TCR_Public/060530.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Tuesday, May 30, 2006, Vol. 10, No. 127

                             Headlines

ABB LUMMUS: Hires Kirkpatrick & Lockhart as Bankruptcy Counsel
ABB LUMMUS: Court Okays Pachulski Stang as Bankruptcy Co-Counsel
ACANDS INC: High Court Lets 3rd Circuit Decision Stand
ACLC: Moody's Reviews B2 Rating on $13.1MM Notes & May Downgrade
ADELPHIA COMMS: Court Okays Erie County Lease-Back Transaction

ADVANCED MICRO: Plans $2.5 Billion Expansion in Germany
AIRADIGM COMMUNICATIONS: Taps Liebmann Conway as Special Counsel
AIRADIGM COMMUNICATIONS: Taps Lukas Nace as FCC Special Counsel
AIRBASE SERVICES: Court Extends Deadline to File Schedules
ALLIED HOLDINGS: Wants Until September 24 to Decide on Leases

AMERIQUEST MORTGAGE: Fitch Cuts Two Certificate Class Ratings to B
ANCHOR GLASS: Obtains Court Approval for Glenshaw Settlement
ANCHOR GLASS: Court Abates Proceedings on Encore Glass' Claims
ANCHOR GLASS: Three Claimants Want Claims Objection Overruled
ASARCO LLC: Court Approves Hedging Program Implementation

ASARCO LLC: Seeks Approval for Bridgeview Management Agreement
ASARCO LCC: Lack of Info Prompts S&P to Withdraw Default Ratings
ASPECT SOFTWARE: S&P Puts CCC+ Rating on Proposed $385 Mil. Loan
ATA AIRLINES: Court Approves Boeing Settlement Agreement
ATA AIRLINES: Settles Claims Dispute with NatTel LLC

ATA AIRLINES: SEC Reporting Obligations Officially Suspended
BANYAN CORP: Posts $1 Mil. Net Loss in 2006 First Fiscal Quarter
BAY POINT: S&P Assigns BB Rating to $125 Million Debt Facility
BEARINGPOINT: Moody's Holds B3 Rating on $450 Million of Bonds
BLACKROCK: Moody's Reviews B2 Rating on Class B-5 & May Downgrade

BOMBARDIER RECREATIONAL: S&P Rates $790 Mil. Loan Facility at B+
BRAVO MORTGAGE: Moody's Puts Low-B Rating on Two Cert. Classes
CANON COMMS: Moody's Rates $35.7 Million Sr. Secured Loan at B3
CANON COMMS: Acquisition Plan Cues S&P to Revise Outlook to Neg.
CARMIKE CINEMAS: S&P Lowers Sub. Notes' Rating One Notch to CCC

CERTIFIED HR: Creditors Have Until July 31 to File Proofs of Claim
CITIZENS COMMS: Moody's Reviews Debt Rating & May Upgrade
CITX CORPORATION: 3rd Circuit Kills Trustee's Malpractice Suit
CLEAN POWER: DBRS Puts BB(high) Issuer Debt Rating Under Review
CNL FUNDING: Moody's Puts Low-B Rating on $15.4 Million of Bonds

CONGOLEUM CORP: Files Amended Disclosure Statement in New Jersey
DANA CORP: Watson & Chalin Wants Stay Lifted to Permit Set-Off
DC PROPERTIES: Disclosure Statement Hearing Scheduled on June 14
DELPHI CORP: Court Approves Blake Cassels as Canadian Counsel
DELPHI CORP: Court Okays Enlargement of KPMG's Scope of Employment

DELPHI CORP: Hires Mayer Brown as Special IT Outsourcing Counsel
DELTA AIR: Can Perform Obligations on Seattle Operating Agreement
DYNEGY HOLDINGS: S&P Puts BB- Rating on $820 Million Bank Facility
E*TRADE: DBRS Places BB Rating on Deposits & Senior Debt
EDDIE BAUER: Hires Goldman Sachs to Aid in Possible Sale

EDDIE BAUER: S&P Puts B Corp. Credit & Sr. Debt Ratings on Watch
EDWARD GROGAN: Chapter 15 Petition Summary
ELEPHANT TALK: Auditor Raises Going Concern Doubt
ELGIN NATIONAL: S&P Places CCC+ Corporate Credit Rating on Watch
EMPIRE GLOBAL: Posts $109,642 Net Loss in 2006 1st Fiscal Quarter

ENTERGY NEW ORLEANS: Court Approves Insurance Allocation Protocol
FDL INC: U.S. Trustee Names Phoenix Furniture to Creditors Panel
FENDER MUSICAL: Moody's Lowers B3 Rating on $100MM Loan to Caa1
FENDER MUSICAL: S&P Affirms B+ Rating & Revises Outlook to Neg.
FFCC 1999-2: Moody's Cuts Rating on $16MM Class A-2 Certs. to B1

FLYI INC: Judge Walrath Approves UAL Settlement Agreement
FLYI INC: Court Approves Rejection of Seven IAE Purchase Contracts
FOAMEX INTERNATIONAL: Can't File 1st Quarter 2006 Results on Time
FOSTER WHEELER: Moody's Rates $250MM Sr. Sec. Debt Facility to Ba3
GENERAL MOTORS: 20,000+ Workers Taking Buy-Out & Retirement Offers

GOLDSPRING INC: March 31 Balance Sheet Upside Down by $15.6 Mil.
H&E EQUIPMENT: Commences $253 Million Debt Securities Offering
HEALTHSOUTH CORP: S&P Assigns CCC+ Rating to $1 Billion Sr. Notes
HORNE COMMERCIAL: Case Summary & 2 Largest Unsecured Creditors
IMAGING3 INC: First Quarter Balance Sheet Upside Down by $3 Mil.

INCO LTD: Reaches Tentative CBA with USW Bargaining Committee
INGRAM MICRO: S&P Affirms BB+ Corporate Credit Rating
IT GROUP: Third Circuit Rejects ERISA Plan Participants' Claims
KANSAS CITY SOUTHERN: Names New Finance Department Leadership
KL INDUSTRIES: Has Until Friday to File Schedules

KMART CORP: Court Signs Order Resolving LNR & Goldblatt Dispute
KMART CORP: Settles Dispute Over Texas Taxing Authorities' Claims
KMART CORP: Court Rules Heaton's Claim Motion is Withdrawn as Moot
LEGACY ESTATE: Gets Interim Nod on DIP Loan & Cash Collateral Use
LG.PHILIPS DISPLAYS: Court Converts Case to Chapter 7 Liquidation

LUMINENT TRUST: Moody's Rates Class B-4 Certificates at Ba2
MASTR ALTERNATIVE: Moody's Puts Low-B Rating on 2 Cert. Classes
MESABA AVIATION: Judge Kishel Okays E*Trade Agreement Rejection
MIRANT CORP: Cadwalader Wickersham Asks for $3 Million Bonus
MIRANT CORP: MC Asset Recovery Wants BofA to Produce Documents

NORTHWEST AIRLINES: Court Sets August 16 as Claims Bar Date
NORTHWEST AIRLINES: Court Approves GE & Safran Financing Accord
NORTHWEST AIRLINES: Wants Until June 15 to File Statements
OAKWOOD HOMES: Trust's Suit Vs. Insurers Survives Dismissal Motion
OWENS CORNING: Wants to Execute Terms of Plan Support Agreement

OWENS CORNING: Asks Court to Approve Pact with Tobacco Defendants
PARMALAT USA: Wants S.N.Y. Dist. Ct. to Dismiss BofA Counterclaims
PERFORMANCE TRANSPORTATION: Court Okays Watson Wyatt's Retention
PLIANT CORP: Has Until August 1 to Remove State Court Actions
PRISM BUSINESS: S&P Assigns CCC+ Rating to $12 Million Term Loan

PRO-BUILD HOLDINGS: S&P Rates Proposed $550MM Debt Facility at BB+
RAMP SERIES: Moody's Assigns Ba1 Rating to Class M-10 Certificates
REFCO INC: Court Sets July 17 as Refco LLC Claims Bar Date
REFCO INC: Court Sets July 17 as Refco Capital Claims Bar Date
REFCO INC: Wants to Indemnify RGL Director in FXCM Board

RHODES INC: Court Confirms Restated Joint Liquidating Plan
SAINT VINCENTS: Inks Memorandum of Agreement with Interns' Union
SAINT VINCENTS: Wants to Assign Staten Island Contracts & Leases
SEDONA CORP: March 31 Balance Sheet Upside-Down by $6.4 Million
SERACARE LIFE: Judge Adler Won't Appoint Equity Holders Committee

SILICON GRAPHICS: Will Honor Prepetition Customer Programs
SOUNDVIEW HOME: Moody's Puts Low-B Rating on Two Cert. Classes
STARBOUND RE: S&P Assigns BB+ Rating to $90 Million Bank Loan
STRUCTURED ASSET: DBRS Rates $17.4 Million Loan at BB(high)
SYLVEST FARMS: Selling All Assets to Koch Foods for $58 Million

SYLVEST FARMS: Can Borrow $34 Million from Wachovia Under DIP Pact
SYLVEST FARMS: Court Appoints Nine-Member Creditors Committee
TENET HEALTHCARE: Hires Biggs Porter as Chief Financial Officer
TOMMY HILFIGER: Completes Tender Offer of 9% Senior Bonds Due 2031
TOWER AUTOMOTIVE: Fuji Dietec Wants Stay Lifted to Recover Tooling

TRACE INTERNATIONAL: Directors & Officers Entitled to Jury Trial
TRM CORP: Agrees to Sell UK Subsidiary to Digital 4 for $4.9 Mil.
USA COMMERCIAL: U.S. Trustee Appoints 5-Member Creditors Committee
USA COMMERCIAL: Trustee Names 7-Member Equity Panel in Diversified
USA COMMERCIAL: Trustee Names 7-Member Equity Panel in First Trust

WALTON SCDO: Moody's Lowers Rating on $5 Million Notes to Ba2
WINN-DIXIE: Opposes Florida Tax Collectors' Move to Collect Taxes

* Large Companies with Insolvent Balance Sheets

                             *********

ABB LUMMUS: Hires Kirkpatrick & Lockhart as Bankruptcy Counsel
--------------------------------------------------------------
ABB Lummus Global Inc. obtained authority from the U.S. Bankruptcy
Court for the District of Delaware to employ Kirkpatrick &
Lockhart Nicholson Graham LLP as its bankruptcy counsel, nunc pro
tunc to April 21, 2006.

As reported in the Troubled Company Reporter on May 4, 2006,
Kirkpatrick & Lockhart will:

    a. provide legal advice with respect to the Debtor's powers
       and duties as a debtor-in-possession in the continued
       operation of its businesses and management of its
       properties;

    b. take all necessary legal action to protect and preserve the
       Debtor's Bankruptcy Estate, including the prosecution of
       actions on behalf of the Debtor, the defense of any actions
       commenced against the Debtor, negotiations concerning
       litigation in which the Debtor is involved, and objection
       to claims filed against the Debtor's bankruptcy estate;

    c. prepare on behalf of the Debtor all necessary motions,
       answers, orders, reports, and other legal papers on
       connection with the administration of its bankruptcy
       estate;

    d. assist the Debtor in connection with approval of its
       disclosure statement in accordance with Section 1125 of the
       Bankruptcy Code;

    e. assist the Debtor in confirming and consummating its
       prepackaged plan of reorganization at the earliest possible
       date;

    f. perform any and all other legal services for the Debtor in
       connection with its chapter 11 case; and

    g. perform such other legal services as the Debtor may
       request.

Jeffrey N. Rich, Esq., a member of Kirkpatrick & Lockhart, told
the Court that the Firm's professionals bill:

       Professional               Hourly Rate
       ------------               -----------
       Partners                   $350 - $625
       Counsel                    $260 - $385
       Legal Assistants           $170 - $210

Headquartered in Houston, Texas, ABB Lummus Global Inc. --
http://www.abb.com/lummus/-- offers advanced process   
technologies, project management, engineering, procurement and
construction-related services for the oil and gas, petroleum
refining and petrochemical process industries.  The group oversees
the construction of process plants and offshore facilities.  The
company filed for chapter 11 protection on Apr. 21, 2006 (Bankr.
D. Del. Case No. 06-10401).  Jeffrey N. Rich, Esq., at Kirkpatrick
& Lockhart Nicholson Graham LLP, represents the Debtor.  Laura
Davis Jones, Esq., at Pachulski, Stang, Ziehl Young, Jones &
Weintraub, LLP, serves as the Debtor's co-counsel.  No Official
Committee of Unsecured Creditors has been appointed in the
Debtor's case.  Joseph D. Frank, Esq., at Frank/Gecker LLP
represents the Informal Asbestos Claimants' Committee.  When the
Debtor filed for protection from its creditors, it estimated more
than $100 million in assets and debts.


ABB LUMMUS: Court Okays Pachulski Stang as Bankruptcy Co-Counsel
----------------------------------------------------------------
ABB Lummus Global Inc. obtained authority from the U.S. Bankruptcy
Court for the District of Delaware to employ Pachulski Stang Ziehl
Young Jones & Weintraub LLP as its bankruptcy co-counsel, nunc pro
tunc to April 21, 2006.

As reported in the Troubled Company Reporter on May 4, 2006, the
Debtor told the Court that Pachulski Stang will handle matters
arising in its chapter 11 case that could create conflict issues
for its lead counsel, Kirkpatrick & Lockhart Nicholson Graham LLP.

The Debtor assured the Court that Pachulski Stang will complement
and not duplicate the services of Kirkpatrick & Lockhart.  The
Debtor said that it will implement appropriate procedures to
ensure that there is minimal duplication of services rendered.

Pachulski Stang will:

    a. provide legal advice with respect to the Debtor's powers
       and duties as a debtor-in-possession in the continued
       operation of its businesses and management of its
       properties;

    b. take all necessary legal action to protect and preserve the
       Debtor's Bankruptcy Estate, including the prosecution of
       actions on behalf of the Debtor, the defense of any actions
       commenced against the Debtor, negotiations concerning
       litigation in which the Debtor is involved, and objection
       to claims filed against the Debtor's bankruptcy estate;

    c. prepare on behalf of the Debtor all necessary motions,
       answers, orders, reports, and other legal papers;

    d. assist the Debtor in connection with approval of its
       disclosure statement in accordance with Section 1125 of the
       Bankruptcy Code;

    e. assist the Debtor in confirming and consummating its
       prepackaged plan of reorganization at the earliest possible
       date;

    f. appear in Court and protect the interests of the Debtor
       before the Court; and

    g. perform all other legal services for the Debtor which may
       be necessary and proper in the Debtor's chapter 11 case and
       in any related proceedings.

Laura Davis Jones, Esq., a partner at Pachulski Stang, told the
Court that she will bill $675 per hour for this engagement.  Ms.
Jones said that other professionals expected to render services
and their hourly rates are:

         Professional                  Hourly Rate
         ------------                  -----------
         Scotta E. McFarland, Esq.         $450
         Curtis A. Hehn, Esq.              $350
         Patricia Cuniff, Esq.             $155

Headquartered in Houston, Texas, ABB Lummus Global Inc. --
http://www.abb.com/lummus/-- offers advanced process   
technologies, project management, engineering, procurement and
construction-related services for the oil and gas, petroleum
refining and petrochemical process industries.  The group oversees
the construction of process plants and offshore facilities.  The
company filed for chapter 11 protection on Apr. 21, 2006 (Bankr.
D. Del. Case No. 06-10401).  Jeffrey N. Rich, Esq., at Kirkpatrick
& Lockhart Nicholson Graham LLP, represents the Debtor.  Laura
Davis Jones, Esq., at Pachulski, Stang, Ziehl Young, Jones &
Weintraub, LLP, serves as the Debtor's co-counsel.  No Official
Committee of Unsecured Creditors has been appointed in the
Debtor's case.  Joseph D. Frank, Esq., at Frank/Gecker LLP
represents the Informal Asbestos Claimants' Committee.  When the
Debtor filed for protection from its creditors, it estimated more
than $100 million in assets and debts.


ACANDS INC: High Court Lets 3rd Circuit Decision Stand
------------------------------------------------------
The U.S. Supreme Court denied certiorari, and will let stand the
decision by the U.S. Court of Appeals for the Third Circuit,
reported at 435 F.3d 252.  

In its petition for a writ of certiorari, Travelers Casualty and
Surety Co. noted a conflict among the Courts of Appeals as to
whether vacatur of a commercial arbitration award may be based
upon judicially-created, non-statutory "public policy" grounds, or
whether vacatur is limited to the grounds specified in the Federal
Arbitration Act.  The insurer also argued that, in finding that
the "public policy" underlying the automatic stay provisions of
the Bankruptcy Code required vacatur of the award, the Third
Circuit ignored the Supreme Court's well established precedent
favoring arbitration.

To avoid interfering with the broad purposes served by the
automatic stay, the Third Circuit ruled an arbitration panel had
to halt an arbitration proceeding arising out of an insurance
coverage dispute between a liability insurer and its insured, an
asbestos insulation installer, as soon as the scope of the
parties' submissions supported an award that could diminish the
insured's Chapter 11 estate.  By continuing beyond that point, the
arbitration proceeding violated the automatic stay and both the
panel's deliberations and the resulting award were void.  
Moreover, the contractual right of the insured to have 45% of the
asbestos-related claims against it allocated to its policies'
operations coverage, pursuant to its prepetition letter agreement
with the insurer, was property of the estate.  Consequently, the
arbitration award violated the automatic stay when it granted
affirmative relief to the insurer by allocating zero claims to the
insured's operations coverage, thereby effectively terminating the
insured's coverage.

Headquartered in Lancaster, Pennsylvania, ACandS, Inc., was an
insulation contracting company, primarily engaged in the
installation of thermal and mechanical insulation.  In later
years, the Debtor also performed a significant amount of asbestos
abatement and other environmental remediation work.  The Company
filed for chapter 11 protection on September 16, 2002, (Bankr.
Del. Case No. 02-12687).  Laura Davis Jones, Esq., at Pachulski
Stang Ziehl Young Jones & Weintraub, P.C., represents the Debtor
in its restructuring efforts.  Kathleen Campbell Davis, Esq., and
Marla Rosoff Eskin, Esq., at Campbell & Levine, LLC, represent the
Official Committee of Asbestos Personal Injury Claimants.  When
the Company filed for protection from its creditors, it estimated
debts and assets of over $100 million.

                    Chapter 11 Plan Update

As previously reported, Judge Fitzgerald approved the adequacy
of the Debtor's Amended Disclosure Statement explaining their
proposed Plan of Reorganization on Oct. 3, 2003.  On Jan. 26,
2004, Judge Fitzgerald entered Proposed Findings of Fact and
Conclusions of Law Re Chapter 11 Plan Confirmation (Doc. 979),
recommending that the U.S. District Court deny confirmation
of the Debtor's Plan.  On Feb. 5, 2004, the Debtor and the
Official Committee of Asbestos Personal Injury Claimants jointly
filed with the District Court an objection to the Bankruptcy
Court's Proposed Findings.  In that filing, the Debtor and the
Committee asked the District Court to reject the Bankruptcy
Court's Findings and Conclusions and confirm the proposed chapter
11 plan.


ACLC: Moody's Reviews B2 Rating on $13.1MM Notes & May Downgrade
----------------------------------------------------------------
Moody's Investors Service placed under review for possible
downgrade one class of franchise loan backed notes issued by ACLC
Business Loan Receivables Trust 1998-2.  The complete rating
action:

Under Review For Possible Downgrade:

ACLC Business Loan Receivables Trust 1998-2

   * $13,154,000 Class B Notes, rated B2.

The balance of delinquent, defaulted and accelerated loans in this
deal is significant, currently at roughly one-half of the loan
balance of the collateral pool.  Moody's review will focus on the
degree to which these loans and the uncertainty surrounding their
recoveries may ultimately impact principal paydown on the notes.


ADELPHIA COMMS: Court Okays Erie County Lease-Back Transaction
--------------------------------------------------------------
Adelphia Communications Corporation currently participates in a
sales tax incentive program in which it has received an exemption
from state and local sales taxes in connection with the purchase
of certain capital equipment.

Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, in New
York, relates that the ACOM Debtors have saved approximately
$147,580 in sales tax by their participation in the Program and
if their participation is not properly terminated, they could
potentially be liable for repayment of the sales tax saved as
well as for the interest and penalties of that tax savings.

The ACOM Debtors had also paid a $231,863 initial agency fee in
connection with the Program, which will be recouped once their
participation in the Program is terminated.

ACOM now wishes to terminate its participation in the Program in
order to gain benefits of approximately $400,000.

In order to terminate the participation in the Program, ACOM must
comply with certain enabling statutes requiring ACOM to lease
computer equipment valued at $1,900,000 acquired through the
Program to Erie County Industrial Development.

ACOM will lease the computer equipment to ECIDA for seven days,
during which time ECIDA will sublease it back to ACOM.  At the
conclusion of the Lease-Back Transaction, ACOM will retain title
to the computer equipment.

Ms. Chapman assures the Court that all negotiations with ECIDA
have been conducted through counsel on an arm's-length basis.

ACOM sought and obtained the Court's authority to enter into the
Lease-Back Transaction pursuant to Section 363 of the Bankruptcy
Code.

While the Lease-Back Transaction arguably could be characterized
as a transaction in the ordinary course of business, the ACOM
Debtors seek the Court's approval out of abundance of caution and
in compliance with ECIDA's request.

Based in Coudersport, Pa., Adelphia Communications Corporation --
http://www.adelphia.com/-- 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.  PricewaterhouseCoopers serves as the Debtors'
financial advisor.  Kasowitz, Benson, Torres & Friedman, LLP, and
Klee, Tuchin, Bogdanoff & Stern LLP represent the Official
Committee of Unsecured Creditors.  (Adelphia Bankruptcy News,
Issue No. 133; Bankruptcy Creditors' Service, Inc., 215/945-7000)


ADVANCED MICRO: Plans $2.5 Billion Expansion in Germany
-------------------------------------------------------
Advanced Micro Devices, Inc., plans to expand its microprocessor
manufacturing capacity over the next three years by adding
additional 300-millimeter wafer production capabilities in Dresden
through the implementation of three new projects.  AMD's newest
fabrication facility will come online through a major
transformation of the company's existing Fab 30, which will be
named Fab 38.  The transition from 200mm to 300mm allows for more
than twice as many processors on a wafer.  In addition, AMD will
also expand Fab 36's existing 300mm capacity and build a new clean
room facility to handle the site's growing Bump and Test
requirements, which is one of the final stages of the
manufacturing process where wafers are prepared to be shipped for
packaging.  With plans to invest a total of $2.5 billion in the
Dresden expansion projects, AMD continues to aggressively scale
its innovative manufacturing processes to meet growing customer
needs.

"As global demand continues to rise for AMD products, we are
scaling our manufacturing capacity intelligently to meet our
customers' growing needs," said Hector Ruiz, chairman of the board
and chief executive officer of AMD.  "To achieve this, we are
pursuing an aggressive path to invest in and expand our top-rated
manufacturing capabilities in Dresden.  These strategic
investments highlight how significant Germany and Europe are to
the future of AMD competitiveness.  We expect that AMD's momentum
and demand for our products will continue to increase, fueled by
our technology leadership, our commitment to customer-centric
innovation and the continuing global antitrust scrutiny that will
ensure truly competitive markets."

AMD will ramp down 200mm manufacturing in the second half of 2007,
with preparation already underway for the ramp of 300mm wafers on
65nm process technology at Fab 38 by the end of 2007.  Through the
combination of leading-edge equipment, Automated Precision
Manufacturing and the great people of Dresden, the plant will
produce the latest generations of AMD microprocessors, reaching
full capacity by the end of 2008.  The majority of the investment
will go into new equipment in the Fab 38 facility.  AMD will also
build a new clean room facility on its Dresden campus for Bump and
Test requirements, which will support both fabrication facilities.  
Previously the clean room facilities for Bump and Test activities
were located within Fab 30 and Fab 36.  By moving them into a new
facility in 2007, AMD has the ability to maximize production space
at both Fab 36 and Fab 38, providing increased output and
capacity.  These three projects have the potential to increase
Dresden-based manufacturing to a full capacity of 45,000 300mm
wafer starts per month by the end of 2008.

"With the addition of Fab 36, AMD took a major step forward in
increasing output and scale for its global manufacturing and with
this announcement we raise the bar even further," Daryl Ostrander,
senior vice president, logic technology and manufacturing,
Microprocessor Solutions Sector, said.  "As we look ahead to
aggressive process technology transitions to 45nm and beyond, the
ability to continue delivering these technologies with world-class
yields will provide customers with incredibly sophisticated and
agile manufacturing capabilities, whereby we can continue to
accommodate the increasing demand for AMD products."

                            About AMD

Based in Sunnyvale, California, Advanced Micro Devices Inc. --
http://www.amd.com/-- is a leading global provider of innovative  
microprocessor solutions for computing, communications and
consumer electronics markets.  Founded in 1969, AMD is dedicated
to delivering superior computing solutions based on customer needs
that empower users worldwide.

                            *   *   *

As reported in the Troubled Company Reporter on Jan. 31, 2006,
Standard & Poor's Ratings Services raised its ratings on
Sunnyvale, California-based Advanced Micro Devices Inc., including
its corporate credit rating, to 'B+' from 'B'.  In addition, the
ratings on the microprocessor manufacturer were removed from
CreditWatch with positive implications, where they were placed on
Jan. 24, 2006.  S&P says the ratings outlook is stable.

As reported in the Troubled Company Reporter on Jan. 26, 2006,
Fitch Ratings revised Advanced Micro Devices Inc.'s Rating Outlook
to Positive from Stable and affirmed the company's 'B' issuer
default rating.   AMD's 'B/RR4' senior unsecured debt and 'BB/RR1'
senior secured bank credit facility are also affirmed.  Fitch's
action affected approximately $1.2 billion of  total debt.

As reported in the Troubled Company Reporter on Jan. 26, 2006,
Moody's Investors Service raised the corporate family rating of
Advanced Micro Devices, Inc., two notches to Ba3, with a stable
outlook.


AIRADIGM COMMUNICATIONS: Taps Liebmann Conway as Special Counsel
----------------------------------------------------------------
Airadigm Communications, Inc., asks the U.S. Bankruptcy Court for
the Western District of Wisconsin for permission to employ
Liebmann, Conway, Olejniczak & Jerry, S.C., as its special
counsel.

Liebmann Conway will represent the Debtor in general corporate
legal matters relating to the operation of its business and
fulfillment of requirements relating its corporate status.  This
includes contract review, matters relating to the structure of the
corporation, disputes arising from the Debtor's operation of its
business, and financial planning.

The Debtor tells the Court that the Firm's professionals bill:

      Professional                  Designation       Hourly Rate
      ------------                  -----------       -----------
      Jerome E. Smyth, Esq.         Principal            $255
      Robert M. Charles, Esq.       Principal            $230
      Michele M. McKinnon, Esq.     Associate            $200
      Kristen M. Hooker, Esq.       Associate            $180

      Title                                           Hourly Rate
      -----                                           -----------
      Principals                                      $230 - $255
      Associates                                      $170 - $200
      Legal Assistants and Paralegals                    $125

Jerome E. Smyth, Esq. a partner at Liebmann Conway, assures the
Court that his firm is "disinterested" as that term is defined in
Section 101(14) of the Bankruptcy Code.

Mr. Smyth can be reached at:

         Jerome E. Smyth, Esq.
         Liebmann, Conway, Olejniczak & Jerry, S.C.
         231 South Adams Street
         P.O. Box 23200
         Green Bay, Wisconsin 54305-3200
         Tel: (920) 437-0476
         Fax: (920) 437-2868
         http://www.lcojlaw.com/

                    About Airadigm Communications

Headquartered in Little Chute, Wisconsin, Airadigm Communications,
Inc. -- http://www.eisnteinpcs.com/-- provides local wireless  
phone services through its Einstein PCS wireless networking
technology.  The company filed for chapter 11 protection on July
28, 1999 (Bankr. W.D. Wis. Case No. 99-33500).  The Court
confirmed its plan of reorganization in 2000.

The company filed a new chapter 11 petition on May 8, 2006 (Bankr.
W.D. Wis. Case No. 06-10930).  Kathryn A. Pamenter, Esq., and
Ronald Barliant, Esq., at Goldberg, Kohn, Bell, Black, Rosenbloom
& Moritz, Ltd., represent the Debtor in its new bankruptcy
proceedings.  No Official Committee of Unsecured Creditors has
been appointed in the Debtor's new bankruptcy case.  In its second
bankruptcy filing, the Debtor estimated assets between $10 million
to $50 million and debts of more than $100 million.


AIRADIGM COMMUNICATIONS: Taps Lukas Nace as FCC Special Counsel
---------------------------------------------------------------
Airadigm Communications, Inc., asks the U.S. Bankruptcy Court for
the Western District of Wisconsin for permission to employ Lukas,
Nace, Gutierrez & Sachs, as its special counsel.

Lukas Nace will represent and advise the Debtor in negotiations
and dealings with the Federal Communications Commission.

The Debtor assures the Court that Lukas Nace will not duplicate
the services being rendered by Goldberg, Kohn, Bell, Black,
Rosenbloom & Moritz, Ltd., its counsel or Liebman, Conway,
Olejniczak & Jerry, S.C., its special counsel on general corporate
legal matters.  The Debtor says that Lukas Nace's services to the
Debtor will be limited to matters concerning the FCC.

Thomas Gutierrez, Esq., a partner at Lukas Nace, tells the Court
that he will bill $440 per hour for this engagement.  

Mr. Gutierrez discloses that the firm's other professionals bill:

      Professional            Designation      Hourly Rate
      ------------            -----------      -----------
      Russell Lukas, Esq.     Principal            $440
      Steven Chernoff, Esq.   Associate            $275
      Lynn Ratnabale, Esq.    Associate            $270

Mr. Gutierrez assures the Court that his firm is "disinterested"
as that term is defined in Section 101(14) of the Bankruptcy Code.

Mr. Gutierrez can be reached at:

         Thomas Gutierrez, Esq.
         Lukas, Nace, Gutierrez & Sachs
         1650 Tysons Boulevard, Suite 1500
         McLean, Virginia 22102
         Tel: (703) 584-8678
         Fax: (703) 584-8696
         http://www.fcclaw.com/

                   About Airadigm Communications

Headquartered in Little Chute, Wisconsin, Airadigm Communications,
Inc. -- http://www.eisnteinpcs.com/-- provides local wireless  
phone services through its Einstein PCS wireless networking
technology.  The company filed for chapter 11 protection on July
28, 1999 (Bankr. W.D. Wis. Case No. 99-33500).  The Court
confirmed its plan of reorganization in 2000.

The company filed a new chapter 11 petition on May 8, 2006 (Bankr.
W.D. Wis. Case No. 06-10930).  Kathryn A. Pamenter, Esq., and
Ronald Barliant, Esq., at Goldberg, Kohn, Bell, Black, Rosenbloom
& Moritz, Ltd., represent the Debtor in its new bankruptcy
proceedings.  No Official Committee of Unsecured Creditors has
been appointed in the Debtor's new bankruptcy case.  In its second
bankruptcy filing, the Debtor estimated assets between $10 million
to $50 million and debts of more than $100 million.


AIRBASE SERVICES: Court Extends Deadline to File Schedules
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
extended the deadline in which Dennis Faulker, Chapter 11 Trustee
for Airbase Services, Inc., may file the Debtor's Schedules and
Statements of Financial Affairs.  

The trustee has until June 17, 2006, or three days before the
Section 341(a) creditors' meeting, to file the schedules.  The
Section 341(a) meeting is scheduled on June 20, 2006.

The trustee tells the Court that due to his recent appointment, he
needs additional time to collect the data needed for the accurate
preparation and filing of the Debtor's schedules and statements.

Headquartered in Grand Prairie, Texas, Airbase Services, Inc. --
http://www.airbaseservices.com/-- maintains and repairs a wide
range of cargo equipment and cabin interior designs for commercial
airlines, and provides maintenance and management services for the
airline industry.  Due to bankruptcies filed by several of its
airline customers, the Company filed for bankruptcy protection on
May 1, 2006 (Bankr. N.D. Tex. Case. No. 06-41231).  The Court
approved the appointment of Dennis Faulkner as trustee in the
Debtor's chapter 11 case on May 3, 2006.  Mark J. Petrocchi, Esq.,
at Goodrich Postnikoff Albertson & Petrocchi, LLP, represents the
Trustee.  No Official Committee of Unsecured Creditors has been
appointed in the Debtor's case.  When the Debtor filed for
bankruptcy, the Company reported assets and debts amounting to
$10 million to $50 million.


ALLIED HOLDINGS: Wants Until September 24 to Decide on Leases
-------------------------------------------------------------
Pursuant to Section 365(d)(4) of the Bankruptcy Code, Allied
Holdings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Northern District of Georgia to extend their
deadline to assume or reject their non-residential real property
leases -- except the lease for their corporate headquarters in
Decatur, Georgia -- through and including Sept. 24, 2006.

Thomas R. Walker, Esq., at Troutman Sanders LLP, in Atlanta,
Georgia, relates that the Debtors continue to be parties to around
52 non-residential real property leases.

Given the large number of Leases, the Debtors need additional time
to determine whether the Leases should be assumed or rejected,
Mr. Walker asserts.

Mr. Walker assures the Court that the Debtors have paid, and will
continue to pay, all postpetition lease obligations under the
Leases.  Therefore, the landlords will not be harmed by the
proposed extension.

A list of the 52 Leases is available for free at
http://ResearchArchives.com/t/s?a0b

Headquartered in Decatur, Georgia, Allied Holdings, Inc. (OTC Pink
Sheets: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its   
affiliates provide short-haul services for original equipment
manufacturers and provide logistical services.  The Company
and 22 of its affiliates filed for chapter 11 protection on
July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through
05-12537).  Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP,
represents the Debtors in their restructuring efforts.  Henry S.
Miller at Miller Buckfire & Co., LLC, serves as the Debtors'
financial advisor.  Anthony J. Smits, Esq., at Bingham McCutchen
LLP, provides the Official Committee of Unsecured Creditors with
legal advice and Russell A. Belinsky at Chanin Capital Partners,
LLC, provides financial advisory services to the Committee.  When
the Debtors filed for protection from their creditors, they
estimated more than $100 million in assets and debts. (Allied
Holdings Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


AMERIQUEST MORTGAGE: Fitch Cuts Two Certificate Class Ratings to B
------------------------------------------------------------------
Fitch Ratings took rating actions on these Ameriquest Mortgage
Securities Inc. home equity issues:

  AMSI series 2002-C:

    -- Class A affirmed at 'AAA'

    -- Class M1 affirmed at 'BBB'

    -- Class M2 downgraded to 'B' from 'BBB-' and is removed from
       Rating Watch Negative

  AMSI series 2002-3:

    -- Class M-2 affirmed at 'AA-'

    -- Class M-3 affirmed at 'BBB'

    -- Class M-4 downgraded to 'B' from 'BBB-' and is removed from
       Rating Watch Negative

The affirmations reflect satisfactory credit enhancement
relationships to future loss expectations and affect approximately
$193.64 million.  In the case of series 2002-C class A,
affirmation on this class reflects the Freddie Mac guarantee of
timely distribution on interest and ultimate distribution of
principle on the offered certificates and affect approximately
$79.48 million of outstanding certificates.

The downgrades, affecting approximately $28.97 million of the
outstanding certificates, are taken as a result of a deteriorating
relationship between CE and expected loss.

All of the loans were either originated or acquired by Ameriquest
Mortgage Company, which also serves as the servicer (rated 'RSP2+'
by Fitch).  Ameriquest Mortgage Company is a specialty finance
company engaged in the business of originating, purchasing, and
selling mortgage loans.

