TCR_Public/060331.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Friday, March 31, 2006, Vol. 10, No. 77

                             Headlines

ADELPHIA COMMS: Court Approves $1.3-Bil. Extended DIP Facility
AES CORP: S&P Lifts Corp. Credit Rating to BB- with Stable Outlook
AMCAST INDUSTRIAL: Panel Wants Alvarez & Marsal as Advisor
AMERICAN AIRLINES: S&P Rates $773 Million Amended Facility at B+
AMERICAN AIRLINES: Tom Horton Returns as AMR Corp. EVP & CFO

AMERICAN FINANCIAL: S&P Assigns Preliminary BB+ Pref. Stock Rating
AMERIQUEST TRUST: Moody's Puts Low-B Ratings on Two Cert. Classes
ANCHOR GLASS: Court Allows Highwoods Lease Rejection
ASPEON INC: Ninth Circuit Affirms Dismissal of Shareholders' Suit
ATA AIRLINES: Inks Stipulation Allowing GATX's Claim for $7.9 Mil.

BEST MANUFACTURING: SSG Arranges $97 Million Financing Package
BIRCH TELECOM: Court Confirms Plan of Reorganization in Delaware
BLUE BEAR: Hires Computer Forensic Lab as Computer Consultant
BOMBARDIER INC: Earns $249 Million in Fiscal Year 2006
CALPINE CORP: Agrees to Sell 45% Interest in Mexico Power Plant

CHASE FUNDING: S&P Downgrades Class IB Certificate's Rating to BB
CHEVY CHASE: Moody's Rates Class B-5 Certificate at B2
CLEAN EARTH: Taps General Capital as Investment Banker
CLEAN EARTH: U.S. Trustee Amends Official Committee Membership
CONVERSENT COMMUNICATIONS: S&P Puts B Ratings on Developing Watch

CREDIT SUISSE: Moody's Lifts 17 Securitization Tranche Ratings
CREDIT SUISSE: Moody's Holds Ba1 Rating on $22.5MM Class L Certs.
CYBERCARE INC: Has Until May 20 to File Chapter 11 Plan
D&M FINANCIAL: Judge Stern Converts Case to Chapter 7 Liquidation
DANA CORP: ITW Wants Debtors to Decide on Executory Contracts

DANA CORP: U.S. Trustee Amends Creditors Committee Membership
DELPHI CORP: Gets Court OK to Hire Dickinson Wright as IP Counsel
DORAL FINANCIAL: Appoints Lidio Soriano as Chief Financial Officer
DYNEGY HOLDINGS: S&P Rates $750 Million Sr. Unsecured Notes at B-
EMISPHERE TECHNOLOGIES: PwC Expresses Going Concern Doubt

EDDIE BAUER: Credit Metrics Decline Cues Moody's to Lower Ratings
ENCORE ACQUISITION: Raising $131 Million in Common Stock Offering
ENRON CORP: Inks Claim Settlement Pact with Toronto Dominion
ENRON CORP: North American Unit Selling Emission Reduction Credits
FEDERAL-MOGUL: CNA Parties Assert Rights Over Insurance Settlement

FINOVA GROUP: Gets Adverse Ruling from Dist. Court in Thaxton Case
FINOVA GROUP: No Class Certification for Thaxton Sub. Noteholders
FONIX CORP: December 31 Balance Sheet Upside-Down by $15.2 Million
FRGC DEVELOPMENT: Involuntary Chapter 11 Case Summary
GENERAL MOTORS: Faulty Financials Prompt Moody's Ratings Review

GENERAL MOTORS: S&P Puts B Corporate Credit Rating on Neg. Watch
GENERAL MOTORS: Mulls Sale of Isuzu Shares
GMAC COMMERCIAL: Fitch Lifts $6.6MM Class J Certs.' Rating to BB+
GMAC COMMERCIAL: Fitch Lifts $9.6MM Class L Certs.' Rating to BB
GOODYEAR TIRE: SEC Closes Accounting-Related Probe

HANDEX GROUP: GAIC Wants Handex-Harris County Contract Terminated
HAWS & TINGLE: Picks Ford Nassen to Prosecute Construction Claims
HEALTHSOUTH CORP: Net Loss Doubles Year-Over-Year in 2005
HOST MARRIOTT: S&P Rates Proposed $600 Million Sr. Notes at BB-
INDYMAC TRUST: Moody's Places Class B Certificate Rating at Ba2

INTERNATIONAL PAPER: Selling Wisconsin Land For $83 Million
INTERPUBLIC GROUP: Fitch Lowers Preferred Stocks' Ratings to CCC
INTERSTATE BAKERIES: Selling Dorchester Lot to Tenean for $3.55M
INTERSTATE BAKERIES: Settling Class Action After Court Lifts Stay
IPIX CORP: Losses Prompt Auditors to Raise Going Concern Doubt

J.G. WENTWORTH: S&P Puts B- Long-Term Counterparty Credit Rating
KAISER ALUMINUM: PBGC & VEBA Agree to Stock Transfer Restrictions
KAISER ALUMINUM: Asks Dist. Court to Consolidate Insurers' Appeals
KB HOME: Moody's Puts Ba1 Rating on New $300MM 7.25% Senior Notes
KING PHARMACEUTICALS: Prices $400-Mil. Conv. Senior Notes Offering

LEAR CORP: S&P Downgrades Senior Unsecured Rating to B- from BB+
LEAR CORP: Secures $800 Mil. Loan Commitment & Suspends Dividends
LEGACY ESTATE: Gets Court OK to Hire Deloitte as Restr. Advisor
LEGACY ESTATE: Has Until May 20 to File Plan of Reorganization
LIFE SCIENCES: Equity Deficit Widens to $14.5 Million at Dec. 31

LONDON FOG: Columbia Sportswear Acquires Pacific Trail Brands
MANITOWOC: Expects Higher 1st Qtr. Earnings v. Wall Street Average
MERIDIAN AUTOMOTIVE: Files Plan of Reorganization in Delaware
METOKOTE CORP: S&P Affirms B+ Rating & Changes Outlook to Negative
MIRANT CORP: Kern River Gets Stock for $81,765,967 Unsec. Claim

MOUNT SINAI: Moody's Lifts Long-Term Debt Ratings to Ba1 from Ba2
MUSICLAND HOLDING: Balks at Marisa Uriarte's Lift Stay Motion
MUSICLAND HOLDING: Can Hire Abacus as Advisors on Final Basis
NATIONAL ENERGY: Asks Court to Approve Mirant Settlement Agreement
NEIMAN MARCUS: Fitch Affirms $500 Mil. Sr. Sub. Notes' CCC Rating

NELLSON NUTRACEUTICAL: Hires PricewaterhouseCoopers as Tax Advisor
NET2000 COMMS: Chapter 7 Trustee Hires Recovery Services as Agent
NEVADA POWER: Fitch Puts BB+ Rating on $250 Mil. Mortgage Notes
NEVADA POWER: S&P Places BB Rating on Proposed $250 Million Bonds
NEWBURGH DYEING: Case Summary & Largest Unsecured Creditor

NEWFIELD EXPLORATION: Moody's Rates Pending $500MM Notes at Ba3
NEWFIELD EXPLORATION: S&P Rates $500 Million Sr. Sub. Notes at BB-
NEXSTAR BROADCASTING: S&P Affirms Rating & Revises Outlook to Neg.
NOBEX CORP: Gets Court Ok to Hire SSG Capital as Investment Banker
NOBEX CORP: Panel Can Hire NachmanHaysBrownstein as Fin'l Advisor

ON TOP COMMS: Wants to Sell Mississippi Station for $1.5 Million
PANAVISION INC: S&P Rates $115 Million 2nd-Lien Term Loan at CCC
PARAGON REAL: Losses & Equity Deficit Raise Going Concern Doubt
PARMALAT USA: Tax Liability Battle with U.S. Govt. Continues
PATH 1: Losses Cue Swenson Advisors to Raise Going Concern Doubt

PINE PRAIRIE: S&P Puts Preliminary B+ Rating on $320 Million Debts
PLIANT CORP: Liquidation Analysis Under Plan of Reorganization
PRG-SCHULTZ INT'L: Losses & Deficit Prompt Going Concern Doubt
RASC TRUST: Moody's Puts Low-B Ratings on Two Certificate Classes
REAL ESTATE: Moody's Places Ba3 Rating on Class B7 Notes

RESIX FINANCE: Moody's Rates Class B7 Series 2006-A Notes at Ba3
RIVERSTONE NETWORKS: Stockholder Withdraws Motion to Dismiss Case
RIVERSTONE NETWORKS: Committee Hires Schulte Roth as Counsel
SAINT VINCENTS: Proposes $25,000 Ordinary Course Professional Cap
SEALY CORP: Expects to Raise $277 Million from Stock Offering

SEMGROUP L.P.: Fitch Puts B Issuer Default Rating on Neg. Watch
SFBC INT'L: Lenders Grant Waivers for $90 Million Credit Facility
SOUNDVIEW HOME: S&P Affirms Ten Transaction Class' Low-B Ratings
STARTECH ENVIRONMENTAL: Posts $439,462 Net Loss in January 2006
STARWOOD HOTELS: Host Marriott Merger Cut to $3.7B Sans CDN Hotels

STATE STREET: U.S. Trustee Calls for Chapter 7 Conversion
STATE STREET: Court Conditions Continued Use of MLC's Collateral
STELCO INC: Monitor Files Fifty-Seventh Restructuring Report
STEWART ENTERPRISES: Releases First Fiscal Quarter Ended Jan. 31
SUNNY DELIGHT: S&P Cuts Corp. Credit & Bank Loan Ratings to CCC+

SYNAGRO TECHNOLOGIES: Posts $549,000 Net Loss in Fourth Qtr. 2005
TOMMY HILFIGER: S&P Holds BB- Corp. Credit Rating on Neg. Watch
THAXTON GROUP: 4th Cir. Denies Class Certification in Finova Suits
THAXTON: Dist. Court Finds Finova Guilty of Fraud in Loan Deal
U.S. ABS: S&P Puts Two B Certificate Class Ratings on Neg. Watch

UNION PACIFIC: DBRS Holds BBB Issuer Rating on Stable Trend
US AIRWAYS: America West Will Redeem $112MM of 7.5% Conv. Notes
USG CORP: US Gypsum to Fund Otsego's $18M Purchase of Paper Mill
VANTAGEMED CORP: Equity Deficit Narrows to $3.4 Mil. at Dec. 31
VENTURE HOLDINGS: Erman Teicher to Handle Small Preference Claims

VICORP RESTAURANTS: Posts $2 Mil. Net Loss in Qtr. Ended Jan. 26
WCI STEEL: Bankruptcy Court Confirms Noteholders' Chapter 11 Plan
WINN-DIXIE STORES: To Merge Distribution Biz in Southern Florida
WORLDCOM INC: Wants Musicland's Decision on Service Pact Now
WORLDCOM INC: Gets Okay to File Enforcement Request Under Seal

XYBERNAUT CORP: Court Approves East River as Interim DIP Lender

* Houlihan Lokey Relocating Washington Office Effective April 1

BOOK REVIEW: Dynamics of Institutional Change: The Hospital in
             Transition

                             *********

ADELPHIA COMMS: Court Approves $1.3-Bil. Extended DIP Facility
--------------------------------------------------------------
The Honorable Robert D. Gerber of the U.S. Bankruptcy Court for
the Southern District of New York approved the Extended DIP
Facility of Adelphia Communication Corporation and its
debtor-affiliates, despite objections from the Ad Hoc Committee of
Arahova Noteholders, as holders of over $510,000,000 in Senior
Notes issued by Arahova Communications, Inc.

Among other things, the Extended DIP Facility:

    (a) provides for a $1,300,000,000 facility, comprised of an
        $800,000,000 revolving credit facility (including a
        $500,000,000 letter of credit sub facility) and a
        $500,000,000 term loan;

    (b) extends the maturity date from March 31, 2006, to
        August 7, 2006;

    (c) extends the date for delivery of:

        -- ACOM's consolidated audited financial statements for
           the fiscal year ended December 31, 2005, until no later
           than April 30, 2006, and

        -- the combining unaudited schedule for each borrower
           group under the Extended DIP Facility for the fiscal
           year ended December 31, 2005, until no later than
           May 31, 2006;

    (d) increases the aggregate amount of Intercompany Loans
        that may be made to ACOM and the Borrower in the Joint and
        Several Borrower Group from $100,000,000 to $130,000,000
        that will:

        -- be used solely for Permitted Purposes; and

        -- not be subject to the monthly true-up required by the
           Cash Management Protocol, but will be repaid in full on
           the Effective Date;

    (e) permits Intercompany loans to be made by each of the
        Participating Borrowers to the Holding Company Guarantors
        in an aggregate maximum amount of $320,000,000 which will
        be used by the Holding Company Guarantors to make payments
        to certain Borrower Groups on the implementation of a new
        cost allocation methodology that the Debtors are in the
        process of finalizing;

    (f) increases the amount of Shared Capital Expenditures that
        the Joint and Several Borrower Group will be permitted
        to allocate to the other Borrower Groups from $200,000,000
        to $230,000,000;

    (g) eliminates the SPV structure contained in the Existing DIP
        Facility and the provision that each existing SPV will be
        designated as a Holding Company Guarantor;

    (h) decreases the interest rate margin applicable to loans
        made under the Extended DIP Facility by 25 basis points;
        and

    (i) changes the Borrowing Limits and extension of the
        financial covenants levels of each Borrower Group through
        the new maturity date:

           Borrower Group          Initial             Final
           --------------          -------             -----
           Century            $690,000,000      $650,000,000
           Century-TCI         230,000,000       250,000,000
           UCA                 100,000,000        75,000,000
           Parnassos            10,000,000        10,000,000
           FrontierVision      215,000,000       205,000,000
           Olympus              25,000,000        25,000,000
           Seven A                       0                 0
           Seven B              20,000,000        75,000,000
           Seven C              10,000,000        10,000,000
                            --------------    --------------
           TOTAL            $1,300,000,000    $1,300,000,000

            Arahova Noteholders Committee's Response

The Ad Hoc Committee of Arahova Noteholders noted that the ACOM
Debtors' existing DIP Facility states that an "Event of Default"
will occur if a Chapter 11 trustee is appointed to administer any
of the ACOM Debtors' estates.  In the ACOM Debtors' proposed
Extended DIP Facility, that section remains unaltered and in full
force and effect.

The Arahova Noteholders Committee's appeal from Judge Gerber's
denial of its request to:

   (i) terminate the Arahova Debtors' exclusive periods; and

  (ii) appoint a trustee for the Arahova Debtors and certain
       other Debtors,

is currently pending before the United States District Court for
the Southern District of New York.

John K. Cunningham, Esq., at White & Case LLP, in New York, told
the Court that in the event the Appeal is granted in favor of the
Arahova Noteholders and the District Court finds that a Chapter
11 trustee should be appointed for one or more of the Debtors'
estates, an Event of Default will be triggered.

The Arahova Noteholders Committee asserts that prudence mandates
that any order approving the ACOM Debtors' DIP extension request
provide that the appointment of a Chapter 11 trustee granted by
the District Court pursuant to the Appeal will not constitute an
Event of Default.

                        Debtors Talk Back

The ACOM Debtors asked the Court to overrule the Arahova
Noteholders Committee's response for three reasons:

   -- The DIP Lenders are unwilling to modify the affected
      provisions in the Extended DIP Facility;

   -- ACOM has a legitimate business need in extending and
      modifying the Existing DIP Facility; and

   -- ACOM cannot afford any delay in obtaining the DIP Financing
      extension and modification.

              Agents Support DIP Facility Extension

JPMorgan Chase Bank, N.A., as Administrative Agent; Citigroup
Global Markets Inc., as Syndication Agent; Citicorp North
America, Inc., as Collateral Agent; and J.P. Morgan Securities
Inc. and Citigroup Global Markets Inc., as Joint Bookrunners and
Co-Lead Arrangers, on behalf of themselves and a syndicate of
financial institutions, declared that they fully support the ACOM
Debtors' efforts to extend their Existing DIP Facility.

On behalf of JPMorgan Chase and Citicorp, Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, in New York, emphasized that the
right to declare an event of default on the appointment of a
Chapter 11 trustee is a necessary and totally standard protection
for lenders in the Chapter 11 context.  The DIP Lenders have
agreed to lend the ACOM Debtors up to $1,300,000,000, based on
their knowledge and understanding of the ACOM Debtors and their
current management.

The provision stating that the appointment of a trustee is an
Event of Default is important to ensure that the DIP Lenders have
rights, including the right to stop lending, if there is cause
sufficient to warrant the appointment of a trustee under Section
1104(a) of the Bankruptcy Code, Mr. Huebner explains.  "The
provision at issue is completely standard and exists in virtually
all, if not all, debtor-in-possession financing agreements."

Accordingly, the Agents do not consent to the amendment of the
Extended DIP Facility proposed by the Arahova Noteholders
Committee.

                  About Adelphia Communications

Headquartered in Coudersport, Pa., Adelphia Communications
Corporation (OTC: ADELQ) is the fifth-largest cable television
company in the country.  Adelphia serves customers in 30 states
and Puerto Rico, and offers analog and digital video services,
high-speed Internet access and other advanced services over its
broadband networks.  The Company and its more than 200 affiliates
filed for Chapter 11 protection in the Southern District of New
York on June 25, 2002.  Those cases are jointly administered under
case number 02-41729.  Willkie Farr & Gallagher represents the
ACOM Debtors.  Kasowitz, Benson, Torres & Friedman, LLP, and Klee,
Tuchin, Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.  (Adelphia Bankruptcy News, Issue No. 125;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


AES CORP: S&P Lifts Corp. Credit Rating to BB- with Stable Outlook
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on diversified energy company The AES Corp. to 'BB-' from
'B+'.  The outlook is stable.

As of Dec. 31, 2005, the Arlington, Virginia-based company had
$4.892 billion of debt outstanding.

The upgrade follows Standard & Poor's review of the company after
its financial restatements completed in January.

"The upgrade reflects the company's reduction of parent level
leverage and resulting improved parent-level financial metrics,"
said Standard & Poor's credit analyst Scott Taylor.

Although AES continues to have material weaknesses in its
accounting controls that it needs to address, and future
restatements are not out of the question, in Standard & Poor's
view, the company has likely resolved its major problems.

Standard & Poor's also said the stable outlook on AES reflects the
expectation for consistent performance over the next 18 to 24
months.


AMCAST INDUSTRIAL: Panel Wants Alvarez & Marsal as Advisor
----------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Amcast
Industrial Corporation and its debtor-affiliates' bankruptcy
cases, asks the U.S Bankruptcy Court for the Southern District of
Indiana in Indianapolis for authority to retain Alvarez & Marsal,
LLC, as its financial advisor, nunc pro tunc to Feb. 15, 2006.

The Committee has selected A&M as its financial advisors because
of the firm's diverse experience and extensive knowledge in the
field of bankruptcy.

A&M is expected to:

     a) provide analytical support to the Committee's counsel on
        certain litigation issues, including, but not limited to,
        the agreement between Amcast and General Motors;

     b) advise the Committee and its counsel on contract and
        commercial issues;

     c) perform an extensive analysis and review of the
        profitability of the Debtors' existing contracts and, if
        necessary, participate in the contract renegotiation
        process;

     d) assist the Committee and its counsel in any other
        Financial Advisor service, as requested by the Committee
        or its counsel, to maximize the recovery to the estate.
        These services include:

            -- analyzing and monitoring the Debtors' post-petition
               cash flow forecasts and assess the associated
               operational reasonableness, viability and risks;

            -- reviewing the Debtors' operational performance and
               business plans and analyzing the various
               operational risks and opportunities therein;

            -- analyzing the potential cost savings proposed by
               the Debtors' as well as potential cost savings
               incremental to those proposed by the Debtors; and

      e) Assist the Committee and its counsel in responding to
         various developments or motions during the course of the
         Debtors' Chapter 11 proceedings.

The customary hourly rates for A&M's professionals are:

         Professional                     Hourly Rate
         ------------                     -----------
         Managing Director                $500 to $650
         Directors                        $400 to $500
         Associates                       $300 to $400


Thomas E. Hill, a Managing Director at A&M, assures the Bankruptcy
Court that his firm does not hold any interest adverse to the
Debtors' estates and is a "disinterested person" as that term is
defined in section 101(14) of the Bankruptcy Code.

                      About Alvarez & Marsal

Alvarez & Marsal -- http://www.alvarezandmarsal.com-- is a
leading global professional services firm with expertise in
guiding under performing companies and public sector entities
through complex financial, operational and organizational
challenges.

                     About Amcast Industrial

Headquartered in Fremont, Indiana, Amcast Industrial Corporation,
manufactures and distributes technology-intensive metal products
to end-users and suppliers in the automotive and plumbing
industry.  The Company and four debtor-affiliates filed for
chapter 11 protection on Nov. 30, 2004.  The U.S. Bankruptcy Court
for the Southern District of Ohio confirmed the Debtors' Third
Amended Joint Plan of Reorganization on July 29, 2005.  The
Debtors emerged from bankruptcy on Aug. 4, 2005.

Amcast Industrial Corporation and Amcast Automotive of Indiana,
Inc., filed for chapter 11 protection a second time on Dec. 1,
2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman, Esq.,
and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, P.C.,
represent the Debtors in their restructuring efforts.  When the
Debtor and its affiliate filed for protection from their
creditors, they listed total assets of $97,780,231 and total
liabilities of $100,620,855.


AMERICAN AIRLINES: S&P Rates $773 Million Amended Facility at B+
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' bank loan
rating and its '1' recovery rating to a $773 million amended
and restated senior secured credit facility dated as of
March 27, 2006, available to AMR Corp. subsidiary American
Airlines Inc. (B-/Stable/--).  AMR (B-/Stable/B-3) guarantees the
facility.  The credit facility amends an existing bank facility
(which has the same bank loan and recovery ratings) to revise:

   -- pricing;

   -- allocation of credit between the revolving credit facility
      ($325 million) and senior secured term loan ($448 million);
      and

   -- the cash flow coverage covenant.

"American's credit facility is rated 'B+', two notches above the
corporate credit rating, with a recovery rating of '1', indicating
the expectation of full recovery of principal in the event of a
payment default," said Standard & Poor's credit analyst Philip
Baggaley.

The 'B-' long-term corporate credit ratings on AMR Corp. and
subsidiary American Airlines Inc. reflect a weak financial profile
due to:

   -- several years of huge losses;

   -- a heavy debt and pension burden; and

   -- participation in the competitive, cyclical, and capital-
      intensive airline industry.

Adequate liquidity, with $3.8 billion of unrestricted cash at
Dec. 31, 2005, is a positive.  American Airlines Inc. is the
world's largest airline, measured by traffic, with solid market
shares in the U.S. domestic, trans-Atlantic, and Latin American
markets, but a minimal presence in the Pacific.

American, like most other large U.S. airlines, has incurred heavy
losses since late 2000 due to industrywide problems of:

   -- terrorism,

   -- war,

   -- high fuel prices, and

   -- increasing price competition in the domestic market as low-
      cost airlines expand.

AMR's $861 million net loss in 2005, which included a $180 million
negative impact from write-down of certain assets, was hurt by
much higher fuel prices (fuel expense up by 42%).  This was
particularly true in the fourth quarter, when the company reported
a $604 million net loss ($413 million loss before special items).
However, strong international revenues and improved pricing in the
U.S. domestic market boosted total 2005 revenues 11% and resulted
in a narrowing of the full-year operating loss compared with 2004.
American's credit measures, while improved from previous years,
remain weak, with EBITDA interest coverage about 1x and funds flow
to debt in the mid-single-digit percent area last year.  Earnings
and cash flow are expected to improve significantly in 2006, based
on current revenue trends.

A healthy cash balance and other potential sources of liquidity
support credit quality, despite recent substantial losses.
Improving revenue trends in the U.S. domestic market should allow
greatly improved operating results in 2006.  The outlook could be
revised to positive if AMR appears likely to achieve approximately
breakeven results or better this year, and if that improvement
appears sustainable.  A material deterioration in airline industry
conditions, most likely due to higher fuel prices not offset by
higher fares, could prompt a revision of the outlook to negative.


AMERICAN AIRLINES: Tom Horton Returns as AMR Corp. EVP & CFO
------------------------------------------------------------
AMR Corporation, the parent company of American Airlines, reported
the appointment of Thomas W. Horton as Executive Vice President -
Finance and Planning and Chief Financial Officer.

Mr. Horton returns to AMR and American from AT&T, where he most
recently had been Vice Chairman and Chief Financial Officer after
joining that company from AMR as CFO in June 2002.

In his new role as AMR's Executive Vice President - Finance and
Planning, Mr. Horton will also be CFO, responsible for all of the
Company's finance functions, including financial planning,
treasury, corporate development, accounting, tax, investor
relations, a business unit that provides investment services, and
purchasing.

In addition, Mr. Horton will have overall responsibility for all
planning functions led by Henry C. Joyner, American's Senior Vice
President - Planning.  These include capacity planning, revenue
management, corporate real estate, international planning,
activities related to American's membership in the global oneworld
alliance, and fleet planning.

"All of us at AMR are thrilled to welcome Tom Horton back to the
leadership team," said Gerard Arpey, AMR's Chairman and CEO.  "Tom
is an executive of extraordinary insight and ability who served
our Company with distinction in many roles, including Chief
Financial Officer, before going on to do great things at AT&T.
His broad knowledge of the challenging airline industry and keen
understanding of the financial markets will be enormous assets to
AMR as we continue the vital work of restoring the Company to
sustained profitability in a global aviation marketplace."

                     Executive Retirements

With the expected retirement of two key executives in the next few
years, American also disclosed several other major appointments to
strengthen the management team and develop more refined lines of
succession in several critical areas as the airline positions
itself to become a stronger and more vibrant global competitor.

Those planning retirement are Peter J. Dolara, American's Senior
Vice President - Miami, the Caribbean and Latin America, who
pioneered the airline's services in those regions and guided their
growth into some of the most successful portions of American's
network; and William F. Quinn, President of American Beacon
Advisors, AMR's investment services unit, who founded that
enterprise in 1986 and grew the business to a point where today it
manages more than $45 billion in pension assets and short-term
cash assets on behalf of American and outside clients.

Mindful of these changes, American reported two senior
international appointments made to address the changes that will
result from Mr. Dolara's future retirement and to better position
American globally for long-term competitive success.

Craig S. Kreeger was named Senior Vice President - International,
and C. David Cush was appointed Senior Vice President - Global
Sales.

At present, Mr. Kreeger is responsible for all sales and ground
operations activities in Europe and Asia as Vice President -
Europe and Pacific Division, based in London.  Mr. Cush currently
is Vice President and General Sales Manager, responsible for
leading American's domestic sales team and for developing all
sales policies worldwide, including those relating to key
distribution systems.

Under the transition that will take place when Mr. Dolara retires,
Mr. Kreeger will become responsible for all ground operations in
Latin America, Europe and Asia, and Cush will be responsible for
all sales activities worldwide, including those in Latin America,
Europe and Asia.

Douglas G. Herring, currently American's Vice President and
Controller, will become President of American Beacon Advisors,
eventually succeeding Quinn, who will continue as the unit's chief
executive officer and chairman, and remain on the American Beacon
Mutual Fund Board.

Isabella Goren was named Senior Vice President - Customer
Relationship Marketing and Reservations. In this new role, Ms.
Goren will continue to oversee the full range of on-line customer
interactions, including expanding customer relationships through
personalized service via the AA.com Web site, and the operation of
American's reservations centers.  In addition, Ms. Goren will be
responsible for the airline's industry-leading AAdvantage travel
awards program, led by Kurt Stache, President of AAdvantage.

Brian McMenamy was appointed Vice President and Controller to
succeed Herring.  Mr. McMenamy is currently American's Managing
Director - Airline Profitability and Financial Analysis.

Mr. Dolara and Mr. Quinn, the two executives planning retirement,
are remaining in their respective roles so they can work closely
with their successors in the coming years to ensure a smooth and
successful transition of leadership in their important areas of
responsibility.

                    About American Airlines

American Airlines is the world's largest airline.  American,
American Eagle and the AmericanConnection regional airlines serve
more than 250 cities in over 40 countries with more than 3,800
daily flights. The combined network fleet numbers more than 1,000
aircraft.  American's Web site -- http://www.AA.com/-- provides
users with easy access to check and book fares, plus personalized
news, information and travel offers.  American Airlines is a
founding member of the oneworld Alliance, which brings together
some of the best and biggest names in the airline business,
enabling them to offer their customers more services and benefits
than any airline can provide on its own.  Together, its members
serve more than 600 destinations in over 135 countries and
territories.  American Airlines, Inc. and American Eagle are
subsidiaries of AMR Corporation (NYSE: AMR).

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 24, 2006,
Moody's Investors Service affirmed all debt ratings of AMR Corp.,
and its primary subsidiary American Airlines, Inc. - corporate
family rating at B3 -- as well as all tranches of the Enhanced
Equipment Trust Certificates supported by payments from American
and the SGL-2 Speculative Grade Liquidity Rating.  The outlook has
been changed to stable from negative.

The stable outlook reflects Moody's expectation of steadily
improving operating and financial performance during 2006
resulting primarily from yield-driven revenue growth while
maintaining control of the growth of unit costs.

As reported in the Troubled Company Reporter on Nov. 2, 2005,
Standard & Poor's Ratings Services assigned its 'B-' rating to
$800 million of New York City Industrial Development Agency
special facility revenue bonds, series 2005 -- American
Airlines Inc., John F. Kennedy International Airport Project,
which mature at various dates.  At the same time, the ratings on
existing series 2002 bonds were raised to 'B-' from 'CCC',
reflecting changes in the security arrangements that apply to
those bonds.  Both series of bonds will be serviced by payments
made by AMR Corp. unit American Airlines Inc. under a lease
between the airline and the agency.


AMERICAN FINANCIAL: S&P Assigns Preliminary BB+ Pref. Stock Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary:

   -- 'BBB' senior debt,
   -- 'BBB-' subordinated debt, and
   -- 'BB+' preferred stock ratings

to American Financial Group's (NYSE:AFG) recently filed universal
shelf.

Standard & Poor's also affirmed its 'BBB' counterparty credit
rating on AFG.  The outlook remains stable.

The new shelf has an undesignated notional amount in accordance
with the new SEC rules effective Dec. 1, 2005.

"The ratings on AFG reflects a number of strengths, including
its strong competitive position in the specialty property/casualty
sector and -- through its indirect 82% ownership in Great
American Financial Resources Inc. -- the 403(b) annuity market,"
said Standard & Poor's credit analyst Jason A. Jones.  "In
addition, AFG has strong operating results, especially in its
property/casualty operations; strong financial flexibility because
of its access to the capital markets; and strong capital adequacy
in the operating subsidiaries."

Partly offsetting weaknesses are the company's frequent special
charges and loss reserve additions and asbestos and environmental
exposure in the insurance business and in railroad properties.

Standard & Poor's expects that AFG's operating results in 2006
will be strong.  Capital adequacy in both the life and
property/casualty groups is also expected to remain strong,
supported by organic earnings.


AMERIQUEST TRUST: Moody's Puts Low-B Ratings on Two Cert. Classes
-----------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued by Ameriquest Mortgage Securities Trust 2006-
R2, Asset-Backed Pass-Through Certificates, Series 2006-R2, and
ratings ranging from Aa1 to Ba2 to the subordinate certificates in
the deal.

The securitization is backed by Ameriquest Mortgage Company
originated adjustable-rate and fixed-rate subprime mortgage loans.
The ratings are based primarily on the credit quality of the
loans, and on the protection from subordination, excess spread,
overcollateralization, and an interest rate swap agreement.
Moody's expects collateral losses to range from 4.65% to 5.15%.

Ameriquest Mortgage Company will act as Master Servicer and AMC
Mortgage Services will act as sub-servicer for the mortgage
collateral.

Ameriquest had previously disclosed discussions with financial
regulatory agencies or attorneys general offices of several
states, regarding lending practices of AMC.  ACC Capital Holdings
Corporation, the parent company of Argent and AMC, had recorded a
provision of $325 million in its financial statements with respect
to this matter.

ACC has recently announced that it had entered into a settlement
agreement with forty-nine states and District of Columbia.  Under
the terms of the settlement agreement, ACC agreed to pay $295
million toward restitution to borrowers and $30 million to cover
the States' legal costs and other expenses.  In addition, ACC has
agreed on behalf of itself, AMC and AMC's retail affiliates, to
supplement several of its business practices and to submit itself
to independent monitoring.  The agreement is not expected to have
any material credit implications on securitizations backed by
collateral originated by AMC, Argent or their affiliates.

The complete rating actions are:

          Ameriquest Mortgage Securities Trust 2006-R2
     Asset-Backed Pass-Through Certificates, Series 2006-R2

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


ANCHOR GLASS: Court Allows Highwoods Lease Rejection
----------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized Anchor Glass Container Corporation to reject a lease
with Highwoods Non-Orlando, LLC, for the premises at Anchor Plaza,
effective Jan. 31, 2006.

Highwoods has until April 15, 2006, to file a rejection damage
claim against the Debtor.

As reported in the Troubled Company Reporter on Feb. 1, 2006,
Anchor Glass Container Corporation sought to reject the Highwoods
lease after deciding to move its corporate offices to another
location in Tampa, Florida.

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets.  The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,
Esq., at Carlton Fields PA, represents the Debtor in its
restructuring efforts.  Edward J. Peterson, III, Esq., at
Bracewell & Guiliani, represents the Official Committee of
Unsecured Creditors.  When the Debtor filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts. (Anchor Glass Bankruptcy News, Issue No. 21;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ASPEON INC: Ninth Circuit Affirms Dismissal of Shareholders' Suit
-----------------------------------------------------------------
In a filing with the Securities and Exchange Commission, Aspeon,
Inc., disclosed that on Feb. 23, 2006, the U.S. Court of Appeals
for the Ninth Circuit affirmed the dismissal with prejudice of a
consolidated, putative class action lawsuit alleging securities
violations by the company, Richard M. Stack, the company's former
CEO, and Horace M. Hertz, the company's former CFO.

As previously reported in the Class Action Reporter, the
shareholders filed another appeal after their "Third Amended
Consolidated Complaint," was dismissed with prejudice on March
2004.

The Ninth Circuit concluded that the company, Mr. Stack and Mr.
Hertz had been sued in error and found that the allegations were
insufficient under the Private Securities Litigation Reform Act of
1995.

                        Fifth Dismissal

The company said that this is the fifth time that the Courts have
ruled in favor of Aspeon and against the shareholders who have
brought this suit against Aspeon.  The company related that on
each of the previous occasions, the shareholders who have brought
this suit against Aspeon have filed an appeal against the decision
of the Courts.  The company said that there is no assurance that
the shareholders who have brought this suit against Aspeon will
not file a further appeal against the Courts' latest ruling but
will continue to vigorously defend against the claims.

                      Shareholder Lawsuit

The lawsuit was originally filed on Oct. 11, 2001 in the United
States District Court for the Central District of California,
alleging that Aspeon's Form 10-Q financial statements for quarters
ended September 30, 1999, December 31, 1999, and March 31, 2000,
were false and misleading.  Since the inception of the lawsuit,
the company has maintained that the lawsuit was without merit.

                    Discontinued Operations

The company said that on June 30, 2003, it discontinued all of its
remaining operating business and focused on:

    * reaching  satisfactory negotiated settlements with its
      outstanding  creditors,

    * winning the outstanding law suit  brought  against  it by
      certain  of its  shareholders,

    * bringing  its financial records and SEC filings up to date,

    * seeking a listing on the over the counter  bulletin  board,

    * raising  debt  or  equity  to fund  negotiated settlements
      with its creditors and to meet its ongoing  operating
      expenses, and

    * attempting  to  merge  with  another  entity  with
      experienced  management  and opportunities  for growth in
      return  for  shares of its  common  stock to create value
      for its shareholders.  The company said that in order for
      them to merge with another entity, the lawsuit must be
      settled on a basis satisfactory to Aspeon.

                      Bankruptcy Warning

The company currently has no assets or ongoing source of income.
The company says the proceeds from its Directors' and Officers'
insurance policy will be sufficient to meet the legal cost
incurred in defending any further appeal against the Court's
decision.

The company said that if these funds are exhausted, they would
have no alternative but to file for bankruptcy.  The company
further said that if they lose an appeal against the Court's
decision, the funds would be insufficient to cover any damages
assessed and the company would also be forced into bankruptcy.

As reported in the Troubled Company Reporter on Feb. 28, 2006, the
company reported that as of Dec. 31, 2005, it had had only $7 in
total assets, no operating  business or other source of income,
outstanding liabilities  of approximately $8.1 million and an
outstanding lawsuit filed by some of its shareholders.

                        About Aspeon

Aspeon Inc. used to design, manufacture and sell open systems
touch screen point-of-sale computers for the food service and
retail industries.  The Company also provided customized,
integrated business application software.


ATA AIRLINES: Inks Stipulation Allowing GATX's Claim for $7.9 Mil.
------------------------------------------------------------------
As previously reported, ATA Airlines, Inc., and its debtor-
affiliates sought and obtained authority from the U.S. Bankruptcy
Court for the Southern District of Indiana to assume its amended
lease with GATX Third Aircraft Corporation.  GATX leased to ATA
Airlines a Boeing B757-200 aircraft bearing U.S. Registration No.
N514AT.

In addition to the Lease, ATA Airlines, ATA Holdings and GATX are
parties to these documents relating to the Aircraft:

    -- Tax Reimbursement Agreement dated September 1, 1995,
       between GATX and ATA Airlines;

    -- Aircraft Lease Framework Agreement dated June 30, 1995,
       between GATX and ATA Airlines; and

    -- Guaranty of the Obligations of American Trans Air, Inc.,
       dated June 30, 1995, by ATA Holdings.

On June 8, 2005, GATX filed Claim No. 2054 asserting an unsecured
non-priority claim for damages related to the Lease, the Amended
Lease or other Lease Documents.  The Debtors objected to Claim
No. 2054.

Pursuant to an agreement between GATX, ATA and Holdings, GATX
waived its right to require cure of any defaults existing under
the Lease Documents at the time of their assumption.  However,
GATX reserved its right to assert general unsecured non-priority
claims for damages arising from any defaults under the Lease
Documents as well a claim for the difference in the amount of rent
provided in the Lease and the Amended Lease.

Having considered both the time and expense that will be required
to litigate the allowed amount of GATX's general unsecured non-
priority claims, and the anticipated distributions on account of
those unsecured claims, GATX and the Reorganizing Debtors agree
that GATX's total unsecured, non-priority claim against the
Reorganizing Debtors, or any of the other Debtors, for the
Aircraft Claims will be $7,878,476.

The allowance of the Allowed GATX Claim fully resolves all of
GATX's Aircraft Claims against the Reorganizing Debtors, or any of
the other Debtors, and all claims, filed or scheduled, other than
the Allowed GATX Claim, for the Aircraft Claims will be disallowed
in their entirety.

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.  Daniel H.
Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland,
Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the
Official Committee of Unsecured Creditors.  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. 50; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


BEST MANUFACTURING: SSG Arranges $97 Million Financing Package
--------------------------------------------------------------
SSG Capital Advisors reports that Best Manufacturing Group had
difficulty absorbing an acquisition which temporarily suppressed
cash flow and fatigued the Company's existing senior lender.  SSG
was retained as Best's exclusive investment banker to explore
refinancing alternatives.  SSG delivered a $97 million financing
package comprised of an $80 million revolver and a $17 million
term loan.  The term loan was partially secured by machinery &
equipment and real estate and had partial stretch or tranche B
collateral characteristics.

Best Manufacturing Group, LLC -- http://www.bestmfg.com/-- is the
nation's premier supplier of washable textiles and garments for
the textile rental, hospitality, healthcare, and image apparel
industries.  Headquartered in Jersey City, NJ, the Company
maintains manufacturing facilities in Cambodia, Mexico and the
United States.  BMG's products include bed linen, table linen and
uniforms.

The professionals involved in the transaction included:

     Matthew P. Karlson
     Michael S. Goodman
     Luis A. Pillich
     Robert C. Smith
     SSG Capital Advisors, L.P.
     Five Tower Bridge
     300 Barr Harbor Drive, Suite 420
     West Conshohoken, PA 19428
     Telephone (610) 940-1094

     Mark Samson
     Getzler Henrich & Associates, LLC
     295 Madison Avenue
     New York, NY 10017
     Telephone (212) 697-2400

     Christopher M. Graham, Esq.
     Levett Rockwood P.C.
     33 Riverside Avenue
     Westport, CT 06880
     Telephone (203) 222-0885


BIRCH TELECOM: Court Confirms Plan of Reorganization in Delaware
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware in
Wilmington entered an order confirming the Plan of Reorganization
of Birch Telecom.

The Honorable Peter J. Walsh ruled that Birch had met all of the
statutory requirements to confirm its Plan.  With this action,
Birch is set to complete its restructuring and emerge from Chapter
11 protection in early April.

                        Terms of the Plan

Upon consummation of the Plan and Birch's exit from Chapter 11,
Birch will issue 100% of its post-emergence equity to its secured
lenders.  In addition, Birch's pre-petition secured debt of $108
million will be reduced to $35 million in reinstated debt held by
the secured lenders.  Birch's current equity will be canceled and
equity holders will receive no distribution under the plan.  Other
creditors will receive distributions as provided under the plan.

"We are extremely pleased with the Court's approval of our Plan of
Reorganization," said Larry Adelman, principal of AEG Partners and
Chief Restructuring Officer of Birch Telecom.  "Emergence from
Chapter 11 and the new business plan are positive developments for
Birch's customers, employees, and partners as they bring financial
stability and significantly reduce regulatory risks."

Mr. Adelman added, "We accomplished what we set out to do at the
start of this process, namely making the Company cash flow
positive, de-leveraging our balance sheet and strengthening the
Company's operations so that we can compete effectively in the
current regulatory environment.  We accomplished all of this in
eight months, which is the time frame we anticipated at the
beginning of the Chapter 11 process.

"The fact that we were able to achieve a successful restructuring
is the direct result of the hard work put forth by senior
management, our employees, and our creditors.  All of these groups
contributed greatly to the successful restructuring of Birch and
should be commended for their efforts.  In addition, the
management team did a great job caring for our customers and
ensuring customer service continued to excel through this
process," Mr. Adelman said.

                   CEO & President Appointment

Birch also reported that upon the Company's emergence from Chapter
11, Stephen Dube would take over as CEO and President, replacing
Greg Lawhon who is leaving to become general counsel of News-Press
& Gazette Company.

"On behalf of the board and the entire company, I would like to
take this opportunity to thank Greg for his years of service to
Birch," said Mr. Adelman.  "We are indebted to him for the
guidance and leadership he demonstrated not only through the
restructuring process but also during his entire tenure with the
company.  We will miss Greg and wish him great success in his new
endeavor.

"At the same time, we are very fortunate to have Mr. Dube join us
at this important time.  His industry knowledge, management
skills, leadership and experience will be invaluable as we move
forward," Mr. Adelman said.

Mr. Dube has extensive experience in the telecommunications
industry.  Previously, he was elected a principal of CXO, L.L.C.,
a Dallas-based growth and management-consulting firm he has worked
with since 2002.  He provided on- site operations management and
consulting services for many of CXO's clients, including
competitive local exchange carriers.  Prior to his work at CXO,
Mr. Dube was president of a network management software company
and before that was chief operating officer of OpTel, Inc., a
national provider of telecommunications and broadband services.
He holds a bachelor's degree in commerce from Carleton University,
Ottawa, Canada, and an MBA from the York University Schulich
School of Business, Toronto, Canada.

"I am excited to be leading Birch at a time that presents great
opportunities for the Company," said Mr. Dube.  "I look forward to
working with Birch's outstanding employees as we strive to exceed
our customers' expectations and continue to offer and deliver
exceptional service at the best price for small and mid-sized
companies.  While there are still challenges ahead of us, I
believe that the Company is now well-positioned to meet those
challenges and to realize the potential created by the successful
restructuring."

A new Board of Directors will also be appointed and Mr. Dube will
serve as member of the new Board.  Birch's new Board of Directors
will be finalized upon consummation of the Plan or soon
thereafter.

                      DSL Service Agreement

Key to the company's go-forward business plan is renewed
relationships with carriers and vendors including AT&T, BellSouth,
Qwest and Lucent.  In addition, Birch recently signed a key
agreement with Covad Communications, a leading national provider
of integrated voice and data communications.  Birch will utilize
Covad's comprehensive DSL access network to supply the last mile
to its DSL customers.  The agreement represents a major cost
savings for the Company and will ensure continued, affordable
access for Birch's DSL customers.

"We are proud that we were able to restructure successfully under
Chapter 11 without any disruption in our ability to provide top-
quality service to our customers," said Mr. Adelman.  "We thank
them for their loyalty during this process.  Furthermore, as
demonstrated by this most recent deal with Covad, we remain
committed to continuing to offer our customers the best service at
competitive rates for many years to come."

                       About Birch Telecom

Headquartered in Kansas City, Missouri, Birch Telecom, Inc., and
its subsidiaries -- http://www.birch.com/-- own and operate an
integrated voice and data network, and offer a broad portfolio of
local, long distance and Internet services.  The Debtors provide
local telephone service, long-distance, DSL, T1, ISDN, dial-up
Internet access, web hosting, VPN and phone system equipment for
small- and mid-sized businesses.  Birch Telecom and 28 affiliates
filed for chapter 11 protection on Aug. 12, 2005 (Bankr. D. Del.
Case Nos. 05-12237 through 05-12265).  Mark S. Chehi, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represents Birch and its
debtor-affiliates in its second chapter 11 restructuring since
2002.  Robert P. Simons, Esq., and Kurt F. Gwynne, Esq., at Reed
Smith LLP, provide the Official Committee of Unsecured Creditors
with legal advice and Chanin Capital Partners LLC provides the
Committee with financial advisory services.  When the Debtors
filed for protection from their creditors, they estimated more
than $100 million in assets and debts.


BLUE BEAR: Hires Computer Forensic Lab as Computer Consultant
-------------------------------------------------------------
Blue Bear Funding, LLC, fka 1st American Factoring, LLC, sought
and obtained authority from the U.S. Bankruptcy Court for the
District of Colorado to employ Computer Forensic Lab, Inc., as its
forensic computer consultant.

Computer Forensic is expected to inspect, evaluate and retrieve
data from four pieces of equipment:

    * a Western Digital Enhanced IDE Hard Drive, S/N WMAAN2807338;

    * a Western Digital Enhanced IDE Hard Drive, S/N WMAD1A076740;

    * a Maxtor DimanodMax Plus 8 hard Drive; S/N E1HYKSJE; and

    * Dell Latitude D800 Laptop Computer, Model No. PP02X;
      BCM94306MP.

The Debtor doesn't relate where the hard drives and laptop
computer came from, who used them, or what it hopes to find.

The Debtor tells the Court that Computer Forensic will bill:

    -- a $1,000 fee for forensic bit-stream images of the hard
       drives;

    -- $225 per hour for forensic examination of the hard drive
       image;

    -- $225 per hour for forensic analysis of recovered data; and

    -- $225 per hour for testimony under oath.

David Penrod, a partner at Computer Forensics, assures the Court
that the Firm is "disinterested" as that term is defined in
Section 101(14) of the Bankruptcy Code.

Headquartered in Windsor, Colorado, Blue Bear Funding, LLC --
http://www.bluebearfunding.com/-- provides invoice factoring
services. The Company filed for chapter 11 protection on Aug. 22,
2005 (Bankr. D. Colo. Case No. 05-31300).  Alice A. White, Esq.,
and Douglas W. Jessop, Esq., at Jessop & Company, P.C., represent
the Debtor in its restructuring efforts.  Erin L. Connor, Esq.,
represents the Official Committee of Unsecured Creditors.  When
the Debtor filed for protection from its creditors, it estimated
assets between $1 million and $10 million and debts between
$10 million and $50 million.


BOMBARDIER INC: Earns $249 Million in Fiscal Year 2006
------------------------------------------------------
Bombardier's financial results for the fourth quarter and the year
ended Jan. 31, 2006, show substantial improvement in the overall
performance from the previous year.

Net income for the fourth quarter of fiscal year 2006 was $86
million compared to $56 million for fiscal year 2005.  Net income
for fiscal year 2006 reached $249 million compared to a loss of
$85 million for fiscal year 2005.

Consolidated revenues totaled $4 billion for the three-month
period ended Jan. 31, 2006, compared to $4.7 billion for the same
period last fiscal year.  The decrease is mainly due to lower
mainline revenues in the United Kingdom and Germany, lower
deliveries of regional aircraft and a lower volume of pre-owned
business aircraft sales, partially offset by higher deliveries of
business aircraft.

For the year ended Jan. 31, 2006, consolidated revenues totaled
$14.7 billion, compared to $15.5 billion the previous year.  The
decrease mainly reflects lower rolling stock revenues resulting
from decreased mainline revenues in the U.K. and Germany due to a
lower level of activities in these markets, lower deliveries of
CRJ200 aircraft and a lower volume of pre-owned business aircraft
sales, partially offset by increased deliveries and improved
selling prices of business aircraft and increased deliveries of
Q300 turboprops.

