TCR_Public/060209.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

            Thursday, February 9, 2006, Vol. 10, No. 34

                           Headlines

AFAMIA INC: Case Summary & List of Debtor's Known Creditors
AMAZON.COM: Profits in 2005 Wipe Away Shareholder Deficit
ANDRE TATIBOUET: SCS Extends Unique $40.5 Million DIP Loan
ARMOR HOLDINGS: Earns $37.6 Mil. in Fourth Quarter Ended Dec. 31
ARMOR HOLDINGS: Adopts Supplemental Pension Plan for Executives

ASARCO LLC: Will Pay M&T $2.9 Mil. & BofA $1 Mil. as Cure Payments
ASARCO LLC: Resurrection Joint Venture Rejection Motion Draws Fire
ASARCO LLC: MC Construction Gets Tacoma Property for $6.2 Mil.
ASSOCIATED MATERIALS: Can Access Additional $10 Million Under Loan
ATA AIRLINES: Liquidating Units Want Until April 3 to File Plan

AUSAM TECHNOLOGIES: Case Summary & Largest Unsecured Creditors
CHARTER COMMS: CCH Units Selling $450 Million of 10.25% Sr. Notes
CONSECO FINANCE: Moody's Places Four Low-B Rated Certs. on Review
CONSUMERS TRUST: Court Okays David Rubin as Financial Advisor
CONSUMERS TRUST: Court Okays Lawrence Graham as English Counsel

CORNELL TRADING: Wants to Hire Verdolino & Lowey as Accountants
CORNERSTONE PRODUCTS: Taps American Dream as Real Estate Agents
CROWN HOLDINGS: Incurs $351 Million Net Loss in 2005
DELTA AIR: Wants to Ink Forbearance Agreement with GE Capital
DELTA AIRLINES: Has Until March 28 to File Schedules & Statements

DELTA AIRLINES: Wants Access to $5 Million GE Capital L/C Facility
DIAMOND RANCH: Robison Hill Raises Going-Concern Doubt
DIRECTED ELECTRONICS: Cuts Borrowing Costs by 100 Basis Points
ENER1 INC: Names Gerard A. Herlihy as Chief Financial Officer
ENTERGY GULF: Moody's Confirms Ba3 Rating on Preferred Stock

ERIC FARRINGTON: Case Summary & 10 Largest Unsecured Creditors
ESCHELON TELECOM: Plans to Sell $150 Million of New Securities
FELCOR LODGING: Posts $265 Million Net Loss in FY 2005 Fourth Qtr.
FLYI INC: Wants Until May 31 to Remove Civil Actions
FLYI INC: Judge Waltrath Fixes March 31 as Claims Bar Date

GARDEN RIDGE: Wants Court to Delay Final Entry Until April 26
GENERAL MOTORS: Moody's Continues Review of Low-B Ratings
GFSI INC: Moody's Withdraws Caa1 Rating on Sr. Subordinated Bonds
HUDSON'S BAY: S&P Holds BB- Rating on Negative CreditWatch
HUNTINGTON AMC: Case Summary & 20 Largest Unsecured Creditors

HUNTSMAN CORP: S&P Removes BB- Corporate Credit Rating from Watch
HUNTSMAN CORP: Moody's Affirms B1 Rating Despite $1.5 Bil. IPO
IELEMENT CORP: Registers 112.7 Million Common Shares for Resale
INSIGHT HEALTH: S&P Revises Outlook to Negative & Affirms B Rating
INTERSTATE BAKERIES: Sells El Cajon Property for $1.4 Million

ISTAR FINANCIAL: Moody's Raises Preferred Stock Rating to Ba1
KAISER ALUMINUM: Files Asbestos Trust-Related Plan Documents
KMART CORP: Jeri Fisher Wants Stay Lifted to Pursue Lawsuit
LINKS @ WESTFORK: Voluntary Chapter 11 Case Summary
LMP 8500: Case Summary & 11 Largest Unsecured Creditors

LOVESAC CORP: Retains Keen Realty to Auction 21 Retail Leases
MAGELLAN HEALTH: Completes $122-Mil. Buy-Out of National Imaging
MAYTAG CORP: Dec. 31 Balance Sheet Upside-Down by $187 Million
MCCANN INC: Ch. 11 Trustee Files Disclosure Statement in S.D.N.Y.
MCLEODUSA INC: Asserts No Contractual Defaults With SBC Entities

MCMORAN EXPLORATION: Converts $15M of Senior Notes to Common Stock
MEGO FINANCIAL: Court Converts Case to Chapter 7 Liquidation
MERRILL LYNCH: Fitch Affirms Class F & G Certs.' Low-B Ratings
MESABA AIRLINES: Union Members Give Management Thumbs Down
MIRANT CORP: Court OKs NY-Gen's Asset Transfer to New York City

MIRANT CORP: Board Approves Criteria for 2006 Corporate Payouts
MMM HOLDINGS: Moody's Upgrades Senior Debt Ratings to B1 from B2
MORGAN STANLEY: Fitch Lifts $10MM Class K Certs.' Ratings to B+
MUSICLAND HOLDING: Media Play Wants to Assume GOB Pact with Hilco
MUSICLAND HOLDING: Taps Curtis Mallet-Prevost as Conflicts Counsel

NADER MODANLO: Chap. 11 Trustee Taps Shapiro Sher as Lead Counsel
NOBEX CORP: Will Sell Intellectual Property Assets on March 16
NORTHWEST AIRLINES: Wants Court to Approve Accord with GE & Safran
NORTHWESTERN CORP: Plan Committee Asks for Surplus Distribution
NORTHWESTERN CORP: Provides Update on Strategic Alternatives

NRG ENERGY: Gets Access to $5.575 Billion Senior Sec. Financing
PACIFIC COAST: Moody's Places $30 Mil. Junk Rated Notes On Watch
PERFORMANCE TRANSPORTATION: Can Pay Prepetition Employee Wages
PHOTOCIRCUITS: Taps Anthony V. Curto as Special Purpose Trustee
PHOTOWORKS INC: Posts $328K Net Loss in 1st Quarter of Fiscal 2006

PIER 1: S&P Lowers Corporate Credit Rating to B With Neg. Watch
PLY GEM: Moody's Rates $121 Million Incremental Senior Loan at B1
R.H. DONNELLEY: Completes $1.86 Billion Merger with Dex Media
REFCO INC: Creditors Oppose Converting Chapter 11 to Liquidation
RGLP ENTERPRISES: Case Summary & 7 Largest Unsecured Creditors

RIM SEMICONDUCTOR: Embarq(TM) System Gets Positive Response
ROBERT JAFARI: Case Summary & 20 Largest Unsecured Creditors
SAINT VINCENTS: Extends Dadourian Lease for Another Four Years
SAINT VINCENTS: Agrees to Pay $880,000 to Julia Nelson
SAINT VINCENTS: Nurses' Association Inks New Three-Year Contract

SASCO NET: Interest Shortfall Prompts S&P to Junk Notes' Ratings
SIERRA HEALTH: S&P Places BB Counterparty Credit Rating on Watch
SIERRA HEALTH: Earns $120 Million of Net Income in 2005
SILICON GRAPHICS: Posts $30M Net Loss in Second Qtr. Ended Dec. 30
STANDARD MOTOR: Moody's Junks Rating on $90 Mil. Conv. Sub. Notes

STANLEY CHEVROLET: Case Summary & 14 Largest Unsecured Creditors
STATION CASINOS: Earns $41.7 Mil. in Fourth Quarter Ended Dec. 31
STRUCTURED ASSET: Moody's Lifts Ratings on Six Series 2002 Certs.
TITAN CRUISE: Wants Excl. Plan-Filing Period Extend to Mar. 31
TRUMP HOTELS: Has Until March 15 to Object to NJSEA Claims

TRUMP HOTELS: 17 Former Shareholders Wants RSH's Motion Denied
US AIRWAYS: Allows Wachovia's Multi-Million Unsecured Claims
US AIRWAYS: Gets Court Approval to Reject E*Trade Contract
USG CORP: Wants Court to Okay Berkshire Equity Commitment Accord
VARAHI INVESTMENTS: Case Summary & Largest Unsecured Creditor

WENDY'S INT'L: Has New Combo Plan to Drive Sales & Improve Margins
WESTERN WATER: Judge Tchaikovsky Confirms First Amended Plan
WINN-DIXIE: Wants to Reject Jeffersonville Lease Effective Today
WINN-DIXIE: Equity One Offers $3.7 Million for Oviedo Property
WINN-DIXIE: Want to Reject Nine Contracts Effective Today

* Ropes & Gray Brings In Four Partners to Bankruptcy Practice
* Kasowitz Benson Hires Renowned Trial Lawyer Lawrence Goodwin

                           *********

AFAMIA INC: Case Summary & List of Debtor's Known Creditors
-----------------------------------------------------------
Debtor: Afamia Inc.
        248 Mulberry Lane
        Rockwall, Texas 75032

Bankruptcy Case No.: 06-30483

Chapter 11 Petition Date: February 6, 2006

Court: Northern District of Texas (Dallas)

Judge: Barbara J. Houser

Debtor's Counsel: Robert M. Nicoud, Jr., Esq.
                  Olson, Nicoud & Gueck, LLP
                  1201 Main St., Suite 2470
                  Dallas, Texas 75202
                  Tel: (214) 979-7300
                  Fax: (214) 979-7301

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

List of the Debtor's Known Creditors:

   Entity
   ------
1st International Bank
191 W. Main
Lewisville, TX 75057

B&S Insulation
212 Julie Drive
Crowley, TX 76063

Gary M. Pridavka
900 Jackson Street, Suite 770
Dallas, TX 75202

Habiba Norman Barodi
John J. Gitlin, Esq.
5323 Spring Valley Road, Suite 150
Dallas, TX 75254

Hegwood Group
16990 Dallas Parkway, Suite 215
Dallas, TX 75248

Karrie L. Huzenlaub, P.C.
P.O. Box 180
Bedford, TX 76095

Midas Financials, Inc.
Aubyn K. Shettle
4619 Insurance Lane
Dallas, TX 75205

Quality 1 Energy Systems
Ford White Nassen
8080 N. Central Expressway, Suite 16
Dallas, TX 75206-1819

Tax Assessor Collector
100 E. Weatherford
Fort Worth, TX 76196

Texas Land Finance Company
14850 Quorum Drive, Suite 300
Dallas, TX 75254


AMAZON.COM: Profits in 2005 Wipe Away Shareholder Deficit
---------------------------------------------------------
Amazon.com, Inc. (NASDAQ: AMZN) announced financial results for
its fourth quarter and year ended Dec. 31, 2005.

                    Full Year 2005 Results

Amazon earned $359 million of net income for the year ended
Dec. 31, 2005, compared with net income of $588 million in the
prior year.  Net income for 2005 included a $95 million income tax
expense, compared with a $233 million income tax benefit in 2004.

Net sales grew 23% to $8.49 billion in 2005, compared with $6.92
billion in 2004.  Excluding the $73 million unfavorable impact
from year-over-year changes in foreign exchange rates throughout
the year, net sales grew 24% compared with 2004.

Operating income was $432 million in 2005, compared with $440
million in 2004.  Operating income for 2005 includes the $40
million negative impact of the legal settlement and an $8 million
unfavorable impact from year-over-year changes in foreign exchange
rates throughout the year.

At Dec. 31, 2005, Amazon's balance sheet showed $3.6 billion in
total assets and liabilities of $3.4 billion.

                   Fourth Quarter Results

Amazon earned $199 million of net income in the fourth quarter of
2005, compared with $347 million of net income in the fourth
quarter of 2004.  Operating income increased 1% to $165 million in
the fourth quarter, compared with $162 million in fourth quarter
2004.

Net sales increased 17% to $2.98 billion in the fourth quarter,
compared with $2.54 billion in fourth quarter 2004.  Excluding the
$121 million unfavorable impact from year-over-year changes in
foreign exchange rates throughout the quarter, net sales grew 22%
compared with fourth quarter 2004.

Fourth quarter highlights include:

      -- $1.68 billion in North America segment sales,
         representing the Company's U.S. and Canadian sites, up
         21% from fourth quarter 2004;

      -- North America Media sales surpassing the $1 billion mark
         for the first time in the fourth quarter;

      -- $1.29 billion in international segment sales,
         representing the Company's U.K., German, French, Japanese
         and Chinese sites, up 13% from fourth quarter 2004.

      -- 38% growth, to $2.3 billion in 2005, of Worldwide
         Electronics & Other General Merchandise sales.

                 Full Year 2006 Expectations

Amazon expects net sales in 2006 to be between $9.85 billion and
$10.45 billion, or grow between 16% and 23%, compared with 2005.

Operating income is expected to be between $370 million and $510
million, or between 14% decline and 18% growth, compared with
2005.  This guidance includes $135 million for stock-based
compensation and amortization of intangible assets, and assumes,
among other things, that no additional intangible assets are
recorded and that there are no changes to stock-based compensation
or restructuring-related estimates.

                      Debt Repurchase

Amazon also announced that on March 7, 2006 it will redeem ?250
million ($304 million at the Euro to U.S. dollar exchange rate on
January 31, 2006) in principal amount of its outstanding 6.875%
Convertible Subordinated Notes due 2010, plus accrued and unpaid
interest from and including Feb. 16, 2006 to March 6, 2006, under
its previously announced $500 million debt repurchase
authorization.  No premium payment is required to redeem these
notes.

                      About Amazon

Amazon.com, a Fortune 500 company based in Seattle, opened its
virtual doors on the World Wide Web in July 1995 and today offers
Earth's Biggest Selection.  Amazon.com seeks to be Earth's most
customer-centric company, where customers can find and discover
anything they might want to buy online, and endeavors to offer
customers the lowest possible prices.  Amazon.com and third-party
sellers offer millions of unique new, refurbished, and used items
in categories such as health and personal care, jewelry and
watches, gourmet food, sports and outdoors, apparel and
accessories, books, music, DVDs, electronics and office, toys and
baby, and home and garden.

Amazon.com and its affiliates operate seven retail websites:

http://www.amazon.com/http://www.amazon.co.uk/
http://www.amazon.de/http://www.amazon.co.jp/
http://www.amazon.fr/http://www.amazon.ca/and
http://www.joyo.com/

                         *     *     *

As reported in the Troubled Company Reporter on Sept. 19, 2005,
Standard & Poor's Ratings Services raised its ratings on Internet
retailer Amazon.com, including raising its corporate credit rating
to 'BB-' from 'B+'.  At the same time, Standard & Poor's affirmed
its 'B-1' short-term rating on the company.  The outlook is
stable.

As reported in the Troubled Company Reporter on Dec. 8, 2004,
Moody's Investors Service upgraded the long-term debt ratings of
Amazon.com and assigned a positive rating outlook as a result of
the company's consistent improvement in operating margins,
reduction in funded debt levels, and strengthening operating cash
flow.

These ratings are upgraded:

   * Senior implied of B1,

   * Issuer rating of B2,

   * Various convertible subordinated notes issues maturing 2009
     thru 2010 of B3,

   * Multiple shelf ratings of (P) B2, (P) B3, and (P) Caa1.

This rating is affirmed:

   * Speculative grade liquidity rating of SGL-2.

                        Solvency Restored

Amazon's balance sheet dated Dec. 31, 2005, shows $246 million in
positive shareholder equity.  In 2001, Amazon's shareholder
deficit topped $1.4 billion.


ANDRE TATIBOUET: SCS Extends Unique $40.5 Million DIP Loan
----------------------------------------------------------
Strategic Capital Solutions, LLC is pleased to announce the
successful closing of a $40.5 million debtor-in-possession
loan to hotelier Andre S. Tatibouet.  The financing will help
re-establish Tatibouet's hotel business in Hawaii and facilitate
his efforts to emerge from personal bankruptcy.  The loan is
secured by the 247-room Coral Reef Hotel in Waikiki Beach and
Tatibouet's 18,000 square foot Hawaiian home.  SCS arranged the
financing and was instrumental in structuring the complex and
sensitive transaction.

Although SCS had secured funding for the loan within a matter of
days, the transaction took several months to complete due to the
number of parties involved in the bankruptcy proceedings.  In
fact, this was one of the largest and most complex bankruptcies
ever in the State of Hawaii.

"When Andre first explained the situation to us, we knew
immediately that on the surface, this did not fit most lending
parameters, but it was exactly the type of deal that we knew how
to structure and close," Edward O. Mehrfar, Managing Member of New
York based Strategic Capital Solutions said.  "While others are
typically reluctant to invest the time and effort necessary to
complete a deal such as this one, our expertise is in funding
these unique situations that many of our competitors would be
unwilling or unable to handle."

Mr. Tatibouet filed for Chapter 11 Bankruptcy in April 2005 to
block a possible foreclosure of the Coral Reef Hotel.  With the
DIP financing in place, a confirmed bankruptcy reorganization plan
should occur within the next six months.  "It was a pleasure
dealing with the SCS team," Mr. Tatibouet said.  "Their creativity
and professionalism was the key to finalizing this highly
complicated transaction."

The loan proceeds repay all of the hotel's secured creditors,
provide $7 million for renovations and allow Tatibouet to retain
ownership of the hotel and maintain his leadership in the Hawaiian
Hospitality industry.  Prior to contacting SCS, Mr. Tatibouet had
pursued a variety of structured transactions but ultimately
determined that the loan SCS had structured was best suited to his
needs.  The planned renovation comes as the Waikiki Hotel market
is experiencing heightened demand amid a record number of
tourists, topping 7 million in 2005, and the loss of more than
1,500 conventional hotel rooms that have been converted into time
shares and luxury condominiums or razed to make room for the new
high-end hotels.

             About Strategic Capital Solutions, LLC

Strategic Capital Solutions, LLC provides financing for conforming
and "hard to place" Commercial and Real Estate Loans as well as
Project Financing from $500,000 to $200 million and above.  SCS's
fast, flexible and creative financing solutions and expertise with
complex transactions and its understanding of the needs of
entrepreneurs allows us to structure, fund and close deals that
others will not even consider.  SCS prides itself on its ability
to expediently process almost any commercial loan for competitive
pricing.

                    About Andre S. Tatibouet

Mr. Tatibouet has been actively involved in the Hawaii hospitality
industry for more than 35 years, including serving as the
president of the Hawaii Hotel Association.  Mr. Tatibouet founded
Aston Hotels & Resorts, a hotel management company in the Hawaiian
Islands. Mr. Tatibouet's parents were among the pioneers of the
hotel industry in Waikiki, opening the 14-room Royal Grove Hotel
in 1948.

Andre S. Tatibouet owns the Coral Reef Hotel in Hawaii and filed
for chapter 11 protection on April 5, 2005 (Bankr. D. Hawaii Case
No. 05-00829).  James A. Wagner, Esq., at Wagner Choi & Evers,
represents Mr. Tatibouet.  Mr. Tatibouet estimates his assets and
liabilities between $10 million and $50 million.


ARMOR HOLDINGS: Earns $37.6 Mil. in Fourth Quarter Ended Dec. 31
----------------------------------------------------------------
Armor Holdings, Inc. (NYSE:AH) reported its financial results for
the fourth quarter and fiscal year ended Dec. 31, 2005.

                   Fourth Quarter Results

For the fourth quarter ended Dec. 31, 2005, the Company reported
revenue of $452.7 million, an increase of 34.1% versus the year-
ago quarter's $337.5 million.  Net income for the fourth quarter
was $37.6 million, versus the year-ago quarter's net income of
$26.4 million.

Included in the fourth quarter 2005 results are pre-tax
integration and other charges of $2.6 million on an after-tax
basis, which compares with prior year charges of $524,000 on an
after-tax basis.

Integration and other charges in the fourth quarter of 2005 relate
primarily to the Bianchi and Second Chance acquisitions.  There is
also an $857,000 pre-tax gain included in other income, resulting
from an increase in the fair market value of 1 million put option
contracts on Company stock expiring prior to July 2006.

The Mobile Security Division internal revenue decline was
primarily a result of a surge in demand in Europe in the fourth
quarter of the prior year, which made for a difficult comparison.

The Company's gross profit margin in the fourth quarter decreased
to 22.5% of revenues versus 23.7% in the year-ago quarter due to a
reduction in Aerospace & Defense Group gross margins.

The Company's selling, general and administrative expenses as a
percentage of revenue improved to 7.8% of revenue versus 9.2% of
revenue in the year-ago quarter.  This improvement was primarily
due to the Company's ability to continue to scale its business.
Earnings before interest, taxes, depreciation and amortization for
the fourth quarter increased by 29% to $66.9 million versus
$52 million in the year-ago quarter.

"We are extremely pleased with the record results we have achieved
and with the strategic progress we have made in our business model
over the course of the past year, Robert R. Schiller, President
and Chief Operating Officer of Armor Holdings, Inc., commented.
"We exceeded all of our operational and financial targets,
smoothly integrated the acquisitions of Specialty Defense and
Bianchi International, and effectively leveraged our asset
purchase from Second Chance.  We also continued to build and
effectively utilize our large and growing staff of engineers and
scientists to develop market-leading products and to make advances
in the technology of force protection."

"We have developed greater visibility on our business for 2006 as
a result of our expanding capabilities, our deepening relationship
with the Department of Defense, and what we believe is a highly
favorable procurement trend across many categories of force-
protection equipment.  In the Aerospace and Defense segment, we
believe that we have excellent opportunities to continue our
strong pace of vehicle armoring, show strong growth in the
individual equipment category, and to identify new areas for
growth. We also expect to have excellent opportunities in our law-
enforcement products and mobile security segments, where long-term
trends appear to remain clear and strong," Mr. Schiller continued.

                         Year-End Results

For the fiscal year ended Dec. 31, 2005, the Company reported
revenue of $1,636.9 million, an increase of 67% versus the prior
year's $979.7 million.

Net income for the fiscal year ended Dec. 31, 2005, was
$132.5 million versus prior year's $80.5 million.  Included in the
fiscal year ended Dec. 31, 2005, results is a $19.9 million pre-
tax charge, due to a voluntary Zylon(R) Vest Exchange Program.

There are $4.9 million of pre-tax integration and other charges,
recorded in the fiscal year ended Dec. 31, 2005.  There is also a
$5.9 million, net pre-tax gain included in other income resulting
from the unexercised expiration of our 2.5 million put option
contracts on Company stock and an increase in the fair market
value of 1 million put option contracts on Company stock expiring
prior to July 2006.

Included in the fiscal year ended Dec. 31, 2004, results was a
$6.3 million pre-tax non-cash charge due to the accelerated
vesting of performance based, long-term, restricted stock awards
granted to certain senior executives in 2002, as well as a
$5 million pre-tax charge for the prior year warranty revision and
product exchange program concerning the Company's Zylon(R)-based
ballistic vests.  The Company also incurred approximately $4
million pre-tax of integration and other charges in the fiscal
year ended Dec. 31, 2004.

The Company's gross profit margin in the fiscal year ended
Dec. 31, 2005, decreased to 23.7% of revenues versus the year-ago
level of 27.2% of revenues.

The reduction in gross profit margin was largely a function of
revenue mix and changing customer specifications within the
Aerospace & Defense Group, and lower selling prices negotiated on
the HMMWV contract renewal, which began to impact gross margins in
the third quarter of 2004.

The gross profit margin excludes separately identified cost
associated with the Vest Exchange Program/warranty revision of
$19.9 million, or 1.2% of revenues, for fiscal 2005 and
$5 million, or 0.5% of revenues, for fiscal 2004.

The Company's selling, general and administrative expenses as a
percentage of revenue improved to 8.5% of revenue versus the year-
ago level of 10.2% of revenue.  This improvement was primarily due
to the Company's ability to continue to scale its business.
EBITDA for the fiscal year ended Dec. 31, 2005, increased by 48%
to $236 million versus the year-ago level of $159.6 million.

                          Balance Sheet

As of Dec. 31, 2005, the Company reported cash, cash equivalents
and equity-based securities of $500 million compared to
$421 million at Dec. 31, 2004.  Cash equivalents at Dec. 31, 2005,
excluded $29 million of cash that was invested in equity-based
securities, which is reflected on our balance sheet as a long-term
asset in accordance with accounting principles generally accepted
in the United States.

Total debt was $497 million at Dec. 31, 2005, compared to
$501 million at Dec. 31, 2004.

During 2005, the Company sold put options covering 3.5 million
shares of the Company's common stock in various private
transactions, of which put options covering 2.5 million shares
expired unexercised.

The remaining put options covering 1 million shares (2.8% of
outstanding shares) have a weighted average strike price of $40.00
per share and expire prior to July 2006.  If the purchasers
exercise the put options, the Company will be required to
repurchase its shares or enter into alternative cash settlement
arrangements at the negotiated strike price.

If all of these put options are exercised, the Company would have
6.3 million shares remaining under its repurchase programs.  If
the Company's stock price were to decline below $39.31 on the
settlement date of the remaining put options, the Company would be
required to record a loss on the put options that may be material
depending on the final closing price of the Company's stock on the
expiration dates.

"We will continue to make it our mission, as we develop our
Company and its capabilities to create the best products possible,
Robert Schiller commented.  "We know that the interests of our
shareholders are aligned with the interests of our customer and
our end-users, which is to provide them with life saving equipment
and to ensure their ability to perform the difficult tasks they
face every day.  As we look ahead to the future of our business,
we are encouraged by the strong recognition received for our
efforts by a variety of important constituencies and our superior
competitive and financial position.  We believe that we can
continue to produce superior levels of return and value for our
shareholders."

                       About Armor Holdings

Armor Holdings, Inc. (NYSE: AH) -- http://www.armorholdings.com/
-- is a diversified manufacturer of branded products for the
military, law enforcement and personnel safety markets.

                            *   *   *

Armor Holdings, Inc.'s 8.25% Senior Subordinated Notes due 2013
carry Moody's Investor Service's B1 rating and Standard & Poor's
B+ rating.


ARMOR HOLDINGS: Adopts Supplemental Pension Plan for Executives
---------------------------------------------------------------
Armor Holdings, Inc., formally adopted a supplemental nonqualified
defined benefit pension plan known as the Armor Holdings, Inc.,
Executive Retirement Plan, on Jan. 25, 2006.

The SERP provides supplemental retirement benefits for employees
of the Company and its subsidiaries who are employed at a job
level of senior vice president or higher and who are selected by
the Compensation Committee of the Board of Directors of the
Company for participation.

Senior executive officers of the Company who are initially
eligible for the SERP include:

   -- Warren Kanders,
   -- Robert Schiller,
   -- Glenn Heiar,
   -- Robert Mecredy,
   -- Scott O'Brien,
   -- Gary Allen, and
   -- Peter (Tony) Russell.

The normal form of payment for a normal retirement at age 62 under
the SERP, or for a late retirement, is a monthly annuity payment
for the participant's lifetime based on 2% of the participant's
final average pay multiplied by each year of service with the
Company.

Final average pay is equal to the average of the highest three
calendar years of pay (which includes base salary plus short-term
incentive pay including any amounts deferred under the Company's
Executive Deferred Compensation Plan) over the last ten calendar
years.

A participant will not receive any credit for pre-acquisition
service for a company or business that is acquired by the Company
or its subsidiaries, but a participant may be granted additional
years of credited service at the discretion of the Compensation
Committee.

Alternate forms of payment, including various forms of annuity and
a single sum distribution, are available under the SERP.  Reduced
benefits may be paid in the case of an early retirement or a
pre-retirement death.

Early retirement under the SERP is the earlier of:

   (a) attaining age 60; or

   (b) attaining age 55 and completing 10 years of service
       with the Company.

A participant is eligible for a deferred vested benefit upon
attaining ten years of credited service.  A pre-retirement death
benefit is payable if a vested participant dies before retirement.

In the event of a change of control, all participants will:

   -- receive an additional 4 years of credited service for
      determining the accrued benefit;

   -- become fully vested into the plan; and

   -- automatically receive their benefits in a lump sum
      distribution as soon as practicable after the first day of
      the seventh calendar month following the month that includes
      the date of the participant's termination

Change of control can either be direct or indirect, which results
in:

   -- involuntary termination or voluntary termination due to a
      decrease in base salary,

   -- diminution in responsibilities, or

   -- a forced relocation in excess of 30 miles.

Participants will receive the benefit provided that any
participant who has an employment arrangement is in compliance
with its material terms.

In the event of a change of control, which either directly or
indirectly results in involuntary termination or voluntary
termination due to a decrease in base salary, diminution in
responsibilities or a forced relocation in excess of 30 miles, and
provided that any participant who has an employment arrangement is
in compliance with the material terms thereof,

Initial and subsequent elections as to form and time of payment
shall be made in compliance with Section 409A of the Internal
Revenue Code of 1986, as amended and regulations thereunder.

                       About Armor Holdings

Armor Holdings, Inc. (NYSE: AH) -- http://www.armorholdings.com/
-- is a diversified manufacturer of branded products for the
military, law enforcement and personnel safety markets.

                            *   *   *

Armor Holdings, Inc.'s 8.25% Senior Subordinated Notes due 2013
carry Moody's Investor Service's B1 rating and Standard & Poor's
B+ rating.


ASARCO LLC: Will Pay M&T $2.9 Mil. & BofA $1 Mil. as Cure Payments
------------------------------------------------------------------
As previously reported in the Troubled Company Reporter on Jan. 6,
2006, ASARCO LLC asks Judge Schmidt of the U.S. Bankruptcy Court
for the Southern District of Texas in Corpus Christi to enter an
order authorizing it to assume a master equipment lease agreement,
and its related schedules, initially entered into with Fleet
Capital Corporation.  Certain of the equipment under the Master
Lease have been assigned to Bank of America, and another portion
of the equipment to M&T Bank.

Jack L. Kinzie, Esq., at Baker Botts LLP, in Dallas, Texas,
informed the Court that the cure amount under BofA Portion of the
Lease is $51,235, while the cure amount under the M&T Portion is
$114,459.

                            M&T Objects

M&T Credit Services, Inc., asks the Court to deny the ASARCO
LLC's request because the Lease attached to the request failed to
note that ASARCO LLC's right to exercise its "Early Purchase
Option" has already expired on October 2, 2005.

Timothy P. Dowling, Esq., at Gary, Thomasson, Hall & Marks, in
Corpus Christi, Texas, points out that ASARCO did not notify M&T
of its right to exercise the option until Dec. 19, 2005, hence,
giving up its right to exercise the option.

In addition, Mr. Dowling asserts that because ASARCO was
delinquent on its $114,000 rental payments, it is not entitled
to exercise the Early Payment Option.

In the event the Court finds that ASARCO may exercise the Early
Purchase Option, Mr. Dowling calculates that the cure amount
would equal to $114,459, plus the pro-rated rent estimated at
$270,005, plus all of M&T's attorneys' fees and expense.

M&T also tells the Court that it needs more time to consider
ASARCO's request.

                           *     *     *

Judge Schmidt grants the ASARCO's request with respect to:

   (a) the M&T Lease Documents and the M&T Purchase Options; and

   (b) Subject Fleet Lease Schedule and the Fleet Early Purchase
       Option.

The Court directs ASARCO to pay $2,945,286 to M&T, consisting of:

   * $114,459 for prepetition rent,
   * $60,823 for attorneys' fees and expenses,
   * $270,005 for postpetition rent, and
   * $2,500,000 for the Option Purchase Price.

After M&T's receipt of all amounts, M&T will deliver a bill of
sale transferring title to the equipment described in the M&T
Lease Documents to ASARCO as is, where is and with all faults and
without any warranties from M&T, either express or implied.  M&T
will also deliver to ASARCO other requested documents to
facilitate the closing of the sale.

Upon ASARCO's full payment of all amounts to M&T, M&T will have
no claim against ASARCO or its estate for the M&T Lease Documents
and the equipment.

Banc of America is the successor-in-interest to Fleet with
respect to the Fleet Lease Schedule.

The Court also directs ASARCO to pay $1,079,492 to Banc of
America, consisting of:

   * $51,234 for prepetition rent,
   * $2,562 for late charges and interest,
   * $9,817 for attorneys' fees,
   * $120,861 for postpetition rent, and
   * $895,019 for options purchase price.

The Court rules that ASARCO will transfer $12,578 to Banc of
America for ASARCO's 2005 property taxes for the equipment in the
Subject Fleet Lease Schedule.

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: Resurrection Joint Venture Rejection Motion Draws Fire
------------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Nov. 9, 2005, ASARCO LLC sought authority from the U.S. Bankruptcy
Court for the Southern District of Texas in Corpus Christi to
immediately reject all 15 Contracts relating to the Joint Venture
with Resurrection Mining Company, effective as of Oct. 14, 2005.

Eric A. Soderlund, Esq., at Baker Botts L.L.P., in Dallas, Texas,
told Judge Schmidt that the Contracts provided for the conduct of
exploration, development and mining activities on properties owned
or leased by the parties in the vicinity of Leadville, Colorado.
The Joint Venture ceased active mining in the area in 1999.

Over time, the focus of the Joint Venture's activities shifted to
environmental remediation.  On the Petition Date, ASARCO was the
Joint Venture's managing partner.  ASARCO has been the operator of
the water treatment facility described in certain consent decrees
as Operable Unit 1 of the California Gulch Superfund Site since
its construction in
the mid-1990s.

Mr. Soderlund said that rejecting the Contracts will free ASARCO
from the burdensome obligation of operating the Water Treatment
Facility.

                            Objections

1. Resurrection Mining Company

H. Rey Stroube III, Esq., at Akin Gump Strauss Hauer & Feld LLP,
in Houston, Texas, argues that ASARCO LLC's reservation in its
Rejection Motion is completely contradictory to the relief
requested if the documents are actually executory contracts.

ASARCO noted that nothing in its Motion to Reject constituted a
waiver, admission or estoppel that any claims or defenses it may
have arising out of or related to the Contracts, including that
one or more of the Contracts is not an executory contract or
ceased to be an executory contract as of a date prior to the
effective date of any rejection under its Motion to Reject.

Mr. Stroube contends that the primary focus of ASARCO's Motion to
Reject is to rid itself of the obligation to comply with specific
environmental burdens.  "In particular, the Debtor wants to
convince the Court that by permitting rejection of the
'Contracts,' the Debtor will not be liable for reclamation
obligations at the Black Cloud Mine, and will not be obligated to
operate the 'Water Treatment Facility'."

ASARCO also failed to tell the Court that it is required,
under permits issued by the State of Colorado and an
administrative order issued by the Environmental Protection
Agency, to undertake the responsibilities to the Black Cloud Mine
and the Water Treatment Facility, Mr. Stroube points out.

Even if the Contracts are subject to rejection, ASARCO is still
obligated to perform the burdens in relation to the Contracts,
Mr. Stroube maintains.

Accordingly, Resurrection Mining asks the Court to:

   (a) schedule a hearing at a later time to allow it to conduct
       pre-trial discovery; and

   (b) at the hearing, deny ASARCO's request.


2. Colorado Minerals and Geology

Colorado Division of Minerals and Geology, and Colorado Hazardous
Materials and Waste Management Division oppose ASARCO's
contention that its obligation to operate the Water Treatment
Facility under consent decrees and administrative orders is a
dischargeable unsecured claim.

Cheryl A. Linden, Esq., in Denver, Colorado, relates that in
discussions with ASARCO's counsel, ASARCO stated that the purpose
of its request was not to seek a Court ruling on its obligations.

Rather, ASARCO's counsel stated that the request only sought
authority to reject contracts with respect to its joint venture
with Resurrection Mining Company.

Hence, ASARCO and the Colorado agencies agreed to revise the
request to make clear that ASARCO is not asking the Court to
enter any order or ruling concerning its obligations under
consent decrees, administrative orders, permits or other
applicable law.

If the Court denies the revised request or finds that ASARCO's
liabilities are properly filed before the Court, the Colorado
agencies objects to the request on the grounds that:

   (a) certain agreements requested to be rejected are not
       executory contracts;

   (b) ASARCO has not identified all of the contracts related to
       the joint venture it sought to reject; and

   (c) the advantage to rejection of the contracts alleged in
       ASARCO's request is unfounded because of ASARCO's
       obligations under administrative orders, consent decrees,
       permits or other applicable law.

3. U.S. Environmental Protection Agency

Like the State of Colorado Agencies, the United States of
America, on behalf of the U.S. Environmental Protection Agency,
has no objections to ASARCO's request provided that the proposed
order submitted by the Colorado Agencies is entered.

However, the United States object to ASARCO's assertion that its
operations in the Water Treatment Facility are dischargeable
claims because it does not own the Facility.

