
quarter to quarter, but overall supply demand fundamentals coupled
with low inventories should prove favorable for Lyondell and its
businesses in the short term.

The Stable Outlook reflects favorable business conditions for the
markets Lyondell and its subsidiaries participate in and Fitch's
expectation that Lyondell will continue to use excess cash for
debt repayment during the near term.  Fitch also expects that
energy and raw material prices will continue to be volatile and
price relief may not occur until the second half of 2006.
Potential weakness related to MTBE is likely to be offset by
strong operating earnings from petrochemical and refining
operations throughout 2006.

The ratings upgrade for Equistar is supported by a substantial
improvement in cash generation driven by a cyclical recovery in
the chemical sector and margin expansion.  Strong cash
distributions from Equistar to Lyondell as well as Millennium have
allowed both entities to accelerate their debt reduction efforts.

The ratings also incorporate:

   * Equistar's product offerings of ethylene, ethylene
     derivatives and co-products;

   * its significant earnings leverage; and

   * its exposure to unstable energy prices.  

However, Equistar's ratings are limited by:

   * Lyondell's strong access to its cash flow;
   * its focus on North American markets; and
   * a narrower product portfolio compared to Lyondell.

The rating affirmation for Millennium is supported by its debt
repayment efforts in 2005, and favorable access to cash
distributions from its 29.5% interest in Equistar.  Total debt at
Millennium decreased, by $270 million, to $1.14 billion at Dec.
31, 2005, from $1.41 billion at 2004 year-end.  Fitch expects
additional debt reduction with the company's recent announcement
of its tender offer for the remaining $160 million, 7.00% senior
notes due November 2006.  The ratings also consider the cyclical
nature of its commodity products and Lyondell's ownership of the
company.

Lyondell and subsidiaries had total balance sheet debt of $6.44
billion at Dec. 31, 2005.  Debt reduction has been funded from a
combination of strong joint venture cash distributions from
Equistar, and to a lesser extent from LCR, as well as cash from PO
and related products during 2005.  For the full-year 2005,
Lyondell and subsidiaries generated $2.22 billion of EBITDA on
$18.6 billion in sales.  For the 12 months ending Dec. 31, 2005,
Lyondell and subsidiaries had a total debt-to-operating EBITDA of
2.9x and total adjusted debt-to-EBITDAR of 3.1x.  Lyondell and
subsidiaries' adjusted operating EBITDA-to-gross interest expense
for the same period was 3.7x, with funds flow from operations
interest coverage of 3.6x.  Also, in 2005, Lyondell's consolidated
cash flow from operations and free cash flow were $1.59 billion
and $973 million, respectively.

Lyondell holds leading global positions in propylene oxide and
derivatives, plus TiO2, as well as leading North American
positions in:

   * ethylene,
   * propylene,
   * polyethylene,
   * aromatics,
   * acetic acid, and
   * vinyl acetate monomer.

The company benefits from strong technology positions and barriers
to entry in its major product lines.  Lyondell owns 100% of
Equistar; 70.5% directly and 29.5% indirectly through its wholly
owned subsidiary Millennium.  It also owns 58.75% of LCR, a highly
complex petroleum refinery that benefits from a long-term, fixed-
margin crude supply agreement.  In 2005, Lyondell and subsidiaries
generated $2.22 billion of EBITDA on $18.6 billion in sales.


MASTEC INC: Closes Purchase of Digital Satellite for $26 Million
----------------------------------------------------------------
MasTec, Inc. (NYSE: MTZ) completed the purchase of substantially
all of the assets and operating liabilities of Digital Satellite
Services, Inc.  DSSI also operates under the names of Ron's
Digital Satellite and Ron's TV, and is principally involved in the
installation of residential and commercial satellite and security
services.

The purchase price is composed primarily of $18.5 million in cash
and $7.5 million of MasTec common stock (637,214 shares), based on
pricing as of Jan. 27, 2006.

"MasTec's recently closed equity offering, which netted the
Company approximately $156.4 million, and the acquisition of DSSI
continue MasTec's announced plan of recapitalizing for growth and
focusing on profitable core businesses," Austin J. Shanfelter,
MasTec's President and CEO, stated.  "The equity offering
positions MasTec with one of the strongest balance sheets in
the sector, while the DSSI acquisition expands the Company's
profitable install-to-the-home geographical footprint and adds an
excellent management team and service technician workforce."

Headquartered in Coral Gables, Florida, MasTec Inc. --
http://www.mastec.com/-- is a leading specialty contractor
operating throughout the United States and in Canada across a
range of industries.  The Company's core activities are the
building, installation, maintenance and upgrade of communication
and utility infrastructure systems.

Mastec Inc.'s 7-3/4% Senior Subordinated Notes due 2008 carry
Moody's Investors Service's B2 rating.


MODAVOX INC: Posts $251,660 Net Loss in Quarter Ended November 30
-----------------------------------------------------------------
Modavox, Inc., formerly SurfNet Media Group, Inc., delivered its
quarterly report on Form 10-QSB for the quarter ended Nov. 30,
2005, to the Securities and Exchange Commission on Jan. 24, 2006.

The Company reported a $251,660 net loss on $509,923 of revenue
for the three-months ended June 30, 2005.  At June 30, 2005, the
Company's balance sheet showed $188,460 in total assets and
liabilities of $1,998,794, resulting in a stockholders' deficit of
$1,810,334.

                     Going Concern Doubt

Epstein Weber & Conover, PLC, expressed substantial doubt about
Modavox's ability to continue as a going concern after it audited
the Company's financial statements for the fiscal year ended Feb.
28, 2005.  The auditing firm pointed to the Company's operating
losses,  negative working capital of $1,718,661 as of Feb. 28,
2005, and failure to generate sufficient revenue to support its
operations.

A full-text copy of the regulatory filing is available at no
charge at http://researcharchives.com/t/s?502

                      About Modavox

Modavox, Inc. -- http://www.modavox.com/-- produces and  
distributes online audio and video streaming media content,
offering innovative, effective and comprehensive online marketing
tools for reaching targeted niche communities worldwide.  Through
Modavox Central(TM), Modavox takes the search out of search,
delivering content straight to computer desktops and portable
devices.  Through StreamSafe(TM), Webcast Wizard(TM), Stream
Syndicate(TM) and AudioEye(TM), Modavox offers managed access to
secure Internet streaming media; facilitates enterprise
collaboration for online meeting, event management, enterprise
communications and distance learning; offers digital rights
management to syndicate audio and video content to Internet-
enabled devices; and provides Internet accessibility for the
handicapped.


MULTICARE AMC: Files Final Report & Chapter 11 Cases Closed
-----------------------------------------------------------
Multicare AMC, Inc., and its debtor-affiliates filed a final
report with the U.S. Bankruptcy Court for the District of Delaware
in order to close their chapter 11 cases.

The Debtors disclosed the fees and expenses paid to certain
professionals:

    Type of Payment                            Amount of Payment
    ---------------                            -----------------
    Trustee's Compensation                            N/A

    Attorney for Trustee or
    Debtor-in-Possession (fee)                     $174,046

    Attorney for Debtor (fee)                    $1,563,462     

    Attorney for Debtor-in-Possession (expenses)   $256,337

    Trustee (expenses) (non-operating)                N/A

    Attorney for Trustee (expenses)                   N/A

    Professional Fees for Creditor's Committee   $1,197,497

    Expenses for Creditor's Committee              $171,309

    Other Professionals for Debtor (fee)         $9,390,474

    Other Professionals for Debtor (expenses)      $578,247

    U.S. Trustee's Fees                               N/A

    Other Fees or Expenses                            N/A

Multicare AMC, Inc., and its debtor-affiliates filed for chapter
11 protection on June 22, 2000.  (Bank. D. Del. Case No. 00-
02494).  On June 5, 2001, the Reorganized Debtors, together with
Genesis Health Ventures, Inc., filed their joint plan of
reorganization and disclosure statement.  On Sept. 20, 2001, the
Court entered a final order confirming the joint plan.  The plan
became effective on Oct. 2, 2001.  The Court formally closed their
chapter 11 cases on Jan. 12, 2006.


MUSICLAND HOLDING: Walks Away from 51 Real Property Leases
----------------------------------------------------------
Musicland Holding Corp. and its debtor-affiliates have identified
51 nonresidential real property leases that are no longer integral
to the Debtors' ongoing business operations.  James H.M.
Sprayregen, Esq., at Kirkland & Ellis LLP, contends that the
leases present burdensome contingent liabilities, are unprofitable
and are unnecessary for the Debtors' restructuring efforts.

Accordingly, the Debtors sought and obtained the U.S. Bankruptcy
Court for the Southern District of New York's authority to reject
each of the Leases effective as of the later of:

   (i) the Petition Date; and

  (ii) the date that the Debtors actually vacate or vacated the
       premises and surrender possession of the premises by
       delivering the keys to the landlord at the mall manager's
       office.

A six-page list of the 51 Real Property Leases is available for
free at http://bankrupt.com/misc/Musicland_jan11leases.pdf

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.

Any proof of claim for damages arising from rejection of the
Leases be filed on the later of the deadline set by the Court or
30 days after the effective date of rejection of that lease.

                     Lease Rejection Protocol

At the Debtors' behest, the Court also approved expedited
procedures for rejecting other nonresidential real property leases
as the Debtors may determine should be rejected:

   (a) The Debtors will file written notice to reject a lease and
       will serve the Rejection Notice together with the Court's
       order via overnight delivery service upon:

       * the landlords affected by the Rejection Notice;

       * other interested parties to each lease sought to be
         rejected, including subtenants to the affected lease;

       * the Office of the United States Trustee;

       * counsel for Wachovia, as agent for the Debtors'
         Senior Lenders and as agent for the Debtors' proposed
         DIP lenders;

       * counsel for the Secured Trade Creditors; and

       * those creditors listed on the Debtors' Consolidated List
         of Creditors Holding 30 Largest Unsecured Claims.

   (b) The Rejection Notice will give out information to the
       best of the Debtors' knowledge:

       * the street address, mall name or center name of the real
         property that is the subject of the lease the Debtors
         seek to reject;

       * the approximate monthly rental obligation specified in
         the affected lease;

       * the approximate remaining term specified for the
         affected lease;

       * the name and address of the affected lessor, landlord,
         management company, subtenant or other party in
         interest, and;

       * a description of the deadlines and procedures for filing
         objections to the Rejection Notice;

   (c) If a party-in-interest objects to the rejection of the
       Debtors' lease, those objections must be filed with the
       Court and received no later than 10 days after the date of
       service of the Notice by:

       * Kirkland & Ellis LLP, counsel to the Debtors;

       * the Official Committee of Unsecured Creditors' counsel;
         and

       * the Office of the United States Trustee.

   (d) If no objection is timely filed and served the lease will
       be deemed rejected on a final basis effective on the date
       the Rejection Notice was filed;

   (e) 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; and

   (f) If the Debtors have deposited funds with a lessor of a
       rejected lease as a security deposit or other arrangement,
       that lessor may not set off or use that deposit without
       the Court's authority.

Mr. Sprayregen asserts that the Lease Rejection Procedure will
streamline the Debtors' ability to reject leases that provide no
benefit to the Debtors' estates.  It will thereby minimize
unnecessary postpetition obligations while providing landlords and
other affected parties with adequate notice and an opportunity to
object within a definitive time period.

                          Objections

Certain lessors dispute the Court Order authorizing the Debtors to
reject unexpired, nonresidential real property leases as of the
Petition Date, and approving an expedited procedure for rejection
of leases:

(1) 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 of the Bankruptcy Code 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 reports 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.

(2) Taubman Landlords

The Taubman Landlords tell the Court that the Debtors should be
required to provide written notice to each landlord whose lease is
designated for rejection.  Further, the Debtors should be required
to bring all postpetition rent as a pre-condition for the
rejection of the Leases.

The Taubman Landlords consist of independent entities which own
various regional retail shopping centers.

(3) Ramco

On behalf of Ramco-Gershenson Properties, L.P., Matthew E.
Thompson, Esq., at Kupelian Ormond & Magy, P.C., in Southfield,
Michigan, informs the Court that the Debtors' request fails the
basic elements of Section 365(a) because the lease for 50,000
square feet of retail premises at Tel-Twelve Mall, in Southfield,
Michigan, is neither "unexpired" nor a "lease of the debtor."

Mr. Thomson clarifies that the Lease has been terminated on
September 30, 2005 -- prior to the Petition Date -- in accordance
with Michigan law, pursuant to a Lease Termination Agreement dated
September 21, 2005, between Ramco and Media Play, Inc.

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: Gets Okay to Hire Ordinary Course Professionals
------------------------------------------------------------------
Musicland Holding Corp. and its debtor-affiliates customarily
retain the services of various attorneys, accountants, and other
professionals in the ordinary course of their business operations,
unrelated to their Chapter 11 cases, including general corporate,
accounting, auditing, tax, and litigation matters.

The Debtors seek the U.S. Bankruptcy Court for the Southern
District of New York's authority to continue to employ the
ordinary course professionals postpetition without the necessity
of each OCP filing a formal application for employment and
compensation pursuant to Sections 327, 328, and 330 of the
Bankruptcy Code.

A list of the Debtors' ordinary course professionals is available
for free at http://bankrupt.com/misc/Musicland_OCP.pdf

Due to the number and geographic diversity of the OCPs they
regularly retained, the Debtors explain that it would be unwieldy
and burdensome to both the Debtors and the Court to require each
OCP to apply separately for approval of its employment and
compensation.  Additionally, the Debtors do not believe that
Section 327 requires that approval.

The Debtors propose to employ the OCPs, effective as of the
Petition Date, on terms substantially similar to those in effect
prior to the Petition Date.  The Debtors represent that:

   -- they wish to employ the OCPs as necessary for the day-to-
      day operations of their businesses;

   -- expenses for the OCPs will be kept to a minimum; and

   -- the OCPs will not perform substantial services relating to
      bankruptcy matters without the Court's permission.

Certain of the OCPs may hold unsecured claims against the
Debtors.  The Debtors do not believe, however, that any of the
OCPs have an interest materially adverse to them, their estates,
creditors or shareholders.

According to James H.M. Sprayregen, Esq., at Kirkland & Ellis
LLP, the Debtors will continue to require the services of the OCPs
to enable them to continue normal business activities that are
essential to their stabilization and reorganization efforts.

The Debtors also ask the Court to approve these procedures for the
retention and compensation of the OCPs:

   (a) The Debtors will be authorized to pay 100% of fees and
       disbursements to each of the OCPs retained by the Debtors
       after submission of an Affidavit of Disinterestedness and
       an invoice detailing the nature of the services rendered
       after the Petition Date, provided that the Fees do not
       exceed $50,000 per month or exceed an aggregate of
       $500,000 per OCP.  The Debtors reserve the right, without
       prejudice, to seek approval from the Court of an increase
       of the Aggregate Cap, in their sole discretion.

   (b) Any payments made in excess of the fee cap to any OCP
       will be subject to prior Court approval.

   (c) Commencing on April 15, 2006, and on each July 15,
       October 15, January 15, and April 15 of every year
       thereafter in which these Chapter 11 cases are pending,
       the Debtors will file with the Court and serve on the
       trustees and counsels involved a statement with respect
       to the immediately preceding quarter relating the
       necessary OCP information.

   (d) Each OCP will file with the Court and serve the Notice
       Parties an affidavit of disinterestedness at least 14 days
       prior to submitting an initial invoice to the Debtors.

   (e) The Notice Parties will have 10 days after the receipt
       of each OCP's Affidavit of Disinterestedness to object to
       the retention of the OCP.  The objecting party will
       serve any objections upon the Notice Parties and the
       OCP on or before the Objection Deadline.

       If any objection cannot be resolved within 10 days of its
       receipt, the parties will ask the Court to rule on the
       issue.

       If no objection is received from any of the Notice Parties
       by the deadline with respect to any OCP, the Debtors will
       be authorized as a final matter to retain and pay OCPs to
       whom an objection was not filed.

   (f) The Debtors reserve the right to supplement the list of
       OCPs, in their sole discretion as necessary to add or
       remove OCPs without the need for any further hearing and
       to file individual retention applications for each.  In
       this event, the Debtors propose to file a notice with the
       Court listing the additional OCPs that the Debtors intend
       to employ and serve notice to the Notice Parties.  The
       Debtors propose that if no objections are filed to any
       OCP within 10 days after service of the OCP Notice, then
       the retention will be deemed approved by the Court without
       the necessity of a hearing or further order.

                          *     *     *

"[T]he Debtors are authorized, but not required, to employ and pay
reasonable fees and expenses of the OCPs to assist and advise the
Debtors in the operation of their businesses and to defend the
Debtors in matters arising in the ordinary course of the Debtors'
business," Judge Bernstein rules.

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)


MYLAN LAB: Earns $48 Mil. of Net Income in 3rd Qtr. Ended Dec. 31
-----------------------------------------------------------------
Mylan Laboratories Inc. (NYSE: MYL) reported its financial results
for the third quarter and nine months ended Dec. 31, 2005.

Revenue for the third quarter was $311.2 million compared to
$291 million in the same prior year period.  

For the third quarter ended Dec. 31, 2005, the Company had
net earnings of $48.2 million, compared to net earnings of
$34.7 million for the same period in 2004.      

Gross profit for the third quarter of fiscal 2006 increased by
15% or $20.5 million to $155.8 million from $135.3 million in the
same prior year period, while margins increased to 50.1% from
46.5%.  Operating income was $78 million for the three months
ended Dec. 31, 2005, an increase of $29.1 million from the same
prior year period.

"We are pleased with the results we are reporting today, and, most
importantly, we continue to execute against each of the strategic
initiatives that we previously announced," Robert J. Coury,
Mylan's Vice Chairman and Chief Executive Officer, commented.  "We
believe the strengthening of our core generic business, the
addition of new products rolling in from our robust pipeline and
the successful outlicensing of nebivolol, as well as the current
and potential business development opportunities such as the
recent strategic alliances for Mylan Technologies position us well
for success in fiscal 2007 and beyond."

For the first nine months of fiscal 2006, net revenues were
$932.6 million compared to $936.9 million for the first nine
months of the prior fiscal year.

For nine months ended Dec. 31, 2005, the Company has net earnings
of $126.8 million, compared to net earnings of $165.4 million for
the same period in 2004.

For the nine months ended Dec. 31, 2005, revenue decreased by
$4.3 million to $932.6 million, compared to $936.9 million in the
same prior year period.

Gross profit for the nine months ended Dec. 31, 2005, decreased by
$3.5 million to $466.9 million from $470.4 million in the same
prior year period.  

Operating income was $195.6 million for the nine months ended
Dec. 31, 2005, a decrease of $53.4 million, from the same prior
year period.  

Headquartered in Canonsburg, Pennsylvania, Mylan Laboratories Inc.
-- http://www.mylan.com/-- is a leading pharmaceutical company  
with three subsidiaries, Mylan Pharmaceuticals Inc., Mylan
Technologies Inc., and UDL Laboratories, Inc., that develop,
manufacture and market an extensive line of generic and
proprietary products.

Mylan Laboratories Inc.'s 6-3/8% Senior Notes due 2015 carry
Moody's Investors Service's Ba1 rating and Standard & Poor's BB+
rating.


NAVISTAR INT'L: Moody's Downgrades Subordinated Debt Rating to B3
-----------------------------------------------------------------
Moody's Investors Service lowered the ratings of Navistar
International Corporation (senior unsecured to B1 from Ba3 and
subordinate to B3 from B2) and placed the ratings under review for
further possible downgrade.  Moody's rating actions followed
Navistar's announcement that it has received notice from purported
holders of more than 25% of the company's approximately $200
million senior subordinated exchangeable notes due 2009, claiming
that the company is in default of reporting requirements relating
to the filing of its financial statements for the fiscal year
ending Oct. 31, 2005.  The company disputes the allegation of
default.  Nevertheless, receipt of the notice of default
represents a further negative development for the company stemming
from its inability to file financial statements in a timely manner
because of accounting issues.