"A year ago, we said we would improve our profitability through an
unrelenting focus on costs, on product innovation and on customer
needs," said Laurent Beaudoin, Chairman of the Board and Chief
Executive Officer of Bombardier Inc.  "The result is that we're
back to profitability.  We increased our cash position and our
free cash flow generation.  We also reduced our debt by some $2.5
billion, and in so doing, decreased risk and strengthened our
balance sheet."

"As number one in the business aircraft market, we take pride in
the fact that more than half of this year's orders were for our
newest models.  Our Transportation customers also have shown their
confidence in our innovative rail transportation solutions through
an impressive 66% increase in new orders," Mr. Beaudoin continued.

"We dealt with the changing business environment.  In Aerospace,
we adjusted our production rates to match the increased demand for
our business jets and turboprop aircraft and lower demand for 50-
seat regional jets.  On the Transportation side, our restructuring
initiative is near completion, and results are starting to show on
the bottom line.  Bombardier Capital's non-core portfolios are
essentially wound down or sold."

"This year's results indicate that we're doing the right things to
restore Bombardier's earnings power and solidify our financial
position," concluded Mr. Beaudoin.

Bombardier Aerospace's results improved in fiscal year 2006,
confirming the benefits of its diversification.  The regional
aircraft market presented significant challenges, but Aerospace
nevertheless increased its earnings before interest and taxes by
31%, from $203 million last year to $266 million in 2006.  The
group also reached its delivery target with 337 aircraft.

Bombardier Transportation also had a good year.  EBIT before
special items was $179 million, compared to $33 million last year,
and the EBIT margin before special items reached 2.7%, as opposed
to 0.4% in fiscal year 2005.

                          About Bombardier

A world-leading manufacturer of innovative transportation
solutions, from regional aircraft and business jets to rail
transportation equipment, Bombardier Inc. --
http://www.bombardier.com/-- is a global corporation
headquartered in Canada.  Its revenues for the fiscal year ended
Jan. 31, 2005 were $15.8 billion US and its shares are traded on
the Toronto Stock Exchange.

                            *   *   *

As reported in the Troubled Reporter on March 7, 2006, Fitch
Ratings affirmed its BB ratings on Bombardier Inc. senior
unsecured debt and credit facilities and its B+ rating on
Bombardier Inc. preferred stock.  Fitch rates Bombardier Capital
Inc. senior unsecured debt at BB.  Fitch also revised the Rating
Outlook to Stable from Negative earlier this month.   Due to the
existence of a support agreement and demonstrated support by the
parent, Bombardier Capital's ratings are linked to those of
Bombardier Inc.  These ratings cover approximately $4.7 billion of
outstanding debt and preferred stock.

As reported in the Troubled Company Reporter on Feb. 21, 2006,
Standard & Poor's Ratings Services affirmed the ratings on
Bombardier Inc. and its subsidiaries, including the 'BB' long-term
corporate credit rating, following a review of the company's
performance in 2005 and expected performance during the next few
years.  S&P says the outlook is negative.


CALPINE CORP: Agrees to Sell 45% Interest in Mexico Power Plant
---------------------------------------------------------------
Calpine Corporation's (OTC Pink Sheets: CPNLQ) foreign non-debtor
affiliate agreed to sell its 45% interest in the 525-megawatt
Valladolid III Power Plant, currently under construction on the
Yucatan Peninsula in Mexico.  Calpine is selling its equity
interest to the two remaining partners in the project, Mitsui &
Co., Ltd. and Chubu Electric Power Co., Inc., for a purchase price
of approximately $43 million.

                       Terms of Agreement

Calpine will receive a cash payment of approximately $43 million,
less a 10% holdback, at closing.  The Buyers will return the 10%
holdback after a period of one-year following closing of the
transaction.  At closing, Calpine will also eliminate its 45%
share of the non-recourse unconsolidated project debt.

In addition, at closing $9.1 million of Calpine funds held in
escrow for credit support for the project will be released to
Calpine.  The company expects to record a non-cash impairment
charge of approximately $41 million on its investment in the
project and expects to complete the transaction in the next 30
days.

"The sale of the Valladolid project will provide Calpine with
additional liquidity and is consistent with our strategy of
focusing on our core business, power generation in key power
markets in the United States," said Robert P. May, Calpine's Chief
Executive Officer.  "As part of our restructuring program, Calpine
will continue to assess opportunities to sell non-strategic
assets, with the goal of emerging from Chapter 11 as a
sustainable, competitive and profitable power company."

Valladolid III is a natural gas-fired, combined-cycle power plant
that will provide up to 525 megawatts of energy through a 25-year
power purchase agreement with the Comision Federal de
Electricidad.  Calpine had supplied two General Electric F-class
combustion gas turbines in exchange for its 45% interest in the
project.  Calpine also provided engineering, construction and
commissioning services for the construction subcontractor.
Construction of the project is scheduled for completion in June
2006.

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


CHASE FUNDING: S&P Downgrades Class IB Certificate's Rating to BB
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on class IB
from Chase Funding Loan Acquisition Trust Series 2001-C2 to 'BB'
from 'BBB'.  Concurrently, the rating on the IB certificate is
placed on CreditWach with negative implications.  At the same
time, ratings are affirmed on 46 classes from six Chase Funding
Loan Acquisition Trust transactions, including series 2001-C2.

The lowered rating is the result of realized losses that have
continuously depleted overcollateralization.  As of the March 2006
distribution date, overcollateralization was below its target
balance by approximately 25%.  The CreditWatch placement is due to
projected losses that have the potential to eliminate the credit
enhancement supporting the IB certificate.  If realized losses
continue to outpace excess spread, it is likely that Standard &
Poor's will lower the rating on the IB certificate to 'B'.  Total
delinquencies for this transaction are 22.92%.  Cumulative
realized losses represent 2.52% of the original pool balance.

The affirmations are based on current and projected credit support
percentages that are sufficient to maintain the current ratings.
Total delinquencies ranged from 0.44% to 22.92% of the current
pool balances, while cumulative realized losses ranged from 0.03%
to 2.52% of the original pool balances.

Credit support is provided by:

   * subordination,
   * overcollateralization, and
   * excess spread.

The underlying collateral consists of 30-year fixed- or
adjustable-rate subprime mortgage loans secured by first-liens on
residential properties.

Rating lowered; on creditwatch negative:

Chase Funding Loan Acquisition Trust
Mortgage loan asset-backed certificates

                             Rating

             Series     Class   To              From
             ------     -----   --              ----
             2001-C2    IB      BB/Watch Neg    BBB

Ratings affirmed:

Chase Funding Loan Acquisition Trust
Mortgage loan asset-backed certificates

   Series    Class                                      Rating
   ------    -----                                      ------
   2001-C2   IA-4, IA-5                                 AAA
   2001-C2   IM-1                                       AA
   2001-C2   IM-2                                       A
   2002-C1   IA-6                                       AAA
   2002-C1   IM-1                                       AA
   2002-C1   IM-2                                       A
   2002-C1   IB                                         BBB
   2003-C1   IA-3, IA-4, IA-5, IIA-2                    AAA
   2003-C1   IM-1, IIM-1                                AA
   2003-C1   IM-2, IIM-2                                A
   2003-C1   IB, IIB                                    BBB
   2003-C2   IA, IIA, IA-X, IIA-X, IA-P, IIA-P          AAA
   2003-C2   B-1                                        AA+
   2003-C2   B-2                                        A+
   2003-C2   B-3                                        BBB+
   2003-C2   B-4                                        BB+
   2003-C2   B-5                                        B+
   2004-AQ1  A-2                                        AAA
   2004-AQ1  M-1                                        AA
   2004-AQ1  M-2                                        A
   2004-AQ1  M-3                                        A-
   2004-AQ1  B-1                                        BBB+
   2004-AQ1  B-2                                        BBB
   2004-AQ1  B-3                                        BBB-
   2004-AQ1  B-4                                        BB+
   2004-AQ1  B-5                                        BB
   2004-OPT1 A-2                                        AAA
   2004-OPT1 M-1                                        AA
   2004-OPT1 M-2                                        A
   2004-OPT1 M-3                                        A-
   2004-OPT1 B-1                                        BBB+
   2004-OPT1 B-2                                        BBB
   2004-OPT1 B-3                                        BBB-
   2004-OPT1 B-4                                        BB+


CHEVY CHASE: Moody's Rates Class B-5 Certificate at B2
------------------------------------------------------
Moody's Investors Service assigned ratings ranging from Aaa to B2
to certificates issued by Chevy Chase Funding LLC, Mortgage-Backed
Certificates, Series 2006-1.

The securitization is backed by Chevy Chase Bank, F.S.B.
originated or acquired 100% adjustable-rate mortgage loans with a
negative amortization or an interest only payment option.  The
ratings are based primarily on the credit quality of the loans,
the structure of the transaction, and on the protection from
subordination and primary mortgage insurance.  After taking into
account the benefit from the mortgage insurance, Moody's expects
collateral losses to range from 0.85% to 0.95%.

Chevy Chase Bank, F.S.B. will service the loans.

The complete rating actions are:

                Chevy Chase Funding LLC, Mortgage-
                Backed Certificates, Series 2006-1

                      * Class A-1, rated Aaa
                      * Class A-1I, rated Aaa
                      * Class A-2, rated Aaa
                      * Class A-2I, rated Aaa
                      * Class A-NA, rated Aaa
                      * Class B-1, rated Aaa
                      * Class B-1I, rated Aaa
                      * Class B-1NA, rated Aaa
                      * Class B-2, rated Aa2
                      * Class B-2I, rated Aa2
                      * Class B-2NA, rated Aa2
                      * Class B-3, rated A2
                      * Class B-4, rated Baa3
                      * Class B-5, rated B2
                      * Class IO, rated Aaa
                      * Class NIO, rated Aaa

The notes are being offered in a privately negotiated transaction
without registration under the 1933 Act.  The issuance was
designed to permit resale under Rule 144A and, in the case of
certain certificates, under Regulation S.


CLEAN EARTH: Taps General Capital as Investment Banker
------------------------------------------------------
Clean Earth Kentucky, LLC, and its debtor-affiliate, Clean Earth
Environmental Group, LLC, ask the U.S. Bankruptcy Court for the
Eastern District of Kentucky for permission to employ General
Capital Partners, LLC, as their investment banker and broker.

General Capital will:

    (a) prepare a program which may include marketing the Debtors'
        assets through newspapers, magazines, journals, letters,
        fliers, signs, telephone solicitation, or such other
        methods as General Capital may deem appropriate;

    (b) prepare advertising letters, fliers and/or similar sales
        materials which would include information regarding the
        Debtors' assets;

    (c) locate parties who may have an interest in acquiring or
        refinancing the Debtors' assets.

    (d) circulate materials to interested parties regarding the
        Debtors assets, after completing confidentiality documents
        with those interested parties.  The Debtors give General
        Capital the right to execute and modify confidentiality
        agreements on the Debtors' behalf;

    (e) respond, provide information to, communicate and negotiate
        with and obtain offers from interested parties and make
        recommendations to the Debtors as to whether or not a
        particular offer should be accepted;

    (f) communicate regularly with the Debtors in connection with
        the status of General Capital's efforts with respect to
        the disposition of the Debtors' assets;

    (g) recommend to the Debtors the proper method of handling any
        specific problems encountered with respect to the
        marketing or disposition of the Debtors' assets.

    (h) facilitate the auction sale for the Debtors' assets in
        conjunction with the Debtors' counsel.

The Debtors tell the Court that General Capital will be paid a
fixed fee of $20,000.

                  Results-Based Transaction Fee

On the sale of the Debtor's assets, if the initial bidder or its
affiliates complete a transaction for $12.5 million, General
Capital will receive nothing.

If any party, including the Initial Bidder, completes a
transaction for more than $12.5 million where the Initial Bidder
is the Stalking Horse, then General Capital will receive:

    * 10% of the Gross Value if the transaction is between
      $12.5 million and $14.5 million;

    * 15% of the Gross Value if the transaction is between
      $14.5 million and $16.5 million; and

    * 20% of the Gross Value if the transaction is above
      $16.5 million.

The Debtors clarify that the percentages apply to the incremental
amounts above the $12.5 million mark.

The Debtors further say that if any party other than the Initial
Bidder completes a transaction and the Initial Bidder is not the
Stalking Horse, then General Capital will receive a transaction
fee of 4% of the total Gross Value.

Michael J. Eddy, managing director of General Capital, assures the
Court that the Firm is "disinterested" as that term is defined in
Section 101(14) of the Bankruptcy Code.

A copy of the Debtors' agreement with General Capital is available
for a fee at:

   http://www.researcharchives.com/bin/download?id=060330023109

                  About Clean Earth Kentucky LLC

Headquartered in Cynthiana, Kentucky, Clean Earth Kentucky, LLC --
http://www.cleanearthllc.com/-- manufactures specialized sewer
machines, street sweepers, and refuse trucks.  The Company and its
affiliate, Clean Earth Environmental Group, LLC, filed for chapter
11 protection on Jan. 24, 2006. (Bankr. E.D. Ky. Case No.
06-50052).  Laura Day DelCotto, Esq., at Wise DelCotto PLLC,
represents the Debtors in their restructuring efforts.  R. Scott
Williams, Esq., at Haskell Slaughter Young & Rediker, LLC,
represents the Official Committee of Unsecured Creditors.  When
the Debtors filed for protection from its creditors, they
estimated individual assets and debts between $10 million to
$50 million.


CLEAN EARTH: U.S. Trustee Amends Official Committee Membership
--------------------------------------------------------------
The U.S. Trustee for Region 8 added Parker Hannifin Corporation to
the Official Committee of Unsecured Creditors in Clean Earth
Kentucky, LLC's chapter 11 case.

The Trustee tells the Court that Parker Hannifin's claim places it
within the top twenty unsecured creditors of the Debtor and has
expressed interest in being part of the Committee.

The Committee now consists of:

    1. Tassco, LLC
       Attn: Larry Thomas
       2700 5th Avenue, South, Irondale
       Industrial Park
       Birmingham, Alabama 35210
       Tel: (205) 956-2567
       Fax: (205_ 956-9703

    2. AmCOMP Assurance Corp.
       Attn: Marjorie Barker
       P.O. Box 40819
       Indianapolis, Indiana 46240-0819
       Tel: (317) 616-0840
       Fax: (317) 469-8800

    3. Charlie Schroder
       Attn: Charlie Schroder
       3229 U.S. 27 North
       Cynthiana, Kentucky 41031
       Tel: (859) 234-9786
       Fax: (859) 234-7017

    4. Unisource Manufacturing, Inc.
       Attn: Doug Biddy
       617 Country Club Drive
       Burlington, North Carlonia 27215
       Tel: (336) 266-1221
       Fax: (336) 227-2353

    5. Parker Hannifin Corporation
       Attn: Bob Suszek
       6035 Parkland Boulevard
       Cleveland, Ohio 44124
       Tel: (216) 896-3000
       Fax: (216) 896-4042

Headquartered in Cynthiana, Kentucky, Clean Earth Kentucky, LLC --
http://www.cleanearthllc.com/-- manufactures specialized sewer
machines, street sweepers, and refuse trucks.  The Company and its
affiliate, Clean Earth Environmental Group, LLC, filed for chapter
11 protection on Jan. 24, 2006. (Bankr. E.D. Ky. Case No.
06-50052).  Laura Day DelCotto, Esq., at Wise DelCotto PLLC,
represents the Debtors in their restructuring efforts.  R. Scott
Williams, Esq., at Haskell Slaughter Young & Rediker, LLC,
represents the Official Committee of Unsecured Creditors.  When
the Debtors filed for protection from its creditors, they
estimated individual assets and debts between $10 million to
$50 million.


CONVERSENT COMMUNICATIONS: S&P Puts B Ratings on Developing Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed the long-term ratings on
Marlborough, Massachusetts-based competitive local exchange
carrier (CLEC) Conversent Communications Inc. on CreditWatch with
developing implications, including the:

   -- 'B' corporate credit rating, and
   -- 'B' bank loan rating.

"These actions follow the announcement that Conversent has signed
a definitive agreement to be acquired by unrated CLECs CTC
Communications and Choice One Communications, which had previously
announced an agreement to merge on Feb. 10, 2006," said Standard &
Poor's credit analyst Allyn Arden.

Given the lack of information on merger terms and detailed
financial disclosure by the acquiring companies and uncertainty
about the financial profile and business strategy of the new
entity, it is not clear whether the outcome of the transaction
will be detrimental or beneficial to Conversent's overall credit
profile.  The acquisition will be partially funded with:

   * an equity investment from Columbia Ventures Corp. (the sole
     shareholder of CTC Communications); and

   * an equity investment from existing Choice One shareholders.

As more detailed information on the acquisition is announced, the
CreditWatch placement will be revised to reflect Standard & Poor's
assessment of the potential effect on Conversent's credit ratings.


CREDIT SUISSE: Moody's Lifts 17 Securitization Tranche Ratings
--------------------------------------------------------------
Moody's Investors Service upgraded the ratings on seventeen
tranches and placed three tranches under view for possible
upgrades from four securitizations issued by Credit Suisse First
Boston Mortgage Securities Corporation.  These are jumbo deals
that consist of conventional, adjustable rate, first lien mortgage
loans originated by Chevy Chase Bank.

The certificates are being upgraded or placed on watch for
possible upgrade based on the high credit enhancement levels
compared to the loss projections.  These deals have experienced
very low or no credit losses with a small amount of negative
amortization.  They are performing better than anticipated due to
the high prepayment levels, low delinquencies, and the positive
impact of the stepdown triggers.

Complete rating actions are:

               Credit Suisse First Boston Mortgage
                Securities Corp., Series 2002-P1

              * Class B-1, Upgraded from Aa2 to Aa1;
              * Class B-2, Upgraded from A2 to Aa3;
              * Class B-3, Upgraded from Baa2 to A3;
              * Class B-4, Upgraded from Ba2 to Baa3;
              * Class B-5, Currently: B2; under review for
                   possible upgrade.

               Credit Suisse First Boston Mortgage
                Securities Corp., Series 2002-P2

              * Class B-1, Upgraded from Aa2 to Aa1;
              * Class B-2, Upgraded from A2 to Aa3;
              * Class B-3, Upgraded from Baa2 to A3;
              * Class B-4, Upgraded from Ba2 to Baa3;
              * Class B-5, Currently: B2; under review for
                   possible upgrade.

               Credit Suisse First Boston Mortgage
                Securities Corp., Series 2002-P3

              * Class M-1, Upgraded from Aa1 to Aaa;
              * Class B-1, Upgraded from Aa2 to Aa1;
              * Class B-2, Upgraded from A2 to A1;
              * Class B-3, Upgraded from Baa2 to Baa1;
              * Class B-4, Upgraded from Ba2 to Ba1.

               Credit Suisse First Boston Mortgage
                 Securities Corp., Series 2002-P4

              * Class B-1, Upgraded from Aa2 to Aa1;
              * Class B-2, Upgraded from A2 to Aa3;
              * Class B-3, Upgraded from Baa2 to A3;
              * Class B-4 Upgraded from Ba2 to Baa3;
              * Class B-5, Currently: B2; under review for
                   possible upgrade.


CREDIT SUISSE: Moody's Holds Ba1 Rating on $22.5MM Class L Certs.
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of five classes and
affirmed the ratings of eight classes of Credit Suisse First
Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through
Certificates, Series 2005-TFL1:

    * Class A-2, $127,915,743, Floating, affirmed at Aaa
    * Class A-X-1, Notional, affirmed at Aaa
    * Class A-X-2, Notional, affirmed at Aaa
    * Class B, $41,000,000, Floating, upgraded to Aaa from Aa1
    * Class C, $27,500,000, Floating, upgraded to Aaa from Aa2
    * Class D, $25,000,000, Floating, upgraded to Aaa from Aa3
    * Class E, $22,500,000, Floating, upgraded to Aa1 from A1
    * Class F, $22,500,000, Floating, upgraded to Aa3 from A2
    * Class G, $22,500,000, Floating, affirmed at A3
    * Class H, $22,500,000, Floating, affirmed at Baa1
    * Class J, $15,000,000, Floating, affirmed at Baa2
    * Class K, $15,000,000, Floating, affirmed at Baa3
    * Class L, $22,500,000, Floating, affirmed at Ba1

The Certificates are collateralized by senior participation
interests in five mortgage loans.  The loans range in size from
12.4% to 27.5% of the pool based on current principal balances. As
of the March 15, 2006 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 63.6%
to $363.9 million from $1.0 billion at securitization due to the
payoff of two loans and a partial property release associated with
one loan.

Moody's current weighted average loan to value ratio is 64.0%,
compared to 66.4% at securitization.  Moody's is upgrading Classes
B, C, D, E and F due to increased credit support from the loan
payoffs.

The JW Marriott Las Vegas Resort & Spa Loan is secured by a 541-
room full service resort hotel with 66,000 square feet of meeting
and banquet space, 44,000 square feet of retail space, a spa and a
57,650 square foot casino located in Las Vegas, Nevada.  RevPAR
for the year-to-date period ending October 2005 was $131.36,
compared to $122.42 at securitization.  Moody's LTV is 61.3%, the
same as at securitization.  Moody's current shadow rating is Baa3,
the same as at securitization.

The Shidler Office Portfolio Loan is secured by ten Class B+
flex/office properties and two industrial properties located
throughout Southern California.  Portfolio occupancy as of
November 2005 was 80.0%, compared to 83.2% at securitization.  In-
place rent has decreased and operating expenses have increased.
Moody's LTV is 73.8%, compared to 67.3% at securitization.
Moody's current shadow rating is Ba2, compared to Baa3 at
securitization.

The One & Only Palmilla Loan is secured by a 172-room luxury
resort hotel located in the city of San Jose del Cabo in
northwestern Mexico.  The hotel offers a 27-hole Jack Nicklaus
signature golf course.  The hotel underwent a $102.5 million
renovation during 2003 and 2004.  RevPAR for the year-to-date
period ending November 2005 was $510.00, compared to $437.50 at
securitization.  Moody's LTV is 62.4%, the same as at
securitization.  Moody's current shadow rating is Baa3, the same
as at securitization.

The Ritz-Carlton San Juan Loan is secured by a leasehold mortgage
on a 416-room full service hotel, casino and spa located in
Carolina, Puerto Rico.  Average RevPAR in 2005 was $225.54,
compared to $181.61 at securitization.  Moody's LTV is 58.1%,
compared to 61.6% at securitization.  Moody's current shadow
rating is Baa2, compared to Baa3 at securitization.

The Galleria Office Towers Loan is secured by one office building
and office portions of two other buildings located in the Galleria
submarket of Houston, Texas.  The property contains an overall net
rentable area of 1,071,728 square feet.  Occupancy as of October
2005 was 74.2%, compared to 78.9% at securitization. Moody's LTV
is 63.2%, compared to 59.2% at securitization. Moody's current
shadow rating is Baa3, compared to Baa2 at securitization.


CYBERCARE INC: Has Until May 20 to File Chapter 11 Plan
-------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
extended, until May 20, 2006, the period within which Cybercare,
Inc., and CyberCare Technologies, Inc., have the exclusive right
to file a chapter 11 plan of reorganization.

The Court also ordered that if the Debtors file their disclosure
statement and plan of reorganization on or before May 20, then
their exclusive period to solicit acceptances of that plan will
then be extended for 60 days from the day the plan is filed.

The Debtors assured the Court that the extension won't prejudice
any party.  The Debtors say that to the best of their knowledge,
no other party wants to file a plan.

The Debtors' exclusive plan-filing period initially expired on
Feb. 13, 2006.  In previous requests to extend their exclusive
periods, the Debtors said that Cast-Crete Corporation, their
proposed exit-financing lender and post-confirmation merger
partner, planned to circulate a revised term sheet.  The Debtors
contend that until it receives and reviews the revised term sheet,
it will be unable to move forward and finalize a chapter 11 plan.

The Debtors want to file a consensual plan rather than file the
plan in its current form -- especially if the current drafts are
inconsistent with changes Cast-Crete might request.

Headquartered in Tampa, Florida, CyberCare, Inc., f/k/a Medical
Industries of America, Inc., is a holding company that owns
service businesses, including a physical therapy and
rehabilitation business, a pharmacy business, and a healthcare
technology solutions business.  The Company and its debtor-
affiliate, CyberCare Technologies, Inc., filed for chapter 11
protection on Oct. 14, 2005 (Bankr. M.D. Fla. Case No. 05-27268).
Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$5,058,955 in assets and $26,987,138 in debts.


D&M FINANCIAL: Judge Stern Converts Case to Chapter 7 Liquidation
-----------------------------------------------------------------
The Hon. Morris Stern of the United States Bankruptcy Court for
the District of New Jersey converted D&M Financial Corp.'s
chapter 11 case to a chapter 7 liquidation proceeding.

                      Lack of Insurance

Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, asked the
Court to convert the case after the Debtor failed to comply with
the U.S. Trustee Operating Guidelines by not producing proof of
insurance.

Ms. Stapleton told the Court that after discussing the insurance
problem with Saul Berkman, Esq., the Debtor's counsel, she learned
that the Debtor has only one employee, the company's president,
and limited or no operations.

Ms. Stapleton relates that the Debtor surrendered its premises to
the landlord and any remaining operations will be conducted from
the principal's home.

Ms. Stapleton advised the Court that the debtor is pursuing a
lawsuit which could result in a recovery for the estate.

Ms. Stapleton argued that there appeared to be no chance of
rehabilitation or even funding a plan and said that conversion of
the case into a chapter 7 liquidation was in the best interest of
creditors

                       Chapter 7 Trustee

As a consequence of the Court's conversion of the Debtor's case,
Ms. Stapleton appointed Jonathan Kohn, Esq., to serve as the
chapter 7 trustee.

                    About D&M Financial Corp.

Headquartered in Belleville, New Jersey, D&M Financial Corp. --
http://www.dnmfc.com/-- is a full-service mortgage company that
offers home loan products.  The company filed for chapter 11
protection on Feb. 14, 2006 (Bankr. D. N.J. Case No. 06-11040).
Saul A. Berkman, Esq., represents the Debtor.  When the Debtor
filed for protection from its creditors, it estimated assets
between $100,000 to $500,000 and debts between $10 million to $50
million.  The Debtor's chapter 11 case was converted to a chapter
7 liquidation on Mar. 28, 2006.  Jonathan Kohn, Esq., was
appointed as the chapter 7 trustee.


DANA CORP: ITW Wants Debtors to Decide on Executory Contracts
-------------------------------------------------------------
International Trade Winds, LLC, asks the U.S. Bankruptcy Court for
the Southern District of New York to compel Dana Corporation and
its debtor-affiliates to promptly assume or reject their executory
contracts.

ITW is both a customer and supplier of the Debtors and their non-
debtor foreign affiliates in Brazil.  Before the Petition Date,
the Debtors issued several purchase orders to ITW for component
parts, which the Debtors cannot obtain from another source
without a severe interruption of the Debtors' business.  The
component parts include:

   (a) differential castings used on axles supplied to General
       Motors for the GMC Savannah van;

   (b) universal joint components used in the assembly of drive
       shafts for the heavy truck industry;

   (c) constant velocity joints used in the drive shafts for the
       Ford Escape and the Mazda Tribute;

   (d) components used in heavy-duty drive shafts supplied to the
       heavy truck industry (Freight Liner, Volvo and Navistar);
       and

   (e) driveline components used to produce drive shafts for
       Caterpillar, Oshkosh, JLG Industries and John Deere.

Currently, the Debtors pay ITW amounts due under the ITW Purchase
Orders on a net 30-day basis.  However, the Debtors have not paid
ITW $1,094,128 for goods delivered prepetition.

Richard M. Meth, Esq., at Pitney Hardin LLP, in Florham Park, New
Jersey, relates that, of the unpaid amount, at least $618,241:

   (a) is entitled to an administrative expense priority under
       Section 503(b)(9) of the Bankruptcy Code, for goods
       delivered to the Debtors within 20 days of the Petition
       Date; and

   (b) should be entitled to an administrative expense status as
       a reclamation claim pursuant to Section 546(c) and
       applicable state law.

According to Mr. Meth, it is critical for ITW to know whether the
Debtors will assume or reject the ITW Purchase Orders for ITW to
perform its contractual obligations to the Debtors and to
mitigate any damages.

Mr. Meth explains that ITW obtains, stores and then delivers
goods to the Debtors on a just-in-time basis.  Because the goods
must first be shipped to ITW's warehouse from foreign countries,
ITW must begin acquisition of the goods at least 60 days in
advance of receiving a purchase order release or purchase order
amendment from the Debtors.  ITW must continually obtain goods
from its suppliers to fill requests from the Debtors.  However,
since the Petition Date, ITW's suppliers in foreign countries
have demanded payment in advance from ITW.

Under the ITW Purchase Orders, the Debtors may cancel the
contracts with ITW at any time, but must pay all outstanding
invoices and all costs and expenses incurred by ITW under the ITW
Purchase Orders.  If the Debtors reject the ITW Purchase Orders,
the amounts paid by ITW to fill postpetition release requests
will constitute a prepetition unsecured claim.

He also notes that ITW's business with the Debtors and their
affiliates comprise majority of ITW's business and income.
Without current payment from the Debtors and a commitment to
assume the ITW Purchase Orders, ITW will suffer financial
distress and may not be able to pay its suppliers.

ITW also asks the Court to direct the Debtors to pay on a cash-
on-delivery basis the amount owing for all goods shipped by ITW
to the Debtors after the Petition Date until its contracts with
Debtors are assumed.

Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies.  Dana employs 46,000 people in 28 countries.  Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually.  Corinne Ball, Esq., and
Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker.  Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer.  When the Debtors filed for protection
from their creditors, they listed $7.9 billion in assets and
$6.8 billion in liabilities as of Sept. 30, 2005.  (Dana
Corporation Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


DANA CORP: U.S. Trustee Amends Creditors Committee Membership
-------------------------------------------------------------
Deirdre A. Martini, the United States Trustee for Region 2,
appoints the Estate of Julio Gonzalez to the Official Committee of
Unsecured Creditors replacing the Estate of Matthew Scott.

The Creditors Committee currently consists of:

     (1) Wilmington Trust Company
         520 Madison Avenue, 33rd Floor
         New York, New York 10022
         Attn: James J. McGinley
         Tel. No. (212) 415-0522

     (2) P. Schoenfeld Asset Management LLC
         1330 Avenue of the Americas, 34th Floor
         New York, New York 10019
         Attn: Peter Faulkner
         Tel. No. (212) 649-9542

     (3) Sypris Technologies, Inc.
         101 BullittLane, Suite 450
         Louisville, Kentucky 40222
         Attn: John R. McGeeney, General Counsel
         Tel. No. (502) 329-2000

     (4) Metaldyne Company LLC
         47603 Halvard Drive
         Plymouth, Michigan 48170
         Attn: Thomas A. Amato
         Tel. No. (734) 207-6200

     (5) Baton Corporation
         1111 Superior Avenue
         Cleveland, Ohio 44114
         Attn: William T. Reiff
         Tel. No. (216) 523-0566

     (6) International Union, United Automobile, Aerospace and
            Agricultural Implement Workers of America
         8000 East Jefferson Avenue
         Detroit, Michigan 48214
         Attn: Niraj R. Ganatra, Associate General Counsel
         Tel. No. (313) 926-5216

     (7) Julio Gonzalez, Jr., Special Administrator of the
            Estate of Julio Gonzalez, deceased
         103 Chipola Road
         Cocoa Beach, Florida 32931
         c/o John Cooney, Esq.
         Cooney and Conway
         120 North LaSalle, 30th Floor
         Chicago, Illinois 60602
         Tel. No. (312) 236-6166

Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/-- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to those
companies.  Dana employs 46,000 people in 28 countries.  Dana is
focused on being an essential partner to automotive, commercial,
and off-highway vehicle customers, which collectively produce more
than 60 million vehicles annually.  Corinne Ball, Esq., and
Richard H. Engman, Esq., at Jones Day, in Manhattan and
Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black,
Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio,
represent the Debtors.  Henry S. Miller at Miller Buckfire & Co.,
LLC, serves as the Debtors' financial advisor and investment
banker.  Ted Stenger from AlixPartners serves as Dana's Chief
Restructuring Officer.  When the Debtors filed for protection
from their creditors, they listed $7.9 billion in assets and
$6.8 billion in liabilities as of Sept. 30, 2005.  (Dana
Corporation Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


DELPHI CORP: Gets Court OK to Hire Dickinson Wright as IP Counsel
-----------------------------------------------------------------
Prior to the bankruptcy filing, Dickinson Wright PLLC represented
the Delphi Corporation and its debtor-affiliates in certain
litigation matters and provided legal services to their in-house
counsel with respect to certain corporate and commercial
transactional matters.  After the Petition Date, Dickinson Wright
continued to provide corporate and commercial transactional legal
services to the Debtors, and was authorized by the Court to do so
as an ordinary course professional.

The Debtors sought and obtained the U.S. Bankruptcy Court for the
Southern District of New York' authority to employ Dickinson
Wright as intellectual property counsel and as litigation and
corporate and commercial counsel pursuant to an ongoing
professional relationship between them.

Dickinson Wright will:

   (a) review invention disclosures, preparation of patentability
       opinions, and preparation and filing of patent
       applications with U.S. Patent and Trademark Office,
       focusing on, among others, these areas of technical
       expertise: climate control systems, heat exchange systems,
       compressors, evaporators, heating and air conditioning
       systems, steering systems, chassis, brakes, half shafts
       and ball joints, fuel injectors, hydraulic steering pumps,
       electrical systems, and plasma spray systems.

   (b) review correspondence from U.S. Patent and Trademark
       Office and prepare amendments to patent applications to
       secure the patent, focusing on the areas of technical
       expertise.

   (c) review potential products and inventions, conduct searches
       for relevant patents and publications, review and analyze
       uncovered patents and publications, and prepare opinions,
       focusing on the areas of technical expertise.

   (d) provide miscellaneous intellectual property advice and
       advice counsel related to copyrights, trademarks and know-
       how and contractual matters involving intellectual
       property, focusing on the areas of technical expertise.

   (e) if requested to do so by the Debtors, assist them with
       discrete ordinary course litigation and corporate and
       commercial transactional matters.

Dickinson Wright attorneys who work or may work on Delphi matters
and their hourly rates are:

      Attorneys                      Hourly Rate
      ---------                      -----------
      Anderson, Edmund P.                $325
      Bergsman, Marc A.                  $330
      Cho, Christine Y.                  $185
      Honaker, William H.                $375
      Jones, Richard A.                  $350
      Littlepage, Samuel D.              $395
      Maeso, Christopher C.              $275
      Marks, Lisa E.                     $300
      Meyer, Nicole M.                   $255
      Molinoff, Jeffrey S.               $200
      Naber, John M.                     $305
      Phillips, Craig A.                 $240
      Schaldenbrand, Michael A.          $295
      Shoemaker, Randall L.              $275
      Stearns, Robert L.                 $335
      Thelen, Bruce C.                   $385

Legal Assistants Hourly Rate are:

      Campbell, Eggerton A.              $160
      Marasco, Jacqueline                 $90
      Large, Dawn                         $90

William H. Honaker, Esq., a member of the firm, assures the Court
that Dickinson Wright does not hold or represent any interest
adverse to the Debtors and other party-in-interest with respect
to the matters on which its is to be employed.

Headquartered in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is the single largest global supplier of
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology.  The Company's
technology and products are present in more than 75 million
vehicles on the road worldwide.  The Company filed for chapter 11
protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-44481).  John Wm. Butler Jr., Esq., John K. Lyons, Esq., and
Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
represent the Debtors in their restructuring efforts.  Robert J.
Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude,
Esq., at Latham & Watkins LLP, represents the Official Committee
of Unsecured Creditors.  As of Aug. 31, 2005, the Debtors' balance
sheet showed $17,098,734,530 in total assets and $22,166,280,476
in total debts.  (Delphi Bankruptcy News, Issue No. 18; Bankruptcy
Creditors' Service, Inc., 215/945-7000


DORAL FINANCIAL: Appoints Lidio Soriano as Chief Financial Officer
------------------------------------------------------------------
Doral Financial Corporation (NYSE: DRL) reported the appointment
of Lidio Soriano as its Chief Financial Officer.  Mr. Soriano has
served as interim Chief Financial Officer of the Company since
August 2005.

"We are very pleased with Mr. Soriano's outstanding contribution
during the restatement process.  His financial and accounting
experience, and his familiarity with the residential mortgage
market make him an ideal fit for Doral as we continue to rebuild
our senior management team," said John A. Ward, III, the Company's
Chairman and Chief Executive Officer.

Prior to his appointment as interim Chief Financial Officer, Mr.
Soriano served as Senior Vice President and Risk Management
Director of the Company since January 2005.  As Risk Management
Director, Mr. Soriano was a member of the Company's Asset
Liability Management Committee.  From June 2004 until December
2004, Mr. Soriano served as President of Doral Money, a New York
based subsidiary of Doral Bank, specializing in commercial and
construction mortgage lending.  Before joining the Company, Mr.
Soriano was Vice President in charge of the Mortgage Division of
Citibank Puerto Rico.

The Company also reported that, effective Feb. 17, 2006, Arturo
Tous had become Chief Accounting Officer.  After joining the
Company in 2005, Mr. Tous played an important role in the
completion of the Company's restatement process.  Prior to
joining the Company, Mr. Tous was a Senior Associate at
PricewaterhouseCoopers LLP.  Mr. Tous is a Certified Public
Accountant and holds a bachelor's degree from Marquette University
and a Masters in Business Administration degree from the
University of Wisconsin-Madison.

The Company also announced that it has tentatively set Aug. 23,
2006 for its 2006 Annual Meeting of Stockholders.

On Feb. 27, 2006, the Company completed the restatement of its
previously issued consolidated financial statements for the years
2000 through 2004.  Due to the work required to complete the
restatement and to prepare and file the Company's quarterly
reports on Form 10-Q for the first three quarters of 2005, the
Company does not expect that it will be able to complete its
audited financial statements for the year ended Dec. 31, 2005, in
time for the regular date of the annual meeting, which is
generally held in April.  The Board has not set a record date for
determining the shareholders entitled to vote at the annual
meeting.

The Board of Directors also adopted an amendment to the Company's
Bylaws with respect to the annual meeting.  Prior to the
amendment, the Bylaws provided that the Company's annual meeting
of shareholders would be held "at such time and date as the Board
of Directors, by resolution, shall determine."  In addition, the
Bylaws provided that "in the event the Board of Directors fails so
to determine the time, date and place of the meeting, the annual
meeting of shareholders shall be held on the third Wednesday in
April of each year."  The amended Bylaws eliminate the reference
to the third Wednesday in April as a default date for the annual
meeting, and continue to provide that the annual meeting will be
held at the time and date fixed by the Board.

              About Doral Financial Corporation

Doral Financial Corporation -- http://www.doralfinancial.com/--
a financial holding company, is the largest residential mortgage
lender in Puerto Rico, and the parent company of Doral Bank, a
Puerto Rico based commercial bank, Doral Securities, a Puerto
Rico based investment banking and institutional brokerage firm,
Doral Insurance Agency, Inc. and Doral Bank FSB, a federal
savings bank based in New York City.

                          *     *     *

As reported in the Troubled Company Reporter on March 27, 2006,
Moody's Investors Service downgraded to B1 from Ba3 the senior
debt ratings of Doral Financial Corporation, and reiterated the
negative rating outlook.  Moody's action follows cease and desist
orders placed by banking regulators on Doral and some of its
subsidiaries, including Doral Bank, San Juan, Puerto Rico.  When
Moody's last downgraded Doral's debt on Oct. 28, 2005, it issued a
negative rating outlook, but noted that any credit deterioration
including regulatory consequences or liquidity issues could result
in a review for possible downgrade or an outright downgrade.


DYNEGY HOLDINGS: S&P Rates $750 Million Sr. Unsecured Notes at B-
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on Dynegy
Holdings Inc.'s senior unsecured debt to 'B-' from 'CCC+'.  At
the same time, Standard & Poor's assigned its 'B-' rating to
Dynegy Holdings' $750 million senior unsecured notes due 2016.

The outlook remains stable.  As of Dec. 31, 2005, Houston, Texas-
based parent company, Dynegy Inc., had $4.7 billion of debt
outstanding.

"The rating action reflects the reduction in the amount of secured
financing that had placed the unsecured debtholders at a
disadvantage and caused a greater separation between ratings,"
said Standard & Poor's credit analyst John Kennedy.

Dynegy intends to use a combination of the net proceeds from the
sale of senior unsecured notes and cash on hand to tender three
series of its second priority senior notes totaling $1.75 billion.

The stable outlook reflects the expectation that Dynegy will
generate sufficient cash flow to service its obligations.


EMISPHERE TECHNOLOGIES: PwC Expresses Going Concern Doubt
---------------------------------------------------------
PricewaterhouseCoopers LLP raised substantial doubt about
Emisphere Technologies, Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the years ended Dec. 31, 2005, 2004, and 2003, and
of its internal control over financial reporting as of Dec. 31,
2005.  PwC pointed to the company's sustained operating losses,
limited capital resources and significant future commitments.

                            Financials

Emisphere Technologies, Inc. reported its financial results for
the fourth quarter and year ended Dec. 31, 2005.

The company reported a $18,051,000 net loss on $3,540,000 of
revenues for the year ended Dec. 31, 2005.

At Dec. 31, 2005, the company's balance sheet showed $18,988,000
in total assets and $33,883,000 in total liabilities, resulting in
a $14,895,000 stockholders' equity deficit.

The company's Dec. 31 balance sheet also showed strained liquidity
with $10,240,000 in total current assets available to pay
$10,762,000 in total current liabilities coming due within the
next 12 months.

The Company also reviewed highlights of the year, including
progress in advancing its product portfolio and a successful
result in a contract dispute lawsuit against Eli Lilly and
Company.

        2005 Product Development and Licensing Highlights

A.  Oral Heparin

During the third quarter of 2005, Emisphere completed a multi-arm,
cross-over, clinical trial with 16 normal subjects designed to
compare heparin delivered by different injection routes to heparin
delivered orally.

Emisphere conducted this trial to support its contention that
heparin, when given orally using the Company's eligen(R)
technology, is unaltered when compared to heparin delivered by
injection.

The results from the trial should be available shortly.  Once
available, Emisphere expects to discuss the data with the U.S.
Food and Drug Administration to determine if the results can
accelerate the Company's product registration.

In November 2005, Emisphere received written guidance from the FDA
regarding the Company's planned Phase III trial with oral heparin.
The planned trial is designed to determine the safety and efficacy
of oral heparin measured against titrated Coumadin(R) (sodium
warfarin) for the prevention of venous thromboembolism (VTE)
following elective total hip replacement.

The trial will be a randomized double blind, non-inferiority,
multi-center study with the primary endpoint to prevent VTE, which
consists of deep vein thrombosis, objectively confirmed by
ultrasound, pulmonary embolism and death.

The two-arm study will compare 30 days of dosing, three times per
day, of two Emisphere oral heparin capsules, to 30 days of dosing,
once per day, of oral titrated Coumadin(R).

The expected enrollment for the trial is approximately 2,100
patients (including an allowance for non-evaluable patients), with
1,050 patients per arm.

An independent Data and Safety Monitoring Committee will be
charged with periodically reviewing the trial for safety.  The
Company plans to discuss modifications to the proposed protocol
with the FDA based on the results of the cross-over trial that
Emisphere completed during the third quarter of 2005 to determine
if the results can accelerate the Company's product registration.

B.  Oral Insulin

In November 2005, Emisphere commenced a Phase II trial in India
for the Company's oral insulin product.  The trial is a 90-day,
multi-center, double-blind, randomized clinical trial.

The four arm study will evaluate the safety and efficacy of low
and high doses of oral insulin tablets measured against placebo in
120 subjects with Type 2 Diabetes Mellitus who have inadequate
glycemic control with their existing oral antidiabetic
monotherapy.

The primary efficacy endpoint of the study is related to the
change in hemoglobin A1c, the standard for evaluating glucose
control in Type II diabetics.

The Company also will focus on the safety of oral insulin,
specifically incidents of hypoglycemia as well as the occurrence
of insulin antibodies.

C.  Oral Salmon Calcitonin

During the third quarter, Novartis Pharma AG and Nordic Bioscience
A/S informed Emisphere that they had met with the FDA to discuss
their Phase III development plan for the oral formulation of
salmon calcitonin for the treatment of osteoporosis using
Emisphere's eligen(R) technology.

Based on the advice provided by the FDA, Nordic Bioscience and
Novartis are planning to move forward with Phase III clinical
studies.

On Dec. 12, 2005, Emisphere announced positive clinical data
generated by Drs. Daniel Manicourt and Jean-Pierre Devogelaer from
the Department of Rheumatology at the University Hospital St-Luc,
Universite Catholique de Louvain, Brussels, Belgium evaluating
oral CT supplied by Novartis Pharma AG using Emisphere's eligen(R)
technology in treating osteoarthritis.

Results of this study strongly suggest that CT exhibits not only
clinical efficacy but also markedly reduces the levels of several
biochemical markers of joint metabolism, which all have been shown
to have a negative prognostic value of the osteoarthritis process
in longitudinal studies involving large groups of patients.

D.  Oral Recombinant Human Growth Hormone

Novartis notified Emisphere that it initiated a multidose study in
2006 in growth hormone deficient adults with Novartis' improved
oral formulation of rhGH.

Emisphere will be entitled to a $5 million milestone payment upon
completion of the study if Novartis elects to continue development
under the Option and License Agreement with the Company.

Results from the study are expected in April.  In addition,
Novartis is responsible for all costs related to the development
of this product and Emisphere is entitled to receive royalties
based on product sales.

E.  Roche Licensing Agreement

Roche continued a clinical study utilizing Emisphere's eligen(R)
technology in a number of different tablet dosage forms, under
Roche's agreement with the Company to develop new oral
formulations of a Roche small molecule compound for the treatment
of bone-related diseases.

Roche is using the Company's oral drug delivery technology to
evaluate a number of new formulations that may be more convenient
for patients than products currently on the market.

Roche has completed the dosing portion of the study and is
analyzing the relative performance of the various formulations
tested in the study.

On Feb. 15, 2006, the Company announced that Roche had initiated a
clinical study utilizing Emisphere's eligen(R) delivery technology
in a formulation for a second product.  As a result, Emisphere
received an additional milestone payment from Roche.

F.  Eli Lilly and Company Litigation

On Jan. 9, 2006, U.S. Federal District Court Judge David F.
Hamilton of the Southern District of Indiana, ruled that Eli Lilly
& Co. had breached its contractual obligations with Emisphere and
that the Lilly license and collaboration agreements with Emisphere
for oral PTH were properly terminated by Emisphere as of Aug. 23,
2004.

Judge Hamilton ruled in Emisphere's favor, finding that "Lilly did
not act in good faith and did not deal fairly with Emisphere.  The
breach of trust went to the root of the parties' agreement, and it
is serious enough to support termination of the contracts."

The decision allows Emisphere to license the technology for oral
PTH to Novartis.  While the litigation with Lilly was pending,
Emisphere had entered into a contingent license option agreement
with Novartis in the event that the District Court permitted
Emisphere to terminate the Lilly license, permitting Novartis
to use Emisphere's eligen(R) technology with PTH as a treatment
for osteoporosis.

In addition, Emisphere will work with counsel to pursue all
remedies against Lilly, including monetary damages, for Lilly's
actions, which the Company believes have caused direct and
consequential damages to Emisphere.

          $15 Million Financing With Largest Shareholder

In September, Emisphere raised $15 million through a senior
secured term loan financing with funds managed by MHR Fund
Management LLC.

The Loan Agreement required Emisphere to hold a special
stockholder meeting for the purpose of obtaining stockholder
approval of:

   (a) the exchange of the loan for an 11% senior secured
       convertible note with substantially the same terms as the
       Loan Agreement, and

   (b) the amendment and restatement of Emisphere's Restated
       Certificate of Incorporation.

On Dec. 8, 2005, Emisphere filed a definitive proxy statement with
the Securities and Exchange Commission relating to this special
meeting of the Company's stockholders.

On Jan. 17, 2006, the special meeting of stockholders was
held and both proposals were approved by the Company's
stockholders.

The $6.9 million cash balance as of Feb. 28, 2006, includes the
proceeds of the MHR financing.

"We are excited to be entering 2006 with two products set to begin
pivotal Phase III trials -- our oral salmon calcitonin product
that is partnered with Novartis for two indications and our oral
heparin product," Michael M. Goldberg, M.D., Chairman and Chief
Executive Officer of Emisphere said.

"We expect to receive the results from our heparin cross over
study early in the second quarter and later this year, we will
announce results from our Phase II oral insulin trial in India."

"We continue to advance our licensing agreement with Roche to
identify oral compounds for bone-related diseases.  The strong
clinical activity reflects the broad applicability of our
eligen(R) technology platform."

"We are very pleased with the findings of Judge Hamilton, backing
our claim that Lilly breached its contract with Emisphere.  We
expect to ask the Federal Court in the Southern District of
Indiana to order Lilly to pay substantial penalties related to
this case."

"Finally we are eager to work with our partner Novartis to advance
development of oral PTH," Goldberg concluded.