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: MC Construction Gets Tacoma Property for $6.2 Mil.
--------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Jan. 18, 2006, ASARCO LLC seeks permission from the U.S.
Bankruptcy Court for the Southern District of Texas in Corpus
Christi to sell 97 acres of real property located in Tacoma and
Ruston, Washington, to MC Construction Consultants, Inc.

MC Construction's bid for the property was $6,220,000 and other
considerations.

                            Responses

(A) Metropolitan Park

Metropolitan Park District of Tacoma contends that the Purchase
Agreement does not clearly and adequately provide for completion
of the necessary remediation.  The Agreement excludes
responsibility for the Yacht Basin and groundwater beneath the
Breakwater Peninsula and other portions that are not part of the
Property.

MPD is an owner of the land adjacent to the Property, which has
been heavily contaminated as a result of operations on the
Property.

Michael W. Johns, Esq., at Davis Roberts & Johns, PLLC, in GIG
Harbor, Washington, points out that ASARCO LLC has generated slag
in its operations containing arsenic, lead and other hazardous
substances, which were released into the environment, heavily
contaminating the Property, the Breakwater Peninsula and the
surrounding area.

The ASARCO Site is the subject of enforcement by the United
States Environmental Protection Agency under the Comprehensive
Environmental Response, Compensation and Liability Act as a
result of the contamination caused by ASARCO, Mr. Johns notes.

ASARCO has adopted a Master Development Plan, in consultation
with the City of Tacoma, the town of Ruston and MPD, which
focused on coordinated clean-up and redevelopment, Mr. Johns
adds.

ASARCO has not completed its obligations with respect to the
Master Development Plan, Mr. Johns tells the Court.

Accordingly, MPD asks the Court to deny ASARCO's request and
instruct ASARCO to revise the Agreement to provide that MC
Construction Consultants, Inc., the buyer, will assume full
responsibility for the remedial actions in the 1995 and 2000 EPA
Records of Decision.

In the alternative, MPD asks the Court to delay the consideration
of the Sale Motion until ASARCO has fulfilled its obligations
related to the ASARCO Site.

(B) Murray Pacific

Joel M. Gross, Esq., at Arnold & Porter LLP, in Washington, D.C.,
argues that the slag ASARCO LLC generated at its Tacoma copper
smelter is not inert.

ASARCO generated slag at its Tacoma copper smelter for more than
100 years.  In the late 1970s, environmental regulations forced
ASARCO to find other avenues to dispose of the slag.  ASARCO
approached timber companies like Murray Pacific Corporation that
operated log sort yards on the Port of Tacoma.  ASARCO offered
"free" slag, representing it to be inert and non-toxic, and an
ideal substitute for gravel for use as ballast to reduce the mud
on the sort yards.

The Tacoma Sale Motion provides that the purchaser will assume
certain environmental liabilities associated with the Property,
as well as some of the remedial obligations regarding certain
offsite property.

However, Mr. Gross tells the Court that:

   (a) The specific liabilities to be assumed are not precisely
       defined;

   (b) The Sale Motion did not explain how the division between
       Assumed Liabilities and Excluded Liabilities was arrived
       at, or why that division is appropriate; and

   (c) The Sale Motion did not explain why the Debtors'
       obligations to the B&L Landfill are an Excluded Liability.

The Sale Motion suggests that the final determination of which
off-site cleanup liabilities will be assumed will be further
negotiated between the purchaser and the EPA, Mr. Gross points
out.  The document did not specify the criteria to be used in the
negotiations and did not provide a process for informing parties-
in-interest to which liabilities are finally assumed.

Without the procedural safeguards, Murray Pacific and other
parties-in-interest have no assurance as to which of ASARCO's
liabilities will be assumed, Mr. Gross contends.

Accordingly, Murray Pacific asks the Court to deny ASARCO's
request.

If the Court grants ASARCO's request, Murray Pacific asks the
Court to include in the order a provision for further review of
the sale once the negotiations are completed.

                           *     *     *

ASARCO LLC did not receive any competing bids for the Property.

Accordingly, Judge Schmidt approves ASARCO's request.  ASARCO is
authorized to transfer the property located in Tacoma and Ruston,
Washington, to MC Construction Consultants, Inc.  Objections to
the Sale Transaction not otherwise withdrawn, waived or settled
are overruled on the merits.

Judge Schmidt clarifies that upon assignment of MC Construction's
rights to Point Ruston LLC under the Agreement, Point Ruston will
be substituted as the party-in-interest for all purposes and MC
Construction's duties, obligations, rights and liabilities under
the Agreement will terminate.

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).


ASSOCIATED MATERIALS: Can Access Additional $10 Million Under Loan
------------------------------------------------------------------
Associated Materials Incorporated entered into Amendment No. 1 to
the December 22, 2004, Second Amended and Restated Credit
Agreement it inked with Gentek Building Products Limited, as
borrower, Associated Materials Holdings Inc., and AMH Holdings,
Inc., as guarantors, UBS AG, Stamford Branch, as the U.S.
Administrative Agent and Canadian Imperial Bank of Commerce,
as the Canadian Administrative Agent.

The Amendment to the AMI senior credit facility:

   -- increases the interest margins on each of the term loan
      facility and revolving credit facility by 25 basis points;

   -- increases the U.S. portion of the revolving credit facility
      from $60 million to $70 million; and

   -- relaxes the leverage, interest coverage and fixed charge
      coverage ratio covenants.

A full-text copy of Amendment No. 1 to the Second Amended and
Restated Credit Agreement is available for free at
http://ResearchArchives.com/t/s?51e

A full-text copy of the 2004 credit agreement is available at no
charge at http://ResearchArchives.com/t/s?523.

Headquartered in Akron, Ohio, Associated Materials Incorporated --
http://www.associatedmaterials.com/-- manufactures exterior
residential building products, which are distributed through
company-owned distribution centers and independent distributors
across North America.  AMI produces a broad range of vinyl
windows, vinyl siding, aluminum trim coil, aluminum and steel
siding and accessories, as well as vinyl fencing, decking and
railing.  AMI is a privately held, wholly owned subsidiary of
Associated Materials Holdings Inc., a wholly owned subsidiary of
AMH, a wholly owned subsidiary of AMH II, which is controlled by
affiliates of Harvest Partners, Inc., and Investcorp S.A.

                         *     *     *

As reported in the Troubled Company Reporter on Jan. 23, 2006,
Moody's downgraded the ratings of Associated Materials Inc. and
its holding company AMH Holdings, Inc.  AMH Holdings' corporate
family rating and ratings on the AMI's senior secured credit
facilities have been downgraded to B3 from B2.  The downgrade in
the ratings and change in outlook reflects the company's
difficulty in passing on higher raw material costs thereby
decreasing margins and the uncertainty surrounding the company's
ability to navigate around a slowing construction market.  The
ratings outlook is stable.

Moody's has downgraded these ratings for Associated Materials
Incorporated:

   * $80 million secured revolver, due 2009, downgraded to B3
     from B2;

   * $175 million secured term loan B, due 2010, downgraded to B3
     from B2; and

   * $165 million senior subordinated notes, due 2012, downgraded
     to Caa2 from Caa1.

Moody's has downgraded these ratings for AMH Holdings, Inc.:

   * $446 million senior discount notes, due 2014, downgraded
     to Caa3 from Caa2; and

   * Corporate Family Rating, downgraded to B3 from B2.


ATA AIRLINES: Liquidating Units Want Until April 3 to File Plan
---------------------------------------------------------------
Ambassadair Travel Club, Inc., and Amber Travel, Inc., ask the
Court to extend the period:

   (a) during which only they may file their Chapter 11 plans, to
       and including April 3, 2006; and

   (b) for obtaining acceptance of their plans, to and including
       June 2, 2006.

Jeffrey C. Nelson, Esq., at Baker & Daniels, in Indianapolis,
Indiana, relates that Ambassadair and Amber are not yet positioned
to make a responsible and informed determination of whether filing
liquidating plans or converting each of their cases to Chapter 7
cases is in the best interest of their creditors.

Additionally, Ambassadair and Amber more need time to analyze the
claims filed against them to determine the administrative solvency
of their estates.

Pending a final ruling on the request, Judge Lorch extends the
exclusive period during which only Ambassadair and Amber may file
their plans today, February 9, 2006.

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


AUSAM TECHNOLOGIES: Case Summary & Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: AusAm Biotechnologies, Inc.
        645 Madison Avenue, Suite 502
        New York, New York 10022
        Tel: (212) 659-0703

Bankruptcy Case No.: 06-10214

Type of Business: The Debtor is a biopharmaceutical
                  company that manufactures drugs.
                  See http://www.ausambiotech.com/

Chapter 11 Petition Date: February 7, 2006

Court: Southern District of New York (Manhattan)

Judge: Burton R. Lifland

Debtor's Counsel: Fred B. Ringel, Esq.
                  Robert R. Leinwand, Esq.
                  Robinson Brog Leinwand Greene
                     Genovese & Gluck P.C.
                  1345 Avenue of the Americas, 31st Floor
                  New York, New York 10105-0143
                  Tel: (212) 586-4050
                  Fax: (212) 956-2164

Total Assets:  $3,660,663

Total Debts:  $13,478,418

A full-text copy of the Debtor's 25-page Schedule F, listing
creditors holding unsecured nonpriority claims, is available for
free at http://ResearchArchives.com/t/s?51d


CHARTER COMMS: CCH Units Selling $450 Million of 10.25% Sr. Notes
-----------------------------------------------------------------
CCH II, LLC and CCH II Capital Corp., indirect subsidiaries of
Charter Communications Holdings, LLC and Charter Communications
Holdings Capital Corporation, entered into a purchase agreement
with J. P. Morgan Securities Inc., Credit Suisse Securities (USA)
LLC and Deutsche Bank Securities Inc. as representatives of
several purchasers.

In the Agreement, the CCH Entities agreed to issue and sell, in a
private transaction under Rule 144A and Regulation S, $450 million
in principal amount of 10.25% Senior Notes due 2010.  The CCH
Entities also agreed to issue the Notes with the benefit of a
Registration Rights Agreement and under a Supplemental Indenture,
each with terms substantially similar to the terms of the Issuers'
existing 10.25% senior notes.

The Notes will bear interest at 10.25% per annum, payable on March
15 and September 15 of each year, will mature on Sept. 15, 2010,
and are redeemable at the Issuers' option on or after Sept. 15,
2008, at various redemption prices beginning at 105.25% in
September 2008 and declining to par in September 2009.  In
addition, from the proceeds of certain equity offerings, the CCH
Entities may redeem up to 35% of the Notes at 110.25% of their
principal amount.  The purchase of the Notes closed on January 30,
2006.

Charter Communications Holdings, LLC, is a holding company whose
principal assets as of September 30, 2005 are equity interests in
its operating subsidiaries.  Charter Holdings is a subsidiary
holding company of cable TV system operator Charter Communications
Inc. (Charter; CCC+/Negative/B-3)

Charter Communications -- http://www.charter.com/-- a Wired World
Company(TM), is the nation's third-largest broadband
communications company.  Charter provides a full range of advanced
broadband services to the home, including cable television on an
advanced digital video programming platform via Charter Digital
Cable(R) brand and high-speed Internet access marketed under the
Charter Pipeline(R) brand.  Commercial high-speed data, video and
Internet solutions are provided under the Charter Business
Networks(R) brand.  Advertising sales and production services are
sold under the Charter Media(R) brand.

                         *     *     *

As reported in the Troubled Company Reporter on Feb. 6, 2006,
Fitch Ratings assigned a 'CCC+' rating and 'RR3' Recovery Rating
to the $450 million of 10.25% senior notes due 2010 issued by CCH
II, LLC, in a private transaction.  CCH II, LLC, is an indirect
subsidiary of Charter Communications, Inc.  The proceeds from the
issuance are expected to be used to repay borrowings under the
Charter Communications Operating, LLC, credit facility.

In addition, Fitch has placed Charter's 'CCC' Issuer Default
Rating and the individual issue ratings of Charter and its
subsidiaries on Rating Watch Negative.

As reported in the Troubled Company Reporter on Feb. 2, 2006,
Standard & Poor's Ratings Services assigned its 'CCC-' rating to
the $450 million 10.25% senior notes due 2010 of CCH II LLC and
CCH II Capital Corp., which are indirect subsidiaries of cable TV
system operator Charter Communications Inc.  Proceeds will be used
to reduce borrowings, but not commitments, under the Charter
Communications Operating LLC revolving credit facility.

The notes are being issued under Rule 144A with registration
rights.  This offering represents an upsizing of the company's
proposed $400 million aggregate amount of two issues due in 2010
and 2013 originally rated on Jan. 26, 2006.  The 2010 notes were
increased; the 2013 notes are not being issued and the rating on
this issue was withdrawn.

"The 'CCC+' corporate credit rating and all other ratings on
Charter and its subsidiaries were affirmed; the outlook is
negative," said Standard & Poor's credit analyst Eric Geil.


CONSECO FINANCE: Moody's Places Four Low-B Rated Certs. on Review
-----------------------------------------------------------------
Moody's Investors Service has placed under review for possible
downgrade six certificates from four transactions, and placed
under review for possible upgrade three certificates from one
transaction, issued by Conseco Finance Home Equity Improvement
Trust in 2000 and Conseco Finance Home Equity Loan Trust in 2001.
The certificates are secured by fixed-rate home equity and home
improvement loans.

The subordinate fixed-rate certificates from the 2000-E, 2001-A,
2001-C and 2001-D transactions are placed on review for possible
downgrade because existing credit enhancement levels may be low
given the current projected losses on the underlying pools.  One
of the main factors causing high cumulative losses is the presence
of second lien loans in these transactions, which generally
experience very high loss severities.

The mezzanine fixed-rate certificates from the 2001-A transaction
are placed under review for possible upgrade based on the
substantial build-up in credit support.  Excess spread and the
fact that these loan pools are failing the cumulative loss trigger
have allowed the mezzanine certificates to build credit support.

Moody's complete rating actions are:

   1. Review for Possible Downgrade:

      Issuer: Conseco Finance Home Improvement Loan Trust

      * Series 2000-E; Class B-2, current rating B1, under review
        for possible downgrade;

      Issuer: Conseco Finance Home Equity Loan Trust

      * Series 2001-A; Class I-B-2, current rating Ba1, under
        review for possible downgrade;

      * Series 2001-C; Class B-1, current rating Baa1, under
        review for possible downgrade;

      * Series 2001-C; Class B-2, current rating Ba1, under
        review for possible downgrade;

      * Series 2001-D; Class B-1, current rating Baa2, under
        review for possible downgrade;

      * Series 2001-D; Class B-2, current rating Ba1, under
        review for possible downgrade.

   2. Review for Possible Upgrade:

      Issuer: Conseco Finance Home Equity Loan Trust

      * Series 2001-A; Class I-M-1, current rating Aa2, under
        review for possible upgrade;

      * Series 2001-A; Class II-M-2, current rating A1, under
        review for possible upgrade;

      * Series 2001-A; Class II-B-1, current rating Baa1, under
        review for possible upgrade.

For more information please see http://www.Moodys.com/


CONSUMERS TRUST: Court Okays David Rubin as Financial Advisor
-------------------------------------------------------------
The Consumers Trust sought and obtained authority from the U.S.
Bankruptcy Court for the Southern District of New York to employ
David Rubin & Partners as its financial advisor.

As reported in the Troubled Company Reporter Dec. 12, 2005, David
Rubin will assist the Debtor and the Receivers during the pendency
of the Debtor's chapter 11 case.

The Firm's professionals' hourly rates are:

          Professional                 Hourly Rate
          ------------                 -----------
          David Rubin                  GBP330 ($571)
          Henry Lan                    GBP190 ($502)
          David Stephenson             GBP175 ($303)
          Other Managers               GBP150 - 175 ($260 - $303)
          Senior Administrators        GBP100 - 125 ($173 - $216)
          Assistants & Support Staff   GBP50 - 75 ($87 - $130)

To the best of the Debtor's knowledge, David Rubin does not hold
any interest adverse to its estate and is a "disinterested person"
as that term is defined in Section 101(14) of the Bankruptcy Code.

David Rubin is a firm of chartered accountants and licensed
insolvency practitioners with wide ranging experience in the
fields of corporate and personal insolvency, forensic examinations
of entities in financial difficulties, and the reconciliation of
claims and distribution of dividends for all classes of creditors
connected with formal insolvency proceedings.

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


CONSUMERS TRUST: Court Okays Lawrence Graham as English Counsel
---------------------------------------------------------------
The Consumers Trust sought and obtained approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Lawrence Graham LLP as special English law counsel.

As reported in the Troubled Company Reporter on Dec. 12, 2005, the
Debtor told the Court that it was a business trust formed under
and governed by English law.  The High Court Order imposes certain
obligations on the Receivers and the Debtor, which are matters of
English law.  Accordingly, the Debtor selects Lawrence Graham to
represent with respect to English law issues.

Lawrence Graham will:

   a) advice on the Law as it relates to Receivers appointed by
      the High Court of Justice;

   b) advice on the duties of the Receivers and the Trustees of
      the Trust;

   c) work with professionals retained in England, the USA and
      Canada to ensure that, in compliance with the High Court's
      Order, the affairs of the Trust are administered in the
      correct manner in all three relevant jurisdictions;

   d) take all necessary steps in England to gather in the assets
      of the Trust for distribution among its creditors,
      including as may be appropriate investigating whether any
      breaches of Trust have occurred and commencing proceedings
      in respect of the recover of any misapplied trust property;

   e) engage English barristers for specialist advice where
      necessary; and

   f) generally assist the Debtor and Katten Muchin Rosenman LLP,
      its bankruptcy counsel, in the co-ordination of the
      bankruptcy case.

John Verrill, Esq., a partner at Lawrence Graham, discloses that
the Firm's professionals bill:

         Designation           Hourly Rate
         -----------           -----------
         Partners              GBP320 - 410 ($554 - $710)
         Associates            GBP180 - 310 ($312 - $536)
         Trainees              GBP125 - 115 ($216 - $199)

Mr. Verrill tells the Court that the Firm received a $108,000
prepetition retainer for its services and expenses provided.

To the best of the Debtor's knowledge, Lawrence Graham does not
hold any interest adverse to the Debtor's estate.

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


CORNELL TRADING: Wants to Hire Verdolino & Lowey as Accountants
---------------------------------------------------------------
Cornell Trading, Inc., asks the U.S. Bankruptcy Court for the
District of Massachusetts for permission to employ Verdolino &
Lowey, P.C., as its accountants and consultants.

Verdolino & Lowey will:

   1) render general reorganization and financial advisory
      services, including cash management and control, cost
      reduction, revenue enhancement and business regeneration
      strategies, including the development of business plans and
      assist in negotiations with the Debtor's lenders;

   2) assist in preparing financial information for
      distribution to creditors and other parties in interest,
      including cash flow projections and budgets, cash receipts
      and disbursements analysis, analysis of various asset and
      liability accounts;

   3) attend meetings and assist in negotiations with potential
      investors or purchasers, senior lenders, sub-debt lenders,
      the creditors' committee, the U.S. Trustee and other parties
      in interest;

   4) assist the Debtor in preparing chapter 11 operating reports
      as required by the Bankruptcy Rules, the local rules and
      orders of the Bankruptcy Court;

   5) identify executory contracts and unexpired leases and
      perform cost and benefit evaluations with respect to the
      assumption or rejection of those contracts and leases and
      assist in renegotiating of those contracts;

   6) analyze creditor claims by type and coordinate the efforts
      of any authorized claims processing agent, company personnel
      and counsel in the resolving and estimating claims;

   7) assist in analysis of tax issues, valuation and analysis of
      avoidance actions, valuation analysis related to the
      Debtor's business and render testimony on various matters;
      and

   8) perform all other necessary accounting and tax advisory
      services to the Debtor in connection with its chapter 11
      case.

Craig R. Jalbert, C.I.R.A., a member of Verdolino & Lowey,
discloses that his Firm received a $23,490 retainer.

Bankruptcy Court records don't show Verdolino & Lowey's
professionals' compensation rates.

Verdolino & Lowey assures the Court that it does not represent any
interest materially adverse to the Debtor and is a "disinterested
person" as that term is defined under 11 U.S.C. Section 101(14),
as modified by 11 U.S.C. Section 1107(b).

Headquartered in Williston, Vermont, Cornell Trading, Inc. --
http://www.aprilcornell.com/-- sells women's and children's
apparel including dresses, skirts, blouses, and sleepwear.
Cornell also offers books and housewares like table linens,
placemats and napkins, bedding, and dolls and stuffed animals.
The Company filed for chapter 11 protection on January 4, 2006
(Bankr. D. Mass. Case No. 06-10017).  Christopher J. Panos, Esq.,
at Craig & Macauley, P.C., represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed estimated debts and assets between
$10 million to $50 million.


CORNERSTONE PRODUCTS: Taps American Dream as Real Estate Agents
---------------------------------------------------------------
Cornerstone Products, Inc., seeks authority from the U.S.
Bankruptcy Court for the Eastern District of Texas, Sherman
Division, to employ and retain Renea Roberts and American Dream
Realty as its real estate agents.

On Dec. 16, 2005, the Debtor asked the Court to approve an
agreement with First United Bank & Trust Company and First United
Venture Capital Corporation providing for modification of the
automatic stay.  The Court approved that request on Jan. 6, 2006.

A key provision of the settlement with FUB and the Unsecured
Creditors Committee is the sale of two parcels of unencumbered
real property owned by the Debtor:

   a) a 24,000 sq. ft. office and warehouse on a 3.6 acre land
      located at 301 South 22nd Street in Durant, Oklahoma,
      with a fair market value of $380,000; and

   b) a house located at 402 South 21st Street in Durant,
      Oklahoma, with a fair market value of $40,000,

free and clear of all liens claims and encumbrances to Reggie
Sullivan, the Debtor's Chief Executive Officer, for an agreed cash
sum as negotiated by the Committee and subject to higher and
better offers.

Frank J. Wright, Esq., at Hance Scarborough Wright Ginsberg &
Brusilow, LLP, explains that the Debtor wants to hire American
Dream because of its familiarity with the property and its
expertise and extensive knowledge of the commercial real estate
market in Durant, Oklahoma.

Given that time is of the essence under to the terms of the Motion
to Compromise, the Debtor has executed, subject to the Court's
approval, an Exclusive Right-to-Sell Listing Agreement with Ms.
Roberts and American Dream.

Mr. Wright discloses that Ms. Roberts and American Dream will be
paid a 6% commission on the gross sales price at closing.

To the best of the Debtor's knowledge, Ms. Roberts and American
Dream do not represent any interest adverse to the Debtor's
estate, and are "disinterested persons" as that term is defined in
Section 101(14) of the Bankruptcy Code.

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


CROWN HOLDINGS: Incurs $351 Million Net Loss in 2005
----------------------------------------------------
Crown Holdings, Inc. (NYSE: CCK), announced its financial results
for the fourth quarter and year ended Dec. 31, 2005 on Feb. 1,
2005.

                      Annual Results

For the year ended Dec. 31, 2005, Crown Holdings posted a net loss
from continuing operations of $351 million, versus a net income
from continuing operations of $16 million in the prior year.  The
2005 net loss from continuing operations does not include net
income of $36 million earned from the Company's plastic closures
business prior to the October 2005 sale of that business.

For 2005, net sales rose to $6,908 million, an increase of 5.8%
over the $6,531 million in 2004.  Gross profit for the year
increased to $900 million, up 11.8% over the $805 million reported
for 2004.  The improvements reflect increased operating
efficiencies and productivity throughout the Company and lower
pension expense.

At Dec. 31, 2005, the Company's balance sheet showed $6.5 billion
in total assets and liabilities of $6.7 billion, resulting in a
stockholders' deficit of $236 million.

                     Fourth Quarter Results

Net sales in the fourth quarter rose to $1,629 million, a 2.8%
increase over the $1,585 million in the fourth quarter of 2004.
Gross profit increased 9.8% in the fourth quarter to $190 million
over the $173 million in the 2004 fourth quarter.

For the fourth quarter, the Company reported a net loss from
continuing operations of $428 million.  In the 2004 fourth
quarter, the net loss from continuing operations was $29 million.

Commenting on the results, John W. Conway, Chairman and Chief
Executive Officer, stated, "We are very pleased to report that
2005 was another year of improvement for Crown.  The progress is
even more notable given the challenges of a rising cost
environment.  Prior years' capital investment and cost containment
programs together with the dedication of our employees around the
globe enabled us to achieve world-class manufacturing excellence
with increased productivity.  Our industry-leading research and
development capabilities were honored numerous times during the
year with prestigious trade awards for truly custom and compelling
packaging and new ink technologies and finishes.  Our strength in
new product development continues to gain increasing interest from
customers looking to distinguish both consumer and industrial
brands.  Crown's proprietary SuperEnd(R) beverage can end design,
which uses 10% less metal than traditional beverage can ends, is
also becoming increasingly important and garnering more attention
as an obvious solution to reduce cost."

"During the quarter we also successfully completed an important
debt refinancing which we expect will reduce our interest expense,
improve cash flow and liquidity and extend our debt maturities.
With this improved capital structure in place, we are very excited
as we look ahead to the organic growth opportunities in emerging
markets such as the Middle East and Asia," Mr. Conway said.

The refinancing during the quarter consisted of the sale of $1,100
million of senior notes, an $800 million revolving credit facility
and $500 million in term loans.  The proceeds of the refinancing
were used to refinance the Company's prior revolving credit
facility and approximately $2.1 billion of senior secured notes.

                    About Crown Holdings

Crown Holdings, Inc. -- http://www.crowncork.com/-- through its
affiliated companies, is a leading supplier of packaging products
to consumer marketing companies around the world.  World
headquarters are located in Philadelphia, Pennsylvania.

                         *     *     *

As reported in the Troubled Company Reporter on Oct. 28, 2005,
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating on Crown Holdings Inc.  The outlook is stable.

At the same time, Standard & Poor's lowered its senior secured
debt rating on EUR460 million of first-priority senior secured
notes due 2011 issued by wholly owned subsidiary Crown European
Holdings S.A. to 'BB-' from 'BB'.

The recovery rating on these notes was lowered to '2' from '1',
now indicating expectations for substantial, not full, recovery in
the event of a payment default.


DELTA AIR: Wants to Ink Forbearance Agreement with GE Capital
-------------------------------------------------------------
Delta Air Lines Inc. and its debtor-affiliates seek the U.S.
Bankruptcy Court for the Southern District of New York's
permission to enter into and perform various obligations under a
Letter of Intent, dated as of December 14, 2005, as amended,
between Delta and GE Commercial Aviation Services LLC.  The
Debtors also seek authority to consummate the restructuring
transactions contemplated in the LOI.

The Debtors and General Electric Capital Corporation are parties
to various agreements and as a result of the Debtors' Chapter 11
filing, GE Capital might be able to declare certain defaults in
respect of certain of the GECC Agreements, Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, in New York, relates.

Pursuant to the Letter of Intent, GE Capital agrees to forbear
from exercising rights and remedies it may have under the GECC
Agreements and will agree to various amendments to the
Agreements.

                     Reimbursement Agreement

Delta and GE Capital are parties to a Reimbursement Agreement,
dated as of May 1, 2003, pursuant to which GE Capital issued
seven letters of credit with a $409,000,000 aggregate drawable
amount.  GE Capital issued the L/Cs in support of Delta's
obligations to make debt service and principal payments in
respect of certain tax-exempt special facility bonds issued by
certain city or certain county development or aviation
authorities or airport board for the purposes of refinancing the
project costs of certain airport facilities leased to Delta.  To
secure its obligations under the agreement, Delta has mortgaged
nine Boeing 767-432 aircraft and three Boeing 777-232IGW aircraft
to U.S. Bank Trust National Association, as trustee for the
benefit of GE Capital pursuant to an Aircraft Mortgage and
Security Agreement, dated as of May 1, 2003.

                       Credit Agreements

Delta and GE Capital are parties to:

   (i) an Amended and Restated Credit Agreement, dated July 7,
       2004, pursuant to which GE Capital extended to Delta a
       loan secured by, inter alia, substantially all of Delta's
       spare parts pursuant to a Spare Parts Security Agreement,
       dated as of April 15, 2003, between Delta and U.S. Bank,
       as security trustee;

  (ii) an Amended and Restated Loan Agreement (Engines), dated as
       of July 7, 2004, pursuant to which GE Capital extended to
       Delta a loan secured by 92 spare aircraft engines owned by
       Delta pursuant to an Amended and Restated Indenture and
       Security Agreement (Engines), dated as of July 7, 2004,
       between Delta and U.S. Bank, as loan trustee; and

(iii) an Amended and Restated Loan Agreement (Aircraft), dated
       as of July 7, 2004, pursuant to which GE Capital extended
       to Delta a loan secured by, inter alia, five Boeing
       767-432ER aircraft owned by Delta pursuant to an Amended
       and Restated Indenture and Security Agreement (Aircraft),
       dated as of July 7, 2004, between Delta and U.S. Bank, as
       loan trustee.

Delta also entered into an Amended and Restated Payment and
Indemnity Agreement, dated as of November 30, 2004, in favor of
GE Capital and certain of its affiliates -- the Beneficiaries --
pursuant to which Delta has agreed to make certain payments to
the Beneficiaries if the Beneficiaries fail to receive certain
payments under various lease financings, loans and indentures as
a result of a payment default attributable to Delta.

To secure its payment and performance obligations under the
Payment and Indemnity Agreement and the Security Trustee
Agreement, Delta granted to U.S. Bank, as the security trustee,
subordinated security interests in, inter alia, the Spare Parts
and the Spare Engines pursuant to a Subordinated Spare Parts
Security Agreement, dated as of November 30, 2004, and a
Subordinated Indenture and Security Agreement, dated April 15,
2003.

The Beneficiaries and U.S. Bank, as the security trustee, entered
into a Second Amended and Restated Security Trustee Agreement,
dated November 30, 2004, pursuant to which the Beneficiaries
authorized U.S. Bank to exercise their rights under the Spare
Parts Facility, Spare Engines Facility and Payment and Indemnity
Agreement.

                       CRJ Put Agreement

Delta and GE Capital entered into a CRJ Put Agreement, dated as
of November 30, 2004, under which GE Capital or its affiliate or
assignee put 12 CRJ-200 aircraft to Delta, and Delta or its
affiliate leased the aircraft from GE Capital or its affiliate or
an owner trustee acting on its behalf pursuant to certain lease
agreements.

               Modifications to GECC Agreements

Under the Letter of Intent, GE Capital will agree to forbear from
exercising any rights and remedies it may have under the L/C
Facility arising solely from Delta's:

   (i) filing of its Chapter 11 petition; or

  (ii) breaching certain of its representations in the
       Reimbursement Agreement.

The forbearance will continue until the earlier of (a) the
effective date of a plan of reorganization for Delta and (b) the
occurrence of a Liquidation Event.

GE Capital will also agree that any Excused Defaults arising
prior to the Effective Time will not constitute a default or
event of default under any of the GECC Agreements.

Prior to the earlier of (a) the Effective Time and (b) the
receipt by GE Capital of an instruction from any Issuer under any
Trust Indenture or any related Bond document to exercise any of
the remedies, GE Capital will forbear from exercising any
remedies it might otherwise be entitled to exercise under any of
the trust indentures pursuant to which the Bonds were issued or
under any related Bond documents arising from any default or
event of default under any Trust Indenture other than a Payment
Default.

The Letter of Intent also provides that (a) any drawing on an L/C
made to pay the purchase price of Bonds tendered by the holders
thereof pursuant to the applicable Trust Indenture and (b) any
drawing for the payment of the principal of any of the Bonds upon
acceleration based solely on a Non-Payment Indenture Default, so
long as:

   (x) no default, other than the Excused Defaults or waived
       defaults, exists under the L/C Facility, and

   (y) certain representations contained in the Reimbursement
       Agreement remain true and correct, the reimbursement
       obligations of Delta under the L/C Facility will be
       treated as Advances with an amortization period extended
       to July 2011, rather than as immediately payable
       obligations.

In addition, the Reimbursement Agreement will be amended to:

   (i) eliminate the loan-to-collateral value test that would
       otherwise be required in March 2006;

  (ii) extend the term of the L/C Facility from 2008 to
       July 2011; and

(iii) reduce the L/C fees payable by Delta under the
       Reimbursement Agreement so long as no defaults, other than
       the Excused Defaults, exist under the GECC Agreements
       other than the Payment and Indemnity Agreement, the
       Subordinated Engine Indenture, the Subordinated Spare
       Parts Indenture, and the Security Trustee Agreement.

While the Letter of Intent does not require Delta to assume any
of the Existing CRJ Leases, Delta has agreed that it will not
reject any of the Leases unless -- prior to the rejection of any
the Leases -- it and Comair, Inc., have rejected leases relating
to or abandoned all other CRJ-100 and CRJ-200 aircraft currently
leased to, or owned by, either Debtor.

                  Entry of 1110 Stipulations

According to Mr. Huebner, in exchange for the important
concessions by GE Capital, Delta agrees, pursuant to Section
1110(a) of the Bankruptcy Code, to perform all of its obligations
under the L/C Facility, the Spare Parts Facility, the Spare
Engines Facility, the 764 Aircraft Facility, the Existing CRJ
Leases and the related security agreements, each as modified by
or pursuant to the Letter of Intent.

Pursuant to stipulations, dated November 17 and December 22,
2005, regarding the Section 1110(b) Extension with respect to the
GE Related Financings, Delta paid an aggregate cure amount to GE
Capital which represented all amounts due and owing to GE Capital
under the L/C Facility, the Spare Parts Facility, the Spare
Engines Facility, the 764 Aircraft Facility, the Existing CRJ
Leases and the related security agreements from and after the
Petition Date through and including January 31, 2006.

Recently GE Capital, Delta and other parties stipulated that the
60-day period set forth in Section 1110(a)(2) will be further
extended to February 28, 2006.

Upon the earlier to occur of the Court's approval of (a) the New
Stipulation and (b) Delta's 1110 Election as provided in the
Letter of Intent, Delta will agree to pay any and all amounts
that became due under the L/C Facility, the Spare Parts Facility,
the Spare Engines Facility, the 764 Aircraft Facility, the
Existing CRJ Leases and the related security agreements from and
after the Petition Date.

Therefore, through the payments made or to be made pursuant to
the Stipulations, Delta has satisfied or will satisfy the
requirements of Section 1110(a)(2)(B) to cure any monetary
defaults under the Cured GECC Agreements, Mr. Huebner notes.

To the extent that the requirements to cure defaults are not
satisfied, the L/C Facility, the Spare Parts Facility, the Spare
Engines Facility and the 764 Aircraft Facility will be cross
collateralized among each other, so that:

   (i) the L/C Aircraft will also secure the Spare Parts Facility
       and the 764 Aircraft Facility; and

  (ii) the Aircraft will also secure the L/C Facility and the
       Spare Engines Facility.

The L/C Aircraft, the Spare Parts, the Spare Engines and the
Aircraft will secure the Existing CRJ Leases and the Additional
CRJ Leases.  The existing caps on the value of the Spare Parts
securing Delta's obligations under the L/C Facility, the Spare
Engines Facility, the Payment and Indemnity Agreement, the
Security Trustee Agreement, the Put Agreement and the Existing
CRJ Leases and on the value of the Spare Engines securing Delta's
obligations under the Payment and Indemnity Agreement and the
Security Trustee Agreement will be eliminated.

Delta will also agree not to dispose of the Spare Parts unless,
after giving effect to the disposition, the value of the
remaining Spare Parts exceeds the balance of the loan under the
Spare Parts Facility.  At the option of GE Capital, pursuant to
an Additional Put, Delta will lease from GE Capital or its
affiliates 15 additional CRJ-200 aircraft

                      Termination of L/Cs

In the event that the L/Cs are terminated, Delta satisfies its
obligations under the L/C Facility, and no defaults or events of
default then exist under the Senior Agreements, then certain of
the modifications between Delta and GE Capital will terminate.
In particular, and among other things:

   (i) the cross collateralization provisions involving the
       Aircraft will revert to what they were prior to the
       Restructuring Transactions;

  (ii) if Delta has prepaid and satisfied in full all of its
       obligations and liabilities under the Aircraft Facility,
       the Spare Parts and Spare Engines cross collateral caps
       and related provisions limiting GE Capital's rights to the
       collateral to the applicable maximum amounts will be
       reinstated, subject to certain terms and conditions;

(iii) certain provisions of the Spare Engines security agreement
       which permit certain Spare Engines to be released from the
       lien of the Spare Engines Facility will be reinstated; and

  (iv) certain limitations on disposition of the Spare Parts will
       be eliminated, subject to certain terms and conditions.