The downgrade and review reflect the heightened financial risk
stemming from uncertainty as to Navistar's ability to file its
financial statements in a timely manner given the number and
complexity of various open items that the company continues to
discuss with its auditors Deloitte and Touche.  As a result of
these open issues, Navistar cannot estimate the time frame for the
filing of its October 2005 financial statements.  

Moody's review is concentrating on:

   * Navistar's ability to ensure the stability of its capital
     structure in the face of the alleged default;

   * the ultimate resolution of these accounting and auditing
     issues; and

   * the attendant risks that the rating agency believes Navistar
     could face.

These potential risks include:

   * a protracted delay in completing the audit and in filing
     financial statements;

   * the need for additional or extended waivers relating to
     lending agreements;

   * potential adverse impacts on the company's liquidity if
     needed waivers can not be obtained in a timely fashion;

   * potential for material restatements of past financial
     results;

   * a significant deviation between the audited results for 2005
     and the company's previous guidance for that year; and

   * a determination that there might be material weaknesses in
     Navistar's reporting controls and procedures.

Moody's will also monitor the ability of Navistar Financial
Corporation (NFC), Navistar's captive finance subsidiary, to
ultimately file its financial statements, the deadline for which
was Jan. 31, 2006.  On January 17 the providers of NFC $1.2
billion revolving credit facility waived financial statement
filing requirements through May 31, 2006.

Navistar disputes the allegation of default contained in the
notice letter that it received pertaining to the exchangeable
notes.  Nevertheless, should the purported holders of the
exchangeable notes be successful in asserting a default, Navistar
would have 60 days from the date notice to cure such default.  If
not cured, the outstanding principal and interest on the notes
could be declared due and payable.  Such an acceleration of the
$200 million in exchangeable notes could lead to an acceleration
of Navistar's other obligations, including $1.3 billion in
additional public debt, as well as an acceleration of NFC's $1.2
billion revolving credit facility.

Despite the challenges posed by the financial reporting delays,
Moody's notes that Navistar's operating fundamentals are improving
as demand in the North American truck market remains strong, and
the portfolio quality of NFC has strengthened considerably.  The
company's credit metrics continue to show positive trends with
improving free cash flow generation, and it had approximately $877
million in cash on hand as of Oct. 31, 2005.  These factors could
contribute to an environment in which the company could obtain
necessary waivers of reporting covenant violations, and avoid any
risk of an acceleration of its debt or that of NFC.  Nevertheless,
Moody's believes that the scope and number of open issues being
addressed in Navistar's ongoing audit, and the resulting delay in
filing its financial statements, are important analytic
considerations, and contribute to a higher risk profile.

Consequently, Navistar's rating will likely remain under pressure
until these open issues are resolved, audited financial statements
are filed, and the audit process reaffirms that the company's
financial statements reflect solidly improving credit trends as
well as sound reporting and control practices.

Navistar International Corporation, headquartered in Warrenville,
Illinois, is a leading North American producer of:

   * medium and heavy duty trucks,
   * school busses, and
   * diesel engines

for the:

   * truck,
   * van, and
   * SUV markets.


NAVISTAR INT'L: Fitch Holds Low-B Debt Ratings on Negative Watch
----------------------------------------------------------------
The debt ratings of both Navistar International Corp (NAV) and its
subsidiary, Navistar Financial Corp. (NFC) remain on Rating Watch
Negative by Fitch Ratings:

  Navistar International Corp.:

   -- Issuer Default Rating 'BB'
   -- Senior unsecured debt 'BB'
   -- Subordinated debt 'B+'

  Navistar Finance Corp.:

   -- Senior unsecured secured bank lines 'BB'
   -- Senior unsecured debt 'BB'

Fitch's ratings incorporate the notice of default Navistar
received from holders of its 4.75% senior subordinated notes
arising from the delay in filing audited year-end financial
statements.  The debt holders claim that a default has occurred
due to the lack of timely filed audited financial statements for
the year-end Oct. 31, 2005.  Navistar has a 60-day cure period to
resolve the default.

The notice raises the concern that there may be an acceleration of
the $220 million principal amount, that other debt holders may
give notice and that, despite obtaining a filing-default waiver
through May 31 from the banks, the banks and other debt holder's
could also accelerate repayment under cross-default provisions.
The Rating Watch Negative status reflects uncertainty regarding
the resolution of this issue and any potential changes to
Navistar's current capital structure.  Fitch is also concerned
that alternative or supplemental financing could be arranged on a
secured basis, potentially impairing the position of unsecured
holders.  Financing costs could also rise.  The Watch status also
reflects the lack of audited financial statements and the
uncertain timing as to when they will be filed.

Navistar's operating profile remains sound.  In 2006, Fitch
anticipates improved profitability due to industry volumes, market
share gains and cost reduction efforts.  Medium and heavy truck
markets are expected to remain strong through the year due to a
pre-buy situation similar to the one that developed in 2002 as a
result of more stringent air emissions regulations affecting
diesel engine technology.

However, Fitch expects industry demand to be negatively impacted
beginning in 2007, especially Class 7-8 vehicles.  Navistar's
current liquidity ($875 million unrestricted cash balance at Oct.
31, 2005) and cash generation provide adequate coverage of near
term maturities ($400 million in June 2006 and $190 million in
December 2007).  Fitch expects that Navistar will maintain a
strong liquidity position as it enters the potential decline in
demand in 2007, though deterioration of this position in 2006
could lead to a review of the rating.


NAVISTAR INT'L: S&P Continues Watch on BB- Corporate Credit Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services held its 'BB-' corporate credit
ratings on North American heavy-duty and medium-duty truck
producer Navistar International Corp., and Navistar's subsidiary,
Navistar Financial Corp., on CreditWatch with negative
implications.  The company's senior unsecured and subordinated
debt ratings also remain on CreditWatch.  The ratings were
originally placed on CreditWatch on Jan. 17, 2006.
     
The CreditWatch update follows the company's 8-K filing, in which
it states that it has received a notice of default from purported
holders of one of its outstanding debt instruments.  Under the
terms of the company's bond indenture for that issue, Navistar has
60 days from the time the notice was received (Jan. 25, 2006) to
cure the default by either filing its financial statements or by
receiving a waiver from its bondholders.  Navistar disputes
the allegations that it is in default.  However, if the company is
in default and it failed to cure the default, an acceleration of
required payment could occur on this instrument as well as its
other various debt instruments.
      
"We currently believe that Navistar will resolve the potential
default well before the 60-day cure period ends," said Standard &
Poor's credit analyst Eric Ballantine.  

Standard & Poor's will monitor Navistar's progress in reaching a
resolution in the very near term, as well as its current and
prospective sources of liquidity.  

"If it appears that the company will be unable to resolve this
potential default quickly, or if the company's liquidity were to
become a concern, a multiple-notch downgrade is possible," the
analyst added.
     
At Oct. 31, 2005, Navistar had approximately $875 million of cash,
and the company has access to a $1.2 billion revolving credit
facility at finance subsidiary Navistar Financial, subject to
waivers related to filing financial statements that expire May 31,
2006, although we believe that additional waivers could be granted
if needed.  In June 2006, Navistar faces nearly $400 million of
maturing debt and the company has previously indicated that it
plans to repay this obligation with cash from operations.
     
The reason for the delay continues to be the company's ongoing
discussions with its outside auditors about a variety of open
items, including some complex and technical accounting issues.
Although Navistar is currently unable to provide recent financial
results, based on results through the first nine months of the
company's fiscal year (nine months ending July 31, 2005), sales
and earnings were up significantly versus 2004.  Sales were
approximately $8.3 billion compared with $6.4 billion for the
first nine months of 2004 (ending July 31, 2004).  Net income was
$135 million (for the first nine months of 2005) compared with $88
million for the same period in 2004.  Standard & Poor's believes
that Navistar should continue to benefit from solid demand in
the heavy-duty truck market during 2006.  U.S. heavy-duty truck
sales were up more than 20% for full-year 2005, and Standard &
Poor's expects sales will be up between 5% and 10% in 2006.
     
Standard & Poor's anticipates that the ratings on Navistar will
remain on CreditWatch until the company has filed its 10-K with
the SEC.  Once the company has filed its financial statements and
if results are not materially different from previous
expectations, Standard & Poor's currently expects to affirm the
ratings with a stable outlook.


NEIMAN MARCUS: Moody's Confirms $125 Million Debentures' B1 Rating
------------------------------------------------------------------
Moody's Investors Service confirmed the B1 rating on Neiman Marcus
Group, Inc.'s legacy $125 million 7.125% debentures due in 2028,
concluding the review for possible downgrade of this debt issue.
The rating on this debt was lowered on Sept. 20, 2005, but kept on
review for possible downgrade to cover the unlikely event that
expected security would not be forthcoming.  This rating action is
based on the fact that the debentures do share in the first lien
on certain of the real property that secures Neiman's senior
secured term loan, as anticipated.

Rating confirmed:

   * 7.125% debentures due 2028 at B1

Ratings affirmed:

   * Corporate Family Rating at B1

   * $1.975 billion senior secured guaranteed term loan at B1

   * $700 million senior unsecured guaranteed PIK/cash notes
     issued under Rule 144A at B2

   * $500 million senior subordinated unsecured guaranteed notes
     issued under Rule 144A at B3

   * Speculative Grade Liquidity Rating at SGL-2

In October 2006, Neiman was sold to investment funds affiliated
with Texas Pacific Group and Warburg Pincus (the Sponsors) for
approximately $5.4 billion plus the assumption of about $125
million of the company's legacy debt.

Neiman's ratings incorporate the significant deterioration in
credit metrics following its leveraged buyout, with debt to EBITDA
(based on Moody's standard analytic adjustments) expected to
exceed 6 times at fiscal year end July 2006.  The ratings also
reflect the company's prominence in the high-end department
store/specialty store segments and its consistent execution and
improving operating profitability despite the intense competition
at retail.  With Neiman's current senior management in place,
Moody's anticipates that there will be no material changes in
critical elements of the company's operations, including
merchandising, customer service and shopping environment.

However, the sale of Neiman to the Sponsors greatly increased the
company's leverage and caused significant deterioration in other
key credit metrics.  Free cash flow measures are especially
limited -- free cash flow to debt is unlikely to reach 4% at
fiscal year end July 2006, in Moody's view.  To generate free cash
flow for debt reduction, the company must grow revenues robustly
and, just as important, continue to improve current profit margins
-- already at a high level.

Moody's believes that refinancing debt issues at their maturity is
likely to be necessary.  The loss of much of the company's
historical financial flexibility is a major credit negative given
that Neiman operates in a cyclical and seasonal industry that is
also subject to fashion risk.  The transaction has left Neiman
with little room to accelerate capital expenditure spending if
needed or to rebound from a recession, for example.  The company's
high service standards, which are a key element in its business
model, preclude aggressive cost cutting as a source of
supplemental temporary funding.  Yet, with this degree of
leverage, management may be under much greater pressure than in
the past to trim costs and will face the significant, new
challenge of finding a workable balance between belt-tightening
and maintaining sufficiently high service levels to meet the
demands of its affluent customer base.

Neiman is the leading high-end department/specialty chain, through
its:

   * 35 upscale Neiman Marcus stores,
   * its 2 Bergdorf Goodman stores,
   * 17 clearance centers, and
   * its direct retail business.

The company's stores are somewhat concentrated in Texas, the West,
the Midwest and the Northeast, to serve its affluent customer
base.  Neiman targets the wealthiest consumers by offering
carefully chosen:

   * couture,
   * designer and bridge apparel,
   * jewelry, and
   * accessories.

While Neiman has no guaranteed supply sources, its prestige and
ability to sell at full retail price encourage many designers to
introduce new products in its stores.  The company's sales
associates, whose compensation is heavily commission-based,
provide superior service.  Neiman quite appropriately protects its
cachet by carefully controlling its expansion and by not
soliciting lower income consumers.  Consequently, its store base
is small compared to other department and specialty store chains,
and its ability to grow physically is limited.  Service is
exceptional, merchandising appropriate, and execution consistent.

The stable rating outlook reflects Moody's expectation that Neiman
will grow comparable store sales at the same pace or faster than
department store peers, that margins will continue to improve and
that all free cash flow will be applied to debt reduction.

Given the company's highly leveraged capital structure, an upgrade
in the intermediate term is unlikely.  Over the longer term, an
upgrade would require:

   * consistently positive comparable store sales;

   * continued margin improvement;

   * a significant reduction in leverage such that debt to EBITDA
     (based on Moody's standard analytic adjustments) is below 5
     times; and

   * more robust free cash flow generation such that free cash
     flow to debt is approaching 10%.

Ratings would be pressured:

   * if comparable store sales fall;

   * if margins fail to continue to improve;

   * if debt to EBITDA rises above 6.5 times; or

   * if already thin free cash flow generation diminishes such
     that free cash flow to debt falls below 3%.

All funded debt and bank facilities are the obligation of Neiman.
Moody's assumes that future funded debt, if any, will also be
centralized at Neiman.  The $1.975 billion senior secured
guaranteed term loan due in 2013 is secured by a first priority
interest in property, plant and equipment and other non-current
assets and by a second priority interest in current assets.  The
term loan, $700 million of senior unsecured guaranteed PIK/Cash
notes due 2015, and $500 million of senior subordinated guaranteed
unsecured notes due 2015 are guaranteed by Neiman's wholly owned
domestic subsidiaries and by its immediate parent.  The legacy
$125 million notes due 2028 are also secured by a first priority
interest in certain of the company's real property.

Notching on Neiman's long-term debt reflects the fact that a first
lien on Neiman's most liquid assets --primarily inventory -- and a
second lien on non-current assets secure an unrated senior secured
guaranteed $600 million Asset Backed Revolving Credit.

The Speculative Grade Liquidity Rating of SGL-2 reflects the
company's ability over the next 12 months to fund major cash uses
internally, but with modest cushion, plus its access to the
unrated $600 million asset backed senior secured bank revolving
credit facility expiring in October 2010 that will exceed seasonal
working capital needs.  Neiman's liquidity profile is
characterized by the expectation that the company will further
improve operating margins that are already at a high level.  Its
asset based revolving credit facility, secured primarily by the
company's upscale inventory, is likely to be fully available to be
drawn.

The cushion of annual free cash flow can be enhanced should Neiman
exercise its ability to pay interest in kind instead of in cash
through 2010 on its $700 million senior unsecured guaranteed
PIK/cash notes and/or reduce capital expenditures to maintenance
levels.  However, specified percentages of excess cash flow as
defined must prepay the $1.975 billion term loan.  Neiman has
limited alternative sources of liquidity since all its domestic
assets have been pledged to secure its debt.

Headquartered in Dallas, The Neiman Marcus Group, Inc. operates
Neiman Marcus and Bergdorf Goodman stores, in addition to both
print and online retail businesses.  Revenues for the fiscal year
ended July 30, 2005, exceeded $3.8 billion.


NEW LIFE: Case Summary & 6 Largest Unsecured Creditors
------------------------------------------------------
Debtor: New Life Ministries of Houston Incorporated
        dba New Life Ministries
        710 Highway 90-A East
        Richmond, Texas 77469

Bankruptcy Case No.: 06-30373

Chapter 11 Petition Date: February 3, 2006

Court: Southern District of Texas (Houston)

Judge: Marvin Isgur

Debtor's Counsel: Aaron Keiter, Esq.
                  The Keiter Law Firm, P.C.
                  4545 Mt. Vernon
                  Houston, Texas 77006-5815
                  Tel: (713) 706-3636
                  Fax: (713) 706-3622

Total Assets: $1,465,856

Total Debts:  $826,713

Debtor's 6 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Kay Kemp                      Former landlord -          $15,050
709 Highway 90a East          office lease
Richmond, TX 77469            deficiency

DeLage Landen Recovery        Purchase money             $13,195
c/o NCO Financial Systems     Value of collateral:
3850 North Causeway           $13,000
Boulevard, Suite 200
Metairie, LA 70002

Angel Food Ministries         NSF - check                 $3,615
P. O. Box 128
Good Hope, GA 30641

Viking Office Products        Office supplies               $536
c/o Pro Consulting Services,  
Inc.
P. O. Box 66510
Houston, TX 77266


Integrity Direct, Inc.        Sunday school                 $384
North Shore Agency            curriculum
P. O. Box 851389
Mobile, AZ 36685-1389

Lupe C. Ramirez               Lawsuit debt                    $0
c/o Clement B. Pink
2646 South Loop West,
Suite 195
Houston, TX 77054


NEW WORLD: Redeeming $160M Sr. Sec. Notes & Retiring $15M Loan
--------------------------------------------------------------
New World Restaurant Group, Inc. (Pink Sheets: NWRG.PK), will
redeem $160 million in 13% senior secured notes due in 2008,
retire its $15 million revolving credit facility and refinance
that debt with $170 million in new term loans and a $15 million
revolver at more favorable interest rates.  The transaction, which
is being arranged by Bear, Stearns & Co. Inc., is designed to
strengthen the Company's balance sheet, reduce capital costs and
improve cash flow.

"New World's steadily improving financial performance has given us
an opportunity to replace higher interest debt with new notes with
a more attractive average interest rate and a more balanced
repayment schedule," said Rick Dutkiewicz, chief financial
officer.  "By extending our debt maturities, lowering our cost of
capital and retaining a pre-payment feature, New World expects to
improve liquidity and have increased financial flexibility with
which to pursue operating and cash flow enhancing initiatives."  
Dutkiewicz said the Company expects after-tax cash flow to
increase by $5.5 million per year as a result of the refinancing.

New World expects to fund the new loans in late February.  The
Company will send notice of redemption to holders of the 13%
senior secured notes.  Those notes would be redeemed with proceeds
of the new funding.

The new financing is comprised of:

   -- a five-year, $15 million revolving credit facility;
   -- a five-year, $80 million first lien term loan;
   -- a six-year, $65 million second lien term loan; and
   -- a $25 million seven-year subordinated term loan.  

The maturities of the new loans would accelerate to dates
commencing on December 30, 2008 if, by that date, the Company has
not redeemed, extended or replaced its $57 million in Series Z
mandatorily redeemable preferred stock, which currently is
scheduled to mature June 30, 2009.  The new loans will be
pre-payable and carry a floating interest rate based on LIBOR.  
The subordinated term loan will have a fixed interest rate of
13.75%, of which 6.5% is payable in cash and 7.25% is payable in
kind.  Upon completion of the new financing and note redemption,
the Company expects its average cash interest expense rate on all
debt to improve to 9.01% from 13.0%.

Mr. Dutkiewicz noted that improved operating performance over the
past year was instrumental in the Company securing more favorable
debt terms.  Through the first nine months of 2005 New World
reported a 5.6% increase in comparable store sales versus the same
period in 2004.  Over the same comparative periods, the Company
increased revenue and gross margins, doubled operating income,
reduced its net loss, and generated $2.8 million in cash from
operations.

New World Restaurant Group Inc.'s operates restaurants primarily
under the Einstein Bros. and Noah's New York Bagels brands and
primarily franchises locations under the Manhattan Bagel and
Chesapeake Bagel Bakery brands.  

At September 27, 2005, New World Restaurant Group Inc.'s balance
sheet showed a $125,705,000 stockholders' deficit, compared to a  
$112,483,000 deficit at Dec. 28, 2005.


NOBEX CORP: Can Access $1.2 Million Biocon DIP Loan on Final Basis
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave Nobex
Corporation authority to obtain post-petition financing on a final
basis from Biocon Limited.

As previously reported, the Debtor entered into a Purchase and
Sale Agreement dated Dec. 1, 2005, with Biocon for the sale of
substantially all of its assets.

The Debtor can obtain up to $1.2 million in DIP financing from
Biocon, plus any Maintained Patent Advances of up to $200,000.  

The DIP Loan is intended to maintain the Debtor's operations in
the short term and to consummate the sale of its assets at the
highest possible price.

To secure repayment of the DIP Loan, the Debtor grants Biocon a
continuing first priority security interest in and liens on all
currently existing and acquired collateral.

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


NOBEX CORP: Wants to Hire SSG Capital as Investment Banker
----------------------------------------------------------
Nobex Corporation asks the U.S. Bankruptcy Court for the District
of Delaware for permission to retain SSG Capital Advisors, L.P.,
as its investment banker, nunc pro tunc to January 6, 2006.