The underlying collateral consists of fully amortizing 15- to 30-
year fixed-and adjustable-rate mortgages secured by first liens on
one- to four-family residential properties extended to subprime
borrowers.  As of the May 2006 distribution date, the series 2002-
C is 42 months seasoned and series 2002-3 is 44 months seasoned.
The pool factors (current principal balance as a percentage of
original) are approximately 11% and 10%, respectively.

Due to differences in prepayment behavior, the geographic
composition of the pools has changed significantly since issuance.
Borrowers located in areas enjoying rapid home appreciation have
prepaid at a much faster rate than borrowers located in areas with
relatively slow home price appreciation.  As a result, a large
percentage of the remaining pool is now located in states which
have experienced slower-than-average home price appreciation
trends.

Approximately 40% of the remaining loans in both pools are secured
by properties in Indiana, Ohio, Michigan, Illinois, Pennsylvania,
and Texas.

Loans located in these states have generally been more likely to
default and have generally experienced high loss severities.  This
is expected to continue to put upward pressure on loss trends
going forward.

Series 2002-C collateral losses have exceeded excess spread 9x out
of the past 12 months causing the overcollateralization to fall
below its target amount.  The current OC is at $3,648,590 which
falls short of its target by $2,851,410.  The cumulative loss as a
percentage of the original pool balance is 1.71% and the
delinquency rate (including 60+, bankruptcy foreclosure, and REO)
as a percentage of the current pool balance is 24.6%.

The OC for series 2002-3 is also currently below its target due to
losses that have exceeded XS 10x out of the last 12 months.  The
current OC amount is 2,782,719, about 3.46% of current principal
balance.  The cumulative loss as a percentage of the original pool
balance is 2.08% and the delinquency rate (including 60+,
bankruptcy foreclosure, and REO) as a percentage of the current
pool balance is 27.94%.

Both transactions are currently failing their delinquency trigger
tests and Fitch expects that the triggers will continue to fail
therefore the transactions will distribute principal sequentially
among the classes.  As a result, the credit risk for the mezzanine
and senior classes is mitigated.


ANCHOR GLASS: Obtains Court Approval for Glenshaw Settlement
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
approve a Settlement Agreement between Anchor Glass Container
Corporation, GGC LLC, aka Glenshaw Glass Company, and Dufftown
Real Estate Limited Partnership.

As reported in the Troubled Company Reporter on April 27, 2006,
Anchor Glass and GGC exchanged certain molds and related materials
used in the container manufacturing process.

Glenshaw has a pending bankruptcy petition in the United States
Bankruptcy Court for the Western District of Pennsylvania.  In
June 2005, Glenshaw commenced an adversary proceeding against
Anchor Glass in the Pennsylvania Bankruptcy Court, seeking the
immediate recovery of certain glass-making molds in Anchor Glass'
possession.  Glenshaw also alleged that Anchor Glass was
improperly using the molds.

In August 2005, Glenshaw obtained from the Pennsylvania
Bankruptcy Court a default judgment against Anchor Glass on the
Complaint, and an order granting Glenshaw injunctive relief
against Anchor Glass, as a result of Anchor Glass' alleged
continued use of the molds.

In October 2005, the Pennsylvania Bankruptcy Court approved the
sale of substantially all of Glenshaw's assets, including the
rights Glenshaw had in the subject molds, to Dufftown.

On Feb. 10, 2006, Anchor Glass asked the Pennsylvania Bankruptcy
Court to open and set aside the default judgment and injunction
order.

To resolve the outstanding issues among them, Anchor Glass,
Glenshaw and Dufftown agreed that:

   (a) Anchor Glass will be permitted to retain possession of the
       molds allegedly belonging to Glenshaw, and Dufftown will
       be permitted to retain possession of the molds allegedly
       belonging to Anchor Glass;

   (b) Anchor Glass, Glenshaw and Dufftown will each file a
       motion seeking approval of the Settlement Agreement in the
       appropriate bankruptcy courts;

   (c) Glenshaw and Dufftown will seek to reopen the Adversary
       Proceeding for purposes of causing withdrawal of the
       complaint and injunctive motion, as well as causing the
       court to vacate the default judgment and injunction order;

   (d) Upon approval of the motions seeking approval of the
       Settlement Agreement, Anchor Glass will pay $115,000 to
       Dufftown; and

   (e) The parties will execute mutual releases.

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. 25;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ANCHOR GLASS: Court Abates Proceedings on Encore Glass' Claims
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida rules
that all further proceedings related to the objections of Anchor
Glass Container Corporation's Official Committee of Unsecured
Creditors to Encore Glass Inc.'s Claim No. 730 will be abated
until the U.S. District Court for the Middle District of Florida
has entered an order on the appeal of the Bankruptcy Court's
disallowance of the Encore Claim.

All parties are directed to file the appropriate papers to
reinstate proceedings on the Objection upon entry of the District
Court's order on the Appeal.

As of the Effective Date of the Debtor's Plan of Reorganization,
Samuel M. Stricklin, as Alpha Resolution Trustee, is
automatically substituted in place of the Committee as the
Objecting Party, without further Court order.

As reported in the Troubled Company Reporter on Feb. 3, 2006,
Encore Glass, Inc., filed a claim, which was later amended, in the
prior Chapter 11 case of Anchor Glass in 2002.  Encore's amended
claim in the Anchor Glass 2002 bankruptcy case was disallowed in
January 2005 by Judge Thomas E. Baynes, Jr., and is now on appeal
to the United States District Court for the Middle District of
Florida.

Based on the same facts and events underlying Encore's claim in
the Anchor Glass 2002 case, Encore filed Claim No. 45 for
$6,102,913, in Anchor Glass' current bankruptcy case.  Encore
later filed an amended Claim No. 730 for the same claim amount.

Anchor Glass, the Creditors Committee and Encore agreed that:

   (a) Claim No. 45 is disallowed as superseded by Claim No. 730
       for $6,102,913;

   (b) Anchor Glass and the Committee will file an objection to
       Claim No. 730;

   (c) until the District Court rules, Claim No. 730 will be
       treated as, and will be deemed to be, a Disputed Class 5
       Claim as to which the Alpha Resolution Trustee will
       maintain an appropriate pro rata reserve as set forth in
       Anchor Glass' Plan of Reorganization;

   (d) if the District Court affirms the orders from Anchor
       Glass' 2002 bankruptcy case, then Claim No. 730 will be
       disallowed in the current Anchor Glass Chapter 11 case.
       If Encore file a further appeal of that District Court
       order, the Alpha Resolution Trustee will not be required
       to maintain any reserve on account of Claim No. 730
       without an order staying the effect of the District Court
       order;

   (e) if the District Court reverses the orders from Anchor
       Glass' 2002 bankruptcy case, then Claim No. 730 will
       remain a Disputed Claim, and will be subject to further
       judicial proceedings in Anchor Glass' current bankruptcy
       case;

   (f) Claim No. 730 will be treated as a Class 5 general
       unsecured claim to the extent it is allowed and will, if
       allowed, share pro rata with the Claims of other Holders
       of Class 5 Claims.  Encore will not be entitled to any
       payment as administrative or priority claim holder; and

   (g) Encore's objection to the confirmation of the Plan is
       overruled, with prejudice.

The Creditors Committee asked the Court to disallow Claim No. 730
because of the preclusive and binding effect of the earlier
Bankruptcy Court orders, disallowing Encore's identical claims in
the Anchor Glass 2002 bankruptcy case, applying principals of law
including res judicata, collateral estoppel, and law of the case.

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. 25;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ANCHOR GLASS: Three Claimants Want Claims Objection Overruled
-------------------------------------------------------------
Three claimants ask the U.S. Bankruptcy Court for the Middle
District of Florida to overrule Anchor Glass Container
Corporation's objection to their claims:

   1. Iron Mountain Information Management, Inc.,
   2. Madison Warehouse Corporation, and
   3. Midwest Warehouse & Distribution, Inc.

Anchor Glass had asked the Court to disallow nine claims,
asserting statutory warehouse liens:

   Claimant                           Claim No.   Claim Amount
   --------                           --------    ------------
   Spartan Warehouse and Distri.         378         $25,983
   Spartan Warehouse and Distri.         537          10,762
   Iron Mountain, Inc.                   498           4,717
   H & O Distribution, Inc.              676          40,257
   National Distribution Centers LP      902          77,162
   New Star Warehouse                    938          21,980
   Madison Warehouse Corp.              1151           8,725
   Regency Warehousing & Distr.         1179           3,742
   Midwest Warehouse                    1181          31,202

Robert M. Quinn, Esq., at Carlton Fields PA, in Tampa, Florida,
asserted that the asserted liens are avoidable under Section
545(3) of the Bankruptcy Code.

                      Claimants' Response

Section 545(3) of the Bankruptcy Code provides that "the trustee
may avoid the fixing of a statutory lien on property of the debtor
to the extent that the lien . . . is for rent."

Andrew T. Jenkins, Esq., at Bush Ross PA, in Tampa, Florida,
Stated  that the Claimants' liens are valid, perfected and
enforceable, however, they do not secure "rent" obligations.

Mr. Jenkins asserted the Debtor cannot avoid the Claims by merely
filing an objection.  To avoid a lien, Rule 7001 of the Federal
Rules of Bankruptcy Procedure requires that the Debtor file an
adversary proceeding.

Moreover, Claim No. 498 filed by Iron Mountain cannot be avoided
because the avoidance powers in Section 545 only apply to
"statutory liens", Mr. Jenkins avers.  The Archival Services and
Storage Order between Iron Mountain and the Debtor grants Iron
Mountain a lien against the Debtor's records material in Iron
Mountain's possession.  Iron Mountain also has a consensual
security interest that is not subject to avoidance under Section
545 as a statutory lien.

The Court has overruled Anchor Glass Container Corporation's
objections to the claims of Iron Mountain, Inc., and allowed the
claims as a fully secured claim for $4,717.

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. 25;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ASARCO LLC: Court Approves Hedging Program Implementation
---------------------------------------------------------
The Court authorizes ASARCO LLC's Board of Directors to establish
a Hedging Program committee, which will include FTI Consulting,
Inc., financial advisors to ASARCO's Official Committee of
Unsecured Creditors.

FTI's attendance is required at all Hedging Committee meetings
provided that the committee meetings may be held by telephone on
reasonable notice.

ASARCO's Board of Directors is authorized to designate one or
more members and advisors of the Hedging Committee in its sole
discretion.

The Court directs the Hedging Committee to notify the Board of
its recommendations once specific trades within the parameters
established by the Board has been identified.  The Board will
review the recommendations, and has the power to veto the
recommendations.

Before any trades are executed, ASARCO's counsel must disclose
the specific terms of the Hedging Program to these parties by
e-mail:

    * counsel for ASARCO Committee;

    * counsel for Asbestos Debtors' Official Committee of
      Unsecured Creditors;

    * counsel for the Future Claims Representative;

    * counsel for The CIT Group/Business Credit, Inc.;

    * the U.S. Trustee; and

    * the Department of Justice.

The Notice Parties will have 24 hours after receipt of notice to
file an objection with the Court.  All objections and responses
must be filed under seal.

Without a timely objection, ASARCO may implement the specific
trades without further Court order.

The Court authorizes ASARCO to use up to $30,000,000 in the
implementation of the Hedging Program without further Court
order.  The Maximum Hedging Expenditure can be increased by
$10,000,000 more if no notice party objects to the increase.

ASARCO will maintain a $10,000,000 minimum cash balance in
unrestricted cash after the implementation of the Hedging
Program, excluding any borrowings under the DIP Facility.

The Hedging Program is limited to copper.

All contracts under the Hedging Program must be settled
financially on or before Dec. 31, 2007.  ASARCO is authorized
to extend the Hedging Term until Dec. 31, 2008, if no Notice
Party objects to the extension.

The Order does not prejudice the Ad Hoc Committee of ASARCO
Noteholders from requesting to become a Notice Party at a later
time, subject to appropriate confidentiality agreements.

Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,  
smelting and refining company.  Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent.  The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor
in its restructuring efforts.  Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services.  Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.  When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.

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

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee.  Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 22; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


ASARCO LLC: Seeks Approval for Bridgeview Management Agreement
--------------------------------------------------------------
ASARCO LLC seek authority from the U.S. Bankruptcy Court for the
Southern District of Texas in Corpus Christi to enter into a
property management agreement with Bridgeview Management Company,
effective as of Aug. 9, 2005.

Bridgeview Management Company is a wholly owned subsidiary of
ASARCO LLC and is a Chapter 11 debtor.  It was formed in the
1970s to manage and hold ASARCO's closed plants and leased
properties in New Jersey.  Since then, Bridgeview has managed
certain properties of ASARCO and its affiliates.

Currently, Bridgeview oversees the management of ASARCO's real
property in Perth Amboy, New Jersey.  Bridgeview is also
responsible in the collection of rents for the Property.

The Agreement provides that:

    (a) ASARCO will reimburse Bridgeview for any out-of-pocket
        expenses in connection with the Property;

    (b) ASARCO will provide Bridgeview with any personnel who are
        needed to fulfill Bridgeview's obligations under the
        Agreement; and

    (c) rental proceeds related to the Property will be
        transferred to ASARCO on a monthly basis.

As of April 30, 2006, Bridgeview has not distributed to ASARCO
$504,357 in outstanding rental proceeds.  That amount, plus
rentals collected after April 30, 2006, will be distributed to
ASARCO upon Court approval of the Property Management Agreement.

Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,  
smelting and refining company.  Grupo Mexico S.A. de C.V. is
ASARCO's ultimate parent.  The Company filed for chapter 11
protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).
James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.
Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter
Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,
at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor
in its restructuring efforts.  Lehman Brothers Inc. provides the
ASARCO with financial advisory services and investment banking
services.  Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to
the Official Committee of Unsecured Creditors and David J.
Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.  When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.

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

Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered
with its chapter 11 case.  On Oct. 24, 2005, Encycle/Texas' case
was converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee.  Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7
Trustee. (ASARCO Bankruptcy News, Issue No. 22; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


ASARCO LCC: Lack of Info Prompts S&P to Withdraw Default Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'D' corporate
credit and senior unsecured debt ratings on ASARCO LCC, owing to
the company's lack of financial and operational information.
      
"The rating withdrawals are due to the very limited financial and
operational information," said Standard & Poor's credit analyst
Juan Pablo Becerra.

The current rating reflects ASARCO's announcement that it
voluntarily filed for bankruptcy under Chapter 11 on Aug. 10,
2005.  To maintain surveillance on its ratings, Standard & Poor's
requires the prompt provision of all relevant information by
issuers.


ASPECT SOFTWARE: S&P Puts CCC+ Rating on Proposed $385 Mil. Loan
----------------------------------------------------------------
Standard & Poor's Rating Services revised its outlook on Westford,
Massachusetts-based Aspect Software Inc. to negative from stable,
while affirming its 'B' corporate credit rating on the company.

The outlook revision reflects Aspect's recently announced plans
for a refinancing and dividend payment, which would result in pro
forma operating lease-adjusted total debt to EBITDA of about 6x as
of March 2006.
      
"At the same time, we assigned a 'B+' rating and a recovery rating
of '1' to Aspect's proposed $775 million first-lien credit
facilities, consisting of a $725 million term loan and a $50
million revolving credit facility," said Standard & Poor's credit
analyst Stephanie Crane.

The rating and recovery rating indicate expectation for full
recovery of principal in the event of a payment default.  

The proposed $385 million second-lien term loan has been assigned
a 'CCC+' with a recovery rating of '5', indicating Standard &
Poor's expectation of negligible (0%-25%) recovery of principal by
creditors in the event of a payment default or bankruptcy.
Proceeds of the bank facility, totaling $1.11 billion, together
with $35 million of existing cash, will be used to fund a dividend
and a refinancing.
     
Aspect develops, installs, and maintains software-based solutions
for contact centers.  Aspect's strength in "inbound" software,
notably automatic call distributors, complements positions in
"outbound" technologies of predictive dialing.  Aspect also holds
solid positions in workforce management software for call centers.
     
The ratings reflect:

   * a mature industry;
   * the competitiveness of the contact center solutions market;
   * the soft corporate spending environment; and
   * the company's aggressive financial profile.

These factors are partially offset by the company's highly
recurring revenue base and leading position in a niche market with
significant barriers to entry.


ATA AIRLINES: Court Approves Boeing Settlement Agreement
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana
approved ATA Airlines, Inc.'s Settlement Agreement with the Boeing
Company.

As reported in the Troubled Company Reporter on April 25, 2006,
ATA and Boeing are parties to a purchase agreement dated June 30,
2000, under which ATA Airlines was to purchase seven model 737-800
aircraft on certain terms and conditions.

ATA and Boeing agreed to execute a settlement agreement to settle
any and all claims and causes of actions that:

    (i) Boeing may have that arise under the Purchase Agreement as
        it relates to the Undelivered Aircraft, including the
        Boeing Claim; and

   (ii) ATA may have that:

        (a) arise under the Purchase Agreement as it relates to
            the Undelivered Aircraft including claims relating to
            the Advance Payments; or

        (b) arise under Chapter 5 of the Bankruptcy Code, whether
            or not related to the Purchase Agreement.

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


ATA AIRLINES: Settles Claims Dispute with NatTel LLC
----------------------------------------------------
The U.S. District Court for the Southern District of Indiana
approved ATA Airlines, Inc., and its debtor-affiliates' Settlement
Agreement with NatTel, LLC.

The salient terms of the Settlement Agreement are:

   (i) The Debtors, the Committee and NatTel will enter into a
       stipulation providing that NatTel's appeal pending in the
       Court will be dismissed with prejudice, with each side to
       bear its own attorneys' fees and costs.  The stipulation
       will be filed with the District Court;

  (ii) Except with respect to two filed prepetition claims,
       NatTel abandons all claims it holds in any of the Chapter
       11 cases and agrees that neither NatTel nor its affiliates
       will be or will become a party-in-interest with respect
       to any of the Chapter 11 cases or any contested matter or
       proceeding arising in, or related to, any of the Chapter
       11 cases;

(iii) NatTel abandons all pleadings filed in any of the Chapter
       11 cases and abandons all rights remedies and objections
       it may have or might assert in any of the Chapter 11
       cases, including its objections to various administrative
       claims asserted in the Chapter 11 case of C8 Airlines,
       Inc., and any rights or remedies NatTel may have or might
       assert to comment on or object to any proposed plan or
       disclosure statement.

       However, notwithstanding anything to the contrary, NatTel
       may vote its claims regarding any plan proposed in the C8
       Chapter 11 case and share in any recoveries pursuant to
       the claims pari passu with all of C8's other general
       unsecured creditors.

       NatTel agrees that it will not file any other pleadings
       nor appeal any other orders in the Chapter 11 cases, and
       the Debtors and the Creditors Committee agree that any
       plan or disclosure statement filed or approved in the C8
       Chapter 11 case will not refer to or mention by name,
       NatTel and its Affiliates; and

  (iv) The Parties exchange mutual releases.

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


ATA AIRLINES: SEC Reporting Obligations Officially Suspended  
------------------------------------------------------------
ATA Holdings, Corp., filed a notice with the Securities and
Exchange Commission on March 1, 2006, to terminate registration of
its securities under Section 12(G) of the Securities Exchange Act
of 1934.

ATA Holdings' duty to file reports under Sections 13 and 15(D) of
the Securities Exchange Act of 1934 is officially suspended.

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


BANYAN CORP: Posts $1 Mil. Net Loss in 2006 First Fiscal Quarter
----------------------------------------------------------------
Banyan Corporation filed its first quarter financial statements
for the three months ended March 31, 2006, with the Securities and
Exchange Commission on May 19, 2006.

The Company reported a $1,010,534 net loss on $1,317,967 of
revenues for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $5,113,397
in total assets, $3,833,154 in total liabilities, and $1,280,243
in total stockholders' equity.

The Company's March 31 balance sheet also showed strained
liquidity with $1,360,379 in total current assets available to pay
$3,093,545 in total current liabilities coming due within the next
12 months.

Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?a08

                       Going Concern Doubt

As reported in the Troubled Company Reporter on May 17, 2006,
Schwartz Levitsky Feldman LLP, Chartered Accountants, in Ontario,
Canada, raised substantial doubt about Banyan Corporation's
ability to continue as a going concern after auditing the
Company's consolidated financial statements for the year ended
Dec. 31, 2005.  The auditor pointed to the Company's recurring
losses from operations, negative working capital and stockholders'
deficiency.

Banyan Corporation is a holding company focused on investing in
and building a network of subsidiaries engaged in diagnostic
testing, the franchising of Chiropractic USA branded chiropractic
clinics, providing practice development training and assistance to
chiropractors, and offering franchise support and related services
to franchisees.


BAY POINT: S&P Assigns BB Rating to $125 Million Debt Facility
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' counterparty
credit rating to Bay Point Re Ltd. and assigned its 'BB' senior
secured debt rating to Bay Point's term loan debt facility of up
to $125 million.  The outlook is stable.
     
Bay Point is a limited-life, special-purpose Class 3 reinsurance
company domiciled in Bermuda and set up specifically to offer
quota share reinsurance to Harbor Point Re Ltd. (Harbor Point; A-
/Stable/--).
      
"The senior debt rating reflects the modeled risk inherent in
writing property catastrophe business and to a lesser extent Bay
Point's delegation of underwriting authority to Harbor Point,"
explained Standard & Poor's credit analyst James Brender.

"These positive factors are balanced by Harbor Point's strong
competitive position and risk management, good alignment of
interests between Bay Point and its cedant, the unique structure
of sidecars, and a low modeled probability of attachment."

Leverage and coverage were not considered explicitly as ratings
factors due to Bay Point Re's use of a trust structure.  However,
these factors indirectly affect the modeled results for a given
capital structure and premium base.
     
Bay Point Re may borrow up to $125 million from a consortium of
banks for five years.  The entity's capital structure will include
an equal amount of equity.
     
The proceeds from capital raising transactions will be placed in a
collateral account, which will provide Harbor Point with a source
of indemnity cover for losses relating to its property catastrophe
lines of business and other related lines.  The duration of Bay
Point's assets will be consistent with that of its obligations.
     
Harbor Point will cede a portion of its premium from its property
business to Bay Point through a quota share reinsurance treaty
under which Bay Point's liability will attach simultaneously with
that of Harbor Point and otherwise follow the fortunes with
respect to the business retroceded to Bay Point.  The exact
cession percentage will depend on Bay Point Re's collateral and
Harbor Point's expected premium volume and probable maximum loss
from a 1-in-100-year U.S. wind event and 1-in-250-year U.S.
earthquake event.  Initially, the quota share cession will be up
to 50%.


BEARINGPOINT: Moody's Holds B3 Rating on $450 Million of Bonds
--------------------------------------------------------------
Moody's Investors Service confirmed the ratings for BearingPoint,
Inc.  This action concludes the review that began on April 21,
2005 following the company's announcement that it would delay the
filing of its 2004 financials.  The rating outlook is negative.

The ratings confirmation reflects the company's ongoing efforts
toward the filing of its delayed financials, as well as ongoing
efforts to remediate internal control deficiencies and cost
imbalances.  The company has filed its FY2004 financials but
expects to delay the filing of its FY2005 financials to later this
year.  The confirmation also reflects Moody's expectation that
BearingPoint will continue to maintain billing rate stability,
reduce employee turnover, and grow bookings and free cash flow.

The B1 corporate family rating reflects the company's challenging
but stabilizing competitive position, substantial internal control
remediation costs, sizable employee turnover, and weak returns.  
Financial leverage, as measured by debt to EBITDA absent unusual
compliance costs and benefiting from bookings growth and bill rate
stability, could potentially map to a higher rating.

However, the company's high employee turnover and ongoing costs of
remediating known internal control deficiencies, and relative size
drive the overall B1 corporate family rating.  Moody's considered
the following IT services key ratings factors in its review:
competitive position, financial returns, cash flow generation,
financial leverage, and liquidity.

The negative outlook reflects the challenges and costs that
BearingPoint continues to face to become current on its SEC
financial filings, reduce costs, improve internal controls, and
deal with its remaining legal issues, an SEC investigation, and
high employee turnover.

In addition, bill rates have only recently stabilized and the
negative outlook reflects the potential for bill rate volatility
in the near term.  While the company has made progress in recent
quarters, it is not yet clear if the positive trend is
sustainable.  Moody's notes that if the company is unable to
become current in its FY2005 and quarterly financial filings by
later in 2006, the ratings may be subject to a downgrade or a
withdrawal.

Ratings confirmed include:

   * Corporate Family Rating -- B1

   * $250 million series A subordinated convertible bonds
     due 2024 -- B3

   * $200 million series B subordinated convertible bonds
     due 2024 -- B3

   * $1 billion multiple seniority
     shelf -- (P)Ba3/(P)B2/(P)B3/(P)Caa1

BearingPoint, Inc., headquartered in McLean, Virginia, is a global
business consulting, systems integration and managed services
firms serving government and commercial clients with revenue in
excess of $3 billion in 2005.


BLACKROCK: Moody's Reviews B2 Rating on Class B-5 & May Downgrade
-----------------------------------------------------------------
Moody's Investors Service placed the rating of BlackRock Capital
Finance L.L.C. 1997-R2, Class B-5 on review for possible
downgrade.  The class is being placed on review for possible
downgrade based upon the component structure of subordination
which has significantly reduced the amount of available credit
support.

Complete rating actions:

Issuer: BlackRock Capital Finance L.L.C. 1997-R2

   * Cl. B-5, Currently: B2; on review for possible downgrade.


BOMBARDIER RECREATIONAL: S&P Rates $790 Mil. Loan Facility at B+
----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its ratings on
recreational products manufacturer Bombardier Recreational
Products Inc., including its long-term corporate credit rating,
to 'B+' from 'BB-'.  The outlook is negative.
     
In addition, Standard & Poor's assigned its 'BB' bank loan rating,
with a recovery rating of '1', to the Valcourt, Quebec-based
company's proposed CDN$250 million revolving credit facility,
indicating that the asset values provide lenders with the
expectation of a high recovery of principal (100%) in a payment
default scenario.

Standard & Poor's also assigned its 'B+' bank loan rating, with a
recovery rating of '3', to the company's proposed US$790 million
term loan B facility, indicating that the asset values provide
lenders with the expectation of a meaningful recovery of principal
(50%-80%) in a payment default scenario.  The bank loan ratings
are based on preliminary terms and conditions and are subject to
review once full documentation is received.  

Proceeds of the new facility will be used to:

   * pay a substantial special distribution to shareholders;

   * refinance the company's existing debt;

   * redeem preferred shares at parent company J.A. Bombardier
     Inc. (unrated); and

   * for general corporate purposes.
     
"The downgrade and negative outlook reflect the company's more
aggressive financial policy given the proposed significant
increase in debt, which will result in a material weakening in the
company's financial profile due to high debt leverage and reduced
financial flexibility," said Standard & Poor's credit analyst Lori
Harris.

Pro forma for the transaction, debt to EBITDA (adjusted for
operating leases, accounts receivable securitization, and
realized foreign exchange gains) will be about 4.9x based on the
EBITDA calculation for the fiscal year ended Jan. 31, 2006.
Furthermore, the company's financial flexibility will be reduced
to handle unforeseen events such as an economic downturn, poor
weather conditions, or unfavorable foreign exchange conditions,
given its heavy debt load.
     
The ratings on BRP reflect:

   * the company's significant debt leverage;
   * volatile demand for the company's primary products;
   * highly seasonal operating profits; and
   * intense competition.

These factors are partially offset by:

   * the company's solid market position;

   * brand equity;

   * well-established dealer network; and

   * the stable margins and revenues of the parts and accessories
     component of the business.
     
BRP is a manufacturer of motorized recreational products.  BRP
Manufactures:

   * snowmobiles under the Ski-Doo and Lynx brand names;
   * watercraft and sport boats under the Sea-Doo name;
   * power sport engines under the Rotax name;
   * all-terrain vehicles under the Can-Am name; and
   * outboard engines under the Evinrude and Johnson names.

The company's revenues are geographically diversified, with the
key markets being the U.S., Canada, and Europe.
     
The competitive environment in the recreational products industry
is challenging and demand is cyclical.  BRP competes against well-
established U.S. and Japan-based competitors; therefore,
continuous investment in new products is required to maintain
market share.  Nevertheless, BRP's long history in the snowmobile
and personal watercraft markets and strong customer loyalty have
facilitated the company's leading development in new products.
This, combined with BRP's expansive dealership base, has been key
to building market share, which has allowed for maintenance of
leading market positions.
     
The negative outlook reflects the company's weakened financial
profile, including BRP's significantly reduced financial
flexibility to handle unforeseen events such as an economic
downturn, poor weather conditions, or unfavorable foreign exchange
conditions, given its heavy debt load.  

The ratings could be lowered if the company does not improve
credit metrics meaningfully on a sustainable basis in the medium
term.  On the other hand, the outlook could be revised to stable
if the company reduces leverage and demonstrates a sustained
improvement in margins.


BRAVO MORTGAGE: Moody's Puts Low-B Rating on Two Cert. Classes
--------------------------------------------------------------
Moody's Investors Service assigned a Aaa rating to the senior
certificates issued by Bravo Mortgage Asset Trust 2006-1 and
ratings ranging from Aa1 to Ba2 to the subordinate certificates in
the deal.

The certificates are backed Encore Credit Corp. and Bravo Credit
Corporation originated adjustable-rate and fixed- rate mortgage
loans. The ratings are based primarily on the credit quality of
the loans, and on the protection from subordination,
overcollateralization, excess spread, an interest rate swap
agreement and an interest rate cap agreement.  Moody's expects
collateral losses to range from 6.50% to 7.00%.

CitiMortgage will act as master servicer and Ocwen Loan Servicing,
LLC will service the loans.

The Complete Rating Actions:

Issuer: Bravo Mortgage Asset Trust 2006-1

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

The certificates were sold in a privately negotiated transaction
without registration under the Securities Act of 1933 under
circumstances reasonably designed to preclude a distribution
thereof in violation of the Act.  The issuance has been designed
to permit resale under Rule 144A.


CANON COMMS: Moody's Rates $35.7 Million Sr. Secured Loan at B3
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Canon
Communications LLC's proposed $35.7 million tack-on senior secured
first lien term loan and affirmed all other ratings.

Full details of the rating action:

Ratings assigned:

   * $35.7 million first lien tack-on senior secured term loan,
     due 2011 -- B3

Ratings affirmed:

   * $10 million first lien senior secured revolving credit
     facility, due 2010 -- B3
   * $85 million first lien senior secured term loan,
     due 2011 -- B3
   * Corporate Family rating -- B3

The rating outlook is stable.

The ratings reflect Canon's modest scale, continued high leverage,
the acquisitiveness of management, its vulnerability to spending
in the medical device manufacturing sector for a large proportion
of its sales, and its current dependence upon its largest three
trade shows and two publications for approximately 65% of total
contribution.  The proposed acquisition of certain business-to-
business assets from Reed Elsevier Inc. is expected to reduce this
dependence to around 50% of total contribution.

Ratings are supported by the defensibility and leading market
position of the company's trade shows and publishing titles, the
cost efficiencies and high margins which have resulted from its
trade show co-location model, and the high growth prospects of its
on-line product offerings.

The stable outlook recognizes management's ability to achieve top
line and EBITDA growth during fiscal 2005 and the high degree of
near-term revenue visibility, which characterizes Canon's trade
show business in particular.

In May 2006, Canon executed an asset purchase agreement with Reed
Elsevier Inc. and Reed Elsevier Properties Inc. to acquire a
select portfolio of B2B assets.  Management considers that some of
these assets have been neglected and will benefit from Canon's
more focused approach.

The ratings on the proposed first lien facilities are rated at
parity with the Corporate Family rating, since first lien debt
will continue to represent the preponderance of Canon's debt
structure. The interests of first lien creditors are enhanced by:

   (1) a claim on assets which rank ahead of that of second lien
       lenders, and
   (2) covenant provisions which can be triggered before that of
       second lien holders.

Moody's does not rate Canon's $49 million second lien term loan.
The ratings are subject to Moody's satisfactory review of loan
documentation, which management has indicated will substantially
conform to the terms and conditions of the current facilities.

At closing, Canon expects to count on full availability of its $10
million revolving credit facility, representing an adequate level
of liquidity to meet seasonal cash working capital needs.

The recent revitalization in the health of the B2B sector has led
to an unusually high level of M&A activity, which has resulted in
a significant increase in market valuation multiples.  Moody's is
concerned that the level of these multiples may not be sustainable
going forward.

Headquartered in Los Angeles, California, Canon Communications is
a leading producer of print productions, trade shows and digital
media for the medical device manufacturing and other niche
markets.  Total revenues for fiscal year 2005 were approximately
$61million.


CANON COMMS: Acquisition Plan Cues S&P to Revise Outlook to Neg.
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Canon
Communications LLC to negative from stable while affirming its 'B'
corporate credit rating on the company, following the company's
announcement that it will be making a $41 million debt-financed
acquisition.
     
At the same time, Standard & Poor's raised its recovery rating for
Canon's amended first-priority bank credit facility to '2' from
'3', while affirming the 'B' bank loan rating, indicating
expectations for a substantial (80%-100%) recovery of principal in
a payment default scenario.
     
Pro forma for the transaction, the Los Angeles-based business-to-
business publication and trade show operator will have
approximately $169.7 million in debt.
     
Canon will use the proceeds from debt upsizing:

   * to acquire eight specialty manufacturing trade shows and one
     publication from Reed Elsevier Group PLC; and

   * to repay the $6.5 million outstanding balance on Canon's
     revolving credit facility.
     
"The outlook revision reflects the risks related to integrating
such a large acquisition with the company's existing businesses
and our concern over its ability to reduce leverage over the
longer term," said Standard & Poor's credit analyst Tulip Lim.

"However, we raised the recovery rating after raising our EBITDA
valuation multiple based on current market information."


CARMIKE CINEMAS: S&P Lowers Sub. Notes' Rating One Notch to CCC
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
Columbus, Georgia-based motion picture exhibitor Carmike Cinemas
Inc., including lowering the corporate credit rating to 'B-' from
'B'.  The ratings remain on CreditWatch with negative implications
pending the completion of 2005 and first-quarter 2006 filings of
SEC financial documents, and Standard & Poor's review of them.

Standard & Poor's lowered the rating on the company's senior
secured facility to 'B-' from 'B' and the rating on its
subordinated notes to 'CCC' from 'CCC+'.
     
"The downgrade resulted from our concerns over the company's
liquidity based on the potential for bondholders to accelerate the
payment of principal on the notes," said Standard & Poor's credit
analyst Tulip Lim.
     
Also, Standard & Poor's is concerned over broad uncertainty about
U.S. box office performance of feature film releases over the
balance of 2006.  U.S. movie attendance weakness is partially
attributable to the proliferation of competing entertainment
alternatives and shortening periods in theatrical release prior to
home video and video-on-demand release.
     
The rating reflects:

   * Carmike's high lease-adjusted leverage;
   * weak discretionary cash flow;
   * limited liquidity;
   * less-modern theater circuit compared with key peers; and
   * the narrower film preferences in its regions of operation.

These factors more than outweigh Carmike's decent geographic
diversity and competitive positions in many of its smaller
markets.


CERTIFIED HR: Creditors Have Until July 31 to File Proofs of Claim
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida set
July 31, 2006, the deadline for all creditors to file proofs of
claims or interests against Certified Services, Inc.

On May 10, 2006, the Court entered a memorandum opinion on
substantive consolidation of Certified Services with Certified HR
Services Company's estate.  Any creditor that objects to or seeks
reconsideration of the relief must file an objection with the
Court by June 30, 2006.

Objections and Proofs of Claims or interest must be filed with
the:

            Clerk's Office
            U.S. Courthouse
            299 E. Broward Boulevard
            Ft. Lauderdale, FL 33301

Headquartered in Ft. Lauderdale, Florida, Certified HR Services  
Company filed a voluntary petition for relief under Chapter 11 of
title 11 of the United States Code on May 12, 2005 (Bankr. S.D.
Fla. Case No. 05-22912).  Thomas R. Lehman, Esq., at Miami
Florida, represents the Debtor in its restructuring efforts.