The Restructuring Transactions will, subject to certain terms and
conditions described in the Letter of Intent, be formalized in
final documentation that may take the form of new agreements or
amendments, supplements or waivers to or of the GECC Agreements.

A redacted copy of the Letter of Intent is available free of
charge at http://ResearchArchives.com/t/s?514

Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  As of June 30, 2005, the Company's balance
sheet showed $21.5 billion in assets and $28.5 billion in
liabilities.  (Delta Air Lines Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


DELTA AIRLINES: Has Until March 28 to File Schedules & Statements
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended until March 28, 2006, the period within which Delta Air
Lines Inc. and its debtor-affiliates may file their:

    (i) schedules of assets and liabilities;

   (ii) schedules of current income and expenditures;

  (iii) schedules of executory contracts and unexpired leases; and

   (iv) statements of financial affairs.

As reported in the Troubled Company Reporter on Jan. 18 2006,
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York,
explained that, since the Petition Date, the Debtors employees and
professionals have devoted much time and effort to:

   (i) stabilizing the Debtors' business operations to maximize
       the value of their estates;

  (ii) negotiations and related proceedings under Section 1113 of
       the Bankruptcy Code before the Court;

(iii) analyzing a significant number of non-residential real
       property leases to determine whether to assume or reject
       them; and

  (iv) evaluating various aircraft financing arrangements in
       light of Section 1110 of the Bankruptcy Code and
       conducting negotiations with numerous counterparties.

The Debtors also relate that to prepare their schedules, they
need to compile information from various sources relating to
thousands of claims, assets and contracts.  The information is
voluminous and is located in numerous places throughout the
Debtors' organization, thus collecting the required data requires
an enormous amount of time and effort on the part of the Debtors'
employees and professionals.

Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  As of June 30, 2005, the Company's balance
sheet showed $21.5 billion in assets and $28.5 billion in
liabilities.  (Delta Air Lines Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


DELTA AIRLINES: Wants Access to $5 Million GE Capital L/C Facility
------------------------------------------------------------------
Delta Air Lines Inc. and its debtor-affiliates seek the U.S.
Bankruptcy Court for the Southern District of New York's
authorization to:

   (i) enter into a $5 million letter of credit facility provided
       by General Electric Capital Corporation;

  (ii) pledge cash and cash equivalents as collateral for any
       obligations that the Debtors may have under the letter of
       credit facility; and

(iii) allow GE Capital to liquidate and use the collateral.

Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York,
explains that, in the ordinary course of their business, the
Debtors are required to provide L/Cs to third parties to secure
their payment or performance of certain obligations, including,
without limitation, workers' compensation obligations,
obligations owed to municipalities, obligations associated with
foreign operations, contractual or permit obligations, fuel and
liquor taxes, airport obligations and U.S. and Canadian customs
requirements.

Failure to maintain a ready source of L/Cs for purposes of
providing, maintaining or timely replacing these letters of
credit may, in some instances, jeopardize the Debtors' ability to
meet their continuing obligations under various operating and
other agreements, Mr. Huebner tells Judge Hardin.

However, since the Petition Date, certain of the Debtors'
existing L/C providers have indicated a reluctance to issue new
L/Cs letters of credit on their behalf.

After engaging in discussions, GE Capital has agreed to provide
the L/C Facility so that the Debtors will have an alternative
source of letters of credit.  GE Capital may issue up to
$5 million in standby L/Cs for the account of the Debtors.

The Debtors believe that the economic terms and conditions of the
L/C Facility are ordinary for facilities of this type, and the
L/C Facility is offered on reasonable terms, including customary
issuance fees.

The Debtors also ask the Court to hold that no obligation,
payment, transfer or grant of security or other property by the
Debtors to GE Capital or any other person pursuant to the Letter
of Credit Facility will be stayed, restrained, voided or
recovered under the Bankruptcy Code -- including, without
limitation, under Section 502(d) of the Bankruptcy Code --- or
under any other applicable law, or subject to any defense,
reduction, set-off, recoupment, or counterclaim.

Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  As of June 30, 2005, the Company's balance
sheet showed $21.5 billion in assets and $28.5 billion in
liabilities.  (Delta Air Lines Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


DIAMOND RANCH: Robison Hill Raises Going-Concern Doubt
------------------------------------------------------
Robison, Hill & Co. expressed substantial doubt about Diamond
Ranch Foods, Ltd.'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 recurring losses from operations and net capital
deficiency.

                 Fiscal Year 2005 Results

In its annual report on form 10-KSB for fiscal year ended
March 31, 2005, submitted to the Securities and Exchange
Commission on Feb. 6, 2006, Diamond Ranch reported a net loss of
$1,518,874, compared to a $927,544 net loss in the prior year.

Revenues from operations for the year ended March 31, 2005 were
$10,039,552, and were generated from the sale of the Company's
meat products and services.  Management says that the Company's
business activities and exposure in the competitive marketplace
have favorably evolved, causing revenues to increase at a rate of
21.45% between the years ended March 31, 2005 and 2004.

Diamond Ranch's balance sheet at March 31, 2005, showed $1,834,181
in total assets and liabilities of $3,933,639, resulting in a
$2,099,458 stockholders' deficit.  As of March 31, 2005, the
Company had a working capital deficit of $1,936,971.

                   About Diamond Ranch

Diamond Ranch Foods, Ltd., processes and distributes meats and
fresh cut portion controlled poultry, and is located in the
historic Gansevoort meatpacking district in lower Manhattan, NY.
Operations include packing, processing, labeling and distribution
of products.  The company also provides portion controlled meats,
custom meat cutting, and private labeling.  The company's
diversified customer base includes in-home food service
businesses, retailers, hotels, restaurants, and institutions, deli
and catering operators and industry suppliers.


DIRECTED ELECTRONICS: Cuts Borrowing Costs by 100 Basis Points
--------------------------------------------------------------
Directed Electronics, Inc. (Nasdaq: DEIX) has successfully
negotiated a 100 basis point interest rate reduction to its
current credit agreement.

Effective Feb. 4, 2006, the interest rate on the Company's term
loan was reduced by 100 basis points from LIBOR plus 3.25% to
LIBOR plus 2.25%.  At Directed Electronics' current debt level,
the 2006 annual savings at the current LIBOR rate will be
approximately $1.5 million.  The reduction was contingent on the
successful completion of Directed's initial public offering, and
the Company's subordinated notes being paid in full.

"We are very pleased with the support we have received from CIBC,
Wachovia, and our entire lending group as we embark on a new
journey as a public company.  The reduction in our interest rate
will have a positive impact on our bottom-line and cash flow
performance," commented Jim Minarik,President and CEO of Directed
Electronics.  "We are excited about this interest savings as well
as the growth opportunities in front of us, and believe we have
the right strategic initiatives to execute on our goals."

Headquartered in Vista, California, Directed Electronics --
http://www.directed.com/-- is the largest designer and marketer
of consumer branded vehicle security and convenience systems in
the United States based on sales and a major supplier of home and
car audio, mobile video, and satellite radio products.  As the
sales leader in the vehicle security and convenience category,
Directed offers a broad range of products, including security,
remote start, hybrid systems, GPS tracking, and accessories, which
are sold under its Viper, Clifford, Python, and other brand names.
Directed's car audio products include speakers, subwoofers, and
amplifiers sold under its Orion, Precision Power, Directed Audio,
a/d/s/, and Xtreme brand names.  Directed also markets a variety
of mobile video systems under the Directed Video, Directed Mobile
Media and Automate brand names.  In the home audio market,
Directed designs and markets award-winning Definitive Technology
and a/d/s/ premium loudspeakers.  In August 2004, Directed began
marketing and selling certain SIRIUS-branded satellite radio
products, with exclusive distribution rights for such products to
Directed's existing U.S. retailer customer base.

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 02, 2006,
Moody's Investors Service upgraded Directed Electronics' debt
rating to B1 from B2, concluding a review for possible upgrade
initiated on Nov. 23, 2005.  The rating action follows the
repayment of $74 million of unrated subordinated debt with IPO
proceeds.  The rating outlook is stable.


ENER1 INC: Names Gerard A. Herlihy as Chief Financial Officer
-------------------------------------------------------------
Gerard A. Herlihy was appointed as the Chief Financial Officer of
Ener1, Inc., on January 27, 2006.

Mr. Herlihy will devote substantially all of his time to his role
at Ener1.  However, Mr. Herlihy will continue to serve as the
President and Chief Financial Officer of Splinex Technology, Inc.,
positions he has held since September 1, 2005 and June 1, 2004.
Splinex is an affiliate of Ener1 that is controlled by certain
direct and indirect beneficial owners of Ener1 Group, Inc., the
majority shareholder of Ener1.  Ener1 Inc. will pay $190,000, or
approximately 76% of Mr. Herlihy's aggregate salary from the two
companies, and Splinex will pay $60,000.

For the year before he joined Splinex, Mr. Herlihy provided
accounting, financing and acquisition advisory consulting services
to public and private companies.  From 2001 through 2003, he was
also the founder and chief executive officer of Putt Trak Inc., a
vision systems software development company for sports training
devices.  From 1996 to 2000, Mr. Herlihy was chief financial and
administrative officer of Williams Controls, Inc., a publicly held
manufacturer of sensors and controls.  Mr. Herlihy held previous
positions directing turnarounds in public and private companies
and in investment banking and public accounting.  Mr. Herlihy has
a Masters of Business Administration degree from the Harvard
Business School and a Bachelor of Science degree from the
University of Rhode Island and is a Certified Public Accountant
(inactive status).

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

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


ENTERGY GULF: Moody's Confirms Ba3 Rating on Preferred Stock
------------------------------------------------------------
Moody's Investors Service confirmed the debt ratings of Entergy
Gulf States, Inc.  Ratings confirmed include Entergy Gulf States':

   * Baa3 senior secured;

   * Ba1 senior unsecured; and

   * Ba3 preferred stock.

This concludes the review that was initiated in Sept. 2005
following extensive damage to the utility's infrastructure caused
by Hurricane Rita.  The rating outlook is stable.

The ratings confirmation reflects the proactive measures taken by
Entergy Corporation's management in putting in place and promptly
executing a financial plan to fund storm costs and bolster the
liquidity of Entergy Gulf States, its largest utility subsidiary,
immediately following the storm.  This plan included the provision
of $300 million of equity funding to Entergy Gulf States from the
parent; the issuance of $350 million of first mortgage bonds at
Entergy Gulf States; the issuance of $500 million of equity linked
securities at the parent to finance storm costs throughout the
Entergy system, including those at Entergy Gulf States; and an
increase in the parent company's bank revolving credit facility to
$3.5 billion from $2.0 billion.

Although the issuance of first mortgage bonds by Entergy Gulf
States has increased the level of funded debt at the utility, this
is balanced by the infusion of equity from the parent company and
the expectation that regulators will allow substantial recovery of
spending on storm related repairs.

Entergy Gulf States relies solely on $340 million of availability
under the Entergy money pool for its short term financing needs
and does not maintain its own bank facility, although Entergy is
in the process of obtaining regulatory approval to add a separate
bank facility at the utility.  Moody's believes that committed
bank facilities without material adverse change provisions can
provide more reliable immediate funding under distress than a
money pool arrangement.  As an example, it is noted that Entergy
New Orleans filed for bankruptcy protection before using up its
designated availability under the Entergy system money pool.

The ratings confirmation also reflects Entergy Gulf States'
financial metrics, which are strong for the Baa3 senior secured
rating category.  These include adjusted funds from operations to
adjusted interest ratio of approximately 3.5 times and adjusted
funds from operations to adjusted debt ratio in the 15% to 20%
range over the last several years.

Using guidelines in Moody's rating methodology for electric
utility companies of average medium risk, the financial ratios of
Entergy Gulf States might justify a rating that is one to two
notches higher.  However, the risk is considered to be slightly
higher than average, taking into consideration the rate freeze in
Texas, the implementation of retail open access in Texas,
uncertainty related to the eventual separation of the utility into
Texas and Louisiana jurisdictions, a service territory with per
capita income lower than the U.S. average, and event risk that
includes possible hurricanes.

The rate freeze in Texas is in place until June 30, 2008, which
will limit the improvement of the utility's financials and
constrain the utility's credit quality over this time period.
However, the utility did recently receive approval in Texas to
recover purchased power capacity costs of $18 million annually
beginning December 2005 and an increase to cover transition to
competition costs of $18 million annually beginning March 1, 2006,
which should help to address normal operating cost pressures under
the rate freeze.

The ratings consider the traditionally difficult regulatory
environment for utilities in which Entergy Gulf States operates
and the slow regulatory response to the utility's storm cost
recovery efforts.  While some state regulators in Texas have
voiced support for cost recovery and acknowledged past decisions
allowing recovery of prudently incurred hurricane costs, actions
thus far have been limited to an inquiry into the level of storm
costs incurred.  The ratings confirmation reflects Moody's
expectation of a supportive regulatory response from Texas
regulators when the utility makes a formal request for cost
recovery in June.

In Louisiana, Entergy Gulf States has filed for interim recovery
of storm costs through an annual interim surcharge, although the
recovery period is over a ten-year time frame, which will result
in weaker financial metrics than would be the case for a more
rapid recovery arrangement.  This contrasts markedly with the more
timely storm cost recovery periods in other hurricane affected
states, most notably Florida, where some storm costs are being
recovered over a time frame of several years.  Entergy's request
for $350 million in direct hurricane recovery assistance has been
denied, although it is still possible that aid could be
forthcoming through tax breaks or community development block
grants.

The stable outlook for Entergy Gulf States reflects Moody's
expectation that:

   -- the utility will be allowed, through securitization or
      other regulatory mechanisms, to recover a substantial
      portion of the costs related to the recent hurricanes;

   -- any jurisdictional separation of the company will be
      executed in a manner that is not detrimental to
      bondholders;

   -- financial metrics will be maintained over the near term as
      the utility begins to recover deferred storm costs and
      collect purchased power and transition to competition costs
      in Texas; and

   -- that a base rate increase will be implemented to cover
      increased costs following the expiration of its rate freeze
      in Texas in 2008.

Entergy Gulf States, Inc., is a public utility headquartered in
Beaumont, Texas and a subsidiary of Entergy Corporation, an
integrated energy company that is temporarily headquartered in
Clinton, Mississippi.


ERIC FARRINGTON: Case Summary & 10 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Eric Farrington
        1801 Cottonwood Valley Circle
        Irving, Texas 75038

Bankruptcy Case No.: 06-30486

Chapter 11 Petition Date: February 6, 2006

Court: Northern District of Texas (Dallas)

Debtor's Counsel: Charles M. Hamilton, Esq.
                  French & Hamilton
                  211 N. Record Street, Suite 400
                  Dallas, Texas 75202
                  Tel: (972) 404-1414
                  Fax: (972) 404-1808

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 10 Largest Unsecured Creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Internal Revenue Services        Taxes & Penalties       $147,430
100 Commerce Street, Room 9B8
Dallas, TX 75242

United States Attorney           Fines                   $111,000
1100 Commerce Street, 3rd Floor
Dallas, TX 75242

NTFN, Inc.                       Unsecured Debt           $49,000
1717 Main Street
Dallas, TX 75201

Quincy Smith                     Unsecured Debt           $31,500
6800 Park Ten Boulevard
San Antonio, TX 78213

Fain Plumbing                    Unsecured Debt            $3,610

Orchard Bank Visa                Unsecured Debt              $971

Merrick Bank Visa                Unsecured Debt              $747

Household Bank Mastercard        Unsecured Debt              $385

Capital One                      Unsecured Debt              $300

First Premier Bank Mastercard    Unsecured Debt              $146


ESCHELON TELECOM: Plans to Sell $150 Million of New Securities
--------------------------------------------------------------
Eschelon Telecom, Inc., and its majority owned subsidiaries plan
to offer up to $150 million in aggregate initial offering price of
debt securities, shares of preferred stock, shares of common stock
and debt and equity warrants.  Payment obligations under any
series of debt securities may be guaranteed, on a joint and
several basis, by the Company and its subsidiaries.

The terms of each series of debt securities are still to be
established by a resolution of the Company's Board of Directors.

The Company will use the net proceeds from the securities sale for
its general corporate purposes, which may include repaying
indebtedness, making additions to its working capital or funding
future acquisitions.

The Company's common stock is traded on the Nasdaq National Market
under the symbol "ESCH."  The Company's common shares trade
between $12.40 and $12.98 this month.

Eschelon Telecom, Inc., is a facilities-based competitive
communications services provider of voice and data services and
business telephone systems in 19 markets in the western United
States.  Headquartered in Minneapolis, Minnesota, the company
offers small and medium-sized businesses a comprehensive line of
telecommunications and Internet products.   Eschelon currently
employs approximately 1,134 telecommunications/Internet
professionals, serves over 50,000 business customers and has
approximately 400,000 access lines in service throughout its
markets in Minnesota, Arizona, Utah, Washington, Oregon, Colorado,
Nevada and California.

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 7, 2006,
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.

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

As reported in the Troubled Company Reporter on Feb. 6, 2006,
Standard & Poor's Ratings Services assigned its preliminary
rating of 'CCC+' to the debt securities under a $150 million
universal shelf registration by Eschelon Telecom, Inc., filed
on Feb. 1, 2006.

At the same time, Standard & Poor's affirmed its 'CCC+' corporate
credit rating on Eschelon.  S&P said the outlook remains positive.


FELCOR LODGING: Posts $265 Million Net Loss in FY 2005 Fourth Qtr.
------------------------------------------------------------------
FelCor Lodging Trust Incorporated (NYSE: FCH) reported operating
results for the fourth quarter and year ended Dec. 31, 2005.

Revenues for the 2005 fourth quarter increased to $299 million
from $267 million of revenues for the fourth quarter in 2004.
Revenues for the year 2005 increased to $975 million from $886
million of revenues for the year 2004.

Net loss for the 2005 fourth quarter soared to $265 million from
$10 million net loss for the fourth quarter in 2004.  Net loss for
the year 2005 increased to $251 million from $100 million net loss
for the year 2004.

"This is an exciting time for FelCor," Thomas J. Corcoran, Jr.,
FelCor's Chairman of the Board, said.  "We are pleased with our
continued strong performance in RevPAR and ADR in 2005, as well as
far exceeding our expectations.  Our repositioning plan has set
the stage for further growth.  FelCor has entered a new era and
the future is very bright for our Company."

At Dec. 31, 2005, assets totaled $2.9 billion and debts totaled
$1.6 billion, resulting in a stockholders' equity of $1 billion.

Capital Structure

At Dec. 31, 2005, FelCor had $1.7 billion of debt outstanding with
a weighted average life of five years, compared to $1.8 billion at
Dec. 31, 2004.  The Company's cash and cash equivalents totaled
approximately $95 million at the end of 2005.

During 2005, FelCor issued 6.8 million depositary shares
representing our 8% Series C Preferred Stock, with gross proceeds
of $169.4 million.  The proceeds were used to redeem all of the
shares outstanding of our 9% Series B Preferred Stock.  As a
result of this redemption, the Company recorded a reduction in net
income applicable to common stockholders of $6.5 million for the
original issuance cost of the Series B preferred stock, which was
redeemed.

In January, FelCor retired its $225 million unsecured term loan
facility and established a new $125 million unsecured line of
credit.

The New FelCor

On Jan. 25, 2006, FelCor reported the completion of an agreement
modifying the current management agreements covering all our owned
hotels managed by IHG.  This agreement enables us to complete our
repositioning program and creates the "New FelCor."

The completion of the agreement with IHG enables the Company to
sell its non-strategic hotels and use the proceeds to reduce debt
and invest in high return-on-investment capital projects at its
remaining core hotels.  The New FelCor will be a lower-leveraged
company with a much stronger and fully renovated portfolio.  The
Company's repositioned portfolio will provide a solid platform for
future growth in today's strong RevPAR environment.

Headquartered in Irving, Texas, FelCor Lodging Trust Inc. --
http://www.felcor.com/-- is one of the nation's largest hotel
REITs and the nation's largest owner of full service, all-suite
hotels.  FelCor's portfolio is comprised of 117 consolidated
hotels, located in 28 states and Canada.  FelCor's portfolio
includes 64 upper upscale, all-suite hotels, and FelCor is the
largest owner of Embassy Suites Hotels(R) and Doubletree Guest
Suites(R) hotels.  FelCor's hotels are flagged under global brands
such as Embassy Suites Hotels, Doubletree(R), Hilton(R),
Sheraton(R), Westin(R), and Holiday Inn(R).  FelCor has a current
market capitalization of approximately $3.2 billion.

                      *     *     *

As reported in the Troubled Company Reporter on Jan. 27, 2006,
Moody's Investors Service placed the B1 rating of FelCor Lodging
Limited Partnership's senior unsecured debt and FelCor Lodging
Trust's B3 preferred stock on review for possible upgrade.  These
rating reviews were prompted by FelCor's recent announcement
regarding its management agreement with InterContinental Hotels
Group (IHG) and repositioning program, as well as the REITs
improved operating performance during 2005.

These ratings are on review for upgrade:

  FelCor Lodging Limited Partnership:

     * senior unsecured debt rating at B1
     * senior unsecured debt shelf at (P)B1
     * subordinated debt shelf at (P)B3

  FelCor Lodging Trust, Incorporated:

     * preferred stock at B3
     * preferred shelf at (P) B3


FLYI INC: Wants Until May 31 to Remove Civil Actions
----------------------------------------------------
FLYi, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to estend, until May 31, 2006,
their time to file notices of removal with respect to prepetition
civil actions pursuant to Rules 9006 and 9027 of the Federal Rules
of Bankruptcy Procedure.

The Debtors say that they are party to certain prepetition actions
and they need additional time to determine whether to remove any
pending prepetition civil action.  The Debtors' current time
period to file their removal notices expired on February 5, 2006.

Brendan Linehan Shannon, Esq., at Young Conaway Stargatt & Taylor
LLP, in Wilmington, Delaware, contends that the rights of the
Debtors' adversaries will not be prejudiced by an extension
because any party to a prepetition action that is removed may seek
to have it remanded to the state court.

The Court will convene a hearing on February 22, 2006 to consider
the Debtors' request.  By application of Del. Bankr.LR 9006-2,
the deadline is automatically extended until the Court rules on
the Debtors' request.

Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport.  The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017).  Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.  As of Sept. 30, 2005, the Debtors listed
assets totaling $378,500,000 and debts totaling $455,400,000.
(FLYi Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., 215/945-7000).


FLYI INC: Judge Waltrath Fixes March 31 as Claims Bar Date
----------------------------------------------------------
As reported in the Troubled Company Reporter on Jan. 25, 2006,
FLYi, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to establish March 31, 2006, as
the last day for all creditors, other than governmental units, to
file prepetition claims.

The Debtors also ask the Court to establish May 8, 2006, as last
day for all governmental units to file prepetition claims.

The Debtors told the Court that they anticipate filing a plan of
liquidation in the second quarter of 2006.  In connection with the
Plan, the Debtors must obtain accurate information about the
nature, validity and amount of the various claims being asserted
against each of their estates to understand and analyze the
liabilities that must be addressed in the Plan or other wind down
of their estates.

The Debtors anticipate that some entities may assert claims in
connection with the Debtors' rejection of executory contracts and
unexpired leases pursuant to Section 365 of the Bankruptcy Code.
The Debtors propose that the Bar Date for rejection damage claims
will be the later of the General Bar Date or 30 days after the
date of the Rejection Order.

The Debtors want to retain the right to:

    (a) dispute, assert offsets or defenses to, any claim filed,
        listed or reflected in the Schedules as to nature, amount,
        liability or classification;

    (b) subsequently designate any claim as disputed, contingent,
        or unliquidated; and

    (c) amend their Schedules of Assets and Liabilities.

In light of the discontinuation of scheduled flight operations
and their other major operations, the Debtors believe that the
most significant portion of their Administrative Claims will
relate to the period from November 7, 2005, through February 28,
2006.  Thus, the Debtors ask the Court to establish March 31,
2006, as the last day by which all entities, including
governmental units, must file a proof of claim against any Debtor
with respect to any Administrative Claim that arose from Nov. 7,
2005 to February 28, 2006.

The Debtors will seek to establish a separate bar date for
Administrative Claims that arise after the First Administrative
Period.

                    *     *     *

The Honorable Mary F. Walrath granted the Debtors' motion and
established March 31, 2006 as the last day for:

   a. all creditors, other than governmental units, to file
      prepetition claims; and

   b. all entities, including governmental units, to file a proof
      of claim against any Debtor with respect to any
      Administrative Claim that arose between November 7, 2005
      and February 28, 2006.

Judge Walrath also fixed May 8, 2006 as last day for all
governmental units to file prepetition claims.

Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport.  The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017).  Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.  As of Sept. 30, 2005, the Debtors listed
assets totaling $378,500,000 and debts totaling $455,400,000.
(FLYi Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., 215/945-7000).

GARDEN RIDGE: Wants Court to Delay Final Entry Until April 26
-------------------------------------------------------------
Reorganized Garden Ridge Corporation and its reorganized debtor-
affiliates ask the U.S. Bankruptcy Court for the District of
Delaware to delay, until April 26, 2006, automatic entry of a
final decree closing their chapter 11 cases.

The Reorganized Debtors also ask the Court to extend to April 26
the deadline for filing of a final report and accounting.

Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP,
in Wilmington, Delaware, tells the Court that there are several
remaining substantive issues to be addressed by the Court prior to
the closure of the Debtors' cases.  The Reorganized Debtors are
engaged in protracted litigation with the Informal Committee of
Landlords regarding its alleged substantial contribution to the
Debtors' reorganization efforts.  The claims reconciliation
efforts of the Post-Effective Date Committee and the Reorganized
Debtors are expected to continue over the next several months.
Case closure, at this time, is not possible due to the pending
matters and active litigation before the Court, Ms. Morgan
contends.

Headquartered in Houston, Texas, Garden Ridge Corporation --
http://www.gardenridge.com/-- is a megastore home decor retailer
that offers decorating accessories like baskets, candles, crafts,
home accents, housewares, party supplies, pictures and frames,
pottery, seasonal items, and silk and dried flowers.  The Company
and its debtor-affiliates filed for chapter 11 protection on
February 2, 2004 (Bankr. D. Del. Case No. 04-10324).  Joseph M.
Barry, Esq., at Young Conaway Stargatt & Taylor LLP, represents
the Debtors.  When the Debtors filed for protection from their
creditors, they listed estimated debts and assets of over $100
million.  The Bankruptcy Court confirmed the Debtors' First
Amended Joint Plan of Reorganization on Apr. 28, 2005.  The Plan
took effect on May 12, 2005.  David B. Stratton, Esq., at Pepper
Hamilton LLP represents the Post-Effective Date Committee.


GENERAL MOTORS: Moody's Continues Review of Low-B Ratings
---------------------------------------------------------
Moody's is continuing its review of GMAC's Ba1/Review-Direction
Uncertain rating and its review of General Motors Corporation's
B1/Review-Possible Downgrade rating.  Moody's is also continuing
its review of the ratings of Residential Capital Corporation.

Referring to GM's plan to sell a controlling stake in GMAC to an
investment-grade strategic investor, Moody's said that the passage
of time suggests the difficulty of successfully completing the
transaction, and may indicate a declining probability that it can
be structured in such a way as to lead to an upgrade of the
current Ba1 rating.  Moody's said that GMAC's best chance to
achieve an investment grade rating outcome would be through the
sale of a majority stake to a highly-rated strategic investor.

The sale of a majority interest to a financial investor-led
consortium would be unlikely to lead to an upgrade from the
current Ba1 rating.  Depending upon the structure of the final
transaction, a closer linkage of GMAC's rating with GM's rating
may be determined to be more appropriate.  Additionally, if
Moody's comes to believe that there is a low probability of any
sale transaction being completed, or that GMAC's intrinsic credit
strength has further weakened, Moody's might decide to take a
negative rating action notwithstanding ongoing efforts to sell the
GMAC stake.

In announcing that the B1 rating of General Motors Corporation
remains under review for possible downgrade, Moody's said the
actions which the company identified in today's announcement
regarding the revisions to its salaried health care and pension
benefit plans, the reduction in its dividend, and the cuts in
executive compensation, are viewed as constructive elements of the
company's efforts to support its turnaround.  However, the likely
near term impact of these actions is not considered to be of
sufficient magnitude to offset the concerns cited in the pending
review of GM's ratings.

Additional actions, including further restructuring costs related
to the North American turnaround effort and a potential cash
contribution to assist in the reorganization of Delphi may be
needed.  Proceeds from any partial monetization of GMAC would be
helpful in funding such actions.  In this regard, Moody's ongoing
review of GM's ratings will continue to focus on the areas
identified in the January 26, 2006 press release initiating the
rating review.

General Motors Corporation, headquartered in Detroit, Michigan, is
the world's largest producer of cars and light trucks.  GMAC, a
wholly owned subsidiary of GM, provides retail and wholesale
financing in support of GM's automotive operations and is one of
the world's largest non-bank financial institutions.


GFSI INC: Moody's Withdraws Caa1 Rating on Sr. Subordinated Bonds
-----------------------------------------------------------------
Moody's Investors Service withdrew these ratings for GFSI, Inc.:

   * Corporate Family Rating of B2; and

   * Senior Subordinated Bond Rating of Caa1.

Moody's has withdrawn the ratings for business reasons.  Please
refer to Moody's Withdrawal Policy on http://www.moodys.com/

As previously reported in the Troubled Company Reporter, most GFSI
bondholders exchanged their 9-5/8% Senior Subordinated Notes due
2007 (CUSIP Nos. 361695-AC-3 and 361695-AF-6) for new unrated
Senior Secured Notes due 2011.

Based in Lenexa, Kansas, GFSI Inc. designs, manufactures and
markets high quality, custom designed sportswear and activewear
bearing names, logos and insignia of resorts, corporations,
national associations, colleges and professional sports leagues
and teams.  GFSI custom designs and decorates an extensive line of
high-end outerwear, fleecewear, polo shirts, T-shirts, woven
shirts, sweaters, shorts, performance apparel and headwear.  GFSI
markets its products through its well-established and diversified
distribution channels.

HUDSON'S BAY: S&P Holds BB- Rating on Negative CreditWatch
----------------------------------------------------------
Standard & Poor's Ratings Services kept its ratings on Toronto-
based Hudson's Bay Co. (HBC; BB-/Watch Neg/--) on CreditWatch with
negative implications, where they were placed Nov. 29, 2005.  The
CreditWatch update follows HBC's announcement that it has entered
into an acquisition agreement and 10-year alliance with
General Electric Co. (GE; AAA/Stable/A-1+) in which GE will
purchase HBC's private label credit card and related financial
services assets for CDN$370 million, net of securitized
receivables and other costs.

The transaction puts greater emphasis on the ongoing royalty
payment stream from GE to HBC, with the expected ongoing
contribution of financial services to HBC's operating income
likely to be similar to historical earnings levels.  Performance
payments from GE will be based on:

   * the level of credit sales;
   * new account acquisitions; and
   * new product introductions.

"With the financial services sale, HBC will be able to dispense of
heavy funding costs and servicer fees associated with managing its
own credit card portfolio," said Standard & Poor's credit analyst
Don Povilaitis.  "The company, however, will continue to rely
heavily on its credit card operation for a disproportionally high
level of operating income contribution relative
to its core retailing operations," Mr. Povilaitis added.

Standard & Poor's believes that HBC shareholders will approve
Maple Leaf Heritage Investments' (MLHI) amended all-cash offer for
100% of HBC's common shares, an offer endorsed by HBC's board of
directors.  The offer, which expires on Feb. 24, 2006, would
result in HBC's CDN$200 million 7.5% convertible debentures due
2008 being redeemed and the ratings withdrawn.  MLHI has already
arranged committed bank financing of CDN$1.7 billion, and HBC's
CDN$160.0 million 7.4% 2006 unsecured debentures are likely to be
redeemed in April 2006, while plans for its CDN$120.0 million 7.5%
2007 unsecured debentures outstanding are unknown.

In resolving its CreditWatch listing, Standard & Poor's will meet
with HBC's management and review the company's ultimate capital
structure, including the expected use of the proceeds from the
credit card sale.  Therefore, the ratings on HBC may be affirmed,
lowered, or withdrawn, depending on the outcome of Standard &
Poor's review.


HUNTINGTON AMC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Huntington AMC, LLC
        5700 Boca Raton
        Fort Worth, Texas 76112

Bankruptcy Case No.: 06-30438

Chapter 11 Petition Date: February 6, 2006

Court: Northern District of Texas (Dallas)

Judge: Barbara J. Houser

Debtor's Counsel: Joyce W. Lindauer, Esq.
                  8140 Walnut Hill Lane, Suite 301
                  Dallas, Texas 75231
                  Tel: (972) 503-4033
                  Fax: (972) 503-4034

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
Tyler Plantations Pines, LLC                             $50,000
920 Tenison Memorial Drive
Dallas, Texas 75223

Fort Worth Water Dept.                                   $17,568
P.O. Box 961003
Fort Worth, TX 76161

Atmos Energy                     Utilities               $15,156
P.O. Box 650654
Dallas, TX 75265-0654

M Power Retail Energy, LP                                 $6,268

McAllister's Landscape Mgmt.                              $3,659

A & B Supply, Inc.               Business Debt            $3,321

Polo Carpet Cleaning                                      $2,116

Waste Management                                          $1,932

RCI Utilities, Inc.                                       $1,825

Metro Private Security, Inc.                              $1,732

CBeyond Communications                                    $1,509

First Specialty Ins. Corp.                                $1,102

Sherwin Williams                                            $759

Bug Stompers, Inc.                                          $714

Redi Carpet                                                 $648

Classic Blind Limited                                       $334

Tenant Tracker, Inc.                                        $320

Call Source                                                 $177

Nevill                                                      $141

Ami Auto Glass, Inc.             Business Debt              $119


HUNTSMAN CORP: S&P Removes BB- Corporate Credit Rating from Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services removed its ratings on Huntsman
Corp. and its affiliate Huntsman International LLC from
CreditWatch with negative implications, where they were placed
Jan. 31, 2006.  The ratings, including the 'BB-' corporate credit
ratings, were affirmed.  The outlook is positive.

The rating actions follow Huntsman's announcement that it has
terminated discussions regarding the potential sale of the
company.  "The affirmation indicates that an ownership change is
now less likely to impact credit quality for the foreseeable
future, while Huntsman's continued emphasis on debt reduction and
moderate growth within differentiated product categories supports
credit quality," said Standard & Poor's credit analyst Kyle
Loughlin.

Salt Lake City, Utah-based Huntsman Corp. is a holding company
with diverse chemical operations generating annual sales of
approximately $13 billion.  Ratings are supported by a
satisfactory business risk profile, reflective of the considerable
scope of its well-established chemical businesses, but more than
offset by an improving, albeit still-aggressive, capital
structure.  The company's substantial debt burden elevates
vulnerability to economic and industry cycles somewhat, although
the capital structure improved meaningfully after a $1.5 billion
(net proceeds) IPO of common and preferred stock at the parent
company, Huntsman Corp., during February 2005.

Despite a strategic emphasis on growing the performance chemicals
business, nearly half of Huntsman International's total revenue is
still derived from commodity product categories, consisting of the
domestic petrochemical and plastic assets and a large basic
petrochemical complex at Wilton, U.K., and a No. 3 position in the
global titanium dioxide business.  These markets are cyclical and
sensitive to changes in the balance between supply and demand,
rapid movements in the price of raw materials, and the level of
economic growth; accordingly, operating profit margins will
exhibit significant variability depending upon external business
conditions.

Still, Huntsman's business mix in commodity chemicals is balanced
by:

   * good positions in a number of intermediate products;

   * participation in the more attractive niches within the
     polymers segment; and

   * significant contributions from differentiated product
     categories.


HUNTSMAN CORP: Moody's Affirms B1 Rating Despite $1.5 Bil. IPO
--------------------------------------------------------------
Moody's Investors Service affirmed the B1 corporate family rating
of Huntsman Corporation and of Huntsman International LLC.  The
change in outlook back to positive is the result of HC's
announcement that the Board of Director's has terminated
discussions regarding existing proposals to acquire the Company.
Management also suggested that current stock prices have not
reflected the full value of Huntsman's differentiated businesses
such that management is continuing to evaluate the available
alternatives for realizing this potential.  Moody's believes that
opportunities and prospects for 2006 and beyond include the
expansion of HC's differentiated businesses and possible
divestitures to accelerate HC's debt reduction.