SSG Capital will:

   a) prepare an offering memorandum describing the Debtor, its
      historical performance and prospects;

   b) assist the Debtor in developing a list of suitable potential
      buyers who will be contacted on a discreet and confidential
      basis after approval by the Debtor;

   c) coordinate the execution of confidentiality agreements for
      potential buyers wishing to review the offering memorandum;

   d) assist the Debtor in coordinating site visits for interested
      buyers and work with the management team to develop
      appropriate presentations for such visits;

   e) solicit and analyze competitive offers from potential buyers
      as authorized by the Debtor in each instance;

   f) advise and assist the Debtor in structuring the transaction
      and negotiating the transaction agreements; and

   g) assist the Debtor, its attorneys and accountants, as
      necessary, through closing on a best efforts basis.

Additionally, SSG Capital will assist the Debtor in negotiating
with various stakeholders in the company regarding the possible
reorganization of existing claims and equity by way of a
recapitalization or other restructuring through a plan of
reorganization.

The Debtor proposes to pay SSG Capital:

      i) an initial fee of $40,000 (100% of which will be credited
         against the Sale Fee);

     ii) a sale fee or reorganization fee of $200,000 plus 5.0% of
         the total consideration if the total consideration is
         between $3.5 million and $10 million, plus 10% of the
         total consideration in excess of $10 million if the
         Debtor closes on the sale of all or a significant portion
         of its assets or securities, or any other extraordinary
         corporate transaction, or if the Debtor effectuates a
         reorganization or other restructuring through a confirmed
         chapter 11 plan; and

    iii) all reasonable out-of-pocket expenses incurred by SSG
         Capital in connection with its duties.

J. Scott Victor, a managing director of SSG Capital, assures the
Court that SSG Capital does not represent any interest materially
adverse to the Debtors or their estates pursuant to Section 327(a)
of the Bankruptcy Code.

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


ON SEMICONDUCTOR: Equity Deficit Narrows to $300.3MM at Dec. 31
---------------------------------------------------------------
ON Semiconductor Corporation's (NASDAQ: ONNN) total revenues in
the fourth quarter of 2005 were $341.8 million, an increase of
approximately 9% from the third quarter of 2005.  During the
fourth quarter of 2005, the company reported net income of $43.8
million.  During the third quarter of 2005, the company reported
net income of $23.5 million.

On a mix-adjusted basis, average selling prices in the fourth
quarter of 2005 were down approximately 2% from the third quarter
of 2005.  The company's gross margin in the fourth quarter was
35%, approximately 180 basis points higher than the third quarter
of 2005.

EBITDA for the fourth quarter of 2005 was $76.8 million and
included a $0.8 million restructuring, asset impairments and other
benefit.  EBITDA for the third quarter of 2005 was $65.4 million
and included $0.2 million in restructuring, asset impairments and
other charges.  

The $0.8 million in restructuring, asset impairments and other
benefit for the fourth quarter of 2005 was primarily related to
reversals of previously accrued costs associated with the closure
of ON Semiconductor's East Greenwich manufacturing facility.

While total revenues for 2005 of $1.261 billion were approximately
flat as compared to $1.267 billion of revenues for 2004, fourth
quarter 2005 revenues of $341.8 million were up approximately
11% as compared to fourth quarter 2004 revenues of $306.8 million.  
During 2005 the company reported net income of $100.6 million that
included $3.3 million in restructuring, asset impairments and
other charges.  During 2004 the company reported a net loss of
$123.7 million that included a loss on debt prepayment of $159.7
million and restructuring, asset impairments and other charges of
$19.6 million.  The company's gross margin increased by
approximately 80 basis points to 33.2% in 2005 from 32.4% in 2004.

"2005 was a significant year for the company." said Keith Jackson,
ON Semiconductor president and CEO. "We exited the year with the
highest gross margin and the first year of profitability since
2000.  We also shipped record units during the fourth quarter at
an annualized run rate of approximately 30 billion units.  We look
to continue to fuel our growth with new product designs and wins
in the Computing, Consumer and Wireless end-markets and are
excited about our prospects for the upcoming year."

                   First Quarter 2006 Outlook

"Based upon booking trends, backlog levels and estimated turns
levels, we anticipate that total revenues will be approximately
$330 million in the first quarter of 2006 as compared to revenues
of $302.4 million in the first quarter of 2005 and revenues of
$341.8 million in the fourth quarter of 2005," Mr. Jackson said.
"Backlog levels at the beginning of the first quarter were up from
backlog levels at the beginning of the fourth quarter of 2005, and
represented over 90 percent of our anticipated first quarter 2006
revenues.  We expect that average selling prices will be down
approximately 1 percent for the first quarter of 2006.  We also
expect cost reductions to offset the decline in average selling
prices and that gross margins will be flat at approximately
35 percent in the first quarter of 2006. Beginning in the first
quarter of 2006, we are required to expense stock based
compensation.  This is in accordance with the Statement of
Financial Accounting Standards No. 123(R) Share Based Payment.  We
currently expect this expense to be approximately $2 million in
the first quarter of 2006."

ON Semiconductor Corp. -- http://www.onsemi.com/-- supplies power
solutions to engineers, purchasing professionals, distributors and
contract manufacturers in the computer, cell phone, portable
devices, automotive and industrial markets.

As of December, 2005, the Company's equity deficit narrowed to
$300.3 million from a $537 million deficit at December 31, 2004.


OPTIGENEX INC: Restates Third Quarter 2005 Financial Statements
---------------------------------------------------------------
Optigenex Inc. amended its quarterly report on Form 10-QSB for the
period ended Sept. 30, 2005, to correct its accounting for the
embedded conversion feature of the 8% Callable Secured Convertible
Notes and to correctly compute earnings per share for the reverse
merger that occurred during the period.

The restated balance sheet for the quarter ended Sept. 30, 2005
record a $1,553,659 liability for the fair value of the embedded
derivative feature.

The statement of operations for the three and nine-month periods
ended Sept. 30, 2005 have also been restated to reflect an
increase in net loss by $509,595 for the additional charges
relating to valuing the embedded derivative liability at inception
and the subsequent change in value of the liability.

At Sept. 30, 2005, the Company's restated balance sheet showed
$7,669,585 in total assets and liabilities of $2,554,043.  The
company had an accumulated deficit of $12,680,581 at Sept. 30,
2005.

                    Going Concern Doubt

Goldstein Golub Kessler LLP in Manhattan raised substantial doubt
about Optigenex Inc.'s ability to continue as a going concern
after it audited the company's financial statements for the year
ended Dec. 31, 2004.  Goldstein Golub pointed to the company's
recurring losses from operations.

A full-text copy of the regulatory filing is available for free at
http://researcharchives.com/t/s?4fa

Based in Manhattan, Optigenex, Inc. -- http://www.ac-11.com/-- is  
an applied DNA Sciences Company, which researches, develops and
markets a patented product known as AC-11(TM) within the wellness,
age intervention, personal care markets and in clinically relevant
disease states.  Optigenex, Inc., offers effective solutions to
age-related issues. These solutions take the form of supplements,
cosmeceuticals or even specialized services.


PACIFIC GAS: Will Pay $295 Million to Settle Chromium 6 Lawsuits
----------------------------------------------------------------
Pacific Gas and Electric Company agreed on Feb. 3, 2006, to pay
$295 million to settle lawsuits, Michael Liedtke of the Union
Tribune reported.

PG&E allegedly contaminated the water with chromium 6 in Kings,
Riverside and San Bernardino, all located in California.  The
lawsuits, which were filed in 1996, were filed by some of the same
attorneys in the Erin Brockovich movie.  That movie was based on a
true story of a woman that helped bring about PG&E's $333 million
settlement.

Mr. Liedtke said that the $295 settlement affects about 1,100
people in the three California counties.

Headquartered in San Francisco, California, Pacific Gas and
Electric Company -- http://www.pge.com/-- a wholly owned    
subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest
combination natural gas and electric utilities in the United
States.  The Company filed for Chapter 11 protection on
April 6, 2001 (Bankr. N.D. Calif. Case No. 01-30923).  James L.
Lopes, Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer,
Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent
the Debtors in their restructuring efforts.  On June 30, 2001, the
Company listed $23,216,000,000 in assets and $22,152,000,000 in
debts.  Pacific Gas and Electric emerged from chapter 11
protection on April 12, 2004, paying all creditors 100 cents-on-
the-dollar plus post-petition interest.


PENN TRAFFIC: Board Dismisses Knox & Jones After Inquiry Findings
-----------------------------------------------------------------
The Penn Traffic Company reported that the Board of Directors
terminated the employment of Les Knox, Senior Vice President,
Chief Marketing Officer, and Linda Jones, Vice President,
Non-Perishable Merchandising, following the presentation by the
Audit Committee of an interim report in connection with its
internal investigation into the Company's promotional allowance
practices and policies.  To date, the internal investigation has
found certain improper practices relating to the recognition of
promotional allowances in periods prior to the Company's emergence
from Chapter 11 under the Bankruptcy Code in April 2005.

The Audit Committee's internal investigation, which was suspended
as previously reported, has recommenced and is ongoing.  Penn
Traffic continues to cooperate with the previously disclosed
investigations by the U.S. Securities and Exchange Commission and
the U.S. Attorney's Office.

Penn Traffic continues to have full access to its working capital
facility.  At Jan. 28, 2006, Penn Traffic had undrawn availability
of approximately $53 million and a 30-day average undrawn
availability of approximately $55 million under this revolving
credit facility.

Headquartered in Rye, New York, The Penn Traffic Company operates
109 supermarkets in Pennsylvania, upstate New York, Vermont and
New Hampshire under the BiLo, P&C and Quality trade names.  Penn
Traffic also operates a wholesale food distribution business
serving 80 licensed franchises and 39 independent operators.
The Company filed for chapter 11 protection on May 30, 2003
(Bankr. S.D.N.Y. Case No. 03-22945).  Kelley Ann Cornish, Esq., at
Paul Weiss Rifkind Wharton & Garrison, represents the Debtors in
their restructuring efforts.  When the grocer filed for protection
from their creditors, they listed $736,532,614 in total assets and
$736,532,610 in total debts.  The Court confirmed the Debtor's
First Amended Plan of Reorganization on March 17, 2005.  The Plan
took effect on Apr. 13, 2005.


PERFORMANCE TRANS: Bankruptcy Prompts Moody's to Withdraw Ratings
-----------------------------------------------------------------
Moody's Investors Service withdrew the ratings for Performance
Transportation Services, Inc. ("PTS") in conjunction with the
company and its U.S. operating subsidiaries' filing on January 25
to reorganize under Chapter 11 of the U.S. Bankruptcy Code.
Moody's has withdrawn the rating because the issuer has entered
bankruptcy.

These specific ratings were withdrawn:

   * Caa1 Corporate Family

   * First lien guaranteed senior secured credit facilities
     consisting of:

     -- Caa1 rating of the PTS $20 million revolving credit;

     -- Caa1 rating of the $45 million letter of credit facility;

     -- Caa1 rating of the $65 million term loan;

     -- Caa3 rating of the second lien guaranteed secured
        $35 million term loan

PTS, headquartered in Wayne, Michigan, is a provider of new
automobile logistics distribution for original equipment
manufacturers in the United States and Canada.  In 2004 the
company managed the distribution of over 3.8 million new vehicles
and had revenues of approximately $350 million.  Principal
shareholders include:

   * Penske Truck Leasing,
   * Onex Corporation and affiliates,
   * Norwest,
   * Management, and
   * Others.


PERSISTENCE CAPITAL: Bruilbilt Renews Bid for Chapter 11 Trustee
----------------------------------------------------------------
Bruilbilt, LLC, through its counsel, Richard W. Brunette, Esq., at
Sheppard, Mullin, Richter & Hampton LLP, asks the U.S. Bankruptcy
Court for the Central District of California to appoint a
chapter 11 trustee in Persistence Capital, LLC's chapter 11
proceedings.  This is Bruilbilt's second request for the
appointment of a chapter 11 trustee in the Debtor's bankruptcy
proceeding.

On Dec. 15, 2005, the Court denied Bruilbilt's first request to
appoint a chapter 11 trustee in the Debtor's case, without
prejudice.  

As previously reported, Bruilbilt told the Court that the Debtor
owed more than $13.5 million to it on account of an arbitration
award for fraud and breach of contract.  The estate's
representative, Robert A. Coberly, Jr., was the Debtor's co-
managing member when the fraud occurred and is specifically
identified in the arbitration award as one of the persons who
orchestrated the fraud.

At the same time Bruilbilt received its $13.1 million arbitration
award, Mr. Coberly was the subject of a final judgment in an
action brought by the Securities and Exchange Commission charging
him with securities law violations.  Mr. Coberly paid a $40,000
penalty and was enjoined from future violations of the securities
laws.

Bruilbilt gave the Court three reasons in support of its first
request:

   -- Mr. Coberly cannot be trusted to continue managing the
      financial affairs of the Debtor during its bankruptcy given
      the fact that Retired Justice Robert Feinerman of the
      California Court of Appeal found Mr. Coberly to have engaged
      in fraud;

   -- the SEC Final Judgment against Mr. Coberly shows that his
      fraudulent actions and misconduct are probably not limited
      to one instance; and

   -- a state court judge determined that Mr. Coberly had no
      credibility.

Bruilbilt says its renewed request is based on newly discovered
facts to bolster its request for the appointment of a chapter 11
trustee.  

Bruilbilt tells the Court that on Nov. 21, 2004, Mr. Coberly
engaged in self-dealing by signing a release agreement in which he
agreed to personally accept $1 million in exchange for a general
release of all of the Debtor's claims against Curtis D. Somoza, a
former managing director of the Debtor, and EZ/IIS, LLC.  That
release encompasses the Debtor's claim that Mr. Somoza diverted
$5 million for his personal use in 2004.

Bruibilt says Mr. Coberly's signing of a release of the Debtor's
claims against Mr. Somoza and EZ/IIS is a clear indication of the
need of a chapter 11 trustee to administer the Debtor's assets in
order to protect the interest of creditors and other parties.

The Court will convene a hearing at 10:00 a.m., on Feb. 21, 2006,
to consider Bruilbilt's request.

Headquartered in Westlake Village, California, Persistence Capital
LLC, filed a voluntary chapter 11 petition on Sept. 13, 2005
(Bankr. C.D. Calif. Case No. 05-16450).  Lawrence R. Young, Esq.,
in Downey, California, represents the Debtor in its restructuring
proceedings.  When the Debtor filed for protection from its
creditors, it listed $85,000,000 in total assets and $28,602,241
in total debts.


PERSISTENCE CAPITAL: Court Okays David Hahn as Chapter 11 Examiner
------------------------------------------------------------------
Steven Jay Katzman, the U.S. Trustee for Region 2, sought and
obtained authority from the U.S. Bankruptcy Court for the Central
District of California to appoint David Hahn, C.P.A., as the
chapter 11 Examiner in Persistence Capital's chapter 11 case
pursuant to 11 U.S.C. Section 1104(c).  The Court approved
Mr. Hahn's appointment on Jan. 25, 2006.

Mr. Hahn's will investigate and report to the Court about:

   1) the basis and bona fides of the claims shown on the Debtor's
      schedules of assets and liabilities; and

   2) the loss or dissipation, if any, of the Debtor's assets
      relating to the claims shown on the Debtor's schedules of
      assets and liabilities.

Mr. Hahn assures the Court he does not represent any interest
materially adverse to the Debtor, its estate, its creditors and
other parties-in-interest in the Debtor's chapter 11 case.

Headquartered in Westlake Village, California, Persistence Capital
LLC, filed a voluntary chapter 11 petition on Sept. 13, 2005
(Bankr. C.D. Calif. Case No. 05-16450).  Lawrence R. Young, Esq.,
in Downey, California, represents the Debtor in its restructuring
proceedings.  When the Debtor filed for protection from its
creditors, it listed $85,000,000 in total assets and $28,602,241
in total debts.


PLIANT CORP: Wants to Continue Funding Non-Debtor Subsidiaries
--------------------------------------------------------------
Pliant Corporation and its debtor-affiliates seek the U.S.
Bankruptcy Court for the District of Delaware's authorization to
continue to advance funds to these non-debtor foreign
subsidiaries:

   (i) Aspen Industrial, S.A. de C. V., Jacinto Mexico, S.A. de
       C.V., and Pliant de Mexico, S.A. de C.V.; and

  (ii) Pliant Film Products GmbH.

Harold C. Bevis, chief executive officer of Pliant Corporation,
relates that the Debtors will be required to advance to their
Foreign Subsidiaries approximately $2,030,000 over the course of
the next three months.  Of this total, $475,000 is on account of
obligations the Debtors owe their Foreign Subsidiaries for raw
materials purchased on the Debtors' behalf or for customer
receipts collected by the Debtors on their Foreign Subsidiaries'
behalf.

Although the Debtors advanced funds to their Foreign Subsidiaries
in the ordinary course of business before the Petition Date, the
Debtors seek permission from the Court out of an abundance of
caution.

                         Pliant Mexico

Pliant Mexico is comprised of three legal entities that are
direct and indirect subsidiaries of the Debtors.  Pliant Mexico
manufactures films for sale into personal care, shrink bundling
and industrial film applications for customers in Mexico and
other Latin American countries and around the world.  Pliant
Mexico also produces printed products, including printed
rollstock, bags and sheets to package food and consumer goods,
for Mexico and other Latin American countries.  In 2004, about
10% of the sales for Pliant Mexico's printed products film
division was outside the United States, primarily in Mexico and
Latin America.

Based upon their internal financial projections, the Debtors
estimate that they will be required to advance $1,550,000 to
Pliant Mexico over the next three months to ensure that it will
have sufficient financing for its working capital and capital
expenditure needs.  If the Debtors are not permitted to advance
these funds to Pliant Mexico, there is a substantial risk that
the operations of Pliant Mexico would be seriously impaired,
which would disrupt the Debtors' ability to supply Latin America
with certain of their film and printed product needs and
consequently cause harm to the Debtors and their estates.

In addition, in the ordinary course of their businesses, the
Debtors serve as "middle-men" on behalf of Pliant Mexico with
respect to certain of Pliant Mexico's customers.

In particular, certain of Pliant Mexico's customers receive
product directly from Pliant Mexico but are invoiced by and remit
payment to the Debtors.  The Debtors then forward these payments
to Pliant Mexico.  In these instances, the Debtors have no
equitable interest in the funds that flow through the Debtors to
Pliant Mexico and which are essentially held in trust by the
Debtors.

The Debtors estimate that they will be required to forward to
Pliant Mexico $350,000 over the course of the next three months
on account of the Debtors' collections on Pliant Mexico's behalf.

                        Pliant Germany

Pliant Germany is a wholly owned subsidiary of Pliant
Corporation.  Pliant Germany is one of the largest producers of
PVC films in Europe.  Pliant Germany's films are sold to
supermarkets, processors of red meat and poultry and produce
packers.  In addition to these PVC films, Pliant Germany also
produces PVC shrink films and converter films for use in products
like cutterbox and printed film.  On occasion, Pliant Germany
purchases raw materials on behalf of certain of the Debtors, and
the Debtors remit payment to Pliant Germany on account of these
purchases.

The Debtors estimate that they will be required to pay Pliant
Germany $125,000 during the next three months on account of raw
materials purchased by Pliant Germany for the Debtors.

Headquartered in Schaumburg, Illinois, Pliant Corporation --
http://www.pliantcorp.com/-- produces value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets.  The Debtor and 10 of its
affiliates filed for chapter 11 protection on Jan. 3, 2006
(Bankr. D. Del. Lead Case No. 06-10001).  Edmon L. Morton, Esq.,
and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor,
represent the Debtors in their restructuring efforts.  As of
Sept. 30, 2005, the company had $604,275,000 in total assets and
$1,197,438,000 in total debts.  (Pliant Bankruptcy News, Issue
No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000)


PLIANT CORP: Wants Until March 4 to File Schedules & Statements
---------------------------------------------------------------
Pliant Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to extend their
deadline to file schedules of assets and liabilities, schedules of
current income and expenditures, schedules of executory contracts
and unexpired leases, and statements of financial affairs to March
4, 2006, without prejudice to a further request for extension.