CITIZENS COMMS: Moody's Reviews Debt Rating & May Upgrade
---------------------------------------------------------
Moody's Investors Service placed the debt ratings of Citizens
Communications' on review for possible upgrade, reflecting the
company's increased commitment to maintain a stable and
predictable debt profile.

Ratings reviewed include:

Issuer: Citizens Communications Company

On Review for Possible Upgrade:

Ratings Actions:

Issuer: Citizens Communications Company

   * Corporate family rating -- Placed on Review for Possible
     Upgrade, currently Ba3,

   * Senior unsecured revolving credit facility -- Placed on
     Review for Possible Upgrade, currently Ba3,

   * Senior unsecured notes, debentures, bonds -- Placed on
     Review for Possible Upgrade, currently Ba3

Issuer: Citizens Utility Trust:

   * Preferred Stock -- Placed on Review for Possible Upgrade,
     currently B2.

The review will focus on the level of expected competition in
Citizens' markets, management's ongoing dividend and stock buy-
back policies, and management's commitment to maintain a more
modest leverage profile, along with the balance in cash flow
allocations between debt and equity constituents.

Citizens Communications is an RLEC providing wireline
telecommunications services to approximately 2.2 million access
lines in primarily rural areas and small- and medium-sized cities.  
The company is headquartered in Stamford, CT.


CITX CORPORATION: 3rd Circuit Kills Trustee's Malpractice Suit
--------------------------------------------------------------
CitX Corporation, an insolvent internet company involved in an
illegal Ponzi scheme, used its financial statements, compiled (but
not reviewed or audited) by Robert Schoen, a certified public
accountant, and Detweiler, Hershey and Associates, P.C., his
employer, to attract investors.  

After the company spent the investors' money and incurred millions
more in debt, it filed for chapter 11 protection in July 2001.  
The case converted to Chapter 7 liquidation proceeding, and Gary
Seitz was appointed as the Chapter 7 trustee.  Mr. Seitz sued Mr.
Schoen and Detweiler in July 2003.  His complaint contained four
causes of action: (1) malpractice, (2) deepening insolvency, (3)
breach of fiduciary duty, and (4) negligent misrepresentation.

The U.S. Bankruptcy Court for the District of Delaware dismissed
Mr. Seitz's fiduciary duty claim.  Later, after withdrawing the
reference of the adversary proceeding to the Bankruptcy Court, the
U.S. District Court for the District of Delaware granted summary
judgment to Detweiler on the negligent misrepresentation claim.  
Finally, the District Court granted summary judgment to Detweiler
on Seitz's malpractice and deepening-insolvency claims.  Mr. Seitz
appealed the rulings on the malpractice and deepening insolvency
claims to the United States Court of Appeals for the Third
Circuit.

The Third Circuit says the malpractice claim founders on two
grounds: the company was not harmed by its accountants' actions,
and in any event the affidavit submitted to support the claim was
a sham.  Mr. Seitz's malpractice claim, the Third Circuit says,
fails because he cannot establish harm or causation.  He could not
establish harm because deepening insolvency is not a valid theory
of damages for negligence.  And the affidavit that purported to
create a genuine issue of fact on the causation issue should be
discarded in favor of that affiant's later, conflicting deposition
testimony.

As for the deepening-insolvency claim, the Third Circuit says,
allegations of negligent conduct do not qualify for consideration.
Mr. Seitz's deepening-insolvency claim fails because he cannot
establish a genuine factual issue to support the allegation that
Detweiler engaged in fraudulent conduct.  Negligence cannot
support such a claim, the Third Circuit holds.


CLEAN POWER: DBRS Puts BB(high) Issuer Debt Rating Under Review
---------------------------------------------------------------
Dominion Bond Rating Service placed the ratings of Clean Power
Income Fund "Under Review with Developing Implications", after the
Fund's announcement that it has reached a definitive agreement
regarding the sale of Gas Recovery Systems, Inc., for $90 million.

    * Income Fund Under Review - Developing STA-3 (low)
    * Issuer Rating Under Review - Developing BB (high)

The sale of GRS will be to Fortistar Renewables Group LLC, a
wholly owned subsidiary of Fortistar LLC.  The transaction is
expected to close by the end of July 2006.

Funds from the sale of GRS will be used primarily to pay down debt
incurred to develop the Erie Shores Wind Farm in Ontario, which
will reduce total interest costs for the Fund and improve key
financial ratios.

DBRS notes that Clean Power has not generated sufficient cash
available for distributions to cover its distributions since its
inception, mainly due to lower-than-expected output and higher-
than-expected maintenance costs at its GRS landfill-gas
electricity generating facilities.  The Fund's investment in GRS
is in the form of loans with fixed monthly payments.  GRS earned
$11.7 million in EBITDA in 2006 and paid the Fund $11 million in
interest payments.

With the sale of GRS, a reduction in debt, and the completion of
the Erie Shores Wind Farm -- which has a 20-year power purchase
agreement with the Ontario Power Authority, rated A by DBRS -- the
Fund's payout ratio should show material improvement going
forward.

However, Clean Power also indicated that it continues to
investigate other "unitholder value-enhancement opportunities"
over and above the sale of GRS.  Hence, the "Under Review with
Developing Implications" rating action reflects the uncertainty
with respect to what other value-enhancement opportunities will be
undertaken.  DBRS will remove the "Under Review" status once the
Fund finalizes its value-enhancement strategy.


CNL FUNDING: Moody's Puts Low-B Rating on $15.4 Million of Bonds
----------------------------------------------------------------
Moody's Investors Service placed under review for possible
downgrade two classes of franchise loan backed bonds issued by CNL
Funding 2000-A, LP.  The triple net leases backing this
transaction were originated by CNL APF Partners, LP and corporate
affiliates.

Complete rating action:

Under Review For Possible Downgrade:

CNL Funding 2000-A, LP

   * $4,631,000 Class B Bonds, rated Ba2;
   * $10,804,000 Class C Bonds, rated B2.

The balance of delinquencies and other specially serviced loans
comprise roughly 9% of the collateral pool in this transaction.
Moody's review of the Bonds will focus on the degree to which the
current levels of delinquencies and specially serviced loans might
ultimately impact principal paydown on the notes.  Additionally,
the Class B and Class C Bonds are behind in interest
distributions, and Moody's review will consider the ultimate
expected payment of interest to these classes.


CONGOLEUM CORP: Files Amended Disclosure Statement in New Jersey
----------------------------------------------------------------
Congoleum Corp. and its debtor-affiliates' filed an Amended
Disclosure Statement explaining their Eighth Modified Joint
Chapter 11 Plan of Reorganization with the U.S. Bankruptcy Court
for the District of New Jersey.  The Debtors also submitted their
Plan Trust Agreement and Trust Distribution Procedures with
respect to their Plan.

As reported in the Troubled Company Reporter on Apr. 28, 2006, the
Hon. Kathryn C. Ferguson of the U.S. Bankruptcy Court for the
District of New Jersey adjourned, until June 8, 2006, the hearing
to determine the adequacy of the disclosure statements explaining:

    * Congoleum Corp. and its debtor-affiliates' Eighth Modified
      Joint Chapter 11 Plan of Reorganization;

    * The Official Committee of Bondholders' First Modified Joint
      Chapter 11 Plan of Reorganization; and

    * Continental Casualty Company and Continental Insurance
      Company's Joint Chapter 11 Plan of Reorganization.

Judge Ferguson also ordered the Debtors to file their Trust
Distribution Procedures Valued Asbestos Claims and Plan Trust
Agreement.

                  Means for Execution of the Plan

On the effective date, a Plan Trust will be established in
accordance with the Plan Documents.  In addition, on the effective
date, the Plan Trust established pursuant to the Plan Trust  
Agreement will become solely responsible for the payment of all
Plan Trust Asbestos Claims.

The Plan Trust will be funded through:

    * the New Class A Common Stock;

    * the New Convertible Security;

    * the Asbestos Insurance Rights;

    * the proceeds of the Asbestos Insurance Settlement
      Agreements;

    * the proceeds of the Asbestos In-Place Insurance Coverage;

    * the proceeds of the Asbestos Insurance Actions;

    * the proceeds of the Asbestos Insurance Action Recoveries;

    * the Asbestos Property Damage Insurance Rights;

    * the ABI Contribution;

    * the Additional Plan Trust Contribution;

    * all of the assets held by the Collateral Trust on the
      effective date;

    * Plan Trust Bankruptcy Causes of Action including, without
      limitation, the Avoidance Actions to the extent not already
      adjudicated prior to the Effective Date;

    * other Causes of Action, other than Bankruptcy Causes of
      Action, related to Plan Trust Asbestos Claims and Plan Trust
      Assets including, without limitation, the right to void any
      Asbestos Claim of a Qualified Pre-Petition Settlement
      Claimant or of a Qualified Participating Claimant whether
      because of failure to comply with the requirements of any
      applicable settlement agreement, including, without
      limitation, the Claimant Agreement, or because such Claim
      was not submitted in good faith or otherwise and including
      the right to pursue such Causes of Action, if any, in the
      name of any Debtor, if necessary; and

    * the rights granted to the Plan Trust pursuant to the
      Insurance Assignment Agreement.

A full-text copy of the Debtors' Plan Trust Agreement is available
for free at http://ResearchArchives.com/t/s?9f0

                     Treatment of Claims

Under the Plan, holders of allowed Administrative Claims will
receive either:

    a. cash equal to the unpaid their claim, or

    b. other treatment as agreed by the Debtor and the holder of
       the claims in writing,

provided, however, that Administrative Claims representing:

    (i) post-petition liabilities incurred in the ordinary course
        of business by the Debtors; and

   (ii) post-petition contractual liabilities arising under loans
        or advances to the Debtors, whether or not incurred in the
        ordinary course of business,

will be paid by the Reorganized Debtors in accordance with the
terms and conditions of the particular transactions relating to
the liabilities and any related agreements.

Priority Tax Claims will receive:

    (i) cash equal to the unpaid portion of the claim;

   (ii) other treatment as agreed by the Debtor and the holder of
        the claims in writing; or

  (iii) at the Reorganized Debtors' sole discretion, deferred Cash
        payments over a period not exceeding six years after the
        assessment date of the claim, valued as of the effective
        date in an amount equal to the claim.

Priority Claims will receive either:

    (i) cash equal to the allowed amount of the claim, or

   (ii) other treatment as agreed by the Debtor and the holder of
        the claims.

Workers' Compensation Claims will be paid in the ordinary course
pursuant to rights that exist under any state workers'
compensation system or laws that apply to such Claims.

Holders of interests in Congoleum will retain their interests,
provided, that on the effective date, the New Class A Common Stock
and the New Convertible Security, which will be contributed to the
Plan Trust, will be issued.

Holders of Subsidiary Interests will also retain their interests.

                          Secured Claims

The Debtors tell the Court that Lender Secured Claims constitute
any claim arising under or relating to the Existing Credit
Agreement, Existing Subsidiary Guaranty or any related documents.
On the effective date, the Existing Credit Agreement, as ratified,
amended and approved in accordance with the Financing Order, will
be amended and restated in accordance with the terms of the
Amended Credit Agreement and the holder of the Lender Secured
Claim will be entitled to all the rights and benefits of a Lender
under the Amended Credit Agreement and related documents, which
will be on terms and conditions mutually acceptable to the Debtors
and Wachovia Bank, National Association.

The Debtors tell the Court that if it is unable to agree on the
terms of the Amended Credit Agreement with the holder of the
Lender Secured Claim by the confirmation hearing, the claim will
be paid in full indefeasibly on the effective date or as soon
thereafter as practicable and Wachovia will be released from any
and all liabilities and causes of action in accordance with the
Financing Order.

Holders of Other Secured Claims and General Unsecured Claims will
retain their legal, equitable and contractual rights and their
respective claims will be reinstated.

                        Senior Note Claims

Senior Note Claims will be reinstated, provided that:

    (i) the maturity date of the Senior Notes will be extended to
        Aug. 1, 2011; and

   (ii) holders of the Allowed Senior Note Claims will receive,
        less $10 million:

         * all accrued and unpaid interest on the Senior Notes
           from the filing of the bankruptcy through and including
           the interest payment date immediately preceding the
           effective date; and

         * any accrued and unpaid applicable default interest in
           accordance with the Indenture from the filing of the
           bankruptcy through and including the effective date,

provided further, that all interest accruing on the Senior Notes
from the interest payment date preceding the effective date will
be paid on the next succeeding interest payment date after the
effective date and thereafter the interest shall be paid in
accordance with the Indenture.

The Debtors tell the Court that in addition, any funds up to the
Maximum Additional Bondholder Recovery actually recovered by the
Debtors or Reorganized Congoleum on account of certain
disgorgement orders against Gilbert Heintz & Randolph LLP and The
Kenesis Group LLC entered by the Court on Mar. 27, 2006, and
Mar. 10, 2006, respectively, or on account of any other actions
against such parties, including for malpractice, will be paid to
the holders of the Senior Note Claims and any settlement of such
judgments or actions that result in the receipt by the holders of
the Senior Note Claims of less than the Maximum Additional
Bondholders' Recovery in the aggregate shall be subject to
approval by the Bondholders' Committee.

                            ABI Claims

Holders of ABI Claims will receive these treatments:

    (a) all ABI Claims, other than ABI Asbestos Personal Injury
        Indemnity Claims, ABI Asbestos Property Damage Indemnity
        Claims and Other ABI Asbestos Claims, will be reinstated
        and will be payable;

    (b) ABI Asbestos Personal Injury Indemnity Claims will be
        channeled to and become the obligations of the Plan Trust,
        and be payable in accordance with the terms of the Plan
        and the TDP; and

    (c) all ABI Asbestos Property Damage Indemnity Claims and
        Other ABI Asbestos Claims will be deemed Disallowed and
        expunged.

On the effective date, the Plan Trust will assume all liability
for all Allowed Asbestos Property Damage Claims and the
Reorganized Debtors will have no liability thereof.  Allowed
Asbestos Property Damage Claims will be paid solely from the
Asbestos Property Damage Claim Sub-Account on account of the
unpaid allowed amount of the claim pursuant to the Plan Trust
Agreement.  Once the assets in the Asbestos Property Damage Claim
Sub-Account have been exhausted, the Plan Trust shall have no
further liability or obligation for or in respect of any Asbestos
Property Damage Claims.

          Secured Asbestos Claims of Qualified Claimants

The Debtors tell the Court that on the effective date, the Plan
Trust will assume all liability for all Secured Asbestos Claims of
Qualified Claimants and the Reorganized Debtors will have no
liability on account of the claims.

Each Qualified Claimant will, in respect of its Secured
Asbestos Claim, be determined, liquidated and treated pursuant to
the Plan Trust Agreement and the TDP without priority of payment
and in all respects pari passu with the Unsecured Asbestos
Personal Injury Claims.

On the Effective Date, each Qualified Claimant will have
irrevocably consented or be deemed to have irrevocably consented
to the Forbearance of his, her or its rights, if any, under the
respective Pre-Petition Settlement Agreements or Claimant
Agreement, as applicable, and his, her or its rights, if any,
under the Collateral Trust Agreement and the Security Agreement by
failing to timely object to the Forbearance upon notice thereof in
accordance with procedures established by the Bankruptcy Court.
The Forbearance will become irrevocable upon occurrence.

If any Qualified Claimant timely objects to the Forbearance, the
Secured Asbestos Claim of the objecting Qualified Claimant will be
deemed a Plan Trust Disputed Claim and the validity of the Secured
Asbestos Claim will be subject to objection by the Plan Trustee
based on:

    (i) the terms of the Collateral Trust Agreement;

   (ii) any Plan Trust Bankruptcy Cause of Action; and

  (iii) any other Cause of Action available to the Plan Trustee
        under Section 12.4 of the Plan or otherwise and each
        Qualified Claimant will be immediately added as a party
        defendant to the Avoidance Actions to the extent not
        already a party.

Plan Trust Disputed Claims will be treated as provided in a Final
Order of the Bankruptcy Court adjudicating such Claims.

Unsecured Asbestos Personal Injury Claims will receive the same
treatment as those applied to Secured Asbestos Claims of Qualified
Claimants.

A copy of the Debtors' Amended Disclosure Statement explaining
their Eighth Modified Joint Chapter 11 Plan of Reorganization is
available for free at:

           http://ResearchArchives.com/t/s?9ef

A copy of the Debtors' Plan Trust Distribution Procedures is
available for free at:

            http://ResearchArchives.com/t/s?9f1

                  About Congoleum Corporation

Headquartered in Mercerville, New Jersey, Congoleum Corporation --
http://www.congoleum.com/-- manufactures and sells resilient
sheet and tile floor covering products with a wide variety of
product features, designs and colors.  The Company filed for
chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No.
03-51524) as a means to resolve claims asserted against it related
to the use of asbestos in its products decades ago.  Richard L.
Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennanat, Esq.,
at Pillsbury Winthrop Shaw Pittman LLP represent the Debtors.
Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump
Strauss Hauer & Feld LLP represents the Official Committee of
Unsecured Bondholders.  R. Scott Williams serves as the Futures
Representative, and is represented by lawyers at Orrick,
Herrington & Sutcliffe LLP.  Aaron Van Nostrand, Esq., at Coughlin
Duffy, LLP, represents Continental Casualty Company and
Continental Insurance Company.  When Congoleum filed for
protection from its creditors, it listed $187,126,000 in total
assets and $205,940,000 in total debts.

At. Dec. 31, 2005, Congoleum Corporation's balance sheet showed a
$44,960,000 stockholders' deficit compared to a $20,989,000
deficit at Dec. 31, 2004.  Congoleum is a 55% owned subsidiary of
American Biltrite Inc. (AMEX:ABL).


DANA CORP: Watson & Chalin Wants Stay Lifted to Permit Set-Off
--------------------------------------------------------------
Watson & Chalin Manufacturing, Inc., asks the U.S. Bankruptcy
Court for the Southern District of New York to lift the automatic
stay to permit a set-off or, in the alternative, allow Watson to
recoup the debt of Dana Corporation and its debtor-affiliates
against its own debt to the Debtors.

Before the Debtors filed for bankruptcy, Watson was engaged in
mutual purchasing and selling of products and materials with Dana
Corporation.  As a result, the parties at various times incurred
mutual obligations.

At Dana's request, Watson has continued its relationship with Dana
postpetition to aid in its efforts to reorganize and continued
both buying from and selling to the Debtor on credit.

Daniel B. Jones, Esq., in Plano, Texas, discloses that as of the
Petition Date:

   -- Dana owed $312,782 to Watson, and

   -- Watson owed $492,497 to the Debtor.

Pursuant to Section 553 of the Bankruptcy Code, Watson is entitled
to set off their mutual debts, Mr. Jones asserts.

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.  The company and its affiliates
filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y.
Case No. 06-10354).  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.  Thomas
Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP,
represents the Official Committee of Unsecured Creditors.  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. 9;
Bankruptcy Creditors' Service, Inc., 215/945-7000).


DC PROPERTIES: Disclosure Statement Hearing Scheduled on June 14
----------------------------------------------------------------
The Hon. Ronald G. Pearson of the U.S. Bankruptcy Court for the
Southern District of West Virginia will convene a hearing at 2:30
p.m., on June 14, 2006, to consider the adequacy of the
information contained in the Disclosure Statement explaining DC
Properties, LLC's Chapter 11 Plan of Reorganization.

                       Overview of the Plan

The Debtor says that the Plan provides for negative amortization
and complete liquidation of its assets.  The Plan contemplates the
payment of a portion of the contractual interest due to United
Bank.  The payments will increase as occupancy of the building
increases.

                       Treatment of Claims

Under the Debtor's plan, administrative claims will be paid in
full.

Unpaid real estate taxes owed to the Sheriff-Treasurer of Putnam
County, West Virginia for the 2005 tax period will be paid over a
period of eight quarters from the effective date.  Wachovia
Securities purchased the unpaid 2004 taxes at a duly convened tax
sale scheduled by the Sheriff of Putnam County.  These taxes will
be redeemed.

The Debtor will pay United Bank under the terms of a "New Note".  
The New Note requires the debtor, one year from the Effective Date
of the Plan, to pay United Bank $10,750 per month with interest at
7.5% per annum, over a period of five years.  The Debtor will also
remit to United Bank the rental net proceeds from Orr Safety,
which approximate $4,000 per month, beginning on the first day of
the first month following the Effective Date of the Plan, for a
12-month period.  United Bank holds a deed of trust lien on the
Debtor's real property in West Virginia.

Branch Banking & Trust, holding junior liens on a real property
for its more than $14 million in total claim , will be paid with
interest at a rate of 6% per annum until the property is financed
after five years.

Headquartered in Huntington, West Virginia, DC Properties, LLC
filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.
W.Va. Case No. 05-26014).  Joseph W. Caldwell, Esq., at Caldwell &
Riffee, and Marshall C. Spradling, Esq., represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it estimated assets between $1 million and $10
million and estimated debts between $10 million and $50 million.


DELPHI CORP: Court Approves Blake Cassels as Canadian Counsel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorizes Delphi Corporation and its debtor-affiliates to hire
Blake, Cassels & Graydon LLP, as their Canadian counsel, effective
as of Jan. 9, 2006.

As Canadian counsel, Blakes will provide:

   (a) legal advice and litigation services with respect to tort,
       contract, and general business disputes in Canada;

   (b) legal advice and representation with respect to out-of-
       court commercial workouts in Canada;

   (c) legal advice and representations with respect to
       financially distressed suppliers in Canada; and

   (d) miscellaneous commercial and litigation advice related to
       Canadian issues.

The Debtors believe that Blakes is especially attuned to the
unique Canadian law issues that have arisen and may in the future
arise in the Debtors' Chapter 11 cases.

The Debtors will pay Blakes at its standard hourly rates, which
vary from CN$470 to CN$830 per hour for partners, CN$275 to
CN$570 per hour for associates, CN$105 to CN$270 per hour for law
clerks, and CN$155 to CN$170 per hour for students.

Susan M. Grundy, Esq., a member of the firm, assures the Court
that Blakes does not represent or hold any interest adverse to
the Debtors or their estates.

Blakes has a well-established and prominent bankruptcy and
insolvency practice in Canada with extensive experience in
crossborder insolvency matters and in dealing with troubled
suppliers in the automotive industry.

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


DELPHI CORP: Court Okays Enlargement of KPMG's Scope of Employment
------------------------------------------------------------------
Delphi Corporation and its debtor-affiliates obtained authority
from the U.S. Bankruptcy Court for the Southern District of New
York for authority to employ KPMG LLP as their valuation advisors,
nunc pro tunc to Feb. 16, 2006.

In addition, the Court approves the Debtors' continued employment
of KPMG as tax advisors, nunc pro tunc to January 1, 2006.

The Court also approves the Debtors' employment of KPMG to perform
additional international executive tax services, nunc pro tunc to
January 18, 2006.

As valuation advisors, KPMG will:

   a. analyze potential impairment charges in accordance with
      Statements of Financial Accounting Standards (SFAS) 142 and
      144 related to goodwill, intangibles, and long-lived
      assets; and

   b. assist the Debtors with initial planning for the Fresh
      Start valuation exercise in connection with the Debtors'
      future emergence from Chapter 11.

KPMG's tax consulting services will be identical to those set
forth in its original engagement, other than the extension of the
term until December 31, 2006.

KPMG will provide these additional international executive
services:

   (1) Prior to assignment services:

       a. prepare cost projection including revisions;

       b. prepare draft expatriate agreement; and

       c. prepare draft pay calculation;

   (2) Beginning of assignment services:

       a. prepare final expatriate agreement and pay calc and
          participate in orientation;

       b. calculate relocation allowance and mobility premium to
          be paid in month prior to assignment and provide to
          payroll; and

       c. calculate first year spending account to be paid in
          first month of assignment and provide to payroll;

In addition, KPMG will calculate annual spending account on
assignment anniversary date and provide to payroll and calculate
relocation allowance less outstanding tax and pro-rata spending
account due from employee.

KPMG has agreed to apply a 20% discount for its advisory and
valuation services.  Accordingly, the Debtors will pay KPMG at
these rates:

         Professional                Rate
         ------------                ----
         Partner                     $620
         Director                    $600
         Manager                     $488
         Senior                      $376
         Staff                       $312

KPMG's hourly rates for the tax consulting services and
international executive tax services are identical to those set
forth in KPMG's original engagement.

However, the Debtors will pay KPMG at these hourly rates for its
additional services:

   Additional Services                                    Rate
   -------------------                                    ----
   Prepare amended US income tax returns for employees
   assigned to the Mexican border                         $375

   Prepare monthly Mexican non-resident income tax
   withholding calculation for employees assigned to
   the Mexican Border                                      $40

   Prepare and compile payments at host information for
   employees assigned from the US, expatriates assigned
   to the US, and expatriates assigned to and from
   non-US countries                                       $375

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


DELPHI CORP: Hires Mayer Brown as Special IT Outsourcing Counsel
----------------------------------------------------------------
Delphi Corporation and its debtor-affiliates had employed Mayer,
Brown, Rowe & Maw LLP, as an ordinary course professional.  
However, it has become apparent that Mayer Brown will exceed the
fee cap established for Ordinary Course Professionals.

Therefore, the Debtors asked to formally employ Mayer Brown as
special information technology outsourcing counsel, nunc pro tunc
to Feb. 1, 2006.  The U.S. Bankruptcy Court for the Southern
District of New York approves the Debtors' employment application.

As special counsel, Mayer Brown will:

   (a) review documents, including Delphi's form IT outsourcing
       agreements;

   (b) draft, revise, and edit a new form IT outsourcing
       agreement for the IT outsourcing services;

   (c) negotiate specific IT outsourcing agreements with third-
       party bidders; and

   (d) provide miscellaneous information technology advice and
       counsel related to IT outsourcing matters.

The Debtors will pay Mayer Brown's professionals at these hourly
rates:

      Marjorie Harris Loeb, Esq.          $580
      Paul Chandler, Esq.                 $475
      Greg Manter, Esq.                   $300
      Kristina Herrmann, Esq.             $260

Mayer Brown will discount its rates by 5% for the first $500,000
of fees, and by 10% for the portion of its fees that exceed
$500,000.  Mayer Brown will not charge for travel time, though it
will charge for time spent working while traveling.

Paul J.N. Roy, Esq., a member of the firm, assures Judge Drain
that Mayer Brown does not represent any interest adverse to the
Debtors' estates.

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


DELTA AIR: Can Perform Obligations on Seattle Operating Agreement
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Delta Air Lines, Inc., and its debtor-affiliates authority to
undertake and perform their obligations under a Seattle-Tacoma
International Airport 2006-2012 Signatory Lease and Operating
Agreement between Delta Air Lines, Inc., and the Port of Seattle,
effective Jan. 1, 2006.

As reported in the Troubled Company Reporter on Apr. 26, 2006,
Tacoma owns and operates the Seattle-Tacoma International Airport.  
Delta is party to a Signatory Lease and Operating Agreement with
Tacoma effective January 1, 2004.  Delta continues operations at
the Airport pursuant to a holdover under the 2004 Agreement.

Airlines are eligible to become signatories to the 2006 Agreement
by signing the 2006 Agreement and satisfying its requirements.
Airlines that become signatories are entitled to receive certain
benefits, including:

   (i) a preferential regime of rates and charges; and

  (ii) less burdensome security deposit requirements pursuant to
       the Security Fund arrangement for any Airline that agrees
       to forever renounce its right to receive a specified
       portion of its Proportionate Percentage of the 2005
       Revenue Available for Sharing.

Delta believes that it has the authority under Section 363(c)(1)
of the Bankruptcy Code to perform all of its obligations under
the 2006 Agreement.  Section 363(c) expressly grants a debtor the
authority to enter into transactions in the ordinary course of
business.

However, according to Sharon Katz, Esq., at Davis Polk &
Wardwell, in New York, Delta is currently unable to meet the
requirements set forth in Section 7.5 of the 2006 Agreement,
which requires the Debtor to obtain a Court order providing that:

   (1) Delta will be authorized to execute, deliver and perform
       its obligations under the Agreement;

   (2) Delta will not grant to any person a lien on or security
       interest in any portion of the Security Fund, as defined
       in the Agreement; and

   (3) Tacoma will be granted relief from any applicable stay of
       action in a case or proceeding against the Security Fund,
       provided that, after giving effect to the action, there
       remains in the Security Fund an amount greater than or
       equal to one month of estimated rental charges for
       Airline's use of its Preferential Use Premises and
       Exclusive Use Premises, plus one month of estimated rental
       charges for Delta's use of Common Use Premises and Joint
       User Areas, plus one month of the Debtor's estimated
       Landing Fees.

Pursuant to a letter agreement dated March 31, 2006, Tacoma
agreed that Delta could (i) conditionally become a signatory to
the 2006 Agreement and (ii) become a permanent, unconditional
signatory to the 2006 Agreement by obtaining a Court approval of
the 2006 Agreement on or before May 31, 2006.

Ms. Katz relates that the amount of Delta's economic obligation
under the 2006 Agreement is small in relation to the size of
Delta's estate.  In addition, both airline debtors as well as
airlines operating outside of Chapter 11 regularly enter into and
perform the kind of obligations set forth in the 2006 Agreement.

Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in their
restructuring efforts.  Timothy R. Coleman at The Blackstone Group
L.P. provides the Debtors with financial advice.  Daniel H.
Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss
Hauer & Feld LLP, provide the Official Committee of Unsecured
Creditors with legal advice.  John McKenna, Jr., at Houlihan Lokey
Howard & Zukin Capital and James S. Feltman at Mesirow Financial
Consulting, LLC, serve as the Committee's financial advisors.  As
of June 30, 2005, the Company's balance sheet showed $21.5 billion
in assets and $28.5 billion in liabilities. (Delta Air Lines
Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service,
Inc., 215/945-7000).


DYNEGY HOLDINGS: S&P Puts BB- Rating on $820 Million Bank Facility
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' senior
secured debt and '1' recovery ratings to Dynegy Inc. (B/Stable/B-
2) subsidiary Dynegy Holdings Inc.'s $820 million bank facility.
     
The 'BB-' rating (which is two notches higher than the corporate
credit rating on Dynegy) and '1' recovery rating on the term loan
indicate the high expectation for full recovery of principal in
the event of default.
     
The loan will be secured by a first priority perfected security
interest on all tangible and intangible assets of Dynegy Holdings
Inc.


E*TRADE: DBRS Places BB Rating on Deposits & Senior Debt
--------------------------------------------------------
In May 2006, Dominion Bond Rating Service placed "Under Review
with Positive Implications" the short-term and long-term ratings
of E*TRADE Financial Corporation and of its subsidiary bank
E*TRADE Bank.

   * Short-Term Instruments Positive R-2 (low)
   * Short-Term Instruments Positive R-3 (high)
   * Deposits & Senior Debt Positive BB
   * Issuer & Senior Debt Positive BB (low)
   * Subordinated Debt Positive B (high)

The review will focus on the Company's success with integrating
its recent acquisitions, progress in generating more business from
the existing client base and attracting new customers, and the
ongoing improvement of its financial profile.

E*TRADE has made considerable progress over the past year in its
transformation into a broader-based online financial services
institution.  At the end of Q1 2006, the Company had $47 billion
in assets, 3.4 million retail customers with just under $200
billion in customer assets.

E*TRADE's success with the integration of its brokerage and
banking services demonstrates the power of its online franchise.
Providing customers with a broader range of tools to manage their
financial activities, E*TRADE's new suite of online products shows
the strength of its technology and product development
capabilities.

In addition, E*TRADE made two major acquisitions in 2005 that
added over 600,000 customers with about $69 billion in customer
assets.  So far, integration of these acquisitions has been
largely successful with customer attrition running below the
Company's expectations.

E*TRADE has leveraged its success with its franchise to strengthen
its financial profile.  Product integration has generated
significant growth in deposits which are now over $19 billion.  By
accumulating the cash resources of its brokerage customers and
putting them to work with ET Bank products, the Company has been
able to increase the contribution of net interest income to
overall revenues to 51% in 2005 from 29% in 2003.

Leveraging growth of E*TRADE's retail business segment, the
Company's institutional segment has also seen an increase in
revenues.  Despite the demands of E*TRADE's expansion, new product
development, and major acquisitions, strong cost control has kept
expenses and headcount largely flat.  With revenues rising and
costs constrained, E*TRADE is delivering more stable higher margin
earnings.

Franchise success and steps to reduce risk have also improved the
financial profile of ET Bank.  Deposit growth has limited
increases in the cost of funds leading to margin improvement.  On
the asset side, risk has been reduced by growth in secured
residential lending in mortgages and home equity lines of credit.

The share of consumer loans is declining following the decision to
exit lending on RVs, autos and boats, as these portfolios were put
into runoff. Strong cost control and the leveraging of E*TRADE's
online infrastructure has lowered ET Bank's expense ratio to just
37% in 2005 from 58% in 2003.

The current ratings reflect the strength of E*TRADE's online
franchise and its improving financial profile.  At the same time,
the ratings incorporate leverage risks in the Company and in the
Bank, exposure to downturns in capital markets and a highly
competitive environment.

Headquartered in New York City, E*TRADE provides brokerage,
banking, and lending products, primarily through electronic
delivery channels.  It was the ninth-largest U.S. broker/dealer
with approximately $1.8 billion in revenues in 2005.


EDDIE BAUER: Hires Goldman Sachs to Aid in Possible Sale
--------------------------------------------------------
Eddie Bauer Holdings, Inc. reported, on May 25, 2006, that it
intends to explore strategic alternatives to increase shareholder
value, including among others, a possible sale of the Company.

The Company has retained Goldman, Sachs & Co. as its financial
advisor to evaluate and assist with a possible sale.  There can be
no assurance regarding the timing of, or whether, this process
will result in any sale or other transaction.

The Company does not intend to provide updates or make any further
comment until the outcome of the process is determined.

Headquartered in Redmond, Washington, Eddie Bauer Holdings, Inc.
-- http://www.eddiebauer.com/-- is a specialty retailer that   
sells casual sportswear and accessories for the "modern outdoor
lifestyle."  Established in 1920 in Seattle, Eddie Bauer believes
the Eddie Bauer brand is a nationally recognized brand that stands
for high quality, innovation, style, and customer service.  Eddie
Bauer products are available at approximately 375 stores
throughout the United States and Canada, through catalog sales and
online at http://www.eddiebaueroutlet.com/ The Company also   
participates in joint venture partnerships in Japan and Germany
and has licensing agreements across a variety of product
categories.  Eddie Bauer employs approximately 10,000 part-time
and full-time associates in the United States and Canada.

                          *     *     *

As reported in the Troubled Company Reporter on March 29, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
rating on specialty apparel retailer Eddie Bauer Holdings Inc.
and the bank loan rating on Eddie Bauer Inc. to 'B' from 'B+'.  
S&P says the outlook is negative.


EDDIE BAUER: S&P Puts B Corp. Credit & Sr. Debt Ratings on Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Redmond,
Washington-based specialty apparel retailer Eddie Bauer Holdings
Inc. on CreditWatch with developing implications.
      
"The action follows the company's recent announcement that it
intends to explore strategic alternatives to increase shareholder
value, including a possible sale of the company," said Standard &
Poor's credit analyst Ana Lai.
     
Standard & Poor's will monitor developments associated with this
process to assess the implications for the ratings.
     
Specifically, the 'B' corporate credit rating for Eddie Bauer
Holdings and 'B' senior secured debt rating and '2' recovery
rating for Eddie Bauer Inc. were placed on CreditWatch.