The positive outlook, which was initially assigned in July of
2005, reflects the fact that HC has not only successfully executed
its initial public offering but has also paid down some $475
million of debt obligations with operating cash flow since the
IPO.  Moody's believes that, subject to improvements in cash flow
from operations, further material reductions in indebtedness are
likely over the next several years.

The ratings and outlook incorporates Moody's belief that
management has succeeded in materially simplifying HC's corporate
structure over the last half of 2005.  The outlook also assumes
that management will avoid large debt financed acquisitions to
grow the group.

While the positive outlook incorporates the possibility of
strategic bolt-on acquisitions they are not expected to be
material or to delay the expected improvement in credit metrics as
debt is reduced.  Total debt at the HC level pro forma for the IPO
was reduced to approximately $5 billion from $6.2 billion.

At the end of September 2005, HC consolidated book debt totaled
$4.4 billion.  The positive outlooks assume continued debt
reduction given the expected improvement in the operating
performance.  This assumption is supported by the group's recent
strengthening business fundamentals, notwithstanding the effects
of hurricane related challenges in the fourth quarter of 2005. The
positive outlooks assume that HC will benefit from the cyclical
upside in the company's key commodity markets over the next two
years.  Moody's notes, however, that the free cash flow generation
of the group was relatively weak in 2003 and 2004.

Moody's believes that HC, even after the IPO, remains highly
levered and the ratings and outlooks are based on the expectation
of material debt reduction over the next twelve months.  If this
debt reduction is slowed or if free cash flow to total debt were
to fall below 5% the ratings or outlooks could be pressured
downward.  However, if free cash flow generation were to reach or
exceed $600 million in 2006 and be used for debt reduction such
that book debt approached $3.8 billion and this was combined with
ongoing positive industry fundamentals the ratings would be
upgraded.

Huntsman Corporation is a global manufacturer of differentiated
and commodity chemical products.  Huntsman's products are used in
a wide range of applications, including those in the adhesives,
aerospace, automotive, construction products, durable and non
-durable consumer products, electronics, medical, packaging,
paints and coatings, power generation, refining and synthetic
fiber industries.  Huntsman had revenues for the twelve months
ended Sept. 30, 2005 of $12.9 billion.


IELEMENT CORP: Registers 112.7 Million Common Shares for Resale
---------------------------------------------------------------
iElement Corporation filed a Registration Statement with the U.S.
Securities and Exchange Common to allow the resale of 112,700,329
shares of its common stock, of which 82,212,048 shares are
currently outstanding and 30,488,281 shares are issuable upon the
exercise of stock purchase warrants by certain selling
shareholders.

The Company will not receive any proceeds from any resale.  It may
receive proceeds from the exercise price of the Warrants if they
are exercised by the selling security holders.

A list of the Selling Shareholders is available for free at
http://ResearchArchives.com/t/s?521

The Company's common stock is traded on the OTC Bulletin Board
under the symbol "IELM.OB."  The Company's common shares traded
between $0.10 and $0.11 this month after climbing from $0.04 in
November.

A full-text copy of the Registration Statement is available for
free at http://ResearchArchives.com/t/s?520

IElement Corporation -- http://www.ielement.com/-- provides
telecommunications services to small and medium sized businesses.
IElement provides broadband data, voice and wireless services by
offering integrated T-1 lines as well as a Layer 2 Private Network
and VOIP solutions.  IElement has a network presence in 18 major
markets in the United States, including facilities in Los Angeles,
Dallas, and Chicago.

                    Going Concern Doubt

Bagell, Josephs & Company, L.L.C., expressed substantial doubt
about IElement's ability to continue as a going concern after it
audited the Company's financial statements for the fiscal year
ended March 31, 2005, due to operating losses and capital
deficits.


INSIGHT HEALTH: S&P Revises Outlook to Negative & Affirms B Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
InSight Health Services Corp. to negative from stable.  Ratings on
the company, including the 'B' corporate credit rating, were
affirmed.

"The outlook change reflects continued earnings and cash flow
erosion as a result of competitive and pricing pressures,
exacerbated by anticipated cuts in Medicare reimbursement," said
Standard & Poor's credit analyst Cheryl Richer.  "While the
company currently has sufficient liquidity for the rating, the
trend of weakening cash flow and debt protection measures could
trigger a downgrade if it is not offset by future volume gains."

The ratings on InSight reflect:

   * the highly fragmented and competitive nature of the medical
     imaging industry;

   * the limited barriers to competitor entry; and

   * reimbursement risk.

Moreover, the company's debt-financed acquisitions over the past
few years have weakened its balance sheet.  These risks
overshadow:

   * the favorable effect on the industry as the population ages;

   * the ability of imaging to limit overall health costs; and

   * the expanded approval of imaging for additional disease
     states.

Lake Forest, California-based InSight provides diagnostic imaging
services through its network of 111 fixed-site and 120 mobile
facilities, and serves patients in more than 30 states, with a
substantial presence in:

   * California,
   * Arizona,
   * New England,
   * the Carolinas,
   * Florida, and
   * the Mid-Atlantic states.

Although the company provides various modalities, magnetic
resonance imaging represents about 70% of revenues.  InSight's
fixed-site centers (which contribute about 60% of its revenues)
primarily serve physicians, whereas its mobile facilities (40%)
primarily serve hospitals.  Mobile operations are challenged by
the roughly one-third of contracts that renew annually;
competition centers largely on price.  Medicare revenues derived
from fixed-site centers (about 13% of total revenues) have come
under pressure as a result of recent developments.


INTERSTATE BAKERIES: Sells El Cajon Property for $1.4 Million
-------------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates sought
and obtained the U.S. Bankruptcy Court for the Western District of
Missouri's permission to sell a property located at 440 North
Johnson, in El Cajon, California to Ynez Two, LLC and K Motors
Company, LLC, for $1,400,000.

Paul M. Hoffman, Esq., at Stinson Morrison Hecker LLP, in Kansas
City, Missouri, relates that the El Cajon Property includes
approximately 1.05 acres of land with an approximately 5,358
square foot building, which the Debtors formerly operated as a
bakery.  The Debtors are winding up their use of the El Cajon
Property and will conclude their current operations prior to the
closing of the sale.

Pursuant to an auction, the Debtors, with the assistance of Hilco
Industrial, LLC, and Hilco Real Estate LLC, have determined that
the $1,400,000 offered by Ynez Two and K Motors represents the
highest and best offer for the El Cajon Property.

Judge Venters authorizes the Debtors to pay outstanding real and
personal property taxes for 2004-2005 with respect to the
Property for $7,840 to the San Diego County Treasurer Tax
Collector at the Closing, and interest thereon.  Penalties on
2004-2005 Property Taxes are disallowed.

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)


ISTAR FINANCIAL: Moody's Raises Preferred Stock Rating to Ba1
-------------------------------------------------------------
Moody's Investors Service upgraded iStar Financial Inc.'s senior
unsecured ratings to Baa2, from Baa3, with a stable outlook.  This
action concludes Moody's review of iStar's ratings, which were
placed under review in Nov. 2005.

According to the rating agency, the rating upgrade is based on:

   (i) the significant reduction in secured debt and growth of
       unencumbered assets in late 2005;

  (ii) consistent, sound operating performance;

(iii) maintenance of solid asset quality;

  (iv) appropriate leverage given asset risk characteristics and
       concentrations; and

   (v) increase in portfolio size and sector leadership.

The rating upgrade also takes into account iStar's franchise in a
niche real estate finance business, and its strong management and
control processes.  The stable rating outlook reflects Moody's
expectation that iStar will maintain a balanced investment
portfolio of its high quality corporate tenant lease business with
its higher risk real estate debt financing business, coupled with
stable earnings without compromising asset quality.

Moody's noted that based on the REIT's increasingly diverse asset
mix, good funding characteristics, earnings stability and business
position at Sept. 30, 2005, iStar could operate at leverage
(debt/equity) of 2.5X; this leverage cap will fluctuate as iStar's
asset mix and business profile change.  The rating upgrade assumes
iStar's future bond covenant packages will remain materially the
same as its most recent issues.  In specific, Moody's expects
iStar's covenants to be "springing" in nature, whereby should its
senior unsecured ratings fall below Baa2, the covenants at Baa3
and below would be reinstated.

Moody's indicated that the agency continues to be concerned with
the scalability of the REIT's business as its portfolio and
business complexity grow, as well as iStar's ability to sustain
its disciplined culture and customer service as new associates and
offices are added.  The firm is entering an important inflection
point in its development, and managing the transition from a
moderate-sized firm in preponderantly one location to a larger,
more diverse firm by location, headcount and line of business will
be an important challenge -- one that could have rating
implications, both positive and negative.  iStar's investment
portfolio, although continuing to exhibit strong credit quality,
retains several, albeit diminishing, concentrations.  Moody's also
expressed concern over competition encroaching into iStar's
marketplace, as demonstrated by thinning margins in 2005.

iStar's ratings are stable, and rating movement upward is not
expected in the near term.  Moody's stated that an upgrade would
depend on continued stable, profitable growth to at least $15
billion in assets, and greater diversification by asset and
investment area, with further strengthening of its franchise.

Moody's does not see improvements in liquidity, funding structure
or use of secured debt being upward rating drivers, given iStar's
progress in these areas already achieved.  While a material drop
in leverage could boost the rating, Moody's does not see such a
shift as likely.  Circumstances leading to a downgrade would
include leverage above 2.5X, a sharp deterioration in asset
quality, secured debt above 10% of gross assets, or weakened
liquidity.  Persistent asset concentrations would also negatively
pressure iStar's ratings.

These ratings were upgraded:

Issuer: iStar Financial Inc.

   * Senior unsecured debt to Baa2, from Baa3;

   * Preferred stock to Ba1, from Ba2;

   * Senior debt shelf to (P)Baa2, from (P)Baa3;

   * Subordinated debt shelf to (P)Baa3, from (P)Ba1;

   * Preferred stock shelf to (P)Ba1, from (P)Ba2.

iStar Financial Inc. [NYSE: SFI] is a property finance company
that elects REIT status.  iStar provides structured mortgage,
mezzanine and corporate net lease financing.  iStar Financial is
headquartered in New York City, and had assets of $8 billion and
equity of $2.5 billion as of Sept. 30, 2005.


KAISER ALUMINUM: Files Asbestos Trust-Related Plan Documents
------------------------------------------------------------
Kaiser Aluminum Corporation and its debtor-affiliates delivered to
the U.S. Bankruptcy Court for the District of Delaware clean and
blacklined versions of documents related to their Second Amended
Plan of Reorganization:

   (1) the Asbestos PI Trust Agreement,
   (2) the Asbestos Distribution Procedures,
   (3) the Asbestos Alternative Dispute Resolution, and
   (4) the Asbestos Proof of Claim Forms.

Kimberly Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, says copies of the Plan documents are
available for free at:

   * the Debtors' Web site at http://www.kaiseraluminum.com/or

   * the Web site of Logan & Company at http://www.loganandco.com/

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


KMART CORP: Jeri Fisher Wants Stay Lifted to Pursue Lawsuit
-----------------------------------------------------------
Jeri Lynn Fisher asks the U.S. Bankruptcy Court for the Northern
District of Illinois to set aside and amend its ruling issued on
July 21, 2003, and overrule Kmart Corporation's Omnibus
Objection to claims as it relates to her claim.

Ms. Fisher asserts that she was not provided a copy of:

   -- the Omnibus Objection,
   -- the Order sustaining the Objection, or
   -- the affidavit of mailing.

Ms. Fisher insists that she has a meritorious claim.

Furthermore, Ms. Fisher asks the Court -- after it amends the
July 21, 2003 Order disallowing and expunging her Claim -- to
reinstate her Claim and lift the automatic stay with respect her
lawsuit against Kmart pending in the Superior Court of Arizona in
the County of Navajo.  Ms. Fisher explains that:

   (a) the bankruptcy portion of Kmart's case appears to be
       closed and there is no longer any reason in existence that
       justifies Kmart's need or right for stay under the
       appropriate statutes;

   (b) Kmart has filed a plan of reorganization, which has been
       approved; and

   (c) Kmart, by its misconduct, failed to show justification
       for the stay by wrongfully refusing to provide her or her
       counsel information for either settling her Claim or
       allowing the Claim to be adjudicated in a court of law.

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)


LINKS @ WESTFORK: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: The Links @ Westfork, LP
        One Golf Ridge Drive
        Conroe, Texas 77301

Bankruptcy Case No.: 06-30519

Chapter 11 Petition Date: February 7, 2006

Court: Southern District of Texas (Houston)

Judge: Marvin Isgur

Debtor's Counsel: Robert C. Vilt, Esq.
                  Vilt & Associates
                  5177 Richmond, Suite 1250
                  Houston, Texas 77056
                  Tel: (713) 840-7570

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

The Debtor did not file a list of its 20 largest unsecured
creditors.


LMP 8500: Case Summary & 11 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: LMP 8500 Shoal Creek, L.L.C.
        P.O. Box 9767
        Austin, Texas 78766

Bankruptcy Case No.: 06-10161

Chapter 11 Petition Date: February 7, 2006

Court: Western District of Texas (Austin)

Judge: Frank R. Monroe

Debtor's Counsel: Joseph D. Martinec, Esq.
                  Martinec, Winn, Vickers & McElroy, P.C.
                  919 Congress Avenue, Suite 1500
                  Austin, Texas 78701
                  Tel: (512) 476-0750
                  Fax: (512) 476-0753

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 11 Largest Unsecured Creditors:

   Entity                                   Claim Amount
   ------                                   ------------
Architectural Habitat of Austin                 $334,482
1707 West Koenig Lane
Austin, TX 78756

Genie Air                                        $24,104
9118 South Highway 183
Austin, TX 78747

JBG Residential Corp-Northwest                    $8,819
3933 Steck Avenue, Suite B110
Austin, TX 78759

Commercial Real Estate Solutions                  $7,697

Stanberry Commercial                              $5,750

Peel Paulson Design Studio, Inc.                  $5,373

Hill Partners Corporate Services, LLC             $4,620

Sutton Roofing Company                            $3,250

On-Site Blind Cleaning                            $1,454

Native Land Design                                  $630

High Tech Signs                                     $264


LOVESAC CORP: Retains Keen Realty to Auction 21 Retail Leases
-------------------------------------------------------------
The LoveSac Corporation has retained Keen Realty, LLC to market
and dispose of 21 of the company's retail leasehold interests
located throughout the country.  Keen reported that the leaseholds
will be auctioned on Feb. 24, 2006 and the deadline for submitting
bids is Feb. 22, 2006.

LoveSac sells "oversized sacs" -- DuraFoam-filled mega beanbag-
type chairs -- as well as other furniture, apparel, and a variety
of accessories.  The company filed for Chapter 11 protection on
Jan. 30, 2006 in the United States Bankruptcy Court, District of
Delaware.

Keen Realty, LLC is a real estate consulting firm specializing in
maximizing the value of its clients' real estate assets
nationwide.

"We are excited to offer these leases for sale, as they're located
in premier malls and centers throughout the country," Craig Fox,
Keen Realty's Vice President, said.  "Interested parties must act
immediately, as bids must be submitted in accordance with Court
approved bid procedures no later than Feb. 22, 2006.  Qualified
bidders will have the opportunity to compete for the locations at
the auction on Feb. 24, 2006."

The leases, which range in size from 720 sq. ft. - 2,118 sq. ft.,
are located in Connecticut, Iowa, Indiana, Michigan, Missouri,
Nebraska, New Hampshire, New Jersey, New York, Tennessee, and
Texas.

For over 23 years, Keen Consultants has had extensive experience
solving complex problems and evaluating and selling real estate,
leases and businesses.  Keen Realty, a leader in identifying
strategic investors and partners for businesses, has consulted
with hundreds of clients nationwide, and evaluated and disposed of
more than 18,400 properties consisting of approximately
1,723,300,000 sq. ft. across the country.  Recent clients include:
Eddie Bauer/Spiegel, The Penn Traffic Company, Cable & Wireless,
Meadowcraft, Frank's Nursery and Crafts, Arthur Andersen, Service
Merchandise, Tommy Hilfiger, Warnaco, and JP Morgan Chase.

For more information regarding the disposition of these leaseholds
for The LoveSac Corp., contact:

     Craig Fox
     Keen Realty, LLC
     60 Cutter Mill Road, Suite 214
     Great Neck, NY 11021
     Telephone (516) 482-2700
     Fax (516) 482-5764

Headquartered in Salt Lake City, Utah, The LoveSac Corporation --
http://www.lovesac.com/-- operates and franchises retail stores
selling beanbags furniture.  The LoveSac Corp. and three
affiliates filed for chapter 11 protection on Jan. 30, 2006
(Bankr. D. Del. Case No. 06-10080).  When the Debtors filed for
protection from their creditors, they estimated assets and debts
between $10 million to $50 million.


MAGELLAN HEALTH: Completes $122-Mil. Buy-Out of National Imaging
----------------------------------------------------------------
Magellan Health Services, Inc. (Nasdaq:MGLN) has completed its
acquisition of National Imaging Associates, Inc., a privately held
radiology benefits management firm headquartered in Hackensack,
N.J.  The Company paid approximately $122 million, after giving
effect to cash acquired in the transaction, for NIA, which becomes
a wholly owned subsidiary of Magellan.

The Company also confirmed its expectation that the NIA business
would contribute approximately one million dollars of net income,
or $0.02 of earnings per share on a fully diluted basis, and
$13 million of segment profit to Magellan's results in the
remainder of 2006.

Steven J. Shulman, chairman and chief executive officer of
Magellan, said, "With the acquisition of NIA, Magellan has taken a
bold step toward realizing its strategic vision as a leader in the
specialty health care niche.  Radiology benefits management
addresses a top priority for health care purchasers and offers
significant growth opportunity for Magellan.  We look forward to
leveraging our existing customer base, financial strength and
operational infrastructure to support NIA's entry into risk-based
business as a platform for future growth."

NIA manages diagnostic imaging services on a non-risk basis for
its customers, which include some of the nation's largest health
plans, to ensure that such services are clinically appropriate and
cost effective.  With more than 17 million lives under contract,
it manages more lives than any other radiology
benefits management firm in the country.

Headquartered in Farmington, Conn., Magellan Health Services
(Nasdaq:MGLN) is the country's leading behavioral health disease
management organization.  Its customers include health plans,
corporations and government agencies.  The Company filed for
chapter 11 protection on March 11, 2003 (Bankr. S.D.N.Y. Case No.
03-40515).  The Court confirmed the Debtors' Third Amended Plan on
Oct. 8, 2003, allowing the Company to emerge from bankruptcy
protection on Jan. 5, 2004.

                         *     *     *

As reported in the Troubled Company Reporter on May 5, 2005,
Standard & Poor's Ratings Services revised its outlook on Magellan
Health Services Inc. to positive from stable.  At the same time,
Standard & Poor's affirmed its 'B+' counterparty credit rating on
Magellan and its 'B+' issue credit ratings assigned to Magellan's
$241 million 9.375% senior notes due November 2008 and its
$185 million credit facility due August 2008.


MAYTAG CORP: Dec. 31 Balance Sheet Upside-Down by $187 Million
--------------------------------------------------------------
Maytag Corp. delivered its financial results for the quarter ended
Dec. 31, 2005, to the Securities and Exchange Commission on
Feb. 3, 2006.

For the three months ended Dec. 31, 2005, Maytag reported a
$74.9 million net loss on $1.2 billion of net sales, in contrast
to a $14.1 million net loss on $1.1 billion of net sales for the
three months ended Jan. 1, 2005.

At Dec. 31, 2005, the Company's balance sheet showed $2.9 billion
in total assets and $3.1 billion in total liabilities, resulting
in a stockholders' deficit of $187 million.

For the full fiscal year 2005, cash flow provided by operations
was $20.8 million compared with $261.7 million provided by
operations in the same 12-month period in 2004.  Cash flow was
impacted by a larger net loss and an increase in working capital
in 2005 as well as cash payments for restructuring and litigation-
related charges paid in 2005, but recorded in the prior year.

"We showed solid top-line sales growth during the quarter with
increases in all our major appliance product categories, Maytag
Chairman and CEO Ralph Hake said.  "However, I am extremely
disappointed that our positive sales gains in major appliances
were more than offset by our overall high cost structure and poor
floor care performance."

During the quarter, the company also entered into a new
$600 million, five-year, senior-secured revolving credit
agreement.  The new credit agreement should provide the company
with substantially more financial flexibility, including the
capacity to refinance all 2006 debt maturities, as well as
providing working capital needed to operate the business.
Maytag has the ability to increase the new credit facility by
$150 million to  $750 million.

Headquartered in Newton, Iowa, Maytag Corporation --
http://www.maytag.com/-- is a leading producer of home and
commercial appliances.  Its products are sold to customers
throughout North America and in international markets.  The
corporation's principal brands include Maytag(R), Hoover(R),
Jenn-Air(R), Amana(R), Dixie-Narco(R) and Jade(R).

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 17, 2006,
Moody's Investors Service anticipates downgrading Whirlpool
Corp.'s senior long term debt by one notch to Baa2 and
subordinated debt to (P)Baa3 at the conclusion of the purchase of
Maytag Corp.  Whirlpool's commercial paper rating is expected to
be confirmed at P-2.  The rating outlook will be determined at the
conclusion of the review based on updated financial and operating
trends of the companies.  Whirlpool's ratings are currently under
review for possible downgrade pending the acquisition of Maytag.
The acquisition is under review by the U.S. Department of Justice
and has already been approved by European authorities.  The
acquisition is expected to close as early as the first quarter of
2006.

Maytag's ratings are under review with direction uncertain,
pending the completion of the merger.  If its debt is legally
assumed or guaranteed by Whirlpool on a pari passu basis with
Whirlpool's existing debt, Moody's would rate Maytag's debt at the
same level as Whirlpool's.


MCCANN INC: Ch. 11 Trustee Files Disclosure Statement in S.D.N.Y.
-----------------------------------------------------------------
Lee E. Buchwald, the chapter 11 Trustee appointed in McCann,
Inc.'s bankruptcy case, delivered a Disclosure Statement
explaining his Plan of Liquidation to the U.S. Bankruptcy Court
for the Southern District of New York on Feb. 3, 2006.

Payments due under the Plan will be funded from the proceeds of
the liquidation of all of the Debtor's assets, the collection of
accounts receivable and the proceeds of settlement proceedings and
contested matters.

                    Treatment of Claims

Holders of allowed administrative claims will be paid in full on
the later to occur of the effective date of the Plan or the date
the order allowing the administrative claim becomes final.  The
Trustee estimates administrative claim payments to reach
approximately $550,000, exclusive of the $490,000 previously
awarded by the Bankruptcy Court to professionals.  Administrative
claim holders must file requests for payment within 45 days after
the confirmation of the Plan.

Priority tax claims will be paid in full on the earlier of
effective date of the Plan or the date the claim becomes an
allowed Priority Tax Claim.  Priority tax claims consist of the
claims of:

    -- the Connecticut Department of Revenue for $90,000;

    -- the New York State Department of Taxation and Finance for
       $4,000; and

    -- the City of New York Department of Finance for $23,701.

The Internal Revenue Service has issued a notice of deficiency
asserting a claim of $18,752 for tax year 2003.  However, the IRS
has not filed a proof of claim.

The $99,000 claim of the Debtor's landlord for rent will be paid
in full on the effective date of the Plan.

Priority claims asserted by the Debtor's Union Pension and Welfare
Funds, totaling $5,053, will be paid in full on the effective date
of the Plan.

Each holder of a General Unsecured Claim will receive a pro rata
share of any cash remaining after all other claims are paid in
full.  The Trustee will pay unsecured creditors on the later of 30
days after the effective date of the Plan; or within 15 days after
their claims are recognized as allowed unsecured claims.

The Trustee estimates that the Debtor's estate will have from
$1.5 million to $1.6 million in excess cash available to settle
approximately $47 million of general unsecured claims.  This would
result in recoveries of approximately 3.3% for unsecured claim
holders.

Equity holders will get nothing under the Plan.

The Reorganized Debtor will be dissolved upon completion of all
distributions contemplated under the Plan.

A copy of Mr. Buchwald's 45-page Disclosure Statement is available
for a fee at:

     http://www.researcharchives.com/bin/download?id=060208023554

Headquartered in New York, New York, McCann, Inc., is a commercial
interior general contracting company.  On April 15, 2004, a group
of creditors filed an involuntary Chapter 7 petition against
McCann, Inc.  On June 23, 2004, the Debtor exercised its right
under Sec. 706(a) of the Bankruptcy Code to convert its bankruptcy
case to a Chapter 11 case, and an order for relief was entered on
June 25, 2004 (Bankr. S.D.N.Y. Case No. 04-12596 (SMB)).  On July
22, 2004, the court appointed Lee E. Buchwald to serve as Chapter
11 Trustee.  Mr. Buchwald hired Scott S. Markowitz, Esq., at
Todtman, Nachamie, Spizz & Johns, P.C., as his counsel.  Clifford
A. Katz, Esq., at Platzer, Swergold, Karlin, Levine, Goldberg &
Jaslow, LLP, represents the Debtor in its restructuring efforts.


MCLEODUSA INC: Asserts No Contractual Defaults With SBC Entities
----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Dec. 23, 2005, the SBC Entities provide extensive
telecommunication utility services to McLeodUSA Incorporated and
its debtor-affiliates pursuant to 10 separate interconnection
agreements and tariffs in 10 states.

The SBC Entities ask the U.S. Bankruptcy Court for the Northern
District of Illinois not to approve the Debtors' assumption of the
SBC Agreements absent payment of the Cure Amount pre-Effective
Date.

Joji Takada, Esq., at Freeborn & Peters LLP, in Chicago,
Illinois, notes that the Debtors have stated their intention to
assume the SBC Agreements.

Mr. Takada notes that as of Dec. 12, 2005, the Debtors owe the SBC
Entities $35,434,309 in connection with the Debtors' various
defaults under the SBC Agreements.

                        Debtors' Response

Timothy R. Pohl, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Chicago, Illinois, asserts that there are no applicable
contractual defaults under the Debtors' interconnection
agreements and tariffs with the SBC Entities.  The Debtors paid
all undisputed bills of the SBC Entities as they came due
according to their terms.  Therefore, the Debtors need not comply
with Section 365(b)(1) of the Bankruptcy Code to assume the ICAs
and Tariffs.

Mr. Pohl asserts that the most telling evidence that the SBC
Entities fabricated their claim of "defaults by the Debtors" is
that although the SBC Entities knew literally for months before
the Petition Date that the Chapter 11 cases were going to be
commenced and that the ICAs and Tariffs would be sought to be
assumed, no claims of a default or demands for a deposit were
ever made.

In the weeks after the Debtors' emergence from Chapter 11, with
the ICAs and Tariffs having been assumed, the SBC Entities have
sent no delinquency notices, made no deposit demands pursuant to
the provisions of the ICAs or Tariffs, and have availed
themselves of no remedial action to collect what they allege are
sums due to them.

At the Dec. 2, 2005, deadline for parties to object to
confirmation of the Plan, the SBC Entities filed a "Limited
Objection."  However, in their objection, they did not assert any
right to adequate assurance of future performance under Section
365(b)(1).  They provided no information or detailed allegations
about the substance of their purported "cure" claim, beyond
simply saying, in essence, "we will tell you what it is later."

Mr. Pohl notes that the SBC Entities' Notice of Cure Claim
betrays the frivolousness of their demands.  The SBC Entities
merely quoted out-of-context provisions from particular ICAs
selectively, and alleged that the Debtors have in essence
manufactured disputes for certain bills.

"Not only are the allegations baseless, but there is a world of
difference between not paying undisputed bills and not paying
disputed bills -- a difference expressly recognized in the ICAs
and Tariffs, which permit non-payment of disputed items and
prohibit the SBC Entities from claiming default or demanding a
deposit as a result thereof," Mr. Pohl explains.

Mr. Pohl informs the Court that the Debtors are abiding by the
provisions of the ICAs and Tariffs and the regulatory venues and
procedures established for enforcement for the protection of
consumers and competitors alike.   The SBC Entities, however, are
inviting the Court to use Section 365(b)(1) to create new rights
that the SBC Entities do not have under the ICAs and Tariffs, and
to allow them to sidestep the state utility commissions and
courts that routinely hear, and are particularly qualified to
resolve, disputes under the ICAs and Tariffs.

Under the ICAs and Tariffs, the SBC Entities are not entitled to
a deposit as long as the Debtors maintain timely compliance with
their undisputed payment obligations.  The SBC Entities are only
allowed to re-evaluate existing deposit amounts, if they have
sent the Debtors two delinquency notification letters.  In the
present case, Mr. Pohl says, the criteria to require a deposit
from the Debtors have not been met, and no delinquency notice has
ever been sent by the SBC Entities.

Mr. Pohl notes that there are certain bills sent by the SBC
Entities that the Debtors have not paid because the amounts are
being disputed.  Similarly, the Debtors are owed various sums by
the SBC Entities, which the SBC Entities dispute.

Ordinary course-billing disputes are a constant in the industry,
Mr. Pohl maintains.  The non-payment of disputed amounts is
expressly permitted under the ICAs and Tariffs and is
specifically excepted from any determination of whether the
Debtors have a history of late payments and, thus, whether a
deposit may be required.

Mr. Pohl clarifies that the Debtors are not asking the Court to
rule that the Debtors need not pay the bills in dispute.  The
Debtors are simply asking the Court not to grant the SBC Entities
greater rights than what they contracted for or allow the SBC
Entities to circumvent either the substantive or procedural
requirements of the Federal and state regulatory scheme that
govern the ICAs and Tariffs.

                     Evidentiary Hearing

The Debtors are prepared to prove at an evidentiary hearing that
they have been not defaulted under the ICA's or Tariffs, and that
the SBC Entities do not possess cure or adequate assurance
rights, Mr. Pohl tells Judge Squires.

"The Debtors will also be prepared to prove that, even if the
Court finds that there has been such a default, the SBC Entities'
cure and adequate assurance demands are excessive, inappropriate
and should be denied," Mr. Pohl adds.

Headquartered in Cedar Rapids, Iowa, McLeodUSA Incorporated --
http://www.mcleodusa.com/-- provides integrated communications
services, including local services in 25 Midwest, Southwest,
Northwest and Rocky Mountain states.  The Debtor and its
affiliates filed for chapter 11 protection on Oct. 28, 2005
(Bankr. N.D. Ill. Case Nos. 05-53229 through 05-63234).  Peter
Krebs, Esq., and Timothy R. Pohl, Esq., at Skadden, Arps, Slate,
Meagher and Flom, represent the Debtors in their restructuring
efforts.  As of June 30, 2005, McLeodUSA Incorporated reported
$674,000,000 in total assets and $1,011,000,000 in total debts.
Judge Squires confirmed the Debtors' Joint Prepackaged Plan of
Reorganization on Dec. 16, 2005, and that plan took effect on
Jan. 6, 2006.

McLeodUSA Inc. previously filed for chapter 11 protection on
Jan. 30, 2002 (Bankr. D. Del. Case No. 02-10288).  The Court
confirmed the Debtor's chapter 11 plan on April 5, 2003, and
that Plan took effect on April 16, 2002.  The Court formally
closed that case on May 20, 2005.  (McLeodUSA Bankruptcy News,
Issue No. 9 Bankruptcy Creditors' Service, Inc., 215/945-7000).


MCMORAN EXPLORATION: Converts $15M of Senior Notes to Common Stock
------------------------------------------------------------------
McMoRan Exploration Co. privately negotiated transactions to
induce conversion of $15 million of $130 million of its 6%
Convertible Senior Notes due in 2008, into 1,052,631 shares of
McMoRan common stock based on the $14.25 per share conversion
price under terms of the Notes.

McMoRan paid an aggregate $0.9 million in the transactions and
expects to record an approximate $0.9 million charge to expense in
the first quarter of 2006.  McMoRan funded approximately 50
percent of the cash payment from restricted cash held in escrow
for funding of the first six semi-annual interest payments on the
Notes and the remaining portion with its available unrestricted
cash.  As a result of these transactions, the annual interest cost
savings are estimated to approximate $0.9 million.  After the
conversion, McMoRan common shares outstanding total approximately
25.7 million shares.  These transactions are in reliance on the
exemption from registration provided under Section 3(a)(9) of the
Securities Act of 1933.

McMoRan Exploration Co. -- http://www.mcmoran.com/-- is an
independent public company engaged in the exploration, development
and production of oil and natural gas offshore in the Gulf of
Mexico and onshore in the Gulf Coast area.  McMoRan is also
pursuing plans for the development of the MPEH(TM) which will be
used for the receipt and processing of liquefied natural gas and
the storage and distribution of natural gas.

As of Dec. 31, 2005, the company's stockholders' deficit widened
to $86,590,000 from a $49,546,000 deficit at Dec. 31, 2004.


MEGO FINANCIAL: Court Converts Case to Chapter 7 Liquidation
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada converted the
chapter 11 case of Mego Financial Corp., dba Leisure Industries of
America and its debtor-affiliates into a chapter 7 liquidation
proceeding.

Textron Financial Corporation told the Court that the Debtors are
administratively insolvent.  Other reasons Textron said support
converting the Debtors' chapter 11 cases include:

    i) continuing loss to or diminution of the estate and absence
       of a reasonably likelihood of rehabilitation; and

   ii) the Debtors' inability to effectuate a plan;

                         Chapter 7 Trustee

Sara L. Kistler, the U.S. Trustee for Region 17 named
C. Alan Bentley, of Ponte Vedra Beach, Florida, as chapter 7
Trustee for Mego Financial Corp.

Headquartered in Henderson, Nevada, Mego Financial Corp. --
http://www.leisureindustries.com/-- is in the business of
vacation time share resorts sales and management industry.  The
Company and its debtor-affiliates filed for chapter 11 protection
on July 9, 2003 (Bankr. Nev. Case Nos. 03-52300 through
03-2304).  Stephen R Harris, Esq., at Belding, Harris & Petroni,
Ltd., represents the Debtors in their restructuring efforts.  When
the Company filed for protection from its creditors, it listed
$455,179 in assets and $39,319,861 in liabilities.  Its debtor-
affiliates estimated more than $100 million in assets and
liabilities.


MERRILL LYNCH: Fitch Affirms Class F & G Certs.' Low-B Ratings
--------------------------------------------------------------
Merrill Lynch Mortgage Investors, Inc.'s commercial mortgage pass-
through certificates, series 1996-C2 are upgraded by Fitch Ratings
as:

   -- $28.5 million class E to 'AAA' from 'AA+'

In addition, Fitch affirms the following classes:

   -- $36.8 million class A-3 at 'AAA'
   -- $68.3 million class B at 'AAA'
   -- $62.6 million class C at 'AAA'
   -- $56.9 million class D at 'AAA'
   -- Interest-only class IO at 'AAA'
   -- $62.6 million class F at 'BB+'
   -- $39.8 million class G at 'B-'

Fitch does not rate the $15.4 million class H. Classes A-1 and A-2
have been paid in full.

The upgrade reflects improved credit enhancement levels due to
loan payoffs and amortization since Fitch's last rating action.
As of the January 2006 distribution date, the pool's aggregate
certificate balance has decreased 67% to $370.9 million from $1.1
billion at issuance.  There are currently 100 loans remaining in
the pool of the original 300 at issuance.

Currently, six assets (5.52%) are in special servicing.  The
largest specially serviced asset (1.78%) is a real estate-owned
(REO), limited-service hotel in Seattle, Washington.  The asset
has been listed for sale and offers have already been received.
Fitch does not project a loss on this loan at this time.

The second largest specially serviced asset (1.33%) is an REO,
limited-service hotel located in Portland, Oregon.  The special
servicer continues to negotiate with buyers over the sale price of
this asset.  Based on the most appraisal value, Fitch projects a
loss at liquidation.  Anticipated losses on the specially serviced
assets are expected to be absorbed by nonrated class H.

Fitch continues to monitor the Shilo portfolio of loans (10.14%)
within this transaction.  The loans returned to the master
servicer in June 2005 and are current.  Recent operating data
reported by the master servicer shows several properties have
insufficient cash flow to service their debt.

Fitch has identified 26 loans (22.6%) as Fitch Loans of Concern,
which includes the specially serviced loans and those loans with
low debt service coverage ratio and declining occupancies.  Fitch
has incorporated the increased risk associated with these loans
into its rating analysis.