Stephen T. Auburn, Pliant Corp.'s vice president and general
counsel, explains that that the Debtors cannot complete the
Schedules and Statements by February 2, 2005, due to the number
of their creditors, the size and complexity of their businesses,
the diversity of their operations and assets, and the limited
staffing available to gather, process and complete the Schedules
and Statements.

Granting the Debtors additional time to bring their books and
records up to date and to collect the data needed to prepare and
file the Schedules and Statements will greatly enhance their
accuracy, Mr. Auburn maintains.

The Debtors are currently in the process of gathering the
information necessary to complete the Schedules and Statements.  
The Debtors believe that the proposed extension will provide them
sufficient time to prepare and file the Schedules and Statements.

Headquartered in Schaumburg, Illinois, Pliant Corporation --
http://www.pliantcorp.com/-- produces value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets.  The Debtor and 10 of its
affiliates filed for chapter 11 protection on Jan. 3, 2006
(Bankr. D. Del. Lead Case No. 06-10001).  Edmon L. Morton, Esq.,
and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor,
represent the Debtors in their restructuring efforts.  As of
Sept. 30, 2005, the company had $604,275,000 in total assets and
$1,197,438,000 in total debts.  (Pliant Bankruptcy News, Issue
No. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000)


PRICE OIL: Bankruptcy Administrator Proposes New Panel Members
--------------------------------------------------------------
Michael A. Fritz, Sr., Esq., attorney for the U.S. Bankruptcy
Administrator for the Middle District of Alabama, asks the U.S.
Bankruptcy Court for the Middle District of Alabama to
reconstitute the Official Committee of Unsecured Creditors
appointed in Price Oil, Inc., and its debtor affiliates'
bankruptcy cases.

The Bankruptcy Court approved the Bankruptcy Administrator's
recommendation for the appointment of a creditors committee on
Jan. 10, 2006.  However, Dan McKenzie of McKenzie Oil Co., Inc.,
has asked to be removed from the committee.

The proposed six-member creditors' committee will be now be
composed of:

    1. Mr. Earl Gilbert
       CITGO Petroleum Corp
       One Warren Place
       Box 3758
       Tulsa, OK 74102
       Phone: (918) 495-4989

    2. Mr. John E. Locker
       Marathon Petroleum Company, LLC
       Norcross, GA 30092
       Phone: (770) 448-7674


    3. Mr. William Kaye
       Representative of Coca-Cola Enterprises, Inc.
       c/o JLL Consultants, Inc.
       31 Rose Lane
       East Rockaway, NY 11518
       Phone: (516) 374-3705

    4. Ms. Cathy Tranum
       Petry
       P.O. Box 68
       Petry, AL 36062
       Phone: (334) 335-6582

    5. Ms. Debra SuDock
       BP Products North America, Inc.
       c/o Kelley Drye & Warren LLP
       101 Park Avenue
       New York, New York 10178
       Phone: (212) 808-7782

    5. Mr. Frank Flegel, Chair
       Phone: (423) 886-5075
       ExxonMobil
       C/O Francis J. Lawall
       Pepper Hamilton LLP
       3000 Two Logan Square
       18th and Arch Streets
       Philadelphia, PA 19103
       Phone: (215) 981-4481

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 Niceville, Florida, Price Oil, Inc., supplies
gasoline fuel to convenience store owners and operators throughout
Alabama and Florida panhandle.  The Debtor also owns, operates and
lease multiple convenience stores.  The Debtor and five of its
affiliates filed for chapter 11 protection on Dec. 22, 2005
(Bankr. M.D. Ala. Case No. 05-34286).  M. Leesa Booth, Esq., at
Bradley, Arant, Rose & White represents the Debtors in their
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed $10 million to $50 million in assets and
debts.


RELIANCE: Liquidator Can't Recover Multi-Mil. Trade Pact Transfers
------------------------------------------------------------------
Pursuant to Section 530 of the Pennsylvania Insurance Department
Act, 40 P.S. 221.30, M. Diane Koken, the Insurance Commissioner
for the Commonwealth of Pennsylvania, initiated actions in the
Commonwealth Court against:

    * Ingram Micro, Inc.,
    * Mitsui and Co. (USA),
    * H.J. Heinz Company,
    * H.J. Heinz Company, L.P.,
    * H.J. Heinz Finance company,
    * Portion Pac, Inc., and
    * Apple Computer, Inc.,

seeking to avoid payments made before the liquidation order, and
seeking to recover funds paid by Reliance Group Holdings, Inc.    
Each Defendant has filed an answer and new matter to the
Liquidator's complaint.  Having consolidated the actions, the
Court on its own motion assigned the cases to a referee for
initial disposition.

However, the parties were not amenable to the appointment of a
referee to oversee the preliminary aspects of their cases.
Subsequently, on January 20, 2005 the Court removed those cases
from the referee and transferred them back to the Commonwealth
Court.

The Liquidator brought the adversary proceeding against each
Defendant seeking to recover alleged preferential transfers made
to the Defendants totaling approximately $5,000,000.

In their joint answers, the Defendants raised various defenses,
including their contention that they are not creditors of the
Reliance Estate, the transfers were not on account of an
antecedent debt, and that the regular course of business defense
is applicable.

                   The Record on Summary Judgment

The record created by the parties is limited to the pleadings and
the documentary evidence.  Reliance made certain prepetition
transfers to each Defendant pursuant to documents titled Trade
Credit Agreement and Certifications and Release Agreements.

1. Ingram

    Reliance issued two trade credit insurance policies to Ingram
    both having a policy period of March 31, 1999 to January 1,
    2001.

    On April 10, and May 8, 2001, Ingram received two separate
    claim settlements made under the trade credit agreements.  In
    total, Ingram Micro received approximately $1,128,913.

2. Mitsui

    Reliance issued a trade credit insurance policy Mitsui with a
    policy period of November 1, 1999 through November 1, 2000.
    On August 28, 2000, Mitsui received $927,576 as claim
    settlement.

3. Heinz

    Heinz admits its involvement in an insurance policy covering
    the period November 24, 1999 to November 24, 2000.  It also
    admitted that on August 4, 2000, Reliance paid to Heinz
    $1,248,838 as claims settlement.

4. Apple

    Reliance issued a trade credit insurance policy to Apple
    Computer dated November 29, 1999.  Apple subsequently received
    $1,639,328 as claim settlement.

The Liquidator asserts that the payments made under the Trade
Credit Agreements represent preferential transfers, and seeks to
avoid them under Section 503(a) of the Act, 40 P.S. 221.30(a) and
recover them for the benefit of the Reliance Estate.  The
Liquidator states that the defendants were creditors with claims
antecedent to the Transfers, and the Transfers represent payments
to satisfy those antecedent debts.

The Defendants respond that the Transfers are not property of the
Reliance Estate because the funds were paid to them as
policyholders and not as creditors of the Reliance Estate.  They
further contend that when the funds were paid, Reliance was not
insolvent.  Finally, the Defendants contend that even if they are
creditors, the funds paid were received in the regular course of
business and are not preferential payments.

Alternatively, the Defendants state that if the Court is not
going to grant summary judgment in their favor, then further
discovery must be permitted because the Liquidator has not
presented sufficient evidence to support a necessary element of
the cause of action.

The underlying issue is whether the pre-liquidation petition
Transfers made by Reliance to each defendant were preferential
transfers, which may be subsequently disallowed and recovered.

Both parties have filed motions for summary judgment agreeing
that there are no material facts in dispute.  Judge Colins agrees
that the facts of record are sufficient for the Court to render a
decision.

                       Court's Decision

In his 15-page Memorandum Opinion and Order, Judge Colins notes
that each Defendant admits to having received funds from Reliance
on the basis of claims submitted to Reliance under insurance
policies.  In addition, each Defendant contends that it received
those funds as an insurance policyholder and that insurance
policyholders are not creditors.

However, Judge Colins points out that the Pennsylvania Insurance
Department Act makes no distinction between creditors and
insurance policyholders.  The Act defines a creditor as a person
having any claim.

Moreover, in Foster v. Health Market, Inc., (Pennsylvania
Commonwealth Court, 1992), the Court has previously ruled that
insurance agents are creditors within the meaning of Section 503
of the Act, and that therefore, their commissions may be
recoverable pursuant to Section 530 of the Act.  Therefore, the
Court concluded that policyholders who have submitted a claim to
an insurance company in liquidation are creditors within the
meaning of Section 503 of the Act.

Judge Colins further notes that the debt arose as of the
effective date of the insurance policy, which in each case is in
1999 -- nearly two years before the rehabilitation order.

According to Judge Colins:

    (1) The Liquidator has not alleged that there was any
        collusion involved in the payment of those claims, nor has
        the Liquidator alleged anything other than the claims were
        paid in the normal course of doing business between the
        insurer and the insured; and

    (2) The Liquidator has not presented a rational basis to
        distinguish between the claims paid, and the other
        hundreds of millions of dollars in claims that were paid
        during the same prepetition period and has failed to
        establish that the claims should properly be considered
        assets of the Reliance Estate.

For these reasons, Judge Colins denies the Liquidator's motion
for summary judgment, because the Liquidator failed to establish
that the Transfers at issue are preference payments, thus, the
Transfers are not property of the Reliance Estate.

Judge Colins grants the Defendants' joint motion for summary
judgment.

Headquartered in New York, New York, Reliance Group Holdings, Inc.
-- http://www.rgh.com/-- is a holding company that owns 100% of    
Reliance Financial Services Corporation. Reliance Financial, in
turn, owns 100% of Reliance Insurance Company. The holding and
intermediate finance companies filed for chapter 11 protection on
June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing
$12,598,054,000 in assets and $12,877,472,000 in debts. The
insurance unit is being liquidated by the Insurance Commissioner
of the Commonwealth of Pennsylvania.  The Court confirmed the
Creditors' Committee's Plan of Reorganization on Jan. 25, 2005.
(Reliance Bankruptcy News, Issue No. 88; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


REVLON INC: Plans to Conduct a $110MM Rights Offering Next Month
----------------------------------------------------------------
Revlon, Inc. (NYSE: REV), intends to conduct, by the end of March
2006, a $110 million rights offering that would allow stockholders
to purchase additional shares of Revlon Class A common stock.

Pursuant to the rights offering, Revlon would distribute at no
charge to each stockholder of record of its Class A and Class B
common stock, as of the close of business on February 13, 2006,
the record date set by Revlon's Board of Directors, transferable
subscription rights that would enable such stockholders to
purchase shares of Class A common stock at a subscription price to
be determined by a committee of Revlon's Board of Directors,
composed solely of independent directors within the meaning of
Section 303A.02 of the NYSE Listed Company Manual and the Board's
Guidelines for Assessing Director Independence.

Pursuant to an over-subscription privilege in the rights offering,
each rights holder that exercises its basic subscription privilege
in full may also subscribe for additional shares at the same
subscription price per share, to the extent that other
stockholders do not exercise their subscription rights in full.  
If an insufficient number of shares is available to fully satisfy
the over-subscription privilege requests, the available shares
will be sold pro-rata among subscription rights holders who
exercised their over-subscription privilege, based on the number
of shares each subscription rights holder subscribed for under the
basic subscription privilege.

MacAndrews & Forbes, Revlon's parent company, which is wholly
owned by Ronald O. Perelman, has agreed to purchase its pro rata
share of the Class A common stock offered in the rights offering
and not to exercise its over-subscription privilege.  However, if
any shares remain following the exercise of the basic subscription
privilege and the over-subscription privilege by other rights
holders, MacAndrews & Forbes will backstop the rights offering by
purchasing any remaining shares of Class A common stock offered
but not purchased by other stockholders.

Revlon currently intends to conduct a further $75 million equity
issuance through an underwritten public offering by June 30, 2006.
MacAndrews & Forbes' backstop obligations under the Investment
Agreement will remain in effect to ensure that Revlon issues an
additional $75 million of equity by June 30, 2006.  MacAndrews &
Forbes also agreed to extend Revlon Consumer Products
Corporation's existing $87.0 million line of credit from
MacAndrews & Forbes until the consummation of further equity
issuance.

The rights offering of approximately $110 million would be
conducted via an existing effective shelf registration statement.  
The proceeds from the rights offering are expected to be used to
redeem approximately $110 million principal amount of RCPC's
8-5/8% Senior Subordinated Notes in satisfaction of the
requirements under RCPC's bank credit agreement.

Revlon Inc. is a worldwide cosmetics, skin care, fragrance, and
personal care products company.  The Company's vision is to
deliver the promise of beauty through creating and developing the
most consumer preferred brands.  Websites featuring current
product and promotional information can be reached at
http://www.revlon.com/and http://www.almay.com/ Corporate and
investor relations information can be accessed at
http://www.revloninc.com/ The Company's brands, which are sold
worldwide, include Revlon(R), Almay(R), Ultima(R), Charlie(R),
Flex(R), and Mitchum(R).

As of September 30, 2005, the Company's equity deficit widened to
$1.17 billion from a $1.02 billion deficit at December 31, 2004.


REVLON INCORPORATED: Expects to Report $1.33 Billion in 2005 Sales
------------------------------------------------------------------
Revlon, Inc. (NYSE: REV) reaffirmed its financial outlook for 2005
and 2006 and announced strategic actions to further build on its
progress and objective to achieve long-term, profitable growth.

For the full year of 2005, the Company indicated that it continues
to expect Adjusted EBITDA to approximate $170 million.  In
addition to reaffirming its outlook for Adjusted EBITDA, the
Company also expects net sales for 2005 to approximate
$1.33 billion, compared with net sales of $1.297 billion in 2004.

The Company also disclosed an organizational realignment largely
involving the consolidation of certain functions within its sales,
marketing and creative groups, as well as certain headquarters
functions.  These changes are designed to streamline internal
processes, enabling the Company to continue to be more effective
and efficient in meeting the needs of its consumers and retail
customers.  The Company indicated that it expects to take a charge
in 2006 of approximately $10 million to cover severance and other
expenses associated with the realignment, with the vast majority
of the charge impacting results in the first quarter of the year.   
Ongoing annual savings associated with the charge are estimated to
be approximately $15 million, most of which is expected to benefit
2006.  The Company indicated that the organizational realignment
does not alter its previous guidance for 2006 of strong growth in
sales and Adjusted EBITDA.

                        Credit Amendment

While not required, the Company intends to seek an amendment to
its bank credit agreement in order to maintain its financial
flexibility throughout 2006.  The amendment would enable the
Company to exclude, from certain financial covenants, charges in
connection with the realignment, as well as some start-up
investment charges incurred by the Company in 2005 related to the
launch of Vital Radiance and the re-launch of Almay.

Commenting on the announcements, Revlon President and Chief
Executive Officer Jack Stahl stated, "We are pleased with our
expected results for 2005 and the significant progress we have
made to both strengthen the business and position it for
accelerated growth.  The realignment . . . will further our
progress by enabling us to capitalize on marketplace opportunities
in an even more effective and efficient manner, while furthering
our objective to achieve long-term, profitable growth."

Revlon Inc. is a worldwide cosmetics, skin care, fragrance, and
personal care products company.  The Company's vision is to
deliver the promise of beauty through creating and developing the
most consumer preferred brands.  Websites featuring current
product and promotional information can be reached at
http://www.revlon.com/and http://www.almay.com/ Corporate and
investor relations information can be accessed at
http://www.revloninc.com/ The Company's brands, which are sold
worldwide, include Revlon(R), Almay(R), Ultima(R), Charlie(R),
Flex(R), and Mitchum(R).

As of September 30, 2005, the Company's equity deficit widened to
$1.17 billion from a $1.02 billion deficit at December 31, 2004.


REXNORD CORP: S&P Puts B+ Corporate Credit Rating on CreditWatch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Rexnord
Corp., including the 'B+' corporate credit rating, on CreditWatch
with developing implications.  At Jan. 1, 2006, the Milwaukee,
Wisconsin-based diversified industrial manufacturer had $797
million of total debt outstanding.
      
"The CreditWatch placement follows a published report that Rexnord
and its equity sponsor, unrated Carlyle Group, are deliberating
about whether to sell the company to a third party or launch an
IPO," said Standard & Poor's credit analyst Joel Levington.
"Developing implications means our ratings could be raised,
lowered, or affirmed.  For example, if an IPO were to occur, or if
the company were sold to a higher rated company, the ratings could
be raised.  Conversely, if the company were sold in a leveraged
transaction, our ratings could be lowered."
     
Standard & Poor's will meet with management to discuss its capital
structure plans and the impact they may have on the company's
liquidity.
     
Rexnord manufactures a broad range of mechanical power
transmission components for the general industrial markets.  
Standard & Poor's calculates that trailing-12-month sales and
EBITDA at Jan. 1, 2006, were $1.0 billion and $181 million,
respectively.


ROCKY MOUNTAIN: S&P Raises Sr. Secured Term Loans' Ratings to B
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Rocky
Mountain Energy Center LLC's and Riverside Energy Center LLC's
senior secured term loans due 2011 to 'B' from 'CCC'.
     
The outlook is negative.  Rocky Mountain Energy Center and
Riverside Energy Center are power generation projects that are
wholly owned indirect subsidiaries of Calpine Corp. (D/--/--).
     
Standard & Poor's also affirmed its '1' recovery rating on each
project's loan and removed the recovery ratings from CreditWatch
with negative implications.  The recovery ratings were placed on
CreditWatch Dec. 21, 2005.
      
"There appears to be a lower likelihood that the projects will be
brought into Calpine's bankruptcy, which allows for the upgrade to
'B'," said Standard & Poor's credit analyst Jeffrey Wolinsky.
     
The negative outlook on Rocky Mountain Energy and Riverside
reflects the linkage between the project debt and their parent,
Calpine.  The possibility exists that the projects could still be
filed into Calpine's bankruptcy at a future date.
     
The recovery ratings were removed from CreditWatch based on the
receipt of updated information from the projects and the
expectation of future timely updates.


SAINT VINCENTS: Wants to Pay Claims Using Government Funds
----------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates ask the U.S. Bankruptcy Court for the Southern
District of New York for authority to pay in full and prior to the
confirmation of any plan of reorganization:

   (a) 366 Prepetition Claims associated with Grant funds
       received; and

   (b) without further Court order, any prepetition claim for
       which the Debtors have not yet received Grant funds, if
       and when a Grant Agency provides the funds to pay that
       claim.

                       Grant Funds

The Debtors regularly apply for, and receive, grants from various
federal and state agencies.  According to Andrew M. Troop, Esq.,
at Weil, Gotshal & Manges LLP, in New York, grant funds are
distributed to the Debtors in one of two ways:

   (1) The "Voucher System"

       Funds are collected and paid to vendors only after a
       reimbursable expense is incurred wherein a vendor supplies
       goods or services to the Debtors.  The Debtors then
       "voucher" the invoice from the vendor by submitting it and
       appropriate documentation to the applicable Grant Agency.

       The Grant Agency subsequently disburses funds to the
       Debtors sufficient to pay the invoice, and the Debtors
       distribute those funds to the vendor as payment for the
       goods or services supplied.

       Most, if not all, of the Grants that uses the Voucher
       System require the Debtors to certify to the Grant Agency
       that the appropriate vendor has actually been paid.

   (2) The "Prepayment System"

       The Debtors submit a budget to the appropriate Grant
       Agency estimating the cost of various goods and services
       that they intend to purchase for a purpose covered by the
       applicable Grant.  After approving the proposed budget,
       the Grant Agency disburses funds to the Debtors to be used
       in accordance with the terms of the Grant.

       The Debtors subsequently incur expenses and expend the
       money "prepaid" to them to pay these expenses.  The
       Debtors then submit the paid invoices and proof of payment
       to the appropriate Grant Agency to certify that the
       prepaid funds were spent in accordance with the applicable
       Grant's terms.

Based on an internal review of their records, the Debtors have
identified $545,686 in unpaid prepetition claims for which they
either have received, or have the right to receive, Grant funds.

Prior to the Petition Date, the Debtors received $308,944 from
Grant Agencies that they have not distributed to the appropriate
vendors as payment for goods or services provided to them
prepetition.