Full-text copies of Emisphere Technologies, Inc.'s financial
statements for the year ended Dec. 31, 2005, are available at no
charge at http://ResearchArchives.com/t/s?73b

Headquartered in Tarrytown, New York, Emisphere Technologies, Inc.
(Nasdaq: EMIS) -- http://www.emisphere.com/-- is a
biopharmaceutical company pioneering the oral delivery of
otherwise injectable drugs.  Emisphere's business strategy is to
develop oral forms of injectable drugs, either alone or with
corporate partners, by applying its proprietary eligen(R)
technology to those drugs or licensing its eligen(R) technology to
partners who typically apply it directly to their marketed drugs.
Emisphere's eligen(R) technology has enabled the oral delivery of
proteins, peptides, macromolecules and charged organics.
Emisphere and its partners have advanced oral formulations or
prototypes of salmon calcitonin, heparin, insulin, parathyroid
hormone, human growth hormone and cromolyn sodium into clinical
trials.  Emisphere has strategic alliances with world-leading
pharmaceutical companies.

At Dec. 31, 2005, the company's stockholders' equity deficit
widened to $14,895,000 compared to a $11,274,000 deficit at
Dec. 31, 2004.


EDDIE BAUER: Credit Metrics Decline Cues Moody's to Lower Ratings
-----------------------------------------------------------------
Moody's Investors Service downgraded the corporate family and
senior secured term debt ratings of Eddie Bauer, Inc., from Ba3 to
B2 with a stable outlook.  The downgrade reflects Moody's
expectation that the company's performance will continue to
deteriorate during 2006 resulting in a significant weakening in
credit metrics and free cash flow.

These ratings are downgraded:

   * Corporate family rating to B2 from Ba3;

   * $300 million guaranteed secured term loan to B2 from Ba3.

The rating outlook is stable.

The B2 corporate family rating reflects the financial impact of
the company's merchandise missteps during the Fall and Holiday
2005 seasons that resulted in operating performance materially
below Moody's expectations.  This negative trend will likely
worsen during 2006 as the company clears excess inventory and
focuses on readdressing its merchandise offering.

Moody's expects 2006 performance levels will cause a notable
weakening in free cash flow, operating margins, leverage and
coverage metrics, as well as a probable covenant violation.  Eddie
Bauer will likely violate its financial covenants under the term
loan for the first quarter of FY 2006 although Moody's expects the
company will probably receive an amendment from the bank group.

The ratings are supported by the company's adequate liquidity as
provided by its unrated $150 million asset based revolver, its
well recognized brand name, as well as, its stable licensing
revenue stream.  The ratings are also supported by the expected
debt reduction that will occur during 2006 as a result of the
mandatory excess cash flow sweep.  The ratings continue to be
constrained by the nature of the specialty apparel industry which
is highly seasonal, subject to intense competition, and fashion
risk.

The rating outlook is stable reflecting Eddie Bauer's adequate
liquidity as well as Moody's expectations for marginally positive
free cash flow.  A positive outlook could be assigned should the
company's sales and operations stabilize as evidenced by Free Cash
Flow/Debt above 5% and Debt/EBITDA solidly below 6.0x. Downward
rating pressure could develop should; liquidity weaken, free cash
flow turn negative for an extended period of time, or operating
performance deteriorate materially below Moody's expectations.

The $300 million term loan is secured by a first lien on the
trademark and distribution center and has a second lien on the
inventory and accounts receivable.  In addition, it is guaranteed
by the domestic subsidiaries.  The senior secured term loan is
rated at the same level as the corporate family rating given its
dominance in the capital structure.  The credit agreement has both
a leverage and fixed charge coverage covenant as well as a 50%
excess cash flow sweep.

Headquartered in Redmond, Washington, Eddie Bauer, Inc. is a multi
channel retailer that offers it products through its 381 retail
and outlet stores in the U.S. and Canada along with its catalogs
and e-commerce sites.  Eddie Bauer, Inc., had revenues of
approximately $1.0 billion for the year ended Jan. 1, 2006.


ENCORE ACQUISITION: Raising $131 Million in Common Stock Offering
-----------------------------------------------------------------
Encore Acquisition Company (NYSE:EAC) priced a public offering of
4,000,000 shares of its common stock for gross proceeds of
approximately $131.1 million.  Encore intends to use the net
proceeds of the offering to repay indebtedness under its revolving
credit facility and for general corporate purposes.

Citigroup Global Markets Inc. will serve as sole underwriter for
the offering.  When available, copies of the prospectus supplement
and accompanying prospectus may be obtained from:

     Citigroup Global Markets Inc.
     388 Greenwich Street
     New York, NY 10013

Headquartered in Fort Worth, Texas, Encore Acquisition --
http://www.encoreacq.com/-- is a growing independent energy
company engaged in the acquisition, development and exploitation
of North American oil and natural gas reserves.  Organized in
1998, Encore's oil and natural gas reserves are in four core
areas: the Cedar Creek Anticline of Montana and North Dakota; the
Permian Basin of West Texas and Southeastern New Mexico; the Mid
Continent area, which includes the Arkoma and Anadarko Basins of
Oklahoma, the North Louisiana Salt Basin, the East Texas Basin and
the Barnett Shale; and the Rocky Mountains.

                          *     *     *

Encore Acquisition's $300-million senior subordinate notes due on
July 15, 2015, carry Moody's Investors Service's B2 rating and
Standard & Poor's B rating.


ENRON CORP: Inks Claim Settlement Pact with Toronto Dominion
------------------------------------------------------------
Reorganized Enron Corporation and its debtor-affiliates ask Judge
Gonzalez of the U.S. Bankruptcy Court for the Southern District of
New York to approve their Settlement Agreement dated January 25,
2006, with:

    -- The Toronto-Dominion Bank
    -- Toronto Dominion (Texas) LLC
    -- TD Securities (USA) LLC

As previously reported, the Parties have agreed in August 2005 to
enter into a settlement of claims under the MegaClaim Litigation.

Under the Settlement, TD Bank or one of its affiliates will pay
Enron Corp., by wire transfer of immediately available funds,
$130,000,000 to resolve all of the pending disputes among the
Parties.

Pursuant to the MegaClaim Complaint, the Debtors have brought
claims against the TD Entities for damages based on, asserted
aiding and abetting fraud, aiding and abetting breach of
fiduciary duty, and civil conspiracy.  The Debtors also assert
against the TD Entities and some Defendants claims for:

    -- disallowance or equitable subordination
       of the Defendants' claims against the Debtors;

    -- avoidance or recovery of payments made to the Defendants
       allegedly constituting avoidable transfers; and

    -- accounting, punitive damages, interest and costs.

TD Texas filed three proofs of claim against the Debtors for
obligations allegedly owing to, or damages allegedly suffered by,
TD Texas in connection with various credit facilities or
financial transactions.  In addition to the TD Claims, claims
were filed in connection with some financing, loan or other
transactions by parties with whom the Debtors allegedly had
contractual arrangements and for which certain of the TD Entities
allegedly maintain legal or beneficial interests in the proceeds
of those claims.

Aside from the MegaClaim Litigation, the Debtors and the TD
Entities are also parties to various actions including:

1. The Guaranty Action

    An adversary proceeding seeking the avoidance of Enron's
    obligations under a Guaranty Agreement dated December 18,
    2000, captioned Enron Corp. v. Toronto Dominion (Texas), Inc..

2. The Trading Action

    An adversary proceeding, captioned Enron North America Corp.
    v. Toronto Dominion Bank, for the recovery of damages against
    TD Bank pursuant to a variety of theories relating to amounts
    allegedly due and owing to ENA from TD Bank.

3. The Assignee Adversaries

    The Debtors have commenced litigation in the Bankruptcy Court,
    styled Enron Corp. v. OCM Administrative Services II, LLC, and
    Enron Corp. v. Allied Irish Banks, et al., where the Debtors
    seek to disallow and subordinate the claims formerly held as
    of the Petition Date by certain of the TD Entities.  These
    claims were sold, transferred or assigned by the TD Entities
    to third parties.

    The claims which the Debtors seek to disallow and subordinate
    in the Assignee Adversaries, and the holders of the assigned
    claims are:

    Claim No.   Claimant                 Amount       Class
    ---------   --------              ------------    -----
       7541     UBS AG                 $55,238,868       4

      11179     OCM Administrative
                Services II, LLC       118,475,587     185

      11180     OCM Administrative
                Services II, LLC       118,475,587       5

      12301     Allied Irish
                Banks, plc               1,000,000       4

     141797     Citigroup, Inc. as
                agent for Redwood
                Master Fund Ltd.         4,999,999       4

      14179     Citigroup, Inc. as
                agent for Rushmore
                Capital-II              22,083,333       4

Because of the substantial expense of litigating the issues
associated with the Disputes, the length of time necessary to
resolve the issues and the disruption to their efforts to further
distributions contemplated by their Chapter 11 Plan, the
Reorganized Debtors believe that the compromise and settlement
provided in the TD Settlement Agreement is desirable and
beneficial.

The other salient terms of the TD Settlement Agreement includes
the allowance of claims against the Debtors:

A. Allowance of Assignee Claims

    On the Effective Date, the Assignee Claims will be deemed
    allowed as general unsecured claims against these Debtors:

    Claim No.      Debtor            Amount           Class
    --------       -------        ------------        -----
      7541         Enron           $55,238,868           4
     11179         Enron           118,475,587         185
     11180         ENA             118,475,587           5
     12301         Enron             1,000,000           4
     14179         Enron             4,999,999           4
     14179         Enron            22,083,333           4

B. Allowance of TD Claims

    The TD Claims will be deemed allowed as general unsecured
    claims against these Debtors, in these amounts and classes:

    Claim No.      Debtor            Amount           Class
    --------       -------        ------------        -----
      19053       Enron           $15,538,576          185
      19060       Enron             9,006,025            4
      19061       ENA              31,077,153            5

The Reorganized Debtors have determined that the provisions in
the Settlement Agreement could not be achieved unless the TD
Entities were protected from the risk of post-settlement
exposure, including exposure to Non-Settling Defendants.
Accordingly, the TD Settlement Agreement contains release
provisions, which are essential to the settlement with the TD
Entities.

A full-text copy of the TD Settlement Agreement is available for
free at http://bankrupt.com/misc/TD_SettlementAgreement.pdf

Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply. Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.  The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts.  Luc A. Despins, Esq., Matthew Scott Barr,
Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy,
LLP, represent the Official Committee of Unsecured Creditors.
(Enron Bankruptcy News, Issue No. 168; Bankruptcy Creditors'
Service, Inc., 15/945-7000)


ENRON CORP: North American Unit Selling Emission Reduction Credits
------------------------------------------------------------------
Emission Reduction Credits, which are issued by Air Quality
Management Districts, Air Pollution Control Districts, and state
and county governments, are transferable permits to emit certain
types of chemical compounds in accordance with programs
administered by various state and local environmental agencies
within a particular geographic region.

ERCs are required for new major emission sources, or sources
undergoing major expansions, by various state air agencies in
regions that do not meet the Environmental Protection Agency's
national ambient air quality standards.

Enron North America Corp., an Enron Corporation debtor-affiliate,
holds numerous surplus ERCs, issued by regulatory agencies in
California or Texas.

ENA is not currently engaged in emission producing operations for
which the Surplus ERCs would be required to offset current or
future emissions, Brian S. Rosen, Esq., at Weil, Gotshal & Manges
LLP, in New York, tells the U.S. Bankruptcy Court for the Southern
District of New York.

Throughout the course of its Chapter 11 case, ENA has been trying
to liquidate its Surplus ERCs.  On February 7, 2003, ENA sought
the Court's authorization to conduct a comprehensive auction for
its Surplus ERCs.  The Court granted the Debtor's request, and
authorized ENA to sell, without a hearing, any Surplus ERCs,
which remained unsold at the conclusion of the 2003 auction
process, provided that adequate notice is provided to interested
parties.

                       Recent Sale Process

In 2005, ENA was approached by Element Markets LLC, an
environmental commodities broker.  Element Markets indicated it
represented a party interested in purchasing the ERC Assets.  ENA
was also notified by the Broker that it represented various
parties interested in the ERC Assets.

In January 2006, ENA conducted an auction by e-mail with Element
Markets and Cantor Fitzgerald Brokerage L.P., each representing
undisclosed buyers, as the only two participants.  Element
Markets submitted the highest offer -- $1,500,010 -- for the ERC
Assets on behalf of its client, Green Market Investments LLC, a
Texas limited liability company.

Thereafter, ENA and Green Market entered into a purchase
agreement dated as of January 12, 2006.  Green Market tendered a
$10,000 deposit to ENA.  The Green Market Agreement waived all
liability in the event the transaction did not close, subject
only to the Reorganized Debtors' obligation to return the
deposit.

However, the Reorganized Debtors' Board of Directors later
learned that Green Market was affiliated with a former ENE senior
executive.  Throughout these Chapter 11 cases, the Reorganized
Debtors have maintained a policy of not selling estate assets to
former employees or other insiders absent full disclosure of the
buyer's affiliation prior to the sale.

The Board's knowledge of the identity of Green Market, and its
affiliation with a former executive of ENE -- which only came to
light after the parties entered into the Green Market Agreement -
- raised issues regarding potential conflicts of interests.

As a result, ENA resumed discussions with Cantor -- on behalf of
Grey K Holdings I, LLC, as buyer -- for the potential sale of the
ERC Assets.  Grey, through Cantor, was provided an opportunity to
resubmit a higher and better offer.  After continued negotiations
Broker, ENA determined that Grey's final offer was superior to
that of Green Market.

Enron Corp. and ENA ask the Court to approve their purchase
agreement with Grey.  The Debtors will sell the Surplus ERCs to
Grey free and clear of liens, claims, and encumbrances.

The Purchase Agreement provides these terms:

A. Purchase Price

   Grey will pay $1,525,010 for the Surplus ERCs:

      a. $25,000 will be deposited to an account with JP Morgan
         Chase Bank, 1 Chase Manhattan Plaza, New York, NY 10081;
         and

      b. Upon Closing, $1,500,010 plus all applicable district
         transfer fees will be deposited with Commerce Bank,
         National Association.

B. Limitation of Liability

   In no event will any party be liable for consequential,
   incidental, punitive, exemplary, or indirect damages, in tort,
   contract or otherwise.  Except as expressly represented in the
   Purchase Agreement, it is understood that Grey takes Surplus
   ERCs "as is" and "where is."

C. Closing

   The transaction will occur not later than April 3, 2006, at
   10:00 a.m., at the offices of Enron Corporation at 1221 Lamar
   Street, Houston, Texas, 77010, or at another time, place or by
   other means as ENA and Grey may agree.  If the Closing has not
   occurred as of April 10, either party may cancel and terminate
   the Agreement by providing the other party with written notice
   of termination.

D. Failure to Close

   In the event Grey fails to consummate the transactions, ENA
   will:

      a. retain the Deposit and ENA reserves the right to pursue
         all available remedies; and

      b. be free to sell any or all of the ERC Assets to
         another party.

   If ENA fails to consummate the transactions, Grey will have
   the Deposit returned in full, and will have the right to
   pursue all available remedies.  However, if Grey terminates
   the Purchase Agreement due to failure to close on or before
   April 10, 2006, ENA will not be entitled to retain the
   deposit, but will be free to sell all of the ERC Assets to
   another party.

A full-text copy of the Surplus ERCs Purchase Agreement is
available for free at http://ResearchArchives.com/t/s?736

ENA also seeks the Court's authority to pay a commission to
Cantor equal to $45,750, or 3% of the Purchase Price.

If the Reorganized Debtors are barred from paying a commission to
Cantor, brokers representing potential purchasers of the Debtors'
other assets would have less incentive to approach the Debtors
with potential buyers for the assets in the future, Mr. Rosen
asserts.

               Green Market Wants Motion Denied

After an open and competitive auction, the Reorganized Debtors
selected Green Market LLC as the winning bidder for ENA's Surplus
ERCs, David M. LeMay, Esq., at Chadbourne & Parke LLP, in New
York, relates.

Green Market believes it complied with all of the procedures and
rules established by the Reorganized Debtors in conducting an
auction for the sale of the Surplus ERCs.

Mr. LeMay tells the Court that immediately after the Auction, ENA
and Green Market entered into a sale and purchase agreement for
the sale of the Surplus ERCs to Green Market.  Green Market
submitted its initial deposit as required by the Purchase
Agreement and only awaited closing.

However, Mr. LeMay continues, after several weeks of delay, the
Reorganized Debtors inexplicably resumed discussions with the
losing bidder in the Auction, entered into a purported second
sale and purchase agreement for the same assets, and unilaterally
repudiated the Green Market Agreement.

"This abrupt reversal and repudiation not only violated the
principles and procedures of the Auction Protocol, but plainly
breached the Green Market Agreement," Mr. LeMay argues.

Accordingly, Green Market asks Judge Gonzalez to deny the
Reorganized Debtors' request.

Mr. LeMay admits that Lou Pai, a former Enron executive, and
certain trusts established by Mr. Pai, are the ultimate
beneficial owners of Green Market.

The Auction Protocol did not forbid or in any manner restrict any
former Enron or ENA executives, employees or former insiders from
participating in the Auction, nor did the Auction Protocol
require the disclosure of the identities of any principals,
executives or primary investors of any of the bidders, Mr. LeMay
points out.

Headquartered in Houston, Texas, Enron Corporation filed for
chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case
No. 01-16033) following controversy over accounting procedures,
which caused Enron's stock price and credit rating to drop
sharply. Judge Gonzalez confirmed the Company's Modified Fifth
Amended Plan on July 15, 2004, and numerous appeals followed.  The
Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004.
Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil,
Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts.  Luc A. Despins, Esq., Matthew Scott Barr,
Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy,
LLP, represent the Official Committee of Unsecured Creditors.
(Enron Bankruptcy News, Issue No. 169; Bankruptcy Creditors'
Service, Inc., 15/945-7000)


FEDERAL-MOGUL: CNA Parties Assert Rights Over Insurance Settlement
------------------------------------------------------------------
Columbia Casualty Company, Continental Casualty Company, and The
Continental Insurance Company, both in its individual capacity as
well as successor to certain interests of Harbor Insurance
Company, ask the U.S. Bankruptcy Court for the District of
Delaware to find that:

   -- neither Federal-Mogul Corporation nor Federal-Mogul
      Products, Inc., has any rights to certain insurance
      policies or under a settlement agreement the CNA Plaintiffs
      entered into in 2003; and

   -- the Debtors have no property interest in those contracts
      under Section 541 of the Bankruptcy Code.

                         CNA Policies

The CNA Plaintiffs issued policies of liability insurance to IC
Industries, Inc., the predecessor-in-interest by name change to
PepsiAmericas, Inc.  The Policies also covered IC Industries'
subsidiaries.

Abex Corporation, a predecessor of Pneumo Abex, LLC, was a
subsidiary of IC Industries.  Pneumo Abex has alleged that it is
covered by the CNA Policies.

For many years, predecessors of Pneumo Abex were engaged in the
manufacture and distribution of asbestos-containing brake linings
and clutch facings.  Pneumo Abex and its corporate predecessors
have been sued in several thousand personal injury lawsuits
throughout the United States in relation to allegations that the
plaintiffs suffered personal injuries resulting from exposure to
asbestos-containing brake and clutch products Pneumo Abex and its
predecessors manufactured and distributed.

                        D.C. Primary Case

In July 1982, Abex commenced coverage litigation against certain
of its primary insurers before the United States District Court
for the District of Columbia.  The case was styled as Abex
Corporation v. Maryland Casualty Co., et al., Civil Action No.
82-2098 (JGP) (D.D.C).

CIC was not originally named as a defendant in the D.C. Primary
Case, but was made a third-party defendant in 1987 by Abex's
insurance carriers.

Abex's claims against CIC in the D.C. Primary Case were
voluntarily dismissed in 1999, after Abex and CIC agreed that CIC
had paid its full limits of liability applicable to the Abex
Asbestos Actions under the CIC Policies.

Currently, CIC is a nominal party to the D.C. Primary Case in
connection with certain claims of contribution asserted by
another insurer in connection with defense expenses paid prior to
CIC's exhaustion.  CIC is indemnified for those claims by Abex,
PepsiAmericas, and Cooper Industries, LLC.

Cooper is CIC's indemnitor, and has been providing a defense to
the contribution claims.

Pneumo Abex and Cooper are also involved in a July 2002 suit
before the Supreme Court of New York for New York County and a
June 2005 suit before the U.S. District Court for the District of
Columbia.  Both actions seek declaratory judgment with regard to
the rights and responsibilities of certain excess and umbrella
insurers in connection with the Abex Asbestos Actions.

The CNA Plaintiffs are not parties to the D.C. Excess Case.

On July 29, 2005, the New York Supreme Court stayed proceedings
in the New York Excess Case in deference to the D.C. federal
litigation.

The D.C. Excess Case is currently proceeding with discovery and
motion practice.

                      Settlement Agreements

CIC and Columbia in 1999 entered into a confidential settlement
agreement with Pneumo Abex and Whitman Corporation, a successor
to IC Industries and a predecessor to PepsiAmericas, resolving
all claims asserted by Abex against CIC in the Primary Coverage
Litigation.  Payments made by CIC and Columbia pursuant to the
terms of the 1999 Settlement Agreement, along with prior payments
made for unrelated claims, exhausted the limits of liability of
primary and umbrella policies issued by CIC and Columbia.

In 2003, the CNA Plaintiffs entered into a confidential
settlement agreement with Pneumo Abex, PepsiAmericas, MAFCO
Consolidated Group, Inc., and Cooper, in relation to certain
umbrella and excess insurance policies issued to IC Industries.

Pursuant to the 2003 Settlement Agreement, the CNA Plaintiffs
made an initial payment to Pneumo Abex.  The CNA Plaintiffs are
required to make additional payments at specified dates for the
benefit of "Abex."

David C. Christian, II, Esq., at McDermott Will & Emery, LLP, in
Chicago, Illinois, relates that the CNA Plaintiffs have made all
payments due Pneumo Abex prior to February 15, 2006.  Pneumo Abex
has distributed the proceeds of those payments to the other
entities within the definition of "Abex" under the 2003
Settlement Agreement pursuant to agreed procedures among those
parties.

According to Mr. Christian, the CNA Plaintiffs were ready to make
a payment on February 15, 2006.  However, they weren't able to do
so because of competing claims to the payment asserted by the
Debtors and certain of the contracting parties to the 2003
Settlement Agreement.

                      Corporate Transactions

In 1994, Pneumo Abex sold its Friction Products Division to
Wagner Electric Corporation, which was a unit of Cooper at that
time.  As part of the deal, Wagner assumed legal responsibility
for certain liabilities connected with the Friction Products
Division.  Cooper guaranteed Wagner's obligations.

At the same, Pneumo Abex and Wagner entered into an insurance
agreement.  Pneumo Abex agreed to make benefits of its insurance,
including insurance proceeds, available to Wagner to the extent
that Pneumo Abex's insurance may respond to liabilities assumed
by Wagner pursuant to the sale.

Neither the Purchase Agreement nor the Insurance Agreement
assigned to Wagner or Cooper any of the CNA Policies or the
direct right to obtain proceeds from the CNA Policies from the
CNA Plaintiffs.

Wagner later merged with Moog Automotive Products, Inc., a unit
of Cooper's Champion Spark Plug Company.

In 1998, Cooper sold Champion to Federal-Mogul.  The Champion
Purchase Agreement provided that Cooper will make available to
Federal-Mogul and the Champion Companies "the rights of the
Seller and its Affiliates to any benefits, including insurance
proceeds, of or arising out of any insurance policy that covers
Asbestos Claims."

However, Mr. Christian notes that the CNA Policies contain terms
precluding the named insured's assignment of those policies or
the rights and obligations associated with those policies to any
other party without the express consent of the CNA Plaintiffs.
The CNA Plaintiffs have not provided their consent to the
assignment of the CNA Policies or of any of named insureds'
rights and obligations to the CNA Policies to any party, Mr.
Christian says.

               CNA Policies Don't Belong to Debtors

In December 2005, Federal-Mogul, FM Products, the Official
Committee of Asbestos Claimants, and Eric D. Green, the
representative of future asbestos personal injury claimants,
commenced an adversary action styled Federal-Mogul Corp., et al.
v. Bobby Whitley, et al., Adversary No. 05-30785 (Bankr. D.
Del.), to impose injunctive relief prohibiting the further
prosecution of Abex Asbestos Actions for which Federal-Mogul
Products has contractually agreed to indemnify Pneumo Abex.

The Plaintiffs in the Whitley Action argued that the claims were
subject to the bankruptcy stay because the asbestos claimants
were seeking to "obtain possession of property of the estate."
They asserted that the "shared insurance" of FM Products, Cooper,
and Pneumo Abex applicable to the Abex Asbestos Actions was
property of the Debtors' estate under Section 541 of the
Bankruptcy Code.

The CNA Plaintiffs dispute that Federal-Mogul and FM Products had
legal rights to Pneumo Abex's insurance.

Mr. Christian points out that neither Federal-Mogul nor FM
Products had any relationship with IC Industries during the
policy periods.  Accordingly, neither Federal-Mogul nor FM
Products was a "named insureds" or an "additional named insureds"
under the CNA Policies.  No other provision of the Policies
affords Federal-Mogul or FM Products with coverage.

To the extent that any named insured under the CNA Policies
purported to assign rights to the Policies to Federal-Mogul or FM
Products, the CNA Plaintiffs ask the Court to rule that the
purported assignment violated the anti-assignment provisions of
the Policies. Therefore, the assignment is without any legal
effect.

                   Competing Claims for Payment

In connection with the Whitley Action, PepsiAmericas sent
correspondence to the CNA Plaintiffs advising that it must be
made a co-payee on any payment under the 2003 Settlement
Agreement.

However, Pneumo Abex disputes PepsiAmericas' allegation. Pneumo
Abex indicated that any payment to PepsiAmericas would constitute
a breach of the terms of the 2003 deal.

According to Mr. Christian, both PepsiAmericas and Pneumo Abex
indicated that whatever payment procedure the CNA Plaintiffs
followed in response to the mutually conflicting claims would be
made at the CNA Plaintiffs' own "peril."

Cooper, on the other hand, asserted that the 2003 Settlement
Agreement is no longer binding on it in the event that the CNA
Plaintiffs do not make an immediate payment.  Cooper said it
intends not to honor its obligations to provide a defense and
indemnity to the CNA Plaintiffs in the D.C. Primary Case in the
event that the CNA Plaintiffs fail to make the immediate payment
demanded by Cooper.

"The CNA Plaintiffs are ready, willing, and able to perform their
financial obligations under the 2003 Settlement Agreement, but
have been precluded from doing so based on the mutually-
conflicting claims made by the Whitley Action Plaintiffs,
PepsiAmericas, and Pneumo Abex," Mr. Christian tells the Court.

Mr. Christian says the CNA Plaintiffs are prepared to deposit
$1,350,000, the amount they presently owe under the 2003
Agreement, into the Court's registry, pending resolution of the
competing claims for payment.

In this regard, the CNA Plaintiffs ask the Court to declare which
party has the right to receive the payments.

They also ask the Court to hold that Cooper, PepsiAmericas and
Pneumo Abex have a joint and several continuing obligation to
provide a defense and indemnity of claims asserted in the D.C.
Primary Case.

Pursuant to Rule 7008(a) of the Federal Rules of Bankruptcy
Procedure, the CNA Plaintiffs assert that the case is a non-core
proceeding.  They do not consent to the entry of final orders or
judgments by a bankruptcy judge making recommendations concerning
findings of facts or conclusions of law on issues related to
their action.

Pursuant to 28 U.S.C. Section 157(e), the CNA Plaintiffs do not
consent to a jury trial of the action in the bankruptcy court.

                       About Federal-Mogul

Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some US$6
billion.  The Company filed for chapter 11 protection on Oct. 1,
2001 (Bankr. Del. Case No. 01-10582).  Lawrence J. Nyhan Esq.,
James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin
Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang,
Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed US$10.15 billion in
assets and US$8.86 billion in liabilities.  At Dec. 31, 2004,
Federal-Mogul's balance sheet showed a US$1.925 billion
stockholders' deficit.  At Nov. 30, 2005, Federal-Mogul's balance
sheet showed a US$1,450.4 billion stockholders' deficit, compared
to a US$1.926 billion deficit at Dec. 31, 2004.  Federal-Mogul
Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill,
Bradford.  (Federal-Mogul Bankruptcy News, Issue No. 105;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


FINOVA GROUP: Gets Adverse Ruling from Dist. Court in Thaxton Case
------------------------------------------------------------------
The United States District Court for the District of Delaware
handed down a partial judgment on an action commenced by
the Official Committee of Unsecured Creditors appointed in
the chapter 11 cases of The Thaxton Group, Inc., and its
debtor-affiliates against Finova Group, Inc.

The Thaxton Entities owed Finova $108 million at Dec. 31, 2005,
under a senior secured loan agreement.

Through the Adversary Proceeding, the Thaxton Committee sought,
among other things, to avoid or equitably subordinate Finova's
liens and claims against the Thaxton Entities and recover $4
million of payments previously collected due to alleged securities
fraud, violations of banking laws and regulations, preference
payments and similar claims.

In 2003, the Thaxton Entities were declared in default under their
loan agreement with Finova after they advised Finova that they
would have to restate earnings for the first two fiscal quarters
of 2003, and after suspending payments on their subordinated
notes.  As a result of the default, Finova exercised its rights
under the loan agreement, and accelerated the indebtedness.  The
Thaxton Entities then filed for bankruptcy protection in the
U.S. Bankruptcy Court for the District of Delaware on Oct. 17,
2003, listing assets of approximately $206 million and debts of
$242 million.  The Thaxton Group had approximately 6,800 holders
of its subordinated notes that were issued in several states, with
total subordinated indebtedness of approximately $122 million.

                 Delaware District Court Ruling

The District Court found, among other things, that Finova engaged
in fraudulent conduct by purposefully structuring its Loan
Agreement in a way that allowed Thaxton to report to all of its
creditors, and particularly prospective note purchasers, that an
$8 million equity investment had been made, when in fact that
$8 million continued to be debt, and that this enabled Thaxton to
violate federal banking law.

                    Fourth Circuit Appeal

Finova is appealing an equitable subordination order entered in
Gregory v. Finova, Case No. 04-CA-2612, in the U.S. District Court
for the District of South Carolina, to the U.S. Court of Appeals
for the Fourth Circuit (Case No. 05-2118).

In a filing with the Securities and Exchange Commission, Richard
A. Ross, Finova's Senior Vice President, Chief Financial Officer &
Treasurer, laments that if the Fourth Circuit does not modify the
District Court's equitable subordination ruling, Finova's ability
to recover on its claims in the Thaxton Entities bankruptcy cases
may be materially and negatively affected, depending on the
results of other rulings in the Adversary Proceedings that may
substantially limit the effect and importance of the equitable
subordination ruling.  Among the other rulings that could affect
Finova's ability to recover its claims, either positively or
negatively, are the Delaware bankruptcy court's ruling on a
pending request seeking substantive consolidation of the Thaxton
Entities and the ability of Thaxton Group to assert claims against
the other Thaxton entities.

The Delaware Bankruptcy Court held a hearing on the substantive
consolidation issue in 2004, but has not yet ruled on the matter.
No hearing has been held on the Thaxton intercreditor issue.  Mr.
Ross adds that a material and negative impact on Finova's ability
to recover on its claims in the Thaxton Entities bankruptcy cases
would have a material adverse impact on the Company's financial
position, results of operations and cash flow.

Mr. Ross points out if there is a significant adverse final
determination against Finova in the various cases involving the
Thaxton Entities, it is unlikely that Finova would be able to
satisfy that liability due to its financial condition.  As
previously disclosed, due to FINOVA's financial condition, it does
not expect that it can satisfy all of its secured debt obligations
at maturity.  Attempts to collect on any judgment could lead to
future reorganization proceedings of either a voluntary or
involuntary nature.

                          About Thaxton

Headquartered in Lancaster, South Carolina, The Thaxton Group,
Inc., is a diversified consumer financial services company.
The Company filed for Chapter 11 protection on October 17, 2003
(Bankr. Del. Case No. 03-13183).  Daniel B. Butz, Esq.,
Michael G. Busenkell, Esq., and Robert J. Dehney, Esq., at
Morris, Nichols, Arsht & Tunnell, represent the Debtors in their
restructuring efforts.  Alan Kolod, Esq., at Moses & Singer LLP,
represents the Offical Committee of Unsecured Creditors.  As of
Dec. 31, 2005, the Debtors reported assets totaling $98,889,297
and debts totaling $175,693,613.

                          About Finova

Headquartered in Scottsdale, Arizona, The Finova Group, Inc.,
provides commercial financing to small and mid-sized businesses;
other services include factoring, accounts receivable management,
and equipment leasing.  The firm has three segments: Commercial
Finance, Specialty Finance, and Capital Markets.  FINOVA targets
such markets as transportation, wholesaling, communication, health
care, and manufacturing. Loan write-offs had put the firm on
shaky ground.  The Company and its debtor-affiliates and
subsidiaries filed for Chapter 11 protection on March 7, 2001
(U.S. Bankr. Del. 01-00697).  Daniel J. DeFranceschi, Esq., at
Richards, Layton & Finger, P.A., represents the Debtors.  FINOVA
has since emerged from Chapter 11 bankruptcy.  Financial giants
Berkshire Hathaway and Leucadia National Corporation (together
doing business as Berkadia) own FINOVA through the almost
$6 billion lent to the commercial finance company.

At Dec. 31, 2005, The FINOVA Group Inc.'s equity deficit widened
to $611,731,000 from a $534,677,000 stockholders' equity
deficit at Dec. 31, 2004.


FINOVA GROUP: No Class Certification for Thaxton Sub. Noteholders
-----------------------------------------------------------------
United States Court of Appeals for the Fourth Circuit reversed
the order of the U.S. District Court for the District of South
Carolina certifying that five actions relating to The Finova
Group, Inc.'s loan to The Thaxton Group, Inc., are a class.  The
South Carolina District Court entered the class certification
order in June 2005.

The Thaxton Entities were declared in default under their loan
agreement with Finova after they advised Finova that they would
have to restate earnings for the first two fiscal quarters of
2003, and suspended payments on their subordinated notes.
As a result of the default, FINOVA exercised its rights under the
loan agreement, and accelerated the indebtedness.  The
Thaxton Entities then filed for bankruptcy protection in the
U.S. Bankruptcy Court for the District of Delaware on Oct. 17,
2003, listing assets of approximately $206 million and debts of
$242 million.  The Thaxton Group had approximately 6,800 holders
of its subordinated notes that were issued in several states, with
total subordinated indebtedness of approximately $122 million.

The Thaxton Entities' senior secured loan from Finova totaled
$108 million at December 31, 2005.

At Finova's behest, these cases were transferred, on June 18,
2004, to the U.S. District Court for the District of South
Carolina by order of the Judicial Panel on Multidistrict
Litigation:

Plaintiff                  Court                  Filed
---------                  -----                  -----
Earle B. Gregory, et al.   Court of Common Pleas  Oct. 17, 2003
                           Lancaster County
                           South Carolina

Tom Moore, et al.          U.S. District Court    Nov. 25, 2003
                           South Carolina

Sam Jones Wood, et al.     Superior Court         Dec. 9, 2003
                           Gwinnett County
                           Georgia

Grant Hall, et al.         Superior Court         Dec. 9, 2003
                           Mecklenberg County
                           North Carolina

Charles Shope, et al.      U.S. District Court    Jan. 13, 2004
                           Southern District
                           Ohio

Each of the five Thaxton-related lawsuits are styled as class
actions, purportedly brought on behalf of certain defined classes
of people who purchased subordinated notes from the Thaxton
Entities.  The complaints by the subordinated note holders allege
claims against Finova for fraud, securities fraud, and various
other civil conspiracy and business torts in the sale of the
subordinated notes.  Each complaint seeks an unspecified amount of
damages, among other remedies.

                     Fourth Circuit's Order

The Fourth Circuit ruled that in light of an adversary proceeding
brought by Thaxton's unsecured creditors committee against Finova
in Thaxton's chapter 11 cases, class certification is not the
superior method for the fair and efficient adjudication of the
controversy.  Unless the Fourth Circuit's ruling is modified or
reversed on rehearing or appeal, the Litigations will not be
permitted to proceed as a class action and could only be pursued
as individual or arguably mass actions.

Through the Adversary Proceeding, the Thaxton Committee sought,
among other things, to avoid and/or equitably subordinate the
liens and claims of Finova against the Thaxton Entities and to
recover $4 million previously collected due to alleged securities
fraud, violations of banking laws and regulations, preference
payments and similar claims.

The Delaware District Court, in a ruling handed down on March 20,
2006, found, among other things, that Finova engaged in fraudulent
conduct by purposefully structuring its Loan Agreement in a way
that allowed Thaxton to report to all of its creditors, and
particularly prospective note purchasers, that an $8 million
equity investment had been made, when in fact that $8 million
continued to be debt, and that this enabled Thaxton to violate
federal banking law.

                          About Thaxton

Headquartered in Lancaster, South Carolina, The Thaxton Group,
Inc., is a diversified consumer financial services company.
The Company filed for Chapter 11 protection on October 17, 2003
(Bankr. Del. Case No. 03-13183).  Daniel B. Butz, Esq.,
Michael G. Busenkell, Esq., and Robert J. Dehney, Esq., at
Morris, Nichols, Arsht & Tunnell, represent the Debtors in their
restructuring efforts.  Alan Kolod, Esq., at Moses & Singer LLP,
represents the Offical Committee of Unsecured Creditors.  As of
Dec. 31, 2005, the Debtors reported assets totaling $98,889,297
and debts totaling $175,693,613.

                          About Finova

Headquartered in Scottsdale, Arizona, The Finova Group, Inc.,
provides commercial financing to small and mid-sized businesses;
other services include factoring, accounts receivable management,
and equipment leasing.  The firm has three segments: Commercial
Finance, Specialty Finance, and Capital Markets.  FINOVA targets
such markets as transportation, wholesaling, communication, health
care, and manufacturing. Loan write-offs had put the firm on
shaky ground.  The Company and its debtor-affiliates and
subsidiaries filed for Chapter 11 protection on March 7, 2001
(U.S. Bankr. Del. 01-00697).  Daniel J. DeFranceschi, Esq., at
Richards, Layton & Finger, P.A., represents the Debtors.  FINOVA
has since emerged from Chapter 11 bankruptcy.  Financial giants
Berkshire Hathaway and Leucadia National Corporation (together
doing business as Berkadia) own FINOVA through the almost
$6 billion lent to the commercial finance company.

At Dec. 31, 2005, The FINOVA Group Inc.'s equity deficit widened
to $611,731,000 from a $534,677,000 stockholders' equity
deficit at Dec. 31, 2004.


FONIX CORP: December 31 Balance Sheet Upside-Down by $15.2 Million
------------------------------------------------------------------
Hansen, Barnett & Maxwell expressed substantial doubt about Fonix
Corporation's ability to continue as a going concern after
auditing the Company's financial statements for the years ended
December 31, 2005 and 2004.  The auditing firm pointed to the
Company's significant losses and negative cash flows from
operating activities.

Hansen Barnett also noted Fonix's current accrued liabilities and
accrued settlement obligations, pending vendor accounts payable
and current portion of notes payable.

                       2005 Financials

For the 12 months ended Dec. 31, 2005, Fonix Corp. incurred a
$22,631,000 net loss on $16,191,000 of total revenues.  For the
12 months ended Dec. 31, 2004, the Company incurred a $15,148,000
net loss on $14,902,000 of total revenues.

For the year ended Dec. 31, 2005, Fonix Corp. has approximately
$10,214,000 of current accrued liabilities and accrued settlement
obligations, vendor accounts payable of 6,770,000 and current
portion of notes payable of $2,333,000.

At Dec. 31, 2005, Fonix's balance sheet shows a $19,004,000
negative working capital balance.

At Dec. 31, 2005, Fonix's balance sheet showed $9,293,000 in total
assets and $24,519,000 in total liabilities.  The Company's
balance sheet shows a $250,521,000 accumulated deficit at Dec. 31,
2005.

A full-text copy of Fonix Corp.'s latest annual report is
available for free at http://ResearchArchives.com/t/s?738

Headquartered in Sandy, Utah, Fonix Corporation --
http://www.fonix.com/fonix/index.php-- is a communications and
technology company that provides integrated telecommunications
services and value-added speech technologies through its wholly
owned subsidiaries and operation groups: Fonix Telecom Inc.,
LecStar Telecom Inc. and The Fonix Speech Group.  The combination
of interactive speech technology and integrated telecommunications
services allows Fonix to provide customers with comprehensive,
cost-effective solutions to enhance and expand their
communications needs.

As of Dec. 31, 2005, Fonix Corp.'s stockholders' equity deficit
contracted to $15,226,000 from a $2,058,000 equity deficit
reported at Dec. 31, 2004.


FRGC DEVELOPMENT: Involuntary Chapter 11 Case Summary
-----------------------------------------------------
Alleged Debtor: FRGC Development, LLC
                3605 South Flagstaff Ranch Road
                Flagstaff, Arizona 86001

Involuntary Petition Date: March 30, 2006

Case Number: 06-00842

Chapter: 11

Court: District of Arizona (Phoenix)

Petitioners' Counsel: Scott B. Cohen, Esq.
                      Sacks Tieerney P.A.
                      4250 North Drinkwater Boulevard, 4th Floor
                      Scottsdale, Arizona 85251-3693
                      Tel: (480) 425-2616

                            -- and --

                      Janessa E. Koenig, Esq.
                      Jaburg & Wilk, P.C.
                      3200 North Central Avenue, Suite 2000
                      Phoenix, Arizona 85012
                      Tel: (602) 248-1000

                            -- and --

                      Philip R. Rupprecht, Esq.
                      Hebert Schenk
                      4742 North 24th Street, Suite 100
                      Phoenix, Arizona 85016-4858
                      Tel: (602) 248-8203

   Petitioner                  Nature of Claim    Amount of Claim
   ----------                  ---------------    ---------------
Robert Lutz as                 Secured,               $13,815,333
Trustee of the Lutz Family     Unsecured
71 Biltmore Estates            Loans and Fees
Phoenix, AZ 85016

Martz & Associates, Inc.       Breach of Contract,       $246,457
dba The Martz Agency           Pending Lawsuit
7020 East Acoma Drive
Scottsdale, AZ 85254

Vincent Goett                  Unpaid & Earned           $290,000
6400 North 48th Street         Fees
Paradise Valley, AZ 85253


GENERAL MOTORS: Faulty Financials Prompt Moody's Ratings Review
---------------------------------------------------------------
Moody's Investors Service maintained its review for possible
downgrade on General Motors Acceptance Corporation's Ba1 long-term
rating and Residential Capital Corporation's Baa3 long-term and
Prime-3 short-term ratings.  These actions follow the announcement
by the two firms and their parent, General Motors, that certain
prior period financial statements cannot be relied upon, as
disclosed in securities filings made by the firms.  Concurrently,
Moody's said it downgraded GM's corporate family rating to B3 with
a negative outlook.

Moody's believes that the further weakening at GM puts additional
negative pressure on GMAC's stand-alone credit profile.  This is
due to the substantial direct and indirect exposures GMAC
currently has to GM.  However, Moody's maintained GMAC's Ba1 long-
term rating, on review for possible downgrade, because it believes
that a successful conclusion of the GMAC sale process could have
positive implications for GMAC's current stand-alone credit
profile, corporate governance and control.  This could lead to the
confirmation of GMAC's ratings at their current level.

In the absence of a sale transaction, Moody's said that it would
re-link GMAC's ratings with GM's ratings.  This would most likely
result in the assignment of a Ba3 long-term rating to GMAC, absent
the occurrence of additional deterioration to its credit profile
resulting from internal issues or further GM stress.  In addition,
Moody's would monitor the structural subordination of GMAC's
unsecured creditors, and their potential loss given default, given
the likely increased reliance upon securitization financing in
this scenario.

Moody's also stated that even if the sale of GMAC does not take
place it would most likely maintain the current Baa3 and Prime-3
ratings of ResCap.  This rating action would reflect Moody's
expectation that ResCap would likely be sold on its own if the
GMAC sale efforts are abandoned.  Moody's review of ResCap's
ratings is focusing on any further accounting or control issues,
the company's continued efforts to extinguish its intercompany
debt with GMAC, and the progress made on GM's sale of GMAC.

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.

ResCap is a holding company for the real estate financing
businesses of GMAC, including GMAC-RFC Holding and GMAC
Residential Holding Corp.


GENERAL MOTORS: S&P Puts B Corporate Credit Rating on Neg. Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed all its ratings,
including its 'B' long-term and 'B-3' short-term corporate credit
ratings, on General Motors Corp. on CreditWatch with negative
implications.  This action stems from:

   * GM's disclosure in its 2005 10-K that the recent restatement
     of its previous financial statements raises potential issues
     regarding access to its $5.6 billion standby credit facility;
     and

   * the possibility that certain lease obligations of as much as
     $3 billion could be subject to possible claims of:

     -- acceleration,
     -- termination, or
     -- other remedies.

At a minimum, GM could have seek waivers on financial reporting
requirements from lenders, which could put pressure on its
liquidity.  Standard & Poor's understands that no similar issues
exist under General Motors Acceptance Corp.'s (GMAC's) various
bank facilities.  GM's balance sheet debt stood at about $32
billion at Dec. 31, 2005.

The need to attend to this issue adds to the various challenges
that management continues to face on a number of non-operating
issues beyond solidifying access to bank credit facilities,
including:

   * the situation at Delphi Corp.;
   * the possible sale of GMAC; and
   * various accounting and other investigations.

GMAC ('BB/B-1') and all GMAC-related entities, including
Residential Capital Corp. (ResCap; 'BBB-/A-3'), are already on
CreditWatch with developing implications, given GM's announced
intention to sell a majority stake in GMAC.  The ratings on ResCap
are two notches above GMAC's, its direct parent, reflecting
ResCap's ability to operate its mortgage businesses separately
from GMAC's auto finance business, from which ResCap is partially
insulated by financial covenants and governance provisions.
However, Standard & Poor's continues to link the ratings on ResCap
with those on GMAC because of the latter's full ownership of
ResCap.

"Although the primary reason for GM's CreditWatch listing is its
uncertain access to existing or new bank facilities," said
Standard & Poor's credit analyst Robert Schulz, "the resolution of
the CreditWatch will also encompass other ongoing concerns,
including the potential for work stoppages at Delphi and possible
costly resolution for GM, as well as our primary concern -- GM's
North American operations."

Standard & Poor's will also consider progress on the sale of a
controlling stake in GMAC.  The rating agency expects to resolve
this review once GM's access to existing or new bank facilities
becomes more certain, or sooner if other developments such as the
Delphi situation warrant.

Previously, Standard & Poor's indicated that if these financial
reporting issues had any near-term effect on GM's liquidity, the
ratings could be placed on CreditWatch with negative implications.
Standard & Poor's continues to view GM's unrestricted cash
balances as likely to be adequate, given a total of $20.4 billion
at Dec. 31, 2005, including available amounts in the short-term
VEBA fund.

Standard & Poor's believes current cash and VEBA balances remain
close to year-end levels.  Still, the rating agency is concerned
that GM is facing an incremental decrease in liquidity because of
an uncertain period of questionable access to its bank facility.
This reduced liquidity is occurring at the same time as various
potential calls on liquidity are looming -- for example, probable
upcoming resolution of issues at Delphi that could be costly to
GM.

Standard & Poor's expects GM to act to remedy these uncertainties,
possibly by establishing a new bank facility secured with certain
assets as permitted under existing indentures.  Were a secured
bank facility to be established, Standard & Poor's would review
the effect of contractual subordination on the unsecured debt, and
depending on the level of security granted, the unsecured debt
rating could be lowered.


GENERAL MOTORS: Mulls Sale of Isuzu Shares
------------------------------------------
General Motors disclosed that it is exploring the possible sale of
its interest in Isuzu Motors Ltd.

The Company said that any sale of the Isuzu shares will not have
any effect on existing strategic alliances with the Japanese
carmaker.  Isuzu is GM's core alliance partner and the two
companies are involved in many long-term mutually beneficial
projects.

The Wall Street Journal reporter Kae Inoue says GM is in talks to
sell its $340 million stake in Isuzu to Itochu Corp., Mitsubishi
Corp. and Mizuho Financial Group Inc.

Early this month, GM raised approximately $2 billion from the sale
of most of its stake in Suzuki Motor Corp.  As reported in the
Troubled Company Reporter on March 8, 2006, that transaction
reduced GM's equity interest in Suzuki from 20.4% to 3%.

Last week, Kohlberg Kravis Roberts & Co., completed the
acquisition of a majority interest in GMAC Commercial Holding
Corp. from General Motors Acceptance Corporation.

GMAC, GM's wholly owned financial services subsidiary, sold 78% of
its equity in GMACCH, in exchange for more than $1.5 billion in
cash.  At the closing, GMACCH also repaid to GMAC approximately
$7.3 billion of inter-company loans, bringing GMAC's total cash
proceeds from the transaction to almost $9 billion.