MESABA AIRLINES: Union Members Give Management Thumbs Down
----------------------------------------------------------
Mesaba pilots, flight attendants and mechanics are calling for the
removal of top executives at Mesaba Airlines and MAIR Holdings in
an overwhelming "Vote of No Confidence."

The employee groups, which have formed the Mesaba Labor Coalition,
don't believe that top management has acted in the airline's best
interests.  The decision to transfer virtually all of Mesaba's
profits to MAIR Holdings has put the employees' careers,
livelihood and futures at risk.

Each Mesaba employee who signed a petition reaffirmed that he or
she has absolutely "no confidence in management's ability to lead,
direct, or run either Mesaba or MAIR."

Management is currently seeking to use the bankruptcy process to
reject the pilot, flight attendant, and mechanic contracts, and
has proposed deep wage and benefit cuts.

The "Vote of No Confidence," signed by the vast majority of
Mesaba's unionized employees, is substantiated by these facts:

     * Mesaba Airlines generates more than 95% of MAIR Holdings'
       revenue. Virtually all of Mesaba's profits have been
       transferred to MAIR Holdings, which had $120 million in
       cash and equivalent assets when Mesaba filed for
       bankruptcy.

     * MAIR Holdings began to siphon off Mesaba's profits in late
       2002 when it used Mesaba's earnings to purchase Big Sky
       Airlines.  MAIR announced that Big Sky would become the
       holding company's "growth vehicle" because of its low labor
       costs.  MAIR executives actively pursued growth via Big
       Sky, but were not successful in winning any new business.
       Big Sky has been consistently unprofitable since its
       purchase, yet it is not in bankruptcy.

     * Despite the failed growth strategy, MAIR Holdings
       executives have rewarded themselves with salaries, bonuses,
       and stock options at levels that exceed their peers at both
       regional and mainline carriers.

"This management team has acted shamefully and it's about time the
public knows what we know," said flight attendant Carla Rogat,
vice president of the Association of Flight Attendants unit at
Mesaba.  "Mesaba and MAIR executives are bleeding this airline dry
without regard for anyone or anything but their own financial
gain."

"We agree that Mesaba needs to restructure," says Kevin
Wildermuth, negotiating chairman for the Aircraft Mechanics
Fraternal Association, "but labor is not the problem at Mesaba.
In today's environment, Mesaba cannot subsidize an expensive
holding company and an unprofitable airline subsidiary."

Employees are in agreement that top management at both Mesaba and
MAIR Holdings must be removed if the airline is to successfully
emerge from this bankruptcy reorganization.  "A strong, viable
airline operation requires capable leadership to develop a
workable business plan and implement it in cooperation with its
labor force," said Captain Tom Wychor, ALPA Executive Vice
President and chairman of the ALPA unit at Mesaba.

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

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

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

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


MIRANT CORP: Court OKs NY-Gen's Asset Transfer to New York City
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas gave
Mirant NY-Gen, LLC, a Mirant Corporation debtor-affiliate to:

    (a) convey certain property to Orange & Rockland Utilities,
        Inc., related to the Grahamsville hydroelectric station
        in accordance with a Sublease dated June 30, 1999, by
        and between Orange & Rockland and Mirant NY-Gen, as
        successor to Southern Energy NY-Gen, L.L.C.; and

    (b) transfer certain permits relating to the Grahamsville
        Plant to the City of New York, free and clear of certain
        liens, claims, encumbrances and interest pursuant to
        Section 363(f) of the Bankruptcy Code.

               The Grahamsville Plant Sublease

Along with two combustion turbines, Mirant NY-Gen operates four
hydroelectric generating stations located in Sullivan and Orange
Counties in southeast New York, with a combined nominal capacity
of 44MW.  Three of the hydroelectric stations are owned by Mirant
NY-Gen and are commonly referred to as The Swinging Bridge
Station, The Mongaup Station, and The Rio Station.  The
Grahamsville Plant, the remaining plant, is not owned but is
leased by Mirant NY-Gen from Orange & Rockland under the
Sublease.

The Sublease was executed to effectuate the terms and provisions
of a Gas Turbine and Hydroelectric Generating Stations Sales
Agreement dated as of November 24, 1998, between Orange &
Rockland and Mirant NY-Gen pursuant to which Mirant NY-Gen
acquired certain generating assets from Orange & Rockland.

Under the Sublease, Mirant NY-Gen agreed to perform the terms and
conditions imposed on Orange & Rockland under a lease between
Orange & Rockland, as successor-in-interest to Rockland Light and
Power Company, and the City of New York dated Feb. 2, 1951.

Under the Lease, New York agreed to construct, operate and
maintain the East Delaware Tunnel and granted to Orange &
Rockland's predecessor the right to lease certain real property
for the purpose of constructing, operating and maintaining a
hydroelectric generating plant, which was in fact constructed as
the Grahamsville Plant.

The Sublease terminated by its own terms on December 30, 2005.
The Lease terminated on December 31, 2005.

Approximately 20% of the drinking water for New York flows
through the Grahamsville Plant.  Consequently, the Lease requires
Orange & Rockland to convey to New York certain property relating
to the Grahamsville Plant by the Lease Termination Date or by the
end of 2005.  Under the Sublease, Mirant NY-Gen shares that
obligation with Orange & Rockland.

The Lease also contains an anti-assignment provision.  New York
has taken the position that the Sublease constitutes an
impermissible assignment of the Lease to Mirant NY-Gen without
New York's consent in violation of the Anti-Assignment Provision.

              The Grahamsville Plant Negotiations

Because of the impending Termination Date, Mirant NY-Gen
commenced discussions with Orange & Rockland and New York
regarding its obligations under the Sublease and Orange &
Rockland's obligations to New York under the Lease.

After much discussion and in consultation with its advisors,
Mirant NY-Gen determined to comply with the letter and spirit of
its obligations set forth in the Sublease.

Consequently, the parties have reached an agreement with respect
to the various assets that must be conveyed to New York under the
Sublease and Lease.  Mirant NY-Gen will sell, convey and transfer
to Orange & Rockland the entire Grahamsville Plant including
certain equipment and appurtenances except for some excluded
assets, which Mirant NY-Gen wants to retain.  Orange & Rockland
will in turn convey the Grahamsville Plant Assets to New York.

Mirant NY-Gen will separately convey and transfer to New York two
permits related to the Grahamsville Plant:

    (1) State Pollutant Discharge Elimination System (SPDES)
        Discharge Permit effective August 1, 2003; and

    (2) Petroleum Bulk Storage Certificate issued November 29,
        2005.

The parties have agreed that the Permits will be transferred
directly from Mirant NY-Gen to New York because of the logistical
and administrative difficulties associated with transferring the
Permits.

Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally.  Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590).  Thomas E. Lauria, Esq., at White &
Case LLP, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.
(Mirant Bankruptcy News, Issue No. 91 Bankruptcy Creditors'
Service, Inc., 215/945-7000)

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to power generator and developer Mirant Corp.  The
outlook is stable.  The rating reflects the credit profile of
Mirant, based on the structure the company expects to have on
emergence from bankruptcy at or around year-end 2005.


MIRANT CORP: Board Approves Criteria for 2006 Corporate Payouts
---------------------------------------------------------------
On January 24, 2006, the Compensation Committee of the Board of
Directors of Mirant Corporation approved certain criteria on
which corporate payout factors in the 2006 fiscal year will be
based, Thomas Legro, the Company's senior vice president and
controller discloses in a regulatory filing with the Securities
and Exchange Commission.

Under its short-term incentive plan, Mirant awards annual cash
bonuses or "corporate payout", Mr. Legro relates.  Each of
Mirant's named executive officers is a participant in the short-
term incentive program.

The Company takes into account, as corporate payout factors, a
participant's "target bonus percentage", individual performance
and Mirant's performance against established business and
financial goals.

For the fiscal year 2006, two-thirds of the corporate payout
factor will be dependent on achievement of a range of targeted
Adjusted EBITDA, Mr. Legro tells the SEC.  EBITDA refers to
earnings before interest, taxes, depreciation and amortization.

Mr. Legro explains that the level of Adjusted EBITDA necessary to
earn 50%, 100% and 200% of the target percentage was set taking
into consideration Mirant's projected Adjusted EBITDA under its
2006 operating plan.  Bonus amounts between the threshold and the
target and between the target and maximum will be based on
interpolated performance levels between the specified levels. The
remainder will be dependent upon the achievement of other
operational and strategic metrics.

"The Compensation Committee will be responsible for assessing
Mirant's achievement of such operational and strategic metrics,"
Mr. Legro adds.

Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally.  Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590).  Thomas E. Lauria, Esq., at White &
Case LLP, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.
(Mirant Bankruptcy News, Issue No. 92 Bankruptcy Creditors'
Service, Inc., 215/945-7000)

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to power generator and developer Mirant Corp.  The
outlook is stable.  The rating reflects the credit profile of
Mirant, based on the structure the company expects to have on
emergence from bankruptcy at or around year-end 2005.


MMM HOLDINGS: Moody's Upgrades Senior Debt Ratings to B1 from B2
----------------------------------------------------------------
Moody's Investors Service upgraded the senior debt rating of MMM
Holdings, Inc., and NAMM Holdings, Inc., to B1 from B2.  In
addition, the corporate family rating of MMM Holdings was upgraded
to B1 from B2.  The insurance financial strength ratings of MMM
Healthcare, Inc., and PrimeCare Medical Network, Inc., were
affirmed at Ba2.  The outlook on all the ratings remains stable.

Moody's stated that the key driver of the rating upgrade was the
repayment of $165.3 million of debt at MMM and NAMM.  According to
the rating agency, Aveta Inc., the parent company of MMM and NAMM,
used a portion of the proceeds it received from a private equity
offering in Dec. 2005 to repay a portion of the debt at MMM and
NAMM.  This included $132.5 million of the outstanding $420
million term loan and the full repayment of $32.8 million of
subordinated debt.  Moody's noted that the financial leverage was
reduced to 2.5 times from 4.0 times as of Dec. 31, 2005.  In
addition, the coverage ratio is expected to increase to 6.4 times
during 2006 versus the previously projected 4.1 times prior to the
debt repayment.

Moody's said that the B1 senior secured credit bank facility
rating is based on the consolidated results of MMM and NAMM and
reflects the companies' highly leveraged capital structure,
including the large amount of goodwill, the companies' short
operating history, dependence on the Medicare Advantage product
and geographic concentration in Puerto Rico, as well as the
uncertainty which surrounds the future financial prospects of the
Medicare program.  Although the companies comply with the
regulatory capital requirements of each jurisdiction in which they
operate, Moody's believes that the targeted consolidated capital
adequacy on an NAIC risk-based capital basis is relatively weak at
50% of company action level.  However, the rating agency noted
that the results for 2005 were solid, with Medicare membership
exceeding 130,000 members and net margins of approximately 5%
anticipated.  The rating agency added that given the current
Medicare reimbursement rates and market situation in Puerto Rico,
similar results are expected during 2006.

Commenting further, Moody's said that the Ba2 IFSRs on the two
regulated subsidiaries reflect their dependence on the Medicare
product and their low RBC levels, tempered somewhat by their
strong growth and earnings position.

Moody's noted that the ratings are based on the expectation that
there are no changes in the methodology used by the Centers for
Medicare and Medicaid Services in determining the Medicare
Advantage reimbursement rates, that 100% of excess unregulated
cash flow is used for debt repayment, and that the companies
maintain a consolidated RBC of at least 50% of company action
level.  Moody's also expects that there will be no significant
changes to the financial covenants contained in the secured bank
credit facility and that all covenants will be met or exceeded.

The rating agency stated that the ratings could move up if NAIC
RBC increases to 100% of company action level, debt to EBITDA
falls below 2 times, Medicare membership grows in excess of 10%
during 2006, and there is additional product or geographic
diversification.  However, if there is a significant adverse
change in Medicare reimbursement levels, if NAIC RBC falls below
50% of company action level, if debt to EBITDA exceeds 5 times, if
EBITDA to interest expense falls below 3.5 times, or if a
significant portion of debt is not retired each year, then,
Moody's said, the ratings could be moved down.


MMM Healthcare offers Medicare Advantage products exclusively to
eligible participants in Puerto Rico.  Moody's commented that the
company currently enjoys being the market leader in providing
Medicare Advantage products in Puerto Rico, and being reimbursed
at a very favorable rate from CMS, which determines the rates that
health benefit companies are paid to provide a Medicare Advantage
product.  As a result of these circumstances, Moody's stated, the
company has been able to record impressive growth and earnings
margins since it was established in 2001.

While several competitors have entered the Medicare marketplace in
Puerto Rico in 2005, Moody's said that it expects that MMM
Healthcare will retain its dominant market position.  In addition,
while CMS reimbursement rates are in place for 2006, rates for
2007 and later are susceptible to unpredictable shifts in Medicare
policy emanating from Washington.

NAMM is a medical management company that operates in California
and Illinois.  Its regulated operating subsidiary, PMNI, consists
of 10 owned IPAs in Southern California that contract with major
health care benefit companies on a capitated basis to provide
medical care to commercial and Medicare members.

The last rating action on MMM and NAMM was on Jan. 10, 2006.

These ratings were upgraded with a stable outlook:

   * MMM Holdings, Inc.

     -- senior secured debt rating to B1 from B2;

     -- corporate family rating to B1 from B2;

   * NAMM Holdings, Inc.

     -- senior secured debt rating to B1 from B2.

These ratings were affirmed with a stable outlook:

   * MMM Healthcare, Inc.

     -- insurance financial strength rating of Ba2;

   * PrimeCare Medical Network, Inc.

     -- insurance financial strength rating of Ba2.

Aveta, Inc., is headquartered in Fort Lee, New Jersey.  As of
Sept. 30, 2005, Aveta, as Aveta Holdings, LLC, reported members'
equity of ($24.6) million and 123,771 Medicare members.  For the
nine month period ending Sept. 30, 2005, total revenue was $482
million.


MORGAN STANLEY: Fitch Lifts $10MM Class K Certs.' Ratings to B+
---------------------------------------------------------------
Fitch Ratings upgrades Morgan Stanley Capital I, Inc.'s commercial
mortgage pass-through certificates, series 1998-HF2 as:

   -- $582 million class D to 'AA' from 'A'
   -- $212 million class E to 'A+' from 'BBB+'
   -- $238 million class F to 'A-' from 'BBB'
   -- $185 million class G to 'BBB' form 'BB+'
   -- $106 million class H to 'BBB-' from 'BB'
   -- $212 million class J to 'BB-' from 'B+'
   -- $106 million class K to 'B+' from 'B'

In addition, these classes are affirmed:

   -- $4753 million class A-2 at 'AAA'
   -- Interest only class X at 'AAA'
   -- $529 million class B at 'AAA'
   -- $529 million class C at 'AAA'
   -- $159 million class L at 'B-'

The $10.6 million class M remains at 'CC'.

Fitch does not rate the $1.7 million class N certificates.

The rating upgrades are a result of increased defeasance and
credit enhancement due to prepayments and amortization.  As of the
January 2006 distribution report, the pool's aggregate certificate
balance has been reduced 27% to $773 million from $1.1 billion at
issuance.

There are currently five loans (1.36%) in special servicing.  The
largest specially serviced loan (.44%) is a 554-unit self-storage
property in Mineola, New York, and is 90-plus days delinquent.
The loan transferred as a result of the borrowers' inability to
fund the debt service.  Occupancy at the property has suffered due
to new competition in the area.  The special servicer continues to
work with the borrower to bring the loan current and has
simultaneously begun the foreclosure process.  Recent appraised
value indicates a potential loss if the asset is liquidated from
the trust.

The second-largest loan (.37%) in special servicing is a 70,000-
square feet industrial property in Foster City, California, and is
current.  The loan is expected to become corrected and return to
the master servicer shortly.


MUSICLAND HOLDING: Media Play Wants to Assume GOB Pact with Hilco
-----------------------------------------------------------------
Media Play, Inc., sought and obtained the U.S. Bankruptcy Court
for the Southern District of New York's permission to assume an
agreement dated December 9, 2005, with Hilco Merchant Resources,
LLC.

The agreement relates to Hilco's role as the Going Out of
Business Agent for 61 Media Play stores.

James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, relates that
Media Play and Musicland Purchasing Corp. entered into the Agency
Agreement with Hilco to conduct Going Out of Business or "store
closing" sales at 61 Media Play store locations.  Hilco is
currently in the process of conducting those GOB sales.

Under the terms of the Agreement, in the event of a voluntary
bankruptcy proceeding, Hilco and Media Play agreed to continue
performing in accordance with the contract -- but only if Media
Play assumes the Agreement.  Moreover, all sales by Hilco must be
completed on January 31, 2006, subject to Media Play receiving
written notice of an extension beyond that date.  Unless mutually
agreed upon however, sales will be completed and stores vacated no
later than February 28, 2006, Mr. Sprayregen says.

According to Mr. Sprayregen, the compensation to Hilco for its
services rendered include an Agent's Fee and a 50/50 sharing of
remaining proceeds from sales after expenses and payment of a
certain guaranteed amount to Media Play.

Mr. Sprayregen notes that as of the Petition Date, Media Play owes
$2,000,000 to Hilco.

Mr. Sprayregen asserts that it is in the best interest of
Musicland Holding Corp. and its debtor-affiliates, their creditors
and all parties-in-interest, for Hilco to continue in its
performance of conducting GOB sales.

Media Play risks losing the aggregate retail price of the
Merchandise remaining in the 61 Media Play stores and the
furniture, fixtures and equipment purchase price relating to all
furniture, fixtures and equipment remaining in the same stores if
the Agreement is not assumed.

In addition, if the Agreement is not assumed, the Debtors will be
left with no one to assume the continuation of sales and no one to
pay all the expenses currently being covered by Hilco.

Mr. Sprayregen adds that if Hilco stops performing, the Debtors
will lose out on a recovery amount which would equal 50% of future
proceeds from the GOB Sales.

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: Taps Curtis Mallet-Prevost as Conflicts Counsel
------------------------------------------------------------------
Musicland Holding Corp. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Northern District of Georgia for
permission to employ Curtis, Mallet-Prevost, Colt & Mosle LLP as
their conflicts counsel.

The Debtors need Curtis Mallet-Prevost to handle matters which
cannot be handled by Kirkland & Ellis LLP -- the Debtors' general
bankruptcy counsel -- or other counsel, as a result of an actual
or potential conflict of interest issues.  The Debtors believe
that rather than resulting in extra expense to their estates, the
efficient coordination of efforts between K&E and CMP will avoid
unnecessary litigation, add to the effective administration of the
Chapter 11 Cases and reduce the overall expense of administering
the Chapter 11 Cases.

Moreover, K&E and CMP will function cohesively to ensure that
legal services provided are not duplicative.

Craig G. Wassenaar, Chief Financial Officer of Musicland Holding
Corp., states that CMP will:

   (a) advise the Debtors with respect to their powers and duties
       as debtors-in-possession in the continued management and
       operation of their business and properties;

   (b) attend meetings and negotiate with representatives of
       creditors and other parties-in-interest;

   (c) take all necessary actions to protect and preserve the
       Debtors' estates, including prosecuting actions on the
       Debtors' behalf, defending any action commenced against
       the Debtors and representing the Debtors' interests in
       negotiations concerning all litigation in which the
       Debtors are involved;

   (d) prepare all motions, applications, answers, orders,
       reports and papers necessary to the administration of the
       Debtors' estates;

   (e) take any necessary action on behalf of the Debtors to
       obtain approval of a disclosure statement and confirmation
       of the Debtors' plan of reorganization;

   (f) represent the Debtors in obtaining postpetition financing;

   (g) advise the Debtors in any potential sale of assets;

   (h) appear before the Court, any appellate courts and the
       United States Trustee and protect the interests of the
       Debtors' estates before those Courts and the United States
       Trustee;

   (i) consult with the Debtors regarding tax matters; and

   (j) perform other necessary legal services and provide other
       necessary legal advice to the Debtors, including:

       * the analysis of the Debtors' leases and executory
         contracts and the assumption, rejection or assignment of
         those leases or contracts;

       * the analysis of the validity of liens filed against the
         Debtors; and

       * advice on corporate, litigation and environmental
         matters.

Presently, active matters between the Debtors and certain of the
Conflict Parties, which have been identified by the Debtors or
their counsel, involve Sun Music, LLC and certain of its
affiliates, including Sun Capital Partners III, LP and Sun
Capital Partners III QP, LP; Twentieth Century Fox Home
Entertainment, Inc.; Motorola, Inc., and one or more of its
affiliates; and GMAC Commercial Finance LLC.  CMP will represent
the Debtors on all aspects of those matters.

According to Mr. Wassenaar, CMP has extensive expertise,
experience and knowledge in the field of debtors' and creditors'
rights and business reorganization under Chapter 11 of the
Bankruptcy Code as well as other areas of the law where the
Debtors may need legal advice.

The Debtors believe that CMP is both well qualified and uniquely
able to perform as conflicts counsel to the Debtors in the
Chapter 11 Cases in an efficient and timely manner.

CMP will be paid for its legal services on an hourly basis in
accordance with its ordinary and customary hourly rates and
reimbursed for actual and necessary out-of-pocket expenses.

The current hourly rates charged by CMP are:

       Billing Category                           Range
       ----------------                           -----
       Partners                                $495 to 675
       Counsel                                 $385 to 540
       Associates                              $240 to 495
       Paraprofessionals                       $120 to 170

According to Steven J. Reisman, Esq., a partner at CMP, CMP is a
"disinterested person," as that phrase is defined in Section
101(14) of the Bankruptcy Code, as modified by Section 1107(b).

Mr. Reisman adds that CMP received a classic retainer for $50,000
from the Debtors prior to the Petition Date.  CMP has offset
amounts for prepetition fees and expenses against the retainer and
will hold the balance of retainer and apply it to postpetition
fees and expenses.

As of the Petition Date, the Debtors do not owe CMP any amounts
for legal services rendered or expenses incurred before the
Petition Date which are not covered by the retainer.

                          *     *     *

Judge Stuart M. Bernstein approved the Debtors' application on an
interim basis.

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)


NADER MODANLO: Chap. 11 Trustee Taps Shapiro Sher as Lead Counsel
-----------------------------------------------------------------
Christopher B. Mead, the chapter 11 Trustee for the estate of
Nader Modanlo, asks the U.S. Bankruptcy Court for the District of
Maryland for permission to employ Shapiro Sher Guinot & Sandler as
his counsel.

The Trustee tells the Court that he hired Shapiro Sher as his
counsel to provide him with bankruptcy related legal services. The
Firm will exert efforts to avoid duplication of services with the
Trustee's co-counsel, London & Mead.

Shapiro Sher will:

   1) advise the chapter 11 Trustee regarding possession and
      management of the Debtor's assets and represent the Trustee
      in connection with any proceedings for relief from stay
      which may be instituted in the Bankruptcy Court;

   2) prepare on behalf of the Trustee all necessary applications,
      motions, answers, orders, reports and other legal papers
      required by the Court;

   3) advise, assist and represent the Trustee in preparing,
      filing and prosecuting a disclosure statement and plan of
      reorganization in the Debtor's chapter 11 case ;

   4) represent the Trustee in collateral litigation before the
      Bankruptcy Court and other courts, including appellate
      Courts; and

   5) render all other necessary legal services to the Trustee in
      carrying out his duties and responsibilities in the Debtor's
      chapter 11 case.

Richard M. Goldberg, Esq., a member at Shapiro Sher, is one of
the lead attorneys from the Firm performing services for the
chapter 11 Trustee.

Bankruptcy Court records don't show if Shapiro Sher received a
retainer, nor do they disclose the Firm's professionals'
compensation rates.

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

Nader Modanlo of Potomac, Maryland, is the President of Final
Analysis Communication Services, Inc.  Mr. Modanlo filed for
chapter 11 protection on July 22, 2005 (Bankr. D. Md. Case No.
05-26549).  Joel S. Aronson, Esq., at Ridberg Sherbill & Aronson
LLP, represents the Debtor.  When the Debtor filed for protection
from his creditors, he listed total assets of $776,237 and total
debts of $106,002,690.  Christopher B. Mead is the chapter 11
Trustee for the Debtor's estate.


NOBEX CORP: Will Sell Intellectual Property Assets on March 16
--------------------------------------------------------------
Bizjournals.com reported that Nobex Corporation will sell its
intellectual property assets on March 16, 2006.

The Company has already attracted a $3.5 million stalking-horse
bid from Biocon Ltd.  Biocon is a biopharmaceutical firm that
partnered with the Debtor to make an insulin pill and a pill for
cardiovascular disease.

Nobex's Chairman, Charles Dimmler III, said that a number of other
interested parties have also maintained contact with Nobex
executives.  "It all depends on the results of the auction," Mr.
Dimmler added.  "If a strategic buyer purchases the assets and
then integrates those assets into its operation, then it may very
well be that Nobex ceases to operate."

Potential bidders have until March 13, 2006, to submit competing
bids, make deposits, and execute purchase agreement documents.

Biocon has made $1.2 million of DIP financing available to the
Debtor.  Biocon is based in Bangalore, India, and, as of March 31,
2005, held a 4.4% equity stake Nobex, according to The Indian
Express.  Those close relationships have caused discomfort for the
Official Committee of Unsecured Creditors appointed in Nobex's
chapter 11 case.

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).  Ben Hawfield, Esq., at
Moore & Van Allen PLLC, represents Nobex.  J. Scott Victor at SSG
Capital Advisors, L.P., is providing Nobex with investment banking
services.  Michael B. Schaedle, Esq., and David W. Carickhoff,
Esq., at Blank Rome LLP, represent the Official Committee of
Unsecured Creditors in Nobex's chapter 11 case, and John Bambach,
Jr., and Ted Gavin at NachmanHaysBrownstein, Inc., provides the
Committee with financial advisory services.  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.


NORTHWEST AIRLINES: Wants Court to Approve Accord with GE & Safran
------------------------------------------------------------------
Northwest Airlines, Inc., asks the U.S. Bankruptcy Court for the
Southern District of New York for authority to implement the
transactions and agreements contemplated in its Financing
Restructuring Term Sheet, dated January 20, 2006, with General
Electric Company, and Safran, pursuant to Sections 105(a), 363,
364 and 1110 the Bankruptcy Code and Rule 9019 of the Federal
Rules of Bankruptcy Procedure.

The Parties agree to restructure the terms of:

   (a) Northwest Airline's $125,000,000 Variable Rate Guaranteed
       Notes due December 22, 2009;

   (b) the leveraged leases regarding two 1990 vintage Airbus
       A320-200 aircraft into mortgage loan facilities;

   (c) the indebtedness relating to four 1992 vintage Airbus
       A320-200 aircraft; and

   (d) the indebtedness relating to two 2003 vintage aircraft --
       an Airbus A319-100 and an Airbus A320-200.

Bruce R. Zirinsky, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, tells the Court that Northwest Airlines negotiated a
restructuring of each of the four aircraft financing arrangements
and agreements to purchase spare engines, to provide Northwest
substantial reductions in principal of the indebtedness relating
to the Aircraft, deferrals of principal payments with respect to
other Aircraft and the Term Loan, and deferral of progress
payments with respect to purchase of the engines.

Mr. Zirinsky asserts that these restructurings will result in
substantial savings for the estate and reduce the burdens on
Northwest Airlines' cash flow.  The agreement with GE and Safran
will also settle other disputes among the parties, including a
payment due on the term loan in December 2005.

Northwest Airlines also seeks permission to file a redacted
version of the Term Sheet to protect confidential information it
contains.  Northwest Airlines will provide an unredacted version
of the Term Sheet to the Official Committee of Unsecured
Creditors and its advisors.

The restructurings and other agreements contemplated in the Term
Sheet, are conditioned upon, among other things, approval of
Northwest Airlines' board of directors and will be considered by
the board prior to the hearing on the Debtors' request.

                    Proposed Restructurings

A. Term Loan

In December 1990, Northwest Airlines entered into four Note
Purchase Agreements with institutional investors providing for
the purchase of its $125,000,000 Variable Rate Guaranteed Notes
due December 22, 2009.  As of the Petition Date, the aggregate
principal amount outstanding under the Notes was $77,000,000.

Mr. Zirinsky says that GE has guaranteed the principal of and
interest on the Notes.  Safran has agreed to indemnify GE for a
portion of the payments GE made.  Northwest Airlines has also
agreed to reimburse GE and Safran.

Aircraft, engines, spare parts, and other collateral, secure
Northwest Airlines' obligations to GE and Safran.  Section 1110
may be applicable with respect to certain of the collateral.

Pursuant to the Term Sheet, GE and Safran agree to delay the
principal amortization for the Term Loan, such that the principal
repayment due on December 22, 2005, and each subsequent principal
repayment date under the Term Loan documents will be suspended
for a fixed period of time, or until the first principal
repayment date occurs after confirmation of a Plan of
Reorganization in Northwest Airlines' Chapter 11 case.

Mr. Zirinsky says that the restructuring is conditioned upon the
closing under the restructured Term Loan documents occurring
prior to March 31, 2006.

GE and Safran also agree to suspend certain financial covenants
and modify appraisal requirements in the Term Loan documents.
The Term Loan will otherwise remain as currently in effect,
including in particular the interest rate under the Notes.

Northwest Airlines will make periodic interest payments to GE and
Safran, which will be entitled to administrative expense
priority, Mr. Zirinsky informs the Court.

Northwest Airlines will also reimburse GE for the interest
payment due on December 22, 2005, under the Term Loan, with
interest at the current rate under the Term Loan.

B. 1990 Aircraft

Northwest Airlines currently leases the 1990 Aircraft under
leveraged leases.  The parties have agreed to restructure the
financings for the 1990 Aircraft as mortgage loan facilities,
including a reduction in the principal amount of the indebtedness
relating to the aircraft.  GE and Safran will transfer title of
the 1990 Aircraft to Northwest Airlines, and convert the current
leveraged lease debt into direct mortgage loans to Northwest
Airlines at a reduced amount.

The interest rate under the financing for each 1990 Aircraft will
be adjusted, and the loan amortization schedules for each
aircraft will be amended.  No return conditions will apply with
respect to either 1990 Aircraft, and insurance provisions will be
amended favorably for Northwest Airlines.  The principal
reduction amounts, together with any other deficiency suffered by
GE and Safran as a result of the reduction, will constitute
prepetition general unsecured claims of GE and Safran.

C. 1992 Aircraft

Northwest Airlines currently owns each of the 1992 Aircraft,
subject to mortgage loan facilities.  The parties have agreed to
restructure the financings for the 1992 Aircraft, including a
reduction in the principal of the indebtedness relating to
each 1992 Aircraft, with further reductions under certain
circumstances.  The loan amortization schedules for each 1992
Aircraft will be amended to reflect the principal reductions.

All amounts paid by GE and Safran to the current lenders to
effect the reduction in principal -- through partial prepayments
under the related financing documents -- together with any other
deficiency suffered by GE and Safran as a result of the
prepayment, will constitute prepetition general unsecured claims
of GE and Safran.  The interest rate will remain as in the
existing financings.  Insurance provisions will also be amended
favorably for Northwest Airlines.

D. 2003 Aircraft

Northwest Airlines currently owns each of the 2003 Aircraft,
subject to mortgage loan facilities.  On November 14, 2005,
Northwest Airlines agreed under Section 1110(a) to perform the
required obligations with respect to each of the 2003 Aircraft.

The existing loan facilities relating to the 2003 Aircraft
currently mature in 2006.  The parties have agreed to restructure
the financings for the 2003 Aircraft, such that the current debt
maturities will be extended for a number of years.  During the
extended period, minimum periodic payments on the principal of
the debt will be made.

                   Section 1110(b) Agreements

Mr. Zirinsky informs the Court that the 1990 Aircraft and 1992
Aircraft were the subject of an agreement pursuant to Section
1110(b) to extend the 60-day period under Section 1110(a) through
January 16, 2006.  The parties agree to further extend the
Section 1110 period with respect to these Aircraft until the
closing of the restructuring agreement.

                      Additional Agreements

In connection with the restructurings, Northwest Airlines will
make the payments, cures, and reimbursements necessary to satisfy
all of its payment obligations under the financing documents
relating to the 1990 Aircraft, 1992 Aircraft, 2003 Aircraft, and
the Term Loan, to the extent consistent with the existing Section
1110(b) agreements relating to the 1990 Aircraft and the 1992
Aircraft, the Section 1110(a) agreements relating to the 2003
Aircraft and the restructuring of the Term Loan as provided in
the Term Sheet.

Additionally, the restructured mortgage loan obligations for the
1990 Aircraft and 1992 Aircraft will constitute postpetition
financings and, from and after the closing date, all of its
payment obligations, including those caused by a postpetition
default and acceleration, will be entitled to administrative
priority.

The Term Sheet further provides that any proposed Chapter 11
plan will not seek to modify or impair any of GE's or Safran's
security interests in the 1990 Aircraft, 1992 Aircraft, 2003
Aircraft and collateral under the Term Loan.

Northwest Airlines has also agreed to take delivery of a number
of spare engines that were originally scheduled for delivery in
2005.  With respect to spare engines currently scheduled for
delivery in 2006, the parties have agreed that Northwest Airlines
may defer a progress payment on each engine until the date of
delivery, or may cancel the delivery of any of the engines before
a certain time, subject to the forfeiture of the existing
deposits on each engine.  All the spare engines delivered to
Northwest Airlines will be included in the collateral securing
the Term Loan.

                Restructurings Should Be Approved

Mr. Zirinsky tells Judge Gropper that the restructured financings
will provide Northwest Airlines with continued use of the
Aircraft and Term Loan collateral during its Chapter 11 case and
afterward, on terms and conditions favorable to the estate, and
will advance its goal of bringing the costs for its aircraft in
line with current market values.

If the Term Sheet is not approved and the restructured financings
are not implemented, absent further agreement, the Section 1110
period will expire and the automatic stay will be terminated with
respect to six of the Aircraft.

Mr. Zirinsky asserts that Northwest Airlines has satisfied
Section 364(c) because GE and Safran are unwilling to provide
credit to Northwest to purchase the 1990 Aircraft, and are
unwilling to restructure the 1992 mortgage loans on an unsecured
or superpriority basis.

Mr. Zirinsky maintains that the mortgage loan facilities will be
beneficial to Northwest Airlines' estate and creditors, as they
will allow Northwest Airlines to acquire the 1990 Aircraft and
substantially reduce obligations related to the 1990 Aircraft and
1992 Aircraft.

Northwest Airlines Corporation -- http://www.nwa.com/-- is
the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-
17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $14.4 billion in total assets and $17.9
billion in total debts.  (Northwest Airlines Bankruptcy News,
Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000)


NORTHWESTERN CORP: Plan Committee Asks for Surplus Distribution
---------------------------------------------------------------
NorthWestern Corporation could be required to make surplus
distributions from funds reserved for the payment of disputed
claims if the U.S. Bankruptcy Court for the District of Delaware
agrees to the Plan Committee's move to distribute excess reserved
funds to allowed Class 7 claim holders.

NorthWestern, however, opposes the Plan Committee's motion, saying
any distribution from the reserved funds is premature since there
are still outstanding disputed claims that need to be paid out of
the fund.

                    Surplus Distribution

The Plan Committee, composed of several members of NorthWestern's
Official Committee of Unsecured Creditors, was created pursuant to
the Debtors' confirmed plan of reorganization.  The committee was
specifically formed to oversee the post-confirmation claims
reconciliation and settlement process.

In addition to the formation of the Plan Committee, NorthWestern
also established a Disputed Claims Reserve to satisfy disputed
claims against the estate.  The Reorganized Debtor set aside 13.5%
of its New Common Stock to fund the reserve.  In October 2004,
NorthWestern created a sub-reserve within the Disputed Claims
Reserve containing shares of New Common Stock worth $50 million.
The sub-reserve was created to satisfy the disputed claims of PPL
Montana LLC.

In September 2005, eleven months after NorthWestern's plan of
reorganization became effective, the Plan Committee filed a motion
asking the Bankruptcy Court to compel NorthWestern to distribute
excess shares from the Disputed Claims Reserve.

The Plan Committee told the Court that the Disputed Claims Reserve
already contained sufficient surplus shares to warrant a
supplemental distribution.  Surplus shares constitute any
difference between the actual amount paid to settle a disputed
claim versus the amount originally set aside for it.

The Plan Committee pointed out that the 2.2 million shares of New
Common Stock released from the PPL sub-reserve after the
settlement of PPL's claims are surplus shares.  The Plan Committee
wants the Court to designate the PPL surplus shares as surplus
distributions.