A list of the 292 Unpaid Prepetition Claims associated with the
prepetition Grant funds is available for free at:

  http://bankrupt.com/misc/SVCMC_$308,944prepetition_claims.pdf

Since the Petition Date, the Debtors have received $142,886 from
Grant Agencies related to claims for goods and services supplied
prepetition.

A list of the 74 Unpaid Prepetition Claims associated with the
postpetition Grant funds is available for free at:

http://bankrupt.com/misc/SVCMC_$142,886prepetition_claims.pdf

Mr. Troop relates that there exists $93,856 in unpaid prepetition
claims for which the Debtors have the right to receive payment
under existing Grants, but for which they have not yet received
any Grant monies.

A list of the 46 Unfunded Prepetition Claims is available for
free at:

  http://bankrupt.com/misc/SVCMC_$93,856prepetition_claims.pdf

Mr. Troop tells the Court that none of the Grant funds the
Debtors received either prepetition or postpetition have been
physically segregated from the Debtors' general operating funds.
However, the Debtors have records detailing:

   * the claims for which Grant monies have been received under
     either the "prepay" or "voucher" system;

   * the subset of those claims that have not yet been paid; and

   * the claims for which no Grant monies have yet been received
     by the Debtors.

The Debtors have a strong business justification for paying
prepetition claims for which they have received Grant funds, Mr.
Troop asserts.  "This enables the Debtors to certify to the Grant
Agencies that all Grant funds have been properly used, and will
thus be able to protect their ability to renew current Grants or
receive new grants in the future."

The Grant Agencies may have administrative expense claims against
the Debtors' estates for any Grant funds the Debtors received
postpetition, but have not used to pay the claims for which the
funds were distributed.  Therefore, the Grant funds are not
includable in the Debtors' estates, as they remain the property
of the Grant Agencies unless and until expended in accordance
with the terms of the applicable Grant, Mr. Troop avers.

Allowing the Debtors to pay prepetition claims with the Grant
funds decreases the amount of prepetition claims against the
Debtors' estates without a proportionate decrease in the value of
the estates themselves, Mr. Troop concludes.

                   12 More Claims Identified

The Debtors identified 12 additional prepetition claims totaling
$34,500 for which they have received Grant funds postpetition:

         Invoice Date          Amount      Date Vouchered
         ------------          ------      --------------
         January 20, 2005        $500      April 30, 2005
         January 26, 2005       1,000      April 30, 2005
         February 16, 2005      1,000      April 30, 2005
         February 28, 2005      3,000      April 30, 2005
         March 16, 2005         5,500      April 30, 2005
         April 21, 2005           500      April 30, 2005
         April 26, 2005         1,000      April 30, 2005
         June 13, 2005            500       June 30, 2005
         June 15, 2005          5,500       June 30, 2005
         June 28, 2005          5,000     August 29, 2005
         June 30, 2005         10,000       June 30, 2005
         June 29, 2005          1,000       July 25, 2005

The 12 Prepetition Claims were incurred by St. Vincent's Midtown
Hospital Manhattan, which shares a name with the Debtors.  St.
Vincent's Midtown is not owned or sponsored by the Debtors, and
is not a debtor in the Debtors' Chapter 11 cases, Mr. Troop
states.

The Debtors administer a federal grant, the purpose of which is
to promote bio-terrorism preparedness activities, for both
themselves and St. Vincent's Midtown.  To the extent that St.
Vincent's Midtown incurs expenses related to this grant, the
Debtors voucher these expenses on St. Vincent's Midtown's behalf,
collect the appropriate funds from the agency administering the
grant, and distribute the funds to St. Vincent's Midtown.

According to Mr. Troop, St. Vincent's Midtown incurred the
expenses between January and June 2005, but the Debtors did not
receive grant funds to pay these expenses until August,
September, and October 2005.  Because the Debtors received the
grant funds after the Petition Date, they did not reimburse St.
Vincent's Midtown for these expenses.

Mr. Troop asserts that the 12 Claims should be added to the list
of Unpaid Prepetition Claims associated with the Grant funds
received and should be paid in full and prior to the confirmation
of any plan of reorganization in the Debtors' Chapter 11 cases,
either by way of a payment directly to the holder of those claims
or indirectly through a payment to St. Vincent's Midtown.

The total amount of Prepetition Claims the Debtors are seeking to
be paid is therefore $580,186, Mr. Troop notes.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the     
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts.  (Saint Vincent Bankruptcy
News, Issue No. 20; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


SAINT VINCENTS: Can Use Sun Life's Cash Collateral Until April 2
----------------------------------------------------------------
The Hon. Adlai S. Hardin of the U.S. Bankruptcy Court for the
Southern District of New York extended the termination date for
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates' use of the Sun Life Assurance Company of
Canada, and Sun Life Assurance Company of Canada (U.S.) Cash
Collateral through April 2, 2006.

However, Judge Hardin rules, on each of March 1, 2006, and
April 1, 2006, the Debtors must remit $368,404 interest payments
to Sun Life.

All other terms and conditions of the Sun Life Stipulation will
remain in full force, provided that the Debtors and Sun Life may
with the prior written approval of the Official Committee of
Unsecured Creditors, further extend the Termination Date.  The
extension will be deemed effective without further Court order.

As reported in the Troubled Company Reporter on Sept. 27, 2005,
Saint Vincent Catholic Medical Centers of New York issued $78.3
million in promissory notes to the order of Sun Life Assurance
Company of Canada and Sun Life Assurance Company of Canada (U.S.)
prior to its bankruptcy filing.  The Promissory Notes are secured
by first priority liens to the Debtors' various properties.  On
July 1, 2005, SVCMC defaulted on its obligation to pay Sun Life
$500,214 under the Loan Documents.

                     Reservation of Rights

The Committee and Sun Life have stipulated to further extend the
Reservation of Rights, through and including August 1, 2006, with
respect to:

   (a) the Westchester Notes;

   (b) the Westchester Collateral; and

   (c) any and all claims, challenges, causes of action and
       objections related to the Westchester Notes and
       Collateral.

              Use of CCC Collateral Also Extended

The Debtors and Comprehensive Cancer Corporation of New York
agree to further extend the Debtors' use of CCC's cash
collateral, through and including February 28, 2006.

The parties' Stipulation is without prejudice to CCC's right to
ask the Court to:

   (a) terminate the Debtors' use of CCC's cash collateral for
       cause; and

   (b) compel the Debtors to assume or reject the Services
       Agreement and the ancillary agreements of the Original
       Stipulation.

The parties also agree to modify the Original Stipulation to
reflect that the superpriority administrative claim granted to
CCC as additional adequate protection under Section 507(b) of the
Bankruptcy Code will not attach to or be payable from any
proceeds from causes of action arising under Sections 544, 545,
547, 548, 549, 550, and 724.  The Administrative Claim will be:

   (a) junior to any claim allowed in favor of General Electric
       Capital Corporation under the Court-approved DIP Credit
       Agreement between the Debtors and GE Capital;

   (b) pari passu with any other superpriority administrative
       claim arising under Section 507(b); and

   (c) subject to the Carve-out as that term is defined in the
       DIP Credit Agreement.

Judge Hardin approves the parties' Stipulation in its entirety.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the     
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts.  (Saint Vincent Bankruptcy
News, Issue No. 20; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


SAINT VINCENTS: Wants to Set Up Residence Facility at Port Chester
-----------------------------------------------------------------
Saint Vincent Catholic Medical Centers proposes to establish a
community residence facility at a building located at 18 Spring
Street in Port Chester, New York, to provide a structured,
supervised environment for women with chemical dependencies who
are transitioning to a dependency-free lifestyle.  It will be a
20-bed, transitional residence that will provide 24-hour care to
females who, after a short stay at the facility, will be ready to
resume an independent life outside the Community Residence
Facility.

Andrew M. Troop, Esq., Weil, Gotshal & Manges LLP, in New York,
tells the U.S. Bankruptcy Court of the Southern District of New
York that the New York State Office of Alcoholism and Substance
Abuse Services has committed to cover all of SVCMC's costs of
establishing and operating the Community Residence Facility.

The establishment of the Community Residence Facility requires
SVCMC to enter into three agreements:

(1) The Capital Grant Agreement -- An agreement with OASAS to
    provide the funding of up to $60,000, to renovate the Spring
    Street Property to make it suitable for the Community
    Residence Facility.

    The Capital Grant Agreement was signed by OASAS on July 19,
    2005, approved by the New York State Attorney General on
    August 23, 2005, and approved by the New York State
    Comptroller's Department of Audit and Control on Sept. 15,
    2005.

    The $600,000 limit imposed under the Capital Grant Agreement
    should be more than sufficient to cover all the expenses, Mr.
    Troop asserts.  It is based on a cost estimate performed by
    an architect, and it includes a $72,000 cushion for
    contingencies that may occur during the renovation period.

    OASAS' payment of the funds to SVCMC will be either by
    advance or reimbursement, determined in OASAS' sole
    discretion.

(2) The Operating Grant Agreement  -- An agreement with OASAS to
    provide ongoing funding to cover the operational expenses of
    the Community Health Facility.

(3) A lease with the Church of Our Lady of Mercy for the Spring
    Street Property

    The Spring Street Lease provides for an initial term of 10
    years, with the option for SVCMC to renew the lease for two
    additional five-year terms as long as SVCMC is not in default
    under the Lease.  The monthly rent for the Spring Street
    Property is $4,250 for the first five years and $4,463 for
    the next five years.

    SVCMC has the right to terminate the Spring Street Lease upon
    three month's prior written notice to the Church of Our Lady
    of Mercy if OASAS terminates funding to SVCMC for the
    Community Residence Facility.

Accordingly, the Debtors seek the Court's authority to enter into
the Capital Grant Agreement, the Operating Grant Agreement and
the Spring Street Lease.

Mr. Troop points out that because OASAS provides the funding for
the construction and renovation of the Spring Street Property and
the operation of the Community Residence Facility, SVCMC's estate
will be able to fulfill its charitable mission by providing
necessary and beneficial health services to a critical population
in need without ultimately incurring any significant costs.

Furthermore, the establishment of the Community Residence
Facility may provide incidental economic benefit to the Debtors'
estates, as residents of the Community Residence Facility will
ultimately utilize SVCMC's medical and psychiatric services,
specifically those provided by SVCMC's Westchester hospital.

By establishing the Community Residence Facility, the Debtors
will cement their excellent relationship with OASAS and provide a
much-needed resource to the Westchester community.

In addition, the creation of a new medical program will reaffirm
to the larger New York community that despite their recent
financial troubles, the Debtors remain a vibrant and effective
healthcare system that can be relied upon to provide important
medical services to those in need for years to come, Mr. Troop
says.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the     
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts.  (Saint Vincent Bankruptcy
News, Issue No. 20; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


SECUNDA INT'L: S&P Holds B- Corporate Credit Rating on CreditWatch
------------------------------------------------------------------
Standard & Poor's Ratings Services held its 'B-' long-term
corporate credit and senior secured debt ratings on Nova Scotia-
based Secunda International Ltd., on CreditWatch with positive
implications, where they were placed Sept. 29, 2005.  The
continued CreditWatch listing reflects Secunda's filing of an
amended form F-1 with the SEC and its progression through the
registration process.
     
"The CreditWatch placement reflects the potential for an upgrade
if the IPO is successfully completed and Secunda's aggressive debt
leverage is reduced," said Standard & Poor's credit analyst Jamie
Koutsoukis.  

"The funds from the offering should provide the company with much-
needed liquidity as well the added flexibility from the company's
access to the equity market.  Furthermore, the equity offering
provides Secunda with an ability to expand and improve its fleet
at the present time without any incremental negative effects on
its financial profile," Ms. Koutsoukis added.
     
The extent of any positive rating action will depend on an
analysis of Secunda's planned uses of the proceeds and amount of
debt reduction the company will achieve as a result of the
offering.  Standard & Poor's will resolve the CreditWatch action
after further consultation with Secunda's management and the
successful completion of the IPO.


SP NEWSPRINT: Moody's Affirms B1 Corporate Family & Debt Ratings
----------------------------------------------------------------
Moody's Investors Service affirmed SP Newsprint Company's B1
corporate family rating and the B1 ratings on the company's senior
secured term loans and four-year senior secured revolving credit
facility.  The outlook remains positive.

Although SP experienced a significant increase in energy, ONP,
chemical, and freight costs in 2005, the company generated:

   * EBITDA of approximately $60 million;
   * free cash flow of $17 million; and
   * reduced debt by $17 million.  

As a result, leverage improved slightly to 3.4x and interest
coverage remained relatively flat at approximately 4.4x.  In 2006,
Moody's expects:

   * SP's operating performance will improve as newsprint prices
     will increase from current levels over the near term;

   * energy costs will moderate; and

   * adequate liquidity will be maintained.  

If the company is successful in further reducing debt from current
levels on a sustainable basis while improving its current cost
position, the ratings would likely improve in the next twelve
months.  Specifically, the ratings would improve if the company
generates EBITDA of at least $75 million and maintains balance
sheet debt at $165 million.

Moody's recognizes that SP has mitigated, to a certain degree, its
exposure to ONP pricing through recycling efforts of its SP
Recycling subsidiary and the agreement to purchase unsold
newspapers from its partners.  The company should also continue to
benefit from a recent energy project at its Dublin mill and the
ability to use alternate fuel sources in its operations.  Moody's
considers SP's liquidity adequate and expects that over the next
twelve months the company will be able to fund all cash
requirements from internal sources, while maintaining full access
to its revolving credit facility.  However, with minimal cash
balances and limited sources of alternate liquidity, any
deterioration in anticipated cash flows could raise concerns.

Factors that could negatively impact the ratings or outlook would
be an inability to reduce debt due to stagnant or declining
newsprint prices or further significant increases in costs such as
ONP or energy.  Also, a shift in newsprint strategy within the
industry and the uncertainty of the company's future ownership
structure due to the potential sale of Knight Ridder, Inc. may
negatively impact the rating or outlook.  SP is a partnership
owned equally by:

   * Knight Ridder, Inc.;
   * Cox Enterprises, Inc.; and
   * Media General, Inc.

The ratings incorporate the benefits received from the partners,
which include:

   * purchases of excess inventory to maintain operating rates;

   * raw material supply (unsold newspapers);

   * additional liquidity at certain times; and

   * high volume newsprint purchases (approximately 30% of annual
     sales).

The partners usually provide approximately 40,000 tonnes of
alternate support annually to SP.

Affirmation of the B1 corporate family rating reflects the
improved pricing environment for newsprint over the last several
quarters and lower debt levels.  The ratings also reflect the
company's relatively low cash cost position when compared to
others in the industry.  However, the ratings also incorporate:

   * the company's reliance on a single commodity product,
     newsprint;

   * the cyclical nature of newsprint prices; and

   * the challenges continuing to impact the paper sector such as:

     -- over capacity,
     -- relatively weak demand,
     -- elevated costs for energy and transportation, and
     -- significant competitive pressures.

Moody's also views competitive pressures from the market leaders
with substantially greater resources than SP as significant.
Although the market leaders are impacted by the same industry
fundamentals, in addition to foreign exchange issues, Moody's
believes they have greater flexibility in meeting the challenges
in the marketplace due to the scale of their operations and
greater access to alternate sources of liquidity.

SP Newsprint Company, headquartered in Atlanta Georgia, operates
paper mills that produce recycled newsprint.


STANDARD PACIFIC: Earns $154 Million in Fourth Qtr. Ended Dec. 31
-----------------------------------------------------------------
Standard Pacific Corp. (NYSE: SPF) reported the Company's 2005
fourth quarter and fiscal year operating results.

The Company had a net income of $154 million for the quarter
ending Dec. 31, 2005, compared to a net income of $138 million for
the same period in 2004.

Revenues for the fourth quarter were $1.2 billion, compared to
$1.1 billion revenues for the same period in 2004.

"2005 marks the tenth consecutive year of revenue and earnings
growth for the Company and the most successful year in the
Company's 39-year history," Stephen J. Scarborough, Chairman and
Chief Executive Officer, stated.  "Over this ten-year period our
revenues and earnings per share increased at compound annual rates
of 28% and 53%, respectively."

The Company had a net income of $440 million for the year ended
Dec. 31, 2005, compared to a net income of $315 million for the
same period in 2004.

Revenues for the year ended Dec. 31, 2005, were $3.9 billion,
compared to $3.3 billion revenues for the same period in 2004.

Headquartered in Irvine, California, Standard Pacific Corp. --
http://www.standardpacifichomes.com-- has built homes for more  
than 82,000 families during its 40-year history.  One of the
nation's largest homebuilders, the Company constructs homes within
a wide range of price and size targeting a broad range of
homebuyers.  Standard Pacific operates in some of the strongest
housing markets in the country with operations in major
metropolitan areas in California, Florida, Arizona, the Carolinas,
Texas, Colorado, and Nevada.  The Company provides mortgage
financing and title services to its homebuyers through its
subsidiaries and joint ventures, Family Lending Services, WRT
Financial, Westfield Home Mortgage, Home First Funding, Universal
Land Title of South Florida and SPH Title.  

                          *     *     *

As reported in the Troubled Company Reporter on Oct. 11, 2005,
Fitch Ratings initiates ratings on Standard Pacific Corp.
(NYSE:SPF).  Fitch assigns a 'BB' rating to the senior unsecured
debt.  The rating applies to approximately $1.1 billion in
outstanding senior notes and Standard Pacific's revolving credit
agreement.  A rating of 'B+' has been assigned to the company's
outstanding $150 million senior subordinated notes.  The Issuer
Default Rating is 'BB'.  The Rating Outlook is Positive.

Standand Pacific Corp.'s 9-1/4% Senior Subordinated Notes due 2012
carry Standard & Poor's, Fitch Ratings', and Moody's Investors
Service's single-B ratings.


STRATTON GARDENS: Case Summary & 45 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Stratton Gardens Associates LLC
        One Odell Plaza
        Yonkers, New York 10701

Bankruptcy Case No.: 06-22049

Type of Business: The Debtor is a real estate developer.