EDWARD GROGAN: Chapter 15 Petition Summary
------------------------------------------
Petitioner: Edward Earl Grogan
            Mary Beth Grogan
            800 Quince Hill Road
            Jacksonville, Arkansas 72076

Debtor: Edward Earl Grogan
        Mary Beth Grogan
        800 Quince Hill Road
        Jacksonville, Arkansas 72076

Case No.: 06-12107

Chapter 15 Petition Date: May 29, 2006

Court: Eastern District of Arkansas (Little Rock)

Petitioner's Counsel: David K. Lester, Esq.
                      P.O. Box 1515
                      Cabot, Arkansas 72023
                      Tel: (501) 843-7754

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

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


ELEPHANT TALK: Auditor Raises Going Concern Doubt
-------------------------------------------------
Jimmy C. H. Cheung & Co., in Hong Kong, raised substantial doubt
about Elephant Talk Communications, Inc.'s ability to continue as
a going concern after auditing the Company's consolidated
financial statements for the year ended Dec. 31, 2005.  The
auditor pointed to the Company's loss, negative working capital,
and stockholders' and accumulated deficiencies.

The Company reported a $1,213,549 net loss on $282,417 of revenues
for the year ended Dec. 31, 2005.

At Dec. 31, 2005, the Company's balance sheet showed $9,704,151 in
total assets, $7,991,311 in total liabilities, $41,638 in minority
interest, and $1,671,202 in total stockholders' equity.

The Company's Dec. 31 balance sheet also showed strained liquidity
with $2,048,094 in total current assets available to pay
$5,421,011 in total current liabilities coming due within the next
12 months.

A full-text copy of the Company's 2005 Annual Report is available
for free http://ResearchArchives.com/t/s?a06

Elephant Talk Communications, Inc., is a voice-over-internet-
protocol telecommunications and mobile short message service and
other value added telecom services provider in China.  With its
completion of acquisition of Beijing China Wind, the Company
provides its mobile value added services to over 1 million
customers in China.  Its services include short message service,
ring tone/wall-paper downloads and mobile e-commerce services.  
Its international call services are provided through an integrated
network infrastructure comprising both the packet-switched system
and circuit switched system focusing on the Asia Pacific region
and the U.S.


ELGIN NATIONAL: S&P Places CCC+ Corporate Credit Rating on Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Elgin
National Industries, including the 'CCC+' corporate credit rating,
on CreditWatch with positive implications.  The company recently
announced in a regulatory filing that it retained Jefferies &
Company to assist it in connection with a possible refinancing or
other transaction involving the company's 11% senior notes due
2007.
      
"The CreditWatch listing reflects the possibility that Elgin
National's senior notes could be refinanced, eliminating
substantial refinancing risk," said Standard & Poor's credit
analyst Clarence Smith.  

The listing also reflects Standard & Poor's expectation that the
company will build on the positive operating performance shown in
recent months.
     
Standard & Poor's will meet with management to further discuss
both the company's operations and its financing strategy before
taking further rating actions.
     
Downers Grove, Illinois-based Elgin National is a privately held
diversified manufacturer.  The company operates a number of small,
middle-market manufacturing units serving coal mining, durable
goods, and heavy-duty truck markets as well as engineering and
construction services units serving the mineral processing and
electric utility industries.  


EMPIRE GLOBAL: Posts $109,642 Net Loss in 2006 1st Fiscal Quarter
-----------------------------------------------------------------
Empire Global Corp., filed its first quarter financial statements
for the three months ended March 31, 2006, with the Securities and
Exchange Commission on May 19, 2006.

The Company reported a $109,642 net loss on $210,320 of revenues
for the three months ended March 31, 2006.

At March 31, 2006, the Company's balance sheet showed $9,959,709
in total assets, $8,352,658 in total liabilities, and $1,607,051
in total stockholders' equity.

The March 31 balance sheet also showed strained liquidity with
$460,762 in total current assets available to pay $1,057,385 in
total current liabilities coming due within the next 12 months.

Full-text copies of the Company's financial statements for the
three months ended March 31, 2006, are available for free at
http://ResearchArchives.com/t/s?9fd

                        Going Concern Doubt

SF Partnership, LLP, in Toronto, Canada, raised substantial doubt
about Empire Global Corp.'s ability to continue as a going concern
after auditing the Company's consolidated financial statements for
the years ended Dec. 31 2004, and 2005.  The auditor pointed to
the Company's recurring losses from operations and working capital
deficit.

Empire Global Corp., (OTCBB: EMGL) is a holding company that
acquires, develops and operates income producing real estate
properties that service commercial business tenants, and hotel,
tourism and leisure travel business operators internationally.


ENTERGY NEW ORLEANS: Court Approves Insurance Allocation Protocol
-----------------------------------------------------------------
The Hon. Jerry A. Brown of the U.S. Bankruptcy Court for the
Eastern District of Louisiana approved a protocol by which
insurance proceeds related to Entergy New Orleans, Inc.'s losses
for Hurricane Katrina would be allocated and distributed to and
among the Operating Companies.  The allocation and distribution
would also apply to the First Partial Payment.

                            Responses

1. Creditors Committee

The Official Committee of Unsecured Creditors and its financial
advisors have had the opportunity to review and analyze the
proposed insurance protocol, Carey L. Menasco, Esq., at Liskow &
Lewis, APLC, in New Orleans, Louisiana, states.  The Committee
expects that Entergy New Orleans, Inc.'s affiliates will proceed
quickly to obtain all insurance proceeds to which ENOI may be
entitled.  Thus, the Committee does not object to the Court's
approval of the proposed insurance protocol.

However, the Committee expresses several concerns regarding the
seeming effects of the proposed protocol on ENOI's estate and
related benefits to Entergy Corporation and ENOI's affiliates.

Under the proposed insurance protocol, ENOI would be entitled to
receive 80% of the total insurance proceeds.  But the proposed
method of allocating insurance proceeds will result in ENOI's
receipt of only $4,700,000 -- 32% of the first partial insurance
payment of $14,750,000.  ENOI's share of the initial payment will
be $7,000,000 less than what ENOI would receive if the allocation
of those proceeds were based on the expected ultimate distribution
of proceeds among the Entergy companies, Mr. Menasco asserts.

ENOI's financial situation is more desperate than that faced by
the other Entergy affiliates, Mr. Menasco contends.  The immediate
receipt of money by ENOI would help in rebuilding critical
infrastructure destroyed by the hurricanes and in repaying the
accruing indebtedness to Entergy Corp.

If the allocation of the initial insurance payment to ENOI were
based on the expected distribution of proceeds rather than the
proposed protocol, and if ENOI thus could use the additional
$7,000,000 it received from the first insurance payment to repay
the DIP Loan, ENOI would receive a $315,000 annual reduction in
interest expense payable to Entergy Corp., Mr. Menasco points out.

The protocol would allow ENOI to recover most of its own very
substantial claims only on the back end, toward the conclusion of
the insurance claim adjustment process, Mr. Menasco says.

If the ongoing insurance payments to Oil Insurance Limited's
insureds reach the $1,000,000,000 cap before completion of the
insurance adjustment process for ENOI's own massive losses, ENOI
obviously will not receive from the OIL policy its full share of
the insurance proceeds since OIL also caters to companies with
sizeable hurricane damages.

Mr. Menasco adds that if the $1,000,000,000 cap comes into play,
the protocol mechanism may permit some of ENOI's affiliates to end
up fully compensated for insured losses, while ENOI will not.

Despite these potential shortcomings, the Committee recognizes
that a completely-satisfactory remedy may well require the
involvement of numerous parties, including the governmental
authorities regulating other Entergy operating companies as well
as substantial time and effort of ENOI's professionals and key
employees.

"Moreover, any funds the [D]ebtor can obtain now, even if only a
reduced portion of ENOI's rightful share of insurance proceeds,
will benefit the estate now," Mr. Menasco maintains.

2. The Gordon and Lowenburg Plaintiffs

From the Insurance Allocation Motion and the Committee's response,
it appears that ENOI was substantially underinsured with respect
to the losses suffered as a result of Hurricane Katrina, Michael
H. Piper, Esq., at Steffes, Vingiello & McKenzie, in Baton Rogue,
Louisiana, contends.

The failure to adequately insure may give rise to claims by the
Debtor, its estate, its creditors or its ratepayers against either
Entergy Corp. or its affiliates, and ENOI's officers.

The Gordon and Lowenburg Plaintiffs, in the event that the
Insurance Allocation Motion is approved, reserve all potential
claims for the benefit of ENOI, its creditors and its ratepayers.

3. New Orleans Council

The Council for the city of New Orleans reserves its regulatory
rights and powers as to the Insurance Allocation Motion, which
will be unaffected by the Motion.

Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.
-- http://www.entergy-neworleans.com/-- is a wholly owned  
subsidiary of Entergy Corporation.  Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans.  Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004.  Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing.  Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697).  Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed total assets of
$703,197,000 and total debts of $610,421,000.  (Entergy New
Orleans Bankruptcy News, Issue No. 17; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


FDL INC: U.S. Trustee Names Phoenix Furniture to Creditors Panel
----------------------------------------------------------------
Nancy J. Gargula, the United States Trustee for Region 10,
appointed Phoenix Furniture Group Co. Ltd. to the Official
Committee of Unsecured Creditors in FDL, Inc.'s chapter 11 case.

The Committee is now composed of:

   (1) Ms. Wanna Harindhanavudhi
       Phoenix Furniture Group Co. Ltd.
       753 Moo 4 Phuttaraksa Road
       Tambol Prakkasa, Ampuhur Muang
       Samutprakarn Province 10280 Thailand

   (2) Noppandon Mingvanish Torch 2100 Co., Ltd.
       No. 99 Moo & Taboonme
       Khochan Sub District
       Chonburi 20240 Thailand
       Cell Phone No.: +66 18048410
       Fax No.: +66 29383129

       United States Representative:
       Steven Strum
       P.O. Box 780
       Mamaroneck, NY 10543-0780
       Tel: (914) 381-6000
       Fax: (914) 381-6499

   (3) Susan McCardell
       UPS Global Trade Finance Corp.
       800 Red Brook Boulevard
       Owings Mills, MD 21117-1008
       Tel: (410) 753-0753
       Fax: (410) 753-0943

   (4) Ken Ho, Vice-President
       Excellent Tripod Co., Ltd.
       XiaoBian Village, ChangAn Town
       DongGuan City, GuangDong Province,
       China 523852
       Tel: (86) 769-8547-8335
       Fax: (86) 769-8531-6500

   (5) Charlie Wen
       Mean Young Universal Co., Ltd.
       c/o 2, Shang YI TS'US, TA BAY
       Hisiang, Yun Lin Hsien, 631
       Taiwan
       Tel: (86) 559-12315
       Fax: (86) 559-16200

       United States Representative
       Steven Strum
       P.O. Box 780
       Mamaroneck, NY 10543-0780
       Tel: (914) 381-6000
       Fax: (914) 381-6499

   (6) Millon Tsai
       Fusco Industrial Corporation
       7F, No. 352, Sec. 1, FU Hsing S. Road
       Taipei 10640, Taiwan R.O.C.
       Tel: (886) 2-27073597
       Fax: (886) 2-27073379

   (7) Ada Chen, Sales Manager
       King Technology B.V.I. Inc.
       Jinghe Industrial Area . Zhang
       Mu Tou Dongguan City, Guang-Dong, China
       Tel: (86) 769-8779-3957
       Fax: (86) 769-8779-3946

   (8) James Wang
       Delight Furniture Co., Ltd.
       Yixing Ind. Area, Shiguang Road,
       Shiqiao Town, Panyu Dist,
       Guangzhou, China
       Tel: (86) 20-3480-8118
       Fax: (86) 20-3480-8113

   (9) Gregory Chang, Sales Manager
       ZhongShan QingYi Metal Products
       DingXi Village, ShenWan Town
       Zhong-Shan City, GuangDong Province,
       China
       Tel: (486) 760-660-7888
       Fax: (486) 760 660-9955

  (10) China Export & Credit Insurance Corporation
       aka Sinosure
       Attn: Malhar S. Pagay, Esq.
       Pachulski Stang Ziehl Young Jones & Weintraub LLP
       10100 Santa Monica Boulevard, 11th Floor
       Los Angeles, CA 90067
       Tel: (310) 277-6910
       Fax: (310) 201-0760
       eFax: (603) 462-5486

Headquartered in Kokomo, Indiana, FDL, Inc., manufactures office
and fast food metal furniture.  The company filed for Chapter 11
protection on March 24, 2006 (Bankr. S.D. Ind. Case No. 06-01222).  
Deborah Caruso, Esq., and Erick P. Knoblock, Esq., at Dale & Eke,
P.C., represent the Debtor.  Elliott D. Levin, Esq., at Rubin &
Levin, represents the Official Committee of Unsecured Creditors.  
When the Debtor filed for protection from its creditors, it did
not state its assets but estimated debts between $10 million and
$50 million.


FENDER MUSICAL: Moody's Lowers B3 Rating on $100MM Loan to Caa1
---------------------------------------------------------------
Moody's Investors Service downgraded the debt ratings of Fender
Musical Instruments Corporation by one notch in light of the
deterioration in operating performance and ongoing uncertainty
regarding the demand for the company's products, although recent
demand has started to rebound.  The rating outlook is stable.

These ratings were downgraded by this action:

   * $170 million term loan under the first lien credit facility
     to B2 from B1;

   * $50 million revolver under the first lien credit facility
     to B2 from B1;

   * $100 million second lien credit facility to Caa1 from B3;

   * Corporate family rating to B2 from B1

The ratings downgrade reflects deterioration in the company's
operating performance in the first quarter of 2006, stemming from
softening consumer demand and further exacerbated by weaknesses in
the company's inventory management system in 2005 that caused
higher inventory levels.  The weak operating performance has
precipitated the need for the company to amend its financial
covenants; Moody's expects the banks to grant such waivers within
the next month.

In addition to the covenant revisions and weakening operating
performance, the ratings and stable outlook reflect the continuing
challenges the company faces in operating in a competitive
environment and a high leverage structure, which Moody's expects
will exceed 5 times by the end of 2006. Offsetting these concerns
are Fender's record of cash flow generation and debt reduction,
history of product innovation, leading market position and strong
brand value.

Fender Musical Instruments Corporation, based in Scottsdale,
Arizona, develops, manufactures and distributes musical
instruments, principally guitars and amplifiers, to wholesale and
retail outlets throughout the world.  Net sales for the LTM ended
March 31, 2006 approximated $425 million.


FENDER MUSICAL: S&P Affirms B+ Rating & Revises Outlook to Neg.
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook
on Fender Musical Instruments Corp. to negative from stable.  
Existing credit ratings on the company, including the 'B+'
corporate credit rating, were affirmed.  Approximately $242
million of debt is affected.
     
While Standard & Poor's affirmed all its existing credit ratings
on Fender, including the 'B+' rating on the company's $192 million
first-lien secured loan (which is at the same level as the
corporate credit rating), the rating agency revised the recovery
rating on this loan to '2' from '3'.  The '2' recovery rating
indicates the expectation for substantial (80%-100%) recovery of
principal in the event of a payment default.  The revision of the
recovery rating reflects debt paydowns of $28 million, as well as
the use of a somewhat higher enterprise value multiple.
      
"The revised rating outlook reflects Fender's weaker-than-expected
operating performance through the first quarter of fiscal 2006 and
our expectation that these trends may continue over the near
term," said Standard & Poor's credit analyst Patrick Jeffrey.

This could result in debt leverage peaking at more than 6x before
operations begin to improve.  The company faced soft sales trends
in the key fourth-quarter holiday season which continued into the
first quarter of fiscal 2006.  As a result, the company plans to
amend its existing bank facility to provide covenant relief over
the near term.
     
The ratings are based on:

   * Fender's high debt leverage;
   * narrow business focus; and
   * the discretionary nature of its products.

The factors are somewhat mitigated by the company's strong market
share and global brand names in the guitar and amplifier segment,
including Fender, Squier, Gretsch, and Guild.
     
The company has been a musical instrument innovator since its
founding in the 1940s, and has produced some of the best known
electric guitars, including the Telecaster and the Stratocaster.
Despite its defendable position, purchases are highly
discretionary, and lower-priced foreign competition remains a
concern.  The company has some concentration with its largest
customer, Guitar Center Inc.


FFCC 1999-2: Moody's Cuts Rating on $16MM Class A-2 Certs. to B1
----------------------------------------------------------------
Moody's Investors Service downgraded three classes of franchise
loan backed certificates issued by FFCA 1999-2.  FFCA was acquired
by GE Capital Franchise Finance Corporation, a subsidiary of
General Electric Capital Corporation, in 2001.  The complete
rating actions:

FFCA Secured Lending Corporation Franchise Loan Grantor Trust
1999-2

   * $17,560,509 Class A-1b Certificates, downgraded
     from Baa3 to Ba2;
   * $16,037,210 Class A-2 Certificates, downgraded
     from Ba1 to B1;
   * Class IO Certificates, downgraded from Baa1 to Ba2.

The balance of specially serviced loans in the 1999-2 portfolio
remains significant, currently over one-quarter of the collateral
pool.  Recoveries relating to several obligors are uncertain due
to continued arbitration between American International Specialty
Lines Insurance Company, a subsidiary of American International
Group, Inc., as provider of environmental insurance policies, and
GEFF.

The downgrade reflects the degree to which the current levels of
specially serviced loans, and the uncertainty surrounding their
recoveries, might ultimately impact principal repayment on the
certificates.  The downgrade also reflects the impact of cash flow
paid to the interest-only certificates, which pay interest based
on the total certificate balance until the certificates are
written down, and the level of outstanding servicer advances.


FLYI INC: Judge Walrath Approves UAL Settlement Agreement
---------------------------------------------------------
The Hon. Mary Walrath of the U.S. Bankruptcy Court for the
District of Delaware approved FLYi, Inc., and its debtor-
affiliates' Settlement Agreement with United Airlines.

Judge Walrath also authorized the Debtors, in consultation with
the Official Committee of Unsecured Creditors, to sell the UAL
Shares and the right to receive UAL Shares using commercially
reasonable methods.

                        The UAL Claim

Independence Air, Inc., fka Atlantic Coast Airlines, operated as a
regional airline under code share agreements with United Airlines,
Inc., providing service as part of the United Express program.

In December 2002, UAL Corporation and its subsidiaries filed for
protection under Chapter 11 of the Bankruptcy Code in the United
States Bankruptcy Court for the Northern District of Illinois.  
Subsequently, Independence Air announced that it intended to
utilize its assets to operate as an independent low-fare airline
if United Airlines determined to reject the UA Agreements.

On April 5, 2004, Independence Air announced that it had reached
an agreement with United Airlines providing for a transition
schedule and exit plan for all of its United Express aircraft and
related operations as a result of United Airlines' decision to
reject the UA Agreements.

The UAL Bankruptcy Court approved the Exit Plan Agreement and
United Airlines' rejection of the UA Agreements.

In September 2004, FLYi, Inc., and Independence Air filed claims
in UAL Bankruptcy Court for more than $1,000,000,000, resulting
from United Airlines' rejection of the UA Agreements.

United Airlines argued that the claim should be reduced to
$300,000,000, while the Official Committee of Unsecured Creditors
of UAL asserted that the claim should be disallowed in its
entirety.

The UAL Bankruptcy Court fixed the amount of the Rejection
Damages Claims against United Airlines at $500,000,000.

According to M. Blake Cleary, Esq., at Young Conaway, Stargatt &
Taylor, LLP, in Wilmington, Delaware, the Rejection Damages Claim
is by far the largest asset in the Debtors' Chapter 11 cases, and
it is also fully unencumbered.

The Debtors, United Airlines and the UAL Creditors Committee all
filed notices of appeal of the Rejection Damages Claim Order.

Independence Air also filed an administrative claim in UAL's
Chapter 11 cases, based on United Airlines' potential violations
of state and federal antitrust laws.  Independence Air alleged
that conduct by United Airlines that might be anti-competitive
and illegal under antitrust laws negatively impacted its economic
performance and was a factor to the failure of its operations.

                   UAL Settlement Agreement

After extensive arm's-length negotiations, the Debtors and United
Airlines agreed to resolve all of the claims and disputes among
them.  The Parties agree that:

   (a) The Rejection Damages Claim will be allowed as a Class
       2E-6 general unsecured claim for $750,000,000, in UAL's
       Chapter 11 cases.  United Airlines' objection to the
       Rejection Damages Claim will be deemed withdrawn, and the
       appeals from the Rejection Damages Claim order will be
       dismissed;

   (b) Pursuant to UAL's confirmed Chapter 11 Plan of
       Reorganization, creditors with allowed claims in Class
       2E-6, including the Debtors, are entitled to shares of
       stock in reorganized UAL Corporation.  Those shares are
       distributed from a disputed claims reserve.

       As a claim against United Airlines is allowed, it is
       entitled to receive an initial distribution of New UAL
       Common Stock and may receive additional shares of New UAL
       Common Stock as other disputed claims subject to the
       reserve subsequently are allowed.  The initial
       distribution will be no less than 3,266,250 shares of New
       UAL Common Stock;

   (c) The parties will mutually release each other from all
       claims that arose prior to the date of the Settlement
       Agreement, except for a certain subrogation claim; and

   (d) The Settlement Agreement specifically preserves the
       "Subrogation Claim", relating to an accident at the
       Chicago O'Hare Airport involving United Airlines' bus and
       Independence Air's airplane.  The Subrogation Claim
       consists of claims by Independence Air and its insurer
       against United Airlines' insurer for economic and other
       damages.

A full-text copy of the FLYi-UAL Settlement Agreement is
available for free at http://ResearchArchives.com/t/s?9f4

Mr. Cleary asserts delay in the resolution of the Rejection
Damages Claim would mean delay in the receipt of the primary
asset that will be used to fund distributions to unsecured
creditors under a plan of liquidation, which the Debtors intend
to propose in the near future.

Failure to settle the Antitrust Administrative Claim would
require the Debtors to embark on an expensive and time-consuming
litigation over that claim, Mr. Cleary adds.

Moreover, if the Debtors did not settle the Rejection Damages
Claim, but instead waited to receive New UAL Common Stock at that
time as all appeals of the amount of the claim had been
exhausted, the Debtors would bear the risk of the price of the
stock at that time, Mr. Cleary notes.

Mr. Cleary contends that because the Debtors are in liquidation,
it is appropriate for the Debtors to sell the shares of New UAL
Common Stock received as a result of the Settlement Agreement.  
The sale will provide the Debtors with adequate proceeds to fund
their Chapter 11 cases.

                          About FLYi Inc.

Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport.  The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017).  Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.  Brett H. Miller, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represents the Official
Committee of Unsecured Creditors.  As of Sept. 30, 2005, the
Debtors listed assets totaling $378,500,000 and debts totaling
$455,400,000. (FLYi Bankruptcy News, Issue No. 18; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


FLYI INC: Court Approves Rejection of Seven IAE Purchase Contracts
------------------------------------------------------------------
FLYi, Inc., and its debtor-affiliates obtained authority from the
U.S. Bankruptcy Court for the District of Delaware to reject seven
executory contracts with IAE International Aero Engines AG.

As reported in the Troubled Company Reporter on May 12, 2006, the
Debtors told the Court that as a result of the discontinuation of
the their scheduled flight operations, the contracts, which relate
to the purchase of aircraft engines, have become unnecessary to
their estates.  The Debtors said that the IAE Contracts have no
value to their estates and thus are appropriate for immediate
rejection:

    1. Initial Order Interim Agreement for the Supply of New V2500
       Engine Spare Parts signed 9/1/2004;

    2. Side Letter No. 1 to the V2500-A5 General Terms of Sale
       dated 9/30/2004;

    3. Side Letter No. 2 to the V2500-A5 General Terms of Sale
       dated 9/30/2004;

    4. Side Letter No. 3 to the V2500-A5 General Terms of Sale
       dated 9/30/2004;

    5. Standard Terms of Business for Lease of V2500 Engines
       signed 9/30/2004;

    6. Standard Terms of Business for Lease of V2500 Engines
       signed 9/30/2004; and

    7. V2500 General Terms of Sale dated 9/30/2004.

Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast
Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent
of Independence Air Inc., a small airline based at Washington
Dulles International Airport.  The Debtor and its six affiliates
filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del.
Case Nos. 05-20011 through 05-20017).  Brendan Linehan Shannon,
Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.  Brett H. Miller, Esq., at Otterbourg,
Steindler, Houston & Rosen, P.C., represents the Official
Committee of Unsecured Creditors.  As of Sept. 30, 2005, the
Debtors listed assets totaling $378,500,000 and debts totaling
$455,400,000.  (FLYi Bankruptcy News, Issue No. 18; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


FOAMEX INTERNATIONAL: Can't File 1st Quarter 2006 Results on Time
-----------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, Foamex International, Inc., discloses that it won't
be able to timely file its financial report for the first quarter
ended April 2, 2006.

Because of the Company's recent trading activity and the newly
established trading limit procedures, Gregory J. Christian,
executive vice president of Foamex International, says the
Company needs more time to assess the impact the recent trades of
the Company's equity securities may have on the Company's ability
to utilize its net operating loss carryforwards for the first
quarter of 2006.

Foamex International expects to report income before income taxes
of $16,200,000 for the first quarter, as compared to a loss before
income taxes of $10,900,000 in the first quarter of 2005.

Mr. Christian says the improvement is due to an increase in gross
profit of $33,400,000, principally due to higher selling prices.
The increase in gross profit is partially offset by restructuring
charges and reorganization expenses, which aggregate $8,900,000.

Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of       
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets.  The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries.  The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).  
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts.  Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders.  Kenneth A. Rosen,
Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and
Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the
Official Committee of Unsecured Creditors.  As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts.  (Foamex International Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


FOSTER WHEELER: Moody's Rates $250MM Sr. Sec. Debt Facility to Ba3
------------------------------------------------------------------
Moody's Investors Service upgraded Foster Wheeler LLC's  corporate
family rating to B1 from B3 and assigned a Ba3 rating to FWC's
$250 million senior secured bank revolving credit facility.  The
rating outlook is changed to Positive.

The upgrade and positive outlook reflect the successful completion
of the company's debt reduction program and continued improvement
in demand within FWC's key end markets resulting in increased
bookings, backlog and free cash flow generation.

The five-year $250 million credit facility for standby letters of
credit, with a final maturity date of 2010, includes a currently
undrawn $75 million sub-limit for borrowings.  Substantially all
the assets and capital stock of Foster Wheeler Ltd. and its direct
subsidiaries secure the credit facility.  Guarantees are provided
by Foster Wheeler Ltd. and certain domestic and foreign
subsidiaries.

Financial covenants include a maximum leverage ratio, a fixed
charge ratio and a minimum liquidity level.  The company was in
compliance with its covenants at March 31, 2006 and expects to
remain in compliance throughout the year.

The key rating factors driving the upgrade and positive outlook
include:

   1) the completion FWC's debt reduction program, reducing debt
      by $380 million since 2004 to $190 million;

   2) a significant improvement in global E&C market conditions
      and an improving global power outlook, which should
      continue to drive growth in FWC's bookings and backlog;

   3) Moody's expectation of continued improvement in free cash
      flow generation despite the drag from asbestos settlements
      funded from operations; and

   4) the removal of the going concern opinion and the correction
      of material weaknesses identified in 2005.

Moody's noted that the Ba3 rating for the bank facility
incorporates the benefits and limitations of the collateral, as
well as the modest level of potential borrowing.  The facility
represents virtually all of FWC's corporate debt, is expected to
remain undrawn, and is highly collateralized, resulting in a one
notch upgrade from the corporate family rating.

Moody's has withdrawn the B3 rating on the 10.359% senior secured
notes due in 2011 and the Caa3 rating on the FW Preferred Capital
Trust I - Preferred trust securities following FWC's exchange
and/or redemption of these issuances.  

Moody's previous rating action on FWC was the June 16, 2005
upgrade of the corporate family rating to B3 from Caa2.

Foster Wheeler Ltd, headquartered in Hamilton, Bermuda, is a
leading industrial engineering, construction, maintenance, and
related technical service company.  Consolidated operating
revenues were $2.2 billion in 2005.


GENERAL MOTORS: 20,000+ Workers Taking Buy-Out & Retirement Offers
------------------------------------------------------------------
General Motors Corp.'s buy-out offers were accepted by around
20,000 of its employees, published reports say.  GM spokesman Dan
Flores said the Company would release the results after the offers
expire.  

The offers, which apply to about 113,000 GM workers and 15,000
Delphi Corporation workers, are part of an agreement among GM,
Delphi and the United Auto Workers union to accelerate a
restructuring plan.  This plan calls for 30,000 job cuts and nine
plant closings by 2008.

Delphi's viability is important to GM.  GM gets most of its car
parts from Delphi.  GM and Delphi workers have until
June 23, 2006, to accept offers for buy-outs and early retirement.

GM and Delphi offered $35,000 for workers with at least 30 years
to retire and begin a $36,000-a-year pension.  Workers not
eligible to retire can opt for a buyout of as much as $140,000 and
give up health care benefits.

Under current union contracts, employees get almost their full pay
even where there's no work for them to do.  Reducing the number of
active workers would let GM put idled workers back in operating
factories and make it easier for Delphi to close plants.

GM would hire temporary workers at some of its plants to
compensate for employees taking the buyout and early retirement
offers.  The number of additional temporary workers will depend on
how many employees chose to take buyouts.  Temps will be paid $18
to $19 an hour without benefits, compared with about $26 to 28 an
hour plus benefits for permanent workers.

                      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 including Mexico.  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 May 9, 2006,
Moody's Investors Service placed the B3 senior unsecured rating of
General Motors Corporation under review for possible downgrade,
and affirmed the company's Corporate Family Rating at B3.  The
rating actions are in response to the company's disclosure that it
is pursuing various options to replace or amend its existing
$5.6 billion bank credit facility, and that these options could
result in providing its bank lenders with a security interest in
certain GM assets.  GM anticipates that any credit facility
replacement or amendment will be completed by the end of the
second quarter or early in the third quarter.


GOLDSPRING INC: March 31 Balance Sheet Upside Down by $15.6 Mil.
----------------------------------------------------------------
Goldspring, Inc., filed its amended first quarter financial
statements for the period ended March 31, 2006, with the
Securities and Exchange Commission on May 16, 2006.

The Company's Statement of Operations for the period ended
March 31, 2006, showed a net loss of $1,017,133 on revenues of
$537,806.

At March 31, 2006, the Company's balance sheet showed $3,759,327
in total assets and $19,409,917 in total liabilities, resulting in
a $15,650,590 in stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $778,105 in total current assets available to pay
$18,658,827 in total current liabilities coming due within the
next 12 months.

Full-text copies of the Company's financial statements for the
period ended March 31, 2006, are available for free at
http://researcharchives.com/t/s?9fa

                       Going Concern Doubt

Jewett, Schwartz & Associates, in Hollywood, Florida, raised
substantial doubt about Goldspring, Inc.'s ability to continue as
a going concern after auditing the Company's consolidated
financial statements for the year ended Dec. 31, 2005.  The
auditing firm pointed to the Company's operating losses and
working capital deficit.

Goldspring, Inc. (OTCBB:GSPG.OB) -- http://www.goldspring.us/--  
is a North American precious metals mining company with an
operating gold and silver mine in northern Nevada.  The primary
nature of its business is the exploration and development of
mineral producing properties.


H&E EQUIPMENT: Commences $253 Million Debt Securities Offering
--------------------------------------------------------------
H&E Equipment Services, Inc., and wholly owned subsidiary, H&E
Finance Corp. commenced a cash tender offer and consent
solicitation for all $200 million of the Issuers' outstanding
11-1/8% Senior Secured Notes due 2012 (CUSIP No. 404085AB8), and
all $53 million of the Issuers' outstanding 12-1/2% Senior
Subordinated Notes due 2013 (CUSIP No. 404085AF9).

The total consideration for each $1,000 principal amount of the
Senior Secured Notes and Senior Subordinated Notes tendered and
accepted for purchase pursuant to the tender offer will be
determined as specified in the Offer to Purchase and Consent
Solicitation Statement of the Issuers, dated May 25, 2006, on the
basis of a yield to the applicable first redemption date equal to
the sum of

     (i) the yield (based on the bid side price) of the U.S.
         Treasury security specified in the Statement for each of
         the Notes, as calculated by Credit Suisse Securities
         (USA) LLC in accordance with standard market practice on
         the Price Determination Date, plus

    (ii) a fixed spread of 50 basis points.

The Price Determination Date will be June 7, 2006 (unless the
Issuers extend the tender offer for any period longer than ten
business days from the previously scheduled expiration date, in
which case a new Price Determination Date will be established).

In connection with the tender offer, the Issuers are soliciting
consents to certain proposed amendments to the indentures pursuant
to which the Notes were issued, which would eliminate
substantially all of the restrictive covenants, eliminate or
modify certain events of default and eliminate or modify related
provisions of the indentures.

The Issuers are offering to make a cash consent payment of $30 per
$1,000 principal amount of Notes (which is included in the total
consideration for the Notes described above) to holders who
validly tender (and do not withdraw) their Notes and deliver (and
do not revoke) their consents prior to 5:00 p.m., New York City
time, on June 6, 2006.  No consent payments will be made in
respect of Notes tendered and consents delivered after the Consent
Date.  Holders may not tender their Notes without delivering their
consents, and may not deliver their consents without tendering
their Notes.

The tender offer is scheduled to expire at Midnight, New York City
time, on June 22, 2006, unless extended.  Notes tendered prior to
the Consent Date may not be withdrawn, and consents delivered
prior to the Consent Date may not be revoked, after the Consent
Date, except in the limited circumstances described in the
Statement.  Notes tendered and consents delivered after the
Consent Date and prior to the Expiration Date may not be withdrawn
or revoked, except in the limited circumstances described in the
Statement.

Subject to satisfaction of the conditions to the tender offer, the
Issuers currently expect to accept for purchase, and pay the total
consideration (as to all Notes tendered prior to the Consent Date)
and the tender offer consideration (which is the total
consideration less the cash consent payment, as to all Notes
tendered after the Consent Date) with respect to, all validly
tendered Notes on a date promptly following the Expiration Date.  
On the Payment Date, the Issuers will also pay accrued and unpaid
interest up to, but not including, the Payment Date on the Notes
accepted for purchase.

The tender offer and consent solicitation are subject to the
satisfaction of certain conditions, including the receipt of
consents from the holders of at least a majority in principal
amount of each series of the Notes and the consummation by H&E
Inc. of one or more debt financings on terms satisfactory to H&E
Inc. in an aggregate amount not less than $250 million and consent
of the lenders under H&E Inc.'s senior secured credit facility.  
No assurance can be given that such new financing will be
completed in a timely manner or at all or that such consent will
be obtained.

The complete terms and conditions of the tender offer and consent
solicitation are described in the Statement and the related
Consent and Letter of Transmittal, copies of which may be obtained
by contacting the information agent for the tender offer and
consent solicitation:

     D.F. King & Co. Inc.
     Telephone (212) 269-5550
     Toll Free (866) 387-1500

Questions regarding the tender offer and consent solicitation may
be directed to the Dealer Manager and Solicitation Agent for the
tender offer and consent solicitation:

     Credit Suisse Securities (USA) LLC
     Telephone (212) 538-0652
     Toll Free (800) 820-1653

Based in Baton Rouge, Louisiana, H&E Equipment Services, Inc. --
http://www.he-equipment.com/-- is one of the largest integrated  
equipment services companies in the United States with 47 full-
service facilities throughout the Intermountain, Southwest, Gulf
Coast, West Coast and Southeast regions of the United States.  The
Company is focused on heavy construction and industrial equipment
and rents, sells and provides parts and service support for four
core categories of specialized equipment: hi-lift or aerial
platform equipment; cranes; earthmoving equipment; and industrial
lift trucks.  The Company trades on the Nasdaq Stock Exchange
under the symbol "HEES."

                         *     *     *

As reported in the Troubled Company Reporter on Feb. 20, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on rental equipment company H&E Equipment Services Inc.
(formerly known as H & E Equipment Services LLC) to 'BB-' from
'B+'.