In addition, the Plan Committee wants NorthWestern to provide
information regarding the total number of shares within the
Disputed Claims Reserve constituting surplus distributions.  They
want these surplus shares distributed to allowed Class 7 claim
holders.

                    NorthWestern's Response

NorthWestern tells the Bankruptcy Court that excess shares
resulting from the settlement with PPL are not "surplus
distributions" and should be returned to the Disputed Claims
Reserve to pay for other disputed claims.

NorthWestern further stated that if the Plan Committee's motion is
approved, holders of allowed claims would be receiving post-
reorganization shares with a current market value close to or in
excess of 100% of their pre-petition claims.

In the event that the proposed surplus distribution is approved,
NorthWestern wants the Bankruptcy Court to:

     -- declare that no further shares need to be held in reserve
        in connection with remaining unresolved class 9 claims
        held by Law Debenture Trust Company of New York and Magten
        Asset Management Corporation and any alleged claims that
        may be asserted by Securities and Exchange Commission; or

     -- allow Northwestern to segregate shares in the Disputed
        Claims Reserve for the claims asserted by Law Debenture
        and Magten, and any civil claim that may be asserted by
        the SEC, and to distribute any excess shares remaining
        pursuant to the plan.

NorthWestern Corporation, d/b/a NorthWestern Energy --
http://www.northwesternenergy.com/-- is one of the largest
providers of electricity and natural gas in the Upper Midwest and
Northwest, serving more than 617,000 customers in Montana, South
Dakota and Nebraska. On Sept. 14, 2003, Northwestern filed a
voluntary petition for relief under chapter 11 of the Bankruptcy
Code.  The U.S. Bankruptcy Court fort he District of Delaware
confirmed Northwestern's Plan of Reorganization on Oct. 19, 2004
and the plan became effective on Nov. 1, 2004.

                         *     *     *

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


NORTHWESTERN CORP: Provides Update on Strategic Alternatives
------------------------------------------------------------
The Board of Directors of NorthWestern Corporation d/b/a
NorthWestern Energy (Nasdaq: NWEC) provided an update to its
stockholders regarding its ongoing review of strategic
alternatives.

As previously reported in the Troubled Company Reporter on Dec. 8,
2005, the Board directed management and its financial advisor
Credit Suisse to commence an evaluation of all strategic
alternatives to maximize value for all stockholders.  In
connection with this review, NorthWestern has entered into
confidentiality agreements with a select number of parties who
have expressed an interest in participating in the process.  Under
the terms of the confidentiality agreements, the identities of
these parties will not be disclosed.  The Company expects formal
due diligence to commence as early as this week.

The Board is gratified by the quality of the expressions of
interest received thus far and that such interest demonstrates
that the strategic review process is the best means of maximizing
stockholder value.

At this time, the Board has not decided to pursue any specific
strategic alternative.  It is expected that the Board will make
its determination following completion of due diligence and
confirmation of interest by parties, which may take several weeks.
The Board has informed all interested parties that it may
terminate the process at any time and that there is no guarantee
that any transaction will take place.

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

                         *     *     *

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


NRG ENERGY: Gets Access to $5.575 Billion Senior Sec. Financing
---------------------------------------------------------------
NRG Energy, Inc., entered into a new senior secured credit
facility with a syndicate of financial institutions providing for
up to $5.575 billion financing:

Morgan Stanley Senior Funding, Inc., is the administrative agent.
Morgan Stanley & Co. Incorporated, serves as collateral agent.
Morgan Stanley Senior Funding, Inc., and Citigroup Global Markets
Inc. are the joint lead bookrunners, joint lead arrangers and co-
documentation agents.

The facility consists of:

   (1) a $3.575 billion senior first priority secured term loan
       facility;

   (2) a $1.0 billion senior first priority secured revolving
       credit facility; and

   (3) a $1.0 billion senior first priority secured synthetic
       letter of credit facility.

The New Senior Credit Facility replaced NRG's then existing senior
secured credit facility.  The Term Loan Facility will mature on
February 2, 2013, and will amortize in 27 consecutive equal
quarterly installments of 0.25% of the original principal amount
of the Term Loan Facility during the first 6-3/4 years with the
balance payable on the seventh anniversary.  The full amount of
the Revolving Credit Facility will mature on February 2, 2011.
The Letter of Credit Facility will mature on February 2, 2013.  No
amortization will be required.

The New Senior Credit Facility is guaranteed by substantially all
of NRG's existing and future direct and indirect subsidiaries,
with certain customary or agreed-upon exceptions for unrestricted
foreign subsidiaries, project subsidiaries and certain other
subsidiaries.  In addition, the New Senior Credit Facility is
secured by liens on substantially all of the assets of NRG and the
assets of its subsidiaries, with certain customary or agreed-upon
exceptions for unrestricted foreign subsidiaries, project
subsidiaries and certain other subsidiaries.  The capital stock of
substantially all of NRG's subsidiaries, with certain exceptions
for unrestricted subsidiaries, foreign subsidiaries and project
subsidiaries, has been pledged for the benefit of the New Senior
Credit Facility lenders.

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

                         *     *     *

As reported in the Troubled Company Reporter on Jan. 16, 2006,
Fitch Ratings has initiated rating coverage of NRG Energy, Inc. by
assigning a 'BB' rating to NRG's proposed $5.2 billion secured
credit facility, consisting of:

     * a $3.2 billion secured term loan B and $2 billion of
       revolving credit/synthetic letter of credit facilities,

     * a 'B' rating to NRG's proposed $3.6 billion issuance of
       senior unsecured notes, and

     * a 'CCC+' rating to NRG's proposed issuance of $500 million
       mandatory convertible preferred stock.

In addition, Fitch has assigned NRG a 'B' issuer default rating,
as well as recovery ratings for the proposed debt instruments.
The Rating Outlook is Stable.  The ratings have been initiated by
Fitch as a service to investors.

Recovery ratings by Fitch are:

   NRG Energy, Inc.

     -- $3.2 billion secured term loan 'RR1';
     -- $1 billion secured revolving credit line 'RR1';
     -- $1 billion secured synthetic letter of credit 'RR1';
     -- $3.2 billion senior unsecured notes 'RR4';
     -- $500 million mandatory convertible preferred stock 'RR6'

As reported in the Troubled Company Reporter on Jan. 9, 2006,
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on power generation company NRG Energy Inc.

Standard & Poor's also assigned its:

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

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

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

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

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

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


PACIFIC COAST: Moody's Places $30 Mil. Junk Rated Notes On Watch
----------------------------------------------------------------
Moody's Investors Service placed four classes of notes issued by
Pacific Coast CDO, Ltd., on watch for possible downgrade:

   (1) the Aaa rated U.S. $450,000,000 Class A First Priority
       Senior Secured Floating Rate Notes due 2036;

   (2) the A2 rated U.S. $96,000,000 Class B Second Priority
       Senior Secured Floating Rate Notes due 2036;

   (3) the Caa2 rated U.S. $21,000,000 Class C-1 Mezzanine
       Secured Floating Rate Notes due 2036; and

   (4) the Caa2 rated U.S. $9,000,000 Class C-2 Mezzanine Secured
       Floating Rate Notes due 2036.

According to Moody's, this action is due to deterioration in
credit quality of the collateral pool.  Moody's noted that as of
Dec. 2005, excluding defaulted securities, the weighted average
rating factor of the collateral pool was 1924.

   Rating Action: On Watch For Possible Downgrade

   Issuer: Pacific Coast CDO, LTD.

      * Tranche Description: U.S. $450,000,000 Class A First
           Priority Senior Secured Floating Rate Notes due 2036

           Current Rating: Aaa

      * Tranche Description: U.S. $96,000,000 Class B Second
           Priority Senior Secured Floating Rate Notes due 2036

           Current Rating: A2

      * Tranche Description: U.S. $21,000,000 Class C-1 Mezzanine
           Secured Floating Rate Notes due 2036

           Current Rating: Caa2

      * Tranche Description: U.S. $9,000,000 Class C-2 Mezzanine
           Secured Floating Rate Notes due 2036

           Current Rating: Caa2


PERFORMANCE TRANSPORTATION: Can Pay Prepetition Employee Wages
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
authorized Performance Transportation Services, Inc., and its
debtor-affiliates to:

   a. pay prepetition:

         -- wages, salaries and other compensation;
         -- employee medical, insurance and similar benefits;
         -- workers' compensation obligations;
         -- vacation and similar benefits; and
         -- reimbursable employee expenses; and

   b. make deductions from employees' paychecks.

However, the Bankruptcy Court clarifies that the Debtors will not
pay more than $10,000 in Unpaid Compensation to any single
Employee without further authority from the Court.

The Debtors currently employ approximately 2,100 people.  About
1,900 of the Employees are covered by various collective
bargaining agreements, and all of the Union Employees work full-
time.  The Debtors employ around 220 people on a full-time
salaried basis and four people on a part-time basis.

According to John Stalker, vice president and chief financial
officer of Debtor Leaseway Motorcar Transport Company, the
Employees' skills and their knowledge and understanding of the
Debtors' infrastructure, operations and customer relations are
essential to the effective reorganization of the Debtors'
businesses.

"Without the continued services of the Employees, an effective
reorganization of the Debtors will not be possible," Mr. Stalker
asserts.

                 Prepetition Employee Obligations

A. Wages & Salaries

The Debtors' average aggregate monthly wage and salary expense
ranges between $10,560,000 and $11,850,000, consisting of:

   -- Union Employee wages that range between $9,430,000 and
      $10,720,000;

   -- salaries of approximately $1,150,000; and

   -- a relatively nominal amount to the Part-Time Employees.

Because the Debtors' Employees are paid in arrears, as of the
Petition Date, many of the Debtors' Employees may not have been
paid all of their prepetition wages.

The Debtors estimate their unpaid accrued salaries, wages and
other compensation as of the Petition Date, to total around
$3,900,000 -- approximately $345,000 to Salaried Employees and
$3,550,000 to Union Employees.

The Debtors also obtain the services of seven to 10 individuals
who work on an independent contract basis.  The total expense to
the Debtors of the Independent Contractors is less than $50,000
per month.  Although the Independent Contractors are not the
Debtors' employees in the legal sense, Mr. Stalker contends that
their services are important to the Debtors' ongoing operations.

B. Deductions and Withholdings

The Debtors routinely deduct amounts from paychecks, including:

   -- union dues;

   -- garnishments, child support and similar deductions; and

   -- other deductions payable pursuant to employee benefit
      plans.

The Debtors forward the Deductions to various third-party
recipients.  On average, the Debtors have historically deducted
approximately $1,000,000 to $1,200,000 from the Union Employees'
paychecks per week and around $160,000 from the Salaried
Employees' paychecks per payroll period.

The Debtors are also required by law to withhold from the
Employees' wages amounts related to federal, state and local
income taxes, social security and Medicare taxes for remittance
to the appropriate federal, state or local taxing authority.  The
Debtors must then match from their own funds for social security
and Medicare taxes and pay, based on a percentage of gross
payroll, additional amounts for state and federal unemployment
insurance.

The Debtors' Payroll Taxes, including both the employee and
employer portion, for 2005 were on average $15,000 for each of
the Employees.  The Payroll Taxes are approximately $900,000 each
month.

C. Reimbursable Expenses

Prior to the Petition Date, and in the ordinary course, the
Debtors reimbursed Employees for certain expenses incurred on the
Debtors' behalf in the scope of their employment.

Salaried Employees are entitled to reimbursement for expenses of
business travel and for entertainment of customers.  The Debtors
spend approximately $25,000 to $30,000 per month on Reimbursable
Expenses of Salaried Employees.

Union Employees are also entitled to reimbursement for toll
charges and other authorized business expenses.  Reimbursement of
Union Employees is handled by the individual terminals operated
by the Debtors, which issue checks to the Union Employees.  The
Debtors transfer funds to the terminals' "petty cash accounts"
for this purpose.  The Debtors spend approximately $83,000 per
month to fund the petty cash accounts at the various terminals,
the large majority of which is used to fund reimbursements.

Some Reimbursable Expenses are charged to a company credit card.
The Card, which the Debtors directly pay for, has a $10,000
credit limit.  If the charges on the Card are not paid, the
Card's issuer could seek to enforce payment from an individual
employee who is associated with the Card.

                  Prepetition Employee Benefits

The Debtors provide Salaried Employees in ordinary course with
certain employee benefits.

A. Life and Accidental Death & Dismemberment Insurance

The Debtors provide life insurance and accidental death and
dismemberment coverage for their Salaried Employees through
Jefferson Pilot.  Salaried Employees who have completed at least
90 days of service and work at least 30 hours per week receive
the coverage at no cost to them.  The coverage provides a benefit
equal to three times the employee's salary up to a maximum of
$500,000, with an additional $20,000 benefit if the employee is
enrolled in the Debtors' medical plan.

B. Sick Pay

Salaried Employees who have attained one year of service are
eligible for salary continuation for absences due to illness or
injury for up to 90 consecutive days.  After 90 days, the
Debtors' long-term disability insurance provides coverage to the
Salaried Employees.

C. Long Term Disability Insurance

The Debtors provide long-term disability insurance for their
Salaried Employees through Jefferson Pilot.  Salaried Employees
who have completed at least 90 days of service and work at least
30 hours per week receive the coverage at no cost to them.  The
coverage provides a benefit equal to 60% of the employee's salary
up to a maximum of $8,000 per month.  The coverage commences when
an employee has been disabled for 90 days and continues until the
employee is 65.

The Debtors pay the entire cost of the long-term disability
insurance.  The total monthly cost to the Debtors to provide
long-term disability insurance, along with life insurance and
accidental death and dismemberment coverage, is approximately
$5,000.

D. Medical Plan

The Debtors provide either a standard or a choice medical plan
for their Salaried Employees through Blue Cross Blue Shield of
Michigan.  Both plans are provided through a preferred provider
organization, with higher coverage and lower deductibles and co-
pays when the employee uses providers within the preferred
network.

The standard plan has a yearly deductible of $1,000 per person
and $2,000 per family for in-network care and $2,000 or $4,000
for out-of-network care.  The choice plan deductibles are $250 or
$500 for in-network care and $500 or $1,000 for out-of-network
care.  The patient co-pay amounts for office visits under the
standard plan are typically twice as much as the co-pay amounts
under the choice plan and the prescription co-pay amounts under
the standard plan are one and a half times those of the choice
plan.

Salaried Employees who have completed at least 90 days of service
and work at least 30 hours per week may choose to receive
coverage under one of the Medical Plans.  Under the standard
plan, the employee pays $64 per month for individual coverage,
$116 per month to cover the employee and one family member, or
$170 per month to cover the employee's entire family.  Under the
choice plan, the employee pays $80 per month for individual
coverage, $145 per month to cover the employee and one family
member, or $210 per month to cover the employee's entire family.

The Salaried Employees' contributions pay between 18% and 25% of
the cost of the Medical Plan.  The Debtors pay the remaining
cost.  The total monthly cost to the Debtors of providing the
Medical Plan is approximately $26,000.

If a Salaried Employee opts out of the Debtors' Medical Plan and
the Debtors' Dental Plan, the Debtors pay the Employee $58 per
month.  The Debtors pay a much smaller Opt-Out Payment if the
Employee opts out of the Medical Plan but uses the Dental Plan.
The total amount of Opt-Out Payments paid by the Debtors in
December 2005 was $2,096.

E. Dental Plan

The Debtors provide two dental care options for their Salaried
Employees through Aetna -- a PPO plan or a Dental Maintenance
Organization plan.  Salaried Employees who have completed at
least 90 days of service and work at least 30 hours per week may
choose to receive the coverage.  Under either the PPO or the DMO
plan, the employee pays $18 per month for individual coverage,
$35 per month to cover the employee and one family member, or $42
per month to cover the employee's entire family.

The Salaried Employees' contributions pay 50% or more of the cost
of the Dental Plan.  The Debtors pay the remaining cost.  The
total monthly cost to the Debtors of providing the Dental Plan is
approximately $3,000.

F. 401(k) Plans

The Debtors maintain two 401(k) plans for the benefit of their
Salaried Employees.  Each Salaried Employee 401(k) Plan provides
for automatic pre-tax deductions of eligible compensation up to
the limits set by the Internal Revenue Code.  Approximately 286
Employees participate in the Salaried Employee 401(k) Plans, and
the approximate amount withheld from the Employees' paychecks per
payroll period is $67,000.  The Debtors also pay matching
contributions to the two Salaried Employee 401(k) Plans.  The
Debtors deposit 25 cents for every dollar a Salaried Employee
contributes, up to a maximum Employee contribution of 6% of his
or her compensation

The annual cost to the Debtors of maintaining the two Salaried
Employee 401(k) Plans is $1,000 per plan, which is paid in
advance.  The Debtors' monthly matching contributions with
respect to the Salaried Employee 401(k) Plans are approximately
$14,000.

G. Flexible Spending Account

The Debtors maintain flexible spending accounts to allow the
Salaried Employees to set aside money to pay for medical expenses
and dependent care with pre-tax dollars.  Each employee who
chooses to participate may set aside up to $500 per year for
medical expenses and up to $5,000 per year for dependent care
expenses.  The contributions are spread evenly over the entire
year and are automatically deducted from the Employees' pay.

Approximately 20 Employees participate in the Flexible Spending
Plans and the approximate monthly amount withheld from the
Employees' paychecks is $1,900.

The Debtors pay Benefit Administrative Services International
Corp. to manage the Flexible Spending Plans and to pay claims.
The cost to the Debtors is a $400 annual fee, paid in advance,
and approximately $130 per month.

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

Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors
in their restructuring efforts.  When the Debtors filed for
protection from their creditors, they estimated assets between $10
million and $50 million and more than $100 million in debts.
(Performance Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


PHOTOCIRCUITS: Taps Anthony V. Curto as Special Purpose Trustee
---------------------------------------------------------------
Photocircuits Corporation asks the U.S. Bankruptcy Court for the
Eastern District of New York to appoint Anthony V. Curto as the
successor Special Purpose Trust Fund Trustee pursuant to a January
26, 1993, agreement between the Debtors and Kollmorgen
Corporation.

Louis J. Stans, the former Special Purpose Trustee, recently
resigned from his position.

In 1986, PC Acquisition Corporation, an entity formed, owned and
controlled by the Debtor, acquired the real property, plant and
equipment located at 31 Sea Cliff Avenue, Glen Cove, New York,
from Kollmorgen.

After the transaction, litigation between the parties ensued
involving the responsibility for the cleanup of environmental
waste, including hazardous substances at the Gen Cove Property.
The litigation involving the Debtors included a lawsuit filed by
the City of Glen Cove (Dist. E.D.N.Y. Case No. 90-CV-0939).

The Debtor and Kollmorgen eventually agreed, under a settlement
agreement, to establish a trust for the purpose, among other
things, of providing funding for the remediation of the Glen Cove
Property.  The Agreement required that each of the parties
designate separate trustees to administer and manage the Trust
Estate.  Pursuant to the Trust, the Trust Estate consists of two
separate funds designated as the Special Purpose Fund and the
General Purpose Fund.  The Debtor named Mr. Stan as its trustee
for the Special Purpose Fund.  Kollmorgen tapped James A. Ederas
as its trustee for the Special Purpose Fund.

The Debtor deposited $1.5 million to the Trust.  At present,
around $500,000 remains in the Special Purpose Trust and there are
continuing and ongoing remediation expenses still to be paid.

Upon termination of the Special Purpose Trust, 20% of its balance,
if any, will be distributed to the Debtor.

Headquartered in Glen Cove, New York, Photocircuits Corporation
-- http://www.photocircuits.com/-- was the first independent
printed  circuit board fabricator in the world.  Its worldwide
reach comprises facilities in Peachtree City, Georgia; Monterrey,
Mexico; Heredia, Costa Rica; and Batangas, Philippines.  The
Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr.
E.D.N.Y. Case No. 05-89022).  Gerard R Luckman, Esq., at Silverman
Perlstein & Acampora LLP, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated more than $100 million in assets and
debts.


PHOTOWORKS INC: Posts $328K Net Loss in 1st Quarter of Fiscal 2006
------------------------------------------------------------------
PhotoWorks, Inc., delivered its financial results for the quarter
ended Dec. 24, 2005, to the Securities and Exchange Commission on
Feb. 6, 2006.

Fiscal first quarter highlights include:

     -- digital sales of $2.3 million, a 76% increase over the
        same period last year;

     -- a 43% decline in 35mm film processing and other
        traditional revenue, to $1.6 Million; and

     -- a 43.7% jump in gross margin, compared to 32.9% for the
        same period last year.

The Company reported a net loss of $328,000 for the quarter ended
Dec. 24, 2005, a 67% improvement compared to a net loss of
$991,000 in the first quarter of fiscal year 2005.

For the three months ended Dec. 24, 2005, the Company generated
revenues of $3,964,000 versus $4,219,000 for the same period last
year.

At Dec. 24, 2005, Photoworks' balance sheet showed $3,313,000 in
total assets and liabilities of $3,779,000.

The Company has experienced significant revenue declines and has
incurred operating losses in the past several years.  For the
first quarter 2006, cash flow used in operations was $56,000,
primarily attributable to a net loss of $328,000.  As compared to
prior periods, the net loss was reduced by increased gross profits
and a reduction in operating expenses.

Management has taken various actions to reduce operating expenses.
Implementation of various cost reduction projects combined with
the outsourcing of its entire production capacity lead to the shut
down of the 45,000 sq foot production facility and the move to a
15,000 sq ft office facility.  The entire project and its full
cost impact will be seen after the move to the new facility in
February 2006.  The costs related to these transactions were
accrued in fiscal year 2005 and the related cash flows will
negatively affect the second quarter of fiscal 2006.

"PhotoWorks is beginning to show results from its investment in
digital photography," said Philippe Sanchez, Chairman and CEO of
PhotoWorks.  "We are pleased with the performance of our digital
products and services over the holiday period, and we expect this
trend to continue."

                     Going Concern Doubt

Williams & Webster, PS, the Company's auditor, expressed
substantial doubt about the Company's ability to continue as a
going concern after it audited the financial statements for the
year ending Sept. 30, 2005.  The auditing firm pointed to the
Company's net losses and cash flow shortages.

Copies of the Company's financials for the quarter ended Dec. 24,
2005 is available for free at http://researcharchives.com/t/s?512

PhotoWorks(R), Inc. (OTCBB:FOTO) -- http://www.photoworks.com/--  
is an online photography services company.  Every day,
photographers send film, memory cards and CDs, or go to the
Company's website to upload, organize and email their pictures,
order prints, and create Signature Photo Cards and Custom Photo
Books.


PIER 1: S&P Lowers Corporate Credit Rating to B With Neg. Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on specialty home furnishings retailer Pier 1 Imports Inc.
to 'B' from 'BB'.  The rating remains on CreditWatch with negative
implications, where it was placed on Dec. 19, 2005.

"The downgrade reflects our expectation that results for the
fourth quarter ending Feb. 28, 2006, deteriorated substantially
following much weaker operating results for the first nine
months," said Standard & Poor's credit analyst Ana Lai.

Pier 1 has not been able to make progress in turning around its
negative sales trends and there has been a significant decline in
credit protection measures.  Moreover, Standard & Poor's is
concerned about how successful Pier 1 will be in its efforts to
turn around sales and profitability through new merchandising and
marketing initiatives.


PLY GEM: Moody's Rates $121 Million Incremental Senior Loan at B1
-----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Ply Gem
Industries, Inc.'s $121 million incremental senior secured credit
facility and affirmed all of the existing ratings of Ply Gem;
however, the ratings outlook has been changed from stable to
negative.

The change in the ratings outlook primarily reflects the company's
underperformance for 2005 relative to Moody's expectations coupled
with the additional debt that Ply Gem is taking on to acquire AWC
Holding Company, an aluminum and vinyl window manufacturer geared
primarily to new construction markets in the south and south west
U.S.

The change in outlook reflects continued high leverage for the B1
rating category and the belief that the company may be more
challenged now in reducing its debt and improving its free cash
flow to total debt to a level more in line with the B1 rating
category by the end of 2006 than after the MW Manufacturer's
acquisition in mid-2004.

Other factors contributing to negative outlook include:

   -- a further increase to the existing substantial goodwill
      when compared to the amount of tangible assets;

   -- the company's historical acquisition appetite; and

   -- increased exposure to the more volatile and cyclical new
      construction market at a time when new housing construction
      is expected to weaken in 2006 after several years of strong
      housing starts.

The affirmation of the company's corporate family rating and
existing debt instruments as well as the assignment of a B1 on the
company's incremental term loan reflect the company's geographic
diversification, well known brand names, market position, cost
reduction focus, and strong management team plus the expected
synergies that the company should be able to achieve as it
integrates Alenco's operations which are also expected to broaden
the company's geographic reach and competitive position,
particularly in the Florida, Arizona and Texas markets.

These rating actions have been taken:

   * $121 million incremental senior secured term loan credit
     facility, due 2011, assigned a B1;

   * $277 million senior secured term loan, due 2011, affirmed at
     B1;

   * $70 million senior secured revolving credit facility, due
     2009, affirmed at B1;

   * $360 million 9% senior subordinated notes, due 2012,
     affirmed at B3;

   * Corporate Family Rating, affirmed at B1.

Proceeds from the $121 million incremental senior secured credit
facility along with $8 million of Alenco management rollover
equity will be used primarily to purchase Alenco for $120 million
or 6.1 times estimated 2005 adjusted EBITDA plus fees.  The
additional term loan will increase the company's pro forma debt to
EBITDA to 5.6 times from 5.4 times using Moody's standard analytic
adjustments.  While this may not seem significant, the company was
already weakly positioned in the B1 rating category plus Moody's
had expected leverage to drop to around 5.0 times by FYE 2005
after the MW acquisition in mid-2004.

The $121 million incremental senior secured term loan will be pari
passu with other senior secured indebtedness and will benefit as
well from upstream and downstream guarantees as well as a security
interest in all the tangible and intangible assets of Ply Gem;
however, tangible asset coverage for the total senior secured
credit facilities should be construed as weak given the
disproportionate amount of goodwill on the balance sheet.

Projected 2006 free cash flow to debt is expected around 3.6%
which is considered weak for the ratings category.  While
unanticipated higher raw material prices hurt the company's
margins and its free cash flow generation in 2005, Ply Gem's
acquisition based growth strategy continues to constrain Ply Gem's
ability to de-lever its balance sheet leaving little cushion to
absorb any further negative impacts to its operating margin or
balance sheet.  Moody's also notes that goodwill, which is
projected to represent approximately 70% of assets in 2006, will
undoubtedly continue to result in low ROA which could indicate the
possibility of asset write downs sometime in the future.

Given the Alenco transaction and the current housing environment,
a ratings upgrade is highly unlikely; however, to stabilize its
ratings Ply Gem will undoubtedly need to allocate all of its free
cash flow towards debt reduction, take a more aggressive approach
to reducing its cost structure, and improve its free cash flow to
debt ratio to over 5% by the end of 2006 in addition to turning in
an operating performance that would strongly indicate continued
improvement in the company's credit metrics to a level that is
more consistent with those typically found at the B1 ratings level
which would include FCF to total debt above 8% and debt to EBITDA
at 5 times or lower by FYE 2007.

Given the uncertainty surrounding new construction in the housing
industry and volatile raw material prices over the balance of
2006, a marked slowdown in housing starts or a spike in raw
material prices resulting in margin compression leading to an
increase in debt to EBITDA in excess of 6.0 times or FCF to debt
below 3% would likely result in a downgrade.

It should be noted that stockholders' equity, estimated at a pro
forma $266 million as of Dec. 31, 2005, includes PIK preferred
stock that was contributed as equity to the Ply Gem LBO in 2004 by
its financial sponsors and management.  While this preferred stock
is not mandatorily redeemable by the company, it is not unusual
for this type paper to be refunded as part of a partial or
complete recapitalization that could transpire down the road.
Moody's notes that the term of the credit facilities limit the
company's ability to pay cash dividends on the PIK notes.

Headquartered in Kearney, Missouri, Ply Gem Industries, Inc., is a
leading manufacturer and distributor of building, remodeling and
renovation, and the do-it-yourself products for the residential
markets.  Its products include vinyl siding, windows, patio doors,
fencing, railing and decking products.  Pro forma revenues,
including Alenco, for 2005 are approximately $974 million.


R.H. DONNELLEY: Completes $1.86 Billion Merger with Dex Media
-------------------------------------------------------------
R.H. Donnelley Corporation completed its acquisition of Dex Media,
Inc., on January 31, 2006, pursuant to an October 3, 2005,
Agreement and Plan of Merger.

With the completion of the Dex Media Merger, each share of Dex
Media's common stock was canceled and converted into the right to
receive $12.30 in cash and 0.24154 of a share of the Company's
common stock, for the aggregate consideration of approximately
$1.86 billion in cash and approximately 36.5 million shares of the
Company's common stock.

At the completion of the Dex Media Merger, the stockholders of the
Company immediately prior to the effective time of the Dex Media
Merger, and the stockholders of Dex Media immediately prior to the
effective time of the Dex Media Merger, owned approximately 47%
and 53% of the Company's shares of outstanding common stock,
respectively.

The Company financed the cash portion of the Dex Media Merger
consideration through a combination of proceeds from the sale of
senior notes issued in a private placement and borrowings under
credit facilities of the Company's subsidiaries.

A full-text copy of the Plan of Merger Agreement is available for
free at http://ResearchArchives.com/t/s?50f

R.H. Donnelley -- http://www.rhd.com/-- is a Yellow Pages
publisher and local online search company.  RHD publishes
directories with total distribution of approximately 28 million
serving approximately 260,000 local and national advertisers in 19
states.  RHD publishes directories under the Sprint Yellow
Pages(R) brand in 18 states with total distribution of
approximately 18 million serving approximately 160,000 local and
national advertisers, with major markets including Las Vegas,
Nevada, and Orlando and Fort Myers, Florida.  In addition, RHD
publishes directories under the SBC Yellow Pages brand in Illinois
and Northwest Indiana with total distribution of approximately 10
million serving approximately 100,000 local and national
advertisers.  RHD also offers online city guides and search
websites in its major Sprint Yellow Pages markets under the Best
Red Yellow Pages(R) brand at http://www.bestredyp.com/and in the
Chicago area at http://www.chicagolandyp.com/

                         *     *     *

As reported in the Troubled Company Reporter on Feb. 2, 2006,
Standard & Poor's Ratings Services lowered its ratings on R.H.
Donnelley Corp. and its operating subsidiary Donnelley (R.H.),
Inc., including its corporate credit rating to 'BB-' from 'BB', as
expected, following the company's announcement that the company
has completed its acquisition of Dex Media Inc.

In addition, all ratings on RHD and RHD Inc. were removed from
CreditWatch with negative implications.

Furthermore, Standard & Poor's affirmed bank loan rating on RHD
Inc. and all ratings on the Dex family of companies, including the
corporate credit rating of 'BB-'.  S&P said the outlook is stable.

As reported in the Troubled Company Reporter on Jan. 13, 2006,
Fitch Ratings has initiated rating coverage on R.H. Donnelley
Corp. by assigning a 'B+' Issuer Default Rating and a 'CCC+'
rating to RHD's senior unsecured notes.

Fitch has also assigned specific issue ratings to R.H. Donnelley
Inc. and has revised ratings on Dex Media Inc. and its wholly
owned subsidiaries, Dex Media West and Dex Media East.  All Dex
ratings are removed from Rating Watch Negative where they were
placed Oct. 3, 2005.

The 'B+' IDR applies to each of the five issuing entities.  The
rating action affects approximately $8.5 billion of debt
outstanding at Sept. 30, 2005.  Fitch said the Rating Outlook is
Stable.

As reported in the Troubled Company Reporter on Jan. 12, 2006,
Moody's Investors Service affirmed R.H. Donnelley Corporation's B1
Corporate Family rating and assigned a Caa1 rating to its proposed
$2.142 billion senior unsecured notes.  The rating action follows
the company's announcement that it has revised the structure of
the debt that it plans to issue in connection with its proposed
acquisition of Dex Media Inc.

Moody's took these rating actions:

Ratings Assigned:

  R.H. Donnelley Corporation:

     * Proposed $332 million (in gross proceeds) 6.875% series A-1
       senior discount notes, due 2013-- Caa1

  R.H. Donnelley Finance Corporation III:

     * Proposed $600 million (in gross proceeds) 6.875% series A-2
       senior discount notes, due 2013 -- Caa1

     * Proposed $1,210 million Series A-3 senior unsecured notes,
       due 2016 -- Caa1

Ratings Withdrawn:

  R.H. Donnelley Corporation:

     * Proposed $1,842 million senior unsecured notes -- Caa1

  Dex Media, Inc.:

     * Proposed $250 million 7% add-on senior unsecured notes
       -- B3

Ratings Affirmed:

  R.H. Donnelley Corporation:

     * Corporate Family rating -- B1

     * $300 million 6.875% senior unsecured notes, due 2013
       -- Caa1

  R.H. Donnelley Inc.:

     * $175 million senior secured revolving credit facility,
       due 2009 -- Ba3

     * Proposed $350 million add-on senior secured term loan D-1,
       due 2011 -- Ba3

     * $544 million senior secured term loan A, due 2009 -- Ba3

     * $1,433 million senior secured term loan D, due 2011 -- Ba3

     * $325 million 8.875% senior notes, due 2010 -- Ba3 (will be
       withdrawn at closing)

     * $600 million 10.875% senior subordinated notes, due 2012
       -- B2

  Dex Media Inc.:

     * Corporate Family rating -- Ba3 (will be withdrawn at
       closing)

     * $570 million 9% senior discount notes, due 2013 -- B3

     * $500 million 8% senior unsecured notes, due 2013 -- B3

  Dex Media East LLC:

     * $100 million senior secured revolving credit facility,
       due 2008 -- Ba2

     * $364 million senior secured term loan A, due 2008 -- Ba2

     * $452 million senior secured term loan B, due 2009 -- Ba2

     * $450 million 9.875% senior unsecured notes, due 2009 -- Ba3

     * $341 million senior subordinated notes, due 2012 -- B1

  Dex Media West LLC:

     * $453 million add-on senior secured term loan B-1 (reduced
       from $503 million), due 2010 -- Ba2

     * $100 million senior secured revolving credit facility,
       due 2009 -- Ba2

     * $392 million senior secured term loan A, due 2009 -- Ba2

     * $917 million senior secured term loan B, due 2010 -- Ba2

     * $385 million senior unsecured notes, due 2010 -- B1

     * $300 million senior unsecured notes, due 2011-- B1 (will be
       withdrawn at closing)

     * $762 million 9.875% senior subordinated notes, due 2013
       -- B2

R.H. Donnelley Corporation's speculative grade liquidity rating is
affirmed at SGL-1.  However, Moody's expects to withdraw this
rating at closing and assign a new speculative grade liquidity
rating to the surviving entity.

Moody's said the rating outlook is stable.


REFCO INC: Creditors Oppose Converting Chapter 11 to Liquidation
----------------------------------------------------------------
Creditors of Refco Inc. and Refco Capital Markets, including Bank
of America Corp. and Wells Fargo & Co., filed memoranda opposing
the customers' attempts to convert Refco Capital Markets Ltd.'s
Chapter 11 bankruptcy case into a Chapter 7 liquidation
proceeding, Reuters reports.

In response to the customers' assertion that they are entitled to
their assets, Refco declared that the assets belong to the
company, and Refco thinks those customers ought to have the same
treatment as other unsecured creditors.

Refco tells Reuters that recharacterizing Refco Capital Markets as
an inadvertent stockbroker would unfairly and inequitably advance
the interests of a small group of clients to the detriment of
clients who traded in commodities, foreign currency, and even
those who traded in securities but do not meet the stringent
definition of 'customer'.

According to Reuters, VR Global Partners, a Refco Capital Markets
customer and major creditor, is ready to submit overwhelming
evidence that will prove that Refco Capital Markets is a
stockbroker.

A week after discovering that former chief executive Phillip
Bennett hid $430 million of debt, Refco filed for protection from
creditors.  The company is now selling some assets to pay
creditors owed up to $16.8 billion.

Mr. Bennett has pleaded innocent to conspiracy, fraud and other
charges.

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

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


RGLP ENTERPRISES: Case Summary & 7 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: RGLP Enterprises LLC
        aka Select
        49 West 24th Street
        New York, New York 10010

Bankruptcy Case No.: 06-10212

Type of Business: The Debtor sells beverages & liquor.