Chapter 11 Petition Date: February 6, 2006

Court: Southern District of New York (White Plains)

Debtor's Counsel: Tracy L. Klestadt, Esq.
                  Klestadt & Winters, LLP
                  292 Madison Avenue, 17th Floor
                  New York, New Yokr 10017-6314
                  Tel: (212) 972-3000
                  Fax: (212) 972-2245

Total Assets: $3,475,600

Total Debts:  $4,929,314

Debtor's 45 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
David & Debra Lerner             Loan                  $120,000
2 Meadow Lark Lane
Bedford, NY 10506

Warren Ecker                     Loan                   $80,000
210 Glenwood Road
Del Rey, FL 33445

WW Building Supply                                      $72,676
P.O. Box 299
Route 30
Newfane, VT 05345

SVE Associates                   Engineering            $76,820
P.O. Box 1818                    services
Brattleboro, VT 05302-1818

Metropolitan Life FBO            Loan                   $60,000
Attn: Roger C. Crawford
399 Knollwood Road
White Plains, NY 10603

Peter Blum                       Loan                   $60,000
4 Trapping Way
Pleasantville, NY 10570

Philip Edelstein                 Loan                   $60,000
45 Hirst Road
Briarcliff Manor, NY 10510

Acadia Insurance                 Worker's               $57,615
P.O. Box 1059                    Compensation
Albany, NY 12201-5159
$57,615.46
Attn: Meyers Saxon & Cole
3620 Quentin Road
Brooklyn, NY 11234

Waterworks                                              $54,780
60 Backus Avenue
Danbury, CT 06819

Trevor Lauer                                            $50,000
2196 South Villa Drive
Gibsonia, PA 15044

Joe Marion                                              $49,718
40 Lamplighter Lane
Apartment 1A
South Point of Massapequa
Massapequa, NY 11758

Rabin Panero & Herrick           Legal services         $44,334
44 Church Street, Suite 100
White Plains, NY 10601

Town of Winhall                  Land Taxes             $40,275
P.O. Box 46
Attn: Kathryn Coleman
Bondville, VT 05340

Howard Ecker                     Loan                   $40,000
30 Hidden Glen Road
Scarsdale, NY 10583

Southworth Electric                                     $18,249
P.O. Box 20
West Wardsboro, VT 05360

Stoneman Masonry                                        $18,000
11 Apple Blossom Lane
Grafton, VT 05146

Al Jeffers & Sons                                       $17,794
P.O. Box 124
Townshed, VT 05353

Superior Walls by Joint Lime                            $15,253
301 Nott Street, Building 346
Schenectady, NY 12308

Cocoplum Appliance                                      $14,649
1300 Putney Road
Brattleboro, VT 05301-9063

Washburn Vault                                          $13,781
795 Meadowbrook Road
Brattleboro, VT 05301

NBC Solid Surfaces                                      $10,671
160 Clinton Street
P.O. Box 60
Springfield, VT 05156

Green Mountain Insulation                               $10,250
84 Leroy Road
Williston, VT 05495

Bennington House of Tile                                 $6,482
1267 Harwood Hill Drive
Bennington, VT 05201

The CIT Group/EF                                         $2,887
1540 West Fountainhead Parkway
Tempe, AZ 85285-7248

Portland Glass                                           $2,682
P.O. Box 10700
Portland, ME 04104-0700

Waste Management                                         $2,448
4 Liberty Lane West
Hampton, NH 03842-1729

Ultramar                                                 $2,382
379 Richville Road
Manchester Center, VT 05255-9146

All American Plumbing & Heating                          $1,135
217 Knight Road
Jamacia, VT 05343

Kelly's Outboard World Inc.                              $1,652
639 Route 30
Newfane, VT 05345

Studebaker Worthington Lease                             $1,358
Corporation
100 Jericho Quadrangle
Jericho, NY 11753

Michael Cavanagh                                         $1,201
1381 Old West Road
Arlington, VT 05250

Southern Vermont Signworks                               $1,133
P.O. Box 2096
Manchester Center, VT 05255

Harvest Homes                                            $1,000
185 Railroad Avenue
Delanson, NY 12053

Reich, Reich & Reich, P.C.       Legal services            $900
175 Main Street, Suite 300
White Plains, NY 10601-3257

Foard Panel                                                $828
P.O. Box 185
West Chesterfield, NH 03466

Key Equipment Finance                                      $572
600 Travis, Suite 1300
Houston, TX 77002

Larry Brown                                                $350
50 Smith Haven Lane
South Londonberry, VT 05155

Ryan Smith & Carbine                                       $219
98 Merchants Row
P.O. Box 310
Rutland, VT 05702-0310

Dorr Company                                               $212
209 Riverside Heights
Manchester, VT 05255

Create & Associates                                        $139
4 Leatherman Ct
Armonk, NY 10504

Brown Enterprises                                          $115
50 Smith Haven Lane
S. Londonderry, VT 05155

Central Vermont Appraisers Inc.                            $100
19 Spellman Terrace
Rutland, VT 05701

Central Vermont Public Service                              $58
P.O. Box 827
Rutland, VT 05702

Sigda Lumber Inc.                                           $51
P.O. Box 27
South Londonberry, VT 05155

State of Vermont                 Penalty                Unknown
Agency of Natural Resources      alleged
103 South Main Street, Cannery   environmental
Waterbury, VT 05671              violations


TRUST ADVISORS: Court Extends Claims Bar Date to March 6
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut
extended, until March 6, 2006, the deadline for all creditors owed
money on account of claims arising prior to Sept. 30, 2005,
against the Trust Advisors Stable Value Plus Fund.

The Debtor sought the extension to allow equity holders additional
time to review the information contained in a list of equity
holders, Julie A. Manning, Esq., at Shipman & Goodwin, LLP, in
Hartford, Connecticut, says.

According to Ms. Manning, the List of Equity Holders, listing
about 1,500 pension plans and the value of the holdings of each of
the pension plans, was filed with the Court on Jan. 12, 2006.
If after review, each plan agrees with the amounts in the List of
Equity Holders, the need to file a proof of claim will be
alleviated pursuant to Rule 3003(b)(1) of the Federal Rules of
Bankruptcy Procedure, Ms. Manning relates.

Headquartered in Darien, Connecticut, Trust Advisors Stable Value
Plus Fund filed for chapter 11 protection on Sept. 30, 2005
(Bankr. D. Conn. Case No. 05-51353).  Scott D. Rosen, Esq., at
Cohn Birnbaum & Shea P.C. represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated assets and debts of more than
$100 million.


UAL CORP: Incurs $17 Billion Net Loss in 2005 Fourth Quarter
------------------------------------------------------------
UAL Corporation (OTCBB: UALAQ.OB), the holding company whose
primary subsidiary is United Airlines, reported its fourth quarter
and full year 2005 financial results.

"We have made fundamental, sustainable changes to United's
business and established a solid financial platform," said Glenn
Tilton, United's chairman, CEO and president.  "Moving forward,
our focus is on our customers and continuous improvement in
everything we do to drive increased margins and renew
profitability.  Although operating earnings for both the fourth
quarter and the full year 2005 have improved significantly --
despite an increase in system fuel price of over 40 percent -- we
know we can do better.   We will continue to contain costs, apply
sound revenue management and deliver consistent service to our
customers."

UAL reported a fourth quarter operating loss of $182 million, a
$388 million improvement over the same quarter last year, as
revenue improvement and non-fuel cost reduction more than offset a
$397 million increase in fuel costs for mainline and regional
operations.  The company reported a full-year operating loss of
$219 million, a $635 million improvement year-over-year, driven by
a $1 billion increase in revenue and a $1 billion reduction in
non-fuel costs partially offset by $1.4 billion higher fuel costs
for mainline and regional operations.

UAL reported a fourth quarter net loss of $17 billion, or $145
per basic share, including non-cash reorganization expenses of
$17 billion.   Full-year net loss totaled $21 billion, or $182 per
basic share, including reorganization expenses of $21 billion.  
The company believes the best indicator of United's post-
reorganization financial performance is its net losses excluding
reorganization and special items.  Excluding reorganization and
special items, UAL reported a net loss for the fourth quarter and
full year totaling $297 million and $557 million, respectively.  
This represents a year-over-year improvement of $333 million and
$729 million for the fourth quarter and full year, respectively.

The $17 billion of reorganization items recorded in the fourth
quarter represent mostly unsecured claims allowed during the
bankruptcy process.  These claims, along with similar unsecured
claims that the company has recognized in prior periods of the
reorganization, are expected to be settled when the company exits
bankruptcy for a minor fraction of the amount of the claims
recorded.  As a result, the company expects to report a
substantial gain at exit in early 2006.  It is important to note
that these items are not expected to have a significant impact on
the company's cash position.

      United Prepared to Exit Bankruptcy in Early February

On January 20, 2006, the Bankruptcy Court confirmed United's Plan
of Reorganization, and the company is prepared to exit on the
effective date of the plan, in early February 2006.  Over the last
three years, United has methodically worked its way through a
difficult and multifaceted restructuring, compounded by an
unprecedented confluence of external challenges and fundamental
changes taking place in the airline industry, with its
unparalleled worldwide network, valuable brand and other assets
intact.  The company has made sustainable improvements in its
cost structure, revenue management and operations.  United has
successfully:

   * Achieved significant cost reductions that are expected to
     result in $7 billion of average annual cost savings by 2010;

   * Resized and redeployed the fleet to better meet market
     demand and increase operational flexibility;

   * Enhanced products and services with the launch of TedSM,
     p.s.SM, and explusSM;

   * Improved operational performance across the board;

   * Outperformed the industry in revenue improvement;

   * Secured $3 billion in all-debt exit financing;

   * Received solid credit ratings for our business and financing
     facility from both Moody's and Standard & Poor's that are
     better than the ratings of our network peers; and

   * Upon exit, will emerge with a stronger balance sheet after
     eliminating $13 billion of debt and pension obligations.

"In every year of our restructuring, United has steadily improved
operating earnings.  Our cost per available seat mile (CASM) is
now competitive, and revenue continues to outpace the industry
average," said Jake Brace, United's executive vice president and
chief financial officer.  "The recent over-subscription by our
lenders of United's exit financing facility demonstrates the
market's confidence that United now has the financial and
operating flexibility to meet the shifting challenges in our
industry, including current high fuel prices."

                         Revenue Results

During the quarter, mainline passenger unit revenue (PRASM)
increased 12 percent and yield increased 8 percent, compared to
the fourth quarter of last year.  United's PRASM performance
outperformed the industry average improvement by 1 point.  System
load factor increased 3 points to 80 percent over the same
period.  Results for the fourth quarter of 2005 reflect
essentially flat traffic on a 4 percent reduction in system
capacity compared with the same period last year.  United expects
its system length-of-haul adjusted passenger unit revenue to be
among the best in the industry.  The company continues to see
fares increasing industry-wide.  United is benefiting from the
early decision to move aircraft capacity to more profitable
international routes, and is also benefiting from capacity
reductions by the company's U.S. competitors in domestic and
Asian markets, especially Japan.  Total revenue for the fourth
quarter and full year improved 10 percent and 6 percent,
respectively.

United's strategy of market segmentation is intended to maximize
margins from high-yield business travelers and to control costs
while offering more price-sensitive leisure travelers the right
service at the right price.  The company is committed to enhancing
the customer experience with such industry-leading products as
United Economy PlusSM service, explus premium service on 70-seat
regional jets for United Express(R), and United's  p.s., premium
transcontinental service between New York and Los Angeles or San
Francisco.  At the same time, United's low fare leisure product
Ted has been expanded in 2005 from 47 to 56 aircraft serving 20
airports with over 240 daily departures from all United hubs and
is a valuable addition to United's portfolio of products.  United
also continues to transform and optimize all areas of revenue
execution, including its business-to-business sales efforts,
loyalty programs, revenue management and all areas of network
optimization.

"We are offering United's customers the wide range of choices
in products and services they demand in today's market, at
prices they are willing to pay.  Both Ted and p.s. are showing
double-digit margin improvements," said John Tague, executive vice
president - marketing, sales and revenue.  "United will continue
to be competitive on price and we are expanding our efforts to
better merchandise our services to generate additional revenue.  
For example, Economy Plus is successfully generating upsell
revenue after the initial ticket purchase.  Our corporate sales
force has been revamped and, armed with United's differentiated
premium product offerings, is booking good account wins for
higher-yield business travel."

                        Operating Expenses

During the fourth quarter, mainline operating expense per
available seat mile increased by 4 percent from the year-ago
quarter largely driven by a 4 percent decrease in capacity and a
44 percent increase in mainline fuel price. Excluding fuel and
special items, mainline operating expenses per available seat
mile decreased 7 percent.

Mainline fuel expense was $324 million higher than in the fourth
quarter 2004.  Fuel expense is the company's single largest
expense item, surpassing salaries and related expenses.  Average
mainline fuel price for the quarter was $2.09 per gallon
(including taxes). Salaries and related costs were down 27
percent, or $337 million, primarily reflecting labor and benefit
cost reductions, including an 8 percent reduction in manpower.  
Total operating expenses for the quarter and full year were flat
and up 2 percent, respectively.

The company had an effective tax rate of zero for all periods
presented, which makes UAL's pre-tax loss the same as its net
loss.

                             Cash

The company ended the quarter with an unrestricted cash balance of
$1.8 billion, and a restricted cash balance of $957 million, for a
total cash balance of $2.7 billion.  The unrestricted cash balance
increased by $49 million during the quarter.

                          Operations

In the most recent data available from the U.S. Department of
Transportation, United was ranked number 1 for the last 12 months
in on-time arrival performance and ranked second in the least
mishandled baggage among the six major network carriers.  In
addition, employee productivity (available seat miles divided by
employee equivalents) was up 4 percent for the quarter compared to
the same period in 2004.

During the fourth quarter, reallocation of aircraft capacity to
international markets and further optimization of United's
domestic schedule contributed to an increase in mainline fleet
utilization of 3 percent compared to the same period last year.  
As a result, year-over-year the company reduced the number of
aircraft in its mainline fleet by 7 percent, while reducing system
available seat miles by only 4 percent.

In 2005, the company depeaked its hub in Los Angeles through
optimization of the schedule.  This initiative reduced costs and
increased efficiency, and, by allowing us to eliminate the remote
United Express terminal, it also improved the customer experience.  
In 2006, the company will continue resource optimization and
depeaking throughout the United system, beginning with San
Francisco in the first quarter.  The company plans to eliminate
the remote United Express facility in San Francisco as well.

"We will continue to find and implement ways to increase the
efficient and effective deployment and utilization of United's
core assets," said Pete McDonald, United's chief operating
officer.  "United employees are engaged in systemwide resource
optimization projects that we expect will free up at least 10
aircraft in 2006.  We will concentrate on further improving
productivity, reliability and cost reduction, while maintaining
our focus on delivering consistent service."

                          Outlook

United expects system mainline capacity to be up approximately
1 percent year-over-year for the first quarter, driven by improved
aircraft utilization through the company's resource optimization
effort.

The company expects mainline fuel price for the first quarter to
average $1.92 per gallon, and for the full-year to average
$1.81 per gallon (including taxes).  Currently the company has no
hedges in place for 2006.  For the full-year 2006, the company
anticipates fuel expense for mainline and the company's regional
affiliates' operations will increase by approximately $885 million
over its previous assumption, which was based on a mainline fuel
price of $1.48 per gallon (including taxes).  The company expects
to be able to offset some, but not all, of this increase through
higher revenues.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.  Judge Wedoff confirmed
the Debtors' Second Amended Plan on Jan. 20, 2006. The Company
emerged from bankruptcy protection on February 1, 2006.  (United
Airlines Bankruptcy News, Issue No. 116; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


URBAN HOTELS: Plans to Sell All Assets to Seemyun Kymm for $23MM
----------------------------------------------------------------
Urban Hotels Inc. asks the U.S. Bankruptcy Court for the Central
District of California, Los Angeles Division, for authority to
sell substantially all of Lax Plaza Hotel's assets free and clear
of liens and encumbrances to Seemyun Kymm for $23 million, subject
to higher and better offers.

The purchase price includes:

   -- $21 million for the Lax Plaza Hotel's assets; and

   -- $2 million in consideration of a consulting and non-
      competition agreement.

The sale will include Seemyun Kymm's assumption of certain
personal property leases.  The total payments owed on those leases
is $1 million.

                         Use of Proceeds

The sale proceeds are sufficient to pay all creditors and any
taxes which may be payable due to the sale.   The Company will pay
a $230,000 broker's commission to The Real Estate Group.

                   Liens Against Hotel Assets

The Company owes $700,000 in taxes, for which the taxing
authorities hold statutory liens.

The Company owes First Credit Bank, the first deed of trust
holder, an undisputed amount of $9.5 million.  The Company is
willing to pay First Credit Bank $9.8 million, which includes
interest at the non-default rate.  First Credit Bank has told the
Debtor it plans to press for payment of interest at the default
rate.  

The Company owes AN Capital, the second priority deed of trust
holder, an undisputed amount of $3.5 million.  The Company and AN
Capital are still at odds over the total debts to be paid.  The
Company will reserve $3.8 million for full payment of AN Capital's
claim.  

The Company and Specialty Finance dispute whether their agreement
covering a significant portion of personal property assets located
at the hotel and used in the hotel operations is a lease or a
financing agreement.  The Debtor owes Specialty Finance $2 million
if it is determined that the transaction was a property perfected
secured sale.  If the transaction is a true lease, it will be
assumed by Seemyun Kymm.

The Company believes no more than $2 million is owed to other
creditors.  Creditors have until March 1, 2006, to file proofs of
claim.

Headquartered in Culver City, California, Urban Hotels Inc.,
operates Lax Plaza Hotel.  The Company filed for chapter 11
protection on Nov. 29, 2005 (Bankr. C.D. Calif. Case No.
05-50140), to stop a foreclosure sale by AN Capital, Inc.  
M. Jonathan Hayes, Esq., of Woodland Hills, California, represents
the Debtor in its restructuring efforts.  When the Debtor filed
for protection from its creditors, it listed $23,000,000 in assets
and $20,000,000 in debts.


URBAN HOTELS: Wants Bids for Hotel Assets in by February 20
-----------------------------------------------------------
Urban Hotels Inc., asks the U.S. Bankruptcy Court for the Central
District of California, Los Angeles Division, to approve uniform
bidding procedures for soliciting, accepting and selecting the
highest and best bid for the purchase of Lax Plaza Hotel's assets.  

Seemyun Kymm has offered to buy the assets for $23 million, and
assume certain personal property leases.  

The Company wants any interested bidder to:

   -- send its initial bid;

   -- provide a $500,000 cashier's check as a deposit; and

   -- prove its ability to close and pay in full its bid price;  

on or before February 20, 2006.  

The initial overbid must be at least $300,000 more than the
purchase price.  Bidding among competing bidders will continue in
$100,000 increments.

The Company will pay a $100,000 breakup fee to Seemyun Kymm if
another bidder wins the auction.

Headquartered in Culver City, California, Urban Hotels Inc.,
operates Lax Plaza Hotel.  The Company filed for chapter 11
protection on Nov. 29, 2005 (Bankr. C.D. Calif. Case No.
05-50140), to stop a foreclosure sale by AN Capital, Inc.  
M. Jonathan Hayes, Esq., of Woodland Hills, California, represents
the Debtor in its restructuring efforts.  When the Debtor filed
for protection from its creditors, it listed $23,000,000 in assets
and $20,000,000 in debts.


U.S. CONCRETE: Looks to Raise $78,750,000 from Stock Sale
---------------------------------------------------------
U.S. Concrete Inc. plans to sell 7 million shares of its common
stock.  At $11.25 per share offering price, the Company expects to
generate $78.75 million of gross proceeds from the offering.  The
Company will grant underwriters discounts at $0.661 per share or
$4.627 million for the total offering.  The Company then expects
to generate $74.123 million of proceeds before expenses.

The Company has also granted the underwriters an option to
purchase up to 1.05 million additional shares of common stock to
cover over-allotments.

Citigroup is the sole book-runner for the offer.  The underwriters
include:

   * BB&T Capital Markets,
   * Sanders Morris Harris, and
   * Davenport & Company LLC.

The Company plans to use those net proceeds to fund future
acquisitions and for general corporate purposes.  The Company
currently expects to use substantially all the net proceeds of
this offering within the next 12 months to complete acquisitions,
based on the existing market for acquisition candidates.

The Company's common stock is quoted on the Nasdaq National Market
under the symbol "RMIX."  The Company's common shares traded
between $9.42 and $12.12 last month.  This month, the common
shares price hovered above $12 per share.

A full-text copy of the Prospectus is available for free at
http://ResearchArchives.com/t/s?507

U.S. Concrete Inc. -- http://www.us-concrete.com/-- provides
ready-mixed concrete and related concrete products and services to
the construction industry in several major markets in the United
States.

                         *     *     *

As reported in the Troubled Company Reporter on Feb. 24, 2005,
Standard & Poor's Ratings Services revised its outlook on U.S.
Concrete, Inc., to stable from positive, and affirmed its 'B+'
corporate credit and 'B-' subordinated debt ratings.


USG CORP: Intends to File Plan of Reorganization This Month
-----------------------------------------------------------
USG Corporation and its debtor-affiliates anticipate filing a plan
of reorganization and accompanying disclosure statement this
month, incorporating the terms of the agreement they reached with
the Official Committee of Asbestos Personal Injury Claimants and
the legal representative for future asbestos claimants.

The Asbestos Agreement resolves all present and future asbestos-
related personal injury claims, enabling the Debtors to take a
significant step toward emerging from bankruptcy.

                     Recovery Under the Plan

The Debtors intend to repay claims of USG Corp.'s unsecured
creditors, including banks, bondholders and trade creditors, in
full, in cash, including contract interest.