At the same time, Standard & Poor's raised its rating on H & E's
$165 million first-lien revolving credit facility due in 2009.
That rating is now 'BB+', two notches higher than the corporate
credit rating, while the recovery rating on the facility is '1',
meaning that full recovery of principal is expected in the event
of a default.  The rating on H & E's $200 million second-lien
notes, due in 2012, rose to 'B+', one notch lower than the
corporate credit rating, and was assigned a recovery rating of
'3'.  This indicates that S&P expects a meaningful recovery of
principal (50%-80%) in the event of a default after full recovery
of the first-lien facility.  S&P said the outlook is stable.


HEALTHSOUTH CORP: S&P Assigns CCC+ Rating to $1 Billion Sr. Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
HealthSouth Corp.'s $1 billion (in aggregate) of floating-rate
senior unsecured notes due 2014 and fixed-rate senior unsecured
notes due 2016.
     
At the same time, existing ratings on HealthSouth, including the
'B' corporate credit rating, were affirmed.  The rating outlook is
stable.
     
The new notes transactions were anticipated when the corporate
credit rating was originally assigned (April 11, 2006).  In the
short time since then, the company has performed within Standard &
Poor's expectations.  Proceeds of the notes will be used to
refinance an existing unsecured interim term facility of the same
size.
     
HealthSouth's senior unsecured notes are rated 'CCC+', two notches
below the 'B' corporate credit rating, in line with Standard &
Poor's criteria.  Although these notes are considered senior, the
company has a sizable amount of priority debt (secured bank debt
and capitalized operating leases).  Because of the magnitude of
priority debt (totaling more than 30% of total eligible assets),
the unsecured notes are considered materially disadvantaged.
      
"The speculative-grade ratings on Birmingham, Alabama-based
HealthSouth reflect the company's position as a major U.S.
provider of rehabilitative health care services, outpatient
surgery, and diagnostic imaging, as well as the challenges of
operating in a competitive industry that has significant
reimbursement risk," said Standard & Poor's credit analyst David
Peknay.

"HealthSouth's size and scope of services position it well to
benefit from an aging population that could help drive healthy
growth rates in its businesses.  However, the company has not
realized these benefits due to mismanagement and fraudulent
financial reporting, which caused significant damage to its
operations and reputation."
     
HealthSouth had incurred large financial losses that were revealed
after extensive forensic accounting was performed to reconstruct
several years of financial statements.  Now with entirely new
governance, new senior management in 2004, substantially new local
management, and more responsible and appropriate business
practices, Standard & Poor's believes that HealthSouth is past the
worst of its troubles and will operate with a strong commitment to
the principles of sound corporate governance.

However, though its corporate renaissance bodes well for the
company's ability to navigate through a difficult health care
environment, its success is uncertain, as it will continue to face
a number of risks.


HORNE COMMERCIAL: Case Summary & 2 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Horne Commercial Properties, LLC
        550 Corporate Center Drive
        Raleigh, North Carolina 27607

Bankruptcy Case No.: 06-00770

Type of Business: The Debtor is a real estate developer.

Chapter 11 Petition Date: May 26, 2006

Court: Eastern District of North Carolina (Raleigh)

Judge: A. Thomas Small

Debtor's Counsel: William P Janvier, Esq.
                  Everett Gaskins Hancock & Stevens, LLP
                  P.O. Box 911
                  Raleigh, North Carolina 27602
                  Tel: (919) 755-0025
                  Fax: (919) 755-0009

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 2 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Southern States                                      $1,241,699
Cooperative, Inc.
c/o Luther Starling
P.O. Drawer 1960
Smithfield, NC 27577

Johnston County                  Real Estate            Unknown
P.O. Box 1049
Smithfield, NC 27577


IMAGING3 INC: First Quarter Balance Sheet Upside Down by $3 Mil.
----------------------------------------------------------------
Imaging3, Inc., filed its amended first quarter financial
statements for the three months ended March 31, 2006, with the
Securities and Exchange Commission on May 16, 2006.

The Company's Statement of Operations for the period ended
March 31, 2006, showed a net loss of $368,488 on revenues of
$268,436.

At March 31, 2006, the Company's balance sheet showed $640,835 in
total assets and $3,645,982 in total liabilities, resulting in a
$3,005,147 stockholders' deficit.

The Company's March 31 balance sheet also showed strained
liquidity with $567,365 in total current assets available to pay
$3,645,982 in total current liabilities coming due within the next
12 months.

A full-text copy of the Company's financial statements for the
three months ended March 31, 2006, is available for free at  
http://ResearchArchives.com/t/s?a01

                       Going Concern Doubt

Kabani & Company, Inc., in Los Angeles, California, raised
substantial doubt about Imaging3, Inc.'s ability to continue as a
going concern after auditing the Company's consolidated financial
statements for the year ended Dec. 31, 2005.  The auditing firm
pointed to the Company's net losses, accumulated deficit, and
negative cash flow from operating activities.

Headquartered in Burbank, California, Imaging3, Inc. (OTCBB:IMGG)
--  http://www.imaging3.com/-- manufactures and sells medical  
equipment and parts to hospitals, surgery centers, and research
labs.  Imaging3 specializes in medical imaging devices.


INCO LTD: Reaches Tentative CBA with USW Bargaining Committee
-------------------------------------------------------------
Inco Limited and United Steelworkers Locals 6500 and 6200 reached
a tentative collective bargaining agreement at 1 p.m. May 29,
2006, for Inco's Sudbury and Port Colborne operations.

The bargaining committee for Locals 6500 and 6200 is unanimously
recommending acceptance of the proposed new three-year agreement.

Mark Cutifani, Inco's President of North America/Europe said the
Company's offer includes improvements to wages, benefits and
pensions and provides the basis for continuing the business
improvement and growth strategy in Ontario.

"We believe the tentative agreement is a fair and reasonable one,"
Mr. Cutifani, said.  "Our employees are the key to our success.
Looking forward, our strategy is to continue working in
partnership with all employees to grow the business in Ontario and
generate positive returns in all price cycles."

The USW has scheduled information sessions for its members today,
May 30, with a vote on the deal taking place on tomorrow, May 31.

Details of the tentative agreement will not be made public until
the USW has an opportunity to present the tentative agreement to
its membership.

                           About Inco

Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N) --
http://www.inco.com/-- is the world's #2 producer of nickel,  
which is used primarily for manufacturing stainless steel and
batteries.  Inco also mines and processes copper, gold, cobalt,
and platinum group metals.  It makes nickel battery materials and
nickel foams, flakes, and powders for use in catalysts,
electronics, and paints.  Sulphuric acid and liquid sulphur
dioxide are produced as byproducts.  The company's primary mining
and processing operations are in Canada, Indonesia, and the UK.

                          *     *     *

Inco Limited's 3-1/2% Subordinated Convertible Debentures due 2052
carry Moody's Investors Service's Ba1 rating and Standard & Poor's
BB+ rating.


INGRAM MICRO: S&P Affirms BB+ Corporate Credit Rating
-----------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit rating on Santa Ana, California-based Ingram Micro Inc.,
and revised the outlook to positive from stable.

The outlook revision reflects the company's improving
profitability, and good financial profile for the rating.
     
"The rating reflects relatively thin profitability levels and
highly competitive industry conditions, partially offset by the
company's leading market position and moderately leveraged balance
sheet," said Standard & Poor's credit analyst Martha Toll-Reed.
     
Ingram Micro is the world's largest wholesale provider of
technology products and services.  Fiscal 2005 revenues were $28.8
billion.  With a leading market share and global presence, Ingram
is well positioned to provide a broad range of distribution and
logistics services to its customers.

Although the computer products distribution market is relatively
mature and highly competitive, Ingram is expected to achieve
revenue growth through ongoing expansion into adjacent product
lines and markets.  EBITDA margins of about 1.7% have trended up
gradually but consistently from 1.1% in fiscal 2002.  Ingram is
expected to sustain profitability levels through ongoing cost
reduction actions and revenue growth.  EBITDA coverage of interest
-- in excess of 6x -- is good for the rating level.
     
Free operating cash flow varies with revenue growth and with
seasonal working capital fluctuations.  At current revenue growth
rates Ingram is expected to be moderately cash flow positive on an
annual basis.  Total debt (including capitalized operating leases)
to EBITDA was below 2x as of March 31, 2006.


IT GROUP: Third Circuit Rejects ERISA Plan Participants' Claims
---------------------------------------------------------------
A group of participants in IT Corporation's Deferred Compensation
Plan, filed an adversary complaint in the U.S. Bankruptcy Court
for the District of Delaware against IT Corporation, its parent
company, IT Group, Inc., and their subsidiaries, seeking secured,
priority status for their claims for benefits owed to them under
the Plan.  

The Participants' complaint relied principally on the Plan and
Trust documents, but also alleged that a former President and CEO
of IT Corporation orally promised a senior officer and other
potential Plan participants that the Corporation would fund the
Trust for the exclusive benefit of plan participants and ensure
that benefits would be paid in full if the Corporation ever faced
the prospect of insolvency or bankruptcy.  

The Debtors and the Plan Fiduciaries filed a consolidated motion
to dismiss the Participants' claims.  The Bankruptcy Court found
that the Plan was "unfunded" and offered only to a "select group
of management or highly compensated employees," and was, thus, a
top hat plan exempt from ERISA's substantive protections.   The
Bankruptcy Court's decision was reported at 305 B.R. 402.  

The Participants took an appeal to the United States District
Court for the District of Delaware (Civil No. 04-cv-00146), and
the Honorable Joseph J. Farnan, Jr., affirmed the Bankruptcy
Court's ruling.  

The Participants took another appeal to the U.S. Court of Appeals
for the Third Circuit (Docket No. 05-2191), arguing that certain
novel features of the Plan obligated IT Corporation to fund a
secular trust, outside the reach of creditors, for their exclusive
benefit when the committee learned that the Corporation was facing
insolvency.  The Third Circuit disagrees, and affirmed the
District Court's decision last week.  The Decision is reported at
2006 WL 1421016 and a copy of the Slip Opinion is available
at http://www.ca3.uscourts.gov/opinarch/052191p.pdf

"[T]he terms of the Plan and Trust documents clearly and
unambiguously evince the Corporation's intent to create an
unfunded top hat plan," the Third Circuit says.  "Moreover, as the
Bankruptcy Court observed, the oral representation alleged by
Participants 'would add an additional term to the contract
regarding funding; it would not shed light on the written terms of
the Plan.'  [T]he oral representation does not undermine our
initial conclusion that the Plan is unfunded, and has no place in
our analysis."

Headquartered in Monroeville, Pennsylvania, The IT Group, Inc.
-- http://www.theitgroup.com/-- together with its 92 direct and  
indirect subsidiaries, is a leading provider of diversified,
value-added services in the areas of consulting, engineering and
construction, remediation, and facilities management. The Company
filed for chapter 11 protection on Jan. 16, 2002 (Bankr. Del.
Case No. 02-10118).  David S. Kurtz, Esq., at Skadden Arps Slate
Meagher & Flom LLP, represents the Debtors.  On Sept. 30, 2001,
the Debtors listed $1,344,800,000 in assets and 1,086,500,000 in
debts.  The Court confirmed the Debtors' chapter 11 Plan on
April 5, 2004, and the Plan took effect on April 30, 2004.  Alix
Partners LLC is the IT Litigation Trust Trustee appointed under
the confirmed Plan.  John K. Cunningham, Esq., and Ileana Cruz,
Esq., at White Case LLP represents the Trustee.


KANSAS CITY SOUTHERN: Names New Finance Department Leadership
-------------------------------------------------------------
Kansas City Southern appointed Patrick J. Ottensmeyer as executive
vice president and chief financial officer.  Mr. Ottensmeyer
brings over 25 years of financial experience to KCS.  Most
recently, he served as chief financial officer of Intranasal
Therapeutics, Inc.  Mr. Ottensmeyer will lead KCS' international
finance department.

"Pat understands the rail industry and brings a broad set of
financial and leadership skills to our company," said KCS
chairman, president and chief executive officer Michael R.
Haverty.  "We look forward to his contributions as we continue to
drive costs out of our newly integrated rail network."

Susan B. Wollenberg has been promoted to vice president financial
planning and administration.  Ms. Wollenberg joined KCS in early
April 2006 and will serve as interim chief accounting officer.  
She is a former chief financial officer for E.W. Blanch Holdings,
Inc. and has ten years experience with GE Capital Services, where
she held various financial roles, including manager strategic
investments and second vice president.  She also serves on the
board of directors of Windhaven Insurance Company.

Julio Quintero has been named controller for Kansas City Southern
de Mexico and will be based in Monterrey, N.L.  While leading the
accounting department in Monterrey, he will spend his first six
months with the holding company in Kansas City to ensure
standardized accounting procedures in both countries.  Mr.
Quintero joins KCSM from Wyeth Pharmaceuticals, where he served as
controller for Mexico and Central America with responsibilities
for cost accounting, treasury and Sarbanes Oxley compliance.  

T. Nicholas Nocita has been promoted from general director
financial compliance to assistant vice president international
internal audit and financial compliance and retains responsibility
for Sarbanes Oxley compliance in both the U.S and Mexico.  Mr.
Nocita joined the company in 1998. Prior to joining KCS, he spent
nine years as a certified public accountant in Kansas City.

KCS thanks former executive vice president and chief financial
officer Ronald G. Russ and former vice president and comptroller
James S. Brook for their service to the company.

Headquartered in Kansas City, Missouri, Kansas City Southern
(NYSE: KSU) - http://www.kcsi.com/-- is a transportation holding  
company that has railroad investments in the U.S., Mexico and
Panama.  Its primary U.S. holding is The Kansas City Southern
Railway Company, serving the central and south central U.S.  Its
international holdings include KCSM, serving northeastern and
central Mexico and the port cities of L zaro Cardenas, Tampico and
Veracruz, and a 50 percent interest in Panama Canal Railway
Company, providing ocean-to-ocean freight and passenger service
along the Panama Canal.  KCS' North American rail holdings and
strategic alliances are primary components of a NAFTA Railway
system, linking the commercial and industrial centers of the U.S.,
Canada and Mexico.

                             *   *   *

As reported in the Troubled Company Reporter on May 22, 2006,
Standard & Poor's Ratings Services lowered its preferred stock
ratings on Kansas City Southern to 'D' from 'C' and removed the
ratings from CreditWatch where they were initially placed on
March 23, 2006; ratings were previously lowered on April 4 and May
1 and maintained on CreditWatch with negative implications.

Standard & Poor's other ratings on Kansas City Southern, including
its 'B' corporate credit rating, remain on CreditWatch with
negative implications, where they were initially placed April 4,
2006.  Ratings were lowered on April 10 and maintained on
CreditWatch.


KL INDUSTRIES: Has Until Friday to File Schedules
-------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
gave KL Industries, Inc., until June 2, 2006, to file its
Schedules and Statement of Financial Affairs.

The Debtor tells the Court that in order to accurately and
completely prepare its schedules and statements, it will assemble
information from various books and records, reports, agreements,
tax returns and other sources.  The Debtor says that this task is
expected to be rather arduous and quite time consuming given the
fact that the employee with responsibility over the its finances
has been in plan for only a couple of weeks and is still in the
process of familiarizing himself with the Debtor's books and
records.

The Debtor contends that it has just begun the process of
compiling the information necessary to complete the schedules and
statements since it has been focusing all of its efforts on
operating its business.

Headquartered in Addison, Illinois, KL Industries, Inc.,
manufactures springs, assemblies and other products for the
automotive and electronic markets.  The Company does business as
KL Spring & Stamping Division, KL Spring Division, KL Stamping
Division, KL Assembly Division and American Metal Forming
Division.  The Company filed for bankruptcy protection on May 2,
2006 (Bankr. N.D. Ill. Case No. 06-04882).  Peter J. Roberts,
Esq., and Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz
Wolfson & Towbin LLC represent the Debtor in its restructuring
efforts.  The Official Committee of Unsecured Creditors has
retained Winston & Strawn LLP, to represent it in the Debtor's
case.  When the Debtor filed for bankruptcy protection, it
reported assets totaling between $1 million and $10 million and
debts amounting between $10 million to $50 million.


KMART CORP: Court Signs Order Resolving LNR & Goldblatt Dispute
---------------------------------------------------------------
The Hon. Susan Pierson Sonderby of the U.S. Bankruptcy Court for
the Northern District of Illinois signed the agreed order between
LNR Partners, Inc., and Richard A. Goldblatt.

Kmart Corporation and Continental Mart Michigan Limited
Partnership are parties to lease agreement where Kmart leases
property from Continental in Three Rivers, Michigan.

On January 31, 2002, Confederation Life Insurance Co., and
Continental entered a Mortgage and Security Agreement and Fixture
Financing Statement covering a property known as Kmart Store No.
3950 located in Three Rivers.

On the same day, Confederation and Continental also entered into
an assignment of lease agreement, which assigned the Lease between
Continental and Kmart to Confederation.

Continental transferred all of its interests in Store No. 3950 to
Good Neighbor Properties pursuant to an Amendment and Assignment
agreement dated April 23, 1993.  Good Neighbor assumed
Continental's obligations under the original Assignment of Lease
Agreement between Confederation and Continental.

Good Neighbor, in turn, transferred all of its interests in Store
No. 3950 to Mr. Goldblatt pursuant to an Amendment and
Assignment Agreement relating to Financing Documents of Record
dated February 14, 1994.  Mr. Goldblatt assumed Good Neighbor's
obligations under the Original Assignment of Lease Agreement.

On April 12, 1994, Confederation assigned its right, interest and
title in Store No. 3950 to LaSalle National Bank.  LaSalle
National serves as Trustee for the holders of the Structured Asset
Securities Corporation Multiclass Pass-Through Certificates,
Series 1996-CFL.

On the Petition Date, Lennar Partners, Inc., was LaSalle's
attorney-in-fact.  LaSalle held a mortgage on Store No. 3950,
which Store was now property of Mr. Goldblatt and was leased to
Kmart.

On July 29, 2002, Kmart rejected the Store No. 3950 Lease.

Mr. Goldblatt filed Claim No. 34563 for $1,118,663 asserting lease
rejection damages for loss of future rent, damages for maintenance
fees, and 2001 taxes.

In September 2002, LaSalle transferred its interests in Store No.
3950 to SASCO 1996-CFL Three Rivers, LLC, pursuant to an
Assignment of Mortgage dated September 17, 2002.  SASCO was an
entity created by LaSalle.

On September 20, 2002, SASCO recorded an assignment of lease.

Mr. Goldblatt defaulted on his obligations under the Mortgage that
belonged to LaSalle.  Pursuant to the which, LaSalle advertised
the sale of Store No. 3950 for the applicable period of time.  
LaSalle was the highest bidder at the forced sale of Store No.
3950.

On November 14, 2002, LaSalle was granted a deed of ownership
rights -- the Sheriff's Deed -- in Store No. 3950.

                Lennar Transfers Claim to LaSalle

On February 25, 2003, the Debtor objected to the allowance of
Claim No. 34563 and notified both Lennar and Mr. Goldblatt of the
objection and their right to respond.

In 2004, Lennar filed a notice transferring the Claim from Mr.
Goldblatt to LaSalle.  Mr. Goldblatt objected.

As authorized in the Assignment of Lease Agreement between
Confederation and LaSalle, the Mortgage by Mr. Goldblatt, and a
Consent Agreement between Kmart and LaSalle, LaSalle and the
Debtors entered agreed to resolve the lease rejection claim for
Kmart Store No. 3950 by:

    * allowing the Claim in favor of SASCO for $1,012,873; and

    * barring Mr. Goldblatt from asserting, collecting, seeking to
      collect any lease rejection or administrative expense amount
      relating to Store No. 3950.

On August 30, 2004, the Court signed the agreed order between
LaSalle and the Debtors.

Mr. Goldblatt has not appealed the order or filed a request for
reconsideration.

In November 2004, Lennar asked the Court to rule that Mr.
Goldblatt's rights in Claim No. 34653 were transferred to LaSalle
and that LaSalle is the owner of the Claim.

On Lennar's behalf, Gabriel Reilly-Bates, Esq., at Jenner & Block
LLP, in Chicago, Illinois, argued that LaSalle was entitled to the
lease rejection claim on the basis that:

    (i) Mr. Goldblatt has not timely objected to the agreed order
        between LaSalle and the Debtors;

   (ii) the Assignment of Lease Agreement between Confederation
        and LaSalle gave LaSalle the explicit authority to settle
        any bankruptcy claims arising out of the Lease;

  (iii) the Assignment of Lease Agreement between Confederation
        and LaSalle transferred Mr. Goldblatt's rights to receive
        rent and bankruptcy claims to LaSalle prior to the
        foreclosure; and

   (iv) any residual interest that Mr. Goldblatt may have had in
        Store No. 3950 was terminated and transferred to LaSalle
        by the Sheriff's Deed, which transferred all right, title
        and interest, including tenements in Store No. 3950.

                 LNR and Goldblatt Allow Transfer

In December 2004, Mr. Goldblatt sought to vacate the agreed order
between LaSalle and the Debtors.

To settle the dispute, Lennar, now known as LNR Partners, Inc.,
and Mr. Goldblatt, agree that on the effective date of the
Debtors' Plan of Reorganization:

    * the Claim Transfer Request is granted provided that any
      distributions to be made on account of Claim No. 34563 will
      be made in accordance with the Agreed Order between LNR and
      Mr. Goldblatt;

    * Mr. Goldblatt's request to vacate the August 2004 Agreed
      Order and the remaining Goldblatt requests are deemed
      withdrawn with prejudice; and

    * the Debtor will distribute the first 3,198 shares to be
      issued on account of Claim No. 34563 to Mr. Goldblatt and
      all remaining shares to LNR.

Headquartered in Troy, Michigan, Kmart Corporation nka KMART
Holding Corporation -- http://www.bluelight.com/-- operates  
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues.  The waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act
expired on Jan. 27, without complaint by the Department of
Justice.  (Kmart Bankruptcy News, Issue No. 111; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


KMART CORP: Settles Dispute Over Texas Taxing Authorities' Claims
-----------------------------------------------------------------
Sixty-one taxing authorities in Texas filed prepetition secured
proofs of claim against the Debtors aggregating in excess of
$14,000,000.  The Claims were for ad valorem property taxes
assessed against the Debtors' real and personal property for tax
year 2002.

To liquidate and resolve the Debtors' prepetition liability to the
Taxing Authorities:

    * the Debtors and nine Taxing Authorities agree to the
      allowance of the non-contingent, undisputed, liquidated
      amounts, to be paid in full and final satisfaction of the
      Claims and the Debtors' prepetition liability:

      Taxing Entity         Claim Nos.            Allowed Amount
      -------------         ----------            --------------
      Brownsville Isd       42, 334, 47794, 57288        $30,382

      Cameron County        333, 47792, 57285             32,672

      City of Arlington     17285, 47702, 48023,          18,110
                            48195

      City of Harlingen     335, 47793                     8,791

      Harlingen Cisd        336, 47813, 57315             23,420

      Round Rock Isd        331, 47797, 48207             26,537

      Tarrant County        831, 17286, 21404,           111,777
                            47717, 48016, 48194

      Victoria County       427, 47800, 57319             46,009

      Williamson County     769, 781, 45898,              13,792
                            45819,57249

      The nine Taxing Authorities agree that their sole remedy for
      the liabilities is payment pursuant to the Stipulation.  The
      nine Taxing Authorities will promptly update their records
      following receipt of the payment to confirm application to
      the Debtors' prepetition obligations, in full, and to
      reflect that the tax obligations are deemed paid in full,
      whether ore not formally claimed.

    * the Debtors and 52 Taxing Authorities agree that all
      prepetition ad valorem tax liabilities of the Debtors',
      whether previously claimed or not, are fully satisfied.
      Therefore, the claims filed by the 52 Taxing Authorities
      are deemed withdrawn, and the claims administrative agent is
      authorized to expunge the claims, including:

      Taxing Entity         Claim Nos.
      -------------         ----------
      Angelina County       7, 47867, 48344

      Bexar County          16, 48182, 48214, 47879

      City of Carollton     830, 13403, 47711, 48019, 48193

      City of Del Rio       18, 47880, 57321

      City of Desoto        117, 47705, 48020, 48202

      City of El Paso       14, 47878, 57287

      City of Forth Worth   13388, 14467, 37373, 44509, 44626,
                            52415, 54279

      Corsicana ISD         802, 32817, 43534, 47707, 47954,
                            48014, 48200

      Cypress-Fairbanks     2173, 45058, 45060, 47868, 48345
      ISD

      Dallas County         114, 17284, 47715, 48018, 48201

      Ector CAD             57516

      Ector County          17, 47860, 47861, 57316, 57515

      Ector ISD             1320, 47752, 47875, 47907

      Fort Bend County      8, 21730, 47883, 57339, 57343

      Fort Bend ISD         9, 47884, 57337

      Grayson County        115, 47710, 4802, 48198

      Gregg County          48017, 48192, 56911

      Harris County/        3, 1335, 21736, 29341, 37871,
      City of Houston       40152, 40153, 40480, 40481,
                            45061, 47876, 48342, 55336

      Hidalgo County        585, 47799, 48209

      Hopkins County        928, 47703

      Houston ISD           12, 21732, 29410, 47882, 48343, 55335

      Hunt County           801, 47712, 57309, 57313

      Jefferson County      601, 817, 45903, 47804, 48173

      Katy ISD              6, 21734, 37870, 40151, 40573, 47866,
                            47892, 48341, 55311, 55337

      Lamar CAD             832, 47708, 57029

The Debtors and the 61 Taxing Authorities exchange mutual
releases.

A full-text copy of the Taxing Authorities' allowed and withdrawn
claims is available for free at:

               http://researcharchives.com/t/s?a09

Headquartered in Troy, Michigan, Kmart Corporation nka KMART
Holding Corporation -- http://www.bluelight.com/-- operates  
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues.  The waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act
expired on Jan. 27, without complaint by the Department of
Justice.  (Kmart Bankruptcy News, Issue No. 111; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


KMART CORP: Court Rules Heaton's Claim Motion is Withdrawn as Moot
------------------------------------------------------------------
The Hon. Susan Pierson Sonderby of the U.S. Bankruptcy Court for
the Northern District of Illinois ruled that Helen Heaton's
request to file claim is "withdrawn as moot."

The Court established June 20, 2003, as Kmart Corporation and its
debtor-affiliates' Bar Date for filing administrative expense
claims.  On September 9, Ms. Heaton filed an administrative
expense claim against Kmart Corporation.

According to Bruno Bellucci, III, Esq., at Law Offices of Bruno
Bellucci, III, P.C., in Linwood, New Jersey, the delay was due to
inadvertence, oversight, or excusable neglect.  On these grounds,
Ms. Heaton asked the Court to allow her late-filed administrative
expense claim.

                     Claim Must be Disallowed

David E. Gordon, Esq., at Wilmer Cutler Pickering LLP, in New
York, asserts that while a late claim was indeed filed on
September 9, 2003, Ms. Heaton's request for the allowance of her
late administrative claim was not filed until two and one-half
years had passed.

Mr. Gordon says Ms. Heaton failed to present sufficient facts to
establish that the failures of her counsel and the delay in filing
a late claim request amount to excusable neglect.

Ms. Heaton's counsel admitted that he received communications and
notices mailed directly to him by the Court and from Kmart, Mr.
Gordon continues.  Ms. Heaton also received copies of additional
communications mailed directly to her.

According to Mr. Gordon, although Ms. Heaton's counsel was aware
that he needed to obtain relief from the Bankruptcy Court, he put
off filing the request for more than two years.

Mr. Gordon informs the Court that allowance of the late Claim
would be highly prejudicial as Kmart will expend significant
resources to determine the value of the claim and may end up
litigating them.

The Debtors, hence, ask the Court to deny Ms. Heaton's request.

Headquartered in Troy, Michigan, Kmart Corporation nka KMART
Holding Corporation -- http://www.bluelight.com/-- operates  
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues.  The waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act
expired on Jan. 27, without complaint by the Department of
Justice.  (Kmart Bankruptcy News, Issue No. 111; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


LEGACY ESTATE: Gets Interim Nod on DIP Loan & Cash Collateral Use
-----------------------------------------------------------------
The Honorable Alan Jaroslovsky of the U.S. Bankruptcy Court for
the Northern District Of California in Santa Rosa gave The Legacy
Estate Group LLC interim access to a debtor-in-possession credit
facility to be provided by Connaught Capital Partners, LLC.

The Court also allowed the Debtor to use cash collateral securing
repayment of the Debtor's prepetition loan from a group of lenders
headed by Laminar Direct Capital, L.P.

The Debtor can borrow $6.381 million from Connaught to pay growers
holding valid producer's liens under California law who supplied
the Debtor with grapes during the 2005 harvest.  The Debtor will
also borrow $4.736 million to pay growers during the 2006 harvest.  
An additional $5 million from the DIP loan and the cash collateral
will be used for the Debtor's working capital needs.  A portion of
the DIP loan is reserved to pay up to $250,000 of the fees and
expenses incurred by professionals hired in the Debtor's chapter
11 cases, except Chanin Capital Partners.  

The Debtor owes the Laminer lenders $15.89 million, secured by a
lien on substantially all of its assets.  The Laminer lenders are
granted replacement lien to the same extent, validity and priority
as the prepetition lien.  They have a junior superpriority claim
against the Debtor's assets, with priority over and above all
administrative expenses of any kind.  As additional adequate
protection, the Debtor is ordered to pay $75,000 monthly to the
Laminer lenders.  

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.


LG.PHILIPS DISPLAYS: Court Converts Case to Chapter 7 Liquidation
-----------------------------------------------------------------
The Hon. Brendan Linehan Shannon of the U.S. Bankruptcy Court for
the District of Delaware converted LG.Philips Displays USA, Inc.'s
chapter 11 case to a liquidation proceeding under chapter 7 of the
Bankruptcy Code.

Kelly Beaudin Stapleton, U.S. Trustee for Region 3, asked the
Court to convert the case after the Debtor ceased operations and
abandoned all prospects for rehabilitating its business.  Since
stopping operations, the Debtor had been unable to generate
revenue and administrative expenses are being paid from the its
eroding assets.

Ms. Stapleton pointed out that these circumstances constitute a
"continuing loss to or diminution of the Debtor's estate and the
absence of a reasonable likelihood of rehabilitation" under
Section 1112(b)(4)(A) of the Bankruptcy Code.

Headquartered in San Diego, California, LG.Philips Displays USA,
Inc., is an indirect American affiliate of LG.Philips Displays
Holding B.V.  The company manufactures cathode ray tubes that are
incorporated into television sets and computer monitors.  The
company filed for chapter 11 protection on Mar. 15, 2006 (Bankr.
D. Del. Case No. 06-10245).  Adam Hiller, Esq., at Pepper Hamilton
LLP represents the Debtor in its restructuring efforts.  The
Official Committee of Unsecured Creditors has retained the
services of Scott L. Hazan, Esq., at Otterbourg, Steindler,
Houston & Rosen, P.C., as lead counsel and Bonnie Glantz Fatell,
Esq., at Blank Rome LLP, as co-counsel to represent them in the
Debtor's bankruptcy proceedings.  When the Debtor filed for
protection from its creditors, it estimated assets of more than
$100 million and debts between $50 million and $100 million.


LUMINENT TRUST: Moody's Rates Class B-4 Certificates at Ba2
-----------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
certificates issued by Luminent Mortgage Trust 2006-4, Mortgage
Loan Pass-Through Certificates, Series 2006-4, and ratings ranging
from Aa2 to Ba2 to the subordinate certificates in the deal.

The securitization is backed by adjustable-rate negative
amortization Alt-A mortgage loans acquired by Maia Mortgage
Finance Statutory Trust.  The ratings are based primarily on the
credit quality of the loans, and on the protection from
subordination. Moody's expects collateral losses to range from
1.45% to 1.65%.

GMAC Mortgage Corporation, Paul Financial, LLC, and National City
Mortgage Co. will service the loans, and Wells Fargo Bank, N.A.
will act as master servicer.

The Complete Rating Actions:

                  Luminent Mortgage Trust 2006-4
      Mortgage Loan Pass-Through Certificates Series 2006-4

                    * Cl. A-1A, Assigned Aaa
                    * Cl. A-1B, Assigned Aaa
                    * Cl. A-1C, Assigned Aaa
                    * Cl. X, Assigned Aaa
                    * Cl. PO, Assigned Aaa
                    * Cl. A-R, Assigned Aaa
                    * Cl. B-1, Assigned Aa2
                    * Cl. B-2, Assigned A2
                    * Cl. B-3, Assigned Baa2
                    * Cl. B-4, Assigned Ba2

The Class B-4 certificates were sold in a privately negotiated
transaction without registration under the Securities Act of 1933
under circumstances reasonably designed to preclude a distribution
thereof in violation of the Act.  The issuance has been designed
to permit resale under Rule 144A.


MASTR ALTERNATIVE: Moody's Puts Low-B Rating on 2 Cert. Classes
---------------------------------------------------------------
Moody's Investors Service assigned a rating of Baa2 to the Class
N-1 notes, a rating of Ba3 to the Class N-2 notes, and a rating of
B2 to the Class N-3 notes issued by MASTR Alternative Loan NIM
2006-5.

The notes are backed by residual and prepayment penalty cash flows
from two underlying securitizations of Alt-A, negative
amortization residential mortgage loan transactions: CWALT, Inc.
Alternative Loan Trust 2006-OA3 and MASTR Adjustable Rate Mortgage
Trust 2006-OA1.  The notes are also supported by a Yield
Maitenance Agreement with Bear Stearns Financial Products Inc.

The cash flows available to repay the notes are most significantly
impacted by the level of prepayments, as well as the timing and
amount of losses on the underlying mortgage pool. Moody's applied
various combinations of loss and prepayment scenarios to evaluate
the adequacy of cash flows to fully amortize the rate notes.

The Complete Rating Actions:

Issuer: MASTR Alternative Loan NIM 2006-5

Co-Issuer: MASTR Alternative Loan NIM 2006-5 Asset Holdings Corp.

Securities: MASTR Alternative Loan NIM 2006-5

   * Cl. N-1, Assigned Baa2
   * Cl. N-2, Assigned Ba3
   * Cl. N-3, Assigned B2

The notes are being offered in privately negotiated transactions
without registration under the 1933 Act.  The issuance was
designed to permit resale under Rule 144A.


MESABA AVIATION: Judge Kishel Okays E*Trade Agreement Rejection
---------------------------------------------------------------
The Hon. Gregory Kishel of the U.S. Bankruptcy Court for the
District of Minnesota permitted Mesaba Aviation, Inc., doing
business as Mesaba Airlines, to reject its Stock Plan Outsourcing
and OptionsLink Services Agreement with E*Trade Financial
Corporate Services, Inc., effective as of May 1, 2006.

Pursuant to the Contract, E*Trade administered the Debtor's
employee stock option plan and the Contract remains enforceable
through December 23, 2006.  The Contract was executed in
contemplation of the Debtor's employees' extensive participation.
However, a very limited number of the Debtor's employees
participated in the Plan.

The Debtor has determined that the Contract is no longer cost
effective and creates unnecessary expense to its estate.

Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba
Mesaba Airlines -- http://www.mesaba.com/-- operates as a
Northwest Airlink affiliate under code-sharing agreements with
Northwest Airlines.  The Company filed for chapter 11 protection
on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258).  Michael L.
Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA,
represents the Debtor in its restructuring efforts.  Craig D.
Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the
Official Committee of Unsecured Creditors.  When the Debtor filed
for protection from its creditors, it listed total assets of
$108,540,000 and total debts of $87,000,000.  (Mesaba Bankruptcy
News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-
7000).


MIRANT CORP: Cadwalader Wickersham Asks for $3 Million Bonus
------------------------------------------------------------
Cadwalader, Wickersham & Taft LLP and Cox Smith Matthews
Incorporated, attorneys for the Official Committee of Unsecured
Creditors of Mirant Americas Generation LLC, ask Judge Michael
D. Lynn of the U.S. Bankruptcy Court for the Northern District of
Texas to approve a $3,000,000 fee enhancement for services they
performed for the MAGi Committee from July 25, 2003, through
January 3, 2006.