Chapter 11 Petition Date: February 7, 2006

Court: Southern District of New York (Manhattan)

Judge: Allan L. Gropper

Debtor's Counsel: Chris Mularadelis, Esq.
                  Ballon, Stoll, Bader & Nadler, P.C.
                  1450 Broadway
                  New York, New York 10018-2268
                  Tel: (212) 575-7900
                  Fax: (212) 764-5060

Estimated Assets: Unknown

Estimated Debts:  Unknown

Debtor's 7 Largest Unsecured Creditors:

   Entity                        Claim Amount
   ------                        ------------
TSAI Relaty                           $54,000
7W 36th Street, 2nd Floor
New York, New York 10036

Charmer Industries                    $23,000
48-11 20th Avenue
Astoria, New York 1105

Peerless Import                       $14,000

Chase Bank                            $16,000

Internal Revenue Service              $10,000

Con Ed                                 $5,000

Verizon                                  $900


RIM SEMICONDUCTOR: Embarq(TM) System Gets Positive Response
-----------------------------------------------------------
Brad Ketch, President and CEO of Rim Semiconductor Company,
informed the Company's shareholders in a letter dated Feb. 1,
2006, that Rim's Embarq(TM) E30 (Release 1.3) digital signal
processor has generated a high degree of interest and support from
two of its target customers.

Mr. Ketch revealed that the customers are interested in presenting
the merits of the Embarq(TM) system to their own clients, the
wireline telephone service providers.  The customers confirmed
that demand for telecommunications gear from wireline telephone
service providers is very strong, and that it is likely to
increase in the future.

The Embarq(TM) E30 (Release 1.3) digital signal processor was made
available to prospective customers for evaluation and testing in
the first quarter of fiscal 2006.  The Embarq(TM) system, is
designed to substantially increase the capacity of existing copper
telephone networks, allowing telephone companies, office building
managers, and enterprise network operators to provide enhanced and
secure video, data and voice services over the existing copper
telecommunications infrastructure.

The Company is currently working on Release 1.4 of the E30 and
Release 1.1 of the Embarq(TM) E20 analog front end.

In his letter to shareholders, Mr. Ketch also discussed:

      -- the Company's receipt of $672,500 of net proceeds from a
         loan.  The new funding will be used to retire debt, pay
         general monthly expenses, and continue developing the
         Embarq(TM) product family.

      -- the completion of approximately 85% of possible
         conversions related to the Company's $3.5 million
         convertible debentures issue.  The notes are convertible
         into Rim's registered common stock.

      -- the restatement of the Company's quarterly report for the
         period ended July 31, 2005 to correct an accounting error
         in the treatment of certain features of the debentures
         issued in May 2005.

                      Going Concern Doubt

Marcum & Kliegman LLP expressed substantial doubt about Rim's
ability to continue as a going concern after it audited the
Company's financial statements for the fiscal years ended Oct. 31,
2005 and 2004.  The auditing firm pointed to the Company's
$6,923,386 net loss in the year ending Oct. 31, 2005, and a
$5,506,287 loss in fiscal 2004.  The $3,145,391 working capital
deficiency as of Oct. 31, 2005, also caused concern.

                     About Rim Semiconductor

Headquartered in Portland, Oregon, Rim Semiconductor, fka New
Visual Corporation -- http://www.rimsemi.com/-- is an emerging
fabless communications semiconductor company.  It has made
available an advanced technology that allows data to be
transmitted at greater speed and across extended distances over
existing copper wire.


ROBERT JAFARI: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Joint Debtors: Robert Bahram & Poopak Amanda Jafari
               7969 Four Mile Lake Road
               Three Lakes, Wisconsin 54562

Bankruptcy Case No.: 06-10155

Chapter 11 Petition Date: February 6, 2006

Court: Western District of Wisconsin (Eau Claire)

Judge: Thomas S. Utschig

Debtors' Counsel: Leonard G. Leverson, Esq.
                  Kravit, Hovel, Krawczyk & Leverson s.c.
                  825 North Jefferson Street, Suite 500
                  Milwaukee, Wisconsin 53202-3737
                  Tel: (414) 271-7100
                  Fax: (414) 271-8135

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $10 Million to $50 Million

Debtors' 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
JP Morgan Chases Bank, N.A.   Personal guaranty of   $10,825,000
4090 East Ogden               maker, or co-maker of
Hinsdale, IL 60521            term loan, 3 working
    - and -                   capital loans, & line
JP Morgan Chases Bank, N.A.   of credit balance
120 South LaSalle Street
Chicago, IL 60603

Wynn Las Vegas                Gambling debt           $1,173,000
c/o Marc H. Rubinstein
3131 Las Vegas Boulevard South
Las Vegas, NV 89109

Dr. Amir Saed                 Loan                    $1,018,512
c/o Ronald Peterson
Jenner & Block LLP
One IBM Plaza
Chicago, IL 60611

Bellagio                      Gambling debt           $1,000,000
Attn: Patrick Kragor
3600 Las Vegas Boulevard South
Las Vegas, NV 89109

American Express              Credit card debt          $354,054
c/o David Conover
Jaffe & Asher LLP
600 Third Avenue
New York, NY 10016

Atlantis Casino Resort        Gambling debt             $350,000
Attn: Lyndon Stockton
Kerzner International -
Linwood Commons
2106 New Road, Suite C7
Linwood, NJ 08221

Caesars Palace                Gambling debt             $250,000
Attn: Lyza Jascolt
3570 Las Vegas Blvd. South
Las Vegas, NV 89109

Chase Auto Finance            Unsecured portion of      $183,361
                              vehicle loans

R______ Saed                  Loan                      $147,594

MBNA America (Mastercard)     Credit card debt          $130,000

Chase (Mastercard)            Credit card debt           $90,000

Neiman Marcus                 Credit card debt           $64,584

M&I Bankcard Services         Credit card debt           $51,082

Dr. Robert Saed               Loan                       $49,172

Capital One Auto Finance,     Unsecured portion of       $19,673
Inc.                          vehicle loan. Vehicle
                              being surrendered.

Wildman, Harrold, Allen &     Legal fees                 $13,060
Dixon

Ford Motor Credit             Unsecured portion of        $8,442
                              vehicle loan

Mercedes-Benz Credit          Unsecured portion of       Unknown
                              vehicle loan. Vehicle
                              surrendered on 1/17/06.

Rolls Royce Motor Car         Unsecured portion of       Unknown
Financial Services            vehicle loan. Vehicle
                              surrendered on 1/25/06.

Wisconsin Public Service      Utility                    Unknown
Corp.


SAINT VINCENTS: Extends Dadourian Lease for Another Four Years
--------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates sought and obtained permission from the U.S.
Bankruptcy Court for the Southern District of New York to:

   (a) extend their lease on premises owned by Dadourian Export
       Corporation for an additional term of four years and
       eight months; and

   (b) assume the Extended Lease, effective as of Jan. 31, 2006.

The Court further authorizes the Debtors to pay Dadourian $3,948
in full satisfaction of any and all cure amounts due to Dadourian
under the Extended Lease.

The Debtors operate an acute care family health center at 168
Canal Street, also known as 25 Elizabeth Street, New York, in
Manhattan's Chinatown neighborhood.  They currently lease the
Premises from Dadourian.

The Lease was scheduled to expire by its terms on Sept. 30, 2005.
Effective as of Sept. 30, 2005, the Court approved a stipulation
between the parties extending the time within which the Debtors
may assume or reject the Lease, through and including Nov. 30,
2005, and approving extension of the Lease.

John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP, in New
York, relates that the parties have engaged in negotiations to
further extend the term of the Lease.  The parties have agreed to
extend the Lease for an additional term of four years and eight
months.

Pursuant to the proposed Extended Lease, the Debtors:

   -- will continue to lease the Premises, which comprised of the
      entire 4th floor and part of the 5th floor of the building;
      and

   -- are obligated to remit to Dadourian a $31,000 monthly rent
      plus additional rent comprised of certain taxes, utility,
      and insurance expenses as well as common area charges.

Mr. Rapisardi asserts that the Debtors' continued occupation of
the Premises is the most cost effective way to continue to operate
the Clinic at this time.

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: Agrees to Pay $880,000 to Julia Nelson
------------------------------------------------------
Prior to Saint Vincents Catholic Medical Centers of New York and
its debtor-affiliates' bankruptcy filing, Julia Nelson, as
administrator of the estate of Alfred Nelson, deceased, and as
guardian of her and Mr. Nelson's children, commenced an action in
the United States District Court for the Eastern District of New
York against several defendants, including the Debtors, alleging
that medical malpractice at SVCMC's Bayley Seton hospital caused
the death of Alfred Nelson.

Prior to trial in the Action, Ms. Nelson's counsel agreed to
settle the Action:

   (a) globally against all defendants for $2,300,000; and

   (b) with respect to the claims against the Debtors and their
       employees, directly with the Debtors' primary insurance
       carrier for SVCMC's Bayley Seton Hospital, Medical
       Liability Mutual Insurance Company, for $880,000.

Prior to consummation of the Settlement, the Debtors filed their
Chapter 11 cases resulting in the imposition of the automatic
stay.

To effectuate the Settlement, Ms. Nelson asked the Court to lift
the automatic stay.

The Debtors determined that they have sufficient primary insurance
coverage from Medical Liability for the period to fund the
Settlement with Ms. Nelson.  Therefore, modifying the automatic
stay to allow consummation of the Settlement will not require
payment from the assets of their estates.

To resolve the Action, the Debtors and Ms. Nelson agreed to modify
the automatic stay to permit:

   (a) Ms. Nelson to execute a proper Stipulation of
       Discontinuance, General Release, and Affidavit of
       Liens/Hold Harmless Agreement with defense counsel and
       present a wrongful death compromise order to a court with
       competent jurisdiction for approval of the Settlement;

   (b) upon approval of the Settlement, the parties to consummate
       the Settlement through the distribution of insurance
       proceeds totaling $880,000 to Ms. Nelson.

       However, Ms. Nelson and the estate of Alfred Nelson will:

       * in no event be entitled to recover any property of the
         Debtors or their estates and will instead have recourse
         solely against the available Insurance Proceeds;

       * not have an allowed claim pursuant to Section 502 of the
         Bankruptcy Code against any of the Debtors and will have
         no right to share in any distribution from any of the
         Debtors' estates, whether under a Chapter 11 plan of
         reorganization or otherwise; and

   (c) use of the Insurance Proceeds, to the extent available, to
       pay the Debtors' defense costs and any possible indemnity,
       and no further; and

   (d) Ms. Nelson will release and forever discharge the Debtors
       from any  all claims and actions that are known or
       unknown.

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: Nurses' Association Inks New Three-Year Contract
----------------------------------------------------------------
New York State Nurses Association Nurses at St. Vincent's Hospital
Manhattan have ratified a new three-year contract with the
hospital.  The new contract provides St. Vincent's important
savings as the healthcare organization undergoes reorganization.

"St. Vincent's is grateful to its nurses for their dedication and
commitment throughout this long process.  After months of
negotiations, NYSNA and St. Vincent's reached an agreement that
marks a responsible economic balance between the short term fiscal
needs of the hospital and our joint commitment to the long term
future of our organization," said Guy Sansone, chief executive
officer and chief restructuring officer of Saint Vincent Catholic
Medical Centers.

The contract provides for a 6% increase on base salary over the
three-year agreement with most of the increase to occur in the
latter years.  Additionally, there will be a temporary deferral of
increases to the experience pay differential for a portion of the
contract.  With a shared understanding of the current short-term
economic challenges facing the hospital, the St. Vincent's
settlement will save in excess of $3 million over the term of the
contract when compared to 9% increases on base salary agreements
reached at other leading New York City hospitals in 2005.

"The contract recognizes the important work that is performed by
our nurses every day to deliver quality and compassionate
healthcare to our patients, and it will ensure our ability to
recruit and retain a dedicated nursing staff as we emerge from
bankruptcy," added Mr. Sansone.

The new agreement also resolves several operational and staffing
issues that will enhance day-to-day employee relations and ensure
that our working environment is one that will remain attractive to
nursing professionals who will continue to deliver the
compassionate patient care for which our hospital is uniquely
renowned.

The contract runs from February 2005 to February 2008.

St. Vincent's Hospital Manhattan is committed to providing
excellent, comprehensive medical care in a warm and compassionate
environment.  The hospital is located in the heart of Greenwich
Village and serves all of downtown and much of the Westside of
Manhattan.

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)


SASCO NET: Interest Shortfall Prompts S&P to Junk Notes' Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the
notes issued by SASCO Net Interest Margin Trust 2003-12XS to
'CCC' from 'A-'.

The lowered rating reflects the lack of excess interest cash flow
being remitted to the transaction.  The transaction has not
received any excess interest cash flow for the past six months,
resulting in five months of interest shortfalls to the notes.  In
addition, the amount of prepayment penalty fee collections has
continued to diminish, as would be expected, given the seasoning
of the underlying transaction.

As of the December 2005 remittance period, the outstanding
notional principal balance of the net interest margin security
(NIMS) was 42.57% of the original balance. In addition, the
transaction is 34 months seasoned.  At origination, Standard &
Poor's projected the transaction would be repaid in full, without
incurring any interest shortfalls, in 25 months.

The significantly faster-than-projected prepayment speed
experienced by the underlying transaction (Structured Asset
Securities Corp. series 2003-12XS) is the primary reason for the
lower-than-projected cash flow and resultant slower repayment
rate.  As of the December 2005 remittance period, the outstanding
collateral balance of the underlying transaction was 15.45% of
the original balance.  Cash flow projections indicate that it is
unlikely that the NIMS will be repaid if the underlying
transaction continues its current performance.  Using the most
benign scenario (assuming a zero prepayment speed and zero default
rate), the NIMS would require 60 months before it is repaid
in full.

To date, SASCO Net Interest Margin Trust 2003-12XS has received
approximately 55% of the projected excess interest.  However,
prepayment penalty fees have been more than 200% of original
projections.  The higher prepayment penalty fees were the result
of the higher prepayment speed experienced by the underlying
transaction.  Conversely, the high prepayment speeds resulted in
the significantly lower-than-projected excess interest cash
flow.  The losses incurred by the underlying transaction have not
had an effect on the cash flow because the underlying transaction
has been incurring losses that are in line with original
projections.  As of December 2005, the underlying transaction had
incurred approximately 0.59% in cumulative realized losses.

The collateral backing the underlying transaction consists of
30-year, fixed-rate, fully amortizing Alt A mortgage loans secured
by first liens on one- to four-family residential properties.


SIERRA HEALTH: S&P Places BB Counterparty Credit Rating on Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' counterparty
credit rating on Sierra Health Service Inc. on CreditWatch with
positive implications.

"Sierra exceeded our expectations for 2005 by achieving very
strong operating performance and double-digit organic enrollment
growth," explained Standard & Poor's credit analyst Joseph
Marinucci.

The company's pretax ROR was more than 13% and its average for the
five-year period ended Dec. 31, 2005, exceeded 8%.

"Also, the company strengthened key balance sheet fundamentals by
reducing debt and increasing equity primarily through the
conversion of hybrid securities," Mr. Marinucci added.

As of Dec. 31, 2005, financial leverage was 16% and interest
coverage (EBITDA) exceeded 20x.  The company also increased the
capital adequacy and liquidity of its regulated health plan
subsidiaries in 2005.

Standard & Poor's will be conducting a more in depth review of
Sierra's financial profile and growth strategy to determine the
sustainability of its improved financial condition and expects to
resolve the CreditWatch in the second quarter of 2006.  Following
the review, the rating could be raised to 'BB+' or 'BBB-'.


SIERRA HEALTH: Earns $120 Million of Net Income in 2005
-------------------------------------------------------
Sierra Health Services Inc. (NYSE:SIE) earned $120 million of net
income for the year ended Dec. 31, 2005, compared to $122.7
million for the year ended Dec. 31, 2004.  During 2004, the
company's military health services operations segment contributed
28.4% of operating income, compared to 7.6% for 2005.  Net income
for the quarter ended Dec. 31, 2005, was $28.3 million, compared
to $28.0 million, for the quarter ended Dec. 31, 2004.

Revenues for the quarter were $353.7 million, a 6.3% increase over
the $332.7 million for the same period in 2004.  Medical premium
revenues from the company's core managed care business were $332.5
million, an increase of 12.1% over the $296.6 million for the same
period in 2004.  Annual revenues were $1.4 billion, compared to
$1.6 billion for 2004, a decrease of 12.1%.

Cash flow from operations was $13.9 million for the fourth quarter
of 2005 and $166.8 million for the year ended Dec. 31, 2005.  This
compares to $69.5 million for the fourth quarter of 2004 and
$164.5 million for the year ended Dec. 31, 2004.

The reduction in cash flow for the fourth quarter is primarily due
to the timing of payments from the Center for Medicare and
Medicaid Services.  The company received two monthly payments from
CMS during the quarter, compared to four monthly payments in the
fourth quarter of 2004.  In 2005, average monthly revenue from CMS
has been approximately $42 million.

At Dec. 31, 2005, the Company's balance sheet showed $668,846,000
in total assets and liabilities of $384,594,000.

At Dec. 31, 2005, membership in Sierra's commercial HMO plans grew
by 12.4% to 254,200 from 226,200 at Dec. 31, 2004.  Membership in
the company's Medicare Advantage plan grew by 5.6% in 2005 to
56,300 from 53,300 in 2004.  Membership in the company's Medicaid
plans grew by 9.1% in 2005 to 55,100 from 50,500 in 2004.  Total
membership in all of Sierra's plans grew by 13.8% to 637,900 at
Dec. 31, 2005, from 560,500 at Dec. 31, 2004.  As of Jan. 30,
2006, approximately 163,000 members were enrolled in the company's
stand-alone Medicare Prescription Drug Plan, which became
effective Jan. 1, 2006.

"The year 2005 continued a period of exceptional performance from
our core operations," said Anthony M. Marlon, M.D., chairman and
chief executive officer of Sierra.  "Despite this being the first
full year of operations without our military segment, our managed
care division, with its industry-leading commercial membership
growth and solid revenue generation, continues to move the company
forward. As I have often said, the Las Vegas market is an
outstanding place in which to do business."

Sierra Health Services Inc. -- http://www.sierrahealth.com/--  
based in Las Vegas, is a diversified health care services company
that operates health maintenance organizations, indemnity
insurers, military health programs, preferred provider
organizations and multispecialty medical groups. Sierra's
subsidiaries serve more than 1.2 million people through health
benefit plans for employers, government programs and individuals.

                         *     *     *

As reported in the Troubled Company Reporter on May 19, 2005,
Fitch Ratings has upgraded its long-term issuer and senior debt
ratings on Sierra Health Services, Inc. to 'BB+' from 'BB', as
well as the insurer financial strength ratings of SIE's core
insurance subsidiaries Health Plan of Nevada, Inc. and Sierra
Health and Life Insurance Co., Inc. to 'BBB+' from 'BBB'.  The
rating action affects approximately $115 million of outstanding
public debt.  Fitch says the Rating Outlook is Stable.

As reported in the Troubled Company Reporter on May 18, 2005,
Standard & Poor's Ratings Services raised its counterparty credit
rating on Sierra Health Services Inc. to 'BB' from 'B+'.

Standard & Poor's also said that it raised its senior unsecured
debt rating on Sierra's $115 million, 2.25% senior convertible
notes, which are due in March 2023, to 'BB' from 'B+'.  S&P says
the outlook is stable.


SILICON GRAPHICS: Posts $30M Net Loss in Second Qtr. Ended Dec. 30
------------------------------------------------------------------
Silicon Graphics (OTC: SGID) reported its financial results for
the second fiscal quarter ended Dec. 30, 2005.

Revenue for the second quarter fiscal year 2006 was $144 million,
gross margin was 41.7% and the operating loss was $28 million.
For comparison, in the first quarter FY06, revenue was
$170 million, gross margin was 37.8% and the operating loss was
$26 million.  The second quarter fiscal year 2006 net loss was
$30 million, compared with a net loss of $32 million in the
previous quarter.

GAAP operating expenses for the second fiscal quarter were $88
million compared with $90 million in the first fiscal quarter
2006. Non-GAAP operating expenses were $78 million in the second
quarter compared with $83 million in the first fiscal quarter
excluding restructuring charges of $10 million and $7 million,
respectively.

"Our Q2 performance was consistent with our operating income
guidance and within our EBITDA targets with strong margins
offsetting lower than expected billings," said Jeff Zellmer, chief
financial officer.  "Looking forward, we will take a number of
actions to improve our top-line results and continue to lower our
cost structure."

Unrestricted cash, cash equivalents and marketable investments on
Dec. 30, 2005, were $66 million as compared with $77 million at
Sept. 30, 2005.

Separately, SGI reported that Dennis McKenna has been named as
chairman, CEO and president, replacing Robert Bishop, who will
remain as vice chairman.

Silicon Graphics, Inc. -- http://www.sgi.com/-- is a leader in
high-performance computing, visualization and storage.  SGI's
vision is to provide technology that enables the most significant
scientific and creative breakthroughs of the 21st century.
Whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense or enabling the transition from
analog to digital broadcasting, SGI is dedicated to addressing the
next class of challenges for scientific, engineering and creative
users.

                            *   *   *

Silicon Graphics, Inc.'s 6.5% Senior Secured Convertible Notes due
2009 carry Standard & Poor's CCC+ rating.


STANDARD MOTOR: Moody's Junks Rating on $90 Mil. Conv. Sub. Notes
-----------------------------------------------------------------
Moody's Investors Service lowered the ratings for Standard Motor
Products, Inc. -- Corporate Family to B3 from B1, convertible
subordinated debentures to Caa2 from B3.  This rating action
reflects the deterioration in Standard Motor's credit metrics
during 2005, driven by a competitive pricing environment, setbacks
in the integration of Dana Corporation's Engine Management Group,
and higher debt levels generated by higher working capital
requirements.  The rating outlook is stable.  The stable outlook
recognizes that Standard Motor has implemented price increases
that should benefit overall performance. Nevertheless, Moody's
expects increased competition in the company's aftermarket
segments.  Continued stability of the rating will be dependent on
the company's ability to improve credit metrics and sustain an
adequate liquidity profile.

These ratings were lowered:

   -- Corporate Family, to B3 from B1

   -- $90 million of 6.75% convertible subordinated debentures
      due July 2009 (not guaranteed by subsidiaries), to Caa2
      from B3

The last rating action was Nov. 3, 2003, when the ratings were
downgraded.

The rating downgrades reflect that Standard Motor's credit metrics
for leverage and interest coverage worsened materially during
2005, and are currently at levels that are more consistent with a
B3 Corporate Family rating under Moody's rating methodology for
auto parts suppliers. Standard Motor benefits from its position as
an aftermarket supplier, sales growth, and customer
diversification. However, these factors are offset by the
company's key credit metrics which are more heavily weighted in
Moody's rating methodology.

The deterioration of credit metrics resulted from increased price
competition in the company's business and higher debt levels
caused in part by the company's acquisition of DEM and share
repurchase activity. Moreover, because of changes in the company's
customer draft programs, reducing accelerated account receivable
collections, higher account receivable balances have occurred,
requiring incremental working capital funding.

For the last 12 months ended Sept. 30, 2005 Standard Motor's total
debt/EBITDA leverage was approximately 7.5x. EBIT/interest
coverage was about 0.8x.  Free cash flow for the trailing 12
month period ending Sept. 30, 2005, was negative $61 million.  At
Sept. 30, 2005, the company maintained $13.6 million in cash and
had $64.4 million available under its revolving credit facility.
The company's last twelve month ended Sept. 30, 2005, results were
also impacted by approximately $11 million of one-time gross
profit costs from the DEM integration in the fourth quarter of
2004.  Going forward, debt levels should reduce somewhat as the
company seeks to moderate working capital needs.

Management expects margins in the company's engine management
business to improve due to price increases implemented in the
third quarter of 2005 across all of Standard Motor's product lines
and greater outsourcing to low cost countries, and the reduction
of charges related to the DEM acquisition.  While at lower than
historical levels, liquidity should be adequate as the company has
nominal debt maturities through 2006.

Standard Motor's latest actuarial study of its potential asbestos
liabilities was performed in Aug. 2005.  The estimate of the
undiscounted liability for asbestos settlement payments ranged
between $25 million and $51 million for the period through 2049.
The change from the prior year study was a $3 million decrease for
the low end of the range and a $12 million decrease for the high
end of the range.  Legal costs are estimated to range from $16 to
$20 million during the same period.

Standard Motor's auditors reported material weaknesses in the
internal controls in the company's prior fiscal year-end
statement.  However, according to the statements, these items did
not affect the company's reported results.  Standard Motor has
subsequently hired additional accounting staff, re-allocated
resources, and is implementing policies and procedures to address
the material weaknesses.

Standard Motor's unrated $305 million asset-based guaranteed
senior secured revolving credit facility is contractually,
effectively, and structurally senior to the company's
un-guaranteed and unsecured convertible subordinated debentures.
In Dec. 2005 Standard Motor amended the facility to, among other
things, carve out Standard Motor's Canadian subsidiaries and
permitted a separate $7 million senior secured term loan facility
to the Canadian subsidiaries.

Future events that could negatively affect Standard Motor's
outlook or rating include the loss of a significant customer,
further pricing pressures from OE aftermarket sales which reduce
operating performance, deterioration of liquidity, and material
increases in the dollar amount of asbestos settlements.
Consideration for lower ratings could arise if any combination of
these factors were to contribute to the company maintaining its
current credit metrics.

Factors that could favorably affect Standard Motor's outlook or
rating include realization of positive free cash flow, an improved
pricing environment or customer base enabling improved profit
margins, consistent improvement in liquidity, or an increase in
geographic diversity.  Consideration for an improved outlook or
rating upgrade could arise if any combination of these factors
were to reduce leverage consistently under 4.5x or increase
EBIT/interest coverage consistently above 1.5x.

Standard Motor Products, headquartered in Long Island City, New
York, is a manufacturer and distributor of replacement parts for
the automotive aftermarket industry.  The company is organized
into two principal divisions:

   (i) Engine Management -- ignition and emission parts, on-board
          computers, ignition wires, battery cables, and fuel
          system parts; and

  (ii) Temperature Control -- air conditioning compressors, other
          air conditioning parts, and heater parts.

Standard Motor's annualized revenues currently approximate $840
million.


STANLEY CHEVROLET: Case Summary & 14 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Stanley Chevrolet-Olds-Buick-Cadillac, Inc.
        587 Lake Flower Avenue
        Saranac Lake, New York 12983
        Tel: (518) 891-5501

Bankruptcy Case No.: 06-10178

Debtor affiliates filing separate chapter 11 petitions:

   Entity                                         Case No.
   ------                                         --------
   Walter Franklin Stanley                        06-10179
   Randolph Joseph Stanley & Linda Jean Stanley   06-10180

Type of Business: The Debtor sells, repairs, and maintains
                  vehicles such as Chevrolet, Buick, and Cadillac.
                  See http://www.stanleychevrolet.com/

Chapter 11 Petition Date: February 7, 2006

Court: Northern District of New York (Albany)

Judge: Robert E. Littlefield, Jr.

Debtors' Counsel: Richard L. Weisz, Esq.
                  Hodgson Russ LLP
                  677 Broadway
                  Albany, New York 12207
                  Tel: (518) 465-2333
                  Fax: (518) 465-1567

Financial condition as of February 6, 2006:

      Total Assets: $1,042,511

      Total Debts:  $1,224,121

Debtors' 14 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Wells Fargo                                             $49,447
P.O. Box 348750
Sacramento, CA 95834

American Express                                        $36,000
P.O. Box 297879
Fort Lauderdale, FL 33336

NYS Department                   Taxes                  $33,000
Taxation & Finance
P.O. Box 5300
Albany, NY 12205-0300

Glens Falls National Bank                               $32,031
250 Glen Street
Glens Falls, NY 12801

Coastal Publications                                    $26,610
56 Perimeter Center Rast
Atlanta, GA 30356

Village of Saranac Lake          Village Tax            $10,814

Saranac Lake Central             School Tax              $9,842
School District

Internal Revenue Service         Taxes                   $5,368

Advanced Auto Parts                                      $4,673

Exxon Mobil                                              $3,874

BHH Financial Services Co.                               $2,559

DeLage Landen                                            $2,407

ADP Dealer Services                                      $1,400

Captiva Automotive Direct                                  $816


STATION CASINOS: Earns $41.7 Mil. in Fourth Quarter Ended Dec. 31
-----------------------------------------------------------------
Station Casinos, Inc. (NYSE: STN - News) reported the results of
its operations for the fourth quarter ended Dec. 31, 2005.

The fourth quarter highlights include:

   -- record fourth quarter EBITDA of $123.9 million, an increase
      of 16% over the prior year's fourth quarter and record
      EBITDA for the year of $480.9 million, an increase of 25%
      over the prior year;

   -- EBITDA margins for its Major Las Vegas Operations, including
      Green Valley Ranch, increased to 41.4% from 39.2% in the
      prior year's fourth quarter;

   -- revenues from its Major Las Vegas Operations, including
      Green Valley Ranch, increased 11% from the prior year's
      fourth quarter, marking the eighth consecutive quarter of
      double-digit revenue growth on a year-over-year basis.  For
      the full year 2005, revenues from its Major Las Vegas
      Operations, including Green Valley Ranch, increased 15% over
      the prior year;

   -- executing a letter of intent and announcing plans to open a
      Bass Pro Shops Outdoor World superstore in conjunction with
      the Company's proposed resort hotel and casino in Reno,
      Nevada;

   -- increasing the Company's revolving credit facility from
      $1 billion to $2 billion, extending the maturity date of the
      facility to December 2010 and reducing the borrowing costs;
      and

   -- for the second year in a row, the Company was selected as
      one of FORTUNE magazine's "100 Best Companies to Work For."
      Station is still the only Nevada-based company or member of
      the gaming industry to ever be selected for this honor.

                      Results of Operations

The Company's net revenues for the fourth quarter ended Dec. 31,
2005 were approximately $285.1 million, an increase of 8% compared
to the prior year's fourth quarter.  The Company reported EBITDA
for the quarter of $123.9 million, an increase of 16% compared to
the prior year's fourth quarter.

For the fourth quarter, Adjusted Earnings applicable to common
stock were $46.9 million.  This marks the sixteenth consecutive
quarter of year-over-year growth of Adjusted EBITDA, EBITDA margin
and EPS.

During the fourth quarter, the Company incurred preopening costs
related to projects under development of $3.1 million, $3 million
in costs to terminate certain leases and $2 million in costs to
develop new gaming opportunities, primarily related to Native
American gaming.  Including these items, the Company reported net
income of $41.7 million.

                     Future Development Plans

The Company has established April 18, 2006, as the opening date
for Phase I of Red Rock Resort, which is located in the Summerlin
master-planned community in Las Vegas, Nevada.

The initial phase of Red Rock Resort will include over 400 hotel
rooms, approximately 3,000 slot machines, 94,000 square feet of
meeting and convention space, a 35,000 square-foot spa, eight full
service restaurants, a 16-screen movie theater complex, a night
club and parking for approximately 5,200 vehicles.

The cost of Phase I is expected to be approximately $760 million.

Phase II of Red Rock Resort, which includes an additional hotel
tower containing over 400 hotel rooms, is currently under
construction and is expected to open by the end of 2006.  The
total cost of both phases of the project is expected to be
approximately $925 million.

The next property the Company anticipates developing is Aliante
Station, which will be located in the Aliante master-planned
community in North Las Vegas, Nevada.  This project is a
50/50 joint venture with an affiliate of the Greenspun
Corporation, the Company's partner in Green Valley Ranch.

The first phase of Aliante Station is expected to include 200
hotel rooms, approximately 2,000 slot machines, multiple full
service restaurants and a multi-screen movie theater complex.
Construction on this project is expected to commence in late 2006
or early 2007 with a projected opening date in mid 2008.  The
project is expected to cost between $400 million and $450 million.

Similar to Green Valley Ranch, Station will manage the property
and received a management fee of 2% of revenues and approximately
5% of EBITDA.

In addition to the development of Aliante Station, the Company
owns or controls four undeveloped parcels of gaming-entitled
property located in the Las Vegas valley, as well as two
undeveloped parcels in Reno, Nevada.  The Company also has
numerous other development opportunities in the form of potential
master-planned expansions of its existing properties.

"The focus of our development program over the next few years will
be the Las Vegas local's market and Reno.  While we have also
assembled 67 acres around the current Wild Wild West site for
future development, we anticipate that such development will not
proceed until after we further expand our local's franchise,"
said Lorenzo Fertitta.

                             Dividend

The Company's Board of Directors has declared a quarterly cash
dividend of $0.25 per share.  The dividend is payable on March 3,
2006, to shareholders of record on Feb. 10, 2006.

Station Casinos, Inc. -- http://www.stationcasinos.com/-- is the
leading provider of gaming and entertainment to the residents of
Las Vegas, Nevada.  Station's properties are regional
entertainment destinations and include various amenities,
including numerous restaurants, entertainment venues, movie
theaters, bowling and convention/banquet space, as well as
traditional casino gaming offerings such as video poker, slot
machines, table games, bingo and race and sports wagering.
Station owns and operates Palace Station Hotel & Casino, Boulder
Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire
Casino and Wild Wild West Gambling Hall & Hotel in Las Vegas,
Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho
Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel
& Casino, Fiesta Henderson Casino Hotel, Magic Star Casino and
Gold Rush Casino in Henderson, Nevada.  Station also owns a 50%
interest in both Barley's Casino & Brewing Company and Green
Valley Ranch Station Casino in Henderson, Nevada, and a 6.7%
interest in the Palms Casino Resort in Las Vegas, Nevada.  In
addition, Station manages the Thunder Valley Casino near
Sacramento, California, on behalf of the United Auburn Indian
Community.

                        *     *     *

As reported in the Troubled Company Reporter on Aug. 26, 2005,
Moody's Investors Service raised the ratings of Station Casino,
Inc. and affirmed the company's SGL-2 speculative grade
liquidity rating.  Moody's also assigned a Ba3 rating to Station's
$150 million add-on to its existing 6-7/8% senior subordinated
notes due 2016.

These ratings were raised:

   -- Corporate family rating, to Ba1 from Ba2;

   -- $450 million 6% senior notes due 2012, to Ba2 from Ba3;

   -- $450 million 6-1/2% senior subordinated notes due 2014,
      to Ba3 from B1; and

   -- $350 million 6-7/8% senior subordinated notes due 2016,
      to Ba3 from B1.

This new rating was assigned:

   -- $150 million 6-7/8% senior subordinated note add-on
      due 2016 -- Ba3.

This rating was affirmed:

   -- Speculative grade liquidity rating, at SGL-2.

As reported in the Troubled Company Reporter on Mar. 29, 2005,
Standard & Poor's Ratings Services revised its rating outlook on
Las Vegas, Nevada-based Station Casinos, Inc. to positive from
stable.

At the same time, Standard & Poor's affirmed its ratings on the
owner of off-Strip casino properties, including its 'BB' corporate
credit rating.


STRUCTURED ASSET: Moody's Lifts Ratings on Six Series 2002 Certs.
-----------------------------------------------------------------
Moody's Investors Service has reviewed various transactions issued
by Structured Asset Securities Corporation.  As a result of this
review, Moody's has upgraded its ratings on six certificates,
placed one certificate on watch for possible upgrade and two
certificates on watch for possible downgrade.

The transactions, issued in 2001 and 2002, are backed primarily by
first lien adjustable- and fixed-rate Jumbo/Alt-A and Subprime
mortgage loans.  The upgrades are based on stronger than
anticipated loan performance and current credit enhancement levels
provided by subordination relative to projected loss.

Class M3 of Structured Asset Securities Corp 2002-BC1 and the most
subordinate class of Structured Asset Securities Corp 2002
-HF1 transaction have been placed on review for possible downgrade
based on existing credit enhancement levels being low given the
current projected losses on the underlying pool.

Class B of Structured Asset Securities Corp 2002-BC1 will remain
on watch for possible downgrade.  The deal is very close to
breaching the triggers and the distributions of the coming months
will allow Moody's to determine the outcome of the review.