                        About General Motors

General Motors Corp. -- http://www.gm.com/-- the world's largest
automaker, has been the global industry sales leader for 75 years.
Founded in 1908, GM today employs about 327,000 people around the
world.  With global headquarters in Detroit, GM manufactures its
cars and trucks in 33 countries.  In 2005, 9.17 million GM cars
and trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn and Vauxhall.  GM operates one of the
world's leading finance companies, GMAC Financial Services, which
offers automotive, residential and commercial financing and
insurance.  GM's OnStar subsidiary is the industry leader in
vehicle safety, security and information services.

                          *     *     *

As reported in the Troubled Company Reporter on Mar. 21, 2006,
Moody's Investors Service placed the B2 long-term rating of
General Motors Corporation on review for possible downgrade and
lowered the company's Speculative Grade Liquidity to SGL-2 from
SGL-1.  Moody's also changed the review status of General Motors
Acceptance Corporation's Ba1 long-term rating to "review for
possible downgrade" from "review with direction uncertain" and
confirmed GMAC's Not Prime short-term rating.  In addition,
Moody's changed the review status of ResCap's senior unsecured
Baa3 and short-term Prime-3 ratings to "review for possible
downgrade" from "review with direction uncertain."  These rating
actions follow GM's announcement that it will delay filing its
annual report on Form 10-K with the SEC due to an accounting issue
regarding the classification of cash flows at ResCap, the
residential mortgage subsidiary of GMAC.


GMAC COMMERCIAL: Fitch Lifts $6.6MM Class J Certs.' Rating to BB+
-----------------------------------------------------------------
Fitch Ratings upgraded and removed from Rating Watch Positive
GMAC Commercial Mortgage Securities Inc.'s mortgage pass-through
certificates, series 2000-C1 as:

   -- $30.8 million class E to 'AAA' from 'A+'
   -- $15.4 million class F to 'AA' from 'A-'
   -- $22.0 million class G to 'A-' from 'BBB-'
   -- $15.4 million class H to 'BBB-' from 'BB'
   -- $6.6 million class J to 'BB+' from 'BB-'

Fitch also affirms the following classes:

   -- $27.9 million class A-1 at 'AAA'
   -- $537.2 million class A-2 at 'AAA'
   -- Interest-only class X at 'AAA'
   -- $37.4 million class B at 'AAA'
   -- $41.8 million class C at 'AAA'
   -- $8.8 million class D at 'AAA'
   -- $8.8 million class K at 'B+'
   -- $11.0 million class L at 'B-'

The $2.9 million class N and $6.6 million class M certificates
maintain 'D' and 'C' ratings respectively.

The rating upgrades are due to:

   * increased credit enhancement from scheduled amortization; and
   * an increase in defeasance since Fitch's last rating action.

Thirty loans (29%) have defeased since issuance.  As of the March
2006 distribution date, the transaction's aggregate principal
balance has decreased 12.34% to $771.3 million from $879.9 million
at issuance.

There are currently three loans (3%) in special servicing,
including two real estate owned assets.  The largest specially
serviced asset (1.62%) is an industrial facility in
Dearborn, Michigan, and is expected to be listed for sale in the
near future.  Fitch expects a loss once the property is
liquidated.

The second largest specially serviced loan (1.22%) is an office
property located in Schaumburg, Illinois.  Fitch expects the
property to be sold and the transaction to incur a loss shortly.

Fitch reviewed Equity Inns Portfolio secured by 19 limited service
and extended stay hotels located across 12 states and maintains a
below investment grade credit assessment.  The revenue per average
room (RevPar) was $62.5 with 71% occupancy, based on year-to-date
third quarter 2005 servicer provided operating statements.  This
was an improvement compared to year-end 2004 when RevPar and
occupancy was $57 and 68.35%, respectively.  Fitch will review the
YE 2005 statements when they become available.


GMAC COMMERCIAL: Fitch Lifts $9.6MM Class L Certs.' Rating to BB
----------------------------------------------------------------
Fitch Ratings upgraded and removed from Rating Watch Positive
GMAC Commercial Mortgage Securities, Inc.'s mortgage pass-through
certificates, series 2000-C3 as:

   -- $54.0 million class B to 'AAA' from 'AA+'
   -- $12.1 million class D to 'AAA' from 'A'
   -- $35.1 million class E to 'AA+' from 'BBB'
   -- $19.1 million class F to 'AA-' from 'BBB-'
   -- $8.0 million class G to 'A+' from 'BBB-'
   -- $9.9 million class H to 'A' from 'BB+'
   -- $4.5 million class K to 'BBB-' from 'BB-'

In addition, Fitch upgrades these classes:

   -- $57.1 million class C to 'AAA' from 'A+'
   -- $25.5 million class J to 'BBB' from 'BB'
   -- $9.6 million class L to 'BB' from 'B+'

Fitch also affirms these classes:

   -- $71.7 million class A-1 at 'AAA'
   -- $851.4 million class A-2 at 'AAA'
   -- Interest-only class X at 'AAA'
   -- $15.9 million class M at 'B'
   -- $3.2 million class N at 'B-'
   -- $3.2 million class O at 'CCC'
   -- $12.8 million class S-MAC-1 at 'A-'
   -- $9.0 million class S-MAC-2 at 'BBB'
   -- $5.4 million class S-MAC-3 at 'BB+'
   -- $14.3 million class S-MAC-4 at 'BB'

Fitch does not rate classes P and S-AM.  Classes S-MAC-1, S-MAC-2,
S-MAC-3, and S-MAC-4 represent the interest in the trust fund
corresponding to the junior portion of the MacArthur Center loan.

The rating upgrades reflect increased credit enhancement due to a
loan payoff, scheduled amortization and additional defeasance of
eight loans (5.8%) since the last Fitch rating action.  Twenty-
eight loans (20.3%) have been defeased to date.  As of the March
2006 distribution date, the pool's collateral balance has
decreased 6.5% to $1.23 billion from $1.32 billion at issuance.

Currently, there are five specially serviced loans (0.7%) in the
transaction.  The largest specially serviced loan (0.27%) consists
of 11 apartment buildings located around the Quad Cities in
Illinois and Iowa and remains 90+ days delinquent.  The borrower
filed bankruptcy in December 2004 on the date of a foreclosure
sale.  The special servicer approved a loan modification in
October 2005, which required debt service payments to recommence
in February 2006.

The second largest specially serviced loan (0.18%) is a
multifamily property located in Beaumont, Texas, which is current.
The loan had transferred to special servicing in October 2004, due
to imminent default.  The borrower had disputed the required
amounts of monthly replacement reserves.  Progress on the loan
workout was impeded by damage incurred from Hurricanes Katrina and
Rita.  The borrower has since brought the loan current and upon
payment of certain outstanding expenses, the loan will be returned
to the master servicer.

Fitch reviewed the transaction's three credit assessed loans and
their underlying collateral.  Due to their stable performance, the
senior portions of the loans retain their investment grade credit
assessments.

The Arizona Mills loan (11.3%) is secured by a 1.23 million square
feet regional mall and is located in Tempe, Arizona.  Occupancy as
of June 2005, is 94.2% compared with 96.5% as of year-end 2004.

The MacArthur Center loan (7.7%) is secured by 528,846 square feet
in a 942,662 square feet regional mall in Norfolk, Virginia.
Occupancy remains at 100% as of October 2005.

The AmeriSuites loan (2.4%) is secured by eight limited service,
cross-collateralized, cross-defaulted hotels located in eight
states.  As of September 2005, the occupancy is 71%, compared with
70% as of YE 2004.


GOODYEAR TIRE: SEC Closes Accounting-Related Probe
--------------------------------------------------
The Securities and Exchange Commission terminated its
investigation into accounting matters included in a restatement of
The Goodyear Tire & Rubber Company's financial results, first
disclosed in October 2003.

The SEC notified Goodyear that it will not recommend enforcement
action against the company.  SEC also terminated its investigation
and will not recommend enforcement action against the company's
former chief financial officer and former chief accounting
officer.

Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company
(NYSE: GT) -- http://www.goodyear.com/-- is the world's largest
tire company.  The company manufactures tires, engineered rubber
products and chemicals in more than 90 facilities in 28 countries.
It has marketing operations in almost every country around the
world.  Goodyear employs more than 80,000 people worldwide.

                         *     *     *

Goodyear's 9% Senior Notes due 2015 carry Moody's Investor
Service's B3 rating, Standard & Poor's B- rating, and Fitch
Ratings' CCC+ rating.


HANDEX GROUP: GAIC Wants Handex-Harris County Contract Terminated
-----------------------------------------------------------------
Great American Insurance Company asks the U.S. Bankruptcy Court
for the Middle District of Florida in Orlando to deem the contract
for channel conveyance and basin improvements between Handex
Construction Services, Inc., and Harris County, Texas rejected.
In the alternative, GAIC asks the Court to lift the automatic stay
to permit Harris County to terminate the Contract.

As surety for the Debtor's performance and payment bond under
Texas Law, GAIC provided the Debtor financial support in
completing the Contract after it filed for bankruptcy protection.
Currently, however, the Debtor is unable to complete the work
under the Contract due to lack of financial assistance.

To avoid any potential loss from the Debtor's delayed performance
on the Contract, T. Scott Leo, Esq., at Leo & Weber, PC, in
Chicago, Illinois, argues, the Contract must be terminated to
allow GAIC's prompt takeover or tender of a new contractor for the
completion of the Contract work.

GAIC asserts an equitable interest in the Contract funds to the
extent it incurs a loss completing the Contract and to the extent
of any right to setoff it may possess.  Harris County also claims
liquidated damages due to loss incurred as a result of delays on
the Contract.  Hence, GAIC asks the Court's authority to make
arrangements for the completion of the Contract work by replacing
the Debtor as the contractor of record and to use and recover the
Contract funds to reimburse its losses and to setoff remaining
funds for other losses incurred.

Headquartered in Mount Dora, Florida, Handex Group Inc. --
http://www.handex.com/-- and its affiliates help companies solve
environmental issues.  The Debtors offer management and consulting
services, which include remediation, regulatory support, risk
management, waste minimalization, health and safety training, data
support, engineering and construction services.  The Debtors filed
for chapter 11 protection on Nov. 23, 2005 (Bankr. M.D. Fla. Case
No. 05-17617).  Mariane L. Dorris, Esq., and R. Scott Shuker,
Esq., at Gronek & Latham LLP, represent the Debtor.  The U.S.
Trustee advised the Bankruptcy Court on Dec. 30, 2005, that there
was insufficient interest among the Debtor's unsecured creditors
in order to form an official committee.  When the Debtors filed
for protection from their creditors, they listed estimated assets
and debts of $10 million to $50 million.


HAWS & TINGLE: Picks Ford Nassen to Prosecute Construction Claims
-----------------------------------------------------------------
Haws & Tingle, Ltd., seeks authority from the U.S. Bankruptcy
Court for the Northern District of Texas in Dallas to employ
Ford Nassen & Baldwin P.C., as its special counsel.

The Debtor wants to hire Ford Nassen to sue Hensel Phelps
Construction Company or the DFW International Airport Board for
claims related to construction of the Maintenance & Storage
Facility Building as part of DFW's Automated People Mover project.

Jeffrey A. Ford, Esq., an attorney at Ford Nassen, states that the
firm will charge for its legal services on a contingency basis.

According to Mr. Ford, if the Complaint succeeds, the law firm
will first recover the costs and expenses it disbursed in
connection with the Complaint.  If the case is settled prior to
commencement of trial, the law firm will collect a 25% contingency
fee.  The contingency fee increases to 1/3 if a trial is necessary
and 40% in the event it becomes necessary to defend a judgment on
appeal.

Mr. Ford assures the Court that Ford Nassen does not hold any
interest adverse to the Debtor and is a "disinterested person" as
that term is defined in Section 101(14) of the Bankruptcy Code.

Ford Nassen & Baldwin, P.C., is a construction law firm based in
Dallas, Texas.

                       About Haws & Tingle

Headquartered in Fort Worth, Texas, Haws & Tingle, Ltd., is a
building contractor.  The Debtor filed for chapter 11 protection
on October 6, 2005 (Bankr. N.D. Tex. Case No. 05-82478).  Mark
Edward Andrews, Esq., and Omar J. Alaniz, Esq., at Neligan Tarpley
Andrews & Foley LLP represent the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it estimated assets and debts between $10 million to $50 million.


HEALTHSOUTH CORP: Net Loss Doubles Year-Over-Year in 2005
---------------------------------------------------------
HealthSouth Corporation filed its Annual Report on Form 10-K,
including its audited financial statements, for the year ended
Dec. 31, 2005, with the Securities and Exchange Commission on
March 29, 2006.

HealthSouth incurred a $446 million net loss for the year ended
Dec. 31, 2005, compared with a $174.5 million net loss in 2004.
The net loss in 2005 includes a previously disclosed $215 million
non-cash charge relating to a global, preliminary agreement in
principle to settle litigation and other restructuring costs, on
net revenues of $3.2 billion. Consolidated Adjusted EBITDA was
$629.1 million in 2005.

"We're pleased that our consolidated adjusted EBITDA was
consistent with our expectations, which underscores the
fundamental strength of HealthSouth's business model and
positioning in our core segments," said HealthSouth President and
Chief Executive Officer Jay Grinney.  "The company's underlying
cash flow continues to be strong.  While cash flow provided by
operations declined from $391.6 million in 2004 to $1.6 million in
2005, the significant decline is related primarily to government
settlement payments and cash used in discontinued operations."

HealthSouth Chief Financial Officer John Workman said,
"HealthSouth's multi-year process of reconstructing its historical
accounting records is now complete.  We have also made significant
improvements in effectively remediating a number of previously
reported internal control weaknesses.  Filing our 2005 Form 10-K
within the timeframe prescribed by the SEC is another significant
step in HealthSouth's progress and we want to thank the many
people who have tirelessly dedicated their time and efforts in the
preparation and filing of this important document."

                       Internal Controls

HealthSouth notes that the 2005 Form 10-K includes an unqualified
opinion from PricewaterhouseCoopers LLP, the company's independent
auditor, as to the fair presentation of the financial statements
included in the Form 10-K.

The company further notes that the 2005 Form 10-K contains an
unqualified opinion with respect to the company's assessment of
its internal control over financial reporting but contains an
adverse opinion with respect to the effectiveness of the company's
internal control over financial reporting, which is consistent
with the company's assessment.

Since Dec. 31, 2004, the company has significantly reduced the
number of material weaknesses.  Improvements in internal controls
include improved company-wide policies and procedures over the
financial close and reporting process, implementation of an anti-
fraud program, substantial improvements to the corporate
governance process and updated and enhanced procedures with
respect to the review, supervision, and monitoring of accounting
operations at the facility level.

The Company's balance sheet at Dec. 31, 2005, showed
$3,592,213,000 in total assets, $4,859,192,000 in liabilities and
$273,742,000 of minority interests, resulting in a $1,540,721,000
stockholders deficit.

A full-text copy of the regulatory filing is available for free
at http://researcharchives.com/t/s?73d

                         About HealtSouth

HealthSouth Corporation -- http://www.healthsouth.com/-- is one
of the nation's largest providers of outpatient surgery,
diagnostic imaging and rehabilitative healthcare services,
operating facilities nationwide.

HealthSouth Corporation's balance sheet showed a $1,540,721,000
stockholders' deficit at Dec. 31, 2005, a $1,109,420,000
stockholders' deficit at Dec. 31, 2004, and a $963,837,000 deficit
at Dec. 31, 2003.



HOST MARRIOTT: S&P Rates Proposed $600 Million Sr. Notes at BB-
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' rating to
Host Marriott Corp.'s proposed $600 million senior notes due 2016.

Host is proposing to offer the notes in a private placement and
use the proceeds to fund a portion of the cash consideration for
the company's pending purchase of hotels from Starwood Hotels &
Resorts Worldwide Inc. (BB+/Positive/--).  All other ratings for
Host were affirmed, including the 'BB-' corporate credit rating.
The outlook is stable.

"The ratings on Host reflect its highly leveraged financial
profile and, as a REIT, its reliance on external sources of
capital for growth," said Standard & Poor's credit analyst Emile
Courtney.

These factors are tempered by:

   * Host Marriott's high-quality and geographically diversified
     hotel portfolio;

   * high barriers to entry for new competitors because its hotels
     are primarily located in urban and resort markets or in close
     proximity to airports;

   * strong brand relationships;

   * experienced management team; and

   * the expectation that management remains intent on continuing
     to improve its balance sheet, despite a proposed sizable
     acquisition of 35 Starwood-branded hotels for $3.8 billion.

Since the November 2005 announcement, three Canadian hotels have
been removed from the deal because Starwood was unable to obtain a
necessary tax ruling and the overall purchase price was reduced by
$276 million.

As of Dec. 30, 2005, Host Marriott owned 107 luxury and upscale
full-service hotels, with more than 55,000 rooms, predominantly
in:

   * urban,
   * airport, and
   * resort locations

in the:

   * U.S.,
   * Canada, and
   * Mexico.

Host Marriott has signed a definitive merger agreement to acquire
35 luxury and upper upscale hotels for $3.8 billion from Starwood.
The transaction is expected to close in early April 2006.  Upon
completion of this acquisition, about:

   * 64% of Host Marriott's revenues will be generated from
     Marriott brands; and

   * 23% from Starwood brands.

Other brands in the portfolio include:

   * Hyatt,
   * Fairmont,
   * Swiss"tel,
   * Four Seasons, and
   * Hilton.

The new portfolio will have good geographic diversification; its
largest regional exposure is expected to be in California, with
about 20% of total revenues.


INDYMAC TRUST: Moody's Places Class B Certificate Rating at Ba2
---------------------------------------------------------------
Moody's Investors Service assigned Aaa ratings to the senior
certificates issued by IndyMac Residential Mortgage-Backed Trust,
Series 2006-L1 and ratings ranging from Baa3 to Ba2 to the
subordinated certificates in the deal.

The securitization is backed by IndyMac Bank F.S.B. originated
adjustable-rate and fixed-rate mortgage lot loans.  The ratings
are based primarily on the credit quality of the loans, and on the
protection from subordination, overcollateralization, excess
spread and, in the case of the senior certificates, a financial
guarantee policy issued by Ambac Assurance Corporation.  Moody's
expects collateral losses to range from 3.75 % to 4.25%.

The Class B certificates are privately offered certificates to a
limited number of "qualified institutional investors" within the
meaning of Rule 144A of the Securities Act of 1933, as amended.

IndyMac Bank F.S.B. will be the servicer of the lot loans.

The complete rating actions are:

       IndyMac Residential Mortgage-Backed Trust 2006-L1

                    * Class A-1, Assigned Aaa
                    * Class A-2, Assigned Aaa
                    * Class A-3, Assigned Aaa
                    * Class M, Assigned Baa3
                    * Class B, Assigned Ba2


INTERNATIONAL PAPER: Selling Wisconsin Land For $83 Million
-----------------------------------------------------------
International Paper (NYSE: IP) is selling 69,000 acres of
forestland in Wisconsin to The Nature Conservancy, as part of
efforts to explore the sale of some or all of its U.S. forestland.
Proceeds from the sale are expected to total approximately $83
million.  The agreement also includes a fiber supply agreement.

The "Wild Rivers Legacy Forest" project represents the largest
land conservation effort in Wisconsin's history and one that will
protect working forests, public access for recreation, wildlife
habitat, and water quality.

"International Paper is proud to be part of this important
transaction in Wisconsin.  It comes on the heels of our
announcement yesterday to protect 218,000 acres of southern
forestland, which was IP's largest conservation agreement ever.
Today we continue our legacy of protecting forestlands here in
Wisconsin.  We applaud The Nature Conservancy and the state of
Wisconsin's leaders for taking this important step to protect the
state's forests," said David Liebetreu, International Paper vice
president of forest resources.

Yesterday, International Paper, The Nature Conservancy, and The
Conservation Fund announced a 218,000-acre, 10-state conservation
project, which represents the largest single private conservation
transaction in the history of the South.  The $300 million project
protects key lands clustered around some of the South's most
ecologically important rivers and estuaries.

Private and non-profit conservation groups continue to express
interest in additional International Paper land holdings, and the
company will continue to explore those opportunities.

                    About International Paper

International Paper Inc. -- http://www.internationalpaper.com/--
is the world's largest paper and forest products company.
Businesses include paper, packaging, and forest products.  As one
of the largest private forest landowners in the world, the company
manages its forests under the principles of the Sustainable
Forestry Initiative (R) (SFI) program, a system that ensures the
continual planting, growing and harvesting of trees while
protecting wildlife, plants, soil, air and water quality.

                         *     *     *

As reported in the Troubled Company Reporter on July 22, 2005,
Moody's Investors Service placed International Paper Company's
ratings on review for possible downgrade.

International Paper Company:

   * Senior Unsecured Baa2
   * Subordinate Shelf (P)Baa3
   * Preferred Shelf (P)Ba1
   * Commercial Paper P-2

International Paper Capital Trust II:

   * Bkd Preferred Stock Baa3
   * International Paper Capital Trust III:
   * Bkd Preferred Shelf Baa3

International Paper Capital Trust IV:

   * Bkd Preferred Shelf (P) Ba1
   * International Paper Capital Trust VI:
   * Bkd Preferred Shelf (P) Ba1

Champion International Corporation:

   * Senior Unsecured Baa2
   * Federal Paper Board Co., Inc.
   * Senior Unsecured Baa2

Union Camp Corporation:

   * Senior Unsecured Baa2


INTERPUBLIC GROUP: Fitch Lowers Preferred Stocks' Ratings to CCC
----------------------------------------------------------------
Fitch Ratings downgraded Interpublic Group (IPG) as:

   -- Issuer default rating to 'B' from 'B+'

   -- Senior unsecured credit facility to 'B' from 'B+' (Recovery
      Rating 'RR4');

   -- Senior unsecured notes to 'B' from 'B+' (Recovery Rating
      'RR4')

   -- Cumulative convertible perpetual preferred stock to 'CCC'
      from 'CCC+' (Recovery Rating 'RR6')

   -- Mandatory convertible preferred stock to 'CCC' from 'CCC+'
      (Recovery Rating 'RR6')

The Rating Outlook is Negative.

The downgrade and Negative Outlook reflect heightened operational
and financial risk given an extended time frame for its
operational turn around and what Fitch believes is reduced
liquidity associated with recent amendments made to IPG's $500
million credit facility.  Fitch notes IPG has not used this
facility in two years; however, the amendments make future
borrowing unlikely.  In order to borrow, IPG would be required to
maintain $300 million in deposits at the bank syndicate in
addition to the balance of any borrowings.  This amendment
effectively reduces $300 million in bank facility capacity that
Fitch had expected IPG would have access to while it attempts its
operational turn around.  IPG and its bank group have also amended
the covenants on the bank facility for year end 2005 and the first
two quarters of 2006, removing the interest coverage and debt to
EBITDA covenants and revising the minimum EBITDA thresholds to:

   * $233 million,
   * $175 million, and
   * $100 million, respectively.

The ratings continue to reflect:

   * weak financial performance which has been driven by numerous
     accounting and operational challenges;

   * continued integration issues from IPG's restructuring
     initiatives, including major management changes, the ongoing
     material weaknesses and internal control issues, which have
     yet to be remedied; and

   * ongoing risk of client losses.

These risks are balanced somewhat by IPG's position in the
industry as a leading global advertising holding company and its
diverse client base with long-term relationships with key
accounts.

Fitch had expected a very weak 2005 and had forecasted weakness in
credit metrics through the first half of 2006.  Fitch understood
that negative effects of client losses on revenues, combined with
an under utilized staff pitching new business and significant
professional fees associated with the control issue remediation
efforts would elevate cost levels significantly, and would result
in significant deterioration in EBITDA levels through mid-2006.

The timeframe for an operational turnaround has been extended as
Fitch now believes the operating and financial profile may not
improve until well into 2007 and that IPG faces significant
challenges in reaching a normalized operating and financial
profile by 2008.  As such, Fitch's revenue expectations and
Fitch's projected operating EBITDA are weaker than Fitch's prior
expectations.  Fitch expects IPG to make steady progress toward
improved operating fundamentals, as measured by meaningful,
consistent organic growth trends (above 2% initially) and
healthier EBITDA margins (above 10%).

Fitch recognizes that IPG has been proactive in bolstering its
financial flexibility, issuing $500 million in preferred stock in
October of 2005 and maintaining the cash on its balance sheet.
Fitch expects IPG to continue to improve financial flexibility
while demonstrating progress on addressing its operational issues
as described previously.

Its liquidity position is supported by approximately $2 billion in
cash at year-end 2005.  Fitch incorporates into its analysis the
meaningful working capital deficit (in excess of $1.5 billion)
resulting from short term payables which exceed receivables.
Fitch expects that IPG will be free cashflow negative in 2006.
Near-term flexibility is enhanced by the minimal debt maturities
IPG faces in 2006 and 2007 and by Fitch's belief that capital
expenditures are largely discretionary.  IPG's next meaningful
maturity is in 2008, when its $800 million 4.5% convertible senior
notes due 2023 are putable by the note holders for cash.

The Recovery Ratings and notching reflect Fitch's recovery
expectations under a distress scenario.  Fitch has used an
enterprise value analysis for these recovery ratings, given the
limited tangible asset base which exists in this company.  The
'RR4' recovery rating for IPG's bank facility and senior unsecured
notes reflects Fitch's belief that approximately 30%-50% recovery
is realistic, and the 'RR6' recovery rating for the preferred
stock reflects Fitch's estimate that negligible recovery would be
achievable.


INTERSTATE BAKERIES: Selling Dorchester Lot to Tenean for $3.55M
----------------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates seek the
authority of the U.S. Bankruptcy Court for the Western District of
Missouri to sell their property located at 60 Tenean Street, in
Dorchester, Massachusetts, to Tenean Properties, LLC, for
$3,550,000, subject to higher and better bids.

The Dorchester Property is comprised of a 0.71-acre land with a
48,159-square foot building.  The Debtors are no longer using the
Property in connection with their business operations, Samuel S.
Ory, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Chicago,
Illinois, tells the Court.

Hilco Industrial, LLC, and Hilco Real Estate, LLC, assisted the
Debtors in the sale and marketing of the Dorchester Property.

The Sale Agreement provides for a $355,000 Escrow Deposit.

The Debtors will deliver good and marketable fee simple title to
the Land and Improvements, free and clear of liens, other than
Permitted Exceptions.  The Property is being sold as-is, where-
is, with no representations or warranties, reasonable wear and
tear, casualty and condemnation excepted.

The Bid Deadline for the sale of the Dorchester Property is
April 5, 2006, as may be extended by the Debtors in their sole
discretion, Mr. Ory relates.  An auction is set for April 10,
2006, as may be changed in the Debtors' sole discretion.
Qualified Bidders will be permitted to participate in the Auction
by teleconference.

The Sale Agreement provides for a $3,700,000 Minimum Bid.  The
Debtors have agreed to provide Bid Protection to the Proposed
Purchaser in the form of a termination fee equal to $71,000,
which is 2% of the Purchase Price.  The Debtors have also agreed
to pay reasonable and documented expense reimbursement of up to
$50,000, to the Proposed Purchaser.

The Debtors reserve the right to elect not to hold an Auction, to
change the time and location of the Auciton, and to impose other
terms and conditions as they may determine to be in their best
interests.

In connection with the sale of the Dorchester Property, the
Debtors propose to pay to the City of Boston, Massachusetts, tax
collector:

   -- $33,124 in principal for real and personal property taxes
      that are due and owing for the 2004-2005 tax year and its
      interest at an accruing annual rate of 6% beginning on the
      date that statutory interest began to accrue on the past
      due balance; and

   -- $0 in penalties with respect to any and all delinquent
      taxes with respect to the Property.

The payments will be in full satisfaction of all real property
taxes for the Property for the tax year 2004-2005 and all prior
tax years.  The Debtors and the Successful Bidder will prorate
2005-2006 real and personal property taxes as of the Closing Date
in accordance with the terms of the Successful Sale Agreement.

The Debtors will publish notices and advertisements of the
proposed sale in the Boston Globe before April 5, 2006.  The
Debtors ask the Court to deem the notice as proper notice to any
other interested parties whose identities are unknown to them.

                    About Interstate Bakeries

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.  Kenneth A. Rosen, Esq., at
Lowenstein Sandler, PC, represents the Official Committee of
Unsecured Creditors.  Peter D. Wolfson, Esq., at Sonnenschein Nath
& Rosenthal, LLP, represents the Official Committee of Equity
Security Holders.  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. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000)


INTERSTATE BAKERIES: Settling Class Action After Court Lifts Stay
-----------------------------------------------------------------
Dennis Gianopolous, Mary K. Frost and Lisa Drucker are the
proposed representatives of putative class in a class action
lawsuit against Interstate Bakeries Corporation currently pending
in the Circuit Court of Cook County, Illinois, County Department,
Chancery Division.

The Action arose out of the discovery of materials that allegedly
contaminated certain products produced over a 17-day period in
January 1998 at a bakery operated by the Debtors in Illinois.

After the discovery, the Debtors conducted a product recall and
offered to give a full refund to people returning the product.
The refunds and credits represented approximately $5,000,000 or
approximately 50% of the products purchased.

On November 22, 2004, the parties entered into a stipulation
under which, among other things, the Claims asserted in the
Action were exempted from inclusion in the Debtors' procedures
for liquidating and settling tort claims.  A then pending request
for relief from the automatic stay was denied without prejudice,
and the Debtors' rights and defenses to any stay relief were
reserved.

The Class filed a motion for relief from the automatic stay to
resume the Action in March 2005.  Thereafter, the Debtors
submitted a response opposing the Stay Relief Motion.

On September 12, 2005, while discussions continued about a
possible settlement, the Debtors filed an objection to Claim Nos.
6267 and 6268 seeking to have the Court determine the merits of
the Claims asserted in the Action.

After an arm's-length negotiation, the parties have agreed to
compromise and settle their dispute.  The salient terms of the
Settlement Agreement, which is subject to approval of the
Bankruptcy Court and Illinois Court, are:

    (a) The Debtors will cause to be issued by customary placement
        27,000,000 coupons each with a redemption value of $0.35
        for a total face value of $9,450,000.  The coupons will be
        usable for purchases of any Multipack.  The coupons may be
        combined without limit and will have an expiration date 60
        days from the date of issuance.  Within 120 days of Final
        Approval of the Settlement, the Debtors will arrange for
        the coupons to be circulated within a specified 23-state
        area.

    (b) The Debtors agree not to object to a request by Class
        Counsel to the Illinois Court for a total of $500,000 in
        attorneys' fees, costs and expenses and to pay the Court
        award to that amount.  The award of attorneys' fees, costs
        and expenses will become an allowed general unsecured
        claim in the Debtors' cases.

    (c) The Debtors agree not to object to a request by Class
        Counsel to the Illinois Court for $1,500 for the benefit
        of Dennis Gianopolous and $1,200 ($600 each) for the
        benefit of Mary K. Frost and Lisa Drucker.  The award will
        become an allowed general unsecured claim.

Pursuant to Sections 362 and 363 of the Bankruptcy Code and Rule
9019 of the Federal Rules of Bankruptcy Procedure and at the
Debtors' behest, the Court:

    (1) modified the automatic stay to allow them to proceed with
        the Action for the purpose of conducting a fairness
        hearing seeking approval for and implementation of the
        Settlement Agreement,

    (2) approved the Settlement Agreement, and

    (3) conditionally approved the issuance of the coupons in the
        Settlement Agreement and these claims in favor of the
        Class counsel and representatives:

           (i) up to a $500,000 general prepetition unsecured
               claim for Class counsel, as determined by the
               Illinois Court; and

          (ii) $1,500 for Dennis Gianopolous, and $600 each for
               the benefit of Mary K. Frost and Lisa Drucker.

                    About Interstate Bakeries

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.  Kenneth A. Rosen, Esq., at
Lowenstein Sandler, PC, represents the Official Committee of
Unsecured Creditors.  Peter D. Wolfson, Esq., at Sonnenschein Nath
& Rosenthal, LLP, represents the Official Committee of Equity
Security Holders.  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
Nos. 36 & 37; Bankruptcy Creditors' Service, Inc., 215/945-7000)


IPIX CORP: Losses Prompt Auditors to Raise Going Concern Doubt
--------------------------------------------------------------
In compliance with Nasdaq Marketplace Rule 4350(b)(1)(B), IPIX
Corporation's (Nasdaq:IPIX) independent auditors, Armanino McKenna
LLP, included an explanatory paragraph in its Annual Report on
Form 10-K for the year ended Dec. 31, 2005, stating concern on the
Company's ability to continue as going concern.  A similar
explanatory paragraph was included in the Company's Annual Report
on Form 10-K for the years ended Dec. 31, 2003 and 2004.  The
Company has suffered recurring losses and negative cash flow from
operations that raises substantial doubt about its ability to
continue as a going concern.

In 2005, the Company took certain action to reduce its costs and
raise additional funds.  In June 2005, the Company completed a
$10 million private placement of common stock to a group of
existing and new institutional investors.  In August 2005 the
Company reduced its staff in both its Reston, Virginia and Oak
Ridge, Tennessee offices.  In November, further staff and costs
were reduced in Oak Ridge, Tennessee.  Although difficult, these
cost-cutting measures enabled IPIX to streamline its processes and
become more strategic in its focus on technology and vertical
markets.  Management monitors the Company's cash position
carefully and evaluates its future operating cash requirements
with respect to its strategy, business objectives and performance.

While the Company has extensive experience in 360-degree
technology, it has limited experience addressing the emerging IP
360-degree video market.  As such, the Company has a limited
operating history under its current business model, upon which an
evaluation of its business and prospects in 2006 may be made.

In addition, the Company is subject to generally prevailing
economic conditions and, as such, the Company's operating results
in 2006 will be dependent upon its ability to provide quality
products and services, the success of its customers and the
appropriations processes of various commercial and governmental
entities.  Management believes the Company will have to acquire
additional working capital through financing to supplement working
capital from operations to meet its funding needs for 2006.  There
can be no assurance that such additional financing will be
available or if available, that such financing can be obtained on
terms satisfactory to the Company.  If the Company is not able to
raise additional funds, it may be required to significantly
curtail its operations, which would have an adverse effect on its
financial position, results of operations and cash flow.

                     About IPIX Corporation

Headquartered in Reston, Virginia, IPIX Corporation --
http://www.ipix.com/-- is a premium provider of immersive imaging
products for government and commercial applications.  The company
combines experience, patented technology and strategic
partnerships to deliver visual intelligence solutions worldwide.
The company's immersive, 360-degree imaging technology has been
used to create high-resolution digital still photography and video
products for surveillance, visual documentation and forensic
analysis.


J.G. WENTWORTH: S&P Puts B- Long-Term Counterparty Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' long-term
counterparty credit rating to J.G. Wentworth LLC.  The outlook is
stable.  In addition, we also assigned a bank loan rating of 'B',
and a recovery rating of '1'.

The bank loan rating reflects Standard & Poor's belief that:

   * there is meaningful embedded value in the company's customer
     database (its main asset); and

   * the recovery rating of '1' indicates a high expectation for
     full recovery of principal in the event of a payment default.

The five-year term loan will be secured by:

   * database customer lists,
   * trademarks, and
   * a pledge of capital stocks from related entities.

Loan proceeds are being used to buy out existing shareholder
interests.  All book equity at the end of 2005, approximately $155
million, plus an additional $39 million, is being upstreamed to
the company's owners, which are comprised of management and the
private equity firm, JLL Partners (71% ownership interest).  As a
result, the company will go from having a positive tangible net
worth of $28 million at Dec. 31, 2005, to negative tangible equity
of $165 million.

The rating takes into account Standard & Poor's conclusion that
capital matters for this type of business.  "While the credit
quality of most counterparties is strong, and the company has
recorded only minimal losses on the 12,315 court-ordered
settlements purchased since June 2000, we do not believe that
credit risk is nonexistent, and believe that some positive equity
is required," said Standard & Poor's credit analyst Ernest D.
Napier.

Wentworth's business is the purchasing and servicing of structured
settlements.  A structured settlement is a contractual agreement
whereby a claimant is compensated for damages through a series of
payments over time, usually arising from an out-of-court
negotiated settlement.  Wentworth will pay the claimant a lump sum
for these future cash streams at a significant discount and then
securitize the associated receivable at a substantial cash
premium (currently averaging 131% of purchase price.)

The company has a customer database of unpurchased receivables-
including amendments and new fundings from qualified leads-that,
under various stress scenarios, should generate sufficient
secondary market value to repay the $200 million secured bank
loan.  Standard & Poor's default scenario assumes:

   * a slowdown in new originations and conversions of existing
     customers;

   * the erosion in the high cash premiums that are realized at
     the time of securitizations; and

   * adverse change in the legal environment.

This scenario would have a direct negative effect on the economics
of the business and thus on the economic value of the customer
database.  Nevertheless, Standard & Poor's believes that the
customer database should maintain sufficient value to repay the
secured bank loan.

The outlook is stable.  The company is limited in its ability to
pay additional dividends as part of the loan's covenants.  Over
time it is possible that the company could begin to rebuild equity
and accumulate sufficient unencumbered residuals (and even
unrestricted cash) that would elicit a more favorable rating
outcome.  Nevertheless, within the next two years, it is doubtful
that the company could restore its capitalization to a positive
surplus of a magnitude that could affect the rating.


KAISER ALUMINUM: PBGC & VEBA Agree to Stock Transfer Restrictions
-----------------------------------------------------------------
Section 172 of the Internal Revenue Code of 1986, as amended,
permits a corporation to carry forward net operating losses to
offset future income, thereby reducing federal income tax
liability on the future income and significantly improving the
corporation's cash position.

Section 382 of the IRC limits the amount of taxable income that
can be offset by a corporation's NOL carryforwards in any taxable
year following an "ownership change".

Under Section 382(l)(5), a corporation is generally not subject
to the limitations imposed by Section 382 with respect to an
ownership change resulting from consummation of a Chapter 11
plan, provided that, under that plan, qualified creditors or the
debtor's shareholders, immediately before the relevant ownership
change, emerge from the reorganization owning at least 50% of the
total value and voting power of the debtor's stock immediately
after the ownership change.

Alternatively, if the Section 382(l)(5) safe harbor does not
apply, either because the corporation elects out of that
provision or because its requirements are not satisfied, then
under Section 382(l)(6) of the IRC, the appropriate value of the
debtors for purposes of calculating the Section 382 limitation
reflects the increase in value of the debtors resulting from any
surrender or cancellation of creditors' claims in the transaction
as well as new investment pursuant to the plan.

Kaiser Aluminum Corporation and its debtor-affiliates expect that
they will:

    (a) qualify for the Section 382(l)(5) safe harbor; and
    (b) elect to have Section 382(l)(6) of the IRC apply.

Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, relates that upon emergence, the
Reorganizing Debtors expect to have NOLs in excess of
$500,000,000 to offset future income.  The Reorganizing Debtors
estimated the projected cash savings from the use of the NOLs to
have a present value of approximately $65,000,000 to $85,000,000.

If the Reorganizing Debtors qualify for the Section 382(l)(5)
safe harbor, their United States consolidated tax group may use
the NOLs to offset the group's future income, thereby reducing
the corresponding federal income tax liability and improving the
group's cash position.

          Plan-related Agreements With PBGC & VEBA Trusts

Under the Reorganizing Debtors' Plan of Reorganization:

    (1) the Pension Benefit Guaranty Corporation,

    (2) the voluntary employees' beneficiary association trusts
        benefiting certain hourly and salaried retirees, and

    (3) the Asbestos Personal Injury Trust,

are the only known creditors entitled to receive 5% or more of
the equity in Reorganized Kaiser Aluminum Corporation.

Under the Plan, upon the Reorganizing Debtors' emergence, the
PBGC and the VEBA Trusts will collectively hold more than 80% of
the common stock in the Reorganized KAC:

    * the PBGC will be entitled to receive approximately 16%;

    * the Union VEBA Trust will be entitled to receive
      approximately 57%; and

    * the Retired Salaried Employee VEBA Trust will be entitled to
      receive approximately 9%.

To avoid an ownership change following the effective date of the
Plan and to preserve their ability to use the NOLs after
emergence for the benefit of all creditors, the Reorganizing
Debtors have included stock-transfer restrictions in certain
Plan-related documents.

In particular, the Certificate of Incorporation for Reorganized
KAC prohibits, with certain exceptions, the transfer of equity
securities, including common stock, in Reorganized KAC if either:

    (a) the transferor holds 5% or more of the total fair market
        value of all issued and outstanding securities; or

    (b) as a result of that transfer:

         (i) any person or group of persons would become a 5%
             Shareholder; or

        (ii) the percentage of stock ownership in Reorganized KAC
             of any 5% Shareholder would be increased.

In addition, the Reorganized Debtors, the PBGC and the Union VEBA
Trust will, on the Effective Date of the Plan, enter into the
Stock Transfer Restriction Agreement and the Registration Rights
Agreement.

The Stock Transfer Restriction Agreement prevents the PBGC and
the Union VEBA Trust from transferring or otherwise disposing of
more than 15% of the total number of shares of the stock issued
to each under the Plan in any 12-month period without prior
written approval of Reorganized KAC's board of directors in
accordance with Reorganized KAC's Certificate of Incorporation.

In the Registration Rights Agreement, the PBGC and the Union
VEBA Trust acknowledge that all resales of Registrable Securities
are subject to the terms of the Stock Transfer Restriction
Agreement and the restrictions on transfer contained in
Reorganized KAC's Certificate of Incorporation.

Ms. Newmarch relates that the Reorganizing Debtors have recently
become aware that certain parties have expressed interest in
acquiring all or a portion of the PBGC's or the VEBA Trusts'
claims against the Reorganizing Debtors or rights to
distributions under the Plan.  In fact, some discussions among
the parties have already occurred.

The Reorganizing Debtors are concerned that any disposition by
the PBGC or the VEBA Trusts could make them ineligible for the
benefits of the Section 382(l)(5) safe harbor, which will
constitute an attempt to "exercise control over property of the
estate" in violation of Section 362(a)(3) of the Bankruptcy Code.

Moreover, any disposition could require the Reorganizing
Debtors to modify the Plan because certain dispositions will
require changes to the Reorganized KAC's Certificate of
Incorporation, the Stock Transfer Restriction Agreement or the
Registration Rights Agreement, which could delay the confirmation
process.

To ensure the preservation of certain carryforwards of net
operating losses and that any agreement will not delay the
confirmation process, the Reorganizing Debtors ask Judge
Fitzgerald to prohibit the PBGC and the VEBA trusts from entering
into agreements regarding their claims or rights to distributions
under the Plan without prior Court approval.

                       About Kaiser Aluminum

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


KAISER ALUMINUM: Asks Dist. Court to Consolidate Insurers' Appeals
------------------------------------------------------------------
As reported in the Troubled Company Reporter on Mar. 9, 2006,
Twenty-four insurers took an appeal from Judge Fitzgerald's order
and findings of fact and conclusions of law confirming the Second
Amended Plan of Reorganization filed by Kaiser Aluminum
Corporation and its debtor-affiliates, to the U.S. District Court
for the District of Delaware.

The Insurers want the District Court to review the Bankruptcy
Court's decision.

The Insurers are:

     (1) ACE Property & Casualty Company
     (2) AIU Insurance Company
     (3) Central National Insurance Company of Omaha
     (4) Century Indemnity Company
     (5) Columbia Casualty Company
     (6) Continental Insurance Company
     (7) First State Insurance Company
     (8) Granite State Insurance Company
     (9) Harbor Insurance Company
    (10) Hartford Accident and Indemnity Company
    (11) Industrial Indemnity Company
    (12) Industrial Underwriters Insurance Company
    (13) Insurance Company of the State of Pennsylvania
    (14) Landmark Insurance Company
    (15) Lexington Insurance Company
    (16) National Union Fire Insurance Company of Pittsburgh, Pa.
    (17) New England Reinsurance Corporation
    (18) New Hampshire Insurance Company
    (19) Nutmeg Insurance Company
    (20) Pacific Employers Insurance Company
    (21) Republic Indemnity Company
    (22) TIG Insurance Company
    (23) Transcontinental Insurance Company
    (24) Transport Insurance Company

Pursuant to Rule 9033 of the Federal Rules of Bankruptcy
Procedure, the Insurers also filed separate requests asking the
District Court to conduct a de novo review of Judge Fitzgerald's
findings of fact and conclusions of law, to the extent that these
are proposed findings of fact and conclusions of law to the
District Court.

The Plan Proponents initially filed their Joint Response to the
insurers' request for de novo review of the Confirmation Findings
with the Bankruptcy Court "because [as of February 24] there is
not yet a pending case relating to confirmation in the District
Court."

The Plan Proponents are:

    -- the Reorganizing Debtors,

    -- the Official Committee of Unsecured Creditors,

    -- the Official Committee of Asbestos Claimants,

    -- the Official Committee of Retired Employees,

    -- Martin J. Murphy, as Legal Representative for Future
       Asbestos Claimants, and

    -- Anne M. Ferrazi, as Legal Representative for Future Silica
       and Coal Tar Pitch Volatiles Claimants.

The Plan Proponents note repeatedly that they expect the District
Court to address the issues raised in their Joint Response.

Thus, Columbia Casualty Insurance Company, Transcontinental
Insurance Company, Harbor Insurance Company, and Continental
Insurance Company asks Judge Fitzgerald to:

    (a) disregard the Plan Proponents' Joint Response because they
        raise matters properly within the jurisdiction of, and
        addressed to, the District Court; and

    (b) give the Insurers a full opportunity to address the
        substance and procedure of their Appeals and Rule 9033
        requests before the District Court.

           Plan Proponents Seek Consolidation of Appeals

The Plan Proponents ask the District Court to:

    (a) consolidate all appeals filed by the 24 insurers and
        Duncan McNeill;

    (b) waive the mediation ordinarily required pursuant to the
        District Court's Standing Order dated July 23, 2004;

    (c) proceed without further briefing of the issues; and

    (d) schedule a hearing prior to April 10, 2006, to consider
        the Bankruptcy Court's Findings of Fact and Conclusions of
        Law regarding Confirmation of the Debtors' Plan of
        Reorganization.

Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, explains that the Plan Proponents want the
appeals consolidated because each Appeal seeks a review of the
Confirmation Order and raises the same legal issues.

The Plan Proponents also seek a waiver of mediation and an
expedited hearing of their request because any further delay in
obtaining the District Court's affirmation of the Confirmation
Order may have an adverse effect and will create an unnecessary
risk for the Reorganizing Debtors' businesses, Ms. Newmarch points
out.

Moreover, the Reorganizing Debtors' postpetition financing
facility and commitment for exit financing expire on May 11,
2006.  To ensure that the Bankruptcy Court approval of any
extension can be timely obtained, the Reorganizing Debtors will be
required to file a request with the Bankruptcy Court no later than
April 10, 2006, seeking an extension of the maturity date of their
postpetition financing and an extension of the commitment for
their exit financing.

The filing of that request for extension itself could have an
adverse effect on the Reorganizing Debtors, Ms. Newmarch points
out.  Among other things, a further request for an extension
beyond May 11, 2006:

    -- may cause the Reorganizing Debtors' customers and suppliers
       to develop mistaken impressions about when emergence will
       occur;

    -- may adversely affect the customers' and suppliers'
       confidence in the Reorganizing Debtors' business and
       reorganization prospects;

    -- will undermine the lenders' confidence in the Reorganizing
       Debtors, requiring them, as a result, to pay substantial
       fees associated with any resulting amendment to their
       postpetition facility; and

    -- may cause the lenders to modify the current terms of the
       financing facilities.

The Plan Proponents believe that a hearing prior to April 10,
2006, will ensure that those adverse effects from the filing of an
extension request are avoided or largely mitigated.

Furthermore, Ms. Newmarch tells the District Court that delays in
the Reorganizing Debtors' emergence will:

    * prevent the implementation of the Reorganizing Debtors'
      post-emergence strategic plans and programs for 2006;

    * adversely affect their ability to compete in the
      marketplace;

    * cause substantial operating costs and administrative
      expenses.  The Reorganizing Debtors' restructuring costs
      now range between $2,000,000 and $3,000,000 per month; and

    * prevent them from making distributions to creditors,
      payments to tort claimants, and payments to hourly and
      salaried retirees.

The Insurers will not be prejudiced at all by the District
Court's expedited consideration of the Confirmation Order and
Confirmation Findings, Ms. Newmarch says.

                  Seven Groups of Insurers Respond

Certain insurers agree with the Plan Proponents' requests to:

    -- consolidate the Appeals and for a de novo review of Judge
       Fitzgerald's findings of fact and conclusions of law
       pursuant to Rule 9033 of the Federal Rules of Bankruptcy
       Procedure; and

    -- waive mediation, as mediation is not likely to achieve
       resolution of the matter.