Gregory M. Petrick, Esq., a partner at Cadwalader, Wickersham &
Taft LLP, relates that the $3,000,000 fee enhancement represents
a 22% premium to fees charged by each firm.  If awarded, the fee
enhancement will be allocated pro rata between the two firms
based on fees billed.

With Cadwalader's and Cox Smith's efforts, the MAGi Committee
fulfilled its mandate for a full recovery, Mr. Petrick asserts.
Under the confirmed Plan of Reorganization, effective as of
January 3, 2006, MAGi creditors holding approximately
$1,157,000,000 in claims have been paid, through a combination of
cash and new equity, the full par value of their claims, plus all
accrued interest due and owing, totaling approximately
$210,000,000, through the Effective Date.

Mr. Petrick adds that MAGi creditors holding $1,732,000,000 in
claims have:

    * had their claims reinstated in accordance with its original
      terms, with enhanced covenant protections; and

    * been paid in cash all interest due and owing on their
      claims, totaling $416,000,000, through the Effective Date.

According to Mr. Petrick, Cadwalader and Cox Smith worked
cooperatively and efficiently without duplication of effort in
delivering to the MAGi Committee strategic and substantive legal
issues relating to:

      * intercompany claims,
      * substantive consolidation,
      * stand-alone plan of reorganization,
      * reinstatement,
      * postpetition interest, and
      * de-leveraging Mirant.

Cadwalader and Cox Smith also performed actions to protect the
MAGi creditors, relating to:

    * the $500,000,000 DIP financing;

    * issues in connection with Potomac Electric Power Company;

    * MIRMA leases;

    * hedging practices;

    * commodities trading;

    * the Debtors' net operating losses tax attributes;

    * a screening wall order; and

    * claims against Mirant entities arising from the
      California energy crisis.

For these reasons, Mr. Petrick asserts that payment of a fee
enhancement to Cadwalader and Cox Smith is justified.

                         New Mirant Objects

The New Mirant Entities believe that no professional, including
the MAGi Committee' attorneys should be rewarded with a success
fee, Craig H. Averch, Esq., at White & Case LLP, in Miami,
Florida, tells the Court.  Providing quality services does not
qualify a professional for a fee enhancement.  Rather, fee
enhancements should be granted only in "rare and exceptional"
circumstances.

Mr. Averch argues that the award of fee enhancement is
inappropriate where the success of the Debtors' Chapter 11 cases
was the result of a combination of many factors.  In addition,
the MAGi Committee's lawyers were appropriately compensated for
their services through the lodestar method.

The grant of any fee enhancement should take into account the
fact that Cadwalader and Cox Smith have received an hourly rate
that reflects the firms' expertise and experience, Mr. Averch
points out.  The MAGi Committee's lawyers, however, failed to
demonstrate that their representation of the Committee was
"superior" in light of their hourly rate.

Although Cadwalader and Cox Smith's services were of a high
quality, they were not superior to that reasonably expected from
a law firm of their skill and experience, to justify a request
for an enhancement, Mr. Averch contends.

New Mirant notes that, as the party responsible for payment of
the fee enhancement, its lack of consent should be weighed
heavily when determining whether the award of a fee enhancement
to MAGi Committee's counsels is appropriate.

Accordingly, New Mirant asks the Court to deny Cadwalader and Cox
Smith's fee enhancement request.

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

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services placed a 'B+' corporate credit
rating on Mirant and said the outlook is stable.


MIRANT CORP: MC Asset Recovery Wants BofA to Produce Documents
--------------------------------------------------------------
Jeff P. Prostok, Esq., at Forshey & Prostok LLP, in Fort Worth,
Texas, relates that prior to confirmation of the plan of
reorganization filed by Mirant Corporation and its debtor-
affiliates, the Debtors undertook an investigation of potential
causes of action against, among others, Bank of America.

Mirant's investigation included potential claims against Bank of
America either through affirmative acts or omissions for
avoidance, breach of fiduciary duty, aiding and abetting breach
of fiduciary duty, negligence, breach of professional duties, and
breach of statutory duties.

The Avoidance Action is based on a Credit Agreement dated as of
May 22, 2000, entered into by Mirant's predecessor-in-interest,
Southern Energy, Inc., with Bank of America, as agent.  Under the
Credit Agreement, Bank of America has a commitment, as an initial
lender, totaling $550,000,000 -- the 2000 Dividend Facility.

On May 26, 2000, Mirant transferred $450,000,000 of the
$538,000,000 initial borrowing to The Southern Company from the
2000 Dividend Facility.  On October 2, 2000, Mirant repaid
$450,000,000 to Bank of America from the proceeds of Mirant's
initial public offering.

On July 13, 2005, Bank of America entered into a Stipulated
Tolling Agreement with Mirant that tolled the statute of
limitations while Mirant continued its investigation of potential
claims against Bank of America.

The Original Stipulation was set to expire on January 13, 2006,
but Bank of America and MC Asset Recovery, LLC, entered into an
Amended Stipulation extending the toll to July 13, 2006.

In connection with the investigation, MCAR asks the Court to
direct Bank of America, N.A., and Banc of America Securities LLC,
to produce for inspection and copying, certain documents not
later than May 22, 2006, at the offices of Forshey & Prostok,
L.L.P.

Mr. Prostok asserts that MCAR's request for examination of Bank
of America is within the scope of Rule 2004 of the Federal Rules
of Bankruptcy Procedure and Local Bankruptcy Rule 2004.

                      Bank of America Responds

According to Toby L. Gerber, Esq., at Fulbright & Jaworski
L.L.P., in Dallas Texas, MCAR's requests for production of
documents by May 22, 2006, are in direct conflict with the
Amended Tolling Agreement not to seek any legal or equitable
relief against Bank of America prior to July 1, 2006.

For this reason, Bank of America asks the Court to deny MCAR's
request as improper.

Additionally, MCAR's Requests contain overly broad requests for
production that do not relate to "the acts, conduct, or property
or to the liabilities and financial condition of the debtor" or
the "administration of the debtor's estate," Mr. Gerber points
out.  Specifically, MCAR asks for documents that pertain to
transactions between Bank of America and Southern Company,
neither of which are debtors.

Mr. Gerber asserts that the Court lacks jurisdiction to require
Bank of America to produce documents that fall outside the scope
of Rule 2004.

Mr. Gerber notes that the Debtors have adversary proceedings
pending against other parties related to the spin-off of Mirant
from the Southern Company.  To the extent that the discovery
requests will benefit MCAR or the Debtors in other litigation or
contested matters, Bank of America asks the Court to deny MCAR's
motion.

In the event the Court grants MCAR's Motion, Bank of America, in
the alternative, asks the Court:

     (i) to limit the scope of the 2004 Requests; and

    (ii) for additional time to produce all responsive, relevant
         and non-privileged documents at a mutually convenient
         date, time and place after July 1, 2006.

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

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services placed a 'B+' corporate credit
rating on Mirant and said the outlook is stable.


NORTHWEST AIRLINES: Court Sets August 16 as Claims Bar Date
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
set 5:00 p.m., on Aug. 16, 2006, as the deadline for creditors
owed money by Northwest Airlines Corp. and its debtor-affiliates,
on account of claims arising prior to Sept. 14, 2006, to file
their proofs of claims, subject to these provisions:

   -- An entity need not file a proof of claim if it does not
      dispute that its claim is an obligation of a specific
      Debtor against which the claim is listed on the Debtors'
      schedules of assets and liabilities; and

   -- Any employee subject to a collective bargaining agreement
      and labor unions representing the employees need not file a
      proof of claim based on wages, salaries and benefits that
      were to be paid in accordance with the First Day Wage
      Order, unless the Debtors notify an employee or the union
      that they do not intend to pay the Claim.

All proofs of claim will be deemed timely filed if actually
received by the Bankruptcy Court on or before the Bar Date.  The
proofs of claim must either be mailed to the Court or delivered
by messenger or overnight courier to the Clerk of Court.  Proofs
of claim sent by facsimile or telecopy will not be accepted.

Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.  (Northwest Airlines Bankruptcy
News, Issue No. 27; Bankruptcy Creditors' Service, Inc.,
215/945-7000).


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

The Parties agree to restructure the terms of:

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

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

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

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

As reported in the Troubled Company Reporter on Feb. 9, 2006,
Bruce R. Zirinsky, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, told the Court that Northwest Airlines negotiated a
restructuring of each of the four aircraft financing arrangements
and agreements to purchase spare engines, to provide Northwest
substantial reductions in principal of the indebtedness relating
to the Aircraft, deferrals of principal payments with respect to
other Aircraft and the Term Loan, and deferral of progress
payments with respect to purchase of the engines.

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

                   About Northwest Airlines

Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.  (Northwest Airlines Bankruptcy
News, Issue No. 27; Bankruptcy Creditors' Service, Inc.,
215/945-7000).


NORTHWEST AIRLINES: Wants Until June 15 to File Statements
----------------------------------------------------------
Northwest Airlines Corp. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to further
extend, until June 15, 2006, the deadline to file their statements
of financial affairs.

Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, relates that the preparation and filing of the
Debtors' schedules of assets and liabilities on May 1, 2006, was
a major undertaking considering that they have more than 60,000
creditors and are party to over 100,000 executory contracts.  

"The Debtors worked diligently to gather the necessary
information to prepare and file the Schedules, which consists of
over 26,500 pages of information in total."

Mr. Petrick tells Judge Gropper that, in order to complete the
SOFAs, the Debtors and their professionals need additional time
to review the data collected from various sources and reconcile
discrepancies between those data and the Debtors' books and
records, resolve certain inconsistencies, and identify errors and
omissions.

Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/
-- is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 daily departures.  Northwest is a member of
SkyTeam, an airline alliance that offers customers one of the
world's most extensive global networks.  Northwest and its travel
partners serve more than 900 cities in excess of 160 countries on
six continents.  The Company and 12 affiliates filed for chapter
11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq.,
at Cadwalader, Wickersham & Taft LLP in New York, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
The Official Committee of Unsecured Creditors has retained Akin
Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the
Debtors' chapter 11 cases.  When the Debtors filed for protection
from their creditors, they listed $14.4 billion in total assets
and $17.9 billion in total debts.  (Northwest Airlines Bankruptcy
News, Issue No. 27; Bankruptcy Creditors' Service, Inc.,
215/945-7000).


OAKWOOD HOMES: Trust's Suit Vs. Insurers Survives Dismissal Motion
------------------------------------------------------------------
OHC Liquidation Trust (created under Oakwood Homes Corp.'s
confirmed chapter 11 plan in 2004), by and through Alvarez &
Marsal, LLC, the OHC Liquidation Trustee, sued Discover Re and
United States Fidelity & Guaranty Co. last year in the U.S.
Bankruptcy Court for the District of Delaware (Adv. Pro. No.
05-51766).  The Trust's lawsuit asserts causes of action against
the Insurers for breach of contract, fraudulent transfer, turnover
and other theories.  The Insurers filed a motion to dismiss for a
variety of reasons.  The Honorable Peter J. Walsh issued a
decision, published at 2006 WL 1314664, granting and denying the
Insurers' Motion in part, and holding:

     (1) a forum selection clause in the underlying indemnity and
         premium agreements don't require that any lawsuit proceed
         in a state or federal court in Connecticut;

     (2) the Trust's request that Bankruptcy Court estimate the
         Insurers' claims under 11 U.S.C. Sec. 502(c)(1) for
         purposes of recovering estate property under 11 U.S.C.
         Sec. 105(a) fails to state a claim upon which relief can
         be granted because estimation of claims is only for the
         purpose of allowance of a claim;

     (3) proceeds of a letter of credit issued by Wells Fargo are
         not property of Oakwood's estate and can't be recovered   
         by the Trust, and the Trust's fraudulent conveyance
         theory fails if it contends that the improper transfer is
         the Insurers' draw on the L/C; the Trust has leave to
         amend its Complaint if the fraudulent conveyance claim is
         based on some other fact pattern;

     (4) Count III of the Trust's Complaint alleges that the
         defendants refused to return the excess funds and that
         the refusal constitutes a breach of the agreements.  The
         Insurers assert that their retention of the funds is not
         a breach.  

         The issue is one of contract interpretation, Judge Walsh
         says, and, ordinarily, contract interpretation is a
         question of fact.  PSE Consulting, Inc. v. Frank Mercede
         & Sons, Inc., 267 Conn. 279, 838 A.2d 135, 145 (Conn.
         2004).  However, if there is "definitive contract
         language," then the determination is a question of law.
         The Insurers assert that their interpretation is the only
         one possible, in other words, there is definitive
         contract language.  If true, then that would end this
         Court's inquiry.  "I do not accept this as true,
         however," Judge Walsh says.  "In the Court's view, at
         this early stage, there is no clearly articulated
         provision in the agreements that supports either parties'
         position.  The provisions cited are either unclear or
         simply inapplicable.  Therefore, under Connecticut law, a
         court may look to industry custom to interpret a contract
         that is ambiguous or silent on a particular point.  New
         England Rock Servs., Inc. v. Empire Paving, Inc., 53
         Conn. App. 771, 731 A.2d 784, 789 (Conn. App. 1999).
         Whether industry custom will support the plaintiff's
         interpretation, as it argues, will have to await trial."

     (5) Count VI of the Trust's Complaint alleges a breach of the
         implied covenant of good faith and fair dealing.  The  
         Insurers argue that the count should be dismissed because
         the complaint fails to allege the requisite bad faith.  
         Judge Walsh disagrees because under Connecticut law,
         "[e]very contract carries an implied covenant of good
         faith and fair dealing requiring that neither party do
         anything that will injure the right of the other to
         receive the benefits of the agreement."  See Habetz v.  
         Condon, 224 Conn. 231, 618 A.2d 501, 505 (Conn. 1992).  
         The Complaint, Judge Walsh holds, sufficiently states a
         claim for breach of the covenant of good faith and fair
         dealing; and

     (6) the Trust's allegations are sufficient to state claim
         under Connecticut law for unjust enrichment.  

Oakwood Homes Corporation and its subsidiaries are engaged in the
production, sale, financing and insuring of manufactured housing
throughout the U.S.  The Debtors filed for chapter 11 protection
on November 15, 2002 (Bankr. Del. Case No. 02-13396).  Robert J.
Dehney, Esq., Derek C. Abbott, Esq., at Morris, Nichols, Arsht &
Tunnell, and C. Richard Rayburn, Esq., and Alfred F. Durham, Esq.,
at Rayburn Cooper & Durham, P.A., represent the Debtors.  When the
Debtors filed for protection from their creditors, they listed
$842,085,000 in total assets and $705,441,000 in total debts.  The
Court confirmed the Debtors' Joint Consolidated Plan of
Reorganization on March 31, 2004, and the Plan took effect on
April 15, 2004.  Pursuant to the confirmed Plan, all of the
Debtors' assets and businesses were sold to Clayton Homes, Inc.


OWENS CORNING: Wants to Execute Terms of Plan Support Agreement
---------------------------------------------------------------
Owens Corning and its debtor-affiliates, as reported in the
Troubled Company Reporter on May 12, 2006, reached a settlement
agreement in principle with representatives of all major
constituencies in their Chapter 11 cases.  The Debtors filed with
the Court a Settlement Term Sheet and the parties entered into a
plan support agreement with respect to the terms contained in the
agreement in principle.

Pursuant to the Plan Support Agreement, the Plan Proponents agree
to file a Sixth Amended Joint Plan of Reorganization for the
Debtors, related Disclosure Statement and other related plan
documents.  

As an initial and critical step towards transforming the platform
of the Fifth Amended Plan into, what is anticipated to be, a
consensual Sixth Amended Plan on an expedited basis, and their
ultimate emergence from Chapter 11, the Debtors seek the U.S.
Bankruptcy Court for the District of Delaware's authority to
execute and implement the terms of the Plan Support Agreement.

The salient terms of the Plan Support Agreement are:

A. Treatment of the Key Creditor Constituencies under the    
   Settlement Term Sheet

   The Debtors have agreed to modify their Plan with respect to
   the treatment of these claims:

   a. Owens Coming & Fibreboard Asbestos Personal Injury Claims

      On the Effective Date, the Debtors will pay the Asbestos
      Personal Injury Trust a total of:

      * $2,872,000,00 in cash; and

      * a contingent payment which, subject to certain conditions
        precedent, will consist of $1,390,000,000 plus interest
        in cash and 28,600,000 shares of common stock, par value
        $0.10 per share, of Reorganized Owens Coming -- New OCD
        Common Stock.

      Owens Corning has entered into a backstop agreement with
      J.P. Morgan Securities, Inc., and a syndicate of investors
      consisting of D.E. Shaw Laminar Portfolios, L.L.C.,
      Plainfield Special Situations Master Fund Limited or their
      affiliates, and certain other bondholders, in connection
      with a proposed equity rights offering.

      Pursuant to the Plan Support Agreement, the Asbestos PI
      Trust will grant the Backstop Providers options to purchase
      the 28,600,000 shares at an exercise price of $37.50 per
      share.  The options will expire 12 months after the date
      the Trust receives the shares.

      The Backstop Providers will grant the Asbestos PI Trust
      options to sell to them 28,600,000 shares in the aggregate
      at a $25 per share exercise price.  The options will expire
      three months after the date the Trust receives the shares.

   b. Owens Corning Bank Debt Holders Claims

      The Banks will receive the treatment afforded to them under
      the Fifth Amended Plan.

   c. Owens Corning Bondholders Claims

      In full satisfaction of their claims, the Bondholders will
      receive 26,600,000 shares of New OCD Common Stock on the
      Effective Date and, if exercised, their pro rata share of
      72,900,000 shares of New OCD Common Stock at $30 per share
      pursuant to the Rights Offering.

   d. Owens Corning General Unsecured Claims

      In full satisfaction of their claims, the senior and junior
      unsecured creditors in Classes A6-A and A6-B will receive
      $248,500,000 in cash on the Effective Date and, if
      exercised, their pro rata share of 72,900,000 shares of New
      OCD Common Stock at $30 per share pursuant to the Rights
      Offering.

   e. Owens Corning Subordinated Claims

      Holders of the subordinated claims against Owens Corning in
      Class A11 will receive warrants -- with customary market
      protections, exercisable within seven years of the
      Effective Date -- to obtain 10% of the fully diluted New
      OCD Common Stock at a strike price of $43 per share.  Upon
      the occurrence of certain events, holders of certain
      subordinated claims against Owens Corning in Class A11 will
      have the right to exchange the warrants for 5.5% of the
      fully diluted New OCD Common Stock.  If the holders of
      certain subordinated claims against Owens Corning in Class
      A11 vote to reject the Plan, they will get the
      corresponding cramdown treatment provided in the Fifth
      Amended Plan.

   f. OCD Interests

      Holders of Interests in Owens Corning in Class A12 will
      receive warrants -- with customary market protections,
      exercisable within seven years of the Effective Date -- to
      obtain 5% of the fully diluted New OCD Common Stock at a
      strike price of $45.25 per share.  Upon the occurrence of
      certain events, holders of Interests in Owens Corning in
      Class A12 will have the right to exchange the warrants for
      14.75% of the fully diluted New OCD Common Stock.  If the
      holders of Interests in Owens Corning in Class A12 vote to
      reject the Plan, they will get the corresponding cramdown
      treatment set forth in the Fifth Amended Plan.

B. Support of the Plan Proposal

   Each of the Holders agrees:

   a. to vote to accept the Sixth Amended Plan;

   b. to recommend and support confirmation of the Sixth
      Amended Plan and to approve any other action or document
      necessary to implement the terms of the Plan Support
      Agreement;

   c. to permit disclosure in the Amended Disclosure Statement
      and any filings with the Securities and Exchange Commission
      regarding the execution and contents of the Plan Support
      Agreement;

   d. not to object or commence any proceedings to oppose the
      Sixth Amended Plan, Amended Disclosure Statement or
      Plan Support Agreement;

   e. not to support, solicit or participate in the formulation
      of any other plan of reorganization, restructuring or
      settlement with respect to the Debtors; and

   f. not to take any other action that is materially
      inconsistent with or would materially delay the
      confirmation of the Sixth Amended Plan, Amended Disclosure
      Statement or Plan Support Agreement.

C. Conditions

   The Holders' undertakings are subject to certain conditions,
   including:

   a. each of the Sixth Amended Plan, Amended Disclosure
      Statement and all of the documents relating to the Rights
      Offering will be reasonably satisfactory to the Holders;

   b. the material terms of the Plan Documents will be
      substantially identical to the terms set forth in the Plan
      Support Agreement;

   c. the Court's approval of the Amended Disclosure Statement;

   d. there is no material modification of the Plan Documents
      and no material breach of the Plan Support Agreement; and

   e. each of the Holders agrees, subject to certain exceptions,
      not to transfer or otherwise dispose of its Holdings
      unless, among others, the transferee agrees in writing to
      be bound by all of the terms of the Plan Support Agreement.

D. Termination

   The Plan Proponents and the Holders have the right to
   terminate the Plan Support Agreement where there has been a
   material breach of the agreement, any Holder fails to satisfy
   a material term or condition of the agreement, or the Plan
   Effective Date does not occur by October 30, 2006, or at a
   later date as the Plan Proponents will agree.

The Debtors believe that the Plan Support Agreement represents a
major advance toward their ultimate emergence from Chapter 11 in
that the ACC and the FCR and a majority of their bondholders
support it.

Norman L. Pernick, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, asserts that the Plan Support Agreement is the result
of arm's-length, good-faith negotiations among the parties.  The
obligations contained in the Agreement are fair and reasonable
under the circumstances.

Owens Corning (OTC: OWENQ.OB) (BULLETIN BOARD: OWENQ.OB) --
http://www.owenscorning.com/-- manufactures fiberglass
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts.  Headquartered in Toledo,
Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000
(Bankr. Del. Case. No. 00-03837).   Norman L. Pernick, Esq., at
Saul Ewing LLP, represents the Debtors.  Elihu Inselbuch, Esq., at
Caplin & Drysdale, Chartered, represents the Official Committee of
Asbestos Creditors.  James J. McMonagle serves as the Legal
Representative for Future Claimants and is represented by Edmund
M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy
News, Issue No. 131; Bankruptcy Creditors' Service, Inc.,
215/945-7000).


OWENS CORNING: Asks Court to Approve Pact with Tobacco Defendants
-----------------------------------------------------------------
Before Owens Corning and its debtor-affiliates filed for
bankruptcy, Debtors Owens Corning and Fibreboard Corporation
pursued litigation against tobacco companies and other tobacco
industry defendants before the Circuit Court for Jefferson County,
Mississippi, and the Superior Court of California, County of
Alameda.

The Debtors asserted claims for indemnification, unjust
enrichment restitution, fraud and violations of state antitrust
and unfair competition laws.  The Debtors sought payment of
monetary damages, including punitive damages, for payments they
made to asbestos claimants who have used tobacco products and
allegedly developed smoking-related diseases.

In June 2001, the Jefferson County court granted the defendants'
request for summary judgment dismissing Owens Corning's claims.  
The Jefferson County court held that Owens Corning's claims were
indirect and too remote under Mississippi law to allow recovery.

Owens Corning took an appeal to the Supreme Court of Mississippi.  

The defendants in the California Litigation also sought summary
judgment to dismiss Owens Corning's claims, citing the Jefferson
County court's ruling.  However, the California court denied the
motions to dismiss and stayed litigation pending the outcome of
Owens Corning's appeal in the Mississippi case.

In March 2004, the Supreme Court of Mississippi upheld the
summary judgment against Owens Corning.

                        Defendants' Claims

The Tobacco defendants are:

   1.  R.J. Reynolds Tobacco Company;

   2.  British American Tobacco (Investments) Limited, formerly
       known as British American Tobacco Company Limited;

   3.  Brown & Williams Tobacco Corporation, individually and as
       successor by merger to the American Tobacco Company;

   4.  Philip Morris USA, Inc., formerly known as Philip Morris
       Incorporated;

   5.  Liggett Group, Inc.; and

   6.  Lorillard Tobacco Company

Certain of the defendants filed claims against the Debtors for
the costs and expenses they incurred in the California and
Mississippi actions:

   Defendant              Amount   Status         Debtor
   ---------              ------   ------         ------
   R.J. Reynolds         $11,860   Unsecured,     Owens Corning,
                                   Non-priority   et al.

   Philip Morris USA     $48,714   Secured        Owens Corning,
                                                  et al.

   Lorillard Tobacco     $12,785   Secured        Owens Corning,
                                                  et al.

   Liggett Group    unliquidated   Unsecured,     Fibreboard
                                   Non-priority

                    Unliquidated   Unsecured,     Owens Corning
                                   Non-priority

The Lorillard Claim was later reclassified as unsecured, non-
priority claims pursuant to the Bankruptcy Court's orders
granting the Debtors' Non-Substantive Objection to Claims.

                       Settlement Agreement

The Debtors and the Defendants engaged in discussions with
respect to the California Litigation and the Claims.  
Subsequently, the parties agreed to dismiss the California
Litigation and the Claims on the terms set forth in an Agreement
to Dismiss Suit and Related Claims dated as of May 10, 2006.

The parties will execute mutual releases from the claims,
liabilities and demands related to the Mississippi and California
actions.  Each party will shoulder its attorney's fees and other
costs in connection with the Mississippi and California cases.

The Agreement to Dismiss will not affect an $8,400 claim filed by
RJR Packaging Co. against Debtor Exterior Systems, Inc.

The Debtors ask Judge Fitzgerald to approve the Agreement to
Dismiss.

The Debtors explain that the probability of success in
prosecuting the California litigation to its conclusion and
obtaining judgment against the Defendants -- which would be
costly in terms of expense, inconvenience and delay -- is
uncertain.  The Debtors also face additional risks in connection
with the Claims from certain of the Defendants.

Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/--  
manufactures fiberglass insulation, roofing materials, vinyl
windows and siding, patio doors, rain gutters and downspouts.  
Headquartered in Toledo, Ohio, the Company filed for chapter 11
protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837).   
Norman L. Pernick, Esq., at Saul Ewing LLP, represents the
Debtors.  Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,
represents the Official Committee of Asbestos Creditors.  James J.
McMonagle serves as the Legal Representative for Future Claimants
and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP.
(Owens Corning Bankruptcy News, Issue No. 130; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


PARMALAT USA: Wants S.N.Y. Dist. Ct. to Dismiss BofA Counterclaims
------------------------------------------------------------------
Judge Lewis A. Kaplan of the U.S. District Court for the Southern
District of New York had allowed Bank of America Corp. and its
related entities to proceed with their compulsory counterclaims
against Dr. Enrico Bondi, as extraordinary commissioner of
Parmalat Finanziaria and its debtor-affiliates.

Dr. Bondi asks the District Court to dismiss the BofA
Counterclaims.

"It is undisputed that a fraud was committed at Parmalat," says
Johanna Y. Ong, Esq., at Quinn Emanuel Urquhart Oliver & Hedges
LLP, counsel for Dr. Bondi.

However, Ms. Ong points out, BofA's allegations do not show that
the Parmalat entities it sued perpetuated the fraud.  BofA also
did not demonstrate it was a victim of that fraud or if it has a
right to sue.

Dr. Bondi asserts at least six grounds why the BofA counterclaims
must be dismissed:

   1. BofA has not alleged any wrongdoing by 13 of the 16
      counterdefendants;

   2. BofA's securities fraud claim is barred by res judicata
      principles and the claim also fails because BofA has not
      sufficiently alleged economic loss;

   3. BofA's RICO claim fails because it has not alleged a
      distinct "person" and "enterprise," and it is based on
      transactions that caused no financial loss to it;

   4. BofA's claim for unfair and deceptive trade practices fails
      because it is based on securities transactions and
      transactions that caused no injury to it;

   5. BofA's conspiracy claim fails because a corporation cannot
      conspire with its alleged agents and subsidiaries; and

   6. all BofA's claims against Parmalat Netherlands B.V. fail as
      a matter of law.

Dr. Bondi asks the District Court to dismiss:

   a. BofA's claims against Parmalat Netherlands B.V., Parmalat
      Finance Corporation B.V., Parmalat Capital Netherlands
      B.V., Dairies Holding International B.V., Olex S.A.,
      Eurolat S.p.A., Lactis S.p.A., Contal S.r.l., Geslat
      S.r.l., Newco S.r.l., Centro Latte Centallo S.r.l., Panna
      Elena S.r.l., Parmengineering S.r.l. and Parmalat Soparfi;

   b. BofA's affirmative claim for punitive and treble damages;

   c. BofA's claims for RICO, securities fraud and civil
      conspiracy; and

   d. BofA's unfair trade practices claim to the extent it is
      based on securities transactions and transactions that
      caused the bank no injury.

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


PERFORMANCE TRANSPORTATION: Court Okays Watson Wyatt's Retention  
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
authorized Performance Transportation Services, Inc., and its
debtor-affiliates to retain Watson Wyatt & Company as their
compensation experts.  Without further Court approval, the Debtors
can spend up to $125,000 for the retention.

As reported in the Troubled Company Reporter on April 27, 2006,
Watson Wyatt will:

   a. assist the Debtors in reviewing and modifying the terms of a
      performance-based bonus program for three of their
      management personnel; and

   b. provide expert testimony regarding its opinion of the
      modified Program's reasonableness.

The Debtors will pay Watson Wyatt's professionals according to
the firm's customary hourly rates:

         Position                          Rate
         --------                          ----
         Senior Consultants                $700
         Associates                        $360
         Analysts/Research                 $285

                   Teamsters Moved to Deny Motion

The Teamsters National Automobile Transporters Industry
Negotiating Committee and certain local unions affiliated with the
International Brotherhood of Teamsters asked Judge Kaplan to deny
the Debtors' request to hire Watson Wyatt.

"The only conceivable purpose for this motion is to use estate
funds to benefit two insiders by utilizing a consultant to design
a bonus program to skirt the outer limits of the congressional
prohibitions," Frederick Perillo, Esq., at Previant, Goldberg,
Uelmen, Gratz, Miller and Brueggeman, s.c., in Milwaukee,
Wisconsin, said.

The Teamsters had asserted that the compensation program was an
attempt to circumvent the recently enacted proscription on bonus
programs in the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005.

                About Performance Transportation

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

Headquartered in Niagara Falls, New York, Leaseway Motorcar
Transport Company Debtor and 13 affiliates filed for chapter 11
protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107).
James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A.
Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq.,
at Hodgson Russ LLP represent the Debtors in their restructuring
efforts.  David Neier, Esq., at Winston & Strawn LLP, represents
the Official Committee of Unsecured Creditors.  When the Debtors
filed for protection from their creditors, they estimated assets
between $10 million and $50 million and more than $100 million in
debts.  (Performance Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


PLIANT CORP: Has Until August 1 to Remove State Court Actions
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended
the period within which Pliant Corporation and its debtor-
affiliates can remove state court civil actions to the U.S.
District Court for the District of Delaware to Aug. 1, 2006.

The Debtors sought the extension to afford them additional time to
make fully informed decisions concerning removal of each pending
prepetition civil action.  The extension will also assure that
they do not forfeit valuable rights under Section 1452 of the
Judiciary Code.

The Debtors have not yet been able to comprehensively evaluate the
potential need to remove any of their pending prepetition civil
actions, Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor
LLP, in Wilmington, Delaware, told Judge Walrath.  Since the
Debtors filed for bankruptcy, Mr. Brady explained, they have
focused on the transition into Chapter 11, as well the formulation
and filing of their Plan of Reorganization and Disclosure
Statement.

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.  Kenneth A. Rosen, Esq., at Lowenstein Sandler, P.C.,
serves as counsel to the Official Committee of Unsecured
Creditors.  Don A. Beskrone, Esq., at Ashby & Geddes, P.A., is
local counsel to the Creditors' Committee.  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. 11; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


PRISM BUSINESS: S&P Assigns CCC+ Rating to $12 Million Term Loan
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned bank loan and recovery
ratings to bank loans of Prism Business Media Inc. (formerly PBI
Media Inc.).
     
Standard & Poor's assigned its 'B' bank loan rating and a recovery
rating of '3' to Prism's $26 million first-lien tack-on term loan
due 2012, indicating an expected meaningful (50%-80%) recovery of
principal in the event of a payment default.

The rating agency also assigned its 'CCC+' rating and a recovery
rating of '5' to the company's $12 million second-lien tack-on
term loan due 2013, indicating the expectation of a negligible
(less than 25%) recovery of principal in the event of a payment
default.
     
At the same time, Standard & Poor's revised its outlook on Prism
to negative from stable and affirmed its 'B' corporate credit
rating and existing ratings on the company's bank debt.  Prism's
total debt, pro forma for the special dividend, was $332 million
at March 31, 2006.  The New York-based company is a leading
business-to-business communications concern.
     
"The outlook revision reflects the increase in debt leverage
resulting from the company's plan to pay a debt-financed $38
million special dividend to Prism's common stockholders," said
Standard & Poor's credit analyst Hal F. Diamond.
     
Ratings also consider the company's already high financial risk
resulting from:

   * the September 2005, highly leveraged acquisition of the
     company;

   * its cyclical operating performance; and

   * mature growth prospects for many of the company's end
     markets.  

These factors are only partially offset by:

   * the company's good niche positions in the trade publishing
     and exhibition industries;

   * diverse customer base; and

   * experienced management team.


PRO-BUILD HOLDINGS: S&P Rates Proposed $550MM Debt Facility at BB+
------------------------------------------------------------------
Standard & Poor's Rating Services assigned its 'BB' corporate
credit rating to Delaware-based Pro-Build Holdings Inc.

At the same time, Standard & Poor's assigned its 'BB+' secured
bank loan rating and '1' recovery rating to the company's proposed
$550 million revolving credit facility due in 2011 and $750
million term loan due in 2013, based on preliminary terms and
conditions.  The bank loan and recovery ratings indicate
expectations of full recovery of principal in the event of a
payment default.  The outlook is stable.
     
The proceeds from the term loan, $100 million of equity
contributed by affiliates of Fidelity Capital and $600 million of
unsecured subordinated notes, which will be held by Fidelity
entities, will be used to:

   * repay $750 million of interim financing provided by Fidelity
     entities;

   * repay existing indebtedness; and

   * fund additional acquisitions.

Fidelity Capital used the interim financing and $500 million of
equity for the acquisition of unrated Lanoga Corp., which was
combined with unrated Strober Organization Inc. to form Pro-Build
Holdings.  Pro forma for the proposed financing transaction and
additional acquisitions, Pro-Build will have total debt of $1.8
billion, including capitalized operating leases and treating the
$600 million of subordinated notes held by Fidelity entities as
equity for our analysis, with pro forma total debt to projected
2006 EBITDA of 3.3x.
     
Pro-Build is the largest "Pro-Dealer," a company that primarily
supplies homebuilders and repair/remodeling contractors, in the
U.S. with $5.1 billion in pro forma 2005 sales.
     
"Pro-Build's national footprint and relatively positive long-term
housing market fundamentals support the ratings," said Standard &
Poor's credit analyst Lisa Wright.  "However, Pro-Build's growth
strategy and our expectations for a moderate drop in new
residential construction as well as repair and remodeling spending
over the near term are expected to constrain the ratings.  We
could revise the outlook to positive in the intermediate term if
housing market fundamentals remain strong and Pro-Build
meaningfully increases its market share, which allows it to gain
clout with the large homebuilders.  We could revise the outlook to
negative if the U.S. experiences a sharper-than-expected slowdown
in new residential construction, or if Pro-Build pursues a more
aggressive acquisition strategy than expected."


RAMP SERIES: Moody's Assigns Ba1 Rating to Class M-10 Certificates
------------------------------------------------------------------
Moody's Investors Service assigned a Aaa rating to the senior
certificates issued by RAMP Series 2006-RZ2, Mortgage Asset-Backed
Pass-Through Certificates, Series 2006-RZ2 Trust, and ratings
ranging from Aa1 to Ba1 to the subordinate certificates in the
deal.