Moody's complete rating actions are:

   1. Upgrade:

      Issuer: Structured Asset Securities Corporation

      * Series 2002-1A; Class B4-I, upgraded from Ba2 to Baa1

      * Series 2002-1A; Class B4-II, upgraded from Ba2 to Baa1

      * Series 2002-1A; Class B4-III, upgraded from Ba2 to Baa1

      * Series 2002-1A; Class B5-I, upgraded from B2 to Ba1

      * Series 2002-1A; Class B5-II, upgraded from B2 to Ba1

      * Series 2002-1A; Class B5-III, upgraded from B2 to Ba1

   2. Review for upgrade:

      Issuer: Structured Asset Securities Corporation

      * Series 2001-6; Class B3, current rating Baa3


   3. Review for downgrade:

      Issuer: Structured Asset Securities Corporation

      * Series 2002-BC1; Class M3, current rating Baa3

      * Series 2002-HF1; Class B, current rating Ba1

For more information please see http://www.moodys.com/


TITAN CRUISE: Wants Excl. Plan-Filing Period Extend to Mar. 31
--------------------------------------------------------------
Titan Cruise Lines and Ocean Jewel Casino & Entertainment, Inc.,
ask the U.S. Bankruptcy Court for the Middle District of Florida
to extend their exclusive periods to:

   a) file a chapter 11 plan of reorganization until March 31,
      2006; and

   b) solicit acceptances of that plan until the date set for
      confirmation of the Debtor's plan.

The Debtors tell the Court that they are currently documenting and
arranging to close on a sale of substantial assets, including
several foreign-titled maritime vessels, in a transaction with a
purchase price exceeding $7,000,000.

The Debtors are also coordinating with their secured lenders to
repay their complex postpetition financing obligations and satisfy
their separate responsibilities for claims management and handling
of secured maritime claims.

Furthermore, to assist them in quantifying claims against the
estates, the Debtors plan to file a motion with the Court asking
for authority to reject certain leases and executory contracts not
necessary for the sale and to require counterparties to those
agreements to file any administrative expense claims.

The Debtors relate that the extension will provide them a better
picture of the total claims in the case and the funds available
for a plan of liquidation.  The Debtors assure the Court that the
extension is not submitted for purposes of delay and will not
prejudice any party.

Headquartered in Saint Petersburg, Florida, Titan Cruise Lines and
its subsidiary owns and operates an offshore casino gaming
operation.  The Company and its subsidiary filed for chapter 11
protection on August 1, 2005 (Bankr. M.D. Fla. Case Nos. 05-15154
and 05-15188).  Gregory M. McCoskey, Esq., at Glenn Rasmussen &
Fogarty, P.A., represents the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they estimated assets and debts between $10 million to
$50 million.


TRUMP HOTELS: Has Until March 15 to Object to NJSEA Claims
----------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Sept. 6, 2005, the New Jersey Sports and Exposition Authority and
Trump Plaza Associates entered into an Easement Agreement in 1995,
pursuant to which an enclosed loggia was constructed across the
front of the East Hall of the historic Atlantic City Convention
Center to provide direct enclosed pedestrian access between the
Trump Plaza Casino and the World's Fair Casino.

In January 2000, Trump Plaza terminated the East Hall Loggia
Easement.  The NJSEA alleges that despite the termination, Trump
Plaza is still obligated to restore the easement area to its
original condition.

In January 2005, the NJSEA filed Claim No. 1452 against Trump
Plaza.  In June 2005, the NJSEA filed an amended claim -- Claim
No. 2263 -- asserting an administrative claim for $1,000,000.

                   Court-Approved Stipulation

The Debtors and the New Jersey Sports and Exposition Authority
need more time to continue their settlement discussions.

Accordingly, in a Court-approved stipulation, the Parties
agree that:

   1. the deadline by which the Debtors must file any objections
      to the NJSEA Disputed Claims will be extended to March 15,
      2006;

   2. NJSEA will file its response to the objection no later than
      March 22, 2006; and

   3. the hearing on the objection will be continued to March 29,
      2006, at 10:00 a.m.

If the parties are able to resolve the NJSEA Disputed Claims
before the Continued Hearing, they will ask the Court to vacate
the Continued Hearing.

Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc., nka Trump Entertainment Resorts, Inc. --
http://www.thcrrecap.com/-- through its subsidiaries, owns and
operates four properties and manages one property under the Trump
brand name.  The Company and its debtor-affiliates filed for
chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No.
04-46898 through 04-46925).  Robert A. Klymman, Esq., Mark A.
Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and
Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N.
Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano,
P.A., represent the Debtors in their successful chapter 11
restructuring.  When the Debtors filed for protection from their
creditors, they listed more than $500 million in total assets and
more than $1 billion in total debts.  The Court confirmed the
Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005,
and the plan took effect on May 20, 2005.  (Trump Hotels
Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service,
Inc., 215/945-7000).

                          *     *     *

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

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

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

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

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

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

     -- Corporate family rating -- B3.


TRUMP HOTELS: 17 Former Shareholders Wants RSH's Motion Denied
--------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Sept. 22, 2005, the U.S. Bankruptcy Court for the District of New
Jersey approved the sale of the World's Fair Site in Atlantic
City, New Jersey, to BET Investments, Inc., for $25,150,000.

However, the proceeds of the World's Fair Sale could not be
distributed in view of a Court order prohibiting distributions to
beneficial owners of Old THCR Common Stock under the confirmed
Plan of Reorganization of Trump Hotels & Casino Resorts, Inc., nka
Trump Entertainment Resorts, Inc.

Daniel K. Astin, Esq., at The Bayard Firm, in Wilmington,
Delaware, notes that the Order Prohibiting Distributions was a
result of a request filed by 17 shareholders asking the Court to
enforce its previous orders concerning the record distribution
date.  The shareholder group alleged that the first distribution
made by the Debtors to non-affiliated shareholders did not
conform to the terms of the Plan.

Pursuant to the Order Prohibiting Distributions, The Bayard
Firm served as escrow agent with respect to the World's Fair
Sale Proceeds.  The Sale Proceeds could not be distributed until
the Court gives further order regarding the record date and
distribution issues.

As of Dec. 20, 2005, The Bayard Firm holds $24,518,791 in
an interest bearing escrow account as the World's Fair Sale
Proceeds.

Robino Stortini Holdings LLC asked the Court to direct the Debtors
to make an interim distribution of the World's Fair Escrow Funds
until the resolution of the distribution issues.

RSH was previously a member of the Equity Committee.  RSH,
however, resigned prior to the sale of the World's Fair Site.

RSH suggests that a reserve be established pending the account of
the record date and distribution litigation.

                  17 Former Shareholders Respond

A group of 17 former owners of Old THCR shares oppose Robino
Stortini Holdings's request for an interim distribution of the
World's Fair site sale proceeds.

The Former Shareholders previously initiated a core proceeding in
the Bankruptcy Court, seeking entitlement to the Class 11
distributions called for under the Reorganized Debtors' Second
Amended Joint Plan of Reorganization,

Michael J. Viscount, Jr., Esq., at Fox Rothschild LLP, in
Atlantic City, New Jersey, argues that the Court should not
permit any distributions from the World's Fair proceeds until it
has made a final determination as to who are entitled to the
Class 11 proceeds.

The 17 Shareholders agree with the Reorganized Debtors' position
that RSH's request is premature and should be denied.

Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino
Resorts, Inc., nka Trump Entertainment Resorts, Inc. --
http://www.thcrrecap.com/-- through its subsidiaries, owns and
operates four properties and manages one property under the Trump
brand name.  The Company and its debtor-affiliates filed for
chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No.
04-46898 through 04-46925).  Robert A. Klymman, Esq., Mark A.
Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and
Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N.
Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano,
P.A., represent the Debtors in their successful chapter 11
restructuring.  When the Debtors filed for protection from their
creditors, they listed more than $500 million in total assets and
more than $1 billion in total debts.  The Court confirmed the
Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005,
and the plan took effect on May 20, 2005.  (Trump Hotels
Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service,
Inc., 215/945-7000).

                          *     *     *

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

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

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

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

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

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

     -- Corporate family rating -- B3.


US AIRWAYS: Allows Wachovia's Multi-Million Unsecured Claims
------------------------------------------------------------
Reorganized US Airways, Inc., and its reorganized debtor-
affiliates, Wachovia Bank, National Association, and
Wachovia Bank of Delaware stipulate and agree:

    -- Five claims are allowed as USAI-9 General Unsecured Claims
       under the Plan:

          Claim No.              Claim Amount
          ---------              ------------
          6169 (N519AU)            $4,233,100
          6170 (N520AU)            $4,251,221
          6171 (N521AU)            $3,424,067
          5189 (N576US)            $3,351,541
          5190 (N584US)            $4,563,678

    -- Claim Nos. 3614 and 3612 are deemed withdrawn.

    -- 40 claims related to the assumed aircraft lease are deemed
       withdrawn.

As reported in the Troubled Company Reporter on Aug. 11, 2005,
Under the Second Amended Plan, each holder of an Allowed General
Unsecured Claims will receive their Pro Rata share of 30% of the
Unsecured Creditors' Stock.  The estimated claim amount has been
updated to $408,500,000 to $1,241,500 from $458,500,000 to
$1,311,500,000.  The estimated percentage recovery has also been
changed to 3.1% to 17.4% from 3.3% to 8.3%.

The Debtors currently estimate that at the conclusion of the
claims resolution process the aggregate amount of estimated and
allowed General Unsecured Claims, inclusive of General Unsecured
Convenience Claims, against the Debtors will be between
$430,750,000 and $1,303,000,000.

Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:

            * US Airways, Inc.,
            * Allegheny Airlines, Inc.,
            * Piedmont Airlines, Inc.,
            * PSA Airlines, Inc.,
            * MidAtlantic Airways, Inc.,
            * US Airways Leasing and Sales, Inc.,
            * Material Services Company, Inc., and
            * Airways Assurance Limited, LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts.  In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue
No. 113; Bankruptcy Creditors' Service, Inc., 215/945-7000)


US AIRWAYS: Gets Court Approval to Reject E*Trade Contract
----------------------------------------------------------
To facilitate the distribution of stock to employees after their
emergence from their previous bankruptcy case, US Airways, Inc.,
and its debtor-affiliates entered into an executory contract with
E*Trade Business Solutions Group, Inc.

Under the executory contract, E*Trade administered two of the
Debtors' equity compensation plans:

    * an option plan, and
    * a restricted stock plan.

However, pursuant to the Reorganized Debtors' confirmed Plan of
Reorganization in the current bankruptcy case, the stock that was
being administered by E*Trade has been extinguished and no
additional stock will be distributed.  Therefore, there is no
longer a need for E*Trade's services.

The Reorganized Debtors sought and obtained the Court's authority
to reject the E*Trade Contract effective as of January 9, 2006.

Douglas M. Foley, Esq., at McGuireWoods LLP, in Norfolk,
Virginia, relates that by rejecting the E*Trade Contract, the
Reorganized Debtors will avoid incurring unnecessary costs that
do not benefit their future operations.

Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:

            * US Airways, Inc.,
            * Allegheny Airlines, Inc.,
            * Piedmont Airlines, Inc.,
            * PSA Airlines, Inc.,
            * MidAtlantic Airways, Inc.,
            * US Airways Leasing and Sales, Inc.,
            * Material Services Company, Inc., and
            * Airways Assurance Limited, LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts.  In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue
No. 114; Bankruptcy Creditors' Service, Inc., 215/945-7000)


USG CORP: Wants Court to Okay Berkshire Equity Commitment Accord
----------------------------------------------------------------
USG Corporation has entered into an equity commitment agreement,
dated January 30, 2006, with Berkshire Hathaway Inc., the
company's largest stockholder, in connection with the anticipated
rights offering.

As reported in the Troubled Company Reporter yesterday, USG and
its debtor-affiliates expect to raise $1,800,000,000 through a
rights offering in connection with a plan of reorganization to
finance a portion of settlement payments to the asbestos personal
injury trust, as well as avoid disputes as to the proper valuation
of the shares.

Under the Equity Commitment Agreement, Berkshire Hathaway will
serve as "Standby Purchaser" for all or substantially all of the
shares of USG stock not purchased in the rights offering by USG's
then-existing shareholders.

The central terms of the Equity Commitment Agreement are:

Commitment:      To purchase shares of USG stock not purchased
                 through the rights offering up to an aggregate
                 commitment amount of $1.8 billion

Rights Terms:    USG shareholders on the record date for the
                 offering will be entitled to purchase one
                 share of USG stock for each share owned, at $40
                 per share, with rights to be tradeable on the
                 New York Stock Exchange

Commitment
Expiration
Date:            September 30, 2006; commitment also expires if
                 there will not be a final order approving the
                 Equity Commitment Agreement by March 15, 2006.

Commitment Fee:  $100 million, non-refundable, to be paid on
                 entry of the Final Order

Extension of
Commitment
Period:          USG will have the ability to extend the Standby
                 Purchaser's commitment for 45 additional days
                 until November 14, 2006, through the payment
                 by September 30, 2006, of an additional
                 $20,000,000 commitment fee.

Security for
Commitment:      The Standby Purchaser will deposit treasury
                 securities with a value of $1. 8 billion into
                 an escrow to secure the Standby Purchaser's
                 commitment.

Conditions to
Commitment:      "Hell or High Water" commitment, subject to
                 the Debtors' pursuit and confirmation of a
                 Plan of Reorganization, no changes to the Plan
                 that materially impair the value of USG's
                 equity, USG's  compliance with the Equity
                 Commitment Agreement, and necessary court or
                 other regulatory approvals

USG's
Representations: Standard representations for a transaction of
                 this type, including that the company's
                 publicly filed financial statements fairly
                 represent USG's consolidated financial
                 position

Other provisions of the Equity Commitment Agreement include:

   -- Plan, disclosure statement, and relevant orders and other
      documents to be reasonably satisfactory to the Standby
      Purchaser;

   -- indemnity for losses of the Standby Purchaser resulting
      from breach by the Debtors of the relevant agreements and
      third party claims;

   -- release of the Standby Purchaser as of the date of the
      Final Order; and

   -- payment of fees and expenses of the Standby Purchaser.

A full-text copy of the Equity Commitment Agreement is available
for free at http://ResearchArchives.com/t/s?519

          Shareholders and Registration Rights Covenants

In accordance with the Equity Commitment Agreement, USG and
Berkshire further entered into a shareholder's agreement,
pursuant to which Berkshire agreed that for a period of seven
years following completion of the rights offering, it would not
acquire beneficial ownership of USG voting securities if, after
giving effect to the acquisition, Berkshire would own more than
40% of USG voting securities.

Berkshire further agreed that, during that seven-year period, it
would not solicit proxies with respect to USG's securities or
submit a proposal or offer involving a merger, acquisition or
other extraordinary transaction.

The Shareholder's Agreement also provides that any new shares of
common stock acquired by Berkshire in excess of those owned on
the date of the agreement will be voted proportionally with all
voting shares.

A full-text copy of the Shareholder's Agreement is available for
free at http://ResearchArchives.com/t/s?51b

The parties also entered into a registration rights agreement, in
which USG granted Berkshire registration rights with respect to
its shares of common stock.

A full-text copy of the Registration Rights Agreement is
available for free at http://ResearchArchives.com/t/s?51c

                    Reorganization Rights Plan

Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A.,
in Wilmington, Delaware, further discloses that USG adopted a new
reorganization rights plan, effective January 30, 2006.  Under
the Reorganization Rights Plan, if any person acquires beneficial
ownership of 5% or more of USG's voting stock, shareholders other
than the 5% triggering shareholder will have the right to
purchase additional USG common stock at half their market price,
thus, diluting the triggering shareholders.  USG shareholders who
already own 5% or more of USG's common stock will not trigger
those rights so long as they do not acquire more than an
additional 1% of the company's voting stock while the plan is in
effect other than pursuant to certain transactions effected by
USG.

The Reorganization Rights Plan will expire on December 31, 2006,
or, if later, 30 days after Plan's Effective Date, if the
Asbestos Legislation has not passed in the current session of
Congress.

However, Mr. DeFranceschi tells Judge Fitzgerald that USG's Board
of Directors has the power to accelerate or extend the rights'
expiration date.  The Board also has the right, before or after
the rights plans expire, to take other actions that it determines
in the exercise of its fiduciary duties to be necessary in the
future, which could include the adoption of a new shareholder
rights plan or further amendments of the existing plans.

A full-text copy of the Reorganization Rights Plan is available
for free at http://ResearchArchives.com/t/s?51a

                  Berkshire Offer Most Suitable

The Debtors assert that the Equity Commitment Agreement
represents the best possible equity backstop purchase commitment
available to them.

Mr. DeFranceschi says that after the Debtors decided to raise
close to $2 billion in equity financing to fund the Plan, the
Debtors, with their financial advisors, Chilmark Partners,
contacted a number of potential sources for an equity purchase
commitment to ensure the Plan's feasibility.  The Standby
Purchaser was a logical party for the Debtors to contact along
with traditional commercial and investment banks.

Currently, the Standby Purchaser is USG's largest shareholder,
with approximately 15% of USG's shares, a stake that it acquired
a few months before the Petition Date, and has owned continually
since that time.  The Standby Purchaser is also the Equity
Committee's present chairman.

As a result, the Standby Purchaser has a substantial stake in the
success of the Debtors' enterprise.  Furthermore, as is well
known, the Standby Purchaser has demonstrated the financial
ability to make large financial commitments of the type
represented by the Equity Commitment Agreement on terms generally
not otherwise available in the financial marketplace.  The
Debtors have kept the Equity Committee and its advisors fully and
directly apprised of the status and the negotiations regarding
the Equity Commitment Agreement.

Moreover, the Debtors have been informed that the Equity
Committee has formed a subcommittee to evaluate the Equity
Commitment Agreement, which subcommittee does not include the
Standby Purchaser and other members of the Equity Committee that
may have demonstrated an interest in providing a similar
commitment.

Mr. DeFranceschi relates that the Debtors and Chilmark discussed
a potential equity backstop purchase commitment with each of the
institutions contacted by the Debtors.  However, no party was
willing to provide a commitment to the Debtors on terms as
favorable as those provided by the Standby Purchaser.

A key factor in the Debtors' decision making, Mr. DeFranceschi
says, was the desire to obtain a commitment that:

   (i) would be in place for a period of time that comfortably
       would extend beyond the anticipated confirmation of the
       Debtors' Plan; and

  (ii) would be a "hell or high water" commitment.

With the second requirement, the Debtors could be confident that
the $1.8 billion commitment sought for the Plan would be honored
if and when needed.

         Equity Commitment Agreement Should Be Approved

Considering all of the relevant factors, the Debtors believe that
the Equity Commitment Agreement represented the best approach to
ensure that the Debtors have the capital necessary to fund the
Plan.

By this motion, the Debtors ask Judge Fitzgerald to approve the
Equity Commitment Agreement and to authorize USG to pay the
Standby Purchaser a non-refundable Commitment Fee.

Mr. DeFranceschi asserts that the commitment offered by the
Standby Purchaser satisfied the Debtors' needs with respect to
the Plan because the Standby Purchaser agreed that its commitment
would be in place, without change, through September 30, 2006.
The Standby Purchaser has also agreed to escrow treasury
securities equal to its entire $1.8 billion purchase commitment.

Mr. DeFranceschi concludes that Berkshire Hathaway is, indeed,
the Debtors' best choice to act as the Standby Purchaser, since
"no other potential backstop purchaser was willing to agree to a
commitment of that type for anywhere near that length of time,"
and "no other party contacted by the Debtors indicated a
willingness or ability to provide an escrow to secure an equity
purchase commitment.

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)


VARAHI INVESTMENTS: Case Summary & Largest Unsecured Creditor
-------------------------------------------------------------
Debtor: Varahi Investments, Inc.
        710 W. Spring Valley Road
        Richardson, Texas 75080

Bankruptcy Case No.: 06-30481

Chapter 11 Petition Date: February 6, 2006

Court: Northern District of Texas (Dallas)

Debtor's Counsel: Jeffrey R. Hacker, Esq.
                  Law Offices of Jeffrey R. Hacker, P.C.
                  16801 Addison Road, Suite 246
                  Addison, Texas 75001-5501
                  Tel: (972) 380-5630
                  Fax: (972) 380-5635

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's Largest Unsecured Creditor:

   Entity                        Claim Amount
   ------                        ------------
DFW Oil                          $8,000
10433 Garland Road
Dallas, TX 75218


WENDY'S INT'L: Has New Combo Plan to Drive Sales & Improve Margins
------------------------------------------------------------------
Wendy's International, Inc. (NYSE:WEN) reported new "3-Tiered,
3-Year Combo Plan" to drive sales, improve restaurant profit
margins and reduce costs over the next three years.

"We are focused on driving Wendy's same-store sales by more than
3% annually and reducing costs throughout the organization by
$40 million to $60 million beginning in 2006," Chairman and Chief
Executive Officer Jack Schuessler said.  "Our goals are to improve
restaurant margins 500 total basis points and to generate at least
$100-125 million pretax profit improvement by the end of 2008.  We
are confident about our future and we are eager to begin writing
the next great chapter of Wendy's long-term success story."

Wendy's management team is confident about its "3-Tiered, 3-Year
Combo Plan" strategy focused on:

     1) Increasing Sales - Chief Marketing Officer Ian Rowden has
        developed a new marketing strategy to drive same-store
        sales by more than 3% annually.  Wendy's will
        differentiate its brand in the quick-service restaurant
        industry with innovative products, new product categories
        and day-parts, and more compelling advertising.

        The Company also plans to invest an incremental
        $25 million in advertising and marketing activity to
        support certain Wendy's products during 2006.

     2) Improving Restaurant Margins - Management is focused on
        improving restaurant-level margins 500 total basis points
        over the next three years.  In addition to the sale
        initiatives, there are several cost-saving initiatives to
        improve margins.

     3) Reducing Costs - Management is reviewing processes
        throughout the organization, analyzing opportunities for
        efficiencies and identifying cost reductions as it plans
        for the future.

Tim Hortons IPO remains on track for its targeted date in late
March.  The Company filed its amended registration statement with
the Securities and Exchange Commission on Jan. 19, 2006.

The Company reiterated its plan, assuming a successful IPO that a
spinoff of Tim Hortons would occur within nine to 18 months after
the IPO, depending on market conditions.

Headquartered in Dublin, Ohio, Wendy's International, Inc. --
http://www.wendys-invest.com/-- is one of the world's largest
restaurant operating and franchising companies with more than
9,900 total restaurants and quality brands - Wendy's Old Fashioned
Hamburgers(R), Tim Hortons and Baja Fresh Mexican Grill.  The
Company also has investments in two additional quality brands -
Cafe Express and Pasta Pomodoro(R).

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 04, 2005,
Moody's Investors Service placed all ratings of Wendy's
International, Inc. on review for possible downgrade.  The review
was prompted by continued deterioration in same store sales at the
Wendy's and Baja Fresh concepts that have not decelerated as
previously expected, largely due to competitive pressures, in
addition to a continued erosion of operating margins driven by the
negative sales trend and exacerbated by historically high
commodity prices.

The review also reflects concerns related to continued poor
operating performance at the Wendy's concept in the context of
Wendy's previously announced strategic initiatives, which:

   * over the near term (6 to 12 months) include:

     -- the sale of up to 18% of Tim Horton's,
     -- the sale of real estate assets, and
     -- the repayment of approximately $100 million of debt; and

   * over the longer-term the potential spin-off of Tim Horton's
     entirely.

These ratings were placed on review for possible downgrade:

     * Senior unsecured notes rated Baa2
     * Senior unsecured shelf registration rated (P)Baa2
     * Subordinated shelf registration rated (P)Baa3
     * Preferred stock shelf registration rated (P)Ba1
     * Commercial Paper rating of P-2


WESTERN WATER: Judge Tchaikovsky Confirms First Amended Plan
------------------------------------------------------------
The Honorable Leslie J. Tchaikovsky of the U.S. Bankruptcy Court
for the Northern District of California confirmed the First
Amended Plan of Reorganization filed by Western Water Company.
Judge Tchaikovsky.  Judge Tchaikovsky approved the Debtor's Plan
on Feb. 6, 2006.

Judge Tchaikovsky rules that the:

   1) the Plan complies with the applicable provisions of the
      Bankruptcy Code, including Sections 1122 and 1123, and the
      Debtor as plan proponent complied with the requirements of
      Section 1129(a)(2) of the Bankruptcy Code;

   2) the Plan was proposed in good faith and not by any means
      forbidden by law, pursuant to Section 1129(a)(3) of the
      Bankruptcy Code and it represents the best interests of
      creditors and shareholders pursuant to Section 1129(a)(7);
      and

   3) the Plan's confirmation is not likely to be followed by the
      liquidation or the need for further financial reorganization
      of the Debtor, pursuant to Section 1129(a)(11) of the
      Bankruptcy Code.

As reported in the Troubled Company Reporter on Jan. 13, 2006, the
Plan provides for the reorganization of the Debtor as a private
company.  The plan contemplates the full cash payment of all
allowed claims with postpetition interest at 3.32%.

Under the Plan, these claims will be fully paid in cash:

   * administrative claims,
   * priority tax claims,
   * priority wage claims,
   * other secured claims,
   * $72,000 general unsecured claims,
   * $8.8 million debenture claims, and
   * $1.1 million promissory note claims.

Preferred shareholders holding an allowed $2.5 million liquidation
preference claim of the Series F Preferred Stock can elect to
receive new common stock or a $260,000 cash payment on the
effective date.

Preferred shareholders holding an allowed $7.7 million liquidation
preference claim of the Series C Preferred Stock will receive new
common stock.

All common stock in the Debtor will be cancelled, and the
Preferred Shareholders will become the new common shareholders in
the Reorganized Debtor.

                             Plan Funding

The Debtor will use the net proceeds of the recent sale of its
Cherry Creek Project to fund cash distributions under the Plan.
The Debtor sold the water rights for $14 million in cash to Cherry
Creek Project Water Authority in November 2005.

A full-text copy of the Court-approved Disclosure Statement
explaining the First Amended Plan is available for a fee at:

     http://www.researcharchives.com/bin/download?id=060112012224

Headquartered in Point Richmond, California, Western Water Company
manages, develops, sells and leases water and water rights in the
western United States.  The Company filed for chapter 11
protection on May 24, 2005 (Bankr. N.D. Calif. Case No. 05-42839).
Adam A. Lewis, Esq., at the Law Offices of Morrison and Foerster,
represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it estimated
between $10 million and $50 million in assets and debts.


WINN-DIXIE: Wants to Reject Jeffersonville Lease Effective Today
----------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates want to walk
away from an unexpired non-residential real property lease for
Store No. 1643 at the Jeffersonville Plaza Shopping Center in
Jeffersonville, Indiana, effective today, Feb. 9, 2006.

The Debtors previously assigned the Lease to Buehler Foods Inc.

Cynthia C. Jackson, Esq., at Smith Hulsey & Busey, in
Jacksonville, Florida, explains that Buehler Foods, which filed
for bankruptcy in the United States Bankruptcy Court for the
Southern District of Indiana, Evansville Division, rejected its
assigned interest in the Lease.  By that rejection, the Debtors
want to relieve their estates of any continuing obligations under
the Buehler Lease.

Winn-Dixie Raleigh, Inc., formerly known as Winn-Dixie Charlotte,
Inc., leases the Property from Marshall Planning Mill, Inc.,
pursuant to a Lease dated Feb. 15, 1995.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000).


WINN-DIXIE: Equity One Offers $3.7 Million for Oviedo Property
--------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates want to sell a
closed grocery store in Oviedo, Florida, to prevent further losses
and bring cash into the estate.  The Oviedo grocery store operated
at a loss of over $400,000 in each of 2004 and 2005.

The Debtors marketed the Oviedo Property extensively through DJM
Asset Management, Inc., which sent over 10,000 sale notices to
potential purchasers.  Through DJM's efforts, the Debtors have
received six offers, including an offer by Equity One (Florida
Portfolio), Inc., for $3,700,000.  After reviewing all offers,
the Debtors have determined that Equity One's offer is the
highest or best offer for the Oviedo Property.

Notwithstanding that the Assets have been sufficiently marketed,
the Debtors solicited higher and better bids.  An auction was
scheduled yesterday, Feb. 8, 2006.

The Debtors will conduct the auction in consultation with the
Official Committee of Unsecured Creditors Committee and the DIP
Lender.

                     Seminole County Responds

The Seminole County Tax Collector points out that the 2005 ad
valorem taxes for the Oviedo Property are due and have not yet
been paid.  The Seminole County Tax Collector's lien for these
taxes constitutes a claim and interest in the Oviedo Property,
Brian T. Fitzgerald, Esq., in Tampa, Florida, says.

Upon the closing of the Sale, Mr. Fitzgerald notes, the Seminole
County Tax Collector's lien will attach to the proceeds of the
Sale in accordance with the first lien priority afforded by
Section 197.122, Florida Statues.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000).


WINN-DIXIE: Want to Reject Nine Contracts Effective Today
---------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority
from the U.S. Bankruptcy Court for the Middle District of Florida
to reject nine executory contracts effective today, Feb. 9, 2006.

The contracts are:

   (1) five copier/fax machine lease agreements with General
       Electric Capital Corporation and Berney Office Solutions
       and two digital copier lease agreements with Lanier
       Worldwide, Inc.;

   (2) an electric service agreement with the Public Works
       Commission of the City of Fayetteville, North Carolina;
       and

   (3) a real property lease termination agreement with
       Woolbright/SSR Marketplace LLC with respect to
       Store No. 2386.

Cynthia C. Jackson, Esq., at Smith Hulsey & Busey, in
Jacksonville, Florida, explains that the Equipment Leases are no
longer being used or are located in a facility that has been
targeted for closing.  Due to the age of the equipment, the
Equipment Leases are not a source of potential value to the
Debtors' estates.

Ms. Jackson further explains that the PWC Agreement, which
governed the use of electric service with the City of
Fayetteville, is no longer needed because the Debtors have sold
or closed all of their stores in North Carolina.  Electric
utility services for those stores have been terminated.

In addition, Ms. Jackson reports that rejecting the Lease
Termination Agreement with Woolbright will save their estates
$55,000 per month.

                    Woolbright Responds

Woolbright contends that the Lease Termination Agreement is not
an executory contract because the only remaining material
unperformed obligation under it was the Debtors' obligation to
pay remaining monthly installments totaling $351,353.

Richard H. Malchon, Jr., Esq., at Ruden, McClosky, Smith,
Schuster & Russell, P.A., in Tampa, Florida, relates that
pursuant to the Lease Termination Agreement, the Debtors agreed
to make 10 monthly installment payments of $55,000 to Woolbright.

Woolbright is negotiating with the Debtors and is hopeful that an
acceptable settlement will be arrived at.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King &
Spalding LLP, represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $2,235,557,000 in total assets and
$1,870,785,000 in total debts.  (Winn-Dixie Bankruptcy News,
Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000).


* Ropes & Gray Brings In Four Partners to Bankruptcy Practice
-------------------------------------------------------------
Ropes & Gray is pleased to announce that four new partners have
joined its bankruptcy practice in New York, significantly
enhancing the firm's capabilities in representing institutional
investors, committees, financiers and debtors in large, complex
restructurings and bankruptcies.

The four new partners are Mark I. Bane, Mark R. Somerstein, Keith
H. Wofford and Adam R. Kokas.  Messrs. Bane, Somerstein and
Wofford are bankruptcy lawyers; Mr. Kokas is a corporate attorney.
The four were previously partners at Kelley Drye, which was ranked
recently by The Deal in the top 10 of the "Top Bankruptcy Law
Firms."

"Expertise in representing creditors and bondholders in complex
workouts and major chapter 11 cases has always been an essential
element of our bankruptcy and business restructuring practice at
Ropes & Gray," said Steven T. Hoort, co-head of the firm's
Bankruptcy and Business Restructuring Department.

"Our new partners have a proven record of success in representing
institutional investors, bondholder and creditor committees in
major restructurings and bankruptcies.  With our new partners and
our existing bankruptcy capabilities in Boston and New York, Ropes
& Gray is poised to become one of the premier bankruptcy and
business restructuring practices in the country."

"We're honored that Ropes & Gray, with its exceptionally strong
client base and diverse practice, has asked us to join the ranks
of its talented lawyers," said Mr. Bane, who will serve as co-head
of the firm's Bankruptcy and Business Restructuring Department.
"Now that we're here, we look forward to continuing the work of
Stu, Steve and our other new colleagues in building the firm's
dynamic bankruptcy practice."

Mark I. Bane has built a successful practice in restructuring and
creditors' rights, bankruptcy and corporate transactions.  He was
the chair of the Restructuring and Creditors' Rights practice
group at Kelley Drye.  A graduate of Johns Hopkins University and
the New York University School of Law, Mr. Bane was ranked among
the country's top 30  bankruptcy lawyers by The Deal.

Mark R. Somerstein specializes in restructuring, bankruptcy and
creditors' rights.  He was recognized by Turnaround and Workouts
magazine as an Outstanding Young Restructuring Lawyer for 2005,
and he joined Bane in The Deal's top 30 bankruptcy lawyers.  Mr.
Somerstein earned his law degree from Hofstra University after
completing his undergraduate studies at Tufts University.

Keith H. Wofford's practice focuses on restructuring, bankruptcy
and creditors' rights. Mr. Wofford regularly represents secured
and unsecured creditors, official and unofficial committees,
indenture trustees, and holders of public debt securities in
complex chapter 11 cases.  He earned both his undergraduate and
law degrees from Harvard University.

Adam R. Kokas has a general corporate practice with a focus on
securities and business, including corporate finance, mergers,
acquisitions and divestitures, corporate governance and venture
capital.  After earning his undergraduate degree from Rutgers
University, Mr. Kokas was an Edward F. Hennessey Scholar at the
Boston University School of Law.

                       About Ropes & Gray

Ropes & Gray LLP provides comprehensive legal services to leading
businesses and individuals around the world.  With offices in
preeminent centers of finance, technology and government, Ropes &
Gray is ideally positioned to address today's most pressing legal
and business issues.  Capabilities include antitrust, bankruptcy
and business restructuring, corporate mergers and acquisitions,
employee benefits, environmental, health care, intellectual
property and technology, international, investment management,
labor and employment, life sciences, litigation, private equity
and venture capital, private client services, real estate and tax.


* Kasowitz Benson Hires Renowned Trial Lawyer Lawrence Goodwin
--------------------------------------------------------------
Kasowitz, Benson, Torres & Friedman LLP reported that Lawrence
Goodwin has joined the firm as a partner in its Intellectual
Property Group.  Mr. Goodwin joined the firm on Jan. 20, 2006.

Mr. Goodwin is a nationally renowned trial lawyer specializing in
patent litigation.  He has been lead trial counsel in numerous
jury and bench trials throughout the country, and has served as a
court-appointed Special Master in patent infringement litigation.
The federal bench, his colleagues and the industry have acclaimed
Mr. Goodwin's work.  Although patent infringement litigation has
been the focus of Mr. Goodwin's practice, he also has had
substantial experience litigating trade secret, software
copyright, and trademark matters.

During his 30-year career in intellectual property, Mr. Goodwin
has litigated matters concerning technologies including complex
electronics, mechanical devices, computer software, business
methods, and biological sciences.  He is a frequent lecturer on
both patent law and principles of general law as applied to patent
infringement cases.

Prior to joining Kasowitz, Benson, Torres and Friedman LLP,
Mr. Goodwin was a partner at Chadbourne & Parke, and Orrick
Herrington & Sutcliffe, where he served as co-chair of the
Intellectual Property Group.

Kasowitz, Benson, Torres and Friedman's Intellectual Property
Group has grown substantially since its inception in October 2005,
and the firm plans to continue recruiting the best and brightest
lawyers specializing in intellectual property matters.

"I am thrilled to join Kasowitz, Benson, Torres & Friedman, one
of the nation's most prominent firms, as the firm expands its
high-quality Intellectual Property Group," Mr. Goodwin said.  "I
look forward to collaborating with the many talented lawyers at
the firm in the years to come."

            About Kasowitz, Benson, Torres & Friedman

Kasowitz, Benson, Torres & Friedman LLP, founded in 1993, has
built a highly sophisticated, national practice specializing in
complex civil litigation.  The firm, which numbers over 150
lawyers in New York, Houston, Atlanta, San Francisco and Newark,
principally focuses on general litigation, creditor's rights and
bankruptcy, employment practices, intellectual property and family
law.

                        *********

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.  Marie Therese V. Profetana, Shimero Jainga, Yvonne L.
Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry
A. Soriano-Baaclo, Terence Patrick F. Casquejo, Christian Q.
Salta, Jason A. Nieva, Lucilo Junior M. Pinili, Tara Marie A.
Martin and Peter A. Chapman, Editors.

Copyright 2006.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $725 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

                 *** End of Transmission ***