The Insurers are:

    (1) Republic Indemnity Company

    (2) Transport Insurance Company formerly known as Transport
        Indemnity Company

    (3) Columbia Casualty Insurance Company, Transcontinental
        Insurance Company, Harbor Insurance Company, and
        Continental Insurance Company -- collectively called CNA

    (4) TIG Insurance Company

    (5) Republic Indemnity Company

    (6) Ace Property & Casualty Company, formerly known as Cigna
        Property & Casualty Company formerly known as Aetna
        Insurance Company, Central National Insurance Company Of
        Omaha, Century Indemnity Company, Industrial Indemnity
        Company, Industrial Underwriters Insurance Company, and
        Pacific Employers Insurance Company

    (7) AIU Insurance Company, Granite State Insurance Company,
        Insurance Company of the State of Pennsylvania, Landmark
        Insurance Company, Lexington Insurance Company, National
        Union Fire Insurance Company and New Hampshire Insurance
        Company

The Insurers do not agree with the Plan Proponents' request to do
away with further briefing of the issues on appeal, Richard W.
Riley, Esq., at Duane Morris LLP, in Wilmington, Delaware, tells
the District Court.  Mr. Riley represents Republic Indemnity.

Mr. Riley notes that the Plan Proponents would have the District
Court believe that the preemption issue has long since been
decided in their favor in the Third Circuit in In re Combustion
Eng'g, 391 F. 3rd 190 (3rd Cir. 2005) and that the District Court
is bound by precedent.

The Plan Proponents' reliance on the Combustion Engineering case
is misplaced, Mr. Riley asserts.  The Court of Appeals in
Combustion Engineering affirmed the settled principle that an
interest of the debtor in property -- a debtor's interest in the
proceeds of its insurance policies -- is property of the debtor's
estate within the meaning of Section 541(c)(1), regardless of any
contractual anti-assignment provision.

The Third Circuit did not, however, reach the question of whether
Section 1123(a)(5) preempts otherwise enforceable contractual
provisions precluding assignment of "insurance rights" to a trust,
Mr. Riley points out.  The only Circuit decision that directly
addressed that issue, which is In re Pacific Gas & Electric Corp.,
350 F.3d 932 (9th Cir. 2003), refutes the Plan Proponents' Section
1123(a)(5) express preemption argument.

The Insurers maintain that briefing is necessary.  Contrary to the
Plan Proponents' arguments, the issues were not "fully briefed in
the Bankruptcy Court," Mr. Riley indicates.  The prior briefs in
the Bankruptcy Court, Mr. Riley says, were written before:

    -- the confirmation hearing;

    -- the colloquy between the Bankruptcy Court and insurers'
       representatives, which illuminate Judge Fitzgerald's
       legally flawed reasoning supporting her Confirmation
       Findings; and

    -- Judge Fitzgerald issued the Confirmation Order and the
       Confirmation Findings.

Carmella P. Keener, Esq., at Rosenthal, Monhait & Goddess, P.A.,
in Wilmington, Delaware, on behalf of CNA, disagrees with the
Plan Proponents' proposal that the parties rely on the same briefs
before the District Court as were filed with the Bankruptcy Court.

The Insurers note that the affirmance or reversal of the
Bankruptcy Court's preemption ruling on appeal will not impair the
Plan Proponents' ability to consummate their Plan.  The Plan
itself contemplates a scenario where federal preemption is
rejected by the federal courts, in which case the permissible
scope of the proposed assignment will be decided among many other
issues in an on-going California coverage litigation instituted by
the Debtors prepetition.

Although the Insurers agree with the Plan Proponents that the
matter can be briefed and heard, based on the Court's
availability, in a relatively short period of time, Mr. Riley
contends that the proposed timeline is neither reasonable nor
workable.  Under normal procedures, briefing is usually done on a
40-day schedule, after which oral argument is ordinarily held.

Assuming that the mandatory mediation requirement is waived by the
District Court, the Insurers are willing to agree to a reasonable
shortening of the schedule, Mr. Riley says.  But the Plan
Proponents seek extreme relief -- barring all briefs in the
District Court and holding oral argument on or before April 10,
2006, barely 26 days after the record was transmitted to the
District Court and a mere 14 days from the filing of the
Response.

Mr. Riley notes that the only reason offered by the Plan
Proponents for their "extreme" request is that the Reorganizing
Debtors' postpetition financing commitment is set to expire on
May 11, 2006.  If the Reorganizing Debtors wish to extend that
commitment they must file a request with the Bankruptcy Court on
or before April 10, 2006.

Considering the known inherent uncertainties of the litigation
process, the Reorganizing Debtors had no reasonable assurance and
certainly no entitlement to locking in their exit financing by
May 11, 2006, Mr. Riley points out.  An extension of financing is
not sufficient enough to justify depriving the Insurers of their
fundamental due process rights in the Appeals, he says.

The Insurers ask the District Court to:

    (a) consolidate the Appeals and Rule 9033 Requests in a single
        proceeding;

    (b) waive the mediation requirement; and

    (c) set a reasonable schedule for the consolidated proceeding,
        which will allow them a reasonable time to file and argue
        their briefs.

                       About Kaiser Aluminum

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


KB HOME: Moody's Puts Ba1 Rating on New $300MM 7.25% Senior Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to KB Home's new
issue of $300 million of 7.25% senior notes due June 15, 2018,
which will be used to fund out drawings under the company's
revolver.  At the same time, Moody's affirmed all of the company's
existing ratings, including the ratings on the company's existing
senior notes at Ba1 and on its senior subordinated debt at Ba2.
The ratings outlook is positive.

The positive ratings outlook reflects Moody's expectation that KB
Home will fund its current share repurchase program through
reduced land purchases and will continue to work towards bringing
its reported debt leverage metric to below 45%.

The ratings incorporate the company's leading share position in
many of the markets that it serves, successful track record both
in de novo expansions and in integrating numerous acquisitions,
and its long and successful history through various housing
cycles.  However, the ratings also consider the financial and
integration risks that accompany an aggressive expansion strategy,
the still-sizable concentration of land inventory values and
profits in California, the growing proportion of profits coming
out of one market-Las Vegas, and the historically large share
repurchase program.

Going forward, consideration for further improvement in the
company's ratings will depend largely on management's capital
structure discipline.  Moody's would view positively a permanent
reduction in reported debt/capitalization to the 40% - 45% level
and to adjusted debt/capitalization to between 45% - 50%.  Factors
that could stress the ratings and outlook going forward include a
sizable increase in the size and pace of share repurchases, a
large impairment charge, or a major acquisition involving large
amounts of issued or assumed debt that had a significant effect on
debt leverage.

Founded in 1957 and headquartered in Los Angeles, California, KB
Home is one of America's largest homebuilders, with domestic
operating divisions in the following regions and states: West
Coast -- California; Southwest -- Arizona, Nevada and New Mexico;
Central -- Colorado, Illinois, Indiana and Texas; and Southeast --
Florida, Georgia, North Carolina and South Carolina.  Kaufman &
Broad S.A., the company's 49%-owned subsidiary, is one of the
largest homebuilders in France.  KB Home's fiscal 2005 revenues
and net income were $9.4 billion and $842 million, respectively.


KING PHARMACEUTICALS: Prices $400-Mil. Conv. Senior Notes Offering
------------------------------------------------------------------
King Pharmaceuticals, Inc. (NYSE:KG) disclosed the pricing of $400
million of convertible senior notes due 2026 in a private
offering.  In addition, the Company has granted the initial
purchasers of the notes an option to purchase up to an additional
$60 million aggregate principal amount of notes to cover over-
allotments.

The notes pay interest semiannually at a rate of 1.25% per year
and will be convertible upon the occurrence of specified events,
at an initial conversion rate of 48.0031 shares of common stock
per $1,000 principal amount of notes (representing a conversion
price of approximately $20.83 per share).  The notes will also pay
contingent interest commencing on April 1, 2013, if the trading
price of the notes reaches a specified level. Upon conversion, the
Company will pay cash equal to the lesser of the principal amount
and the conversion value of such notes, based upon a specified
observation period, and, if the conversion value exceeds the
principal amount, cash or shares of its common stock as the
Company may elect as payment for the premium.  The notes are
guaranteed by the Company's domestic subsidiaries.

The Company intends to use the net proceeds from the offering to
repurchase from time to time or redeem its 2-3/4% Convertible
Debentures due November 15, 2021, and for general corporate
purposes.

Headquartered in Bristol, Tennessee, King Pharmaceuticals --
http://www.kingpharm.com/-- is a vertically integrated branded
pharmaceutical company.  King, an S&P 500 Index company, seeks to
capitalize on opportunities in the pharmaceutical industry through
the development, including through in-licensing arrangements and
acquisitions, of novel branded prescription pharmaceutical
products in attractive markets and the strategic acquisition of
branded products that can benefit from focused promotion and
marketing and product life-cycle management.

                         *     *     *

As reported in the Troubled Company Reporter on Mar. 27, 2006,
Moody's Investors Service affirmed the ratings of King
Pharmaceuticals, Inc., including the Ba3 Corporate Family Rating,
Ba2 senior secured revolver due 2007, and Ba3 senior unsecured
guaranteed convertible debentures due 2021.  Following the rating
action, the rating outlook remains negative.

As reported in the Troubled Company Reporter on Oct. 4, 2005,
Standard & Poor's Ratings Services affirmed its ratings on King
Pharmaceuticals Inc., including the 'BB' corporate credit rating,
and removed them from CreditWatch, where they were placed with
negative implications on Feb. 28, 2005.  The CreditWatch listing
followed the cancellation of King Pharmaceuticals' potential
acquisition by Mylan Laboratories Inc.  S&P said the rating
outlook is negative.


LEAR CORP: S&P Downgrades Senior Unsecured Rating to B- from BB+
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on automotive supplier Lear Corp. to 'B+' from 'BB+'.
The downgrade reflects:

   * the sharp deterioration in Lear's operating performance
     during 2005; and

   * the expectation that earnings and cash flow generation will
     remain below previously expected levels for the next few
     years.

The senior unsecured rating on the company was lowered to 'B-'
from 'BB+', two notches below the corporate credit rating, because
of structural subordination concerns and because there has been an
increase in the amount of the company's higher ranking, secured
liabilities.

Both the corporate credit and senior unsecured ratings were
removed from CreditWatch with negative implications, where they
were placed Jan. 25, 2006.  The ratings assume that the company
will successfully raise at least $800 million in new secured debt
to refinance upcoming debt maturities.

At the same time, Standard & Poor's assigned a 'B-2' short-term
corporate credit rating to Lear.

Southfield, Michigan-based Lear has total debt of about $3 billion
(including operating leases and securitized accounts receivable)
and underfunded employee benefit liabilities of $580 million.  The
outlook is negative.

Lear reported pretax income of $103 million for 2005 (excluding
$1.1 billion of special charges).  This is a sharp decline from
its solid earnings in prior years.  The weakened financial
performance stemmed from:

   * reduced automotive production in North America;
   * volatile production schedules;
   * unfavorable shifts in product mix;
   * unusually high new-product launch costs; and
   * higher raw-material costs.

Cash flow generation was negative $400 million.  Also, Lear's
credit protection measures have weakened dramatically.  After it
is adjusted for underfunded benefit liabilities, Lear's ratio of
funds from operations to debt declined to 8% in 2005 from 25% in
2004, and debt to EBITDA increased to 4.8x from 2.9x.

"Although Lear is expected to improve its financial results during
2006, we believe the improvement will be modest, and that Lear's
earnings and cash flow will remain depressed in the near term,"
said Standard & Poor's credit analyst Martin King.

Continued challenges will come from Lear's customer concentration:
Its two largest clients:

   * Ford Motor Co. (BB-/Negative/B-2), and
   * General Motors Corp. (GM; B/Watch Neg/B-3),

together represent about 50% of sales.

Both companies are suffering from market share losses and
intensified competitive pressures, and both are engaged in
restructuring activities designed to reduce production capacity
and lower their cost structures.  Lear's own business profile has
deteriorated significantly along with the declining fortunes of
Ford and GM.

Additional challenges facing Lear include persistently high raw
material costs, which are well in excess of the amount recovered
from customers.  The company is also suffering from unfavorable
product mix as consumers shy away from gas-guzzling SUVs.
Furthermore the company must offer assistance to its own
distressed suppliers, who have been unable to cope with the
business challenges facing the industry.  And Lear is confronting
extensive restructuring plans, mainly focused on its distressed
interior components segment.


LEAR CORP: Secures $800 Mil. Loan Commitment & Suspends Dividends
-----------------------------------------------------------------
The Board of Directors of Lear Corporation (NYSE: LEA) approved
several significant actions to strengthen the company's financial
flexibility and reposition the company's operational focus.

These include the approval of bank commitments for $800 million in
secured term loans, an agreement in principle to contribute
substantially all of Lear's European Interior Products business to
the joint venture with WL Ross & Co. LLC and the suspension of the
company's dividend program.

"The senior leadership of Lear understands that near-term
challenges within the automotive sector are weighing heavily on
investors' minds," said Bob Rossiter, Lear's chairman and chief
executive officer.  "By refinancing our 2007 debt maturities
early, investors can be assured that the company is financially
sound and focused on improving our longer-term operating
performance."

Lear has received commitments from four of its largest global
lenders, JPMorgan Chase Bank, N.A., Bank of America, N.A.,
Citibank, N.A. and Deutsche Bank, to provide Lear with an
aggregate $800 million of secured term loans.  The term loans will
mature no earlier than March 2012 and are expected to be made on
market terms.  A portion of the proceeds will be used to refinance
the company's $400 million term loan scheduled to mature in
February 2007.  The remaining proceeds are expected to fund the
retirement of Lear's outstanding convertible senior notes and for
general corporate purposes.  The financing commitments are subject
to customary terms and conditions.

In connection with the new term loan facilities, the company's
primary credit facility would be amended and restated to, among
other things, provide additional collateral for both the company's
existing revolving credit facility and the new term loans,
increase the interest rates applicable to the revolving credit
facility and provide additional flexibility under the facility's
existing financial covenants through 2007.

The amendment and restatement of the company's primary credit
facility will require the consent of lenders holding a majority of
the outstanding commitments.  The banks who provided the financing
commitments for the term loans have agreed to support the proposed
amendment . The amendment and restatement of the credit facility
and the new term loan facility are expected to be completed in the
second quarter.

Additionally, Lear's Board of Directors approved an agreement in
principle to contribute substantially all of the company's
European Interior Products operations to International Automotive
Components Group, Lear's joint venture with WL Ross & Co. LLC and
Franklin Mutual Advisers LLC.  The transaction is consistent with
the framework agreement the parties entered into last fall to
explore strategic opportunities in the automotive interior
components sector.

IAC was recently formed to acquire the principal businesses of
Collins & Aikman Corporation in Europe.  In exchange for its
European Interiors business, Lear expects to receive a 34% equity
stake in the joint venture.  The transaction is subject to
negotiation of definitive documentation as well as customary
conditions, including the receipt of all required regulatory
approvals, and is expected to close before June 30, 2006.

Lear's European Interior operations that are being contributed to
the joint venture include nine manufacturing locations generating
about $750 million in annual sales, as well as certain management
and operational support functions.  The combined European Interior
operations of Lear and Collins & Aikman would represent the
largest enterprise of its kind in Europe, and provide a solid
platform for improving ongoing operating performance.

The Board also suspended Lear's quarterly cash dividend program to
provide an additional measure of liquidity cushion given current
industry conditions.  "While we regret having to suspend the
dividend program, management is focused on preserving the
company's financial flexibility in a very challenging industry
environment," Rossiter continued.  "At the same time, the entire
Lear team is working to improve our ongoing financial results,
with an emphasis on improving cash flow and taking further
aggressive actions to address our under-performing Interior
Products business globally."

                         Lear Corporation

Headquartered in Southfield, Michigan, Lear Corporation --
http://www.lear.com/-- is one of the world's largest suppliers of
automotive interior systems and components.  Lear provides
complete seat systems, electronic products and electrical
distribution systems and other interior products.  With annual net
sales of $17.1 billion, Lear ranks #127 among the Fortune 500.
The company's world-class products are designed, engineered and
manufactured by a diverse team of 115,000 employees at 282
locations in 34 countries.  Lear's and Lear is traded on the New
York Stock Exchange under the symbol [LEA].

                          *     *     *

As reported in the Troubled Company Reporter on March 22, 2006,
Moody's Investors Service lowered Lear's Corporate Family and
Senior Unsecured Debt ratings to B2 from Ba2.  The actions
reflected deterioration in Lear's operating performance and
prospects below previous expectations.  Leverage is anticipated to
remain elevated over the intermediate term.

As reported in the Troubled Company Reporter on March 20, 2006,
Fitch downgraded Lear's Issuer Default Rating to 'B' from 'BB+',
and the company's senior unsecured debt and secured bank agreement
to 'B+' from 'BB+.  Approximately 53% of Lear's 2005 revenues were
to Ford and GM, which face capacity reductions and declining
production over the next several years.  A Recovery Rating of
'RR3' has been assigned, indicating that in the event of further
deterioration in financial and operating results to the point
where the company sought Chapter 11 protection, recovery values on
secured bank facilities and senior unsecured debt are projected to
be between 50%-70%.  The Rating Outlook remains Negative.


LEGACY ESTATE: Gets Court OK to Hire Deloitte as Restr. Advisor
---------------------------------------------------------------
The Bankruptcy Court for the Northern District of California
authorized The Legacy Estate Group LLC and its debtor-affiliates
to employ Deloitte Financial Advisory Services, LLP, as their
restructuring advisor, nunc pro tunc to Dec. 15, 2005.  The Court
entered its order on March 17, 2005.

As reported in the Troubled Company Reporter on Jan. 27, 2006,
Deloitte Financial will:

     a) advise the Debtors as they establish various reporting
        processes required in their bankruptcy cases;

     b) assist the Debtors with the production of relevant
        budgeting and forecasting, cash flow projections and
        operating and business plans;

     c) assist the Debtors in upgrading and streamlining their
        accounting and reporting functions and related practices
        and procedures;

     d) provide the Debtors with advice and recommendations
        designed to refine their cash management processes,
        including the monitoring of actual cash flow versus
        projections;

     e) assist the Debtors understand the business and financial
        impact of various operational, financial and strategic
        restructuring alternatives;

     f) assist the Debtors in gathering and evaluating information
        regarding leases, contracts and agreements in relation to
        their bankruptcy cases;

     g) assist the Debtors in the financial restructuring process,
        including the development of a plan of reorganization;

     h) assist the Debtors with respect to human resources issues;

     i) assist the Debtors in preparing internal and external
        communications related to restructuring and bankruptcy;

     j) assist the Debtors in negotiations and due diligence
        efforts with other parties-in-interest;

     k) assist the Debtors in evaluating and reconciling claims
        asserted, including PACA and reclamation claims;

     l) attend and participate as a technical advisor in hearings
        and meetings on matters within the scope of the services
        to be performed under its engagement, including providing
        expert testimony; and

     m) provide advice and recommendations with respect to issues
        regarding the integration of the Debtor's accounting
        systems that arise during the course of its engagement.

The hourly rate for Deloitte Financial's professionals are:

        Designation                          Hourly Rate
        -----------                          ------------
        Partner/Principal/Director           $475 to $525
        Senior Manager                       $360 to $395
        Manager                              $310 to $340
        Senior Consultant                    $275 to $305
        Consultant                           $210 to $230

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

Headquartered in Saint Helena, California, The Legacy Estate Group
LLC -- http://www.freemarkabbey.com/-- owns Freemark Abbey
Winery, which produces a range of red, white, and dessert wines.
Legacy Estate and Connaught Capital Partners, LLC, filed for
chapter 11 protection on November 18, 2005 (Bankr. N.D. Calif.
Case No. 05-14659).  John Walshe Murray, Esq., Lovee Sarenas,
Esq., and Robert A. Franklin, Esq., at the Law Offices of Murray
and Murray represent the Debtors in their restructuring efforts.
Lawyers at Winston & Strawn LLP represents the Official Committee
of Unsecured Creditors.  When the Debtors filed for protection
from their creditors, they estimated more than $100 million in
assets and debts between $50 million and $100 million.


LEGACY ESTATE: Has Until May 20 to File Plan of Reorganization
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
approved the Stipulation between The Legacy Estate Group LLC and
its debtor-affiliates, Laminar Direct Capital, Wilson Daniels,
Ltd., and the Official Committee Of Unsecured Creditors, to extend
until May 20, 2006, the Debtors' exclusive right to file a plan of
reorganization.

Laminar Direct and Wilson Daniels are two of the Debtors'
creditors.

Under that Stipulation, the Debtors also have until May 20, 2006,
to solicit acceptances of that plan from their creditors.

The Debtors and the three parties to the Stipulation told the
Court that the extension of the exclusive periods is in the best
interest of the Debtors' estates and will give them more
opportunity to negotiate and formulate a consensual chapter 11
plan.

The Court's order is without prejudice to the Debtors' right to
seek a further extension of its exclusive periods, conditioned
upon the written consent of the parties to the Stipulation and a
Court order further extending the exclusive periods.

Headquartered in Saint Helena, California, The Legacy Estate Group
LLC -- http://www.freemarkabbey.com/-- owns Freemark Abbey
Winery, which produces a range of red, white, and dessert wines.
Legacy Estate and Connaught Capital Partners, LLC, filed for
chapter 11 protection on November 18, 2005 (Bankr. N.D. Calif.
Case No. 05-14659).  John Walshe Murray, Esq., Lovee Sarenas,
Esq., and Robert A. Franklin, Esq., at the Law Offices of Murray
and Murray represent the Debtors in their restructuring efforts.
Lawyers at Winston & Strawn LLP represents the Official Committee
of Unsecured Creditors.  When the Debtors filed for protection
from their creditors, they estimated more than $100 million in
assets and debts between $50 million and $100 million.


LIFE SCIENCES: Equity Deficit Widens to $14.5 Million at Dec. 31
----------------------------------------------------------------
Life Sciences Research, Inc. (Other OTC: LSRI) reported its
financial results for the year ended Dec. 31, 2005.

The company reported $1,491,000 of net income on $172,013,000 of
revenues for the year ended Dec. 31, 2005.

At Dec. 31, 2005, the company's balance sheet showed $184,369,000
in total assets and $198,937,000 in total liabilities, resulting
in a $14,568,000 stockholders' equity deficit.

The company's Dec. 31 balance sheet also showed strained liquidity
with $63,265,000 in total current assets available to pay
$119,760,000 in total current liabilities coming due within the
next 12 months.

"2005 was another great year of progress in improving our
financial performance with operating income up by one third on
2004, and now representing 12% of revenues," Brian Cass, LSR's
President said.

"Net orders for the year set a new record and we had a book to
bill ratio of 1.06.  This would have been even more but some
customers faced difficulties in the development of their compounds
so cancellations were unusually high this year.

"However such variations which impact quarterly results are a
feature of our business.  We approach 2006 with confidence and
optimism.  Order levels on fourth quarter were solid with a book
to bill of 1.13 and these will flow through to revenues later this
year.

"As always my thanks go to our employees and other stakeholders
who have shown commitment and determination in supporting our
company through another excellent year."

Full-text copies of Life Sciences Research, Inc.'s financial
statements for the year ended Dec. 31, 2005, are available at no
charge at http://ResearchArchives.com/t/s?737

Life Sciences Research, Inc. -- http://www.lsrinc.net-- is a
global contract research organization providing product
development services to the pharmaceutical, agrochemical and
biotechnology industries.  LSR identifies risks to humans, animals
or the environment resulting from the use or manufacture of a wide
range of chemicals that are essential components of LSR's clients'
products.  The Company's services are designed to meet the
regulatory requirements of governments around the world.  LSR
operates research facilities in the United States (the Princeton
Research Center, New Jersey) and the United Kingdom (Huntingdon
and Eye, England).

At Dec. 31, 2005, the company's stockholders' equity deficit
widened to $14,568,000 compared to a $2,064,000 deficit at
Dec. 31, 2004.


LONDON FOG: Columbia Sportswear Acquires Pacific Trail Brands
-------------------------------------------------------------
Columbia Sportswear Company (Nasdaq: COLM) outbid Perry Ellis and
will acquire the Pacific Trail group of brands.  The transaction
closed on Mar. 30, 2006.  The acquisition is the result of the
Mar. 29, 2006, auction in bankruptcy court of specified assets of
Pacific Trail, Inc., and London Fog Group, Inc., where Columbia
was the winning bidder for consideration of $20.4 million cash
plus the assumption of certain liabilities.

Established in 1945 in Seattle, Washington, Pacific Trail
manufactures and sells products to retailers nationwide.  The
Pacific Trail business includes the Pacific Trail(R) outerwear and
sportswear brand, the Towne(R) outerwear and rainwear brand, the
Pac Tec(R) high-performance outerwear brand, the Black Dot(R)
Clothing surfboard apparel brand, and the Moonstone(R) mountain
equipment brand.

"With the acquisition of Pacific Trail, we continue to strengthen
our portfolio of authentic, outdoor brands," said Tim Boyle,
President and CEO of Columbia Sportswear.  "We are particularly
enthusiastic about the opportunity to leverage our design and
capital strengths to expand the growth opportunities for Pacific
Trail products in distribution channels that Columbia has not yet
developed."

Grant D. Prentice, Vice President Global Outerwear Integration at
Columbia, will be responsible for interim management of the
Pacific Trail brands.

                About Columbia Sportswear Company

Founded in 1938 in Portland, Oregon, Columbia Sportswear Company
-- http://www.columbia.com/-- is a global leader in the design,
sourcing, marketing and distribution of active outdoor apparel and
footwear.  As one of the largest outerwear brands in the world and
a leading seller of skiwear in the United States, the Company has
developed an international reputation for quality, performance,
functionality and value.  Columbia Sportswear Company manages a
portfolio of outdoor brands including Mountain Hardwear(R),
Sorel(R), Montrail(R), and Pacific Trail(R).

                   About the London Fog Group

The London Fog Group -- http://www.londonfoggroup.com/-- is
comprised of three principal operations:

   * London Fog -- http://www.londonfog.com/-- is a great
     American apparel brand, ranked #32 of the top 100 brands by
     Women's Wear Daily. Created in the 1920s, London Fog became
     the ubiquitous symbol of American rainwear with the
     introduction of the classic trench. Today, London Fog is
     being made into a powerful must-have global lifestyle brand
     in the designer tier, showcased in the most prestigious
     retail venues and with the highest caliber product in
     fashion, accessories, outerwear and fragrance.

   * Pacific Trail http://www.pacifictrail.com/-- is a quietly
     powerful brand with an 60-year tradition of quality in the
     outerwear and sportswear world, and roots as an authentic
     Northwest lifestyle brand.  The brand has a powerful
     emotional connection to the rugged outdoor life and leisure
     of the Pacific Northwest, and a prominent position at major
     national retailers.  Pacific Trail is currently growing its
     consumer presence and retail footprint with additional
     licensing and new product development.

   * Homestead -- http://www.homesteadbrands.com-- is the
     premier designer and manufacturer of home fashions in the
     U.S. today.  The company has extensive experience in a wide
     range of home textiles for major designers and private label
     brands.  The Homestead portfolio includes brands such as
     Angela Adams, Collier Campbell, Nancy Koltes, Dreams by
     Peacock Alley, Preston Bailey, Jeffrey Bilhuber, The Art of
     Home Ann Gish, Cubanitas, MaryJane Butters, Pacific Trail
     Home and others.

London Fog Group, Inc. and its debtor-affiliates filed for chapter
11 protection on March 20, 2006 (Bankr. D. Nev. Case No.
06-50146).  Stephen R. Harris, Esq., at Belding, Harris & Petroni,
Ltd., in Reno, Nevada, represents the Debtors.  Avalon Group,
Ltd., serves the Debtors' financial advisor.  When the Debtors
filed for protection from their creditors, they estimated assets
and debts between $50 million and $100 million.


MANITOWOC: Expects Higher 1st Qtr. Earnings v. Wall Street Average
------------------------------------------------------------------
The Manitowoc Company expects first-quarter 2006 earnings per
share to be at least $0.20 in excess of Wall Street average
estimates.  Because of this first-quarter performance and its
outlook for the remainder of the year, the company is also
increasing its annual GAAP earnings per share guidance range to
$3.75 TO $4.00 from the $3.30-$3.60 per share range announced
earlier this year.  The GAAP earnings will include the change in
accounting for stock option expense which is estimated to be
$0.15, net of tax.

Chairman and chief executive officer Terry Growcock commented that
"the crane business has continued to outperform even our own high
expectations.  We are extremely pleased with our success in
working through production challenges common in this high demand
environment.  The very strong cyclical upswing in our crane market
appears to have offset much of the seasonal softness we would
typically see in the first quarter of the year.  Both the
Foodservice and Marine segments are performing in-line with levels
planned at the beginning of the year."

The Manitowoc Company, Inc. -- http://www.manitowoc.com/-- is one
of the world's largest providers of lifting equipment for the
global construction industry, including lattice-boom cranes, tower
cranes, mobile telescopic cranes, and boom trucks.  As a leading
manufacturer of ice-cube machines, ice/beverage dispensers, and
commercial refrigeration equipment, the company offers the
broadest line of cold-focused equipment in the foodservice
industry.  In addition, the company is a leading provider of
shipbuilding, ship repair, and conversion services for government,
military, and commercial customers throughout the maritime
industry.

                         *     *     *

As reported in the Troubled Company Reporter on Mar. 27, 2006,
Standard & Poor's Ratings Services raised its ratings on
diversified equipment manufacturer The Manitowoc Co. Inc.,
including the corporate credit rating on the company, which rose
to 'BB' from 'BB-'.  S&P said the outlook is stable.


MERIDIAN AUTOMOTIVE: Files Plan of Reorganization in Delaware
-------------------------------------------------------------
Meridian Automotive Systems, Inc., filed its Plan of
Reorganization with the United States Bankruptcy Court for the
District of Delaware.  Now that the Plan has been filed, Meridian
will follow the process required by the Bankruptcy Court to obtain
approval of its Plan and related documents at a confirmation
hearing and ultimately exit Chapter 11.

"Filing a Plan in less than eleven months since entering Chapter
11 is a major accomplishment and clearly reflects the strength of
our company and our efficiency with respect to our restructuring
efforts," Richard E. Newsted, Meridian's President and CEO, said.
Our restructuring process is now entering into its critical final
stage and we are committed to completing our exit from Chapter 11
as quickly and efficiently as possible."

A copy of the Company's Proposed Plan is available for a fee at:

  http://www.researcharchives.com/bin/download?id=060330223815

                About Meridian Automotive Systems

Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers.  Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers.  The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176).  James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts.  Eric E. Sagerman, Esq.,
at Winston & Strawn LLP represents the Official Committee of
Unsecured Creditors.  The Committee also hired Ian Connor
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,
to prosecute an adversary proceeding against Meridian's First Lien
Lenders and Second Lien Lenders to invalidate their liens.  When
the Debtors filed for protection from their creditors, they listed
$530 million in total assets and approximately $815 million in
total liabilities.


METOKOTE CORP: S&P Affirms B+ Rating & Changes Outlook to Negative
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
automotive and industrial coating supplier MetoKote Corp. to
negative from stable.  The ratings on the company, including the
'B+' corporate credit rating, were affirmed.  MetoKote, which
applies industrial coating designed to inhibit corrosion of metal
products made by its automotive and industrial customers, had
total balance sheet debt of $170 million at Jan. 31, 2006.

"The outlook revision reflects our concerns about MetoKote's
ability to maintain credit protection measures consistent with the
rating, given the company's high leverage and current fundamental
automotive industry challenges that have the potential to pressure
EBITDA," said Standard & Poor's credit analyst Nancy C. Messer.

The automotive OEM market, which accounts for 51% of MetoKote's
revenues, has significantly deteriorated in the past year.
Industry conditions are typified by:

   * pricing pressures,
   * weak volumes, and
   * high material costs.

In addition, the financial performance of the auto supplier group
is vulnerable to the increasingly fragile financial health of some
of its major customers.

MetoKote's relatively weak fiscal 2005 EBITDA left the company
more highly leveraged than expected following a debt-financed
share repurchase early in the year.  The company's EBITDA,
totaling $47 million for fiscal 2005, ended Oct. 31, was below
expectations because of:

   * significant start-up problems in two new European InPlant
     facilities; and

   * high operating costs that were not recovered from customers.

The European plant problems resulted from the difficulty of
inaugurating a large number of facilities in a single year;
MetoKote installed five InPlants:

   * one General Purpose operation, and
   * three Paint Shop operations.

Because MetoKote's growth plan depends on the success of frequent
facility startups, the company undertook a major organizational
restructuring in 2005 to improve its practices.

The ratings on Lima, Ohio-based MetoKote reflect:

   * the company's weak business risk profile as a participant in
     the highly competitive and cyclical:

     -- automotive,
     -- agricultural, and
     -- construction markets; and

   * its highly leveraged financial position.

The negative outlook reflects Standard & Poor's concern that
MetoKote's high leverage may not decline to a level appropriate
for the rating in the year ahead.  The rate of EBITDA expansion
fell short of expectations in fiscal 2005, and the currently
difficult auto market could constrain fiscal 2006 EBITDA growth.
The ratings could be lowered if MetoKote is not able to generate
free cash flow and reduce debt in the year ahead, or its financial
performance is disrupted by customers' financial difficulties.

The outlook could be revised to stable if market conditions
improve and this recovery is sustained.  This could strengthen
MetoKote's earnings and cash flow generation prospects, enabling
the company to reduce leverage following the recapitalization in
2005 that allowed a dividend payment to the equity sponsor.
However, Standard & Poor's does not expect significant near-term
market improvement for the auto sector.


MIRANT CORP: Kern River Gets Stock for $81,765,967 Unsec. Claim
---------------------------------------------------------------
In 2001, Mirant Americas Energy Marketing, L.P., entered into a
long-term firm contract for transportation capacity with Kern
River Gas Transmission Company.  MAEM subsequently rejected the
Contract.  As a result, Kern River filed for rejection damages in
the Debtors' cases.

Pursuant to the Court's "Agreed Order Concerning Modification of
Automatic Stay" dated May 27, 2004, Kern River applied certain
cash security against the rejection damages, leaving an
unsatisfied general unsecured claim outstanding for $138,889,498.

The Debtors objected to Kern River's $138,889,498 Claim.  The
Objection became the subject of a court battle that ensued
between the parties.

On September 21, 2005, Judge Lynn ruled that Kern River is a
holder of a $74,403,116 allowed unsecured claim against MAEM.

According to David W. Elrod, Esq., at Elrod, PLLC, in Dallas,
Texas, the effect of the Court's holding is that Kern River had a
gross allowed claim of $89,154,705 as of the Petition Date.

Under the Debtors' Plan of Reorganization, Kern River's Allowed
Claim was classified in Mirant Debtor Class 3, and is entitled to
receive distributions.

Mr. Elrod notes that under the Plan, Allowed Unsecured Claims
that have a contractual interest rate will be paid at the
applicable non-default contractual rate with compounding to occur
on the date of scheduled payments.  For those claims that do not
have a contractual rate of interest, the interest from the
Petition Date through the Effective Date will be accrued at 4%
without compounding.

However, Kern River and the Debtors disagreed over the correct
calculation of the interest with respect to Kern River's Claim.
The Debtors argued that:

    (a) Kern River is not entitled to interest from the Petition
        Date through the Effective Date, but rather only from the
        date of rejection through the Effective Date;

    (b) Kern River is not entitled to interest in the full amount
        of the Kern River Gross Allowed Claim for the time period
        through May 27, 2004, when the Court permitted Kern River
        to apply the cash security; and

    (c) Kern River is not entitled to contractual interest with
        compounding but rather was only entitled to 4% simple
        interest.

Using the 4% simple interest, Kern River believes that it is
entitled to $82,288,203 in Plan distributions.

Accordingly, Kern River asks the Court to direct the Debtors to
make a timely distribution for $82,288,203, and award Kern River
its reasonable attorneys' fees and costs.

                     New Mirant Entities Object

Craig H. Averch, Esq., at White & Case LLP, in Miami, Florida,
argues that there are remaining material disputes as to the total
distributions to be made to Kern River by the New Mirant Entities
under the Plan.  No final judgment has been entered on Kern
River's contested claim and it, therefore, does not have a "Final
Order" pursuant to the Plan.

Mr. Averch points out that immediate distribution to Kern River
would violate the Hart-Scott-Rodino Antitrust Improvements Act of
1976.  The HSR Act provides that a person may not acquire voting
securities of another person in a transaction meeting the HSR
Act's jurisdictional thresholds without filing an HSR filing with
the Federal Trade Commission and the Antitrust Division of the
U.S. Department of Justice, and observing a statutory waiting
period.

Mr. Averch believes that Kern River's proposed acquisition of
Mirant voting securities meets the HSR Act's jurisdictional
thresholds.  Thus, unless Kern River is able to identify an
applicable exemption, it may not acquire in excess of $53.1
million of voting securities of Mirant without filing a
Notification and Report Form under the HSR Act, and waiting for
the expiration or early termination of the statutory waiting
period.  Kern River was notified of the HSR Act's restrictions in
September 2005.

Kern River, therefore, cannot seek an order compelling
distribution when the order would be in violation of federal law,
Mr. Averch says.

Moreover, the New Mirant Entities have recently become aware of
new evidence that necessitates the filing of a request for a 2004
examination and reconsideration of Kern River's Claim.  The New
Mirant Entities were able to gather information alleging that
Kern River sold some or all of the rejected capacity as firm
capacity in 2005 representing tens of millions of dollars in
income, Mr. Averch explains.

The New Mirant Entities believe that this new evidence may prove
that additional firm capacity agreements will provide mitigation
to Kern River beyond 2008.

Pursuant to Rule 2004 of the Federal Rules of Bankruptcy
Procedure, the Debtors ask the Court to direct Kern River to
appear for an examination and to produce any and all documents
and any other physical evidence, records, correspondence or other
property that relate to any, and all, sales of firm capacity from
May 1, 2005, to the present.

                       Kern River Talks Back

David W. Elrod, Esq., at Elrod, PLLC, in Dallas, Texas, points
out that the New Mirant Entities knew or could have known of all
of the capacity sales months ago, including during the time prior
to plan confirmation, but they did nothing.  The capacity sales
and rates are publicly available on the Kern River Web site and
have been posted there beginning at the time or shortly after the
bids were awarded.

Mr. Elrod argues that the New Mirant Entities' so-called "newly
discovered evidence" does not prevent distribution and does not
justify reconsideration.  The facts on which the "newly
discovered evidence" was based arose after the close of evidence
at the Kern River hearing on July 7, 2005, and do not justify
reconsideration because they were not in existence at the time of
trial.

Furthermore, Mr. Elrod asserts that Kern River is exempt from the
filing provisions of the HSR Act.  Under Section 802.9 of the
applicable FTC rules, a party is exempt from the requirements of
the HSR Act if it would hold less than 10% of the stock of the
issuing entity and does not participate in management of the
entity.

Kern River's distribution would be for slightly more than 1% of
the common stock of New Mirant -- far short of the 10% threshold.
Kern River has not participated in the management of New Mirant
and has no intention of doing so, Mr. Elrod adds.

Kern River, however, admits that it earned a relatively small
amount of interest on funds it held that constituted a portion of
the Kern River Gross Allowed Claim.  To dismiss any notion of
double recovery, Kern River informs Judge Lynn that it will
reduce its request by the amount of interest it earned, which was
$73,433.

As a result, Kern River asks the Court to direct the Debtors to
pay it $82,214,770, as Plan distribution, and award its
attorney's fees and costs.

                  Parties Agree to Resolve Dispute

To resolve the dispute, the parties entered into a stipulated
final judgment, signed by Judge Lynn, which provides that:

    (a) The Disbursing Agent will issue to Kern River shares of
        New Mirant Common Stock amounting to $81,765,967 in Mirant
        Debtors Class 3 - Unsecured Claims.  The Disbursing Agent
        will notify Kern River of the issuance and provide an
        account number for the issued shares;

    (b) Kern River will also receive any and all subsequent
        distributions under the Plan in accordance with being a
        holder of an Allowed Claim in Mirant Debtor Class 3 -
        Unsecured Claims, including the corresponding pro rate
        share of the designated net litigation distributions; and

    (c) Kern River's allowed claim and distribution rights will
        not be subject to reconsideration under Section 502(j) of
        the Bankruptcy Code, or Rule 3008 of the Federal Rules of
        Bankruptcy Procedure or any other applicable law.  The
        Debtors will not:

        -- seek any further discovery against Kern River related
           in any way to the Allowed Claim; and

        -- not initiate any contested matter, adversary proceeding
           or any other cause of action against Kern River.

All of Kern River's other claims against the Debtors are expunged
and disallowed in their entirety.  The Disallowed Claims will not
be asserted in any forum or subject to reconsideration under
Section 502(j) or Rule 3008 or any other applicable law.

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), and emerged under the terms of a
confirmed Second Amended Plan on January 3, 2006.  Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring.  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. 93 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. and
said the outlook is stable.  That rating reflected the credit
profile of Mirant, based on the structure the company expects to
have on emergence from bankruptcy at or around year-end 2005, S&P
said.


MOUNT SINAI: Moody's Lifts Long-Term Debt Ratings to Ba1 from Ba2
-----------------------------------------------------------------
Moody's Investors Service upgraded the long-term ratings to Ba1
from Ba2 on Mount Sinai Medical Center of Florida's outstanding
debt.  The rating action affects an aggregate $278.2 million of
rated debt issued through the City of Miami Beach Health
Facilities Authority.

The upgrade to Ba1 reflects MSMC's ability to generate and sustain
a multi year improvement in operating cashflow as well as sustain
unrestricted liquidity at more adequate levels.  Further credit
improvement, and specifically an investment grade rating, is
largely dependent on a sustained reversal of current volume trends
that support enterprise growth.

Legal Security: All outstanding bonds are secured by: a gross
revenue pledge of the obligated group; a full and irrevocable
guaranty of the Mount Sinai Medical Center Foundation for
principal and interest payments; a mortgage on MSMC's south
campus; MSMC's right, title and interest in the ground lease on
the land that the north campus is situated on, and; a negative
pledge from the Medical Center and the Foundation.

Interest Rate Derivatives: None

Strengths:

   * Sustained trend of positive cashflow with 8.6% operating
     cashflow margin that has transformed MSMC's financial
     profile, with more adequate debt measures such as nearly 2.0
     times coverage of maximum annual debt service and reduced
     debt to cashflow to an improved but still high 10 times.  We
     are also encouraged by inpatient volume growth of nearly
     3.7% through the first two months of FYE 2006.

   * Maintenance of improved cash position held by MSMC and
     Foundation

   * Established management team with appropriate financial rigor

   * Clearly articulated operational imperatives to achieve much
     needed top line growth

Challenges:

   * Debt levels remain very high relative to size of operations
     and balance sheet liquidity

   * Multi-year trend of sizable volume declines, across
     inpatient and outpatient service lines, which poses a
     fundamental challenge to MSMC's ability to achieve
     enterprise growth, as evidenced by revenue contraction in FY
     2004, though volumes through the first two months of FY 2006
     show an encouraging turn

   * Changing demographic of Miami Beach challenges MSMC to grow
     volumes

   * Multi faceted plans for enterprise growth may prove to be
     dilutive as debt or cash is used

Recent Developments:

The rating upgrade follows a review of MSMC's audited FY 2005
financial statements which shows a fourth consecutive year of
operational improvement.  In 2005, MSMC incurred a $4.4 million
operating loss compared with a $7.4 million operating loss in FY
2004 and a budget that reflected expectations for break-even
operating performance.  MSMC's financial profile has strengthened
through aggressive cost reductions and business cycle initiatives.
Variances to budget are largely tied to continued volume declines
that have resulted from the shifting demographic on Miami Beach
and recently challenging Hurricane seasons that brought several
high intensity storms to the greater market area. Operating
cashflow of nearly $39 million in FY 2005 is slightly better then
the FY 2004 level of just over $35.0 million, suggesting that the
progress made since FYE 2001 is sustainable, though challenges to
grow top line revenue remain.

Sluggish revenue growth threatens to impede the organization's
longer-term momentum including further credit improvement unless
growth is sustained at levels that can generate sufficient
cashflow.  While key financial ratios remain weak, general and
sustained improvement is noted supporting a stable outlook on the
below investment grade rating, with 10.2 times debt to cashflow
and 2.0 times maximum annual debt service coverage comparing
favorably to levels that were negative at FYE 2001.

Management prepared budget for FY 2006 shows continued growth in
earnings and slightly better then break-even performance.  Moody's
continue to believe that volume is a critical issue for MSMC.  It
is noted that progress has been made in recruiting physicians for
key clinical areas, as evidenced by 3.7% volume growth in the
first two months of FY 2006.  The ability to reverse negative
volume trends and sustain growth will be a key driver of further
credit improvement.

Moody's are encouraged that the combined unrestricted liquidity
balances held by MSMC and the Foundation have stabilized, after
noted growth, although resources remain modest and highly
leveraged for an organization of this size.  The combined
unrestricted cash balances totaled $111.3 million at FYE 2005,
equates to an adequate 94.5 days but remains modest relative to
leverage with cash to debt coverage of just 40%.  While strategic
capital projects are being considered, including the consideration
of a new hospital to the north of the beach in Aventura, new money
borrowings are not contemplated at this time. It is management's
intention to fund strategic capital with resources that do not
represent additional leverage.  Historically strong, the MSMC
Foundation has provided explicit and unconditional support to the
clinical operations of MSMC.  In FY 2005 the Foundation raised a
record $16.9 million, suggesting the likelihood that a portion of
MSMC's larger strategic capital needs could be financed with
resources that do not leverage MSMC further.

Outlook: The stable outlook recognizes our belief that financial
performance should continue to produce acceptable and improving
operating profile and debt coverage measures.  Further improvement
in liquidity and balance sheet measures, however, may be tempered
by increasing capital investment.

What could change the rating up: Consistent track record of
operating cash flow at higher levels; reduction of debt
outstanding or significant growth in liquidity; further credit
improvement will not be contingent upon a move to a positive
outlook as MSMC's ability to achieve and sustain enterprise growth
as measured by revenue and volumes will likely complete the
transformation of the credit risk to an investment grade profile.

What could change the rating up: Deterioration of financial
performance or liquidity levels; further enterprise contraction
that results in continuous trend of market share loss; a material
increase in debt without commensurate growth in cash flow or
liquidity.

Assumptions & Adjustments:

   -- Based on financial statements for Mount Sinai Medical
         Center of Florida, Inc. & Subsidiaries
   -- First number reflects audit year ended December 31, 2004
   -- Second number reflects audit year ended December 31, 2005
   -- Operating income in each FY 2004 and 2005 excludes a $10
         million transfer from the Foundation
   -- Investment returns smoothed at 6% unless otherwise noted

   * Inpatient admissions: 25,564; 24,319
   * Total operating revenues: $426.8 million; $450.9 million
   * Moody's-adjusted net revenue available for debt service:
        $42.1 million; $45.5 million
   * Total debt outstanding: $282.6 million; $278.2 million
   * Maximum annual debt service (MADS): $22.8 million; $22.8
        million
   * MADS Coverage with reported investment income: 1.7 times;
        1.8 times
   * Moody's-adjusted MADS Coverage with normalized investment
        income: 1.8 times; 2.0 times
   * Debt-to-cash flow: 12.0 times; 10.2 times
   * Days cash on hand: 101 days; 94.5 days
   * Cash-to-debt: 40.3%; 40%
   * Operating margin: -1.7%; -1.0%
   * Operating cash flow margin: 8.3%; 8.6%

Rated Debt: Series 1998, Series 2001A and Series 2004 bonds


MUSICLAND HOLDING: Balks at Marisa Uriarte's Lift Stay Motion
-------------------------------------------------------------
As reported in the Troubled Company Reporter on Mar. 24, 2006,
Marisa Uriarte asked the U.S. Bankruptcy Court for the Southern
District of New York to lift the automatic stay so as to finalize
Court approval of the Class Action Settlement and allow the Action
to be brought to completion.

Gene J. Stonebarger, Esq., at Lindsay & Stonebarger, in
Sacramento, California, relates that on Feb. 2, 2005, Marisa
Uriarte, individually, and on behalf of a class of California
residents, initiated a state court litigation against Musicland
Group, Inc., alleging violations of Section 432.8 of the
California Labor Code.

Section 432.8 protects the rights of an applicant for employment
or an employee from disclosing information about a conviction
related to the possession of marijuana where the conviction is
more over two years old.

Mr. Stonebarger asserts that allowing a matter to proceed in
another forum can constitute a cause for lifting the automatic
stay.  It would be a waste of judicial and legal resources for the
Action to be reinstituted in the Bankruptcy Court, he says.

In addition, Mr. Stonebarger notes, the Action only involves
issues of state law and California law must be applied in
approving the Class Action Settlement.

                         Debtors Object

It is not certain that lifting the automatic stay will
expeditiously resolve the state court litigation against the
Debtors, David A. Agay, Esq., at Kirkland & Ellis LLP, in New
York City asserts.

If the parties meet the Superior Court's conditions for interim
approval, and the Superior Court sustains an objection to the
settlement at the final approval hearing, the Debtors will incur
the costs and risks of continuing to litigate the Action
potentially before both the Appellate Court and the Superior
Court.

Mr. Agay also points out that allowing the Action to proceed will
prejudice the interests of other creditors.  In addition, lifting
the stay would impose unwarranted expenditures and could
potentially diminish the value of the Debtors' estates.

Thus, the Debtors ask the Court to deny Ms. Uriarte's request.

The Informal Committee of Secured Trade Vendors joins in the
Debtors' objection.  The Trade Committee does not consent to the
use of its collateral for the expenses related to settlement of
the Action.