The securitization is backed by HomeComings Financial Network,
Inc. and Meritage Mortgage Corporation originated adjustable-rate
and fixed-rate high loan-to-value mortgage loans acquired by
Residential Funding Corporation.  The ratings are based primarily
on the credit quality of the loans and on the protection from
subordination, overcollateralization, excess spread, and a yield
maintenance agreement.  Moody's expects collateral losses to range
from 4.90% to 5.40%.

Primary servicing will be provided by HomeComings Financial
Network, Inc., and GMAC Mortgage Corporation.  Residential Funding
Corporation will act as master servicer.  Moody's has assigned
HomeComings its servicer quality ratings of and as a servicer of
subprime and prime first lien loans, respectively, and RFC its top
servicer quality rating as master servicer.

The Complete Rating Actions:

RAMP Series 2006-RZ2 Trust

                      Mortgage Asset-Backed
             Pass-Through Certificates Series 2006-RZ2

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


REFCO INC: Court Sets July 17 as Refco LLC Claims Bar Date
----------------------------------------------------------
At the request of Albert Togut, the interim Chapter 7 trustee
appointed to oversee the liquidation of Refco LLC's estate, the
U.S. Bankruptcy Court for the Southern District of New York, set
July 17, 2006, as the deadline for all persons and entities --
including, without limitation, individuals, partnerships,
corporations, joint ventures, trusts and governmental units --
that assert a claim against Refco LLC, prior to Nov. 25, 2005, to
file their proofs of claim.

The Court also approves procedures for the filing of proofs of
claim:

    a. Proofs of claim must conform substantially to the
       customized Proof of Claim Form;

    b. Proofs of claim must be filed either by mailing the
       original proof of claim to the Court, or by delivering the
       original proof of claim by hand or overnight courier to
       the Court.  The Clerk of the Court will not accept for
       filing, proofs of claim filed by facsimile, telecopy, or
       other electronic means;

    c. Proofs of claim will be deemed filed only when received by
       the Clerk of the Court on or before the Bar Date;

    d. Proofs of claim must (i) be signed; (ii) include
       supporting documentation -- if voluminous, attach a
       summary -- or an explanation as to why documentation is
       not available; (iii) be in the English language; and (iv)
       be denominated in United States currency; and

    e. Proofs of claim asserting Claims against Refco LLC must be
       filed in the Chapter 7 Debtor's case.  Proofs of claim
       naming the Chapter 7 Debtor and filed in the Chapter 11
       cases will not be deemed received unless also filed in the
       Chapter 7 Debtor's case.

The Proof of Claim Form has been modified, at the request of the
Commodity Futures Trading Commission, to add an additional
category under unsecured priority claims for "Customer Property -
11 U.S.C. Section 766(h)."

These entities need not file a proof of claim on or prior to the
Bar Date:

    -- Any person or entity that has already filed a proof of
       claim against Refco LLC with the Clerk of the Court for
       in a form substantially similar to Official Bankruptcy
       Form No. 10;

    -- Any holder of a claim that heretofore has been allowed by
       Court order;

    -- Any person or entity whose claim has been paid in full;

    -- Any holder of a claim for which specific deadlines have
       previously been fixed by the Court;

    -- Any holder of a claim allowable under Sections 503(b)
       and 507(a) of the Bankruptcy Code as an expense of
       administration; and

    -- Any person or entity who timely submitted a claim to any
       board of trade, derivatives transaction execution
       facility, derivatives clearing organization, securities
       exchange, electronic trading facility or other trading
       facility in accordance with the Clearing Organization's
       regulations providing for the filing of claims.

Any person or entity that holds a claim that arises from the
rejection of an executory contract or unexpired lease must file a
proof of claim based on the rejection on or before the Bar Date.  
Any person or entity that holds a claim that arises from the
rejection of an executory contract or unexpired lease must file a
proof of claim on or before the date as the Court may fix in the
applicable order authorizing the rejection.

Nothing in the Bar Date Order will prejudice the right of the
Chapter 7 Trustee or any other party-in-interest to dispute or
assert offsets or defenses to any Claim reflected in Refco LLC's
schedules of assets and liabilities.

The Chapter 7 Trustee will publish notice of the Bar Date once in
the national and global editions of The Wall Street Journal, The
Times of London, and the national and global editions of The
Financial Times.

With regard to those holders of Claims relating to customer
accounts of Refco LLC, the Trustee will mail a customer notice
along with the Proof of Claim Form.

                         About Refco Inc.

Based in New York, New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base.  Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago, New
York, London and Singapore.  In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products.  Refco is one of
the largest global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors.  Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada.  Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. (Refco Bankruptcy News, Issue
No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000)


REFCO INC: Court Sets July 17 as Refco Capital Claims Bar Date
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
set 5:00 p.m., on July 17, 2006, as the deadline for all persons
and entities -- including, without limitation, individuals,
partnerships, corporations, joint ventures, trusts and
governmental units -- that asserts a claim against Refco Capital
Markets, Ltd., prior to Oct. 17, 2005, to file their proofs of
claim.

Written proofs of claim must be filed on or before the July 15
Claims Bar Date and those forms must be delivered to:

If by mail:

         U.S. Bankruptcy Court
         Southern District of New York
         Attn: Refco Inc., Claims Docketing Center
         Bowling Green Station
         P.O. Box 5175
         New York, New York 10274-5175

If by messenger or overnight courier:

         U.S. Bankruptcy Court
         Southern District of New York
         Attn: Refco Inc., Claims Docketing Center
         One Bowling Green
         Room 534
         New York, New York 10004-1408

                         About Refco Inc.

Based in New York, New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base.  Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago, New
York, London and Singapore.  In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products.  Refco is one of
the largest global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors.  Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada.  Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.


REFCO INC: Wants to Indemnify RGL Director in FXCM Board
--------------------------------------------------------
Refco Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York's consent to indemnify
the RGL Director appointed to FXCM Board of Directors in
accordance with an Indemnification Agreement.

Refco F/X Associates, LLC, a debtor-affiliate, operates an on-line
retail foreign exchange trading business under the trade name
RefcoFX.com.  The business operates under a Facilities Management
Agreement between Refco Group Ltd., LLC, and Forex Capital
Markets, LLC, on a software trading platform created and
maintained by FXCM.

In connection with entering into the FMA, RGL acquired a 35%
limited liability company interest in FXCM and still currently
holds that interest.  Under FXCM's Amended and Restated Limited
Liability Company Agreement, RGL is entitled to appoint a
director to FXCM's Board of Directors.

Sally McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher
& Flom LLP, relates that before Oct. 17, 2005, Phillip R.
Bennett served as the FXCM director appointed by RGL.  In light of
the circumstances surrounding Mr. Bennett's resignation as an
officer and director of Refco, the Debtors have not had an
effective representative on the FXCM Board of Directors since
filing for bankruptcy.

FXCM approached the Debtors to propose an acquisition of the
assets related to FXA's online business, including RGL's 35%
equity stake in FXCM, FXA's on-line customer accounts and related
cash balances, and other related executory contracts.  The Selling
Debtors engaged in extensive negotiations with FXCM ultimately
culminating in a Memorandum of Understanding.

                           Stipulation

To allow customers to continue to trade and preserve the
business's customer base and good will pending a sale transaction,
FXA and FXCM entered into a stipulation in conjunction with the
MOU.

Under the Stipulation, FXA and FXCM agreed to continue the
operation of the RefcoFX trading platform under the FMA.  FXCM
also agreed that both parties would continue to share any positive
net spread, but FXCM would cover all negative net spread
for any month, subject to certain limitations.

On December 21, 2005, the Bankruptcy Court approved the
Stipulation and bid procedures, including breakup fee, expense
reimbursement, and overbid protections.  Pursuant to the Bid
Procedures Order, the Debtors are allowed to enter into a
purchase agreement that was negotiated after the parties entered
into the MOU, and establish bid procedures and protections in
connection with an auction to sell the Acquired Assets to FXCM or
the successful bidder.

The Bank of America, N.A., and the Official Committee of
Unsecured Creditors subsequently objected to the sale of FX
Assets to FXCM.  Various document requests and deposition notices
were served between the parties.

To continue negotiations among the parties and avoid unnecessary
expense and litigation, the parties agreed to adjourn the Sale
Hearing and all related discovery requests indefinitely.

Ms. Henry tells Judge Drain that as the largest single equity
holder in FXCM, RGL is entitled to appoint a director to the FXCM
Board of Directors.  This corporate governance right, Ms. Henry
says, is an important mechanism for RGL to preserve its equity
investment in FXCM, which is a valuable asset of the Debtors'
estates.

In addition, Ms. Henry states that because the parties were
attempting to consummate a re-purchase of RGL's equity stake by
FXCM, RGL had not exercised its appointment right pending a
resolution of whether FXCM would purchase RGL's equity interest.

Although the Operating Agreement contains standard limitation of
liability and indemnification provisions, the Debtors have been
advised that FXCM does not carry director and officer insurance.  
Ms. Henry attests that the protections afforded to FXCM's
directors is limited to FXCM's ability and willingness to honor
its obligations to its directors.

Considering that the Debtors and FXCM are potential adverse
parties, the Debtors are uncertain that anyone would be willing
to serve as the Refco Director, unless the individual was also
indemnified by the Debtors for its service.

To provide the appropriate level of protection to the Refco
Director, the Debtors propose that the Indemnification Agreement
should cover any act, conduct or omission of the Refco Director.

In addition, the Debtors intend to make payments under the
Indemnification Agreement in the ordinary course of business
without further order of the Court.  Otherwise, the Refco
Director will be subject to unusual uncertainty as to whether the
proposed protection would actually be available in case of need.

The Debtors believe that granting a separate indemnity to the
Refco Director is reasonable under Section 363(c) of the
Bankruptcy Code.

Moreover, even if the Court finds that Section 363(c) does not
apply, the Debtors assert that their request is still warranted
under Section 363(b), which permits a debtor to use an estate
property "other than in the ordinary course of business" after
notice and a hearing.

                         About Refco Inc.

Based in New York, New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base.  Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago, New
York, London and Singapore.  In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products.  Refco is one of
the largest global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc A.
Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents
the Official Committee of Unsecured Creditors.  Refco reported
$16.5 billion in assets and $16.8 billion in debts to the
Bankruptcy Court on the first day of its chapter 11 cases.

Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134).  Refco, LLC, is
a regulated commodity futures company that has businesses in the
United States, London, Asia and Canada.  Refco, LLC, filed for
bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc. (Refco Bankruptcy News, Issue
No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000)


RHODES INC: Court Confirms Restated Joint Liquidating Plan
----------------------------------------------------------
The Honorable James Massey of the U.S. Bankruptcy Court for the
Northern District of Georgia confirmed the Third Amended and
Restated Joint Plan of Liquidation filed by Rhodes, Inc., and its
two debtor-affiliates, Rhodes Holdings, Inc., and Rhodes Holdings
II, Inc.

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

                       Overview of the Plan

Under the plan, Rhodes will continue to exist after the effective
date as a separate corporate entity while Rhodes Holdings and
Rhodes Holdings II will be dissolved.

                       Treatment of Claims

Under the Plan, administrative expense claims, priority tax
claims, and the debtor-in-possession loan will be paid in full.

Priority claims will be paid in full and in cash.

Other secured Claims will receive, in full satisfaction of their
claims, either:

    (a) a reinstatement of the legal, equitable and contractual
        rights of the claim, or

    (b) the surrender of the collateral securing the claim by the
        Liquidating Agent.

Holders of general unsecured claims will a receive their pro rata
share of the liquidation proceeds remaining after payment of
administrative, priority tax, DIP lender, other secured claims,
priority claims and unsecured convenience claims.  The third
amended plan did not quantify how much unsecured creditors will
get.

Unsecured convenience claims will receive a one-time cash payment
equal to 25% of their claims.

Holders of subordinated claims will receive their pro rate
distribution of the liquidation proceeds remaining after payment
of all other claims except Rhodes Holdings and Rhodes Holdings II
unsecured claims.

Holder of Rhodes Holdings II unsecured claims will receive a
pro rata distribution of the liquidation proceeds remaining after
payment of all other claims.  Holders of these claims will also
receive their pro rata share of any net recoveries on account of
causes of action attributable to the assets of Rhodes Holdings II.
Otherwise, the Debtors say, holders of general unsecured claims
will also be entitled to the distribution.

Under the plan, holders of Rhodes Holdings unsecured claims will
receive no distributions on account of their respective claims.

Holders of interests in the Debtors will receive nothing under the
Plan and those interests will be cancelled and extinguished.

A copy of the Debtors' Third Amended and Restated Joint Plan of
Liquidation is available for a fee at:

  http://www.researcharchives.com/bin/download?id=060419210729

Headquartered in Atlanta, Georgia, Rhodes, Inc., will continue to
offer brand-name residential furniture to middle- and upper-
middle-income customers through 63 stores located in 11 southern
and midwestern states (after disposing of the locations listed
above).  The Company and two of its debtor-affiliates filed for
chapter 11 protection on Nov. 4, 2004 (Bankr. N.D. Ga. Case No.
04-78434).  Paul K. Ferdinands, Esq., and Sarah Robinson Borders,
Esq., at King & Spalding represent the Debtors.  Clifford A. Katz,
Esq., at Platzer, Swergold, Karlin, et al, represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection from their creditors, they estimated less than $50,000
in total assets but more than $50 million in total debts.


SAINT VINCENTS: Inks Memorandum of Agreement with Interns' Union
----------------------------------------------------------------
Saint Vincent Catholic Medical Centers of New York and its debtor-
affiliates ask the U.S. Bankruptcy Court for the Southern District
of New York to approve a Memorandum of Agreement with the
Committee of Interns and Residents.  If approved, the MOA would
become effective retroactive to May 1, 2006, and will be in full
force and effect through April 30, 2009.

Since June 2004, Saint Vincent Catholic Medical Center has engaged
in extensive collective bargaining negotiations with the Committee
of Interns and Residents relating to its obligations at St.
Vincent's Hospital in Manhattan and the Hospital's interns,
residents, and fellows, Andrew M. Troop, Esq., at Weil, Gotshal &
Manges LLP, in Boston, Massachusetts, tells the Court.

The CIR currently represents 347 of SVM's House Staff Officers,
including 20 chief residents.  Pursuant to the National Labor
Relations Act, the CIR is the only entity with whom SVM may
negotiate and enter into agreements regarding terms and
conditions of employment for House Staff Officers.

On May 9, 2006, SVM and the CIR entered into a memorandum of
agreement entitled, Memorandum of Agreement Between Saint
Vincents Catholic Medical Centers - St. Vincent's Manhattan and
the Committee of Interns and Residents.

                              The MOA

The MOA consists of procedural, operational, and economic terms
and conditions of employment.  The major economic changes from
historical practice contained in the MOA relate to wage increases
for, and rent subsidies to be provided to, the House Staff
Officers.

A) Wage Increases

    Each House Staff Officer employed on:

    * May 1, 2006, will receive a 6% wage increase, effective
      retroactively on that date;

    * May 1, 2007 will receive a 3% wage increase, effective on
      May 1, 2007; and

    * May 1, 2008, will receive a 3% wage increase, effective on
      May 1, 2008.

    Each full-time chief resident will receive an annual stipend
    of $1,500 for the period of his or her service as chief
    resident, which will increase by 6% on July 1, 2006 and 3% on
    July 1, 2007, and July 1, 2008.

    SVM expects that the wage increases will total:

    -- $1,050,513 for May 1, 2006, to April 30, 2007;
    -- $556,772 for May 1, 2007, to April 30, 2008; and
    -- $573,475 for May 1, 2008, to April 30 2009.

    SVM also expects that the chief resident stipend increase cost
    will total to $1,800 for July 1, 2006, to June 30, 2007, and
    that it will increase by an aggregate of:

    -- $960 for July 1, 2007, to June 30, 2008, and
    -- $980 from July 1, 2008, to April 30, 2009.

B) Rent Subsidies

    SVM currently owns 253 apartments, of which 213 are leased by
    House Staff Officers.  Historically, SVM has leased these
    apartments to House Staff Officers at rates substantially
    below not only fair market, but also below the modified market
    rent charged by other academic medical institutions to their
    interns and residents, Mr. Troop tells the Court.

    SVM has decided to increase rents to a more competitive rate
    effective July 1, 2006.

    Accordingly, pursuant to the MOA, SVM has agreed to provide
    limited rent subsidies to House Staff Officers residing in
    housing owned by SVM to help defer the cost of rent.  The
    amount of each rent subsidy depends on the size of the
    apartment and whether or not the lessee has a family with a
    child, Mr. Troop explains.

    The amount of the rent subsidies will decrease from year to
    year, and, for the most part, be eliminated by July 1, 2008.
    In addition, House Staff Officers entering a residency program
    on or after July 1, 2007, will generally not be eligible to
    receive rent subsidies.

    SVM expects that the rent subsidies provided to the House
    Staff Officers will total:

    -- $1,298,820 from July 1, 2006, through June 30, 2007,
    -- $611,200 from July 1, 2007, through June 30, 2008, and
    -- $0 from July 1, 2008, through April 30, 2009.

    SVM also expects that the increased revenue from these
    apartments realized from the proposed rent increases will more
    than offset the amount of subsidies offered through June 30,
    2008.

Mr. Troop relates that the wages currently paid to the House
Staff Officers are 7% less than the wage paid to interns and
residents at local competing hospitals.  The 6% wage increase to
be effective retroactively on May 1, 2006, merely brings the
House Staff Officers closer to market and reflects the wage
adjustments they should have otherwise received in 2004 and 2005
if their standard annual wage increase of 3% was not frozen due
to the collective bargaining negotiations with the CIR and the
Debtors' filing for bankruptcy, Mr. Troop tells the Court.

The subsequent 3% yearly increases to be effective in 2007 and
2008 are consistent with the annual wage increases that the House
Staff Officers received prior to entering into collective
bargaining negotiations, and to the annual wage increases
provided by SVM's peer hospitals.  The yearly stipends to be
provided to the chief residents are also consistent with the
practices of SVM's peer hospitals, Mr. Troop explains.

Similarly, the rent subsidies are necessary to help the House
Staff Officers residing in SVM's housing units adjust to the
sudden increase in their rent.

Absent Court approval of the MOA, SVM will be at risk of work
stoppages by the House Staff Officers, which may severely disrupt
its ability to provide high-quality patient care.  The importance
of the House Staff Officers to SVM's successful operations cannot
be underestimated, Mr. Troop says.
                       
                       About Saint Vincents

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. 26;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


SAINT VINCENTS: Wants to Assign Staten Island Contracts & Leases
----------------------------------------------------------------
Pursuant to Section 365 of the Bankruptcy Code, Saint Vincents
Catholic Medical Centers of New York and its debtor-affiliates
seek authority from the U.S. Bankruptcy Court for the Southern
District of New York to assume and assign executory contracts and
unexpired leases related to St. Vincent's Hospital, Staten Island
to Castleton Acquisition Corporation, an affiliate of Bayonne
Medical Center Bayonne, or to the Successful Bidder.

A list of the Contracts and Leases to be assumed and assigned is
available for free at http://ResearchArchives.com/t/s?a0e

The Debtors propose to amend the list of the Assumed Contracts and
Leases at a later date.  The Debtors will retain the right to
amend the Assumption Schedule to remove any contracts or leases at
any time prior to the Closing Date.  The Assumption Schedules will
include any amount the Debtors believe is required to be paid,
pursuant to Section 365(b) to cure any defaults under the
agreements listed on the Assumption Schedule.

The Successful Bidder will be fully responsible for satisfying the
requirements of Section 365(b), including payment of the Cure
Amounts, with regard to the Assumed Contracts and Leases.  The
Debtors will not be required to pay any Cure Amounts.

As the Debtors are selling the Staten Island Assets, the Assumed
Contracts and Leases, which generally relate solely to the Staten
Island Hospital, no longer have any value to the Debtors.  By
assuming and assigning the Assumed Contracts and Leases to
Castleton or the Successful Bidder and causing the assignee to pay
the Cure Amounts, the Debtors' estates benefit from avoiding the
rejection damage claims that would arise from rejecting the
Assumed Contracts and Leases.

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. 26;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


SEDONA CORP: March 31 Balance Sheet Upside-Down by $6.4 Million
---------------------------------------------------------------
SEDONA(R) Corporation filed its financial results for the first
quarter ended March 31, 2006, with the Securities and Exchange
Commission on May 22, 2006.

For the three months ended March 31, 2006, the company reported a
$420,000 net loss on $468,000 of net revenues, compared to a
$817,000 net loss on $157,000 of net revenues for the same period
in 2005.

At March 31, 2006, the company's balance sheet showed total assets
of $642,000 and total debts of $7 million, resulting in $6.4
million stockholders' deficit.  As of March 31, 2006, the
Company's accumulated deficit widened to $70.6 million from a
$70.2 million accumulated deficit at Dec. 31, 2005.

A full-text copy of SEDONA(R) Corp.'s Quarterly Report is
available for free at http://researcharchives.com/t/s?9f3

                        Going Concern Doubt

McGladrey & Pullen, LLP, raised substantial doubt about SEDONA(R)
Corp.'s ability to continue as a going concern after it audited
the company's financial statements for the year ended Dec. 31,
2005.  The auditing firm points to the company's substantial
operating losses, negative working capital and stockholders'
equity and anticipates that it will require additional debt or
equity financing in 2006.

SEDONA(R) Corporation (OTCBB: SDNA) -- http://www.sedonacorp.com/
-- is a technology and services provider that delivers
verticalized Customer Relationship Management solutions
specifically tailored for the small to mid-sized business market.
Utilizing SEDONA's CRM solutions, community and regional banks,
and insurance companies can effectively identify, acquire, foster,
and retain loyal, profitable customers.


SERACARE LIFE: Judge Adler Won't Appoint Equity Holders Committee
-----------------------------------------------------------------
The Honorable Judge Louise DeCarl Adler of the U.S. Bankruptcy
Court for the Southern District of California denied the request
of SeraCare Life Sciences, Inc.'s Ad Hoc Committee of Equity
Holders for the appointment of an Official Committee of Equity
Holders, The Deal reports.  

The Court said that the motion "rehashed a motion previously
denied."

As reported in the Troubled Company Reporter on May 5, 2006, the
Ad Hoc Equity Committee defended its plea for an official
appointment, saying Debtor is not insolvent and that the Debtor:

    -- has sufficient cash in its bank accounts to pay all
       creditors in full;

    -- maintains a cash-flow-positive operating business with
       clear growth potential; and

    -- enjoys a significant market share.

Apart from arguments relating to the material value for equity in
the Debtor's case, the Ad Hoc Equity Committee also claimed that
the circumstances of the Debtor's bankruptcy filing are highly
suspect.    

The Official Committee of Unsecured Creditors opposed the Ad Hoc
Equity Committee's request.  The Creditors' Committee pointed out
that it is unclear what benefits the Debtor's estate will gain
from an official equity committee appointment.  

Based in Oceanside, California, SeraCare Life Sciences, Inc. --
http://www.seracare.com/-- develops and manufactures biological   
based materials and services for diagnostic tests, commercial
bioproduction of therapeutic drugs, and medical research.  The
Company filed for chapter 11 protection on March 22, 2006
(Bankr. S.D. Calif. Case No. 06-00510).  The Official Committee of
Unsecured Creditors selected Henry C. Kevane, Esq., and Maxim B.
Litvak, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub
LLP, as its counsel.  When the Debtor filed for protection from
its creditors, it listed $119.2 million in assets and
$33.5 million in debts.


SILICON GRAPHICS: Will Honor Prepetition Customer Programs
----------------------------------------------------------
Silicon Graphics, Inc., and its debtor-affiliates obtained the
U.S. Bankruptcy Court for the Southern District of New York's
permission to:

    -- honor their obligations under the Warranty and Customer
       Support Programs;

    -- pay up to $187,000 in respect of the Debtors' prepetition
       obligations under the Marketing Development Fund Program;

    -- pay up to $33,000 in respect of the Debtors' prepetition
       obligations under the Limited Refund Program; and

    -- honor their obligations, including the provision of up to
       $4,800,000 worth of products to Customers, under the
       Prepayment Program.

According to Gary T. Holtzer, Esq., at Weil, Gotshal & Manges
LLP, in New York, Silicon Graphics, Inc.'s customers include many
Fortune 1,000 corporations, world-leading research organizations,
and numerous government agencies, including NASA.

The Debtors engage in certain activities to develop and sustain a
positive reputation with the distributors, resellers, and end-
users to whom the Debtors market their products.  To that end, the
Debtors implemented various customer-service programs and policies
designed to:

    -- ensure customer satisfaction,
    -- effectively compete with their market,
    -- develop and sustain customer loyalty,
    -- improve profitability, and
    -- generate goodwill for the Debtors and their products.

The benefits of the Customer Programs are integral to the
Debtors' efforts to rehabilitate, restore vitality to their
businesses, and ultimately to deliver the most value to their
creditors.  The Debtors believe they must quickly assure
Customers of their continued ability to fulfill their obligations
under the Customer Programs in order to maintain their valuable
Customer relationships after the Petition Date, particularly given
the increased pressure from competitors that the Debtors believe
will inevitably arise.

Among others, the Debtors' Customer Programs include:

    A. Warranty and Customer Support Programs

    B. Marketing Development Fund Program -- As of the Petition
       Date, the Debtors estimate that no more than approximately
       $187,000 in outstanding prepetition obligations under the
       Marketing Development Fund Program remain unpaid.

    C. Limited Refund Program -- The Debtors estimate that, as of
       the Petition Date, approximately $33,000 may be owed to
       Customers relating to prepetition obligations.

    D. Prepayment Program -- As of the Petition Date, the Debtors
       hold approximately $4,800,000 in Customers' Prepayments.

Headquartered in Mountain View, California, Silicon Graphics, Inc.
(OTC: SGID) -- http://www.sgi.com/-- offers high-performance  
computing.  SGI helps customers solve their computing challenges,
whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense, enabling the transition from
analog to digital broadcasting, or helping enterprises manage
large data.  The Debtor and 13 of its affiliates filed for chapter
11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977
through 06-10990).  Gary Holtzer, Esq., and Shai Y. Waisman, Esq.,
at Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $369,416,815 and
total debts of $664,268,602.  (Silicon Graphics Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000)


SOUNDVIEW HOME: Moody's Puts Low-B Rating on Two Cert. Classes
--------------------------------------------------------------
Moody's Investors Service assigned an Aaa rating to the senior
certificates issued by Soundview Home Loan Trust 2006-OPT3, Asset-
Backed Certificates, Series 2006-OPT3, and ratings ranging from
Aa2 to Ba2 to the subordinate certificates in the deal.

The securitization is backed by Option One Mortgage Corporation
originated or acquired 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 5.70%
to 6.20%.

Option One Mortgage Corporation will service the loans.  Moody's
has assigned Option One its top servicer quality rating as a
primary servicer of subprime loans.

The Complete Rating Actions:

                Soundview Home Loan Trust 2006-OPT3
            Asset-Backed Certificates Series 2006-OPT3

                    * Cl. I-A-1, Assigned Aaa
                    * Cl. II-A-1, Assigned Aaa
                    * Cl. II-A-2, Assigned Aaa
                    * Cl. II-A-3, Assigned Aaa
                    * Cl. II-A-4, Assigned Aaa
                    * Cl. M-1, Assigned Aa2
                    * Cl. M-2, Assigned Aa3
                    * Cl. M-3, Assigned A1
                    * Cl. M-4, Assigned A2
                    * Cl. M-5, Assigned A3
                    * Cl. M-6, Assigned Baa1
                    * Cl. M-7, Assigned Baa2
                    * Cl. M-8, Assigned Baa3
                    * Cl. M-9, Assigned Ba1
                    * Cl. M-10, Assigned Ba2


STARBOUND RE: S&P Assigns BB+ Rating to $90 Million Bank Loan
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned:

  -- its 'A+' senior unsecured bank loan rating to Starbound
     Re Ltd.'s $50 million (Debt III) bank loan;

  -- its 'BBB-' senior unsecured bank loan rating to Starbound's
     $50 million bank loan (Debt II subordinated to Debt III);
     and

  -- its 'BB+' senior secured bank loan rating to Starbound's
     $90 million bank loan (Debt I subordinated to Debt II and
     Debt III).

The differences in ratings reflect the probabilities of the debt
becoming impaired.
    
Starbound is a limited-life, special-purpose Class 3 reinsurance
company domiciled in Bermuda and set up specifically to offer
reinsurance to Renaissance Reinsurance Ltd.
(Ren Re; A+/Stable/--).
      
"The ratings on Starbound are based on a very remote (0.2%)
modeled probability of even the most junior bank loan (Debt I)
becoming impaired," said Standard & Poor's credit analyst James
Brender.

"They're also based on Ren Re's strong competitive position and
risk management, Starbound Re's predetermined exposures and risk
tolerances, and very strong price increases in Florida, which is
about 75% of Starbound Re's exposure."

These positive factors are offset in part by the difficulties of
modeling exposure to natural disasters, which is exacerbated by
Starbound's significant concentration of risk in Florida.  The
lack of a strong alignment of interest between Ren Re and
Starbound is a minor negative rating factor.  Leverage and
coverage were not considered explicitly as ratings factors because
of Starbound's use of a trust structure.  However, these factors
indirectly affect the modeled results for a given capital
structure and premium base.
     
Starbound may borrow up to $190 million from a consortium of banks
for a term of about 1.75 years.  The entity's capital structure
will also include $125 million of equity.
     
The proceeds from capital-raising transactions will be placed in a
collateral account, which will provide Ren Re with a source of
indemnity cover for losses relating to its property catastrophe
lines of business and other related lines.  The duration of
Starbound's assets will be consistent with that of its
obligations.
     
Ren Re will cede 80% of the premium from a defined selection of
its property catastrophe business to Starbound through a quota
share reinsurance treaty, under which Starbound's liability will
attach simultaneously with that of Ren Re and otherwise follow the
fortunes with respect to the business retroceded to Starbound.


STRUCTURED ASSET: DBRS Rates $17.4 Million Loan at BB(high)
-----------------------------------------------------------
Dominion Bond Rating Service assigned these ratings to the
Mortgage Pass-Through Certificates, Series 2006-S2 issued by
Structured Asset Securities Corporation.

   * $295.3 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class A1 New Rating AAA

   * $98.4 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class A2 New Rating AAA

   * $196.9 million (notional), Mortgage Pass-Through
     Certificates, Series 2006- S2, Class A-IO New Rating AAA

   * $106.6 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class M1 New Rating AA (high)

   * $34.8 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class M2 New Rating AA

   * $13.8 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class M3 New Rating AA (low)

   * $17.4 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class M4 New Rating A (high)

   * $14.8 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class M5 New Rating A

   * $9.2 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class M6 New Rating A (low)

   * $8.9 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class M7 New Rating BBB (high)

   * $6.6 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class M8 New Rating BBB

   * $6.6 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class M9 New Rating BBB (low)

   * $5.3 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class B1 New Rating BBB (low)

   * $6.9 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class B2 New Rating BB (high)

   * $10.5 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class B3 New Rating BB (high)

   * $11.5 million, Mortgage Pass-Through Certificates,
     Series 2006-S2, Class B4 New Rating BB

The AAA ratings on the Class A Certificates reflect 40.00% of
credit enhancement provided by the subordinate classes, initial
overcollateralization, and monthly excess spread.

The AA (high) rating on Class M1 reflects 23.75% of credit
enhancement.  The AA rating on Class M2 reflects 18.45% of credit
enhancement.  The AA (low) rating on Class M3 reflects 16.35% of
credit enhancement.  The A (high) rating on Class M4 reflects
13.70% of credit enhancement.  The "A" rating on Class M5 reflects
11.45% of credit enhancement.  The A (low) rating on Class M6
reflects 10.05% of credit enhancement.  The BBB (high) rating on
Class M7 reflects 8.70% of credit enhancement.  The BBB rating on
Class M8 reflects 7.70% of credit enhancement.  The BBB (low)
rating on Class M9 reflects 6.70% of credit enhancement.  The BBB
(low) rating on Class B1 reflects 5.90% of credit enhancement.  
The BB (high) rating on Class B2 reflects 4.85% of credit
enhancement. The BB (high) rating on Class B3 reflects 3.25% of
credit enhancement.  The BB rating on Class B4 reflects 1.50% of
credit enhancement.

The ratings on the Certificates also reflect the quality of the
underlying assets and the capabilities of Aurora Loan Services LLC
as Servicer, as well as the integrity of the legal structure of
the transaction.  Citibank, N.A. will act as Trustee.  The trust
will enter into an interest rate swap agreement with HSBC Bank
USA, National Association.  The trust will pay to the Swap
Provider, a fixed payment of 5.85% per annum in exchange for a
floating payment at LIBOR from the Swap Provider.

Interest and principal payments collected from the mortgage loans
will be distributed on the 25th day of each month commencing in
June 2006.  Interest will be paid first to the Class A
Certificates on a pro rata basis and then sequentially to the
subordinate Certificates. Until the step-down date, principal
collected will be paid exclusively to the Class A Certificates
unless their respective note balances have been reduced to zero.

After the step-down date, and provided that certain performance
tests have been met, principal payments will be distributed among
all classes on a pro rata basis.  In addition, provided that
certain performance tests have been met, the level of
overcollateralization may be allowed to step down to 3.0% of the
then-current balance of the mortgage loans.

All of the mortgage loans in the Underlying Trust were originated
or acquired by Aurora Loan Services LLC.  They are all fixed-rate,
closed-end, second lien mortgage loans, which are subordinate to
the first-lien loans on the respective properties. As of the cut-
off date, the aggregate principal balance of the mortgage loans is
$656,215,417.  The weighted-average mortgage rate is 11.35%, the
weighted-average FICO is 703, and the weighted average original
loan-to-value ratio is 96.61%.


SYLVEST FARMS: Selling All Assets to Koch Foods for $58 Million
---------------------------------------------------------------
The Honorable Thomas B. Bennett of the U.S. Bankruptcy Court for
the Northern District of Alabama gave Sylvest Farms, Inc., and its
debtor-affiliates permission to sell substantially all of their
assets to Koch Foods of Alabama, LLC and Koch Farms of Alabama,
LLC, for $58 million.

The sale will be made pursuant to an Amended Asset Purchase
Agreement dated as of April 27, 2006.

The Court directed the Debtors to pay these amounts at the closing
of the sale:

   (1) $35.88 million to Wachovia Bank, N.A., to be applied under
       the Debtor-in-Possession Credit and Security Agreement;

   (2) $1 million from the DIP loan to pay the carve-out reserved
       to all of the reasonable hourly fees and expenses incurred
       by professionals employed in the Debtors' cases;  

   (3) $659,250 to a segregated bank account to pay the Carve-Out;

   (4) $3 million to fund an escrow account contemplated by the
       Asset Purchase Agreement;

   (5) $802,000 to a segregated bank account to pay the
       "Retention/Success Fee Payable" as contemplated by the
       Asset Purchase Agreement.

The balance of the sales proceeds will be provisionally paid to
Wachovia as payment of its prepetition secured claims.  

Headquartered in Montgomery, Alabama, Sylvest Farms, Inc. --
http://sylvestcompanies.com/-- produces, processes and markets
poultry products.  The Debtors employ approximately 1,500 workers.
The Company and two debtor-affiliates filed for chapter 11
protection on April 18, 2006 (Bankr. N.D. Ala. Case No. 06-40525).
The Debtors selected Richard A. Robinson, Esq., and Eric S.
Golden, Esq., at Baker & Hostetler LLP as their bankruptcy
counsel.  The Committee R. Scott Williams, Esq., at Haskell
Slaughter Young & Rediker, LLC, as its counsel.  When the Debtors
filed for protection from their creditors, they estimated their
total assets and debts at $50 million to $100 million.