The proposed Plan will group claims against and equity interests
in the Debtors into 13 classes:

       Class        Description of Claims
       -----        ---------------------
        N/A         Administrative Claims

        N/A         DIP Letter of Credit Facility Claims

        N/A         Priority Tax Claims

         1          Unsecured Priority Claims

         2          Secured Claims

         3          Credit Facility Claims against USG

         4          Senior Note Claims against USG

         5          Industrial Revenge Bond Claims against USG
                       and United States Gypsum Company

         6          General Unsecured Claims

         7          Asbestos Personal Injury Claims

         8          Asbestos Property Damage Claims

         9          Environmental Claims

        10          Insured Claims

        11          Intercompany Claims

        12          Stock Interests of Subsidiary Debtors

        13          Stock Interests of USG

Each holder of Asbestos Property Damage Claims, at the election
of an applicable Debtor, will (i) receive cash equal to the
allowed amount of that claim, or (ii) have its claim reinstated.

Allowed Insured Claims will be paid in full as soon as
practicable by the applicable insurer.

Environmental Claims, Intercompany Claims, and Stock Interests of
Subsidiary Debtors and of USG will be reinstated on the Effective
Date.

                    Over $6-Bil. Cash Payments

The Plan potentially provides around $6,000,000,000 of cash
payments to creditors, including payments in excess of
$2,500,000,000 around the Effective Date.  Close to $900,000,000
will be paid to a trust that will assume all of the Debtors'
current and future asbestos-related PI liabilities.  The
remainder will be used to make principal and postpetition
interest payments to the Debtors' general unsecured, non-asbestos
creditors -- as well as any payments that may be made to holders
of asbestos property damage claims.

Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A.,
in Wilmington, Delaware, notes that should Asbestos Legislation
not be enacted and made law by the Expiration Date, the Debtors
will be required to make additional cash payments into the PI
Trust for $3.05 billion over six months, under the Asbestos
Agreement.

As of December 31, 2005, the Debtors had a cash balance of
approximately $1.5 billion.  As a result, they will require in
excess of $1 billion of additional cash to make payments under
the Plan should the Asbestos Legislation be enacted and made law
by the Expiration Date and survive constitutional challenge.

The Debtors' earnings capacity, which has steadily increased
during the Debtors' Chapter 11 cases, will support the raising of
those required funds through a combination of debt and equity
financing.  The proceeds of that debt and equity financing will
also be supplemented by tax refunds the Debtors expect to receive
as a result of payments made to the PI Trust.

A full-text copy of the proposed restructuring term sheet
generally describing the Plan is available for free at
http://ResearchArchives.com/t/s?503

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading   
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.  The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.
01-02094).  David G. Heiman, Esq., and Paul E. Harner, Esq., at
Jones Day represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG
Bankruptcy News, Issue No. 102; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


VEKOMA INT'L: Chapter 15 Petition Summary
-----------------------------------------
Petitioner: Mr. Philip Willem Schruers, Trustee
            BoelsZanders Advocaten
            P.O. Box 490
            5900 AL Venlo
            The Netherlands
            Foreign Representative

Debtors: Vekoma International B.V.
         c/o Mr. Philip Willem Schruers, Trustee
         BoelsZanders Advocaten
         P.O. Box 490
         5900 AL Venlo
         The Netherlands

         Vekoma Manufacturing B.V.
         c/o Mr. Philip Willem Schruers, Trustee
         BoelsZanders Advocaten
         P.O. Box 490
         5900 AL Venlo
         The Netherlands

         Constructiebedrijf Gebroeders Muurmans B.V.
         c/o Mr. Philip Willem Schruers, Trustee
         BoelsZanders Advocaten
         P.O. Box 490
         5900 AL Venlo
         The Netherlands

         Transquest B.V.
         fka MUVO B.V.
         c/o Mr. Philip Willem Schruers, Trustee
         BoelsZanders Advocaten
         P.O. Box 490
         5900 AL Venlo
         The Netherlands

         Muurmans Beheer BV
         c/o Mr. Philip Willem Schruers, Trustee
         BoelsZanders Advocaten
         P.O. Box 490
         5900 AL Venlo
         The Netherlands

         Vekoma Onroerend Goed B.V.
         c/o Mr. Philip Willem Schruers, Trustee
         BoelsZanders Advocaten
         P.O. Box 490
         5900 AL Venlo
         The Netherlands

         Vekoma Technology B.V.
         c/o Mr. Philip Willem Schruers, Trustee
         BoelsZanders Advocaten
         P.O. Box 490
         5900 AL Venlo
         The Netherlands

Case No.: 06-50151

Type of Business: The Debtors design and manufacture roller
                  coasters, high thrill rides, and family
                  rides.  Vekoma's flagship products include
                  Boomerang, Invertigo, Suspended Looping
                  Coaster, and Junior Coaster.
                  See http://www.vekoma.com/

                  Vekoma previously filed for bankruptcy on
                  Aug. 24, 2001, at the District Court of
                  Roermond, The Netherlands (Lig. No.
                  01-119 F).

Chapter 15 Petition Date: February 3, 2006

Court: Western District of Texas (San Antonio)

Judge: Leif M. Clark

Petitioner's Counsel: D. Ronald Reneker, Esq.
                      Craddock Reneker & Davis, LLP
                      3100 Monticello Avenue, Suite 550
                      Dallas, Texas 75205
                      Tel: (214) 750-3550

Estimated Assets: $50,000 to $100,000

Estimated Debts:  $10 Million to $50 Million


WADDINGTON NORTH: Refinancing Cues Moody's Ratings' Withdrawal
--------------------------------------------------------------
Moody's withdrew ratings on Waddington North America, Inc.,
because the senior secured credit facility that Moody's had rated
was refinanced on Dec. 30, 2005.  Moody's does not rate the new
facility.

These ratings were withdrawn:

   * B3 rating on the senior secured credit facility maturing
     in 2009 - 2011

   * B3 corporate family rating

Headquartered in Covington, Kentucky, Waddington North America,
Inc. services:

   * quick service restaurants,
   * supermarket deli and mass merchandisers,
   * club and cash-n-carry stores, and
   * food service distributors

with injection molded and thermoformed disposable plastic products
such as:

   * plates,
   * cups,
   * trays,
   * cutlery, and
   * customized packaging products.

The company's stock is held by an investor group consisting of
Code Hennessy & Simmons, LLC and its partners.  Annual revenue is
roughly $180 million.


WESTPOINT STEVENS: Aretex Balks at Dist. Ct. Order Implementation
-----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Jan. 10, 2006, Contrarian Funds, LLC, Satellite Senior Income
Fund, LLC, CP Capital Investments, LLC, Wayland Distressed
Opportunities Fund I-B, LLC, and Wayland Distressed Opportunities
Fund I-C, LLC, as members of the Steering Committee, asked Judge
Robert Drain of the U.S. Bankruptcy Court for the District of U.S.
Bankruptcy Court for the Southern District of New York to
implement an order issued by the United States District Court for
the Southern District of New York on Nov. 16, 2005, as amended on
December 7, 2005.

Aretex, LLC, WestPoint International, Inc. and WestPoint Home,
Inc., argue that the Steering Committee's request is premature,
inconsistent with the District Court's Opinion and Amended Order,
and in violation of the transaction documents.

Aretex and the Purchasers ask the Court to discontinue any
proceedings on remand until there is an effective Order from the
District Court.

Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal, LLP, in
New York, relates that the District Court stayed its own Amended
Order stating that it would not be effective until the District
Court ruled upon any objection, thus, it is improper for the
Steering Committee to ask the Court to act prematurely, ignoring
the proceedings that are still going forward in the District
Court.

Mr. Wolfson contends that instead of seeking to implement the
District Court's Opinion and Order, the Steering Committee asks
the Court to pave the way for a new auction for the sale of
control of the Purchasers, which is not only contrary to the
Opinion and Amended Order, but also to the Asset Purchase
Agreement, related documents, and aspects of the Sale Order and
prior proceedings that were left undisturbed on the appeal to the
District Court.

In addition, Mr. Wolfson points out that the Steering Committee's
request would impose on WestPoint International obligations to
register equity securities in the form of common stock that are
inconsistent with what has been agreed in the Registration Rights
Agreement between WestPoint International, the First Lien Lenders,
and several Second Lien Lenders.

Mr. Wolfson discloses that neither the Estate nor Beal Bank,
S.S.B., is a party to the Registration Rights Agreement and
neither has any rights to have securities registered in its name
as provided in the Asset Purchase Agreement and Subscription
Agreement.  Even if there were any basis for the Steering
Committee's assertion, neither would have any right to register
any of the Securities, Mr. Wolfson notes.

Mr. Wolfson says that unless the Securities are registered
pursuant to an effective Registration Statement, the Subscription
Rights would be neither exercisable nor transferable.  If they
cannot be transferred or exercised, Mr. Wolfson adds, the
Subscription Rights become worthless and the relief sought by the
Steering Committee cannot be implemented.

Both the Bankruptcy Court and the District Court recognized that
the Purchasers have already paid a premium for control, and that
further proceedings may not be used to undo that result.

Mr. Wolfson emphasizes that the apparent reason the Steering
Committee wants registration at this time is that the Securities
distributed to the Objecting First Lien Lenders, together with the
Escrowed Subscription Rights, amount to 56% of the common stock of
WestPoint International, and thus, if sold as a block, constitute
sale of control.

Mr. Wolfson represents that, instead of proceeding in the improper
manner proposed by the Steering Committee, Aretex and the
Purchasers suggest that, in order to preserve their rights to
appellate review, the Court delay any action to implement the
District Court's decision until all appeals from the decision have
been determined.  At that time, if the Opinion and Order of the
District Court still stands, it should be implemented in a manner
that preserves the pro rata share of Securities while
accomplishing the mandate to pay the Objecting First Lien Lenders
in cash.  A staggered sale of the Securities would best accomplish
both goals, Mr. Wolfson says.

Aretex and the Purchasers further suggest that the staggered sale
be accomplished in the manner that:

    (1) A sale of the Securities distributed to the Objecting
        First Lien Lenders at the Closing should occur, including
        both Common Stock and Subscription Rights.

        The Securities have already been distributed to each of
        the Objecting First Lien Lenders and the District Court
        made clear that the distribution was not altered by the
        District Court's Opinion.  Title to the Objecting First
        Lien Lenders' Securities remains with each Objecting First
        Lien Lender.

        The proceeds should satisfy the claims of the Objecting
        First Lien Lenders.

    (2) If the Court determines that the sale of the Objecting
        First Lien Lenders' Securities was conducted as
        contemplated, but failed to yield sufficient proceeds to
        pay the Objecting First Lien Lenders in full, then this
        Court should proceed with the sale of the remaining
        Excluded Assets.

        Mr. Wolfson notes that it makes sense to liquidate and
        distribute the Excluded Assets Protection Escrow which is
        not sale proceeds and promptly deliver to the Second Lien
        Lenders, including Aretex, before selling the Escrowed
        Subscription Rights.  If the proceeds of the Excluded
        Assets, when added to the proceeds of the sale of the
        Objecting First Lien Lenders' Securities, are sufficient
        to pay the Objecting First Lien Lenders in full, there
        will be no need to sell the Escrowed Subscription Rights.

    (3) If the two sales still yield insufficient proceeds, and
        if still necessary after Aretex and the Purchasers' appeal
        of the District Court Order, the Court could then direct
        the sale of the Escrowed Subscription Rights.

The District Court has given the Bankruptcy Court jurisdiction to
fashion a remedy consistent with the District Court's Opinion and
Amended Order.  To ensure that the sale process is properly
executed, Mr. Wolfson says, the Bankruptcy Court should enjoin the
Objecting First Lien Lenders from taking any steps to foreclose
any lien or other interest in any Securities except as authorized
by the Bankruptcy Court.

Aretex and the Purchasers agree with the other Second Lien
Lenders that the District Court's Opinion had nothing to do with
the Adequate Protection Escrow Account, and there is no occasion
for the Court to revisit any relating issues.

Furthermore, Mr. Wolfson argues that it is incorrect and
disingenuous for the Steering Committee to argue that the Court's
ruling denying the Steering Committee's request to change the
Court's earlier determinations of value at the Reallocation
Hearing are now moot.  The determinations of value, from which the
Steering Committee did not appeal, are unrelated to the issues on
appeal or the District Court's decision.  According to Mr.
Wolfson, the Bankruptcy Court should decide in accordance with the
determinations made at the Reallocation Hearing, which are not
moot.

Moreover, Mr. Wolfson continues, the Steering Committee asks the
Court to create a procedural knot by lifting the stay of the
Steering Committee's adversary proceeding against Aretex, so that
the proceeding would proceed simultaneously with the remand
proceedings, which makes no sense.  Until the appeal is fully
resolved, Mr. Wolfson emphasizes, the proceeding should remain
stayed as the Steering Committee originally requested.

                    District Court Proceedings

(1) Motion for Clarification

Aretex LLC, WestPoint International, Inc., and WestPoint Home,
Inc., disagree with a number of the rulings contained in the
Court's November 16, 2005 Opinion.

Aretex and the Purchasers seek to reconcile the Court's Nov. 16,
2005 Order, in its final form, with the Nov. 16 Opinion.

Specifically, Aretex and the Purchasers ask that the amendment
directed in the December 7 be further amended and clarified.

Aretex and the Purchasers point out that the Nov. 16 Opinion made
clear that "the sale itself and the direct distribution of the
[Securities] to the consenting First Lien Lenders (i.e., Aretex
and its affiliates)" were not to be disturbed.  Rather, based on
the objecting First Lien Lenders' representation that they would
voluntarily give up for sale the Securities distributed directly
to them at the Closing, the Court noted that it might be possible
to satisfy their claims with cash by selling three things "[i]
those Securities, [ii] the Securities held in escrow pursuant to
the Sale Order, [iii] and/or undistributed Excluded Assets (a term
defined in the Sale Order)."

However, as the amended Nov. 16 Order now reads, the objecting
First Lien Lenders may assert liens against not only (i) the
Securities which they received directly at the Closing in their
capacity as First Lien Lenders, (ii) the Subscription Rights being
held in escrow and/or (iii) the undistributed Excluded Assets, but
also (iv) the Securities that were distributed at the Closing
directly to Aretex in its capacity as a First Lien Lender.  "This
last category was not part of the 11/16 Opinion," Aretex and the
Purchasers note.

Thus, to better reflect the intentions expressed in the District
Court's Nov. 16 Opinion, Aretex and the Purchasers believe the
amended Nov. 16 Order should be clarified.

District Court Judge Laura Taylor Swain denies Aretex and the
Purchasers' request for clarification and overrules their
objection to the December 7 Order.  Judge Swain rules that the
amended order reflects accurately the District Court's
determinations with respect to the appeal.

(2) Motion for Interlocutory Appeal

Aretex and the Purchasers contend that District Court's Nov. 16
Order threatens to divest Icahn affiliates of the control for
which they bid, bargained, and paid a substantial price (including
a control premium), and goes so far as to provide that the liens
of the Objecting First Lien Lenders attach to Securities
consisting of:

    (a) Parent Shares purchased by Textile Holding LLC from
        Purchasers pursuant to the Equity Commitment Agreement
        (17.5% of the Parent Shares for $187 million) which were
        not part of the consideration paid by Purchasers to the
        Debtor, and

    (b) Parent Shares that American Real Estate Holding Limited
        Partnership, through a direct or indirect subsidiary, is
        obligated to purchase from Purchasers at the Exercise
        Price with respect to Subscription Rights not exercised by
        any First or Second Lien Lender by the Expiration Date.

Additionally, Aretex and the Purchasers continue, the Order
deprives Aretex of its absolute right to a pro rata share of
whatever is distributed to First Lien Lenders, and could be argued
to subordinate Aretex's allowed First Lien claims to the claims of
the Objecting First Lien Lenders by providing that the liens of
the Objecting First Lien Lenders attach to the Securities (Parent
Shares and Subscription Rights) distributed to Aretex in its
capacity as a First Lien Lender.

According to Aretex and the Purchasers, the Order involves
controlling questions of law over which there are substantial
grounds for differences of opinion, including the scope of the
District Court's jurisdiction.  Aretex and the Purchasers point
out that important aspects of the decision and Order are rendered
without citation of authority.  "A decision of the correctness of
the Order by the Second Circuit at this time would save
significant judicial resources, and might render additional
litigation unnecessary -- considerations which compel a
certification of the Order for interlocutory appeal."

In addition, Aretex and the Purchasers say, the District Court's
decision and order creates uncertainty as to whether control of
the Purchasers may change.

Therefore, Aretex and the Purchasers seek to have the Second
Circuit rule on the issues presented by the District Court's
decision and Order before engaging in what could be protracted
litigation of issues remanded to the Bankruptcy Court.
Specifically, Aretex and the Purchasers ask the District Court to
certify the decision and Order for interlocutory appeal pursuant
to 28 U.S.C. Section 1292(b).

On the other hand, the Steering Committee argues that Aretex and
the Purchasers have not satisfied the requirements imposed by
Section 1292(b).  The Steering Committee points out that:

    (1) Aretex and the Purchasers have not identified any
        controlling question of law;

    (2) No question of law identified by Aretex and the Purchasers
        presents a substantial ground for difference of opinion;
        and

    (3) Certification of the order will not materially advance
        ultimate termination of the case.

Thus, the Steering Committee asks the District Court to deny the
motion for certification of an interlocutory appeal.

Judge Swain rules in favor of the Steering Committee.

According to Judge Swain, most of the issues advanced by Aretex
and the Purchasers are not easily characterized as "controlling".
"Nor are the issues legal ones that substantially affect a large
number of cases."

Judge Swain believes that even if Aretex and the Purchasers were
deemed to have met the first Section 1292(b) criterion, however,
the motion would still fail because they have not demonstrated the
requisite substantial ground for difference of opinion or that
certification would materially advance the resolution of this
litigation.

If Aretex and the Purchasers' appeal is certified, Judge Swain
says, the parties will almost certainly seek to re-litigate the
host of complex issues that consumed hundreds of pages of
submissions, hours of argument and many hours of consideration on
the part of the District Court.  "Given the complexity of the
myriad issues raised by the parties and the not inconceivable
possibility that the Order could be affirmed, the appeal could
well be followed by further litigation of the sort [Aretex and the
Purchasers] claim to want to avoid by seeking certification."

Absent certification, Judge Swain says, the Bankruptcy Court will
oversee the disposition of the outstanding secured claims and
replacement collateral.  "While an appeal, and disputes regarding
mootness, may follow that stage of the litigation, it is far from
clear that a second level of appellate review in advance of such
Bankruptcy Court determinations will materially advance the
ultimate termination of the litigation."

Accordingly, the District Court denied Aretex and the Purchasers'
motion for certification of an interlocutory appeal from its
November 16, 2005, Order.

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)


WINDOW ROCK: Court Rejects Plea for Emergency Cash Collateral Use
-----------------------------------------------------------------
The Hon. John E. Ryan of the U.S. Bankruptcy Court for the Central
District of California in Santa Ana denied Window Rock Enterprises
Inc.'s emergency request for the approval of a stipulation that
would have allowed it to use all cash collateral securing
repayment of its debts to Ventana Group LLC.

However, the Bankruptcy Court allows the Debtor to draw on
Ventana's cash collateral provided that it segregates, and does
not use, a minimum of $500,000.

                  Cash Collateral Stipulation

Ventana provided the Debtor with a prepetition loan in November
2005.  Adam Michelin, the Debtor's current CEO, acknowledged that
the terms of the loan were expensive, but defended the transaction
because it was allegedly the best deal they could find after a
five-month search for financing.  

After filing for bankruptcy, the Debtor sought to use all of
Ventana's cash collateral.  The Debtor said that it needed
immediate access to the funds in order to operate its business.  

The Debtor supported its emergency cash collateral request with a
stipulation signifying Ventana's willingness to allow the Debtor
to use its cash collateral.  The stipulation authorized the Debtor
to use Ventana's cash collateral through April 30, 2006.

As adequate protection for the use of its cash collateral, the
stipulation proposed to grant Ventana a replacement lien in the
Debtor's post-petition cash and accounts receivable to the same
extent and priority held by Ventana as of the petition date.

In addition, the stipulation required the Debtor to make monthly
interest payments on its obligations to Ventana at the rate of 400
basis points over the prime interest rate.  

A copy of the cash collateral stipulation is available for a fee
at http://ResearchArchives.com

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.