                      About Musicland Holding

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.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000)


MUSICLAND HOLDING: Can Hire Abacus as Advisors on Final Basis
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Musicland Holding Corp. and its debtor-affiliates permission
on a final basis, to employ Abacus Advisors Group LLC as their
advisors and consultants in the sale of the Debtors' certain
assets, nunc pro tunc to the chapter 11 filing.

As reported in the Troubled Company Reporter on Feb. 10, 2006,
Abacus will:

   -- assist in the preparation of an appropriate information
      package regarding closing stores for distribution to
      potential bidders;

   -- review bid proposals and assistance in negotiations with
      the various parties and, if appropriate, orchestration of
      an auction to ensure recoveries are maximized;

   -- provide observance, if necessary, of physical inventories
      that may be taken; and

   -- monitor the conduct and results of any third party selected
      to liquidate the inventory.

For its services, Musicland will pay Abacus a $250,000 base fee.
In addition, Abacus will be paid a value added fee to be
determined in conjunction with the Company, its lenders and the
creditors committee.  Abacus will also be entitled reimbursement
of its reasonable expenses including attorney's fees.

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.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts.  (Musicland Bankruptcy News, Issue
No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000)


NATIONAL ENERGY: Asks Court to Approve Mirant Settlement Agreement
------------------------------------------------------------------
In June 2005, NEGT Energy Trading - Gas Corporation, National
Energy & Gas Transmission, Inc., NEGT Energy Trading Holdings
Corporation, NEGT Energy Trading - Power, L.P., Gas Transmission
Northwest Corporation and Mirant Corporation agreed to stay
certain pending litigation and resolve their claims against each
other through mediation and, if necessary, binding arbitration.

Mediation didn't work.  The parties proceeded to arbitration and
engaged in discovery.  Several weeks prior to the scheduled
arbitration hearing, the parties reached a settlement in
principle.

Among other things, the parties agreed that:

    (1) If the Court does not approve the Settlement on or before
        May 15, 2006, Mirant may terminate the Settlement
        Agreement.

    (2) ET Gas will pay $2,900,000 to Mirant.

    (3) Mirant will retain and own all of the $11,203,719
        collateral as security for the parties' trading positions
        under the Master Firm Purchase/Sale Agreement dated as of
        February 1, 1998, between Southern Company Energy
        Marketing LP and PG&E Energy Trading - Gas Corporation.

    (4) Claim Nos. 145 and 146 filed by Mirant will be deemed
        withdrawn.

    (5) Mirant and NEGT will exchange mutual releases.

    (6) The Settlement Agreement will not result in the release
        of certain claims including:

        -- Claim Nos. 6511, 6512, 7965, 7957, 8082 and 8083 filed
           in Mirant's bankruptcy case by TransCanada PipeLines,
           Ltd., TransCanada Gas Services, Inc., and TransCanada
           Energy, Ltd.; and

        -- claims asserted by GTN and TransCanada Gas Services,
           Inc., in their request to enforce settlement
           agreements.

The parties also have agreed to take the necessary steps to have
their pending litigation dismissed with prejudice.

A full-text copy of the Settlement Agreement is available for
free at http://bankrupt.com/misc/neg_mirantsettlement.pdf

The Debtors ask the U.S. Bankruptcy Court for the District of
Maryland to approve the Settlement Agreement.

Martin T. Fletcher, Esq., at Whiteford, Taylor & Preston L.L.P.,
in Baltimore, Maryland, relates that prior to entering into the
Settlement Agreement, the Debtors reviewed all relevant
documents, including their expert reports and the settlement
calculations and data provided by Mirant.

According to Mr. Fletcher, while the Debtors might well prevail
in the self-administered binding arbitration if it went forward,
the Settlement Agreement makes sense in light of the expense and
uncertainty that would be involved.

The Settlement Agreement is also beneficial to the Debtors
because it will facilitate the release of funds that were placed
in escrow to protect GTN, Mr. Fletcher says.

Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services.  The Company
filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md.
Case No. 03-30459).  Matthew A. Feldman, Esq., Shelley C. Chapman,
Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr &
Gallagher represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT
received bankruptcy court approval of its reorganization plan in
May 2004, and emerged from bankruptcy on Oct. 29, 2004. (PG&E
National Bankruptcy News, Issue No. 57; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


NEIMAN MARCUS: Fitch Affirms $500 Mil. Sr. Sub. Notes' CCC Rating
-----------------------------------------------------------------
Fitch Ratings revised the Rating Outlook on The Neiman Marcus
Group, Inc. (NMG) to Positive from Stable, while affirming the
outstanding ratings as:

   -- Issuer Default Rating (IDR) 'B-'
   -- $600 million secured revolving credit facility 'BB-/RR1'
   -- $1.875 billion secured term loan facility 'B/RR3'
   -- $121 million secured debentures 'B/RR3'
   -- $700 million senior unsecured notes 'CCC+/RR5'
   -- $500 million senior subordinated notes 'CCC/RR6'

The ratings reflect NMG's leadership position within the luxury
retail segment and solid operating performance balanced against
the company's high financial leverage and the cyclical nature of
luxury apparel retailing.  The Positive Rating Outlook reflects
the expectation for solid operating performance over the near term
and NMG's demonstrated commitment to reducing debt levels with
free cash flow.

The buy-out of NMG by Texas Pacific Group and Warburg Pincus was
completed on Oct. 6, 2005.  Since that time, NMG has continued to
perform well, though comparable store sales growth has moderated
from a high single digit pace to a mid-single digit pace over the
past four months.  Retail comparable store sales were up 7.3% in
the six months ended Jan. 28, 2006, while EBITDA declined slightly
to $289 million from $297 million in the prior year period due to
merger-related costs.

NMG used free cash flow in its fiscal second quarter (ended
Jan. 28, 2006) to pay off the $150 million balance on its revolver
and pay down its $1.975 billion term loan by $100 million.
Adjusted debt/EBITDAR declined in the quarter from 6.8x to 6.4x.
Fitch expects NMG to continue to dedicate free cash flow to debt
reduction, which should enable adjusted leverage to decline to
below 6x in the next year.

The ratings of the various classes of debt listed above reflect
their respective recovery prospects.  Fitch's recovery analysis
assumes an enterprise value of $2 billion in a distressed
scenario.  Applying this value across the capital structure
results in outstanding recovery prospects (over 90%) for the $600
million revolving credit facility, which has a first lien on
inventories and receivables.  The $1.875 billion term loan and the
$121 million of secured debentures are secured by a first lien on
NMG's fixed and intangible assets, and have good recovery
prospects (50%-70%).  The $700 million of senior unsecured notes
have below average recovery prospects (10-30%) and the senior
subordinated notes have poor recovery prospects (less than 10%).


NELLSON NUTRACEUTICAL: Hires PricewaterhouseCoopers as Tax Advisor
------------------------------------------------------------------
Nellson Nutraceutical, Inc., and its debtor-affiliates sought and
obtained authority from the U.S. Bankruptcy Court for the District
of Delaware to employ PricewaterhouseCoopers LLP as their tax
advisors, nunc pro tunc to Jan. 28, 2006.

As reported in the Troubled Company Reporter on Mar. 16, 2006,
PricewaterhouseCoopers is expected to:

    a. prepare the U.S. Corporation Income Tax Return, Form 1120,
       for the tax year Jan. 1, 2005 through Dec. 31, 2005 and any
       required state corporate tax returns;

    b. prepare the Schedule M-3 filing required by the Treasury
       and the Internal Revenue Service;

    c. provide tax consulting services, including advice, answers
       to questions or opinions on tax planning or reporting
       matters, including research, discussions, preparation of
       memoranda, and attendance at meetings related to such
       matters;

    d. advice or assist with respect to matters involving the IRS
       or other tax authorities on an as-needed basis;

    e. advice the Debtors regarding tax return disclosures,
       including but not limited to tax shelter compliance; and

    f. provide any other tax assistance as requested by the
       Debtors.

Roderick L. Mayo, a partner at PricewaterhouseCoopers, told the
Court that the Firm's professionals bill:

         Designation                  Hourly Rate
         -----------                  -----------
         Partner                          $570
         Director/Senior Manager          $500
         Manger                           $360
         Senior Associate                 $260
         Associate                        $205

Mr. Mayo related that for this engagement, the Firm has agreed to
a fixed fee of $69,000.

Mr. Mayo assured the Court that the Firm is "disinterested" as
that term is defined is Section 101(14) of the Bankruptcy Code.

                   About Nellson Nutraceutical

Headquartered in Irwindale, California, Nellson Nutraceutical,
Inc., formulate, make and sell bars and powders for the nutrition
supplement industry.  The Debtors filed for chapter 11 protection
on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072).  Laura Davis
Jones, Esq., Rachel Lowy Werkheiser, Esq., Richard M. Pachulski,
Esq., Brad R. Godshall, Esq., and Maxim B. Litvak, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C. represent
the Debtors in their restructuring efforts.  Lawyers at Young,
Conaway, Stargatt & Taylor, LLP, represent an informal committee
of which General Electric Capital Corporation and Barclays Bank
PLC are members.  When the Debtors filed for protection from their
creditors, they estimated more than $100 million in assets and
debts.


NET2000 COMMS: Chapter 7 Trustee Hires Recovery Services as Agent
-----------------------------------------------------------------
Michael B. Joseph, Esq., the trustee appointed in the Chapter 7
cases of Net2000 Communications, Inc., sought and obtained
authority from the U.S. Bankruptcy Court for the District of
Delaware, to employ Recovery Services Inc., as its collection
agent, nunc pro tunc to Sept. 5, 2005.

The Trustee needs RSI's assistance in recovering amounts for the
Chapter 7 Estate with respect to default judgments and other
judgments entered in adversary proceedings commenced in the
Debtors' bankruptcy cases.

RSI is a company in the collection industry since 1995.
Larry Waslow, the firm's secretary and treasurer, will have
primary involvement in the engagement.  Mr. Waslow has worked in
the collection industry for 36 years, and he and RSI has been
employed as a collection agent for other trustees.

RSI's standard compensation for work is a 30% contingency rate,
net of costs.  The Trustee will pay RSI's fee from the proceeds of
any sums recovered from the Default Judgments without the need for
a fee application and further Court order.

To the best of the Trustee's knowledge, RSI does not represent any
interest adverse to the Trustee or the Chapter 7 estate and
is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code.

Headquartered in Reston, Virginia, Net2000 Communications, Inc., a
provider of state-of-the-art broadband telecommunications services
to high-end customers, obtained Court approval to convert its
chapter 11 cases to chapter 7 liquidation proceedings on May 13,
2002 (Bankr. Del. Case No. 01-11324).  Michael G. Wilson, Esq. and
Jason W. Harbour, Esq. at Morris, Nichols, Arsht & Tunnell
represent the Debtors as they wind up their operations.
Raymond H. Lemisch, Esq., at Adelman Lavine Gold and Levin serves
as the Chapter 7 Trustee's counsel.  When the Company filed for
chapter 11 protection, it listed total assets of $256,786,000 and
total debts of $170,588,000.


NEVADA POWER: Fitch Puts BB+ Rating on $250 Mil. Mortgage Notes
---------------------------------------------------------------
Fitch Ratings assigned a 'BB+' rating to Nevada Power Co.'s $250
million general and refunding mortgage notes, series N, due 2036.
Net proceeds will be used to refinance maturing debt obligations.
The notes are being offered in a private placement under Rule 144A
of the Securities Act.  The Rating Outlook is Stable.

The ratings and Outlook of NPC reflect:

   * a more supportive regulatory environment in Nevada;
   * an improving financial profile;
   * adequate system liquidity; and
   * the absence of near-term maturities.

Primary risks for NPC fixed-income investors include:

   * exposure to the wholesale energy markets;
   * high capital spending needs; and
   * relatively weak financial metrics.

Positively, NPC finalized a settlement agreement in January 2006,
resolving litigation with creditors of Enron Corp., which required
only a modest incremental cash payment.  Additionally, the recent
decision approving construction of a new gas-fired plant by its
affiliate, Sierra Pacific Power Co. (SPPC) in northern Nevada,
which included a higher incentive return on equity and
construction-work-in-progress in rate base, underscores the
continuation of constructive regulatory orders by the Public
Utilities Commission of Nevada (PUCN).

The contentious regulatory environment in Nevada that contributed
to NPC's financial distress in 2002-2003 has significantly
improved over the last two years, in Fitch's view.  Since early
2004, NPC has benefited from favorable deferred energy and general
rate case rulings by the PUCN and greater coordination between
company management and regulators on power and fuel supply
procurement issues.  Regulatory decisions will remain critical
going forward as the utility, and affiliate SPPC, are expected to
consistently file for recovery of capital investments and deferred
energy costs.  The Stable Outlook reflects the assumption that NPC
will receive reasonable rate treatment in future rate filings.


NEVADA POWER: S&P Places BB Rating on Proposed $250 Million Bonds
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating to the
proposed $250 million general and refunding mortgage bond issue at
Nevada Power Co.  The outlook is positive.  The proceeds will be
used to refinance existing higher-cost debt.

"The positive outlook reflects the substantial improvements in the
regulatory environment and liquidity, NPC's much-reduced short
position, a steady strengthening of financial ratios, and the
potential for further improvement with debt refinancing," said
Standard & Poor's credit analyst Swami Venkataraman.

Given that financial ratios are expected to be weak for the 'BB'
rating category, prospects for an upgrade would be enhanced if
parent Sierra Pacific Resources were to issue equity, especially
if the capital expenditure plans were not moderated.  Downside
risk is limited in the near term, but may arise if NPC and Sierra
Pacific Co., SRP's other utility subsidiary, again build up
significant deferred costs or become subject to regulatory
disallowances.


NEWBURGH DYEING: Case Summary & Largest Unsecured Creditor
----------------------------------------------------------
Debtor: Newburgh Dyeing Corp.
        4 Thornbrook Lane
        Bedford, New York 10506

Bankruptcy Case No.: 06-35256

Type of Business: The Debtor prints and dyes textiles.

Chapter 11 Petition Date: March 30, 2006

Court: Southern District of New York (Poughkeepsie)

Judge: Cecelia G. Morris

Debtor's Counsel: Thomas Genova, Esq.
                  Genova & Malin
                  Hampton Business Center, 1136 Route 9
                  Wappingers Falls, New York 12590
                  Tel: (845) 298-1600
                  Fax: (845) 298-1265

Total Assets: $3,900,000

Total Debts:  $3,537,916

Debtor's Largest Unsecured Creditor:

   Entity                     Claim Amount
   ------                     ------------
Central Hudson                    $268,445
284 South Avenue
Poughkeepsie, NY 12601


NEWFIELD EXPLORATION: Moody's Rates Pending $500MM Notes at Ba3
---------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Newfield
Exploration's pending $500 million of 10-year senior subordinated
notes and affirmed its existing Ba2 corporate family, Ba2 senior
unsecured note, and Ba3 senior subordinated ratings.  The rating
outlook remains stable.  Note proceeds would fund redemption of
NFX's $250 million of 8.375% senior subordinated notes due 2012
and pre-fund a portion of its budgeted $1.9 billion 2006 capital
spending well in excess of cash flow.  NFX believes it may receive
up to $180 million in insurance recoveries during 2006 for
hurricane repairs included in the capital budget.

NFX is a diversified modest sized independent exploration and
production firm with 333.5 mmboe of proven reserves in the
traditional shelf, deep shelf and deepwater Gulf of Mexico, Gulf
Coast, Mid-Continent, Rocky Mountains; and its emerging Bohai Bay
and shallow and deepwater offshore Malaysian operating areas.
Production is 80% natural gas.

Moody's Global Independent Exploration & Production Rating
Methodology matrix maps NFX to a Ba2 corporate family rating if
drilling rig operating leases are included as debt and Ba3 if the
rig leases are included as debt.  A number of factors involving
(i) largely transitory deferred production due to 2005 hurricane
damage and (ii) NFX's favorable but costly and rather leveraged
repositioning of its property base impacted certain Methodology
metrics but currently do not alter Moody's longer term Ba2 rating
view.  The Ba2 rating is also supported by seasoned management
strength though its comparatively short 5.6 year proven developed
reserve life is a ratings restraint.

Singularly or in combination, the stable rating outlook could
become vulnerable if NFX is unable to restore favorable sequential
quarter production trends in 2006, net lease-adjusted leverage on
PD reserves appears destined to rises materially above $6/PD boe,
and/or its higher risk 2006 exploration and development program
appears destined to be insufficiently productive for 2006.

In that regard, a series of potentially high impact but
commensurately high cost and higher risk wells in the 2006
drilling program sufficiently under-perform, material capital
dissipation and difficulty in meeting 2007 production targets
could result.  In the high impact high risk category, Moody's
includes NFX's deep GOM shelf Blackbeard West exploration program,
Woodford Shale play, deepwater GOM, and deepwater Malaysia
exploration programs.  Additionally, NFX's portfolio repositioning
exposes it to longer lead time, substantial front-end cost
development programs before its production is back on a positive
track.  However, NFX's large inventory of lower risk development
drilling and the likelihood of recovery of the majority of shut-in
GOM production provide production support.

NFX's senior subordinated and senior unsecured notes could be
further notched within 12 months, to B1 and Ba3 respectively, if
it does not add substantial and longer lived reserves to the
direct issuer or if it borrows substantially under its senior
unsecured bank revolver.  NFX's operating subsidiaries do not
guarantee the parent's senior subordinated or senior notes or the
senior unsecured bank facility, both note classes are structurally
subordinated to subsidiary liabilities though no debt currently
resides at subsidiaries, and approximately only 30% of its reserve
volumes are held at the issuer level, with the PD reserve life of
the issuer's direct reserves comparatively short, being dominated
by the short PD reserve life of GOM reserves.

In combination with assessments of managements' strategies and
track records, the Moody's E&P Methodology quantitatively and
qualitatively assesses E&P's by the four core ratings driver
factors of (i), oil and gas reserve and production scale, risk
diversification, quality and mix, and PD reserve life; (ii) and
(iii), reinvestment risk and forward performance catalysts,
including relative capacity to reinvest capital for production
growth at tolerable costs and repeatable sound cash returns on
reinvested capital; and (iv), leverage on PD reserves, the
financial burden on total reserves, and leverage on cash flow
after sustaining capital spending.

   Factor 1: Reserves and Production Characteristics --
      Moody's E&P Methodology maps NFX's proven reserve, PD
      reserve, and production scale, and its degree of
      diversification, to the Ba rating range.  While it's still
      short 5.6 year PD reserve life is a ratings restraint and
      limits the pace at which NFX can transform its property
      profile.  However, its comparatively smaller size, relative
      to its prospect opportunities and reinvestment patterns
      enhance its prospects for organic growth, though this is
      getting evermore capital intensive per sector trends.  In
      the mature E&P sector, it is increasingly difficult to
      sustain organic growth at competitive costs through the
      cycle.  Moody's believes that NFX has a widely diversified
      program though it is carrying an elevated high risk high
      cost element in that program.

      During 2005, NFX's production was flat to 2004 and reserves
      grew 12.2%, though a 43% increase in unfunded and
      comparatively higher risk PD reserves drove over 90% of its
      reserve growth.  Restored production growth in 2006 could
      derive from NFX's expected first half 2006 restart of the
      75% of its shut-in GOM production it expects to restore and
      from its accelerated lower risk drilling programs in the
      Uinta Basin and Western Oklahoma and Texas Panhandle.

   Factors 2 & 3: Re-investment Risk and Operating and Capital
      Efficiency -- These factors assess the catalysts driving
      forward performance, including reserve replacement costs,
      unit operating costs, leveraged operating margins, cash-on-
      cash returns, and scale of discretionary cash flow relative
      to both sustaining and growth capital spending.

      NFX's total unit full-cycle costs for the second half of
      2005 map to a B rating.  This includes unit production
      costs of in the range of $7/boe, G&A expense of
      approximately $4/boe, interest expense in the range of over
      $2/boe, and 3 year average all-sources reserve replacement
      costs of $13.80/boe that, itself, maps to a B rating.
      Fourth quarter full-cycle costs ran above the average for
      the year, partially due to shut-in GOM production having
      lower unit production costs.

      However, very strong accompanying up-cycle prices have
      amply covered NFX's cost structure, for cash-on-cash
      returns mapping to the Ba range.  For 2005, Moody's
      estimates that NFX had a total leveraged full cycle ratio
      of approximately 210%, though this is running at 190% to
      200% during fourth quarter 2005 and first quarter 2006.
      Price realizations have been dampened by NFX's long-
      standing hedging program.

   Factor 4: Leverage and Cash Flow Coverage -- NFX maps to the
      Ba rating category for net fully lease-adjusted leverage on
      PD reserves ($5.22/PD boe), to the Ba range for (Net Lease
      Adjusted Debt + Future FAS 69 Development Capex) divided
      by total proven reserves ($7.79/Boe total proven reserves)
      and, reflecting historic up-cycle prices, maps to the Baa
      range based on free cash flow less sustaining capex,
      divided by net lease adjusted debt.  At approximately
      $13.30/Boe of proven undeveloped reserves, future FAS 69
      development capex needed for PUD reserves is very high
      relative to its peers.  NFX carries a moderate $13,930/Boe
      of adjusted debt divided by daily production, though this
      is aided by the firm's relatively flush production and
      commensurate relatively short reserve life.  Pro-forma
      fully-lease adjusted debt will approximate $1.452 billion.
      Back-up liquidity is sound.  After note offering close and
      pro-forma for the notes redemption, approximately $750
      million of NFX's $1 billion senior unsecured bank facility
      would be available for borrowing.

NFX's leverage and high total costs reflect the challenges and
rising costs and capital intensity of building a North American
exploration and production firm, increased by the high capital
intensity of unconventional reserves, deepwater exploration and
development, and deep horizon exploration and development.

Generally, the ratings are supported by a history of sound funding
and business strategies; larger reserve scale and diversification
with the addition over time of the onshore Lariat, EEX, and Inland
properties, adding or intensifying core areas onshore in the Uinta
Basin of the Rocky Mountains and in the Texas Gulf Coast and South
Texas properties; NFX's long established core position in the
shallow water GOM with deeper horizon potential; and NFX's ability
so far at strong prices and sound hedging to amply internally fund
its relatively high reserve replacement costs.

Newfield Exploration is headquartered in Houston, Texas.


NEWFIELD EXPLORATION: S&P Rates $500 Million Sr. Sub. Notes at BB-
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit rating on Newfield Exploration Co.  At the same time,
Standard & Poor's assigned its 'BB-' subordinated rating to
Newfield's $500 million senior subordinated notes due 2016.  The
outlook is stable.

Proceeds from the note offering should be used to:

   * redeem Newfield's $250 million senior subordinated notes
     due 2012; and

   * help fund near-term capital expenditures.

Houston, Texas-based Newfield will have around $1.1 billion of
debt on a pro forma basis after this transaction.

The ratings on Newfield, a midsize exploration and production
company in the oil and natural gas industry, reflect:

   * the risks associated with its aggressive growth strategy,
   * moderate-lived reserve base, and
   * relatively high-cost operations;

mitigated by:

   * strong leverage to natural gas,
   * continued strong,
   * expected production growth, and
   * moderate financial policies.

Standard & Poor's believes that Newfield compensates for its
operating risks through its somewhat moderate debt burden, around
25% at year-end 2005.  However, this is expected to be around 30%
to 35% in the near term, including operating-lease and asset-
retirement obligations.

"The stable outlook expects continuing moderate financial
policies, while Newfield continues to grow and diversify its asset
base," said Standard & Poor's credit analyst Paul B. Harvey.  If
future acquisitions are aggressively funded, ratings could be
negatively affected.  "However, continued diversification of
reserves to provide a longer and more stable production profile,
combined with the balanced financing of such growth, could lead to
positive rating actions," he continued.


NEXSTAR BROADCASTING: S&P Affirms Rating & Revises Outlook to Neg.
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Nexstar
Broadcasting Group Inc. to negative from stable.  The long-term
ratings, including the 'B' corporate credit rating, were affirmed.
Total debt outstanding, including debt obligations of Mission
Broadcasting Inc. that are guaranteed by Irving, Texas-based
Nexstar, was approximately $646 million at Dec. 31, 2005.

"The negative outlook underscores our concern about Nexstar's
narrow margin of financial covenant compliance at year-end 2005,"
said Standard & Poor's credit analyst Alyse Michaelson Kelly.

Nexstar's EBITDA declined in 2005, resulting primarily from:

   * the absence of sizable political advertising;
   * lost revenues related to its retransmission negotiations; and
   * the impact of Hurricanes Katrina and Rita.

Nexstar's leverage covenant tightens quarterly throughout 2006,
which increases its dependence on EBITDA growth to remain in
compliance.  Meanwhile, political advertising, which is expected
to fuel EBITDA growth in 2006, does not have as meaningful an
impact until the second half of the year, and trends in the key
auto advertising category are weak.

The rating on Nexstar reflects:

   * its high leverage from aggressive debt-financed acquisitions;

   * relatively weak EBITDA margin and conversion of EBITDA into
     discretionary cash flow compared with peers;

   * advertising's vulnerability to economic downturns; and

   * TV broadcasting's mature revenue growth prospects.

These factors are partially offset by:

   * Nexstar's cash flow diversity from major-network-affiliated
     TV stations in midsize markets;

   * broadcasting's good margin and discretionary cash flow
     potential; and

   * station asset values.


NOBEX CORP: Gets Court Ok to Hire SSG Capital as Investment Banker
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave Nobex
Corporation permission to employ SSG Capital Advisors, L.P., as
its investment banker.

As reported in the Troubled Company on Feb. 7, 2006, SSG Capital
will:

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

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

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

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

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

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

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

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

The Debtor will pay SSG Capital:

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

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

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

J. Scott Victor, a managing director at SSG Capital, assured the
Court that SSG Capital does not represent any interest materially
adverse to the Debtor or its estate pursuant to Section 327(a)
of the Bankruptcy Code.

Headquartered in Durham, North Carolina, Nobex Corporation --
http://www.nobexcorp.com/-- is a drug delivery company developing
modified drug molecules to improve medications for chronic
diseases.  The Company filed for chapter 11 protection on
Dec. 1, 2005 (Bankr. D. Del. 05-20050).  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., provide 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.


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

As reported in the Troubled Company on Feb. 24, 2006, NHB will:

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

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

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

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

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

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

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

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

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

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

Headquartered in Durham, North Carolina, Nobex Corporation --
http://www.nobexcorp.com/-- is a drug delivery company developing
modified drug molecules to improve medications for chronic
diseases.  The company filed for chapter 11 protection on
Dec. 1, 2005 (Bankr. D. Del. 05-20050).  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.


ON TOP COMMS: Wants to Sell Mississippi Station for $1.5 Million
----------------------------------------------------------------
On Top Communications, LLC, and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Maryland for permission to
sell their real property located in Brandon, Mississippi (and some
related assets) to Inner City Media Corporation for $1.5 million.

The Debtors tell the Court that they have limited funds to
continue operating their business.  They believe selling their
Mississippi station will minimize their need to incur additional
debt and administrative expenses.

Under the purchase agreement, the excluded assets are:

   a) the Debtors' corporate records;

   b) all of the Debtors' contracts and rights and interests which
      relate to the operation of the business;

   c) the Debtors' account receivable;

   d) all cash held by the Debtor as of the closing date; and

   e) other assets identified in the agreement.

Inner City has deposited $100,000 with the Debtors' counsel and
will be transferred to an interest-bearing escrow account upon
approval of the sale.  Inner City will not assume any of the
Debtors' debts with respect to the Mississippi station and the
Debtor will continually be responsible for any liabilities.

The Debtors also ask the Court's approval to:

   (x) assume and assign the Station Contracts; and

   (y) reject all non-assumed Station Contracts.

A full-text copy of the Debtors' station contracts is available
for free at http://researcharchives.com/t/s?73c

In addition, the Debtors want to enter into a Local Marketing
Agreement with Inner City dated March 22, 2006.  Under the LMA,
the Debtor will license to Inner City all of the station's airtime
and the right to program the Mississippi station pending approval
of the transfer of the operating license by the Federal
Communications Commission.

The LMA requires the Debtor to support Inner City's operation of
the station while nominally maintaining control of the station.
Furthermore, Inner City will pay a commission to the Debtor.

Headquartered in Lanham, Maryland, On Top Communications, LLC, and
its affiliates acquire, own and operate FM radio stations located
in the Southeastern United States.  The Company and its debtor-
affiliates filed for chapter 11 protection on July 29, 2005
(Bankr. D. Md. Case No. 05-27037).  Thomas L. Lackey, Esq., of
Bowie, Maryland, represents the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they estimated assets and debts of $10 million to
$50 million.


PANAVISION INC: S&P Rates $115 Million 2nd-Lien Term Loan at CCC
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its corporate credit
rating on Woodland Hills, California-based Panavision Inc. on
CreditWatch with developing implications, after the company's
announcement that it will be refinancing its outstanding debt
obligations and replacing them with:0

   * a first-lien term loan B;
   * a second-lien term loan B; and
   * a revolving credit facility.

Developing implications suggest that ratings could be raised or
lowered.  If the refinancing is successful, the corporate credit
rating will be raised to 'B-' with a stable outlook.  If the
transaction is not completed, the 'CCC' corporate credit rating
will be affirmed, removed from CreditWatch, and assigned a
negative outlook, which could presage a downgrade if the company
does not refinance its debt maturing in January 2007.

At the same time, Standard & Poor's assigned a bank loan rating of
'B' and a recovery rating of '1' to Panavision's proposed $215
million first-lien credit facilities, indicating an expectation of
full recovery of principal in a payment default scenario.  The
facilities consist of:

   * a $35 million revolving credit facility due 2011; and
   * a $195 million term loan B due 2011.

Standard & Poor's also assigned a 'CCC' bank loan rating and a
recovery rating of '5', indicating an expectation of negligible
(0%-25%) recovery of principal in a payment default scenario, to
Panavision's $115 million second-lien term loan B due 2012.

Pro forma for the transaction, total debt outstanding as of
Dec. 31, 2005, was $323.1 million, including $3 million that is
expected to be drawn on the revolving credit facility and $10.1
million in capital leases.

"Panavision's uncertain growth prospects, high leverage, and
liquidity will remain rating concerns, irrespective of the
refinancing," said Standard & Poor's credit analyst Tulip Lim.

Panavision's revenue and EBITDA, linked to recent acquisitions and
organic improvement in camera and lighting rental revenue,
increased in 2005 from the preceding two years.  Although the
company has invested in new initiatives -- such as its film-
quality, high-definition "Genesis" camera -- it is uncertain
whether they will fuel earnings growth to the extent the company
has planned.


PARAGON REAL: Losses & Equity Deficit Raise Going Concern Doubt
---------------------------------------------------------------
Boulay, Heutmaker, Zibell & Co. P.L.L.P., expressed substantial
doubt about Paragon Real Estate Equity and Investment Trust's
ability to continue as a going concern after auditing the
Company's financial statements for the years ended December 31,
2005 and 2004.  The auditing firm pointed to the Company's net
losses, negative cash flow from operations and an accumulated
deficit.

                       2005 Financials

For the 12 months ended Dec. 31, 2005, Paragon Real incurred a
$1,373,793 net loss on $646,442 of total revenues.  For the
12 months ended Dec. 31, 2004, the Company incurred a $816,224 net
loss on $660,028 of total revenues.

For 12 months ended Dec. 31, 2005, Paragon Real has $529,000 of
unrestricted cash resources.  For the year ended Dec. 31, 2005,
the Company's cash balance decreased to $529,000 compared to a
$1,799,000 cash balance at Dec. 31, 2004.

At Dec. 31, 2005, Paragon Real's balance sheet showed $4,699,066
in total assets, $2,171,352 in total liabilities and a $ 2,171,352
minority interest in a consolidated subsidiary.  The Company's
balance sheet shows a $25,935,287 accumulated deficit at Dec. 31,
2005.

A full-text copy of Paragon Real's annual report is available for
free at http://researcharchives.com/t/s?740

Headquartered in Cleveland, Ohio, Paragon Real Estate Equity and
Investment Trust is a real estate company with a primary focus of
acquiring, repositioning, owning, managing and operating
multifamily apartment communities.  During 2006, Paragon has also
been searching for and reviewing other value-added real estate
deals, including land development, retail, office, industrial,
hotel, and joint venture investments.  As of Dec. 31, 2005, the
Company owns a 1% interest in Paragon Real Estate, LP, the
operating partnership that owns Richton Trail Apartments, an
apartment community containing 72 units.

As of Dec. 31, 2005, Paragon Real's balance sheet shows a $513,917
stockholders' equity deficit, compared to $766,004 of positive
equity reported at Dec. 31, 2004.


PARMALAT USA: Tax Liability Battle with U.S. Govt. Continues
------------------------------------------------------------
The United States Government argued that the U.S. Bankruptcy Court
for the Southern District of New York lacks subject matter
jurisdiction over the U.S. Debtors' 2001 and 2002 claims relating
to net operating losses because they conceded that any increase in
their Net Operating Losses for tax years 2000, 2001, and 2002
would not be used in the future.

As reported in the Troubled Company Reporter on Sept. 30, 2005,
Parmalat USA Corporation and its U.S. debtor-affiliates, asked the
Court to declare that they are entitled to a federal income tax
refund and deductions to increase their NOLs for 2000, 2001, and
2002.

The U.S. Debtors insisted that the Court has jurisdiction over
their claims because their request for deductions for purposes of
increasing their NOLs relates to pre-confirmation tax liability.

At the hearing held in November 2005, the Court asked the parties
to submit supplemental briefing on two issues:

   1. Whether the Court has jurisdiction over the Net Operating
      Loss issues raised by the U.S. Debtors; and

   2. Whether judicial estoppel precludes the U.S. Debtors from
      asserting that the $13,400,000 Reimbursement Credit should
      not be treated as income on their 2000 Amended Return
      because Farmland Dairies LLC filed a claim in the Italian
      Proceedings based on the Reimbursement Credit.

                      Supplemental Briefings

1. U.S. Government

Melanie R. Hallums, Assistant U.S. Attorney for the Southern
District of New York, notes that at the November 2005 Hearing,
the U.S. Debtors said that they "aren't interested in using the
NOLs in order to offset federal tax liability."  The U.S. Debtors
said they only intended to "have the amended returns accepted, so
that the reduced income reported in those returns are carried
through to the state and local tax returns."

Since the U.S. Debtors concede that the NOLs will not affect
their federal tax liability, the U.S. Government asserts that the
Internal Revenue Services should not be required to litigate
these issues, nor is the Court constitutionally authorized to
adjudicate them.

In the absence of any federal tax consequences arising out of the
NOL issues, there is no actual controversy between the IRS and
the U.S. Debtors, Ms. Hallums maintains.

Ms. Hallums notes that the U.S. Debtors took inconsistent
positions in the U.S. Court and in the Italian proceedings.

In the Italian bankruptcy proceedings, the U.S. Debtors,
Ms. Hallums recalls, argued that their right to a refund and
adjustment of the NOLs should not be affected by their claims.
They asserted that the "filing of proofs of claim in the Italian
proceedings was merely a protective action."

The U.S. Debtors argued before the U.S. Court that Parmalat SpA
forced them to record false "reimbursement credits" in their
books.

In the Italian proceedings, however, Farmland's $13,400,000 claim
for the 2000 reimbursement credit was allowed.  Based on their
proofs of claim, the U.S. Debtors apparently failed to allege
fraud during the Italian bankruptcy proceedings, which should
estop the Debtors from making the allegations now, Ms. Hallums
asserts.

Citing AXA Marine and Aviation Ins. (UK) Ltd. v. Seajet Indus.,
Inc., 84 F.3d 622, 628 (2d Cir. 1996), Ms. Hallums contends that
the doctrine of judicial estoppel forbids a party from advancing
contradictory factual positions in separate proceedings.

If its jurisdictional and abstention arguments will be rejected,
the U.S. Government seeks Judge Drain's permission for limited
discovery concerning the status of the U.S. Debtors' claims in
the Italian proceedings to clarify whether the judicial estoppel
doctrine applies.

2. U.S. Debtors

The Bankruptcy Court has subject matter jurisdiction over the
U.S. Debtors' NOL Claims for 2001 and 2002, James M. Sullivan,
Esq., at McDermott Will & Emery LLP, in New York, insists.

Mr. Sullivan further asserts that the controversy between the
U.S. Debtors and the U.S. Government is neither speculative nor
contingent and does constitute a substantial controversy, between
the parties having adverse legal interests, of sufficient
immediacy and reality to warrant the issuance of a declaratory
judgment.

Courts have held that whether a real and immediate controversy
exists in a particular case is a matter of degree and must be
determined on a case-by-case basis, Mr. Sullivan notes.  The
controversy between the parties about the determination of the
U.S. Debtors' rights and obligations relating to their Amended
Returns for 2001 and 2002 is not a "hypothetical, abstract, or
academic" controversy, Mr. Sullivan asserts, citing Muller v.
Olin Mathieson Chem. Corp., 404 F.2d 501, 504 (2d Cir. 1968).

The controversy, Mr. Sullivan continues, is not based on mere
contingencies that may or may not occur but is based on events
that have already occurred, like the filing of the U.S. Debtors'
Amended Returns and the refusal of the IRS to permit the
amendments.  It is a dispute about the U.S. Debtors' alleged tax
liabilities, which liabilities have "already accrued," he
continues, pointing to Dow Jones & Co., Inc. v. Harrods, Ltd.,
237 F. Supp. 2d 394, 406-407 (S.D.N.Y. 2002).

The U.S. Government's argument that it has no "federal interest"
in litigating the NOL issues is of no avail because the pertinent
issue that the Court will determine is whether there is a
substantial controversy between the parties and not whether the
resolution of the controversy will have positive or negative
economic consequences for the U.S. Government.

Furthermore, the U.S. Debtors believe that their Determination
Motion will settle the controversy between the parties and will
terminate and afford relief from the uncertainty, insecurity and
controversy giving rise to the proceeding.

As to the doctrine of judicial estoppel, the U.S. Debtors assert
that it does not prevent them from arguing that the $13,400,000
Reimbursement Credit should not be treated as income.

Whether a domestic court should recognize a judgment of a foreign
court is governed by the principles of comity, Mr. Sullivan says,
citing Rapture Shipping, Ltd. v. Allround Fuel Trading B.V., 350
F. Supp. 2d 369, 373 (S.D.N.Y. 2004).

Comity requires that domestic courts should generally extend full
faith and credit to a judgment of a foreign court provided "the
foreign court had proper jurisdiction and recognition of its
judgment or proceeding does not prejudice the rights of United
States citizens or violate domestic public policy," he adds,
pointing to Victrix S.S. Co. v. Salen Dry Cargo A.B., 825 F.2d
709, 713 (2d Cir. 1987).

Mr. Sullivan points out that the full faith and credit clause of
the U.S. Constitution does not require that a court provide a
sister state judgment greater preclusive effect than the sister
state would provide its own judgment.

Accordingly, a domestic court should not give preclusive effect
to a foreign judgment if the foreign court would not give that
effect to its own judgment, Mr. Sullivan asserts.

Mr. Sullivan also points out that the U.S. Government has failed
to demonstrate that Italian law recognizes the theory of
collateral estoppel.  Even if U.S. law were to apply, however,
the U.S. Government has not shown that:

   -- the Debtors took a position in the U.S. proceedings that is
      clearly inconsistent with the position taken in the Italian
      Proceedings;

   -- the Debtors have succeeded in persuading the Italian court
      of their prior position; and

   -- the Debtors would derive an unfair advantage or impose an
      unfair detriment on the U.S. Government if not estopped.

Accordingly, the U.S. Debtors ask the Court to grant their
request.

Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue.  The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents.  The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139).  Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP, represent the Debtors.  When the U.S.
Debtors filed for bankruptcy protection, they reported more than
$200 million in assets and debts.  The U.S. Debtors emerged from
bankruptcy on April 13, 2005.  (Parmalat Bankruptcy News, Issue
No. 70; Bankruptcy Creditors' Service, Inc., 215/945-7000)


PATH 1: Losses Cue Swenson Advisors to Raise Going Concern Doubt
----------------------------------------------------------------
Path 1 Network Technologies Inc. (Amex: PNO), in compliance
with AMEX rules, reported that the Company's independent
registered public accounting firm, Swenson Advisors, LLP, included
a going concern qualification as part of Path 1 Network
Technologies Inc.'s 2005 financial statements Form 10-K.

Swenson Advisors, LLP, included a going concern qualification in
its audit opinion on the Company's consolidated financial
statements for the fiscal year ended Dec. 31, 2005, as a result of
its operating losses during fiscal 2005 and its potential
inability to raise additional sources of capital to fund
operations.

AMEX's rules require AMEX-listed companies to publicly announce
whenever a Form 10-K includes an audit opinion containing a going-
concern qualification.

                      About Path 1 Network

Headquartered in San Diego, Calif., Path 1 Network Technologies
Inc. -- http://www.path1.com/-- is the pioneer and leading
provider of video transport products that enable the conversion
and distribution of real-time, broadcast-quality video over
Internet Protocol through public and private networks.  From the
delivery of live MPEG-2, MPEG-4, and VC-1 standard definition and
high definition broadcasts to video on demand, Path 1's video
infrastructure platforms allow broadcasters, cable, telco,
satellite and mobile operators to transmit high-quality point-to-
point, multipoint and multiplexed video across town or around the
world.


PINE PRAIRIE: S&P Puts Preliminary B+ Rating on $320 Million Debts
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B+'
rating and '3' recovery rating to Pine Prairie Energy Center
LLC's:

   * $270 million term loan B due 2013; and
   * $50 million revolving credit facility due 2011.

The outlook is stable.  The '3' recovery rating indicates the
expectation of meaningful recovery (50% to 80%) of principal in
a payment default scenario.

Proceeds of the debt will be used for the construction and
development of a natural gas storage facility in Evangeline
Parish, Louisiana, 50 miles north of Henry Hub.

Pine Prairie is indirectly owned by a joint venture between:

   * Plains All American Pipeline L.P., and
   * Vulcan Gas Storage LLC.

"We expect the rating to remain stable in the near term," said
Standard & Poor's credit analyst Chinelo Chidozie.

"We will monitor the project as it reaches key milestones to
reduce construction risk and its ability to execute its strategy
of entering into long-term storage agreements," said Ms. Chidozie.

The project will have access to seven major pipelines with eight
interconnections serving the:

   * Midwest,
   * Northeast,
   * Mid-Atlantic, and
   * Southeastern markets

via a proposed header system.


PLIANT CORP: Liquidation Analysis Under Plan of Reorganization
--------------------------------------------------------------
The "best interests" test under Section 1129 of the Bankruptcy
Code requires as a condition to confirmation of a plan of
reorganization that each holder of impaired claims or impaired
interests receive property with a value not less than the amount
the holder would receive in a Chapter 7 liquidation.

To demonstrate that their Plan of Reorganization satisfies the
requirements of the "best interests" test, Pliant Corporation and
its debtor-affiliates prepared a liquidation analysis with the
assistance of their financial advisors, Jefferies & Company, Inc.

The Debtors based the Liquidation Analysis on their balance
sheets as of December 31, 2005.  The Analysis assumes that the
actual December 31, 2005 balance sheets are conservative proxies
for the balance sheets that would exist at the time a Chapter 7
liquidation would commence.

The Liquidation Analysis contains an estimate of the amount of
Claims that will ultimately become Allowed Claims, according to
Stephen T. Auburn, Pliant vice president and general counsel.
Estimates for various classes of claims are based solely on the
Debtors' continuing review of the claims filed in their Chapter
11 cases and on their books and records.  In preparing the
Liquidation Analysis, the Debtors projected claim amounts that
are consistent with the estimated claims reflected in the Plan
with certain modifications.

For purposes of the Liquidation Analysis, the Debtors assumed
that a liquidation would commence under the direction of a Court-
appointed trustee and would continue for a period of nine months,
during which time all of the Debtors' major assets would either
be sold or conveyed to their lien holders.  The cash proceeds of
the sales, net of liquidation-related costs, would then be
distributed to the Debtors' creditors.  Although the liquidation
of some assets might not require nine months to accomplish, the
Debtors believe that other assets would be more difficult to
collect or sell and hence would require a liquidation period
substantially longer than nine months.

The Debtors further assumed the orderly liquidation and wind down
of all Debtor assets.  The Debtors' management believes the
remaining non-Debtor assets, specifically those located in
Mexico, Germany and Australia, have greater value as a going
concern than in an orderly wind-down.  Thus, the Liquidation
Analysis assumes an orderly liquidation on a going concern basis
for the non-Debtor assets.  There can be no assurances that the
actual value realized in a sale of these operations would yield
the results as assumed in the Liquidation Analysis.

Based on the Liquidation Analysis, the Debtors conclude that the
Plan meets the "best interest of creditors" test pursuant to
Section 1129(a)(7).  There are Impaired Classes with respect to
each Debtor, certain of which are contemplated to receive
recoveries under the Plan.  The Debtors assert that the members
of each Impaired Class will receive at least as much as they
would if the Debtors were liquidated under Chapter 7.

                        Pliant Corporation
       Unaudited Liquidation Analysis - Statement of Assets
                          (In Millions)

                                                      Estimated
                     Book Value   Hypothetical      Liquidation
                       12/31/05     Recovery %            Value
                      ---------   -------------     -----------
                                   Low     High     Low    High
                                  -------------     -----------
Debtor Assets:

Cash & cash
equivalents                $6.9   100.0%  100.0%   $6.9    $6.9

Trade & other
receivables, net          120.0    65.5%   80.0%   78.6    96.0

Inventories, net          100.4    69.4%   79.6%   69.7    79.9

Other current assets       17.8    10.1%   20.2%    1.8     3.6

Property, plant &
equipment, net            266.3    22.3%   38.5%   59.2   102.5

Intercompany
receivables                66.4    12.5%   13.6%    8.3     9.0

Other non-current
assets                     49.4    15.0%   15.0%    7.4     7.4

Goodwill & other
intangibles               197.0     0.0%   0.0%       0       0

Liquidation of
non-debtor
subsidiaries               40.8    70.6%   79.6%   28.8    32.5
                          -----                   -----   -----
Gross estimated
liquidation proceeds
available for
distribution             $864.9                  $260.7  $337.7

Cost Associated with
Liquidation:

Payroll / Overhead costs                          (25.2)  (25.2)
Chapter 7 Trustee Fees                             (7.8)  (10.1)
Chapter 7 Professional Fees (9 months)             (4.5)   (4.5)
                                                  -----   -----

Net Estimated Liquidation
Proceeds Available
for Distribution                                 $223.2  $297.9
                                                 ======  ======


                        Pliant Corporation
             Unaudited Distribution Analysis Summary
                           (In Millions)

                                                  Estimated
                                 Estimated    Liquidation Value
                                 Allowable    -----------------
                                   Claims     Low          High
                                 ---------    -----------------

Net Estimated Proceeds Available
for Distribution                              $223.2     $297.9

Less Superpriority
Administrative Claims:

   Carve Out for Professional Fees    $5.0
   DIP Facility                        0.0
                                    ------   -------    -------
Total Superpriority
Administrative Claims                           $5.0       $5.0

Hypothetical Recovery to
Superpriority Admin Claims                      100%       100%

Gross Proceeds Available after
Superpriority Admin Claims                    $218.2     $292.9

Distribution of Proceeds from
Unencumbered Debtor Subsidiaries                (7.6)     (10.5)

Distribution of Proceeds from
Unencumbered Non-Debtor Subsidiaries           (10.1)     (11.4)
                                              ------     ------
Net Proceeds Available after
Superpriority Admin Claims                    $200.5     $271.1

Less Secured Claims:

   Prepetition Credit Facilities    $138.0
   Additional Drawn Letters            7.4
   First Lien Notes                  294.5
   Second Lien Notes                 273.7
                                    ------    ------     ------
                                              $713.2     $713.2

Hypothetical Recovery to Secured               28.1%        38%

Proceeds Available after Secured                $0.0       $0.0

Distribution of Proceeds from
Unencumbered Debtor Subsidiaries                $3.7       $6.6

Distribution of Proceeds from
Unencumbered Non-Debtor Subsidiaries            10.1       11.4
                                              ------     ------
Total Proceeds Available
after Secured Claims                           $10.1      $11.4

Less Administrative and
Priority Claims:

   Administrative and Priority
   Expense Claims                    $16.9

   Chapter 11 Postpetition
   Accounts Payable & Accrued
   Liabilities                        19.6
   Priority Tax Claims                 0.3
                                    ------    ------     ------
                                               $36.9      $36.9

Hypothetical Recovery to
Administrative & Priority Claims               27.3%      30.8%

Proceeds Available after
Administrative & Priority Claims                $0.0       $0.0

Less Total Unsecured Claims:
   Secured Debt - Deficiency Claim            $512.6     $442.1
   Senior Subordinated Notes                   344.8      344.8
   General Unsecured Claims                     22.5       22.5
                                              ------     ------
                                              $880.0     $809.4

Hypothetical Recovery to
Unsecured Claims                                  0%         0%

Net Estimated Deficiency to
Unsecured Claims                             ($880.0)   ($809.0)
                                              ======     ======

Headquartered in Schaumburg, Illinois, Pliant Corporation --
http://www.pliantcorp.com/-- produces value-added film and
flexible packaging products for personal care, medical, food,
industrial and agricultural markets.  The Debtor and 10 of its
affiliates filed for chapter 11 protection on Jan. 3, 2006
(Bankr. D. Del. Lead Case No. 06-10001).  James F. Conlan, Esq.,
at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S.
Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the
Debtors in their restructuring efforts.  The Debtors tapped
McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy
counsel.   The Ontario Superior Court of Justice named RSM
Richter, Inc., as the Debtors' information officer in their
restructuring proceeding under Companies Creditors Arrangement Act
in Canada.  As of Sept. 30, 2005, the company had $604,275,000 in
total assets and $1,197,438,000 in total debts.  (Pliant
Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


PRG-SCHULTZ INT'L: Losses & Deficit Prompt Going Concern Doubt
--------------------------------------------------------------
KPMG LLP expressed substantial doubt about PRG-Schultz
International, Inc.'s (Nasdaq: PRGX) ability to continue as a
going concern after auditing the company's financial statements
for the years ended December 31, 2005.  The auditing firm pointed
to the Company's recurring losses from operations and
shareholders' deficit.