SYLVEST FARMS: Can Borrow $34 Million from Wachovia Under DIP Pact
------------------------------------------------------------------
The Honorable Thomas B. Bennett of the U.S. Bankruptcy Court for
the Northern District of Alabama allowed Sylvest Farms, Inc., and
its debtor-affiliates to borrow $34 million from Wachovia Bank,
National Association.

The Court also gave the Debtors permission to use cash collateral
securing repayment of their prepetition debt to Wachovia.  The
Debtors' other secured lender, Federal Land Bank Association of
South Alabama, FLCA, has decided to sell its secured claim against
the Debtors to Wachovia for $8 million.  Federal Land is a
federally chartered instrumentality of the United States
government.  

The Debtors will use the proceeds of the debtor-in-possession loan
to pay Wachovia, as prepetition lender, $24.68 million in full
satisfaction of the Wachovia's secured claim.  The rest of the
DIP loan proceeds and the cash collateral will be used to fund
working capital needs.  

The Court granted Wachovia perfected first priority claims and
priming liens on the Debtors' asset pursuant to the DIP Loan.  
Wachovia holds superpriority administrative claims and all
other benefits and protections allowable under Sections 507(b) and
503(b)(1) of the Bankruptcy Code, senior in right to all other
administrative claims against the estate, except for:

   -- bankruptcy administrator fees;

   -- fees and expenses incurred by professionals hired in the
      Debtors' chapter 11 cases;

   -- employee success fees; and

   -- $520,000 cash payment to the estate for the benefit of
      unsecured creditors.

If the Debtors default on the DIP loan, professional fees would be
capped at $125,000.  The Debtors are prohibited from using the DIP
loan to pay professionals used to litigate against Wachovia.  The
Debtors, Wachovia and the Official Committee of Unsecured
Creditors also agreed that none of the first $300,000 of proceeds
from avoidance actions would go to Wachovia.  

Headquartered in Montgomery, Alabama, Sylvest Farms, Inc. --
http://sylvestcompanies.com/-- produces, processes and markets
poultry products.  The Debtors employ approximately 1,500 workers.
The Company and two debtor-affiliates filed for chapter 11
protection on April 18, 2006 (Bankr. N.D. Ala. Case No. 06-40525).
The Debtors selected Richard A. Robinson, Esq., and Eric S.
Golden, Esq., at Baker & Hostetler LLP as their bankruptcy
counsel.  The Committee R. Scott Williams, Esq., at Haskell
Slaughter Young & Rediker, LLC, as its counsel.  When the Debtors
filed for protection from their creditors, they estimated their
total assets and debts at $50 million to $100 million.


SYLVEST FARMS: Court Appoints Nine-Member Creditors Committee
-------------------------------------------------------------
The Honorable Thomas B. Bennett of the U.S. Bankruptcy Court for
the Northern District of Alabama appointed nine creditors to serve
on an Official Committee of Unsecured Creditors in the chapter 11
cases of Sylvest Farms, Inc., and its debtor-affiliates:

   (1) Romero Trucking, Inc.
       Attn: Rauls Romero [sic]
       367 G&S Road
       Prattville, AL 36067
       Tel: (334) 365-9455 ext. 203

   (2) The Starke Agency, Inc.
       Attn: Bolling P. Starke, III
       310 Commerce Street
       P.O. Box 4359
       Montgomery, AL 36103
       Tel: (334) 263-5535

   (3) Bunge North America, Inc.
       Attn: Beverly D. Garner
       11720 Borman Drive
       St. Louis, MO 63146
       Tel: (314) 292-2514

   (4) Georgia-Pacific Corporation
       Attn: Michael H. Traison
       150 West Jefferson Ave., Suite 2500
       Detroit, MI 48226
       Tel: (586) 914-7658

   (5) Southeastern Energy Corp.
       Attn: Jack R. Pitts
       P.O. Box 9309
       Montgomery, AL 36109
       Tel: (334) 265-2501

   (6) FGDI LLC dba Farmers Grain Dealers
       Attn: Steve Speck
             Jean Bratton
       19901 North Dixie Highway, Suite B
       Bowling Green, OH 43402
       Tel: (419) 373-6311

   (7) FMC Foodtech
       Attn: Tom Huneke
       1700 Cannon Road
       Northfield, MN 55057
       Tel: (507) 664-7223
       
   (8) H.J. Baker & Bro., Inc.
       Attn: Scott D. Michelsen
       228 Saugatuck Ave.
       Westport, CT 06880
       Tel: (203) 682-9234

   (9) UPS Supply Chain Services
       Attn: Steven Sass
             Kelly Bohuslav-Kail
       307 International Drive, Suite 270
       Hunt Valley, MD 2130
       Tel: 410 (773-4040)

The Committee selected R. Scott Williams, Esq., at Haskell
Slaughter Young & Rediker, LLC, as its counsel.

As reported in the Troubled Company Reporter on May 5, 2006, Jon
A. Dudeck, the assistant U.S. Bankruptcy Administrator for the
Northern District of Alabama, asked the Court to approve his
request for the appointment of an Omnibus Unsecured Creditors'
Committee in the Debtors' cases.  Pursuant to Section 1102 of the
Bankruptcy Code, the USBA is authorized to recommend to the Court
a committee of creditors holding unsecured claims.

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

Headquartered in Montgomery, Alabama, Sylvest Farms, Inc. --
http://sylvestcompanies.com/-- produces, processes and markets
poultry products.  The Debtors employ approximately 1,500 workers.
The Company and two debtor-affiliates filed for chapter 11
protection on April 18, 2006 (Bankr. N.D. Ala. Case No. 06-40525).
The Debtors selected Richard A. Robinson, Esq., and Eric S.
Golden, Esq., at Baker & Hostetler LLP as their bankruptcy
counsel.  When the Debtors filed for protection from their
creditors, they estimated their total assets and debts at
$50 million to $100 million.


TENET HEALTHCARE: Hires Biggs Porter as Chief Financial Officer
---------------------------------------------------------------
Tenet Healthcare Corporation appointed Biggs C. Porter as chief
financial officer, effective June 5, 2005.  Mr. Porter will join
Tenet from Raytheon Co., where he serves as vice president and
corporate controller.  He also serves as Raytheon's principal
accounting officer.

Mr. Porter will report to Trevor Fetter, Tenet's president and
chief executive officer.  He succeeds Robert S. Shapard, who
resigned as Tenet's chief financial officer last November.

"Biggs has demonstrated a commitment to absolute integrity in
financial reporting and related control systems, which fits
perfectly with Tenet's emphasis on transparency in all we do," Mr.
Fetter said.  "His experience in competitive, highly regulated
industries such as aerospace and defense is relevant to our health
care business.  He also has managed successfully through rapid
change and a variety of challenges.  We have made significant
progress in the last three years to put Tenet on a solid
foundation for sustainable success, and I look forward to Biggs'
leadership and counsel in all our financial matters as we continue
that momentum."

Mr. Fetter added, "During the transition period of the past six
months, I have been grateful for the commitment and efforts of our
entire financial team, especially the leadership of Tim Pullen,
our chief accounting officer, who has served ably as acting chief
financial officer."

Mr. Porter said, "I'm joining Tenet because I believe in the
integrity of the management team and in their commitment and
ability both to achieve the highest level of quality and to
improve financial performance."

At Tenet, Mr. Porter will be in charge of the company's finance,
accounting, investor relations and related functions.  His office
will be at Tenet's headquarters in Dallas.

A certified public accountant, Porter holds a bachelor's degree in
accounting from Duke University and a master's degree in
accounting from the University of Texas, Austin

                     About Tenet Healthcare

Headquartered in Dallas, Texas Tenet Healthcare Corporation (NYSE:
THC) -- http://www.tenethealth.com/-- through its subsidiaries,  
owns and operates acute care hospitals and related health care
services.  Tenet's hospitals aim to provide the best possible care
to every patient who comes through their doors, with a clear focus
on quality and service.

                           *     *     *

As reported in the Troubled Company Reporter on April 6, 2006,
Fitch Ratings affirmed Tenet Healthcare Corp.'s issuer default
rating at 'B-' and senior unsecured notes at 'B-/RR4'.  Fitch say
the rating outlook is negative.

As reported in the Troubled Company Reporter on Jan. 25, 2006,
Moody's Investors Service affirmed Tenet Healthcare Corporation's
speculative grade liquidity rating at SGL-4.  Moody's said the
outlook for the ratings remains negative.


TOMMY HILFIGER: Completes Tender Offer of 9% Senior Bonds Due 2031  
------------------------------------------------------------------
Tommy Hilfiger U.S.A., Inc., a wholly owned subsidiary of Tommy
Hilfiger Corporation, reported that, in connection with its tender
offer and consent solicitation for its outstanding 9% Senior Bonds
due 2031, it had received, as of 5:00 p.m., New York City time, on
May 25, 2006, tenders and consents from holders of a majority in
principal amount of its outstanding 2031 Senior Bonds.

As contemplated by the consent solicitation with respect to the
2031 Senior Bonds, the Company has executed a supplemental
indenture to the indenture governing the 2031 Senior Bonds that
will, once operative, eliminate the principal restrictive
covenants, including those relating to limitations on the
Company's liens and indebtedness, as well as certain related
events of default contained in the indenture under which the 2031
Senior Bonds were issued.  Although the supplemental indenture has
been executed and has therefore become effective, the
modifications and eliminations effected by the amendments will not
become operative until the 2031 Senior Bonds are accepted for
payment pursuant to the Offer.  The Company currently expects to
make prompt payment for 2031 Senior Bonds validly tendered prior
to the Expiration Time and not properly withdrawn at or prior to
5:00 p.m., New York City time, on April 20, 2006.

Assuming a settlement date of May 26, 2006, the total
consideration is $25.25 plus accrued interest of $0.53 (for a
total of $25.78) for each $25 principal amount of 2031 Senior
Bonds that were validly tendered and accepted for payment pursuant
to the Offer.  A soliciting dealer fee of $0.25 per $25 principal
amount of 2031 Senior Bonds that were validly tendered and
accepted for payment will be paid by the Company to retail brokers
that are entitled to receive this fee.

As of the Expiration Time, the Company had received tenders of
2031 Senior Bonds and related consents in these amounts:

                                                Percentage of
                                   Principal     Outstanding
                                    Amount        Principal
   Title of Security   CUSIP No.    Tendered    Amount of Series
   -----------------   ---------    --------    ----------------
   9% Senior Bonds     430908202   $75,738,200      50.49%
      due 2031

For further information with respect to the tender offers and
consent solicitations, holders should contact their broker and the
Dealer Manager:

     Citigroup Corporate and Investment Banking
     Telephone (212) 723-6106 (collect)
     Toll Free (800) 558-3745

or the Information Agent:

     Global Bondholder Services Corporation
     Telephone (212) 430-3774 (collect)
     Toll Free (866) 389-1500

Tommy Hilfiger U.S.A., Inc., incorporated in Delaware, is a direct
wholly owned subsidiary of Tommy Hilfiger Corporation, which is
owned by funds advised by Apax Partners.  Tommy Hilfiger
Corporation, through its subsidiaries, designs, sources and
markets men's and women's sportswear, jeanswear and childrenswear.
Tommy Hilfiger Corporation's brands include Tommy Hilfiger and
Karl Lagerfeld.  Through a range of strategic licensing
agreements, Tommy Hilfiger Corporation also offers a broad array
of related apparel, accessories, footwear, fragrance, and home
furnishings.  Tommy Hilfiger Corporation's products can be found
in leading department and specialty stores throughout the United
States, Canada, Europe, Mexico, Central and South America, Japan,
Hong Kong, Australia and other countries in the Far East, as well
as the Tommy Hilfiger Corporation's own network of outlet and
specialty stores in the United States, Canada and Europe.

                          *     *     *

As reported in the Troubled Company Reporter on May 23, 2006,
Moody's Investors Service withdrew the Ba2 corporate family rating
and unsecured debt ratings of Tommy Hilfiger Corporation and its
subsidiaries following the closing of the company's acquisition by
affiliates of Apax Partners on March 10, 2006.


TOWER AUTOMOTIVE: Fuji Dietec Wants Stay Lifted to Recover Tooling
------------------------------------------------------------------
Fuji Dietec Corporation asks the U.S. Bankruptcy Court for the
Southern District of New York to lift the automatic stay in Tower
Automotive, Inc., and its debtor-affiliates' chapter 11 cases to
allow it to repossess the Fuji Tooling.

Fuji Dietec also asks the Court to direct the Debtors to:

    (a) return the Fuji Tooling to Fuji Dietec; or

    (b) alternatively, provide adequate protection to Fuji Dietec
        for the use and diminution in value of the Fuji Tooling if
        they are to stay in the Debtors' possession.

Fuji Dietec tells the Court that prior to the Debtor filing for
bankruptcy, it fabricated, repaired, or otherwise modified and
delivered to the Debtors certain tooling for the Debtors'
operations.

The Debtors owe Fuji Dietec at least $4,751,025 for goods and
services, Dennis W. Loughlin, Esq., at Raymond & Prokop, P.C., in
Southfield, Michigan, tells the Court.

Pursuant to the Michigan Special Tool Lien Act, Fuji Dietec:

    (a) permanently affixed its name and address on the Tooling
        prior to shipping it to the Debtors;

    (b) filed UCC-1 financing statements relative to the Fuji
        Tooling;

    (c) has a perfected first priority statutory lien on the Fuji
        Tooling.

According to Mr. Loughlin, the Debtors have failed to pay Fuji
Dietec on, and have failed to otherwise satisfy the liens on, the
Fuji Tooling.

Mr. Loughlin explains that the Fuji Tooling was singularly
designed for use in the automotive industry for the purpose of
producing specific production parts and components for a
particular vehicle program.  After the production life of the
part ends either by the vehicle program being discontinued or
sufficient parts are produced, the Tooling becomes obsolete and
its value is diminished to scrap value.

The Debtors' continued used of the Fuji Tooling results in wear
and tear and other depreciation-related damage to the Tooling,
Mr. Loughlin relates.  However, he continues, the Debtors have
failed to provide adequate protection to Fuji or otherwise
satisfy the tool liens on the Fuji Tooling.

Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and
producer of vehicle structural components and assemblies used by
every major automotive original equipment manufacturer, including
BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan,
Toyota, Volkswagen and Volvo.  Products include body structures
and assemblies, lower vehicle frames and structures, chassis
modules and systems, and suspension components.  The Company and
25 of its debtor-affiliates filed voluntary chapter 11 petitions
on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through
05-10601).  James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq.,
Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet,
Esq., at Kirkland & Ellis, LLP, represent the Debtors in their
restructuring efforts.  Ira S. Dizengoff, 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 $787,948,000 in total assets and
$1,306,949,000 in total debts.  (Tower Automotive Bankruptcy News,
Issue No. 34; Bankruptcy Creditors' Service, Inc., 215/945-7000).


TRACE INTERNATIONAL: Directors & Officers Entitled to Jury Trial
----------------------------------------------------------------
The U.S. Supreme Court denied certiorari from a Second Circuit
decision that gave directors and officers of Trace International
Holdings, Inc., and Trace Foam Sub, Inc., the right to a jury
trial in a breach of fiduciary duty lawsuit brought against them
by John S. Pereira, the Chapter 7 Trustee overseeing Trace's
liquidation.  

The Chapter 7 Trustee alleges that the former directors and
officers allowed the debtor's CEO to engage in improper
transactions unchecked, including the CEO's unauthorized
borrowing, excessive compensation, and the like.  

The Second Circuit says the relief sought by the Chapter 7 Trustee
must be regarded as a legal remedy in the nature of "compensatory
damages," rather than as "restitution" as Mr. Pereira claimed.  
The officers and directors had never possessed the funds in
question.  Since the nature of the remedy sought was the most
important factor in assessing the officers' and directors' right
to a jury trial, they had a Sixth Amendment right, the Court of
Appeals concluded.

In his petition for a writ of certiorari, the trustee questioned
whether the Second Circuit correctly read the Supreme Court's
decision in Great-West Life & Annuity Ins. Co. v. Knudson, 534
U.S. 204, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002), as being of
constitutional magnitude, under the Seventh Amendment, so as to
overrule long-settled jurisprudence that actions against
fiduciaries are exclusively equitable and therefore not triable of
right to a jury.  The Second Circuit's decision is reported at 413
F.3d 330.  

Trace international Holdings, Inc., and Trace Foam Sub, Inc.,
filed for chapter 11 protection on July 21, 1999 (Bankr. S.D.N.Y.
Case Nos. 99-B-10425 and 99-B-10426 (SMB)).  Barry N. Seidel,
Esq., at King & Spalding LLP, represents the Debtors.  Trace
reported $136,322,000 in assets and $266,455,000 in its bankruptcy
petition.  On Jan. 24, 2000, the Bankruptcy Court signed an order
converting the cases to chapter 7 liquidation proceedings and the
U.S. Trustee appointed John S. Pereira to serve as the Chapter 7
Trustee.  Harold D. Jones, Esq., at Jaspan Schlesinger Hoffman
LLP, represents the Chapter 7 Trustee.


TRM CORP: Agrees to Sell UK Subsidiary to Digital 4 for $4.9 Mil.
-----------------------------------------------------------------
TRM Corporation entered into a definitive agreement for the stock
sale of TRM Copy Centres (UK) Limited, TRM's wholly owned UK
photocopier subsidiary, to Digital 4 Convenience PLC, a UK-based
operator of retail photocopiers.  

The purchase price is based on the net sales average for the
period November 2005 through April 2006.  Based on preliminary
April net sales, the estimated purchase price is 2.6 million
pounds Sterling ($4.9 million).

The definitive sale agreement is subject to certain pre-closing
conditions, including the transfer of certain assets not relating
to the UK photocopier business, the confirmation of aggregate
copier meter readings up to the closing date and formal
notification to TRM UK staff.

TRM Copy Centres (UK) Limited includes approximately 2,500
photocopier units and represents approximately 10% of the TRM
photocopier units in stores worldwide.  The UK Copier business
generated approximately $4.2 million of net sales in fiscal 2005.
"The sale of the UK photocopier business is part of our overall
focus on improving shareholder value," says Jeff Brotman, TRM
President and Chief Executive Officer.  "It will allow our UK
operations to focus solely on growing the existing ATM business
and related services."

Headquartered in Portland, Oregon, TRM Corporation (NASDAQ: TRMM)
-- http://www.trm.com/-- is a consumer services company that  
provides convenience ATM and photocopying services in high-traffic
consumer environments.  TRM's ATM and copier customer base has
grown to over 35,000 retailers throughout the United States and
over 46,200 locations worldwide, including 6,400 locations across
the United Kingdom and over 4,900 locations in Canada.  TRM
operates one of the largest multi-national ATM networks in the
world, with over 22,000 locations deployed throughout the United
States, Canada, Great Britain, including Northern Ireland and
Germany.

                          *     *     *

As reported in the Troubled Company Reporter on Mar. 23, 2006,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Portland, Oregon-based TRM Corporation to 'CCC' from
'B+' and revised its CreditWatch placement to developing from
negative.  The downgrade reflected the weakened status of the
company's loan agreement.

As reported in the Troubled Company Reporter on Mar. 23, 2006,
Moody's Investors Service downgraded the corporate family rating
of TRM Corporation to Caa1 from B2 and assigned a negative
outlook.


USA COMMERCIAL: U.S. Trustee Appoints 5-Member Creditors Committee
------------------------------------------------------------------
The U.S. Trustee for Region 17 appointed five creditors to serve
on an Official Committee of Unsecured Creditors in USA Commercial
Mortgage Company and its debtor-affiliates' chapter 11 cases:

    1. Del Bunch d/b/a Loan Partners Capital
       Donald R. Walker
       9209 Eagle Hills Drive
       Las Vegas, Nevada 89134-6109
       Tel: (702) 250-3638
       Fax: (702) 228-2279

    2. Russell/AD Development Group, LLC
       Robert A. Russell
       8585 East Hartford Drive, Suite 500
       Scottsdale, Arizona 85255
       Tel: (480) 505-4048
       Fax: (480) 505-4049

    3. Annee Nounna
       8057 Lands End Court
       Las Vegas, Nevada 89117-7635
       Tel: (702) 217-8599
       Fax: (702) 364-8822

    4. Advanced Information Systems
       Michael T. Yoder
       4270 Cameron Street, Suite 1
       Las Vegas, Nevada 89103
       Tel: (702) 360-2266
       Fax: (702) 360-2022

    5. Robert L. Hagmaier
       15254 Candlewood Court
       Lake Oswego, Oregon 97035
       Tel: (503) 344-3733
       Fax: (503) 344-3733

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

Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba
USA Capital -- http://www.usacapitalcorp.com/-- provides
more than $1 billion in short-term and permanent financing to
homebuilders, commercial developers, apartment owners and
institutions nationwide.  The Company and its debtor-affiliates
filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev.
Case Nos. 06-10725 to 06-10729).  Lenard E. Schwartzer, Esq., at
Schwartzer & Mcpherson Law Firm, represents the Debtors.  When the
Debtors filed for protection from their creditors, they estimated
assets of more than $100 million and debts between $10 million and
$50 million.


USA COMMERCIAL: Trustee Names 7-Member Equity Panel in Diversified
------------------------------------------------------------------
The U.S. Trustee for Region 17 appointed seven equity holders to
serve on an Official Committee of Equity Security Holders in USA
Capital Diversified Trust Deed Fund, LLC's chapter 11 case:

    1. Robert Worthen
       1112 Worthen Circle
       Las Vegas, NV 89145
       Tel: (702) 254-8735
       Fax: (702) 363-6661

    2. Katz 2000 Separate Property Trust
       Sara M. Katz, Managing Trustee
       4250 Executive Square, #670
       San Diego, CA 92037
       Tel: (619) 813-9551
       Fax: (619) 552-8437

    3. Thomas C. Lawyer Family Trust
       Thomas C. Lawyer
       45 Ventana Canyon Drive
       Las Vegas, Nevada 89113
       Tel: (702) 876-7530
       Fax: (702) 876-6612

    4. Maryan Rutar
       4043 Chalfont Court
       Las Vegas, NV 89121
       Tel: (702) 434-2242
       Fax: None provided

    5. Charles O. Nichols
       2561 Seascape Drive
       Las Vegas, NV 89128
       Tel: (702) 255-5594
       Fax: (702) 233-0306

    6. The Gannaway Charitable Remainder Trust Dated 4/15/97
       Kurt Hunsberger
       3500 Lakeside Court, #200
       Reno, NV 89520
       Tel: (775) 827-2999
       Fax: (775) 827-2185

    7. Robert H. Mansfield
       3611 Victory Avenue
       Las Vegas, NV 89121-7224
       Tel: (702) 434-6227

The Official Committee of Equity Security Holders in USA Capital
Diversified Trust Deed Fund, LLC, along with the Official
Committee of Equity Security Holders of USA Capital First Trust
Deed Fund, LLC, and the Official Committee of Holders Of
Executory Contract Rights Through USA Commercial Mortgage Company
has retained Stutman, Treister & Glatt, P.C., as their special
bankruptcy counsel for all matters of common interest.

Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba
USA Capital -- http://www.usacapitalcorp.com/-- provides
more than $1 billion in short-term and permanent financing to
homebuilders, commercial developers, apartment owners and
institutions nationwide.  The Company and its debtor-affiliates
filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev.
Case Nos. 06-10725 to 06-10729).  Lenard E. Schwartzer, Esq., at
Schwartzer & Mcpherson Law Firm, represents the Debtors.  When the
Debtors filed for protection from their creditors, they estimated
assets of more than $100 million and debts between $10 million and
$50 million.


USA COMMERCIAL: Trustee Names 7-Member Equity Panel in First Trust
------------------------------------------------------------------
The U.S. Trustee for Region 17 appointed seven equity holders to
serve on an Official Committee of Equity Security Holders in USA
Capital First Trust Deed Fund, LLC's chapter 11 case:

    1. Robert E. Taylor
       Chuck Heinrichs
       198 El Pajaro
       Newbury Park, CA 91320
       Tel: (805) 498-2457

    2. John H. Warner, Jr.
       2048 North Chettro Trail
       St. George, UT 84770-5345
       Tel: (435) 652-8308
       Fax: (435) 652-8379

    3. Mary Ellen Moro
       1009 - 8th Street
       Manhattan Beach, CA 90266
       Tel: (310) 379-9250
       Fax: (310) 279-9250

    4. Richard G. Woudstra Revocable Trust
       Richard G. Woudstra, Trustee
       P.O. Box 530025
       Henderson, NV 89053
       Tel: (702) 217-8710
       Fax: None provided

    5. Wen Baldwin Separate Property Trust u/a/d 9/2/97
       Wen Baldwin, Trustee
       365 Dooley Drive
       Henderson, NV 89015
       Tel: (702) 566-8010
       Fax: (702) 566-8010

    6. Jerry T. McGimsey
       3115 South El Camino Road
       Las Vegas, NV 89146-6621
       Tel: (702) 871-0296

    7. Richard Horowitz
       5 Fir Drive
       Kings Point, NY 11024
       Tel: (516) 487-4434
       Fax: (516) 487-6368

The Official Committee of Equity Security Holders of USA
Capital First Trust Deed Fund, LLC, along with the Official
Committee of Equity Security Holders in USA Capital Diversified
Trust Deed Fund, LLC, and the Official Committee of Holders Of
Executory Contract Rights through USA Commercial Mortgage Company,
has retained Stutman, Treister & Glatt, P.C., as their special
bankruptcy counsel for all matters of common interest.

Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba
USA Capital -- http://www.usacapitalcorp.com/-- provides
more than $1 billion in short-term and permanent financing to
homebuilders, commercial developers, apartment owners and
institutions nationwide.  The Company and its debtor-affiliates
filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev.
Case Nos. 06-10725 to 06-10729).  Lenard E. Schwartzer, Esq., at
Schwartzer & Mcpherson Law Firm, represents the Debtors.  When the
Debtors filed for protection from their creditors, they estimated
assets of more than $100 million and debts between $10 million and
$50 million.


WALTON SCDO: Moody's Lowers Rating on $5 Million Notes to Ba2
------------------------------------------------------------
Moody's Investors Service downgraded seven notes issued by Walton
SCDO 2003-1 Ltd.:

   (1) $10,000,000 Class A-2F Notes Due 2009

       Previous Rating: Aa3
       Current Rating: A1

   (2) $2,000,000 Class A-2L Notes Due 2009

       Previous Rating: Aa3
       Current Rating: A1

   (3) $5,000,000 Class A-2-1 Swap Due 2009

       Previous Rating: Aa3
       Current Rating: A1

   (4) $3,000,000 Class A-2 Swap Due 2009

       Previous Rating: Aa3
       Current Rating: A1

   (5) $5,000,000 Class A-3LD Notes Due 2009

       Previous Rating: A3
       Current Rating: Baa2

   (6) $5,000,000 Class A-3LD-1 Notes Due 2009

       Previous Rating: A3
       Current Rating: Baa2

   (7) $5,000,000 Class B-1F Notes Due 2009

       Previous Rating: Baa3
       Current Rating: Ba2

According to Moody's, the rating action is the result of
deterioration in the credit quality of the transaction's
underlying collateral pool, which consists primarily of investment
grade credits, as well as the occurrence of asset defaults and par
loss.


WINN-DIXIE: Opposes Florida Tax Collectors' Move to Collect Taxes
-----------------------------------------------------------------
As reported in the Troubled Company Reporter on May 24, 2006,
the Florida Tax Collectors ask the U.S. Bankruptcy Court for the
Middle District of Florida to recognize the continued provision of
necessary services to Winn-Dixie Stores, Inc., and its debtor-
affiliates and their locations, and ensure that taxing authorities
will be refunded the full amount of the ad valorem taxes owed the
Florida Tax Collectors.

Furthermore, the Florida Tax Collectors ask the Court to:

    (a) provide that all tangible personal property and real
        estate taxes will be paid in full in accordance with
        standard commercial sales practices; or

    (b) in the alternative, order that:

        * all ad valorem tax liens will attach to the proceeds and
          that 2006 postpetition taxes will be paid before
          delinquency in accordance with Florida law; and

        * sufficient provision be made to separate and escrow into
          an account identified to their benefit for payment of
          the full amount of taxes plus monthly accrued interest
          and attorneys' fees as allowed by Florida statutes.

The Florida Tax Collectors assert that the Debtors' amended
request seeks to essentially liquidate, either through sale or
lease rejection procedures, the Debtors' remaining interests in
the listed stores, 28 of which are located within the state of
Florida.

                        Debtors' Objection

Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Middle District of Florida to deny the
Florida Tax Collectors' request because they are:

    (a) not entitled to adequate protection in connection with
        taxes owed by the landlords on property leased by the
        Debtors; and

    (b) adequately protected by an equity cushion in excess of
        98%, on property owned by the Debtors, regardless of the
        ultimate valuation of these properties.

The Debtors dispute that they owe the Florida Tax Collectors
taxes on properties they lease rather than own.

D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
in New York, asserts that the Debtors have paid to their
landlords, as required by their leases, all ad valorem taxes
accruing postpetition -- as administrative expenses of their
estates.

With regard to 2005 ad valorem taxes on real and personal real
property owned by the Debtors, the amount the Debtors actually
owe and have not paid is not more than $8,600,000.

Moreover, any tax claims against property owned by the Debtors,
which are ultimately allowed by the Court, are secured under
Florida law by first liens against the taxed property.

It is undisputed that the Florida Tax Collectors' tax claim
against the Debtors is over-secured, Mr. Baker says.  The
Debtors' property is worth in excess of $430,000,000, assuming a
tax effective rate of 2%.

Mr. Baker explains that the difference between the value of the
collateral securing the Florida Tax Collectors' secured tax claim
and the amount of the tax claim itself represents an equity
cushion in favor of the Florida Tax Collectors of more than 98%.
Even taking into account the Debtors' assertion that these
properties have been overvalued for tax purposes, any decrease in
tax value will correspondingly decrease the tax liability, so
that there will always be an equity cushion of 98%, assuming an
effective tax rate of 2%, Mr. Baker maintains.

                           Unpaid Taxes

As reported in the Troubled Company Reporter on Nov. 14, 2005, at
the Florida Tax Collectors' request, the Court further extended
the Bar Date to Nov. 23, 2005, solely as to the Florida Tax
Collectors' claims on account of the 2005 ad valorem taxes.

The Florida Tax Collectors asked the Court to allow their claims
to be filed without prejudice to any further amendments relative
to the amounts due.  The Florida Tax Collectors clarify that their
claims will be without prejudice and will not be considered a
waiver of any defenses whatsoever.

The Florida Tax Collectors have contacted the Debtors and have
been proactive in identifying and liquidating outstanding tax
obligations due pursuant to Florida law.  This process, if
allowed to continue, will greatly reduce the amount of
unnecessary "Omnibus Claims Objections" which burden the Court
and create excessive administrative professional fee expenses for
the Debtors.

The Florida Tax Collectors believe that the Debtors intend to
contest virtually all of the Debtors' tangible personal property
and real estate taxes in the state of Florida.

According to the Florida Tax Collectors, despite their repeated
requests to work together informally with the Debtors to allow
them to pay the appropriate taxes with the maximum discount, the
Debtors refused to do so.

In this regard, the Florida Tax collectors asked the Court:

   -- to compel the Debtors to consult with them to determine the
      actual tax accounts and amounts in which the Debtors are
      responsible for paying; and

   -- that the full amount of the taxes either be paid and
      contested pursuant to Florida law in the Florida judicial
      system or, alternatively, that the full amount of the
      Debtors' ad valorem property taxes plus a monthly deposit
      of interest, be paid into a separate segregated escrow
      account.

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.  (Winn-Dixie Bankruptcy News,
Issue No. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000).


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------  
                                Total  
                                Shareholders  Total     Working  
                                Equity        Assets    Capital  
Company                 Ticker  ($MM)          ($MM)     ($MM)  
-------                 ------  ------------  -------  --------  
Abraxas Petro           ABP         (22)         125       (6)
AFC Enterprises         AFCE        (44)         176       31
Adventrx Pharma         ANX         (26)          23      (27)
Alaska Comm Sys         ALSK        (29)         550       12
Alliance Imaging        AIQ         (29)         683       19
AMR Corp.               AMR      (1,272)      29,918   (1,924)
Atherogenics Inc.       AGIX       (114)         227      182
Bally Total Fitn        BFT      (1,463)         486     (442)
Biomarin Pharmac        BMRN         46          488     (322)
Blount International    BLT        (134)         462      129
CableVision System      CVC      (2,468)      12,832    2,643
CCC Information         CCCG        (95)         112       34
Centennial Comm         CYCL     (1,069)       1,409       32
Cenveo Inc              CVO         (56)       1,045      157
Choice Hotels           CHH        (148)         274      (68)
Cincinnati Bell         CBB        (727)       1,888       33
Clorox Co.              CLX        (427)       3,622     (258)
Columbia Laborat        CBRX         11           43       24
Compass Minerals        CMP         (59)         702      171
Crown Holdings I        CCK          46        6,885      171
Crown Media HL          CRWN       (165)       1,229       93
Deluxe Corp             DLX         (71)       1,394     (264)
Denny's Corporation     DENN       (261)         505      (75)
Domino's Pizza          DPZ        (632)         387      (10)
Echostar Comm           DISH       (690)       8,935    1,438
Emeritus Corp.          ESC        (105)         725      (19)
Emisphere Tech          EMIS        (26)          13      (11)
Empire Resorts I        NYNY        (28)          57       (5)
Encysive Pharm          ENCY        (38)         119       82
Foster Wheeler          FWLT       (239)       2,032      (52)
Gencorp Inc.            GY          (84)       1,002       (3)
Graftech International  GTI        (175)         919      286
H&E Equipment           HEES        204          667       13
Hollinger Int'l         HLR        (198)       1,038     (271)
I2 Technologies         ITWO        (65)         195      (20)
ICOS Corp               ICOS        (51)         248      121
IMAX Corp               IMAX        (25)         238       33
Incyte Corp.            INCY        (38)         399      189
Indevus Pharma          IDEV       (134)          86       50
Investools Inc.         IEDU        (33)          87      (54)
Koppers Holdings        KOP        (100)         556      150
Kulicke & Soffa         KLIC         46          399      204
Labopharm Inc.          DDS          (8)          46        9
Level 3 Comm. Inc.      LVLT       (546)       8,284      713
Ligand Pharm            LGND       (212)         289     (144)
Linn Energy LLC         LINE        (45)         280      (51)
Lodgenet Entertainment  LNET        (70)         261        7
Maxxam Inc.             MXM        (661)       1,048      101
Maytag Corp.            MYG        (187)       2,954      150
McDermott Int'l         MDR         (50)       3,160      277
McMoran Exploration     MMR         (38)         411       (1)
Movie Gallery           MOVI       (171)       1,248     (843)
NPS Pharm Inc.          NPSP       (129)         287      212
New River Pharma        NRPH          3           96       82
Omnova Solutions        OMN         (15)         360       65
ON Semiconductor        ONNN       (224)       1,211      251
Qwest Communication     Q        (3,060)      21,126     (923)
Revlon Inc.             REV      (1,042)       1,085       37
Riviera Holdings        RIV         (30)         219        7
Rural/Metro Corp.       RURL        (93)         302       50
Rural Cellular          RCCC       (500)       1,427      144
Sepracor Inc.           SEPR       (128)       1,284      906
St. John Knits Inc.     SJKI        (52)         213       80
Sun Healthcare          SUNH         (1)         531      (46)
Tivo Inc.               TIVO        (33)         143       19
USG Corp.               USG        (496)       6,522    1,956
Unigene Labs Inc.       UGNE         (7)          21       (2)
Vertrue Inc.            VTRU        (24)         466      (78)
Weight Watchers         WTW         (42)         856      (69)
Worldspace Inc.         WRSP     (1,516)         682      197
WR Grace & Co.          GRA        (548)       3,506      881

                             *********

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/

On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts.  The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.

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, Joel Anthony
Lopez, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A.
Soriano-Baaclo, Christian Q. Salta, Jason A. Nieva, Lucilo M.
Pinili, Jr., 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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