WINDSOR FINANCING: Moody's Rates Proposed $49.6 Mil. Notes at Ba2
-----------------------------------------------------------------
Moody's Investors Service assigned a Baa3 rating to Windsor
Financing, LLC's proposed issuance of $265.6 million of senior
secured bonds due 2017.  Moody's also assigned a Ba2 rating to
Windsor's proposed issuance of $49.6 million of subordinated
secured notes due 2016.  The rating outlook is stable.

Proceeds from the offering will:

   * repay $178.5 million of existing project debt (including
     estimated breakage costs);

   * pay transaction costs of about $9.5 million; and

   * fund major maintenance reserve accounts totaling
     $2.8 million.

The remaining funds will be distributed to Cogentrix Energy, Inc.
(Cogentrix: Corporate Family Rating Ba2), which indirectly owns
100% of Windsor.

The Baa3 rating assigned to the senior secured bonds is supported
by the contracted cash flow expected to be generated through
existing agreements between Windsor's two wholly-owned operating
subsidiaries and Virginia Electric Power Company (VEPCO:A3 senior
unsecured, under review for possible downgrade).  Windsor's
operating subsidiaries Spruance Genco, LLC and Edgecombe Genco,
LLC, own power projects known as Richmond and Rocky Mount,
respectively, and will provide unconditional upstream guarantees
of Windsor's debt on a joint and several basis.

The Richmond project and the Rocky Mount project have a combined
generating capacity of approximately 330 megawatts, which is sold
to VEPCO under three separate Power Purchase Agreements (PPA's).
Two PPA's have a maturity date of July 2017, and the maturity date
of the third PPA is October 2015.  The parties have recently
restructured the PPA's with new terms that will become effective
upon closing of the proposed debt offering.

The rating on the senior secured bonds considers favorable changes
associated with the restructuring of the PPA's.  The revisions to
the PPA's eliminate VEPCO's ability to reduce capacity payments if
it is not able to recover the cost through pass-through to utility
customers.  The revisions also result in the option for Richmond
and Rocky Mount to source replacement energy from the PJM market.
The ability to source replacement power from the PJM market is
beneficial because cash flow could be largely maintained in the
event of an operating disruption or if the market price for power
is less than the projects' cost to produce electricity.  The
projects will enter into separate scheduling services agreement
with J. Aron & Company, a Goldman Sachs affiliate, which will
facilitate the sourcing of power from the PJM market.

In connection with the restructuring of the PPA's, Richmond and
Rocky Mount agreed to a reduced fixed capacity payment and a
modest reduction in the contractual price for energy if energy is
sourced from the PJM market.  The reduction in capacity payments
is $5.8 million on an annual aggregate basis through December 2010
and $2.8 million annually thereafter.

The rating relies heavily upon the expected stability of capacity
payments from VEPCO, which exceed $100 million annually through
2015.  However, these capacity payments are expected to be
partially offset by losses incurred through the sale of energy
since the contractual price that VEPCO pays is significantly less
than Richmond and Rocky Mount's marginal cost of production.

Losses resulting from the sale of energy, excluding any benefit
associated with the projects ability to source power from the PJM
market, are projected to range from $24 million to $32 million
annually.  These amounts include higher assumed coal costs upon
the maturity of existing coal contracts in August 2007, May 2012,
and December 2013.

Cash flow coverages and the results of sensitivity analysis
suggest expected debt service coverages that are consistent with
similarly rated power projects.  Base case projections provided by
the issuer and that take into account the subordination of
operation and maintenance and management fees assume an average
senior secured debt coverage ratio of approximately 1.59 times.
Under the base case model, average coverage, which reflect the
subordination of fees, is about 1.38 times for senior debt plus
interest on the senior subordinated notes and the minimum
scheduled subordinated amortization.  Failure by Windsor to make
more than the minimum subordinated amortization payments would
result in approximately $19 million of subordinated notes
remaining outstanding at the final maturity date of the notes.

Results of sensitivity analysis, including scenarios with higher
capacity factors, heat rates, and coal prices, indicate that cash
flow coverages are expected to be sufficient under reasonably
likely scenarios, largely due to the stable underpinning of the
capacity payments from VEPCO.  For example, an increase of
projected capacity factors to match more recent capacity levels
would be expected to result in a reduction of the average senior
secured debt coverage ratio to approximately 1.49 times after
taking into account the subordination of operation and maintenance
and management fees.

The ratings also consider Windsor's high balance sheet leverage.
About 40% of the proposed financing, or about $134.9 million, will
be distributed to Cogentrix at closing, following which Windsor's
balance sheet is expected to show negative GAAP equity of $126.4
million.

The Ba2 rating for the subordinated secured notes incorporates the
depth of subordination of this debt relative to the much larger
tranche of senior secured debt.  While holders of the subordinated
secured notes will have a second priority interest in the
collateral package, holders lack rights to take action in the
event that scheduled payments are not met.

The ratings consider structural features that provide additional
protection for the debt holders.  The senior secured bonds will be
secured by a first priority security interest in the assets, as
well as a pledge of the equity interests of:

   * Windsor,
   * Spruance Genco, LLC, and
   * Edgecombe Genco, LLC.  

The subordinated secured notes will be secured by a second
priority security interest in the same collateral package.

The senior secured bonds and subordinate secured notes will each
benefit from a separate six months debt service reserve.

The proposed transaction will include a waterfall structure of
operating accounts administered by a trustee, which will require
certain conditions be met in order for cash to be made available
for payment of interest and principal for the subordinated debt.
These conditions include 1.2 times debt service coverage on the
senior secured bonds on a 12-month look-forward and look-backward
basis, and full funding of the senior debt service reserve account
and the major maintenance reserve account.  However, failure to
pay interest or principal on the subordinated senior notes will
not result in an event of default or provide acceleration rights
unless the senior secured debt has been accelerated or the senior
secured bonds have been paid in full.

Equity distributions will be permitted if all accounts are fully
funded and consolidated debt service coverage ratio on a four
quarter look-forward look-backward is equal to or greater than 1.2
times.

Moody's analysis considered the risk that Windsor could be drawn
into bankruptcy in the event of a Cogentrix bankruptcy filing,
through substantive consolidation or a voluntary filing.  The
ratings considered that Windsor is a separate legal entity whose
assets, cash receipts, records, and accounting are to be
maintained separately from those of Cogentrix Energy.  One of the
four managers constituting the Board of Control is required to be
independent, and an affirmative vote of the independent director
will be required for certain actions, including a voluntary
bankruptcy filing.

The stable rating outlook reflects the contractual underpinnings
of the project's cash flow and its history of good operating
performance for over ten years.

The ratings are predicated upon final documentation in accordance
with Moody's current understanding of the transaction, and debt
sizing to meet initially projected debt service coverage ratios.

Cogentrix Energy, Inc., an independent power producer, is a
wholly-owned indirect subsidiary of The Goldman Sachs Group, Inc.
It is headquartered in Charlotte, North Carolina.


WORLDGATE COMMS: Files Delinquent Sept. 30, 2005, Form 10-Q  
-----------------------------------------------------------
WorldGate Communications, Inc., delivered its financial results
for the quarter ended Sept. 30, 2005, to the Securities and
Exchange Commission on Jan. 24, 2006.

As reported in the Troubled Company Reporter on Dec. 2, 2005,
WorldGate received notice from the staff of the NASDAQ Stock
Market indicating that the company was subject to potential
delisting from the NASDAQ National Market for failure to comply
with NASDAQ's requirements to file its Form 10-Q for the quarter
ended Sept. 30, 2005 in a timely fashion, as required under
Marketplace Rule 4310(c)(14).

On Jan. 25, 2006, the NASDAQ Listing Qualifications panel granted
the Company's request for continued listing on the NASDAQ Capital
Market.  The panel indicated that the Company was in full
compliance with its filing requirements and all other standards
for continued listing.

                     Third Quarter Results

WorldGate's third quarter of 2005 result was marked by the
achievement of several milestones important for the commercial
viability of the Company's product.  Key recent operating
highlights during and subsequent to the third quarter include:

     -- Ojo net revenues of $2.3 million for the third quarter, a
        64% increase versus the second quarter ended June 30,
        2005;

     -- Motorola's distribution expansion of the Company's
        products to over 300 retail outlets;


     -- consumer price reduction program implemented for the 2005
        holiday season lowering the MSRP by $200 to $599 and a
        consumer rebate offering resulting in a further reduction
        in the net price to consumers to approximately $474 per
        unit;


     -- completion of  a private placement of $17.5 million of the
        Company's common stock and warrants that will allow
        expansion of its research and development effort to
        broaden the Ojo line of video phone products;

Net revenues for the three months ended Sept. 30, 2005, were $2.3
million as the Company continued to provide a launch discount of
$800,000 million on a predetermined number of initial units.  The
Company expects to eliminate this discount in the near future as
manufacturing cost reductions are implemented.  

The net loss from continuing operations for the third quarter
ending Sept. 30, 2005 was $3.2 million, as compared to the $3.1
million loss in the third quarter ending Sept. 30, 2004.

At Sept. 30, 2005, the Company's balance sheet showed $25,299,000
in total assets and liabilities of $5,155,000. The Company had a
$218,207,000 accumulated deficit at Sept. 30, 2005.

                    Going Concern Doubt

As reported in the Troubled Company Reporter on April 5, 2005,
Grant Thornton expressed substantial doubt about the Company's
ability to continue as a going concern after it audited the
Company's financial statements for the fiscal year ended Dec. 31,
2004.  The auditing firm pointed to the Company's recurring losses
from operations and a $220 million net accumulated deficit.  

Marcum & Kliegman, LLP, replaced Grant Thornton as the Company's
new independent registered public accountants.

                        About WorldGate

WorldGate Communications, Inc. -- http://www.wgate.com/--  
develops, manufactures and distributes video phones for personal
and business use, under the Ojo brand name.  The Ojo video phone
is designed to conform with industry standard protocols, and
utilizes proprietary enhancements to the latest technology for
voice and video compression to deliver quality, real-time video
images that are synchronized with the accompanying sounds.  
WorldGate has applied for patent protection for its unique
technology and techno-futuristic design that contribute to the
functionality and consumer appeal offered by the Ojo video phone.


WORLDGATE COMMS: Files Amended 2004 Financial Statements
--------------------------------------------------------
WorldGate Communications, Inc., filed amendments to its financial
statements for the years ended Dec. 31, 2003 and 2004, and its
Quarterly Reports for the periods ended March 31, 2004 through
June 30, 2005, on Jan. 24, 2006.

The Company amended its financial statements to properly account
for warrants and additional investment rights issued in a private
placements of the Company's common stock during the fourth quarter
of 2003 and the first and fourth quarters of 2004.  

The warrants and additional investment rights associated with
these transactions were originally treated as non-cash expenses
and, in accordance with the advice of Grant Thornton LLP, the
Company's former independent registered public accounting firm,
the accounting for these securities were restated by reducing the
previously reported loss by $700,370 in the fourth quarter of
2003, $630,130 in the first quarter of 2004, and $94,125 in the
fourth quarter of 2004 and correspondingly reducing paid in
capital for these periods.

The Company's balance sheets were affected by the decrease in the
accumulated deficit and correspondingly decrease the paid in
capital.

After accounting for the adjustments, there was no change to total
net stockholders equity, and there was no cash impact associated
with the amendments and restatements.

A copy of the Company's restated quarterly report for the three-
months ended June 30, 2005, is available for free at:

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

A copy of the Company's restated quarterly report for the three-
months ended March 31, 2005, is available for free at:

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

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

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

A copy of the Company's restated quarterly report for the three-
months ended Sept. 30, 2004, is available for free at:

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

A copy of the Company's restated quarterly report for the three-
months ended June 30, 2004, is available for free at:

         http://researcharchives.com/t/s?500

A copy of the Company's restated quarterly report for the three-
months ended March 31, 2004, is available for free at:

         http://researcharchives.com/t/s?501

                   Going Concern Doubt

As reported in the Troubled Company Reporter on April 5, 2005,
Grant Thornton expressed substantial doubt about the Company's
ability to continue as a going concern after it audited the
Company's financial statements for the fiscal year ended Dec. 31,
2004.  The auditing firm pointed to the Company's recurring losses
from operations and a $220 million net accumulated deficit.  

Marcum & Kliegman, LLP, replaced Grant Thornton as the Company's
new independent registered public accountants.

                     About WorldGate

WorldGate Communications, Inc. -- http://www.wgate.com/--  
develops, manufactures and distributes video phones for personal
and business use, under the Ojo brand name.  The Ojo video phone
is designed to conform with industry standard protocols, and
utilizes proprietary enhancements to the latest technology for
voice and video compression to deliver quality, real-time video
images that are synchronized with the accompanying sounds.  
WorldGate has applied for patent protection for its unique
technology and techno-futuristic design that contribute to the
functionality and consumer appeal offered by the Ojo video phone.


* Laurel Isicoff to Become Fellow of American College of Bankr.
---------------------------------------------------------------
Miami attorney Laurel M. Isicoff has been selected to become one
of only 21 bankruptcy and insolvency professionals from throughout
the United States and two foreign countries to be inducted next
month as Fellows in the American College of Bankruptcy.  The
College is considered by many to be the most prestigious
professional and educational organization for bankruptcy
professionals.

Mrs. Isicoff is a partner in the Miami law firm Kozyak Tropin &
Throckmorton.  The firm's senior bankruptcy partner, John W.
Kozyak, is also a Fellow in the College, which has only 633
members worldwide, representing the highest echelon of bankruptcy
and insolvency professionals.

Nominees to the American College of Bankruptcy are extended an
invitation to join based on a proven record of achievement in the
insolvency process and upon the highest standards of
professionalism and service to the profession.

Mrs. Isicoff has been a bankruptcy law practitioner for more than
two decades, 14 years of which have been with Miami law firm
Kozyak Tropin & Throckmorton.  For the past nine years, Mrs.
Isicoff has been a partner in the firm, where she has specialized
in bankruptcy law, distressed property workouts, commercial
mortgage foreclosures and commercial landlord/tenant litigation.

Mrs. Isicoff, a native of New York, earned her law degree from the
University of Miami School of Law, where she graduated with honors
in 1982.  She was admitted to the Florida Bar in 1982, and has
practiced bankruptcy law in Florida since 1984.

Mrs. Isicoff has gained national recognition for her professional
achievements and expertise.  In 2005, Best Lawyers In America
named her as one of the country's top bankruptcy attorneys,
marking her fourth consecutive appearance in the publication,
dating back to 2002.  Likewise, Chambers USA recently included
Mrs. Isicoff in its listing of "America's Leading Lawyers for
Business."

Complementing her work at Kozyak Tropin & Throckmorton, Mrs.
Isicoff is active in professional as well as civic organizations
in South Florida and elsewhere.

In addition to having served as president of the Bankruptcy Bar
Association of the Southern District of Florida and Director of
the Florida Association of Women Lawyers in past years, Mrs.
Isicoff is an active member of the:

     * American Bar Association,

     * American Bankruptcy Institute,

     * University of Miami School of Law Center for Ethics and
Public        Service,

     * Cuban American Bar Association and

     * the Gwen S. Cherry Black Women Lawyers Association.

Mrs. Isicoff has also served as a board member of Miami's Bet
Shira Congregation for more than ten years.  Mrs. Isicoff is often
called upon to speak before national and regional professional and
business organizations.

Fellows of the American College of Bankruptcy include: commercial
and consumer bankruptcy attorneys, corporate turnaround
specialists, bankruptcy trustees, investment bankers, insolvency
accountants, law professors, judges, government officials,
appraisers, and others involved in the bankruptcy and insolvency
community.

Kozyak Tropin and Throckmorton -- http://www.kttlaw.com/-- is a  
20-lawyer firm that concentrates on complex commercial litigation
and bankruptcy matters.  Founded more than 20 years ago, the firm
has played a key role in many major cases in Florida and
nationwide.  The firm has been recognized frequently for its pro
bono work and for promoting diversity in the legal profession and
in the community.


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------  
                                Total  
                                Shareholders  Total     Working  
                                Equity        Assets    Capital  
Company                 Ticker  ($MM)          ($MM)     ($MM)  
-------                 ------  ------------  -------  --------  
Abraxas Petro           ABP         (27)         120       (4)
Accentia Biophar        ABPI         (8)          34      (20)
AFC Enterprises         AFCE        (44)         216       53
Alaska Comm Sys         ALSK         (9)         589       49
Alliance Imaging        AIQ         (43)         643       42
AMR Corp.               AMR        (729)      29,436   (1,882)
Atherogenics Inc.       AGIX        (98)         213      190
Bally Total Fitn        BFT      (1,463)         486     (442)
Biomarin Pharmac        BMRN       (65)          209      (38)
Blount International    BLT        (201)         427      110
CableVision System      CVC      (2,486)      10,204   (1,881)
CCC Information         CCCG        (95)         112       34
Centennial Comm         CYCL       (488)       1,511       69
Cenveo Inc              CVO         (12)       1,146      127
Choice Hotels           CHH        (165)         289      (34)
Cincinnati Bell         CBB        (672)       1,893      (10)
Clorox Co.              CLX        (528)       3,567     (205)
Columbia Laborat        CBRX        (13)          17       10
Compass Minerals        CMP         (83)         686      149
Crown Holdings I        CCK        (236)       6,545      (98)
Crown Media HL          CRWN        (64)       1,250     (125)
Deluxe Corp             DLX         (82)       1,426     (277)
Denny's Corporation     DENN       (261)         498      (72)
Domino's Pizza          DPZ        (553)         414        3
DOV Pharmaceutic        DOVP         (3)         116       94
Echostar Comm           DISH       (785)       7,533      321
Emeritus Corp.          ESC        (134)         713      (62)
Empire Resorts          NYNY        (18)          65       (4)
Foster Wheeler          FWLT       (375)       1,936     (186)
Guilford Pharm          GLFD        (20)         136       60
Graftech International  GTI         (13)       1,026      283
Hollinger Int'l         HLR        (177)       1,001     (396)
I2 Technologies         ITWO       (144)         352      112
ICOS Corp               ICOS        (67)         232      141
IMAX Corp               IMAX        (34)         245       30
Immersion Corp.         IMMR        (15)          46       29
Immunomedics Inc.       IMMU         (7)          39       16
Indevus Pharma          IDEV       (115)         113       79
Intermune Inc.          ITMN        (30)         194      109
Investools Inc.         IED         (20)          64      (46)
Koppers Holdings        KOP        (186)         570      120
Kulicke & Soffa         KLIC         (3)         440      216
Level 3 Comm. Inc.      LVLT       (632)       7,580      502
Ligand Pharm            LGND        (96)         306      (99)
Lodgenet Entertainment  LNET        (69)         283       22
Maxxam Inc.             MXM        (677)       1,044      114
Maytag Corp.            MYG        (187)       2,954      150
McDermott Int'l         MDR         (53)       1,627      244
McMoran Exploration     MMR         (58)         408       67
NPS Pharm Inc.          NPSP        (55)         354      258
Omnova Solutions        OMN         (13)         355       46
Owens Corning           OWENQ    (8,443)       8,142      976
ON Semiconductor        ONNN       (276)       1,148      228
Quality Distribu        QLTY        (26)         377       20
Quest Res. Corp.        QRES        (27)         244      (29)
Qwest Communication     Q        (2,716)      23,727      822
Revlon Inc.             REV      (1,169)         980       86
Riviera Holdings        RIV         (28)         221        6
Rural/Metro Corp.       RURL        (93)         315       56
Rural Cellular          RCCC       (460)       1,367       46
SBA Comm. Corp.         SBAC        (47)         886       25
Sepracor Inc.           SEPR       (165)       1,275      879
St. John Knits Inc.     SJKI        (52)         213       80
Tivo Inc.               TIVO         (9)         163       36
Unigene Labs Inc.       UGNE        (15)          14       (9)
Unisys Corp             UIS         (33)       4,029      339
Vector Group Ltd.       VGR         (38)         536      168
Vertrue Inc.            VTRU        (30)         446      (82)
Visteon Corp.           VC       (1,430)       8,823      404
Vocus Inc.              VOCS         (9)          21      (10)
Worldspace Inc.         WRSP     (1,475)         765      249
WR Grace & Co.          GRA        (559)       3,517      876

                          *********

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 ***