The paragraph in the audit opinion explaining the qualification
noted that realization of assets and the satisfaction of
liabilities in the ordinary course of business are dependent on
the Company's ability:

     * to return to profitability,

     * to complete planned restructuring activities,

     * to generate positive cash flows from operations, and

     * to maintain credit facilities adequate to conduct its
       business.

The disclosure was made in compliance with Nasdaq Marketplace Rule
4350(b)(1)(B), and does not represent any change from the
Company's Annual Report on Form 10-K as filed with the Securities
and Exchange Commission on March 23, 2006.

                     Senior Credit Facility

On March 17, 2006, the Company completed a substantial debt
restructuring through the exchange of 99.6% of its outstanding
4.75% Convertible Subordinated Notes Due 2006 for:

     * new 11% Senior Notes Due 2011,

     * new 10% Senior Convertible Notes Due 2011 and

     * new 9% Senior Series A Convertible Participating Preferred
       Stock.

Additionally, on March 17, 2006, the Company also entered into a
new $45 million senior secured credit facility to provide ongoing
liquidity for the Company's working capital needs.  The Company
believes that these actions constitute a substantial step in
addressing the concerns expressed by the Company's independent
auditors in the going concern qualification included in the
independent auditors' report contained in the Form 10-K.

                 About PRG-Schultz International

Headquartered in Atlanta, Ga., PRG-Schultz International, Inc. --
http://www.prgx.com/-- is the world's leading recovery audit
firm, providing clients throughout the world with insightful value
to optimize and expertly manage their business transactions.
Using proprietary software and expert audit methodologies, PRG-
Schultz industry specialists review client purchases and payment
information to identify and recover overpayments.

At Dec. 31, 2005, PRG-Schultz International's balance sheet showed
a stockholders' deficit of $102,365,000, compared to a positive
equity of $103,584,000 at Dec. 31, 2004.


RASC TRUST: Moody's Puts Low-B Ratings on Two Certificate Classes
-----------------------------------------------------------------
Moody's Investors Service assigned Aaa rating to the senior
certificates issued by RASC Series 2006-KS3 Trust, Home Equity
Mortgage Asset-Backed Pass-Through Certificates, Series 2006-KS3
and ratings ranging from Aa1 to Ba2 to the subordinate
certificates in the deal.

The securitization is backed by EFC Holdings Corporation, People's
Choice Home Loan, Inc., and HomeComings Financial Network, Inc.,
originated adjustable-rate and fixed-rate subprime mortgage loans
acquired by Residential Asset Securities Corporation.  The ratings
are based primarily on the credit quality of the loans, and on the
protection from subordination, overcollateralization, excess
spread and a swap agreement. Moody's expects collateral losses to
range from 5.10% to 5.60%.

Primary servicing will be provided by HomeComings Financial
Network, Inc., and Residential Funding Corporation will act as
master servicer.  Moody's has assigned HomeComings its servicer
quality rating as primary servicer of subprime loans and RFC its
top servicer quality rating as master servicer.

The complete rating actions are:

                 RASC Series 2006-KS3 Trust
             Home Equity Mortgage Asset-Backed
         Pass-Through Certificates, Series 2006-KS3

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


REAL ESTATE: Moody's Places Ba3 Rating on Class B7 Notes
--------------------------------------------------------
Moody's Investors Service assigned ratings to the Class A, Class
B1, and Class B2 tranche exposures and to the Class B3, Class B4,
Class B5, Class B6, and Class B7 certificates of Real Estate
Synthetic Investment Securities, Series 2006-A.  The Class A,
Class B1, and Class B2 tranche exposures will not be issued and
sold as securities on the closing date.

The synthetic transaction provides the owner of a sizable pool of
jumbo mortgages credit protection similar to the credit
enhancement provided through subordination in conventional
residential mortgage backed securities transactions.

The reference portfolio includes approximately $7.2 billion of
prime conforming and nonconforming balance fixed-rate mortgages
purchased from various originators.  The portfolio is generally
static as in most RMBS deals.

Through an agreement with the securities issuer, the Protected
Party pays a fee for the transfer of a portion of the portfolio
risk.  Investors in the securities have an interest in the
holdings of the issuer, which include highly rated investment
instruments, a forward delivery agreement and fee collections on
the agreement with the Protected Party.  Investors are exposed to
risk from the reference portfolio but benefit only indirectly from
cash flows from these assets.  Depending on the class of
securities held, investors have credit protection from
subordination.  Moody's expected loss on the reference portfolio
is approximately 0.23% to 0.33%.

The complete rating actions are:

Co-Issuer: RESI Finance Limited Partnership 2006-A
Co-Issuer: RESI Finance DE Corporation 2006-A
Issue: Real Estate Synthetic Investment Securities, Series 2006-A

           * Class A Tranche Exposure, Assigned Aaa
           * Class B1 Tranche Exposure, Assigned Aa2
           * Class B2 Tranche Exposure, Assigned Aa3
           * Class B3 Notes, Assigned A2
           * Class B4 Notes, Assigned A3
           * Class B5 Notes, Assigned Baa2
           * Class B6 Notes, Assigned Baa3
           * Class B7 Notes, Assigned Ba3


RESIX FINANCE: Moody's Rates Class B7 Series 2006-A Notes at Ba3
----------------------------------------------------------------
Moody's Investors Service assigned Ba3 rating to the Class B7
Notes issued by RESIX Finance Limited Credit Linked Notes, Series
2006-A (RESIX 2006-A).  The credit-linked note replicate the cash
flow of synthetic RMBS securities issued with respect to Class B7
of the Real Estate Synthetic Investment Securities, Series 2006-A
transaction.

Complete rating action:

   * RESIX Finance Limited Credit-Linked Notes, Series 2006-A
     Class B7 Notes, Assigned Ba3


RIVERSTONE NETWORKS: Stockholder Withdraws Motion to Dismiss Case
-----------------------------------------------------------------
Charles L. Grimes informed the U.S. Bankruptcy Court for the
District of Delaware that he is withdrawing his request to dismiss
the chapter 11 cases involving Riverstone Networks, Inc., and its
debtor-affiliates.  Mr. Grimes is one of the Debtor's largest
stockholders.

As reported in the Troubled Company Reporter on Feb. 28, 2006,
Mr. Grimes told the Court that on the same day the Debtors inked
an agreement with Lucent Technologies to sell its assets, they
turned around and filed chapter 11 petitions, citing for the need
to conduct the sale of their business under Section 363 of the
Bankruptcy Code.

Mr. Grimes argued that the case should be dismissed because it was
filed in bad faith.  Mr. Grimes reminded the Court that the
Debtors pointed to three factors motivating their chapter 11
filing:

    1. managerial distraction,
    2. decline in market share and cash on hand, and
    3. it is a condition of the agreement with Lucent.

Mr. Grimes said that these reasons don't hold water.  Mr. Grimes
argued that:

    a. The Debtors allegations that the Securities and Exchange
       Commission investigation, earning restatement  review and
       de-listing of the Riverstone's stock caused significant
       distraction can hardly be grounds for the filing of a
       chapter 11 petition since they occurred some time ago.

    b. The Debtors have not shown they were suffering financial
       distress at the time of the filing of the petition.  Mr.
       Grimes says loss of money or experiencing a downward spiral
       is not sufficient to establish financial distress.
       Mr. Grimes relates that the Debtors have not identified any
       value that would be preserved in the bankruptcy, which
       would otherwise be lost.

    c. While selling assets under Section 363 of the Bankruptcy
       Code constitutes a valid reorganization purpose because
       it allows a purchaser to buy the assets free and clear of
       liens, Mr. Mr. Grimes contends that in these particular
       chapter 11 cases, not only is there virtually no secured
       debt, but there are no liens for the purchaser to be
       concerned about.  At the same, all creditors will be paid
       in full.

Headquartered in Santa Clara, California, Riverstone Networks,
Inc. -- http://www.riverstonenet.com/-- provides carrier Ethernet
infrastructure solutions for business and residential
communications services.  The company and four of its affiliates
filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del.
Case Nos. 06-10110 through 06-10114).  Edmon L. Morton, Esq., and
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP,
represent the Debtors in their restructuring efforts.  As of
Dec. 24, 2005, the Debtors reported assets totaling $98,341,134
and debts totaling $130,071,947.


RIVERSTONE NETWORKS: Committee Hires Schulte Roth as Counsel
------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in
Riverstone Networks, Inc., and its debtor-affiliates' bankruptcy
cases, sought and obtained authority from the U.S. Bankruptcy
Court for the District of Delaware to retain Schulte Roth & Zabel
LLP as its lead bankruptcy counsel, nunc pro tunc to Feb. 17,
2006.

As reported in the Troubled Company Reporter on Mar. 14, 2006,
Schulte Roth is expected to:

   (a) assist and advise the Committee in its consultations with
       the Debtors, other committees, if any, and other parties-
       in-interest relative to the overall administration of the
       Debtors' estates;

   (b) represent the Committee at hearings to be held before the
       Court and communicate with the Committee regarding the
       matters heard and issues raised, as well as the decisions
       and considerations of the Court;

   (c) assist and advise the Committee in its examination and
       analysis of the Debtors' financial affairs;

   (d) review and analyze all applications, orders, operating
       reports, schedules and statements of financial affairs
       filed or to be filed with the Court by the Debtors or other
       interested parties in the Debtors' cases; advise the
       Committee as to the necessity and propriety of those
       documents and their impact on the rights of unsecured
       creditors, and upon the cases generally; and after
       consultation with, and approval from, the Committee or its
       designees' consent to appropriate orders on its behalf or
       otherwise object to them;

   (e) assist the Committee in preparing appropriate legal
       pleadings and proposed orders as may be required in support
       of positions taken by the Committee and preparing witnesses
       and reviewing documents relevant to them;

   (f) coordinate the receipt and dissemination of information
       prepared by and received from the Debtors' attorneys,
       accountants, financial advisors or other professionals
       retained in the Debtors' cases, as well as information as
       may be received from other professionals engaged by the
       Committee and other committees;

   (g) advise the Committee in connection with the Debtors'
       solicitation and filing with the Court of acceptances or
       rejections of any proposed plan or plans or reorganization
       or liquidation; and

   (h) perform all other necessary legal services and provide for,
       all other necessary legal advice to, the Committee in the
       Debtors' cases.

Jeffrey S. Sabin, Esq., a member at Schulte Roth & Zabel LLP,
disclosed that the hourly rates of the Firm's professionals are:

      Designation                      Hourly Rate
      -----------                      -----------
      Partners                         $580 to $800
      Special Counsel                      $550
      Associates                       $225 to $525
      Legal Assistants                 $130 to $265

Mr. Sabin assured the Court that Schulte Roth & Zabel LLP does not
have any connection with, or any adverse interest to the Debtors,
its creditors, or any other party-in-interest.

                     About Schulte Roth

With more than 400 attorneys, Schulte Roth & Zabel LLP --
http://www.srz.com/-- is a full-service law firm, which provides
legal advice and representation on these practice areas: business
reorganization, business transactions, employment & employee
benefits, environmental, finance, individual client services,
intellectual property, investment management, litigation, real
estate, structured products & derivatives, and tax.

                 About Riverstone Networks

Headquartered in Santa Clara, California, Riverstone Networks,
Inc. -- http://www.riverstonenet.com/-- provides carrier Ethernet
infrastructure solutions for business and residential
communications services.  The company and four of its affiliates
filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del.
Case Nos. 06-10110 through 06-10114).  Edmon L. Morton, Esq., and
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP,
represent the Debtors in their restructuring efforts.  As of
Dec. 24, 2005, the Debtors reported assets totaling $98,341,134
and debts totaling $130,071,947.


SAINT VINCENTS: Proposes $25,000 Ordinary Course Professional Cap
-----------------------------------------------------------------
Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New York,
tells the U.S. Bankruptcy Court for the Southern District of New
York that Saint Vincents Catholic Medical Centers of New York's
use of the Ordinary Course Professionals, among other things, has
turned out to be more sporadic than anticipated.

Mr. Troop relates that in some months, certain Ordinary Course
Professionals seek compensation and reimbursement of expenses in
amounts that exceed the Court-approved monthly maximum payment of
$15,000.

The Debtors propose to increase the Cap to $25,000 to:

   -- provide them and their Ordinary Course Professionals with
      added flexibility; and

   -- avoid the cost and expense of requiring that the Ordinary
      Course Professionals be retained under either Section
      327(a) or 327(e) of the Bankruptcy Code.

The Yearly Cap will remain $180,000.  However, it may be exceeded
by up to five Ordinary Course Professionals up to a total of
$225,000 each unless, on a case-by-case basis, the Official
Committee of Unsecured Creditors and the United States Trustee
consent to allow additional exceptions or the Court orders
otherwise.

Mr. Troop notes that the U.S. Trustee and the Creditors' Committee
have no objection to increasing the Cap to $25,000.

As reported in the Troubled Company Reporter on Sept. 7, 2005, the
Debtors sought the Court's permission to pay, without formal
application to the Court by any Ordinary Course Professional, 100%
of the fees and disbursements to each of the Professionals,
provided that the total fees and disbursements do not exceed a
$15,000 per month, and $180,000 per year per Professional.

                    Additional Professionals

Mr. Troop informs the Court that the Debtors will employ four
more Ordinary Course Professionals:

    Professional                      Services Provided
    ------------                      -----------------
    Kelley Drye & Warren LLP          Hospital Arbitrations
    Nixon Peabody                     Residency Review Work
    Ward Norris Heller & Reidy        Litigation Defense

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, filed the Debtors' chapter 11 cases.  On Sept. 12,
2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took
over representing the Debtors in their restructuring efforts.
Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the
Official Committee of Unsecured Creditors.  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. 22;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


SEALY CORP: Expects to Raise $277 Million from Stock Offering
-------------------------------------------------------------
Sealy Corporation expects to net $277 million from its stock
offering underwritten by:

   * Citigroup;
   * Goldman, Sachs & Co.;
   * J.P. Morgan Securities Inc.;
   * Banc of America Securities LLC;
   * Lehman Brothers;
   * Wachovia Securities;
   * SunTrust Robinson Humphrey; and
   * Ferris, Baker Watts

Of the approximately $277.0 million of net proceeds, the Company
intends to use:

   -- approximately $86.7 million to redeem the outstanding
      principal amount of its Pay-In-King notes and pay a related
      redemption premium;

   -- approximately $37.7 million to redeem a portion of the
      outstanding principal amount of its 2014 notes and pay
      accrued interest and a related redemption premium;

   -- approximately $125.0 million to pay a special dividend to
      its existing stockholders;

   -- approximately $17.3 million to pay a transaction-related
      bonus to members of management and $11.0 million to Kohlberg
      Kravis Roberts & Co. to terminate the Company's future
      obligations under its management services agreement.

J.P. Morgan Partners (BHCA), L.P., an affiliate of J.P. Morgan
Securities Inc., an underwriter in this offering, and BancBoston
Capital Inc., an affiliate of Banc of America Securities LLC,
another underwriter, is also disposing their holdings in the
Company.  The Company will not receive any proceeds from the sale
of shares of its common stock by these selling stockholders.

                         Dividend Policy

Immediately prior to the consummation of the offering, the Company
will declare a one-time cash dividend of $125.0 million to its
existing stockholders, to be paid from a portion of the net
proceeds of this offering.  In addition, on the completion of this
offering, the Company currently intends to adopt a policy of
declaring, subject to legally available funds, a quarterly cash
dividend on each common share commencing in the third quarter of
2006, unless our board of directors, in its sole discretion,
determines otherwise.

Sealy Corporation is the largest bedding manufacturer in the
world.  The Company manufactures and markets a broad range of
mattresses and foundations under the Sealy(R), Sealy
Posturepedic(R), Sealy Crown Jewel(R), Sealy Correct Comfort(R),
Stearns & Foster(R), and Bassett(R) brands. Sealy has the largest
market share and highest consumer awareness of any bedding brand
in North America.  Sealy is also a leading supplier to the
hospitality industry.

In its last Form 10-Q filing for the period ending February 29,
2004, Sealy Corporation's balance sheet shows a stockholders'
deficit of $61,850,000 compared to a deficit of $76,162,000 at
November 30, 2003.

As reported in the Troubled Company Reporter on Mar. 22, 2004,
Standard & Poor's Ratings Services assigned its 'B-' rating to
Sealy Mattress Co.'s $490 million senior subordinated notes due
2014, issued under Rule 144A with registration rights.  Standard &
Poor's also assigned its 'B+' senior secured bank loan rating and
'3' recovery rating to Sealy's $685 million senior secured credit
facility due 2012, and affirmed the company's 'B+' corporate
credit and 'B-' subordinated debt ratings.  S&P said the outlook
is stable.


SEMGROUP L.P.: Fitch Puts B Issuer Default Rating on Neg. Watch
---------------------------------------------------------------
Fitch Ratings placed the outstanding credit ratings of SemGroup,
L.P., and its wholly owned subsidiaries SemCrude, L.P., and
SemCams Midstream Co. on Rating Watch Negative, meaning that the
ratings could be lowered or affirmed in the near-term.

These ratings have been placed on Rating Watch Negative:

SemGroup, L.P.:

   -- Issuer Default Rating 'B'
   -- Senior unsecured notes due 2015 'B+/RR3'

SemCrude, L.P.:

   -- IDR 'B';
   -- Secured working capital facility due August 2008 'BB/RR1'
   -- Senior secured term loan B due March 2011: 'BB-/RR1'
   -- Secured revolving credit facility due August 2008: 'BB-/RR1'

SemCams Midstream Co.:

   -- IDR 'B'
   -- Senior secured term loan due March 2011 'BB-/RR1'

The rating action follows the announcement on March 27, 2006, that
SemGroup has reached a definitive agreement to acquire the
outstanding common stock of TransMontaigne, Inc. (TMG) in an all
cash transaction valued at approximately $525 million.  In
addition, SemGroup will assume approximately $200 million of
outstanding TMG debt.  The Rating Watch Negative status reflects
the potential leveraging impact of the acquisition which will
ultimately be determined by SemGroup's permanent financing
strategy.  Based on a preliminary analysis of the combined
SemGroup/TMG entity, pro forma leverage ratios could remain within
parameters for SemGroup's existing 'B' IDR.  However, the
permanent financing structure ultimately executed by SemGroup
could alter Fitch's asset recovery waterfall across the resultant
capital structure.

In particular, ratings on the partnership's outstanding $350
million senior unsecured notes, which are currently rated one
notch higher than SemGroup's IDR at 'B+' are most vulnerable due
to reduced recovery prospects.

TMG is a Denver, Colorado-based provider of refined products
distribution and supply services primarily in the:

   * Gulf Coast,
   * Midwest, and
   * East Coast regions.

Operationally, the TMG assets appear to be a good strategic fit
for SemGroup and should provided expanded market opportunities for
the partnership's existing refined products logistics business.
Specifically, TMG's 15 million barrels of refined product storage
capacity will provide SemGroup with a larger physical platform to
support its existing refined products marketing business.  In
addition, TransMontaigne Partners, L.P., TMG's publicly traded
master limited partnership affiliate, could provide SemGroup with
an alternative vehicle to monetize assets and/or pursue external
growth opportunities on a cost competitive basis.

The transaction remains subject to approval by both TMG
shareholders and certain regulators.  Fitch expects to meet with
management in the near-term to further discuss SemGroup's
acquisition financing structure and overall strategy for
integrating and operating the TMG assets within the SemGroup
partnership.


SFBC INT'L: Lenders Grant Waivers for $90 Million Credit Facility
-----------------------------------------------------------------
SFBC International, Inc. (NASDAQ:SFCC) entered into an agreement
with its lenders, which waives all of the Company's defaults
related to covenants and certain other terms under its existing
Senior Secured Credit Facility.  SFBC obtained waivers for these
defaults to facilitate the timely filing of the Company's Form
10-K for the period ended Dec. 31, 2005. within the extended
deadline of March 31, 2006.

Following the filing of its Form 10-K, SFBC expects to continue
discussions with its lenders to amend the terms of the Credit
Facility to match the Company's current forecasts, growth strategy
and capital requirements.  Until the Credit Facility is amended,
SFBC has agreed with its lenders not to draw down any additional
funds from its Credit Facility.  As of Dec. 31, 2005 and March 29,
2006, SFBC had $17 million drawn upon this $90 million Credit
Facility.  As of March 21, 2006, SFBC had approximately
$44 million in cash, cash equivalents and marketable securities.

"Based on our current business outlook, we anticipate that we will
generate significant cash flow from operations in 2006 and that we
have adequate liquidity to fund our working capital requirements
while we amend the Credit Facility," Jeffrey P. McMullen, chief
executive officer of SFBC International, stated.  "With our cash
position and outlook for positive cash flow from operations in
2006, we determined the best course of action was to obtain
waivers from our lenders, allowing additional time to negotiate
Credit Facility covenants and terms, which more appropriately
match our current business objectives.  We intend to continue
taking appropriate actions to preserve and enhance long-term
shareholder value and maintain flexibility."

The covenant defaults and the waiver of the covenant defaults
for the Credit Facility do not have an effect on the Company's
agreement with holders of its 2.25% Convertible Senior Notes,
due 2024.

                 About SFBC International, Inc.

Headquartered in Princeton, New Jersey, SFBC International, Inc.
-- http://www.sfbci.com/-- is an international drug development
services company offering a comprehensive range of clinical
development, clinical and bioanalytical laboratory, and consulting
services to the branded pharmaceutical, biotechnology and generic
drug industries.  SFBC has more than 35 offices, facilities and
laboratories with approximately 2,500 employees strategically
located throughout the world.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 27, 2006,
Moody's Investors Service downgraded SFBC International's
corporate family rating to B3 from B2, concluding a rating review
for possible downgrade initiated on Jan. 5, 2006.  Moody's also
confirmed the B2 rating on the Company's Senior Secured Credit
Facilities.  In addition, Moody's assigned a speculative grade
liquidity rating of SGL-4 to SFBC.  The SGL-4 rating reflected the
company's modest operating cash flow and its minimal liquidity
availability.  The ratings outlook is negative.


SOUNDVIEW HOME: S&P Affirms Ten Transaction Class' Low-B Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on two
classes from Soundview Home Loan Trust 2004-1.  At the same time,
ratings are affirmed on 101 classes from seven Soundview Home Loan
Trust transactions.

The raised ratings on series 2004-1 reflect a significant increase
in credit support percentages due to the paydown of the senior
classes, combined with the shifting interest feature of the
transaction.  Projected credit support is 2.41x the credit support
level associated with the raised rating.  As of the January 2006
remittance period, cumulative losses and total delinquencies were
0.23% and 8.88%, respectively.  In addition, approximately 39.24%
of the pool principal balance remains for this series.

The affirmations are based on loss coverage percentages that are
sufficient to maintain the current ratings.  Credit support is
provided by:

   * subordination,
   * overcollateralization, and
   * excess spread.

The collateral for these transactions consists of fixed- and
adjustable-rate, fully amortizing and balloon payment mortgage
loans secured by first and second liens on one- to four-family
residential properties.

Ratings raised:

Soundview Home Loan Trust

                             Rating

             Series    Class        To          From
             ------    -----        --          ----
             2004-1    M-1          AAA          AA+
             2004-1    M-2          AA+          AA

Ratings affirmed:

Soundview Home Loan Trust

           Series     Class                     Rating
           ------     -----                     ------
           2003-2     A-2                       AAA
           2003-2     M-1                       AA
           2003-2     M-2                       A
           2003-2     M-3                       A-
           2003-2     M-4                       BBB+
           2003-2     M-5                       BBB
           2003-2     M-6                       BBB-
           2003-2     B                         BB
           2004-1     A-1,A-3,A-4               AAA
           2004-1     M-3                       AA-
           2004-1     M-4                       A+
           2004-1     M-5                       A
           2004-1     M-6                       A-
           2004-1     M-7                       BBB+
           2004-1     M-8                       BBB
           2004-1     M-9                       BBB-
           2004-1     B-1                       BB+
           2004-1     B-2                       BB
           2004-WMC1  1-A1,1-A2,II-A1,II-A2     AAA
           2004-WMC1  II-A3,                    AAA
           2004-WMC1  M-1                       AA+
           2004-WMC1  M-2,M-3                   AA
           2004-WMC1  M-4                       AA-
           2004-WMC1  M-5                       A+
           2004-WMC1  M-6                       A
           2004-WMC1  M-7                       A-
           2004-WMC1  M-8                       BBB+
           2004-WMC1  M-9                       BBB
           2004-WMC1  M-10                      BBB-
           2005-1     1-A1,1-A2,II-A2,II-A3     AAA
           2005-1     M-1                       AA+
           2005-1     M-2                       AA
           2005-1     M-3                       AA-
           2005-1     M-4                       A+
           2005-1     M-5                       A
           2005-1     M-6                       A-
           2005-1     M-7                       BBB+
           2005-1     M-8                       BBB
           2005-1     M-9                       BBB-
           2005-1     B-1                       BB+
           2005-1     B-2                       BB
           2005-1     B-3                       BB-
           2005-3     1-A1,1-A2,II-A1,II-A2     AAA
           2005-3     II-A3                     AAA
           2005-3     M-1                       AA+
           2005-3     M-2,M-3                   AA
           2005-3     M-4                       AA-
           2005-3     M-5                       A+
           2005-3     M-6                       A
           2005-3     M-7                       A-
           2005-3     M-8                       BBB+
           2005-3     M-9                       BBB
           2005-3     B-1                       BBB-
           2005-3     B-2                       BB+
           2005-3     B-3                       BB
           2005-DO1   1-A1,II-A1,II-A2,II-A3    AAA
           2005-DO1   II-A4                     AAA
           2005-DO1   M-1                       AA+
           2005-DO1   M-2,M-3                   AA
           2005-DO1   M-4                       AA-
           2005-DO1   M-5                       A+
           2005-DO1   M-6,M-7                   A
           2005-DO1   M-8                       A-
           2005-DO1   M-9                       BBB+
           2005-DO1   M-10                      BBB
           2005-DO1   M-11                      BBB-
           2005-DO1   B-1                       BB+
           2005-DO1   B-2                       BB
           2005-OPT1  1-A1,II-A1,II-A2,II-A3    AAA
           2005-OPT1  II-A4,M-1                 AAA
           2005-OPT1  M-2                       AA+
           2005-OPT1  M-3                       AA
           2005-OPT1  M-4                       AA-
           2005-OPT1  M-5                       A+
           2005-OPT1  M-6                       A
           2005-OPT1  M-7                       A-
           2005-OPT1  M-8                       BBB+
           2005-OPT1  M-9                       BBB
           2005-OPT1  M-10                      BBB-


STARTECH ENVIRONMENTAL: Posts $439,462 Net Loss in January 2006
---------------------------------------------------------------
StarTech Environmental Corporation reported its financial results
for the quarter ended Jan. 31, 2006, to the Securities and
Exchange Commission on March 21, 2006.

For the three months ended Jan. 31, 2006, StarTech Environmental
incurred a $439,462 net loss on $364,197 of total revenues.  For
the three months ended Jan. 31, 2005, the Company incurred a
$988,586 net loss on of total revenues.

For the three months ended Jan. 31, 2006, StarTech's has
$2,353,472 of cash and cash equivalents and a $1,078,419 negative
working capital balance.

At Jan. 31, 2006, StarTech's balance sheet showed $5,580,248 in
total assets and $3,920,216 in total liabilities.  The Company's
balance sheet shows a $24,681,694 accumulated deficit at Jan. 31,
2006.

A full-text copy of StarTech's latest quarterly report is
available for free at http://ResearchArchives.com/t/s?739

                     Going Concern Doubt

In a Form 10-K report filed by StarTech Environmental with the SEC
on Feb. 14, 2006, Marcum & Kliegman LLP expressed substantial
doubt about StarTech's ability to continue as a going concern
after auditing the Company's financial statements for the year
ended Oct. 31, 2005.  The auditing firm pointed to the Company's
recurring losses since its inception.

Headquartered in Wilton, Connecticut, StarTech Environmental
Corporation is an environmental technology company commercializing
its proprietary plasma processing technology known as the Plasma
Converter(TM) that achieves closed-loop elemental recycling which
irreversibly destroys hazardous and non-hazardous waste and
industrial by-products while converting them into useful
commercial products.  These products include a rich synthesis gas
called PCG (Plasma Converted Gas)(TM) surplus energy for power,
hydrogen, metals and silicates for use and for sale.


STARWOOD HOTELS: Host Marriott Merger Cut to $3.7B Sans CDN Hotels
------------------------------------------------------------------
Starwood Hotels and Resorts Worldwide, Inc., signed an amendment
to its merger agreement with Host Marriott Corporation.  Host
Marriott has also formed a joint venture with two partners that
will own the six hotels included in the proposed acquisition that
are located in Europe.

Changes to the merger agreement in the amendment include, but are
not limited to:

   -- The three hotels located in Canada will not be included in
      the transaction because Starwood was unable to obtain a
      necessary tax ruling.  As a result of the exclusion of the
      Canadian hotels, the overall purchase price for the
      transaction has been reduced by approximately $276 million
      to approximately $3.76 billion.  The adjustment will be made
      to the cash portion of the transaction consideration.

   -- $600 million of senior notes issued by Sheraton Holding
      Corporation will not be assumed as part of the transaction
      (including $150 million of senior notes previously excluded
      from the transaction), which reduces the amount of debt the
      Company will be assuming in accordance with the transaction
      to approximately $104 million.

   -- The closing of five of the hotels included in the
      transaction located in Europe will be deferred as a result
      of certain notice requirements and will not be included in
      the initial closing of the transaction.  The acquisition of
      four of the hotels is expected to occur by May 3, 2006, and
      the acquisition of the fifth hotel, The Westin Europa &
      Regina in Venice, Italy, is expected to occur no later than
      June 15, 2006.

On March 24, 2006, Host Marriott entered into a joint venture in
the Netherlands with Stichting Pensioenfonds ABP, the Dutch
pension fund and Jasmine Hotels Pte Ltd, a subsidiary of GIC Real
Estate Pte Ltd., the real estate investment company of the
Government of Singapore Investment Corporation Pte Ltd.  The joint
venture will acquire the five deferred-closing hotels directly
from Starwood, and the Sheraton Warsaw Hotel & Towers will be
contributed to the joint venture by the Company as a substantial
portion of its equity investment in the joint venture.  The
total consideration for the six hotels will be approximately
$621 million.  The Company will be a limited partner in the joint
venture and also will serve as the general partner of the venture,
and potentially will earn a promote based on achieving certain
return thresholds for the limited partners.  An affiliate of the
Company will serve as the asset manager of the joint venture's
hotels and will earn fees for its services.  The percentage
interests of the parties in the joint venture will be 19.9% for
ABP, 48% for GIC RE and 32.1% for the Company, including both its
general and limited partner interests.

                       About Host Marriott

Host Marriott Corporation -- http://www.hostmarriott.com/-- is a
Fortune 500 lodging real estate company that currently owns or
holds controlling interests in 103 upper-upscale and luxury hotel
properties primarily operated under premium brands, such as
Marriott(R), Ritz-Carlton(R), Hyatt(R), Four Seasons(R),
Fairmont(R), Hilton(R), and Westin(R).

                      About Starwood Hotels

Headquartered in White Plains, New York, Starwood Hotels & Resorts
Worldwide, Inc. -- http://www.starwoodhotels.com/-- is one of the
leading hotel and leisure companies in the world with
approximately 750 properties in more than 80 countries and 120,000
employees at its owned and managed properties.  With
internationally renowned brands, Starwood(R) corporation is a
fully integrated owner, operator and franchiser of hotels and
resorts including: St. Regis(R), The Luxury Collection (R),
Sheraton(R), Westin(R), Four Points(R) by Sheraton, and W(R),
Hotels and Resorts as well as Starwood Vacation Ownership, Inc.,
one of the premier developers and operators of high quality
vacation interval ownership resorts.

                         *     *     *

As reported in the Troubled Company Reporter on Mar. 29, 2006,
Standard & Poor's Ratings Services affirmed its 'BB+' ratings on
Starwood Hotels & Resorts Worldwide Inc. subsidiary ITT Corp.'s:

   * $450 million senior unsecured notes, and
   * $150 million senior unsecured notes.

All other existing ratings for Starwood were affirmed, including
the 'BB+' corporate credit rating.  S&P said the rating outlook is
positive.


STATE STREET: U.S. Trustee Calls for Chapter 7 Conversion
---------------------------------------------------------
State Street Houses, Inc., and State Street Associates, LP, could
face Chapter 7 liquidation if the U.S. Bankruptcy Court for the
Northern District of New York favors the wind-down petition filed
by Deirdre A. Martini, the U.S. Trustee for Region 2.

Ms. Martini asks the Bankruptcy Court to convert the Debtors'
jointly administered bankruptcy case to a liquidation proceeding
under Chapter 7 of the Bankruptcy Code because of the Debtors'
numerous breaches of their statutory and fiduciary duty as
debtors-in-possession.

Ms. Martini alleges that the Debtors reluctance to participate in
the Chapter 11 process indicates that a confirmable plan is
unlikely.

Ms,. Martini charges that the Debtors' continued use of the
protections afforded by Chapter 11 is abusive.

The U.S. Trustee points out that the Debtors:

     a) have not hired new bankruptcy counsel following the
        resignation of Hancock and Estabrook, LLP, on Dec. 20,
        2005 -- a situation that is prejudicial to creditors;

     b) failed to file Monthly Operating Reports since October
        2005, depriving the U.S. Trustee, the Bankruptcy Court and
        creditors of fundamental information regarding the
        Debtor's financial condition; and

     c) have not paid approximately $4,000 in fees due to the U.S.
        Trustee.

New York State Mortgage Loan Enforcement and Administration
Corporation, as agent for the Debtors' secured mortgage lenders
New York State Urban Development Corporation and New York State
Project Finance Agency, supports the U.S. Trustees call for
chapter 7 conversion.

MLC agrees that the Debtors will not be able to formulate a
consensual plan of reorganization soon.  MLC alleges that the
Debtors are only doing the minimum steps necessary to keep their
bankruptcy case afloat in order to avoid the adverse tax
consequences that will follow foreclosure of their assets.

                         About State Street

Headquartered in Utica, New York, State Street Houses, Inc., is a
New York Corporation and legal titleholder of Kennedy Plaza
Apartments in Utica, New York.  Kennedy Plaza Apartments is a
residential apartment complex consisting of one 17-story building
and two five-story buildings with 303 total apartment units.  The
Company and its affiliate, State Street Associates, L.P., filed
for chapter 11 protection on May 21, 2004 (Bankr. N.D.N.Y. Case
No: 04-63673).  When the Debtors filed for chapter 11 protection,
they reported estimated  assets and debts amounting between $10
million to $50 million.


STATE STREET: Court Conditions Continued Use of MLC's Collateral
----------------------------------------------------------------
The Hon. Stephen D. Gerling of the U.S. Bankruptcy Court for the
Northern District of New York granted State Street Houses, Inc.,
and its debtor-affiliates limited access to cash collateral
securing repayment of their prepetition debts to New York State
Mortgage Loan Enforcement and Administration Corporation, or MLC.

MLC serves as agent for the Debtors' secured mortgage lenders, New
York State Urban Development Corporation and New York State
Project Finance Agency, which collectively hold approximately 89%
of claims against the Debtors.  MLC asserts that the Debtors have
been in default under the mortgage debt since 2002 and have not
made payments on that debt since 1998.

The Bankruptcy Court gave the Debtors access to MLC's cash
collateral since May 2004, pursuant to a final cash collateral
order and several extensions.

On Feb. 16, 2006, MLC objected to the continued use of its cash
collateral because of the Debtors' continued failure to provide
financial information regarding its operations.  Gregory J.
Mascitti, Esq., at Nixon Peabody LLP, told the Bankruptcy Court
that because of the lack of information, MLC cannot determine if
the Debtors have complied with the prior cash collateral orders
and if its interest in the cash collateral continues to be
adequately protected.

The Debtors requested for continued use of MLC's cash collateral
to maintain operations at its main asset, the Kennedy Plaza
Apartments located in Utica, New York.  MLC assured the Bankruptcy
Court that it is willing and ready to take over operation at
Kennedy Plaza once the Debtors are barred from using the cash
collateral.

                  Terms of Cash Collateral Use

Judge Gerling allows MLC to establish and control a lock box
account that will hold all cash collateral, including rents
generated from the Kennedy Plaza operations.  All Kennedy Plaza
tenants are required to make payments directly to MLC's lock box
account.

Judge Gerling directs the Debtors to submit a budget for the
period from Feb. 28, 2006, to May 5, 2006.  To the extent the cash
collateral will be used in accordance with the budget, the Debtors
are required to make bi-weekly requests to obtain funds from the
lock box account.

The Debtors are also required to provide MLC with a written
reconciliation of the actual cash collateral used and the amount
approved in the bi-weekly cash request.  Failure to submit the
reconciliation or a Monthly Operating Report ten days after the
due date will immediately cut the Debtors' access to cash
collateral.

Apart from the Budget, the Bankruptcy Court also directs the
Debtors to file an accounting and reconciliation of actual cash
collateral used versus budgeted items for the period from May 21,
2004 to Feb. 28, 2006.  The report will include an accounting and
reconciliation of all funds the Debtors transferred to
Mathematical Bridge Corp., Mathematical Bridge LLC, and Lanny A
Horowitz.

                         About State Street

Headquartered in Utica, New York, State Street Houses, Inc., is a
New York Corporation and legal titleholder of Kennedy Plaza
Apartments in Utica, New York.  Kennedy Plaza Apartments is a
residential apartment complex consisting of one 17-story building
and two five-story buildings with 303 total apartment units.  The
Company and its affiliate, State Street Associates, L.P., filed
for chapter 11 protection on May 21, 2004 (Bankr. N.D.N.Y. Case
No: 04-63673).  When the Debtors filed for chapter 11 protection,
they reported estimated  assets and debts amounting between $10
million to $50 million.


STELCO INC: Monitor Files Fifty-Seventh Restructuring Report
------------------------------------------------------------
Stelco Inc. reported that the Monitor filed its Fifty-Seventh
Report in the matter of the Company's Court-supervised
restructuring.

As preciously reported in the Troubled Company Reporter on March
27, 2006, the Company's restructuring plan and reorganization of
its corporate structure will be implemented as planned on March
31, 2006.

The Report also reviews the previously reported process of
finalizing and posting certain principal documents in connection
with the restructuring and reorganization.

The Monitor indicates that it will seek an Order extending the
protection afforded it under Stelco's CCAA process until it is
discharged.  While plan implementation is expected to occur on
March 31, 2006, the Monitor's duties will extend beyond that date.
It may be several months before the claims procedure and other
matters for which the Monitor is responsible are completed.

                        About Stelco

Stelco is expected to emerge from its Court-supervised
restructuring on March 31, 2006.  At that time, new common shares
will be issued under the approved restructuring plan and are
expected to begin trading on the TSX on April 3, 2006, subject to
certain conditions.

Stelco, Inc. -- http://www.stelco.ca/-- is a large, diversified
steel producer.  Stelco is involved in all major segments of the
steel industry through its integrated steel business, mini-mills,
and manufactured products businesses.  The company is currently in
the final stages of a Court-supervised restructuring.  This
process is designed to establish the Company as a viable and
competitive producer for the long term.  The new Stelco will be
focused on its Ontario-based integrated steel business located in
Hamilton and in Nanticoke.  These operations produce high quality
value-added hot rolled, cold rolled, coated sheet and bar
products.

In early 2004, after a thorough financial and strategic review,
Stelco concluded that it faced a serious viability issue.  The
Corporation incurred significant operating and cash losses in 2003
and believed that it would have exhausted available sources of
liquidity before the end of 2004 if it did not obtain legal
protection and other benefits provided by a Court-supervised
restructuring process.  Accordingly, on Jan. 29, 2004, Stelco and
certain related entities filed for protection under the Companies'
Creditors Arrangement Act.

The Court extended the stay period under Stelco's Court-supervised
restructuring from Dec. 12, 2005, until March 31, 2006.


STEWART ENTERPRISES: Releases First Fiscal Quarter Ended Jan. 31
----------------------------------------------------------------
Stewart Enterprises, Inc. (Nasdaq NMS: STEIE) reported its
financial results for the first quarter of fiscal 2006, with
increases in earnings and cash flow compared to the first quarter
of fiscal 2005.

For the quarter ended Jan. 31, 2006, the Company reported net
earnings of $8.4 million compared to a net loss of $145.3 million
for the first quarter of fiscal 2005.

"We have achieved solid results during the first quarter of fiscal
2006, including increases in cash flow, gross profit and
earnings," Kenneth C. Budde, Chief Executive Officer, stated.

"We experienced increases in the number of same-store funeral
calls, the average revenue per same-store funeral call, and
preneed sales, each of which represents an integral part of our
long-term business strategy for organic growth."

"We also experienced a significant reduction in interest expense.
Including the Louisiana properties affected by Hurricane Katrina,
we achieved an increase in the number of services performed by our
same-store funeral businesses of 2.4%, an increase in our cemetery
property sales of 10%, and an increase in our preneed funeral
sales of 9% during the first quarter of 2006 compared to the first
quarter of 2005."

"These results exceeded our 2006 goal to grow same-store funeral
calls up to 2% and are at the high end of our 2006 goal to grow
preneed property and funeral sales by 5% to 10%."

"We believe that these strong results reflect the successful
execution of our strategic plan, which focuses on putting people
first -- customers and employees -- expanding our product and
service offerings to the cremation consumer, and marketing
additional products and services to our existing customer-base."

"Additionally, we believe that our funeral home incentive
compensation program, which was implemented during the first
quarter of last year, continues to foster a sense of ownership in
our funeral homes."

"In our efforts to focus on customer service and in anticipation
of growing our same-store funeral calls up to 2% in fiscal year
2006, we increased our staffing in funeral operations during the
first quarter," Mr. Budde commented.

"Additionally, as a result of the 9% increase in preneed funeral
sales, the investment in preneed selling costs during the quarter
placed some downward pressure on funeral gross profit, as these
preneed selling costs are expensed as incurred."

"The increased preneed funeral sales are deferred into our backlog
until the products and services are delivered."

"We are pleased to report these strong operating and financial
results for the first quarter," Mr. Budde concluded.  By
continuing to execute our strategic plan and maintaining our focus
on employees and customers, we are well positioned to deliver
stable, sustainable results over the long-term."

"We are proud of our accomplishments and appreciate the confidence
and support of our employees, customers, and shareholders."

Full-text copies of Stewart Enterprises, Inc.'s financial
statements for the first quarter ended Jan. 31, 2006, are
available for free at http://ResearchArchives.com/t/s?734

Headquartered in Jefferson, Louisiana, Stewart Enterprises Inc. --
http://www.stewartenterprises.com/-- is the third largest
provider of products and services in the death care industry in
the United States, currently owning and operating 231 funeral
homes and 144 cemeteries.  Through its subsidiaries, the company,
founded in 1910, provides a complete range of funeral merchandise
and services, along with cemetery property, merchandise and
services, both at the time of need and on a preneed basis.

Stewart Enterprises' 6.25% Senior Notes due 2013 carry Moody
Investor's Service's B1 rating and Standard & Poor's BB rating.


SUNNY DELIGHT: S&P Cuts Corp. Credit & Bank Loan Ratings to CCC+
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and bank loan ratings on Cincinnati, Ohio-based Sunny Delight
Beverages Co. to 'CCC+' from 'B'.  The ratings have been removed
from CreditWatch, where they were placed with negative
implications on March 3, 2006, following the company's disclosure
that liquidity was extremely limited, and because of Standard &
Poor's concern that the company would be challenged to meet
financial covenants at Dec. 31, 2005, and quarterly in 2006.

The outlook is negative.  Sunny Delight had about $117 million of
total debt outstanding at Sept. 30, 2005.

"The downgrade reflects Standard & Poor's concern that Sunny
Delight will be in technical default of its credit facility
because of a potential financial covenant violation for the
December 2005 quarter, given the company's weaker-than-expected
operating performance," said Standard & Poor's credit analyst
Alison Sullivan.

The deadline for covenant compliance is March 31, 2005, and the
company has not secured a waiver or amendment on its covenants for
this quarter to date.  Furthermore, Standard & Poor's is concerned
about Sunny Delight's ability to maintain compliance with its
credit facilities' covenants in 2006 without a waiver and/or
amendment.

The company's liquidity is very limited.  As of March 2, 2006,
Sunny Delight was fully drawn on its $30 million revolver during
its peak seasonal borrowing period and had about $10 million of
cash.  Revolver borrowing is expected to remain high until the
second half of fiscal 2006.  Standard & Poor's believes the
company will have limited cushion to meet its debt amortization
payments in 2006.

Sunny Delight is a global manufacturer and distributor of juice
drinks and sports beverages under the Sunny Delight brand name.
The ratings on Sunny Delight reflect:

   * its narrow product portfolio and limited size within the
     highly competitive and somewhat fragmented global juice
     industry; and

   * higher-than-expected leverage.

The company, owned by financial sponsor JW Childs Associates L.P.,
was formed by the combination of two juice drink businesses:

   * Sunny Delight; and

   * Punica (which was sold on June 1, 2005), previously owned by
     Procter & Gamble Co.


SYNAGRO TECHNOLOGIES: Posts $549,000 Net Loss in Fourth Qtr. 2005
-----------------------------------------------------------------
Synagro Technologies, Inc. (Nasdaq:SYGR) (ArcaEx: SYGR) reported
its financial results for the three months and full year ended
Dec. 31, 2005.

The company reported a $549,000 net loss on $90,020,000 of
revenues for the three months ended Dec. 31, 2005.

"For the quarter our top line revenue increased 5.8% over the
prior year's quarter to $90.0 million, including a $5.7 million
increase in our contract revenues, while our design build revenues
decreased $1.2 million as we are nearing completion of the
Honolulu dryer facility," commenting on the results of the
quarter, the Company's Chief Executive Officer, Robert C. Boucher,
Jr. stated.

"Operating income for the quarter totaled $8.6 million compared
to $10.4 million reported last year.  Our earnings before
interest, taxes, depreciation and amortization for the quarter
totaled $14.3 million compared to $16.0 million reported in the
same period last year."

"The decreases in operating income and EBITDA are primarily due
to a $800,000 decrease in revenue on a long-term cleanout contract
that had higher than normal margins in 2004, a $1.2 million
increase in facility utility costs, an increase in insurance
claims, and Sarbanes Oxley implementation costs of $500,000."

"During 2005, we made substantial progress with our new facilities
development projects.  Specifically, construction was
substantially completed on the Honolulu dryer facility, the
Central Valley compost facility, and the Providence Soil
dewatering facility such that all three are expected to startup in
the first quarter of 2006."

"These projects are expected to generate approximately $9 million
of annual operating revenue.  We experienced delays in obtaining
final approvals to commence construction activity on the Kern
composting facility and the Woonsocket incinerator expansion, but
these facilities are now under construction and currently expected
to be completed near the end of 2006."

"These two projects are expected to generate in excess of
$14.0 million of annual operating revenue when they commence
operations."

"For 2006, we expect revenues of approximately $325 million
to $340 million, net income of approximately $9 million to
$11.5 million and EBITDA adjusted to exclude non-cash charges
for restricted stock awards and option expense of approximately
$60.0 million to $64.0 million."

"We also expect 2006 capital expenditures, excluding new
facilities capital expenditures, to total approximately
$5 million."

"We expect new facilities capital expenditures in 2006 of
approximately $43 million related primarily to the Kern,
Woonsocket, and Providence Soils projects."

"Interest expense is expected to total approximately $20.0 million
(excluding $2.5 million of interest that is expected to be
capitalized on the Kern and Woonsocket projects)."

"Our guidance for revenues and EBITDA is similar to our reported
results for 2005 as growth associated with expected new business
and the startup of new facilities is being offset by an increase
in utility costs in the first quarter of 2006 compared to 2005,
and reductions from non-recurring items in 2005, including margin
from $25.5 million of construction revenue, and $2.7 million of
gains on sales of real estate."

"Finally, we operate four facilities that do not have natural gas
pass-through provisions with our customers.  Our results in 2005
were negatively impacted by commodity prices for natural gas and
electricity which significantly increased during 2005."

"Though costs remain high, we have locked in our unit costs on
natural gas for substantially all of our requirements for 2006
which should significantly decrease our exposure to fluctuations
in the price of natural gas in 2006."

                         Recapitalization

In June 2005, the Company:

   -- closed a new $305 million senior secured credit agreement,

   -- repaid $190 million of debt under its previously outstanding
      senior and subordinated debt agreements,

   -- converted all outstanding shares of preferred stock into
      41,885,597 shares of common stock, and

   -- completed a $160 million offering of 9,302,326 primary and
      27,847,674 secondary shares of common stock.

Accordingly, the Company incurred certain costs and write-offs
relating to the Recapitalization, including $1.5 million of
transaction costs and expenses, $6.8 million of stock option
redemptions and transaction bonuses, and $19.5 million of debt
extinguishment costs.

The Company also recognized as dividends $4.6 million of
previously unrecognized accretion on preferred stock.  These
costs and write-offs are included in the year-to-date consolidated
statement of operations.

                 About Synagro Technologies, Inc.

Headquartered in Houston, Texas, Synagro Technologies, Inc. --
http://www.synagro.com/-- offers a broad range of water and
wastewater residuals management services focusing on the
beneficial reuse of organic, nonhazardous residuals resulting from
the wastewater treatment process, including drying and
pelletization, composting, product marketing, incineration,
alkaline stabilization, land application, collection and
transportation, regulatory compliance, dewatering, and facility
cleanout services.

                            *   *   *

The company's $180 million term loan due 2012, $30 million delayed
draw term loan due 2012, and $95 million revolving credit facility
due 2010, all carry Standard & Poor's BB- rating.  Those ratings
were assigned on Jan. 31, 2005.


TOMMY HILFIGER: S&P Holds BB- Corp. Credit Rating on Neg. Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services held the ratings of Tommy
Hilfiger U.S.A. Inc., including the 'BB-' corporate credit rating,
on CreditWatch with negative implications, where they were placed
on Nov. 3, 2004.  The company recently indicated it has received
approval from the European Commission to be acquired by Apax
Partners for about $1.6 billion.  The Apax transaction is expected
to close in April 2006.  Men's and women's sportswear, jeanswear,
and childrenswear company Tommy Hilfiger had about $345 million in
long-term debt outstanding as of Dec. 31, 2005.

"Although the financing plans for this transaction were not
disclosed, Standard & Poor's expects a significant portion to be
debt financed," said Standard & Poor's credit analyst Susan H.
Ding.  "The operating challenges in invigorating the Tommy
Hilfiger brand and the ability to reverse the company's negative
operating trends for recent periods are major rating concerns."

Other concerns include open tax issues with the Hong Kong tax
authorities, and shareholder lawsuits.

Standard & Poor's will continue to closely monitor developments as
they occur.  Resolution of the CreditWatch will depend on the
outcome of the above open issues and Standard & Poor's review of
the company's business and financial strategies following the
acquisition.


THAXTON GROUP: 4th Cir. Denies Class Certification in Finova Suits
------------------------------------------------------------------
The United States Court of Appeals for the Fourth Circuit reversed
the order of the U.S. District Court for the District of South
Carolina certifying plaintiff classes in five actions relating to
The Finova Group, Inc.'s loan to The Thaxton Group, Inc.  The U.S.
District Court of South Carolina entered the class certification
order in June 2005.

The Thaxton Entities were declared in default under their loan
agreement with Finova after they advised Finova that they would
have to restate earnings for the first two fiscal quarters of
2003, and had suspended payments on their subordinated notes.
As a result of the default, FINOVA exercised its rights under the
loan agreement, and accelerated the indebtedness.  The
Thaxton Entities then filed for bankruptcy protection in the
U.S. Bankruptcy Court for the District of Delaware on Oct. 17,
2003, listing assets of approximately $206 million and debts of
$242 million.  The Thaxton Group had approximately 6,800 holders
of its subordinated notes that were issued in several states, with
a total subordinated indebtedness of approximately $122 million.

The Thaxton Entities' senior secured loan from Finova totaled
$108 million at December 31, 2005.

These cases were transferred, on June 18, 2004, to the South
Carolina District Court at Finova's behest to the United States
Judicial Panel on Multidistrict Litigation:

Plaintiff                  Court                  Filed
---------                  -----                  -----
Earle B. Gregory, et al.   Court of Common Pleas  Oct. 17, 2003
                           Lancaster County
                           South Carolina

Tom Moore, et al.          U.S. District Court    Nov. 25, 2003
                           South Carolina

Sam Jones Wood, et al.     Superior Court         Dec. 9, 2003
                           Gwinnett County
                           Georgia

Grant Hall, et al.         Superior Court         Dec. 9, 2003
                           Mecklenberg County
                           North Carolina

Charles Shope, et al.      U.S. District Court    Jan. 13, 2004
                           Southern District
                           Ohio

Each of the five Thaxton-related lawsuits are styled as class
actions, purportedly brought on behalf of certain defined classes
of people who had purchased subordinated notes from the Thaxton
Entities.  The complaints by the subordinated note holders allege
claims against Finova for fraud, securities fraud, and various
other civil conspiracy and business torts in the sale of the
subordinated notes.  Each of the complaints seeks an unspecified
amount of damages, among other remedies.

                     Fourth Circuit's Order

The Fourth Circuit ruled that in light of an adversary proceeding
brought by Thaxton's unsecured creditors committee against Finova
in Thaxton's chapter 11 cases, class certification is not the
superior method for the fair and efficient adjudication of the
controversy.  Unless the Fourth Circuit's ruling is modified or
reversed on rehearing or appeal, the Litigations will not be
permitted to proceed as a class action and could only be pursued
as individual or arguably mass actions.

Through the Adversary Proceeding, the Thaxton Committee sought,
among other things, to avoid and/or equitably subordinate the
liens and claims of Finova against the Thaxton Entities and to
recover payments amounting to $4 million previously collected due
to alleged securities fraud, violations of banking laws and
regulations, preference payments and similar claims.

The Delaware District Court, in a March 20, 2006, ruling, found,
among other things, that Finova engaged in fraudulent conduct by
purposefully structuring its Loan Agreement in a way that allowed
Thaxton to report to all of its creditors, and particularly
prospective note purchasers, that an $8 million equity investment
had been made, when in fact that $8 million continued to be debt,
and that this enabled Thaxton to violate federal banking law.

                          About Finova

Headquartered in Scottsdale, Arizona, The Finova Group, Inc.,
provides commercial financing to small and mid-sized businesses;
other services include factoring, accounts receivable management,
and equipment leasing.  The firm has three segments: Commercial
Finance, Specialty Finance, and Capital Markets.  FINOVA targets
such markets as transportation, wholesaling, communication, health
care, and manufacturing. Loan write-offs had put the firm on
shaky ground.  The Company and its debtor-affiliates and
subsidiaries filed for Chapter 11 protection on March 7, 2001
(U.S. Bankr. Del. 01-00697).  Daniel J. DeFranceschi, Esq., at
Richards, Layton & Finger, P.A., represents the Debtors.  FINOVA
has since emerged from Chapter 11 bankruptcy.  Financial giants
Berkshire Hathaway and Leucadia National Corporation (together
doing business as Berkadia) own FINOVA through the almost
$6 billion lent to the commercial finance company.

                          About Thaxton

Headquartered in Lancaster, South Carolina, The Thaxton Group,
Inc., is a diversified consumer financial services company.
The Company filed for Chapter 11 protection on October 17, 2003
(Bankr. Del. Case No. 03-13183).  Daniel B. Butz, Esq.,
Michael G. Busenkell, Esq., and Robert J. Dehney, Esq., at
Morris, Nichols, Arsht & Tunnell, represent the Debtors in their
restructuring efforts.  Alan Kolod, Esq., at Moses & Singer LLP,
represents the Offical Committee of Unsecured Creditors.  As of
Dec. 31, 2005, the Debtors reported assets totaling $98,889,297
and debts totaling $175,693,613.


THAXTON: Dist. Court Finds Finova Guilty of Fraud in Loan Deal
--------------------------------------------------------------
The United States District Court for the District of Delaware
handed down a partial judgment on an action commenced by
the Official Committee of Unsecured Creditors appointed in
the chapter 11 cases of The Thaxton Group, Inc., and its
debtor-affiliates against Finova Group, Inc.

The Thaxton Entities owe Finova $108 million at Dec. 31, 2005,
under a senior secured loan.

Through the Adversary Proceeding, the Thaxton Committee sought,
among other things, to avoid or equitably subordinate the liens
and claims of Finova against the Thaxton Entities and to recover
payments amounting to $4 million previously collected due to
alleged securities fraud, violations of banking laws and
regulations, preference payments and similar claims.

In 2003, the Thaxton Entities were declared in default under their
loan agreement with Finova after they advised Finova that they
would have to restate earnings for the first two fiscal quarters
of 2003, and had suspended payments on their subordinated notes.
As a result of the default, Finova exercised its rights under the
loan agreement, and accelerated the indebtedness.  The
Thaxton Entities then filed for bankruptcy protection in the
U.S. Bankruptcy Court for the District of Delaware on Oct. 17,
2003, listing assets of approximately $206 million and debts of
$242 million.  The Thaxton Group had approximately 6,800 holders
of its subordinated notes that were issued in several states, with
a total subordinated indebtedness of approximately $122 million.

                 Delaware District Court Ruling

The District Court found, among other things, that Finova engaged
in fraudulent conduct by purposefully structuring its Loan
Agreement in a way that allowed Thaxton to report to all of its
creditors, and particularly prospective note purchasers, that an
$8 million equity investment had been made, when in fact that
$8 million continued to be debt, and that this enabled Thaxton to
violate federal banking law.

                    Fourth Circuit Appeal

Finova is appealing an equitable subordination order entered in
Gregory v. Finova, Case No. 04-CA-2612, in the U.S. District Court
for the District of South Carolina, to the U.S. Court of Appeals
for the Fourth Circuit (Case No. 05-2118).

In a filing with the Securities and Exchange Commission, Richard
A. Ross, Finova's Senior Vice President, Chief Financial Officer &
Treasurer, laments that if the Fourth Circuit does not modify the
District Court's equitable subordination ruling, Finova's ability
to recover on its claims in the Thaxton Entities bankruptcy cases
may be materially and negatively affected, depending on the
results of other rulings in the Adversary Proceedings that may
substantially limit the effect and importance of the equitable
subordination ruling.  Among the other rulings that could affect
Finova's ability to recover its claims, either positively or
negatively, are the Delaware bankruptcy court's ruling on a
pending request seeking substantive consolidation of the Thaxton
Entities and the ability of Thaxton Group to assert claims against
the other Thaxton entities.

The Delaware Bankruptcy Court held a hearing on the substantive
consolidation issue in 2004, but has not yet ruled on the matter.
No hearing has been held on the Thaxton intercreditor issue.  Mr.
Ross adds that a material and negative impact on Finova's ability
to recover on its claims in the Thaxton Entities bankruptcy cases
would have a material adverse impact on the Company's financial
position, results of operations and cash flow.

Mr. Ross points out if there is a significant adverse final
determination against Finova in the various cases involving the
Thaxton Entities, it is unlikely that Finova would be able to
satisfy that liability due to its financial condition.  As
previously disclosed, due to FINOVA's financial condition, it does
not expect that it can satisfy all of its secured debt obligations
at maturity.  Attempts to collect on any judgment could lead to
future reorganization proceedings of either a voluntary or
involuntary nature.

                          About Finova

Headquartered in Scottsdale, Arizona, The Finova Group, Inc.,
provides commercial financing to small and mid-sized businesses;
other services include factoring, accounts receivable management,
and equipment leasing.  The firm has three segments: Commercial
Finance, Specialty Finance, and Capital Markets.  FINOVA targets
such markets as transportation, wholesaling, communication, health
care, and manufacturing. Loan write-offs had put the firm on
shaky ground.  The Company and its debtor-affiliates and
subsidiaries filed for Chapter 11 protection on March 7, 2001
(U.S. Bankr. Del. 01-00697).  Daniel J. DeFranceschi, Esq., at
Richards, Layton & Finger, P.A., represents the Debtors.  FINOVA
has since emerged from Chapter 11 bankruptcy.  Financial giants
Berkshire Hathaway and Leucadia National Corporation (together
doing business as Berkadia) own FINOVA through the almost
$6 billion lent to the commercial finance company.

                          About Thaxton

Headquartered in Lancaster, South Carolina, The Thaxton Group,
Inc., is a diversified consumer financial services company.
The Company filed for Chapter 11 protection on October 17, 2003
(Bankr. Del. Case No. 03-13183).  Daniel B. Butz, Esq.,
Michael G. Busenkell, Esq., and Robert J. Dehney, Esq., at
Morris, Nichols, Arsht & Tunnell, represent the Debtors in their
restructuring efforts.  Alan Kolod, Esq., at Moses & Singer LLP,
represents the Offical Committee of Unsecured Creditors.  As of
Dec. 31, 2005, the Debtors reported assets totaling $98,889,297
and debts totaling $175,693,613.


U.S. ABS: S&P Puts Two B Certificate Class Ratings on Neg. Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on two
classes from one U.S. ABS securitization related to General
Motors Corp. on CreditWatch with negative implications.

At the same time, the ratings on two classes from one U.S. ABS
securitization related to General Motors Acceptance Corp. remain
on CreditWatch with developing implications, where they were
placed Oct. 11, 2005.

The March 29, 2006, placement of the ratings on GM on CreditWatch
negative does not have any immediate impact on the GMAC-related
ABS transactions supported by collateral pools of consumer auto
loans or auto wholesale loans.  The 'BB' corporate credit rating
on GMAC remains on CreditWatch with developing implications.

The transaction with ratings placed on CreditWatch negative is
weak-linked to the long-term corporate credit rating on GM.  GM
provides the underlying collateral for the securitization.

The March 29, 2006, placement of the ratings on GM on CreditWatch
negative reflects:

   * GM's disclosure in its 2005 10-K that the recent restatement
     of its previous financial statements raises potential issues
     regarding access to its $5.6 billion standby credit facility;
     and

   * the possibility that certain lease obligations of as much as
     $3 billion could be subject to possible claims of:

     -- acceleration,
     -- termination, or
     -- other remedies.

Ratings placed on creditwatch negative:

Corporate Backed Trust Certificates Series 2001-8 Trust

                             Rating

      Class    To             From    Role of GM
      -----    --             ----    ----------
      A-1      B/Watch Neg    B       Underlying collateral
      A-2      B/Watch Neg    B       Underlying collateral

Ratings remaining on creditwatch developing:

Freedom Certificates US Autos Series 2004-1 Trust

      Class          Rating           Role of GMAC
      -----          ------           ------------
      A              BB/Watch Dev     Underlying collateral
      X              BB/Watch Dev     Underlying collateral


UNION PACIFIC: DBRS Holds BBB Issuer Rating on Stable Trend
-----------------------------------------------------------
Dominion Bond Rating Service confirmed the rating of Union Pacific
Corporation at BBB.  The trend is Stable.  UP's financial profile
remains on track for the rating, following operating performance
improvement over the past year that was in line with expectations.

   * Union Pacific Corp. -- Issuer Rating Confirmed at BBB

UP's credit metrics are compatible with the rating.  The Company
has made progress in enhancing network efficiency and further
gains are expected.  However, an improvement to the flow of
traffic on many main routes remains a key issue facing UP.
Network-related expenses have moderated earnings and cash flow
growth relative to the Company's peers.  In addition, further
capacity expansion initiatives will continue to require
significant investment, which will limit UP's ability to generate
significant free cash flow.

DBRS expects the trend of earnings growth since year-end 2004 to
continue over the near term, driven by robust demand across much
of its highly diversified revenue base.  Rising prices, fuel
surcharges, and increasing volumes will remain the primary
earnings drivers, and more than offset the impact of high/rising
diesel prices.  Continuing network capacity initiatives are
expected to enhance efficiency, improve service, and support
significant growth from global trade and truck market share gains
over the longer term.

DBRS notes that UP is expected to fund operations internally over
the near term, driven by earnings growth.  However, free cash flow
is expected to be modest, largely due to continuing high capex
required primarily for capacity investments and network upgrades.
The Company's credit metrics are expected to strengthen over the
near term.  In the event of sharper-than-expected growth in
earnings and cash flow, combined with flat or lower adjusted debt
levels, DBRS would consider a positive rating adjustment.  The
rating is likely to be constrained until more tangible evidence of
network efficiency improvement is demonstrated by UP.


US AIRWAYS: America West Will Redeem $112MM of 7.5% Conv. Notes
---------------------------------------------------------------
America West Holdings Corporation, a wholly owned subsidiary of US
Airways Group, Inc., gave notice of full redemption to the holders
of its 7.5% Convertible Senior Notes due 2009.  The redemption
date of the Notes has been set for April 13, 2006.  The aggregate
principal amount outstanding of the Notes is $112,299,302.

Holders of the Notes will receive $1,053.42 in cash per $1,000
principal amount of Notes, which includes accrued and unpaid
interest up to, but not including, the date of redemption.  A
notice of redemption has been sent to all registered note holders
as of March 24, 2006.  Copies of the notice may be obtained from
the trustee and paying agent:

     Wilmington Trust Company
     Telephone (302) 636-6016

Holders of the Notes have the right, at any time at or prior to
5:00 p.m., New York City time, on April 11, 2006, the date that is
two business days prior to the redemption date, to convert the
Notes in integral multiples of $1,000 into shares of the common
stock of US Airways Group at a price of $29.09 per share, or
34.376 shares per $1,000 principal amount.  As indicated in the
notice of redemption, to convert the Notes, a holder must deliver
to the Depository Trust Company the appropriate instruction form
for conversion pursuant to DTC's conversion program and must pay
any transfer taxes or other applicable taxes or duties, if
required.

US Airways and America West's recent merger creates the fifth
largest domestic airline employing nearly 35,000 aviation
professionals.  US Airways, US Airways Shuttle and US Airways
Express operate approximately 3,700 flights per day and serve more
than 230 communities in the U.S., Canada, Europe, the Caribbean
and Latin America.

                        About US Airways

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.


USG CORP: US Gypsum to Fund Otsego's $18M Purchase of Paper Mill
----------------------------------------------------------------
Menasha Packaging Company, LLC, a Wisconsin limited liability
company and a wholly owned subsidiary of Menasha Corp., owns a
paper mill and related assets located in Otsego, Michigan.  The
original site of the mill was developed in 1887.

Paper machine no. 1 located at the site was built in 1964, with a
major upgrade completed in 1991 and a new process control system
installed in 2001.  The latest product produced at the Paper Mill
was corrugating medium.  The Paper Mill was shut down in the
third quarter of 2005 because it no longer fits Menasha
Packaging's operational needs.

Subsequently, Menasha Corp., Menasha Packaging, United States
Gypsum Company, and Otsego Paper, Inc., entered into an
Acquisition Agreement, pursuant to which US Gypsum will be able
to acquire the Paper Mill and upgrade its production capabilities
to fit its paper production needs.

Having been in the paper business since 1920, Paul N. Heath,
Esq., at Richards, Layton & Finger, P.A., in Wilmington,
Delaware, relates that US Gypsum's vertical integration of paper
manufacturing remains an important strategy because it supports
US Gypsum's goal to reduce the cost of its delivered wallboard so
that it can produce and deliver high quality wallboard at a lower
cost than its competitors.

"This strategy accounts for a significant portion of US Gypsum's
total cost reduction program," Mr. Heath says.

In connection with the Acquisition Agreement, US Gypsum
incorporated Otsego Paper as a wholly owned subsidiary to execute
the Agreement and acquire the Paper Mill.

US Gypsum will fund Otsego Paper all amounts necessary for it to
purchase the Paper Mill.

Key terms of the Acquisition Agreement are:

   (1) In consideration for the purchased assets, Otsego Paper
       will pay $18,000,000 to Menasha Packaging at the closing
       of the acquisition by wire transfer of immediately
       available funds.

   (2) At the closing date, Menasha Packaging will sell, convey
       and transfer to Otsego Paper all of its right, title,
       and interest in and to the Purchased Assets, including
       specified real and personal property related to the
       Paper Mill and its co-generation facility.

   (3) Otsego Paper will assume and agree to pay, perform and
       discharge certain liabilities and obligations in
       connection with its acquisition of the Purchased
       Assets.

   (4) US Gypsum will guarantee all of Otsego Paper's
       obligations, including payment of the Purchase Price and
       indemnity obligations.

   (5) Otsego Paper and Menasha Packaging will indemnify each
       other from certain losses actually incurred by each
       party.

As part of their efforts to expand and strengthen their position
in the building products manufacturing and distribution
businesses, the Debtors, according to Mr. Heath, are receptive
to, and actively search for, opportunities to acquire assets that
can increase their cost and other advantages within those
industries.

"The building products manufacturing and distribution industries
are highly competitive," Mr. Heath says.  "The controlled
expansion of the Debtors' businesses through strategic
acquisitions is not merely beneficial to, but is in fact
necessary for, the maximization of value for the Debtors' estates
and creditors."

Mr. Heath maintains that the failure to capitalize on those
opportunities may result in the loss of the Debtors' pre-eminent
position in the marketplace and a corresponding decline in their
prospects.

Accordingly, US Gypsum seeks Judge Fitzgerald's permission to
consummate all of the transactions contemplated by the
Acquisition Agreement, including providing funding to Otsego
Paper to pay for the Paper Mill.

                         About USG Corp

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., Gus
Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq.,
Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day
represent the Debtors in their restructuring efforts.

Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes,
Esq., represent the Official Committee of Unsecured Creditors.
Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin
& Drysdale, Chartered, represent the Official Committee of
Asbestos Personal Injury Claimants.  Martin J. Bienenstock, Esq.,
Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A.
Hickerson, Esq., at Weil Gotshal & Manges LLP represent the
Statutory Committee of Equity Security Holders.  Dean M. Trafelet
is the Future Claimants Representative.  Michael J. Crames, Esq.,
and Andrew  A. Kress, Esq., at Kaye Scholer, LLP, represent the
Future Claimants Representative.  Scott Baena, Esq., and Jay
Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP,
represent the Asbestos Property Damage Claimants Committee.

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


VANTAGEMED CORP: Equity Deficit Narrows to $3.4 Mil. at Dec. 31
---------------------------------------------------------------
VantageMed Corporation (OTCBB: VMDC.OB) reported its financial
results for the fourth quarter and year ended Dec. 31, 2005.

The company reported a $303,000 net loss on $3,464,000 of total
revenues for the three months ended Dec. 31, 2005.  For the full
year ended Dec. 31, 2005, the company reported a $4,280,000 net
loss on $15,295,000 of total revenues.

At Dec. 31, 2005, the company's balance sheet showed $2,764,000 in
total assets and $6,174,000 in total liabilities, resulting in a
$3,410,000 stockholders' equity deficit.

The company's Dec. 31 balance sheet also showed strained liquidity
with $2,174,000 in total current assets available to pay
$6,110,000 in total current liabilities coming due within the next
12 months.

"In 2005 we invested significant capital in strengthening our core
products and capabilities with our three practice management
operations, and our lightweight computerized medical record
solution," Steve Curd, VantageMed's CEO, commented.

"During this process we were also able to make significant
reductions to our operating costs and cash usage levels.
Quarterly net losses have been reduced significantly from over
$1 million in each of the first three quarters of 2005 to
approximately $300,000 in the fourth quarter.  The company is now
better positioned to move toward profitability."

VantageMed Corporation -- http://www.vantagemed.com/-- is a
provider of healthcare software products and services to more than
18,000 physician, anesthesiologist and behavioral health providers
nationwide.  VantageMed's core products include ChartKeeper
Computerized Medical Records software, RidgeMark, Northern Health
Anesthesia, and Helper family of Practice Management products.
All these products are supported by SecureConnect electronic
transaction services.  Its suite of software products and services
automates administrative, financial, clinical and management
functions for physicians and other healthcare providers as well as
provider organizations.

At Dec. 31, 2005, the company's stockholders' equity deficit
narrowed to $3,410,000 from a $4,262,000 deficit at Dec. 31, 2004.


VENTURE HOLDINGS: Erman Teicher to Handle Small Preference Claims
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
approved the request of Stuart A. Gold, Chapter 7 Trustee
overseeing the liquidation of Venture Holdings Company, LLC, and
its debtor-affiliates, to employ Erman, Teicher, Miller, Zucker &
Freedman, P.C., as his special purpose counsel.

Erman Teicher will represent the Debtors in all preference actions
which are under $15,000 per creditor regardless of whether an
adversary proceeding is or was filed, effective Jan. 17, 2006.

The Trustee will pay the Firm a contingency fee equal to 33-1/3%
of the net recovery received from each preference action after
deductions, if any, for costs advanced by the Firm or by the
estate for any preference action.

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


VICORP RESTAURANTS: Posts $2 Mil. Net Loss in Qtr. Ended Jan. 26
----------------------------------------------------------------
VICORP Restaurants, Inc., reported its financial results for the
fiscal 2006 first quarter ended Jan. 26, 2006.

                            Financials

The company reported a $2,120,000 net loss on $112,304,000 of
revenues for the three months ended Jan. 26, 2006.

At Jan. 26, 2006, the company's balance sheet showed $403,351,000
in total assets, $331,097,000 in total liabilities, and
[$72,254,000] in total stockholders' equity.

The company's Jan. 26 balance sheet also showed strained liquidity
with $27,230,000 in total current assets available to pay
$43,245,000 in total current liabilities coming due within the
next 12 months.

"While we are disappointed with the results of the quarter from a
contribution perspective, we are nonetheless pleased with the
comparable sales of the three business units," Debra Koenig, CEO,
commented.

"Comparable restaurant sales at Village Inn increased 0.2% in the
first quarter of 2006 versus the same quarter of 2005, reversing
the slight decline shown in the fourth quarter of 2005."

"Same store sales at the Bakers Square business unit declined by
0.3%; however, this performance was significantly improved over
the fourth quarter of 2005, and represents the third successive
quarter of improving same store sales."

"This quarter was again very significant to VICORP in terms of our
development program.  During the first quarter, we opened six new
restaurants, acquired four restaurants from a franchisee and
closed two under-performing locations whose leases had expired."

"We plan to open or acquire a total of 33 to 37 new restaurants
throughout fiscal 2006, predominantly under the Village Inn
brand."

The company's fiscal year is comprised of 52 or 53 weeks divided
into four fiscal quarters.  The company's 2006 first fiscal
quarter is comprised of 12 weeks, or 84 days.  The company's 2005
first fiscal quarter was comprised of 13 weeks, or 91 days.

Full-text copies of VICORP Restaurants, Inc.'s financial
statements for the quarter ended Jan. 26, 2006, are available for
free at http://ResearchArchives.com/t/s?735

                   About VICORP Restaurants, Inc.

Headquartered in Denver, Colorado, VICORP Restaurants, Inc. --
http://www.vicorpinc.com/-- operates family-dining restaurants
under two proven and well-recognized brands, Village Inn and
Bakers Square.  VICORP, founded in 1958, has 379 restaurants in 25
states, consisting of 279 company-operated restaurants and 100
franchised restaurants.  Village Inn is known for serving fresh
breakfast items throughout the day, and we have also successfully
leveraged its strong breakfast heritage to offer traditional
American fare for lunch and dinner.  Bakers Square offers
delicious food for breakfast, lunch and dinner complimented by its
signature pies, including dozens of varieties of multi-layer
specialty pies made from premium ingredients.

                            *   *   *

As reported in the Troubled Company Reporter on Mar. 29, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Denver-based restaurant operator VICORP Restaurants Inc.
to 'B' from 'B+'.  The senior unsecured debt rating was lowered to
'B-' from 'B'.  S&P said the outlook is negative at that time.


WCI STEEL: Bankruptcy Court Confirms Noteholders' Chapter 11 Plan
-----------------------------------------------------------------
WCI Steel, Inc. completed another step towards its emergence from
bankruptcy reorganization after a U.S. Bankruptcy Court judge
signed orders confirming a Plan of Reorganization for WCI.

U.S. Judge Marilyn Shea-Stonum, the bankruptcy judge in charge of
WCI's Chapter 11 case, ruled in favor of the reorganization plan
presented by a group of WCI's secured noteholders.

                  Terms of the Competing Plans

As reported in the Troubled Company Reporter on Oct. 28, 2005, the
Second Competing Plans each incorporate provisions for the
substantive consolidation of the Debtors' assets and liabilities.
Substantive consolidation means that the assets and liabilities of
the six Debtors will be pooled and all of Debtors' creditors will
share in that common pool.  Each of the plan proponents believes
that substantive consolidation of the Debtors' assets and
liabilities will assist the expeditious and successful conclusion
of these Bankruptcy Cases.

                      WCI's Second Plan

The WCI Plan provides for:

   1) a fully negotiated agreement with the United Steelworkers
      of America on the terms of a new collective bargaining
      agreement and related matters;

   2) a capital structure that will allow New WCI to provide for
      the future needs of its business and

   3) proven, capable management.

The Debtors Plan is founded on a Revised CBA with their Union.
The Revised CBA establishes the labor savings and costs necessary
to reorganize WCI's business and to make the reorganized business
a viable competitor in the future steel industry.  Further, with a
Revised Union CBA and the backing of the USW, the Reorganized
Debtors avoid labor disputes and strikes and the other negative
effects (including potential loss of valuable customers)
associated with an unstable and uncertain workforce.

The Debtors emphasize that their Plan is supported by their
workers, and recommended by the Official Committee of Unsecured
Creditors.

Under WCI's Plan, these creditors are impaired:

     * Noteholders,
     * Unsecured Noteholders and
     * General Unsecured Creditors.

Secured noteholders will receive on the Distribution Date, their
pro rata portion of New Secured Notes in an aggregate principal
amount equal to $93 million.  The unsecured portion of the
Noteholders' claim will get pro rata shares of the common
interests of Equity Holdings LLC or a cash payment equivalent to
3% of their claims.

General Unsecured Creditors will recover 22% of their claims, in
cash.

Secured lender claims, other secured claims and convenience claims
are unimpaired.

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

                 The Noteholders' Second Plan

The Secured Noteholders:

   1) are prepared to own Reorganized WCI subject to the terms
      and conditions of the existing labor contract;

   2) believe that they will be able to negotiate an acceptable
      agreement with the United Steel Workers and

   3) are committed to invest $50,000,000 in new cash on that
      basis.

Under this Plan, WCI will reorganize on a stand-alone basis.  The
Debtors will continue to own and operate their businesses, without
any sale of assets, any change in its pension or labor agreements,
or any other business change.  The Secured Noteholders and
unsecured creditors will own all of the stock of the Reorganized
WCI, the amount of debt on the company's balance sheet will be
reduced, and the management of Reorganized WCI will change through
the appointment of new officers and directors.

The Noteholders financial advisor, CIBC World Markets valued
Reorganized WCI at $325,000,000.

All creditors, other than the Secured Noteholders and general
unsecured creditors, will be paid either in full and in cash, or
in accordance with the terms of their agreements.  Secured
Noteholders and general unsecured creditors will receive new
notes, new common stock, cash and the right to purchase new
preferred stock.

The Plan also provides the assumption of the existing USW
collective bargaining agreement without change to its terms.  This
differs from the plan of reorganization previously proposed by the
Secured Noteholders, which provided for WCI to be sold to a
separate entity without any collective bargaining agreement in
place.

Under the Noteholders' Plan, these claims are impaired:

     * Noteholders and
     * other allowed claims.

The Noteholders will receive:

   a) $17 million in cash;
   b) $100 million of New Notes; and
   c) 1,730,129 of New Common Stock with a total value of
      $28,080,000.

Unsecured creditors will receive and share pro rata 2,269,871
shares of New Common Stock plus any additional New Notes
reallocated from the Noteholders.  Unsecured creditors are
expected to recover 22% of their claims.

Wachovia's loan claims, other secured claims and small claims are
unimpaired.

Equity interest holders won't receive any distribution.

                           CEO Comment

Patrick G. Tatom, WCI's president and chief executive officer,
said the timing of WCI's emergence from bankruptcy would depend
upon a ratification vote by the United Steelworkers on a
collective bargaining agreement negotiated in November with the
noteholders.

He added that the confirmed plan would enable WCI to emerge from
bankruptcy with a strong balance sheet, a lower cost structure and
a competitive labor agreement, all of which will position the
company to better serve customers' needs now and in the future.

"This plan gives the opportunity to build WCI Steel as a strong,
independent custom flat-rolled producer," Mr. Tatom said.

WCI filed a voluntary petition for protection under Chapter 11 of
the U.S. Bankruptcy Code on Sept. 16, 2003.

"All of us at WCI are greatly appreciative of the patience,
support and loyalty shown by our customers, vendors and employees
through the bankruptcy process," Mr. Tatom said.  "We also are
gratified by the strong commitment of our noteholder group, which
is investing $50 million in the reorganized WCI."

                         About WCI Steel

Headquartered in Warren, Ohio, WCI Steel, Inc., is an integrated
steelmaker producing more than 185 grades of custom and commodity
flat-rolled steel at its Warren, Ohio facility.  WCI products are
used by steel service centers, convertors and the automotive and
construction markets.  WCI Steel filed for chapter 11 protection
on Sept. 16, 2003 (Bankr. N.D. Ohio Case No. 03-44662).  Christine
M. Pierpont, Esq., and G. Christopher Meyer, Esq., at Squire,
Sanders & Dempsey, L.L.P., represent the Company.  When WCI Steel
filed for chapter 11 protection it reported $356,286,000 in total
assets and liabilities totaling $620,610,000.


WINN-DIXIE STORES: To Merge Distribution Biz in Southern Florida
----------------------------------------------------------------
Winn-Dixie Stores, Inc., reported that as part of its ongoing
focus on enhancing its financial performance and helping to
position the company for profitability when it emerges from
Chapter 11 later this year, it has decided to consolidate its
distribution operations in Southern Florida.

Winn-Dixie will sell its distribution center in Pompano Beach,
Florida and move the work performed at that facility to its
distribution center nearby in Miami.  Associates at the Pompano
Beach facility will be offered positions in Miami.  The transfer
of operations is expected to begin in late April and be completed
by the end of June.

"We have continued to examine our operations to ensure Winn-Dixie
is best positioned to emerge from Chapter 11 financially healthier
and better able to compete," Winn-Dixie President and Chief
Executive Officer Peter Lynch said.  "Using one facility rather
than two in Southern Florida will allow us to leverage economies
of scale and operate more efficiently.  Proceeds received from the
sale of the Pompano distribution center will provide us with
additional capital to help fund our remodeling program and other
improvements."

Mr. Lynch added, "We are pleased that this consolidation can be
achieved with a minimal amount of layoffs, as we expect to be able
to offer employment opportunities at the Miami facility to every
associate in the Pompano Beach distribution center."

Winn-Dixie, together with its outside advisors, will conduct an
active marketing effort to identify potential buyers for the
Pompano Beach facility, which is approximately 787,500 square feet
and handles grocery, meat, dairy and produce items.  The Miami
facility is approximately 961,690 square feet and handles the same
items as well as frozen foods.  There are currently approximately
280 full-time and part-time associates at the Pompano facility and
440 at the Miami facility.

Winn-Dixie currently operates seven distribution centers in
Florida, Alabama and Louisiana.

Those interested in purchasing the Pompano Beach facility may
contact:

     Emilio Amendola
     DJM Asset Management
     Telephone (631) 752-1100

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.  Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors.  Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors.  Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee.  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.


WORLDCOM INC: Wants Musicland's Decision on Service Pact Now
------------------------------------------------------------
Pursuant to a Service Agreement dated August 2005, The Musicland
Group, Inc., agreed to purchase a minimum of $1,500,000 worth of
telecommunication services from MCI, Inc., each year, over a
three-year term, with additional six-month ramp-up and ramp-down
provisions.

WorldCom, Inc., and its debtor-affiliates provide
telecommunication services, including:

   * interstate and intrastate telecommunications services,
   * local service,
   * regional calling,
   * local metered TI service, and
   * voicemail service.

William J. Hanlon, Esq., at Seyfarth Shaw LLP, in Boston,
Massachusetts, relates that as a part of the Service Agreement,
and as a reward for committing to the three-year term, the Debtors
agreed to pay a $250,000 sign-up credit.  The Sign-up
Credit becomes due four months after the start of the Ramp-up
Period, which started on October 15, 2005.

The Service Agreement also provides that if Musicland terminates
the Agreement before the end of the term, or if the Debtors
terminates the Agreement for a cause, Musicland is required to pay
a pro rata portion of any and all credits.

Musicland and its 14 debtor-affiliates filed for Chapter 11
protection with the U.S. Bankruptcy Court for the Southern
District of New York.  Judge Bernstein presides over Musicland's
bankruptcy proceedings.

The Debtors ask Judge Bernstein to fix a deadline for Musicland to
assume or reject the Service Agreement.

According to Mr. Hanlon, there is a potential substantial injury
to the Debtors if the Service Agreement is not assumed.  If the
Debtors pay the Sign-up Credit without a prior assumption,
Musicland will be able to reject the Service Agreement and treat
both their obligations to refund the cash Signing bonus and the
balance due for breach to the Debtors as an unsecured non-
priority, prepetition claim.

Musicland should not be allowed to pick and choose the
advantageous portion of the Service Agreement, while retaining the
option of avoiding its own obligation, Mr. Hanlon contends.

The Debtors believe that the telecommunication services it
provided under the Service Agreement are necessary to Musicland's
operations.  Thus, there is little prejudice to Musicland's estate
in compelling it to assume the Service Agreement.

The Debtors also seek Judge Bernstein's permission to file the
Service Agreement under seal.

Mr. Hanlon notes that the disclosure of certain information
contained in the Service Agreement, including the pricing of
telecommunications services, would put the Debtors at a
competitive disadvantage.

The Debtors ask Judge Bernstein to restrict access to the Service
Agreement to:

   (a) the Court,

   (b) the United States Trustee,

   (c) professionals retained by an official committee in
       Musicland's Chapter 11 cases, and

   (d) those persons who:

       * are deemed acceptable by Musicland and the Debtors;

       * have executed a confidentiality agreement acceptable to
         Musicland and the Debtors; and

       * present the Clerk of the Court with a document
         evidencing satisfaction of the previous two Conditions,
         signed by the Debtors.

The Debtors ask Judge Bernstein to rule that:

   -- access to the Service Agreement will only be for
      determining whether the relief requested in their Motion to
      Fix Deadline for Assumption or Rejection should be granted;

   -- any parties permitted access to the Service Agreement will
      not share any information contained in that document with
      any third party; and

   -- any party found to have violated those conditions will be
      subject to sanctions.

                          About WorldCom

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532).  On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts.  The Bankruptcy Court confirmed WorldCom's Plan on October
31, 2003, and on April 20, 2004, the company formally emerged from
U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News,
Issue No. 115; Bankruptcy Creditors' Service, Inc., 215/945-7000)


WORLDCOM INC: Gets Okay to File Enforcement Request Under Seal
--------------------------------------------------------------
To resolve certain outstanding business issues with Qwest
Corporation and its affiliates, MCI, Inc., and Qwest signed a
settlement agreement on August 14, 2003.

Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, Esq., in
New York City, relates that the Settlement Agreement contains
substantial proprietary and confidential information, as well as
provisions imposing confidentiality and non-disclosure
obligations.  Thus, the Agreement was not filed with the U.S.
Bankruptcy Court for the Southern District of New York.  Rather,
WorldCom, Inc., and its debtor-affiliates filed a summary of the
general terms of the Agreement.

On January 9, 2006, Qwest filed a complaint against certain of the
Reorganized Debtors in the U.S. District Court for the District of
Colorado, asserting claims for breach of federal tariffs, breach
of state tariffs, and in the alternative, unjust enrichment.  The
lawsuit is now pending in the Colorado Court.
The parties have been unable to reach an agreement on the Qwest
Action.

The Qwest Action will necessarily implicate provisions of the
parties' confidential Settlement Agreement, Mr. Perez says.

According to Mr. Perez, the dissemination of certain commercial
information pertaining to the Debtors' business relationship with
Qwest would prejudice the Debtors by allowing other competitors
and claimants to gain an unfair advantage in future settlements
and business transactions.  In addition, a disclosure would also
violate the Settlement Agreement.

Therefore, the Debtors ask the Court to:

   (a) allow them to file a motion to enforce the Plan and
       Confirmation Order against Qwest from prosecuting
       discharged claims and any related exhibits under seal;

   (b) require Qwest to file any response to the Enforcement
       Motion under seal; and

   (c) rule that the contents of the Motion to Enforce, any
       response filed by Qwest and any related pleadings and
       papers, and hearing transcripts recorded, will remain
       confidential and will not be made available to the general
       public.

                          *     *     *

Judge Arthur Gonzalez grants the Debtors' request.

                          About WorldCom

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532).  On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts.  The Bankruptcy Court confirmed WorldCom's Plan on October
31, 2003, and on April 20, 2004, the company formally emerged from
U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News,
Issue No. 115; Bankruptcy Creditors' Service, Inc., 215/945-7000)


XYBERNAUT CORP: Court Approves East River as Interim DIP Lender
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia
approved East River Capital LLC as Xybernaut Corporation's (Pink
Sheets: XYBR.PK) interim replacement Debtor-in-Possession lender,
subject to final approval on April 25.  ERC has provided a $1.9
million initial loan to Xybernaut that will be increased to $2.6
million on final approval, and can be increased to $3.2 million by
mutual agreement.

Separately, the Court also approved the engagement of SSG Capital
Advisors, L.P. and Technology Options Capital LLC, confirming
their activities since February as the investment banking team
spearheading the sale of some or all of the Company's extensive
patent portfolio as part of its plan to emerge from Chapter 11.

"Due to a dispute with the original DIP lender -- LC Capital
Master Fund -- the Company did not receive funding from this
lender in January or February," Perry L. Nolen, President of
Xybernaut, declared.  "With the interim approval of ERC, the
Company's near-term budget has been funded in full and we have
caught up on substantially all our obligations to vendors and
employees.  By reducing the size of the escrows in the new
structure, we were able to reduce the loan amount from $5 million
with the prior lender to $2.6 million with ERC. Assuming approval
of the final order by the court, we believe this amount will be
sufficient to see us successfully through the sale process of the
patents."

"With this new loan in place, we are back on our original plan to
sell some or all of our patent portfolio to obtain the funding
needed to emerge from Chapter 11 in the second half of the year as
an ongoing provider of mobile computing solutions," Mr. Nolen
said.  "As part of that plan, we selected TOC to provide expertise
in evaluating and positioning the patent portfolio and selected
SSG to add expertise in sales of assets through the Chapter 11
process.  In February, the Investment Banking team started the
process of targeting and positioning components of this portfolio
to key industry players.  Although there can be no assurance as to
the outcome of this sales process, we are pleased with the
progress made by the investment banking team."

East River Capital is a special situations investment fund based
in Westport, Connecticut.  Additional information about the fund
can be obtained by contacting:

     Stevi Pasquella
     Telephone (203) 341-9964

                   About Xybernaut Corporation

Headquartered in Fairfax, Virginia, Xybernaut Corporation,
develops and markets small, wearable, mobile computing and
communications devices and a variety of other innovative products
and services all over the world.  The corporation never turned a
profit in its 15-year history.  The Company and its affiliate,
Xybernaut Solutions, Inc., filed for chapter 11 protection on
July 25, 2005 (Bankr. E.D. Va. Case Nos. 05-12801 and 05-12802).
John H. Maddock III, Esq., at McGuireWoods LLP, represents the
Debtors in their chapter 11 proceedings.  Paul M. Sweeney, Esq.,
at Linowes & Blocher LLP , represents the  Official Committee of
Unsecured Creditors.  Craig Benson Young, Esq., at Connolly Bove
Lodge & Hutz, represents the Official Committee of Equity Security
Holders.  When the Debtors filed for protection from their
creditors, they listed $40 million in total assets and $3.2
million in total debts.


* Houlihan Lokey Relocating Washington Office Effective April 1
---------------------------------------------------------------
Houlihan Lokey Howard & Zukin is relocating and expanding its
Washington, D.C., office, effective April 1, 2006.  The firm's new
Washington address is:

      Houlihan Lokey Howard & Zukin
      1800 Tysons Boulevard, Suite 300
      McLean, VA 22102-4262
      Phone: 703.847.5225
      Fax: 703.848.9667

Phone numbers will remain the same.

International investment bank Houlihan Lokey Howard & Zukin --
http://www.hlhz.com/-- provides a wide range of services,
including mergers and acquisitions, financing, financial opinions
and advisory services, and financial restructuring.  Houlihan
Lokey has ranked among the top 10 M&A advisors in the U.S. for the
past five years, has been the No. 1 provider of M&A fairness
opinions for five consecutive years, and has one of the largest
worldwide financial restructuring practices of any investment
bank.  Established in 1970, the firm has over 700 employees in 11
offices in the United States and Europe.


BOOK REVIEW: Dynamics of Institutional Change: The Hospital in
             Transition
--------------------------------------------------------------
Authors:    Milton Greenblatt, M.D., Myron R. Sharaf, Ph.D., and
            Evelyn M. Stone
Publisher:  Beard Books
Hardcover:  292 pages
List Price: $34.95

Order your personal copy today at:
http://www.amazon.com/exec/obidos/ASIN/1587981815/internetbankrupt

"Few social issues are more important today than the question of
changing our public institutions so that they are more responsive
to human want."  This observation, made by the authors in 1971
when Dynamics of Institutional Change: The Hospital in Transition
was first published, is even more relevant today.  As the co-
authors foresaw, the problem of sclerotic institutions threatening
the social and moral commitments of government and other
organizations was likely to become even more severe with the
expanding population and with a more informed public having higher
expectations and seeking accountability for shortcomings and
failures.  Hence, "[t]his book is concerned with the transitional
period in the reorganization of a large public institution."  As
Superintendent of Boston State Hospital from 1963 to 1967, Milton
Greenblatt, the book's principal author, ushered this large public
institution through a transitional period.  The hospital improved
its services and better served not only its patients, but also its
employees and the public, which funded the hospital through its
taxes.

While transition within complex, established organizations is the
general topic, the focus is especially on "problems hampering
change and the gains and losses of one or another strategy of
change."  These seemingly contradictory ends that must be
considered in most transitions are: centralization versus
decentralization; unified philosophy versus multiple ideologies;
equal distribution versus special concentration of wealth; and
professional domain versus use of volunteers.  Evaluating and
balancing these ends are discussed in the early chapters.  The
later chapters explore in greater depth the issues Greenblatt
confronted when he led the transition at Boston State Hospital.

While the work is based mainly on Greenblatt's assignment and
experiences with the hospital, the majority of the content takes a
broad enough look at the transition to make it an instructive and
invaluable guide for any healthcare professional responsible for
planning and effecting a transition in healthcare delivery.  As
the authors state at the start of this book, the Boston State
Hospital case affords "parallels and similarities" with other
large institutions.  The book offers a blueprint for structuring,
planning, implementing, leading, and monitoring a major,
organization-wide transition.  At the same time, readers will find
encouragement and, at times, will sympathize with Greenblatt's
experiences from his difficult, and ultimately satisfying, task in
leading a large public healthcare institution through a wrenching
transition.  Like any determined leader, Greenblatt was the focal
point for concerns, disagreements, resistance, and resentment
among some members of the staff.  How he overcame these personnel
issues while keeping the transition moving along provides a "real
world" perspective to the subject matter.

The core of Dynamics of Institutional Change is how
decentralization through unitization was implemented at Boston
State Hospital.  Sometimes known more simply as "unitization," the
authors prefer the longer term "decentralization through
unitization" because it connotes the purpose of unitization, which
is decentralization.  Decentralization is an especially desirable
result for large public institutions that have become unresponsive
to public needs because of entrenched bureaucratic practices and
the vested interests of various factions.  Furthermore,
decentralization helps organizations better utilize today's more
educated and productive workforce.  "[I]n the context of the state
mental hospital, decentralization, or unitization as it is
commonly called, involves breaking up the hospital into
semiautonomous units."  With the hospital, this means that each
semiautonomous unit has its own admission service, respective
treatment programs, and transitional and aftercare programs -- in
effect, serving a specific part of the community by virtually
becoming a "small mental health center."

As explained by the authors, decentralization through unitization
advances the "delegation of responsibility and maximum
participation in decision-making" among employees in key
positions.  Thus, this approach helps diminish the inevitable
skepticism and resistance to a transition, clarifies its purposes
and ends among employees, and insures that it takes root in the
different sectors of the organization.

Dynamics of Institutional Change advocates change in massive,
tangled healthcare organizations.  However, the authors offer more
than just a tired discourse on the nature of transition.  This
book tells how the needed transformation can be achieved by making
difficult decisions, addressing nettlesome problems, and attending
to daily management details.  Readers can judge for themselves
whether decentralization through unitization is relevant for
resolving chronic institutional problems.  However, planners and
leaders in charge of transitions in other institutions will find
this book especially worthwhile reading.

Milton Greenblatt is a former Commissioner of the Massachusetts
Department of Health who is on the teaching staffs of the medical
schools at Tufts, Harvard, and Boston University.  Co-authors
Myron Sharaf and Evelyn M. Stone have experience in the areas of
medicine and public health in the Boston area.

                             *********

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, 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.


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